SFL Corporation Ltd

Welcome to SFL's third quarter 2025 conference call. My name is Espen Jøsum and I'm Vice President of Investor Relations in SFL. Our CEO, Ole Ertaker, will start the call with an overview of the third quarter highlights. Then, our Chief Operating Officer, Trum Sjöli, will comment on vessel performance matters, followed by our CFO, Axel Olesen, who will take us through the financials. The conference call will be concluded by opening up for questions, and I will explain the procedure to do so prior to the Q&A session. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Please note that forward-looking statements are not guarantees of future performance. These statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, but are not limited to, conditions in the shipping, offshore, and credit markets. You should therefore not place undue reliance on these forward-looking statements. Please refer to our filings within the Securities and Exchange Commission for a more detailed discussion of risks and uncertainties, which may have a direct bearing on operating results and our financial condition. Then I will leave the word over to our CEO, Ole Jaftakoff, with highlights for the third quarter.

Thank you, Aspen. We are pleased to announce our 87th consecutive dividend as we continue to build SFL as a maritime infrastructure company with a diversified and high-quality fleet. For the third quarter, we reported revenues of $178 million and an EBITDA-equivalent cash flow of $113 million. Over the past 12 months, EBITDA amounts to $473 million, reflecting the continued strength and stability of our operations. In recent quarters, we have taken decisive steps to strengthen our charter backlog, securing long-term agreements with strong counterparties, and deploying high-quality assets. At the same time, we have made substantial investments in cargo handling and fuel efficiency upgrades across our fleet, while divesting older and less efficient vessels. Our Chief Operating Officer, Trim Shirley, will elaborate on this later. As part of our fleet renewal strategy, five 57,000 deadweight-toned dry bulk vessels built between 2009 and 2012 have been sold with the final vessels delivered in the third quarter. In addition, eight older tape-sized bulkers were re-delivered to Golden Ocean, and seven 2002-built container ships were re-delivered to MSC during the second and third quarters. These actions, combined with our efficiency upgrades, have materially improved the operational and fuel efficiency profile of our fleet, delivering tangible benefits to both SFL and our customers. We have also advanced our commitment to cleaner technology, with 11 vessels now capable of operating on LNG fuel, including five new buildings currently under construction. During the third quarter, we announced new five-year charters for three 9,500 TEU container vessels on charter to Maersk, adding approximately $225 million to our charter backlog from 2026 onwards. These vessels will be upgraded with advanced cargo handling and fuel efficiency features in line with our larger container ship fleet. Turning to the offshore segment, the drilling rig Hercules remained idle also in the third quarter. While we continue to evaluate the strategic alternatives for Hercules, we remain optimistic about securing new employment for the Reagan Duke course. Hercules remains warm-stacked and can be mobilized on relatively short notice, though it is difficult to provide timing guidance at this stage. With the announced 20 cent dividend, SFL has now returned approximately $2.9 billion to shareholders over 87 consecutive quarters. This represents a dividend yield of over 10% based on yesterday's share price. Our charter backlog stands at $4 billion, with two-thirds contracted to investment-grade counterparties, providing strong cash flow visibility and resilience amid current market volatility. Over time, we have consistently demonstrated our ability to renew and diversify their asset base, supporting a sustainable long-term capacity for shareholder returns. Our solid liquidity position, including undrawn credit lines and unlevered vessels at quarter end, ensures that we remain well positioned to continue investing in accretive growth opportunities. And with that, I will now hand the call over to our Chief Operating Officer, Trim Shirley.

Thank you, Ola. Our current fleet is made up of 59 maritime assets, including vessels, rigs and contracted new buildings. Over the last 12 months, we have sold 22 of our older vessels at an average age of more than 18 years. This has reduced the fleet average by about two years to a new average age of less than 10 years per vessel. We have a diversified fleet of assets, charted out to first class customers on mostly long term charges, and the majority of our customer base is large industrial end users. Our backlog from all owned and managed shipping assets stands at approximately $4 billion, and the fleet following Q3 is made up of two dry bulk vessels, 30 container ships, 16 large tankers, two chemical tankers, seven car carriers and two drilling rigs. Our backlog is mainly derived from time charter contracts and from Q3 onwards we have four container ships left on bare boat leases, the rest on time charter. The charter revenue from our fleet was about 178 million dollars and we had a total of 4748 operating days in the quarter. Operating days is defined as calendar day, less technical or fire, and dry dockings, or stacking for the rigs. Following several quarters with high number of ships in dry dock, this quarter we had two vessels in dry dock at a cost of around $3.8 million. The two vessels in dry dock were one car carrier and one tanker. Our overall utilization across the shipping fleet in Q3 was about 98.7%. Adjusted for unscheduled technical off-fire only, the utilization of the shipping fleet was 99.9%, a very high availability. In August, our car carrier SFL Composer had a collision in Denmark when approaching Odense pilot station going in for a special survey dry docking at Feyard. The collision happened when an overtaking container vessel struck the port quarter of the SFL Composer. There were no injuries to personnel nor pollution as a result of the incident. And furthermore, the vessel was empty of cargo in preparation for upcoming dry docking. She went straight into Fayard after the incident and completed her dry docking as well as the damage repairs in a total of 34 days. We are fully covered for the extra time required for repairs by our loss of higher insurance as well as the damage repairs less $200,000 in deductible by our whole machinery insurance. It is likely we will recover part of the deductible following the outcome of court proceedings, or alternatively, a settlement with owners of the other vessel. The current commercial and regulatory environment means that energy efficiency and emissions reduction is fundamental to SFL's ability to attract and retain first class charters. Our toolbox includes energy efficiency measures, operational optimization, and not least, new low emission fuel technology. We have taken significant strides in optimizing and renewing our fleet to meet these challenges by installing scrubbers, energy efficiency devices, and investing in new tonnage with dual fuel capabilities. By modernizing and enhancing our fleet We position ourselves for growth either by providing new vessels with modern technology or extending the life of existing ones. On the container side, we have over the last two years upgraded 13 container vessels with three more to come by carrying out major upgrades to cargo systems, energy saving technologies, propeller enhancements or replacements, and hull modifications like bulbous bow. The upgrades amount to almost 100 million US dollars, fully or partly funded by our charters and have been instrumental in securing new charters or charter extensions. On notable vessel acquisitions, we have since 2023 bought two dual fuel chemical tankers and taken delivery of four LNG dual fuel new building car carriers. We also have five 16,000 TEU dual fuel LNG container vessels on order for charter to a leading European container operator. I will now give the word over to our CFO, Axel Olsson, who will take us through the financial highlights of the quarter.