SFL Corporation Ltd. reported preliminary results for the third quarter of 2025, posting total operating revenue of $178 million, a decline of 32% from the $263.2 million earned in the same period last year. The drop is largely attributable to a 30% contraction in shipping‑related charter hire, which accounts for 86% of revenue, and a 14% decline in energy‑related charter hire. The company’s net income fell to $8.6 million, or $0.07 per share, compared with $44.5 million ($0.34 per share) in Q3 2024, reflecting the combined impact of lower revenue and higher operating costs. Adjusted EBITDA stood at $113 million, including $8 million from associated companies, indicating that the core business remains profitable despite the revenue slide.
The earnings beat analyst expectations by a wide margin. Consensus estimates called for a loss of $0.025 per share, while SFL delivered $0.0881 per share, a $0.1131 or 452% improvement. Revenue also exceeded forecasts by $4.61 million, driven by a modest uptick in high‑margin dry‑bulk contracts that partially offset the decline in energy charter hire. The company’s ability to maintain profitability amid a weaker market demonstrates disciplined cost management and a favorable mix of long‑term charters.
SFL’s management highlighted several strategic initiatives that underpin the results. CEO Ole B. Hjertaker noted that the company’s fixed‑rate charter backlog remains robust at approximately $4 billion, providing strong cash‑flow visibility and supporting the continued payment of the $0.20 quarterly dividend, the 87th consecutive payout. The firm also invested nearly $100 million in fuel‑efficiency upgrades and sold older dry‑bulk and container vessels to modernize its fleet. These actions are intended to reduce operating costs and improve environmental performance, positioning SFL for long‑term growth.
The company’s only headwind is the “Hercules” drilling rig, which is currently warm‑stacked and awaiting new employment. Management expressed optimism that a new charter will be secured next year, and that the rig’s status will not materially affect the company’s earnings outlook. In addition, market volatility and fluctuating oil prices have contributed to the revenue decline, but the firm’s diversified charter mix and focus on high‑margin contracts mitigate the impact.
SFL’s guidance for the remainder of 2025 remains unchanged, with management maintaining confidence in the company’s ability to generate stable cash flow from its charter backlog and to continue investing in fleet modernization. The firm’s focus on cost discipline, coupled with a strong backlog, signals resilience in a volatile market and supports the company’s long‑term dividend policy.
SFL’s Q3 2025 results underscore the company’s strategic focus on a modern, efficient fleet and a solid charter backlog, while highlighting the challenges posed by market volatility and the temporary underutilization of the “Hercules” rig. The earnings beat and dividend continuation reinforce investor confidence in the company’s operational execution and long‑term value creation.
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