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1. Company Snapshot

1.a. Company Description

SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters.The company is also involved in the charter, purchase, and sale of assets.In addition, it operates in various sectors of the maritime, and shipping and offshore industries, including oil, chemical, oil product, container, and car transportation, as well as dry bulk shipments and drilling rigs.


As of December 31, 2021, the company owned six crude oil tankers, 15 dry bulk carriers, 35 container vessels, two car carriers, one jack-up drilling rig, one ultra-deepwater drilling unit, two chemical tankers, and four oil product tankers.It primarily operates in Bermuda, Cyprus, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands.The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd.


in September 2019.SFL Corporation Ltd.was incorporated in 2003 and is based in Hamilton, Bermuda.

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1.b. Last Insights on SFL

Negative drivers behind SFL Corporation Ltd.'s recent performance include concerns about future debt gearing and potential share dilution, despite fleet renewal efforts. The container-ship segment faces challenges with a large order book and potential lower rates, impacting conventional fuel vessels. Offshore drilling assets, particularly the "Hercules" rig, significantly contribute to revenue but face employment uncertainties, affecting Q4 income projections. The rig's expected idle period for at least two quarters will negatively impact financial results.

1.c. Company Highlights

2. SFL's Q3 2025 Earnings: A Resilient Performance Amidst Industry Challenges

SFL reported a robust financial performance in Q3 2025, with revenues reaching $178 million and an EBITDA equivalent cash flow of $113 million. The company's adjusted EBITDA was supported by its diversified portfolio of vessels, with container vessels remaining the largest contributor. The reported EPS of $0.07 exceeded estimates of $0.00105, indicating a strong operational performance. As Aksel Olesen noted, "Our diversified portfolio of vessels contributed to an adjusted EBITDA of $113 million for the quarter," highlighting the company's ability to generate cash across various segments.

Publication Date: Nov -26

📋 Highlights
  • Quarterly Revenue and EBITDA:: Reported $178 million revenue and $113 million EBITDA equivalent cash flow for Q3 2025, with 12-month EBITDA at $473 million.
  • Fleet Renewal Progress:: Sold 22 older vessels in 12 months, reducing fleet average age by 2 years, with 59 active maritime assets now.
  • Charter Revenue and Utilization:: Generated $178 million in charter revenue with 98.7% fleet utilization across 4,748 operating days.
  • Financial Resilience:: Ended Q3 with $278 million cash and $40 million undrawn credit lines, alongside a $100 million buyback program (with $80 million remaining).
  • Segment Contributions:: Tanker segment led with $44 million, followed by container vessels ($113M adjusted EBITDA) and car carriers ($23 million).

Segmental Performance

The company's car carrier fleet added $23 million to EBITDA, while the Tanker segment generated $44 million. Dry bulk contributed $6 million, down from $19 million due to fleet renewal. Energy assets contributed $24 million, mainly from the LINUS, which is on a long-term charter contract to ConocoPhillips. This diversified revenue stream helped mitigate the impact of fleet renewal on dry bulk earnings.

Financial Position and Liquidity

SFL's financial position remains strong, with approximately $278 million in cash and cash equivalents, supplemented by $40 million of undrawn credit lines. The book equity ratio stands at around 26% at the end of Q3. The company's net debt to EBITDA ratio is 5.58, indicating a manageable debt burden. With a remaining $80 million on the $100 million buyback program, SFL continues to return value to shareholders.

Valuation and Outlook

Analysts estimate a revenue decline of 5.9% for next year, but SFL's diversified fleet and long-term charters provide a stable foundation. The stock trades at a P/E ratio of 31.82 and an EV/EBITDA multiple of 7.87. The dividend yield stands at 12.29%, making it an attractive income-generating stock. As Ole Hjertaker mentioned, "We are looking for opportunities to bring the Hercules rig back to work," indicating potential for future growth. With a ROE of 3.17% and an ROIC of 5.34%, SFL's returns are modest, but the company's efforts to renew its fleet and improve efficiency are expected to drive long-term value creation.

3. NewsRoom

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SFL: Decent Earnings But No Catalyst For Near-Term Growth

Nov -12

Source: seekingalpha.com

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SFL Corporation Ltd. (SFL) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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SFL - Third Quarter 2025 Results Presentation

Nov -11

Source: globenewswire.com

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SFL - Third Quarter 2025 Results

Nov -11

Source: globenewswire.com

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SFL - Invitation to Presentation of Q3 2025 Results

Nov -04

Source: globenewswire.com

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Short Interest in SFL Corporation Ltd. (NYSE:SFL) Rises By 61.1%

Nov -04

Source: defenseworld.net

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Ethic Inc. Has $237,000 Holdings in SFL Corporation Ltd. $SFL

Oct -31

Source: defenseworld.net

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SFL: Is The Above-10% Yield Worth Chasing Post-Cut?

Sep -26

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.67%)

6. Segments

Time Charter

Expected Growth: 2.8%

SFL Corporation's 2.8% Time Charter growth driven by increasing global seaborne trade, rising demand for energy transportation, and a growing orderbook of newbuild vessels. Additionally, the company's diversified fleet and strong relationships with major oil companies contribute to its growth momentum.

Drilling Contract

Expected Growth: 2.5%

SFL Corporation Ltd.'s drilling contract growth of 2.5% is driven by increasing offshore oil and gas exploration, rising demand for energy, and a growing backlog of projects. Additionally, the company's strategic partnerships, cost-saving initiatives, and investments in modern drilling technologies also contribute to this growth.

Voyage Charter

Expected Growth: 2.2%

SFL Corporation's Voyage Charter growth of 2.2% is driven by increasing demand for seaborne transportation, rising commodity prices, and a growing global economy. Additionally, the company's diversified fleet and strong relationships with charterers contribute to its growth. Furthermore, SFL's cost-saving initiatives and efficient operations also support its revenue expansion.

Profit Sharing

Expected Growth: 1.8%

SFL Corporation Ltd.'s 1.8% profit sharing growth is driven by increasing charter rates, fleet expansion, and cost savings initiatives. Strong demand for shipping services, particularly in the tanker and bulker segments, contributes to revenue growth. Additionally, the company's focus on operational efficiency and effective cost management enables it to maintain a competitive edge and boost profitability.

Other

Expected Growth: 1.5%

SFL Corporation Ltd.'s 1.5% growth in 'Other' segment is driven by increasing charter rates, fleet expansion, and improved operational efficiency. Additionally, the company's diversified revenue streams, strong customer relationships, and strategic cost management contribute to this growth.

Direct Financing Leases and Leaseback Assets Interest Income

Expected Growth: 1.2%

SFL Corporation Ltd.'s 1.2% growth in Direct Financing Leases and Leaseback Assets Interest Income is driven by increasing vessel acquisitions, expanding charter agreements, and rising interest rates. Additionally, the company's diversified portfolio of vessels and strong relationships with charterers contribute to the growth. Furthermore, the company's ability to secure long-term charters and fixed-rate debt also supports the growth.

7. Detailed Products

SoftBank's Global IP Network

A high-performance, low-latency network that connects major hubs across the globe, providing secure and reliable connectivity for businesses.

Colocation Services

Secure, reliable, and scalable data center solutions that provide customers with a flexible and customizable environment to house their IT infrastructure.

Cloud Connectivity

Direct, secure, and high-performance connectivity to major cloud providers, enabling seamless access to cloud-based applications and services.

IP Transit

A scalable and reliable IP transit service that provides customers with high-quality internet access and connectivity to the global internet backbone.

Managed Security Services

Comprehensive security solutions that provide real-time threat detection, intrusion prevention, and incident response to protect businesses from cyber threats.

Data Center Services

Comprehensive data center solutions that provide customers with a range of services, including data center design, build, and operation.

8. SFL Corporation Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SFL Corporation Ltd. is medium due to the availability of alternative transportation methods, such as buses and trains, which can substitute for the company's logistics services.

Bargaining Power Of Customers

The bargaining power of customers for SFL Corporation Ltd. is low due to the company's strong brand reputation and the lack of alternative logistics providers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for SFL Corporation Ltd. is medium due to the company's dependence on a few key suppliers for fuel and equipment, which gives them some negotiating power.

Threat Of New Entrants

The threat of new entrants for SFL Corporation Ltd. is low due to the high barriers to entry in the logistics industry, including the need for significant capital investment and regulatory compliance.

Intensity Of Rivalry

The intensity of rivalry for SFL Corporation Ltd. is high due to the competitive nature of the logistics industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 71.17%
Debt Cost 6.77%
Equity Weight 28.83%
Equity Cost 7.32%
WACC 6.93%
Leverage 246.88%

11. Quality Control: SFL Corporation Ltd. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.31$

Current Price

8.31$

Potential

-0.00%

Expected Cash-Flows