SFL Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenues: $201 million, up from $174.5 million in Q1 2026.

EBITDA: $130 million, a 20% increase from the previous quarter.

Net Income: $34 million, or $0.25 per share, compared to $26 million or $0.20 per share in Q1.

Dividend: Declared at $0.22 per share, marking the 90th consecutive dividend.

Charter Backlog: $3.8 billion, with approximately 65% from investment-grade counterparties.

Cash and Liquidity: Cash and equivalents of $113 million, plus $160 million in undrawn credit facilities.

2Strategic Updates and Business Highlights

Fleet Expansion: Ordered four dual-fuel 7,000 CEU capacity car carriers with a total cost of $360 million; two already chartered for 5 + 5 years, adding $150 million to backlog.

Car Carrier Market: Confidence in ordering new builds due to strong demand, particularly from China, and a gap between supply and demand expected to widen post-2029.

Spot Market Success: Two Suezmax tankers achieved average rates of $133,000 per day in Q2, significantly higher than previous long-term charter rates.

Operational Performance: Fleet utilization rates were strong across segments, with car carriers at 100% and tankers at 99.8%.

3Forward Guidance and Outlook

Market Dynamics: Anticipates continued strength in the car carrier market and potential for new long-term charters for Suezmax tankers.

Investment Strategy: Plans to leverage strong liquidity for growth opportunities without additional share issuance in the near term.

Future Cash Flow: The company is optimistic about cash flow visibility due to a diversified charter backlog and investment-grade counterparties.

4Bad News, Challenges, or Points of Concern

Energy Segment Performance: The energy segment's operating rate was only 50%, with one rig warm stacked, raising concerns about future revenue contributions.

Market Volatility: While the tanker market is currently strong, there is inherent risk in spot market reliance and potential fluctuations in charter rates.

Newbuilding Costs: The decision to order new builds without attached charters poses risks if market conditions shift unfavorably before delivery.

5Notable Q&A Insights

Car Carrier Market Confidence: Management highlighted the growth in China’s car volumes and the aging fleet as key factors supporting new builds.

Rig Operations: The Hercules rig is preparing for operations in Canada, with a fixed contract of 400 days and options for extensions, but market conditions remain uncertain.

Dual-Fuel Propulsion Justification: Management believes LNG is currently the best fuel option for car carriers, driven by customer demand for greener transportation solutions.

Charter Options: There are several upcoming charter extension options for tankers that could lead to either continued long-term contracts or potential asset sales for profit, depending on market conditions. This summary encapsulates the key aspects of SFL's Q2 2026 earnings call, providing a balanced view of the company's performance, strategic direction, and market outlook.