Breaking Down SFL Corporation Ltd. (SFL) Financial Health: Key Insights for Investors

Are you looking to navigate the financial seas and understand the key indicators of SFL Corporation Ltd.'s performance? With a strong track record of 84 consecutive quarterly dividends, declaring $0.27 per share in the latest quarter, and a substantial fixed rate charter backlog of approximately $4.3 billion as of December 31, 2024, the company presents an interesting case for investors. But how do these figures translate into overall financial health, and what are the critical insights you need to make informed decisions? Keep reading to find out!

SFL Corporation Ltd. (SFL) Revenue Analysis

SFL Corporation Ltd. (SFL) generates revenue primarily through the chartering of its vessels. These vessels include tankers, bulkers, container vessels, and offshore drilling rigs. Revenue is derived from time charters, bareboat charters, and occasionally from the sale of vessels.

Analyzing SFL Corporation Ltd.'s revenue streams involves understanding the performance of its diverse fleet and the stability of its long-term contracts. The company's ability to secure favorable charter rates and maintain high utilization rates directly impacts its financial health.

Here's a breakdown of what to consider when evaluating SFL's revenue:

• Vessel Types: Revenue contribution from tankers, bulkers, container vessels, and offshore drilling rigs.
• Charter Types: Income generated from time charters (where SFL operates the vessel) versus bareboat charters (where the charterer operates the vessel).
• Geographic Regions: Revenue distribution across different regions where SFL's vessels operate.

To fully understand SFL Corporation Ltd.'s financial health, investors should monitor these key areas and compare them against industry benchmarks and historical performance.

Year-over-year revenue growth rate (historical trends, percentage increase/decrease) is crucial for investors. Based on the latest available information, SFL Corporation Ltd. reported total operating revenues of $571.726 million for the fiscal year ending December 31, 2023, a decrease of 1.9% from $582.798 million in 2022.

Here is a table summarizing SFL's revenue performance:

Analysis of any significant changes in revenue streams, the decrease in revenue was primarily due to reduced activities or lower charter rates in certain segments. Investors should pay close attention to management commentary in earnings reports and investor presentations to understand the drivers behind these changes and the outlook for future revenue performance.

For further insights into SFL Corporation Ltd. (SFL) investor profiles, consider reading: Exploring SFL Corporation Ltd. (SFL) Investor Profile: Who’s Buying and Why?

SFL Corporation Ltd. (SFL) Profitability Metrics

Analyzing SFL Corporation Ltd.'s profitability involves looking at several key metrics that reveal how efficiently the company generates profit from its revenues. These metrics include gross profit, operating profit, and net profit margins. By examining these figures, investors can gain insights into SFL's financial health and operational effectiveness.

Here's a breakdown of essential profitability aspects:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It reflects the company's efficiency in managing production costs.
• Operating Profit Margin: This margin shows the percentage of revenue left after deducting both COGS and operating expenses. It illustrates how well the company manages its operational costs.
• Net Profit Margin: The net profit margin represents the percentage of revenue that translates into profit after all expenses, including interest and taxes, have been paid. It provides a comprehensive view of the company's overall profitability.

To fully understand SFL Corporation Ltd.'s financial standing, it's crucial to evaluate these margins over time. Trends in profitability can highlight improvements or declines in the company's performance. Comparing SFL's profitability ratios with industry averages offers valuable context. If SFL's margins are higher than its peers, it may indicate a competitive advantage. Conversely, lower margins could signal areas needing improvement.

Operational efficiency plays a significant role in profitability. Effective cost management and favorable gross margin trends can positively impact the bottom line. Investors should monitor these elements to assess SFL's ability to maintain and grow its profits. For additional insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of SFL Corporation Ltd. (SFL).

When evaluating SFL Corporation Ltd.'s financial health, these metrics provide a solid foundation for informed decision-making. Please note that specific financial data for the 2024 fiscal year is required to provide precise figures and comparisons.

SFL Corporation Ltd. (SFL) Debt vs. Equity Structure

Understanding how SFL Corporation Ltd. (SFL) manages its debt and equity is crucial for investors. This insight provides a view into the company's financial strategy, risk profile, and ability to fund growth and shareholder returns. Here's a breakdown of SFL's debt and equity structure:

SFL Corporation Ltd. (SFL) employs a mix of debt and equity to finance its operations and growth. As of December 31, 2023, the company's financial structure includes:

• Total assets of approximately $4.79 billion
• Total liabilities amounting to around $2.71 billion
• Total equity of about $2.08 billion

These figures highlight the balance between what SFL owns and what it owes to others, providing a foundation for understanding its financial leverage.

SFL Corporation Ltd. (SFL) relies on both long-term and short-term debt to finance its assets. As of the end of 2023, the breakdown is as follows:

• Long-term debt: Approximately $2.64 billion, representing the bulk of the company’s liabilities.
• Short-term debt: Around $68.1 million, a smaller portion of the total debt, indicating manageable near-term obligations.

The prevalence of long-term debt suggests that SFL is investing in long-lasting assets and projects that are expected to generate revenue over an extended period.

The debt-to-equity (D/E) ratio is a key metric for evaluating a company's financial leverage. SFL Corporation Ltd. (SFL)’s debt-to-equity ratio can be calculated as follows:

Debt-to-Equity Ratio = Total Liabilities / Total Equity

Using the figures from the 2023 financial results:

D/E Ratio = $2.71 billion / $2.08 billion ≈ 1.30

A debt-to-equity ratio of approximately 1.30 indicates that SFL has more debt than equity. Comparing this to industry standards is essential. The shipping industry can be capital-intensive, often leading to higher debt levels. However, a ratio of 1.30 suggests that SFL needs to manage its debt effectively to ensure financial stability.

Recent activities, such as debt issuances, credit ratings, or refinancing, can significantly impact SFL Corporation Ltd. (SFL)’s financial health. While specific details on credit ratings and refinancing activities would provide a more detailed picture, monitoring these aspects is crucial for assessing the company's ongoing financial strategy.

SFL Corporation Ltd. (SFL) balances debt and equity in its capital structure to optimize financial flexibility and manage risk. The company’s approach involves:

• Strategic Debt Use: Utilizing debt to finance significant asset acquisitions and long-term projects.
• Equity Management: Balancing debt with equity to maintain a stable financial structure and manage financial risk.

The decision to use debt or equity depends on market conditions, interest rates, and the company's growth prospects. Effective management of this balance is vital for sustaining long-term financial health and delivering value to shareholders.

For more insights into SFL Corporation Ltd. (SFL) and its investors, check out: Exploring SFL Corporation Ltd. (SFL) Investor Profile: Who’s Buying and Why?

SFL Corporation Ltd. (SFL) Liquidity and Solvency

Here's an overview of SFL Corporation Ltd.'s liquidity, based on the most recent financial data:

Assessing SFL Corporation Ltd.'s Liquidity:

• Current and Quick Ratios: SFL's current ratio stands at 0.38 as of December 31, 2024, which is below the generally accepted threshold of 1, indicating potential difficulties in meeting short-term obligations. The quick ratio, also at 0.38, reinforces this concern, suggesting that the company may face challenges in covering its immediate liabilities with its most liquid assets.
• Cash and Liquidity: As of December 31, 2024, SFL had approximately $135 million in cash and cash equivalents on its balance sheet, complemented by an additional $45 million available through undrawn credit lines, bringing the total available liquidity to around $180 million.
• Working Capital Trends: Working capital is a measure of a company's short-term financial health, calculated as the difference between current assets and current liabilities.
• Cash Flow Statements Overview: An examination of SFL's cash flow statements reveals the following trends:
  • Operating Cash Flow: In 2024, SFL reported $369.86 million in operating cash flow, marking a 7.80% increase from the previous year.
  • Investing Activities: Capital expenditures for 2024 amounted to -$644.86 million. However, the sale of property, plant, and equipment generated $22.74 million.
  • Financing Activities: SFL issued a new $150 million five-year bond, strengthening its liquidity position. In 2024, the company raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds. Subsequent to the quarter's end, they raised a new $150 million senior secured bond in the Nordic market, maturing in February 2030.
• Available Liquidity: SFL's available liquidity as of December 31, 2024, totaled approximately $180 million, including cash and cash equivalents and undrawn credit lines. Additionally, the company held unencumbered vessels and marketable securities with a combined market value of around $79 million.
• Potential Liquidity Concerns or Strengths: SFL's consistent dividend payouts, with 84 consecutive quarterly dividends declared at $0.27 per share, highlight a commitment to returning value to shareholders. However, the low current and quick ratios suggest potential liquidity challenges. The company's strategic moves, such as new vessel acquisitions and long-term charters, indicate efforts to bolster long-term financial stability. SFL has a fixed-rate charter backlog of $4.3 billion and added $2 billion in new commitments during 2024.

For more detailed insights, you can refer to Breaking Down SFL Corporation Ltd. (SFL) Financial Health: Key Insights for Investors.

SFL Corporation Ltd. (SFL) Valuation Analysis

Determining whether SFL Corporation Ltd. (SFL) is overvalued or undervalued requires a multifaceted approach, incorporating several key financial metrics and market indicators. Investors commonly use ratios like price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) to gain insights into a company's valuation relative to its peers and its own historical performance.

Currently, information on specific P/E, P/B, and EV/EBITDA ratios for SFL isn't available in the provided search results. To perform a comprehensive valuation analysis, one would typically compare these ratios against industry averages and SFL's historical data. For instance, a high P/E ratio compared to its peers might suggest the stock is overvalued, while a lower ratio could indicate undervaluation, assuming other factors are constant.

Stock price trends provide a visual representation of market sentiment and SFL's performance over time. Recent data indicates:

• On April 18, 2025, SFL's stock price closed at $14.87.
• The 52-week high is $15.19, and the 52-week low is $11.74.

Analyzing these trends helps investors understand the volatility and potential growth trajectory of SFL's stock. A sustained upward trend may reflect positive market sentiment, while a downward trend could signal concerns about the company's future performance.

Dividend yield and payout ratios are crucial for income-focused investors. These metrics reveal how much of a company's earnings are distributed as dividends and the sustainability of those payouts. Recent dividend information for SFL includes:

• An annual dividend rate of $1.00 per share.
• A forward dividend yield of 6.72%.
• The ex-dividend date was March 13, 2025, and the payment date was March 28, 2025.

A high dividend yield can be attractive, but it's essential to examine the payout ratio to ensure the company can sustain its dividend payments. A payout ratio that is too high may indicate that the company is distributing a large portion of its earnings, which could limit its ability to reinvest in growth opportunities.

Analyst consensus provides a summarized view of professional opinions on a stock's valuation and future prospects. While specific analyst ratings (buy, hold, or sell) were not available in the search results, this information is typically compiled from various financial analysts who cover the company. Investors often consider these ratings as part of their due diligence process.

For more in-depth insights, you can explore: Breaking Down SFL Corporation Ltd. (SFL) Financial Health: Key Insights for Investors

SFL Corporation Ltd. (SFL) Risk Factors

SFL Corporation Ltd. (SFL) faces a variety of internal and external risks that could significantly impact its financial health. These risks span from industry-specific challenges to broader market conditions, and understanding them is crucial for investors. For further insights, you might find this resource helpful: Exploring SFL Corporation Ltd. (SFL) Investor Profile: Who’s Buying and Why?

One of the primary external risks is the intense competition within the shipping industry. SFL operates in a market where numerous companies vie for the same business, leading to pressure on charter rates and profitability. Fluctuations in global trade volumes and geopolitical events can also significantly affect demand for shipping services, creating volatility in SFL's revenue streams.

Regulatory changes pose another substantial risk. The shipping industry is subject to stringent environmental regulations, such as those imposed by the International Maritime Organization (IMO), including regulations aimed at reducing greenhouse gas emissions from ships. Compliance with these regulations requires significant investments in new technologies and operational practices, potentially increasing costs and impacting SFL's financial performance.

Market conditions, including economic downturns and changes in commodity prices, can also affect SFL's financial health. A decrease in global economic activity can lead to reduced demand for shipping services, while fluctuations in commodity prices can impact the profitability of transporting goods such as oil, gas and dry bulk.

Internally, SFL faces operational, financial, and strategic risks that are often detailed in their earnings reports and filings. These risks include:

• Vessel operational risks: Incidents such as accidents, mechanical failures, or environmental damage can lead to costly repairs, downtime, and potential liabilities.
• Counterparty risks: SFL relies on charter agreements with various customers, and the financial stability of these counterparties is crucial. Default by a major customer could significantly impact SFL's revenue.
• Financing risks: SFL's capital-intensive business model requires continuous access to financing. Changes in interest rates or credit market conditions could increase borrowing costs and limit access to capital.

Mitigation strategies are essential for managing these risks. SFL employs several strategies to minimize their impact:

• Diversification of assets: SFL invests in a diversified fleet of vessels across different shipping segments, reducing its reliance on any single market.
• Long-term charter agreements: Securing long-term contracts provides stable revenue streams and reduces exposure to short-term market fluctuations.
• Prudent financial management: SFL maintains a strong balance sheet and manages its debt levels carefully to ensure financial flexibility.

While specific details on mitigation strategies can vary, SFL's approach generally involves a combination of diversification, long-term contracts, and prudent financial management to navigate the complex and volatile shipping market.

SFL Corporation Ltd. (SFL) Growth Opportunities

SFL Corporation Ltd. (SFL) navigates the financial seas with strategic precision, focusing on key growth drivers that underpin its future revenue and earnings potential. The company's approach includes a blend of tactical vessel acquisitions, market expansion, and leveraging its competitive advantages to ensure sustained growth.

Key growth drivers for SFL Corporation Ltd. (SFL) include:

• Strategic Acquisitions: SFL strategically acquires vessels with long-term charters, ensuring stable and predictable cash flows.
• Market Expansion: The company continuously evaluates opportunities in various shipping segments, adapting to market demands and diversifying its portfolio.
• Operational Efficiency: SFL focuses on maintaining high operational efficiency across its fleet to maximize revenue generation and minimize costs.

Future revenue growth projections and earnings estimates for SFL Corporation Ltd. (SFL) are influenced by several factors, including:

• Charter Rates: Fluctuations in charter rates directly impact SFL's revenue. Securing long-term charters at favorable rates is crucial for sustained growth.
• Fleet Utilization: High fleet utilization rates are essential for maximizing revenue. SFL's ability to keep its vessels operational and chartered is a key determinant of its financial performance.
• Global Trade: Changes in global trade patterns affect the demand for shipping services. SFL's diversified fleet allows it to capitalize on opportunities in different trade routes.

Strategic initiatives and partnerships that may drive future growth:

• Partnerships: SFL collaborates with leading industry players to secure favorable charter agreements and expand its market presence.
• Technological Innovation: Embracing new technologies to enhance vessel efficiency and reduce environmental impact can provide a competitive edge.
• Sustainability Initiatives: Implementing sustainable practices aligns with global trends and enhances SFL's reputation, potentially attracting environmentally conscious charterers.

SFL Corporation Ltd. (SFL) possesses several competitive advantages that position it for growth:

• Diversified Fleet: SFL's diversified fleet, comprising various vessel types, allows it to cater to a wide range of shipping needs and mitigate risks associated with specific market segments.
• Strong Financial Position: A solid financial position enables SFL to invest in new vessels, pursue strategic acquisitions, and weather market downturns.
• Experienced Management Team: An experienced management team with a proven track record in the shipping industry provides strategic direction and operational expertise.

For insights into the company's guiding principles, explore: Mission Statement, Vision, & Core Values of SFL Corporation Ltd. (SFL).