SFL (NYSE:SFL) reported fourth-quarter 2025 revenues of $176 million and an EBITDA-equivalent cash flow of $109 million, as management highlighted continued fleet stability and a strengthened charter backlog alongside a series of tanker-related transactions that created both gains and U.S. GAAP earnings volatility.
Quarterly results and dividend
Chief Executive Officer Ole Hjertaker said SFL declared its $0.20 quarterly dividend, which he described as the company’s 88th consecutive dividend. Over the past 12 months, SFL generated $450 million in EBITDA, reflecting “strength and stability” in operations, according to management.
Suezmax tanker transactions drove gains and a GAAP loss
A key theme of the call was SFL’s December transactions involving four Suezmax tankers. Hjertaker said the company agreed to sell two 2015-built Suezmax tankers (acquired in 2022 for $47 million per vessel) to a third party for approximately $57 million per vessel, with a profit-sharing arrangement with the charterer. One vessel was delivered in December, producing a book gain of about $11.3 million in the fourth quarter. Management said the net cash effect after debt repayment and profit share was approximately $26 million. The second vessel was delivered early in the first quarter of 2026, and SFL expects a similar gain to be recorded in Q1.
In parallel, SFL agreed to terminate charters on two 2020-built, Korean-built Suezmax tankers in exchange for $11.5 million per vessel in compensation, rather than selling those ships. Hjertaker said SFL opted to retain the newer vessels because they are fuel-efficient, recently dry-docked, and more attractive for future long-term charters.
However, management emphasized that under U.S. GAAP the settlement compensation was expensed in the fourth quarter, which “turned a net profit into a net loss for the quarter,” despite what Hjertaker characterized as a strong return on investment. The company said it now carries the two retained Suezmaxes at $55 million on the books, while broker indications place charter-free values above $80 million.
Operational performance and fleet update
Chief Operating Officer Trym Sjølie said SFL ended the quarter with 57 maritime assets (vessels, rigs, and contracted newbuildings) after the Suezmax sales. The fleet consists of:
- 2 dry bulk vessels
- 30 container ships
- 14 large tankers
- 2 chemical tankers
- 7 car carriers
- 2 drilling rigs
Sjølie reported 4,808 operating days in the quarter and overall shipping fleet utilization of about 98.6%, or 99.8% when adjusted for unscheduled technical off-hire only. Two vessels underwent scheduled dry dockings at a cost of about $4.2 million.
He also noted that a chemical tanker entered a shipyard for upgrades to its LNG dual-fuel system to better handle gas boil-off, with a sister vessel scheduled for similar upgrades in the first quarter. Sjølie said all six of SFL’s LNG dual-fuel vessels are operating on LNG, aligning with the company’s emissions-reduction ambitions.
Segment cash flow mix and GAAP reconciliation
Chief Financial Officer Aksel Olesen described a “performing illustration” of cash flows not prepared under U.S. GAAP, intended to reflect underlying performance excluding extraordinary and non-cash items. SFL generated approximately $176 million of charter hire during the quarter, including:
- $81 million from container ships, including profit share related to fuel savings on seven large container vessels
- $26 million from car carriers, up from $23 million in the prior quarter as all vessels returned to service following scheduled dry docking
- $42 million from tankers, down from $44 million due to scheduled dry docking
- $2.7 million from dry bulk (two remaining Kamsarmax vessels), equating to roughly $15,000 per day per vessel
- $23 million from energy assets, mainly the Linus rig on contract with ConocoPhillips through May 2029
Net operating and G&A expenses were approximately $67 million, resulting in an adjusted EBITDA of about $109 million, in line with the third quarter.
On a U.S. GAAP basis, operating revenues were approximately $176 million versus $178 million in the prior quarter. The quarter included non-recurring and non-cash items, including the $11.3 million gain on the Suezmax sale and $23 million settlement compensation related to the two Suezmax charter terminations. SFL also cited mark-to-market impacts from hedging derivatives ($600,000) and equity investments ($700,000), and a $200,000 increase in credit loss provisions. As a result, SFL reported a net loss of about $4.7 million, or $0.04 per share.
Financing, newbuild capex, and offshore update
At year-end, SFL had $151 million in cash and cash equivalents and $46 million available under committed credit facilities. Olesen said the debt facility related to the Hercules rig matured at year-end and was repaid using balance sheet cash, leaving the rig debt-free at quarter-end. Management said it has negotiated a new $100 million financing facility for Hercules, expected to be executed in the first quarter subject to customary closing conditions.
SFL’s remaining capital expenditures on five container newbuildings total about $850 million and are expected to be funded through a combination of pre- and post-delivery financing. Olesen said the company is seeing “very strong interest” from lenders. Book equity ratio at quarter-end was approximately 26%.
On offshore, Hjertaker said the harsh-environment rig Linus is performing well on its long-term contract with ConocoPhillips, while Hercules remains warm-stacked in Norway and has been idle since November 2024. Management cited recent industry developments—including the announced Transocean-Valaris merger and a new three-year contract in Norway for a comparable harsh-environment rig starting in 2027—as supportive of improving fundamentals, but said it could not comment on specific Hercules discussions.
During Q&A, management also addressed the SFL Composer, saying the vessel suffered a collision during the third quarter while heading into dry dock but did not lose time due to an available yard slot, with repairs and related off-hire covered by insurance. The vessel is back in service with Volkswagen and operating in the Atlantic, according to the company.
About SFL (NYSE:SFL)
Ship Finance International Limited (NYSE: SFL) is an independent owner of modern, large-size ocean-going vessels that provides finance and leasing services to the global shipping industry. The company’s fleet encompasses a diversified mix of crude oil tankers, product and chemical tankers, liquefied natural gas (LNG) carriers, dry bulk carriers, container vessels and floating production storage and offloading (FPSO) units. By structuring long-term charter agreements and bareboat leases with major oil companies, commodity traders and offshore operators, Ship Finance International seeks to deliver stable cash flows and risk-adjusted returns for its shareholders.
In its core business, Ship Finance International acquires or finances vessels through forward sales agreements and then charters them out under fixed-rate contracts, typically ranging from five to 20 years in duration.
