SFL lifts quarterly profit to $37.4m as charter backlog hits $5bn

SFL Corporation booked net income of US$37.4 million for the third quarter of 2026, up from US$33.8 million in the second quarter, while its fixed-rate charter backlog climbed to roughly US$5 billion. Operating revenue held broadly steady at US$201.6 million, against US$200.8 million the previous quarter, and earnings per share edged up from US$0.25 to US$0.26.

The shipowner generated adjusted EBITDA of US$122 million during the period. Vessel charter hire contributed US$178 million of revenue, with offshore drilling assets adding another US$23 million. SFL declared a quarterly dividend of US$0.22 per share — its 91st consecutive quarterly payout.

How much do containers contribute?

The containership portfolio produced US$85 million in revenue over the quarter. The segment operated approximately 2,300 days at 100% utilisation. Containerships account for 71% of the fixed-rate charter backlog.

SFL's container fleet numbers 32 vessels, including ships acquired but not yet delivered. The average remaining contract duration stands at 8.3 years, weighted by charter revenue and excluding extension options — a tenure few tonnage providers in the sector can match.

During the quarter, SFL agreed seven-year charter extensions covering six 15,400 TEU containerships. The extensions kick in when the vessels' existing employment arrangements expire in 2028 and 2029, extending the owner's income visibility deep into the next decade.

What new capacity is coming?

SFL confirmed the acquisition of two 8,800 TEU containership newbuildings, both scheduled for delivery in the second half of 2027. The ships come with minimum eight-year charters to a leading liner company. The purchase forms part of a wider investment package that also includes new Very Large Ammonia Carriers.

The broader portfolio now spans 66 maritime assets across the container, car carrier, tanker, gas carrier, dry bulk and offshore energy segments. SFL said 58% of its fixed contracted revenue is tied to investment-grade counterparties. The charter backlog deliberately excludes extension options, purchase or cancellation options and potential future profit-sharing income — keeping the US$5 billion figure conservative.

For liner operators and forwarders watching tonnage supply, the message is that mid-sized boxship capacity remains locked up in long deals. An 8.3-year weighted duration means those 32 vessels won't return to the spot market any time soon, tightening options for carriers needing flex tonnage toward the end of the decade.

How is SFL funding the fleet growth?

Liquidity stood at approximately US$272 million at quarter-end: US$111.9 million in cash and cash equivalents plus US$160 million in undrawn credit facilities. Remaining capital expenditure commitments total around US$1.7 billion, which the company expects to fund through available cash and secured credit facilities.

SFL also agreed to sell seven tanker vessels. The transactions should generate aggregate net cash proceeds of roughly US$275 million, with deliveries to the new owners split between the fourth quarter of 2026 and the first quarter of 2027 — recycling capital from tankers into the container and gas carrier growth segments.

With US$1.7 billion in commitments still to fund and a dividend streak now at 91 quarters, SFL enters 2027 with a fully contracted container fleet, fresh 15,400 TEU extensions starting in 2028-29, and two 8,800 TEU newbuildings arriving in the second half of next year to further stretch its backlog horizon.