SFL - Q1 2023

Transcript

Operator (participant)

Good day, and thank you for standing by, and welcome to Q1 2023 SFL Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question, you will need to press star one on your telephone. I would now like to end the conference over to Ole B. Hjertaker, CEO. Please go ahead, sir.

Ole B. Hjertaker (CEO)

Thank you, and welcome to SFL's first quarter conference call. I will start the call by briefly going through the highlights of the quarter. Following that, our CFO, Aksel Olesen, will take us through the financials of the. The call will be concluded by opening up for questions. Our Chief Operating Officer, Trym Otto Sjølie, will also be present for the Q&A session. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expect, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not guarantees of future performance.

These statements are based on our current plans and expectations and are inherent subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, but are not limited to, conditions in the shipping offshore and the credit markets. You should therefore not place undue reliance on these forward-looking statements. Please refer to our filings for the Securities and Exchange Commission for more detailed discussions over risks and uncertainties which may have a direct bearing on our operating results and our financial condition. Thank you. The total charter revenues were $182 million in the quarter, which were down from the previous quarter, primarily due to one rig out of service and lower dry lease rates in the first quarter.

The previous quarter also included a $10 million one-off payment relating to the Seadrill restructuring. The vast majority of revenues were from vessels on long-term charters and around 14% from vessels employed on short-term charters and in the spot market. After the sale of the spot traded tankers, the long-term charter ratio will increase further. The EBITDA equivalent cash flow in the quarter was approximately $110 million, and over the last 12 months, the EBITDA equivalent has been $495 million in total. The net income came in at around $6 million in the quarter, or $0.05 per share. This was significantly lower than the fourth quarter and primarily caused by the drilling rig, Hercules, which had no revenues in the quarter but with full operating expenses, while undergoing a scheduled comprehensive special survey and upgrades.

There were also some one-off, mark-to-market effects relating to interest and currency swaps after refinancing bonds in the quarter. The announced dividend of $0.24 per share is in line with the fourth quarter and represents a dividend yield of around 11% based on closing price on Friday. This is our 77th quarterly dividend. Over the years, we have paid more than $2.6 billion in total and more than $29 per share. We have a robust charter backlog supporting continued dividend capacity going forward. Our fixed rate backlog continued to increase and stands at approximately $3.7 billion from owned and managed vessels after recent charters, providing continued cash flow visibility going forward.

Importantly, the backlog figure excludes revenues from the vessels traded in the short-term market and also excludes future profit share optionality, which we are seeing can contribute significantly to our net income. We are very pleased to report extended charters with Volkswagen for our two car carriers, SFL Conductor and SFL Composer, which are currently so-called front runners for the dual fuel new builds to be delivered later this year to Volkswagen. We are very happy with the performance. We have agreed to extend the charters for a minimum period of three years, adding approximately $155 million to the charter backlog.

Operating and financial expenses are not affected, EBITDA contributions increases four-fold, and net cash flow per share after financing increases from around $0.06 per year to around $0.36 on these vessels alone. The expansion and new charter rate will be effective from the time the two new build dual fuel vessels are delivered on their respective 10-year charters to Volkswagen, currently estimated to the third quarter and the fourth quarter this year. We have also recently announced a new shorter contract for Hercules in Namibia, back-to-back with the contract for Exxon in Canada. The new contract is with a subsidiary of Galp Energia for two wells, plus an optional well testing. This contract adds more than $50 million to the backlog, and the rig will then be open for new contracts from the second quarter 2024 onwards.

The quarter was very busy on the financing side with more than $1 billion in new financings, including our new build dual fuel car carrier program, sustainability-linked notes, and refinancing of our drilling rigs. With this funding, virtually all our near-term financing and capital expenditure requirements have been secured at very attractive terms. We continue to renew our fleet and divest of older tankers trading in the spot market. As second-hand prices have increased recently on these assets, along with limited long-term chartering opportunities for older assets, we have decided to sell the two Suezmax tankers built 2009 and 2010, and the two chemical carriers built 2008. This is in line with the strategy of selling older vessels and reinvesting in newer and more fuel efficient vessels.

The Suezmax tanker, Glorycrown, was delivered to new owners in March, and the Everbright was delivered in April, and the chemical tanker, SFL Weser, was delivered in April, and SFL Elbe is expected to be delivered in June. Following the sale of these four vessels, we will not have any tankers vessels trading in the short-term market. Furthermore, the board of directors of the company has authorized the repurchase of up to an aggregate of $100 million of SFL shares. Purchases may be made at their discretion in the form of open market repurchase programs, privately negotiated transactions, accelerated share repurchase program, or a combination of these methods.

The timing and amount of any repurchases will depend on legal requirements, market conditions, stock price, alternative uses of capital availability, and the company's determination that share repurchases are in the best interest of its shareholders and other factors. We see this as a tool in the shareholder value toolbox and would note that the company is not obligated under the terms of the program to repurchase any of its common share. The buyback program is valid until the 30th of June 2024. Over the years, we have changed both fleet composition and structure, and we now have 74 maritime assets in our portfolio, and our backlog from owned and managed shipping assets have increased to $3.7 billion.

Over the years, we have gone from a single asset class chartered to one single customer to a diversified fleet in multiple counter parties, and the fleet composition has varied from 100% tankers to nearly 60% offshore 10 years ago to container vessels now being the largest segment with just under 50% of the backlog. Most of the vessels are on long-term charters, and in the fourth quarter, 93% of charter revenues from our shipping assets came from time charter contracts and only 7% on bareboats or dry lease. In addition to fixed rate charter revenues, we have had significant contribution to cash flow from profit share over time, both relating to charter rates and fuel savings. Last 12 months, the aggregate profit share has been more than $28 million, with around $5 million in the first quarter.

The strength of our counter parties and diversification is key when we assess a portfolio on quality of our contracted backlog. The list speaks for itself that market-leading operators like Volkswagen, Maersk, Hapag-Lloyd, ConocoPhillips, P66, and now lately, Exxon and Galf, to name a few. Relatively few of our customers are intermediaries, where we have less visibility on the use of the assets and quality of operations. Strategically, this also gives us access to more deal flow opportunities, such as the repeat business with several of our blue chip customers, like Volkswagen now recently. Our strategy has therefore been to maintain a strong technical and commercial operating platform in cooperation with our sister companies in the Seatankers Group. This gives us the ability to offer a wider range of services to our customers, from structured financing to full service time charters.

With full control over vessel maintenance and performance, including energy efficiency and emission minimizing efforts, we can impact improvements to our vessels throughout the life of the assets, and not only be passively owning vessels employed on bareboat where the customers may not always have an incentive to make such improvements. In addition, we can retain more of the residual value in the assets when we charter out the time charter basis. In the current environment, with rising raw material costs and inflation driving replacement costs for vessels, this value is for the benefit of SFL and our stakeholders. For bareboat deals or deals where the charterer have purchase option, this value is usually retained by the charterer through fixed price purchase options.

In light of the significant capital expenditure in the drilling of Hercules, I would like to comment some more on the rig and market opportunities. As you know, SFL owns two harsh environment drilling rigs. The 2014 build jack-up rig, Linus, and the 2008 build semi-submersible ultra deepwater rig, Hercules, which originally we chartered to Seadrill on bareboat terms. We took them back in connection with Seadrill's last Chapter 11 bankruptcy process. The Linus remains on its long term contract with ConocoPhillips Scandinavia until 2028, and is managed by Odfjell Technology on our behalf. Hercules was redelivered to us in December and is currently out of service in connection with a scheduled special periodic survey or SPS and upgrade works in Norway, and is managed by Odfjell Drilling.

There were no revenues on the rig in the first and most of the second quarter while operating costs accrue. We estimate the total cost of the SPS and upgrades to approximately $100 million. The SPS is expected to be completed in June. It has taken longer and become more expensive than originally estimated, partly due to the condition of the rig at time of redelivery. We are reclaiming some of the expenses from Seadrill. This is expected to take time as it involves a court process in Norway. Irrespective of that, when the work is finished on the rig, the rig will move to Canada under its own power and commence a contract with ExxonMobil Canada to drill one well.

The duration is estimated to approximately 135 days, including mobilization, the contract has an estimated value of around $50 million. Thereafter, the rig will move to Namibia and commence a contract with a subsidiary of Galp Energia for two wells, plus an optional well testing. Excluding optional days, the duration will be approximately 115 days, including mobilization with an estimated contract value of another $50 million. The rig will then be open for new contracts from the second quarter 2024 onwards. This rig is one of the only a handful harsh environment, ultra deepwater, semi-submersible rigs available. Market analysts are positive to market prospects based on recent tender activity and a tight supply demand balance. There is also a realization in the market that there has been a fundamental under-investment in the segment for a number of years.

The harsh market prospects for 2024 and 2025 is particularly promising, where we have seen several contracts in excess of $400,000 per day plus mobilization fees that may increase net rate further. Depending on geographic location, this may imply annual EBITDA contribution in excess of $80 million when the rigs are working, and further rate increases will go directly to net cash flow. The graph on this slide illustrates the effect of the reduced activity level from 2015 and the impact on day rates. We are now back to the tight supply demand characteristics we saw from, you know, up until 2015, but based on a significantly lower rig count than at the last peak.

Should market rates come back to the $600,000 per day level the oil company have been used to be paying in the past. As we can see on the right side on the slide, EBITDA for the rig would be closer to $150 million per year instead. With that, I will give the word over to our CFO, Aksel Olesen, who will take us through the financial highlights for the quarter.

Aksel Olesen (CFO)

Thank you, Hjertakei. On this slide there's shown a pro forma illustration of cash flows for the first quarter. Please note that this is only a guideline to assess the company's performance and is not in accordance with U.S. GAAP, and also net of extraordinary and non-cash items. The company report generated gross charter hire of approximately $182 million in the first quarter, including approximately $5 million of profit share, with approximately 86% of the revenue coming from our fixed charter rate backlog, which currently stands at $3.7 billion, providing us with strong visibility on our cash flows going forward. In the first quarter, the liner fleet generated gross charter hire of approximately $97 million, including approximately $5 million in profit share related to fuel savings on seven of our large container vessels and one car carrier.

Our tanker fleet generated approximately $47 million in gross charter hire during the first quarter, compared to approximately $49 million in the previous quarter. During the quarter, SFL had two Suezmax tankers and two smaller chemical tankers trading in the spot and short-term charter markets. The net charter hire from these vessels was approximately $10 million. These four vessels were sold during the quarter and only one vessel is yet to be delivered to its new owners. The company has 15 dry bulk car-carriers, of which eight were employed on long-term charters during the quarter. The vessels generated approximately $20 million in gross charter hire in the first quarter. Seven of the vessels were employed in the spot and short-term market and contributed approximately $4.6 million net charter hire during the quarter. SFL owns two harsh environment drilling rigs, the jackup rig Linus and the semi-submersible rig Hercules.

The Linus is currently on a long-term contract with ConocoPhillips Skandinavia until the end of 2028. During the first quarter, the rig generated approximately $19 million in contract revenues, in line with the fourth quarter, when adjusted for approximately $10 million capture payment for previously reduced charter hire from Seadrill during Chapter 11, which was received in the fourth quarter. The harsh environment semi-submersible rig Hercules was previously on variable charter to Seadrill. For the first time since redelivery to SFL in December 2022, we record a full quarter of operating expenses on Hercules, which were approximately $7 million.

We also expect to record a similar level of operating expenses for the rig in the second quarter. There has been no revenue from the Hercules during the quarter, as the rig is currently undergoing a special periodic survey and upgrades before mobilizing for a drilling contract with ExxonCanada, expected to happen at the end of the second quarter. Our operating and G&A expenses for the quarter was $75 million. That also includes the operating cost of the Hercules. This summarizes an adjusted EBITDA of approximately $110 million in the first quarter compared to $135 million in the previous quarter. This result is down predominantly due to temporary yard stay of the Hercules rig and a $10 million lump sum received on Linus in the previous quarter.

We move on to the profit and loss statement as reported on the U.S. GAAP. As we have described in previous earnings calls, our accounting statements are different from those of a traditional shipping company. As our business strategy focuses on long-term charter contracts, a large part of our activities are classified as capital leasing. Therefore, a significant portion of our charter revenues are excluded from U.S. GAAP operating revenues. This includes repayment of investment in sales type, direct financing leases and lease-like assets, and revenues from entities classified as investments in associates for accounting purposes. The first quarter report total operating revenues according to U.S. GAAP of approximately $173 million, which is less than approximately $182 million of charter hires actually received for reasons just mentioned.

During the quarter, the company recorded profit share income of approximately $5 million from fuel savings on some of the large container vessels and a car carrier. As mentioned, we record a full quarter of operating expenses on Hercules, and we did not record any revenue on the rig due to its temporary yard stay. Expect the rig to be recording its full first quarter of revenue in the third quarter. During the quarter, the company recorded a gain from the sale of the Supramax tanker Glorycrown of $10.2 million, and recorded an impairment of $7.4 million relating to the sale of the chemical tankers Elbe and Elbe. The company recorded a $7.4 million non-cash loss due to negative mark-to-market on derivatives linked to SFL bonds acquired during the quarter.

Overall, and according to U.S. GAAP, the company reported a net profit of approximately $6.3 million or $0.05 per share. Moving on to the balance sheet. At quarter end, SFL had approximately $185 million of cash and cash equivalents. Furthermore, the company had marketable securities of approximately $7 million with some market prices at the end of the quarter. In January, SFL issued a new $150 million sustainability-linked bond with maturity in 2027. Part of the proceeds were applied against a convertible note, which was repaid in cash at its maturity in May, as well as against repurchase of the NOK 23 bonds maturing in September. During the first quarter, SFL closed four JOLCO financing arrangements, one for each of our four car carriers currently under construction for delivery in 2023 and 2024.

The combined financing amount is approximately $300 million, corresponding to the yard contract price. Consequently, the arrangements will have a positive cash flow effect at delivery of the vessels equivalent to yard installments paid to date for approximately $100 million. Additionally, the company entered into a pre-delivery $47 million bank loan facility for two vessels to be delivered in 2024, further enhancing the company's liquidity position during the period up to the delivery of the vessels. We also signed and drew down a $145 million financing facility on four Supramaxes during the quarter. Subsequent to quarter end, SFL closed the refinancing of the semi-submersible drilling rig, Hercules, and the jack-up drilling rig, Linus. The financing amount was $150 million per rig, with maturity in the fourth quarter of 2025 and the second quarter of 2026 respectively.

Additionally, SFL also closed two JOLCO financing arrangements, one for $45 million for the car carrier Arabian Sea with a term of approximately six years, and one for $38 million for the container vessel Maersk Pelepas for approximately seven years. As the vessels were debt-free, the transactions will have positive cash flow effects in excess of $80 million combined in the second quarter. Based on the Q1 numbers, the company has booked equity ratio of approximately 28.3%. To conclude, the board has declared a cash dividend of $0.24 for the quarter. This represents a dividend yield of approximately 11% based on the closing share price last Friday. The board has also authorized a new share buyback program with validity until the end of Q2, 2024.

Our fixed rate charter backlog currently stands at $3.7 billion, which provides us with strong visibility on the cash flow going forward. With the latest financing facilities concluded, the company's new build and capital expenditure program is now fully financed, and material all of the short-term debt is refinanced with long-term loans. In summary, SFL has secured new financing arrangements so far in 2023, totaling approximately $1 billion. The amount is split across 12 different facilities and a wide array of products, securing a continued well-diversified funding platform for the company going forward. Furthermore, with the recent contract award for our two car carriers on contract with Volkswagen, with commencement in Q3 and Q4 this year, we estimate the EBITDA from these vessels to approximately $47 million per year, a significant increase from the existing contracts, which was approximately $9 million per year.

Finally, we announced a new contract award for a harsh environment semi-submersible drilling rig, Hercules, confirming a tightening supply demand balance and a strong market outlook, which is now materializing into attractive day rates. With that, I give the roll back to the operator, who will open the line for questions.

Operator (participant)

Ladies and gentlemen, we now begin the question and answer session. As a reminder, if you wish to ask a question, please press star 11 on your telephone. We are now taking the first question. Please stand by. The first question from Sharif El-Maghrabi from BTIG. Please go ahead. Your line is open.

Sherif Elmaghrabi (Equity Research Associate)

Hi, good morning, good afternoon. Thanks for taking my question.

Aksel Olesen (CFO)

Yes, hi.

Sherif Elmaghrabi (Equity Research Associate)

... looking past the most recent contract for the Hercules, what are the long-term employment prospects for that rig? Is the plan to have it stay in Namibia?

Ole B. Hjertaker (CEO)

Yeah, thanks. We, the one contract after ExxonMobil in Canada is in Namibia, and as you can imagine, it's a fairly long transit, but the oil companies are more than happy to compensate for that. This rig can work in multiple places. We are, of course, opportunistic in terms of where we want to employ the rig in order to maximize long-term cashflow. Of course, our objective is to secure longer-term employment for the rig over time, but for now we think that the timing is better right now to have it on relatively shorter contracts as we see the charter rates coming up fairly sharply.

As you may also have seen on the graph we included in the presentation, where we have seen the daily rates coming up, very fundamentally over the last year or so.

Aksel Olesen (CFO)

That said, I mean, in terms of location, we are, I mean, there are tenders out in several geographic locations in North America. You have several in the North Sea, and Namibia has become a hotspot as well. You see Petrobras also requiring more rigs. You have recently seen two North Sea rigs going down to Australia. I would say, I mean, the opportunities are currently worldwide.

Sherif Elmaghrabi (Equity Research Associate)

That's helpful. Thank you. Looking at the tanker fleet, I see two product tankers are rolling off next year, and tanker fundamentals are looking pretty constructive recent weakness notwithstanding. Are you starting to have conversations about work for those vessels? Really, how are charterers looking at crude and product tankers right now?

Ole B. Hjertaker (CEO)

Yeah. I think, you know, looking at the two product tanker you're mentioning, they are the two chartered to P66. I think they're very happy with the vessels. They fit very well in their program as we understand. Also, you know, the charter, optional charter rates and the charter rate they're on today is way under the spot market today. So if you ask anyone certainly now, you know, you wouldn't hesitate to extend the charters. These charters, you know, these extension options are of course in the charterers options. We have to wait and see if they exercise them. If not, I would say it would be an upside for us.

Sherif Elmaghrabi (Equity Research Associate)

That's very helpful. I'll turn it over. Thank you.

Ole B. Hjertaker (CEO)

Yeah, thank you.

Operator (participant)

Thank you for your question. We are now taking the next question. Please stand by. The next question from Richard Diamond for Castlewood Capital. Please go ahead. Your line is open. Richard Diamond, your line is open.

Richard Diamond (Principal)

Good morning, good afternoon. I wanna commend you on the buyback. Given that there's significant cognitive dissonance regarding the stock price and the outlook for the company, it's really SFL is in the best shape it's been, both in chartering operations and financing since I started following the company in 2014. I wondered if you could provide some color on how you visualize, you know, deploying the buyback now that it's been approved. I have one more question.

Ole B. Hjertaker (CEO)

Thank you, Richard. And thanks, you're speaking to the choir here, obviously. No, we think that having multiple, call it tools in the investor call it or value enhancement, the toolbox is good for the company. As you know, we've had sort of dividend reinvestment plans and ATM call it optionality sort of in that toolbox that we have used, you know, rarely, sparingly, but we have used it in the past. We just renewed that now, and we believe that also having share repurchase optionality as part of our, I would say, capital allocation, you know, strategy, you know, is wise. We cannot give you sort of specific numbers for how much of that we will utilize, if any. I mean, that we cannot disclose.

Clearly, you know, we have seen the share price coming down in a market where we think the underlying, you know, for, you know, call it value backing for I would say most shipping stock with replacement cost of the assets coming off, and also that we own most of the residual in these assets, is a clear benefit for SFL. Just illustrated by the car, the renewal of the car carriers, where if this had been more like a normal sort of one of those bareboat charters that, you know, maybe we could have done some years ago, you know, the charterer would have kept that, all that value.

Instead, we own these vessels, and we keep that residual value, which we think is the much better for our stakeholders. The same thing with the drilling rig, Hercules, that we spent some time on here on the call. We think that the market dynamics there is very interesting. Of course, it's all about timing. It's a very expensive asset. You know, the SPS process that we are going through now is of course very expensive for us. We still believe that this will be a very, you know. This could really contribute to, you know, earnings per share, you know, from later in the year and onwards.

While we see there is softness in the share price, you know, having opportunity to buy back from time to time, you know, could enhance value, long-term value for our stakeholders. I hope that was, you know, vague enough, but precise enough for you, Richard.

Richard Diamond (Principal)

Absolutely. The second question is, you know, as you look over shipping markets and you decide where you wanna allocate capital, what do you think are the most interesting areas today?

Ole B. Hjertaker (CEO)

Yeah, it's a tricky question. I mean, we look at market opportunities across the board, you know, across all these segments. We see opportunities everywhere, but given where segments are in their cycle, you know, you would structure the deals differently. Tanker market, for instance, had come up quite rapidly with values, which means that, you know, the deal we would do a year and a half ago, where we would have, you know, where we would accept effectively, you could say, a lower rate in a deal, but with more optionality on the upside. Now we would probably look more for fixed rate and to ensure that we take it down to a more mid-level depreciated, you know, book or market value at the end of the charter period.

At the same time, we see an underlying value, I would say the underlying, you know, the floor here is coming up because, you know, there is a reduced shipbuilding capacity out there, and the values measured in $ are coming up, both new building prices and also secondhand prices now over time. That means that what you pay now maybe may have a, you know, the, you could say call it an inflation hedge in itself, owning a maritime asset out there. That is mitigating some of that risk that you would take on if you invest a little higher in the cycle than our preference. Yeah, I would say it's more down to structuring. We look at deals now on the tanker side.

We look at deals, you know, on the dry bulk side. We look also in the container segment. Although, of course there we are quite careful. You know, the car carrier market has been quite interesting over the last two years. Across the board, you know, we are also, we're also patient. We don't feel that we need to invest a certain amount every single quarter. It's all about finding the right deals and deploying the capital when we think that the dynamics are as right for us and our stakeholders, which means that maybe a quarter or two we won't invest. Then when we see the right deal, we can invest a lot more. That is the balance.

You know, and then also back to, you know, the share repurchase program, having that also then as a tool, for capital allocation, hopefully will benefit shareholders long term.

Richard Diamond (Principal)

Okay.

Operator (participant)

Thank you for your question. We are now taking the next question. Please stand by. The next question from Climent Molins from Value Investors Edge. Please go ahead. Yeah.

Climent Molins (Head of Shipping Research)

Hi. Thank you for taking my questions. I wanted to start with a modeling question about the Hercules. You've lined up two strong short-term contracts, and I was wondering, do mobilization costs come on top of the contracted revenues you mentioned on the press releases?

Ole B. Hjertaker (CEO)

The mobilization contract is a part of the contract amount mentioned, correct, yeah. Depends on the, the.

Climent Molins (Head of Shipping Research)

Right.

Ole B. Hjertaker (CEO)

Yeah, it becomes you basically have a certain base that we calculate based on a certain mobilization and demob, yeah.

Climent Molins (Head of Shipping Research)

All right, that's helpful. After recent disposals on the tanker space, you've greatly reduced your overall spot exposure, but you still own some bulkers trading on spot. How should we think about those going forward? Are they, let's say, non-core, or are they still an important part of your fleet?

Ole B. Hjertaker (CEO)

It's a good question. I would say any asset, you know, in our shop, anything is for sale at the right price, if we think that it's beneficial for shareholders. Generally, I would say that those vessels are trading in the market. Of course, we did own seven handysize dry bulk vessels, you know, in the past, and we sold them at what we believe was at a, you know, optimistically sort of good timing. For now, we keep these vessels, we keep trading them and, you know, they generate good cash flow and certainly a good return on invested capital.

Uh, but, uh, whether or not we may sell them, uh, at some point, uh, you know, that, that we cannot say. There is no-- They are definitely not identified and defined as, uh, a sales candidates or, or being marketed as such in the market. But, uh, but if you, if you, if you have a lot of cash and, and, and want to invest, I mean, we would be happy to entertain an offer by you.

Climent Molins (Head of Shipping Research)

All right, that makes sense. Thank Thank you for taking my questions.

Ole B. Hjertaker (CEO)

Thank you.

Climent Molins (Head of Shipping Research)

You're welcome.

Operator (participant)

Thank you for your question. There are no further question at the moment. I will hand back the conference for closing remarks.

Ole B. Hjertaker (CEO)

Thank you. I would like to thank everyone for participating in the conference call. If you have any follow-up questions, there are contact details in the press release or you can get in touch with us through the contact pages on our webpage, www.sflcorp.com. Thank you.

Operator (participant)

That concludes the conference for today. Thank Thank you for participating. You may all disconnect.