HAMILTON, Bermuda - SFL Corporation Ltd. (NYSE: NYSE:SFL), a global maritime industry player, has announced a public offering of 8 million common shares, with an additional over-allotment option for underwriters to purchase up to 1.2 million shares. The proceeds from this offering are slated for general corporate purposes, which may include the acquisition of vessels.
The offering is being managed by Morgan Stanley (NYSE:MS), serving as the sole bookrunning manager, and BTIG, LLC, acting as the lead manager. Details regarding the offering will be available through a prospectus supplement and an accompanying base prospectus, as part of a registration statement filed with the U.S. Securities and Exchange Commission (SEC) and currently effective.
Interested parties can access these documents, once they are available, on the SEC's website. Copies can also be requested from the offices of Morgan Stanley and BTIG, LLC.
This move comes as SFL, known for its diverse fleet that includes tankers, bulkers, container vessels, car carriers, and offshore drilling rigs, continues to pay dividends each quarter since its initial listing on the New York Stock Exchange in 2004. The Company's long-term distribution capacity is bolstered by a portfolio of long-term charters and has seen significant growth in the asset base over time.
The press release includes forward-looking statements, which are subject to various assumptions and inherent uncertainties. While the Company believes these assumptions were reasonable, they acknowledge that unforeseen factors could lead to material differences in actual results.
The offering is subject to market conditions, and there will be no sale of these securities in jurisdictions where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This news is based on a press release statement from SFL Corporation Ltd.
In other recent news, SFL Corporation reported robust Q1 2024 results, with total charter revenues reaching $236 million, marking a 13% increase from the previous quarter. The company's EBITDA equivalent cash flow rose to approximately $152 million, and net income was reported at around $45 million. SFL Corporation also announced an increase in its quarterly dividend to $0.27 per share and highlighted a significant charter backlog valued at approximately $3.6 billion.
In addition, SFL Corporation has recently entered into new 5-year charter agreements for four 8,700 TEU container vessels, extending the company’s fixed rate charter backlog by approximately $240 million. These vessels will undergo enhancements to increase their cargo capacity to 9,500 TEU and introduce new energy efficiency features, at an estimated cost of around $20 million.
Furthermore, the company plans to expand its fleet with the addition of five new 16,800 TEU container vessels, each equipped with LNG dual-fuel propulsion, representing an investment of approximately $1 billion. These vessels are scheduled for delivery in 2028 and will be chartered for a minimum of 10 years to a leading liner company, contributing roughly $1.2 billion to SFL's charter backlog.
These recent developments reflect SFL Corporation's ongoing commitment to strategic growth and maintaining a strong presence in the maritime industry.
InvestingPro Insights
As SFL Corporation Ltd. embarks on its latest common shares offering, the company's financial health and market performance offer key insights for potential investors. With a market capitalization of approximately $1.76 billion, SFL demonstrates a significant presence in the maritime industry. The firm's Price-to-Earnings (P/E) ratio stands at 14.35, which aligns with industry standards, reflecting its earnings relative to its share price. When adjusted for the last twelve months as of Q1 2024, the P/E ratio sees a slight increase to 15.04, suggesting a stable earnings outlook.
Investors seeking long-term value may find SFL's consistent dividend payments appealing. The company has upheld its commitment to shareholders by maintaining dividend payments for 21 consecutive years. The gross profit margin of 61.87% for the last twelve months as of Q1 2024 underscores the company's ability to manage its direct costs effectively, which is a testament to its operational efficiency.
Despite a robust gross profit margin, SFL operates with a significant debt burden, as noted in one of the InvestingPro Tips. This is a crucial factor for investors to consider, as it may affect the company's financial flexibility and future growth potential. Moreover, the fact that two analysts have recently revised their earnings estimates downwards for the upcoming period could signal potential headwinds or a more conservative outlook on the company's financial performance.
For investors interested in a deeper dive into SFL's financials and market standing, InvestingPro offers additional insights and tips to help make informed decisions. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and uncover many more InvestingPro Tips that can guide your investment strategies.
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