Earnings Analysis November 6, 2026

SFL Corp Ltd ($SFL) Q3 2026 Earnings Analysis: Revenue Beats Estimates · No Guidance Provided

Earnings Report

Revenue: $201.58 million (Q3 2026 consolidated, US GAAP, +13.1% YoY, vs. $172 million expected) ✅ Beat

EPS (Earnings Per Share): $0.17 (vs. $0.07 expected, +135.7%) ✅ Beat

Guidance: Not provided · No outlook provided for next quarter or annual revenue/EPS

Stock Reaction: -4.9% (Based on BMO closing price)

Highlights

Long-term Contracts: Extended the charter period for 6 container ships by 7 years in September 2026.

Dividend Continuity: Paid $0.22 per share in Q3 2026, marking the 91st consecutive quarterly dividend.

New Vessels: Secured 3 ammonia carriers with long-term charter contracts following the end of the quarter.

Chartering is a contract where a vessel is leased out in exchange for rental income. Securing new vessels alongside charter contracts makes it easier to estimate future revenue. Company Announcement

Lowlights

Energy Deficit: The operating loss for the energy segment under US GAAP was $18.57 million in Q3 2026.

Includes Valuation Gains: Net income for Q3 2026 included approximately $13 million in derivative valuation gains.

Shipbuilding Cost Burden: The remaining investment for vessels under construction as of late September 2026 is approximately $1.7 billion.

Valuation gains are book profits arising from changes in asset prices and should be distinguished from recurring rental income. The company plans to fund the remaining vessel investment through cash on hand and secured loans. Earnings Report

What the Company Said

The company presented the extension of long-term charter contracts and the securing of charter contracts for new vessels as key achievements. Instead of revenue or profit outlooks, they explained contract expansion and vessel sale plans. Company Announcement

Market Reaction and Future Key Points

Although the stock price declined, it is difficult to pinpoint the exact cause of the decline based solely on the disclosed data. The burdens identified in the earnings results are the deficit in the energy segment and the upcoming shipbuilding costs to be paid. Earnings Report

It is necessary to monitor whether the operating loss in the energy segment decreases in the next quarter.

It is necessary to observe whether the scheduled sale of tankers is completed and cash flows in.

It is necessary to confirm whether collateral loans required for new vessel investments are secured.

Earnings Call Key Summary

We have summarized the key points from the SFL Corp Ltd earnings call.

[Bearish] Drilling Rig Preparation Burden: Operating expenses increased due to drilling rigs preparing for operations in Canada. The cost burden is expected to increase in the coming quarters as preparations continue. Why UST viewed this as bearish: Increased cost burden due to drilling rig preparation work. "The increase in costs is primarily due to increased operating expenses during the movement and preparation process of Hercules to fulfill the contract signed with SunCo in Canada, as well as increases in voyage costs and scheduled maintenance costs." (SFL Corp Ltd CFO)

[Bullish] Securing High Freight Rates Long-term: Long-term contracts for leasing tankers were signed at high prices. Even if market freight rates decline during the contract period, the agreed-upon lease rates can be received. Why UST viewed this as bullish: Secured higher lease rates through long-term contracts. "We have agreed to lease one of the vessels to a large oil company with an investment-grade credit rating for three years, and the contract rate is higher than the combined earnings of the two vessels last year." (SFL Corp Ltd CEO)

[Bullish] Buffer in Long-term Contract Expirations: The vessels currently leased under long-term contracts do not have a concentration of expirations in the near future. There is little immediate pressure to secure new customers or new lease rates. Why UST viewed this as bullish: There is a buffer until the next expiration of long-term contract vessels. "Looking at the vessels currently under long-term lease contracts, the next vessel to have its contract expire will be in 2028." (SFL Corp Ltd CEO)

[Neutral] Net Income Including Valuation Gains: This net income includes gains calculated from the increase in the value of investment assets. It is necessary to distinguish this from profits that involve actual cash inflows. Why UST viewed this as neutral: Valuation gains without cash inflow are included in net income. "This result includes valuation gains without cash inflow of approximately $13.3 million from derivatives and $1 million from equity investments." (SFL Corp Ltd CFO)