Ship Finance International Limited (NYSE:SFL) Q2 2019 Earnings Conference Call August 20, 2019 10:00 AM ET
Ship Finance International Limited（纽约证券交易所代码：[SFL]）2019年第二季度收益电话会议2019年8月20日美国东部时间上午10:00
Ole Hjertaker - Chief Executive Officer
Aksel Olesen - Chief Financial Officer
Trym Sjølie - Chief Operating Officer
- Ole Hjertaker - 首席执行官
- Aksel Olesen - 首席财务官
- TrymSjølie - 首席运营官
Randy Giveans - Jefferies
Greg Lewis - BTIG
James Monigan - Citi
- Randy Giveans - Jefferies
- 格雷格刘易斯 - BTIG
- James Monigan - 花旗
Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Second Quarter 2019 Ship Finance International Limited Earnings Conference Call. At this time, all participants are in listen-only mode. There will be a presentation, followed by a question-and-answer session. [Operator Instructions] I must advise you, the conference is being recorded today, Tuesday, the 20 of August, 2019.
I would now like to hand the conference over to your first speaker today, Ole Hjertaker, CEO. Please go ahead.
女士们，先生们，下午好。 感谢您的支持，欢迎参加2019年第二季度船舶融资国际有限公司收益电话会议。 此时，所有参与者都处于只听模式。 将有一个演示文稿，然后是问答环节。 [操作员说明]我必须告诉你，会议正在记录，即2019年8月20日星期二。
我现在想把这次会议交给你今天的第一位发言人，首席执行官Ole Hjertaker。 请继续。
Thank you and welcome all to SFL's second quarter conference call. With me here today I have our CFO, Aksel Olesen; and Senior Vice President, André Reppen. I will start the call by briefly going through the highlights of the quarter and following that Mr. Olesen will take us through the financials and the call will be concluded by opening up for questions.
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 expects anticipates intends estimates or similar expressions are intended to identify these forward-looking statements.
These statements are based on our current plans and expectations and involve 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 conditions in the shipping, offshore and credit markets. For further information, please refer to SFL's reports and filings with the Securities and Exchange Commission.
The Board has declared a quarterly dividend of $0.35 per share. This is our 62nd quarter with profits and dividends and the dividend represents $1.40 per share on an annualized basis, or nearly 11% dividend yield, based on closing price of $12.82 yesterday.
Over the years, we have paid nearly $26 per share in dividends or more than $2.2 billion in total and we have a fixed rate charter backlog of $3.7 billion, which should support continued dividend capacity going forward. The total charter revenues was $152 million in the quarter with 90% of this from vessels on long-term charters and 10% from vessels employed on short-term charters and in the spot market.
The EBITDA equivalent cash flow in the quarter was approximately $121 million and last 12 months the EBITDA equivalent has been approximately $492 million. The reported net income for the quarter was approximately $28 million or $0.26 per share. This was after a non-cash impairment of $8.2 million relating to a Solstad Offshore claim and some non-cash mark-to-market movements on equity securities and interest rate swaps.
With the changes in U.S. GAAP from 2018, movements in mark-to-market value of all marketable securities will move through our P&L and impact net income. While the second quarter has been relatively quiet with stable performance, the last 18 months have been very active with multiple transactions. As a result of this, the EBITDA is up more than 12% compared to the second quarter of last year.
In the second quarter, we have added backlog by extending charters and upgrading vessels with scrubbers. Some of this is with a profit share feature, where we will receive a part of the benefit in fuel savings for vessels with scrubbers, which is not reflected in the backlog.
In addition to this, we have subsequent to quarter end acquired three additional small feeder vessels on similar terms as the 15 feeder vessels we acquired last year, with full payout charters expiring in 2025. The purchase price is confidential, but relatively marginal compared to a regular fleet and as a repeat deal, the transaction's cost are very low. And we continue building the relationship with one of our largest clients.
谢谢，欢迎所有人参加SFL的第二季度电话会议。今天在这里，我有我们的首席财务官，Aksel Olesen; AndréReppen高级副总裁。我将通过简要介绍本季度的重点开始电话会议，然后Olesen先生将带领我们完成财务工作，并将通过开放问题来结束通话。
Following the recent charter extensions, our charter backlog now stands at approximately $3.7 billion. We have nearly 90 vessels and rigs and the bulk of the recent transactions have been related to container vessels. Only one of the vessels remained from the initial fleet in 2004 and over the years we have changed both fleet composition and structure.
We had gone from a single asset class chartered vessel -- in fact, the company to -- and also one single customer to a diversified fleet and multiple counterparties. And over time, the mix of the charter backlog has varied from 100% tankers to nearly 60% offshore at one stage, to container vessels now being the largest segment with around 54% of the backlog.
We do not have a set mix in the portfolio. Focus is on evaluating deal opportunities across the segments and try to do the right transactions from a risk/reward perspective. Over time, we believe this will balance itself out and the fact that the tanker segment now is only 7% of the backlog is more a coincidence in my mind.
In addition, our strategy has been to maintain a strong technical and commercial operating platform in cooperation with our sister companies in the Seatankers group. This gives us stability to offer a wider range of services to our customer, from structured financing to full service time charters.
But more importantly, we also believe it gives us unique access to deal flow in our core segments. And unlike most other companies with a financing profile in the maritime world, more than 60% of our cash flow comes from vessels on time charters and less than 40% from bareboat chartered vessels.
After the latest acquisitions, SFL has a fleet of 48 container vessels and two car carriers. All our container vessels are employed on long-term fixed rate charters and therefore not exposed to short-term fluctuations in the market. We have recently increased the backlog by more than $160 million in connection with scrubber upgrades and the related charter adjustments to container vessels. And additional several vessels will be upgraded with scrubbers paid for by our customers.
Subsequent to quarter end, the company acquired three container vessels ranging from 2,400 TEU to 4,400 TEU. The vessels immediately commenced approximately 5.5-year bareboat charters to a leading container line until 2025, adding approximately $30 million to the backlog. The purchase price is confidential, but similar to the 15 vessels acquired in 2018, our exposure is near recycling values for the vessels and the transaction will amortize the ships effectively to zero over the charter period.
On the dry bulk side, we have 22 dry bulk vessels in the fleet with 13 larger vessels chartered out on long-term basis and seven Handysize vessels and two Supramax bulkers traded in the spot market. One of our long-term objectives is to combine stability and predictability in cash flows with optionality as we have seen over time that market volatility can generate super returns from time to time. We have a 33% profit split on top of the base rate of $17,600 per day, plus interest adjustment or around $18,500 per day currently on the charters to Golden Ocean.
我们已经从单一的资产类包租船 - 实际上是公司 - 以及单一客户转变为多元化船队和多个交易对手。随着时间的推移，包机积压的组合在一个阶段从100％油轮到近60％不等，现在是集装箱船最大的部分，约有54％的积压。
在季度结束后，该公司收购了三艘集装箱船，从2400 TEU到4,400 TEU。这些船只立即开始大约5。5年的光船租赁到一条领先的集装箱航线，直到2025年，为积压增加了大约3000万美元。购买价格是保密的，但与2018年收购的15艘船舶相似，我们的风险接近船舶的回收价值，交易将在租船期内有效摊销船舶至零。
There was not a profit split in the second quarter, but the market level currently is well above the profit share threshold, so prospects are better for the third quarter. The Kamsarmaxes and most of the Supramaxes are all on long-term fixed rate time charters, while the two remaining Supramaxes and seven Handysize dry bulk carriers continue to trade in the spot market. The rates achieved this quarter were approximately $6,900 per day for the Supras and $5,900 for the Handys. This is roughly in line with the previous quarter.
On the tanker side, SFL has nine crude oil products and chemical tankers, most of which are employed on long-term charters and the vessels represent only around 7% of the charter backlog. The tanker market has recently strengthened and is expected to be healthy for the remainder of 2019 as crude oil demand is forecasted to increase through the end of the year and a temporary reduction in vessel supply is expected as owners prepare for the upcoming implementation of IMO 2020.
SFL's two Suezmax tankers and two of the VLCCs will have scrubbers installed towards the end of the year. The crude oil tankers chartered to Frontline Shipping Limited earned approximately $24,200 on average per day in the second quarter, which is higher than the base rate of $20,000 per day and a profit share of approximately $600,000 was earned in the second quarter of 2019. The average daily time charter rates from the company's two modern Suezmax tankers that are trading in the spot markets was approximately $15,800 per day in the second quarter.
On the offshore side, up until 2017, the offshore segment was our largest segment from -- for a long period from a charter backlog perspective, but it is now down to 26% of our charter backlog and we own three rigs and five offshore support vessels in the segment. The charter hire from the drilling rigs were $30 million in the second quarter.
SFL received full charter hire on the drilling rigs during the restructuring of Seadrill, which enabled us to significantly reduce our financial exposure to the rigs in that period. We have agreed to temporarily reduce charter hire by 30% until 2022 compared to the previous charter rates with a catch-up thereafter. In the meantime, we will continue to generate a strong net cash flow from these assets due to significantly reduced leverage and corresponding lower debt serving cost and breakeven rates for us.
Seadrill, on their side, has sub-chartered, the harsh environment jack-up rig West Linus to ConocoPhillips until the end of 2028. And the harsh environment semisubmersible rig, West Hercules has recently been awarded multiple consecutive sub-charters in the North Sea and is now working for Equinor.
Including the West Linus, we have reduced debt from $1.9 billion initially on the Seadrill rigs to less than $640 million currently or around one-third of the initial debt we had on that. And of this aggregate outstanding loan balance, only $266 million is currently guaranteed by Ship Finance.
在油轮方面，SFL拥有9种原油产品和化学品船，其中大部分用于长期包机，而这些船只仅占租约积压的7％左右。油轮市场近期有所增强，预计2019年剩余时间将保持健康，因为原油需求预计将在年底前增加，预计船东供应将暂时减少，因为业主准备即将实施IMO 2020 。
SFL的两艘Suezmax油轮和两艘VLCC将在今年年底安装洗涤器。特许到Frontline Shipping Limited的原油油轮第二季度平均每天收入约24,200美元，高于每天20,000美元的基本费率，2019年第二季度的利润份额约为600,000美元。该公司在现货市场交易的两艘现代苏伊士型油轮的每日定期租船费率在第二季度约为每天15,800美元。
在离岸方面，截至2017年，离岸部分是我们最大的部分 - 长期从包机积压的角度来看，但现在已经下降到我们的包机积压的26％，我们拥有三个钻井平台和五个海上支持该段的船只。钻井平台的租赁费用在第二季度为3000万美元。
Seadrill，他们一边，已经分包，严酷的环境自升式钻井平台West Linus到ConocoPhillips直到2028年底。在恶劣环境的半潜式钻井平台上，West Hercules最近在北海获得多个连续的分包机现在正在为Equinor工作。
The market for offshore supply vessels is very challenging and the five smaller offshore support vessels on charter to a subsidiary of Solstad remain in layup. In light of the difficult market, Solstad has announced that they will have to restructure their balance sheet and there is a standstill agreement with multiple lenders and other stakeholders including SFL until October. We have therefore not recorded any revenues from these vessels in the second quarter.
Due to the continued uncertainty and pending balance sheet restructuring in Solstad, we have decided to write down the book value of a note we received in 2016 in connection with a vessel sale to zero and recorded an impairment of $8.2 million in this quarter. This is to be conservative and the claim remains unchanged.
Over time, we believe, we have delivered significant shareholder value and we are the only maritime company that has been consistently profitable and paid dividends every quarter since 2004. Over time, we believe our diversified portfolio approach has been important, not only in order to benchmark transactions between segments, but also to mitigate the effect of being -- exposed to individual market cycles and create more stability overtime.
The illustration to the right on this slide is comparing an investment in SFL last 10 years with total return in some representative equities and segments we have been invested in over the period.
With the expansion of the liner segment, performance in the underlying markets, if you have been invested there have been miserable and the total return in the liner market is around zero.
Comparing this to our performance and we have seen some volatility too over these years gives us comfort that we offer an investment alternative with a proven track record and credibility and long-term stability. In total, $26 per share have been paid out and we have a significant charter backlog supporting future cash flow.
And with that, I will give the word over to our CFO Mr. Olesen who will take us through the financial accounts.
随着时间的推移，我们相信，我们已经实现了巨大的股东价值，我们是唯一一家自2004年以来一直保持盈利并每季度支付股息的海事公司。随着时间的推移，我们认为我们的多元化投资组合方法非常重要，不仅仅是为了细分市场之间的基准交易，也是为了减轻存在的影响 - 暴露于个别市场周期并创造更多的加班稳定性。
Thank you, Mr. Hjertaker. On this slide we have shown a pro forma illustration of cash flows for the second quarter. Please note that this is only guideline to assess the company's performance and is not in accordance to the U.S. GAAP and also net of voyage expenses, extraordinary and non-cash Items.
Total charter hire for the second quarter was approximately $149 million, down from $155 million in the previous quarter. Reduction is primarily due to reduced revenues on the SG&A after scheduled rate reduction in May, lower revenues from the Suezmax tankers trading in the short-term market, as well as offer in connection with scheduled dry-dockings.
Net income in the quarter was $28.1 million down from $36.6 million in Q1. The adjusted net income excluding one-offs and nonrecurring items was approximately $24.4 million, marginally down from the previous quarter.
The Liner fleet generated approximately $81 million in charter hire which is in line with the previous quarter. Of this amount approximately 67% was derived from time chartered vessels and approximately 33% from bareboat charter vessels.
Our Tankers generated approximately $13 million in charter hire, including a profit share contribution of approximately $0.5 million. Of this amount, 95% was derived from time and voyage chartered vessels.
Our Dry Bulk vessels generated approximately $25 million in charter hires in the second quarter with approximately 80% from vessels on long-term charters and approximately 20% from vessels trading in the short-term market.
On the Offshore side, we received charter hire of approximately $30 million from all our Seadrill rigs. Our three drilling rigs are chartered to fully guaranteed affiliates of Seadrill Limited. The harsh environment jack-up rig West Linus has been sub-chartered to ConocoPhillips until the end of 2028, while the harsh environment semi-submersible rig West Hercules is employed on consecutive shorter-term subcharters in the North Sea.
The semi-submersible rig West Taurus is currently in layup in Norway. This summarizes to an adjusted EBITDA of approximately $121 million for the second quarter or $1.12 per share down from approximately $1.24 in the previous quarter.
We then move on to the profit and loss statement as reported under U.S. GAAP. As we have described in previous earnings calls, our accounting statements are different from those of a traditional shipping company. Our business strategy focuses on long-term charter contracts, a large part of our activities are classified as capital leasing.
As a result significant portions of our charter revenues are excluded from U.S. GAAP operating revenues and instead booked as revenues classified as repayment of investment in finance leases.
In addition, the revenues from our drilling rigs; i.e. our 100% owned associates are not included at all as they are defined as interest in associates under U.S. GAAP. Net contribution from these subsidiaries are included under results in associates and long-term investments and interest income from associates.
在海上方面，我们从Seadrill钻井平台获得了大约3000万美元的租赁费。我们的三个钻井平台包租给Seadrill Limited的附属公司。恶劣的环境自升式钻井平台West Linus已经被包租给ConocoPhillips直到2028年底，而恶劣环境的半潜式钻井平台West Hercules则被用于北海的连续短期航线。
So overall for the quarter, we report total operating revenue according to U.S. GAAP of approximately $111 million which is the lower number than the $149 million net charter hire actually received for the above mentioned reasons.
In this quarter SFL recorded a $16.8 million gain on mark-to-market movements on equity securities investments and losses of $4.4 million related to mark-to-market movement on hedging derivatives and $2 million in amortization of deferred charges all of which are non-cash items for the quarter.
As previously mentioned, the company recorded a $8.2 million non-cash impairment with regards to note issued by a subsidiary of Solstad Offshore in conjunction with the sale of a vessel and termination of charter back in 2016. So overall, and according to U.S. GAAP the company reported net income of $28.1 million or $0.26 per share.
Then looking at the liquidity and financing status. At quarter end, we had approximately $212 million in cash on our balance sheet in addition to approximately $10 million in 100% owned associates. In addition, the company had approximately $116 million of marketable securities including 11 million shares in Frontline, which at quarter end have a value of $88 million in addition to approximately $10 million worth of shares in ADS Crude Carriers plus other securities.
While many companies in the maritime industry experience a more challenging market as clients are reducing their exposure to the sector, SFL continues to have superior access due to strong track record and affiliation with the Seatankers group. As of today, we have an active bank group of more than 25 global banks and leasing institutions.
Our senior bank and leasing debt is secured in assets and upcoming maturities are to a large extent covered by high-quality assets with moderate leverage, based on asset age and contract backlogs enabling us to roll over the bank debt or alternatively valuing is covered by purchase obligation thus reducing the overall refinancing risk. We have recently diversified our funding sources to include lease financing with both Chinese and Japanese leasing institutions. We find this capital to be attractive due to a combination of long-dated tenors and attractive cost of capital.
SFL is also a repeat issuer in both the U.S. and Norwegian capital markets and our bonds and convertibles are senior unsecured. In June, SFL raised NOK 700 million in a 5-year senior unsecured bond due in 2024 in the Nordic markets. The bonds bear a coupon of 4.6% above the floating NIBOR reference rates that is swapped to approximately $80 million with a fixed interest rate of approximately 6.9%.
Subsequent to quarter end, the company raised approximately NOK 100 million through a tap issue on a bond loan with maturity in 2023. The bonds were issued at a premium to par value and the new outstanding amount after this tap issue is NOK 700 million. The incremental amount has been swapped to approximately $11 million at a fixed interest rate of approximately 5.9%.
然后看流动性和融资状况。在季度末，我们在资产负债表上拥有约2.12亿美元的现金，此外还有100％拥有100％股权的员工。此外，该公司拥有大约1.16亿美元的有价证券，其中包括1100万股Frontline股票，除了价值约1,000万美元的ADS Crude Carriers股票和其他证券外，其在季度末的价值为8800万美元。
At quarter end, stockholders' equity was approximately $1.2 billion giving a book equity ratio of approximately 30% at the end of the quarter, while the market cap is approximately $1.5 billion.
Then to summarize. The Board has declared a cash dividend of $0.35 per share for the quarter. This represents an annualized dividend yield of approximately 11% based on the closing price yesterday. Net income for the quarter was $28.1 million or $0.26 per share. We recently added approximately $200 million in backlog increase through charter extensions. And while we continue to collect revenue from our $3.7 billion backlog, we also have upside from profit split arrangements from our VLCCs and Capesize bulk vessels on charter to Frontline and Golden Ocean respectively.
It sounds interesting to observe that the IMO 2020 story is starting to unfold, it's increasing spread between low and high sulfur fuel oils. SFL has a very robust liquidity position with $221 million in cash in addition to our marketable securities, giving us significant investment capacity going forward. As mentioned, there is less capital available for maritime companies not only from banks, but also from the public markets and it's a growing demand for alternative capital providers.
As a specialty financing provider, SFL is uniquely positioned to be the preferred financing partner for the maritime industry given our versatile toolbox which includes time charter, bareboat and senior financing structures. This is evidenced by our investments over the last year. We've executed more than $1.2 billion of new business increasing the backlog with more than $1.4 billion.
And with that, I give the word back to the operator who will open the line for questions.
Thank you. [Operator Instructions] Your first question comes from the line of Randy Giveans. Please ask your question.
谢谢。 [操作员说明]您的第一个问题来自Randy Giveans系列。 请问你的问题。
How are you gentlemen? How's it going?
Hi. Nice to speak to you.
Yeah. So first couple of questions here, so 29 vessels scheduled to be upgraded with scrubbers, what is the quarterly cadence of the installations and CapEx spend of that $50 million? And then how many of these 29 retrofits are being paid for upfront by the customers?
是啊。 所以前面有几个问题，所以有29艘船计划用洗涤器进行升级，这些装置的季度节奏和5000万美元的CapEx花费是多少？ 那么这些29次改造中有多少是由客户预先支付的？
I think in terms of the CapEx, Randy, that's going to be funded by a mix of cash on balance sheet, but most of the portion will be financed through senior bank financing as some of these investments also come with charter extensions. So that's part of kind of the cash flow basis going forward and it's more or less evenly spread over the next say three quarters.
Just want to add to that. The gross investments that we will fund is relatively limited. So from a capital perspective it's not a big ticket for us at least not now. But we do -- we keep discussions on with some of our clients and we -- there could be more vessels being upgraded.
Of course when you -- when -- the scrubber upgrades for vessels with -- on time charter, the benefit really goes to the charterer. So, we're always happy to do that if we get a good return on our capital and if we believe that it's accretive for us and if some of our customers want to install it for their own account we're happy to because they will add expensive equipment to our vessels and of course once it's integrated on the vessel it's our property.
只是想补充一点。 我们将资助的总投资相对有限。 因此，从资本的角度来看，至少现在不是我们的大票。 但我们这样做 - 我们与一些客户和我们继续讨论 - 可能会有更多船只升级。
当然，当你 - 时间 - 洗涤器升级为具有 - 按时包机的船只时，利益真正归于承租人。 所以，如果我们获得了良好的资本回报，如果我们相信它对我们有利，并且如果我们的一些客户希望为自己的账户安装它，我们很高兴这样做，我们很高兴，因为他们会 为我们的船只添加昂贵的设备，当然，一旦它集成在船上，它就是我们的财产。
Sure. All right. That makes sense. And then I guess switching gears can you talk a little more about the three small container vessels that were acquired. I know on recent calls you're saying tankers, maybe shallow tankers, maybe LNG carriers were kind of the three targets but then your most recent acquisition was three small containerships. So, can you give more color on maybe the age of those and why this asset class instead of a different either larger asset class within containerships or a different sector entirely.
当然。 行。 那讲得通。 然后，我想切换齿轮可以谈谈收购的三艘小型集装箱船。 我知道最近的电话，你说的是油轮，也许是浅油轮，也许液化天然气运输船是三种目标，但最近的收购是三艘小型集装箱船。 那么，您是否可以为这些资产类别提供更多的颜色以及为什么这个资产类别而不是容器中的更大的资产类别或完全不同的部门。
Well, if you look at the product offering as Aksel mentioned we have a fairly large toolbox as we like to say. So, we -- our focus on the container side has been on the larger containerships 10,000 plus modern design sort of eco-style containerships that we believe will have a long economic life going forward because they are much more fuel efficient and therefore deliver a lower cost per transported box for the customers.
At the same time, if -- from a risk/reward perspective, if we can do a deal and like these three vessels we mentioned, they are really I would say almost like an add-on to the 15 vessels we did last year where we effectively buy them at around recycling value and we are amortize them virtually down to zero. It's a super low risk from an asset exposure perspective and I would almost call it more of a structured financing really than an asset where we take a shipping risk. So, we will not operate these. These are bareboat.
And as I said amortizing down from a very comfortable level and as we understand the customer they also put scrubbers on some of these for their own account again adding call it effectively the security if you can call it that in the lease for us.
So, you shouldn't -- so we should look at these call it investments in different lights. In some investments like bigger containerships, we're willing to take more I would say effective residual exposure, i.e. charters that don't amortize them to zero because we believe they have a very long commercial life while on other assets, we take an opportunistic view where we don't have much residual risk at all.
好吧，如果你看看Aksel提到的产品，我们有一个相当大的工具箱，我们想说。因此，我们 - 我们对集装箱方面的关注一直在更大的集装箱船上10,000加上现代设计的生态型集装箱船，我们相信这些集装箱船将有更长的经济寿命，因为它们的燃油效率更高，因此更低每个运输箱的成本为客户。
与此同时，如果 - 从风险/回报的角度来看，如果我们能够达成交易，并且像我们提到的这三艘船一样，那么我真的会说它们几乎就像去年我们去过的15艘船的附加物一样。我们有效地以回收价值购买它们，我们将它们摊销到零。从资产敞口的角度来看，这是一个超低风险，我几乎将其称为结构性融资，而非我们承担运输风险的资产。所以，我们不会操作这些。这些都是光船。
所以，你不应该 - 所以我们应该看看这些称之为投资于不同的灯光。在一些像大型集装箱船这样的投资中，我们愿意采取更多我认为有效的剩余风险，即没有将它们摊销到零的包机，因为我们认为它们具有很长的商业生命，而在其他资产上，我们采取机会主义查看我们根本没有太多的残余风险。
Okay. And I guess one more for me. Looking at the cash balance certainly stands out after the follow-on bond offering and some other things more than $200 million plus the free cash that's coming in the next few quarters. So, just could you touch on expected uses of this cash if acquisitions or those three sectors those crude tankers shallow tankers LNG still the top three priorities? And then any thoughts on share repurchases?
好的。 而且我想再给我一个。 在后续债券发行以及其他一些超过2亿美元以及未来几个季度即将到来的自由现金之后，看现金余额肯定很突出。 那么，如果收购或这三个行业的原油油轮浅层油轮LNG仍然是前三大优先事项，您能否谈谈这笔现金的预期用途？ 然后是关于股票回购的任何想法？
We are -- I can say fair to say we are evaluating projects continuously here. And our ambition is of course to put this money to work in new accretive transactions to support a continued distribution capacity of course and increase the backlog. We've -- when we've talked about this before.
On previous calls, I mean, we of course, would love to do more on the tanker side. We believe call it a relative proportion on tanker side is lower now than it's ever been. But at the same time, we have to make sure we do the right deals, buy the right assets, with charters to the right counterparties, with the right type of exposure.
So, we wouldn't buy ships just because we have to call it add-in in a specific segment. It's all about relative risk/rewards. So, I would say our focus remains on the tanker side. We think there are interesting fundamentals on the tanker side that could potentially materialize also in deal flow for us.
We did look at LNG transactions. There are many LNG vessels coming out and projects there. On the dry bulk side they're also opportunity. I would say there are opportunities across the board, but we cannot guide specifically on how we would deploy capital in each of them because we don't want to the mast so to speak in terms of how we should invest. But as I said our ambition is to invest the capital or have a very big party.
我们 - 我可以公平地说我们正在不断评估项目。我们的目标当然是将这笔资金用于新的增值交易，以支持当然的持续分配能力并增加积压。我们 - 当我们之前谈过这个时。
Exactly or a combination. I guess lastly there with the share repurchases your yield is 11% trading at a pretty good discount to NAV?
It's – I would say, we're always evaluating call it optimization of the capital structure. The small tap, we've just did is maybe an illustration of that where we just had an interesting opportunity where we could take some what we think was relatively reasonably priced capital although it's small. So, we're always benchmarking that. And the fact that, we haven't bought back shares is maybe an indication that we think that we'll be able to deploy some of the capital in transactions that are call it more accretive per share. In the end, that's what we work for to build call it distributable cash flow on a per share basis. So, repurchases of shares or buying back bonds or managing the balance sheet is I would say continuing evaluation on our side.
这是 - 我想说，我们总是在评估它对资本结构的优化。 我们刚才所做的那个小小的点击可能就是我们刚刚有一个有趣的机会，我们可以采取一些我们认为价格相对合理的资本，尽管它很小。 所以，我们总是对此进行基准测试。 事实上，我们还没有买回股票，这可能表明我们认为我们能够在交易中部署一些资本，这些交易称其为每股增值。 最后，这就是我们建立的工作，称之为每股可分配的现金流。 所以，回购股票或回购债券或管理资产负债表我会说继续评估我们这边。
Sounds good. Okay. That's it for me. Thanks again.
听起来不错。 好的。 这对我来说。 再次感谢。
The next question comes from the line of Greg Lewis. Please ask your question.
接下来的问题来自Greg Lewis的一句话。 请问你的问题。
Hey. Thank you and good afternoon, everybody.
Ole, just real quick. On those three vessels you bought post the quarter any kind of guidance you can give us around revenue EBITDA. I mean, obviously this is a scrap financing deal it sounds like but just kind of curious any kind of numbers you can throw out on this?
Ole，真的很快。 在你购买的三艘船上你可以给我们提供任何类型的指导，围绕收入EBITDA。 我的意思是，显然这是一个废话融资交易听起来像但只是好奇你可以抛弃任何类型的数字吗？
I think first of all, it's a relatively marginal transaction. It added around $30 million to the backlog. So $30 million on a $3.7 billion backlog is as I said isn't a big number. So, it's I would say – but we cannot disclose the price because the price is confidential unfortunately.
我认为首先，这是一个相对边缘的交易。 它为积压增加了大约3000万美元。 因此，37亿美元积压的3000万美元正如我所说的不是一个大数字。 所以，我想说 - 但我们不能透露价格，因为不幸的是价格是保密的。
But I don't think it will make a big dent in our cash position quarter-over-quarter.
Sure. Understood. And then I guess obviously everyone's aware of the issues that the offshore space is having. You wrote down those vessels. I mean, push comes to the shove is there – are these sellable assets? Or just given what Solstad is going through these vessels are kind of just going to be locked up inside that company for the medium long-term?
当然。了解。 然后我猜很明显每个人都知道离岸空间存在的问题。 你写下了这些船只。 我的意思是，推动是否存在 - 这些是可销售的资产吗？ 或者只是考虑到索尔斯塔德正在经历的这些船只是否会被锁定在该公司的中长期？
Well, on those vessels specifically they are – I mean, we have sort of signed up with we'd effectively call it the standstill together with the other creditors and stakeholders in Solstad. They are – so they remain on long-term call it bareboat charters and Solstad is responsible for call it maintenance et cetera, and they have costs et cetera on those vessels. So, certainly until the standstill expires we cannot do anything legally. Of course after that, we – there are many – there was – if that call it transaction should collapse, I mean, we can take the vessels back we could potentially redeploy them or sell et cetera.
I think it's also important there to highlight that – their relative importance here on these vessels. When they were included in our backlog and they are not included anymore they used to represent only between 1% and 1.5% of the backlog. Also from a book value perspective they are – it's a very marginal investment for us, mainly because we have amortized down these assets so much since we acquired them back in 2007 and 2008.
So – we of course focus on – we focus on all our call it our whole portfolio. We took a small impairment this quarter relating to a note we got from Deep – what was Deep Sea Supply Limited which is now a subsidiary of Solstad. It was an unsecured note in connection with the sale of a vessel. It was an interest-bearing note. They did service it for some time, but now given the uncertainty around the whole situation we thought that to be conservative, it would be prudent in our books to keep it at zero. But of course, we – the claim remains and it's also part of effectively what we would call the standstill agreement.
那么，特别是那些船只 - 我的意思是，我们有点报名，我们有效地称它为与索尔斯塔德的其他债权人和利益相关者一起停滞不前。他们是 - 所以他们仍然长期称之为光船租赁，索尔斯塔德负责称之为维护等等，他们在这些船只上有成本等等。所以，当然，在停顿期满之前，我们不能合法地做任何事情。当然，在那之后，我们 - 有很多 - 有 - 如果那个叫它的交易应该崩溃，我的意思是，我们可以把船只带回来我们可能会重新部署或出售等等。
我认为强调这一点也很重要 - 它们在这些船上的相对重要性。当它们被包含在我们的积压中并且它们不再包括在内时，它们过去仅占积压的1％到1.5％之间。同样从账面价值的角度来看，这对我们来说是一项非常边际的投资，主要是因为我们自2007年和2008年收购这些资产以来已经对这些资产进行了大量摊销。
所以 - 我们当然专注于 - 我们专注于所有我们称之为我们的整个投资组合。我们本季度收到了一笔小额减值，涉及我们从Deep获得的一份报告 - 什么是Deep Sea Supply Limited，现在是Solstad的子公司。这是与船舶销售有关的无担保票据。这是一个有意义的说明。他们确实服务了一段时间，但现在考虑到整个情况的不确定性，我们认为保守，我们的书中保持零是谨慎的。但当然，我们 - 声称仍然存在，而且它也是我们称之为停滞协议的有效部分。
So, we expect that to do – what we say more to happen there out during the fall and maybe have more of a solution towards the end of the year.
因此，我们希望这样做 - 我们在秋季期间更多地发生这种情况，并且可能在今年年底有更多的解决方案。
Okay. Great. And then just one more for me, I mean, obviously you guys are always in the market looking at transactions. As you think about the cadence of what this looks like when you're looking at deals currently are – what are the holdups like are the holdups the fact that hey heading into IMO 2020 maybe some potential transactions people want to take a wait-and-see approach, is it kind of like some macro headwinds that are out there?
Just as you think about maybe what is preventing you guys or slow playing some of these transactions you're obviously looking at what sort of thing – like what would you kind of characterize as some of the and maybe there aren't any maybe it's just timing just sort of what do you – as you look to deploy capital, what do you think are some of the specking points that are preventing you guys from maybe getting to the finish line, if that's a fair characterization?
好的。 大。 对我来说还有一个，我的意思是，显然你们总是在市场上看待交易。 当你正在考虑目前正在进行的交易时，你会想到这种情况的节奏 - 这些劫持事件是什么导致他们进入IMO 2020的事实可能是人们想要等待的一些潜在交易。 看看方法，有点像一些宏观的逆风吗？
正如你想到的可能是什么阻止你们或者放慢一些这些交易，你们显然在看什么样的事情 - 比如你们将某些特征描述为什么，也许没有任何可能它只是 时机只是你有什么 - 当你想要部署资本时，你认为哪些一些阻止你们可能进入终点线的特定点，如果这是一个公平的特征？
Yeah. It's a very good question. And I would say, generally, I mean, it's extremely easy to buy something you just pay more than the next guy, so I would say, anyone can deploy capital. The question is, how do you deploy the capital in a way where you think that you'll get a true return on the capital? And that is the tricky part. Of course, now with the changes in regulation, if you buy something and you might find a charter of course you have the counterpart, you have to evaluate relative risk, you have – you look at of course the financing structure, you can structure around a charter.
But I think very importantly and that's where we try to be a little conservative we look at the residual value proposition .i.e. after that charter whether it's a five-year or 10-year or 15-year charter where are we then we know on that specific asset? What kind of -- when we know that there could be an infinite number of new vessels in that period where do we want to be to be conservative in light of new regulations and what is developing in the market.
So it's -- I would say it's a cocktail that goes into project evaluation, and of course also benchmarking deals between segments is important, because what we see is that in upturn markets if you are invested in one single segment alone it's so easy to get ahead of yourself and run out and just buy like crazy because the equity markets are open but it may not be a good investment still in the long run. So we try to be -- we know what we say we try to be conservative and careful, but of course also with a very commercial mindset and certainly open to do the business.
是啊。这是一个非常好的问题。而且我想说，一般来说，我的意思是，买一些你付出的钱比下一个人要容易得多，所以我想说，任何人都可以部署资金。问题是，如何以一种您认为可以获得真正资本回报的方式部署资本？这是棘手的部分。当然，现在随着监管的变化，如果你买东西，你可能会找到一个章程，当然你有对手，你必须评估相对风险，你有 - 你看当然融资结构，你可以围绕宪章。
但我认为非常重要，那就是我们试图保守的地方，我们看一下剩余价值主张。在该章程之后，无论是五年，十年还是十五年的章程，我们是否知道该特定资产？什么样的 - 当我们知道在那个时期可能会有无数的新船时，我们希望在新的法规和市场发展的情况下保守。
所以它 - 我会说这是一个鸡尾酒进入项目评估，当然还有细分市场之间的交易基准是很重要的，因为我们看到的是，如果你单独投资于一个单一的细分市场，那么在市场好转中就很容易获得因为股票市场是公开的，但从长远来看，它可能不是一个好的投资，因此领先于自己并且用完并且只是疯狂购买。所以我们试着 - 我们知道我们说的是我们保守和谨慎，但当然也有一种非常商业化的思维方式，当然也可以开展业务。
Okay. Thank you very much.
The next question comes from the line of Jay Mark [ph]. Please ask your question.
接下来的问题来自Jay Mark [ph]。 请问你的问题。
Yes. Hi, gentlemen. The questions basically I was going to ask have been answered already. So I really don't have a question right now. I just want to say congratulations on buying a company and not paying for the company with the 24 liners you bought last year, so that's about it and congratulations. Thank you.
是。 嗨，先生们。 基本上我要问的问题已经回答了。 所以我现在真的没有问题。 我只是想对购买一家公司表示祝贺，而不是为去年购买的24家公司支付费用，所以就这一点而言，祝贺你。 谢谢。
Thank you very much.
The next question comes from the line of Chris Wetherbee. Your line is now open. Please ask your question. [Operator Instructions] Your next question comes from the line of Chris Wetherbee. Please ask your question.
接下来的问题来自Chris Wetherbee。 你的生产线现已开放。 请问你的问题。 [操作员说明]您的下一个问题来自Chris Wetherbee。 请问你的问题。
Hi guys. Can you hear me?
Yeah. Hi, Chris. We couldn't hear you previously.
是啊。 嗨，克里斯。 我们以前听不到你的声音。
Pardon me. James on for Chris. Just wanted to actually touch on the bulker market and get your current view. Trying to understand what you might have to see there before a deal looks appealing and how far you think you are away from a market where you might be able to put your -- some of your existing vessels on longer term charters?
对不起。 詹姆斯换了克里斯。 只是想真正触及散货市场并获得您当前的观点。 在交易看起来很有吸引力之前，试图了解你可能需要看到的东西以及你认为自己离市场有多远，你可以把你的一些现有船只放在长期包租上？
Yes in the dry bulk segment we have 22 vessels, 13 of those are already on longer term charters and nine are on shorter term charters. Of the nine, two are Supramax bulkers that are -- have just recently come off long-term charters to go this and now they're traded in a pool while seven Handysize bulkers have been trading in the spot market or spot related for some time.
We cannot define necessarily exactly when we would like to look in those chartered vessels on longer term charters, and I think the market for -- in this asset class has been I would say relatively slow for a couple of years.
What we do hope now is that the market is firming and there are, of course, several near-term effects in the market that's created some market noise, but at least the order book on the dry side has come down and certainly on the smaller-sized vessels, it's quite moderate.
So our long-term call, it our long-term objective for all our assets, I would say, is to employ them on longer-term charters if possible. And if not we can either continue trading them or potentially sell them.
If we look at the relative in call it investments the smaller dry bulk vessels are of course among the smaller in our portfolio, and therefore, like I say the less -- the least capital intensive. And we've through -- and that is probably one to our -- I hope that one of our strengths is that as these vessels have come off their previous charters, we have been able to trade them in the spot market and we haven't had to effectively flip them, because we haven't had the operational platform to manage the vessels both operationally and commercially without being ripped off by call it service providers. So we keep the focus on them, and of course, hope to call it, optimize the value there and get them on charter.
在干散货部分是的，我们有22艘船，其中13艘已经是长期租船，9艘是短期租船。在这九个中，有两个是Supramax散货船 - 最近刚刚从长期包机中走出去，现在他们在一个游泳池中进行交易，而7个灵便型散货船一直在现货市场或现货交易一段时间。
我们无法准确定义何时我们希望在长期租约中查看这些包租船舶，而且我认为 - 在这个资产类别的市场我会说几年相对缓慢。
如果我们看一下相对的投资，那么较小的干散货船当然是我们投资组合中的较小的，因此，就像我说的那样 - 资本密集程度最低。而且我们已经完成 - 这可能是我们的一个 - 我希望我们的优势之一就是这些船只已经脱离了以前的包机，我们已经能够在现货市场交易它们而且我们没有'我们必须有效地翻转它们，因为我们还没有操作平台来管理船只的操作和商业，而不会被称为服务提供商。因此，我们将重点放在他们身上，当然，我们希望将其称之为优化价值，并将其纳入章程。
Got it. And then I also wanted to touch on the seven scrubber deal there one more time. Sort of -- what sort of appetite is there out there for similar deals? And do you think that sort of scrubber -- has the outlook for scrubber penetration sort of increased more over the past three months relative to sort of where you were at the beginning of the year?
得到它了。 然后我还想再次触及那里的七个洗涤器交易。 有点类似的交易有什么样的胃口？ 而且你认为那种洗涤器 - 洗涤器渗透的前景在过去的三个月中相对于你年初的地方有所增加吗？
Hi. This is Trym Sjølie, COO. I mean, the scrubbers -- I mean, we -- I think, it's fair to say that the scrubber appetite has been quite strong, and we see that even, I mean, more ships are being slated for scrubber installations. And I think we'll see that also during next year that more and more ships will be fitted, especially if their docking cycles are favorable for that.
你好。 这是首席运营官TrymSjølie。 我的意思是，洗涤器 - 我的意思是，我们 - 我认为，可以公平地说，洗涤器的胃口非常强烈，我们看到甚至，我的意思是，更多的船只正在进行洗涤器安装。 而且我认为我们也会在明年看到越来越多的船只安装，特别是如果他们的停靠周期有利于此。
And from -- if you look at the fuel price spread with forward rates for next year, the price differential between high sulfur fuel oil and low sulfur fuel oil, which is the alternative if you don't have -- the cheapest alternative, if you don't have a scrubber installed remains at around $200 per ton. Isn't that right, Trym?
从 - 如果你看一下明年的远期燃油价格差价，高硫燃料油和低硫燃料油之间的价格差异，如果你没有，这是另一种选择 - 最便宜的替代方案，如果 你没有安装洗涤器，每吨约200美元。 不是吗，Trym？
Yeah. That's right. It's around $200. And when you -- and if you put the $200 and even if you're conservative looking at that over several years and take into consideration that it's probably going to full for big ships and for ships with large engines and high consumption, it certainly makes a lot of sense especially as a hedge for the future.
是啊。 那就对了。 这大约是200美元。 当你 - 如果你把200美元，即使你保守看多年，并考虑到大型船舶和大型发动机和高消耗的船舶可能会满员，它肯定会 特别是作为对未来的对冲，这很有道理。
Okay. Got it. Thank you.
好的。 得到它了。 谢谢。
We have no further questions at this time. Please continue.
I would like to thank everyone for participating in our second quarter conference call and also thank the SFL team for their efforts. We are committed to continue building the company and we believe there will be good investment opportunities for us going forward with attractive risk reward profile.
If you do 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 web page www.sflcorp.com. Thank you.
That concludes the conference for today. Thank you for participating. You may all disconnect.
今天的会议结束了。 感谢您的参与。 你可能都断开了。
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