Welcome to SPL's First Quarter 2024 Conference Call. My name is Sander Borgli, I'm Vice President for Investor Relations in SFL. Our CEO, Ole Hjertaker, will start the call with an overview of the first quarter highlights; then our Chief Operating Officer, Trym Sjølie, will comment on vessel performance matters; followed by our CFO, Aksel Olesen, who will take us through the financials. The conference call will be concluded by opening up for questions, and I will explain the procedure to do so prior to 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 expects, 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 inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from these 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 credit markets. You should therefore not place undue reliance on these forward-looking statements. Please refer to our filings within the Securities and Exchange Commission for a more detailed discussion of risks and uncertainties, which may have a direct bearing on our operating results and our financial conditions. Then I will leave the word over to our CEO, Ole Hjertaker, with highlights for the first quarter.

Thank you, Sander. We are now announcing our 81st dividend and have built a unique profile as a maritime infrastructure company with a diversified fleet. The total charter revenues were $236 million in the quarter which is up 13% from the previous quarter, primarily due to the delivery of our new car carriers and also increased revenues on the drilling rig, Hercules. The EBITDA equivalent cash flow in the quarter was approximately $152 million, which was also significantly higher than the previous quarter. And over the last 12 months, the EBITDA equivalent has been $523 million. The net income came in at around $45 million in the quarter or $0.36 per share. We had a positive contribution of $2.2 million relating to profit share on Capesize bulkers and $3.3 million relating to fuel cost savings. And also some minor one-off items, including $1.8 million mark-to-market gain on interest rate swaps. In line with the improved results and commitment to return value to our shareholders, we are again increasing our quarterly dividend, and this time, to $0.27 per share. We have paid dividends every quarter since our inception in 2004, and this has accumulated to more than $30 per share or more than $2.7 billion in total. And we have a robust and increasing charter backlog supporting continued dividend capacity going forward. Our fixed rate backlog stands at approximately $3.6 billion. And importantly, the backlog is concentrated around long-term charters to very strong end users. And I would note that the backlog figure excludes revenues from the vessels trading in the short-term market, and also excludes revenues on the new dual-fuel chemical carriers that will operate in a pool with Stolt-Nielsen. And it also excludes future profit share optionality, which we have seen can contribute significantly to our net income. We…

Thank you, Trym. On this slide, we have shown a pro forma illustration of cash flows for the first quarter. Please note that this is only a guideline. This is the company's performance and is not in accordance with U.S. GAAP, and also net of extraordinary and noncash items. The company generated gross charter hire of approximately $236 million in the first quarter, with approximately 93% of revenue coming from our fixed-charter rate backlog, which currently stands at $3.6 billion, providing us with strong visibility on the cash flow going forward. In the first quarter, the container fleet generated gross charter hire of approximately $19 million, including approximately $3 million in profit share related to fuel savings on some of our large container vessels. With 7 car carriers on charter following the delivery of our 2 remaining dual-fuel LNG car carriers during the quarter, gross charter hire increased approximately $25 million in the first quarter compared to approximately $22 million in the fourth quarter. Our tankers on long-term charters generated approximately $30 million in gross charter hire during the first quarter, in line with the previous quarter. The company has 15 dry bulk car carriers -- dry bulk carriers, of which 8 were employed on long-term charters. The vessels generated approximately $24 million in gross charter hire in the first quarter, including approximately $2 million profit share generated from our 8 Capesize vessels which chartered to Golden Ocean. 7 of these vessels were employed in the spot and short-term market and contributed approximately $6.5 million in net charter hire compared to approximately $7.3 million in the previous quarter. SFL owns 2 modern harsh environment drilling rigs: the [ large ] jack-up, Linus; and the semi-submersible, ultra-deepwater rig, Hercules. During the first quarter, the rigs generated approximately $66.5 million in contract…

[Operator Instructions] And we'll have our first question from Climent Molins.

I wanted to start by asking about the recent chemical tanker acquisitions. Adding a long-term contract on one of them is aligned with your usual structure. But could you provide some insight on the reasoning for employing one of them in Stolt-Nielsen's pool?

Absolutely. So Nielsen is the leader of chemical logistics. They are operating these vessels in the market, but they have a very high proportion of contract of affreightments, i.e., call it, volume contracts with their customers. There is, therefore, visibility on charter revenues relating to those vessels. And the reasoning for doing a combination of the 2 in reality, is that we have then the support of -- on the one vessel with a fixed rate. And then we have the market, call it, opportunity and exposure on the other vessel. And right now, the market or the near-term market based on the COA coverage is significantly higher than the fixed rate charter on the one vessel. So the balance looks to be very good in the near term. From time to time, we have taken some market exposure. But if you look at it on an overall basis, the vast proportion of the charter rates that we received are fixed rate. But on top of that, we also have profit share relating to earnings and for some assets and also on the fuel saving on other assets. So this is from a portfolio perspective, as we see it, a good way to participate in this market, and we believe there are reasons to believe that this market will remain quite firm going forward, also based on the very low order book in this specific segment. Also, these vessels have dual-fuel LNG, dual-fuel propulsion, which we believe will be an increasingly attractive also for the large chemical companies that are the customers of Stolt-Nielsen where these vessels will be employed.

Makes sense. I also wanted to ask about the 2 [indiscernible]. Regarding the Hercules, could you provide some commentary on what's the bid for long-term contracts? And secondly, on the Linus, revenue increased quarter-over-quarter. Is that attributable to the index-linked component of the contract?

Yes. I mean, to start with the Hercules. Hercules is now mobilizing from Namibia on its way to Canada to start drilling for Equinor. So we expect that to start in Canada in early July. So it will be in transit and in the meantime, it started to transit just a week or so ago. That -- so -- and that contract runs until the fourth quarter. Exact timing is not 100% clear yet. This depends on when the redrilling commences and also the scope of work that is needed and the time to drill the wells. But we believe during the fourth quarter is a realistic time when that rig will be released. From a period charter perspective, we are, of course, monitoring the market. We're looking at opportunities that are out there. But we cannot be specific on employment for the rig going forward. But we naturally look at all the opportunities that is -- that makes good sense for a rig of this caliber. There are very few harsh environment, deepwater rigs in the market. It's a relatively tight market. So we believe having this asset there could prove to be very interesting over time. If you look at the Linus, the charter rate there is now increasing. We -- it's coming up from just over $200,000 per day, and we'll now go to around $220,000 per day for us from May onwards. That charter is linked to index -- market index with an adjustment of 10%. And this adjustment is really to balance the fact that this rig does not have any, call it, commercial off-hire between contracts that you normally see with rigs that go from contract to contract. In the second quarter, this rig is -- will be in a dry dock for a 10-year special survey. It just arrived at the shipyard yesterday. We expect the work to take around 5 weeks, so we expect the rig to be back out again at the very end of the month. That rig has a long-term charter. So it will then go back to the charter to ConocoPhillips that runs until the end of 2028. We also believe that there could be more work potential at the Ekofisk field, Conoco and their license partner had their license extended from 2028 to 2048 just over a year ago. And we hope that, and we believe Linus will continue to do a good job for Conoco and then there could be opportunities for extended deployment beyond 2028. But we are still quite some time away from any commercial discussions around future employment of that rig.

We will take our next question from Gregory Lewis.

I was hoping you could talk a little to how we should be thinking about the dividend and just returning cash to shareholders. I mean, I guess this is another increase. I think there's been 3 consecutive increases. Clearly, as we look at not even cash flows, but just net income, there is definitely room to increase that, the dividend even more. Just kind of curious how the Board may be thinking about this, realizing that it was good to see, but just looking at something like backlog, the backlog looks like it was up more than roughly 10% sequentially. So any kind of color you can give on how you're thinking about the dividend, just realizing that it looks like that there is real depth in the long-term charter market for a lot of your assets.

Thank you, Greg. It's Aksel here. Yes, it's a good observation. It's a very solid quarter. Increased net income, and so that's, of course, good. We have more contract backlog being added. I think from the Board's perspective, taking our view quarter-by-quarter on something is long-term and sustainable over time and kind of been increasing the dividend now, as I say, I think, at least 3 consecutive quarters, taking that step by step. So I think kind of that's the approach for now being kind of somewhat conservative, realizing there's a lot of kind of capacity. I would say, at the same time, there's also kind of significant investment opportunities in the market to further grow the company and kind of to increase the dividend over time. So we have to kind of see the totality of kind of how much you increase the dividend quarter-by-quarter, yes.

Okay. And then I was hoping for some more color on the Hercules. I mean that rig is obviously moving to Canada. I believe there's some options on the back of the firm work, how do we -- how -- when does the customer have to exercise those options, and really what I'm wondering is, I'm kind of curious on the time frame around that simply because there's going to be obviously multiple opportunities to fix that rig for work and realizing customer windows for drilling rigs right now is becoming a little more urgent. So I'm kind of curious around that.

Yes. So the drilling scope in Canada is 2 wells, with some testing opportunity around it. The reason why we cannot be too specific on exact number of days is simply that it all depends on the drilling efficiency, which is a combination of, of course, the way the rig is handling the whole drilling operation up on the drilling floor, you can say, but also is linked to the rock down where the rig is actually drilling. So it's -- we have to be a little bit vague in terms of the exact scope and time it will take. We expect the rig to be employed definitely for the third quarter and probably for a good chunk into the fourth quarter, probably most of the fourth quarter. But still, it's -- we cannot be 100% specific. That said, as you have pointed out, I mean, yes, there are other drilling opportunities. I mean the rig has been -- was very successful when it was drilling in Canada for Exxon. It went to Namibia, drilled 2 wells for Galp, was a major success for Galp. I think that fund more than -- they estimated to more than 10 billion barrels of oil. It's massive. So we, of course, are very happy with sort of being assisting and having the equipment that help them then do that. And of course, that we think will hopefully trigger more drilling activity also in that area. This rig has the capability to drill also in benign water, but we believe that given that it has the capacity to drill wells in sort of ultra harsh environment, very deep water, it's winterized. So it has a lot of features that we believe very few other rigs have and a very few rigs that are available from late '24 and into 2025. So we are naturally monitoring this market closely, but can only really comment and be specific when we have secured additional work for the rig.

Okay. Great. And then I did want to squeeze another question in just around the acquisition opportunities that you were able to take advantage of in the tanker market earlier this year. It's interesting, right? Like we've kind of gone through a period where it seems like on the container market, there's always opportunities or maybe not always, but more often than not, there are opportunities for long-term contracts. As you guys -- as the company looks kind of at the landscape in the tanker market, which in the last couple of years has been more short term in nature, are we really seeing increasing depth in the term charter market in tankers and really, I think the question that I'm getting from some investors is could we see -- were these kind of one-offs? Or is there going to be -- should we be surprised if we continue to see, and not necessarily from SFL, but just real -- like long-term charters returning to the tanker market?

If you look at the call it regular, call it crude oil tanker market and product tanker market, that market is dominated by more spot-oriented players that do voyage charters. We have players like Frontline on the crude oil side, you have Scorpio Tankers on the product side and other players in the various segments who are more active and who do more sort of day-to-day movement of oil, picking up one oil here and other cargo there, typically. So what we have been looking for is opportunities to do more long-term employment with very strong counterparties and effectively contribute and be part of a logistics chain more than a [ transport ] owner of an asset. I think the chemical market is also a good example of this, it has more resemblance really to a liner-type market than a spot-traded tanker market where we have logistics operations and moving sometimes very complex mixes of cargoes on board one vessel at the time going from various terminals and going more in a system. So we're quite excited with that deal we did with Stolt, also because they are market leaders in that segment. And we are, in a way, participating a bit also in the market there, given that we have won in a pool and with other similar type vessels. So it's a market we are definitely looking at. We are evaluating opportunities there. But we are segment agnostics. It's all about finding the right type of asset, with strong enough counterparty and the right structure of the deal that makes sense for us and that we think can effectively contribute to boost the dividend capacity. Because that's -- our ultimate objective here is how do we build long-term sustainable dividends. And we believe both these deals -- those deals that we have announced is doing that. And of course, also very happy with the multiple extensions and also the long, really, new charter with Maersk on vessels that have been on charter to Maersk for several years already at high rates that we believe are reflecting, one, that the market is quite robust; and two, these vessels are doing a really good service from us. And that is -- we pride ourselves of being someone, we believe, had premium operations on the vessels. We try to focus on optimizing fuel consumption, which is helping both us in terms of reducing emissions and also helps the customer, of course, in both reducing emissions and reducing fuel costs in the logistics. So that's also something we -- where we believe there could be further opportunities going forward.

[Operator Instructions] as there are no further questions from the audience, I would like to thank everyone for participating in this conference call. If you have any further -- if you have any follow-up questions to management, 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.