SFL Corporation Ltd. (SFL) Q4 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Fourth Quarter 2019 SFL Corporation Limited Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be the question-and-answer session. [Operator Instructions] I must advice you that this conference is being recorded today, on the 18th of February, 2020. I would not like to hand the conference over to your speaker today, Ole Hjertaker. Please go ahead, sir.

Thank you, and welcome all to SFL's fourth quarter conference call. I will start the call by briefly going through the highlights of the quarter, and following that our CFO; Aksel 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 includes 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 64th quarter with profits and dividends, and the dividend represents $1.40 per share on an annualized basis or around 10% dividend yield based on closing price of $13.45 on Friday. Over the years, we have paid nearly $27 per share in dividends or $2.3 billion in total and we have a significant fixed rate charter backlog supported continued dividend capacity going forward. The total charter revenues was $159 million in the quarter, with 90% of this from vessels and 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 $123 million, up from $117 million in the previous quarter, and last 12 months, the EBITDA equivalent has been approximately $485 million. The reported net income for the quarter was approximately $24 million or $0.22 per share. This was after a non-cash impairment of $34 million on offshore assets. But, we also had some positive gains in mark-to-market movements on equity securities, particularly relating to Frontline shares, offsetting part of that effect. And we have added $225 million in charter backlog recently, as a combination of asset acquisitions and charter adjustments linked to scrubber investments, and our fixed rate backlog stands at approximately $3.6 billion. During the fourth quarter , we freed up most of the capital tied up in Frontline shares on the back of strong share price performance in the quarter. We sold 7.6 million shares or two thirds of our holdings at an average price of close to $11 per share and still keep the market exposure to 3.4 million shares through a forward contract expiring in June. The net effect is that we freed up more than $100 million in cash in the fourth quarter. In October and November, we took delivery of the last two 300,000 deadweight on crude oil carriers or VLCCs with charters back to Hunter Group. The purchase price of $60 million per vessel is very attractive compared to the estimated charter fee values of more than $100 million per vessel. We financed $142 million on the three vessels, so equity investment was an aggregate $37.5 million. The charter period is five years, and the transaction added around $33 million per vessel to our charter backlog. In early January, we finalized documentation and funded the cost of installation of scrubbers on seven out of eight vessels on charter to Golden Ocean. We will be compensated for the cash investment through an increase in the charter rate, but importantly the profit share threshold that will remain the same as before. With the scrubbers installed, we believe that the vessel will have a higher earnings potential, and with a threshold for profit share remaining around $18,500 per day per vessel, we believe there is increased potential for profit share going forward. In the fourth quarter, before scrubber fitting, there was $600,000 in profit split on the bulkers, but there was more profit split on the tankers on charter to Frontline, totaling $3.3 million in the quarter, despite the fact that one of these vessels was out of service for dry-docking and scrubber installation during half of the quarter. Both the remaining two Frontline vessels now have scrubbers installed and are operating in the spot market, and economics relating to the scrubber upgrades holds true with owners keeping the delta and the fuel costs currently around $200 per ton. For VLCCs, the effect could be $2 million to $3 million additional net earnings at the current spread between the fuel grades depending on vessel specification and freight. We have also agreed with Maersk Line to extend charters for three additional 9,000 to 10,000 TEU vessels in combination with installing scrubbers. We added $160 million to the charter backlog for the last few vessels, but more importantly we also have a profit share relating to the scrubber economics on seven out of the 10 large vessels we have on charter to Maersk Line. Vessels of this size use around 20,000 tons to 23,000 tons of fuel split per year; and with current price difference of $200 per ton, this could have a significant revenue effect for us going forward. The agreement there is that we will get most of the economics until we have recouped our investment with a good return on capital, and thereafter our customer will get more of the economics. Of the seven vessels, the first vessel will leave the shipyard any day now, and the remaining vessels are scheduled to be upgraded during 2020, so full effect is expected next year. Given the logistics challenges due to the coronavirus outbreak in China, some of the installations will most probably be later in the year than originally planned. Earlier this month, we sold a 2002-built VLCC Front Hakata to an unrelated third party. This was the last vessel remaining from the initial fleet of 47 vessels acquired from Frontline in 2003; and following this transaction, the company has only two scrubber-fitted VLCCs remaining on charter to a subsidiary of Frontline Limited. The net cash proceeds to SFL from that sale was approximately $30 million, after a compensation to Frontline for the early termination of the charter. The book effect of the sale is expected to be neutral. We have also recently agreed to sell three of the vessels previously uncharted to a subsidiary of Solstad Offshore ASA. Two vessels have been sold to an unrelated third party, while, one vessel will be recycled in Norway at the green recycling facility according to the strict European ship recycling regulation. The market for offshore support vessels is very challenging and the vessels have remained in layups since 2016. We have evaluated several alternatives for the asset, but given the age of the vessels and limited capital invested, we believe a sale of the two vessels and recycling of the third is the better alternative for us. The termination of the charter the Solstad is based on mutual agreement and not affecting the ongoing standstill agreement, nor our overall net claim into the restructuring. As a result of the continued uncertainty around the remaining two assets, we have essentially written the assets down to a very conservative low level and recorded a noncash impairment of $34.1 million in the fourth quarter. The impact for us is relatively marginal, as it is less than 1% to our balance sheet. We do not have any mortgage debt on the vessels and the charters were removed from a backlog more than a year ago, given the uncertainty already at that time. And finally we would like to mention that we recently raised the NOK600 million, Norwegian kroners, or the equivalent of $67 million, through a new five year unsecured bond loan. The proceeds were raised at NIBOR or Norwegian Inter based borrowing rate plus a margin of 4.4%, which is well below previous unsecured bond loans, down from NIBOR plus 4.75% in 2018 and NIBOR plus 4.6% last year. All the proceeds, as usual, have been swapped to U.S. dollars at a fixed interest rate and the last bond loan was booked at the rate of approximately 5.9%. Following the recent charter extensions our charter backlog now stands at approximately $3.6 billion, and additionally $500 million has been added the last 12 months. Over the years, we have changed both fleet composition and structure, and we now have 88 vessels and rigs and no vessels remaining from the initial fleet in 2004. We have gone from a single asset class chartered to one single customer to a diversified fleet and multiple counterparties. And over time the mix of the charter backlog has varied from a 100% tankers to nearly 60% offshore, and at one stage two containers now being the largest segment with more than 50% 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 transaction from a risk reward perspective. Over time, we believe this will balance itself out from a segment mix perspective. Last year, we evaluated transactions totaling more than $22 billion in aggregate, or more than four times our balance sheet. It is there for more of a coincidence, that the gross volume of investments in 2018 was higher than last year, but we tried to be careful and conservative in our investments and not just invest because money is burning in our pockets. Our strategy has also 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 wide range of services to our customers 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 come from vessels on time charter, where we control the maintenance and the operating standard of the vessel, and less than 40% from payable charter vessels, where the customer is doing this. On the light of sight, SFL has a fleet of 48 container vessels and two car carriers. And with the exception of two feeder size container ships, 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 our backlog by nearly $300 million in connection with scrubber upgrades and related charter adjustments to container ships. And several additional vessels are expected to be upgraded with scrubbers paid for by our customers. On the dry bulk side, we have 22 vessels in the fleet with 13 larger vessels charted out on long-term basis and seven handy sized vessels and two Supramax bulkers traded in the spot market. One of our long-term objectives is to combine stability and predictability and cash flow spill optionality, as you've seen over time that market volatility can generate super returns from time to time. The profit share arrangement we have at Golden Ocean, as mentioned earlier, is a good example of this, with increased earnings potential after the scrubber upgrades. The Kamsarmaxes in the dry bulk fleet and most of the Supramaxs' all on long-term fixed rate time charters, while the two Supramaxes and seven handy sized dry bulk carriers continue to trade in the spot market. The average rates achieved for these vessels this quarter were approximately $8500 per day, modulated down from $9,100 per day in the previous quarter. In the tanker segment, SFL has 11 crude oil products and chemical tankers, most of which are employed on long-term charters. And the vessels represent around 8% of the charter backlog. The crude oil tankers chartered the Frontline Shipping Limited around $20,000 per day base rate per day in the quarter, plus a profit share of $3.3 million. And as mentioned previously, all our remaining VLCCs have already installed scrubbers. The average daily time charter equivalent rate from the companies to modern Suezmax tankers was approximately $33,000 per day in the quarter, compared to $18,700 per day in the previous quarter. One of these has just had scrubbers installed, while the second will be dried up later in the quarter, where scrubbers also will be added on that vessel. This will take place in Singapore. So, not subject to the same logistical issues are similar work in China these days. Up until 2017, the offshore segment was our largest segment for a long period, but is now down to around to 25% of our charter backlog, and we own three rigs and two offshore support vessels after the recent sales. The charter hired from the drilling rigs were $27 million in the quarter. Seadrill 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 it's now working for Equinor. Including the West Linus, we have reduced the net debt from $1.9 billion initially on the Seadrill rigs to below $600 million currently, or less than $200 million per rig. And of this aggregates outstanding loan balance, less than 50% is currently guaranteed by SFL. And with that, I would like to give the word over to our CFO, Mr. Olesen, who will take us through the financial highlights for the quarter.

Thank you, Mr. Hjertaker . On this slide, we've shown our pro forma illustration of cash flows for the fourth 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 noncash items. The company generated gross charter hire of approximately $169 million in the fourth quarter, with more than 90% of the revenue coming from our fixed charter rate backlogs, which currently stands at $3.6 billion, giving us strong stability on our cash flow going forward. This benefit generated net charter hire of approximately $82 million, of this, approximately 65% was derived from time charter vessels, and approximately 35% from payable charters. Our tanker fleet generated approximately $20.7 million in net charter hire, including $3.3 million in profit split from our charters different time. Of this amount, a 4% was derived from time and voyage charter vessels, and 16% from bareboat charters. Subsequent to quarter end, the company sold the 2002 built VLCC from Takata and terminated the charter agreements with Frontline for the vessel. Net proceeds to the company was approximately $30 million. During the fourth quarter, a dry bulk vessels generated approximately $28.5 million in net charter hire, including $600,000 in profits splits from our charters to go Golden Ocean. Furthermore, as the sale agreed to invest in scrub installation on seven of our eight capesize bulk carriers, long-term charters to Golden Ocean, in exchange for increased charter rates, through 1st of January, 2020. At the end of the fourth quarter, SFL owned three drilling rigs and five offshore support vessels. All of these assets are employed on bareboat charters and generated approximately $26.5 million in charter hire, all from the Seadrill rigs. There was no contribution from the five offshore vessels from charter to Solstad due to the ongoing tanker agreement which is set to expire at the end of March. All of our three drilling rigs are in long-term bareboat charters 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 semisubmersible rig, West Hercules, is employed on consecutive shorter-term subcharters to Equinor in the North Sea. The semisubmersible rig, West Taurus, is currently in layup in Norway. This summarizes to an adjusted EBITDA of approximately $123 million for the fourth quarter or $1.14 per share, compared to $117 million and $1.09 in the previous quarter. We then move onto the profit and loss statement as reported under U.S. GAAP. As we've 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. As a result, a significant portion of our charter revenues are excluded from U.S. GAAP operating revenues and instead booked as revenues classified as repayment of investments in finance leases and vessel loans, results in associates and long-term investments and interest income from associates. So overall, for the quarter, we reported total operating revenues according to U.S. GAAP for approximately $120 million, which is the lower number than the $159 million of charter hire actually received for the above mentioned reasons. In the quarter, the company recorded profit share income of $3.9 million, including $3.3 million from Frontline and $600,000 Golden Ocean. And as previously mentioned, the company recorded noncash impairment charges for approximately $34 million, related towards five offshore support vessels. SFL recorded, $27.9 million gain on mark-to-market movement, marketable securities, primarily related to increased market value of shares in Frontline Limited. So, overall, and according to U.S. GAAP, the company reported net income of $23.6 million or $0.22 per share. Moving on to the balance sheet. We had approximately $225 million of cash and cash equivalents at quarter end, including $22 million freely available cash in our subsidiaries accounted for as investments in associates, and $3.5 million in restricted cash. The change in investments in marketable securities is mainly related to the sale of the Frontline shares and at quarter end the company had marketable securities of approximately $74 million, which includes approximately $44 million of Frontline shares, SFL has $37 million purchase obligation. The increase in short-term debt includes among others, the $37 million purchase obligation on the Frontline shares, $30 million of senior bank financing for existing vessels for SFL at secure refinancing at attractive terms, that's still up to $64 million of senior unsecured bonds with maturity in June 2020. And subsequent to quarter end, the company raised a new five year senior unsecured bond of NOK600 million or approximately $67 million in the Nordic market. The proceeds we raised at NIBOR plus a margin of 440 basis points, this is swapped to U.S. dollars at a fix interest rate of approximately 5.9%. And based on the closing price last Friday, the company had an equity ratio of approximately 38%. Then to summarize. The board has declared a cash dividend of $0.35 per share for the quarter. This represents a decent deal for approximately 10%, based on the closing price on Friday. This is the 64th consecutive quarterly dividend and since the inception of the company back in 2004, nearly $27 per share or $2.3 billion in aggregate has been returned to shareholders through dividends. And while we continued to collect revenue from our $3.6 billion fixed charter rate backlog, we also have upside from profits splits arrangements from our VLCCs and Capesize bulk carriers, in addition to profit split arrangements related to fuel savings on some of our larger container vessels. Over the last 12 months, we added more than $419 million in fixed charter rate backlog. We believe that our strong liquidity profile and consistent ability to access attractively priced financing, will allow us to pursue a creative growth opportunities in a favorable market environment for new investments. And with that, I give the word back to the operator, who will open the line for questions.

[Operator Instructions] The first question comes from the line of Greg Lewis. Please ask your question.

Yes, thank you, and good afternoon, everybody. Just given some of the macro news that we're hearing around coronavirus and force majeure, I guess it would be helpful if you could, Ole, kind of walk us through I guess, does any of your backlog, is it exposed, whether it's on the dry bulk or maybe the liner side in the event that ships cannot call on ports, is there any potential for your charters allowing for any type of force majeure?

Thank you. None of our charters are specifically sort of going to call it sort of Chinese ports, where we are subject to such effects. So, when we have chartered vessels to -- for instance, liner companies, we cannot direct whether they trade them in China or they trade them somewhere else. And therefore also, we don't have any specific force majeure effects. If there are any delays or if there are effects around call it what's going on in the Chinese market right now and the delays we see. It's a little different on shipyards we've heard. We have not experienced it, but we've heard it also for equipment production, et cetera, but for now we have not seen any effect on us. We have some vessels that are being dry docked. We have one that is on its way out of a Chinese shipyard tomorrow, it is the latest container ship. And things have been going slower than expected, but we're talking a few days, we're not talking a very big effect, and also economic effect there is limited for us because we are sharing that with our customer. But, we expect to see more rescheduling of dry dockings where some of that will be pushed later into the year, I believe is likely given the near-term uncertainty on activity level in China. We of course -- we've watched the news and it looks like there are some encouraging signs that it seems to reduce, at least the growth rate is slowing, and hopefully they can get it under control, and we get the Chinese economy and activity back on track.

Okay, great. And then just one more for me around the dividend. Clearly, you guys have done a good job of returning cash to shareholders. As we kind of think about it, and I believe in the prepared remarks you mentioned kind of targeting or thinking about a 9% to 10% yield, how should we think about just looking at the balance sheet? Clearly, there's liquidity capacity for growth, but they're also – it looks like based on cash flows, there's the ability to increase the dividends. How, at least, is the company thinking about potentially revisiting the dividend in 2020? Is it a function of equity? Is it a function of cash flow? Is it a little bit of everything? How is SFL kind of thinking about maybe increasing cash or increasing its returns to shareholders as we look out over the next year just given the backlog and the pretty solid charter coverage?

Yes, thanks. Trust me, the dividend is the first thing we think of when we wake up in the morning, and the last thing we think over before we go to bed. So, it's something we really focus on obviously, and the dividend is set by the Board every quarter. We have specifically decided or the Board has decided not to give guidance going forward on dividend level. But, at the same time, I mean they call it, the reasoning behind the dividend is not derived on a certain percentage of net income, it's not linked to the cash position. It's really linked to long-term distributable cash flow and ensuring that that is very safe. And hopefully, of course, our objective is to grow that over time. So, while we cannot guide anything specifically near -- next few quarters. Of course, we would love to increase the dividend over time and to increase distributions to shareholders, which also hopefully, then could also increase the share price in itself. That said, if you compare to our current yield around more than 10% right now, compared to the deposit rates, you get for term deposit in the U.S. you have a very significant, effective credit margin if you buy shares like SFL, and look at the yield there compared to putting your money into the bank. So, we also, of course, you know what we are saying, we are excited on that there, but we believe that the credit add on or the risk margin you're getting, if you buy this shares like SFL, certainly, with security we believe is built into the charter backlog, we think that is a good deal. And hopefully, investors will also buy into that, and hopefully the yield could come down. So, in terms of getting value to shareholders, it's really a combination of two things. One, increased dividends over time if we can invest wisely, so we don't – to build that sustainably, and then secondly demonstrate the risk profile, so hopefully, we can get the yield down.

Okay, perfect all. Thanks for the facts. Thank you for the comments.

Yes, thank you.

Thank you. The next question comes from the line of Randy Giveans. Please ask your question.

So first, clearly, dry bulk owners are hurting for cash right now with Capesize rates at, pick your number 4,000 a day. As such, has there been increased interest from dry bulk owners for sale and leasebacks to SFL similar to what Golden Ocean did a few years ago? And also, last time we talked, you mentioned you wanted to expand your tanker exposure but asset values were too high. Now that those tanker asset values have come in, are they at a more attractive level now?

Yes, I would say, we are looking at opportunity, I would say, on a daily basis. I think if you just summing up our sort of deal screening, last year, I think we were at more than $22 billion of deal opportunities that we were screening and looking at. Of course, we only did a small fraction of that. If you look at the split between the various segments, I would say, plus minus 30% of what we looked at was linked to the container side around 30% tankers. And then gas carriers say around 15%, and dry bulk below that. So, we are looking of course, also in that segment. But, the volumes have been in other segments than dry bulk. But, we tried to be careful, we tried to be diligent when we do our deals. And we prefer to deal with end users, if we get the risk reward dynamics to work for us. And if we don't see that, we rather pass on a deal than just do it, just because we have the cash on our balance sheet. So, I cannot give you a specific number on what we will do, but we are looking at opportunities in both those sectors, as we speak.

Got it, okay. And then, I see now you have, SFL has 41 vessels that are either upgraded or scheduled to be upgraded with the scrubbers. Do you still expect that kind of in a regular cadence here in the coming months and quarters, obviously, the coronavirus is impacting some of the timing but all that to be done by the first let's call it half of this year?

I cannot give you -- you probably follow that market even closer, closer than we do, in terms of what the various companies are saying with their specific scrubber upgrade programs. So far, we've seen call it more sort of delays in scrubber upgrades at Chinese shipyards. We have several vessels that have scrubbers fitted in Singapore, also in the Middle East, where we haven't seen any sort of effects like that on the scrubber fitting. The economics relating to scrubbers seem to hold true. We currently have around $200 per ton difference between the higher sulfur that we can use for the scrubber, and the low sulfur alternatives, and that spread also, runs up through the year. So, we still see that also into next year. And given particularly, for larger vessels, larger container ships, which of course have the biggest engines, but also VLCCs, Capesize, Suezmaxes it's still a very compelling investment on the margin simply because there is so much cash coming back through the reduced fuel costs. So, I wouldn't be surprised if we saw a higher even more vessels being operated with scrubbers. Also, we've seen that the lead time from you order, call it scrubber until you can have it installed, came down sharply through last year right now, because of the disruption, it's a little unclear, but we believe that, if we get back on track there will be an increased number of vessels fitted.

Got it. And then lastly, real quick for the Frontline shares that you own, as of December 31st, it was 3.4 million shares. Is that still the number today?

Yes, the 3.4 million shares, correct. That's a number we have. We have those on effectively a forward contract. So, we have released there some of the cash relating to those already. But, the forward contract then has expiry in June.

June.

But most of the cash has been from shares that are sold and where we have received all the cash.

Perfect. That's it for me. Thank you.

Thank you.

Thank you. The next question comes from the line of Chris Wetherbee. Please ask your question.

Hi, this is Liam on for Chris. Thank you for taking my question. So first, I just wanted to start kind of follow-up on some of the prior questions on the dry bulk fleet. I know obviously, some of the headline rates has come down recently, particularly with disruptions related to coronavirus or COVID19. But, what are your views on your employment contracts for those? I know that a lot of them are market related charters, would you consider, keeping -- are going to keep them on them or are you going to consider kind of strategic alternatives including like potentially selling some of the vessels?

Yes, I mean, we have 22 dry bulk vessels in the fleet, most of those are on long term, charters, where there is some profit share on the Capesize vessels. Of course, in the current depressed market near-term, we don't expect much profit share to generate from those, but the profit share is calculated quarter-by-quarter, so hopefully, going forward that could be. We also have some smaller vessels. We have seven handy size bulkers and two 56,000 dry bulk -- deadweight ton dry bulk vessels and the charter rate for those vessels where, call it, in the fourth quarter were in line with the rates we saw and in the third quarter, just marginally down. I think it's a little early to sort of to be -- because call it, to concise on what we have -- I don't think we should guide anything on earnings into first quarter, partly, because a part of the first quarter is usually, relatively slower due to the Chinese holidays and the Chinese taking off many of these vessels affected to and from Chinese supports. And then we've had this added delay in activity pickup due to the virus. But, at the same time, these vessels also trade all over the place. And depending on which, call it, broker you speak to these vessels currently earn in the region of around say $5,000 to $6,000 per day on average. So it's not really a very dramatic, we don't see the same extreme volatility as we see on the Capesize vessels. But of course, we monitor the situation ongoing.

Yes, and that said, the majority of our dry bulk vessels in terms of revenue is fixed to long-term charters, which is basically paid, you know, not depending on, call it, the underlying market. And also given the recent scrubber agreement with Golden Ocean that will add approximately $3.9 million per year in additional revenue from the dry bulk vessels.

All right. Thank you. And I also wanted to follow-up on your bareboat charter arrangements with Solstad Offshore. And I know that three arrangements for some of your vessels have been terminated. And do you expect like a similar result for the remaining two vessels?

We cannot give you any specific guiding there. Of course, as we do with all our counter parties and all the situations, always evaluating our alternatives to optimize quality outcome for us. We did agree to sell the three vessels, one will be recycled and two will be sold for further trading to a third party. And then we only have two vessels remaining. There is a standstill agreement there with Solstad through next month. So, we have to await call it final outcome of that and also before that, there are -- we are limited how much we can really comment on the situation. But, we will make sure, we will disclose as much as we can as soon as we can, relating to that restructuring.

Alright. Thank you for taking my questions.

Yes, thank you.

[Operator Instructions] Dear speaker, there are no further questions at this time. Please continue.

Then, I would like to thank everyone for participating in our fourth quarter conference call and also thank the SFL team for their hard efforts and continue building the business. 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.

That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day.