Maritime ship and offshore asset owner SFL (NYSE:SFL) reported earnings and a dividend cut today. Investors in turn cut the share price, which closed down 15% from Wednesday's closing price.
Even with the lower dividend, shares are yielding over 9% at their current price.
The company reported $16 million of net income in its third quarter, and CEO Ole B. Hjertaker issued a statement saying that after the initial disruption of world trade due to the coronavirus pandemic, the company has not "had any material operational impact on our 84 vessels."
Hjertaker also noted that several markets, including container and car carriers, are performing well enough for the company to reactivate previously idled vessels.
But SFL reported that with Seadrill (NYSE:SDRL) in the midst of restructuring, SFL's board of directors thought it was prudent to lower its quarterly dividend payment to $0.15 per share, from $0.25. SFL owns three drilling rigs that are on long-term charters to subsidiaries of Seadrill.
The company noted in September that Seadrill was current in its charter payments for the three drilling rigs, but that it still needed to work out a solution, since Seadrill is technically in default under the leases due to its failure to pay interest on bank debt.
Some investors may think the risk is still too high, as the offshore rigs provided 15.5% of total gross charter hire fees for the quarter.