Ship Finance to Install Scrubbers on 7 Boxships

ContainershipIllustration; Source: Pxhere under CC0 Creative Commons license

Bermuda-based shipowner Ship Finance International has reached an agreement to install exhaust gas cleaning systems (EGCS) on a total of seven containerships.

The deal, agreed with an undisclosed customer, includes ships ranging in size from 8,700 to 10,600 TEU.

“We have recently increased the backlog by more than USD 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,” Ole Hjertaker, Ship Finance International CEO, said.

“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,” Hjertaker added.

The company revealed the additional scrubber installations as part of its financial report for the second quarter of 2019.

During the period, SFL’s operating revenues reached USD 110.9 million, dropping from USD 116.5 million reported in the previous quarter.

Reported net income was down at USD 28.1 million for the quarter ended June 30, 2019, compared to USD 33.6 million seen in the first quarter of the year.

Subsequent to quarter end, the Company acquired three container vessels ranging from 2,400 to 4,400 TEU. The vessels immediately commenced approximately 5.5-year bareboat charters to a leading container line until 2025, adding around USD 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,” the company said.

After the latest acquisitions, SFL has a fleet of 48 container vessels, all employed on long-term fixed rate charters, and two car carriers.

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