Hapag to lease 6 14,000 TEU vessels from SFL Corporation for $540mn

New York Stock Exchange-listed SFL Corporation has agreed to charter out six 14,000 TEU container vessels to German carrier Hapag-Lloyd AG for a fixed period of five years following the expiry of the vessels' existing charters to another container line in 2023-2024.

"The vessels will then have charter coverage until 2028-2029 at firm rates, reflecting the current strong container market. The new time charter contracts will add approximately $540 million to SFL's fixed rate charter backlog, increasing the backlog to $3.8 billion," according to an official statement from SFL Corporation.

"We are excited to build a long term relationship with Hapag-Lloyd, who is the world's fifth largest container line," says Ole B. Hjertaker, CEO, SFL Management AS. This transaction also highlights the value and importance of our strong operational platform and our time charter strategy, enabling us to build strong customer relationships with industry leading counterparties. We have now added more than $1 billion to our charter backlog during the first quarter of 2022 which gives us strong earnings visibility and long term distribution capacity going forward."

Mediterranean Shipping Company (MSC) and Maersk account for 48 percent of contracted revenue for SFL in Q42021. Time charter was 90 percent of the charter hire for the company in the last quarter. SFL reported total revenue of $152 million and net income of $80 million for the quarter ended December 31, 2021. The company finished the quarter with cash and cash equivalents of $146 million.

SFL, established in 2003, has developed from a pure tanker owning company to one of the world's largest ship owning companies with investments in the tanker, bulker, container and offshore segments. SFL was listed on the NYSE in 2004, and has paid dividends every quarter.