The Board of Directors of Eimskipafélag Íslands hf. has approved newbuild contracts for two 2,280 TEU container vessels and a ten-year time-charter through ElbFeeder, a German affiliate of Eimskip. The vessels are intended to provide transportation services between Reykjavík, Iceland and Rotterdam, as well as Teesport in the UK, the Company's current Blue Line.
In recent years, customer demand for transportation of fresh cargo has grown significantly, driven by increased exports of fresh seafood and farmed salmon, as well as imports of fresh products. Further growth is expected in fresh exports due to substantial development in land-based salmon farming in Iceland. The new vessels will be considerably larger than those currently servicing this route, supporting continued growth on the Blue line as well as in the Trans-Atlantic services, a core pillar of Eimskip's service between Iceland and North America.
ElbFeeder, majority-owned by the German shipping company Ernst Russ which listed on the Frankfurt Stock Exchange, has signed contracts with China Merchants Jin Ling Shipyard (Nanjing) Co. Ltd. Eimskip has at the same time signed a ten-year time-charter for the vessels, as previously stated. Delivery is expected in the second half of 2028.
The vessels will be specifically designed with customer service needs in mind, emphasizing service speed, reliability and high maneuverability ideal for the conditions in the North Atlantic. With a capacity of 2,280 TEU, length of 185 meters and breadth of 29.4 meters, the vessels will be the largest vessels in Eimskip's operations.
In addition to the design supporting service speed in an efficient way focus is also on optimal energy utilization, including hull design, silicone coating, shore power connection and various other equipment selection. The vessels will also feature a dual-fuel propulsion system, methanol- and LNG-ready, supporting the Company's environmental policy.
ElbFeeder currently operates seven container vessels and has performed strongly in recent years. The company is well positioned to invest in new vessels and the newbuilds will be funded through a combination of equity and debt within ElbFeeder. Expected lease liability for Eimskip balance sheet, for the ten-year time-charter with ElbFeeder, will amount to USD 86 million in 2028, partly offset by lease liabilities for current vessels on the Blue Line.
Vilhelm Már Thorsteinsson, CEO of Eimskip:
"We are very pleased to take this important step in renewing our fleet. We see great opportunities with the delivery of these new vessels, especially considering the ambitious plans to increase exports of fresh seafood and salmon. Over the past few years, we've also seen strong momentum in our Trans-Atlantic services from Europe to North America, which are the foundation of our weekly service between Iceland and North America. These new vessels will support further growth in that service.
We are proud of the fact that the design of these vessels focuses on customer service, operational efficiency, and reliability. The design also enables transition to alternative energy sources when they become accessible and reasonable option, supporting the Company's environmental journey.
The strong partnership and trust we've built with our co-owners in ElbFeeder, Ernst Russ in Germany, is reflected in this positive outcome and strengthens our continued collaboration."
Joseph Schuchmann, Co-CEO and Chief Commercial Officer of Ernst Russ AG:
"This investment will be a milestone for Ernst Russ, marking our first newbuild investment in decades. We are delighted to be able to implement it together with our long-standing partner Eimskip, who will also function as the initial long-term charterer and thus contributes significantly to the financial viability of the project".
For further information:
Harpa Hödd Sigurdardóttir
EVP of Human Resources and Communication
Tel: +354 825 7379, email: harpa@eimskip.com
Gudbjörg Birna Björnsdóttir
Head of Treasury and Investor Relations
Tel: +354 844 4752, email: investors@eimskip.com
