John Fredriksen-backed shipowning company SFL Corp will net around $48m in profit from the sale of two VLCCs and a container ship.
The New York-listed sale-and-leaseback specialist has sold its last two VLCCs on charter to Frontline and a feeder container ship to Mediterranean Shipping Co (MSC).
The vessels have been sold for a total of $83m, but net proceeds amount to $48m after repayment of the associated debt, the company said.
The Oslo-based company in April sold the last of its two last VLCCs on charter to Frontline for a total of $70m.
The price for the 305,000-dwt Front Energy and Front Force (both built 2004) included compensation from Frontline for the early termination of the charters.
SFL has also sold a 19-year old sub-panamax container vessel for approximately $13m, including $12m in profit share.
The 1,700-teu MSC Alice (built 2003) was delivered to liner giant after a hire purchase agreement over the last five years.
The vessel was debt-free and SFL expects to record a gain of approximately $12m in the second quarter.
Sole customer
Chief executive Ole Hjertaker noted that the deals helped the diversification of the company.
“The recent sale of the two last VLCCs chartered to Frontline is noteworthy as this initially was SFL’s sole customer and all vessels were crude oil tankers,” he said.
“We now have a diverse fleet to multiple industry-leading counterparties and continue to expand our business relationships.”
This was illustrated by the recent long term charter of six large container vessels to Hapag-Lloyd, Hjertaker said.
In March, SFL tied up five-year charters for six 14,000-teu vessels with German liner operators in deals that will add $540m to the backlog.
Profit down
SFL reported net profit for the first quarter of the year was $47m, sharply down on $80m profit of the previous quarter.
That compares with a total profit in 2021 of $164.3m.
Total operating revenues for the quarter remained unchanged at $152.4m.
SFL plans to increase its dividend by another 10% compared to last quarter with the issue of a quarterly cash dividend of $0.22 per share.
The company has a fleet of 71 wholly or partly owned vessels, of which 34 are container ships.
Six are car carriers, including four dual car carriers under construction.
The company’s 16 crude oil, product and chemical tankers added approximately $30.2m in gross charter hire during the quarter.
The company also has 15 dry bulk carriers, of which 10 were employed on long term charters.
SFL owns two harsh environment drilling rigs, West Hercules and West Linus, which received charter hire of $21.4m in the quarter.
