Eimskipafélag Íslands hf. - Company Announcement

Eimskip further reduces purchase price of a new vessel building project

Delay of vessel delivery this year

In 2011, Eimskip and the shipyard Rongcheng Shenfei in China made an agreement
of building two container vessels. Each vessel's size is 875 TEU, thereof each
containing plugs for 230 reefer containers. Deadweight of each vessel is
approximately 12 thousand tons. The vessels are 140.7 meters long and 23.2
meters wide. 

According to the amendment agreement with the shipyard from April 2013,
expected delivery of the first vessel was in the first quarter of 2014. A new
amendment agreement with the shipyard expects delivery of the first vessel at
the second quarter of 2014, but besides the delay Eimskip has negotiated a
further reduction of the first vessel's purchase price in the amount of USD 750
thousand. Before, Eimskip had negotiated a reduction of the total purchase
price of both of the vessels by USD 10 million. 

There will also be a delay in the delivery of the second vessel. A new
amendment agreement for the second vessel has not been made, but expected
delivery is in the fourth quarter this year. 

The delay of the vessels' delivery time will neither affect these changes nor
services to the company's customers. The delay will however extend chartering
of two vessels, but the new vessels are expected to replace two chartered
vessels currently operated by the company. 



Gylfi Sigfússon, President and CEO

“It is indeed unfortunate that the completion of the new vessel building
project has been delayed, but fortunately the delay does not affect our
services to the company's customers. The negotiation of a reduced purchase
price can be considered as the shipyard's compensation since Eimskip has to
charter vessels longer than expected. 

The worldwide shipbuilding industry has been facing difficulties, among other
things due to significant excess capacity of container vessels worldwide, which
has resulted in vessel owners in general delaying delivery of new vessel
buildings since they need additional assignments for the vessels. This has
resulted in general delay in vessel delivery, including Eimskip's new vessel
building project.” 



About Eimskip

Eimskip runs a network of 51 offices in 19 countries and operates 16 vessels.
Total number of employees is around 1,390, of which about 800 are located in
Iceland. About half of Eimskip's operating revenue comes from operations
outside Iceland. The company's vision is to provide outstanding transportation
services through a dependable transport system in the North Atlantic, as well
as offering extensive worldwide network of reefer logistics services.