Seaspan posts higher revenues, lower profits

The independent containership owner and manager reported profits of $36.4 million on revenues of $224.3 million for the second quarter of 2016.

   Seaspan Corporation, an independent containership owner and manager, had a profits of $36.4 million in the second quarter of 2016 compared with $81.4 million in the second quarter of 2015.
   Revenues for the quarter amounted to $224.3 million compared with $199.2 million in the same period last year.
   The company’s normalized net earnings totaled nearly $44 million in the second quarter, compared with $35.2 million in the same 2015 period. Normalized net earnings, which are a non-GAAP measure, are “adjusted for interest expense, excluding amortization of deferred financing fees, refinancing expenses, foreign exchange gain, write-off of vessel equipment, change in fair value of financial instruments, interest expense at the hedged rate, and certain other items that Seaspan believes are not representative of its operating performance,” the company said.
   During the second quarter, Seaspan secured in excess of $1 billion in new capital, comprised of loan, lease and equity financings, according to Seaspan CEO Gerry Wang. “Our continued ability to access capital from diverse sources is a strong endorsement of our stress tested business model and disciplined growth strategy,” Wang said.
   Seaspan also took delivery of the eighth in a series of 14,000-TEU containerships using Seaspan’s “SAVER” design. The vessel also began a 10-year, fixed-rate contract with Yang Ming.
   In addition, Seaspan leased, with options to buy, two ships, bringing its operating fleet to 89 ships at the end of the second quarter. One ship has a capacity of 10,000 TEUs, while the other ship has a capacity of 14,000 TEUs. The ships, which are chartered to MOL, were previously owned by Greater China Intermodal Investment (GCI) and constructed under Seaspan’s supervision.
   Meanwhile, Seaspan also acquired two new 11,000-TEU vessels during the quarter from GCI for $195.6 million and their associated 17-year charters with MSC. These two vessels are expected to be delivered next year.
   GCI is a joint venture established to invest in containership assets, of which, Seaspan holds an 11.1 percent interest in. In addition to Seaspan, other members of the GCI joint venture include Carlyle Group; the family of Seaspan co-chairman Kyle Washington; and Tiger Group Investments, which is chaired by Seaspan director Graham Porter.