Seaspan Corp Ends Quarter with Lower Income
Hong Kong-headquartered containership manager and owner Seaspan Corporation recorded a net income of USD 28.3 million for the three months ended June 30, 2017, a drop of 22.3 percent when compared to a net income of USD 36.4 million seen in the same quarter last year.
Revenues for the quarter dropped by 8.8 percent to USD 204.6 million from USD 224.3 million posted in 2Q 2016. As explained, this was primarily due to lower average charter rates for vessels that were on short-term charters. The decrease was partially offset by the delivery of newbuilding vessels in 2016 and 2017 and the addition of two leased-in vessels in 2016, according to the company.
Additionally, the company’s adjusted EBITDA decreased to USD 153.9 million in the three-month period ended June 30, 2017, from USD 177.2 million recorded in the same quarter a year earlier.
In May 2017, Seaspan took delivery of one 14,000 TEU vessel, YM Wind. The vessel was constructed at CSBC Corporation’s shipyard in Taiwan by using the fuel-efficient SAVER design. It commenced a 10-year fixed rate time charter with Yang Ming Marine in June 2017.
Also in May, Seaspan entered into a sale-leaseback transaction with special purpose companies (SPCs) for YM Wind for gross proceeds of USD 144.0 million. Under the lease, Seaspan sold the vessel to the SPCs and leased the vessel back for 12 years, with an option to purchase the vessel at the 9.5 year anniversary for a pre-determined fair value purchase price. The company said it used approximately USD 53.2 million of the proceeds to repay a credit facility.
Furthermore, the company completed in April the renewal of its 364-day unsecured, revolving loan facility for a total commitment of up to USD 120 million. The facility includes features providing for an increase in commitments by up to USD 30 million, enabling a total facility size of up to USD 150 million.
Seaspan also raised gross proceeds of USD 33.9 million through common equity sales in “at-the-market” offerings during the three months ended June 30, 2017, and USD 58.6 million for the six months ended June 30, 2017.
“During the second quarter, Seaspan grew its operating fleet with the delivery of the YM Wind, a 14,000 TEU containership on a long-term fixed rate time charter. We also achieved strong operating results, highlighted by our ongoing success in reducing costs and our high utilization rate for the quarter,” Gerry Wang, Chief Executive Officer and Co-Founder of Seaspan, commented.
“We took important steps to further strengthen our financial position during the quarter, including entering into a sale-leaseback transaction to fund the YM Wind delivery and renewing our unsecured revolving loan facility. Both of these transactions demonstrate the company’s strong access to capital. We remain committed to creating long-term shareholder value and are pleased to enter the second half of the year with a strong cash position and the financial flexibility to capitalize on future opportunities,” Wang concluded.
Seaspan’s managed fleet consists of 114 containerships representing a total capacity of over 915,000 TEU, including nine newbuildings on order scheduled for delivery by the end of 2018. As of June 30, 2017, Seaspan had a total of 89 vessels in operation.