Seaspan takes Hanjin hit, posts US$184 million quarterly net

Time: 2016-11-02 13:41
HONG KONG non-operating shipowner Seaspan has posted a third quarter net loss of US$184 million, against last year's profit of $20.4 million, drawn on revenues of $224.8 million, which increased 5.6 per cent.
Seaspan also posted a net loss of $140.4 million against a year-on-year net profit of $123. 1 million for the first nine months of 2016, drawn on revenues of $664.7 million, which increased 10.6 per cent.
Revenue increases were offset by lower average charter rates and reductions on three 10,000-TEU vessels after Hanjin declared bankruptcy, the company said. 
Third quarter pre-tax profit (EBITDA) stood at $148.3 million, down 19.1 per cent year on year while the nine-month figure came in at $489.1 million, down 3.3 per cent.
"Seaspan has grown through periods of adversity to become the world's largest independent containership owner and lessor," said Seaspan founder and CEO Gerry Wang. 
"With future contracted revenue of over $5 billion and over $500 million in liquidity, we believe that Seaspan is well positioned to capitalise on opportunities that may arise due to industry challenges," said Mr Wang, whose company is headquartered in Vancouver, but run from Hong Kong.
"On August 31, Seaspan's customer Hanjin filed for bankruptcy in Korea. Charters for three of Seaspan's 10,000-TEU vessels and the Seaspan Efficiency have been cancelled and all four vessels have been returned," said the Seaspan statement.
Seaspan stopped recognising revenue on these vessels on September 1 after Hanjin declared bankruptcy, the company said.
At the same time, Seaspan raised over $1.5 billion from capital markets, sale-leaseback, and other financing transactions during the first nine months of 2016.
It achieved 8.9 per cent reduction in ship operating expense per ownership day during the third quarter year on year, primarily due to a continued focus on cost management initiatives.
Vessel utilisation reached 95.6 per cent and 97 per cent for the three and nine months ended September 30, or 95.9 per cent and 97.5 per cent the impact of scheduled off-hire days is excluded.
Seaspan also accepted delivery of one vessel on a five-year time charter to Maersk during the third quarter, bringing Seaspan's operating fleet to a total of 89 vessels on September 30.   
The company also paid $8.4 million of quarterly dividends to preferred shareholders of record as of July 29. Said Mr Wang: "During the third quarter, we continued to modernise our fleet with the delivery of our eleventh 10,000-TEU SAVER ship, which commenced a five-year fixed-rate time charter with Maersk Line. 
"This represents the fifth newbuilding vessel that has been delivered to Seaspan this year.  We are also very pleased with the success of our cost control measures that resulted in a decline in our ship operating expenses while our fleet ownership days continued to increase," he said.
In August, Seaspan sold a 4,600-TEU vessel, the Seaspan Excellence, to a ship recycler for net sale proceeds of $5.8 million, resulting in a loss on disposition of $16.5 million.
Contact:  Aster Chen
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