Seaspan sees Q1 profits skyrocket after tough 2016

The containership owner and charterer reported net earnings of $40 million in the first quarter of 2017, a massive jump from just $7.1 million the previous year, despite revenues falling 6.6 percent year-over-year to $201.3 million.    Global containership owner and charterer Seaspan Corp. is back in the black in the first quarter of 2017 after a tumultuous 2016 in which it took heavy losses.
   Seaspan reported net earnings of $40 million in the first quarter of 2017, a massive 461 percent jump from just $7.1 million in the same quarter last year.
   Diluted earnings per share (EPS) stood at $0.22 for the quarter compared with an EPS loss of $0.06 per share in Q1 2016, even as revenues slipped 6.6 percent year-over-year to $201.3 million.
   Seaspan attributed the decline in revenues primarily to lower average charter rates for vessels on short-term charters and an increase in unscheduled off-hire, primarily relating to vessels being off-charter.
   The company noted that a total of 190 of its off-charter days related to three vessels previously chartered to now-defunct South Korean ocean carrier Hanjin Shipping. The remaining off-charter days related mostly to Panamax vessels, including four secondhand vessels purchased in December 2016.
   For the full year in 2016, the company recorded a loss of $139 million on revenues of $877.9 million, compared with a profit of $199.4 million on revenues of $819 million for 2015.
   During the first quarter, Seaspan accepted delivery of the 4,250-TEU Seaspan Alps, which it acquired in December 2016, bringing the firm’s operating fleet to a total of 88 vessels.
   Total operating expenses were essentially flat at $130.6 million, despite a 10.8 percent reduction in ship operating expenses to $45.6 million.
   “During the first quarter, our modern fleet on long-term time charters continued to provide Seaspan with a solid and stable foundation,” Co-Chairman and CEO Gerry Wangsaid of the results. “Complementing our $5.0 billion contracted revenue backlog, Seaspan’s short-term fleet allows the company to benefit from a containership market recovery, which we believe has begun.
   “We have seen significant improvement in charter rates over the past two months,” added Wang. “In particular, Panamax charter rates have more than doubled to approximately $10,000 per day.”