Seaspan’s profits down despite increased revenue

The independent containership owner and manager increased revenues by 5.9 percent, but saw profits drop 56.1 percent.    Seaspan Corporation recorded net earnings of $131.25 million for the full year in 2014, down 56.1 percent from $299.03 million in 2013, according to its latest financial statements.
   Profits for the fourth quarter of 2014 were also down as the company reported net earnings of $27.77 million for the quarter ended Dec. 31, a 59.3 percent decrease from $68.23 million for same period in 2013.
   These results came despite revenue increasing 5.9 percent to $717.2 million for the full year and 10.1 percent to $189.4 million for the quarter in 2014, compared to 2013.
   Seaspan attributed the increased revenue primarily to the delivery of six 10,000-TEU vessels in 2014 and a decrease in unscheduled off-hiring of vessels, as well as the delivery of two 4,600-TEU second-hand vessels in mid-2013. Seaspan’s operating fleet included a total of 77 vessels as of Dec. 31, 2014.
   On Dec. 19, 2014, Seaspan entered into contracts with Jiangsu New Yangzi Shipbuilding Co., Ltd. and Jiangsu Xinfu for the construction of two additional 10,000-TEU newbuilding containerships. The purchase price for the vessels, scheduled for delivery in October 2016 and January 2017, was approximately $186.0 million.
   Increases in revenue were partially offset by an increase in scheduled off-hiring, lower average charter rates for three vessels on short-term charters and a decrease in vessel management revenue, according to the company.
   Seaspan achieved vessel utilization of 99 percent for the full year in 2014 and 98.7 percent for the fourth quarter.
   In addition, the company announced it has increased common share quarterly dividend by 9 percent to $0.375 per common share, effective first quarter 2015.
   “2014 was an important year for Seaspan, as we took steps to further grow our high quality fleet, contracted revenue stream and earnings power,” said Gerry Wang, the company’s CEO co-chairman. “Our on-going success signing attractive long-term time charters with world class liner companies enabled Seaspan to increase its total committed revenue to $6.4 billion, positioning the company to continue to provide shareholders with stable and growing cash flows. During the year, we also further diversified and strengthened our capital structure, highlighting the strong support we continue to receive from leading banks and the capital markets.”
   “We continue to execute our disciplined growth strategy and are pleased to announce our sixth dividend increase since 2010, reflecting our stable business model and commitment to return capital to shareholders,” added Wang.