Seaspan Reports Financial Results for the Three and Six Months Ended June 30, 2013
Signs Newbuilding Contracts for Fuel Efficient Vessels
(firmenpresse) - HONG KONG, CHINA -- (Marketwired) -- 07/29/13 -- Seaspan Corporation ("Seaspan") (NYSE: SSW) announced today its financial results for the three and six months ended June 30, 2013. Below is a summary of Seaspan's key financial results:
Summary of Key Financial Results (in thousands of USD):
Summary of Key Highlights
Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of Seaspan, commented, "During the first half of 2013, we generated strong and stable results and once again increased our common share dividend."
Mr. Wang continued, "Seaspan continues to capitalize on attractive growth opportunities. We are pleased to have commenced the third quarter by signing a major newbuilding contract and are in the process of finalizing long-term time charter agreements for these vessels. Seaspan's strong balance sheet combined with its technical and operational expertise in large modern containerships position the Company to continue to execute its growth strategy and provide charterers with their desired vessels."
Second Quarter Developments
Vessel Delivery
On June 13, 2013, Seaspan accepted delivery of the MOL Excellence, bringing its operating fleet to 70 vessels. The 4600 TEU vessel is on charter to Mitsui O.S.K. Lines Ltd. ("MOL") under a two-year, fixed-rate time charter.
Loan Facility Transactions
On April 25, 2013, Seaspan entered into a term loan facility with an Asian bank for up to $174.0 million to be used to fund the construction of two 14000 TEU newbuilding containerships to be chartered to Yang Ming Marine Transport Corp. ("Yang Ming Marine").
On June 20, 2013, Seaspan entered into a term loan facility with a U.S. bank and an Australian bank for up to $30.0 million to be used to fund the purchase price of two 4600 TEU containerships on charter to MOL. Seaspan drew the full $30.0 million of this facility on July 9, 2013.
Subsequent Events
Newbuilding Contracts
On July 19, 2013, Seaspan entered into contracts with a major Asian shipbuilder for certain newbuilding containerships. The vessels are scheduled for delivery in 2015 and have an aggregate purchase price of approximately $550 million. Seaspan expects to sign long-term time charters with one of the liner majors shortly.
Vessel Delivery
On July 4, 2013, Seaspan accepted delivery of the MOL Efficiency, bringing its operating fleet to 71 vessels. The 4600 TEU vessel is on charter to MOL under a two-year, fixed-rate time charter.
Time Charters
In July 2013, three vessels were re-delivered to Seaspan and these vessels were subsequently re-chartered. The Seaspan Chiwan commenced a short-term charter for up to seven months. The Seaspan Dalian and Seaspan Felixstowe commenced time charters for up to 30 months with an additional option period of six to 12 months. The Seaspan Ningbo is expected to be re-delivered to Seaspan on July 30, 2013 and will be off-charter until a charter is entered into.
Dividends
On July 16, 2013, Seaspan declared cash dividends of $0.59375 and $0.496875 per Series C and Series D preferred share, respectively, for the period from April 30, 2013 to July 29, 2013. The dividends, representing a total distribution of $9.9 million, will be paid on July 30, 2013 to all Series C and Series D preferred shareholders of record as of July 29, 2013.
On July 24, 2013, Seaspan declared a quarterly dividend of $0.3125 per Class A common share. The dividend is payable on August 21, 2013 to all shareholders of record as of August 12, 2013.
Loan Facility Transaction
On July 25, 2013, Seaspan entered into a term loan facility with a leading European bank for up to $83.0 million to fund the construction of one 14000 TEU newbuilding containership to be chartered to Yang Ming Marine. With this transaction, all three 14000 TEU newbuilding containerships to be chartered to Yang Ming Marine are now financed.
Results for the Three and Six Months Ended June 30, 2013
The following table summarizes vessel utilization for the three and six months ended June 30, 2013:
At the beginning of 2013, Seaspan had 69 vessels in operation and accepted delivery of one vessel during the second quarter of 2013, bringing its fleet to a total of 70 vessels as of June 30, 2013. Revenue is determined primarily by the number of operating days, and ship operating expense is determined primarily by the number of ownership days.
The following table summarizes Seaspan's consolidated financial results for the three and six months ended June 30, 2013 and 2012:
Revenue
Revenue increased by 0.1% and 3.6% for the three and six months ended June 30, 2013, respectively, over the same periods for 2012. This is due primarily to: the impact of a full period's contribution of the larger newbuilding vessels delivered in 2012 (and higher time-charter rates associated with such vessels); revenue received from management of third party vessels; a decrease in scheduled off-hire; and the delivery of one vessel in June 2013. These increases over the same periods for 2012 were partially offset by: lower rates for five vessels which were on short-term charters during the period; one less day in 2013 due to the 2012 leap year; and an increase in unscheduled off-hire, which included 238 off-charter days for four of Seaspan's 4250 TEU vessels for the six months ended June 30, 2013.
The increase in operating days and the related financial impact for the three and six months ended June 30, 2013, relative to the corresponding periods in 2012, is attributable to the following:
Vessel utilization was 99.0% and 97.5% for the three and six months ended June 30, 2013, respectively, compared to 99.4% and 99.2% for the comparable periods in 2012.
The decrease in vessel utilization for the six months ended June 30, 2013, compared to the same period in 2012, was primarily due to a 249-day increase in unscheduled off-hire, which includes 238 off-charter days for four of Seaspan's 4250 TEU vessels. During the six months ended June 30, 2013, Seaspan completed two dry-dockings, which resulted in 19 days of scheduled off-hire compared to the completion of five dry-dockings, which resulted in 68 days of scheduled off-hire, during the comparable period in 2012.
The dry-dockings Seaspan completed during the three and six months ended June 30, 2013 involved the following vessels:
Seaspan's cumulative vessel utilization since its initial public offering in August 2005 through June 30, 2013 was 99.1%.
Ship Operating Expense
Ship operating expense increased by 18.5% to $37.3 million and by 13.4% to $74.9 million for the three and six months ended June 30, 2013, respectively, compared to the same periods in 2012. The increases are due to 233 and 535, or 4.0% and 4.7%, more ownership and managed days for the three and six months ended June 30, 2013, respectively, related to the addition of four 13100 TEU vessels during the first half of 2012 and management of third party vessels. The larger TEU vessels are more expensive to operate and the increased cost of lubes, insurance and other operating costs associated with these vessels further contributed to higher ship operating expenses in 2013. In addition, spare parts expense increased by $1.2 million and $1.8 million for the three and six months ended June 30, 2013, respectively, compared to the same periods in 2012 primarily due to earlier timing of purchases in 2013 and increased expense due to an expanding and aging fleet.
Ship operating expense for the three and six months ended June 30, 2012 included fixed, daily per vessel fees totalling $9.3 million, paid to the Manager for technical services prior to the acquisition of the Manager on January 26, 2012, and $56.8 million of direct costs incurred during the post-acquisition period from January 27 to June 30, 2012.
Depreciation and Amortization Expense
The increase in depreciation and amortization for the three and six months ended June 30, 2013 was due to the increase in the size of the fleet. Four vessels were delivered in the first six months of 2012 and a full period of depreciation was taken for these vessels in the three and six months ended June 30, 2013.
General and Administrative Expense
General and administrative expenses increased by 77.4% to $11.8 million and by 56.7% to $19.6 million for the three and six months ended June 30, 2013, respectively, compared to the same periods in 2012. The increases for the three and six months ended June 30, 2013 over the same periods in 2012 were due primarily to increases of $5.8 million and $7.8 million, respectively, in stock-based compensation expense related to the non-cash stock appreciation rights ("SARs") granted to Seaspan's Chief Executive Officer in December 2012 and to certain members of management in March 2013. Of the $5.8 million increase in stock-based compensation expense for the three months ended June 30, 2013, $2.6 million resulted from an accelerated recognition of stock-based compensation expense related to the vesting of the first tranche of SARs. During the quarter ended June 30, 2013, the first tranche of SARs vested because the 20 consecutive trading-day average of Seaspan's common stock exceeded the base price of $21.50 per share for that tranche. The original vesting period that was being used to recognize the stock-based compensation expense was based on a fair value model. Because the first tranche of SARs vested earlier than had been estimated by the fair value model, Seaspan was required to accelerate recognition of $2.6 million of stock-based compensation expense during the three months ended June 30, 2013, which amount otherwise would have been recognized later in 2013.
Operating Lease Expense
On June 27, 2012, Seaspan sold the Madinah to a U.S. bank and since that date has been leasing the vessel back over a nine-year term. Prior to June 27, 2012, Seaspan owned the vessel and financed it with a term loan of $53.0 million, which was repaid using the proceeds from the sale to the bank. During the three and six months ended June 30, 2013, Seaspan incurred operating lease expenses relating to this arrangement of $1.1 million and $2.2 million, respectively. In the comparable periods of 2012, instead of operating lease expense, Seaspan incurred interest expense of $0.5 million and $1.1 million on the $53.0 million loan.
Interest Expense
As at June 30, 2013, the balance of Seaspan's long-term debt totalled $3.1 billion and Seaspan's other long-term liabilities totalled $631.7 million. As at June 30, 2013, Seaspan's operating debt balance was $2.9 billion. Interest expense is comprised primarily of interest incurred on long-term debt and other long-term liabilities relating to operating vessels at the variable rate calculated by reference to LIBOR plus the applicable margin. Interest expense also includes a reclassification of amounts from accumulated other comprehensive loss related to previously designated hedging relationships. Interest incurred on long-term debt and other long-term liabilities for Seaspan's vessels under construction is capitalized to the cost of the respective vessels under construction.
The decreases in interest expense for the three and six months ended June 30, 2013 of $3.9 million and $5.4 million, respectively, compared to the same periods of 2012 were primarily due to lower operating debt and other long-term liabilities as well as a reduction in average LIBOR. The remaining decreases were due to a lower reclassification of accumulated other comprehensive loss into earnings and repayment of the term loan of $53.0 million in 2012 using the proceeds from the sale of the Madinah. For the six months ended June 30, 2013, the decrease in interest expense is partially offset by less interest capitalized as the average vessel under construction balance for the six months ended June 30, 2013 was lower than for the six months ended June 30, 2012. The average LIBOR charged on Seaspan's long-term debt for the three months and six months ended June 30, 2013 was 0.2% compared to 0.5% for the comparable periods in 2012. Although Seaspan has entered into fixed interest rate swaps for much of its variable rate debt, the difference between the variable interest rate and the swapped fixed-rate on operating debt is recorded in Seaspan's change in fair value of financial instruments.
Change in Fair Value of Financial Instruments
The change in fair value of financial instruments resulted in a gain of $71.2 million for the three months ended June 30, 2013, compared to a loss of $82.1 million for the comparable period in 2012. The change in fair value of financial instruments resulted in a gain of $68.5 million for the six months ended June 30, 2013, compared to a loss of $86.8 million for the same period in 2012. The changes for the three and six months ended June 30, 2013, compared to the same periods in 2012 were primarily due to the effect of the passage of time and less discounting of expected future settlements.
The fair value of interest rate swap and swaption agreements is subject to change based on the counterparty and Seaspan's company-specific credit risk of Seaspan and of the counterparty included in the discount factor and the interest rate implied by the current swap curve, including its relative steepness. In determining the fair value, these factors are based on current information available to Seaspan. These factors are expected to change through the life of the instruments, causing the fair value to fluctuate significantly due to the large notional amounts and long-term nature of Seaspan's derivative instruments. As these factors may change, the fair value of the instruments is an estimate and may deviate significantly from the actual cash settlements realized over the term of the instruments. Seaspan's valuation techniques have not changed and remain consistent with those followed by other valuation practitioners.
About Seaspan
Seaspan provides many of the world's major shipping lines with creative outsourcing alternatives to vessel ownership by offering long-term leases on large, modern containerships combined with industry leading ship management services. With a reputation for safety, quality and innovation, Seaspan provides turnkey services in ship design, cadet development, crewing, and newbuilding supervision. Seaspan's managed fleet consists of 89 containerships representing a total capacity of over 600,000 TEU, including 16 newbuilding containerships on order scheduled for delivery to Seaspan and third parties by the end of 2015. Seaspan's current operating fleet of 71 vessels has an average age and remaining lease period (excluding the effect of charterers' options to extend certain time charters) of approximately six years.
Seaspan's common shares, Series C Preferred Shares and Series D Preferred Shares are listed on The New York Stock Exchange under the symbols "SSW", "SSW PR C" and "SSW PR D", respectively.
Conference Call and Webcast
Seaspan will host a conference call and webcast presentation for investors and analysts to discuss its results for the three and six months ended June 30, 2013 on July 30, 2013 at 5:00 a.m. PT / 8:00 a.m. ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and request the Seaspan call. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call 1-855-859-2056 or 1-404-537-3406 and enter the replay passcode: 18697996. The recording will be available from July 30, 2013 at 8:00 a.m. PT / 11:00 a.m. ET through 8:59 p.m. PT / 11:59 p.m. ET on August 13, 2013. The conference call will also be broadcast live over the internet and will include a slide presentation. To access the live webcast and slide presentation, go to and click on "News & Events" and then "Events & Presentations" for the link. The webcast and slides will be archived on the site for one year.
Description of Non-GAAP Financial Measures
A. Cash Available for Distribution to Common Shareholders
Cash available for distribution to common shareholders is defined as net earnings adjusted for depreciation and amortization, interest expense, amortization of deferred charges, non-cash share-based compensation, change in fair value of financial instruments, bareboat charter adjustment, organizational development costs, amounts paid for dry-docking, cash dividends paid on preferred shares, gain on vessels, interest expense at the hedged rate and certain other items that Seaspan believes are not representative of its operating performance.
Cash available for distribution to common shareholders is a non-GAAP measure used to assist in evaluating Seaspan's ability to make quarterly cash dividends before reserves for replacement capital expenditures. Cash available for distribution to common shareholders is not defined by United States generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.
B. Normalized Net Earnings and Normalized Earnings per Share
Normalized net earnings is defined as net earnings adjusted for items such as interest expense, change in fair value of financial instruments, interest expense at the hedged rate, organizational development costs, gain on vessels and certain other items Seaspan believes affect the comparability of operating results. Normalized net earnings is a useful measure because it excludes those items that Seaspan believes are not representative of its operating performance.
Normalized earnings per share, converted, is calculated as normalized net earnings, less dividends on Series C and Series D preferred shares, divided by the "converted" number of shares outstanding for the period. The Series A preferred shares automatically convert to Class A common shares at a price of $15.00 per share at any time on or after January 31, 2014 if the trailing 30-day average trading price of the common shares is equal to or above $15.00. If the share price is less than $15.00, Seaspan can choose to not convert the preferred shares and to increase the annual increase in the liquidation preference to 15% per annum from 12%. The "converted" number of shares includes: basic weighted average number of shares, share-based compensation, contingent consideration, shares held in escrow and the impact of the Series A preferred shares converted at $15.00 per share. This method reflects Seaspan's ability to control the conversion if the share price is less than $15.00 and the per share impact of the preferred shares conversion at $15.00.
Normalized net earnings and normalized earnings per share, converted, are not defined by GAAP and should not be considered as an alternative to net earnings, earnings per share or any other indicator of Seaspan's performance required to be reported by GAAP.
B. Normalized Net Earnings and Normalized Earnings per Share (continued)
C. Adjusted EBITDA
Adjusted EBITDA is defined as net earnings before interest expense and other debt-related expenses, income tax expense, interest income, depreciation and amortization, bareboat charter adjustment, organizational development costs, gain on vessels, change in fair value of financial instruments and certain other items that Seaspan believes are not representative of its operating performance.
Adjusted EBITDA provides useful information to investors in assessing Seaspan's results of operations. Seaspan believes that this measure is useful in assessing performance and highlighting trends on an overall basis. Seaspan also believes that this measure can be useful in comparing its results with those of other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net earnings. Adjusted EBITDA is not defined by GAAP and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect management's current views with respect to certain future events and performance, including, in particular, statements regarding: future operating or financial results; expansion of Seaspan's business; future time charters, including the obtaining of charters for the vessels recently ordered by Seaspan; future dividends; the effects of grants of stock appreciation rights on Seaspan's general and administrative expenses; vessel deliveries; vessel financing arrangements; and Seaspan's capital requirements. Although these statements are based upon assumptions Seaspan believes to be reasonable, they are subject to risks and uncertainties.
These risks and uncertainties include, but are not limited to: the availability to Seaspan of containership acquisition opportunities; the availability and cost to Seaspan of financing to pursue growth opportunities; the number of additional vessels managed by the Manager in the future; the amounts of any payments to the former owners of our Manager related to fleet growth; the timing of recognition of compensation expenses related to stock appreciation rights; general market conditions and shipping market trends, including chartering rates; conditions in the containership market; increased operating expenses; the number of off-hire days; dry-docking requirements; availability of crew; insurance costs; Seaspan's ability to borrow funds under its credit facilities and to obtain additional financing in the future; Seaspan's future cash flows and its ability to make dividend and other payments; the time that it may take to construct new ships; Seaspan's continued ability to enter into primarily long-term, fixed-rate time charters with customers, including charters for the vessels recently ordered by Seaspan; Seaspan's ability to leverage to its advantage its relationships and reputation in the containership industry; changes in governmental rules and regulations or actions taken by regulatory authorities; the financial condition of shipyards, charterers, lenders, refund guarantors and other counterparties and their ability to perform their obligations under their agreements with Seaspan; taxation of Seaspan and of distributions to its shareholders; potential liability from future litigation; the potential for early termination of long-term contracts and Seaspan's potential inability to renew or replace long-term contracts; conditions in the public equity markets and the price of Seaspan's shares; and other factors detailed from time to time in Seaspan's periodic reports and filings with the Securities and Exchange Commission, including Seaspan's Report on Form 20-F for the year ended December 31, 2012. Seaspan expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in Seaspan's views or expectations, or otherwise.
Contacts:
Seaspan Corporation - For Investor Relations Inquiries:
Mr. Sai W. Chu
Chief Financial Officer
604-638-2575
The IGB Group - For Media Inquiries:
Mr. Leon Berman
212-477-8438
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 29.07.2013 - 20:40 Uhr
Sprache: Deutsch
News-ID 282698
Anzahl Zeichen: 2608
contact information:
Town:
HONG KONG, CHINA
Kategorie:
Air Freight
Diese Pressemitteilung wurde bisher 221 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Seaspan Reports Financial Results for the Three and Six Months Ended June 30, 2013"
steht unter der journalistisch-redaktionellen Verantwortung von
Seaspan Corporation (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
