May 2--HONG KONG's Seaspan, shipowner and charterer, posted a first quarter year-on-year 465 per cent profit increase to US$40 million, despite a 6.6 per cent decline in revenue to $201.3 million.
"During the first quarter, our modern fleet on long-term time charters continued to provide Seaspan with a solid and stable foundation," said Seaspan CEO Gerry Wang.
Seaspan blamed the revenue decline on low 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 the bankrupt Korean carrier Hanjin Shipping.
The remaining off-charter days related mostly to panamax vessels, including four secondhand ships 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 flat at $130.6 million, despite a 10.8 per cent reduction in ship operating expenses to $45.6 million.
Said Mr Wang: "Complementing our $5 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," he said, adding that panamax charter rates have more than doubled to $10,000 per day.