Seaspan Swings to Quarterly Profit

Seaspan says new, fuel-efficient ships appeal to customers

Hong Kong-based containership company Seaspan Corp. [NYSE:SSW] reports that it made a profit of $17.8 million for the three months ended September 30, 2012 after losing $122.6 million in the same period last year.

The company's revenues rose to $168.7 million for the quarter, from $154.8 million in Q3 2011, as its 69 vessels were fully employed on time charterers.

It said one big factor in the bottom-line numbers was the change in fair value of financial instruments, which resulted in a $174.6 million loss in Q3 2011, but a loss of only $45.8 million in the third quarter of this year.

Gerry Wang, the company's CEO, co-chairman, and co-founder, said the company is focusing on providing its customers with fuel-efficient vessels, capitalising on the "attractive ship acquisition environment."

The company said it will receive three fuel-efficient, 10,000 twenty-foot equivalent unit (TEU) vessels in 2014 for use under charters with Hanjin Shipping for at least 10 years.

In an earnings call with analysts, Wang said demand has been weaker than expected in 2012 mainly because of low Asia-Europe trade, but the company expects container trade growth of about 7 percent in 2013.

"The continuing challenges facing our customers underscore the need for larger, modern fuel-efficient ships that will drive economies of scale and significantly lower the operating costs and highlight the opportunity that exists for owners with strong balance sheet and access to capital like Seaspan," he said.

Wang also said charters are managing supplies through widespread slow steaming and incremental idling of ships, and that the company anticipates demolitions, order consolidations, and conversions.