Seaspan: Loss won't hurt ability to pay dividend

Seaspan Corp., which builds and purchases containerships and then leases them to liner companies, reported a first quarter net loss of $37.7 million, compared to a profit of $14.7 million in the same 2007 period.

Revenue for the quarter was $54.2 million compared to $41.2 million in the same 2007 period.

The company said the results reflected a non-cash unrealized loss of $53.8 million in the quarter from interest rate swap agreements, compared to a $1.4 million gain due to a change in the value of financial instruments in the first quarter of 2007.

Seaspan said it is required by accounting rules to mark to market value interest rate swaps as though the instruments were realized as of the reporting date.

There is no impact on our operating performance or ability to distribute cash to shareholders from the impact of the mark-to-market accounting adjustments, it added. The change in fair value from the unrealized non-cash mark-to-market accounting adjustments are specifically excluded by our banks for our debt covenant calculations and have no impact on security requirements for our debt.

Gerry Wang, chief executive officer of Seaspan, said that during the quarter the company significantly strengthened our position for future growth, and that it increased cash available for distribution by 34.2 percent to $32.5 million and completed two credit facilities for more than $525 million in the first quarter.

Seaspan had a fleet of 29 ships with aggregate capacity of 143,207 TEUs at the end of the first quarter. It has ships on orders that will increase its fleet to 69 ships with capacity of 401,323 TEUs by the end of 2011. 

 

Source: American Shipper