Seaspan suffers paper loss to cover fleet expansion: CEO

VANCOUVER's Seaspan, a non-operating shipowner, posted a third quarter loss of US$71 million year on year, compounding a $66 million in the same 2009 period despite revenue rising $111 million, compared to $74 million as the size of the company's fleet grew.

Described by CEO Gerry Wang as a "paper loss" incurred in financing its expanding fleet, the company reported a $229 million loss for the first nine moths of 2010 compared to a $70 million net profit in 2009, reported London's Containerisation International.

New York-listed Seapan revealed that the company had more than $7 billion in contracted revenue over the extent of its 69 containerships business model - 55 on long-term charter with 14 to be delivered over the next 18-months.

The company also said that it believed it had "fully secured funding" with Credit Agricole for its order book, but nonetheless it had recently entered into a $150 million sale and leaseback for one of its 13,100-TEU ships - now on a 12-year time charter to Cosco.

"Next year, won't be as good as 2010, which is a record year, but still very good compared with '09, '08. For 2012, the same picture holds," he said, according to American Shipper. "For 2013, we're seeing a little bit different picture, which basically is related to the deliveries of newbuildings, which will have been all completed. So, 2013 will be, generally speaking, a brighter year if our assumptions are proven to be correct."

Mr Wang said shipping lines were more interested in fuel-efficient, eco-friendly 8,000- to 10,000-TEU ships than ultra large container carriers in the 13,000 TEU range.

"I was in China just last week and I spent some time with the leading customers there. The situation right now is actually better than anticipated, certainly better than Q4 last year," he said.

"Q4 is a slow season, but the volume is better than what they anticipated. They were prepared for a big correction after the Chinese October Golden Week holidays, but volume has actually recovered better than they thought," he said.

"Freight rates have come down, which is seasonal, but maintained a pretty decent rate. They are very happy, to be honest. And they are cautiously optimistic about next year. They think the volume will continue to move up at three to five per cent," said Mr Wang.

Seaspan now owns 55 containerships, including two delivered in October, compared to 42 at the beginning of the year. The company charters the ships to liner companies, such as China Shipping, Hapag-Lloyd, Maersk, Cosco, MOL, and CSAV.

Source: SchedNet