Seaspan Corporation (SSW)

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Seaspan Corporation (SSW)

Q4 2013 Earnings Conference Call

March 03, 2014 08:30 PM ET


Sai Chu - CFO

Gerry Wang - CEO, Co-Chairman and Co-Founder


Keith Mori - Barclays Capital

Urs Dur - Clarkson Capital Markets

Seth Lowry - Citi Research

Taylor Mulherin - Deutsche Bank



Welcome to the Seaspan Corporation conference call to discuss the financial results for the quarter and the year-end December 2013 -- I'm sorry, December 31, 2013.

Hosting the call today is Gerry Wang, Chief Executive Officer, Co-Chairman and Co-Founder of Seaspan Corporation, and Sai Chu, Chief Financial Officer of Seaspan Corporation.

Mr. Wang and Mr. Chu will be making some introductory comments and then we will open the call for questions. I will now turn the call over to Sai Chu.

Sai Chu

Thank you operator. Good morning everyone and thank you for joining us today. Before we begin please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the fourth-quarter 2013 earnings release and earnings webcast presentation slides, available on our website at, as well as in our annual report on form 20-F for the year ended December 31, 2012, filed with the SEC.

I'd also like to remind you that during this call we will discuss certain non-GAAP financial measures, including adjusted EBITDA, cash available for distribution to common shareholders, normalized net earnings and normalized earnings per share converted.

In regards to such financial measures and for reconciliations of such measures, the most closely-comparable US GAAP measures, please refer to our earnings release.

I will now pass the call over to Gerry who will discuss our fourth-quarter highlights as well as some more recent developments.

Gerry Wang

Thank you Sai. Please turn to slide 3 of the webcast presentation.

During 2013 we continued to execute on our strategy and deliver solid results. The size of our operating and managed fleet increased as we took delivery of vessels chartered to MOL. We diversified our capital structure by issuing new forms of capital and expanding our equity base.

We continued to return capital to shareholders in the form of dividends. Most importantly, we entered into transactions for an additional 29 vessels during the year, scheduled for delivery to Seaspan and GCI by the end of 2016, which will increase our owned and managed fleet to 105 vessels, or over [800,000] TEUs.

Turning to fourth-quarter results I would like to highlight three things. First, we ended the year with 71 vessels in our operating fleet and 73 vessels in our managed fleet.

Our operating fleet achieved 98.5% utilization for the quarter and 98% utilization for the year and continued to generate stable cash flows from long-term time charters.

Second, our Board declared dividends on our common and preferred shares and we delivered on our strategy of growing our common share dividend in a manner that balances our financial strength with ability to expand our fleet.

I'm pleased to announce that we will increase our common share dividend by 10% to $0.345 per share in the first quarter of 2014, which is an expected annual dividend of $1.38 per share for the four quarters ending December 31, 2014.

Third, we completed several important financing transactions during the quarter that improved our financial strength and flexibility.

We entered into our first ever unsecured term loan. We completed a follow-on offering of our Series D preferred shares. We completed our first common share offering since 2008 and we extended and re-financed our $1 billion credit facility in advance of the maturity date.

Please now turn to slide 4. We highlight some of the significant developments that have taken place since the beginning of the year.

Our Series A preferred shares converted to common shares. We issued a new series of preferred shares for proceeds over $130 million. Finally, we are pleased to announce that we have added additional six SAVER design 10,000 TEU vessels on long-term contracts with MOL, to make a total of 10 10,000 TEU vessels, to be constructed at YZJ Shipyard.

We are very pleased to have completed this transaction and to expand our relationship with MOL, one of the premier shipping companies in the Industry. Four of the six vessels will be delivered during second-half 2015 with the remaining two for first half of 2016.

With this transaction the total order book of our SAVER design 10,000 TEU vessels at YZJ will stand at 17. Worth mentioning here, given the requirements of our potential customers we are contemplating to add another four to six sisters for delivery during 2016.

We are also pleased to advise that the MV Hanjin Buddha, our first SAVER design 10,000 TEU vessel, has finished sea trials successfully and will be delivered to Hanjin Shipping ahead of schedule in the second half of March. This will be the first of our 9 units of 10,000 TEU vessels scheduled for delivery during 2015 -- 2014, rather, for Seaspan and GCI.

We continue to see healthy demand from our liner customers for large fuel-efficient vessels and we hope to build on last year's success for the year of 2014.

I will now turn the call over to Mr. Sai Chu, our CFO, to discuss our quarterly financial results. Mr. Chu, Sai, please.

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