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Seaspan Corporation has posted a full year net loss of $139 million for 2016. Revenue was up 7.2 % but vessel impairments took their toll.

Seaspan’s Revenue decreased by 2.4% to $213.2 million for the quarter ended December 31, 2016, compared to the same period in 2015, primarily[ds_preview] due to lower average charter rates for vessels that were on short-term charters and an increase in unscheduled off-hire, primarily relating to vessels being off-charter, including the three vessels previously chartered to Hanjin.

Full year revenue increased by 7.2% to $877.9 million for the year ended December 31, 2016 over the same period in 2015, primarily due to the delivery of newbuilding vessels in 2015 and 2016 and the addition of two leased in vessels in 2016.

Net loss for the full year was $139 million compared to a full year net profit of $199.4 million in 2015.

During the 2016, Seaspan recognized non-cash vessel impairments of $285.2 million related to 16 vessels each under 5,000 TEU in size.

Ship operating expense decreased by 7.2% to $46.9 million and by 0.8% to $192.3 million for the quarter and year ended December 31, 2016, respectively, compared to the same periods in 2015, primarily due to cost savings initiatives.

Expenses related to customer bankruptcy were $0.8 million and $19.7 million for the quarter and year ended December 31, 2016, respectively, which included a full reserve of $18.9 million for past due accounts receivables from Hanjin as a result of their bankruptcy filing in August 2016.

Seaspan reduces quarterly dividend

At the beginning of 2016, Seaspan had 85 vessels in operation. During 2016, the company accepted delivery of three newbuilding vessels, leased in two vessels, acquired three 4,250 TEU vessels, sold two 4,600 TEU vessels and sold four 4,800 TEU vessels upon completion of their five-year bareboat charters, bringing its operating fleet to a total of 87 vessels as at December 31, 2016. The company is the largest non-operating owner. According to Alphaliner its market share is 7.1%.

Seaspan CEO Gerry Wang
Seaspan CEO Gerry Wang (Photo: Seaspan)

CEO Gerry Wang commented, »While we have seen the industry take measures to manage vessel supply and are confident industry conditions will improve over time, after careful consideration the Board of Directors has made the difficult decision to reduce the quarterly dividend on our common shares to $0.125 per share. We believe this decision is in the long-term interests of our shareholders and will allow us to capitalize on industry weakness while maintaining a strong balance sheet.«

Mr. Wang continued, »Seaspan is focused on enchancing its leadership position in the current industry environment. With over $5.2 billion in future contracted revenue, strong industry relationships, and a history of both accessing capital under favourable terms and entering into long-term contracts with leading liners, our focus remains on creating long-term shareholder value.«