Welcome to the Seaspan Corporation Conference Call to go over the monetary results for the quarter ended March 31, 2015. 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 the 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.
Thank you, Operator. Great early morning everybody and thank you for joining us today. Prior to we start, please permit me to advise you that our discussion today consists of forward-looking statements. Actual results may vary materially from outcomes forecasted by these forward-looking statements.
Additional details worrying factors that might trigger real resultsresult in materially differ from those in the forward-looking statements is contained in the very first quarter 2015 incomes release and incomes webcast discussion slides offered on our web site www.seaspancorp.com, as well as in our Annual Report on Type 20-F for the year-ended December 31, 2014 submitted with the SEC.
I would also such as to advise you that during this call, we will talk about specific non-GAAP monetary steps, consisting of changed EBITDA, cash readily available for distribution to common investors, stabilized net incomes, normalized revenues per share. For definitions of such non-GAAP monetary procedures and for reconciliations of such procedures to the most carefully comparable United States GAAP procedures, kindly describe our earnings release.
I will certainly now pass the call over to Gerry, who will discuss our first quarter highlights along with some current developments.
Thank you, Sai. Please turn to Slide 3 of the webcast presentation. During Q1, we continued to provide on our strategic goals. We expanded our operating fleet with the shipment of one 10000 TEU SAVER design vessel. We remain to return capital to shareholders in the kindthrough dividends. We demonstrated access to diverse sources of capital to money our growth and improve our capital structure. We continue to grow our fleet and our long-term contracted income base.
Counting on our first quarter outcomes, I would likewant to highlight three points. Initially, we ended the quarter with 78 vessels in our running fleet and 85 vessels in our managed fleet or a total of 111 vessels in our managed fleet including our order book.
We took delivery of our 7 SAVER design 10000 TEU containership, the MOL Beacon, which began an 8-year fixed-rate time charter with MOL. Our operating fleet accomplished 98.9 % utilization for the quarter including our 4 set up dry-dockings and we remain to generate steady money flows from long-lasting time charters.
Our new structure program has been continuing efficiently at all 3 shipyards, YZJ, HHI, and CSBC. We ended the quarter with 26 vessels under construction for Seaspan and GCI.
Second, we completed several fundings and re-financings throughout the quarter, demonstrating our access to diverse sources of capital and appealing returns. We got in into monetary arrangements with Asian financiers to refinance the three 4500 TEU vessels for overall earnings of $150 million. We likewise entered into a term loan center with the bank for $115 million to finance the 14000 TEU YM Desire, which would be delivered on April 1.
The 10000 TEU MOL Beacon vessel was delivered at the end of March and was moneyed with $110 million operating lease with another Asian sponsor, more diversifying our sources of funding. We remain to see better funding terms and minimized margins for our protected financing requirements.
This enhancement continues to enhance our capital structure and it ought to ultimately result in much better returns for our jobs and for our common investors too.
We expect our funding for the remaining newbuild program to continue advancing efficiently. Lastly, I’m pleased to reveal that we have begun Q2 2015 by adding 7 newbuild vessels to our handled fleet. We have actually signed arrangements for the construction of five 11000 TEU fuel-efficient SAVER design containerships with Hanjin Shipbuilding for roughly $470 million for shipment in 2017. Simultaneously, Seaspan has likewise signed 17 year charters for those vessels with one of the leading operators.
The allocation of those vessels between Seaspan and GCI has actually been set at 3 and two respectively. Furthermore, we got in into contracts with YZJ for the construction of 2 10000 TEU newbuild containerships for an aggregate purchase price of about $186 million for delivery in early 2017. They would be the sister vessels to our existing order book at YZJ.
The allowance of those two vessels will be most likely one for Seaspan and one for GCI. We continue to hold an auction to purchase 6 more sibling vessels for delivery throughout second-half 2017 and early 2018. We’re in active conversations with our consumers for the four firm vessels and the six operating vessels of our SAVER design 10000 TEU class at YZJ.
I will certainly now turn the call over to Sai to discuss our quarterly monetary results. Sai, kindly.
Thanks, Gerry. Please count on Move 4, where I will discuss our results for Q1 compared with Q1 of last year. Our results reflect the six 10000 newbuilds delivered since in 2013 and the use of the operating leases for three of our MOL 10000 newbuilds.
Income enhanced by $20.6 million or 12.2 %. Vessel utilization was 98.9 % constant with in 2014’s quarter. Throughout Q1 we had 37 fewer off-hire days, balanced out by an additional 39 days for arranged dry-dockings for four vessels. Ship operating expendituresbusiness expenses were $44.6 million and 8.1 % or $3.3 million increase reflecting the higher ownership days. We expect quarterly ship OpEx to remain to enhance this year due to expected growth of the fleets, increase in our typical vessel size and slightly higher expenses related to some of our older vessels.
Gamp; A was $6.8 million, a decline of $1.2 million or 15.5 % mostly due to a reduction in stock-based payment expense. Operating lease was $6.2 million, an increase of $5 million. Adjusted EBITDA for the quarter was $136 million, a $12.2 million or $9.8 million increase. Money available for distribution for the quarter was $75.8 million, a $7.9 million or 11.6 % boost, due to shipment of the newbuilds, higher interest income, much lower preferred share dividends partially offset by higher interest cost at hedge rate and increases in quantities paid for dry-docking.
Normalized net earnings for the quarter enhanced by $9.6 million or 33.2 %. On a per-share basis, stabilized EPS was $0.25 as compared to $0.18, a boost of 38.9 %. For 2015, we anticipate to see some improvement in EPS due to the full-year contributions for the 2014 deliveries and the additional 8 deliveries this year. Nevertheless, EPS enhancement will certainly be limited due to the capital costs connected with buying our big newbuild program through 2017. We remain concentrated on handling our expense to capital and continuing mix for appealing funding options. We believeOur team believe our focus technique of acquiring technological events and performances while entering into long-term charterers of creditworthy counterparties will certainly lead to investor value over the long-lasting.
Our board proclaimed a Q1 dividend of $0.375 per typical share, which represents an 8.7 % increase over the previous quarter and is our 6 dividend increase since Q2 2010. We feel this is our sustainable dividend level, the balances return to shareholders, while permitting us to maintain financial versatility and take benefitmake the most of attractive growth opportunities that exist in the present market.
Kindly turn to Slide 5, for balance sheet details, where we’re well compared Q1 to Q4 of 2014. Our debt and capital lease balances at the end of the quarter were $3.75 billion versus $3.6 billion, an increase of $156 million. This is because of the refinancing of three 4500 containerships and drawdown of a term loan for one 14000 TEU containership, partially offset by a decrease in the amounts exceptional under our credit and lease financing centers. Overall, total liabilities enhanced by $174.2 million, shareholder’s equity decreased by $5.6 million considering that the beginning of the year.
As Gerry mentioned, our capital structure continues to develop and diversify, as we carry out on our significant newbuild program. During the quarter, we got in into funding or reinsurance with Asian SPCs to refinance 3 4500s, the total earnings of $150 million. This replaces previous lease financings that was paid back in December. We likewise entered into these funding plans within an Asian SPC for $110 million of the financing of the MOL Beacon, which was provided at the end of March.
These lease financings drive Seaspan with an appealing cost to capital with greater advance rates and difficult secured lending. However, due to higher advance rates, as well as lease accounting treatment, we expect that EBITDA and profits contributions from the MOL Beacon would be lower than if we fund with traditional safe financing.
Subsequent to the end of the quarter, we reached a milestone as we took shipment of our very first two 14000 the Yang Ming Wish and Wellhead finance with practically $200 million in safe loans. On April 10, we got in into a term loan facility for approximately $195 million finance 2 of our 14000. Also in April, we closed on a revolving loan facility with syndicated banks for $200 million and got in into a term loan center for approximately $228 million to finance one of our 14000 and 2 of our 10000.
As we move forward for this year, we plan to remain to diversify our capital structure, by history of execution, strong customer base, contemporary possessions will certainly allow us to continue to get appealing financing terms. This in turn ought to add to improve returns for our investors.
Please rely on Move 6, for most current forward guidance. We have another five vessels set up for delivery in 2015, one 14000 in Q2, chartered to Yang Ming, three 14000 in Q3 likewise chartered to Yang Ming, and one 10000 in Q3 to be chartered to Maersk. For 2016, we anticipate to take shipment of two 14000 chartered to Yang Ming and 3 10000 two of which are chartered to MOL and last one to Maersk. And one 10000 for which we are looking for at charter 4. The three 11000 newbuilds on 17-year charterers will also be provided in 2017, and 2 10000 purchased in April, are also expected to be delivered in 2017.
These vessels continue to be based on the ROFR with GCI, but for purpose of this discussion, you will presume just one continues to be with Seaspan. Our continuing to be CapEx is approximately $1.4 billion with $660 million remaining this year, $460 million next year and $245 million in 2017. Throughout the rest of 2015, we anticipate to have a total of 220 dry-docking days with about 110 in Q2, 85 in Q3, and 25 in Q4. We expect around 240 and 120 dry-docking days by 2016 and 2017 respectively. Each of these remains subject to change.
Please count on Move 7, for details concerning our new orderbook. A total of 17 x vessels will be provided from 2015 to 2017. Our brand-new orderbook represents overall capability of 205,000 TEU. We anticipate to fund the rest of our newbuild fleet first for delivery through 2017 with about $700 million of extra loaning and our debt centers presently in location, another $650 million protected as we are in settlements.
I would now such aswant to turn the call back over to Gerry.
Thanks, Sai. Please count on Move 8, where I will briefly discuss the market. Constant with our comments last quarter, there has actually been no material change in market basics. We continue to anticipate total supply and demand to remain fairly balance differing to some degree a more specific trade lanes. Charter rates for Panamax vessels have stayed stable over the previous few months and we’re also seeing newbuild in prices to continue to enhance for larger vessels. On the supply side, we expect tonnage development of about 6 % to 8 % for 2015. Major operators remained to be managed to offer through ditching, redeployment, sluggish steaming and idling of ships.
The overall orderbook stays at around 19 % of effective packing capacity, or about 6 % per annum generally. Vessel scrapping is expected to continue at high levels, particularly for the 80s and 90s developed ships. On the need side, we expect global containership volume in TEU procedure to grow by up around 5 % to 7 % in 2015, led by boosts in demand on significant trade lanes.
Nearly, 85 % of vessel deliveries in 2015 are 7500 TEU or larger, as great deal of the majors remain to update their fleets, improve their expenses structures with huge contemporary vessels. We have seen a continued need interest for our SAVER design vessels of 10000 TEU and 14000 TEU classes from our customers, regardless of the substantial reduction in bunker fuel expenses. The conclusion of the Panama Canal set of locks in 2016 will allow vessels as much as 13000 TEU to transit the waterway. We’re in discussions with the Panama Canal for enabling our 14000 TEU class vessels to go through.
It is anticipated that the line operators will make use of the brand-new Panama Canal for enhancing cargo from the Asia to United States East Coastline and Asia to South American East Coast. Meanwhile, the existing Panamax vessels will be redeployed to into Asia trades, Asia to Africa trades and Asia to Australia and New Zealand trade, a trend we’re seeing currently.
Starting in – finally, in spite of the industry recovery, we expect the outsourcing trend to continue, as shown over previous cycles. OfferedConsidered that we are the leader in the space that we continue to keep our strong consumer relationships, we will continue to record a substantial share of the growth opportunities in our industry.
Relocating to Move 9, this reveals the staggered maturation profile of our charter portfolio. The average remaining charter length of our running fleet is roughly six years on a TEU weighted average basis. In 2015, we may have to have up to 11 Panamax vessels for re-charter and in 2016 as much as 9 vessels, depending on the exercise of the existing charter alternatives.
Generally, the 2015 vessels up for re-charter represent around 2 % of 2015 EBITDA and the 2016 vessels represent roughly 3 % of 2016 EBITDA. Despite the fact that we have seen visible enhancements in charter rate for Panamax vessels, we will certainly remain to monitor market condition to determine the finestthe very best technique for those vessels. In Q1, we took delivery of one 10000 TUE vessel, the MOL Beacon. So far in Q2, we have actually taken delivery of 2 14000 TEU class vessels, the Yang Ming Desire and the Yang Ming Wellhead.
For the remainder of 2015, we expect our fleet to broaden further with the delivery of one 10000 TEU in the 4 14000 TEU vessels. In 2016, we anticipate to take shipment of 3 10000 TEU vessels and a two 14000 TEU vessels. In 2017, we anticipate to take delivery of three 11000 TEU vessels and one 10000 TEU vessel. All those future shipment completely represents TEU growth of about 33 %, conquer the level for our fleet.
Despite the significant fleet development we have actually experienced over the previous three years, we expect to continue to see chances for further growth. Please now count on Move 10, where I will reiterate our vision for the future.
We thinkOur company believe Seaspan is well positioned to continue to enhance its management position and develop investor value over the long-term. We will continue to sustain fleet development with a regulated and well balanced strategy, being patient and disciplined; and afterwards utilizing financial strength, and technical and functional management position to profit from opportunities that meet our stringent requirements. Our core focus will certainly be staying on designing, owning and chartering large modern fuel-efficient containerships to creditworthy consumers.
We have a history of returning capital to investors and we stay committed to sustainably enhancing our typical share dividends over the long-lasting, as we continue to opportunistically grow our company. At the ship leasing franchise we consider it to be important to regularly keep a strong balance sheet, diversifying our capital structure and enhancing our financial strength including keeping proper leverage will remain our top concerns.
As I stated previously, we might anticipate our 2015 outcomesresult in be somewhat soft as we continue to invest in brand-new vessels for our future. Nevertheless, we also anticipate that our strong base of cash flows from existing charters in addition to future development will certainly allow our franchise to become more powerful and well established for the long-lasting value of our shareholders. I would now such as to open the call for concerns. Operator, please go ahead.