Greek Container Ship Owner Danaos Still Making Money

MarineLink.com
Tuesday, October 29, 2013
Container ship deck: Image courtesy of Danaos

Greek container ship owners, Danaos Corp. reports unaudit financial results for the period ended September 30, 2013 for its chartered out container ship fleet.

Highlights for the Third Quarter and Nine Months Ended September 30, 2013

  • Operating revenues of $148.4 million for the three months ended September 30, 2013 compared to $156.3 million for the three months ended September 30, 2012, a decrease of 5.1%. Operating revenues of $441.1 million for the nine months ended September 30, 2013 compared to $437.2 million for the nine months ended September 30, 2012, an increase of 0.9%.
  • Adjusted EBITDA1 of $109.5 million for the three months ended September 30, 2013 compared to $116.2 million for the three months ended September 30, 2012, a decrease of 5.8%. Adjusted EBITDA1 of $325.5 million for the nine months ended September 30, 2013 compared to $319.3 million for the nine months ended September 30, 2012, an increase of 1.9%.
  • Adjusted net income of $13.4 million, or $0.12 per share, for the three months ended September 30, 2013 compared to $15.6 million, or $0.14 per share, for the three months ended September 30, 2012. Adjusted net income1 of $39.1 million, or $0.36 per share, for the nine months ended September 30, 2013 compared to $48.8 million, or $0.44 per share, for the nine months ended September 30, 2012.
  • The remaining average charter duration of our fleet was 9.0 years as of September 30, 2013 (weighted by aggregate contracted charter hire).
  • Total contracted operating revenues were $4.5 billion as of September 30, 2013, through 2028.
  • Charter coverage of 89% for the next 12 months in terms of contracted operating days and 97% in terms of operating rev

Danaos' CEO Dr. John Coustas commented
"Danaos is reporting yet another solid quarter with adjusted net income of $13.4 million, or 12 cents per share, $2.2 million lower than the third quarter of 2012 due to the weaker charter market today when compared to 1 year ago. However, the few vessels in our fleet deployed under short term charters represent only 3% of our revenues and already operate close to break-even levels. This means that while we are insulated from a prolonged weak charter market with our 97% contract coverage, an improvement in the market fundamentals can only mean upside for our results.

Another visible upside driver of our results in the coming quarters is the anticipated reduction in finance costs as a result of the rapid de-leveraging of the company in combination with the expiration of swap contracts. During the first nine months of the year we have reduced debt by $120 million, while we anticipate paying down debt by approximately a further $50 million until the end of 2013.

We continue to execute our fleet modernization program having sold 8 of our older vessels with an average age of 25 years for net proceeds of $52.3 million and we are still scanning the market for accretive acquisition opportunities of younger tonnage to complement the recent additions of two 2,500 TEU geared containerships to our fleet."

 

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