Greeces's Danaos Reports 2011 Results

Greek-based containership owner Danaos Corporation (NYSE: DAC) reported unaudited results for the quarter and full year ended December 31, 2011. 

Highlights for the Fourth Quarter and Full Year Ended December 31, 2011:

- Operating revenues of $128.3 million for the three months ended December 31, 2011 compared to $100.5 million for the three months ended December 31, 2010, an increase of 27.7%. 

- Operating revenues of $468.1 million for the year ended December 31, 2011 compared to $359.7 million for the year ended December 31, 2010, an increase of 30.1%.

- Adjusted EBITDA1 of $88.8 million for the three months ended December 31, 2011 compared to $65.0 million for the three months ended December 31, 2010, an increase of 36.6%. 

- Adjusted EBITDA1 of $318.6 million for the year ended December 31, 2011 compared to $243.8 million for the year ended December 31, 2010, an increase of 30.7%.

- Adjusted net income of $16.1 million, or $0.15 per share for the three months ended December 31, 2011 compared to $11.1 million, or $0.10 per share for the three months ended December 31, 2010. 

- Adjusted net income1 of $61.2 million, or $0.56 per share for the year ended December 31, 2011 compared to $58.0 million, or $0.77 per share for the year ended December 31, 2010.

- During the fourth quarter of 2011, Danaos took delivery of two new containerships with an aggregate carrying capacity of 17,060 TEU, which have been both deployed on 12-year time charters.

The remaining average charter duration of our fleet was 9.9 years as of December 31, 2011 (weighted by aggregate contracted charter hire).

- Total contracted operating revenues were $5.5 billion as of December 31, 2011, through 2028.

- Charter coverage of 88% for 2012 in terms of contracted operating days and 94% in terms of operating revenues.

"This year was one of the most eventful ones in recent history," said Dr. John Coustas, cEO, Danaos. "The year started with a strong container market but towards the end of the 2nd quarter we started to experience weakness in all segments and liner companies started to lose pricing power. This was due to the combined effect of a fight for market share from industry leaders, the slowdown in Europe Fareast trade due to the European debt crisis and the inflow of the substantial new capacity in this trade, the combined effect of which resulted in a new sharp deterioration of the box freight rates. 

We are now entering 2012 with the liner companies in severe cash drain, which will hopefully be reversed by the rate hike announced for March. The charter market is also in breakeven mode with more than half a million TEU idle, which will delay any improvement in charter rates in the months ahead.  The only fortunate outcome is a complete standstill of new orders and even cancellation of some existing ones."

He continued:

"On the company front, in early 2011 we completed our restructuring, which gave us a solid capital structure to withstand market downturns.  We continued to execute our newbuilding program and during this last quarter we took delivery of two containerships of 8,530 TEU entering on 12 year time charters. The remaining newbuilding program is on track as we have already taken delivery of a 13,100 TEU containership in February 2012 and five more vessels of 60,930 TEU in aggregate will be delivered through the end of the 2nd quarter of 2012.