Danaos Corporation reports second quarter and half year results

During the second quarter of 2024, the company took delivery of the first three newbuilding containerships, namely one 7165 TEU and two 8010 TEU vessels that have commenced their three-year charters. Additionally, during the second quarter of 2024 and through the date of this release, the company added 6 newbuilding containerships to its orderbook. These six newbuilding orders comprise of one additional 8258 container vessel to be built at Yangzijiang shipyard in China expected to be delivered in 2027 and five 9200 TEU container vessels to be built at Dalian shipyard in China, three of which have expected deliveries in 2027 and two in 2028.

As a result, the remaining orderbook currently consists of a further 17 newbuilding containership vessels with an aggregate capacity of 139 019 TEU with expected deliveries of three additional vessels in 2024, two vessels in 2025, three vessels in 2026, seven vessels in 2027 and two vessels in 2028. All the vessels in the company's orderbook are designed with the latest eco characteristics, will be methanol fuel ready, fitted with open loop scrubbers and Alternative Maritime Power (AMP) units and will be built in accordance with the latest requirements of the International Maritime Organization (IMO) in relation to Tier III emission standards and Energy Efficiency Design Index (EEDI) Phase III.

The company has now secured multi-year charter arrangements for all of the vessels in its newbuilding orderbook with an average charter duration of approximately 4.5 years weighted by aggregate contracted charter hire.

Over the past two months, the company added approximately US$900 million to its contracted revenue backlog, which includes (i) approximately US$203 million through forward two-year charter fixtures for nine existing container vessels and (ii) approximately $697 million of revenue backlog through a combination of new charters and charter extensions for 12 of its newbuildings.

As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, currently stand at US$3.2 billion. The remaining average contracted charter duration for its containership fleet is 3.4 years, weighted by aggregate contracted charter hire.

Contracted operating days charter coverage for the company's container vessel fleet is currently 99% for 2024 and 80% for 2025. This includes newbuildings based on their scheduled delivery dates.

The company has now taken delivery of all of its contracted capesize bulk carriers by taking delivery of two vessels in the second quarter of 2024 and one vessel in July 2024. As a result, the capesize dry bulk fleet currently stands at 10 vessels with an aggregate DWT capacity of approximately 1.8 million DWT.

As of the date of this release, Danaos has repurchased a total of 1 671 059 shares of its common stock in the open market for US$104.4 million under its US$200 million authorized share repurchase program that was originally introduced in June 2022 and upsized in November 2023.

Danaos has declared a dividend of US$0.80 per share of common stock for the second quarter of 2024, which is payable on August 29, 2024, to stockholders of record as of August 20, 2024.

Danaos’ CEO Dr. John Coustas commented:

“The last few months brought continued market disruption as conditions in the Red Sea remained challenged and the Ukraine war persisted. Panama canal crossings, however, returned to normal levels, eliminating thatsource of disruption for now. Market conditions have led liner companies to reassess their capacity requirement and rushed to secure tonnage, including tonnage with forward deliveries. The forthcoming environmental legislation has further incentivised liner companies to secure modern newbuilding tonnage for medium term requirements without making long-term commitments in the majority of cases.

In this environment we have secured charter extensions for a number of our existing ships and further we extended our newbuilding program to a total of 20 vessels, three of which were delivered in the second quarter. We have secured multi-year charters with an average charter duration of approximately 4.5 years, weighted by aggregate contracted charter hire, for all of our newbuilding vessels and we are very well positioned for the future. As a result, the Company's total contracted cash operating revenues are US$3.2 billion. Contracted charter coverage for our container vessel fleet, including newbuildings, is currently 99% for 2024 and 80% for 2025, providing us excellent revenue visibility.

With respect to our activities in the dry bulk sector, we have recently taken delivery of all 10 capesize vessels. We have been gearing up our operations to ensure the integration within our fleet during this building phase before we continue to explore opportunities to further our reach in this sector. Our revenues from the dry bulk sector have been steadily increasing, and we look forward to further diversifying our revenues and creating upside through the spot market exposure offered by the sector.

Despite our recent fleet growth, renewal, and diversification activities, our balance sheet remains very strong, with a low net debt position.

We will continue to work tirelessly to ensure accretive performance of our assets and to deliver industry-leading returns to our shareholders over the long term.”

Full results can be accessed here.

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/07082024/danaos-corporation-reports-second-quarter-and-half-year-results/