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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Danaos Corp | NYSE:DAC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 83.25 | 0 | 09:00:00 |
Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s largest independent owners of containerships, today reported unaudited results for the period ended September 30, 2023.
Highlights for the Third Quarter and Nine Months Ended September 30, 2023:
Three and Nine Months Ended September 30, 2023
Financial Summary - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Operating revenues
$239,215
$260,037
$724,268
$740,861
Net income
$133,156
$66,800
$426,378
$406,489
Adjusted net income1
$142,963
$176,922
$431,623
$569,329
Earnings per share, diluted
$6.76
$3.29
$21.28
$19.75
Adjusted earnings per share, diluted1
$7.26
$8.71
$21.54
$27.67
Diluted weighted average number of shares (in thousands)
19,693
20,318
20,039
20,579
Adjusted EBITDA1
$178,027
$213,106
$534,393
$674,738
1Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to adjusted EBITDA provided below.
2Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents.
Danaos’ CEO Dr. John Coustas commented:
“The macroeconomic environment continued to deteriorate during the third quarter of 2023, and container transport stagnated in most areas due to continued inventory destocking and weak retail sales. As a result, the profitability of liner companies has dramatically decreased, and the major operators have announced sweeping cost cutting measures. The chartering market continued to remain under pressure, particularly in the market for vessels smaller than 3,000 TEU, where charter rates returned to pre-pandemic levels.
In larger vessel segments, charter rates have remained relatively stable given the scarcity of open tonnage for next year, a factor that has enabled us to forward fix all our vessels above 10,000 TEU on three year charters at profitable levels that will commence after expiry of existing charter contracts in 2024. As a result, our charter cover for 2024 has increased to 90%.
Separately, through the date of this release we have taken delivery of the first four capesize bulk carriers and we have achieved rates well ahead of our expectations. While we do not expect a sustained upwards momentum in charter rates in the near term, we will closely monitor the dry bulk market and opportunistically pursue opportunities to expand our presence in this market.
The resilience of our business model has been confirmed by the continuation of our solid results despite the significant fall in the charter market. Our strategy of delevering has also been effective and well timed as we have not been impacted by higher interest rates. Our charter backlog of $2.5 billion in contracted revenue also provides us with significant cash flow visibility and allows us to maintain flexibility in our capital allocation policy.
In this regard, we decided to increase our quarterly dividend to $0.80 and also to authorize an additional $100 million in share buybacks as our initial $100 million authorization has been almost exhausted. Due to the prudent execution of our strategy, we have been able to return over $200 million to our shareholders over the last eighteen months and simultaneously grow our fleet in the container segment by placing 10 newbuilding orders and create exposure to the dry bulk segment through investments in companies and vessels.
We will strive to continue to create value for all our shareholders while ensuring the long-term prosperity of Danaos.”
Three months ended September 30, 2023 compared to the three months ended September 30, 2022
During the three months ended September 30, 2023, Danaos had an average of 68.0 container vessels compared to 71.0 container vessels during the three months ended September 30, 2022. Our containership fleet utilization for the three months ended September 30, 2023 was 97.7% compared to 97.1% for the three months ended September 30, 2022.
Our adjusted net income amounted to $143.0 million, or $7.26 per share, for the three months ended September 30, 2023 compared to $176.9 million, or $8.71 per share, for the three months ended September 30, 2022. We have adjusted our net income in the three months ended September 30, 2023 for a $9.3 million change in fair value of investments and a $0.5 million non-cash finance fees amortization. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The $33.9 million decrease in adjusted net income for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 is primarily attributable to a $22.3 million decrease in dividends received. We also incurred a $0.5 million equity loss on investments in the three months ended September 30, 2023, a $20.8 million decrease in operating revenues and a $0.3 million increase in total operating expenses, which were partially offset by a $10.0 million decrease in net finance expenses.
On a non-adjusted basis, net income amounted to $133.2 million, or $6.76 earnings per diluted share, for the three months ended September 30, 2023 compared to net income of $66.8 million, or $3.29 earnings per diluted share, for the three months ended September 30, 2022. Our net income for the three months ended September 30, 2022 included a $84.0 million total loss on our investment in ZIM, net of withholding taxes on dividends, compared to a $8.4 million total loss on our EGLE investments for the three months ended September 30, 2023.
Operating Revenues Operating revenues decreased by 8.0%, or $20.8 million, to $239.2 million in the three months ended September 30, 2023 from $260.0 million in the three months ended September 30, 2022.
Operating revenues for the three months ended September 30, 2023 reflected:
Vessel Operating Expenses Vessel operating expenses increased by $0.3 million to $39.5 million in the three months ended September 30, 2023 from $39.2 million in the three months ended September 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,499 per vessel per day for the three months ended September 30, 2023 compared to $6,173 per vessel per day for the three months ended September 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among the most competitive in the industry.
Depreciation & Amortization Depreciation & Amortization includes Depreciation and Amortization of Deferred Drydocking and Special Survey Costs.
Depreciation Depreciation expense decreased by 5.3%, or $1.8 million, to $32.3 million in the three months ended September 30, 2023 from $34.1 million in the three months ended September 30, 2022 mainly due to our recent sale of three vessels.
Amortization of Deferred Drydocking and Special Survey Costs Amortization of deferred drydocking and special survey costs increased by $1.7 million to $4.8 million in the three months ended September 30, 2023 from $3.1 million in the three months ended September 30, 2022.
General and Administrative Expenses General and administrative expenses decreased by $0.1 million to $7.1 million in the three months ended September 30, 2023, from $7.2 million in the three months ended September 30, 2022.
Other Operating Expenses Other Operating Expenses include Voyage Expenses.
Voyage Expenses Voyage expenses decreased by $1.3 million to $9.0 million in the three months ended September 30, 2023 from $10.3 million in the three months ended September 30, 2022 primarily as a result of a decrease in the commissions and average number of vessels in our fleet.
Interest Expense and Interest Income Interest expense decreased by 73.1%, or $11.7 million, to $4.3 million in the three months ended September 30, 2023 from $16.0 million in the three months ended September 30, 2022. The decrease in interest expense is a result of:
As of September 30, 2023, outstanding debt, gross of deferred finance costs, was $417.4 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $868.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $79.6 million, gross of deferred finance costs, as of September 30, 2022.
Interest income increased by $1.8 million to $3.1 million in the three months ended September 30, 2023 compared to $1.3 million in the three months ended September 30, 2022 mainly as a result of increased interest rates and average amount of time deposits in the three months ended September 30, 2023.
Loss on investments We recognized a $8.4 million loss on marketable securities, which consisted of the change in fair value of $9.3 million and dividends of $0.9 million in the three months ended September 30, 2023 on our shareholding interest in Eagle Bulk (“EGLE”) of 1,552,865 shares of common stock. This loss compares to a loss on investments of $80.3 million in the three months ended September 30, 2022, which consisted of the change in fair value of our shareholding interest in ZIM of $107.3 million and dividends recognized on ZIM ordinary shares of $27.0 million. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.
Equity loss on investments Equity loss on investments amounting to $0.5 million in the three months ended September 30, 2023 relates to our share of initial expenses of a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.
Other finance expenses Other finance expenses increased by $1.0 million to $1.2 million in the three months ended September 30, 2023 compared to $0.2 million in the three months ended September 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.
Loss on derivatives Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended September 30, 2023 and September 30, 2022.
Other income/(expenses), net Other expenses, net were $1.1 million in the three months ended September 30, 2023 compared to other income, net of $0.4 million in the three months ended September 30, 2022.
Income taxes Income taxes of $3.8 million in the three months ended September 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares compared to no income tax in the three months ended September 30, 2023.
Adjusted EBITDA Adjusted EBITDA decreased by 16.5%, or $35.1 million, to $178.0 million in the three months ended September 30, 2023 from $213.1 million in the three months ended September 30, 2022. As outlined above, the decrease is primarily attributable to a $22.3 million decrease in dividends received. We also incurred a $11.3 million decrease in operating revenues, a $1.0 million increase in total operating expenses and a $0.5 million equity loss on investments in the three months ended September 30, 2023. Adjusted EBITDA for the three months ended September 30, 2023 is adjusted for a $9.3 million change in fair value of investments. Tables reconciling Net Income to Adjusted EBITDA can be found at the end of this earnings release.
Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022
During the nine months ended September 30, 2023, Danaos had an average of 68.1 container vessels compared to 71.0 container vessels during the nine months ended September 30, 2022. Our containership fleet utilization for the nine months ended September 30, 2023 was 97.7% compared to 98.1% for the nine months ended September 30, 2022.
Our adjusted net income amounted to $431.6 million, or $21.54 per share, for the nine months ended September 30, 2023 compared to $569.3 million, or $27.67 per share, for the nine months ended September 30, 2022. We have adjusted our net income in the nine months ended September 30, 2023 for a $2.9 million change in fair value of investments, a $2.3 million loss on debt extinguishment, a $1.6 million gain on sale of vessel and a $1.7 million non-cash fees amortization. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The $137.7 million decrease in adjusted net income for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 is primarily attributable to a $146.2 million decrease in dividends received. We also incurred a $3.9 million equity loss on investments in the nine months ended September 30, 2023, a $16.6 million decrease in operating revenues and a $1.3 million increase in total operating expenses, which were partially offset by a $30.3 million decrease in net finance expenses.
On a non-adjusted basis, our net income amounted to $426.4 million, or $21.28 earnings per diluted share, for the nine months ended September 30, 2023 compared to net income of $406.5 million, or $19.75 earnings per diluted share, for the nine months ended September 30, 2022. Our net income for the nine months ended September 30, 2022 included a total loss on our investment in ZIM of $29.2 million, net of withholding taxes on dividends and a gain on debt extinguishment of $22.9 million compared to a $2.0 million total loss on our EGLE investment and a $2.3 million loss on debt extinguishment for the nine months ended September 30, 2023.
Operating Revenues Operating revenues decreased by 2.2%, or $16.6 million, to $724.3 million in the nine months ended September 30, 2023 from $740.9 million in the nine months ended September 30, 2022.
Operating revenues for the nine months ended September 30, 2023 reflect:
Vessel Operating Expenses Vessel operating expenses increased by $3.1 million to $122.0 million in the nine months ended September 30, 2023 from $118.9 million in the nine months ended September 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,758 per vessel per day for the nine months ended September 30, 2023 compared to $6,314 per vessel per day for the nine months ended September 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among the most competitive in the industry.
Depreciation & Amortization Depreciation & Amortization includes Depreciation and Amortization of Deferred Drydocking and Special Survey Costs.
Depreciation Depreciation expense decreased by 5.4%, or $5.5 million, to $95.8 million in the nine months ended September 30, 2023 from $101.3 million in the nine months ended September 30, 2022 due to our recent sale of three vessels.
Amortization of Deferred Drydocking and Special Survey Costs Amortization of deferred drydocking and special survey costs increased by $4.1 million to $13.1 million in the nine months ended September 30, 2023 from $9.0 million in the nine months ended September 30, 2022.
General and Administrative Expenses General and administrative expenses decreased by $0.6 million to $21.1 million in the nine months ended September 30, 2023, from $21.7 million in the nine months ended September 30, 2022. The decrease was primarily attributable to decreased management fees due to the recent sale of three vessels.
Other Operating Expenses Other Operating Expenses include Voyage Expenses.
Voyage Expenses Voyage expenses decreased by $1.7 million to $25.2 million in the nine months ended September 30, 2023 from $26.9 million in the nine months ended September 30, 2022 primarily as a result of a decrease in commissions and the average number of vessels in our fleet.
Gain on Sale of Vessels In January 2023, we completed the sale of the Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.
Interest Expense and Interest Income Interest expense decreased by 65.6%, or $32.3 million, to $16.9 million in the nine months ended September 30, 2023 from $49.2 million in the nine months ended September 30, 2022. The decrease in interest expense is a result of:
As of September 30, 2023, outstanding debt, gross of deferred finance costs, was $417.4 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $868.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $79.6 million, gross of deferred finance costs, as of September 30, 2022.
Interest income increased by $8.0 million to $9.4 million in the nine months ended September 30, 2023 compared to $1.4 million in the nine months ended September 30, 2022 mainly as a result of increased interest rates and average amount of time deposits in the nine months ended September 30, 2023.
Loss on investments We recognized a $2.0 million loss on marketable securities, which consisted of the change in fair value of $2.9 million and dividends of $0.9 million in the nine months ended September 30, 2023 on our shareholding interest in EGLE of 1,552,865 shares of common stock. This loss compares to a loss on investments of $11.0 million in the nine months ended September 30, 2022, which consisted of the change in fair value of our shareholding interest in ZIM of $176.4 million and dividends recognized on ZIM ordinary shares of $165.4 million. In the nine months ended September 30, 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $246.6 million.
Gain/(loss) on debt extinguishment A $2.3 million loss on early extinguishment of our leaseback obligations in the nine months ended September 30, 2023 compares to a $22.9 million gain related to our early extinguishment of debt in the nine months ended September 30, 2022.
Equity loss on investments Equity loss on investments amounting to $3.9 million in the nine months ended September 30, 2023 relates to our share of initial expenses of a newly established company, CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.
Other finance expenses Other finance expenses increased by $2.3 million to $3.4 million in the nine months ended September 30, 2023 compared to $1.1 million in the nine months ended September 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.
Loss on derivatives Amortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ended September 30, 2023 and September 30, 2022.
Other income/(expenses), net Other expenses, net were $0.6 million in the nine months ended September 30, 2023 compared to other income, net of $1.3 million in the nine months ended September 30, 2022.
Income taxes Income taxes of $18.3 million, in the nine months ended September 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares and compared to no income tax in the nine months ended September 30, 2023.
Adjusted EBITDA Adjusted EBITDA decreased by 20.8%, or $140.3 million, to $534.4 million in the nine months ended September 30, 2023 from $674.7 million in the nine months ended September 30, 2022. As outlined above, the decrease is mainly attributable to a $146.2 million decrease in dividends received. We also incurred a $3.1 million increase in total operating expenses and a $3.9 million equity loss on investments in the nine months ended September 30, 2023, which were partially offset by a $12.9 million increase in operating revenues. Adjusted EBITDA for the nine months ended September 30, 2023 is adjusted for a $2.9 million change in fair value of investments, a $2.3 million loss on debt extinguishment and a $1.6 million gain on sale of vessel. Tables reconciling Net Income to Adjusted EBITDA can be found at the end of this earnings release.
Dividend Payment
Danaos has declared a dividend of $0.80 per share of common stock for the third quarter of 2023, which is payable on December 6, 2023 to stockholders of record as of November 27, 2023.
Recent Developments
As of the date of this release, we have repurchased a total of 1,570,195 shares of our common stock in the open market for $97.4 million, under our share repurchase program of up to $100 million announced in June 2022. Additional share repurchase program of up to $100 million was approved by our Board on November 10, 2023.
In September 2023, we entered into agreements to acquire 2 additional Capesize bulk carriers built in 2009 that aggregate to 351,765 DWT for a total of $36.6 million. These vessels are expected to be delivered to us between November and December 2023.
Executive Officers
On November 10, 2023, Iraklis Prokopakis’s previously announced retirement from his executive role as Senior Vice President and Chief Operating Officer of the Company became effective. Mr. Prokopakis will remain a member of the Company’s Board of Directors, on which he will serve as Vice Chairman.
On November 10, 2023, Dimitris Vastarouchas, who had been serving as the Company’s Deputy Chief Operating Officer was appointed the Company’s Chief Operating Officer, and Filippos Prokopakis, who had been serving as Commercial Director of our manager, Danaos Shipping, was appointed Chief Commercial Officer of the Company.
Management Agreement
In November 2023, we agreed to extend the term of our Management Agreement with Danaos Shipping from December 31, 2024 to December 31, 2025 and to modify the fees and commissions payable by us thereunder.
Conference Call and Webcast
On Tuesday, November 14, 2023 at 9:00 A.M. ET, the Company's management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 844 802 2437 (US Toll Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please indicate to the operator that you wish to join the Danaos Corporation earnings call.
A telephonic replay of the conference call will be available until November 21, 2023 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 5709620# as the access code.
Audio Webcast There will also be a live and then archived webcast of the conference call on the Danaos website (www.danaos.com). Participants of the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Slide Presentation A slide presentation regarding the Company and the containership industry will also be available on the Danaos website (www.danaos.com).
About Danaos Corporation Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 68 containerships aggregating 421,293 TEUs and 10 under construction containerships aggregating 74,914 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our containerships fleet is chartered to many of the world's largest liner companies on fixed-rate charters. In addition to our containership fleet, we have recently entered into agreements to acquire 7 Capesize bulk carriers aggregating 1,231,071 DWT, out of which 4 have been delivered to us already. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions. Although Danaos Corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include any resurgence of the COVID-19 pandemic, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, drydocking and insurance costs, our ability to operate profitably in the drybulk sector, ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, including the conflict in Ukraine and related sanctions, the conflict in Israel and the Gaza Strip, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by Danaos Corporation with the U.S. Securities and Exchange Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 22 unscheduled off-hire days in the three months ended September 30, 2023. The following table summarizes containership fleet utilization and the impact of the off-hire days on the Company’s revenue.
Vessel Utilization (No. of Days)
First Quarter
Second Quarter
Third Quarter
2023
2023
2023
Total
Ownership Days
6,150
6,188
6,256
18,594
Less Off-hire Days:
Scheduled Off-hire Days
(150)
(80)
(119)
(349)
Other Off-hire Days
(44)
(2)
(22)
(68)
Operating Days
5,956
6,106
6,115
18,177
Vessel Utilization
96.8%
98.7%
97.7%
97.7%
Operating Revenues (in '000s of US Dollars)
$243,574
$241,479
$239,215
$724,268
Average Gross Daily Charter Rate
$40,896
$39,548
$39,119
$39,845
Vessel Utilization (No. of Days)
First Quarter
Second Quarter
Third Quarter
2022
2022
2022
Total
Ownership Days
6,390
6,461
6,532
19,383
Less Off-hire Days:
Scheduled Off-hire Days
(148)
-
(169)
(317)
Other Off-hire Days
(16)
(8)
(21)
(45)
Operating Days
6,226
6,453
6,342
19,021
Vessel Utilization
97.4%
99.9%
97.1%
98.1%
Operating Revenues (in '000s of US Dollars)
$229,901
$250,923
$260,037
$740,861
Average Gross Daily Charter Rate
$36,926
$38,885
$41,002
$38,950
Fleet List The following table describes in detail our fleet deployment profile of our containerships as of November 10, 2023:
Vessel Name
Vessel Size
(TEU)
Year Built
Expiration of Charter(1)
Hyundai Ambition
13,100
2012
April 2027
Hyundai Speed
13,100
2012
April 2027
Hyundai Smart
13,100
2012
June 2027
Hyundai Respect
13,100
2012
April 2027
Hyundai Honour
13,100
2012
March 2027
Express Rome
10,100
2011
April 2027
Express Berlin
10,100
2011
August 2026
Express Athens
10,100
2011
April 2027
Le Havre
9,580
2006
June 2028
Pusan C
9,580
2006
May 2028
Bremen
9,012
2009
January 2028
C Hamburg
9,012
2009
January 2028
Niledutch Lion
8,626
2008
May 2026
Kota Manzanillo
8,533
2005
February 2026
Belita
8,533
2006
July 2026
CMA CGM Melisande
8,530
2012
January 2028
CMA CGM Attila
8,530
2011
May 2027
CMA CGM Tancredi
8,530
2011
July 2027
CMA CGM Bianca
8,530
2011
September 2027
CMA CGM Samson
8,530
2011
November 2027
America
8,468
2004
April 2028
Europe
8,468
2004
May 2028
Kota Santos
8,463
2005
August 2026
CMA CGM Moliere
6,500
2009
March 2027
CMA CGM Musset
6,500
2010
September 2025
CMA CGM Nerval
6,500
2010
November 2025
CMA CGM Rabelais
6,500
2010
January 2026
Racine (ex CMA CGM Racine)
6,500
2010
April 2026
YM Mandate
6,500
2010
January 2028
YM Maturity
6,500
2010
April 2028
Zim Savannah
6,402
2002
May 2024
Dimitra C
6,402
2002
January 2024
Suez Canal
5,610
2002
April 2026
Kota Lima
5,544
2002
November 2024
Wide Alpha
5,466
2014
March 2024
Stephanie C
5,466
2014
June 2025
Maersk Euphrates
5,466
2014
April 2024
Wide Hotel
5,466
2015
May 2024
Wide India
5,466
2015
November 2025
Wide Juliet
5,466
2015
September 2025
Seattle C
4,253
2007
October 2024
Vancouver
4,253
2007
November 2024
Derby D
4,253
2004
January 2027
Tongala
4,253
2004
November 2024
Rio Grande
4,253
2008
November 2024
Merve A (ex ZIM Sao Paolo)
4,253
2008
September 2025
Kingston (ex ZIM Kingston)
4,253
2008
June 2025
ZIM Monaco
4,253
2009
October 2024
Dalian
4,253
2009
March 2026
ZIM Luanda
4,253
2009
August 2025
Dimitris C
3,430
2001
November 2025
Express Black Sea
3,400
2011
January 2025
Express Spain
3,400
2011
January 2025
Express Argentina
3,400
2010
September 2024
Express Brazil
3,400
2010
June 2025
Express France
3,400
2010
September 2025
Singapore
3,314
2004
May 2024
Colombo
3,314
2004
January 2025
Zebra
2,602
2001
November 2024
Artotina
2,524
2001
May 2025
Advance
2,200
1997
January 2025
Future
2,200
1997
December 2024
Sprinter
2,200
1997
December 2024
Stride
2,200
1997
January 2025
Progress C
2,200
1998
November 2024
Bridge
2,200
1998
December 2024
Highway
2,200
1998
February 2024
Phoenix D
2,200
1997
March 2025
(1)
Earliest date charters could expire. Some charters include options for the charterer to extend their terms.
The following table describes the details of our Capesize drybulk vessels, which did not generate any operating revenues in the three months ended September 30, 2023:
Vessel Name
Capacity
(DWT)
Year Built
Bulk Achievement (3)
175,850
2011
Bulk Genius (2)
175,580
2012
Bulk Ingenuity (2)
176,022
2011
Integrity (2)
175,996
2010
Peace
175,858
2010
West Trader (3)
175,879
2009
East Trader (3)
175,886
2009
(2)
The vessels were delivered to us in October and November 2023
(3)
The vessels are expected to be delivered to us between November and December 2023.
Containerships under construction:
Hull Number
Vessel Size (TEU)
Expected Delivery Year
Minimum Charter Duration
Hull No. C7100-7
7,165
2024
3 Years
Hull No. C7100-8
7,165
2024
3 Years
Hull No. HN4009
8,010
2024
3 Years
Hull No. HN4010
8,010
2024
3 Years
Hull No. HN4011
8,010
2024
3 Years
Hull No. HN4012
8,010
2024
3 Years
Hull No. CV5900-07
6,014
2024
-
Hull No. CV5900-08
6,014
2025
-
Hull No. YZJ2023-1556
8,258
2026
-
Hull No. YZJ2023-1557
8,258
2026
-
DANAOS CORPORATION
Condensed Consolidated Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
OPERATING REVENUES
$239,215
$260,037
$724,268
$740,861
OPERATING EXPENSES
Vessel operating expenses
(39,494)
(39,186)
(121,994)
(118,929)
Depreciation & amortization
(37,097)
(37,225)
(108,873)
(110,259)
General & administrative
(7,070)
(7,157)
(21,107)
(21,684)
Other operating expenses
(8,959)
(10,320)
(25,241)
(26,952)
Gain on sale of vessels
-
-
1,639
-
Income From Operations
146,595
166,149
448,692
463,037
OTHER INCOME/(EXPENSES)
Interest income
3,091
1,323
9,410
1,444
Interest expense
(4,306)
(15,968)
(16,909)
(49,161)
Loss on investments
(8,432)
(80,277)
(1,994)
(10,987)
Gain/(loss) on debt extinguishment
-
-
(2,254)
22,939
Other finance expenses
(1,236)
(155)
(3,358)
(1,096)
Equity loss on investments
(526)
-
(3,852)
-
Other income/(expenses), net
(1,117)
411
(648)
1,272
Realized loss on derivatives
(913)
(913)
(2,709)
(2,709)
Total Other Income/(Expenses), net
(13,439)
(95,579)
(22,314)
(38,298)
Income Before Income Taxes
133,156
70,570
426,378
424,739
Income taxes
-
(3,770)
-
(18,250)
Net Income
$133,156
$66,800
$426,378
$406,489
EARNINGS PER SHARE
Basic earnings per share
$6.76
$3.29
$21.28
$19.77
Diluted earnings per share
$6.76
$3.29
$21.28
$19.75
Basic weighted average number of common shares (in thousands of shares)
19,693
20,299
20,039
20,560
Diluted weighted average number of common shares (in thousands of shares)
19,693
20,318
20,039
20,579
Non-GAAP Measures1
Reconciliation of Net Income to Adjusted Net Income – Unaudited
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Net income
$133,156
$66,800
$426,378
$406,489
Change in fair value of investments
9,333
107,290
2,895
176,386
Loss/(gain) on debt extinguishment
-
-
2,254
(22,939)
Gain on sale of vessels
-
-
(1,639)
-
Amortization of financing fees and debt discount
474
2,832
1,735
9,393
Adjusted Net Income
$142,963
$176,922
$431,623
$569,329
Adjusted Earnings Per Share, diluted
$7.26
$8.71
$21.54
$27.67
Diluted weighted average number of shares (in thousands of shares)
19,693
20,318
20,039
20,579
1 The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Table above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and nine months ended September 30, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
DANAOS CORPORATION
Condensed Consolidated Balance Sheets - Unaudited
(Expressed in thousands of United States dollars)
As of
As of
September 30,
December 31,
2023
2022
ASSETS
CURRENT ASSETS
Cash, cash equivalents and restricted cash
$306,290
$267,668
Accounts receivable, net
7,351
5,635
Other current assets
184,556
99,218
498,197
372,521
NON-CURRENT ASSETS
Fixed assets, net
2,652,958
2,721,494
Advances for vessels acquisition and vessels under construction
289,149
190,736
Deferred charges, net
33,998
25,554
Investments in affiliates
411
-
Other non-current assets
79,226
89,923
3,055,742
3,027,707
TOTAL ASSETS
$3,553,939
$3,400,228
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion
$24,400
$27,500
Long-term leaseback obligations, current portion
-
27,469
Accounts payable, accrued liabilities & other current liabilities
148,681
173,438
173,081
228,407
LONG-TERM LIABILITIES
Long-term debt, net
386,222
402,440
Long-term leaseback obligations, net
-
44,542
Other long-term liabilities
102,263
164,425
488,485
611,407
STOCKHOLDERS’ EQUITY
Common stock
195
203
Additional paid-in capital
695,593
748,109
Accumulated other comprehensive loss
(70,941)
(74,209)
Retained earnings
2,267,526
1,886,311
2,892,373
2,560,414
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$3,553,939
$3,400,228
DANAOS CORPORATION
Condensed Consolidated Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
Three months
ended
Three months
ended
Nine months
ended
Nine months
ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Operating Activities:
Net income
$133,156
$66,800
$426,378
$406,489
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of right-of-use assets
32,325
34,141
95,764
101,253
Amortization of deferred drydocking & special survey costs, finance cost and debt discount
5,246
5,916
14,844
18,399
Amortization of assumed time charters
(4,416)
(13,892)
(16,806)
(46,256)
Prior service cost and periodic cost
220
-
1,106
-
Loss on investments
9,333
107,290
2,895
176,386
Loss/(gain) on debt extinguishment
-
-
2,254
(22,939)
Gain on sale of vessels
-
-
(1,639)
-
Payments for drydocking/special survey
(6,993)
(6,433)
(21,553)
(16,159)
Equity loss on investments
526
-
3,852
-
Amortization of deferred realized losses on cash flow interest rate swaps
913
913
2,709
2,709
Stock based compensation
-
125
-
373
Accounts receivable
740
408
(1,716)
1,986
Other assets, current and non-current
982
(10,123)
(11,424)
(53,553)
Accounts payable and accrued liabilities
(4,654)
(5,498)
(7,805)
(657)
Other liabilities, current and long-term
(17,872)
(10,881)
(58,747)
221,213
Net Cash provided by Operating Activities
149,506
168,766
430,112
789,244
Investing Activities:
Vessels additions and advances
(98,274)
(11,087)
(128,058)
(95,134)
Proceeds and advances received from sale of vessels
-
-
3,914
13,000
Proceeds from sale of investments
-
161,305
-
246,638
Investments in affiliates/marketable securities
-
-
(74,407)
-
Net Cash provided by/(used in) Investing Activities
(98,274)
150,218
(198,551)
164,504
Financing Activities:
Proceeds from long-term debt
-
-
-
127,725
Debt repayment
(6,875)
(17,875)
(20,625)
(401,000)
Payments of leaseback obligations
-
(26,179)
(72,925)
(146,866)
Dividends paid
(14,802)
(15,228)
(45,163)
(46,298)
Repurchase of common stock
(16,596)
(22,228)
(52,334)
(28,553)
Payments of accumulated accrued interest
-
-
-
(3,373)
Finance costs
-
(704)
(1,892)
(15,796)
Net Cash used in Financing Activities
(38,273)
(82,214)
(192,939)
(514,161)
Net increase in cash, cash equivalents and restricted cash
12,959
236,770
38,622
439,587
Cash, cash equivalents and restricted cash, beginning of period
293,331
332,573
267,668
129,756
Cash, cash equivalents and restricted cash, end of period
$306,290
$569,343
$306,290
$569,343
DANAOS CORPORATION
Reconciliation of Net Income to Adjusted EBITDA - Unaudited
(Expressed in thousands of United States dollars)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Net income
$133,156
$66,800
$426,378
$406,489
Depreciation and amortization of right-of-use assets
32,325
34,141
95,764
101,253
Amortization of deferred drydocking & special survey costs
4,772
3,084
13,109
9,006
Amortization of assumed time charters
(4,416)
(13,892)
(16,806)
(46,256)
Amortization of deferred finance costs, debt discount and commitment fees
1,203
2,832
3,965
9,393
Amortization of deferred realized losses on interest rate swaps
913
913
2,709
2,709
Interest income
(3,091)
(1,323)
(9,410)
(1,444)
Interest expense
3,832
13,136
15,174
39,768
Income taxes
-
3,770
-
18,250
Loss on investments and dividend withholding taxes
9,333
103,520
2,895
158,136
Loss/(gain) on debt extinguishment
-
-
2,254
(22,939)
Gain on sale of vessels
-
-
(1,639)
-
Stock based compensation
-
125
-
373
Adjusted EBITDA(1)
$178,027
$213,106
$534,393
$674,738
1)
Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividend, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred finance costs, debt discount and commitment fees, amortization of deferred realized losses on interest rate swaps, gain/loss on investments, gain/loss on debt extinguishment, gain on sale of vessels and stock based compensation. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or “GAAP.” We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. See the Tables above for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and nine months ended September 30, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231113106297/en/
For further information please contact: Company Contact: Evangelos Chatzis Chief Financial Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6480 E-Mail: cfo@danaos.com Investor Relations and Financial Media Rose & Company New York Tel. 212-359-2228 E-Mail: danaos@rosecoglobal.com
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