Danaos has published financial results for the first three months of the year.
“The first quarter of 2022 was another exceptional one for Danaos,” said Danaos’ CEO Dr. John Coustas.
More specifically, adjusted net income was US$235.3 million, or US$11.36 per share, up 305.7% year-on-year compared to 2021 first quarter.
Additionally, the company’s net income was US$331.5 million or US$16.00 per share compared to US$296.8 million or US$14.47 per share in the first quarter of last year.
“Liquidity stands very strong. As at the end of the first quarter we had US$708 million in cash and marketable securities, while during the second quarter we received US$239 million of charter hire prepayment related to charter contracts for 15 of our vessels, representing partial prepayment of charter hire payable during the period from May 2022 through January 2027”, stressed Dr. Coustas.
Furthermore, Danaos operating revenues reached US$229.9 million for the quarter compared to US$132.1 million in 2021 Q1, an increase of 74%.
Moreover, the company’s adjusted EBITDA reached US$269.5 million for the quarter ended 31 March 2022, up 179.9% from US$96.3 million a year ago.
Total contracted operating revenues were US$2.7 billion as of 31 March, with charters extending through 2028 and remaining average contracted charter duration of 3.8 years, weighted by aggregate contracted charter hire.
At the same time, the Greek vessel owner noted that charter coverage reaches 95.5% for the next 12 months based on current operating revenues and 96.2% in terms of contracted operating days.
“Having already seeded the future with $2.7 billion of contracted revenue, we are operating from a position of strength and confidence. This allowed us to invest in the future by ordering six vessels in the 7,000 – 8,000 TEU range, to be delivered between March and September 2024, that are ready to be converted to run on green methanol when such fuel is widely available. Our position in ZIM continues to generate solid returns, including $110 million in net dividends declared in the first quarter,” added Dr. Coustas.
Commenting on the market situation, Dr. Coustas stressed that “the broader market has been affected by geopolitical events, high energy prices, inflation, the interest rate outlook, and China’s ‘Zero-Covid’ policy. Although box freight rates and charter rates have not been significantly affected, sentiment has changed, and market participants have adopted a more conservative short-term attitude. On the other hand, supply chain inefficiencies continue unabated and there is little likelihood that conditions improve this year. This has led to record profits for the liner companies and, most importantly, higher contract levels”.
“Also, fuel oil prices are reaching levels not seen for more than a decade at the same time as supply chain disruptions have resulted in an increase in average sailing speed. Over time, the global container network will normalise as new vessels are delivered and sailing speeds are reduced,” he added.
In the second quarter of 2022, Danaos has repaid and committed to repay US$437 million of debt and leasing obligations as a result of which 13 vessels in the fleet will become unencumbered.
Regarding the above, Dr. John Coustas, noted that “most recently, we have accelerated de-leveraging to minimise the impact of rising interest rates. During the second quarter of 2022 we have already repaid early US$364 million in debt and lease obligations while another US$73 million, for which we have issued early repayment notices, will also be repaid early through the end of the second quarter.”
