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Home News Fleet additions see Danaos ride the Covid economic wave

Fleet additions see Danaos ride the Covid economic wave

Danaos Shipping has announced the acquisition of two container vessels of 8,463TEU and 8,626TEU respectively in 2020, expanding its fleet to 57 boxships, according to a company's announcement.

Both container ships have been fixed on two-year charters and and are expected to contribute approximately US$12 million in aggregated earnings before interest, tax, depreciation and amortisation (EBITDA) on an annualised basis.

According to the company's CEO, John Coustas, Danaos has not been affected by the Coronavirus crisis, "Our results for the first quarter of 2020 were not impacted by the Covid-19 pandemic, except for the increase in off-hire days related to delays in scrubber installations in Chinese shipyards."

Announcing operating revenues of US$106.2 million and adjusted net income of US$33.3 million, both decreased compared to Q1 2019 by 5.9% and 13.7% respectively, when the Greek containership owner unveiled its 2020 first-quarter results, Coustas was less optimistic about the immediate future.

John Coustas said, "The strength of our company and our strong relationships in the finance community is demonstrated by the financing arrangements executed in the midst of the pandemic."

"There is no doubt that the pandemic will have a very negative effect on GDP [Gross domestic product], unemployment and countless other macroeconomic indicators in the near term," he said.

Meanwhile, the Greek shipping company has entered into an agreement to acquire an 8,533TEU vessel, which is expected to be delivered in the second quarter of 2020.

Earlier in April, Danaos Shipping entered into a loan agreement with Macquarie Bank for an amount of up to US$24 million drawn down in full on 9 April 2020. The loan was used to partially finance the acquisition costs of the vessels Niledutch Lion and Phoebe, according to the company.

"We are successfully managing charter renewals, albeit at lower charter rates but still at rates well above operational breakeven levels," Coustas commented.

Moreover, Danaos Shipping has announced that on 12 May they refinanced the existing leaseback obligation related to the vessels Hyundai Honour and Hyundai Respect with a new sale and leaseback arrangement amounting to US$139.1 million with a four-year term, at the end of which the Piraeus-based shipping company will reacquire these vessels for an aggregate amount of US$36.0 million or earlier for a purchase price set forth in the agreement.

Furthermore, Danaos' annual results showed adjusted EBITDA of US$71.9 million, declined by 7.2% and total contracted operating revenues of US$1.3 billion, 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 company's charter coverage of 85% for the next 12 months is based on current operating revenues and 66% in terms of contracted operating days.

Antonis Karamalegkos
Editor





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