Danaos Delivers Major Loss due to Impairments

Greek containership owner Danaos Corporation ended the fourth quarter of 2018 with a major loss due to recorded impairment charges.

The company’s net loss for the quarter ended December 31, 2018 reached USD 180.9 million, compared to a net income of USD 22.8 million seen a year before. Danaos recognized an impairment loss of USD 210.7 million in relation to 10 of its Panamax vessels as of December 31, 2018 compared to nil in the comparable period.

For the full year 2018, the company delivered a net loss of USD 32.9 million, against a net income of USD 83.9 million reported in 2017.

Operating revenues were at USD 115.6 million for the fourth quarter, compared to USD 114.2 million for the three months ended December 31, 2017. On a yearly level, operating revenues were slightly up by 1.5% to USD 458.7 million in 2018 from USD 451.7 million in 2017.

“The 4th quarter of 2018 was the first full quarter following the completion of our recent debt refinancing which reduced indebtedness by USD 551 million, reset financial covenants and extended maturities through the end of 2023. As mentioned before, the refinancing has strengthened the company’s balance sheet and growth prospects by removing all balloon payments and maturities of existing debt over the next five years,” Dr. John Coustas, Danaos’ CEO, said.

The charter market for vessels larger than 5,000 TEU has recently shown encouraging signs of recovery, and the market for smaller vessels remains stable albeit at relatively low levels, according to Danaos.

“Anticipated slow steaming and re-designing of liner networks ahead of the implementation of new restrictions on sulphur emissions in 2020 together with vessels exiting service to be fitted with scrubbers are all positive supply side developments that may lead to improved charter rates,” Coustas concluded.