Danaos Rakes In
Athens-based container ship owner Danaos Corporation reported USD 38 million net income for the quarter ended June 30, 2015, a 227.6% increase compared to USD 11.6 million the company had earned in Q2FY2014.
Danaos attributed the increased profit to a USD 20.6 million reduction in net finance costs, a USD 0.7 million improvement in total operating costs, an increase of USD 2.9 million in operating revenues as a result of the acquisition of two 6,402 TEU vessels which were added to the fleet during the 4th quarter of 2014, and an increase of USD 2.2 million in operating revenues from six 4,253 TEU vessels on charter to Israeli shipping company Zim.
The company’s operating revenue for the second quarter increased by 3.7%, from USD 136.4m in Q2FY2014, to USD 141.5m in Q2FY2015.
During the three months ended June 30, 2015, Danaos had an average of 56 container ships compared to 55.8 container ships for the three months ended June 30, 2014. The company’s fleet utilization increased to 99.4% in the three months ended June 30, 2015 compared to 97.3% in Q2FY2014.
The remaining average charter duration of Danaos’ fleet was 7.6 years as of June 30, 2015, and the total contracted operating revenues were USD 3.4 billion, through 2028.
”The trend of reduced financing costs and, as a consequence, increased earnings, will continue through the next quarters as we continue to reduce debt and benefit from the expiration of expensive interest rate swaps,” Danaos’ CEO Dr. John Coustas said.
”The container charter market corrected during the second quarter partially giving back some of the gains realized during the first quarter of the year, however charter rates still remain at relatively healthy levels. It is our view that the current state of the charter market constitutes a more stable equilibrium. We believe that this adjustment is good for the longer term health of the market as speculative ordering is discouraged. At the same time the drop in the box rates is the combined result of overcapacity and market share competition between the global carriers.
Our charter coverage continues to be at a strong 96.4% in terms of operating revenues for the next 12 months which insulates us from market volatility. At the same time, our USD 6,000 daily operating cost clearly positions us as one of the most efficient operators in the industry.”