Danaos Reports First-Quarter Profit Rise
- Business & Finance
Greek containership owner Danaos Corporation wrapped up the first quarter of this year with a considerably increased net income.
The company’s net income rose by 123% to USD 33.4 million in Q1 2019 from USD 15 million seen in the corresponding period a year earlier.
Operating revenues increased by 0.9% to USD 112.9 million in the three months ended March 31, 2019, from USD 111.9 million posted in the three months ended March 31, 2018.
As explained, the increase in revenues was due to higher fleet utilization of Danaos vessels during the first quarter of this year compared to the same period last year. In addition, rechartering of certain of the company’s vessels at higher rates contributed to the revenue growth.
On May 2, Danaos effected a 1:14 reverse stock split, which the company believes will cure the previously announced NYSE deficiency caused by its stock trading below USD 1.
At the beginning of April, Danaos concluded a USD 150 million sale and leaseback transaction for two 13,100 TEU vessels. The net proceeds were used to prepay certain facilities secured by mortgages on the vessels. Under the terms of the transaction, the company will re-acquire the containerships at the end of their five-year lease periods.
“The charter market for vessels over 5,500 TEU has seen significant improvement when compared to the recent lows of the fourth quarter of 2018,” John Coustas, Danaos’ CEO, commented.
“In general, the charter market for larger vessels has improved considerably, which is notable as more than 70% of our fleet in terms of capacity, is comprised of such vessels. Vessels below 5,500 TEU have also improved slightly since last November’s downturn,” he added.
Speaking on investments, Danaos CEO revealed the company has recently completed its first scrubber installation on a vessel owned by Gemini Shipholdings Corporation, an entity in which Danaos has a 49% shareholding interest.
As informed, Danaos will proceed with installing scrubbers on a further nine vessels wholly-owned by the company as well as one additional vessel owned by Gemini over the next few months.
Danaos currently has a fleet of 59 containerships aggregating 351,614 TEUs, including four vessels owned by Gemini.
“Our total contracted revenues as of March 31, 2019 were USD 1.5 billion, and we maintain our high charter contract coverage of 86% in terms of operating revenues and 71% in terms of operating days over the next 12 months. This insulates us from near-term market weakness,” Coustas continued.