Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s
largest independent owners of containerships, today reported
unaudited results for the period ended September 30, 2021.
Highlights for the Third Quarter and Nine Months Ended
September 30, 2021:
- Adjusted net income1 of $109.5 million, or $5.32 per share,
for the three months ended September 30, 2021 compared to $47.3
million, or $1.91 per share, for the three months ended September
30, 2020, an increase of 131.5%. Adjusted net income1 of $236.4
million, or $11.49 per share, for the nine months ended September
30, 2021 compared to $123.1 million, or $4.97 per share, for the
nine months ended September 30, 2020, an increase of
92.0%.
- Operating revenues of $195.9 million for the three months
ended September 30, 2021 compared to $118.9 million for the three
months ended September 30, 2020, an increase of 64.8%. Operating
revenues of $474.5 million for the nine months ended September 30,
2021 compared to $342.0 million for the nine months ended September
30, 2020, an increase of 38.7%.
- Adjusted EBITDA1 of $149.6 million for the three
months ended September 30, 2021 compared to $83.3 million for the
three months ended September 30, 2020, an increase of 79.6%.
Adjusted EBITDA1 of $349.6 million for the nine months ended
September 30, 2021 compared to $235.3 million for the nine months
ended September 30, 2020, an increase of 48.6%.
- Total contracted operating revenues were $2.1 billion as of
September 30, 2021 with charters extending through 2028 and
remaining average contracted charter duration of 3.3 years,
weighted by aggregate contracted charter hire.
- Charter coverage of 100% for the remainder of 2021 and 90%
for 2022 in terms of contracted operating days.
- Danaos has declared a dividend of $0.50 per share of common
stock for the third quarter of 2021, which is payable on December
2, 2021 to stockholders of record as of November 19, 2021.
Three and Nine Months Ended
September 30, 2021
Financial Summary -
Unaudited
(Expressed in thousands of United
States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Operating revenues
$195,915
$118,932
$474,467
$341,952
Net income
$217,227
$42,786
$886,844
$110,371
Adjusted net income1
$109,547
$47,303
$236,418
$123,078
Earnings per share, diluted
$10.55
$1.73
$43.11
$4.45
Adjusted earnings per share, diluted1
$5.32
$1.91
$11.49
$4.97
Diluted weighted average number of shares
(in thousands)
20,598
24,789
20,571
24,789
Adjusted EBITDA1
$149,621
$83,331
$349,639
$235,322
1 Adjusted net income, adjusted
earnings per share and adjusted EBITDA are non-GAAP measures. Refer
to the reconciliation of net income to adjusted net income and net
income to adjusted EBITDA.
Danaos’ CEO Dr. John Coustas
commented:
"We are certain that everyone is aware of the well-documented
disruptions to the global supply chain that continue unabated. This
situation, despite its negative effect in world growth, had
extremely positive effects in our market which continues from
strength to strength. Despite efforts by all participants to
alleviate the disruptions to the global supply chain, there are no
signs that conditions are improving. The main contributing factors
are an increase in demand, lack of available vessels to satisfy
such demand and low levels of productivity in the ports and other
land-based infrastructure.
Additionally, as new vessel deliveries in 2022 are actually
expected to be lower than in 2021, we do not expect any respite at
least from the vessel supply front in the near term. In 2023,
increased deliveries are forecasted, although there will be an
offsetting effect from new environmental regulations that will
likely tighten the effective supply of vessels due to the
anticipated reductions in speed. Overall, we do not expect a
dramatic difference, provided demand remains healthy.
During the third quarter, we consummated the acquisition of
Gemini and acquired six modern 5,500 TEU vessels, all with existing
cash resources. On the back of these moves we have achieved record
EBITDA and Net Income. We have also expanded our charter coverage
and now have in excess of $2 billion of charter backlog. Our share
ownership in ZIM - although adjusted as per our usual practice -
will also contribute around half a billion dollars to our earnings
for 2021 which is outstanding. Our liquidity in terms of cash and
marketable securities is still close to half a billion and we are
closely monitoring our options and strategy for next year to
deliver even better results for the Company and our
shareholders.
In the meantime, liner companies are announcing record results
which is extremely positive for Danaos as the strong credit quality
of our customers continues to improve. The continued strong
performance of Danaos is ensured by existing charters with an
average charter duration of 3.3 years and new charters that lock in
current rates for several years. We expect strong market conditions
to persist in the near term, which will support a strong
re-chartering environment into next year and should ensure our
stellar performance for the next 3 years."
Three months ended September 30, 2021
compared to the three months ended September 30,
2020
During the three months ended September 30, 2021, Danaos had an
average of 65.7 containerships compared to 58.0 containerships
during the three months ended September 30, 2020. Our fleet
utilization for the three months ended September 30, 2021 was 97.7%
compared to 98.7% for the three months ended September 30,
2020.
Our adjusted net income amounted to $109.5 million, or $5.32 per
share, for the three months ended September 30, 2021 compared to
$47.3 million, or $1.91 per share, for the three months ended
September 30, 2020. We have adjusted our net income in the three
months ended September 30, 2021 for a $64.1 million gain on our
acquisition of the remaining interest in Gemini Shipholdings
Corporation (“Gemini”), the change in fair value of our investment
in ZIM Integrated Shipping Services Ltd. (“ZIM”) of $47.2 million
and a non-cash fees amortization and accrued finance fees charge of
$3.6 million. Please refer to the Adjusted Net Income
reconciliation table, which appears later in this earnings
release.
The increase of $62.2 million in adjusted net income for the
three months ended September 30, 2021 compared to the three months
ended September 30, 2020 is attributable mainly to a $77.0 million
increase in operating revenues and collection of a $12.3 million
dividend from ZIM, which were partially offset by a $17.3 million
increase in total operating expenses, a $8.3 million increase in
net finance expenses, and a $1.5 million decrease in our equity
investment in Gemini following our acquisition and full
consolidation by us since July 1, 2021.
On a non-adjusted basis, our net income amounted to $217.2
million, or $10.55 earnings per diluted share, for the three months
ended September 30, 2021 compared to net income of $42.8 million,
or $1.73 earnings per diluted share, for the three months ended
September 30, 2020. Our net income for the three months ended
September 30, 2021 includes a $64.1 million non-cash gain on our
acquisition of Gemini and a total gain on our investment in ZIM of
$59.5 million.
Operating Revenues Operating revenues increased by 64.8%,
or $77.0 million, to $195.9 million in the three months ended
September 30, 2021 from $118.9 million in the three months ended
September 30, 2020.
Operating revenues for the three months ended September 30, 2021
reflect:
- a $30.6 million increase in revenues in the three months ended
September 30, 2021 compared to the three months ended September 30,
2020 mainly as a result of higher charter rates;
- a $15.6 million increase in revenues in the three months ended
September 30, 2021 compared to the three months ended September 30,
2020 due to the incremental revenue generated by newly acquired
vessels;
- a $21.5 million increase in revenue in the three months ended
September 30, 2021 compared to the three months ended September 30,
2020 due to higher non-cash revenue recognition in accordance with
US GAAP; and
- a $9.3 million increase in revenues in the three months ended
September 30, 2021 compared to the three months ended September 30,
2020 due to amortization of assumed time charters.
Vessel Operating Expenses Vessel operating expenses
increased by $7.0 million to $34.7 million in the three months
ended September 30, 2021 from $27.7 million in the three months
ended September 30, 2020, primarily as a result of the increase in
the average number of vessels in our fleet and an increase in the
average daily operating cost for vessels on time charter to $5,918
per vessel per day for the three months ended September 30, 2021
compared to $5,467 per vessel per day for the three months ended
September 30, 2020. Management believes that our daily operating
cost remains among the most competitive in the industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 20.2%, or $5.2
million, to $31.0 million in the three months ended September 30,
2021 from $25.8 million in the three months ended September 30,
2020 mainly due to our recent acquisition of fifteen vessels and
installation of scrubbers on nine of our vessels in the year ended
December 31, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
decreased by $0.6 million to $2.6 million in the three months ended
September 30, 2021 from $3.2 million in the three months ended
September 30, 2020.
General and Administrative Expenses General and
administrative expenses increased by $1.3 million to $7.3 million
in the three months ended September 30, 2021, from $6.0 million in
the three months ended September 30, 2020. The increase was mainly
attributable to increased management fees due to the increased size
of our fleet and other corporate administrative expenses.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $4.5 million to
$8.1 million in the three months ended September 30, 2021 from $3.6
million in the three months ended September 30, 2020 primarily as a
result of the increase in commissions due to the increase in
revenue per vessel and the increase in the average number of
vessels in our fleet.
Interest Expense and Interest Income Interest expense
increased by 52.1%, or $6.2 million, to $18.1 million in the three
months ended September 30, 2021 from $11.9 million in the three
months ended September 30, 2020. The increase in interest expense
is a combined result of:
- a $6.3 million reduction in the recognition through our income
statement of accumulated accrued interest that had been accrued in
2018 in relation to two of our credit facilities that were
refinanced on April 12, 2021. As a result of the refinancing, the
recognition of such accumulated interest has decreased;
- a $0.7 million increase in interest expense due to an increase
in our debt service cost by approximately 0.4%, which was partially
offset by a decrease in our average indebtedness by $80.5 million
between the two periods (average indebtedness of $1,438.0 million
in the three months ended September 30, 2021, compared to average
indebtedness of $1,518.5 million in the three months ended
September 30, 2020); and
- a $0.8 million decrease in the amortization of deferred finance
costs and debt discount related to our debt.
Net proceeds from the issuance of our $300 million Senior Notes
in February 2021 together with the net proceeds from a new $815
million senior secured credit facility and a new $135 million
leaseback arrangement, each of which was drawn down on April 12,
2021, were used to refinance a substantial majority of our then
outstanding indebtedness.
As of September 30, 2021, our outstanding debt, gross of
deferred finance costs, was $1,165.5 million, which includes $300
million aggregate principal amount of our Senior Notes, and our
leaseback obligation was $242.9 million. These balances compare to
debt of $1,376.2 million and a leaseback obligation of $129.4
million as of September 30, 2020.
Interest income decreased by $1.5 million to $0.2 million in the
three months ended September 30, 2021 compared to $1.7 million in
the three months ended September 30, 2020 mainly as a result of
collection of accrued interest on ZIM and HMM bonds, which were
redeemed by the issuers thereof in the first half of 2021.
Gain on investments The gain on investments of $59.5
million in the three months ended September 30, 2021 consists of
the change in fair value of our shareholding interest in ZIM of
$47.2 million and net dividends received on ZIM ordinary shares of
$12.3 million. ZIM completed its initial public offering and
listing on the New York Stock Exchange of its ordinary shares on
January 27, 2021. In June 2021, we sold 2,000,000 ordinary shares
of ZIM resulting in net proceeds of $76.4 million. Our remaining
shareholding interest of 8,186,950 ordinary shares has been fair
valued at $415.1 million as of September 30, 2021, based on the
closing price of ZIM’s ordinary shares on the NYSE on that date.
Subsequently, in October 2021, we sold 1,000,000 of these ZIM
ordinary shares, resulting in net proceeds to us of $44.3
million.
Equity income on investments Equity income on investments
increased by $62.6 million to $64.1 million in the three months
ended September 30, 2021 compared to $1.5 million in the three
months ended September 30, 2020 mainly due to the non-cash gain of
$64.1 million recognized upon our acquisition of the remaining 51%
equity interest in Gemini on July 1, 2021.
Other finance expenses Other finance expenses, net
decreased by $0.2 million to $0.1 million in the three months ended
September 30, 2021 compared to $0.3 million in the three months
ended September 30, 2020 due to the decreased finance costs on the
refinanced debt.
Loss on derivatives Amortization of deferred realized
losses on interest rate swaps remained stable at $0.9 million in
each of the three months ended September 30, 2021 and September 30,
2020.
Other income, net Other income, net was $0.3 million in
the three months ended September 30, 2021 compared to $0.1 million
in the three months ended September 30, 2020.
Adjusted EBITDA Adjusted EBITDA increased by 79.6%, or
$66.3 million, to $149.6 million in the three months ended
September 30, 2021 from $83.3 million in the three months ended
September 30, 2020. As outlined above, the increase is mainly
attributable to a $67.7 million increase in operating revenues (net
of $9.3 million amortization of assumed time charters) and a
collection of $12.3 million dividend from ZIM, which were partially
offset by a $12.2 million increase in total operating expenses and
a $1.5 million decrease in equity investment in Gemini following
our acquisition and full consolidation since July 1, 2021. Adjusted
EBITDA for the three months ended September 30, 2021 is adjusted
for the gain on Gemini’s acquisition of $64.1 million, the change
in fair value of our investment in ZIM of $47.2 million and stock
based compensation of $0.6 million. Tables reconciling Adjusted
EBITDA to Net Income can be found at the end of this earnings
release.
Nine months ended September 30, 2021
compared to the nine months ended September 30, 2020
During the nine months ended September 30, 2021, Danaos had an
average of 61.9 containerships compared to 56.9 containerships
during the nine months ended September 30, 2020. Our fleet
utilization for the nine months ended September 30, 2021 was 98.5%
compared to 95.8% for the nine months ended September 30, 2020.
Adjusted fleet utilization, excluding the effect of 188 days of
incremental off-hire due to shipyard delays related to the COVID-19
pandemic, was 97.0% in the nine months ended September 30,
2020.
Our adjusted net income amounted to $236.4 million, or $11.49
per share, for the nine months ended September 30, 2021 compared to
$123.1 million, or $4.97 per share, for the nine months ended
September 30, 2020. We have adjusted our net income in the nine
months ended September 30, 2021 for the gain on our investment in
ZIM of $491.4 million, gain on debt extinguishment of $111.6
million, a $64.1 million gain on our acquisition of Gemini, a
non-cash fees amortization and accrued finance fees charge of $12.6
million and stock-based compensation of $4.1 million. Please refer
to the Adjusted Net Income reconciliation table, which appears
later in this earnings release.
The increase of $113.3 million in adjusted net income for the
nine months ended September 30, 2021 compared to the nine months
ended September 30, 2020 is attributable mainly to a $132.5 million
increase in operating revenues, collection of a $12.3 million
dividend from ZIM, and partial collection of a common benefit claim
of $3.9 million from Hanjin Shipping, which were partially offset
by a $32.5 million increase in total operating expenses, a $2.1
million increase in net finance expenses and a $0.8 million
decrease in the operating performance of our equity investment in
Gemini following our acquisition and full consolidation by us since
July 1, 2021.
On a non-adjusted basis, our net income amounted to $886.8
million, or $43.11 earnings per diluted share, for the nine months
ended September 30, 2021 compared to net income of $110.4 million,
or $4.45 earnings per diluted share, for the nine months ended
September 30, 2020. Our net income for the nine months ended
September 30, 2021 includes a total gain on our investment in ZIM
of $503.7 million, a $64.1 million non-cash gain on the acquisition
of Gemini and a $111.6 million gain on debt extinguishment.
Operating Revenues Operating revenues increased by 38.7%,
or $132.5 million, to $474.5 million in the nine months ended
September 30, 2021 from $342.0 million in the nine months ended
September 30, 2020.
Operating revenues for the nine months ended September 30, 2021
reflect:
- a $69.6 million increase in revenues in the nine months ended
September 30, 2021 compared to the nine months ended September 30,
2020 mainly as a result of higher charter rates and improved fleet
utilization;
- a $32.1 million increase in revenues in the nine months ended
September 30, 2021 compared to the nine months ended September 30,
2020 due to the incremental revenue generated by newly acquired
vessels;
- a $21.5 million increase in revenue in the nine months ended
September 30, 2021 compared to the nine months ended September 30,
2020 due to higher non-cash revenue recognition in accordance with
US GAAP; and
- a $9.3 million increase in revenues in the nine months ended
September 30, 2021 compared to the nine months ended September 30,
2020 due to amortization of assumed time charters.
Vessel Operating Expenses Vessel operating expenses
increased by $16.5 million to $98.7 million in the nine months
ended September 30, 2021 from $82.2 million in the nine months
ended September 30, 2020, primarily as a result of the increase in
the average number of vessels in our fleet and an increase in the
average daily operating cost for vessels on time charter to $6,034
per vessel per day for the nine months ended September 30, 2021
compared to $5,592 per vessel per day for the nine months ended
September 30, 2020. The average daily operating cost increased
mainly due to the COVID-19 related increase in crew remuneration in
the nine months ended September 30, 2021. Management believes that
our daily operating cost remains among the most competitive in the
industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 9.7%, or $7.3
million, to $82.9 million in the nine months ended September 30,
2021 from $75.6 million in the nine months ended September 30, 2020
mainly due to our recent acquisition of fifteen vessels and
installation of scrubbers on nine of our vessels in the year ended
December 31, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
decreased by $0.8 million to $7.6 million in the nine months ended
September 30, 2021 from $8.4 million in the nine months ended
September 30, 2020.
General and Administrative Expenses General and
administrative expenses increased by $7.5 million to $25.4 million
in the nine months ended September 30, 2021, from $17.9 million in
the nine months ended September 30, 2020. The increase was mainly
attributable to increased management fees due to the increased size
of our fleet and increased stock-based compensation.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $6.3 million to
$17.2 million in the nine months ended September 30, 2021 from
$10.9 million in the nine months ended September 30, 2020 primarily
as a result of the increase in commissions due to the increase in
revenue per vessel and the increase in the average number of
vessels in our fleet.
Interest Expense and Interest Income Interest expense
increased by 22.7%, or $9.5 million, to $51.4 million in the nine
months ended September 30, 2021 from $41.9 million in the nine
months ended September 30, 2020. The increase in interest expense
is a combined result of:
- a $6.9 million decrease in interest expense due to a decrease
in our debt service cost by approximately 0.5%, while our average
indebtedness also decreased by $27.2 million between the two
periods (average indebtedness of $1,505.3 million in the nine
months ended September 30, 2021, compared to average indebtedness
of $1,532.5 million in the nine months ended September 30,
2020);
- a $16.3 million reduction in the recognition through our income
statement of accumulated accrued interest that had been accrued in
2018 in relation to two of our credit facilities that were
refinanced on April 12, 2021. As a result of the refinancing, the
recognition of such accumulated interest has been decreased;
and
- a $0.1 million increase in the amortization of deferred finance
costs and debt discount related to our debt.
Net proceeds from the issuance of our $300 million Senior Notes
in February 2021 together with the net proceeds from a new $815
million senior secured credit facility and a new $135 million
leaseback arrangement, each of which was drawn down on April 12,
2021, were used to refinance a substantial majority of our then
outstanding indebtedness.
As of September 30, 2021, our outstanding debt, gross of
deferred finance costs, was $1,165.5 million, which includes $300
million aggregate principal amount of our Senior Notes, and our
leaseback obligation was $242.9 million. These balances compare to
debt of $1,376.2 million and a leaseback obligation of $129.4
million as of September 30, 2020.
Interest income increased by $6.7 million to $11.7 million in
the nine months ended September 30, 2021 compared to $5.0 million
in the nine months ended September 30, 2020, mainly as a result of
collection of accrued interest on ZIM and HMM bonds, which were
redeemed by the issuers thereof during the 2021 period.
Gain on investments The gain on investments of $503.7
million in the nine months ended September 30, 2021 consists of the
change in fair value of our shareholding interest in ZIM of $491.4
million and net dividends received on ZIM ordinary shares of $12.3
million. ZIM completed its initial public offering and listing on
the New York Stock Exchange of its ordinary shares on January 27,
2021. In June 2021, we sold 2,000,000 ordinary shares of ZIM
resulting in net proceeds of $76.4 million. For the nine months
ended September 30, 2021, the unrealized gain related to the ZIM
ordinary shares still held on September 30, 2021 amounted to $415.0
million. Our remaining shareholding interest of 8,186,950 ordinary
shares has been fair valued at $415.1 million as of September 30,
2021, based on the closing price of ZIM’s ordinary shares on the
NYSE on that date compared to the book value of these shares of $75
thousand as of December 31, 2020. Subsequently, in October 2021, we
sold 1,000,000 of these ZIM ordinary shares, resulting in net
proceeds to us of $44.3 million.
Equity income on investments Equity income on investments
increased by $63.3 million to $68.0 million in the nine months
ended September 30, 2021 compared to $4.7 million in the nine
months ended September 30, 2020 mainly due to the non-cash gain of
$64.1 million recognized on our acquisition of the remaining 51%
equity interest in Gemini on July 1, 2021.
Gain on debt extinguishment The gain on debt
extinguishment of $111.6 million in the nine months ended September
30, 2021 related to our debt refinancing on April 12, 2021, as
described above.
Other finance expenses Other finance expenses, net
decreased by $0.9 million to $1.1 million in the nine months ended
September 30, 2021 compared to $2.0 million in the nine months
ended September 30, 2020 due to the decreased finance costs on the
refinanced debt.
Loss on derivatives Amortization of deferred realized
losses on interest rate swaps remained stable at $2.7 million in
each of the nine months ended September 30, 2021 and September 30,
2020.
Other income, net Other income, net was $4.5 million of
income in the nine months ended September 30, 2021 compared to $0.4
million of income in the nine months ended September 30, 2020. The
increase was mainly due to the collection from Hanjin Shipping of
$3.9 million as a partial payment of common benefit claim and
interest.
Adjusted EBITDA Adjusted EBITDA increased by 48.6%, or
$114.3 million, to $349.6 million in the nine months ended
September 30, 2021 from $235.3 million in the nine months ended
September 30, 2020. As outlined above, the increase is mainly
attributable to a $123.2 million increase in operating revenues
(net of $9.3 million amortization of assumed time charters),
collection of a $12.3 million dividend from ZIM and partial
collection of a common benefit claim of $3.9 million from Hanjin
Shipping, which were partially offset by a $25.1 million increase
in total operating expenses. Adjusted EBITDA for the nine months
ended September 30, 2021 is adjusted for the change in fair value
of our investment in ZIM of $491.4 million, gain on debt
extinguishment of $111.6 million, a $64.1 million gain on the
acquisition of Gemini and stock based compensation of $6.1 million.
Tables reconciling Adjusted EBITDA to Net Income can be found at
the end of this earnings release.
Dividend Payment Danaos has
declared a dividend of $0.50 per share of common stock for the
third quarter of 2021, which is payable on December 2, 2021 to
stockholders of record as of November 19, 2021.
Recent Developments In
October 2021, we sold 1,000,000 ordinary shares of ZIM, resulting
in net proceeds to us of $44.3 million.
Conference Call and Webcast
On Tuesday, November 9, 2021 at 9:00 A.M. ET, the Company's
management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until November 16, 2021 by dialing 1 877 344 7529 (US Toll Free
Dial In) or 1-412-317-0088 (Standard International Dial In) and
using 10161393# as the access code.
Audio Webcast There will also be a live and then archived
webcast of the conference call on the Danaos website
(www.danaos.com). Participants of the live webcast should register
on the website approximately 10 minutes prior to the start of the
webcast.
Slide Presentation A slide presentation regarding the
Company and the containership industry will also be available on
the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of
modern, large-size containerships. Our current fleet of 71
containerships aggregating 436,589 TEUs ranks Danaos among the
largest containership charter owners in the world based on total
TEU capacity. Our fleet is chartered to many of the world's largest
liner companies on fixed-rate charters. Our long track record of
success is predicated on our efficient and rigorous operational
standards and environmental controls. Danaos Corporation's shares
trade on the New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking
statements within the meaning of the safe harbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements reflect
our current views with respect to future events and financial
performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. The forward-looking statements in
this release are based upon various assumptions. Although Danaos
Corporation believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, Danaos
Corporation cannot assure you that it will achieve or accomplish
these expectations, beliefs or projections. Important factors that,
in our view, could cause actual results to differ materially from
those discussed in the forward-looking statements include the
impact of the COVID-19 pandemic and efforts throughout the world to
contain its spread, including effects on global economic activity,
demand for seaborne transportation of containerized cargo, the
ability and willingness of charterers to perform their obligations
to us, charter rates for containerships, shipyards performing
scrubber installations, drydocking and repairs, changing vessel
crews and availability of financing; Danaos’ ability to achieve the
expected benefits of the 2021 debt refinancing and comply with the
terms of its new credit facilities and other financing agreements;
the strength of world economies and currencies, general market
conditions, including changes in charter hire rates and vessel
values, charter counterparty performance, changes in demand that
may affect attitudes of time charterers to scheduled and
unscheduled dry-docking, changes in Danaos Corporation's operating
expenses, including bunker prices, dry-docking and insurance costs,
ability to obtain financing and comply with covenants in our
financing arrangements, actions taken by regulatory authorities,
potential liability from pending or future litigation, domestic and
international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by
terrorists.
Risks and uncertainties are further described in reports filed
by Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com
Appendix
Fleet Utilization
Danaos had 137 unscheduled off-hire days in the three months
ended September 30, 2021. The following table summarizes vessel
utilization and the impact of the off-hire days on the Company’s
revenue.
Vessel Utilization (No. of
Days)
First Quarter
Second Quarter
Third Quarter
2021
2021
2021
Total
Ownership Days
5,400
5,460
6,043
16,903
Less Off-hire Days:
Scheduled Off-hire Days
(22)
(33)
-
(55)
Other Off-hire Days
(51)
(15)
(137)
(203)
Operating Days
5,327
5,412
5,906
16,645
Vessel Utilization
98.6%
99.1%
97.7%
98.5%
Operating Revenues (in '000s of US
Dollars)
$132,118
$146,434
$195,915
$474,467
Average Gross Daily Charter
Rate
$24,802
$27,057
$33,172
$28,505
Vessel Utilization (No. of
Days)
First Quarter
Second Quarter
Third Quarter
2020
2020
2020
Total
Ownership Days
5,073
5,193
5,336
15,602
Less Off-hire Days:
Scheduled Off-hire Days
(336)
(60)
(10)
(406)
Other Off-hire Days
(104)
(92)
(60)
(256)
Operating Days
4,633
5,041
5,266
14,940
Vessel Utilization
91.3%
97.1%
98.7%
95.8%
Operating Revenues (in '000s of US
Dollars)
$106,196
$116,824
$118,932
$341,952
Average Gross Daily Charter
Rate
$22,922
$23,175
$22,585
$22,888
Fleet List The following
table describes in detail our fleet deployment profile as of
November 5, 2021:
Vessel Name
Vessel Size (TEU)
Year Built
Expiration of
Charter(1)
Hyundai Ambition
13,100
2012
June 2024
Hyundai Speed
13,100
2012
June 2024
Hyundai Smart
13,100
2012
May 2024
Hyundai Respect
13,100
2012
March 2024
Hyundai Honour
13,100
2012
February 2024
Express Rome
10,100
2011
February 2022
Express Berlin
10,100
2011
April 2022
Express Athens
10,100
2011
February 2022
Le Havre
9,580
2006
April 2023
Pusan C
9,580
2006
March 2023
Bremen
9,012
2009
December 2022
C Hamburg
9,012
2009
January 2023
Niledutch Lion
8,626
2008
May 2026
Charleston
8,533
2005
February 2026
CMA CGM Melisande
8,530
2012
November 2024
CMA CGM Attila
8,530
2011
April 2024
CMA CGM Tancredi
8,530
2011
May 2024
CMA CGM Bianca
8,530
2011
July 2024
CMA CGM Samson
8,530
2011
September 2024
America
8,468
2004
February 2023
Europe
8,468
2004
March 2023
Phoebe
8,463
2005
August 2026
CMA CGM Moliere
6,500
2009
April 2022
CMA CGM Musset
6,500
2010
October 2022
CMA CGM Nerval
6,500
2010
December 2022
CMA CGM Rabelais
6,500
2010
February 2023
CMA CGM Racine
6,500
2010
March 2023
YM Mandate
6,500
2010
January 2028
YM Maturity
6,500
2010
April 2028
Zim Savannah (ex Performance)
6,402
2002
May 2024
Dimitra C
6,402
2002
January 2023
Seattle C
4,253
2007
October 2024
Vancouver
4,253
2007
November 2024
Derby D
4,253
2004
January 2027
Tongala (ex ANL Tongala)
4,253
2004
January 2023
Rio Grande
4,253
2008
November 2024
ZIM Sao Paolo
4,253
2008
February 2023
ZIM Kingston
4,253
2008
April 2023
ZIM Monaco
4,253
2009
July 2022
Dalian (ex ZIM Dalian)
4,253
2009
November 2022
ZIM Luanda
4,253
2009
August 2025
Dimitris C
3,430
2001
November 2025
Express Black Sea
3,400
2011
January 2025
Express Spain
3,400
2011
January 2025
Express Argentina
3,400
2010
May 2023
Express Brazil
3,400
2010
June 2025
Express France
3,400
2010
September 2025
Singapore
3,314
2004
May 2024
Colombo
3,314
2004
January 2025
Zebra
2,602
2001
November 2024
Amalia C
2,452
1998
January 2023
Artotina (ex Danae C)
2,524
2001
February 2022
Advance
2,200
1997
December 2024
Future
2,200
1997
November 2024
Sprinter
2,200
1997
November 2024
Stride
2,200
1997
January 2025
Progress C
2,200
1998
November 2024
Bridge
2,200
1998
December 2024
Highway
2,200
1998
August 2022
Vladivostok
2,200
1997
March 2025
Belita (2)
8,533
2006
July 2026
Catherine C (2)
6,422
2001
January 2023
Leo C (2)
6,422
2002
August 2022
Suez Canal(2)
5,610
2002
March 2023
Genoa(2)
5,544
2002
November 2024
Wide Alpha (3)
5,466
2014
March 2024
Wide Bravo(3)
5,466
2014
March 2022
Maersk Euphrates (3)
5,466
2014
April 2024
Wide Hotell(3)
5,466
2015
May 2024
Wide India (3)
5,466
2015
July 2022
Wide Juliet(3)
5,466
2015
June 2023
(1)
Earliest date charters could expire. Some
charters include options to extend their terms.
(2)
Vessels previously owned by Gemini
Shipholdings Corporation, in which we held a 49% equity interest
through the end of the second quarter of 2021. On July 1, 2021, we
exercised our option to acquire the remaining 51% equity interests
in Gemini Shipholdings Corporation and now hold 100%.
(3)
We entered into an agreement on July 7,
2021, to purchase these vessels. We took delivery of: (i) ‘Maersk
Euphrates’ on August 25, 2021, (ii) ‘Wide India’ on September 20,
2021, (iii) ‘Wide Bravo’ on September 23, 2021, (iv) ‘Wide Juliet’
on September 27, 2021, (v) ‘Wide Alpha’ on September 28, 2021, and
(vi) ‘Wide Hotel’ on October 6, 2021.
DANAOS CORPORATION
Condensed Consolidated
Statements of Income - Unaudited
(Expressed in thousands of
United States dollars, except per share amounts)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
OPERATING REVENUES
$195,915
$118,932
$474,467
$341,952
OPERATING EXPENSES
Vessel operating expenses
(34,674)
(27,662)
(98,692)
(82,232)
Depreciation & amortization
(33,584)
(28,939)
(90,536)
(84,029)
General & administrative
(7,342)
(6,048)
(25,367)
(17,901)
Other operating expenses
(8,055)
(3,552)
(17,249)
(10,887)
Income From Operations
112,260
52,731
242,623
146,903
OTHER INCOME/(EXPENSES)
Interest income
152
1,650
11,661
4,952
Interest expense
(18,093)
(11,907)
(51,408)
(41,865)
Gain on investments
59,519
-
503,684
-
Equity income on investments
64,063
1,464
68,028
4,729
Gain on debt extinguishment
-
-
111,616
-
Other finance expenses
(99)
(330)
(1,133)
(1,990)
Other income, net
338
91
4,482
361
Realized loss on derivatives
(913)
(913)
(2,709)
(2,719)
Total Other Income/(Expenses),
net
104,967
(9,945)
644,221
(36,532)
Net Income
$217,227
$42,786
$886,844
$110,371
EARNINGS PER SHARE
Basic earnings per share
$10.67
$1.74
$43.61
$4.49
Diluted earnings per share
$10.55
$1.73
$43.11
$4.45
Basic weighted average number of common
shares (in thousands of shares)
20,354
24,573
20,334
24,573
Diluted weighted average number of common
shares (in thousands of shares)
20,598
24,789
20,571
24,789
Non-GAAP Measures1
Reconciliation of Net Income
to Adjusted Net Income – Unaudited
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Net income
$217,227
$42,786
$886,844
$110,371
Gain on investments
(47,239)
-
(491,404)
-
Equity income on investments
(64,063)
-
(64,063)
-
Gain on debt extinguishment
-
-
(111,616)
-
Amortization of financing fees, debt
discount & finance fees accrued
3,622
4,517
12,579
12,707
Stock based compensation
-
-
4,078
-
Adjusted Net Income
$109,547
$47,303
$236,418
$123,078
Adjusted Earnings Per Share,
diluted
$5.32
$1.91
$11.49
$4.97
Diluted weighted average number of shares
(in thousands)
20,598
24,789
20,571
24,789
1 The Company reports its financial
results in accordance with U.S. generally accepted accounting
principles (GAAP). However, management believes that certain
non-GAAP financial measures used in managing the business may
provide users of this financial information additional meaningful
comparisons between current results and results in prior operating
periods. Management believes that these non-GAAP financial measures
can provide additional meaningful reflection of underlying trends
of the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Table above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and nine months ended
September 30, 2021 and 2020. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company’s
reported results prepared in accordance with GAAP.
DANAOS CORPORATION
Condensed Consolidated Balance
Sheets - Unaudited
(Expressed in thousands of
United States dollars)
As of
As of
September 30,
December 31,
2021
2020
ASSETS
CURRENT ASSETS
Cash, cash equivalents and restricted
cash
$93,557
$65,663
Accounts receivable, net
7,025
7,556
Other current assets
473,350
45,229
573,932
118,448
NON-CURRENT ASSETS
Fixed assets, net
2,918,889
2,479,937
Deferred charges, net
11,327
17,339
Investments in affiliates
-
15,273
Other non-current assets
74,457
83,383
3,004,673
2,595,932
TOTAL ASSETS
$3,578,605
$2,714,380
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Long-term debt, current portion
$96,300
$155,662
Accumulated accrued interest, current
portion
5,661
18,036
Long-term leaseback obligations, current
portion
85,502
24,515
Accounts payable, accrued liabilities
& other current liabilities
204,300
41,472
391,763
239,685
LONG-TERM LIABILITIES
Long-term debt, net
1,038,770
1,187,345
Accumulated accrued interest, net of
current portion
26,111
136,433
Long-term leaseback obligations, net
152,661
95,585
Other long-term liabilities
46,600
19,755
1,264,142
1,439,118
STOCKHOLDERS’ EQUITY
Common stock
206
204
Additional paid-in capital
761,450
755,390
Accumulated other comprehensive loss
(71,852)
(86,669)
Retained earnings
1,232,896
366,652
1,922,700
1,035,577
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$3,578,605
$2,714,380
DANAOS CORPORATION
Condensed Consolidated
Statements of Cash Flows - Unaudited
(Expressed in thousands of
United States dollars)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Operating Activities:
Net income
$217,227
$42,786
$886,844
$110,371
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
31,011
25,765
82,909
75,604
Amortization of deferred drydocking &
special survey costs, finance cost, debt discount and other finance
fees accrued
6,195
7,691
20,206
21,662
Amortization of assumed time charters
(9,318)
-
(9,318)
-
PIK interest
-
686
726
2,236
Gain on investments
(47,239)
-
(491,404)
-
Equity income on investments
(64,063)
(1,464)
(68,028)
(4,729)
Gain on debt extinguishment
-
-
(111,616)
-
Payments for drydocking/special survey
(460)
(17)
(1,615)
(13,397)
Amortization of deferred realized losses
on cash flow interest rate swaps
913
913
2,709
2,719
Stock based compensation
576
301
6,055
897
Accounts receivable
435
1,706
879
(3,701)
Other assets, current and non-current
(22,739)
3,031
(21,093)
2,342
Accounts payable and accrued
liabilities
(6,055)
(8,323)
4,291
614
Other liabilities, current and
long-term
(3,086)
(3,911)
(5,405)
(8,586)
Net Cash provided by Operating
Activities
103,397
69,164
296,140
186,032
Investing Activities:
Vessel additions and advances
(262,267)
(7,403)
(264,078)
(106,149)
Investments
14,388
-
160,265
(75)
Net Cash used in Investing
Activities
(247,879)
(7,403)
(103,813)
(106,224)
Financing Activities:
Proceeds from sale-leaseback of
vessels
-
-
135,000
139,080
Proceeds from long-term debt
-
13,300
1,105,311
36,700
Payments of leaseback obligations
(16,202)
(5,877)
(37,377)
(147,942)
Debt repayment
(24,400)
(34,573)
(1,319,425)
(99,749)
Dividends paid
(10,295)
-
(20,593)
-
Payments of accumulated accrued
interest
(1,532)
(5,284)
(8,890)
(20,786)
Finance costs
(3,950)
(7,914)
(18,459)
(19,913)
Net Cash used in Financing
Activities
(56,379)
(40,348)
(164,433)
(112,610)
Net Increase/(Decrease) in cash, cash
equivalents and restricted cash
(200,861)
21,413
27,894
(32,802)
Cash, cash equivalents and restricted
cash, beginning of period
294,418
84,955
65,663
139,170
Cash, cash equivalents and restricted
cash, end of period
$93,557
$106,368
$93,557
$106,368
DANAOS CORPORATION
Reconciliation of Net Income
to Adjusted EBITDA - Unaudited
(Expressed in thousands of
United States dollars)
Three months ended
Three months ended
Nine months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Net income
$217,227
$42,786
$886,844
$110,371
Depreciation
31,011
25,765
82,909
75,604
Amortization of deferred drydocking &
special survey costs
2,573
3,174
7,627
8,425
Amortization of assumed time charters
(9,318)
-
(9,318)
-
Amortization of deferred finance costs,
debt discount and other finance fees accrued
3,622
4,517
12,579
12,707
Amortization of deferred realized losses
on interest rate swaps
913
913
2,709
2,719
Interest income
(152)
(1,650)
(11,661)
(4,952)
Interest expense
14,471
7,525
38,978
29,551
Gain on investments
(47,239)
-
(491,404)
-
Equity income on investments
(64,063)
-
(64,063)
-
Gain on debt extinguishment
-
-
(111,616)
-
Stock based compensation
576
301
6,055
897
Adjusted EBITDA(1)
$149,621
$83,331
$349,639
$235,322
1)
Adjusted EBITDA represents net income
before interest income and expense, depreciation, amortization of
deferred drydocking & special survey costs, amortization of
assumed time charters, amortization of deferred finance costs, debt
discount and other finance fees accrued, amortization of deferred
realized losses on interest rate swaps, gain on investments, equity
income on investments, gain on debt extinguishment and stock based
compensation. However, Adjusted EBITDA is not a recognized
measurement under U.S. generally accepted accounting principles, or
“GAAP.” We believe that the presentation of Adjusted EBITDA is
useful to investors because it is frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in our industry. We also believe that Adjusted EBITDA
is useful in evaluating our operating performance compared to that
of other companies in our industry because the calculation of
Adjusted EBITDA generally eliminates the effects of financings,
income taxes and the accounting effects of capital expenditures and
acquisitions, items which may vary for different companies for
reasons unrelated to overall operating performance. In evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Note: Items to consider for comparability include gains and
charges. Gains positively impacting net income are reflected as
deductions to net income. Charges negatively impacting net income
are reflected as increases to net income.
The Company reports its financial results
in accordance with U.S. generally accepted accounting principles
(GAAP). However, management believes that certain non-GAAP
financial measures used in managing the business may provide users
of these financial information additional meaningful comparisons
between current results and results in prior operating periods.
Management believes that these non-GAAP financial measures can
provide additional meaningful reflection of underlying trends of
the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Tables above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and nine months ended
September 30, 2021 and 2020. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company’s
reported results prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108006060/en/
Company Contact:
Evangelos Chatzis Chief Financial Officer Danaos
Corporation Athens, Greece Tel.: +30 210 419 6480 E-Mail:
cfo@danaos.com
Iraklis Prokopakis Senior Vice President and Chief
Operating Officer Danaos Corporation Athens, Greece Tel.: +30 210
419 6400 E-Mail: coo@danaos.com
Investor Relations and Financial Media Rose & Company
New York Tel. 212-359-2228 E-Mail:
danaos@rosecoglobal.com
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