With a fleet of 64 containerships aggregating 363,049 TEUs, Athens-based Danaos Corporation (NYSE: DAC) ranks among the largest containership charter owners in the world based on total TEU capacity and their vessels are chartered to many of the world’s largest liner companies.
Chief Executive Dr. John Coustas commented today on their newly-released 9 months earnings report:
The company’s performance for the first 9 months of 2012 is a testament to the resilience of our business model during a challenging period for the container market. Adjusted Net Income stands at $48.8 million or $0.44 per share for the nine months ended September 30, 2012, compared to $45.0 million or $0.41 per share for the same period one year ago. Adjusted EBITDA has reached $319.3 million for the nine months ended September 30, 2012 compared to $229.8 million for the same period one year ago as a result of our fleet expansion program concluded in the previous quarter.
In terms of macro-economic fundamentals, the European financial crisis has been at the forefront of a global economic slowdown this year, with the expectation being that European GDP will marginally contract in 2012. This has also impacted economic growth in the United States which has been sluggish but still expected to do better than 2011, while it is now clear that the pace of growth in China will be moderated. This global slowdown has adversely affected container trade growth and it is clear that the industry is currently facing a demand supply imbalance.
On the bright side, liner companies have demonstrated the ability to manage capacity prudently. Freight rates have been restored and maintained at healthy levels through gradual General Rate Increases over the last 2 quarters. The positive results of this strategy for the liner companies have already been evident in their 2nd and 3rd quarter financial results while if discipline is maintained this trend can be sustainable.
On the charter market, as the big ships are being delivered and absorbed in the main trade lanes, cascading has placed considerable pressure on the mid-size vessels. This pressure is not expected to ease before the 2nd half of 2013 when the drought of new ordering of the last 18 months will start to show and hopefully Europe will have sorted out its issues.
Financial highlights for the Third Quarter and Nine Months Ended September 30, 2012:
- Operating revenues of $156.3 million for the three months ended September 30, 2012 compared to $126.0 million for the same period in 2011, an increase of 24.0%.
- Operating revenues of $437.2 million for the nine months ended September 30, 2012 compared to $339.8 million for the same period in 2011, an increase of 28.7%.
- Adjusted EBITDA of $116.2 million for the three months ended September 30, 2012 compared to $86.2 million for the same period in 2011, an increase of 34.8%.
- Adjusted EBITDA of $319.3 million for the nine months ended September 30, 2012 compared to $229.8 million for the for the same period in 2011, an increase of 38.9%.
- Daily vessel operating costs were reduced by 8% to $5,835 per day for the three months ended September 30, 2012 compared to $6,321 per day for the same period in 2011.
- The remaining average charter duration of our fleet was 9.9 years as of September 30, 2012 (weighted by aggregate contracted charter hire).
- Total contracted operating revenues were $5.1 billion as of September 30, 2012, through 2028.
- Charter coverage of 84.3% for the next 12 months in terms of contracted operating days and 95.1% in terms of operating revenues.
For Danaos’ full financial report, please click HERE