Danaos Corporation reports Second Quarter and Half Year Results

August 6, 2024

1960

Danaos Corporation, one of the world’s largest independent owners of container vessels and drybulk vessels, today reported unaudited results for the period ended June 30, 2024.

Highlights for the Second Quarter and Half Year Ended June 30, 2024:

Financial SummaryThree Months Ended June 30, 2024 and Three Months Ended June 30, 2023 Unaudited(Expressed in thousands of United States dollars, except as otherwise stated)
	Three Months Ended					Three Months Ended
	June 30, 2024					June 30, 2023
Financial & Operating Metrics	Container Vessels	Drybulk Vessels		Other	Total	Container Vessels	Drybulk Vessels	Other	Total
Operating Revenues	$230,586	$15,720		–	$246,306	$241,479	–	–	$241,479
Voyage Expenses, excl. commissions	$(448)	$(3,269)		–	$(3,717)	$(331)	–	–	$(331)
Time Charter Equivalent Revenues ⁽¹⁾	$230,138	$12,451		–	$242,589	$241,148	–	–	$241,148
Net income	$133,683	$2,290		$5,179	$141,152	$141,321	–	$5,700	$147,021
Adjusted net income / (loss) ⁽²⁾	$127,063	$2,290		$2,955	$132,308	$144,143	–	$(738)	$143,405
Earnings per share, basic					$7.30				$7.32
Earnings per share, diluted					$7.23				$7.32
Adjusted earnings per share, diluted ⁽²⁾					$6.78				$7.14
Operating Days	6,088	604		–		6,106	–	–
Time Charter Equivalent $/day ⁽¹⁾	$37,802	$20,614		–		$39,494	–	–
Ownership days	6,253	694		–		6,188	–	–
Average number of vessels	68.7	7.6		–		68.0	–	–
Fleet Utilization	97.4 %	87.0 %		–		98.7 %	–	–
Adjusted EBITDA ⁽²⁾	$169,121	$4,712		$2,955	$176,788	$178,064	–	$(738)	$177,326
Consolidated Balance Sheet& Leverage Metrics			As of June 30, 2024					As of December 31, 2023
Cash and cash equivalents					$372,446				$271,809
Availability under Revolving Credit Facility					$315,000				$337,500
Marketable securities⁽³⁾					$99,232				–
Total cash liquidity & marketable securities⁽⁴⁾					$786,678				$609,309
Debt, gross of deferred finance costs					$577,766				$410,516
Net Debt ⁽⁵⁾					$205,320				$138,707
LTM Adjusted EBITDA ⁽⁶⁾					$704,627				$707,002
Net Debt / LTM Adjusted EBITDA					0.29x				0.20x


1.	Time charter equivalent revenues and time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided in the appendix.
2.	Adjusted net income/(loss), adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and adjusted earnings per share; and net income to adjusted EBITDA provided below.
3.	Marketable securities refer to fair value of 4,070,214 shares of common stock of SBLK on June 30, 2024.
4.	Total cash liquidity & marketable securities includes: (i) cash and cash equivalents, (ii) availability under our Revolving Credit Facility and (iii) marketable securities.
5.	Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents
6.	Last twelve months Adjusted EBITDA. Refer to the reconciliation provided below.

For management purposes, the Company is organized based on operating revenues generated from container vessels and dry-bulk vessels and has two reporting segments: (1) a container vessels segment and (2) a dry-bulk vessels segment. The Company measures segment performance based on net income. Items included in the applicable segment’s net income are directly allocated to the extent that the items are directly or indirectly attributable to the segments. With regards to the items that are allocated by indirect calculations, their allocation is commensurate to the utilization of key resources. The Other column includes components that are not allocated to any of the Company’s reportable segments and includes investments in an affiliate accounted for using the equity method of accounting and investments in marketable securities.

Financial SummarySix Months Ended June 30, 2024 and Six Months Ended June 30, 2023 Unaudited(Expressed in thousands of United States dollars, except as otherwise stated)
	Six Months Ended				Six Months Ended
	June 30, 2024				June 30, 2023
Financial & Operating Metrics	Container Vessels	Drybulk Vessels	Other	Total	Container Vessels	Drybulk Vessels	Other	Total
Operating Revenues	$463,997	$35,758	–	$499,755	$485,053	–	–	$485,053
Voyage Expenses, excl. commissions	$(936)	$(14,096)	–	$(15,032)	$(746)	–	–	$(746)
Time Charter Equivalent Revenues ⁽¹⁾	$463,061	$21,662	–	$484,723	$484,307	–	–	$484,307
Net income	$272,042	$2,627	$16,981	$291,650	$290,110	–	$3,112	$293,222
Adjusted net income / (loss) ⁽²⁾	$265,919	$2,627	$3,778	$272,324	$291,986	–	$(3,326)	$288,660
Earnings per share, basic				$15.05				$14.51
Earnings per share, diluted				$14.92				$14.51
Adjusted earnings per share, diluted ⁽²⁾				$13.93				$14.28
Operating Days	12,107	1,200	–		12,062	–	–
Time Charter Equivalent $/day ⁽¹⁾	$38,247	$18,052	–		$40,151	–	–
Ownership days	12,438	1,331	–		12,338	–	–
Average number of vessels	68.3	7.3	–		68.2	–	–
Fleet Utilization	97.3 %	90.2 %	–		97.8 %	–	–
Adjusted EBITDA ⁽²⁾	$343,309	$6,904	$3,778	$353,991	$359,692	–	$(3,326)	$356,366


1.	Time charter equivalent revenues and time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided in the appendix.
2.	Adjusted net income/(loss), adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and adjusted earnings per share; and net income to adjusted EBITDA provided below.

During the second quarter of 2024, we took delivery of the first three newbuilding containerships, namely one 7,165 TEU and two 8,010 TEU vessels that have commenced their three-year charters. Additionally, during the second quarter of 2024 and through the date of this release, we added 6 newbuilding containerships to our orderbook. These six newbuilding orders comprise of one additional 8,258 container vessel to be built at Yangzijiang shipyard in China expected to be delivered in 2027 and five 9,200 TEU container vessels to be built at Dalian shipyard in China, three of which have expected deliveries in 2027 and two in 2028.
As a result, our remaining orderbook currently consists of a further 17 newbuilding containership vessels with an aggregate capacity of 139,019 TEU with expected deliveries of three additional vessels in 2024, two vessels in 2025, three vessels in 2026, seven vessels in 2027 and two vessels in 2028. All the vessels in our orderbook are designed with the latest eco characteristics, will be methanol fuel ready, fitted with open loop scrubbers and Alternative Maritime Power (AMP) units and will be built in accordance with the latest requirements of the International Maritime Organization (IMO) in relation to Tier III emission standards and Energy Efficiency Design Index (EEDI) Phase III.
We have now secured multi-year charter arrangements for all of the vessels in our newbuilding orderbook with an average charter duration of approximately 4.5 years weighted by aggregate contracted charter hire.
Over the past two months, we added approximately $900 million to our contracted revenue backlog, which includes (i) approximately $203 million through forward two-year charter fixtures for nine existing container vessels and (ii) approximately $697 million of revenue backlog through a combination of new charters and charter extensions for 12 of our newbuildings.
As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, currently stand at $3.2 billion. The remaining average contracted charter duration for our containership fleet is 3.4 years, weighted by aggregate contracted charter hire.
Contracted operating days charter coverage for our container vessel fleet is currently 99% for 2024 and 80% for 2025. This includes newbuildings based on their scheduled delivery dates.
We have now taken delivery of all of our contracted capesize bulk carriers by taking delivery of two vessels in the second quarter of 2024 and one vessel in July 2024. As a result, our capesize dry bulk fleet currently stands at 10 vessels with an aggregate DWT capacity of approximately 1.8 million DWT.
As of the date of this release, Danaos has repurchased a total of 1,671,059 shares of its common stock in the open market for $104.4 million under its $200 million authorized share repurchase program that was originally introduced in June 2022 and upsized in November 2023.
Danaos has declared a dividend of $0.80 per share of common stock for the second quarter of 2024, which is payable on August 29, 2024, to stockholders of record as of August 20, 2024.

Danaos’ CEO Dr. John Coustas commented:

“The last few months brought continued market disruption as conditions in the Red Sea remained challenged and the Ukraine war persisted. Panama canal crossings, however, returned to normal levels, eliminating that source of disruption for now. Market conditions have led liner companies to reassess their capacity requirement and rushed to secure tonnage, including tonnage with forward deliveries. The forthcoming environmental legislation has further incentivized liner companies to secure modern newbuilding tonnage for medium term requirements without making long-term commitments in the majority of cases.

In this environment we have secured charter extensions for a number of our existing ships and further we extended our newbuilding program to a total of 20 vessels, three of which were delivered in the second quarter. We have secured multi-year charters with an average charter duration of approximately 4.5 years, weighted by aggregate contracted charter hire, for all of our newbuilding vessels and we are very well positioned for the future. As a result, the Company’s total contracted cash operating revenues are $3.2 billion. Contracted charter coverage for our container vessel fleet, including newbuildings, is currently 99% for 2024 and 80% for 2025, providing us excellent revenue visibility.

With respect to our activities in the dry bulk sector, we have recently taken delivery of all 10 capesize vessels. We have been gearing up our operations to ensure the integration within our fleet during this building phase before we continue to explore opportunities to further our reach in this sector. Our revenues from the dry bulk sector have been steadily increasing, and we look forward to further diversifying our revenues and creating upside through the spot market exposure offered by the sector.

Despite our recent fleet growth, renewal, and diversification activities, our balance sheet remains very strong, with a low net debt position.

We will continue to work tirelessly to ensure accretive performance of our assets and to deliver industry-leading returns to our shareholders over the long term.”

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

During the three months ended June 30, 2024, Danaos had an average of 68.7 container vessels and 7.6 Capesize drybulk vessels compared to 68.0 container vessels and no drybulk vessels during the three months ended June 30, 2023. Our container vessels utilization for the three months ended June 30, 2024 was 97.4% compared to 98.7% for the three months ended June 30, 2023.

Our adjusted net income amounted to $132.3 million, or $6.78 per diluted share, for the three months ended June 30, 2024 compared to $143.4 million, or $7.14 per diluted share, for the three months ended June 30, 2023. We have adjusted our net income in the three months ended June 30, 2024 for a $7.1 million gain on vessel disposal, a $2.2 million change in fair value of investments and a $0.5 million non-cash finance fees amortization.

Adjusted net income of our container vessels segment amounted to $127.1 million for the three months ended June 30, 2024 compared to $144.1 million for the three months ended June 30, 2023. We adjusted net income of container vessels segment in the three months ended June 30, 2024 for a $7.1 million gain on vessel disposal and a $0.5 million non-cash finance fees amortization.

Adjusted net income of our drybulk vessels segment amounted to $2.3 million for the three months ended June 30, 2024 compared to none for the three months ended June 30, 2023, as we were not engaged in the drybulk vessels segment during that period.

The $11.1 million decrease in adjusted net income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is primarily attributable to a $19.9 million increase in total operating expenses, which was partially offset by a $4.8 million increase in operating revenues, a $3.1 million increase in dividends received, a $0.6 million decrease in equity loss on investments and a $0.3 million decrease in net finance expenses.

Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.

On a non-adjusted basis, our net income amounted to $141.2 million, or $7.23 earnings per diluted share, for the three months ended June 30, 2024 compared to net income of $147.0 million, or $7.32 earnings per diluted share, for the three months ended June 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $133.7 million and the net income of our drybulk vessels segment amounted to $2.3 million for the three months ended June 30, 2024.

Operating Revenues
Operating revenues increased by 2.0%, or $4.8 million, to $246.3 million in the three months ended June 30, 2024 from $241.5 million in the three months ended June 30, 2023.

Operating revenues of our container vessels segment decreased by 4.6%, or $11.0 million, to $230.5 million in the three months ended June 30, 2024 from $241.5 million in the three months ended June 30, 2023, analyzed as follows:

a $4.9 million increase in revenues in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as a result of vessel additions;
a $5.7 million decrease in revenues in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as a result of decreased vessel utilization and lower charter rates;
a $2.4 million decrease in revenues in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to vessel disposals;
a $4.8 million decrease in revenues in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to decreased amortization of assumed time charters; and
a $3.0 million decrease in revenue in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to lower non-cash revenue recognition in accordance with US GAAP.

Operating revenues of our drybulk vessels segment added an incremental $15.8 million of revenues in the three months ended June 30, 2024 compared to no such operating revenues in the three months ended June 30, 2023.

Vessel Operating Expenses
Vessel operating expenses increased by $5.2 million to $47.1 million in the three months ended June 30, 2024 from $41.9 million in the three months ended June 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container newbuilds deliveries and dry bulk vessels acquisitions. The average daily operating cost of our vessels remained stable at $6,961 per vessel per day for the three months ended June 30, 2024 compared to $6,970 per vessel per day for the three months ended June 30, 2023. Management believes that our daily operating costs remain 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 11.0%, or $3.5 million, to $35.4 million in the three months ended June 30, 2024 from $31.9 million in the three months ended June 30, 2023 mainly due to depreciation expense related to 9 recently acquired Capesize drybulk vessels and 3 recently delivered container newbuilds.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $2.5 million to $7.0 million in the three months ended June 30, 2024 from $4.5 million in the three months ended June 30, 2023.

General and Administrative Expenses
General and administrative expenses increased by $4.1 million, to $11.3 million in the three months ended June 30, 2024 from $7.2 million in the three months ended June 30, 2023. The increase was mainly attributable to increased stock-based compensation and management fees.

Other Operating Expenses
Other Operating Expenses include Voyage Expenses.

Voyage Expenses
Voyage expenses increased by $4.3 million to $12.7 million in the three months ended June 30, 2024 from $8.4 million in the three months ended June 30, 2023 primarily as a result of the $4.2 million in voyage expenses related to our recently acquired 9 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses of drybulk vessels in the three months ended June 30, 2023.

Voyage expenses of container vessels segment increased by $0.1 million to $8.5 million in the three months ended June 30, 2024 from $8.4 million in the three months ended June 30, 2023. Total voyage expenses of container vessels comprised $8.0 million commissions and $0.5 million other voyage expenses in the three months ended June 30, 2024.

Voyage expenses of drybulk vessels segment were $4.2 million in the three months ended June 30, 2024 compared to no voyage expenses in the three months ended June 30, 2023. Total voyage expenses of drybulk vessels comprised $0.9 million commissions and $3.3 million other voyage expenses, mainly bunkers consumption and port expenses, in the three months ended June 30, 2024.

Net gain on disposal/sale of vessels
In March 2024, we sold for scrap the vessel Stride, which had been off-hire since January 8, 2024 due to damage from a fire in the engine room that was subsequently contained. We collected $9.9 million net insurance proceeds for total loss of vessel and recognized a gain on disposal of this vessel amounting to $7.1 million in the three months ended June 30, 2024. The proceedings with the insurers are in progress as of June 30, 2024, and any additional gain will be recognized upon their finalization.

Interest Expense and Interest Income
Interest expense decreased by 13.6%, or $0.8 million, to $5.1 million in the three months ended June 30, 2024 from $5.9 million in the three months ended June 30, 2023. The decrease in interest expense is a result of:

a $1.9 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended June 30, 2024; and
a $0.1 million decrease in the amortization of deferred finance costs; which were partially offset by
a $1.2 million increase in interest expense due to an increase in our average indebtedness by $52.1 million between the two periods and an increase in our debt service cost by approximately 0.14% as a result of higher SOFR rates. Average indebtedness was $512.0 million in the three months ended June 30, 2024, compared to average indebtedness of $459.9 million in the three months ended June 30, 2023.

As of June 30, 2024, our outstanding debt, gross of deferred finance costs, was $577.8 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $424.3 million, which included $262.8 million principal amount of our Senior Notes as of June 30, 2023.

Interest income decreased by $0.7 million to $2.9 million in the three months ended June 30, 2024 compared to $3.6 million in the three months ended June 30, 2023.

Gain on investments
Following the all-stock merger of Eagle Bulk Shipping Inc. with Star Bulk Carriers Corp. (“SBLK”) completed on April 9, 2024, we currently own 4,070,214 shares of common stock of SBLK. The gain on investments of $5.3 million in the three months ended June 30, 2024 consisted of the change in fair value of these marketable securities of $2.2 million and dividends recognized on these shares of $3.1 million. This compares to a $6.4 million gain on marketable securities in the three months ended June 30, 2023.

Loss on debt extinguishment
A $2.3 million loss on early extinguishment of our leaseback obligations in the three months ended June 30, 2023 compares to no such loss in the three months ended June 30, 2024.

Equity loss on investments
Equity loss on investments amounting to $0.1 million and $0.7 million in the three months June 30, 2024 and June 30, 2023, respectively, relates to our share of initial expenses of a recently established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other finance expenses
Other finance expenses decreased by $0.2 million to $0.9 million in the three months ended June 30, 2024 compared to $1.1 million in the three months ended June 30, 2023.

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 June 30, 2024 and June 30, 2023.

Other income/(expenses), net
Other expenses, net amounted to $0.1 million in the three months ended June 30, 2024 compared to $0.3 million other income, net in the three months ended June 30, 2023.

Adjusted EBITDA
Adjusted EBITDA decreased by 0.3%, or $0.5 million, to $176.8 million in the three months ended June 30, 2024 from $177.3 million in the three months ended June 30, 2023. As outlined above, the decrease is mainly attributable to a $13.8 million increase in total operating expenses, which were partially offset by a $9.6 million increase in operating revenues, a $0.6 million decrease in equity loss on investments and a $3.1 million increase in dividends received. Adjusted EBITDA for the three months ended June 30, 2024 is adjusted for a $7.1 million net gain on disposal of vessel and a $2.2 million change in fair value of investments. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Adjusted EBITDA of container vessels segment decreased by 5.0%, or $9.0 million, to $169.1 million in the three months ended June 30, 2024 from $178.1 million in the three months ended June 30, 2023.

Adjusted EBITDA of drybulk vessels segment was $4.7 million in the three months ended June 30, 2024. We did not have drybulk vessel operations in the three months ended June 30, 2023.

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

During the six months ended June 30, 2024, Danaos had an average of 68.3 container vessels and 7.3 Capesize drybulk vessels compared to 68.2 container vessels and no drybulk vessels during the six months ended June 30, 2023. Our container vessels utilization for the six months ended June 30, 2024 was 97.3% compared to 97.8% for the six months ended June 30, 2023.

Our adjusted net income amounted to $272.3 million, or $13.93 per diluted share, for the six months ended June 30, 2024 compared to $288.7 million, or $14.28 per diluted share, for the six months ended June 30, 2023. We have adjusted our net income in the six months ended June 30, 2024 for a $13.2 million change in fair value of investments, a $7.1 million gain on vessel disposal and a $1.0 million non-cash finance fees amortization.

Adjusted net income of our container vessels segment amounted to $265.9 million for the six months ended June 30, 2024 compared to $292.0 million for the six months ended June 30, 2023. We adjusted net income of container vessels segment in the six months ended June 30, 2024 for a $7.1 million gain on vessel disposal and a $1.0 million non-cash finance fees amortization.

Adjusted net income of our drybulk vessels segment amounted to $2.6 million for the six months ended June 30, 2024 compared to none for the six months ended June 30, 2023, as we were not engaged in the drybulk vessels segment during that period.

The $16.4 million decrease in adjusted net income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is primarily attributable to a $42.2 million increase in total operating expenses, which was partially offset by a $14.7 million increase in operating revenues, a $4.0 million increase in dividends received, a $4.0 million decrease in net finance expenses and a $3.1 million decrease in equity loss on investments.

Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.

On a non-adjusted basis, our net income amounted to $291.7 million, or $14.92 earnings per diluted share, for the six months ended June 30, 2024 compared to net income of $293.2 million, or $14.51 earnings per diluted share, for the six months ended June 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $272.0 million and the net income of our drybulk vessels segment amounted to $2.6 million for the six months ended June 30, 2024.

Operating Revenues
Operating revenues increased by 3.0%, or $14.7 million, to $499.8 million in the six months ended June 30, 2024 from $485.1 million in the six months ended June 30, 2023.

Operating revenues of our container vessels segment decreased by 4.3%, or $21.1 million, to $464.0 million in the six months ended June 30, 2024 from $485.1 million in the six months ended June 30, 2023, analyzed as follows:

a $4.9 million increase in revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as a result of vessel additions;
a $2.6 million decrease in revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 mainly as a result of lower charter rates and decreased vessel utilization;
a $5.1 million decrease in revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 due to vessel disposals;
a $7.8 million decrease in revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 due to decreased amortization of assumed time charters; and
a $10.5 million decrease in revenue in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 due to lower non-cash revenue recognition in accordance with US GAAP.

Operating revenues of our drybulk vessels segment added an incremental $35.8 million of revenues in the six months ended June 30, 2024 compared to no such operating revenues in the six months ended June 30, 2023.

Vessel Operating Expenses
Vessel operating expenses increased by $7.7 million to $90.2 million in the six months ended June 30, 2024 from $82.5 million in the six months ended June 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container newbuilds and dry bulk vessels acquisitions, which was partially offset by the decrease in the average daily operating cost of our vessels to $6,729 per vessel per day for the six months ended June 30, 2024 compared to $6,889 per vessel per day for the six months ended June 30, 2023. Management believes that our daily operating costs remain 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 9.1%, or $5.8 million, to $69.2 million in the six months ended June 30, 2024 from $63.4 million in the six months ended June 30, 2023 mainly due to depreciation expense related to 9 recently acquired Capesize drybulk vessels and 3 recently delivered container newbuilds.

Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $4.1 million to $12.4 million in the six months ended June 30, 2024 from $8.3 million in the six months ended June 30, 2023.

General and Administrative Expenses
General and administrative expenses increased by $7.5 million, to $21.5 million in the six months ended June 30, 2024 from $14.0 million in the six months ended June 30, 2023. The increase was mainly attributable to increased stock-based compensation and management fees.

Other Operating Expenses
Other Operating Expenses include Voyage Expenses.

Voyage Expenses
Voyage expenses increased by $16.7 million to $33.0 million in the six months ended June 30, 2024 from $16.3 million in the six months ended June 30, 2023 primarily as a result of the $16.3 million in voyage expenses related to our recently acquired 9 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses of drybulk vessels in the six months ended June 30, 2023.

Voyage expenses of container vessels segment increased by $0.4 million to $16.7 million in the six months ended June 30, 2024 from $16.3 million in the six months ended June 30, 2023 mainly due to increased commissions. Total voyage expenses of container vessels comprised $15.8 million commissions and $0.9 million other voyage expenses in the six months ended June 30, 2024.

Voyage expenses of drybulk vessels segment were $16.3 million in the six months ended June 30, 2024 compared to no voyage expenses in the six months ended June 30, 2023. Total voyage expenses of drybulk vessels comprised $2.2 million commissions and $14.1 million other voyage expenses, mainly bunkers consumption and port expenses, in the six months ended June 30, 2024.

Net gain on disposal/sale of vessels
In March 2024, we sold for scrap the vessel Stride, which had been off-hire since January 8, 2024 due to damage from a fire in the engine room that was subsequently contained. We collected $10.6 million net insurance proceeds for total loss of vessel and recognized a gain on disposal of this vessel amounting to $7.1 million in the six months ended June 30, 2024. The proceedings with the insurers are in progress as of June 30, 2024, and any additional gain will be recognized upon their finalization.

In January 2023, we completed the sale of the container vessel Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.

Interest Expense and Interest Income
Interest expense decreased by 34.9%, or $4.4 million, to $8.2 million in the six months ended June 30, 2024 from $12.6 million in the six months ended June 30, 2023. The decrease in interest expense is a result of:

a $4.3 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the six months ended June 30, 2024; and
a $0.3 million decrease in the amortization of deferred finance costs; which were partially offset by
a $0.2 million increase in interest expense due to an increase in our debt service cost by approximately 0.38% as a result of higher SOFR rates, which was partially offset by a decrease in our average indebtedness by $20.8 million between the two periods. Average indebtedness was $462.8 million in the six months ended June 30, 2024, compared to average indebtedness of $483.6 million in the six months ended June 30, 2023.

Interest income decreased by $0.5 million to $5.8 million in the six months ended June 30, 2024 compared to $6.3 million in the six months ended June 30, 2023.

Gain on investments
Following the all-stock merger of Eagle Bulk Shipping Inc. with Star Bulk Carriers Corp. (“SBLK”) completed on April 9, 2024, we currently own 4,070,214 shares of common stock of SBLK. The gain on investments of $17.2 million in the six months ended June 30, 2024 consisted of the change in fair value of these marketable securities of $13.2 million and dividends recognized on these shares of $4.0 million. This compares to a $6.4 million gain on marketable securities in the six months ended June 30, 2023.

Loss on debt extinguishment
A $2.3 million loss on early extinguishment of our leaseback obligations in the six months ended June 30, 2023 compares to no such loss in the six months ended June 30, 2024.

Equity loss on investments
Equity loss on investments amounting to $0.2 million and $3.3 million in the six months June 30, 2024 and June 30, 2023, respectively, relates to our share of initial expenses of a recently established company, CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other finance expenses
Other finance expenses decreased by $0.4 million to $1.7 million in the six months ended June 30, 2024 compared to $2.1 million in the six months ended June 30, 2023.

Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at $1.8 million in each of the six months ended June 30, 2024 and June 30, 2023.

Other income/(expenses), net
Other income, net amounted to $0.2 million in the six months ended June 30, 2024 compared to $0.5 million other income, net in the six months ended June 30, 2023.

Adjusted EBITDA
Adjusted EBITDA decreased by 0.7%, or $2.4 million, to $354.0 million in the six months ended June 30, 2024 from $356.4 million in the six months ended June 30, 2023. As outlined above, the decrease is mainly attributable to a $32.0 million increase in total operating expenses, which were partially offset by a $22.5 million increase in operating revenues, a $4.0 million increase in dividends received and a $3.1 million decrease in equity loss on investments. Adjusted EBITDA for the six months ended June 30, 2024 is adjusted for a $13.2 million change in fair value of investments and a $7.1 million net gain on disposal of vessel. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.

Adjusted EBITDA of container vessels segment decreased by 4.6%, or $16.4 million, to $343.3 million in the six months ended June 30, 2024 from $359.7 million in the six months ended June 30, 2023.

Adjusted EBITDA of drybulk vessels segment was $6.9 million in the six months ended June 30, 2024. We did not have drybulk vessel operations in the six months ended June 30, 2023.

Dividend Payment

Danaos has declared a dividend of $0.80 per share of common stock for the second quarter of 2024, which is payable on August 29, 2024 to stockholders of record as of August 20, 2024.

Recent Developments

In July 2024, we took delivery of our 10^th capsize drybulk carrier. As a result, aggregate DWT capacity of our capesize drybulk fleet currently stands at approximately 1.8 million DWT.