Danaos reported unaudited results for the first quarter ended March 31, 2023.
Highlights for the First Quarter Ended March 31, 2023:
- Adjusted net income1 of $145.3 million, or $7.14 per share, for the three months ended March 31, 2023 compared to $235.3 million, or $11.36 per share, for the three months ended March 31, 2022, a decrease of 38.2%. Our adjusted net income for the three months ended March 31, 2022 included a non-recurring $110.0 million dividend from ZIM that accounted for $5.31 per share.
- Net income of $146.2 million, or $7.18 per share, for the three months ended March 31, 2023 compared to $331.5 million, or $16.00 per share, for the three months ended March 31, 2022. Our net income for the three months ended March 31, 2022 included a non-recurring $209.5 million total gain on ZIM investment that accounted for $10.11 per share.
- Cash and cash equivalents were $359.6 million as of March 31, 2023.
- Total liquidity was $730.8 million as of March 31, 2023, including undrawn available commitments under our Revolving Credit Facility.
- As of the date of this release, Danaos has repurchased in total 683,889 shares of its common stock in the open market for $40.5 million, under its share repurchase program of up to $100 million announced in June 2022.
- During the three months ended March 31, 2023, we invested $4.3 million for a 49% shareholding interest in a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.
- Operating revenues of $243.6 million for the three months ended March 31, 2023 compared to $229.9 million for the three months ended March 31, 2022, an increase of 6.0%.
- During the last three months, we concluded new charter agreements for $380.7 million of contracted revenues that included $262.0 million related to 3-year charters for six under construction containerships expected to be delivered during the second half of 2024.
- On May 12, 2023, we made an early prepayment of our outstanding leaseback obligations related to two of our vessels, which amounted to $66.3 million as of March 31, 2023. As a result of this early prepayment, we currently have no lease obligations on the balance sheet.
- Adjusted EBITDA1 of $179.0 million for the three months ended March 31, 2023 compared to $269.5 million for the three months ended March 31, 2022, a decrease of 33.6%. Our adjusted EBITDA for the three months ended March 31, 2022 included a non-recurring $110.0 million dividend from ZIM.
- Total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, were $2.3 billion as of March 31, 2023. The remaining average contracted charter duration was 3.2 years, weighted by aggregate contracted charter hire.
- Contracted operating days charter coverage is currently 97.3% for 2023, and 73.2% for 2024.
- As of March 31, 2023, Net Debt2 was $137.9 million, and Net Debt / LTM Adjusted EBITDA was 0.18x, while 44 of our vessels are debt-free currently.
- Danaos has declared a dividend of $0.75 per share of common stock for the first quarter of 2023, which is payable on June 7, 2023, to stockholders of record as of May 26, 2023.
Three Months Ended March 31, 2023
Financial Summary – Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
|Three months ended||Three months ended|
|March 31,||March 31,|
|Adjusted net income1||$||145,255||$||235,297|
|Earnings per share, diluted||$||7.18||$||16.00|
|Adjusted earnings per share, diluted1||$||7.14||$||11.36|
|Diluted weighted average number of shares (in thousands)||20,349||20,717|
|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 provided below.|
|2||Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents.|
Danaos’ CEO Dr. John Coustas commented:
“Danaos reports yet another solid quarter, despite the continuing geopolitical uncertainty and the turmoil in the financial markets. Box rates strengthened after the Chinese New Year due to the blank sailings and discipline on the part of liner companies. In addition, the charter market improved due to the very limited supply of charter-free vessels as well as the impact of speed reduction as charterers seek to comply with CII regulations.
Danaos has continued its successful chartering and asset management strategy, driving steady and predictable performance and laying the groundwork for continued growth while also pursuing environmentally sound policies. Our chartering strategy delivered another strong quarter, and we have operating days charter coverage of 97% for 2023 and 73% for 2024. Our strong chartering capabilities and our business strategy continue to drive solid performance.
In the first quarter, we successfully secured more than $380 million of contracted revenue through multi-year charters, including $262 million for all six new buildings that will be delivered to us in 2024. In addition, we have placed an order for two additional 6,000 TEU vessels of the latest eco design to be delivered in the fourth quarter of 2024 and the second quarter of 2025. Our modernization efforts that are key to the future of the Company, highlight our commitment to maintaining a high quality fleet while supporting the ongoing decarbonization of the industry.
We are very well positioned to navigate the operating environment with the new regulatory requirements that are becoming very demanding and complex. Our very strong operating platform provides us significant competitive advantage in complying with upcoming regulations, while strengthening our value proposition and ties with our customers as the industry focuses on achieving environmental goals and closer cooperation between owners and charterers becomes increasingly important.
We appreciate the ongoing support of our customers and employees and will continue to work diligently for the benefit of our shareholders.”