Danaos Corporation Reports Second Quarter and Half Year Results for the Period Ended June 30, 2024
ATHENS, Greece, Aug. 5, 2024 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE: DAC), 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 Summary
Three 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 Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
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 As of June 30, 2024 As of December 31,
2023
& Leverage Metrics
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 Summary
Six 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 Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
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.
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 $0.5 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.
Conference Call and Webcast
On Tuesday, August 6, 2024 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 August 13, 2024 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 4582407# 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 container and drybulk 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 container vessels. Our current fleet of 70 container vessels aggregating 442,278 TEUs and 17 under construction container vessels aggregating 139,019 TEUs ranks Danaos among the largest container vessels charter owners in the world based on total TEU capacity. Danaos has also recently invested in the drybulk sector with the acquisition of 10 capesize drybulk vessels aggregating 1,760,861 DWT. 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 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 drydocking, changes in Danaos Corporation's operating expenses, including bunker prices, drydocking and insurance costs, our ability to operate profitably in the drybulk sector, performance of shipyards constructing our contracted newbuilding vessels, 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, including the conflict in Ukraine and related sanctions, the conflict in Israel and the Gaza Strip, potential disruption of shipping routes such as Houthi attacks in the Red Sea and the Gulf of Aden, 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
Container vessels fleet utilization
---
Vessel Utilization (No. of Days) Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
Ownership Days 6,253 6,188 12,438 12,338
Less Off-hire Days:
Scheduled Off-hire Days (95) (80) (162) (230)
Other Off-hire Days (70) (2) (169) (46)
Operating Days(1) 6,088 6,106 12,107 12,062
Vessel Utilization 97.4 % 98.7 % 97.3 % 97.8 %
Operating Revenues (in '000s of US$) $230,586 $241,479 $463,997 $485,053
Less: Voyage Expenses excluding commissions (in '000s of US$) (448) (331) (936) (746)
Time Charter Equivalent Revenues (in '000s of US$) 230,138 241,148 463,061 484,307
Time Charter Equivalent US$/per day(2) $37,802 $39,494 $38,247 $40,151
Drybulk vessels fleet utilization
---
Vessel Utilization (No. of Days) Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
Ownership Days 694 1,331
Less Off-hire Days:
Scheduled Off-hire Days (90) (121)
Other Off-hire Days (10)
Operating Days(1) 604 1,200
Vessel Utilization 87.0 % 90.2 %
Operating Revenues (in '000s of US$) $15,720 $35,758
Less: Voyage Expenses excluding commissions (in '000s of US$) (3,269) (14,096)
Time Charter Equivalent Revenues (in '000s of US$) 12,451 21,662
Time Charter Equivalent US$/per day(2) $20,614 $18,052
1) We define Operating Days as the total number of Ownership Days net of Scheduled off-hire days (days associated with scheduled repairs, drydockings or
special or intermediate surveys or days) and net of off-hire days associated with unscheduled repairs or days waiting to find employment but including
days our vessels were sailing for repositioning. The shipping industry uses Operating Days to measure the number of days in a period during which vessels
actually generate revenues or are sailing for repositioning purposes. Our definition of Operating Days may not be comparable to that used by other
companies in the shipping industry.
2) Time charter equivalent US$/per day ("TCE rate") represents the average daily TCE rate of our container vessels segment and drybulk vessels segment
calculated dividing time charter equivalent revenues of each segment by operating days of each segment. TCE rate is a standard shipping industry
performance measure used primarily to compare period to period changes in a shipping company's performance despite changes in the mix of charter types
i.e., voyage charters, time charters, bareboat charters under which its vessels may be employed between the periods. Our method of computing TCE rate may
not necessarily be comparable to TCE rates of other companies due to differences in methods of calculation. We include TCE rate, a non- GAAP measure, as
it provides additional meaningful information in conjunction with operating revenues, the most directly comparable GAAP measure, and it assists our
management in making decisions regarding the deployment and use of our operating vessels and assists investors and our management in evaluating our
financial performance.
Fleet List
The following table describes in detail our container vessels deployment profile as of August 2, 2024:
Vessel Name Vessel Year Expiration of
Size Built Charter(2)
(TEU) (1)
Ambition (ex Hyundai Ambition) 13,100 2012 April 2027
Speed (ex Hyundai Speed) 13,100 2012 March 2027
Kota Plumbago (ex Hyundai Smart) 13,100 2012
July 2027
Kota Primrose (ex Hyundai Respect) 13,100 2012 April 2027
Kota Peony (ex Hyundai Honour) 13,100 2012 March 2027
Express Rome 10,100 2011 April 2027
Express Berlin 10,100 2011 August 2026
Express Athens 10,100 2011 April 2027
Le Havre 9,580 2006
June 2028
Pusan C 9,580 2006
May 2028
Bremen 9,012 2009 January 2028
C Hamburg 9,012 2009 January 2028
Niledutch Lion 8,626 2008
May 2026
Kota Manzanillo 8,533 2005 February 2026
Belita 8,533 2006
July 2026
CMA CGM Melisande 8,530 2012 January 2028
CMA CGM Attila 8,530 2011
May 2027
CMA CGM Tancredi 8,530 2011
July 2027
CMA CGM Bianca 8,530 2011 September 2027
CMA CGM Samson 8,530 2011 November 2027
America 8,468 2004 April 2028
Europe 8,468 2004
May 2028
Kota Santos 8,463 2005 August 2026
Catherine C
(3) 8,010 2024
May 2027
Greenland
(3) 8,010 2024
June 2027
Interasia Accelerate
(3) 7,165 2024 April 2027
CMA CGM Moliere 6,500 2009 March 2027
CMA CGM Musset 6,500 2010 September 2025
CMA CGM Nerval 6,500 2010 November 2025
CMA CGM Rabelais 6,500 2010 January 2026
Racine 6,500 2010 April 2026
YM Mandate 6,500 2010 January 2028
YM Maturity 6,500 2010 April 2028
Savannah (ex
Zim Savannah
) 6,402 2002
June 2025
Dimitra C 6,402 2002 February 2025
Suez Canal 5,610 2002 April 2026
Kota Lima 5,544 2002 November 2024
Wide Alpha 5,466 2014
July 2027
Stephanie C 5,466 2014
June 2025
Maersk Euphrates 5,466 2014
July 2025
Wide Hotel 5,466 2015 September 2027
Wide India 5,466 2015 November 2025
Wide Juliet 5,466 2015 September 2025
Seattle C 4,253 2007 October 2026
Vancouver 4,253 2007 November 2026
Derby D 4,253 2004 January 2027
Tongala 4,253 2004 November 2026
Rio Grande 4,253 2008 November 2026
Merve A 4,253 2008 September 2025
Kingston 4,253 2008
June 2025
Monaco (ex ZIM Monaco) 4,253 2009 September 2026
Dalian 4,253 2009 March 2026
ZIM Luanda 4,253 2009 August 2025
Dimitris C 3,430 2001 November 2025
Express Black Sea 3,400 2011 January 2027
Express Spain 3,400 2011 January 2027
Express Argentina 3,400 2010 December 2026
Express Brazil 3,400 2010
June 2025
Express France 3,400 2010 September 2025
Singapore 3,314 2004 March 2025
Colombo 3,314 2004 January 2027
Zebra 2,602 2001 November 2024
Artotina 2,524 2001
May 2025
Advance 2,200 1997 January 2025
Future 2,200 1997 December 2024
Sprinter 2,200 1997 December 2024
Bridge 2,200 1998 December 2024
Progress C 2,200 1998 November 2024
Phoenix D 2,200 1997 March 2025
Highway 2,200 1998 February 2025
(1) Twenty-feet equivalent unit, the international standard measure for containers and
container vessels capacity.
(2) Earliest date charters could expire. Some charters include options for the charterer to
extend their terms.
(3)
The vessels were delivered in the second quarter of 2024.
Container vessels under construction as of August 2, 2024:
Hull Number Vessel Expected Delivery Minimum Charter
Size Year Duration
(TEU)
Hull No. C7100-8 7,165 2024
3 Years
Hull No. HN4011 8,010 2024
3 Years
Hull No. HN4012 8,010 2024
3 Years
Hull No. CV5900-07 6,014 2024
2 Years
Hull No. CV5900-08 6,014 2025
2 Years
Hull No. YZJ2023-1556 8,258 2026
5 Years
Hull No. YZJ2023-1557 8,258 2026
5 Years
Hull No. YZJ2024-1612 8,258 2026
5 Years
Hull No. YZJ2024-1613 8,258 2027
5 Years
Hull No. YZJ2024-1625 8,258 2027
5 Years
Hull No. YZJ2024-1626 8,258 2027
5 Years
Hull No. YZJ2024-1668 8,258 2027
5 Years
Hull No. C9200-7 9,200 2027
5 Years
Hull No. C9200-8 9,200 2027
5 Years
Hull No. C9200-9 9,200 2027
5 Years
Hull No. C9200-10 9,200 2028
5 Years
Hull No. C9200-11 9,200 2028
5 Years
The following table describes the details of our Capesize drybulk vessels as of August 2, 2024:
Vessel Name Capacity Year
Built
(DWT)
(1)
Achievement 175,966 2011
Genius 175,580 2012
Ingenuity 176,022 2011
Integrity 175,966 2010
Peace 175,858 2010
W Trader 175,879 2009
E Trader 175,886 2009
Gouverneur (ex Xin Hang)
(2) 178,043 2010
Valentine (ex Star Audrey)
(2) 175,125 2011
Danaos (ex Guo May)
(3) 176,536 2011
(1) DWT, dead weight tons, the international standard measure for drybulk
vessels capacity.
(2)
The vessels were delivered in the second quarter of 2024.
(3)
The vessel was delivered in July 2024.
DANAOS CORPORATION
Condensed Consolidated Statements of Income - Unaudited
(Expressed in thousands of United States dollars, except per share amounts)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
OPERATING REVENUES $246,306 $241,479 $499,755 $485,053
OPERATING EXPENSES
Vessel operating expenses (47,090) (41,861) (90,204) (82,500)
Depreciation & amortization (42,352) (36,412) (81,667) (71,776)
General & administrative (11,297) (7,192) (21,541) (14,037)
Other operating expenses (12,678) (8,399) (33,020) (16,282)
Net gain on dispoal/sale of vessels 7,094 0 7,094 1,639
Income From Operations 139,983 147,615 280,417 302,097
OTHER INCOME/(EXPENSES)
Interest income 2,923 3,596 5,859 6,319
Interest expense (5,106) (5,881) (8,230) (12,603)
Gain on investments 5,276 6,438 17,187 6,438
Loss on debt extinguishment (2,254) (2,254)
Other finance expenses (868) (1,146) (1,750) (2,122)
Equity loss on investments (97) (738) (206) (3,326)
Other income/(expenses), net (56) 294 179 469
Realized loss on derivatives (903) (903) (1,806) (1,796)
Total Other Income/(Expenses), net 1,169 (594) 11,233 (8,875)
Net Income 141,152 147,021 291,650 293,222
EARNINGS PER SHARE
Basic earnings per share $7.30 $7.32 $15.05 $14.51
Diluted earnings per share $7.23 $7.32 $14.92 $14.51
Basic weighted average number of common shares (in thousands of shares) 19,348 20,081 19,380 20,214
Diluted weighted average number of common shares (in thousands of shares) 19,520 20,081 19,552 20,214
Non-GAAP Measures(1)
Reconciliation of Net Income to Adjusted Net Income - Unaudited
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
Net Income $141,152 $147,021 $291,650 $293,222
Change in fair value of investments (2,224) (6,438) (13,203) (6,438)
Loss on debt extinguishment - 2,254 2,254
Net gain on dispoal/sale of vessels (7,094) (7,094) (1,639)
Amortization of financing fees 474 568 971 1,261
Adjusted Net Income $132,308 $143,405 $272,324 $288,660
Adjusted Earnings Per Share, diluted $6.78 $7.14 $13.93 $14.28
Diluted weighted average number of shares (in thousands of shares) 19,520 20,081 19,552 20,214
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 six months ended June 30, 2024 and 2023. The 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. The non-GAAP financial measures as presented above may not be comparable to
similarly titled measures of other companies in the shipping or other industries.
DANAOS CORPORATION
Condensed Consolidated Balance Sheets - Unaudited
(Expressed in thousands of United States dollars)
As of As of
June 30, December 31,
2024 2023
ASSETS
CURRENT ASSETS
Cash, cash equivalents and restricted cash $372,446 $271,809
Accounts receivable, net 22,726 9,931
Other current assets 222,947 220,030
618,119 501,770
NON-CURRENT ASSETS
Fixed assets, net 3,028,236 2,746,541
Advances for vessels acquisition and
vessels under construction 283,260 301,916
Deferred charges, net 39,546 38,012
Other non-current assets 77,196 72,897
3,428,238 3,159,366
TOTAL ASSETS $4,046,357 $3,661,136
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long-term debt, current portion $25,160 $21,300
Accounts payable, accrued liabilities &
other current liabilities 122,588 146,860
147,748 168,160
LONG-TERM LIABILITIES
Long-term debt, net 544,543 382,874
Other long-term liabilities 76,848 93,785
621,391 476,659
STOCKHOLDERS' EQUITY
Common stock 193 194
Additional paid-in capital 688,122 690,190
Accumulated other comprehensive loss (73,647) (75,979)
Retained earnings 2,662,550 2,401,912
3,277,218 3,016,317
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,046,357 $3,661,136
DANAOS CORPORATION
Condensed Consolidated Statements of Cash Flows - Unaudited
(Expressed in thousands of United States dollars)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
Operating Activities:
Net income $141,152 $147,021 $291,650 $293,222
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 35,380 31,910 69,243 63,439
Amortization of deferred drydocking & special survey
costs and finance costs 7,446 5,070 13,395 9,598
Amortization of assumed time charters (1,036) (5,854) (4,534) (12,390)
Prior service cost and periodic cost 458 394 715 886
Gain on investments (2,224) (6,438) (13,203) (6,438)
Loss on debt extinguishment - 2,254 2,254
Net gain on disposal/sale of vessels (7,094) (7,094) (1,639)
Payments for drydocking/special survey (10,449) (4,818) (14,618) (14,560)
Amortization of deferred realized losses on cash flow
interest rate swaps 903 903 1,806 1,796
Equity loss on investments 97 738 206 3,326
Stock based compensation 1,577 3,153
Accounts receivable (9,343) (517) (12,795) (2,456)
Other assets, current and non-current 9,320 (3,612) 21,207 (12,406)
Accounts payable and accrued liabilities 11,995 1,934 5,767 (3,151)
Other liabilities, current and long-term (23,907) (15,973) (47,331) (40,875)
Net Cash provided by Operating Activities 154,275 153,012 307,567 280,606
Investing Activities:
Vessel additions and advances for vessels under
construction (217,728) (24,048) (341,855) (29,784)
Net proceeds and insurance proceeds from disposal/
sale of vessels 9,923 10,639 3,914
Investments - (70,144) (74,407)
Net Cash used in Investing Activities (207,805) (94,192) (331,216) (100,277)
Financing Activities:
Proceeds from long-term debt 126,000 181,000
Debt repayment (6,875) (6,875) (13,750) (13,750)
Payments of leaseback obligations - (66,296) (72,925)
Dividends paid (15,476) (15,099) (31,011) (30,361)
Repurchase of common stock (1,094) (35,157) (5,223) (35,738)
Finance costs (905) (1,642) (6,730) (1,892)
Net Cash provided by/(used in) Financing Activities 101,650 (125,069) 124,286 (154,666)
Net increase in cash and cash equivalents 48,120 (66,249) 100,637 25,663
Cash and cash equivalents, beginning of period 324,326 359,580 271,809 267,668
Cash and cash equivalents, end of period $372,446 $293,331 $372,446 $293,331
DANAOS CORPORATION
Reconciliation of Net Income to Adjusted EBITDA - Unaudited
(Expressed in thousands of United States dollars)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2024 2023 2024 2023
Net income $141,152 $147,021 $291,650 $293,222
Depreciation 35,380 31,910 69,243 63,439
Amortization of deferred drydocking & special survey costs 6,972 4,502 12,424 8,337
Amortization of assumed time charters (1,036) (5,854) (4,534) (12,390)
Amortization of finance costs and commitment fees 1,026 1,311 2,299 2,762
Amortization of deferred realized losses on interest rate swaps 903 903 1,806 1,796
Interest income (2,923) (3,596) (5,859) (6,319)
Interest expense excluding amortization of finance costs 4,632 5,313 7,259 11,342
Change in fair value of investments (2,224) (6,438) (13,203) (6,438)
Loss on debt extinguishment - 2,254 2,254
Net gain on disposal/sale of vessels (7,094) (7,094) (1,639)
Adjusted EBITDA(1) $176,788 $177,326 $353,991 $356,366
Last twelve Last twelve
months months
ended ended
June 30, December 31,
2024 2023
Net income $574,727 $576,299
Depreciation 135,091 129,287
Amortization of deferred drydocking & special survey costs 22,750 18,663
Amortization of assumed time charters (13,366) (21,222)
Amortization of finance costs and commitment fees 4,673 5,136
Amortization of deferred realized losses on interest rate swaps 3,632 3,622
Interest income (11,673) (12,133)
Interest expense excluding amortization of finance costs 14,179 18,262
Change in fair value of investments (24,632) (17,867)
Stock based compensation 6,340 6,340
Loss on debt extinguishment - 2,254
Net gain on disposal/sale of vessels (7,094) (1,639)
Adjusted EBITDA(1) $704,627 $707,002
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 and commitment fees, amortization of deferred realized losses on interest
rate swaps, change in fair value of investments, stock based compensation, loss on debt extinguishment and net gain on disposal/sale of vessels.
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. The non-GAAP financial measures as presented above may not be comparable to similarly titled measures of other companies in the
shipping or other industries.
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 six months ended June 30, 2024 and June 30, 2023; and the last twelve months ended June 30, 2024 and December 31, 2023. 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
Reconciliation of Net Income to Adjusted EBITDA per segment
Three Months Ended June 30, 2024 and Three Months Ended June 30, 2023
Unaudited
(Expressed in thousands of United States dollars)
Three Months Ended Three Months Ended
June 30, 2024
June 30, 2023
Container Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
Net income $133,683 $2,290 $5,179 $141,152 $141,321 $5,700 $147,021
Depreciation 33,247 2,133 35,380 31,910 31,910
Amortization of deferred drydocking & special survey costs 6,683 289 6,972 4,502 4,502
Amortization of assumed time charters (1,036) (1,036) (5,854) (5,854)
Amortization of finance costs and commitment fees 1,026 1,026 1,311 1,311
Amortization of deferred realized losses on interest rate swaps 903 903 903 903
Interest income (2,923) (2,923) (3,596) (3,596)
Interest expense excluding amortization of finance costs 4,632 4,632 5,313 5,313
Change in fair value of investments (2,224) (2,224) (6,438) (6,438)
Loss on debt extinguishment 2,254 2,254
Net gain on disposal/sale of vessels (7,094) (7,094)
Adjusted EBITDA(1) $169,121 $4,712 $2,955 $176,788 $178,064 $(738) $177,326
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 and commitment fees, amortization of deferred realized losses on interest
rate swaps, change in fair value of investments and net gain on disposal/sale of vessels. 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. The non-GAAP financial measures as
presented above may not be comparable to similarly titled measures of other companies in the shipping or other industries.
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 months ended June 30, 2024 and 2023. 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
Reconciliation of Net Income to Adjusted EBITDA per segment
Six Months Ended June 30, 2024 and Six Months Ended June 30, 2023
Unaudited
(Expressed in thousands of United States dollars)
Six Months Ended Six Months Ended
June 30, 2024
June 30, 2023
Container Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
Net income $272,042 $2,627 $16,981 $291,650 $290,110 $3,112 $293,222
Depreciation 65,255 3,988 69,243 63,439 63,439
Amortization of deferred drydocking & special survey costs 12,135 289 12,424 8,337 8,337
Amortization of assumed time charters (4,534) (4,534) (12,390) (12,390)
Amortization of finance costs and commitment fees 2,299 2,299 2,762 2,762
Amortization of deferred realized losses on interest rate swaps 1,806 1,806 1,796 1,796
Interest income (5,859) (5,859) (6,319) (6,319)
Interest expense excluding amortization of finance costs 7,259 7,259 11,342 11,342
Change in fair value of investments (13,203) (13,203) (6,438) (6,438)
Loss on debt extinguishment 2,254 2,254
Net gain on disposal/sale of vessels (7,094) (7,094) (1,639) (1,639)
Adjusted EBITDA(1) $343,309 $6,904 $3,778 $353,991 $359,692 $(3,326) $356,366
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 and commitment fees, amortization of deferred realized losses on interest
rate swaps, change in fair value of investments and net gain on disposal/sale of vessels. 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. The non-GAAP financial measures as
presented above may not be comparable to similarly titled measures of other companies in the shipping or other industries.
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 six months ended June 30, 2024 and 2023. 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
Reconciliation of Net Income to Adjusted Net Income per segment
Three Months Ended June 30, 2024 and Three Months Ended June 30, 2023
Unaudited
(Expressed in thousands of United States dollars)
Three Months Ended Three Months Ended
June 30, 2024
June 30, 2023
Container Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
Net income $133,683 $2,290 $5,179 $141,152 $141,321 $5,700 $147,021
Change in fair value of investments (2,224) (2,224) (6,438) (6,438)
Loss on debt extinguishment 2,254 2,254
Amortization of financing fees 474 474 568 568
Net gain on disposal/sale of vessels (7,094) (7,094)
Adjusted Net income/(loss)(1) $127,063 $2,290 $2,955 $132,308 $144,143 $(738) $143,405
Adjusted Earnings per Share, diluted $6.78 $7.14
Diluted weighted average number of shares (in thousands of shares) 19,520 20,081
DANAOS CORPORATION
Reconciliation of Net Income to Adjusted Net Income per segment
Six Months Ended June 30, 2024 and Six Months Ended June 30, 2023
Unaudited
(Expressed in thousands of United States dollars)
Six Months Ended Six Months Ended
June 30, 2024
June 30, 2023
Container Drybulk Other Total Container Drybulk Other Total
Vessels Vessels Vessels Vessels
Net income $272,042 $2,627 $16,981 $291,650 $290,110 $3,112 $293,222
Change in fair value of investments (13,203) (13,203) (6,438) (6,438)
Loss on debt extinguishment 2,254 2,254
Amortization of financing fees 971 971 1,261 1,261
Net gain on disposal/sale of vessels (7,094) (7,094) (1,639) (1,639)
Adjusted Net income/(loss)(1) $265,919 $2,627 $3,778 $272,324 $291,986 $(3,326) $288,660
Adjusted Earnings per Share, diluted $13.93 $14.28
Diluted weighted average number of shares (in thousands of shares) 19,552 20,214
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 six months ended June 30, 2024 and 2023. 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. The non-GAAP financial measures as presented above may not be comparable to similarly
titled measures of other companies in the shipping or other industries.
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SOURCE Danaos Corporation
