Danaos Corporation (“Danaos”) (NYSE: DAC), one of the world’s
largest independent owners of containerships, today reported
unaudited results for the period ended June 30, 2021.
Highlights for the Second Quarter and Half Year Ended June
30, 2021:
- Adjusted net income1 of $68.9 million, or $3.34 per share,
for the three months ended June 30, 2021 compared to $42.5 million,
or $1.71 per share, for the three months ended June 30, 2020, an
increase of 62.1%. Adjusted net income1 of $126.9 million, or $6.17
per share, for the six months ended June 30, 2021 compared to $75.8
million, or $3.06 per share, for the six months ended June 30,
2020, an increase of 67.4%.
- Operating revenues of $146.4 million for the three months
ended June 30, 2021 compared to $116.8 million for the three months
ended June 30, 2020, an increase of 25.3%. Operating revenues of
$278.5 million for the six months ended June 30, 2021 compared to
$223.0 million for the six months ended June 30, 2020, an increase
of 24.9%.
- Adjusted EBITDA1 of $103.7 million for the three
months ended June 30, 2021 compared to $80.1 million for the three
months ended June 30, 2020, an increase of 29.5%. Adjusted
EBITDA1 of $200.0 million for the six months ended June 30,
2021 compared to $152.0 million for the six months ended June 30,
2020, an increase of 31.6%.
- Total contracted operating revenues were $1.75 billion as of
June 30, 2021, including the Gemini vessels that were acquired in
July 2021, with charters extending through 2028 and remaining
average contracted charter duration of 3.4 years, weighted by
aggregate contracted charter hire.
- Charter coverage of 92% for the next 12 months based on
current operating revenues and 90% in terms of contracted operating
days.
- We have collected an aggregate amount of $69.5 million of
mandatory repayment of ZIM and HMM notes plus accrued interest of
nearly $10 million in the six months ended June 30, 2021.
Additionally, we have sold 2 million ZIM ordinary shares for net
proceeds of $76.4 million in the six months ended June 30,
2021.
- Danaos has declared a dividend of $0.50 per share of common
stock for the second quarter of 2021, which is payable on August
30, 2021 to stockholders of record as of August 16, 2021.
Three and Six Months Ended
June 30, 2021
Financial Summary -
Unaudited
(Expressed in thousands of United
States dollars, except per share amounts)
Three months
ended
Three months
ended
Six months
ended
Six months
ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
Operating revenues
$146,434
$116,824
$278,552
$223,020
Net income
$372,837
$38,496
$669,617
$67,585
Adjusted net income1
$68,860
$42,494
$126,871
$75,775
Earnings per share, diluted
$18.10
$1.55
$32.57
$2.73
Adjusted earnings per share, diluted1
$3.34
$1.71
$6.17
$3.06
Diluted weighted average number of shares
(in thousands)
20,599
24,789
20,557
24,789
Adjusted EBITDA1
$103,736
$80,073
$200,018
$151,991
1
Adjusted net income adjusted earnings per
share and adjusted EBITDA are non-GAAP measures. Refer to the
reconciliation of net income to adjusted net income and net income
to adjusted EBITDA.
Danaos’ CEO Dr. John Coustas
commented:
"The containership market has maintained its positive momentum,
which is reflected in increasing rates for both containers and
vessel charters. Danaos is continuing to secure charters for its
vessels for periods of between three and five years. It is
noteworthy that some of these charters do not even begin until the
middle of 2022. The market appears to be in short supply until at
least the end of next year, and we have strong leverage to this
dynamic.
The pandemic is continuing to cause inefficiencies in the
transportation chain, and there is no obvious indication that
conditions will normalize in the near term. Travel bans or
restrictions are continuing to impede our efforts to normalize crew
changes. Despite considerable difficulty in joining and
repatriation, our vessel schedules have not been affected.
Our liquidity was enhanced in the second quarter by a total of
$152.6 million from the redemption of the Zim and HMM bonds and the
disposition of 2 million shares of Zim stock. In the aggregate our
cash balance at the end of the quarter was $294.4 million.
Financially, Danaos is in a very strong position, with cash and
marketable securities totaling over $600 million, a $1.75 billion
backlog of charters extended out over an average of 3.4 years and a
very manageable debt repayment schedule. We are also generating
significant free cash flow on the back of exceptionally strong
market conditions. This gives us the capacity and the confidence to
grow our core business when opportunities appear. To that end, we
exercised our option to purchase 51% of Gemini, our joint venture,
taking full ownership of the entity and its assets. This added
approximately $160 million of contracted revenue and approximately
$117 million of contracted EBITDA to our backlog, while these
vessels are expected to contribute $31 million of EBITDA over the
next 12 months. The effective date of the transaction was July 1,
2021, meaning it will be immediately accretive in the third
quarter.
Further we sourced an opportunity to buy six modern eco-design
5,460 TEU vessels built in 2014 and 2015 at a significant discount
to their charter free values. These vessels are tied to below
market, though still profitable, charters expiring from mid-2022 to
mid-2024. They are of similar specification to newbuilding designs
offered today, and we expect to recharter them at levels
significantly higher than their existing charters. We were able to
fund these growth opportunities using cash on our balance sheet,
and we will evaluate whether we will increase our leverage with
respect to these acquisitions moving forward.
Once again, the market dynamics are in our favor, and we will
continue to deliver the best results possible for our
shareholders."
Three months ended June 30, 2021
compared to the three months ended June 30, 2020
During the three months ended June 30, 2021, Danaos had an
average of 60.0 containerships compared to 57.1 containerships
during the three months ended June 30, 2020. Our fleet utilization
for the three months ended June 30, 2021 was 99.1% compared to
97.1% for the three months ended June 30, 2020.
Our adjusted net income amounted to $68.9 million, or $3.34 per
share, for the three months ended June 30, 2021 compared to $42.5
million, or $1.71 per share, for the three months ended June 30,
2020. We have adjusted our net income in the three months ended
June 30, 2021 for the gain on our investment in ZIM of $196.3
million, gain on debt extinguishment of $111.6 million and a
non-cash fees amortization and accrued finance fees charge of $3.9
million. Please refer to the Adjusted Net Income reconciliation
table, which appears later in this earnings release.
The increase of $26.4 million in adjusted net income for the
three months ended June 30, 2021 compared to the three months ended
June 30, 2020 is attributable mainly to a $29.6 million increase in
operating revenues, a $3.8 million decrease in net finance
expenses, and a $0.5 million increase in the operating performance
of our equity investment in Gemini Shipholdings Corporation
(“Gemini”), which were partially offset by a $7.5 million increase
in total operating expenses.
On a non-adjusted basis, our net income amounted to $372.8
million, or $18.10 earnings per diluted share, for the three months
ended June 30, 2021 compared to net income of $38.5 million, or
$1.55 earnings per diluted share, for the three months ended June
30, 2020. Our net income for the three months ended June 30, 2021
includes gain on our investment in ZIM of $196.3 million and gain
on debt extinguishment of $111.6 million.
Operating Revenues Operating revenues increased by 25.3%,
or $29.6 million, to $146.4 million in the three months ended June
30, 2021 from $116.8 million in the three months ended June 30,
2020.
Operating revenues for the three months ended June 30, 2021
reflect:
- a $23.6 million increase in revenues in the three months ended
June 30, 2021 compared to the three months ended June 30, 2020
mainly as a result of higher charter rates and improved fleet
utilization; and
- a $6.0 million increase in revenues in the three months ended
June 30, 2021 compared to the three months ended June 30, 2020 due
to the incremental revenue generated by five vessels acquired in
2020.
Vessel Operating Expenses Vessel operating expenses
increased by $4.3 million to $32.9 million in the three months
ended June 30, 2021 from $28.6 million in the three months ended
June 30, 2020, primarily as a result of the increase in the average
number of vessels in our fleet and by an increase in the average
daily operating cost of $6,241 per vessel per day for vessels on
time charter for the three months ended June 30, 2021 compared to
$5,787 per vessel per day for the three months ended June 30, 2020.
The average daily operating cost increased mainly due to the
COVID-19 related increase in crew remuneration in the three months
ended June 30, 2021. Management believes that our daily operating
cost remains among the most competitive in the industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 3.2%, or $0.8
million, to $26.1 million in the three months ended June 30, 2021
from $25.3 million in the three months ended June 30, 2020 mainly
due to the acquisition of five vessels and installation of
scrubbers on nine of our vessels in the year ended December 31,
2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
decreased by $0.4 million to $2.5 million in the three months ended
June 30, 2021 from $2.9 million in the three months ended June 30,
2020.
General and Administrative Expenses General and
administrative expenses increased by $1.1 million to $7.1 million
in the three months ended June 30, 2021, from $6.0 million in the
three months ended June 30, 2020. The increase was mainly
attributable to increased management fees due to the increased size
of our fleet and other corporate administrative expenses.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $1.7 million to
$5.0 million in the three months ended June 30, 2021 from $3.3
million in the three months ended June 30, 2020 primarily as a
result of the increase in commissions due to the increase in
revenue per vessel and the increase in average number of vessels in
our fleet.
Interest Expense and Interest Income Interest expense
increased by 33.8%, or $4.6 million, to $18.2 million in the three
months ended June 30, 2021 from $13.6 million in the three months
ended June 30, 2020. The increase in interest expense is a combined
result of:
- a $2.2 million improvement in interest expense because of a
decrease in our average indebtedness by $69.6 million between the
two periods (average indebtedness of $1,465.3 million in the three
months ended June 30, 2021, compared to average indebtedness of
$1,534.9 million in the three months ended June 30, 2020) and a
decrease in our debt service cost by approximately 0.36%;
- a reduced by $6.7 million recognition through our income
statement of accumulated accrued interest that had been accrued in
2018 in relation to two of our credit facilities that were
refinanced on April 12, 2021. As a result of the refinancing, the
recognition of such accumulated interest has been decreased;
and
- a $0.1 million increase in the amortization of deferred finance
costs and debt discount related to our debt.
Net proceeds from issuance of our $300 million Senior Notes in
February 2021 together with the net proceeds from a new $815
million senior secured credit facility and a new $135 million
leaseback arrangement, each drawn down on April 12, 2021 were used
to refinance a substantial majority of our indebtedness.
As of June 30, 2021, our outstanding bank debt, gross of
deferred finance costs, was $1,165.9 million, which includes $300
million aggregate principal amount of our Senior Notes, and our
leaseback obligation was $237.2 million. These balances compare to
bank debt of $1,392.6 million and a leaseback obligation of $135.2
million as of June 30, 2020.
Interest income increased by $7.9 million to $9.5 million in the
three months ended June 30, 2021 compared to $1.6 million in the
three months ended June 30, 2020 mainly as a result of collection
of accrued interest on ZIM and HMM bonds, which were redeemed by
the issuers thereof during the 2021 period.
Gain on investments The gain on investments of $196.3
million relates to change in fair value of our shareholding
interest in ZIM, which completed its initial public offering and
listing on the New York Stock Exchange of its ordinary shares on
January 27, 2021. In June 2021, we sold 2,000,000 ordinary shares
of ZIM resulting in net proceeds of $76.4 million. The remaining
shareholding interest of 8,186,950 ordinary shares has been fair
valued at $367.8 million as of June 30, 2021, based on the closing
price of ZIM ordinary shares on the NYSE on that date.
Gain on debt extinguishment The gain on debt
extinguishment of $111.6 million in the three months ended June 30,
2021 related to our debt refinancing on April 12, 2021, as
described above.
Other finance costs, net Other finance costs, net
decreased by $0.4 million to $0.6 million in the three months ended
June 30, 2021 compared to $1.0 million in the three months ended
June 30, 2020 due to the decreased finance costs on the refinanced
debt.
Equity income on investments Equity income on investments
increased by $0.5 million to $2.2 million of income on investments
in the three months ended June 30, 2021 compared to $1.7 million in
the three months ended June 30, 2020 due to the improved operating
performance of Gemini, in which the Company had a 49% shareholding
interest.
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, 2021 and June 30, 2020.
Other income, net Other income, net was $0.2 million in
the three months ended June 30, 2021 compared to nil in the three
months ended June 30, 2020.
Adjusted EBITDA Adjusted EBITDA increased by 29.5%, or
$23.6 million, to $103.7 million in the three months ended June 30,
2021 from $80.1 million in the three months ended June 30, 2020. As
outlined above, the increase is mainly attributable to a $29.6
million increase in operating revenues, a $0.5 million increase in
the operating performance of our equity investees and a $0.3
million decrease in other finance expenses, which were partially
offset by a $6.8 million increase in total operating expenses.
Adjusted EBITDA for the three months ended June 30, 2021 is
adjusted for the gain on investments of $196.3 million, gain on
debt extinguishment of $111.6 million and stock based compensation
of $0.6 million. Tables reconciling Adjusted EBITDA to Net Income
can be found at the end of this earnings release.
Six months ended June 30, 2021 compared
to the six months ended June 30, 2020
During the six months ended June 30, 2021, Danaos had an average
of 60.0 containerships compared to 56.4 containerships during the
six months ended June 30, 2020. Our fleet utilization for the six
months ended June 30, 2021 was 98.9% compared to 94.2% for the six
months ended June 30, 2020. Adjusted fleet utilization, excluding
the effect of 188 days of incremental off-hire due to shipyard
delays related to the COVID-19 pandemic, was 96.1% in the six
months ended June 30, 2020.
Our adjusted net income amounted to $126.9 million, or $6.17 per
share, for the six months ended June 30, 2021 compared to $75.8
million, or $3.06 per share, for the six months ended June 30,
2020. We have adjusted our net income in the six months ended June
30, 2021 for the gain on our investment in ZIM of $444.2 million,
gain on debt extinguishment of $111.6 million, a non-cash fees
amortization and accrued finance fees charge of $9.0 million and
stock-based compensation of $4.1 million. Please refer to the
Adjusted Net Income reconciliation table, which appears later in
this earnings release.
The increase of $51.1 million in adjusted net income for the six
months ended June 30, 2021 compared to the six months ended June
30, 2020 is attributable mainly to a $55.5 million increase in
operating revenues, a partial collection of common benefit claim of
$3.9 million from Hanjin Shipping, a $6.2 million decrease in net
finance expenses and a $0.7 million increase in the operating
performance of our equity investment in Gemini, which were
partially offset by a $15.2 million increase in total operating
expenses.
On a non-adjusted basis, our net income amounted to $669.6
million, or $32.57 earnings per diluted share, for the six months
ended June 30, 2021 compared to net income of $67.6 million, or
$2.73 earnings per diluted share, for the six months ended June 30,
2020. Our net income for the six months ended June 30, 2021
includes gain on our investment in ZIM of $444.2 million and gain
on debt extinguishment of $111.6 million.
Operating Revenues Operating revenues increased by 24.9%,
or $55.5 million, to $278.5 million in the six months ended June
30, 2021 from $223.0 million in the six months ended June 30,
2020.
Operating revenues for the six months ended June 30, 2021
reflect:
- a $40.9 million increase in revenues in the six months ended
June 30, 2021 compared to the six months ended June 30, 2020 mainly
as a result of higher charter rates and improved fleet utilization;
and
- a $14.6 million increase in revenues in the six months ended
June 30, 2021 compared to the six months ended June 30, 2020 due to
the incremental revenue generated by five vessels acquired in
2020.
Vessel Operating Expenses Vessel operating expenses
increased by $9.4 million to $64.0 million in the six months ended
June 30, 2021 from $54.6 million in the six months ended June 30,
2020, primarily as a result of the increase in the average number
of vessels in our fleet and by an increase in the average daily
operating cost of $6,098 per vessel per day for vessels on time
charter for the six months ended June 30, 2021 compared to $5,657
per vessel per day for the six months ended June 30, 2020. The
average daily operating cost increased mainly due to the COVID-19
related increase in crew remuneration in the six months ended June
30, 2021. Management believes that our daily operating cost remains
among the most competitive in the industry.
Depreciation & Amortization Depreciation &
Amortization includes Depreciation and Amortization of Deferred
Dry-docking and Special Survey Costs.
Depreciation Depreciation expense increased by 4.2%, or $2.1
million, to $51.9 million in the six months ended June 30, 2021
from $49.8 million in the six months ended June 30, 2020 mainly due
to the acquisition of five vessels and installation of scrubbers on
nine of our vessels in the year ended December 31, 2020.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs
decreased by $0.2 million to $5.1 million in the six months ended
June 30, 2021 from $5.3 million in the six months ended June 30,
2020.
General and Administrative Expenses General and
administrative expenses increased by $6.1 million to $18.0 million
in the six months ended June 30, 2021, from $11.9 million in the
six months ended June 30, 2020. The increase was mainly
attributable to increased management fees due to the increased size
of our fleet and increased stock-based compensation.
Other Operating Expenses Other Operating Expenses include
Voyage Expenses.
Voyage Expenses Voyage expenses increased by $1.9 million to
$9.2 million in the six months ended June 30, 2021 from $7.3
million in the six months ended June 30, 2020 primarily as a result
of the increase in commissions due to the increase in revenue per
vessel and the increase in average number of vessels in our
fleet.
Interest Expense and Interest Income Interest expense
increased by 11.4%, or $3.4 million, to $33.3 million in the six
months ended June 30, 2021 from $29.9 million in the six months
ended June 30, 2020. The increase in interest expense is a combined
result of:
- a $7.5 million improvement in interest expense because of a
decrease in our debt service cost by approximately 0.94%, while our
average indebtedness remained stable at $1,539.5 million in the six
months ended June 30, 2021 compared to the six months ended June
30, 2020;
- a reduced by $10.0 million recognition through our income
statement of accumulated accrued interest that had been accrued in
2018 in relation to two of our credit facilities that were
refinanced on April 12, 2021. As a result of the refinancing, the
recognition of such accumulated interest has been decreased;
and
- a $0.9 million increase in the amortization of deferred finance
costs and debt discount related to our debt.
Net proceeds from issuance of our $300 million Senior Notes in
February 2021 together with the net proceeds from a new $815
million senior secured credit facility and a new $135 million
leaseback arrangement, each drawn down on April 12, 2021 were used
to refinance a substantial majority of our indebtedness.
As of June 30, 2021, our outstanding bank debt, gross of
deferred finance costs, was $1,165.9 million, which includes $300
million aggregate principal amount of our Senior Notes, and our
leaseback obligation was $237.2 million. These balances compare to
bank debt of $1,392.6 million and a leaseback obligation of $135.2
million as of June 30, 2020.
Interest income increased by $8.2 million to $11.5 million in
the six months ended June 30, 2021 compared to $3.3 million in the
six months ended June 30, 2020, mainly as a result of collection of
accrued interest on ZIM and HMM bonds, which were redeemed by the
issuers thereof during the 2021 period.
Gain on investments The gain on investments of $444.2
million relates to change in fair value of our shareholding
interest in ZIM, which completed its initial public offering and
listing on the New York Stock Exchange of its ordinary shares on
January 27, 2021. In June 2021, we sold 2,000,000 ordinary shares
of ZIM resulting in net proceeds of $76.4 million. For the six
months ended June 30, 2021, the unrealized gain related to the ZIM
ordinary shares still held on June 30, 2021 amounted to $367.8
million. The remaining shareholding interest of 8,186,950 ordinary
shares has been fair valued at $367.8 million as of June 30, 2021,
based on the closing price of ZIM ordinary shares on the NYSE on
that date compared to the book value of these shares of $75
thousand as of December 31, 2020.
Gain on debt extinguishment The gain on debt
extinguishment of $111.6 million in the six months ended June 30,
2021 related to our debt refinancing on April 12, 2021, as
described above.
Other finance costs, net Other finance costs, net
decreased by $0.7 million to $1.0 million in the six months ended
June 30, 2021 compared to $1.7 million in the six months ended June
30, 2020 due to the decreased finance costs on the refinanced
debt.
Equity income on investments Equity income on investments
increased by $0.7 million to $4.0 million of income on investments
in the six months ended June 30, 2021 compared to $3.3 million in
the six months ended June 30, 2020 due to the improved operating
performance of Gemini, in which the Company had a 49% shareholding
interest.
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, 2021 and June 30, 2020.
Other income, net Other income, net was $4.1 million in
income in the six months ended June 30, 2021 compared to $0.3
million in income in the six months ended June 30, 2020. The
increase was mainly due to the collection from Hanjin Shipping of
$3.9 million as a partial payment of common benefit claim and
interest.
Adjusted EBITDA Adjusted EBITDA increased by 31.6%, or
$48.0 million, to $200.0 million in the six months ended June 30,
2021 from $152.0 million in the six months ended June 30, 2020. As
outlined above, the increase is mainly attributable to a $55.5
million increase in operating revenues, a partial collection of
common benefit claim of $3.9 million from Hanjin Shipping, a $0.7
million increase in the operating performance of our equity
investees and a $0.5 million decrease in net finance expenses,
which were partially offset by a $12.6 million increase in total
operating expenses. Adjusted EBITDA for the six months ended June
30, 2021 is adjusted for change in fair value of investments of
$444.2 million, gain on debt extinguishment of $111.6 million and
stock based compensation of $5.5 million. Tables reconciling
Adjusted EBITDA to Net Income can be found at the end of this
earnings release.
Dividend Payment Danaos has
declared a dividend of $0.50 per share of common stock for the
second quarter of 2021, which is payable on August 30, 2021 to
stockholders of record as of August 16, 2021.
Recent Developments As
previously announced, on July 1, 2021, we exercised our option to
acquire the remaining equity interest in Gemini. The purchase price
for the 51% of Gemini was $86.7 million in cash.
As previously announced, we have entered into an agreement to
acquire six 5,500 TEU vessels for a gross purchase price amounting
to $260.0 million. These vessels are expected to be delivered to us
from August to October 2021.
Conference Call and Webcast
On Tuesday, August 3, 2021 at 9:00 A.M. ET, the Company's
management will host a conference call to discuss the results.
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 844 802 2437 (US Toll
Free Dial In), 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075
441 375 (Standard International Dial In). Please indicate to the
operator that you wish to join the Danaos Corporation earnings
call.
A telephonic replay of the conference call will be available
until August 10, 2021 by dialing 1 877 344 7529 (US Toll Free Dial
In) or 1-412-317-0088 (Standard International Dial In) and using
10159187# as the access code.
Audio Webcast There will also be a live and then archived
webcast of the conference call on the Danaos website
(www.danaos.com). Participants of the live webcast should register
on the website approximately 10 minutes prior to the start of the
webcast.
Slide Presentation A slide presentation regarding the
Company and the containership industry will also be available on
the Danaos website (www.danaos.com).
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of
modern, large-size containerships. Our current fleet of 65
containerships aggregating 403,793 TEUs ranks Danaos among the
largest containership charter owners in the world based on total
TEU capacity. On July 7, 2021, Danaos entered into an agreement to
acquire an additional 6 containerships aggregating 32,796 TEUs,
which are expected to be delivered by October 15, 2021. Our fleet
is chartered to many of the world's largest liner companies on
fixed-rate charters. Our long track record of success is predicated
on our efficient and rigorous operational standards and
environmental controls. Danaos Corporation's shares trade on the
New York Stock Exchange under the symbol "DAC".
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking
statements within the meaning of the safe harbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements reflect
our current views with respect to future events and financial
performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. The forward-looking statements in
this release are based upon various assumptions. Although Danaos
Corporation believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, Danaos
Corporation cannot assure you that it will achieve or accomplish
these expectations, beliefs or projections. Important factors that,
in our view, could cause actual results to differ materially from
those discussed in the forward-looking statements include the
impact of the COVID-19 pandemic and efforts throughout the world to
contain its spread, including effects on global economic activity,
demand for seaborne transportation of containerized cargo, the
ability and willingness of charterers to perform their obligations
to us, charter rates for containerships, shipyards performing
scrubber installations, drydocking and repairs, changing vessel
crews and availability of financing; Danaos’ ability to achieve the
expected benefits of the 2021 debt refinancing and comply with the
terms of its new credit facilities and other financing agreements;
the strength of world economies and currencies, general market
conditions, including changes in charter hire rates and vessel
values, charter counterparty performance, changes in demand that
may affect attitudes of time charterers to scheduled and
unscheduled dry-docking, changes in Danaos Corporation's operating
expenses, including bunker prices, dry-docking and insurance costs,
ability to obtain financing and comply with covenants in our
financing arrangements, actions taken by regulatory authorities,
potential liability from pending or future litigation, domestic and
international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by
terrorists.
Risks and uncertainties are further described in reports filed
by Danaos Corporation with the U.S. Securities and Exchange
Commission.
Visit our website at www.danaos.com.
Appendix
Fleet Utilization
Danaos had 15 unscheduled off-hire days in the three months
ended June 30, 2021. The following table summarizes vessel
utilization and the impact of the off-hire days on the Company’s
revenue.
Vessel Utilization (No. of
Days)
First
Quarter
Second
Quarter
2021
2021
Total
Ownership Days
5,400
5,460
10,860
Less Off-hire Days:
Scheduled Off-hire Days
(22)
(33)
(55)
Other Off-hire Days
(51)
(15)
(66)
Operating Days
5,327
5,412
10,739
Vessel Utilization
98.6%
99.1%
98.9%
Operating Revenues (in '000s of US
Dollars)
$132,118
$146,434
$278,552
Average Gross Daily Charter
Rate
$24,802
$27,057
$25,938
Vessel Utilization (No. of
Days)
First
Quarter
Second
Quarter
2020
2020
Total
Ownership Days
5,073
5,193
10,266
Less Off-hire Days:
Scheduled Off-hire Days
(336)
(60)
(396)
Other Off-hire Days
(104)
(92)
(196)
Operating Days
4,633
5,041
9,674
Vessel Utilization
91.3%
97.1%
94.2%
Operating Revenues (in '000s of US
Dollars)
$106,196
$116,824
$223,020
Average Gross Daily Charter
Rate
$22,922
$23,175
$23,054
Fleet List
The following table describes in detail our fleet deployment
profile as of July 31, 2021:
Vessel Name
Vessel Size
(TEU)
Year Built
Expiration of
Charter(1)
Hyundai Ambition
13,100
2012
June 2024
Hyundai Speed
13,100
2012
June 2024
Hyundai Smart
13,100
2012
May 2024
Hyundai Respect
13,100
2012
March 2024
Hyundai Honour
13,100
2012
February 2024
Express Rome
10,100
2011
February 2022
Express Berlin
10,100
2011
April 2022
Express Athens
10,100
2011
February 2022
Le Havre
9,580
2006
April 2023
Pusan C
9,580
2006
March 2023
Bremen
9,012
2009
December 2022
C Hamburg
9,012
2009
January 2023
Niledutch Lion
8,626
2008
May 2026
Charleston
8,533
2005
February 2026
CMA CGM Melisande
8,530
2012
November 2024
CMA CGM Attila
8,530
2011
April 2024
CMA CGM Tancredi
8,530
2011
May 2024
CMA CGM Bianca
8,530
2011
July 2024
CMA CGM Samson
8,530
2011
September 2024
America
8,468
2004
February 2023
Europe
8,468
2004
March 2023
Phoebe
8,463
2005
April 2022
CMA CGM Moliere
6,500
2009
April 2022
CMA CGM Musset
6,500
2010
October 2022
CMA CGM Nerval
6,500
2010
December 2022
CMA CGM Rabelais
6,500
2010
February 2023
CMA CGM Racine
6,500
2010
March 2023
YM Mandate
6,500
2010
January 2028
YM Maturity
6,500
2010
April 2028
Zim Savannah (ex Performance)
6,402
2002
May 2024
Dimitra C
6,402
2002
January 2023
Seattle C
4,253
2007
October 2024
Vancouver
4,253
2007
November 2024
Derby D
4,253
2004
January 2027
Tongala (ex ANL Tongala)
4,253
2004
January 2023
Rio Grande
4,253
2008
November 2024
ZIM Sao Paolo
4,253
2008
February 2023
ZIM Kingston
4,253
2008
April 2023
ZIM Monaco
4,253
2009
July 2022
Dalian (ex ZIM Dalian)
4,253
2009
November 2022
ZIM Luanda
4,253
2009
August 2025
Dimitris C
3,430
2001
January 2022
Express Black Sea
3,400
2011
January 2022
Express Spain
3,400
2011
January 2022
Express Argentina
3,400
2010
May 2023
Express Brazil
3,400
2010
June 2025
Express France
3,400
2010
September 2025
Singapore
3,314
2004
May 2024
Colombo
3,314
2004
December 2021
Zebra
2,602
2001
November 2024
Amalia C
2,452
1998
January 2023
Artotina (ex Danae C)
2,524
2001
February 2022
Advance
2,200
1997
January 2022
Future
2,200
1997
November 2021
Sprinter
2,200
1997
December 2021
Stride
2,200
1997
February 2022
Progress C
2,200
1998
December 2021
Bridge
2,200
1998
December 2024
Highway
2,200
1998
August 2022
Vladivostok
2,200
1997
October 2021
Belita (2)
8,533
2006
July 2026
Catherine C (2)
6,422
2001
January 2023
Leo C (2)
6,422
2002
August 2022
Suez Canal(2)
5,610
2002
March 2023
Genoa(2)
5,544
2002
November 2024
Wide Alpha (3)
5,466
2014
March 2024
Wide Bravo(3)
5,466
2014
March 2022
Maersk Euphrates (3)
5,466
2014
April 2024
Wide Hotell(3)
5,466
2015
May 2024
Wide India (3)
5,466
2015
July 2022
Wide Juliet(3)
5,466
2015
June 2023
(1)
Earliest date charters could expire. Some
charters include options to extend their terms.
(2)
Vessels acquired by Gemini Shipholdings
Corporation, in which Danaos Corporation held a 49% equity interest
through the end of the second quarter of 2021. On July 1, 2021,
Danaos Corporation exercised its option to acquire the remaining
51% equity interests in Gemini Shipholdings Corporation and now
holds 100%.
(3)
Vessels contracted by the Company to be
delivered with the attached charters from August 10, 2021 to
October 15, 2021.
DANAOS CORPORATION
Condensed Consolidated
Statements of Income - Unaudited
(Expressed in thousands of
United States dollars, except per share amounts)
Three months
ended
Three months
ended
Six months
ended
Six months
ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
OPERATING REVENUES
$146,434
$116,824
$278,552
$223,020
OPERATING EXPENSES
Vessel operating expenses
(32,940)
(28,568)
(64,018)
(54,570)
Depreciation & amortization
(28,644)
(28,199)
(56,952)
(55,090)
General & administrative
(7,130)
(6,013)
(18,025)
(11,853)
Other operating expenses
(4,966)
(3,289)
(9,194)
(7,335)
Income From Operations
72,754
50,755
130,363
94,172
OTHER INCOME/(EXPENSES)
Interest income
9,531
1,588
11,509
3,302
Interest expense
(18,204)
(13,645)
(33,315)
(29,958)
Gain on investments
196,290
-
444,165
-
Gain on debt extinguishment
111,616
-
111,616
-
Other finance expenses
(582)
(1,038)
(1,034)
(1,660)
Equity income/(loss) on investments
2,162
1,720
3,965
3,265
Other income, net
173
19
4,144
270
Realized loss on derivatives
(903)
(903)
(1,796)
(1,806)
Total Other Income/(Expenses),
net
300,083
(12,259)
539,254
(26,587)
Net Income
$372,837
$38,496
$669,617
$67,585
EARNINGS PER SHARE
Basic earnings per share
$18.32
$1.57
$32.95
$2.75
Diluted earnings per share
$18.10
$1.55
$32.57
$2.73
Basic weighted average number of common
shares (in thousands of shares)
20,354
24,573
20,323
24,573
Diluted weighted average number of common
shares (in thousands of shares)
20,599
24,789
20,557
24,789
Non-GAAP Measures1
Reconciliation of Net Income
to Adjusted Net Income – Unaudited
Three months
ended
Three months
ended
Six months
ended
Six months
ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
Net income
$372,837
$38,496
$669,617
$67,585
Gain on investments
(196,290)
-
(444,165)
-
Gain on debt extinguishment
(111,616)
-
(111,616)
-
Amortization of financing fees, debt
discount & finance fees accrued
3,929
3,998
8,957
8,190
Stock based compensation
-
-
4,078
-
Adjusted Net Income
$68,860
$42,494
$126,871
$75,775
Adjusted Earnings Per Share,
diluted
$3.34
$1.71
$6.17
$3.06
Diluted weighted average number of shares
(in thousands)
20,599
24,789
20,557
24,789
1 The Company reports its financial
results in accordance with U.S. generally accepted accounting
principles (GAAP). However, management believes that certain
non-GAAP financial measures used in managing the business may
provide users of this financial information additional meaningful
comparisons between current results and results in prior operating
periods. Management believes that these non-GAAP financial measures
can provide additional meaningful reflection of underlying trends
of the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Table above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and six months ended June 30,
2021 and 2020. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company’s reported
results prepared in accordance with GAAP.
DANAOS CORPORATION
Condensed Consolidated Balance
Sheets - Unaudited
(Expressed in thousands of
United States dollars)
As of
As of
June 30,
December 31,
2021
2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$294,418
$65,663
Accounts receivable, net
7,112
7,556
Other current assets
46,956
45,229
348,486
118,448
NON-CURRENT ASSETS
Fixed assets, net
2,429,647
2,479,937
Deferred charges, net
13,440
17,339
Investments in affiliates
19,238
15,273
Other non-current assets
389,319
83,383
2,851,644
2,595,932
TOTAL ASSETS
$3,200,130
$2,714,380
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Long-term debt, current portion
$93,450
$155,662
Accumulated accrued interest, current
portion
5,854
18,036
Long-term leaseback obligations, current
portion
63,316
24,515
Accounts payable, accrued liabilities
& other current liabilities
66,204
41,472
228,824
239,685
LONG-TERM LIABILITIES
Long-term debt, net
1,039,900
1,187,345
Accumulated accrued interest, net of
current portion
27,450
136,433
Long-term leaseback obligations, net
168,542
95,585
Other long-term liabilities
22,221
19,755
1,258,113
1,439,118
STOCKHOLDERS’ EQUITY
Common stock
206
204
Additional paid-in capital
760,869
755,390
Accumulated other comprehensive loss
(73,851)
(86,669)
Retained earnings
1,025,969
366,652
1,713,193
1,035,577
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$3,200,130
$2,714,380
DANAOS CORPORATION
Condensed Consolidated
Statements of Cash Flows - Unaudited
(Expressed in thousands of
United States dollars)
Three months
ended
Three months
ended
Six months
ended
Six months
ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
Operating Activities:
Net income
$372,837
$38,496
$669,617
$67,585
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
26,099
25,258
51,898
49,839
Amortization of deferred drydocking &
special survey costs, finance cost, debt discount and other finance
fees accrued
6,474
7,469
14,011
13,971
PIK interest
84
743
726
1,550
Gain on investments
(196,290)
-
(444,165)
-
Gain on debt extinguishment
(111,616)
-
(111,616)
-
Payments for drydocking/special survey
(248)
(8,530)
(1,155)
(13,380)
Amortization of deferred realized losses
on cash flow interest rate swaps
903
903
1,796
1,806
Equity (income)/loss on investments
(2,162)
(1,720)
(3,965)
(3,265)
Stock based compensation
570
298
5,479
596
Accounts receivable
231
(4,631)
444
(5,407)
Other assets, current and non-current
644
1,200
1,646
(689)
Accounts payable and accrued
liabilities
7,068
3,594
10,346
8,937
Other liabilities, current and
long-term
(109)
(1,639)
(2,319)
(4,675)
Net Cash provided by Operating
Activities
104,485
61,441
192,743
116,868
Investing Activities:
Vessel additions and advances
(575)
(56,500)
(1,811)
(98,746)
Investments
143,485
-
145,877
(75)
Net Cash provided by/(used in)
Investing Activities
142,910
(56,500)
144,066
(98,821)
Financing Activities:
Proceeds from sale-leaseback of
vessels
135,000
139,080
135,000
139,080
Proceeds from long-term debt
810,925
23,400
1,105,311
23,400
Payments of leaseback obligations
(15,259)
(138,189)
(21,175)
(142,065)
Debt repayment
(1,223,176)
(32,539)
(1,295,025)
(65,176)
Dividends paid
(10,298)
-
(10,298)
-
Payments of accumulated accrued
interest
(2,656)
(7,173)
(7,358)
(15,502)
Finance costs
(10,021)
(1,584)
(14,509)
(11,999)
Net Cash used in Financing
Activities
(315,485)
(17,005)
(108,054)
(72,262)
Net Increase/(Decrease) in cash and cash
equivalents
(68,090)
(12,064)
228,755
(54,215)
Cash and cash equivalents, beginning of
period
362,508
97,019
65,663
139,170
Cash and cash equivalents, end of
period
$294,418
$84,955
$294,418
$84,955
DANAOS CORPORATION
Reconciliation of Net Income
to Adjusted EBITDA - Unaudited
(Expressed in thousands of
United States dollars)
Three months
ended
Three months
ended
Six months
ended
Six months
ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
Net income
$372,837
$38,496
$669,617
$67,585
Depreciation
26,099
25,258
51,898
49,839
Amortization of deferred drydocking &
special survey costs
2,545
2,941
5,054
5,251
Amortization of deferred finance costs,
debt discount and other finance fees accrued
3,929
3,998
8,957
8,190
Amortization of deferred realized losses
on interest rate swaps
903
903
1,796
1,806
Interest income
(9,531)
(1,588)
(11,509)
(3,302)
Interest expense
14,290
9,767
24,507
22,026
Gain on investments
(196,290)
-
(444,165)
-
Gain on debt extinguishment
(111,616)
-
(111,616)
-
Stock based compensation
570
298
5,479
596
Adjusted EBITDA(1)
$103,736
$80,073
$200,018
$151,991
1)
Adjusted EBITDA represents net income
before interest income and expense, depreciation, amortization of
deferred drydocking & special survey costs, amortization of
deferred finance costs, debt discount and other finance fees
accrued, amortization of deferred realized losses on interest rate
swaps, gain on investments, gain on debt extinguishment and stock
based compensation. However, Adjusted EBITDA is not a recognized
measurement under U.S. generally accepted accounting principles, or
“GAAP.” We believe that the presentation of Adjusted EBITDA is
useful to investors because it is frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in our industry. We also believe that Adjusted EBITDA
is useful in evaluating our operating performance compared to that
of other companies in our industry because the calculation of
Adjusted EBITDA generally eliminates the effects of financings,
income taxes and the accounting effects of capital expenditures and
acquisitions, items which may vary for different companies for
reasons unrelated to overall operating performance. In evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Note: Items to consider for comparability
include gains and charges. Gains positively impacting net income
are reflected as deductions to net income. Charges negatively
impacting net income are reflected as increases to net income.
The Company reports its financial results
in accordance with U.S. generally accepted accounting principles
(GAAP). However, management believes that certain non-GAAP
financial measures used in managing the business may provide users
of these financial information additional meaningful comparisons
between current results and results in prior operating periods.
Management believes that these non-GAAP financial measures can
provide additional meaningful reflection of underlying trends of
the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company's performance. See the Tables above for
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and six months ended June 30,
2021 and 2020. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company’s reported
results prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210802005702/en/
Company Contact: Evangelos Chatzis Chief Financial
Officer Danaos Corporation Athens, Greece Tel.: +30 210 419 6480
E-Mail: cfo@danaos.com
Iraklis Prokopakis Senior Vice President and Chief
Operating Officer Danaos Corporation Athens, Greece Tel.: +30 210
419 6400 E-Mail: coo@danaos.com
Investor Relations and Financial Media Rose & Company
New York Tel. 212-359-2228 E-Mail:
danaos@rosecoglobal.com
Danaos (NYSE:DAC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Danaos (NYSE:DAC)
Historical Stock Chart
From Apr 2023 to Apr 2024