Danaos Corporation Reports Third Quarter and Nine Months Results for the Period Ended September 30, 2024
ATHENS, Greece, Nov. 12, 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 September 30, 2024.
Highlights for the Third Quarter and Nine Months Ended September 30, 2024:
Financial Summary | ||||||||||||||||||
Three Months Ended September 30, 2024 and Three Months Ended September 30, 2023 | ||||||||||||||||||
Unaudited | ||||||||||||||||||
(Expressed in thousands of United States dollars, except as otherwise stated) | ||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||
September 30, 2024 | September 30, 2023 | |||||||||||||||||
Financial & Operating Metrics | Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | ||||||||||
Operating Revenues | $235,570 | $20,606 | - | $256,176 | $239,215 | - | - | $239,215 | ||||||||||
Voyage Expenses, excl. commissions | $757 | $(8,019) | - | $(7,262) | $(479) | - | - | $(479) | ||||||||||
Time Charter Equivalent Revenues (1) | $236,327 | $12,587 | - | $248,914 | $238,736 | - | - | $238,736 | ||||||||||
Net income/(loss) | $124,102 | $62 | $(1,168) | $122,996 | $142,173 | $(59) | $(8,958) | $133,156 | ||||||||||
Adjusted net income / (loss) (2) | $125,143 | $62 | $1,640 | $126,845 | $142,647 | $(59) | $375 | $142,963 | ||||||||||
Earnings per share, basic | $6.36 | $6.76 | ||||||||||||||||
Earnings per share, diluted | $6.30 | $6.76 | ||||||||||||||||
Adjusted earnings per share, diluted (2) | $6.50 | $7.26 | ||||||||||||||||
Operating Days | 6,387 | 778 | - | 6,115 | - | - | ||||||||||||
Time Charter Equivalent $/day (1) | $37,001 | $16,179 | - | $39,041 | - | - | ||||||||||||
Ownership days | 6,540 | 913 | - | 6,256 | - | - | ||||||||||||
Average number of vessels | 71.1 | 9.9 | - | 68.0 | - | - | ||||||||||||
Fleet Utilization | 97.7 % | 85.2 % | - | 97.7 % | - | - | ||||||||||||
Adjusted EBITDA (2) | $173,454 | $3,826 | $1,617 | $178,897 | $177,701 | $(49) | $375 | $178,027 | ||||||||||
Consolidated Balance Sheet & Leverage Metrics | As of September 30,2024 | As of December 31, 2023 | ||||||||||||||||
Cash and cash equivalents | $384,336 | $271,809 | ||||||||||||||||
Availability under Revolving Credit Facility | $303,750 | $337,500 | ||||||||||||||||
Marketable securities(3) | $96,423 | - | ||||||||||||||||
Total cash liquidity & marketable securities(4) | $784,509 | $609,309 | ||||||||||||||||
Debt, gross of deferred finance costs | $689,476 | $410,516 | ||||||||||||||||
Net Debt (5) | $305,140 | $138,707 | ||||||||||||||||
LTM Adjusted EBITDA (6) | $705,497 | $707,002 | ||||||||||||||||
Net Debt / LTM Adjusted EBITDA | 0.43x | 0.20x | ||||||||||||||||
1. Time charter equivalent revenues and time charter equivalent US$/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 September 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 | |||||||||||||||||
Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023 | |||||||||||||||||
Unaudited | |||||||||||||||||
(Expressed in thousands of United States dollars, except as otherwise stated) | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
Financial & Operating Metrics | Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | |||||||||
Operating Revenues | $699,567 | $56,364 | - | $755,931 | $724,268 | - | - | $724,268 | |||||||||
Voyage Expenses, excl. commissions | $(179) | $(22,115) | - | $(22,294) | $(1,225) | - | - | $(1,225) | |||||||||
Time Charter Equivalent Revenues (1) | $699,388 | $34,249 | - | $733,637 | $723,043 | - | - | $723,043 | |||||||||
Net income/(loss) | $396,144 | $2,689 | $15,813 | $414,646 | $432,283 | $(59) | $(5,846) | $426,378 | |||||||||
Adjusted net income / (loss) (2) | $391,062 | $2,689 | $5,418 | $399,169 | $434,633 | $(59) | $(2,951) | $431,623 | |||||||||
Earnings per share, basic | $21.41 | $21.28 | |||||||||||||||
Earnings per share, diluted | $21.22 | $21.28 | |||||||||||||||
Adjusted earnings per share, diluted (2) | $20.43 | $21.54 | |||||||||||||||
Operating Days | 18,494 | 1,978 | - | 18,177 | - | - | |||||||||||
Time Charter Equivalent $/day (1) | $37,817 | $17,315 | - | $39,778 | - | - | |||||||||||
Ownership days | 18,978 | 2,244 | - | 18,594 | - | - | |||||||||||
Average number of vessels | 69.3 | 8.2 | - | 68.1 | - | - | |||||||||||
Fleet Utilization | 97.4 % | 88.1 % | - | 97.8 % | - | - | |||||||||||
Adjusted EBITDA (2) | $516,763 | $10,730 | $5,395 | $532,888 | $537,393 | $(49) | $(2,951) | $534,393 | |||||||||
1. Time charter equivalent revenues and time charter equivalent US$/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 third quarter of 2024 and through the date of this release, we took delivery of another 3 newbuilding containerships, namely one 7,165 TEU vessel and two 8,010 TEU vessels which have commenced their three-year charters. In total, we have taken delivery of 6 newbuilding containerships in 2024.
- As a result, our remaining orderbook currently consists of a further 14 newbuilding containership vessels with an aggregate capacity of 115,834 TEU with expected deliveries of 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 4.8 years weighted by aggregate contracted charter hire.
- Over the past two months, we added approximately $308 million to our contracted revenue backlog through a combination of new charters and charter extensions for 16 of our container vessels.
- As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, currently stand at $3.3 billion, including newbuildings. 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 100% for 2024, 94% for 2025 and 73% for 2026. This includes newbuildings based on their scheduled delivery dates.
- We took delivery of all of our contracted capesize drybulk carriers by taking delivery of two vessels in the second quarter of 2024 and one vessel in July 2024. As a result, our capesize drybulk fleet currently stands at 10 vessels with an aggregate capacity of approximately 1.8 million DWT.
- As of the date of this release, Danaos has repurchased a total of 1,893,803 shares of its common stock in the open market for $123.2 million under its $200 million authorized share repurchase program that was originally introduced in June 2022 and upsized in November 2023.
- Danaos has declared an increased dividend of $0.85 per share of common stock for the third quarter of 2024, an increase of 6.25%. The dividend is payable on December 4, 2024, to stockholders of record as of November 25, 2024.
Danaos' CEO Dr. John Coustas commented:
"The container market remained very strong in the third quarter of 2024, allowing us to add over $300 million to our contracted charter backlog which presently stands at $3.3 billion. Importantly, all 14 of our newbuildings on order are fixed for 5 years, except for two that are fixed for 2 years. We have excellent earnings visibility as we have covered 100% of our container vessel fleet operating days for 2024, 94% for 2025 and 73% for 2026.
The dry bulk market has been uncharacteristically soft lately, which can be attributed to a disruption of seasonal patterns throughout the year as well as a decrease in Chinese steel production. Our dry bulk fleet performed reasonably well during the quarter, and we are expecting freight rates to gradually improve as we move into 2025.
Due to the certainty provided by the charter backlog in our container segment, Danaos is insulated from the unstable and unpredictable nature of the current global backdrop. The recent U.S. Presidential election has introduced new uncertainty about future policymaking and its effect in the shipping market. Most notably, President Trump has openly declared his intention to implement or increase trade tariffs that have the potential to decrease container movements or at least will reshuffle trade lanes. Additionally, it is likely that energy transition initiatives will take place at a slower rate, and we don't know to what extent existing IMO initiatives will be supported by the new administration.
Danaos remains in a fortunate and enviable position. In addition to our charter coverage, our balance sheet is a significant strength. I am proud of the efforts we have undertaken, efforts that have been acknowledged by Moody's, who upgraded Danaos to Ba1. Together with the S&P credit rating at BB+, Danaos now holds the highest grade assigned to a pure play shipping company. Our creditworthiness will allow us to explore fully the U.S. bond market, creating opportunity to raise competitively priced capital to continue to opportunistically pursue growth opportunities.
Our continued strong financial performance and accompanying strengthening of our balance sheet has enabled us to increase our quarterly dividend to $0.85 per share, in line with the commitment we have made to our shareholders. We are also continuing to return value through our share buyback program. We have now cumulatively bought back stock worth $123 million and have $77 million remaining under our authorized share repurchase program.
We are continuing our efforts to increase the value of the company while remaining vigilant about geopolitical risks to ensure the long-term prosperity of Danaos for the benefit of our shareholders."
Three months ended September 30, 2024 compared to the three months ended September 30, 2023
During the three months ended September 30, 2024, Danaos had an average of 71.1 container vessels and 9.9 Capesize drybulk vessels compared to 68.0 container vessels and no drybulk vessels during the three months ended September 30, 2023. Our container vessels utilization remained stable at 97.7% in each of the three months ended September 30, 2024 and September 30, 2023.
Our adjusted net income amounted to $126.8 million, or $6.50 per diluted share, for the three months ended September 30, 2024 compared to $143.0 million, or $7.26 per diluted share, for the three months ended September 30, 2023. We have adjusted our net income in the three months ended September 30, 2024 for a $2.8 million change in fair value of investments, a $0.6 million non-cash finance fees amortization and a $0.4 million loss on vessel disposal.
Adjusted net income of our container vessels segment amounted to $125.1 million for the three months ended September 30, 2024 compared to $142.6 million for the three months ended September 30, 2023. We adjusted net income of container vessels segment in the three months ended September 30, 2024 for a $0.6 million non-cash finance fees amortization and a $0.4 million loss on vessel disposal.
Adjusted net income of our drybulk vessels segment amounted to $0.1 million for the three months ended September 30, 2024 compared to $0.1 million adjusted net loss for the three months ended September 30, 2023.
The $16.2 million decrease in adjusted net income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is primarily attributable to a $31.1 million increase in total operating expenses, a $3.3 million increase in net finance expenses and a $0.7 million increase in equity loss on investments, which were partially offset by a $17.0 million increase in operating revenues and a $1.9 million increase in dividends received.
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 $123.0 million, or $6.30 earnings per diluted share, for the three months ended September 30, 2024 compared to net income of $133.2 million, or $6.76 earnings per diluted share, for the three months ended September 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $124.1 million and the net income of our drybulk vessels segment amounted to $0.1 million for the three months ended September 30, 2024.
Operating Revenues
Operating revenues increased by 7.1%, or $17.0 million, to $256.2 million in the three months ended September 30, 2024 from $239.2 million in the three months ended September 30, 2023.
Operating revenues of our container vessels segment decreased by 1.5%, or $3.6 million, to $235.6 million in the three months ended September 30, 2024 from $239.2 million in the three months ended September 30, 2023, analyzed as follows:
- a $14.0 million increase in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as a result of vessel additions;
- a $7.1 million increase in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to higher non-cash revenue recognition in accordance with US GAAP;
- a $17.9 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as a result of lower charter rates;
- a $2.4 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to vessel disposals; and
- a $4.4 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to decreased amortization of assumed time charters.
Operating revenues of our drybulk vessels segment added an incremental $20.6 million of revenues in the three months ended September 30, 2024 compared to no such operating revenues in the three months ended September 30, 2023.
Vessel Operating Expenses
Vessel operating expenses increased by $10.4 million to $49.9 million in the three months ended September 30, 2024 from $39.5 million in the three months ended September 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container vessel newbuilds deliveries and drybulk vessels acquisitions and the increase in average daily operating cost of our vessels to $6,860 per vessel per day for the three months ended September 30, 2024 compared to $6,499 per vessel per day for the three months ended September 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 19.8%, or $6.4 million, to $38.7 million in the three months ended September 30, 2024 from $32.3 million in the three months ended September 30, 2023 mainly due to depreciation expense related to 10 recently acquired Capesize drybulk vessels and 5 recently delivered container newbuilds.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $2.7 million to $7.5 million in the three months ended September 30, 2024 from $4.8 million in the three months ended September 30, 2023.
General and Administrative Expenses
General and administrative expenses increased by $3.9 million, to $11.0 million in the three months ended September 30, 2024 from $7.1 million in the three months ended September 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 $8.0 million to $17.0 million in the three months ended September 30, 2024 from $9.0 million in the three months ended September 30, 2023 primarily as a result of the $9.2 million in voyage expenses related to our recently acquired 10 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses related to drybulk vessels in the three months ended September 30, 2023.
Voyage expenses of container vessels segment decreased by $1.2 million to $7.8 million in the three months ended September 30, 2024 from $9.0 million in the three months ended September 30, 2023.
Voyage expenses of drybulk vessels segment were $9.2 million in the three months ended September 30, 2024 compared to no voyage expenses in the three months ended September 30, 2023. Total voyage expenses of drybulk vessels comprised $1.2 million commissions and $8.0 million other voyage expenses, mainly bunkers consumption and port expenses, in the three months ended September 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 six months ended June 30, 2024. In the three months ended September 30, 2024, we recognized $0.4 million of expenses related to this vessel disposal, which reduced the total gain to $6.7 million in the nine months ended September 30, 2024. The proceedings with the insurers are in progress as of September 30, 2024, and any additional gain will be recognized upon their finalization.
Interest Expense and Interest Income
Interest expense increased by $3.7 million, to $8.0 million in the three months ended September 30, 2024 from $4.3 million in the three months ended September 30, 2023. The increase in interest expense is a result of:
- a $4.2 million increase in interest expense due to an increase in our average indebtedness by $224.7 million between the two periods, which was partially offset by a decrease in our debt service cost by approximately 0.26%, mainly as a result of a reduction in the financing margin cost. Average indebtedness was $646.8 million in the three months ended September 30, 2024, compared to average indebtedness of $422.1 million in the three months ended September 30, 2023;
- a $0.1 million increase in the amortization of deferred finance costs; which were partially offset by
- a $0.6 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended September 30, 2024.
As of September 30, 2024, our outstanding debt, gross of deferred finance costs, was $689.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $417.4 million, which included $262.8 million principal amount of our Senior Notes as of September 30, 2023. The increase in our outstanding debt is mainly due to loans drawn down to partially finance our container vessel newbuildings.
Interest income remained stable at $3.1 million in each of the three months ended September 30, 2024 and September 30, 2023.
Gain/(loss) 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 $41 thousand gain on investments in the three months ended September 30, 2024 consisted of the $2.8 million fair value loss on these marketable securities, which was offset by the dividends recognized on these shares of $2.8 million. This compares to a $8.4 million loss on marketable securities in the three months ended September 30, 2023.
Equity loss on investments
Equity loss on investments amounting to $1.2 million and $0.5 million in the three months September 30, 2024 and September 30, 2023, respectively, relates to our share of initial expenses of 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 $0.3 million to $0.9 million in the three months ended September 30, 2024 compared to $1.2 million in the three months ended September 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 September 30, 2024 and September 30, 2023.
Other income/(expenses), net
Other expenses, net amounted to $0.7 million in the three months ended September 30, 2024 compared to $1.1 million other income, net in the three months ended September 30, 2023.
Adjusted EBITDA
Adjusted EBITDA increased by 0.5%, or $0.9 million, to $178.9 million in the three months ended September 30, 2024 from $178.0 million in the three months ended September 30, 2023. As outlined above, the increase is mainly attributable to $21.4 million increase in operating revenues and a $1.9 million increase in dividends received, which were partially offset by a $21.7 million increase in total operating expenses and a $0.7 million increase in equity loss on investments. Adjusted EBITDA for the three months ended September 30, 2024 is adjusted for a $2.8 million change in fair value of investments and a $0.4 million loss 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 2.4%, or $4.2 million, to $173.5 million in the three months ended September 30, 2024 from $177.7 million in the three months ended September 30, 2023.
Adjusted EBITDA of drybulk vessels segment was $3.8 million in the three months ended September 30, 2024. We had just started to be engaged in the drybulk vessels segment and did not have significant expenses in the three months ended September 30, 2023.
Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
During the nine months ended September 30, 2024, Danaos had an average of 69.3 container vessels and 8.2 Capesize drybulk vessels compared to 68.1 container vessels and no drybulk vessels during the nine months ended September 30, 2023. Our container vessels utilization for the nine months ended September 30, 2024 was 97.4% compared to 97.8% for the nine months ended September 30, 2023.
Our adjusted net income amounted to $399.2 million, or $20.43 per diluted share, for the nine months ended September 30, 2024 compared to $431.6 million, or $21.54 per diluted share, for the nine months ended September 30, 2023. We have adjusted our net income in the nine months ended September 30, 2024 for a $10.4 million change in fair value of investments, a $6.7 million gain on vessel disposal and a $1.6 million non-cash finance fees amortization.
Adjusted net income of our container vessels segment amounted to $391.1 million for the nine months ended September 30, 2024 compared to $434.6 million for the nine months ended September 30, 2023. We adjusted net income of container vessels segment in the nine months ended September 30, 2024 for a $6.7 million gain on vessel disposal and a $1.6 million non-cash finance fees amortization.
Adjusted net income of our drybulk vessels segment amounted to $2.7 million for the nine months ended September 30, 2024 compared to $0.1 million adjusted net loss for the nine months ended September 30, 2023, as we just started to be engaged in the drybulk vessels segment during that period.
The $32.4 million decrease in adjusted net income for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to a $73.1 million increase in total operating expenses, which was partially offset by a $31.7 million increase in operating revenues, a $5.9 million increase in dividends received, a $0.7 million decrease in net finance expenses and a $2.4 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 $414.6 million, or $21.22 earnings per diluted share, for the nine months ended September 30, 2024 compared to net income of $426.4 million, or $21.28 earnings per diluted share, for the nine months ended September 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $396.2 million and the net income of our drybulk vessels segment amounted to $2.7 million for the nine months ended September 30, 2024.
Operating Revenues
Operating revenues increased by 4.4%, or $31.6 million, to $755.9 million in the nine months ended September 30, 2024 from $724.3 million in the nine months ended September 30, 2023.
Operating revenues of our container vessels segment decreased by 3.4%, or $24.7 million, to $699.6 million in the nine months ended September 30, 2024 from $724.3 million in the nine months ended September 30, 2023, analyzed as follows:
- a $18.9 million increase in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as a result of vessel additions;
- a $20.5 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 mainly as a result of lower charter rates and decreased vessel utilization;
- a $7.5 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to vessel disposals;
- a $12.3 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to decreased amortization of assumed time charters; and
- a $3.3 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to lower non-cash revenue recognition in accordance with US GAAP.
Operating revenues of our drybulk vessels segment added an incremental $56.3 million of revenues in the nine months ended September 30, 2024 compared to no such operating revenues in the nine months ended September 30, 2023.
Vessel Operating Expenses
Vessel operating expenses increased by $18.1 million to $140.1 million in the nine months ended September 30, 2024 from $122.0 million in the nine months ended September 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container vessel newbuilds and dry bulk vessels acquisitions, while the average daily operating cost of our vessels remained stable at $6,775 per vessel per day for the nine months ended September 30, 2024 compared to $6,758 per vessel per day for the nine months ended September 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 12.7%, or $12.2 million, to $108.0 million in the nine months ended September 30, 2024 from $95.8 million in the nine months ended September 30, 2023 mainly due to depreciation expense related to 10 recently acquired Capesize drybulk vessels and 5 recently delivered container vessel newbuilds.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $6.8 million to $19.9 million in the nine months ended September 30, 2024 from $13.1 million in the nine months ended September 30, 2023.
General and Administrative Expenses
General and administrative expenses increased by $11.4 million, to $32.5 million in the nine months ended September 30, 2024 from $21.1 million in the nine months ended September 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 $24.8 million to $50.0 million in the nine months ended September 30, 2024 from $25.2 million in the nine months ended September 30, 2023 primarily as a result of the $25.5 million in voyage expenses related to our recently acquired 10 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses related to drybulk vessels in the nine months ended September 30, 2023.
Voyage expenses of container vessels segment decreased by $0.7 million to $24.5 million in the nine months ended September 30, 2024 from $25.2 million in the nine months ended September 30, 2023 mainly due to decreased other voyage expenses. Total voyage expenses of container vessels comprised $24.3 million commissions and $0.2 million other voyage expenses in the nine months ended September 30, 2024.
Voyage expenses of drybulk vessels segment were $25.5 million in the nine months ended September 30, 2024 compared to no voyage expenses in the nine months ended September 30, 2023. Total voyage expenses of drybulk vessels comprised $3.4 million commissions and $22.1 million other voyage expenses, mainly bunkers consumption and port expenses, in the nine months ended September 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 six months ended June 30, 2024. In the three months ended September 30, 2024, we recognized $0.4 million expenses related to this vessel disposal, which reduced the total gain to $6.7 million in the nine months ended September 30, 2024. The proceedings with the insurers are in progress as of September 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 $0.7 million, to $16.2 million in the nine months ended September 30, 2024 from $16.9 million in the nine months ended September 30, 2023. The decrease in interest expense is a result of:
- a $4.8 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the nine months ended September 30, 2024; and
- a $0.2 million decrease in the amortization of deferred finance costs; which were partially offset by
- a $4.3 million increase in interest expense due to an increase in our debt service cost by approximately 0.15% as a result of higher SOFR rates, partially offset by a reduction in our financing margin cost, and by an increase in our average indebtedness by $61.7 million between the two periods. Average indebtedness was $524.6 million in the nine months ended September 30, 2024, compared to average indebtedness of $462.9 million in the nine months ended September 30, 2023.
As of September 30, 2024, our outstanding debt, gross of deferred finance costs, was $689.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $417.4 million, which included $262.8 million principal amount of our Senior Notes as of September 30, 2023. The increase in our outstanding debt is mainly due to loans drawn down to partially finance our container vessel newbuildings.
Interest income decreased by $0.4 million to $9.0 million in the nine months ended September 30, 2024 compared to $9.4 million in the nine months ended September 30, 2023.
Gain/(loss) 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 nine months ended September 30, 2024 consisted of the change in fair value of these marketable securities of $10.4 million and dividends recognized on these shares of $6.8 million. This compares to a $2.0 million loss on marketable securities in the nine months ended September 30, 2023.
Loss on debt extinguishment
A $2.3 million loss on early extinguishment of our leaseback obligations in the nine months ended September 30, 2023 compares to no such loss in the nine months ended September 30, 2024.
Equity loss on investments
Equity loss on investments amounting to $1.4 million and $3.9 million in the nine months September 30, 2024 and September 30, 2023, respectively, relates to our share of initial expenses of CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.
Other finance expenses
Other finance expenses decreased by $0.7 million to $2.7 million in the nine months ended September 30, 2024 compared to $3.4 million in the nine months ended September 30, 2023.
Loss on derivatives
Amortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ended September 30, 2024 and September 30, 2023.
Other income/(expenses), net
Other expenses, net amounted to $0.6 million in each of the nine months ended September 30, 2024 and September 30, 2023.
Adjusted EBITDA
Adjusted EBITDA decreased by 0.3%, or $1.5 million, to $532.9 million in the nine months ended September 30, 2024 from $534.4 million in the nine months ended September 30, 2023. As outlined above, the decrease is mainly attributable to a $53.7 million increase in total operating expenses, which were partially offset by a $43.9 million increase in operating revenues, a $5.9 million increase in dividends received and a $2.4 million decrease in equity loss on investments. Adjusted EBITDA for the nine months ended September 30, 2024 is adjusted for a $10.4 million change in fair value of investments and a $6.7 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 3.8%, or $20.6 million, to $516.8 million in the nine months ended September 30, 2024 from $537.4 million in the nine months ended September 30, 2023.
Adjusted EBITDA of drybulk vessels segment was $10.7 million in the nine months ended September 30, 2024. We had just started to be engaged in the drybulk vessels segment and did not have significant expenses in the nine months ended September 30, 2023.
Dividend Payment
Danaos has declared a dividend of $0.85 per share of common stock for the third quarter of 2024, which is payable on December 4, 2024 to stockholders of record as of November 25, 2024.
Recent Developments
In October 2024 and through November 7, 2024, we repurchased 210,422 shares of our common stock in the open market for $17.8 million.
In October 2024, we took delivery of our 6th newbuilding containership the Greenfield, which was deployed on a three-year time charter.
Conference Call and Webcast
On Wednesday, November 12, 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 279 948 9 (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 November 19, 2024 by dialing 1 877 344 7529 (US Toll Free Dial In) or 1-412-317-0088 (Standard International Dial In) and using 8988845# 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 73 container vessels aggregating 465,463 TEUs and 14 under construction container vessels aggregating 115,834 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 container vessels 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 ended | Three months ended | Nine months ended | Nine months ended | |||||
September 30, | September 30, | September 30, | September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||||
Ownership Days | 6,540 | 6,256 | 18,978 | 18,594 | |||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | (127) | (119) | (289) | (349) | |||||
Other Off-hire Days | (26) | (22) | (195) | (68) | |||||
Operating Days(1) | 6,387 | 6,115 | 18,494 | 18,177 | |||||
Vessel Utilization | 97.7 % | 97.7 % | 97.4 % | 97.8 % | |||||
Operating Revenues (in '000s of US$) | $235,570 | $239,215 | $699,567 | $724,268 | |||||
Less: Voyage Expenses excluding commissions (in '000s of US$) | 757 | (479) | (179) | (1,225) | |||||
Time Charter Equivalent Revenues (in '000s of US$) | 236,327 | 238,736 | 699,388 | 723,043 | |||||
Time Charter Equivalent US$/per day(2) | $37,001 | $39,041 | $37,817 | $39,778 | |||||
Drybulk vessels fleet utilization | |||||||||
Vessel Utilization (No. of Days) | Three months ended | Three months ended | Nine months ended | Nine months ended | |||||
September 30, | September 30, | September 30, | September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||||
Ownership Days | 913 | 5 | 2,244 | 5 | |||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | (119) | (5) | (240) | (5) | |||||
Other Off-hire Days | (16) | - | (26) | - | |||||
Operating Days(1) | 778 | - | 1,978 | - | |||||
Vessel Utilization | 85.2 % | - | 88.1 % | - | |||||
Operating Revenues (in '000s of US$) | $20,606 | - | $56,364 | - | |||||
Less: Voyage Expenses excluding commissions (in '000s of US$) | (8,019) | - | (22,115) | - | |||||
Time Charter Equivalent Revenues (in '000s of US$) | 12,587 | - | 34,249 | - | |||||
Time Charter Equivalent US$/per day(2) | $16,179 | - | $17,315 | - | |||||
1) | We define Operating Days as the total number of Ownership Days net of Scheduled off-hire days (days associated with scheduled repairs, drydockings or special or intermediate surveys or days) and net of off-hire days associated with unscheduled repairs or days waiting to find employment but including days our vessels were sailing for repositioning. The shipping industry uses Operating Days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes. Our definition of Operating Days may not be comparable to that used by other companies in the shipping industry. |
2) | Time charter equivalent US$/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 November 7, 2024:
Vessel Name | Vessel Size (TEU) (1) | Year Built | Expiration of Charter(2) | ||
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 | May 2027 | ||
Express Berlin | 10,100 | 2011 | August 2026 | ||
Express Athens | 10,100 | 2011 | May 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 | ||
Greenville(4) | 8,010 | 2024 | August 2027 | ||
Greenfield(5) | 8,010 | 2024 | October 2027 | ||
Interasia Accelerate(3) | 7,165 | 2024 | April 2027 | ||
Interasia Amplify(4) | 7,165 | 2024 | September 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 2027 | ||
Dimitra C | 6,402 | 2002 | April 2027 | ||
Suez Canal | 5,610 | 2002 | April 2026 | ||
Kota Lima | 5,544 | 2002 | September 2025 | ||
Wide Alpha | 5,466 | 2014 | July 2027 | ||
Stephanie C | 5,466 | 2014 | May 2028 | ||
Euphrates (ex Maersk Euphrates) | 5,466 | 2014 | September 2028 | ||
Wide Hotel | 5,466 | 2015 | September 2027 | ||
Wide India | 5,466 | 2015 | October 2028 | ||
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 | December 2026 | ||
Rio Grande | 4,253 | 2008 | November 2026 | ||
Merve A | 4,253 | 2008 | September 2025 | ||
Kingston | 4,253 | 2008 | June 2027 | ||
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 | September 2027 | ||
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 | April 2027 | ||
Express France | 3,400 | 2010 | July 2027 | ||
Singapore | 3,314 | 2004 | March 2027 | ||
Colombo | 3,314 | 2004 | January 2027 | ||
Zebra | 2,602 | 2001 | November 2025 | ||
Artotina | 2,524 | 2001 | January 2026 | ||
Advance | 2,200 | 1997 | June 2026 | ||
Future | 2,200 | 1997 | May 2026 | ||
Sprinter | 2,200 | 1997 | May 2026 | ||
Bridge | 2,200 | 1998 | December 2024 | ||
Progress C | 2,200 | 1998 | April 2026 | ||
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 newbuilding vessels were delivered in the second quarter of 2024. |
(4) | The newbuilding vessels were delivered in the third quarter of 2024. |
(5) | The newbuilding vessel was delivered in October 2024. |
Container vessels under construction as of November 7, 2024: | ||||||
Hull Number | Vessel Size (TEU) | Expected Delivery Year | Minimum Charter Duration | |||
Hull No. CV5900-07 | 6,014 | 2025 | 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 | 4.8 Years | |||
Hull No. C9200-8 | 9,200 | 2027 | 4.8 Years | |||
Hull No. C9200-9 | 9,200 | 2027 | 4.8 Years | |||
Hull No. C9200-10 | 9,200 | 2028 | 4.8 Years | |||
Hull No. C9200-11 | 9,200 | 2028 | 4.8 Years | |||
The following table describes the details of our Capesize drybulk vessels as of November 7, 2024: | ||||
Vessel Name | Capacity (DWT) (1) | Year Built | ||
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 | Nine months | Nine months | |||||
September 30, | September 30, | September 30, | September 30, | |||||
2024 | 2023 | 2024 | 2023 | |||||
OPERATING REVENUES | $256,176 | $239,215 | $755,931 | $724,268 | ||||
OPERATING EXPENSES | ||||||||
Vessel operating expenses | (49,866) | (39,494) | (140,070) | (121,994) | ||||
Depreciation & amortization | (46,211) | (37,097) | (127,878) | (108,873) | ||||
General & administrative | (10,978) | (7,070) | (32,519) | (21,107) | ||||
Other operating expenses | (16,999) | (8,959) | (50,019) | (25,241) | ||||
Net gain/(loss) on disposal/sale of vessels | (443) | - | 6,651 | 1,639 | ||||
Income From Operations | 131,679 | 146,595 | 412,096 | 448,692 | ||||
OTHER INCOME/(EXPENSES) | ||||||||
Interest income | 3,124 | 3,091 | 8,983 | 9,410 | ||||
Interest expense | (8,013) | (4,306) | (16,243) | (16,909) | ||||
Gain/(loss) on investments | 41 | (8,432) | 17,228 | (1,994) | ||||
Loss on debt extinguishment | - | - | - | (2,254) | ||||
Other finance expenses | (944) | (1,236) | (2,694) | (3,358) | ||||
Equity loss on investments | (1,232) | (526) | (1,438) | (3,852) | ||||
Other income/(expenses), net | (746) | (1,117) | (567) | (648) | ||||
Realized loss on derivatives | (913) | (913) | (2,719) | (2,709) | ||||
Total Other Income/(Expenses), net | (8,683) | (13,439) | 2,550 | (22,314) | ||||
Net Income | 122,996 | 133,156 | 414,646 | 426,378 | ||||
EARNINGS PER SHARE | ||||||||
Basic earnings per share | $6.36 | $6.76 | $21.41 | $21.28 | ||||
Diluted earnings per share | $6.30 | $6.76 | $21.22 | $21.28 | ||||
Basic weighted average number of common shares (in thousands of shares) | 19,345 | 19,693 | 19,368 | 20,039 | ||||
Diluted weighted average number of common shares (in thousands of shares) | 19,517 | 19,693 | 19,540 | 20,039 | ||||
Reconciliation of Net Income to Adjusted Net Income – Unaudited | |||||||
Three months | Three months | Nine months | Nine months | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2024 | 2023 | 2024 | 2023 | ||||
Net Income | $122,996 | $133,156 | $414,646 | $426,378 | |||
Change in fair value of investments | 2,808 | 9,333 | (10,395) | 2,895 | |||
Loss on debt extinguishment | - | - | - | 2,254 | |||
Net (gain)/loss on disposal/sale of vessels | 445 | - | (6,649) | (1,639) | |||
Amortization of financing fees | 598 | 474 | 1,569 | 1,735 | |||
Adjusted Net Income | $126,845 | $142,963 | $399,169 | $431,623 | |||
Adjusted Earnings Per Share, diluted | $6.50 | $7.26 | $20.43 | $21.54 | |||
Diluted weighted average number of shares (in thousands of shares) | 19,517 | 19,693 | 19,540 | 20,039 | |||
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 nine months ended September 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 | ||||
September 30, | December 31, | ||||
2024 | 2023 | ||||
ASSETS | |||||
CURRENT ASSETS | |||||
Cash, cash equivalents and restricted cash | $384,336 | $271,809 | |||
Accounts receivable, net | 24,647 | 9,931 | |||
Other current assets | 221,002 | 220,030 | |||
629,985 | 501,770 | ||||
NON-CURRENT ASSETS | |||||
Fixed assets, net | 3,215,293 | 2,746,541 | |||
Advances for vessels acquisition and vessels under construction | 299,458 | 301,916 | |||
Deferred charges, net | 46,133 | 38,012 | |||
Other non-current assets | 62,949 | 72,897 | |||
3,623,833 | 3,159,366 | ||||
TOTAL ASSETS | $4,253,818 | $3,661,136 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
CURRENT LIABILITIES | |||||
Long-term debt, current portion | $31,720 | $21,300 | |||
Accounts payable, accrued liabilities & other current liabilities | 128,687 | 146,860 | |||
160,407 | 168,160 | ||||
LONG-TERM LIABILITIES | |||||
Long-term debt, net | 647,276 | 382,874 | |||
Other long-term liabilities | 59,695 | 93,785 | |||
706,971 | 476,659 | ||||
STOCKHOLDERS' EQUITY | |||||
Common stock | 193 | 194 | |||
Additional paid-in capital | 688,649 | 690,190 | |||
Accumulated other comprehensive loss | (72,472) | (75,979) | |||
Retained earnings | 2,770,070 | 2,401,912 | |||
3,386,440 | 3,016,317 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $4,253,818 | $3,661,136 | |||
DANAOS CORPORATION | ||||||||
Condensed Consolidated Statements of Cash Flows - Unaudited | ||||||||
(Expressed in thousands of United States dollars) | ||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||
September 30, | September 30, | September 30, | September 30, | |||||
2024 | 2023 | 2024 | 2023 | |||||
Operating Activities: | ||||||||
Net income | $122,996 | $133,156 | $414,646 | $426,378 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 38,726 | 32,325 | 107,969 | 95,764 | ||||
Amortization of deferred drydocking & special survey costs and finance costs | 8,083 | 5,246 | 21,478 | 14,844 | ||||
Amortization of assumed time charters | - | (4,416) | (4,534) | (16,806) | ||||
Prior service cost and periodic cost | 1,133 | 220 | 1,848 | 1,106 | ||||
(Gain)/loss on investments | 2,808 | 9,333 | (10,395) | 2,895 | ||||
Loss on debt extinguishment | - | - | - | 2,254 | ||||
Net (gain)/loss on disposal/sale of vessels | 443 | - | (6,651) | (1,639) | ||||
Payments for drydocking/special survey | (14,072) | (6,993) | (28,690) | (21,553) | ||||
Amortization of deferred realized losses on cash flow interest rate swaps | 913 | 913 | 2,719 | 2,709 | ||||
Equity loss on investments | 1,232 | 526 | 1,438 | 3,852 | ||||
Stock based compensation | 1,594 | - | 4,747 | - | ||||
Accounts receivable | 6,216 | 740 | (6,579) | (1,716) | ||||
Other assets, current and non-current | 2,568 | 982 | 23,775 | (11,424) | ||||
Accounts payable and accrued liabilities | (6,728) | (4,654) | (961) | (7,805) | ||||
Other liabilities, current and long-term | (8,368) | (17,872) | (55,699) | (58,747) | ||||
Net Cash provided by Operating Activities | 157,544 | 149,506 | 465,111 | 430,112 | ||||
Investing Activities: | ||||||||
Vessel additions and advances for vessels under construction | (239,353) | (98,274) | (581,208) | (128,058) | ||||
Net proceeds and insurance proceeds from disposal/sale of vessels | (443) | - | 10,196 | 3,914 | ||||
Investments | (1,225) | - | (1,225) | (74,407) | ||||
Net Cash used in Investing Activities | (241,021) | (98,274) | (572,237) | (198,551) | ||||
Financing Activities: | ||||||||
Proceeds from long-term debt | 118,000 | - | 299,000 | - | ||||
Debt repayment | (6,290) | (6,875) | (20,040) | (20,625) | ||||
Payments of leaseback obligations | - | - | - | (72,925) | ||||
Dividends paid | (15,476) | (14,802) | (46,487) | (45,163) | ||||
Repurchase of common stock | (492) | (16,596) | (5,715) | (52,334) | ||||
Finance costs | (375) | - | (7,105) | (1,892) | ||||
Net Cash provided by/(used in) Financing Activities | 95,367 | (38,273) | 219,653 | (192,939) | ||||
Net increase in cash and cash equivalents | 11,890 | 12,959 | 112,527 | 38,622 | ||||
Cash and cash equivalents, beginning of period | 372,446 | 293,331 | 271,809 | 267,668 | ||||
Cash and cash equivalents, end of period | $384,336 | $306,290 | $384,336 | $306,290 | ||||
DANAOS CORPORATION | |||||||
Reconciliation of Net Income to Adjusted EBITDA - Unaudited | |||||||
(Expressed in thousands of United States dollars) | |||||||
Three | Three | Nine | Nine | ||||
September | September | September | September | ||||
2024 | 2023 | 2024 | 2023 | ||||
Net income | $122,996 | $133,156 | $414,646 | $426,378 | |||
Depreciation | 38,726 | 32,325 | 107,969 | 95,764 | |||
Amortization of deferred drydocking & special survey costs | 7,485 | 4,772 | 19,909 | 13,109 | |||
Amortization of assumed time charters | - | (4,416) | (4,534) | (16,806) | |||
Amortization of finance costs and commitment fees | 1,235 | 1,203 | 3,534 | 3,965 | |||
Amortization of deferred realized losses on interest rate swaps | 913 | 913 | 2,719 | 2,709 | |||
Interest income | (3,124) | (3,091) | (8,983) | (9,410) | |||
Interest expense excluding amortization of finance costs | 7,415 | 3,832 | 14,674 | 15,174 | |||
Change in fair value of investments | 2,808 | 9,333 | (10,395) | 2,895 | |||
Loss on debt extinguishment | - | - | - | 2,254 | |||
Net (gain)/loss on disposal/sale of vessels | 443 | - | (6,651) | (1,639) | |||
Adjusted EBITDA(1) | $178,897 | $178,027 | $532,888 | $534,393 | |||
Last twelve | Last twelve | ||||||
September | December | ||||||
2024 | 2023 | ||||||
Net income | $564,567 | $576,299 | |||||
Depreciation | 141,492 | 129,287 | |||||
Amortization of deferred drydocking & special survey costs | 25,463 | 18,663 | |||||
Amortization of assumed time charters | (8,950) | (21,222) | |||||
Amortization of finance costs and commitment fees | 4,705 | 5,136 | |||||
Amortization of deferred realized losses on interest rate swaps | 3,632 | 3,622 | |||||
Interest income | (11,706) | (12,133) | |||||
Interest expense excluding amortization of finance costs | 17,762 | 18,262 | |||||
Change in fair value of investments | (31,157) | (17,867) | |||||
Stock based compensation | 6,340 | 6,340 | |||||
Loss on debt extinguishment | - | 2,254 | |||||
Net gain on disposal/sale of vessels | (6,651) | (1,639) | |||||
Adjusted EBITDA(1) | $705,497 | $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 EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core 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 nine months ended September 30, 2024 and September 30, 2023; and the last twelve months ended September 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 September 30, 2024 and Three Months Ended September 30, 2023 | |||||||||||||||||
Unaudited | |||||||||||||||||
(Expressed in thousands of United States dollars) | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | ||||||||||
Net income/(loss) | $124,102 | $62 | $(1,168) | $122,996 | $142,173 | $(59) | $(8,958) | $133,156 | |||||||||
Depreciation | 35,520 | 3,206 | - | 38,726 | 32,315 | 10 | - | 32,325 | |||||||||
Amortization of deferred drydocking & special survey costs | 6,927 | 558 | - | 7,485 | 4,772 | - | - | 4,772 | |||||||||
Amortization of assumed time charters | - | - | - | - | (4,416) | - | - | (4,416) | |||||||||
Amortization of finance costs and commitment fees | 1,235 | - | - | 1,235 | 1,203 | - | - | 1,203 | |||||||||
Amortization of deferred realized losses on interest rate swaps | 913 | - | - | 913 | 913 | - | - | 913 | |||||||||
Interest income | (3,101) | - | (23) | (3,124) | (3,091) | - | - | (3,091) | |||||||||
Interest expense excluding amortization of finance costs | 7,415 | - | - | 7,415 | 3,832 | - | - | 3,832 | |||||||||
Change in fair value of investments | - | - | 2,808 | 2,808 | - | - | 9,333 | 9,333 | |||||||||
Net (gain)/loss on disposal/sale of vessels | 443 | - | - | 443 | - | - | - | - | |||||||||
Adjusted EBITDA(1) | $173,454 | $3,826 | $1,617 | $178,897 | $177,701 | $(49) | $375 | $178,027 | |||||||||
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 EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core 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 September 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 | |||||||||||||||||
Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023 | |||||||||||||||||
Unaudited | |||||||||||||||||
(Expressed in thousands of United States dollars) | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | ||||||||||
Net income/(loss) | $396,144 | $2,689 | $15,813 | $414,646 | $432,283 | $(59) | $(5,846) | $426,378 | |||||||||
Depreciation | 100,775 | 7,194 | - | 107,969 | 95,754 | 10 | - | 95,764 | |||||||||
Amortization of deferred drydocking & special survey costs | 19,062 | 847 | - | 19,909 | 13,109 | - | - | 13,109 | |||||||||
Amortization of assumed time charters | (4,534) | - | - | (4,534) | (16,806) | - | - | (16,806) | |||||||||
Amortization of finance costs and commitment fees | 3,534 | - | - | 3,534 | 3,965 | - | - | 3,965 | |||||||||
Amortization of deferred realized losses on interest rate swaps | 2,719 | - | - | 2,719 | 2,709 | - | - | 2,709 | |||||||||
Interest income | (8,960) | - | (23) | (8,983) | (9,410) | - | - | (9,410) | |||||||||
Interest expense excluding amortization of finance costs | 14,674 | - | - | 14,674 | 15,174 | - | - | 15,174 | |||||||||
Change in fair value of investments | - | - | (10,395) | (10,395) | - | - | 2,895 | 2,895 | |||||||||
Loss on debt extinguishment | - | - | - | - | 2,254 | - | - | 2,254 | |||||||||
Net gain on disposal/sale of vessels | (6,651) | - | - | (6,651) | (1,639) | - | - | (1,639) | |||||||||
Adjusted EBITDA(1) | $516,763 | $10,730 | $5,395 | $532,888 | $537,393 | $(49) | $(2,951) | $534,393 | |||||||||
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 EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core 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 nine months ended September 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 September 30, 2024 and Three Months Ended September 30, 2023 | |||||||||||||||||
Unaudited | |||||||||||||||||
(Expressed in thousands of United States dollars) | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | ||||||||||
Net income/(loss) | $124,102 | $62 | $(1,168) | $122,996 | $142,173 | $(59) | $(8,958) | $133,156 | |||||||||
Change in fair value of investments | - | - | 2,808 | 2,808 | - | - | 9,333 | 9,333 | |||||||||
Amortization of financing fees | 598 | - | - | 598 | 474 | - | - | 474 | |||||||||
Net loss on disposal/sale of vessels | 443 | - | - | 443 | - | - | - | - | |||||||||
Adjusted Net income/(loss)(1) | $125,143 | $62 | $1,640 | $126,845 | $142,647 | $(59) | $375 | $142,963 | |||||||||
Adjusted Earnings per Share, diluted | $6.50 | $7.26 | |||||||||||||||
Diluted weighted average number of shares (in thousands of shares) | 19,517 | 19,693 | |||||||||||||||
DANAOS CORPORATION | |||||||||||||||||
Reconciliation of Net Income to Adjusted Net Income per segment | |||||||||||||||||
Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023 | |||||||||||||||||
Unaudited | |||||||||||||||||
(Expressed in thousands of United States dollars) | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
Container | Drybulk | Other | Total | Container | Drybulk | Other | Total | ||||||||||
Net income/(loss) | $396,144 | $2,689 | $15,813 | $414,646 | $432,283 | $(59) | $(5,846) | $426,378 | |||||||||
Change in fair value of investments | - | - | (10,395) | (10,395) | - | - | 2,895 | 2,895 | |||||||||
Loss on debt extinguishment | - | - | - | - | 2,254 | - | - | 2,254 | |||||||||
Amortization of financing fees | 1,569 | - | - | 1,569 | 1,735 | - | - | 1,735 | |||||||||
Net gain on disposal/sale of vessels | (6,651) | - | - | (6,651) | (1,639) | - | - | (1,639) | |||||||||
Adjusted Net income/(loss)(1) | $391,062 | $2,689 | $5,418 | $399,169 | $434,633 | $(59) | $(2,951) | $431,623 | |||||||||
Adjusted Earnings per Share, diluted | $20.43 | $21,54 | |||||||||||||||
Diluted weighted average number of shares (in thousands of shares) | 19,540 | 20,039 | |||||||||||||||
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 nine months ended September 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