Leading boxship owner Danaos Corp — which is expanding into the dry sector — remains buffered from the impact of the falling container charter market.
The John Coustas-led company posted a $13.7m decrease in adjusted net income to $143.4m for the three months to the end of June.
The drop was due to a one-time dividend issued in the same period last year by Israeli liner operator Zim. Danaos was a shareholder in Zim but sold the last of its stake in November 2022.
But a “successful chartering strategy” helped generate operating revenues of $241m in the quarter, CEO John Coustas said.
He said charter revenues are still near previous records despite a charter market drop that is more than 50% lower than a year ago.
“The world economies stagnated in the second quarter of 2023, resulting in a gradual easing of the container market,” Coustas said.
Total charter backlog increased to $2.5bn as of the end of the quarter, with charter coverage of 99% for 2023 and 86% for 2024.
“We continue to be active in the charter market and have secured nearly $500m in new charter contracts during the quarter.”
Buyback
The Greek tonnage provider is taking an opportunistic approach to investments in the container and dry bulk sector.
The company has spent $65.5m on a buyback programme of its own shares and has recently set its sights on the dry bulk segment.
Buoyed by record profits from the 2020-2021 coronavirus pandemic, Danaos started investing in bulkers again earlier this summer, building a 16.7% stake in US-listed Eagle Bulk Shipping.
This move made waves, especially after Eagle Bulk management took steps to prevent Danaos from increasing its stake further.
The company followed that by purchasing five capesizes put up for sale by China Development Bank Financial Leasing.
The ships in question are the 176,000-dwt Bulk Integrity and 175,900-dwt Bulk Peace (both built 2010), the 175,900-dwt Bulk Achievement and 176,000-dwt Bulk Ingenuity (both built 2011) and the 175,600-dwt Bulk Genius (built 2012).
The quintet, built at China’s Jinhai Heavy Industry, are said to have changed hands for about $103m in total.
“We exited the segment years ago, which was a well-timed decision in hindsight, and now we again see opportunity,” Coustas said.
Danaos, which owns 68 container ships, also confirmed contracts signed in June for two 8,258-teu vessels for delivery in 2026.
The two vessels are contracted with China’s Yangzijiang Shipbuilding to build two methanol-ready boxships and lift the newbuilding tally to 10.
The Greek owner also has four scrubber-fitted, methanol-ready 7,200-teu ships under construction at South Korea’s DH Shipbuilding, formerly Daehan Shipbuilding; two 7,100-teu vessels on order at Shanhaiguan Shipbuilding, a subsidiary of Dalian Shipbuilding Industry Co; and two wide-beam 5,900-teu boxships at Qingdao Yangfan Shipbuilding.
