Earnings call transcript Q4 2022

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Operator

Good day and welcome to the Danaos Corporation Conference Call to discuss the Financial Results for the 3 months ended December 31, 2022.

As a reminder, today’s call is being recorded. Hosting the call today is Dr. John Coustas, Chief Executive Officer of Danaos Corporation; and Mr. Evangelos Chatzis, Chief Financial Officer of Danaos Corporation. Dr. Mr. and Coustas making open be comments then and Chatzis call some up will the session. to we will introductory a question-and-answer have the you Gentlemen, floor.

Evangelos Chatzis

you and everyone operator morning for thank you, today. joining Thank us good and to

update to of begin, encourage filings no you today. as EBITDA, this financial may EBITDA factor Factors actual where to risk These note of are measures are and remarks them. we results forward-looking and adjusted we that measures that to and measures materially income obligation earnings financial differ as adjusted Reconciliations forward-looking review morning GAAP materials. refer I release to included we remind in statements business. contain to feel discussed Before affect everyone Safe financial with would today evaluate want might from are non-GAAP undertake management’s Harbor SEC Please future could and statements to and certain our the accompanying non-GAAP we and our we that also detailed such quickly disclosures. appropriate, that those made net these projected to in results our continue

the will With of now to me turn Coustas who over that, quarter. John provide let Dr. overview broad a call the

John Coustas

XXXX waiting effect see shadows liner are for to XXXX decline when across market you The Thank sailing levels looming past companies are This year to thank earnings difficult Evangelos. the for you, X of over to routes years Good today’s still compared lower strong quarter ahead. morning us. of recession. we the exceptionally box to we of times XXXX. full rates saw The marked and container all materially the call the the the joining for pre-pandemic behind and and market discuss last peak fourth in our conditions are results projecting the all

Charter higher rates pre-pandemic than remains have but levels. fallen significantly,

months. XX rarely durations charter However, exceeds

XX% year as are market XXXX, insulated with the Fortunately, contracted for we us current of providing ahead. already days our for are conditions from available visibility excellent

downside near-term advantage obligations, limited the amplifier debt our and take forthcoming opportunistically power downturn. risk minimal of our have Given we to

are the non-operating be XM as liner dismantling be in networks. will the positive the co-owners in of alliance We the the less definitely there the following space for efficiency closely developments and will

criticism most the Additionally, widespread been the in through expectation the forecast reductions indicator, redesign in their effective index modified, supply and the study service taken carbon a that intensity to of effects to on speeds. conform with of anticipated to action decarbonization the no is index. reduction have the chartered to and current are structure being vessels networks and to companies factored not or the of will Liner now due CII, fleet beginning likely the view be concrete owned just for

our shareholders. investigating various us of our to the is new and the results for friendly to in year. committed Danaos decarbonization delivered delivering strategies buildings accretive optimization for of our superior existing X and are being actively fleet that remain growth involved strategy is We next actively environmentally

will through will call the you for that, who the I With to hand Evangelos quarter. over back the financials take

Evangelos Chatzis

quarter and for I the again open everyone call today. thanks will Q&A. Thank you, and us for briefly morning John good joining results and review the the to to then

adjusted operating an by finance million of million adjusted million or XXXX. EPS a $XXX.X ZIM or current have $XX.X $X.XX shares per to million partially in for the This $XX the two adjusted dividends million We of offset are quarter the expenses, net fourth compared improvement $XX $X.XX sold $XXX.X income in a income operating EPS total periods of whose adjusted and between now in in revenues, increase of net $X.X increase is decrease million of quarter in expenses. reporting we million $XX.X per result for net share increase of share of a

charter increased, More $XX.X to the recognition This by fourth $X.X which partially of is a $X.X $XXX.X million liabilities, of vessels as to XXXX. charter as XXXX by $XX.X assumed result increase higher and quarter is specifically, during million decrease quarter rates the of sale of fourth lower operating in vessel compared offset attributed amortization I million X million the in said, a revenues revenues $XXX to recent in current of due revenues the the million acquisitions. million quarter to of in increase a

non-cash million lower revenue decrease due recognition in Finally, revenues with $XX.X we accordance GAAP. had in to U.S. also a

travel million $X,XXX by mainly increase per as day operating operating mainly that the XXXX, and XXXX, fourth in increased from a expenses Vessel insurance the as well inflationary of to quarter current million up in expenses of in $X,XXX COVID-XX $X.X quarter of daily due increase $XX general premiums cost average quarter for the this fourth the day million $XX.X in crude remuneration quarter, from result per increased the in as pressures. and in increased related increase to to

cost as the the daily running of our one remains industry. However, in most competitive

partially finance result million $XX.X And two because million million expenses current an $X.X between $X.X this million expense the fourth in million $XXX result fourth decreased of periods. points million in basis between rise in lower the in by $XX.X debt in G&A Interest combined $X.X the a quarter to the in to cost offset amortization, indebtedness quarter increase decrease of a rates. of service by mainly XXXX. quarter $XX.X million cost compared expense, XXXX, $XX.X as XXX interest floating our of interest is current two stock-based in as the by approximately by a of compared a decrease result average excluding by in decreased of the of periods, to a compensation quarter to million

recognition under now a been statement income capitalization accrued that for of construction. that decrease have positive offset the had million $X.X we have We through million that was for $X all interest fully had our And due that accumulated repaid. interest accrued been to partially credit in interest also of expense by reduced facilities of vessels

by increased XX.X% million in for XXXX from to of in $XXX.X the $XXX.X EBITDA the quarter on current million outlined the reasons quarter this Adjusted call. fourth million $XX.X earlier or

updated to encourage investor which posted is you also review website subsequent We disclosures. our presentation, events as on well our as

make certain just a I’ll quick note highlights. of

while the a XX% is As of end with for contracted stood for coverage charter backlog at at XXXX contract billion XXXX. and of the years year, cash revenue our X.X duration average XX% $X.X

Our investor presentation has analytical our contracted charter book. disclosure on

year-end X.Xx earnings currently net XX company’s our XX the in to ratio as adjusted of our are while and out debt-free. reported of as debt EBITDA unencumbered vessels release, stood Finally, at

Last, undrawn to liquidity, year-end, also approximately was note million. our of including that $XXX commitments as total available

like Q&A. you our first for would I call call. With are now we the thank listening this that, part open to Operator, to ready to of to

Operator

And Jefferies. come Nokta with Omar will go Instructions] first question from ahead. [Operator Please the

Omar Nokta

Evangelos. Thank John. afternoon. you. Hi, Hi, Good

John Coustas

Hi, Omar.

Omar Nokta

sheet. was and downturn. wanted positioned I transformational Hi. to we’d you’re quite just going year, the say, into well, just Obviously, ask about XXXX market bit a balance a this

You’ve got a balance strong sheet.

$XXX and got billion just cash year-end. $X mentioned, plus you’ve the the got And Evangelos as million of of backlog. liquidity you You’ve

you kind cash do position. think How position your a you uncertain And aggressively this down be some today getting soon net of outlook? point, the that’s brought think going may into year. debt past your How at about seems into you levels You do over realistic? that financial it

John Coustas

the not on of at of pretty basis is to have Well, we debt, be net that we course, soon intend will zero this something keep.

to realize that quite in Overall, the just previous And difficult really of for It’s market many, there makes, were, is is is moment breakeven are timeline. specific need On than you cyclical is say, has interest of give happening container acquisitions. let’s the to significantly business. it’s assets, the after environment, be very a moving think of we different uncertainty will time what lot The is make decade. shipping right many the let’s kind what in to higher which a years that a calculation kind we entered following at thing world. say, other see a downturn we and which we one order into that hand, rate they to in the some – exactly a

the long sure it’s to be So, yet rate last. interest and will going not how people are what peak

will that we sure factors. strong And very these we our because to all right. our hurry monitoring position, we of call make exactly a make be are So, not in

Omar Nokta

Thanks John. feels as about into years definitely downturn. going ago Yes, opposed XX major the to just last

be are have industry and is could of beginnings a out, I just saying much position knows You is that on interest it liquidity, the lasts. you the And got it rate are who uncertain debt It how it free still – we seems given longer. as it the outlook have and Does playing you horizon. the very how then strong the we and guess quickly this being stronger downturn, overall could be long it’s in situation. got short, in

the If there. about be here we the you to cash cash But I to the a if long you just would know year? into few you of just were said position, don’t develop you kind position wait debt give later color and is remains, deploying any maybe of in build just into on up then Does you shift quarters, until that cash it can maybe next pay-down capital the know of net over timetable were ‘XX, think it how that? use the

John Coustas

the we extent next not we it’s are, Well, say, that are year. to expecting standing vessels still that six let’s

we So, we until the the expect visibility we I of that to commitment. have, already as than year. have, don’t second see I in that, half let’s will said, market develops. growth need a this let’s Further how really later say, say, will

Omar Nokta

second discussion waiting Yes. of sense. well and to And to some maybe just kind are six one when of until similar come as What liners be have you of it those thinking then seems year. Clearly, buildings mentioned are, That from sense, terms the makes the right in one, the better best the that’s about the a they on there vessels? deliver. out final you those that quality, new next that now half

the goes still you what the now charters stay the employment, think time charter in with those or do but duration? beyond about months. rarely XX you release terms of interest of mentioned having is discussions kind How buildings there, You are in that new it on

John Coustas

X ships X even we about When talking the to buildings, years, months, easily now. about are new we talking years are in XX water. talking are No, we

not the have said, a charter in ships. really to in hurry secure finance need we because order a are I we don’t As for

We our these resources. from own funding are vessels

these able exactly fortunate really are for we and So, are see to we to employment be ships. to going that best the wait what’s

Omar Nokta

you, over. Thank Alright. John. I turn Okay. will it

Operator

to any for closing I Coustas to It remarks. no at turn Instructions] Dr. go the have call sir. would like time. questions further Please appears [Operator this back over ahead, we

John Coustas

story. We you our for forward Yes. in all earning you. next Thank joining to our Thank continued you calls. hosting look call and conference your this interest on

Operator

Thank participation. you. like today’s teleconference. for their everyone Have This a concludes afternoon. would We to thank wonderful

Danaos (DAC) 15 Feb 232022 Q4 Earnings call transcript