DAC - Earnings call transcript Q1 2024

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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 March 31, 2024.

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 the be comments, we then Chatzis to some a open call question-and-answer will will introductory session.

Evangelos Chatzis

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

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

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

John Coustas

the charter to from in forecasts. The to results second quarter. charterers commitments through discuss Thank are the longer-term end XXXX. in we quarter you, rechartering and view of the strengthen scheduled rates Evangelos. that vessels and market charter Good of quarter of market morning, has box 'XX have extends for necessary momentum, the a activity joining are in for excess trend making first newbuilding our deliveries internal of our continued into optimism all with renewed and the The who and gaining completed call to of you Both today's continued thank XXXX. XXXX, container first

of an for two ] which of XXXX XXX,XXX Following newbuilding vessels an for our the additional vessels, us. order delivery, have delivered TEU consists X,XXX TEU, two recent to placement XX currently totaling [ been book already of order

have of also chartering vessels. now existing order, all for have charters extended while on secured we importantly, we certain More agreements our multiyear vessels

a our chartering past $XXX with fleet our proofing billion, average have on revenue green ready, future million activity fuel this duration result All $X.X As months, at newbuilding backlog charter of are book we the our today of X years. methanol order over vessels of to in stands usage. portion added the X.X that contracted a an

also a the ensure at We liquidity conservative very expansion. for able have arranged financing first strong to are to we continued support maintain opportunistic fleet to newbuildings competitive profile X that rates

our our in to vessel drybulk vessels an segment, additional increasing XX fleet, In fleet our Capesize we've to added total.

our to continuing we are increase market an and to expectations, We market above ways market. eventual this exposure are that the recovery will to The Chinese performed higher. drive drybulk explore has confident

is easily Our low drybulk into entry our market relatively is therefore point achievable. and breakeven the

longer result well and to relatively practices, place our in continued has of are displaying meantime, in our as positive energy these and trade recession. that the of the goods. believe biggest impact contraction to restrictions in around term. countries consistent we are The performing in on well of solid in that from the trade In hurdles manufactured Despite risk tariffs form comes Despite the ultimately the putting short-term outlook world geopolitical signs most uncertainties, no economies trade are results. as various result the will of market strategy

benefit our while for of opportunities growth will the the shareholders. We of ensuring investments our continue to longevity explore

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

Evangelos Chatzis

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

million of million costs, adjusted million income mainly charters adjusted net drybulk a income improvement quarter costs recognition This adjusted or quarter reporting share of operating decrease the net result costs, per increase adjusted mainly driven quarter, finance $X.X during EPS to a a are of the the sheet to investments. by the on million in million a by in $X.XX improvement is net XXXX. significant EPS due compared fleet, of deleveraging million $X.X million This between or voyage X of increase in to net operating voyage offset and the $X.X related Capesize first $XX.X $XXX.X our share current partially quarters $XXX revenues, for the of of $X.X of we $X.XX per the balance total in

by costs in $XX.X first increased a the the operating current million $XX.X from to our Vessel increase the quarter the million of fleet. vessels $X.X XXXX in in number of in of result quarter million average as

to decreased day the for current quarter per per quarter the first $X,XXX $X,XXX from While corresponding XXXX. of in our operating day costs daily

Our to the remain competitive the industry. operating most costs continue among in

$X.X of rates. rising The lower the by between result decrease offset combined the service basis in the $X $X $XX.X periods, due X to expenses increase XXXX. in in finance to an by by of excluding million debt approximately a XXXX, costs. the $XXX million increased compared in because to indebtedness costs, $X.X by $X.X interest $X.X current current quarter million as million average Interest first million mainly result million compared the increase G&A an expense of to interest in quarter expense the a amortization, partially quarter decreased in million decrease to the in is of stock-based first XX by noncash million approximately cost of of points quarter

finance in of interest costs. amortization higher expense due We $X.X $X.X vessels the million, came expense which our income a in of capitalization construction. million the for interest is quarter decrease had on time, $X.X same also interest million to current than At under at the excluding interest

$XXX quarter decreased reasons Adjusted earlier outlined million call. the been for to XXXX have by million million already of $XXX.X first quarter $X.X or EBITDA that the this X% in in on from current

has presentation posted website events review that encourage well updated also our our subsequent been We as disclosures. you investor on to as

the Let a few me of highlights. summarize

Following contract remained duration, increased recent strong is That in our of cash is a XXXX charter has with terms coverage days. while backlog and X.X-year for actually average $X.X to activity, XXXX. at chartering revenue contracted XX% billion XX% and for coverage operating

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

$XXX.X March shields XX, million. from now debt down current As obviously, costs. this interest of rate And position net environment, to interest the in our is high

currently XX to in Additionally, came and EBITDA the adjusted out vessels while X.XXx, unencumbered debt-free. ratio are at net XX debt of company's our

end $XXX $XXX at our total pursue marketable while to including giving of ample the flexibility of QX, deployment and stood Finally, at revolving liquidity, facility was cash accretive of capital us securities million, as credit valuation million, under availability opportunities.

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

Operator

[Operator Instructions] Omar Jefferies. The first question Nokta comes from at

Omar Nokta

like looks quite business over quite of coming a and it here is of turnaround a along nicely the bit No, the couple months. past

and You've now obviously had the it's gotten bigger. backlog

and market newbuildings, all has you've orders clearly much I stronger. including February from think latest now you the March, the XX -- secured gotten that

all for contracted of 'XX. much pretty not You're

forward today 'XX? what your securing characterize You've to liners been look in on got fixing But ships what's in especially fix some that newbuildings. would for ships, interest the the that capacity able up those you've How like you in happening, and open there's delivery water the 'XX up 'XX? from open 'XX. appetite ships if about some lens Obviously, open

John Coustas

appetite Well, is pretty strong. the

and and of continued look at slowing no will deliveries. really is doubt 'XX situation some say, of mean, 'XX. say, negotiating a least I the that And have last continue the has let's But We strength to at ships pretty a are the combination economies, This that do XXXX. for, with things relative will like, of already, something part forever. solid let's in they opening demand. overall, that there of have the and we situation. not -- of whole the least the Canal is strength of led to way ships it Suez trade market It's the speeds

Omar Nokta

it's your Yes. thereafter kind Or to so securing in of to you order of them your the backdrop get I newbuildings? shortly a you've component that think what's also you was been perhaps for ships a that have guess more for for -- the mentioned interest time? given Do liners what's that it and Yes. on desire the methanol-ready qualitative and newbuildings interest ahead appetite definitely and deep just maybe ships able question those on And of simply side And just charter with contracted, newbuildings. from that the those 'XX, out? drove additional well

John Coustas

once ] green component really no It's No. irrelevant the methanol methanol is -- there around. is [

let's time be available to or doesn't -- XXXX, our say, look is charters. the let's So going of, more less which it's and before, say, horizon

vessels, other the X the environmental but definitely new other main costs hand, is On vessels And factor more the will much which these reduce what are on consumption. hand, lower is all regulations. to their Tier the help through and meet than important is existing economical driving are charterers that fuel

Omar Nokta

say. been just -- decent, And would on just I the drybulk Yes. That investment business. maybe a very has just final one,

bought for on is You've XX you you're [ values, at well that. looking nicely quite do the ] and a What next just business? You sound quite bit capes purchase -- flow up and it think it build want business? how monetizing to further? think Is got the you that about sense? cash it ships? you Or do sort XX makes think the operate, Any harvest of sense you do this

John Coustas

newbuildings, say, -- in back. Capesize thing a is nothing course, because with is -- another, sensitive they containership is like kind go tons not definitely going -- of I'm The And here way to you're the region company. let's stay day, We commit the say that leg important, highly of say, it's to XX consuming. per exactly steaming expensive sure have into to that a to how tons medium-sized today, drybulk. the today but drybulk in if slow that very and you would consumption the like only on are sector which are pay saying which let's the that around the is in We XX And cost. it's let's XX is, of, I'm it's the fuel it's or

things that. are the rates gives, make to to carbon So a greater a the the with But hand, justify a sensitivity subdued, course, bit high bulk which, capital In the course, containership interest market, much hard fuel to going cost let's on is of and more high -- and difference. to it's say, other of costs, eventually. of this make

Operator

question-and-answer or closing the call Dr. Coustas concludes would I further to the any remarks. session. for to over back This like comments turn

John Coustas

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

Operator

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

Danaos (DAC) 28 May 242024 Q1 Earnings call transcript