Danaos (DAC) 14 Nov 232023 Q3 Earnings call transcript

Good day, and welcome to the Danaos Corporation conference call to discuss the financial results for the 3 months ended September 30, 2023.

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 to will the a we will introductory question-and-answer session. Please ahead. go

operator, to morning and you, everyone. Thank good

remind this Before that actual as These the results from forward-looking no might want in risk forward-looking undertake I materially we that we to differ projected safe begin, statements obligation and management's and may with morning affect our results of and them. those remarks could detailed contain statements that certain quickly made to everyone today. you today, Factors factor encourage discussed future are filings these to SEC, we update disclosures. review and harbor are

such note appropriate, measures and we feel EBITDA included that evaluate to adjusted and we net also earnings income refer financial materials. business. GAAP where in financial EBITDA, financial non-GAAP as our Reconciliations of release to adjusted continue Please are measures measures our to will to non-GAAP accompanying

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

quarter to you during continued you, to areas inventory XXXX. for morning, retail continued Good weak macroeconomic and sales. all Evangelos. to XXXX of of transport results container stagnated thank quarter in environment for joining discuss today's third the Thank the and due third The call deteriorate most destocking and

to companies liner the The charter major special and in pre-pandemic returned decreased profitability than vessels operators sweeping dramatically pressure, result, continued market TEU chartering measures. smaller has to cost for levels. where announced a cutting of remain rates As market X,XXX particularly have under

profitable for enabled year, scarcity in that have above will after contracts forward remained all us of a TEU our charters of charter expiring commence factor segments, open stable, relatively vessel at charter has X-year rates given on larger XX,XXX existing fix XXXX. levels vessels to that the next tonnage In

As XXXX a XX%. increased has for result, cover to our charter

of of have the taken this well expectations. carriers release first X we rates the bulk delivery and we have capesize our achieved through date Separately, of ahead

upwards the expect charter and not presence dry we do to in bulk in momentum will to rates opportunities market. we this pursue term, our While expand opportunistically sustain in closely monitor market the near

our has despite resilience significant the the charter fall continuation solid The model confirmed our been business of by the market. of results in

effective strategy also Our rates. higher of interest impacted timed we delivering been has have well been not as and by

flow Our charter $X.X backlog in our visibility allows us contracted of to flexibility capital us also cash with revenue policy. billion provides in maintain significant and allocation

increase additional per quarterly In to authorization share in authorize almost $XXX $X.XX million been and share also our we our this dividend to initial to has decided and an regard, $XXX exhausted. million buybacks

been last prudent in and Due to fleet orders new strategy, vessels. to months and investments and building create our return companies container the shareholder over to XX we able million execution our to $XXX over bulk through of segment our in the the by dry grow simultaneously segment the have XX exposure placing

hand the continue long-term our financials I'll through to take you back quarter. of value call while shareholders, We all to ensuring will Danaos. With will the to strive the over prosperity who Evangelos? create Evangelos, that, for for the

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

to the the in per result ZIM net for million million share of of XXXX. during between $XX.X quarters had This compared in $X.XX recognized income net third adjusted income by by a offset balance was in X expenses, to adjusted share a due $XX.X of of reduction is sold driven million statement have recognition which all accounting decrease been dividend primarily shares. $XX our ours our are noncash drop $XXX.X or further or million the our This third of partly deleveraging that mainly operating of finance adjusted million million sheet. of now our the net the was that Otherwise, by and we quarter revenue adjusted EPS applicable as $XX.X EPS ZIM the net of $X.XX reporting significant affected in XXXX, it's and quarter, quarter income no income revenues, per we longer of adjusted $XXX was

the average operating as $XX.X operating Vessel that $XXX,XXX to to a increased cost of increase XXXX, to third result $X,XXX have increased to $XX.X from the million well compared XXXX, by related and of for per repairs per insurance expenses as of pressures quarter daily the in vessel million vessel current maintenance the in quarter the current quarter as the quarter day and increased premiums. corresponding that affected inflationary per is that $X,XXX day costs in for

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

million decrease a the a expenses a million of by in result $XX.X G&A compared compared million rising the excluding combined Interest decrease debt of third approximately periods, quarter which by X in was an result XXXX. $X.X quarter -- expense, expense decrease $X.X by third current is million in between to X.X% of to of interest interest quarter $XXX the increase cost service increase this because of amortization the in in to partially slightly $X.X rates. by in the dropped million XXXX. decreased million $X.X in as offset average The million indebtedness of quarter $X.X to the the costs, the finance

$X.X the had our in previously to ZIM under on a new construction, applicable. XX.X% to covering no order. quarter been dividend XX expense due interest income from At million it's the third million, $XX.X the the quarter. decrease capitalized we our expense current quarter in EBITDA million have as recognized $XX.X have to of or the million by $XXX.X $XXX decreased and million time, that XXXX, interest the longer due effectively million we XX% in of primarily for buildings vessels Adjusted on same in discussed, Additionally, interest is came which at over $X.X interest

call. on drivers have The other outlined EBITDA already been earlier this

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

few following. the A highlights of the are

revenue of include the vessels and new ships have TEU new contracted Over for of X million contracted two $XXX for these vessels. features million fleet, secured of additional container notably through the for revenues past XX and our in X XX,XXX XX,XXX months, arrangement million $XXX we charters two TEU

XXXX. at average our currently As XX% with at X.X-year stands revenue a result, for and contracted contract a coverage duration backlog XXXX is XXX% $X.X for while billion, charter now

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

rate XX, from down to net this position was $XXX current In As our high us of September the XXXX, costs. interest environment, shields debt million. interest

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

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

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

question Omar [Operator Instructions] Jefferies. Today's with first Nokta from comes

definitely been those especially like quarter, the you you've forward some especially feeling things, good confident that highlighted. given looks Nice fixtures updates, active just with quite with buyback. are you And guys it

buyback. You just new announced the

forward obviously you flexibility backlog you outlined, billion. debt the going with just it have quite the like that's sounds bit Evangelos. a load have $X.X You And of

out you how the have terms and muscle to of go more. In there firepower see of clearly, do you -- opportunities the ahead

are want themselves where to that to bulk starting what's the you do sense get of if choose, Or as opportunities you ahead opportunities there's basis? that some just your an If so think at opportunistic showcase deploy to you there's you think things? the side the Do preference about on there Is you want think in dry are moment capital on container to the a market? are attractive. that more more do

already Omar, in have ample say, identify we power -- have bulk, opportunities smaller significant And dry pursuing as in taken the Eagle container bulk. in invested. the investing let's have sector the to opportunities, And in we and a the are are we them. than sector directly like when said, you in fire position that In we have we as where our Cape both we we we also dry ships, strategy rather we actually sector pursue the Bulk. said, identified,

in containers, are take maybe In vessels -- opportunities new yes, in terms there. of modern some front. -- we from of we'll further building the also eco and looking front opportunities both it at And in the the secondhand

say, We the larger In that the forward. market are sure let's rush. going of bottom general, at engaging to of scale. not in a we a start uncertainty the be order see in in And near, we or are must lot really we

the John. point a opportunities sense, just Makes follow-up just And you're that Yes. to regarding looking at. maybe

in the past of period ahead -- know I least especially a transactions. so, and in market over ago? versus sort or softer modern past, X.X You been mentioned months what modern downshift or there strong of the terms of vessels. the maybe there side buildings in Or maybe years maybe at the from Are one inquiry seeing maybe saw more more Is new pick that much activity? really the in to up? you in the we a there hasn't liquidity X much eco is that eco

seeing very say, now start be they the expiring. for And companies opportunities and And them vessels well are There long-term is that environment charter. number have good let's looking of bought disengage say, of, in They kind are around. opportunities. of say, not players have charters a XXXX, we'll to the kind companies been, sector. Well, the from going to are the are chartered see let's not that market. And there -- this that in floating

and to Are Are seemed for out the amend perhaps from your your liners through of, one big amendments more see shakes started of Danaos basis? in just bit final of, John, just the in extend? shipowners and coming that -- indication sense coming to in but look charters basically it one do get be? Did than seeing of more think to maybe terms relief fleet that And the on sort Any it a but you the a to any scale, for if you as the And seeing and that approach. an wanted a extend you we've say, NPV just me. you. amend or how some not that list, requesting of so, way? things

relatively been The still has very anything quick happening. We kind have cash and really not early. very reach. of are It's companies liner drop seen

I visibility our deals, rule mean for yes. future. companies debt-free for beneficial the to -- certain amend happening we and I in all out that mean, practically are a us that, these increase practically extent, like -- cannot to earnings that are they things because the extend I able future. like So be

It's just it's so let's to not because like the be any While in to that, -- companies is to obligations. important example, in. not many PV cost be say, the going for something actual, to case, afford may priced is able be going debt

like for appears no over at back call the we Dr. further comments further have It any or I questions closing to time. would remarks. to turn Coustas this

Thank operator. Yes. listening Thank for everyone, you, our you, story. to

future. We the work better and will to Thank Danaos towards in you. more continue profitable making

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