DANAOS CORPORATION ATHENS, Greece, Feb. 12, 2018 /PRNewswire/ -- Danaos Corporation ('Danaos') (NYSE: DAC), one of the world's largest independent owners of containerships, today reported unaudited results for the fourth quarter and the year ended December 31, 2017.
Highlights for the Fourth Quarter and Year Ended December 31, 2017:
- Adjusted net income1 of $31.2 million, or $0.28 per share, for the three months ended December 31, 2017 compared to $23.2 million, or $0.21 per share, for the three months ended December 31, 2016, an increase of 34.5%. Adjusted net income1 of $114.9 million, or $1.05 per share, for the year ended December 31, 2017 compared to $140.9 million, or $1.28 per share, for the year ended December 31, 2016, a decrease of 18.5%.
- Operating revenues of $114.2 million for the three months ended December 31, 2017 compared to $112.1 million for the three months ended December 31, 2016, an increase of 1.9%. Operating revenues of $451.7 million for the year ended December 31, 2017 compared to $498.3 million for the year ended December 31, 2016, a decrease of 9.4%.
- Adjusted EBITDA1 of $80.0 million for the three months ended December 31, 2017 compared to $75.9 million for the three months ended December 31, 2016, an increase of 5.4%. Adjusted EBITDA1 of $310.4 million for the year ended December 31, 2017 compared to $350.6 million for the year ended December 31, 2016, a decrease of 11.5%.
- Total contracted operating revenues were $1.7 billion as of December 31, 2017, with charters extending through 2028 and remaining average contracted charter duration of 5.7 years, weighted by aggregate contracted charter hire.
- Charter coverage of 86% for the next 12 months based on current operating revenues and 69% in terms of contracted operating days.
Three Months and Year Ended December 31, 2017 Financial Summary - Unaudited (Expressed in thousands of United States dollars, except per share amounts) | |||||||
Three months | Three months | Year ended | Year ended | ||||
December 31, | December 31, | December 31, | December 31, | ||||
2017 | 2016 | 2017 | 2016 | ||||
Operating revenues | $114,168 | $112,107 | $451,731 | $498,332 | |||
Net income/(loss) | $22,806 | $(446,567) | $83,905 | $(366,195) | |||
Adjusted net income1 | $31,231 | $23,158 | $114,881 | $140,881 | |||
Earnings/(loss) per share | $0.21 | $(4.07) | $0.76 | $(3.34) | |||
Adjusted earnings per share1 | $0.28 | $0.21 | $1.05 | $1.28 | |||
Weighted average number of shares (in thousands) | 109,821 | 109,805 | 109,824 | 109,802 | |||
Adjusted EBITDA1 | $80,016 | $75,874 | $310,378 | $350,587 | |||
Danaos' CEO Dr. John Coustas commented:
Our earnings for the fourth quarter of 2017 improved markedly when compared to the earnings of the fourth quarter of 2016 which had been negatively impacted in the aftermath of the Hanjin bankruptcy. This is mainly the result of our high charter contract coverage which remains at 86% for the next 12 months based on current operating revenues and 69% in terms of contracted operating days.
Adjusted net income of $31.2 million for the quarter represented an increase of $8.0 million, or 34.5%, compared to $23.2 million for the fourth quarter of 2016. This increase was attributable to a $5.2 million increase in the operating revenues of the vessels that were previously chartered to Hanjin compared to the fourth quarter of 2016, and improved operating performance of $2.8 million.
As previously reported, the Company is in breach of certain financial covenants as a result of the Hanjin bankruptcy. We are currently engaged in discussions with our lenders regarding restructuring our debt, substantially all of which matures on December 31, 2018. In the meantime, we continue to generate positive cash flows from our operations and currently have sufficient liquidity to service all our operational obligations as well as all scheduled principal amortization and interest payments under the original terms of our debt agreements leading up to the December 2018 maturity date.
The charter market in general has stabilized at slightly better levels compared to the lows of 2016. However, although the size segment above 10,000 TEU has recently seen some improvement, the size segment between 5,000 to 10,000 TEU has retracted from the charter rate levels achieved within 2017. For panamax vessels between 4,000 to 5,000 TEU the market is stagnant however comfortably above operating costs. For the smaller feeder sector there is a firming market however the lack of long term fixtures shows that there is no faith in the sustainability. We do not expect a material improvement in the market environment within 2018, given the large number of scheduled vessel deliveries. Danaos continues to have low near term exposure to the weak spot market as a result of the aforementioned charter coverage.
During this extended period of market weakness which has presented many challenges, we remain focused on taking necessary actions to preserve the value of our company.
Three months ended December 31, 2017 compared to the three months ended December 31, 2016
During the three months ended December 31, 2017 and December 31, 2016, Danaos had an average of 55 containerships. Our fleet utilization for the fourth quarter of 2017 was 97.8%, while fleet utilization for the vessels under employment, excluding the off charter days of the vessels that were previously chartered to Hanjin Shipping ('Hanjin'), was 97.8% in the three months ended December 31, 2017 compared to 99.5% in the three months ended December 31, 2016.
Our adjusted net income amounted to $31.2 million, or $0.28 per share, for the three months ended December 31, 2017 compared to $23.2 million, or $0.21 per share, for the three months ended December 31, 2016. We have adjusted our net income in the three months ended December 31, 2017 for refinancing related professional fees of $5.0 million and a non-cash amortization charge of $3.4 million for fees related to our 2011 comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees). Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The increase of $8.0 million in adjusted net income for the three months ended December 31, 2017 compared to the three months ended December 31, 2016 is attributable to a $2.1 million increase in operating revenues, a $5.1 million decrease in total operating expenses, a $1.0 million decrease in realized loss on derivatives, a $0.5 million increase in other income and a $0.3 million improvement in the operating performance of our equity investment in Gemini Shipholdings Corporation ('Gemini'), which were partially offset by a $1.0 million increase in net finance expenses.
On a non-adjusted basis, our net income amounted to $22.8 million, or $0.21 per share, for the three months ended December 31, 2017 compared to a loss of $446.6 million, or $4.07 loss per share, for the three months ended December 31, 2016, which includes $466.9 million of impairment related expenses.
Operating Revenues
Operating revenues increased by 1.9%, or $2.1 million, to $114.2 million in the three months ended December 31, 2017 from $112.1 million in the three months ended December 31, 2016.
Operating revenues for the three months ended December 31, 2017 reflect:
- $5.2 million increase in revenues in the three months ended December 31, 2017 compared to the three months ended December 31, 2016 due to the recorded charter income of $6.7 million from eight of our vessels previously chartered to Hanjin Shipping ('Hanjin') that had recorded operating revenues of $1.5 million during the fourth quarter of 2016.
- $2.7 million decrease in revenues in the three months ended December 31, 2017 compared to the three months ended December 31, 2016 due to the re-chartering of certain of our vessels at lower rates.
- $0.4 million decrease in revenues attributed to fleet utilization in the three months ended December 31, 2017 compared to the three months ended December 31, 2016.
Vessel Operating Expenses
Vessel operating expenses increased by 1.2%, or $0.3 million, to $26.2 million in the three months ended December 31, 2017 from $25.9 million in the three months ended December 31, 2016. The average daily operating cost per vessel for vessels on time charter was $5,583 per day for the three months ended December 31, 2017 compared to $5,303 per day for the three months ended December 31, 2016. Management believes that our daily operating cost ranks as one of 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 decreased by 13.8%, or $4.5 million, to $28.0 million in the three months ended December 31, 2017 from $32.5 million in the three months ended December 31, 2016, mainly due to decreased depreciation expense for twenty-five vessels for which we recorded an impairment charge on December 31, 2016.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $0.1 million, to $1.7 million in the three months ended December 31, 2017 from $1.6 million in the three months ended December 31, 2016.
General and Administrative Expenses
General and administrative expenses decreased by $0.2 million to $5.8 million in the three months ended December 31, 2017, from $6.0 million in the three months ended December 31, 2016.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses.
Voyage Expenses
Voyage expenses decreased by $0.9 million to $3.0 million in the three months ended December 31, 2017 compared to $3.9 million in the three months ended December 31, 2016. The decrease is mainly due to decreased bunkering expenses.
Impairment Loss
We have recognized an impairment loss of $415.1 million in relation to 25 of our vessels as of December 31, 2016 compared to nil in the three months ended December 31, 2017.
Interest Expense and Interest Income
Interest expense increased by 4.7%, or $1.0 million, to $22.2 million in the three months ended December 31, 2017 from $21.2 million in the three months ended December 31, 2016. The increase in interest expense was mainly due to the increase in average cost of debt due to the increase in US$ Libor by about 50 bps between the two periods, which was partially offset by a decrease in our average debt by $212.3 million, to $2,340.8 million in the three months ended December 31, 2017, from $2,553.1 million in the three months ended December 31, 2016 and a $0.4 million decrease in the amortization of deferred finance costs.
As of December 31, 2017, the debt outstanding gross of deferred finance costs was $2,340.8 million compared to $2,527.3 million as of December 31, 2016.
Interest income decreased by $0.1 million, to $1.4 million in the three months ended December 31, 2017 from $1.5 million in the three months ended December 31, 2016.
Other Finance Expenses, net
Other finance expenses, net decreased by $0.6 million, to $1.0 million in the three months ended December 31, 2017 from $1.6 million in the three months ended December 31, 2016.
Equity Income/(Loss) on Investments
Equity income on investments amounted to $0.3 million in the three months ended December 31, 2017 compared to the equity loss on investments of $14.6 million (mainly attributed to our share of impairment loss for Gemini vessels) in the three months ended December 31, 2016 and relates to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.
Unrealized Loss on Derivatives
Unrealized loss on interest rate swaps amounted to nil in the three months ended December 31, 2017 compared to an unrealized loss of $6.8 million in the three months ended December 31, 2016. The unrealized loss in the three months ended December 31, 2016 was mainly attributed to the accelerated amortization of accumulated other comprehensive loss of $7.7 million.
Realized Loss on Derivatives
Realized loss on interest rate swaps decreased to $0.9 million in the three months ended December 31, 2017 from a loss of $1.9 million in the three months ended December 31, 2016. This decrease is attributable to swap expirations. As of December 31, 2016, all of our interest rate swaps have expired.
Other Income/(Expenses), net
Other expenses, net amounted to $4.3 million and related mainly to the professional fees of $5.0 million due to refinancing discussions with our lenders in the three months ended December 31, 2017 compared to other expenses, net of $29.2 million incurred mainly due to a $29.4 million impairment loss on Zim equity and debt securities recognized in the three months ended December 31, 2016.
Adjusted EBITDA
Adjusted EBITDA increased by 5.4%, or $4.1 million, to $80.0 million in the three months ended December 31, 2017 from $75.9 million in the three months ended December 31, 2016. As outlined earlier, this increase is attributable to a $2.1 million increase in operating revenues, by a $0.7 million decrease in operating expenses, a $0.3 million operating performance improvement on equity investments and a $1.0 million decrease in other expenses. Adjusted EBITDA for the three months ended December 31, 2017 is adjusted for refinancing professional fees of $5.0 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Year ended December 31, 2017 compared to the year ended December 31, 2016
During the year ended December 31, 2017 and December 31, 2016, Danaos had an average of 55 containerships. Our fleet utilization in the year ended December 31, 2017 was 96.4%, while fleet utilization for the vessels under employment, excluding the off charter days of the vessels that were previously chartered to Hanjin, increased to 97.9% in the year ended December 31, 2017 compared to 97.3% in the year ended December 31, 2016.
Our adjusted net income amounted to $114.9 million, or $1.05 per share, for the year ended December 31, 2017 compared to $140.9 million, or $1.28 per share, for the year ended December 31, 2016. We have adjusted our net income in the year ended December 31, 2017 for refinancing related professional fees of $14.3 million, a non-cash amortization charge of $14.3 million for fees related to our 2011 comprehensive financing plan (comprised of non-cash, amortizing and accrued finance fees) and a loss on sale of Hyundai Merchant Marine ('HMM') securities of $2.4 million. Please refer to the Adjusted Net Income reconciliation table, which appears later in this earnings release.
The decrease of $26.0 million in adjusted net income for the year ended December 31, 2017 compared to the year ended December 31, 2016 is attributable to a $41.3 million decrease in operating revenues during the first half of the year as a result of the Hanjin bankruptcy partially offset by $11.2 million increase in operating revenues earned by the ex Hanjin vessels that earned operating revenues of $1.5 million during the second half of 2016, a decline in operating revenues of $15.5 million as a result of weaker charter market conditions that were prevailing when expiring charters were entered into, and a $1.0 million decrease in operating revenues attributed to fleet utilization, which were partially offset by a $15.8 million decrease in total operating expenses, a $2.0 million decrease in net finance expenses mainly due to interest rate swap expirations and increased interest income, a $2.6 million improvement in the operating performance of our equity investment in Gemini and a $0.2 million increase in other income.
On a non-adjusted basis, our net income amounted to $83.9 million, or $0.76 per share, for the year ended December 31, 2017 compared to net loss of $366.2 million, or $3.34 loss per share, for the year ended December 31, 2016, which includes $466.9 million of impairment related expenses.
Operating Revenues
Operating revenues decreased by 9.4%, or $46.6 million, to $451.7 million in the year ended December 31, 2017 from $498.3 million in the year ended December 31, 2016.
Operating revenues for the year ended December 31, 2017 reflect:
- $41.3 million decrease in revenues during the first half of the year due to loss of revenue from cancelled charters with Hanjin for eight of our vessels due to Hanjin's bankruptcy. These vessels were re-chartered at lower rates and in some cases experienced off hire time in the 2017 period.
- $11.2 million increase in revenues during the second half of 2017 due to the recorded charter income of $12.7 million from eight of our vessels previously chartered to Hanjin that earned operating revenues of $1.5 million during the second half of 2016.
- $15.5 million decrease in revenues in the year ended December 31, 2017 compared to the year ended December 31, 2016 due to the re-chartering of certain of our vessels at lower rates.
- $1.0 million decrease in revenues due to lower fleet utilization in the year ended December 31, 2017 compared to the year ended December 31, 2016.
Vessel Operating Expenses
Vessel operating expenses decreased by 2.2%, or $2.4 million, to $107.0 million in the year ended December 31, 2017 from $109.4 million in the year ended December 31, 2016. The average daily operating cost per vessel for vessels on time charter was $5,661 per day for the year ended December 31, 2017 compared to $5,637 per day for the year ended December 31, 2016. Management believes that our daily operating cost ranks as one of 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 decreased by 10.7%, or $13.8 million, to $115.2 million in the year ended December 31, 2017 from $129.0 million in the year ended December 31, 2016, mainly due to decreased depreciation expense for twenty-five vessels for which we recorded an impairment charge on December 31, 2016.
Amortization of Deferred Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs increased by $1.2 million, to $6.7 million in the year ended December 31, 2017 from $5.5 million in the year ended December 31, 2016. The increase was mainly due to the increased payments for dry-docking and special survey costs related to certain vessels over the last year.
General and Administrative Expenses
General and administrative expenses increased by $0.6 million, to $22.7 million in the year ended December 31, 2017, from $22.1 million in the year ended December 31, 2016.
Other Operating Expenses
Other Operating Expenses include Voyage Expenses and Bad Debt Expense.
Voyage Expenses
Voyage expenses decreased by $1.3 million to $12.6 million in the year ended December 31, 2017 compared to $13.9 million in the year ended December 31, 2016. The decrease is mainly due to decreased commissions.
Bad Debt Expense
Bad debt expense of $15.8 million in the year ended December 31, 2016 compared to nil in the year ended December 31, 2017 relates to receivables from Hanjin, which were written-off.
Impairment Loss
We have recognized an impairment loss of $415.1 million in relation to 25 of our vessels as of December 31, 2016 compared to nil in the year ended December 31, 2017.
Interest Expense and Interest Income
Interest expense increased by 4.3%, or $3.6 million, to $86.6 million in the year ended December 31, 2017 from $83.0 million in the year ended December 31, 2016. The increase in interest expense was mainly due to the increase in average cost of debt due to the increase in US$ Libor by about 50 bps between the two periods, which was partially offset by a decrease in our average debt by $243.1 million, to $2,409.1 million in the year ended December 31, 2017, from $2,652.2 million in the year ended December 31, 2016 and a $1.8 million decrease in the amortization of deferred finance costs.
As of December 31, 2017, the debt outstanding gross of deferred finance costs was $2,340.8 million compared to $2,527.3 million as of December 31, 2016.
Interest income increased by $0.9 million to $5.6 million in the year ended December 31, 2017 compared to $4.7 million in the year ended December 31, 2016. The increase was mainly attributed to the interest income recognized on HMM notes receivable.
Other Finance Expenses, net
Other finance expenses, net decreased by $0.8 million, to $4.1 million in the year ended December 31, 2017 from $4.9 million in the year ended December 31, 2016.
Equity Income/(Loss) on Investments
Equity income on investments amounted to $1.0 million in the year ended December 31, 2017 compared to the equity loss on investments of $16.2 million (mainly attributed to our share of impairment loss for Gemini vessels amounting to $14.6 million) in the year ended December 31, 2016 and relates to the improved operating performance of Gemini, in which the Company has a 49% shareholding interest.
Unrealized Loss on Derivatives
Unrealized loss on interest rate swaps amounted to nil in the year ended December 31, 2017 compared to a loss of $3.1 million in the year ended December 31, 2016. The unrealized loss in the year ended December 31, 2016 was attributable to the accelerated amortization of accumulated other comprehensive loss of $7.7 million, which was partially offset by the unrealized gains of $4.6 million attributable to mark to market valuation of our swaps, which all expired by December 31, 2016.
Realized Loss on Derivatives
Realized loss on interest rate swaps decreased to $3.7 million in the year ended December 31, 2017 from a loss of $9.4 million in the year ended December 31, 2016. This decrease is attributable to swap expirations. As of December 31, 2016, all of our interest rate swaps have expired.
Other Income/(Expenses), net
Other expenses, net amounted to $15.8 million related mainly to a $14.3 million increase in professional fees due to the refinancing discussions with our lenders and a $2.4 million realized loss on sale of HMM securities in the year ended December 31, 2017 compared to other expenses, net of $41.6 million mainly due to a $29.4 million impairment loss in Zim equity and debt securities and a $12.9 million loss on sale of HMM equity securities recognized in the year ended December 31, 2016.
Adjusted EBITDA
Adjusted EBITDA decreased by 11.5%, or $40.2 million, to $310.4 million in the year ended December 31, 2017 from $350.6 million in the year ended December 31, 2016. As outlined earlier, this decrease is mainly attributable to a $46.6 million decrease in operating revenues, which was partially offset by a $3.1 million decrease in operating expenses, a $2.6 million operating performance improvement on equity investments, and a $0.7 million decrease in other expenses. Adjusted EBITDA for the year ended December 31, 2017 is adjusted for refinancing related professional fees of $14.3 million and a loss on sale of HMM securities of $2.4 million. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Credit Facilities
As a result of a decrease in our operating income and the charter-attached market value of certain of our vessels caused principally by the cancellation of eight charters with Hanjin Shipping, which is currently under bankruptcy proceedings with the Seoul Central District Court, we were in breach of the minimum security cover, consolidated net leverage and consolidated net worth financial covenants contained in our Bank Agreement and our other credit facilities as of December 31, 2017 and December 31, 2016. We are currently in discussions with our lenders regarding our non-compliance with these covenants and restructuring our debt, which substantially exceeds the market value of our fleet and matures in December 2018. Accordingly, we will need to reach an agreement with our lenders by December 31, 2018.
Conference Call and Webcast
On Tuesday, February 13, 2018 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 9489 (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 February 20, 2018 by dialing 1 877 344 7529 (US Toll Free Dial In) or +1 412 317 0088 (Standard International Dial In) and using 10117035# as the access code.
Audio Webcast
There will also be a live and then archived webcast of the conference call through 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.
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 59 containerships aggregating 351,614 TEUs, including four vessels owned by Gemini Shipholdings Corporation, a joint venture, ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our 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 safeharbor 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, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. 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, ability to obtain financing, including to reach an agreement with our lenders regarding the restructuring of our debt maturing in December 2018, 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, potential disruption of shipping routes 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 atwww.danaos.com
Appendix
Fleet Utilization
Danaos had 99 unscheduled off-hire days in the three months ended December 31, 2017. The following table summarizes vessel utilization and the impact of the off-hire days on the Company's revenue.
Vessel Utilization (No. of Days) | First | Second | Third | Fourth | |||||
2017 | 2017 | 2017 | 2017 | Total | |||||
Ownership Days | 4,950 | 5,005 | 5,060 | 5,060 | 20,075 | ||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | (15) | (6) | (15) | (10) | (46) | ||||
Other Off-hire Days | (347) | (99) | (139) | (99) | (684) | ||||
Operating Days | 4,588 | 4,900 | 4,906 | 4,951 | 19,345 | ||||
Vessel Utilization | 92.7% | 97.9% | 97.0% | 97.8% | 96.4% | ||||
Operating Revenues (in '000s of US Dollars) | $110,087 | $113,888 | $113,588 | $114,168 | $451,731 | ||||
Average Gross Daily Charter Rate | $23,995 | $23,242 | $23,153 | $23,060 | $23,351 | ||||
Vessel Utilization (No. of Days) | First | Second | Third | Fourth | |||||
2016 | 2016 | 2016 | 2016 | Total | |||||
Ownership Days | 5,013 | 5,005 | 5,060 | 5,060 | 20,138 | ||||
Less Off-hire Days: | |||||||||
Scheduled Off-hire Days | (31) | (45) | - | - | (76) | ||||
Other Off-hire Days | (242) | (110) | (169) | (484) | (1,005) | ||||
Operating Days | 4,740 | 4,850 | 4,891 | 4,576 | 19,057 | ||||
Vessel Utilization | 94.6% | 96.9% | 96.7% | 90.4% | 94.6% | ||||
Operating Revenues (in '000s of US Dollars) | $137,474 | $136,999 | $111,752 | $112,107 | $498,332 | ||||
Average Gross Daily Charter Rate | $29,003 | $28,248 | $22,848 | $24,499 | $26,150 |
Fleet List
The following table describes in detail our fleet deployment profile as of February 12, 2018:
Vessel Name | Vessel Size (TEU) | Year | Expiration of Charter(1) | |||
Containerships | ||||||
MSC Ambition (ex Hyundai Ambition) | 13,100 | 2012 | June 2024 | |||
Maersk Exeter (ex Hyundai Speed) | 13,100 | 2012 | June 2024 | |||
Maersk Enping (ex Hyundai Smart) | 13,100 | 2012 | May 2024 | |||
Hyundai Respect (ex Hyundai Tenacity) | 13,100 | 2012 | March 2024 | |||
Hyundai Honour (ex Hyundai Together) | 13,100 | 2012 | February 2024 | |||
Express Rome | 10,100 | 2011 | January 2019 | |||
Express Berlin | 10,100 | 2011 | September 2019 | |||
Express Athens | 10,100 | 2011 | February 2019 | |||
CSCL Le Havre | 9,580 | 2006 | September 2018 | |||
CSCL Pusan | 9,580 | 2006 | July 2018 | |||
CMA CGM Melisande | 8,530 | 2012 | November 2023 | |||
CMA CGM Attila | 8,530 | 2011 | April 2023 | |||
CMA CGM Tancredi | 8,530 | 2011 | May 2023 | |||
CMA CGM Bianca | 8,530 | 2011 | July 2023 | |||
CMA CGM Samson | 8,530 | 2011 | September 2023 | |||
CSCL America | 8,468 | 2004 | March 2018 | |||
Europe | 8,468 | 2004 | March 2018 | |||
CMA CGM Moliere (2) | 6,500 | 2009 | August 2021 | |||
CMA CGM Musset (2) | 6,500 | 2010 | February 2022 | |||
CMA CGM Nerval (2) | 6,500 | 2010 | April 2022 | |||
CMA CGM Rabelais (2) | 6,500 | 2010 | June 2022 | |||
CMA CGM Racine (2) | 6,500 | 2010 | July 2022 | |||
YM Mandate | 6,500 | 2010 | January 2028 | |||
YM Maturity | 6,500 | 2010 | April 2028 | |||
Performance | 6,402 | 2002 | May 2018 | |||
Priority | 6,402 | 2002 | March 2018 | |||
YM Seattle | 4,253 | 2007 | July 2019 | |||
YM Vancouver | 4,253 | 2007 | September 2019 | |||
Derby D | 4,253 | 2004 | March 2018 | |||
Deva | 4,253 | 2004 | March 2018 | |||
ZIM Rio Grande | 4,253 | 2008 | May 2020 | |||
ZIM Sao Paolo | 4,253 | 2008 | August 2020 | |||
ZIM Kingston (ex OOCL Istanbul) | 4,253 | 2008 | September 2020 | |||
ZIM Monaco | 4,253 | 2009 | November 2020 | |||
ZIM Dalian (ex OOCL Novorossiysk) | 4,253 | 2009 | February 2021 | |||
ZIM Luanda | 4,253 | 2009 | May 2021 | |||
Dimitris C | 3,430 | 2001 | March 2018 | |||
Express Black Sea | 3,400 | 2011 | March 2018 | |||
Express Spain | 3,400 | 2011 | November 2018 | |||
Express Argentina | 3,400 | 2010 | March 2018 | |||
Express Brazil | 3,400 | 2010 | September 2018 | |||
Express France | 3,400 | 2010 | October 2018 | |||
Singapore (ex YM Singapore) | 3,314 | 2004 | October 2019 | |||
Colombo | 3,314 | 2004 | March 2019 | |||
MSC Zebra | 2,602 | 2001 | October 2018 | |||
Amalia C | 2,452 | 1998 | August 2019 | |||
Danae C | 2,524 | 2001 | January 2020 | |||
Advance (ex Hyundai Advance) | 2,200 | 1997 | June 2018 | |||
Future (ex Hyundai Future) | 2,200 | 1997 | March 2018 | |||
Sprinter (ex Hyundai Sprinter) | 2,200 | 1997 | February 2018 | |||
Stride (ex Hyundai Stride) | 2,200 | 1997 | March 2018 | |||
Hyundai Progress | 2,200 | 1998 | March 2018 | |||
Bridge (ex Hyundai Bridge) | 2,200 | 1998 | July 2018 | |||
Hyundai Highway | 2,200 | 1998 | February 2018 | |||
Vladivostok (ex Hyundai Vladivostok) | 2,200 | 1997 | April 2018 | |||
NYK Lodestar(3) | 6,422 | 2001 | March 2018 | |||
NYK Leo(3) | 6,422 | 2002 | February 2019 | |||
Suez Canal(3) | 5,610 | 2002 | March 2018 | |||
Genoa(3) | 5,544 | 2002 | June 2018 | |||
(1) | Earliest date charters could expire. Some charters include options to extend their terms. |
(2) | The charters with respect to the CMA CGM Moliere, the CMA CGM Musset, the CMA CGM Nerval, the CMA CGM Rabelais and the CMA CGM Racine included an option for the charterer, CMA-CGM, to purchase the vessels eight years after the commencement of the respective charters, which fell/will fall in September 2017, March 2018, May 2018, July 2018 and August 2018, respectively, each for $78.0 million. Each such option was exercisable 15 months in advance of these dates. None of these options were exercised. |
(3) | Vessels acquired by Gemini Shipholdings Corporation, in which Danaos holds a 49% equity interest. |
DANAOS CORPORATION Condensed Consolidated Statements of Operations - Unaudited (Expressed in thousands of United States dollars, except per share amounts) | ||||||||
Three months | Three months | Year ended | Year ended | |||||
December 31, | December 31, | December 31, | December 31, | |||||
2017 | 2016 | 2017 | 2016 | |||||
OPERATING REVENUES | $114,168 | $112,107 | $451,731 | $498,332 | ||||
OPERATING EXPENSES | ||||||||
Vessel operating expenses | (26,196) | (25,856) | (106,999) | (109,384) | ||||
Depreciation & amortization | (29,672) | (34,016) | (121,976) | (134,573) | ||||
Impairment loss | - | (415,118) | - | (415,118) | ||||
General & administrative | (5,815) | (5,968) | (22,672) | (22,105) | ||||
Loss on sale of vessels | - | - | - | (36) | ||||
Other operating expenses | (2,962) | (3,923) | (12,587) | (29,759) | ||||
Income From Operations | 49,523 | (372,774) | 187,497 | (212,643) | ||||
OTHER INCOME/(EXPENSES) | ||||||||
Interest income | 1,375 | 1,486 | 5,576 | 4,682 | ||||
Interest expense | (22,227) | (21,170) | (86,556) | (82,966) | ||||
Other finance expenses | (997) | (1,585) | (4,126) | (4,932) | ||||
Equity income/(loss) on investments | 332 | (14,655) | 965 | (16,252) | ||||
Other income/(expenses), net | (4,269) | (29,178) | (15,757) | (41,602) | ||||
Realized loss on derivatives | (931) | (1,915) | (3,694) | (9,425) | ||||
Unrealized loss on derivatives | - | (6,776) | - | (3,057) | ||||
Total Other Expenses, net | (26,717) | (73,793) | (103,592) | (153,552) | ||||
Net Income/(Loss) | $22,806 | $(446,567) | $83,905 | $(366,195) | ||||
EARNINGS/(LOSS) PER SHARE | ||||||||
Basic & diluted earnings/(loss) per share | $0.21 | $(4.07) | $0.76 | $(3.34) | ||||
Basic & diluted weighted average number of common | 109,821 | 109,805 | 109,824 | 109,802 | ||||
Non-GAAP Measures* Reconciliation of Net Income/(Loss) to Adjusted Net Income - Unaudited | |||||||
Three months | Three months | Year ended | Year ended | ||||
December 31, | December 31, | December 31, | December 31, | ||||
2017 | 2016 | 2017 | 2016 | ||||
Net income/(loss) | $22,806 | $(446,567) | $83,905 | $(366,195) | |||
Amortization of financing fees & finance fees accrued | 3,440 | 3,805 | 14,322 | 16,099 | |||
Refinancing professional fees | 4,985 | - | 14,297 | - | |||
Impairment loss | - | 415,118 | - | 415,118 | |||
Impairment loss on securities | - | 29,384 | - | 29,384 | |||
Impairment loss component of equity loss on investments | - | 14,642 | - | 14,642 | |||
Accelerated amortization of accumulated other comprehensive loss | - | 7,706 | - | 7,706 | |||
Bad debt expense | - | - | - | 15,834 | |||
Loss on sale of securities | - | - | 2,357 | 12,906 | |||
Unrealized gain on derivatives | - | (930) | - | (4,649) | |||
Loss on sale of vessels | - | - | - | 36 | |||
Adjusted Net Income | $31,231 | $23,158 | $114,881 | $140,881 | |||
Adjusted Earnings Per Share | $0.28 | $0.21 | $1.05 | $1.28 | |||
Weighted average number of shares (in thousands) | 109,821 | 109,805 | 109,824 | 109,802 | |||
* 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 months and years ended December 31, 2017 and 2016. 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 Condensed Consolidated Balance Sheets - Unaudited (Expressed in thousands of United States dollars) | |||||
As of | As of | ||||
December 31, | December 31, | ||||
2017 | 2016 | ||||
ASSETS | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | $66,895 | $73,717 | |||
Restricted cash | 2,812 | 2,812 | |||
Accounts receivable, net | 6,502 | 8,028 | |||
Other current assets | 49,790 | 51,397 | |||
125,999 | 135,954 | ||||
NON-CURRENT ASSETS | |||||
Fixed assets, net | 2,795,971 | 2,906,721 | |||
Deferred charges, net | 8,962 | 8,199 | |||
Investments in affiliates | 5,998 | 5,033 | |||
Other non-current assets | 49,466 | 71,157 | |||
2,860,397 | 2,991,110 | ||||
TOTAL ASSETS | $2,986,396 | $3,127,064 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
CURRENT LIABILITIES | |||||
Long-term debt, current portion | $2,329,601 | $2,504,932 | |||
Accounts payable, accrued liabilities & other current liabilities | 50,238 | 61,349 | |||
2,379,839 | 2,566,281 | ||||
LONG-TERM LIABILITIES | |||||
Long-term debt, net | - | - | |||
Other long-term liabilities | 57,852 | 73,070 | |||
57,852 | 73,070 | ||||
STOCKHOLDERS' EQUITY | |||||
Common stock | 1,098 | 1,098 | |||
Additional paid-in capital | 546,898 | 546,898 | |||
Accumulated other comprehensive loss | (114,076) | (91,163) | |||
Retained earnings | 114,785 | 30,880 | |||
548,705 | 487,713 | ||||
Total liabilities and stockholders' equity | $2,986,396 | $3,127,064 | |||
DANAOS CORPORATION Condensed Consolidated Statements of Cash Flows - Unaudited (Expressed in thousands of United States dollars) | ||||||||
Three | Three | Year ended | Year ended | |||||
December 31, | December 31, | December 31, | December 31, | |||||
2017 | 2016 | 2017 | 2016 | |||||
Operating Activities: | ||||||||
Net income/(loss) | $22,806 | $(446,567) | $83,905 | $(366,195) | ||||
Adjustments to reconcile net income/(loss) to net cash | ||||||||
Depreciation | 27,961 | 32,459 | 115,228 | 129,045 | ||||
Impairment losses | - | 444,502 | - | 444,502 | ||||
Amortization of deferred drydocking & special survey costs, | 5,151 | 5,362 | 21,070 | 21,627 | ||||
Payments for drydocking/special survey | (1,103) | (189) | (7,511) | (8,976) | ||||
Amortization of deferred realized losses on cash flow | 931 | 8,718 | 3,694 | 11,734 | ||||
Equity (income)/loss on investments | (332) | 14,655 | (965) | 16,252 | ||||
Unrealized gain on derivatives | - | (930) | - | (4,649) | ||||
Bad debt expense | - | - | - | 15,834 | ||||
Loss on sale of securities | - | - | 2,357 | 12,906 | ||||
Loss on sale of vessels | - | - | - | 36 | ||||
Stock based compensation | - | 76 | - | 76 | ||||
Accounts receivable | 541 | (3,976) | (2,544) | (13,210) | ||||
Other assets, current and non-current | (4,599) | (989) | (7,832) | (20,060) | ||||
Accounts payable and accrued liabilities | (1,667) | (5,342) | (23) | 1,067 | ||||
Other liabilities, current and long-term | (4,442) | (10,183) | (26,306) | 21,978 | ||||
Net Cash provided by Operating Activities | 45,247 | 37,596 | 181,073 | 261,967 | ||||
Investing Activities: | ||||||||
Vessel additions | (782) | (1,053) | (4,478) | (4,561) | ||||
Investments in affiliates | - | - | - | (9,996) | ||||
Net proceeds from sale of securities | - | - | 6,236 | - | ||||
Net proceeds from sale of vessels | - | - | - | 5,178 | ||||
Net Cash provided by/(used in) Investing Activities | (782) | (1,053) | 1,758 | (9,379) | ||||
Financing Activities: | ||||||||
Debt repayment | (41,723) | (88,953) | (189,653) | (251,130) | ||||
(Increase)/Decrease in restricted cash | (2,812) | (2,117) | 0 | 6 | ||||
Net Cash used in Financing Activities | (44,535) | (91,070) | (189,653) | (251,124) | ||||
Net Increase/(Decrease) in cash and cash equivalents | (70) | (54,527) | (6,822) | 1,464 | ||||
Cash and cash equivalents, beginning of period/year | 66,965 | 128,244 | 73,717 | 72,253 | ||||
Cash and cash equivalents, end of period/year | $66,895 | $73,717 | $66,895 | $73,717 | ||||
DANAOS CORPORATION Reconciliation of Net Income/(Loss) to Adjusted EBITDA - Unaudited (Expressed in thousands of United States dollars) | |||||||
Three months | Three months | Year ended | Year ended | ||||
December 31, | December 31, | December 31, | December 31, | ||||
2017 | 2016 | 2017 | 2016 | ||||
Net income/(loss) | $22,806 | $(446,567) | $83,905 | $(366,195) | |||
Depreciation | 27,961 | 32,459 | 115,228 | 129,045 | |||
Amortization of deferred drydocking & special survey costs | 1,711 | 1,557 | 6,748 | 5,528 | |||
Amortization of deferred finance costs and other finance fees accrued | 3,440 | 3,805 | 14,322 | 16,099 | |||
Amortization of deferred realized losses on interest rate swaps | 931 | 1,012 | 3,694 | 4,028 | |||
Interest income | (1,375) | (1,486) | (5,576) | (4,682) | |||
Interest expense | 19,557 | 18,195 | 75,403 | 70,314 | |||
Refinancing professional fees | 4,985 | - | 14,297 | - | |||
Impairment loss | - | 415,118 | - | 415,118 | |||
Impairment loss on securities | - | 29,384 | - | 29,384 | |||
Impairment loss component of equity loss on investments | - | 14,642 | - | 14,642 | |||
Accelerated amortization of accumulated other comprehensive loss | - | 7,706 | - | 7,706 | |||
Bad debt expense | - | - | - | 15,834 | |||
Loss on sale of securities | - | - | 2,357 | 12,906 | |||
Loss on sale of vessels | - | - | - | 36 | |||
Stock based compensation | - | 76 | - | 76 | |||
Realized loss on derivatives | - | 903 | - | 5,397 | |||
Unrealized gain on derivatives | - | (930) | - | (4,649) | |||
Adjusted EBITDA(1) | $80,016 | $75,874 | $310,378 | $350,587 | |||
1) | Adjusted EBITDA represents net income/(loss) before interest income and expense, depreciation, amortization of deferred drydocking & special survey costs and deferred finance costs, amortization of deferred realized losses on interest rate swaps, accelerated amortization of accumulated other comprehensive loss, unrealized gain on derivatives, realized loss on derivatives, loss on sale of securities, refinancing professional fees, loss on sale of vessels, impairment losses, stock based compensation and bad debt expense. 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 Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall 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. |
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 and years ended December 31, 2017 and 2016. 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. |
1Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to adjusted EBITDA.
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SOURCE Danaos Corporation
Company Contact - Evangelos Chatzis, Chief Financial Officer, Danaos Corporation, Athens, Greece, Tel.: 30 210 419 6480, E-Mail: cfo@danaos.com, or Iraklis Prokopakis, Senior Vice President and Chief Operating Officer, Danaos Corporation, Athens, Greece, Tel.: 30 210 419 6400, E-Mail: coo@danaos.com; Investor Relations and Financial Media - Rose & Company, New York, Tel. 212-359-2228, E-Mail: danaos@rosecoglobal.com
Danaos Corporation published this content on 12 February 2018 and is solely responsible for the information contained herein.
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Original documenthttp://www.danaos.com/news-and-media/press-release-details/2018/Danaos-Corporation-Reports-Results-for-the-Fourth-Quarter-and-Year-Ended-December-31-2017/default.aspx
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