Danaos first half profit falls 28pc to $26 million as charter rates sink

Danaos first half profit falls 28pc to $26 million as charter rates sink INTERNATIONAL owner of containerships Danaos Corporation has posted a 28.7 per cent first half year-on-year decline in net profit to US$25.7 million despite a 4.2 per cent increase in revenues to $292.7 million.

Quarterly profit dropped 37.2 per cent to $11.8 million year on year, drawn on revenues of $146.6 million, up 0.1 per cent.

The overall decline was attributed to the softening of the charter market.

"However, as the vessels that have been re-chartered at the current low rates deployed under short-term charters are currently running at operating break-even levels, an improvement in the charter market is a one-way option to the improvement of our results," said Danaos CEO John Coustas.

Second quarter adjusted EBITDA rose 0.7 per cent year on year to $107.4 million, and 6.3 per cent over the first six months of the year to $216 million.

The remaining average charter duration of its fleet was 9.3 years as of June 30 (weighted by aggregate contracted charter hire). From the end of June through 2028 total contracted operating revenues will amount to $4.6 billion.

Said Dr Coustas: "We currently have two vessels on cold lay-up compared to seven vessels laid up in the beginning of the year. We are executing a fleet modernisation programme. We have sold five of our older vessels with an average age of 25 years for $32.8 million, while we have already utilised $17.9 million of these sales proceeds for the purchase of two 2,500-TEU geared ships with an average age of 13.4 years (during the second quarter). These two new vessels have already been chartered for one year and operate in niche markets."

By the end of June the company had an average of 60.9 containerships compared to 62.2 vessels last year. Fleet utilisation declined to 94.1 per cent in the second quarter, down from 94.5 per cent over the same period in 2012.