Danaos dips

Fleet utilization is up for Danaos Corp but this has yet to translate into higher revenues and profits.

Boxship disposals at Danaos Corp, the US-listed Greek boxship lessor have resulted in lower second-quarter revenues although profits for the company appear to be holding firm.

After disposing of four redundant containerships, operating revenues came in at $136.4m for the three months ending on 20 June 2014, compared to $146.6m for the same period in 2013, a decrease of 7.0%.

Adjusted net income of $11.6m, or $0.11 per share, for the three months ended 30 June compared to $11.8m, or $0.11 per share, for the same period in 2013.

Despite profits holding steady during the second quarter, Danaos’s overall results for the first half of the year were down, mainly due to the impact of the Zim restructuring on its first quarter results and an overall soft charter market.

First half operating revenues dropped 7.1% to $271.9m as compared to the same period last year, while adjusted net income fell to $18.6m from $25.7 million.

Fleet utilization has been increasing for the company. During the second quarter the fleet utilization increased to 97.3% from 94.1% in the second quarter of 2013. During the second quarter of 2014Danaos had an average of 55.8 containerships compared to 60.9 containerships for the year before.

“During the second quarter signs of improvement in container market fundamentals have manifested themselves through a reduction of laid up tonnage and improved utilization rates in main trade lanes, although this has not yet translated into an improvement in charter rates,” Danaos CEO John Coustas noted.

“Despite the soft charter market, with 98% charter coverage for the next 12 months in terms of operating revenues we are substantially insulated from market volatility and the timing of any recovery. Additionally, our $5,957 daily operating cost clearly positions us as one of the most efficient operators in the industry,” he added.