Danaos (DAC) Q2 2024 earnings summary

Executive summary

• Secured multi-year charters for newbuildings, averaging 4.5 years, resulting in a $3.2 billion charter backlog through 2033 and strong revenue visibility, with 99% charter coverage for 2024 and 80% for 2025.

• Integrated 10 Capesize dry bulk vessels, expanding sector diversification and spot market exposure.

• Fleet expanded to 70 container vessels and 10 Capesize dry bulk vessels, with 17–20 eco-designed, methanol-ready newbuildings on order.

• Pioneering digitalization and ESG, with early achievement of IMO 2030 carbon targets and ongoing investment in operational technology.

• Repurchased 1.67 million shares for $104.4 million under the ongoing $200 million buyback program.

Financial highlights

• Q2 2024 operating revenues were $246.3 million, up 2% year-over-year; adjusted net income was $132.3 million ($6.78 per share), down from $143.4 million ($7.14) in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $176.8 million, nearly flat year-over-year; H1 2024 adjusted EBITDA was $354.0 million.

• Cash and cash equivalents stood at $372 million, with total liquidity of $787 million as of June 30, 2024.

• Net debt was $205 million, with a net debt to LTM Adjusted EBITDA ratio of 0.29x.

• Declared a $0.80 per share dividend for Q2 2024, payable August 29, 2024.

Outlook and guidance

• All newbuilding containerships are eco-designed, methanol-ready, and secured on multi-year charters, supporting strong contracted income and limited downside risk.

• No immediate plans for further newbuild orders; management will pause and monitor market conditions.

• Capesize dry bulk market remains strong, supported by high iron ore imports and vessel diversions from the Red Sea crisis.

• Management expects continued strong revenue visibility due to high charter coverage and contracted backlog.