John Coustas-led Danaos Corp, a New York-listed owner, has secured multi-year charter arrangements for all of the vessels in its newbuilding orderbook with an average charter duration of approximately 4.8 years weighted by aggregate contracted charter hire.
The shipowner over the past two months added approximately $308m to its contracted revenue backlog through a combination of new charters and charter extensions for 16 of its container vessels.
The total contracted cash operating revenues, on the basis of concluded charter contracts currently stand at $3.3bn, including newbuildings. The remaining average contracted charter duration for the company’s containership fleet is 3.4 years, weighted by aggregate contracted charter hire.
The contracted operating days charter coverage for Danaos’ container vessel fleet is currently 100% for 2024, 94% for 2025 and 73% for 2026. This includes newbuildings based on their scheduled delivery dates.
Meanwhile, Danos took delivery – during the third quarter of 2024 – of another 3 newbuilding containerships, namely one 7,165 teu vessel and two 8,010 teu vessels which have commenced their three-year charters. In total, the owner has taken delivery of 6 newbuilding containerships in 2024.
The company’s current fleet consists of 73 container vessels aggregating 465,463 TEUs and 14 under construction container vessels aggregating 115,834 TEUs. Danaos has also recently invested in the drybulk sector with the acquisition of 10 capesize drybulk vessels aggregating 1,760,861-dwt.
Danaos’ CEO Dr. John Coustas commented: “The container market remained very strong in the third quarter of 2024, allowing us to add over $300 million to our contracted charter backlog which presently stands at $3.3 billion.
“Importantly, all 14 of our newbuildings on order are fixed for 5 years, except for two that are fixed for 2 years. We have excellent earnings visibility as we have covered 100% of our container vessel fleet operating days for 2024, 94% for 2025 and 73% for 2026.
“The dry bulk market has been uncharacteristically soft lately, which can be attributed to a disruption of seasonal patterns throughout the year as well as a decrease in Chinese steel production. Our dry bulk fleet performed reasonably well during the quarter, and we are expecting freight rates to gradually improve as we move into 2025.
“Due to the certainty provided by the charter backlog in our container segment, Danaos is insulated from the unstable and unpredictable nature of the current global backdrop. The recent U.S. Presidential election has introduced new uncertainty about future policymaking and its effect in the shipping market.
“Most notably, President Trump has openly declared his intention to implement or increase trade tariffs that have the potential to decrease container movements or at least will reshuffle trade lanes. Additionally, it is likely that energy transition initiatives will take place at a slower rate, and we don’t know to what extent existing IMO initiatives will be supported by the new administration.
“Danaos remains in a fortunate and enviable position. In addition to our charter coverage, our balance sheet is a significant strength. I am proud of the efforts we have undertaken, efforts that have been acknowledged by Moody’s, who upgraded Danaos to Ba1.
“Together with the S&P credit rating at BB+, Danaos now holds the highest grade assigned to a pure play shipping company. Our creditworthiness will allow us to explore fully the U.S. bond market, creating opportunity to raise competitively priced capital to continue to opportunistically pursue growth opportunities.”
