Danaos Thrives Amidst Strong Profits And Diversification


Greece-based Danaos, a non-operating containership owner, announced robust earnings of $143m in Q3, driven by a $239m turnover. 

Strategic Expansion

  • Unlike ocean carriers facing uncertainty, Danaos foresees continued profitability, bolstered by its long-term charter portfolio. 
  • However, amid market unpredictability, the company ventured into the bulk sector, acquiring seven capesize dry-bulk carriers. 
  • Despite softened charter rates, non-operating container ship owners (NOOs) like Danaos persist in reaping benefits from previous peak demand.

Charter Dynamics

Danaos, with 68 container vessels from 2,100 to 13,100 TEU, serves liners like CMA CGM and has a $2.5bn charter backlog until 2028. 

Despite declining client profitability, CEO John Coustas trusts their model’s resilience based on fixed-rate charter agreements.

Ocean carriers aim to cut costs amid lower freight rates, especially in container ship charters post-pandemic. While charter defaults remain rare, ‘re-lets’ and ‘amend and extend’ strategies are rising to mitigate surplus capacity and reduce operating expenses. Danaos, relatively debt-free, hasn’t faced such renegotiations yet but sees potential benefits in increasing future earnings visibility.

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Source: The Load Star


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