What were the key takeaways from Danaos’s earnings call?

What were the key takeaways from Danaos's earnings call?

What does Danaos do and what are its main business segments?

What is Danaos's gross profit margin?

What is Danaos's latest dividend and current dividend yield?

What factors drove the changes in Danaos's revenue and profit?

Did Danaos beat or miss consensus estimates last quarter?

What guidance did Danaos's management provide for the next earnings period?

- **Robust Charter Market**: 100% 2025 and 95% 2026 contracted revenue visibility, with new charters secured to 2028.
- **Newbuilding Expansion**: $236M in new contracts for 2027-2029 vessels, leveraging below-market pricing.
- **Financial Strength**: $500M bond issuance at 6.85%, dividend increased 6% to $0.90/share.
- **Dry Bulk Growth**: 11th Capesize vessel acquisition, targeting 5%+ of assets in dry bulk.
- **Liquidity**: $971M total liquidity, fortress balance sheet with 33 vessels unencumbered.

**【CEO Summary Section】**
- **Market Overview**: The container charter market remains robust with idle fleet at all-time lows. The company secured new charters for vessels as far as early 2028, with shipyard slots becoming scarce and newbuilding prices rising.
- **Newbuilding Expansion**: Added six 1,800 TEU vessels (deliveries 2027-2029) with 10-year charters, contributing $236M to contracted revenue. Extended newbuilding program at below-market prices with multiyear employment secured.
- **Financial Strength**: Completed a $500M unsecured 7-year bond issuance at 6.85%, one of the most competitively priced in the industry. Proceeds to redeem a $300M bond and prepay secured facilities.
- **Dividend Increase**: Raised quarterly dividend to $0.90 per share, consistent with annual growth policy.
- **Dry Bulk Strategy**: Acquired an 11th Capesize vessel, expanding exposure to the dry bulk market due to supply constraints and ton-mile demand growth.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: Adjusted EPS of $6.75 (vs. $6.5 in Q3 2024), adjusted net income of $124.1M. Operating revenues increased $4.5M, offset by $6.1M higher operating costs and $2.5M lower dividend income.
- **Cost Efficiency**: Daily operating cost of $6,927 per vessel (up 0.9% YoY). G&A expenses rose $1.6M to $12.6M, driven by fleet expansion.
- **Contracted Revenue**: $745M added to backlog, bringing total to $4.1B with 4.3-year average charter duration. Coverage: 100% 2025, 95% 2026, 71% 2027.
- **Balance Sheet**: Net debt $165M (0.23x net debt/EBITDA), $596M cash, $971M total liquidity. 33/84 vessels unencumbered.

**【Q&A Highlights】**
- **Market Dynamics**: liners' strong demand for midsized vessels driven by shifting trade patterns (China exports to EU) and Red Sea transit uncertainty. CEO cautious on 2026 outlook but optimistic on 2027+ visibility.
- **Capesize Investment**: 5% of assets in dry bulk, plans to expand selectively in secondhand market. No newbuilding for now due to high prices.
- **Share Buybacks**: Resumed purchases under $300M program ($86.4M remaining). Management believes stock undervalued.
- **Star Bulk Update**: Happy with investment, increased position in spring 2025. No plans to expand into Panamaxes or Supramaxes.

Danaos Corporation (DAC) Q3 2025 Earnings Call Transcript

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