Danaos adds to boxship orderbook as shipping sails into unpredictability
Greek owner is ‘highly insulated’ against near-term turbulence with a $3.4bn backlog of secured charters
Tariff war guarantees disruption, which often benefits shipping, but economic slowdown could cancel out any benefit, says chief executive John Coustas
DANAOS, the Greece-based containership and dry bulk carrier owner, has warned of increasing uncertainty clouding predictions for shipping, although for the near term the company’s position is fortified by a $3.4bn backlog of secured charter contracts.
“The world is entering uncharted territory and any near-term predictions about the direction of shipping markets are inherently unreliable,” said chief executive John Coustas, as the owner released profitable results for the fourth quarter and entire 2024 year.
“The tariff war is bound to generate disruptions, which have historically benefited shipping,” he said.
But Coustas added that an economic slowdown may negate any such benefits.
In the container charter market, where Danaos has a fleet of 74 vessels on the water, rates are weakening and liner companies “exhibiting more caution” about forward chartering.
Nevertheless, the market remained healthy and rates were still “much higher” than prepandemic levels.
“We will have to wait until after Chinese New Year to gauge the effect of the front-loading of exports that occurred in anticipation of tariffs and the demand pattern in the new trade environment,” he said.
Danaos confirmed it has ordered two containerships of 9,200 teu, bringing its orderbook to 15 vessels under construction on top of seven newbuildings that have been delivered over the past 13 months.
The new ships are methanol-ready and fitted with open-loop scrubbers. According to Danaos, 13 of the 15 boxships still on order have already been committed on multiyear charters.
“Our charter backlog of $3.4bn provides us with a certainty of income and firepower to explore accretive investments,” said Coustas.
Danaos was “highly insulated from near-term market uncertainty”, with 97% employment coverage for 2025 and 79% for 2026 at healthy rates, and a remaining average contract duration of 3.7 years.
Coustas linked an “ongoing malaise” in the dry bulk market with the pace of recovery of the Chinese economy that, he said, “has not shown signs of accelerating”.
Delivery of new bulkers this year would add to the weakness in the market, but the capesize segment, where Danaos operates an orderbook, was still at “historically low levels.”
The New York Stock Exchange-listed owner has re-entered the dry bulk sector in the past two years, building up a fleet of 10 capesizes.
The dip in profits was partly due to changes in the fair value of the company’s stake in Eagle Bulk Shipping, which was last year absorbed by Star Bulk Carriers in an all-stock merger, causing Danaos to book a $35.6m loss on marketable securities.
Adjusted for this and other items, the profit came to $133.3m, closely resembling the result in the fourth quarter of the previous year.
Of this, $128.7m of adjusted net income came from the containership fleet, while the bulker segment eked out a $2.3m profit.
For 2024, full-year operating revenues narrowly topped $1bn, up from $973.6m in 2023.
Adjusted net income for the year was $532.4m versus $567.6m the previous year.
At the end of 2024, Danaos had cash of $453.4m, an increase of 67% compared with 12 months earlier.
The owner has declared an unchanged dividend of $0.85 per share for the fourth quarter of 2024.
It has been active repurchasing shares under an outstanding $200m mandate and another $15.7m of stock repurchased so far this year has brought spending on the buyback programme thus far to $168.8m.
