Danaos Corporation (NYSE:DAC) Q4 2022 Earnings Conference Call February 15, 2023 9:00 AM ET

Company Participants

John Coustas - Chief Executive Officer

Evangelos Chatzis - Chief Financial Officer

Conference Call Participants

Omar Nokta - Jefferies

Operator

Good day and welcome to the Danaos Corporation Conference Call to discuss the Financial Results for the 3 months ended December 31, 2022. As a reminder, today’s call is being recorded. Hosting the call today is Dr. John Coustas, Chief Executive Officer of Danaos Corporation; and Mr. Evangelos Chatzis, Chief Financial Officer of Danaos Corporation. Dr. Coustas and Mr. Chatzis will be making some introductory comments and then we will open the call up to a question-and-answer session. Gentlemen, you have the floor.

Evangelos Chatzis

Thank you, operator and good morning to everyone and thank you for joining us today. Before we begin, I quickly want to remind everyone that management’s remarks this morning may contain certain forward-looking statements and that actual results could differ materially from those projected today. These forward-looking statements are made as of today and we undertake no obligation to update them. Factors that might affect future results are discussed in our filings with the SEC and we encourage you to review these detailed Safe Harbor and risk factor disclosures. Please also note that where we feel appropriate, we would continue to refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA and adjusted net income to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release and accompanying materials.

With that, let me now turn the call over to Dr. John Coustas who will provide a broad overview of the quarter.

John Coustas

Thank you, Evangelos. Good morning and thank you all for joining today’s call to discuss our results for the fourth quarter of 2022. This past year marked the peak of the container market and the exceptionally strong market conditions we saw over the last 2 years are behind us. The decline in box rates to pre-pandemic levels across all sailing routes for shadows difficult times ahead. The liner companies are projecting 2023 earnings materially lower when compared to 2022 and we are still waiting to see the full effect of the looming recession.

Charter rates have fallen significantly, but remains higher than pre-pandemic levels. However, charter durations rarely exceeds 12 months. Fortunately, we are insulated from current market conditions as 93% of our available days are already contracted for 2023, providing us with excellent visibility for the year ahead. Given our limited near-term downside risk and our minimal debt obligations, we have amplifier power to opportunistically take advantage of the forthcoming downturn.