Danaos Corporation (NYSE:DAC) Q1 2022 Earnings Conference Call May 17, 2022 9:00 AM ET

Company Participants

Evangelos Chatzis - Chief Financial Officer

John Coustas - Chief Executive Officer

Conference Call Participants

Chris Wetherbee - Citigroup

Jay Mintzmyer - Value Investor’s Edge

Operator

Good day, and welcome to the Danaos Corporation Conference Call to discuss the Financial Results for the Three Months Ended March 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 to a question-and-answer session.

Evangelos Chatzis

Thank you, operator, and good morning to everyone. And thank you for joining us this morning. 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 will 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. 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 first quarter of 2022. The first quarter of 2022 was another exceptional one for Danaos.

Having already seeded the future with $2.7 billion of contracted revenue, we're operating from a position of strength and confidence. This allowed us to invest in the future by ordering six vessels in the 7,000 to 8,000 TEU range to be delivered between March and September 2024, ready to be converted to run on green methanol when such fuel is widely available. Our position in ZIM continues to generate solid returns, including $110 million in net dividends declared in the first quarter.

The broader market has been affected by geopolitical events, high energy prices, inflation, and interest rate outlook and China’s zero COVID policy. Although, box freight rates and charter rates have not been significantly affected, sentiment has changed and market participants have adopted a more conservative short-term attitude.