Danaos Corporation (NYSE:DAC) Q3 2023 Earnings Conference Call November 14, 2023 9:00 AM ET

Company Participants

Evangelos Chatzis – Chief Financial Officer

John Coustas – Chief Executive 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 Three Months Ended September 30, 2023. 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. Please go ahead.

Evangelos Chatzis

Thank you, operator, and good morning to everyone. 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. John Coustas, who will provide the broad overview of the quarter. John?

John Coustas

Thank you, Evangelos. Good morning, and thank you all for joining today’s call to discuss results for the third quarter of 2023. The macroeconomic environment continued to deteriorate during the third quarter of 2023 and container transport stagnated in most areas due to continued inventory destocking and weak retail sales. As a result, profitability of liner companies has dramatically decreased, and major operators have announced sweeping cost cutting measures. The chartering market continued to remain under pressure, particularly in the market for vessels smaller than 3,000 TEU, where charter rates returned to pre-pandemic levels.

In larger vessel segments, charter rates have remained relatively stable given the scarcity of open tonnage for next year, a factor that has enabled us to forward fix all our vessels above 10,000 TEU on three-year charters at profitable levels that will commence after expiry of existing charter contracts in 2024. As a result, our charter cover for 2024 has increased to 90%.