Danaos DAC

Danaos Corporation is an international owner of container vessels and drybulk vessels, chartering its containerships to many of the world’s largest liner companies and employing its drybulk vessels on short term time charters and voyage charters. The company’s fleet consists of 75 container ships totaling 477,491 TEU and 27 newbuilding container ships totaling 174,550 TEU. In addition it owns 11 Capesize drybulk carriers with a combined capacity of 1,943,286 DWT and has 4 Newcastlemax drybulk vessels under construction with an aggregate capacity of approximately 844,000 DWT. Danaos Corporation focuses on maintaining a modern and efficient fleet to meet the demand of global trade.

The company generates revenue primarily from charter hire earned on its container fleet under multi year charters with major liner companies and from short term time charters and voyage charters for its drybulk carriers. As of the reporting date the contracted cash operating revenue from its container vessels, including newbuildings, totals approximately $4.3 billion. The remaining average contracted charter duration for the container fleet is 4.3 years weighted by aggregate contracted charter hire. The drybulk segment earns revenue from spot market charters whose rates fluctuate with supply and demand for bulk commodities such as iron ore and coal. This mixture of long term fixed rate contracts and short term exposure provides Danaos with both stable cash flows and potential upside during strong markets.

The company operates through the following segments.

• Container: This segment owns and charters container vessels to major liner companies under multi year charters that often extend up to 18 years, providing predictable revenue streams and high utilization rates. The fleet ranges in size from 1,800 to 13,100 TEU, allowing the company to serve diverse trade lanes and customer needs.
• Drybulk: This segment owns and operates drybulk vessels primarily on short term time charters and voyage charters, making its earnings sensitive to changes in spot rates for bulk commodities. The fleet includes 11 Capesize carriers and 4 Newcastlemax newbuildings, which are deployed to transport iron ore coal and other dry bulk goods on a voyage or short term basis.

Danaos Corporation holds a strong position among independent tonnage providers in the container shipping sector, benefiting from a large modern fleet, long term charters with leading liner companies and a reputation for operational excellence. Its main competitors include other shipowners such as Seaspan Corporation, Textainer Group and independent operators as well as the container fleets of the liner companies themselves. The company’s competitive advantages stem from its ability to secure long term contracts, its focus on vessels with eco friendly design and its close relationship with its manager which provides technical and commercial support.

The company’s container charter customers include CMA CGM MSC Hapag Lloyd COSCO PIL Maersk ONE Sealead OOCL Samudera Interasia Lines Yang Ming and ZIM. For its drybulk vessels the company serves a variety of charterers in the spot market, including major miners, traders and utilities that require iron ore coal and other bulk cargoes. This diverse base helps Danaos maintain steady demand for its container ships while allowing flexibility in its drybulk operations.