Danaos boosts backlog with $616 million, adds new ships By Investing.com

ATHENS – Danaos Corporation (NYSE:), a prominent containership owner, has announced significant expansions to its operational capacity and revenue prospects. The company has increased its contracted revenue backlog by $616 million due to new charter fixtures and has expanded its fleet with orders for five additional newbuild containerships.

The revenue backlog increase comprises roughly $203 million from two-year charter agreements for nine of Danaos’s current vessels. Additionally, the company has secured approximately $413 million from charter fixtures for the five newbuild orders, with an average charter duration of 4.8 years.

The five new vessels, totaling $509 million in contract price, reflect Danaos’s commitment to modernization and environmental responsibility. One 8,258 TEU vessel is scheduled for delivery in 2027 from Yangzijiang shipyard in China, while four 9,200 TEU vessels from Dalian shipyard in China are expected between 2027 and 2028.

These ships will feature the latest eco-friendly technologies, including methanol fuel readiness, open-loop scrubbers, and Alternative Maritime Power (AMP (OTC:)) units. They will also meet the latest International Maritime Organization (IMO) Tier III emission standards and Energy Efficiency Design Index (EEDI) Phase III requirements.

Following these developments, Danaos’s total contracted cash operating revenues stand at $2.9 billion, with an average remaining contracted charter duration of 3.1 years. The company boasts a container vessel fleet coverage of 99% for 2024 and 80% for 2025, factoring in scheduled newbuild deliveries.

In the second quarter of 2024, Danaos took delivery of three newbuilding vessels, adding to its impressive construction pipeline of 16 container vessels with a combined capacity of 129,819 TEU. The delivery schedule spans from the remainder of 2024 through 2028.

Dr. John Coustas, CEO of Danaos, expressed satisfaction with the company’s strategic growth, emphasizing the latest order’s role in solidifying Danaos’s market position and the importance of securing multi-year charters for future profitability and shareholder value.

Danaos Corporation, with a fleet of 70 containerships and 16 under construction, is a leading force in the global containership market. The company’s shares are publicly traded on the New York Stock Exchange under the ticker “DAC”.

This expansion news is based on a press release statement from Danaos Corporation.

In other recent news, Danaos Corporation unveiled its first-quarter financial results for 2024, demonstrating a slight dip in adjusted net income compared to the previous year. However, the company’s contracted revenue backlog saw a significant rise, now reaching $2.5 billion. This was further bolstered by a successful round of rechartering activities, securing multi-year chartering agreements for all its vessels on order.

The company reported an adjusted EPS for Q1 2024 at $7.15 per share, with an adjusted net income of $140 million. The past three months saw Danaos adding $423 million to its contracted revenue backlog. Furthermore, the company expanded its drybulk fleet with an additional Capesize vessel, bringing the total to 10.

Analysts note the company’s anticipation of continued strength in the container market for 2024 and beyond. Danaos has secured charters for all of its 14 newbuildings, including those set for delivery through 2027. Despite a decrease in net income due to a rise in total operating costs, the company is exploring further growth opportunities and fleet expansion while maintaining a strong liquidity profile. These are the recent developments surrounding Danaos Corporation.

InvestingPro Insights

Amidst an ambitious expansion strategy, Danaos Corporation (NYSE:DAC) has not only been focusing on fleet growth but also demonstrating robust financial metrics that may interest investors. With a market capitalization of approximately $1.7 billion and a strikingly low Price/Earnings (P/E) ratio of 2.96, the company is trading at a valuation that may catch the eye of value investors. Adjusting for the last twelve months as of Q1 2024, the P/E ratio is just slightly higher at 3.04, reinforcing the notion of a potentially undervalued stock.

The company’s gross profit margins are a testament to its operational efficiency, standing at a commendable 75.77% for the same period. This is further supported by a Price/Book ratio of 0.54, suggesting that the company’s assets are potentially undervalued on the balance sheet compared to the market price of its stock. For dividend-seeking investors, Danaos has shown a commitment to returning value, raising its dividend for three consecutive years, with a current yield of 3.57% as of mid-2024.

InvestingPro Tips highlight that Danaos Corporation’s management has been actively buying back shares, a sign of confidence in the company’s value and future prospects. Additionally, the company has been recognized for its high shareholder yield, a metric that combines dividend payments and share buybacks to assess the total returns being distributed to shareholders.

For individuals seeking more in-depth analysis and additional insights, there are 13 more InvestingPro Tips available for Danaos Corporation at https://www.investing.com/pro/DAC. These tips cover various aspects of the company’s financial health and market performance, including its ability to cover interest payments, liquidity, leverage, and historical returns. To access these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which could provide valuable context for Danaos Corporation’s financial narrative and future outlook.

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