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Danaos(DAC) - 2024 Q4 - Earnings Call Transcript
DACDanaos(DAC)2025-02-11 15:19
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Financial Data and Key Metrics Changes - The company reported adjusted EPS for Q4 2024 of 6.93pershare,downfrom6.93 per share, down from 6.99 per share in Q4 2023, resulting in an adjusted income decrease from 136millionto136 million to 133.3 million [13] - Adjusted EBITDA increased by 9.9% to 189.7millioninQ42024comparedto189.7 million in Q4 2024 compared to 172.6 million in Q4 2023 [16] - Total operating expenses increased by 11million,primarilyduetovoyagecostsrelatedtothedrybulkCapesizefleet[14]BusinessLineDataandKeyMetricsChanges−Vesseloperatingexpensesroseto11 million, primarily due to voyage costs related to the dry bulk Capesize fleet [14] Business Line Data and Key Metrics Changes - Vessel operating expenses rose to 45.6 million in Q4 2024 from 40.1millioninQ42023,attributedtoanincreaseintheaveragenumberofvessels[14]−Dailyoperatingcostsimprovedslightlyto40.1 million in Q4 2023, attributed to an increase in the average number of vessels [14] - Daily operating costs improved slightly to 6,135 per vessel per day from 6,188pervesselinQ42023[14]MarketDataandKeyMetricsChanges−ThedrybulkmarketcontinuestostruggleduetotheslowrecoveryoftheChineseeconomy,whilethecontainerchartermarketremainshealthydespiteweakeningboxrates[7][8]−Thecompanyhasacharteredbacklogof6,188 per vessel in Q4 2023 [14] Market Data and Key Metrics Changes - The dry bulk market continues to struggle due to the slow recovery of the Chinese economy, while the container charter market remains healthy despite weakening box rates [7][8] - The company has a chartered backlog of 3.4 billion, with 97% coverage for 2025 and 79% for 2026 [11][17] Company Strategy and Development Direction - The strategic focus is on maintaining a robust financial position, securing long-term contracts, and investing in modern fuel-efficient vessels [12] - The company has arranged an 850millionfacilitytofinanceallnewbuildingvessels,indicatingacommitmenttogrowthdespitemarketuncertainties[11][18]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatnear−termpredictionsaboutshippingmarketsareunreliableduetoongoingtariffwarsandeconomicslowdowns[6][7]−Thecompanyremainsinsulatedfromnear−termmarketvolatilitywithsignificantchartercoverageandastrongbalancesheet[10][11]OtherImportantInformation−Thecompanyhasrepurchased850 million facility to finance all new building vessels, indicating a commitment to growth despite market uncertainties [11][18] Management's Comments on Operating Environment and Future Outlook - Management noted that near-term predictions about shipping markets are unreliable due to ongoing tariff wars and economic slowdowns [6][7] - The company remains insulated from near-term market volatility with significant charter coverage and a strong balance sheet [10][11] Other Important Information - The company has repurchased 168.8 million of stock out of a 200millionauthorityprovidedbytheboard[20][21]−AsoftheendofQ42024,cashstoodat200 million authority provided by the board [20][21] - As of the end of Q4 2024, cash stood at 453.4 million, with total liquidity at 807 million [21] Q&A Session Summary Question: Free cash flow generation and net cash position - The company generated 30 per share in free cash flow in 2024 and is on pace to achieve a net cash position in 2025 [26][27] Question: Dry bulk fleet utilization and dry dockings - All dry bulk vessels have completed dry docking in the last six months, with no further dry dockings planned for the next two to three years [35][36] Question: Appetite for additional vessels - The company is focusing on Capesize vessels and is open to increasing its presence in the sector if prices are attractive [38] Question: Confidence in new building orders - Confidence in new building orders stems from the need for more fuel-efficient ships and secured financing [42] Question: Current share count post-repurchase - The current share count is just below 19 million shares, approximately 18.8 to 18.9 million [47]