Danaos profit off 34pc, but revenue up 6.9pc - swap losses blamed

PIRAEUS' Danaos Corporation, a leading international owner of containerships, has posted a 34 per cent decline in 2009 net profit to US$65.6 million, drawn on revenues of $319.5 million, which increased 6.9 per cent year on year.

"[This] is mainly attributable to increased losses on our interest rate swaps in the 12 months ended December 31 compared to the same period of 2008, as well as, increased interest expense due to higher average indebtedness in 2009," said a company statement.

In the fourth quarter, net earnings also fell 37.6 per cent to $14.8 million based on revenues of $85.3 million, a year on year increase of 8.4 per cent, said a statement from the New York-listed company.

Said Danaos CEO John Coustas: "The year of 2009 was one of the toughest in the history of container shipping. Both demand and supply were severely imbalanced. Consumer demand fell sharply after the third quarter of 2008 and continued to retreat for the most part of 2009, and the supply of shipping tonnage kept increasing with deliveries of vessels ordered in previous years.

"During the second half of 2008, box freight rates dropped even more steeply than demand, and the result was a prolonged cash crunch across all liner companies throughout 2009, which in certain cases raised solvency concerns," said Dr Coustas.

"The gradual stabilisation of the world economy has resolved a large portion of the uncertainty, and while so far there has been a jobless recovery, cargo volumes across the globe have started to show strong recovery trends also on the back of re-stocking.

"Approximately 10 per cent of the world containership fleet is still idle. However, three months into 2010, we see an increasing demand for larger versus smaller vessels, which indicate that the major east-west routes are picking up and that the underlying demand, is further firming up. Liner companies have been able to significantly increase box rates from their lows.

Vessel operating expenses decreased 3.3 per cent year on year to $23.3 million in the last quarter of 2009, said the company. "Although the average number of vessels in our fleet increased during those last three months, the average daily operating cost per vessel was reduced to $6,041 from $6,773 for the last three months of 2008." said the statement.

(Source: Schednet)