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Danaos deep in the red in 2016 including $205m in Hanjin impairments

Danaos deep in the red in 2016 including $205m in Hanjin impairments
Containership owner Danaos slumped to a $366.2m loss in 2016 as it took hefty impairments including $205.2m related to bankrupt Hanjin Shipping.

The loss for 2016 compared to $117m profit for 2015 and the company also saw revenues decline to $486.3m last year compared to $567.9m a year earlier. For Q4 2016 Danaos reported a loss of $446.6m against $6.5m profit in the same period a year earlier.

The shipowner recognised impairment losses of $415.1m on 25 of the vessels in its fleet, mainly in the traditional panamax sector, which has seen a rapid fall in values after the expanded Panama Canal was opened in mid-2016.

Some $205.2m of the impairment loss related to five 3,400 teu vessels that had previously been chartered to bankrupt Hanjin. A further $209.9m of impairments related to eighteen 4,300 teu vessels, and two 6,400 teu ships.

“During the fourth quarter, our fleet utilization decreased to 90.4% after the Hanjin charter cancellations,” said John Coustas ceo of Danaos.
“We have re-chartered five 3,400 teu vessels on short term charters at market rates that reflect the prevailing weak chartering environment and managed to secure employment of up to 12 months starting from April 2017 for the remaining three 10,100 teu vessels.”

Looking ahead Coustas said the global containership orderbook, equivalent to 15% in capacity terms of the existing fleet, comprising mainly larger vessels would continue to put pressure on smaller, less economical ships. “As such, we do not expect rates to meaningfully improve for another 18-24 months absent a significant increase in demand combined with increased scrapping activity,” Coustas said.

At the end of 2016 Danaos owned a fleet of 55 containerships.

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