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Danaos swings back to profit in 2015

Danaos swings back to profit in 2015
Containership charterer Danaos Corporation has swung back to profit in 2015 compared to the previous year thanks to lower impairment charges and reduced loss on derivatives.

The US-listed firm reported a 2015 profit of $117.02m as against the loss of $3.92m in 2014.

Full year revenue rose by 2.9% year-on-year to $567.94m due mainly to contributions from newly added ships to its fleet and improved re-chartering of some ships at higher rates, as well as better fleet utilisation.

Danaos also posted an impairment charge of $41.08m for 2015, compared to the higher impairment loss of $75.78m for 2014. The company’s realised loss on derivatives last year was $56.14m, reducing from $123.63m in 2014.

“The fundamentals of the container market remain very challenging. For the first time since 2009, the Asia to Europe route, the most important trade lane in terms of teu miles, contracted by almost 3% in 2015. Moderate improvements in other trade lanes resulted in an increase in overall container trade growth of 2.5% in 2015,” commented John Coustas, ceo of Danaos.

“Supply growth in excess of 7.5% clearly outpaced demand, resulting in a blended 30% decrease in average freight rates per teu across the industry. The idle fleet is now edging above 7% reflecting the efforts of the industry to manage overcapacity.

“Newbuilding orders have also come to a halt, teu newbuilding capacity scheduled to be delivered in 2016 is expected to be lower than 2015, while scrapping activity, which was rather low in 2015, is anticipated to accelerate in 2016. As a result, we expect that fleet growth will be in the region of 5% for 2016, which will help to correct the current imbalance,” Coustas said.

He pointed out that Danaos will continue to evaluate acquisition opportunities through Gemini Shipholdings Corporation, a joint venture in which Danaos holds a 49% stake.

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