Danaos dragged into the red in Q3 by Hanjin bankruptcy

Danaos reported an $8.39m loss in Q3 compared to $42.07m in the same period a year earlier and revenues were down $111.7m for the quarter compared to $144.5m in the corresponding period in 2015.

Danaos was hit by the bankruptcy of Hanjin which it described as one of its largest customers. The shipowner had three 10,100 teu and five 3,400 teu vessels on long term charter to Hanjin.

“As a result of the bankruptcy, we did not recognize any operating revenues for the vessels that had been chartered to Hanjin during the quarter,” the company said. Danaos’ operating revenues were reduced by $24.8m accordingly.

Additionally the company recorded a $15.8m writedown on unpaid charter owed by Hanjin up to 30 June.

It also resulted in Danaos being in breach of certain financial covenants at the end of Q3, which it has obtained waivers on until 1 April 2017.

“Notwithstanding the negative consequences of the Hanjin bankruptcy, the company is currently in a position to fully service all of its operational and contractual financial obligations,” Danaos said.

The company has so far managed to re-charter the five 3,400 teu vessels and said expects to complete negotiations to recharter the three 10,100 teu boxships.

Read all the background to the Hanjin Shipping bankruptcy on our timeline