Danaos Q1 earnings continue to be dragged down by Hanjin bankruptcy

The Greek shipowner posted a first quarter profit of $18.44m, a plunge of 58.2% from the profit of $44.12m in the same period of 2016.

Revenue for the first three months also dropped by 19.9% year-on-year to $110.09m due mainly to loss of revenue from cancelled charters with Hanjin Shipping for eight of its vessels, and re-chartering of certain vessels at lower rates.

“The results of Danaos for the first quarter of 2017 continue to reflect the impact of the Hanjin bankruptcy on the company’s financial performance,” said John Coustas, ceo of Danaos.

The Hanjin bankruptcy saw Danaos slipped into the red for the third quarter of 2016 and the impact has continued to be reflected in its latest financial results.

Danaos updated that as a result of a decrease in operating income and the charter-attached market value of certain of its vessels caused principally by the cancellation of eight charters with bankrupt Hanjin Shipping, the company was in breach of certain financial covenants.

“We had obtained a waiver for these breaches until 1 April 2017. We have asked our lenders for an extension of this waiver until 1 July 2017 and are engaged in constructive conversations to resolve this matter,” Coustas said.

He added that the company continues to generate positive cash flows from its operations and currently is in a position to service all operational obligations as well as all scheduled principal and interest payments.