Bruce Barnard, Special Correspondent | Feb 22, 2012 9:05AM EST
Danaos reported net income of $9.1 million in the fourth quarter of 2011 against a year earlier loss of $8.9 million, but the Greek containership owner warned the rising number of laid-up vessels will depress charter rates in coming months.
Adjusted net income rose to $16.1 million from $11.1 million, while operating revenue surged 27.7 percent year-over-year to $128.3 million as the NYSE-listed company added nine new ships to its fleet.
Danaos posted full-year net income of $13.4 million compared with a $102.3 million loss in 2010. Revenue rose 30.1 percent year-over-year to $468.1 million.
Chief Executive John Coustas said 2011 was one of the most eventful years for container shipping. All market sectors weakened and liner companies lost pricing power “due to the combined effect of a fight for market share from industry leaders, the slowdown in Europe Far East trade due to the European debt crisis and the inflow of substantial new capacity in this trade.
“We are now entering 2012 with the liner companies in severe cash drain, which will hopefully be reversed by the rate hike [on the Europe-Far East trade], announced for March.”
More than half a million 20-foot equivalent units of capacity are idle, which will delay any improvement charter rates in the months ahead, Coustas said. Danaos has laid-up three older vessels.
“The only fortunate outcome is a complete standstill of new orders and even cancellation of some existing ones,” Coustas said.
-- Contact Bruce Barnard at brucebarnard47@hotmail.com.