Danaos Earns Slim Profit on Higher Revenue

Danaos, the Greek container ship owner, reported third quarter net income shrunk to $970,000 from $16.4 million a year earlier as it revealed an agreement to delay final payment on eight vessels it ordered in South Korea.

The NYSE-listed company said adjusted net income in the three months to Sept. 30 was $4.5 million against $16 million in the 2009 period.

Operating revenue climbed to $94.6 million from $79.8 million, boosted mainly by charter earnings from eight ships that joined the fleet during the year.

By The Numbers: Container Rate Benchmark.

The company which has 50 vessels of 219,929 20-foot equivalent units capacity on charter to major ocean carriers, gave an upbeat assessment of the container ships market.

"We expect that the overall growth, which in 2010, has been in the mid teens, will continue in 2011 but at more sustainable rates," said Chief Executive Officer John Coustas. “All trades are still at very healthy levels despite a small setback from the peaks reached early in the third quarter."

Danaos, which has been restructuring its debt, said it agreed to a $190 million vendor financing deal with Hyundai Samho Heavy Industries to delay a portion of the final payment due the South Korean shipbuilder on eight container ships.

The company has raised $426 million of new financing from its banks, agreed in principle on a $203 million credit facility with Citi and Export-Import Bank of China, and received a $200 million equity injection.

These moves will ensure the timely delivery of a 15 ship order book, Danaos said.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.