Danaos posted higher earnings and revenue in the first quarter as the Greek charter shipowner unveiled plans to renew its container ship fleet.
The NYSE-listed company’s net income rose to $13.4 million from $9.34 million in the first quarter of 2012 as operating revenue jumped 8.9 percent to $146 million from $134.24 million, largely due to the addition of three 13,100-TEU vessels to the fleet.
Container ship market fundamentals still remain weak, particularly on the Far East-Europe trade, where cargo volumes are too low to support an inflow of large container ships, according to Danaos CEO John Coustas.
Growth is still healthy on non-main-lane routes, which helps absorb capacity that is cascaded down from the main-lane routes, but this adds pressure to the charter market, particularly on the mid-size containerships.
“As we enter into the peak season we expect some improvement in the market fundamentals, but all in all we do not expect spectacular changes,” Coustas said.
Danaos sold three of its older ships during the quarter and plans to use the $18.8 million proceeds to acquire younger second-hand vessels. A fourth vessel was sold in April.
Coustas said Danaos, which operates more than 60 ships, is “largely insulated” from the weak charter market, as only 2 percent of its revenue stream is at stake through rechartering over the next twelve months.