Danaos NYSE: DAC reported higher second-quarter earnings as strength in its dry bulk segment offset largely stable container vessel revenue, while the company expanded its contracted revenue backlog to a record $4.6 billion.
Adjusted net income for the three months ended June 30 rose to $133.1 million, or $7.29 per share, from $117 million, or $6.36 per share, in the comparable 2025 period. Adjusted EBITDA increased 6.1% to $186.8 million.
Chief Executive Officer Dr. John Coustas said shipping markets have been supported by geopolitical disruption, supply-chain uncertainty, restrictions in the Bab el-Mandeb and U.S. tariff measures. He said these factors had created tight conditions and pushed rates in most shipping sectors to multiyear highs.
Coustas said a brief ceasefire enabled Danaos to move two vessels out of the Gulf, with both vessels and their crews safe and fully operational.
Dry Bulk Strength Drives Earnings Growth
The dry bulk business was the principal source of the company’s earnings improvement. Dry bulk revenue increased 57% year over year to $35.7 million from $22.7 million, reflecting improved market conditions and the operation of one additional vessel acquired several months earlier.
Danaos’ Capesize time-charter-equivalent rate rose to $30,400 per day during the quarter, compared with approximately $18,000 per day a year earlier. Segment adjusted EBITDA in dry bulk climbed to $18.8 million from $5.9 million.
During the question-and-answer session, Coustas said the company’s dry bulk vessels are generally employed in the spot market. A couple of vessels are on index-linked charters, while only one is fixed at a rate through year-end, he said.
Container vessel revenue was broadly unchanged, declining $0.8 million from a base of $238.7 million in the prior-year quarter. New container ship deliveries added $3.2 million in revenue and higher charter rates added another $0.6 million, according to Chief Financial Officer Evangelos Chatzis. Those gains were offset by a $3.4 million reduction in non-GAAP revenue recognition under U.S. GAAP and $1.2 million in higher off-hire charges.
Backlog Reaches $4.6 Billion
Danaos added approximately $683 million to contracted revenue backlog since its last earnings release. The company ended the quarter with a record $4.6 billion backlog and an average charter duration of 4.7 years.
- Container operating days are 100% contracted for 2026.
- Contract coverage stands at 93% for 2027.
- Coverage is 79% for 2028 and 61% for 2029.
Coustas said Danaos had extended charters across a broad portion of its fleet as charterers competed for quality tonnage. The company also refinanced two additional vessels through Japanese operating leases and added $236 million in charter-financing commitments for three vessels scheduled for delivery in 2027.
In addition, Danaos entered a $132 million credit facility to finance its sixth 1,800-TEU newbuilding, management said.
Costs, Liquidity and Capital Allocation
Vessel operating expenses were essentially stable at $56.7 million, versus $56.4 million a year earlier, despite an increase in the average vessel count. Daily operating costs declined to $7,416 per vessel per day from $7,556.
General and administrative expenses rose to $14.9 million from $11.2 million, primarily due to higher management fees and a $2.2 million increase in corporate G&A expenses.
Interest expense, excluding amortization of finance fees and debt discounts, fell to $7.3 million from $8.9 million. Chatzis said higher capitalized interest associated with the progressing newbuilding program helped reduce expense, while increased average debt partly offset that benefit. Interest income doubled to $7.4 million as cash balances increased, resulting in a $5.3 million decline in net interest expense year over year.
As of June 30, Danaos had net debt of $224.5 million, equal to 0.3 times last-12-month EBITDA. Cash stood at $1 billion, and total liquidity, including cash, revolver availability and marketable securities, was about $1.5 billion. Of the company’s 87 vessels, 78 carried no debt, including 66 unencumbered vessels and 12 that secure an undrawn revolving credit facility.
Asked about capital deployment, Coustas said the company is cautious about new investments at elevated asset prices. “Growing is extremely easy. Growing accretively is much more difficult,” he said, adding that Danaos is strengthening its balance sheet and extending the duration of its financing while waiting for attractive opportunities.
Alaska LNG Plans
Coustas also discussed Danaos’ investment in the Alaska LNG project, saying the company would seek to tie any LNG carrier orders to production from Alaska rather than place speculative orders. He said certain legislative arrangements need to be completed before a final investment decision is made, which management expects sometime in September.
On shareholder returns, Coustas said dividend decisions remain with the board. He noted that Danaos has followed a pattern of dividend increases but said the pace of any further increase would be discussed next quarter.
About Danaos (NYSE:DAC)
Danaos Corporation is a leading independent owner and manager of containerships, specializing in long-term charters of modern vessels to major liner companies worldwide. The company's core services include vessel acquisition and sale, technical and crew management, and commercial chartering, all aimed at supporting global containerized trade. Danaos leverages its in-house expertise in operations, maintenance and regulatory compliance to ensure reliable and efficient fleet performance.
Founded in 1972 by Dr.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Danaos, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Danaos wasn't on the list.
While Danaos currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
