Danaos Chooses Scrubbers for Six Boxships

Greek containership owner Danaos Corporation has decided to install scrubbers on six vessels and is looking to equip a further five ships with these systems.

Danaos said it has committed to installing exhaust cleaning systems on six boxships of which two are owned by the company’s joint venture Gemini Shipholding Corporation.

“These vessels have been chartered out for periods of at least three years in duration and since these are all vessels that are currently on short term charters, these transactions significantly improve income visibility,” John Coustas, Danaos’ CEO, commented.

In addition, Danaos unveiled it is currently in discussions to install scrubbers on five more containerships.

“Danaos has been actively focused on positioning our fleet ahead of the implementation of the new regulations,” Coustas said.

The scrubber project has been unveiled in the company’s financial report which shows that Danaos posted a net income of USD 148 million in the first nine months of this year, compared to USD 61.1 million seen in the corresponding period a year earlier.

Operating revenues rose to USD 343.1 million during the nine-month period of 2018 from USD 337.6 million recorded in the first three quarters of 2017.

In August, Danaos managed to cut its debt by approximately USD 551 million as it consummated the agreement with certain of its lenders to refinance approximately USD 2.2 billion of the debt maturing on December 31, 2018.

“Danaos completed a very significant refinancing transaction in the 3rd quarter of 2018 that reduced our debt by USD 551 million, reset financial covenants and extended debt maturities to the end of 2023 on the back of a sustainable new amortization profile. This transaction has strengthened the company’s growth prospects over the next five years by removing all balloon payments and maturities of existing debt during that period,” Coustas explained.

Coustas further said that the charter market has remained consistently soft in the past few months. Ongoing trade tensions and high newbuilding prices have negatively impacted newbuilding. However, this is seen as positive for the medium term market outlook.

“We maintain our high charter contract coverage of 90% in terms of operating revenues and 78% in terms of operating days over the next 12 months. This insulates us from the near-term soft charter market.  Through the six charters described above on vessels with scrubbers and an additional two fixtures that have been secured for durations of three years, our charter coverage has improved, and our contracted revenue has increased by more than USD 160 million,” Coustas noted.

Danaos’ current fleet comprises 59 containerships aggregating 351,614 TEUs, including four vessels owned by Gemini Shipholdings Corporation, a joint venture.