Reporting its results for the fourth quarter of 2013, the containership owner and charterer Danaos Corp. said it recorded a $19 million impairment loss as a result of the restructuring of Zim.
Athens-based Danaos, whose stock is traded on the New York Stock Exchange, said it had a loss in the fourth quarter of 2013 of $4.2 million compared to a loss of $116.5 million the same 2012 period. Adjusted net income was nearly $15 million in the fourth quarter of 2013 compared to $11.7 million in the same 2012 period. Revenues in the fourth quarter of 2013 were $147 million compared to $151.8 million in the same 2012 period. (At the end of 2013, Danaos recorded the $19 million impairment loss from Zim; in the fourth quarter of 2012, the company incurred a vessel-impairment loss of $129.6 million for
thirteen of its older vessels, which were either laid up or on
For the full year, Danaos had a profit of $37.5 million in 2013, compared to a loss of $105.2 million in 2012. Revenue in 2013 was $588.1 million, compared to $589 million in 2012. Adjusted net income amounted to $54.1 million in 2013, compared to $60.5 million in 2012.
Danaos said Zim’s restructuring of its obligations includes a “significant reduction in the charter rates payable by ZIM for the remaining life of its time charters, expiring in 2020 or 2021, for six of our vessels and our receipt of unsecured, interest-bearing ZIM notes maturing in nine years and ZIM shares in exchange for such reductions and cancellation of ZIM's other obligations to us.
“Based on these anticipated terms," it continued, "we have written down the value of our long-term receivables from ZIM as of Dec. 31, 2013, and recognized a $19 million impairment charge with respect thereto.” It noted the agreement in principle between Zim and its creditors remains subject to various approvals.
John Coustas, the chief executive officer of Danaos, said “the containership market remains challenging but there are indications of recovery.”
Mainlane trade volumes in 2013 expanded by 2.8 percent on average compared to 1 percent in 2012, while the Asia-Europe trade grew by almost 3.5 percent, an improvement when considering the 4.9 percent contraction of 2012," he continued."
“On the supply side, the containership fleet grew by almost 7 percent in 2013, outpacing demand growth that came in at around 4.8 percent," he said. "This imbalance is anticipated to subside during 2014, with demand growth forecasts at around 6 percent and supply growth estimated at around 5 percent.”
He said, “Increased scrapping activity is an additional factor anticipated to mitigate the supply demand imbalance going forward. Amidst a soft charter market, we maintain our strong 93-percent contract coverage, limiting further downside from a prolonged weak spot charter market.”