Danaos Corporation

Good day and welcome to the Denialis Corporation conference call to discuss the financial results for three months ended September 30th, 2020. As a reminder, today's call is being recorded. Hosting the call today is Dr. John Kustis, Chief Executive Officer of Denialis Corporation, Mr. Evangelos Hatzis, Chief Financial Officer of Denialis Corporation. Dr. Kustis and Mr. Hatzis will be making some introductory comments and then we will open the call to a question and answer session.

Thank you operator. Good morning everyone and thank you for joining us today. Before we begin, I quickly want to remind everyone that management's remarks this morning may contain certain forward-looking statements and that actual results could differ materially from those projected today. These forward-looking statements are made as of today and we undertake no obligation to update them. Factors that might affect future results are discussed in our filings with the SEC And we encourage you to review the detailed safe harbor and risk factor disclosures. Please also note that where we feel appropriate, we will continue to refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA and adjusted net income to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release and accompanying materials. Now let me turn the call over to Dr. Koussas who will provide the broad overview of the quarter.

Thank you, Evangelos. Good morning and thank you all for joining today's call to discuss our results for third quarter 2020. We are pleased to report improved performance in the company's profitability during this quarter. Container trade has staged a remarkable recovery since the end of May when 11.5% of the vessels in the global fleet stood idle. Time charter rates have increased across all vessel sizes, and the time charter market is at all close to multi-year highs for all vessel sizes. The ability of the Lionel companies to consistently manage capacity addressed the swift drop in volumes at the onset of the pandemic, which alleviated pressure on our customers' cash flows and stabilized trade rates. All our customers have reported strong profitability, which significantly mitigates our counterparty risk. Volumes have consistently improved, particularly in Trans-Pacific, Eastbound, Intra-Asia and North-South trade lanes. Edge volumes have recovered faster than expected. Notably, the increase in rates has been most pronounced in smaller vessel types. Danaos has the greatest amount of leverage to this segment of the market as our larger vessels are contracted on multi-year time charters. From that perspective, the short-term chartering market has been quite dynamic. Although significant market uncertainty remains, particularly as many countries see increasing spread of COVID-19 cases, global GDP has rebounded swiftly and IMF has recently revised its 2020 GDP estimates upwards. For 2021, the IMF forecast global GDP growth of 5.2%, which effectively equals growth of 0.6% compared to 2019 or pre-pandemic levels. The recovery has thus far been primarily concentrated in goods via land services, which has benefited containerized trade. We continue to execute our strategy and we are well insulated for near term volatility due to our high charter coverage of 87% in terms of operating revenue and 64% in terms of operating days over the next 12 months. This provides significant visibility into our cash flow during this period. We also have some leverage to the presently strong market through our smaller vessels. We're also cautiously optimistic about the medium-term market outlook. The order book is currently in single digits as a percentage of the world fleet for the first time in 20 years. Combined with an anticipated reduction in speeds due to the various environmental initiatives, the supply-side outlook is healthy. Tighter supply will help to maintain momentum in the container market or help to bring about a swift recovery if conditions deteriorate. Consistent with our growth strategy, we've agreed to purchase two 9,000 TEU vessels built in 2009, which were both contracted on two-year charters with a major liner company. These vessels are expected to be delivered to us between December 2020 and January 2021, and will be funded with a combination of cash and new credit facilities. With these new deliveries, our fleet, for the first time, will exceed the 400,000 TEU mark. In the meantime, we're generating strong cash flow from our 1.1 billion charge of backlog and have a healthy liquidity position. This enabled us to opportunistically repurchase 4,339,000 shares or 17.5% of the company's outstanding shares for an aggregate price of 31.1 million in privately negotiated transactions, practically tripling our 10 million original buyback programs. Given the holding nature of the prior owners of these shares, these repurchases increase our per share results and valuation metrics without impacting trading liquidity. In light of the continued uncertainty about the duration of the coronavirus pandemic and the ensuing economic recovery, we remain focused on maintaining a conservative financial profile and making thoughtful capital allocation decisions that align with our strategy and market expectations deliver value to our shareholders. We now hand the call over back to Evangelos who will take you through the financial for the quarter. Evangelos.