Danaos Corporation

Good day, and welcome to the Denauss Corporation conference call to discuss the financial results for the three months ended March 31st, 2021. As a reminder, today's call is being recorded. Hosting the call today is Dr. John Kustis, Chief Executive Officer of Denauss Corporation, and Mr. Evangelos Hadfis, Chief Financial Officer of Denauss Corporation. Dr. Kustis and Mr. Hadfis will be making some introductory comments, and then we will open the call to a question and answer session. I would now like to turn the call over to Mr. Evangelos Hotfis to begin the call.

Thank you, operator. Good morning to everyone, and thank you for joining us today. Before we begin, I quickly want to remind everyone that management 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 these detailed safe harbor and risk factors . 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. With that, let me now turn the call over to Dr. Koustas, who will provide the broad overview for the quarter. John?

Thank you, Evangelos. Good morning, and thank you all for joining today's call to discuss our results for the first quarter of 2021. The dramatic turnaround and strength of the market, which we experienced in the beginning of the year, continues unabated, if not stronger. The continuation of the pandemic and the ensuing slowdown in the terminal operations has exacerbated demand, and the liner sector is at the limit of its capacity. The blockage of the Suez Canal further contributed to the disruption in the supply chain, and conditions will likely not normalize before the end of the year, possibly after the peak season. Liner companies are reporting record profits, and more importantly, are signing multi-year contracts at significantly higher levels, which will keep their profitability at elevated levels. On the non-operating owners front, charter rates have skyrocketed to levels not seen for at least 10 years, and what is more important, duration has been significantly increased so that vessels over 4,000 TU can secure four plus years employment at very healthy levels. This euphoria, due to the sharp increase in rates and confidence that the market will remain strong, has led to a dramatic increase in new building ordering. As a result, the order book now stands at 17% of the existing fleet, which is higher compared to the 9% that year at the end of 2020, but still much lower than the 50% it reached in 2008. Fortunately, the lack of shipyard capacity and the hesitance of many market participants to order vessels with conventional pure propulsion both are inhibiting factors for new orders and are keeping a lead on excessive ordering. In any event, the recently ordered vessels will not deliver until at least 2023, and the next two years should be lean in terms of fleet supply growth. We believe that the expected strong demand growth post-pandemic will comfortably absorb the existing order book. As far as the analysis is concerned, we are currently in the best-ever position in reaping the benefits of the current market environment. On April 12th, We completed our financing on very competitive terms and also positioned the company successfully in the U.S. bond market, giving us access to a very significant pool of capital. The amortization profile of our debt is resulting in significant free cash flow for growth opportunities. The stellar performance of the liner sector had a number of significant consequences for us. First, our shareholding in Zimb is today valued at around $400 million. Secondly, the dramatic cash flow generation of Siemens H&M induced them to redeem early the bonds which they were holding, so we'll have 75 million cash injection in the second quarter of 2021. Thirdly, liner sector performance eliminates counterparty risk for the foreseeable future. From the chartering front, every picture we concluded was done at a new record level. These pictures are beginning to take effect and we expect to see improved metrics for every single quarter for this year. Our strong financial standing and optimistic view of the future has led the board to decide to reinstate a fixed quarterly dividend of $0.50 a share. Danaos has been repositioned as a growth company and has handsomely rewarded its shareholders through a dramatic share appreciation of more than 1,000% since our November 2019 equity offering. We believe that our new fixed dividend will both expand our shareholder base to a new group of yield-driven institutional investors and also enhance liquidity of the stock. All the right steps that the company has undertaken in the last couple of years have been greatly appreciated by the market and will continue along the same path in the future. With that, I'll hand the call over back to Evangelo, who will take you through the financials for the quarter. Evangelo.