Danaos Corporation

Good day, and welcome to the Deneas Corporation conference call to discuss the financial results for the first three months ended June 30th, 2021. As a reminder, today's call has been recorded. Assisting the call today is Dr. John Kustos, Chief Executive Officer of Deneas Corporation, and Mr. Evangelos Hatzis, Chief Financial Officer of Deneas Corporation, Dr. Kustos, and Dr. Hatzis. We'll be making some introductory comments and we'll open the call to question and answer sessions. Please note, this event is being recorded. At this time, I would now like to turn the conference over to Mr. Hatzis. Please proceed.

Thank you, operator, and good morning to 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 these 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. With that, let me now turn the call over to Dr. Koustas who will provide the broad overview of the quarter. John.

Thank you, Evangelos. Good morning and thank you all for joining today's call to discuss our results for second quarter 2021. The container ship market has maintained its positive momentum, which is reflected in increasing rates for both containers and vessel charters. Manaus is continuing to secure charters for its vessels for periods between three and five years. It is noteworthy that some of these charters do not even begin until the middle of 2022. The market appears to be in short supply until at least the end of next year, and we have strong leverage to this dynamic. The pandemic is continuing to cause inefficiencies in the transportation chain, and there is no obvious indication that conditions will normalize in the near term. Travel bans or restrictions are continuing to repeat our efforts to normalize crew changes. Despite considerable difficulty in joining and repatriation, our vessel schedules have not been affected. Our liquidity was enhanced in the second quarter by a total of $162 million from the redemption of the Zin and H&M banks, and a disposition of 2 million shares of VIM stock. In the aggregate, our cash balance at the end of the quarter was 294.4 million. Financially, the analysis is in a very strong position, with cash and marketable securities totaling over 600 million, a 1.75 billion backlog of charters extended out over an average of 3.4 years, and a very manageable debt repayment schedule. We are also generating significant free cash flow on the back of exceptionally strong market conditions. This gives us the capacity and the confidence to grow our core business when opportunities appear. To that end, we exercised our option to purchase 51% of Gemini, our joint venture, taking full ownership of the entity and its assets. This added approximately $160 million of contracted revenue and approximately $170 million of contracted EBITDA to our backlog, while these vessels are expected to contribute 31 million of EBITDA over the next 12 months. The effective date of the transaction was July 1, 2021, meaning it will be immediately accreted in the third quarter. Further, we sourced an opportunity to buy six modern EcoDesign 5,460 TEU vessels built in 2014 and 2015, at a significant discount to their charter-free values. These vessels are tied to the low-market, though still profitable, charters, expiring from mid-'22 to mid-'24. We are of similar specification to new building designs offered today, and we expect to recharter them at levels significantly higher than their existing charters. We were able to fund these growth opportunities using cash on our balance sheet, and we will evaluate whether we will increase our leverage with respect to these acquisitions moving forward. Once again, the market dynamics are in our favor, and we will continue to deliver the best results possible for our shareholders. With that, I'll hand over the call back to Evangelos, who will take you through the financials for the quarter. Evangelos?