Danaos (NYSE:DAC) management emphasized strong demand for midsize container vessels and a growing revenue backlog as it discussed results for the three-month period ended December 31, 2025. Chief Executive Officer Dr. John Coustas said container volumes have reached record highs as businesses continue adapting to geopolitical disruptions, with major liners still largely avoiding the Suez Canal and trade patterns becoming more “multipolar.”
Market backdrop and chartering strategy
Coustas said concerns that tariff and geopolitical uncertainty would trigger a U.S. slowdown “has not materialized,” while AI-related investment optimism and record Chinese exports have supported container demand. Against this backdrop, he said demand for midsize vessels has remained “very strong.”
Fleet investment and newbuild orders
Management said the company continues to invest in modern tonnage, including orders for 6,180 TEU vessels, 4,530 TEU vessels, and 211,000 deadweight Newcastlemax dry bulk vessels for delivery in 2028 and 2029. Coustas said Danaos has secured 10-year charters for four of these vessels.
On the dry bulk side, Coustas described the Newcastlemax decision as driven by elevated secondhand prices and a view that newbuildings offer a better value proposition. In response to an analyst question, he characterized the new vessels as “replacement” in the sense that the existing Capesize fleet averages around 14 years old and can trade to about 20 years (and in some trades longer), while also noting the company wanted to expand its presence in the segment.
When asked about employment for the Newcastlemax newbuilds, Coustas said that, for now, the vessels will be chartered primarily on an index-linked basis, adding that there are “plenty of takers” and that the ships’ characteristics should support an attractive index profile.
Fourth-quarter financial results
Chief Financial Officer Evangelos Chatzis reported Adjusted EPS of EUR 7.14 for the fourth quarter of 2025, with adjusted net income of EUR 131.2 million, compared with Adjusted EPS of EUR 6.93 and adjusted net income of EUR 133.3 million in the fourth quarter of 2024. He attributed the year-over-year decrease in adjusted net income to higher operating costs, the absence of a prior-year legacy claim receipt, and lower dividend income, partially offset by higher operating revenues and lower net finance expenses.
Chatzis said operating revenues benefited from:
- EUR 5.2 million of incremental revenue from a larger containership fleet
- EUR 10.5 million of incremental revenue from higher fleet utilization
- EUR 2.2 million of additional revenue from higher charter income in the dry bulk fleet
These were partially offset by a EUR 7.8 million decline in container segment revenues from lower contracted charter rates and EUR 2.0 million of lower non-cash U.S. GAAP revenue recognition, he said.
On costs, Chatzis reported vessel operating expenses of EUR 48.4 million and said daily operating cost rose to EUR 6,377 per vessel per day from EUR 6,135 a year earlier. G&A expense increased to EUR 28.4 million from EUR 21.7 million, which he said was mainly due to EUR 6.6 million of incremental stock and cash bonus awards.
Interest expense (excluding finance costs amortization) increased to EUR 13.4 million from EUR 9.2 million, driven primarily by higher average indebtedness, partially offset by a lower cost of debt service and higher capitalized interest on vessels under construction. Interest income rose to EUR 8.5 million from EUR 3.9 million due to higher average cash balances, partially offset by lower interest rates. Chatzis said Adjusted EBITDA increased slightly to EUR 190.0 million from EUR 189.7 million.
Backlog, balance sheet, and capital allocation
Chatzis said that since the last earnings release, Danaos added EUR 428 million to contracted revenue backlog, bringing the company’s containership contract backlog to EUR 4.3 billion with an average charter duration of 4.3 years. He said contract coverage is 100% for 2026 operating days, 87% for 2027, and 64% for 2028.
As of December 31, 2025, net debt stood at EUR 141 million, which Chatzis said equates to 0.2x net debt to Adjusted EBITDA. He also noted that 61 of 85 vessels are unencumbered and debt-free, and that an additional 16 vessels are pledged to a revolving credit facility but are also debt-free because the company has not drawn on that facility.
The company declared a quarterly dividend of EUR 0.0090 per share. Chatzis said Danaos continues to execute its share repurchase program, with EUR 65 million of remaining authorization under its EUR 300 million program.
On liquidity, management reported EUR 1.0 billion of cash at quarter-end and EUR 1.4 billion of total liquidity including revolver availability and marketable securities.
Financing and Alaska LNG investment
Coustas highlighted a completed 7-year EUR 500 million unsecured bond offering priced at a 6.875% coupon, describing it as among the most competitively priced unsecured shipping bonds of that tenor and as further diversification of the company’s capital structure.
He also said the company has begun exploring selective investments in the energy sector to broaden revenue sources and expand its LNG business. In that context, management said Danaos became a strategic investor in the Alaska LNG project, which Coustas described as providing access to LNG transportation opportunities associated with a facility planned to produce 20 million tons per annum.
During Q&A, Coustas said the current timeline for completion of the Alaska LNG project is 2030, with an estimated 6 to 10 ships required depending on routing from Alaska to the Far East. He said ship orders would likely need to be placed in “about a couple of years’ time,” and he described the project as long-term in nature, with potential employment lasting “10, 20 years.”
On the company’s existing Capesize exposure, Coustas said the company generally wants to “ride the spot market,” adding that if there were an extraordinary spike worth securing, Danaos could use FFAs or index-linked structures to lock in economics.
About Danaos (NYSE:DAC)
Danaos Corporation is a leading independent owner and manager of containerships, specializing in long-term charters of modern vessels to major liner companies worldwide. The company’s core services include vessel acquisition and sale, technical and crew management, and commercial chartering, all aimed at supporting global containerized trade. Danaos leverages its in-house expertise in operations, maintenance and regulatory compliance to ensure reliable and efficient fleet performance.
Founded in 1972 by Dr.
