Danaos Corp. (DAC) reported a 71% dip in earnings for the second quarter due to an increase in refinancing-related professional fees. The containership operator’s stock fell 3% in the after-hours hurt by the company’s weak performance in the quarter.
Earnings for the quarter plunged 71% to $5.8 million or $0.05 per share. Adjusted earnings inched up 0.7% to $0.27 per share. The growth in the adjusted EPS was driven by a decline in operating expenses, an increase in other income and an operating performance improvement in equity investments.
Operating revenue slid by 0.4% to $113.5 million. The decline was due to the lower fleet utilization of its vessels despite re-chartering of certain of its vessels at higher rates.
Total contracted operating revenues were $1.6 billion as of June 30, 2018, with charters extending through 2028 and remaining average contracted charter duration of 5.3 years, weighted by aggregate contracted charter hire.
During the second quarter, Danaos had an average of 55 containerships. The company’s fleet utilization was 96.1%, down from 97.9% in the previous year quarter.
On August 10, the company consummated the agreement reached with certain lenders for the refinancing of about $2.2 billion of its debt maturing on December 31, 2018, lowering debt by about $551 million. Following this, the company’s capital structure has been strengthened and the maturities have been extended by more than 5 years until the end of 2023.
In connection with this debt refinancing, Danaos issued 99 million new shares of Danaos common stock to certain lenders, which represent 47.5% of the company’s outstanding common stock after giving effect to this issuance and diluting existing shareholders ratably.
Shares of Danaos ended Monday’s regular session up 4.84% at $1.62 on the NYSE. The stock had risen by 12% so far this year, while it slipped 3% in the past three months.