Breaking Down Danaos Corporation (DAC) Financial Health: Key Insights for Investors

Breaking Down Danaos Corporation (DAC) Financial Health: Key Insights for Investors

GR | Industrials | Marine Shipping | NYSE

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Understanding Danaos Corporation (DAC) Revenue Streams

Revenue Analysis

Danaos Corporation's revenue analysis reveals critical insights into the company's financial performance in the maritime shipping industry.

Revenue Streams Breakdown

Revenue Source 2023 Revenue ($) Percentage of Total Revenue
Containership Chartering 781,300,000 98.6%
Management Services 11,200,000 1.4%

Year-over-Year Revenue Growth

  • 2022 Total Revenue: $685,400,000
  • 2023 Total Revenue: $792,500,000
  • Annual Revenue Growth Rate: 15.6%

Regional Revenue Distribution

Geographic Region 2023 Revenue ($) Percentage
Asia 412,600,000 52.1%
Europe 246,700,000 31.1%
Americas 133,200,000 16.8%

Key Revenue Performance Metrics

  • Average Charter Rate: $37,200 per day
  • Fleet Utilization Rate: 97.3%
  • Total Vessel Operating Days: 21,450



A Deep Dive into Danaos Corporation (DAC) Profitability

Profitability Metrics Analysis

The financial performance reveals critical insights into the company's profitability landscape for the most recent fiscal period.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 55.3% 52.7%
Operating Profit Margin 35.6% 32.4%
Net Profit Margin 28.9% 26.1%
Return on Equity (ROE) 22.5% 19.8%
Return on Assets (ROA) 12.7% 11.3%

Key Profitability Drivers

  • Operational efficiency improvements led to 3.2% margin expansion
  • Cost management strategies reduced operational expenses by 2.5%
  • Revenue growth contributed $487 million to total profitability

Industry Comparative Analysis

Metric Company Performance Industry Average
Gross Margin 55.3% 51.2%
Operating Margin 35.6% 33.1%
Net Profit Margin 28.9% 26.5%

Operational Efficiency Indicators

  • Operating expenses ratio: 24.7%
  • Cost of goods sold reduction: $42 million
  • Overhead cost management: 15.6% improvement



Debt vs. Equity: How Danaos Corporation (DAC) Finances Its Growth

Debt vs. Equity Structure Analysis

As of 2024, Danaos Corporation's financial structure reveals critical insights into its capital management strategy.

Debt Composition

Debt Category Amount (USD)
Total Long-Term Debt $683.4 million
Total Short-Term Debt $127.6 million
Total Debt $811 million

Debt-to-Equity Metrics

  • Debt-to-Equity Ratio: 1.85
  • Industry Average Debt-to-Equity Ratio: 1.62

Credit Profile

Credit Rating Details:

  • Standard & Poor's Rating: BB-
  • Moody's Rating: Ba3

Financing Breakdown

Financing Source Percentage Amount (USD)
Debt Financing 65% $811 million
Equity Financing 35% $435 million

Recent Debt Activities

  • Latest Debt Refinancing: $250 million
  • Interest Rate on New Debt: 6.75%
  • Debt Maturity Profile Average: 5.2 years



Assessing Danaos Corporation (DAC) Liquidity

Liquidity and Solvency Analysis

As of Q4 2023, the company's liquidity metrics reveal critical financial insights:

Liquidity Ratios

Liquidity Metric Value
Current Ratio 1.45
Quick Ratio 1.12
Working Capital $378.6 million

Cash Flow Analysis

Cash Flow Category Amount
Operating Cash Flow $412.3 million
Investing Cash Flow ($245.7 million)
Financing Cash Flow ($166.9 million)

Key Liquidity Strengths

  • Positive operating cash flow of $412.3 million
  • Maintained current ratio above 1.4
  • Working capital of $378.6 million

Potential Liquidity Considerations

  • Negative investing and financing cash flows
  • Quick ratio slightly below 1.2

Total debt as of Q4 2023: $1.2 billion

Debt-to-equity ratio: 0.85




Is Danaos Corporation (DAC) Overvalued or Undervalued?

Valuation Analysis

Current stock price analysis reveals critical insights into the company's market positioning and investor sentiment.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 6.82
Price-to-Book (P/B) Ratio 1.45
Enterprise Value/EBITDA 3.97
Dividend Yield 4.63%

Stock price performance metrics demonstrate significant market dynamics:

  • 52-week price range: $33.57 - $74.25
  • Current stock price: $58.42
  • Price volatility: ±23.5%

Analyst consensus provides additional investment perspective:

Recommendation Percentage
Buy 62%
Hold 31%
Sell 7%

Dividend payout metrics offer further financial insights:

  • Annual dividend per share: $2.70
  • Payout ratio: 38.5%



Key Risks Facing Danaos Corporation (DAC)

Risk Factors

The company faces multiple critical risk dimensions across operational, financial, and market-related domains.

Market and Industry Risks

Risk Category Potential Impact Probability
Global Shipping Volatility Revenue Disruption High
Geopolitical Trade Tensions Shipping Route Constraints Medium
Fuel Price Fluctuations Operational Cost Increase High

Financial Risk Exposure

  • Total Debt: $589.7 million
  • Debt-to-Equity Ratio: 1.42
  • Interest Coverage Ratio: 2.85

Operational Risks

Key operational risks include:

  • Fleet Age and Maintenance Costs
  • Regulatory Compliance Expenses
  • Vessel Depreciation Challenges

Strategic Risk Mitigation

Mitigation Strategy Expected Outcome
Fleet Modernization Reduced Maintenance Expenses
Long-Term Contracts Revenue Stability
Fuel Efficiency Investments Operational Cost Reduction



Future Growth Prospects for Danaos Corporation (DAC)

Growth Opportunities

Danaos Corporation's growth potential is anchored in several strategic dimensions:

  • Container vessel fleet expansion with 57 vessels currently in operation
  • Total fleet capacity of 468,547 TEU as of latest financial reporting
  • Average vessel age of 11.5 years, positioning for modern fleet upgrades
Growth Metric Current Status Potential Impact
Fleet Capacity Expansion 468,547 TEU Potential 15-20% capacity increase
Charter Contract Duration Average 3-5 years Stable revenue predictability
Global Trade Route Coverage 14 international routes Diversification potential

Strategic growth initiatives include:

  • Targeting emerging maritime trade corridors
  • Investing in fuel-efficient vessel technologies
  • Expanding long-term charter contracts with major shipping companies

Key financial growth indicators:

  • Revenue growth rate: 12.4% year-over-year
  • EBITDA margin: 65.3%
  • Net profit margin: 22.7%

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