Dear Fellow Shareholders,

I am very pleased to be writing this letter at a time when optimism abounds in our segment of the maritime industry. When front page headlines refer to the shortage of both ships and containers and decade high rates for both, it is hard to not be confident about our prospects. This is the result of a remarkable turnaround of the Container industry that during the pandemic kept the world moving. Now, the increased demand coupled with a slowdown in turnaround times due to Covid restrictions has driven the biggest boom the industry has ever seen.

Danaos has benefited tremendously, as the timing of the remarkable demand for container vessels coincided with the expiration of the charters of almost half the fleet. Additionally, all the acquisitions we made in 2020 proved to be extremely well-timed and accretive. We are currently in the process of securing longer period charters for many of our vessels to ensure the stability of our cash flows over the next few years.

Setting aside favorable market conditions,our most remarkable recent achievement was the complete overhaul of our capital structure, which significantly strengthened our balance sheet. After a company buyback of shares and a subsequent offering by legacy shareholders who received shares of Danaos in the 2018 refinancing our shareholder base was renewed. We also refinanced all our prior debt facilities through a combination of a new bank debt facility and a $300 million seven-year bond. Our new bank debt facility allows for Danaos’ significant cash flow to be deployed towards growth opportunities. It also has no maturity payment until 2025.

Other important events that further improved our balance sheet were the recently announced early redemption of bonds we held on our balance sheet, which will add at least $75 million of liquidity in 2021, and the IPO of ZIM which gave us a profit windfall of at least $250 million, which we hope at some stage will be translated into our cash balances. Combined with our strong operating performance, this series of events led to the reinstatement of a dividend, which we hope to grow over time.

Looking forward, recent market euphoria has led to significant ordering of new vessels. These vessels will not be delivered into the global fleet until 2023. We are taking a very prudent approach to capital allocation and will only order new vessels if they are backed by long-term contracts.

We expect that the continued uncertainty around the industry’s path to decarbonization will limit new investments, and we are focused on continuing out advanced research projects on reducing the carbon footprint of our existing fleet.

Special mention should be made and I would like to convey my gratitude to the crews on board our vessels who have shown astounding resilience and performance amid the various restrictions and enhanced safety protocols related to COVID-19. They have kept our vessels running smoothly facing unprecedented challenges. I hope that by this time next year the restrictions related to COVID-19 will be in the past and that the world economy will grow to new highs, benefiting the container industry and Danaos.

Finally, I would like to thank all my colleagues who helped to successfully navigate the company during this challenging period and now join me in seeing the future with greater certainty and optimism. We will continue to work towards bringing value to the company and reward our shareholders.

Respectfully,

signature Dr. John Coustas
President & CEO

Connect

Corporate

C/O Danaos Shipping Co Ltd.
3, Christaki Kompou Street Peters House 3011, Limassol Cyprus
Tel:  +30 210 419 6480
+30 213 017 6480
Fax: +30 210 419 6489

Athens Branch
14, Akti Kondyli, Piraeus Athens, 18545 Greece