Danaos Corporation Reports Third Quarter and Nine Months Results for the Period Ended September 30, 2024
ATHENS, Greece, Nov. 12, 2024 /PRNewswire/ -- Danaos Corporation ("Danaos") (NYSE:DAC), one of the world's largest independent owners of container vessels and drybulk vessels, today reported unaudited results for the period ended September 30, 2024.
Highlights for the Third Quarter and Nine Months Ended September 30, 2024:
Financial Summary
Three Months Ended September 30, 2024 and Three Months Ended September 30, 2023
Unaudited
(Expressed in thousands of United States dollars, except as otherwise stated)
Three Months Ended
Three Months Ended
September 30, 2024
September 30, 2023
Financial & Operating Metrics
Container Vessels
Drybulk Vessels
Other
Total
Container Vessels
Drybulk Vessels
Other
Total
Operating Revenues
$235,570
$20,606
-
$256,176
$239,215
-
-
$239,215
Voyage Expenses, excl. commissions
$757
$(8,019)
-
$(7,262)
$(479)
-
-
$(479)
Time Charter Equivalent Revenues (1)
$236,327
$12,587
-
$248,914
$238,736
-
-
$238,736
Net income/(loss)
$124,102
$62
$(1,168)
$122,996
$142,173
$(59)
$(8,958)
$133,156
Adjusted net income / (loss) (2)
$125,143
$62
$1,640
$126,845
$142,647
$(59)
$375
$142,963
Earnings per share, basic
$6.36
$6.76
Earnings per share, diluted
$6.30
$6.76
Adjusted earnings per share, diluted (2)
$6.50
$7.26
Operating Days
6,387
778
-
6,115
-
-
Time Charter Equivalent $/day (1)
$37,001
$16,179
-
$39,041
-
-
Ownership days
6,540
913
-
6,256
-
-
Average number of vessels
71.1
9.9
-
68.0
-
-
Fleet Utilization
97.7 %
85.2 %
-
97.7 %
-
-
Adjusted EBITDA (2)
$173,454
$3,826
$1,617
$178,897
$177,701
$(49)
$375
$178,027
Consolidated Balance Sheet
& Leverage Metrics
As of September 30,2024
As of December 31, 2023
Cash and cash equivalents
$384,336
$271,809
Availability under Revolving Credit Facility
$303,750
$337,500
Marketable securities(3)
$96,423
-
Total cash liquidity & marketable securities(4)
$784,509
$609,309
Debt, gross of deferred finance costs
$689,476
$410,516
Net Debt (5)
$305,140
$138,707
LTM Adjusted EBITDA (6)
$705,497
$707,002
Net Debt / LTM Adjusted EBITDA
0.43x
0.20x
1. Time charter equivalent revenues and time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided in the appendix.
2. Adjusted net income/(loss), adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and adjusted earnings per share; and net income to adjusted EBITDA provided below.
3. Marketable securities refer to fair value of 4,070,214 shares of common stock of SBLK on September 30, 2024.
4. Total cash liquidity & marketable securities includes: (i) cash and cash equivalents, (ii) availability under our Revolving Credit Facility and (iii) marketable securities.
5. Net Debt is defined as total debt gross of deferred finance costs less cash and cash equivalents
6. Last twelve months Adjusted EBITDA. Refer to the reconciliation provided below.
For management purposes, the Company is organized based on operating revenues generated from container vessels and dry-bulk vessels and has two reporting segments: (1) a container vessels segment and (2) a dry-bulk vessels segment. The Company measures segment performance based on net income. Items included in the applicable segment's net income are directly allocated to the extent that the items are directly or indirectly attributable to the segments. With regards to the items that are allocated by indirect calculations, their allocation is commensurate to the utilization of key resources. The Other column includes components that are not allocated to any of the Company's reportable segments and includes investments in an affiliate accounted for using the equity method of accounting and investments in marketable securities.
Financial Summary
Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023
Unaudited
(Expressed in thousands of United States dollars, except as otherwise stated)
Nine Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
Financial & Operating Metrics
Container Vessels
Drybulk Vessels
Other
Total
Container Vessels
Drybulk Vessels
Other
Total
Operating Revenues
$699,567
$56,364
-
$755,931
$724,268
-
-
$724,268
Voyage Expenses, excl. commissions
$(179)
$(22,115)
-
$(22,294)
$(1,225)
-
-
$(1,225)
Time Charter Equivalent Revenues (1)
$699,388
$34,249
-
$733,637
$723,043
-
-
$723,043
Net income/(loss)
$396,144
$2,689
$15,813
$414,646
$432,283
$(59)
$(5,846)
$426,378
Adjusted net income / (loss) (2)
$391,062
$2,689
$5,418
$399,169
$434,633
$(59)
$(2,951)
$431,623
Earnings per share, basic
$21.41
$21.28
Earnings per share, diluted
$21.22
$21.28
Adjusted earnings per share, diluted (2)
$20.43
$21.54
Operating Days
18,494
1,978
-
18,177
-
-
Time Charter Equivalent $/day (1)
$37,817
$17,315
-
$39,778
-
-
Ownership days
18,978
2,244
-
18,594
-
-
Average number of vessels
69.3
8.2
-
68.1
-
-
Fleet Utilization
97.4 %
88.1 %
-
97.8 %
-
-
Adjusted EBITDA (2)
$516,763
$10,730
$5,395
$532,888
$537,393
$(49)
$(2,951)
$534,393
1. Time charter equivalent revenues and time charter equivalent US$/day are non-GAAP measures. Refer to the reconciliation provided in the appendix.
2. Adjusted net income/(loss), adjusted earnings per share and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and adjusted earnings per share; and net income to adjusted EBITDA provided below.
During the third quarter of 2024 and through the date of this release, we took delivery of another 3 newbuilding containerships, namely one 7,165 TEU vessel and two 8,010 TEU vessels which have commenced their three-year charters. In total, we have taken delivery of 6 newbuilding containerships in 2024.
As a result, our remaining orderbook currently consists of a further 14 newbuilding containership vessels with an aggregate capacity of 115,834 TEU with expected deliveries of two vessels in 2025, three vessels in 2026, seven vessels in 2027 and two vessels in 2028. All the vessels in our orderbook are designed with the latest eco characteristics, will be methanol fuel ready, fitted with open loop scrubbers and Alternative Maritime Power (AMP) units and will be built in accordance with the latest requirements of the International Maritime Organization (IMO) in relation to Tier III emission standards and Energy Efficiency Design Index (EEDI) Phase III.
We have now secured multi-year charter arrangements for all of the vessels in our newbuilding orderbook with an average charter duration of approximately 4.8 years weighted by aggregate contracted charter hire.
Over the past two months, we added approximately $308 million to our contracted revenue backlog through a combination of new charters and charter extensions for 16 of our container vessels.
As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, currently stand at $3.3 billion, including newbuildings. The remaining average contracted charter duration for our containership fleet is 3.4 years, weighted by aggregate contracted charter hire.
Contracted operating days charter coverage for our container vessel fleet is currently 100% for 2024, 94% for 2025 and 73% for 2026. This includes newbuildings based on their scheduled delivery dates.
We took delivery of all of our contracted capesize drybulk carriers by taking delivery of two vessels in the second quarter of 2024 and one vessel in July 2024. As a result, our capesize drybulk fleet currently stands at 10 vessels with an aggregate capacity of approximately 1.8 million DWT.
As of the date of this release, Danaos has repurchased a total of 1,893,803 shares of its common stock in the open market for $123.2 million under its $200 million authorized share repurchase program that was originally introduced in June 2022 and upsized in November 2023.
Danaos has declared an increased dividend of $0.85 per share of common stock for the third quarter of 2024, an increase of 6.25%. The dividend is payable on December 4, 2024, to stockholders of record as of November 25, 2024.
Danaos' CEO Dr. John Coustas commented:
"The container market remained very strong in the third quarter of 2024, allowing us to add over $300 million to our contracted charter backlog which presently stands at $3.3 billion. Importantly, all 14 of our newbuildings on order are fixed for 5 years, except for two that are fixed for 2 years. We have excellent earnings visibility as we have covered 100% of our container vessel fleet operating days for 2024, 94% for 2025 and 73% for 2026.
The dry bulk market has been uncharacteristically soft lately, which can be attributed to a disruption of seasonal patterns throughout the year as well as a decrease in Chinese steel production. Our dry bulk fleet performed reasonably well during the quarter, and we are expecting freight rates to gradually improve as we move into 2025.
Due to the certainty provided by the charter backlog in our container segment, Danaos is insulated from the unstable and unpredictable nature of the current global backdrop. The recent U.S. Presidential election has introduced new uncertainty about future policymaking and its effect in the shipping market. Most notably, President Trump has openly declared his intention to implement or increase trade tariffs that have the potential to decrease container movements or at least will reshuffle trade lanes. Additionally, it is likely that energy transition initiatives will take place at a slower rate, and we don't know to what extent existing IMO initiatives will be supported by the new administration.
Danaos remains in a fortunate and enviable position. In addition to our charter coverage, our balance sheet is a significant strength. I am proud of the efforts we have undertaken, efforts that have been acknowledged by Moody's, who upgraded Danaos to Ba1. Together with the S&P credit rating at BB+, Danaos now holds the highest grade assigned to a pure play shipping company. Our creditworthiness will allow us to explore fully the U.S. bond market, creating opportunity to raise competitively priced capital to continue to opportunistically pursue growth opportunities.
Our continued strong financial performance and accompanying strengthening of our balance sheet has enabled us to increase our quarterly dividend to $0.85 per share, in line with the commitment we have made to our shareholders. We are also continuing to return value through our share buyback program. We have now cumulatively bought back stock worth $123 million and have $77 million remaining under our authorized share repurchase program.
We are continuing our efforts to increase the value of the company while remaining vigilant about geopolitical risks to ensure the long-term prosperity of Danaos for the benefit of our shareholders."
Three months ended September 30, 2024 compared to the three months ended September 30, 2023
During the three months ended September 30, 2024, Danaos had an average of 71.1 container vessels and 9.9 Capesize drybulk vessels compared to 68.0 container vessels and no drybulk vessels during the three months ended September 30, 2023. Our container vessels utilization remained stable at 97.7% in each of the three months ended September 30, 2024 and September 30, 2023.
Our adjusted net income amounted to $126.8 million, or $6.50 per diluted share, for the three months ended September 30, 2024 compared to $143.0 million, or $7.26 per diluted share, for the three months ended September 30, 2023. We have adjusted our net income in the three months ended September 30, 2024 for a $2.8 million change in fair value of investments, a $0.6 million non-cash finance fees amortization and a $0.4 million loss on vessel disposal.
Adjusted net income of our container vessels segment amounted to $125.1 million for the three months ended September 30, 2024 compared to $142.6 million for the three months ended September 30, 2023. We adjusted net income of container vessels segment in the three months ended September 30, 2024 for a $0.6 million non-cash finance fees amortization and a $0.4 million loss on vessel disposal.
Adjusted net income of our drybulk vessels segment amounted to $0.1 million for the three months ended September 30, 2024 compared to $0.1 million adjusted net loss for the three months ended September 30, 2023.
The $16.2 million decrease in adjusted net income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is primarily attributable to a $31.1 million increase in total operating expenses, a $3.3 million increase in net finance expenses and a $0.7 million increase in equity loss on investments, which were partially offset by a $17.0 million increase in operating revenues and a $1.9 million increase in dividends received.
Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.
On a non-adjusted basis, our net income amounted to $123.0 million, or $6.30 earnings per diluted share, for the three months ended September 30, 2024 compared to net income of $133.2 million, or $6.76 earnings per diluted share, for the three months ended September 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $124.1 million and the net income of our drybulk vessels segment amounted to $0.1 million for the three months ended September 30, 2024.
Operating RevenuesOperating revenues increased by 7.1%, or $17.0 million, to $256.2 million in the three months ended September 30, 2024 from $239.2 million in the three months ended September 30, 2023.
Operating revenues of our container vessels segment decreased by 1.5%, or $3.6 million, to $235.6 million in the three months ended September 30, 2024 from $239.2 million in the three months ended September 30, 2023, analyzed as follows:
a $14.0 million increase in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as a result of vessel additions;
a $7.1 million increase in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to higher non-cash revenue recognition in accordance with US GAAP;
a $17.9 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as a result of lower charter rates;
a $2.4 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to vessel disposals; and
a $4.4 million decrease in revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to decreased amortization of assumed time charters.
Operating revenues of our drybulk vessels segment added an incremental $20.6 million of revenues in the three months ended September 30, 2024 compared to no such operating revenues in the three months ended September 30, 2023.
Vessel Operating ExpensesVessel operating expenses increased by $10.4 million to $49.9 million in the three months ended September 30, 2024 from $39.5 million in the three months ended September 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container vessel newbuilds deliveries and drybulk vessels acquisitions and the increase in average daily operating cost of our vessels to $6,860 per vessel per day for the three months ended September 30, 2024 compared to $6,499 per vessel per day for the three months ended September 30, 2023. Management believes that our daily operating costs remain among the most competitive in the industry.
Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
DepreciationDepreciation expense increased by 19.8%, or $6.4 million, to $38.7 million in the three months ended September 30, 2024 from $32.3 million in the three months ended September 30, 2023 mainly due to depreciation expense related to 10 recently acquired Capesize drybulk vessels and 5 recently delivered container newbuilds.
Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs increased by $2.7 million to $7.5 million in the three months ended September 30, 2024 from $4.8 million in the three months ended September 30, 2023.
General and Administrative ExpensesGeneral and administrative expenses increased by $3.9 million, to $11.0 million in the three months ended September 30, 2024 from $7.1 million in the three months ended September 30, 2023. The increase was mainly attributable to increased stock-based compensation and management fees.
Other Operating ExpensesOther Operating Expenses include Voyage Expenses.
Voyage ExpensesVoyage expenses increased by $8.0 million to $17.0 million in the three months ended September 30, 2024 from $9.0 million in the three months ended September 30, 2023 primarily as a result of the $9.2 million in voyage expenses related to our recently acquired 10 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses related to drybulk vessels in the three months ended September 30, 2023.
Voyage expenses of container vessels segment decreased by $1.2 million to $7.8 million in the three months ended September 30, 2024 from $9.0 million in the three months ended September 30, 2023.
Voyage expenses of drybulk vessels segment were $9.2 million in the three months ended September 30, 2024 compared to no voyage expenses in the three months ended September 30, 2023. Total voyage expenses of drybulk vessels comprised $1.2 million commissions and $8.0 million other voyage expenses, mainly bunkers consumption and port expenses, in the three months ended September 30, 2024.
Net gain on disposal/sale of vesselsIn March 2024, we sold for scrap the vessel Stride, which had been off-hire since January 8, 2024 due to damage from a fire in the engine room that was subsequently contained. We collected $9.9 million net insurance proceeds for total loss of vessel and recognized a gain on disposal of this vessel amounting to $7.1 million in the six months ended June 30, 2024. In the three months ended September 30, 2024, we recognized $0.4 million of expenses related to this vessel disposal, which reduced the total gain to $6.7 million in the nine months ended September 30, 2024. The proceedings with the insurers are in progress as of September 30, 2024, and any additional gain will be recognized upon their finalization.
Interest Expense and Interest IncomeInterest expense increased by $3.7 million, to $8.0 million in the three months ended September 30, 2024 from $4.3 million in the three months ended September 30, 2023. The increase in interest expense is a result of:
a $4.2 million increase in interest expense due to an increase in our average indebtedness by $224.7 million between the two periods, which was partially offset by a decrease in our debt service cost by approximately 0.26%, mainly as a result of a reduction in the financing margin cost. Average indebtedness was $646.8 million in the three months ended September 30, 2024, compared to average indebtedness of $422.1 million in the three months ended September 30, 2023;
a $0.1 million increase in the amortization of deferred finance costs; which were partially offset by
a $0.6 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended September 30, 2024.
As of September 30, 2024, our outstanding debt, gross of deferred finance costs, was $689.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $417.4 million, which included $262.8 million principal amount of our Senior Notes as of September 30, 2023. The increase in our outstanding debt is mainly due to loans drawn down to partially finance our container vessel newbuildings.
Interest income remained stable at $3.1 million in each of the three months ended September 30, 2024 and September 30, 2023.
Gain/(loss) on investmentsFollowing the all-stock merger of Eagle Bulk Shipping Inc. with Star Bulk Carriers Corp. ("SBLK") completed on April 9, 2024, we currently own 4,070,214 shares of common stock of SBLK. The $41 thousand gain on investments in the three months ended September 30, 2024 consisted of the $2.8 million fair value loss on these marketable securities, which was offset by the dividends recognized on these shares of $2.8 million. This compares to a $8.4 million loss on marketable securities in the three months ended September 30, 2023.
Equity loss on investmentsEquity loss on investments amounting to $1.2 million and $0.5 million in the three months September 30, 2024 and September 30, 2023, respectively, relates to our share of initial expenses of Carbon Termination Technologies Corporation ("CTTC"), currently engaged in the research and development of decarbonization technologies for the shipping industry.
Other finance expensesOther finance expenses decreased by $0.3 million to $0.9 million in the three months ended September 30, 2024 compared to $1.2 million in the three months ended September 30, 2023.
Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended September 30, 2024 and September 30, 2023.
Other income/(expenses), netOther expenses, net amounted to $0.7 million in the three months ended September 30, 2024 compared to $1.1 million other income, net in the three months ended September 30, 2023.
Adjusted EBITDAAdjusted EBITDA increased by 0.5%, or $0.9 million, to $178.9 million in the three months ended September 30, 2024 from $178.0 million in the three months ended September 30, 2023. As outlined above, the increase is mainly attributable to $21.4 million increase in operating revenues and a $1.9 million increase in dividends received, which were partially offset by a $21.7 million increase in total operating expenses and a $0.7 million increase in equity loss on investments. Adjusted EBITDA for the three months ended September 30, 2024 is adjusted for a $2.8 million change in fair value of investments and a $0.4 million loss on disposal of vessel. Tables reconciling Adjusted EBITDA to Net Income can be found at the end of this earnings release.
Adjusted EBITDA of container vessels segment decreased by 2.4%, or $4.2 million, to $173.5 million in the three months ended September 30, 2024 from $177.7 million in the three months ended September 30, 2023.
Adjusted EBITDA of drybulk vessels segment was $3.8 million in the three months ended September 30, 2024. We had just started to be engaged in the drybulk vessels segment and did not have significant expenses in the three months ended September 30, 2023.
Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
During the nine months ended September 30, 2024, Danaos had an average of 69.3 container vessels and 8.2 Capesize drybulk vessels compared to 68.1 container vessels and no drybulk vessels during the nine months ended September 30, 2023. Our container vessels utilization for the nine months ended September 30, 2024 was 97.4% compared to 97.8% for the nine months ended September 30, 2023.
Our adjusted net income amounted to $399.2 million, or $20.43 per diluted share, for the nine months ended September 30, 2024 compared to $431.6 million, or $21.54 per diluted share, for the nine months ended September 30, 2023. We have adjusted our net income in the nine months ended September 30, 2024 for a $10.4 million change in fair value of investments, a $6.7 million gain on vessel disposal and a $1.6 million non-cash finance fees amortization.
Adjusted net income of our container vessels segment amounted to $391.1 million for the nine months ended September 30, 2024 compared to $434.6 million for the nine months ended September 30, 2023. We adjusted net income of container vessels segment in the nine months ended September 30, 2024 for a $6.7 million gain on vessel disposal and a $1.6 million non-cash finance fees amortization.
Adjusted net income of our drybulk vessels segment amounted to $2.7 million for the nine months ended September 30, 2024 compared to $0.1 million adjusted net loss for the nine months ended September 30, 2023, as we just started to be engaged in the drybulk vessels segment during that period.
The $32.4 million decrease in adjusted net income for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to a $73.1 million increase in total operating expenses, which was partially offset by a $31.7 million increase in operating revenues, a $5.9 million increase in dividends received, a $0.7 million decrease in net finance expenses and a $2.4 million decrease in equity loss on investments.
Please refer to the Adjusted Net Income reconciliation tables, which appear later in this earnings release.
On a non-adjusted basis, our net income amounted to $414.6 million, or $21.22 earnings per diluted share, for the nine months ended September 30, 2024 compared to net income of $426.4 million, or $21.28 earnings per diluted share, for the nine months ended September 30, 2023. On a non-adjusted basis, the net income of our container vessels segment amounted to $396.2 million and the net income of our drybulk vessels segment amounted to $2.7 million for the nine months ended September 30, 2024.
Operating RevenuesOperating revenues increased by 4.4%, or $31.6 million, to $755.9 million in the nine months ended September 30, 2024 from $724.3 million in the nine months ended September 30, 2023.
Operating revenues of our container vessels segment decreased by 3.4%, or $24.7 million, to $699.6 million in the nine months ended September 30, 2024 from $724.3 million in the nine months ended September 30, 2023, analyzed as follows:
a $18.9 million increase in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as a result of vessel additions;
a $20.5 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 mainly as a result of lower charter rates and decreased vessel utilization;
a $7.5 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to vessel disposals;
a $12.3 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to decreased amortization of assumed time charters; and
a $3.3 million decrease in revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to lower non-cash revenue recognition in accordance with US GAAP.
Operating revenues of our drybulk vessels segment added an incremental $56.3 million of revenues in the nine months ended September 30, 2024 compared to no such operating revenues in the nine months ended September 30, 2023.
Vessel Operating ExpensesVessel operating expenses increased by $18.1 million to $140.1 million in the nine months ended September 30, 2024 from $122.0 million in the nine months ended September 30, 2023, primarily as a result of the increase in the average number of vessels in our fleet due to recent container vessel newbuilds and dry bulk vessels acquisitions, while the average daily operating cost of our vessels remained stable at $6,775 per vessel per day for the nine months ended September 30, 2024 compared to $6,758 per vessel per day for the nine months ended September 30, 2023. Management believes that our daily operating costs remain among the most competitive in the industry.
Depreciation & AmortizationDepreciation & Amortization includes Depreciation and Amortization of Deferred Dry-docking and Special Survey Costs.
DepreciationDepreciation expense increased by 12.7%, or $12.2 million, to $108.0 million in the nine months ended September 30, 2024 from $95.8 million in the nine months ended September 30, 2023 mainly due to depreciation expense related to 10 recently acquired Capesize drybulk vessels and 5 recently delivered container vessel newbuilds.
Amortization of Deferred Dry-docking and Special Survey CostsAmortization of deferred dry-docking and special survey costs increased by $6.8 million to $19.9 million in the nine months ended September 30, 2024 from $13.1 million in the nine months ended September 30, 2023.
General and Administrative ExpensesGeneral and administrative expenses increased by $11.4 million, to $32.5 million in the nine months ended September 30, 2024 from $21.1 million in the nine months ended September 30, 2023. The increase was mainly attributable to increased stock-based compensation and management fees.
Other Operating ExpensesOther Operating Expenses include Voyage Expenses.
Voyage ExpensesVoyage expenses increased by $24.8 million to $50.0 million in the nine months ended September 30, 2024 from $25.2 million in the nine months ended September 30, 2023 primarily as a result of the $25.5 million in voyage expenses related to our recently acquired 10 Capesize drybulk vessels, which generated revenue partially from voyage charter agreements, compared to no such expenses related to drybulk vessels in the nine months ended September 30, 2023.
Voyage expenses of container vessels segment decreased by $0.7 million to $24.5 million in the nine months ended September 30, 2024 from $25.2 million in the nine months ended September 30, 2023 mainly due to decreased other voyage expenses. Total voyage expenses of container vessels comprised $24.3 million commissions and $0.2 million other voyage expenses in the nine months ended September 30, 2024.
Voyage expenses of drybulk vessels segment were $25.5 million in the nine months ended September 30, 2024 compared to no voyage expenses in the nine months ended September 30, 2023. Total voyage expenses of drybulk vessels comprised $3.4 million commissions and $22.1 million other voyage expenses, mainly bunkers consumption and port expenses, in the nine months ended September 30, 2024.
Net gain on disposal/sale of vesselsIn March 2024, we sold for scrap the vessel Stride, which had been off-hire since January 8, 2024 due to damage from a fire in the engine room that was subsequently contained. We collected $9.9 million net insurance proceeds for total loss of vessel and recognized a gain on disposal of this vessel amounting to $7.1 million in the six months ended June 30, 2024. In the three months ended September 30, 2024, we recognized $0.4 million expenses related to this vessel disposal, which reduced the total gain to $6.7 million in the nine months ended September 30, 2024. The proceedings with the insurers are in progress as of September 30, 2024, and any additional gain will be recognized upon their finalization.
In January 2023, we completed the sale of the container vessel Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.
Interest Expense and Interest IncomeInterest expense decreased by $0.7 million, to $16.2 million in the nine months ended September 30, 2024 from $16.9 million in the nine months ended September 30, 2023. The decrease in interest expense is a result of:
a $4.8 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the nine months ended September 30, 2024; and
a $0.2 million decrease in the amortization of deferred finance costs; which were partially offset by
a $4.3 million increase in interest expense due to an increase in our debt service cost by approximately 0.15% as a result of higher SOFR rates, partially offset by a reduction in our financing margin cost, and by an increase in our average indebtedness by $61.7 million between the two periods. Average indebtedness was $524.6 million in the nine months ended September 30, 2024, compared to average indebtedness of $462.9 million in the nine months ended September 30, 2023.
As of September 30, 2024, our outstanding debt, gross of deferred finance costs, was $689.5 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $417.4 million, which included $262.8 million principal amount of our Senior Notes as of September 30, 2023. The increase in our outstanding debt is mainly due to loans drawn down to partially finance our container vessel newbuildings.
Interest income decreased by $0.4 million to $9.0 million in the nine months ended September 30, 2024 compared to $9.4 million in the nine months ended September 30, 2023.
Gain/(loss) on investmentsFollowing the all-stock merger of Eagle Bulk Shipping Inc. with Star Bulk Carriers Corp. ("SBLK") completed on April 9, 2024, we currently own 4,070,214 shares of common stock of SBLK. The gain on investments of $17.2 million in the nine months ended September 30, 2024 consisted of the change in fair value of these marketable securities of $10.4 million and dividends recognized on these shares of $6.8 million. This compares to a $2.0 million loss on marketable securities in the nine months ended September 30, 2023.
Loss on debt extinguishmentA $2.3 million loss on early extinguishment of our leaseback obligations in the nine months ended September 30, 2023 compares to no such loss in the nine months ended September 30, 2024.
Equity loss on investmentsEquity loss on investments amounting to $1.4 million and $3.9 million in the nine months September 30, 2024 and September 30, 2023, respectively, relates to our share of initial expenses of CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.
Other finance expensesOther finance expenses decreased by $0.7 million to $2.7 million in the nine months ended September 30, 2024 compared to $3.4 million in the nine months ended September 30, 2023.
Loss on derivativesAmortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ...
