Greek owner John Coustas patted himself on the back as his container ship company Danaos announced a staggering profit late on Monday. “We foresaw the ongoing disruption in the supply chains and tightening of the container market through 2022 many quarters ago,” he said in a press release after his Piraeus-based company revealed that net income increased nearly sevenfold in 2021 from the previous year, to $1.05bn. Net income in the fourth quarter rose to $166m from $47.8m in the corresponding period of 2020. About half of Danaos’s annual profit, $543.6m, represents financial gains realized as the fair value of Danaos’s stake in Israeli liner company Zim “surpassed all reasonable expectations,” according to Coustas.

Danaos currently holds about 6% in Zim, after selling 3 million of its shares in the company last year for net proceeds of nearly $121m. Danaos results also include a $111.6m gain on debt extinguishment, as Zim and South Korean liner HMM redeemed bonds held by the company, as well as a $64m gain on the buyout of Gemini Ship holdings — a private Coustas vehicle that owned five post-panamax container ships. Remaining profitability was driven by sky-high charter income in a red-hot market for the company’s more than 70 container ships.

Danaos’s timely outlook directed its growth and strategy and helped maximize returns, Coustas said in his comment. Danaos sees no quick end to the current “positive dynamics” in the container market. “Our chartering policy will generate even better cash flows in 2022,” Coustas said. Padded by contracted revenue of $2.8bn through to 2028, the company said it felt comfortable enough to announce a 50% increase to its dividend to $0.75 per share. There may be even more in store to reward shareholders.

“The company’s significant cash flows support the increased dividend and also provide us flexibility to pursue accretive growth opportunities, continue to reduce leverage and also begin to consider a share buyback,” Coustas said. Coustas had told analysts as early as August that a dividend increase was on the cards from 2022. Danaos, which stood on the verge of bankruptcy in 2018, had not paid dividends for 13 years before resuming them in the first quarter of 2021.

Counterparty risk of the kind that almost sank the company a few years ago, when major liner company and Danaos charterer Hanjin Shipping went belly-up, “has completely disappeared,” Coustas said. Long-term charters are becoming the norm and liner companies expand in non-seaborne transport modes to spread their risk, Coustas argued.

On top of that, the German KG market, which was responsible for 70% of containership newbuildings during the previous shipbuilding boom, isn’t around anymore. Uncertainty over future environmental standards keeps a lid on the orderbook anyway, he added. “The future is bright and Danaos is well positioned to benefit from it,” Coustas added.