Global Ship Lease, Inc. (NYSE:GSL) (the “Company”, “Global Ship
Lease” or “GSL”), an owner of containerships, announced today its
unaudited results for the three months and year ended December 31,
2021.
Full Year 2021 and Year To Date
Highlights
- Reported operating revenue of $153.5 million for the fourth
quarter 2021. Operating revenue for the year ended December 31,
2021 was $448.0 million.
- Reported net income available to common shareholders and
normalized net income(3) of $66.1 million for the fourth quarter
2021.
- For the year ended December 31, 2021, net income available to
common shareholders was $163.2 million, after $5.8 million premium
paid on the full optional redemption of the outstanding 9.875%
Senior Secured Notes due 2022 (“2022 Notes”) on January 20, 2021,
associated non-cash write offs of deferred financing charges of
$3.7 million and of original issue discount of $1.1 million, a
non-cash charge of $1.3 million for accelerated stock based
compensation expense, prepayment fees of $3.2 million on three
credit facilities and a $7.8 million net gain from the sale of La
Tour. Normalized net income(3) for the year ended December 31, 2021
was $170.7 million.
- Generated $85.4 million of Adjusted EBITDA(3) for the fourth
quarter 2021. Adjusted EBITDA(3) for the year ended December 31,
2021 was $252.2 million.
- Earnings per share and Normalized earnings per share(3) for the
fourth quarter of 2021 was $1.84. Earnings per share for the year
ended December 31, 2021 was $4.65. Normalized earnings per share(3)
for the year ended December 31, 2021 was $4.86.
- Declared a dividend of $0.25 per Class A common share for the
fourth quarter of 2021 to be paid on March 4, 2022 to common
shareholders of record as of February 22, 2022.
- Paid dividends of $0.25 per Class A common share for the first,
second and third quarters 2021.
- Announced that from first quarter of 2022 the dividend will
increase by 50% to $0.375 per Class A common share per quarter;
$1.50 per share, annualized.
- Authorized $40.0 million for share repurchases, to be utilized
on an opportunistic basis.
- During the fourth quarter 2021, raised $32,561 of net proceeds
under the ATM program for the 8.75% Series B Preferred Shares
(“Series B Preferred Shares”). Since the inception of this ATM
program in December 2019, a total of $71.4 million net proceeds has
been raised. During 2021, the average issue price under this ATM
program was $25.38 per share, against par value of $25.00. As of
December 31, 2021, there were 43,592 Series B Preferred Shares
outstanding.
- The total outstanding of Senior Unsecured Notes due 2024 (the
“2024 Notes”) as at December 31, 2021 was $117.5 million, which
includes the issuance in July 2021 of $35.0 million aggregate
principal amount of the 2024 Notes to the sellers of the Borealis
Fleet, as part of the consideration. Since the inception of the ATM
program for the 2024 Notes in November 2019, a total of $50.9
million net proceeds has been raised. During 2021, the average
issue price under the ATM program was $25.55, against par value of
$25.00. There were no sales of the 2024 Notes under this ATM
program in the third and fourth quarter of 2021.
- In January 2021, fully drew down a
new $236.2 million senior secured loan facility
with Hayfin Capital Management, LLP (the “New Hayfin
Facility”). The proceeds, together with cash on hand, were used to
complete on January 20, 2021 the full optional redemption
of our then outstanding 9.875% 2022 Notes.
- In January 2021, closed a fully underwritten public
offering of 5,400,000 Class A common shares, at a public offering
price of $13.00 per share. The underwriters exercised, in
part, their 30-day option to purchase in February 2021, an
additional 141,959 Class A common shares. The aggregate net
proceeds, after underwriting discounts and commissions and
expenses, were approximately $67.5 million.
- In April and May 2021, drew down in full two
new $51.7 million secured credit facilities and a new
$54.0 million sale and leaseback agreement maturing April 2026 and
May 2028 respectively, to refinance the three existing tranches of
the $180.5 million Deutsche, First Citizens & Trust
Company, HCOB, Entrust, Blue Ocean Credit Facility that had a
maturity date of June 30, 2022.
- In August 2021, entered into a term loan facility
of $12.0 million with Sinopac Capital International
(HK) Limited maturing September 2026 to refinance the $8.125
million Hayfin Facility (the “GSL Valerie Facility”), which was the
final facility maturing in 2022.
- In December 2021, entered into a USD 1 month LIBOR interest
rate cap of 0.75% through fourth quarter 2026 on $484.1
million of floating rate debt, which reduces over time and
represented approximately half of the outstanding floating rate
debt.
- In January 2022, agreed an amendment to the existing $268.0
million Syndicated Senior Secured Credit Facility (CACIB, ABN, CIT,
Siemens, CTBC, Bank Sinopac, Palatine) with outstanding balance of
$213.2 million, to extend the maturity date from September 2024 to
December 2026, favorably amend certain covenants, and release three
vessels from the facility’s collateral basket, at an unchanged rate
of LIBOR + 3.00%. These three vessels were subsequently used as
collateral for a new $60.0 million syndicated senior secured debt
facility, maturing July 2026 and priced at LIBOR + 2.75%, which was
used to fully repay the 10.00% Blue Ocean junior debt facility and
for general corporate purposes. There are now no material debt
maturities before May 2024.
- In February 2022, entered into a further USD 1 month LIBOR
interest rate cap of 0.75% through fourth quarter 2026
on $507.9 million of floating rate debt, which reduces
over time and represented the remaining balance of the outstanding
floating rate debt, leaving the Company fully hedged.
- On September 1, 2021, announced the purchase and
retirement of 521,650 shares for $10.0 million.
- In January 2021, Moody’s upgraded the Corporate Family
Rating and the issue rating of the 2022 Notes to B2 / Positive from
B3 / Positive. In July 2021, Moody’s further upgraded the
Corporate Family Rating to B1 / Stable. In August 2021,
S&P upgraded the Corporate Family Rating to BB- / Stable from
B+ / Stable.
- On February 9, 2021, announced the agreement to purchase
from and charter back to Maersk Line, seven 6,000 TEU
Post-Panamax containerships with an average age of approximately 20
years for an aggregate purchase price of $116.0 million funded
by cash, a new $64.2 million secured credit facility and a new
$14.7 million sale and leaseback agreement. The vessels were
delivered between April 26, 2021 through July 28,
2021.
- On June 8, 2021, announced the agreement to purchase 12
containerships from Borealis Finance LLC (the “Borealis
Fleet”), with an average size of approximately 3,000 TEU, a
weighted average age of 11 years, and all with charters to leading
liner operators, for an aggregate purchase price of $233.9
million funded by cash, an issuance of $35.0 million of existing
2024 Notes to the sellers of the ships and a new $140.0 million
syndicated secured credit facility. All of these vessels were
delivered in July 2021.
- On June 16, 2021, announced the agreement to purchase four
5,470 TEU ultra-high reefer capacity Panamax containerships with an
average age of approximately 11 years, and with charters to Maersk
Line, for an aggregate purchase price of $148.0 million funded by
cash and four new $30.0 million sale and leaseback
agreements. Three of these vessels were delivered to us in
September 2021 and the remaining vessel was delivered on October
13, 2021.
- Between January 1, 2021 and March 1, 2022, including the
charters on the 23 ships purchased during 2021, added 51 charters
(including extensions), representing approximately $1.55 billion of
contracted revenues and $1.17 billion of expected aggregate
Adjusted EBITDA(3), calculated on the basis of the median firm
periods of the respective charters. 26 charters were for 1,100 –
3,500 TEU feeder ships, nine were for 4,250 – 5,470 TEU Panamax
ships, 14 were for 5,900 – 6,800 TEU Post-Panamaxes, and two were
for ECO-9,115 TEU wide-beam vessels. Charter durations ranged from
approximately 21 months to approximately five years, with shorter
durations for the smaller ships and longer durations for the larger
ships. Rates were up materially against those previously
contracted.
George Youroukos, Executive Chairman of Global
Ship Lease, stated, “First and foremost, we must acknowledge the
dreadful situation in Ukraine and extend our sympathies to all
those affected, including the many seafarers who are so concerned
about their families. We are doing all that we can to support them.
The conflict introduces significant uncertainty into the course of
economic recovery and additional complexity into supply chains
throughout the region. That said, throughout 2021 and continuing
into what is normally a seasonally weak period in the new year, the
combination of consistently strong demand and limited vessel supply
has driven the containership charter market to levels not seen in
well over a decade. Facing robust demand for the transportation of
containerized freight, both structural and pandemic-related
congestion and supply chain issues that further tighten the market,
and the real prospect of finding themselves short of vessel
capacity, our liner company customers have sought ever-longer
charter durations at increasingly attractive rates. GSL’s
high-quality fleet of mid-sized and smaller containerships has put
us in a very strong position to benefit from this environment,
securing numerous charters at durations and rates that are
multiples of what would have been available 12-18 months ago, and
unthinkable in years past. In this environment, GSL has entered a
virtuous cycle of improved long-term charter revenues, reduced cost
of debt, selective growth on an immediately accretive basis, and
substantial returns of capital to shareholders in the form of both
opportunistic share buybacks and a sustainable dividend that will
soon be more than triple the level announced in early 2021.”
“Moving forward, supply and demand fundamentals
in the containership sector look set to remain positive through at
least the medium term, with congestion expected to be a continuing
feature and large retail inventory restocking needs representing a
substantial incremental contributor to overall demand. Despite a
continuing recovery in global economic activity, with positive
implications for containerized trade flows, a limited number of new
vessels in our mid-sized and smaller classes are scheduled to be
delivered in the next couple of years. The combination of rising
newbuild costs, a distant delivery window due to a lack of shipyard
capacity, and continued uncertainty about long-term environmental
regulations and propulsion technology are discouraging the
speculative ordering that was a prominent feature of earlier
containership market upcycles. Meanwhile, the imperative to pursue
decarbonization is expected to drive cooperation between liner
operators and containership owners to enhance existing ships to
meet the evolving demands of both regulators and end consumers,
which is expected to result in a material reduction in vessel
speeds and thus in effective fleet supply. In the quarters and
years ahead, and in collaboration with our customers, we expect to
deploy proven technologies and solutions to improve vessel
efficiency and reduce our carbon footprint accordingly. Against
this highly supportive backdrop, and by continuing to execute our
prudent chartering strategy and deploying capital on a highly
disciplined basis, GSL remains well positioned to further improve
our balance sheet, expand our contracted cash flow and fleet
through selective acquisitions, reliably sustain our dividend,
opportunistically utilize our new $40.0 million share repurchase
authorization to return a substantial proportion of our available
cashflow to shareholders, and create lasting value for shareholders
throughout the cycle.”
Ian Webber, Chief Executive Officer of Global
Ship Lease, commented, “The addition of more than $1.5 billion of
contracted revenues and the expansion of our fleet by more than 50%
since the beginning of 2021 – contributing significantly to a more
than doubling of adjusted EBITDA from fourth quarter 2020 to fourth
quarter 2021 - have put GSL in a position to materially improve our
financial performance in ways that will benefit the Company on a
sustained basis for years to come. As credit ratings across the
liner industry have increasingly reflected the dramatically
improved financial condition of our counterparties, we have been
able to refinance over $400.0 million of debt, reduce our cost of
debt from 6.3% to 4.7%, and hedge all of our floating rate debt,
all reflected in our repeated credit rating upgrades. With no debt
maturities until mid-2024 and a high degree of visibility on our
revenues in the years ahead, we intend to continue pursuing
opportunities to eliminate relatively higher cost debt and
maintaining a prudent, non-speculative debt structure in which our
amortization schedule is well matched by contracted cash flows.
From this strong foundation, we believe that we can sustainably
support not only the ongoing capital needs of our business, but
also our disciplined growth strategy and a substantial return of
capital to our shareholders.”
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
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Three months ended |
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Three months ended |
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Year ended |
|
Year ended |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
Operating Revenue (1) |
153,529 |
|
69,970 |
|
447,954 |
|
282,813 |
Operating Income |
82,197 |
|
25,846 |
|
237,517 |
|
104,758 |
Net Income (2) |
66,095 |
|
10,752 |
|
163,232 |
|
37,568 |
Adjusted EBITDA (3) |
85,410 |
|
38,674 |
|
252,202 |
|
163,186 |
Normalized Net Income (3) |
66,095 |
|
11,312 |
|
170,681 |
|
49,566 |
|
|
|
|
|
|
|
|
(1) Operating Revenue is net of address
commissions which represents a discount provided directly to a
charterer based on a fixed percentage of the agreed upon charter
rate and includes the amortization of intangible liabilities.
Brokerage commissions are included in “Time charter and voyage
expenses”.
(2) Net Income available to common
shareholders.
(3) Adjusted EBITDA, Normalized Net Income and
Normalized Earnings Per Share are non-U.S. Generally Accepted
Accounting Principles (“U.S. GAAP”) financial measures, as
explained further in this press release, and are considered by
Global Ship Lease to be a useful measure of its performance. For
reconciliations of these non-U.S. GAAP financial measure to net
income or earnings per share as reported, the most directly
comparable U.S. GAAP financial measures, please see “Reconciliation
of Non-U.S. GAAP Financial Measures” below.
Revenue and Utilization
Revenue from fixed-rate, mainly long-term,
time-charters was $153.5 million in the three months ended December
31, 2021, up $83.5 million (or 119.3%) on revenue of $70.0 million
for the prior year period. The period-on-period increase in revenue
was principally due to (i) a 50.9% increase in ownership days, due
to the net acquisition of 22 vessels in 2021, of which 21 were
delivered prior to September 30, 2021 and one in the fourth quarter
2021, resulting in 5,968 ownership days in the quarter, compared to
3,956 in the fourth quarter 2020, (ii) increased revenue on charter
renewals at higher rates on 15 vessels since the beginning of 2021,
(iii) $17.9 million credit from amortization of intangible
liabilities arising on below-market charters attached to vessel
additions, and (iv) $7.7 million due to the modification of time
charter contracts with a direct continuation at a different rate
with the same charterer, partially offset by an increase in idle
time, from 26 days in the fourth quarter of 2020 to 48 days in the
same quarter in 2021, by an increase in unplanned offhire days from
16 in the fourth quarter of 2020 to 62 days in the same quarter of
2021 and an increase in planned offhire days from 128 in the fourth
quarter of 2020 to 367 in the same quarter of 2021. The 62 days of
unplanned offhire in the fourth quarter of 2021 includes an
incident of 30 days for main engine malfunction and 8 days due to
auxiliary and pipes leakages. The 367 days of planned offhire for
drydockings in the fourth quarter 2021 were attributable to eight
regulatory drydockings, while in the comparative period of 2020,
the 128 days of offhire for drydockings were mainly attributable to
four drydockings. Utilization for the fourth quarter of 2021 was
92.0% compared to utilization of 95.7% in the same period of the
prior year.
For the year ended December 31, 2021, revenue
was $448.0 million, up $165.2 million (or 58.4%) on revenue of
$282.8 million in the comparative period, mainly due to the factors
noted above.
The table below shows fleet utilization for the
three months ended December 31, 2021 and 2020, and for the years
ended December 31, 2021, 2020, 2019 and 2018.
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Three months ended |
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Year ended |
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December 31, |
December 31, |
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Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Days |
2021 |
2020 |
|
2021 |
2020 |
2019 |
2018 |
|
|
|
|
|
|
|
|
Ownership days |
5,968 |
3,956 |
|
19,427 |
16,044 |
14,326 |
7,675 |
Planned offhire - scheduled
drydock |
(367) |
(128) |
|
(752) |
(687) |
(537) |
(34) |
Unplanned offhire |
(62) |
(16) |
|
(260) |
(95) |
(105) |
(17) |
Idle time |
(48) |
(26) |
|
(88) |
(338) |
(164) |
(47) |
Operating days |
5,491 |
3,786 |
|
18,327 |
14,924 |
13,520 |
7,577 |
|
|
|
|
|
|
|
|
Utilization |
92.0% |
95.7% |
|
94.3% |
93.0% |
94.4% |
98.7% |
Four drydockings to meet regulatory requirements
were completed in the fourth quarter 2021 and, as of December 31,
2021, four such drydockings were in progress. In 2022, we
anticipate sixteen drydockings, fourteen as scheduled and two
deferred from 2021 for commercial reasons.
Vessel Operating Expenses
Vessel operating expenses, which primarily
include costs of crew, lubricating oil, repairs, maintenance,
insurance and technical management fees, were up 57.4% to $43.6
million for the fourth quarter 2021, compared to $27.7 million in
the comparative period. The increase of $15.9 million was mainly
due to 2,012 or 50.9% net additional ownership days in the fourth
quarter 2021 as the result of the net increase of 22 vessels since
January 1, 2021, of which 21 were delivered prior to October 1,
2021 and one in the fourth quarter 2021. The average cost per
ownership day in the quarter was $7,308, compared to $7,006 for the
prior year period, up $302 per day, or 4.3%.
For the year ended December 31, 2021, vessel
operating expenses were $130.3 million, or an average of $6,707 per
day, compared to $102.8 million in the comparative period, or
$6,410 per day, an increase of $297 per ownership day, or 4.6%.
Time Charter and Voyage Expenses
Time charter and voyage expenses comprise mainly
commission paid to ship brokers, the cost of bunker fuel for
owner’s account when a ship is off-hire or idle and miscellaneous
owner’s costs associated with a ship’s voyage. Time charter and
voyage expenses were $4.8 million for the fourth quarter 2021,
compared to $2.4 million in the fourth quarter of 2020. The
increase was mainly due to the net increase of 22 vessels since
January 1, 2021, plus the increase in unplanned off hire days
resulting in higher costs for bunker fuel for owner’s account.
For the year ended December 31, 2021, time
charter and voyage expenses were $13.1 million, or an average of
$674 per ownership day, compared to $11.1 million in the
comparative period, or $695 per ownership day, a decrease of $21
per ownership day, or 3.0%.
Depreciation and AmortizationDepreciation and
amortization for the fourth quarter 2021 was $19.2 million,
compared to $12.0 million in the fourth quarter of 2020. The
increase was mainly due to the net increase of 22 vessels since
January 1, 2021 and the 11 drydockings that have been completed
since January 1, 2021, including five drydockings for vessels
acquired in 2021.
Depreciation for the year ended December 31,
2021 was $61.6 million, compared to $47.0 million in the
comparative period, with the increase being due mainly to the
reasons noted above.
Gain on sale of vessel and impairment of vessels
The 2001-built, 2,272 TEU containership, La
Tour, was sold on June 30, 2021 for net proceeds of $16.5 million
resulting in a gain of $7.8 million. As at December 31, 2021, there
were no events or changes in circumstances which indicated that the
carrying amounts of any of our vessels may not be recoverable and
therefore no impairment was charged. As of March 31, 2020, we had
an expectation that the 1999-built, 2,200 TEU feeder ships, GSL
Matisse and Utrillo, would be sold before the end of their
previously estimated useful life, and as a result performed an
impairment test of these two asset groups and an impairment charge
of $7.6 million was recognized. An additional impairment charge of
$0.9 million was recognized on these two vessels in the three
months ended June 30, 2020 for a total of $8.5 million in the year
ended December 31, 2020. The two vessels were sold in July
2020.
General and Administrative Expenses
General and administrative expenses were $3.7
million in the fourth quarter 2021, compared to $2.0 million in the
fourth quarter of 2020. The increase was mainly due to social tax
costs related to vesting of certain senior management stock awards,
the effect in share based compensation expense from a new stock
award plan agreed in July 2021 and increased cost of D&O
insurance. The average general and administrative expense per
ownership day for the fourth quarter 2021 was $618, compared to
$498 in the comparative period, an increase of $120 or 24.1%.
For the year ended December 31, 2021, general
and administrative expenses were $13.2 million, compared to $8.4
million in the comparative period mainly due to the non-cash effect
of accelerated stock-based compensation expense recognized in the
first quarter of 2021 and the factors noted above. The average
general and administrative expense per ownership day for the year
ended December 31, 2021 was $682, compared to $520 in the
comparative period, an increase of $162 or 31.2%.
Adjusted EBITDA
Adjusted EBITDA was $85.4 million for the fourth
quarter 2021, up from $38.7 million for the fourth quarter of 2020,
with the net increase being mainly due to the increased operating
days from the net increase of 22 vessels since January 1, 2021 and
increase revenue from charter renewals at higher rates.
Adjusted EBITDA for the year ended December 31,
2021 was $252.2 million, compared to $163.2 million for 2020, with
the increase being due to the reason noted above.
Interest Expense and Interest Income
Debt as at December 31, 2021 totaled $1,085.6
million, comprising $789.7 million secured debt collateralized by
vessels, $178.4 million under sale and leaseback financing
transactions and $117.5 million of unsecured indebtedness on our
2024 Notes. As of December 31, 2021, none of our vessels were
unencumbered.
Debt as at December 31, 2020 totaled $781.9
million, comprising $233.4 million of indebtedness on our 2022
Notes, collateralized by 16 vessels in the legacy GSL fleet, $488.7
million other secured debt collateralized by our other vessels and
$59.8 million of unsecured indebtedness on our 2024 Notes. As of
December 31, 2020, five of our vessels were unencumbered.
Interest and other finance expenses for the
fourth quarter 2021 were $14.9 million, up from $14.8 million for
the fourth quarter of 2020. The effect of full repayment of our
higher interest rate 2022 Notes in January 2021 and the partial
repayment of our higher interest rate Blue Ocean Junior Credit
Facility in February 2021 was offset by new loans with Hamburg
Commercial Bank AG (“HCOB”) and new sale and leaseback agreements
with Neptune Maritime Leasing (“Neptune”) and with CMB Financial
Leasing Co. Ltd. (“CMBFL”), all for vessel acquisitions.
Interest and other finance expenses for the year
ended December 31, 2021 were $69.2 million, an increase of $3.8
million, or 5.8%, on the interest and other finance expenses for
the comparative period, of $65.4 million, although total debt
increased by a net amount of $303.7 million year on year or 38.8%.
The increase was mainly due to $5.8 million premium paid on the
redemption in full of our 2022 Notes in January 2021 compared to
$2.8 million premium paid on the redemption of $74.0 million of the
2022 Notes in 2020, the non-cash write off of deferred financing
charges of $3.7 million and of original issue discount of $1.1
million associated with the redemption of the 2022 Notes, the
prepayment fee of $1.6 million paid on the partial repayment of our
Blue Ocean Junior Credit Facility, the prepayment fee of $1.4
million paid on the repayment and completion of the refinancing of
our Odyssia Credit Facilities and interest on new loans with HCOB
and new sale and leaseback agreements with Neptune and CMBFL, all
for vessel additions, offset by a decrease in our blended cost of
debt from approximately 6.3% for 2020 to 4.9% for 2021, as a result
of our refinancings.
Interest income for the fourth quarter 2021 was
$0.01 million, the same as is the fourth quarter 2020.
Interest income for the year ended December 31,
2021 was $0.4 million, compared to $1.0 million for 2020.
Other Income, Net
Other income, net was $1.1 million in the fourth
quarter 2021, compared to income of $0.9 million in the fourth
quarter 2020.
Other income, net was $2.8 million in the year
ended December 31, 2021, compared to income of $1.3 million in
2020.
Taxation
Taxation for the fourth quarter 2021 was a
charge of $2,000, compared to a charge of $1,000 in the fourth
quarter 2020.
Taxation for the year ended December 31, 2021
was a credit of $0.06 million, compared to a credit of $0.05
million for 2020.
Earnings Allocated to Preferred Shares
Our Series B Preferred Shares carry a coupon of
8.75%, the cost of which for the fourth quarter 2021 was $2.4
million, compared to $1.2 million for the fourth quarter 2020. The
increase was due to additional Series B Preferred Shares issued
under our ATM program since January 1, 2021. The cost was $8.3
million in the year ended December 31, 2021, compared to $4.0
million for 2020.
Net Income Available to Common ShareholdersNet
income available to common shareholders for the three months ended
December 31, 2021 was $66.1 million. Net income available to common
shareholders for the prior period was $10.8 million after $0.5
million premium paid on the redemption of $28.0 million of our 2022
Notes. Earnings per share for the three months ended December 31,
2021 was $1.84, an increase of 425.7% from the earnings per share
for the comparative period, which was $0.35 per share.
Net income available to common shareholders for
the year ended December 31, 2021 was $163.2 million, including the
$7.8 million net gain on the sale of La Tour, the prepayment fee of
$1.6 million on the partial repayment of our Blue Ocean Junior
Credit Facility, the prepayment fee of $1.4 million on the
completion of the refinancing of our Odyssia Credit Facilities, the
prepayment fee of $0.2 million on the repayment of our Hayfin
Credit Facility, the non-cash effect of $1.3 million for
accelerated stock based compensation expense due to vesting and new
awards of fully vested incentive shares, $5.8 million premium paid
on the redemption in full of our 2022 Notes in January 2021, and
associated accelerated amortization of $3.7 million deferred
financing charges and $1.1 million original issue discount. Net
income available to common shareholders for the prior period was
$37.6 million, after a non-cash impairment charge of $8.5 million,
$0.2 million loss on sale of two ships, $2.3 million premium paid
on the redemption of $46.0 million of our 2022 Notes in February
2020 and $0.5 million premium paid on the redemption of $28.0
million of our 2022 Notes in December and $0.4 million new awards
of fully vested incentive shares. Earnings per share for the year
ended December 31, 2021 was $4.65, and increase of 278.0% from the
earnings per share for 2020, which was $1.23.
Normalized net income (a non-GAAP financial
measure) for the three months ended December 31, 2021, was $66.1
million. Normalized earnings per share for the three months ended
December 31, 2021 was $1.84 the same as reported. Normalized net
income for the three months ended December 31, 2020, was $11.3
million, before the $0.5 million premium paid on the redemption of
$28.0 million of our 2022 Notes in December. Normalized earnings
per share for the three months ended December 31, 2020 was
$0.37.
Normalized net income for the year ended
December 31, 2021 was $170.7 million before the $7.8 million net
gain on the sale of La Tour, the prepayment fee of $1.6 million on
the partial repayment of our Blue Ocean Junior Credit Facility, the
prepayment fee of $1.4 million on the completion of the refinancing
of our Odyssia Credit Facilities, the prepayment fee of $0.2
million on the repayment of our Hayfin Credit Facility, the
non-cash effect of $1.3 million for accelerated stock based
compensation expense, $5.8 million premium paid on the redemption
in full of our 2022 Notes in January 2021, the associated
accelerated amortization of $3.7 million deferred financing charges
and $1.1 million original issue discount. Normalized earnings per
share for the year ended December 31, 2021 was $4.86. Normalized
net income in the comparative period was $49.6 million, before the
non-cash impairment charge of $8.5 million, $2.8 million premium
paid on the redemption of 2022 Notes, $0.2 million of loss on sale
of the two ships and $0.4 million new awards of fully vested
incentive shares. Normalized earnings per share for the year ended
December 31, 2020 was $1.62.
Fleet
As at March 1, 2022, we had 65 containerships in
our fleet.
Vessel Name |
Capacity in TEUs |
Lightweight (tons) |
Year Built |
Charterer |
Earliest Charter Expiry Date |
Latest Charter Expiry Date (2) |
Daily Charter Rate $ |
|
|
|
|
|
|
|
|
CMA CGM Thalassa |
11,040 |
38,577 |
2008 |
CMA CGM |
4Q25 |
2Q26 |
47,200 |
UASC Al Khor (1) |
9,115 |
31,764 |
2015 |
Hapag-Lloyd (3) |
1Q27 (3) |
3Q27 (3) |
34,000 (3) |
Anthea Y (1) |
9,115 |
31,890 |
2015 |
COSCO |
3Q23 |
4Q23 |
38,000 |
Maira XL(1) |
9,115 |
31,820 |
2015 |
ONE (3) |
2Q27 (3) |
4Q27 (3) |
31,650 (3) |
MSC Tianjin |
8,603 |
34,325 |
2005 |
MSC |
2Q24 |
3Q24 |
19,000 |
MSC Qingdao (4) |
8,603 |
34,609 |
2004 |
MSC |
2Q24 |
1Q25 |
23,000 |
GSL Ningbo |
8,603 |
34,340 |
2004 |
MSC |
1Q23 |
3Q23 |
22,500 |
GSL Eleni |
7,847 |
29,261 |
2004 |
Maersk |
3Q24 |
4Q24 (5) |
16,500 (5) |
GSL Kalliopi |
7,847 |
29,105 |
2004 |
Maersk |
4Q22 |
1Q25 (5) |
14,500 (5) |
GSL Grania |
7,847 |
29,190 |
2004 |
Maersk |
4Q22 |
4Q24 (5) |
14,500 (5) |
Mary (1) |
6,927 |
23,424 |
2013 |
CMA CGM |
3Q23 |
4Q23 |
25,910 |
Kristina (1) |
6,927 |
23,421 |
2013 |
CMA CGM |
2Q24 |
3Q24 |
25,910 |
Katherine (1) |
6,927 |
23,403 |
2013 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
Alexandra (1) |
6,927 |
23,348 |
2013 |
CMA CGM |
1Q24 |
3Q24 |
25,910 |
Alexis (1) |
6,882 |
23,919 |
2015 |
CMA CGM |
1Q24 |
3Q24 |
25,910 |
Olivia I (1) |
6,882 |
23,864 |
2015 |
CMA CGM |
1Q24 |
2Q24 |
25,910 |
GSL Christen |
6,840 |
27,954 |
2002 |
Maersk |
3Q23 |
4Q23 |
35,000 |
GSL Nicoletta |
6,840 |
28,070 |
2002 |
Maersk |
3Q24 |
4Q24 |
35,750 |
CMA CGM Berlioz |
6,621 |
26,776 |
2001 |
CMA CGM |
4Q25 |
2Q26 |
37,750 (6) |
Agios Dimitrios (4) |
6,572 |
24,931 |
2011 |
MSC |
4Q23 |
3Q24 |
20,000 |
GSL Vinia |
6,080 |
23,737 |
2004 |
Maersk |
3Q24 |
2Q25 |
13,250 |
GSL Christel Elisabeth |
6,080 |
23,745 |
2004 |
Maersk |
2Q24 |
2Q25 |
13,250 |
GSL Dorothea |
5,992 |
24,243 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (7) |
GSL Arcadia |
6,008 |
24,858 |
2000 |
Maersk |
2Q24 |
1Q26 |
18,600 (7) |
GSL Violetta |
6,008 |
24,873 |
2000 |
Maersk |
4Q24 |
4Q25 |
18,600 (7) |
GSL Maria |
6,008 |
24,414 |
2001 |
Maersk |
4Q24 |
1Q27 |
18,600 (7) |
GSL MYNY |
6,008 |
24,873 |
2000 |
Maersk |
3Q24 |
1Q26 |
18,600 (7) |
GSL Melita |
6,008 |
24,848 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (7) |
GSL Tegea |
5,992 |
24,308 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (7) |
Tasman |
5,936 |
25,010 |
2000 |
Maersk |
1Q22 |
1Q24 |
12,500 (8) |
ZIM Europe |
5,936 |
25,010 |
2000 |
ZIM |
1Q24 |
3Q24 |
14,500 (9) |
Ian H |
5,936 |
25,128 |
2000 |
ZIM |
2Q24 |
4Q24 |
32,500 (9) |
GSL Tripoli |
5,470 |
22,259 |
2009 |
Maersk |
3Q24 |
4Q27 |
36,500 (10) |
GSL Kithira |
5,470 |
22,108 |
2009 |
Maersk |
4Q24 |
1Q28 |
36,500 (10) |
GSL Tinos |
5,470 |
22,067 |
2010 |
Maersk |
3Q24 |
4Q27 |
36,500 (10) |
GSL Syros |
5,470 |
22,098 |
2010 |
Maersk |
3Q24 |
4Q27 |
36,500 (10) |
Dolphin II |
5,095 |
20,596 |
2007 |
OOCL |
1Q25 |
2Q25 |
24,500 (11) |
Orca I |
5,095 |
20,633 |
2006 |
Maersk |
2Q24 |
4Q25 |
21,000 (12) |
CMA CGM Alcazar |
5,089 |
20,087 |
2007 |
CMA CGM |
3Q26 |
4Q26 |
35,500 |
GSL Château d’If |
5,089 |
19,994 |
2007 |
CMA CGM |
4Q26 |
1Q27 |
35,500 |
GSL Susan |
4,363 |
17,309 |
2008 |
CMA CGM |
3Q22 |
4Q22 |
22,000 |
CMA CGM Jamaica |
4,298 |
17,272 |
2006 |
CMA CGM |
3Q22 |
3Q23 |
25,350 |
CMA CGM Sambhar |
4,045 |
17,429 |
2006 |
CMA CGM |
3Q22 |
3Q23 |
25,350 |
CMA CGM America |
4,045 |
17,428 |
2006 |
CMA CGM |
3Q22 |
2Q23 |
25,350 |
GSL Rossi |
3,421 |
16,420 |
2012 |
Gold Star/ZIM |
1Q26 |
3Q26 |
20,000 (13) |
GSL Alice |
3,421 |
16,543 |
2014 |
CMA CGM |
1Q23 |
2Q23 |
21,500 |
GSL Eleftheria |
3,404 |
16,642 |
2013 |
Maersk |
3Q25 |
4Q25 |
37,975 |
GSL Melina |
3,404 |
16,703 |
2013 |
Maersk |
2Q23 |
3Q23 |
24,500 |
GSL Valerie |
2,824 |
11,971 |
2005 |
ZIM |
1Q25 |
3Q25 |
13,250 (14) |
Matson Molokai |
2,824 |
11,949 |
2007 |
Matson |
2Q25 |
3Q25 |
20,250 (15) |
GSL Lalo |
2,824 |
11,950 |
2006 |
ONE |
4Q22 |
1Q23 |
18,500 |
GSL Mercer |
2,824 |
11,970 |
2007 |
ONE |
4Q24 |
1Q25 |
35,750 |
Athena |
2,762 |
13,538 |
2003 |
Hapag-Lloyd |
2Q24 |
2Q24 |
21,500 |
GSL Elizabeth |
2,741 |
11,507 |
2006 |
ONE |
3Q22 |
1Q23 |
18,500 |
GSL Chloe |
2,546 |
12,212 |
2012 |
ONE |
4Q24 |
1Q25 |
33,000 |
GSL Maren |
2,546 |
12,243 |
2014 |
Westwood |
4Q22 |
1Q23 |
19,250 |
Maira |
2,506 |
11,453 |
2000 |
Hapag-Lloyd |
1Q23 |
2Q23 |
14,450 |
Nikolas |
2,506 |
11,370 |
2000 |
CMA CGM |
1Q23 |
1Q23 |
16,000 |
Newyorker |
2,506 |
11,463 |
2001 |
CMA CGM |
1Q24 |
3Q24 |
20,700 |
Manet |
2,272 |
11,727 |
2001 |
OOCL |
4Q24 |
1Q25 |
32,000 (16) |
Keta |
2,207 |
11,731 |
2003 |
CMA CGM |
1Q25 |
1Q25 |
25,000 |
Julie |
2,207 |
11,731 |
2002 |
Sea Consortium |
1Q23 |
2Q23 |
20,000 |
Kumasi |
2,207 |
11,791 |
2002 |
Wan Hai |
1Q25 |
2Q25 |
38,000 (17) |
Akiteta (18) |
2,207 |
11,731 |
2002 |
OOCL |
4Q24 |
1Q25 |
32,000 |
GSL Amstel |
1,118 |
5,167 |
2008 |
CMA CGM |
3Q23 |
3Q23 |
11,900 |
(1) |
Modern design, high reefer capacity, fuel-efficient
vessel. |
(2) |
In many instances charterers have the option to further extend a
charter beyond the nominal latest expiry date by the amount of time
that the vessel was off hire during the course of that charter.
This additional charter time (“Offhire Extension”) is computed at
the end of the initially contracted charter period. The Latest
Charter Expiry Dates shown in this table have been adjusted to
reflect offhire accrued up to the date of issuance of this release
plus estimated offhire scheduled to occur during the remaining
lifetimes of the respective charters. However, as actual offhire
can only be calculated at the end of each charter, in some cases
actual Offhire Extensions – if invoked by charterers - may exceed
the Latest Charter Expiry Dates indicated. |
(3) |
UASC Al Khor & Maira XL. On November 22, 2021 we announced the
forward fixture of these two ships, upon the expiry of their
existing charters in the second or third quarters of 2022, to a
leading liner operator for approximately five years each at a
charter rate of $65,000 per day. |
(4) |
MSC Qingdao & Agios Dimitrios are fitted with Exhaust Gas
Cleaning Systems (“scrubbers”). |
(5) |
GSL Eleni delivered 2Q2019 and is chartered for five years; GSL
Kalliopi (delivered 4Q2019) and GSL Grania (delivered 3Q2019) are
chartered for three years plus two successive periods of one year
at the option of the charterer. During the option periods the
charter rates for GSL Kalliopi and GSL Grania are $18,900 per day
and $17,750 per day respectively. |
(6) |
CMA CGM Berlioz. Chartered at $34,000 per day through end-December
2021, at which time the rate increased to $37,750 per day. |
(7) |
On February 9, 2021 we announced that we had contracted to purchase
seven ships of approximately 6,000 TEU each, which have now been
delivered. Contract cover for each ship is for a firm period of at
least three years from the date each vessel is delivered, with
charterers holding a one-year extension option on each charter (at
a rate of $12,900 per day), followed by a second option (at a rate
of $12,700 per day) with the period determined by - and terminating
prior to - each vessel’s 25th year drydocking & special
survey. |
(8) |
Tasman. 12-month extension at charterer’s option is callable in
2Q2022, at an increased rate of $20,000 per day. |
(9) |
A package agreement with ZIM, for direct charter extensions on two
5,900 TEU ships: Ian H, at a rate of $32,500 per day from May 2021,
and ZIM Europe (formerly Dimitris Y), at a rate of $24,250 per day,
from May 2022. |
(10) |
On June 16, 2021 we announced that we had contracted to purchase
four ultra-high reefer ships of 5,470 TEU each. These ships
delivered in September and October of 2021. Contract cover on each
ship is for a firm period of three years at a rate of $36,500 per
day, with a period of an additional three years (at $17,250 per
day) at charterers’ option. |
(11) |
Dolphin II. Chartered to OOCL at $24,500 per day through April
2022, at which time the rate will increase to $53,500 per day. |
(12) |
Orca I. Chartered at $21,000 per day through to the median expiry
of the charter in 2Q2024; thereafter the charterer has the option
to charter the vessel for a further 12-14 months at the same
rate. |
(13) |
GSL Rossi. Chartered to Gold Star / ZIM to March 2022 at a rate of
$20,000 per day; thereafter the rate increases to an average of
$38,875 per day. |
(14) |
GSL Valerie: chartered to ZIM at $13,250 per day to January 2022;
thereafter the rate increases to an average of $35,600 per
day-$40,000 for the first 12 months, $36,000 for the next 12 months
and $32,000 for the remaining period. |
(15) |
Matson Molokai. Chartered to Matson at $20,250 per day to May 2022
after which the rate increases to $36,500 per day. |
(16) |
Manet. Chartered to OOCL at a rate of $32,000 per day upon
completion of dry-docking. |
(17) |
Kumasi. Chartered to Wan Hai at a rate of $38,000 per day upon
completion of dry-docking. |
(18) |
Akiteta, formerly Marie Delmas. Chartered to OOCL at a rate of
$32,000 per day upon completion of dry-docking. Note that this
charter was formerly attributed to Kumasi, but was switched to
Akiteta due to vessel positioning and availability. |
Conference Call and Webcast
Global Ship Lease will hold a conference call to
discuss the Company's results for the three months ended December
31, 2021 today, Wednesday March 2, 2022 at 10:30 a.m. Eastern Time.
There are two ways to access the conference call:
(1) Dial-in: (877)
445-2556 or (908) 982-4670; Passcode: 7693412
Please dial in at
least 10 minutes prior to 10:30 a.m. Eastern Time to ensure a
prompt start to the call.
(2) Live Internet
webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a
replay of the call will be available through Friday, March 18, 2022
at (855) 859-2056 or (404) 537-3406. Enter the code 7693412 to
access the audio replay. The webcast will also be archived on the
Company’s website: http://www.globalshiplease.com
Annual Report on Form 20-F
The Company’s Annual Report for 2020 was filed
with the Securities and Exchange Commission (the “Commission”) on
March 19, 2021. A copy of the report can be found under the
Investor Relations section (Annual Reports) of the Company’s
website at http://www.globalshiplease.com or on the Commission’s
website at www.sec.gov. Shareholders may request a hard copy of the
audited financial statements free of charge by contacting the
Company at info@globalshiplease.com or by writing to Global Ship
Lease, Inc, care of Global Ship Lease Services Limited, 25 Wilton
Road, London SW1V ILW.
About Global Ship Lease
Global Ship Lease is a leading independent owner
of containerships with a diversified fleet of mid-sized and smaller
containerships. Incorporated in the Marshall Islands, Global Ship
Lease commenced operations in December 2007 with a business of
owning and chartering out containerships under fixed-rate charters
to top tier container liner companies. It was listed on the New
York stock Exchange in August 2008.
As at March 1, 2022, Global Ship
Lease owned 65 containerships, ranging from 1,118 to 11,040
TEU, with an aggregate capacity of 342,348 TEU. 32 ships are
wide-beam Post-Panamax.
Adjusted to include all charters agreed, and
ships contracted to be purchased, up to March 1, 2022, the
average remaining term of the Company’s charters as
at December 31, 2021, to the mid-point of redelivery,
including options under the Company’s control and other than if a
redelivery notice has been received, was 2.6 years on a
TEU-weighted basis. Contracted revenue on the same basis
was $1.79 billion. Contracted revenue was $2.04 billion,
including options under charterers’ control and with latest
redelivery date, representing a weighted average remaining term of
3.3 years.
Reconciliation of Non-U.S. GAAP Financial
Measures
A. Adjusted EBITDA
Adjusted EBITDA represents net income available
to common shareholders before interest income and expense, earnings
allocated to preferred shares, income taxes, depreciation and
amortization of drydocking net costs, gains or losses on the sale
of vessels, amortization of intangible liabilities, charges for
share based compensation and impairment losses. Adjusted EBITDA is
a non-U.S. GAAP quantitative measure used to assist in the
assessment of our ability to generate cash from our operations. We
believe that the presentation of Adjusted EBITDA is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. Adjusted EBITDA is not defined in U.S.
GAAP and should not be considered to be an alternative to net
income or any other financial metric required by such accounting
principles. Our use of Adjusted EBITDA may vary from the use of
similarly titled measures by others in our industry.
Adjusted EBITDA is presented herein both on a
historic basis and on a forward-looking basis in certain instances.
We do not provide a reconciliation of such
forward looking non-U.S. GAAP financial measure
to the most directly comparable U.S. GAAP measure because such
U.S. GAAP financial measure on a forward-looking basis is not
available to us without unreasonable effort.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars)
|
|
Three |
Three |
Twelve |
Twelve |
|
|
months |
months |
months |
months |
|
|
ended |
ended |
ended |
ended |
|
|
December 31, |
December 31, |
December 31, |
December 31, |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
|
|
|
Net income
available to Common Shareholders |
66,095 |
|
10,752 |
|
163,232 |
|
37,568 |
|
|
|
|
|
|
|
Adjust: |
Depreciation and amortization |
19,245 |
|
12,008 |
|
61,563 |
|
46,978 |
|
|
Amortization of
intangible liabilities |
(18,362 |
) |
(453 |
) |
(45,430 |
) |
(541 |
) |
|
Impairment of
vessels |
- |
|
- |
|
- |
|
8,497 |
|
|
(Gain)/loss on
sale of vessels |
- |
|
- |
|
(7,770 |
) |
244 |
|
|
Interest
income |
(80 |
) |
(59 |
) |
(449 |
) |
(956 |
) |
|
Interest
expense |
14,925 |
|
14,821 |
|
69,227 |
|
65,354 |
|
|
Share based
compensation |
1,205 |
|
358 |
|
3,510 |
|
1,998 |
|
|
Earnings allocated
to preferred shares |
2,384 |
|
1,248 |
|
8,263 |
|
3,995 |
|
|
Income tax |
(2 |
) |
(1 |
) |
56 |
|
49 |
|
|
|
|
|
|
|
Adjusted
EBITDA |
85,410 |
|
38,674 |
|
252,202 |
|
163,186 |
|
B. Normalized net income
Normalized net income represents net income available to common
shareholders adjusted for impairment charges, the premium paid on
redemption of our 2022 Notes together with the associated
accelerated amortization of deferred financing costs and original
issue discount, prepayment fees on repayment of credit facilities,
accelerated stock based compensation expense due to vesting and new
awards of fully vested incentive shares and gains or losses on sale
of vessels. Normalized net income is a non-U.S. GAAP quantitative
measure which we believe will assist investors and analysts who
often adjust reported net income for items that do not affect
operating performance or operating cash generated. Normalized net
income is not defined in U.S. GAAP and should not be considered to
be an alternate to net income or any other financial metric
required by such accounting principles. Our use of Normalized net
income may vary from the use of similarly titled measures by others
in our industry.
NORMALIZED NET INCOME
(thousands of U.S. dollars)
|
|
Three |
Three |
Twelve |
Twelve |
|
|
months |
months |
months |
months |
|
|
ended |
ended |
ended |
ended |
|
|
December 31, |
December 31, |
December 31, |
December 31, |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
|
|
|
Net income
available to Common Shareholders |
66,095 |
10,752 |
163,232 |
|
37,568 |
|
|
|
|
|
|
Adjust: |
(Gain)/loss on sale of vessels |
- |
- |
(7,770 |
) |
244 |
|
Prepayment fee on
repayment of Odyssia Credit Facilities |
- |
- |
1,438 |
|
- |
|
Prepayment fee on
partial repayment of Blue Ocean Credit Facility |
- |
- |
1,618 |
|
- |
|
Prepayment fee on
repayment of Hayfin Facility |
- |
|
175 |
|
|
|
Impairment of
vessels |
- |
- |
- |
|
8,497 |
|
Accelerated stock
based compensation expense due to vesting and new awards of fully
vested incentive shares |
- |
- |
1,346 |
|
426 |
|
Premium paid on
redemption of 2022 Notes |
- |
560 |
5,764 |
|
2,831 |
|
Accelerated write
off of deferred financing charges related to redemption of 2022
Notes |
- |
- |
3,745 |
|
- |
|
Accelerated write
off of original issue discount related to redemption of 2022
Notes |
- |
- |
1,133 |
|
- |
|
|
|
|
|
|
Normalized net
income |
66,095 |
11,312 |
170,681 |
|
49,566 |
C. Normalized Earnings per Share
Normalized Earnings per Share represents
Earnings per Share adjusted for impairment charges, the premium
paid on redemption of our 2022 Notes together with the associated
accelerated amortization of deferred financing costs and original
issue discount, prepayment fees on repayment of credit facilities,
accelerated stock based compensation expense due to vesting and new
awards of fully vested incentive shares and gains or losses on sale
of vessels. Normalized Earnings per Share is a non-U.S. GAAP
quantitative measure which we believe will assist investors and
analysts who often adjust reported Earnings per Share for items
that do not affect operating performance or operating cash
generated. Normalized Earnings per Share is not defined in U.S.
GAAP and should not be considered to be an alternate to Earnings
per Share as reported or any other financial metric required by
such accounting principles. Our use of Normalized Earnings per
Share may vary from the use of similarly titled measures by others
in our industry.
NORMALIZED EARNINGS PER SHARE
|
|
Three |
Three |
Twelve |
Twelve |
|
|
months |
months |
months |
months |
|
|
ended |
ended |
ended |
ended |
|
|
December 31, |
December 31, |
December 31, |
December 31, |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
|
|
|
|
EPS as reported
(USD) |
1.84 |
0.35 |
4.65 |
1.23 |
Normalized net
income adjustments-Class A common shares (in thousands USD) |
- |
324 |
7,449 |
6,992 |
Weighted average
number of Class A Common shares |
35,891,587 |
17,741,008 |
35,125,003 |
17,687,137 |
Adjustment on EPS
(USD) |
- |
0.02 |
0.21 |
0.39 |
Normalized EPS
(USD) |
1.84 |
0.37 |
4.86 |
1.62 |
Safe Harbor Statement
This communication contains forward-looking
statements. Forward-looking statements provide Global Ship Lease's
current expectations or forecasts of future events. Forward-looking
statements include statements about Global Ship Lease's
expectations, beliefs, plans, objectives, intentions, assumptions
and other statements that are not historical facts. Words or
phrases such as "anticipate," "believe," "continue," "estimate,"
"expect," "intend," "may," "ongoing," "plan," "potential,"
"predict," “should,” "project," "will" or similar words or phrases,
or the negatives of those words or phrases, may identify
forward-looking statements, but the absence of these words does not
necessarily mean that a statement is not forward-looking. These
forward-looking statements are based on assumptions that may be
incorrect, and Global Ship Lease cannot assure you that these
projections included in these forward-looking statements will come
to pass. Actual results could differ materially from those
expressed or implied by the forward-looking statements as a result
of various factors.
The risks and uncertainties include, but are not
limited to:
- future operating or financial results;
- expectations regarding the future growth of the container
shipping industry, including the rates of annual demand and supply
growth;
- geo-political events such as the conflict in Ukraine;
- the length and severity of the ongoing outbreak of the novel
coronavirus (COVID-19) around the world and governmental responses
thereto;
- the financial condition of our charterers, particularly CMA
CGM, our principal charterer and main source of operating revenue,
and their ability to pay charterhire in accordance with the
charters;
- Global Ship Lease’s financial condition and liquidity,
including its level of indebtedness or ability to obtain additional
financing to fund capital expenditures, ship acquisitions and other
general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and
repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments
and forecasts of its ability to make such payments including the
availability of cash and the impact of constraints under its credit
facilities;
- risks relating to the acquisition of Poseidon Containers and
Global Ship Lease’s ability to realize the anticipated benefits of
the acquisition;
- future acquisitions, business strategy and expected capital
spending;
- operating expenses, availability of crew, number of off-hire
days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends,
including charter rates and factors affecting supply and
demand;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional
economies;
- risks incidental to ship operation, including piracy, discharge
of pollutants and ship accidents and damage including total or
constructive total loss;
- estimated future capital expenditures needed to preserve its
capital base;
- Global Ship Lease’s expectations about the availability of
ships to purchase, the time that it may take to construct new
ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew
long-term, fixed-rate charters or other ship employment
arrangements;
- Global Ship Lease’s ability to realize expected benefits from
its acquisition of secondhand vessels;
- the continued performance of existing long-term, fixed-rate
time charters;
- Global Ship Lease’s ability to capitalize on its management’s
and board of directors’ relationships and reputations in the
containership industry to its advantage;
- changes in governmental and classification societies’ rules and
regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on
commercially reasonable terms;
- unanticipated changes in laws and regulations including
taxation;
- potential liability from future litigation.
Forward-looking statements are subject to known
and unknown risks and uncertainties and are based on potentially
inaccurate assumptions that could cause actual results to differ
materially from those expected or implied by the forward-looking
statements. Global Ship Lease's actual results could differ
materially from those anticipated in forward-looking statements for
many reasons specifically as described in Global Ship Lease's
filings with the U.S. Securities and Exchange Commission (the
“SEC”). Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this
communication.
Global Ship Lease undertakes no obligation to
publicly revise any forward-looking statement to reflect
circumstances or events after the date of this communication or to
reflect the occurrence of unanticipated events. You should,
however, review the factors and risks Global Ship Lease describes
in the reports it will file from time to time with the SEC after
the date of this communication.
Global Ship Lease, Inc.
Interim Unaudited Condensed
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars except
share data)
|
December 31, 2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
75,180 |
|
$ |
80,757 |
|
Restricted cash |
|
24,894 |
|
|
825 |
|
Accounts receivable, net |
|
3,220 |
|
|
2,532 |
|
Inventories |
|
11,410 |
|
|
6,316 |
|
Prepaid expenses and other
current assets |
|
25,224 |
|
|
6,711 |
|
Derivative asset |
|
533 |
|
|
- |
|
Due from related parties |
|
2,897 |
|
|
1,472 |
|
Total current
assets |
$ |
143,358 |
|
$ |
98,613 |
|
NON-CURRENT
ASSETS |
|
|
|
|
|
Vessels in operation |
$ |
1,682,816 |
|
$ |
1,140,583 |
|
Advances for vessels
acquisitions and other additions |
|
6,139 |
|
|
1,364 |
|
Deferred charges, net |
|
37,629 |
|
|
22,951 |
|
Other non-current assets |
|
14,010 |
|
|
- |
|
Derivative asset, net of
current portion |
|
6,694 |
|
|
- |
|
Restricted cash, net of
current portion |
|
103,468 |
|
|
10,680 |
|
Total non-current
assets |
|
1,850,756 |
|
|
1,175,578 |
|
TOTAL
ASSETS |
$ |
1,994,114 |
|
$ |
1,274,191 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
Accounts payable |
$ |
13,159 |
|
$ |
10,557 |
|
Accrued liabilities |
|
32,249 |
|
|
19,127 |
|
Current portion of long-term
debt |
|
190,316 |
|
|
76,681 |
|
Current portion of deferred
revenue |
|
8,496 |
|
|
5,623 |
|
Due to related parties |
|
543 |
|
|
225 |
|
Total current
liabilities |
$ |
244,763 |
|
$ |
112,213 |
|
LONG-TERM
LIABILITIES |
|
|
|
|
|
Long-term debt, net of current
portion and deferred financing costs |
$ |
880,134 |
|
$ |
692,775 |
|
Intangible liabilities-charter
agreements |
|
55,376 |
|
|
4,462 |
|
Deferred revenue, net of
current portion |
|
101,288 |
|
|
- |
|
Total non-current
liabilities |
|
1,036,798 |
|
|
697,237 |
|
Total
liabilities |
$ |
1,281,561 |
|
$ |
809,450 |
|
Commitments and
Contingencies |
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Class A common shares -
authorized214,000,000 shares with a $0.01 par value36,464,109
shares issued and outstanding (2020 – 17,741,008 shares) |
|
365 |
|
|
177 |
|
Series B Preferred Shares -
authorized44,000 shares with a $0.01 par value43,592 shares issued
and outstanding (2020 – 22,822 shares) |
|
- |
|
|
- |
|
Series C Preferred Shares -
authorized250,000 shares with a $0.01 par valueNil shares issued
and outstanding (2020 - 250,000 shares) |
|
- |
|
|
3 |
|
Additional paid in
capital |
|
698,463 |
|
|
586,355 |
|
Retained earnings/(accumulated
deficit) |
|
13,498 |
|
|
(121,794 |
) |
Accumulated other
comprehensive income |
|
227 |
|
|
- |
|
Total shareholders'
equity |
|
712,553 |
|
|
464,741 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
1,994,114 |
|
$ |
1,274,191 |
|
Global Ship Lease, Inc.
Interim Unaudited Condensed
Consolidated Statements of Income
(Expressed in thousands of U.S. dollars)
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
OPERATING REVENUES |
|
|
|
|
|
|
|
|
|
|
|
Time charter revenue (includes related party revenues of $39,686
and $32,604 for the three month periods ended December 31, 2021 and
2020, respectively, and $144,681 and $142,826 for the twelve month
periods ended December 31, 2021 and 2020, respectively) |
$ |
135,167 |
|
|
$ |
69,517 |
|
|
$ |
402,524 |
|
|
$ |
282,272 |
|
Amortization of intangible liabilities-charter agreements (includes
related party amortization of intangible liabilities-charter
agreements of $3,358 and $453 for the three month periods ended
December 31, 2021 and 2020, respectively, and $6,882 and $1,782 for
the twelve month periods ended December 31, 2021 and 2020,
respectively) |
|
18,362 |
|
|
|
453 |
|
|
|
45,430 |
|
|
|
541 |
|
Total Operating Revenues |
|
153,529 |
|
|
|
69,970 |
|
|
|
447,954 |
|
|
|
282,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
Vessel
operating expenses (includes related party vessel operating
expenses of $4,539 and $3,199 for the three month periods ended
December 31, 2021 and 2020, respectively, and $15,294 and $12,580
for the twelve month periods ended December 31, 2021 and 2020,
respectively) |
|
43,612 |
|
|
|
27,713 |
|
|
|
130,304 |
|
|
|
102,837 |
|
Time
charter and voyage expenses (includes related party time charter
and voyage expenses of $1,218 and $645 for the three month periods
ended December 31, 2021 and 2020, respectively, and $3,583 and
$2,446 for the twelve months period ended December 31, 2021 and
2020, respectively) |
|
4,789 |
|
|
|
2,431 |
|
|
|
13,100 |
|
|
|
11,149 |
|
Depreciation and
amortization |
|
19,245 |
|
|
|
12,008 |
|
|
|
61,563 |
|
|
|
46,978 |
|
Impairment of vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8,497 |
|
General and administrative
expenses |
|
3,686 |
|
|
|
1,972 |
|
|
|
13,240 |
|
|
|
8,350 |
|
(Gain)/loss on sale of
vessels |
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
|
|
244 |
|
Operating Income |
|
82,197 |
|
|
|
25,846 |
|
|
|
237,517 |
|
|
|
104,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING INCOME/(EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
80 |
|
|
|
59 |
|
|
|
449 |
|
|
|
956 |
|
Interest and other finance
expenses (include of $5,764 and $2,831 Notes premium for the years
ended December 31, 2021 and 2020, respectively) |
|
(14,925 |
) |
|
|
(14,821 |
) |
|
|
(69,227 |
) |
|
|
(65,354 |
) |
Other income, net |
|
1,125 |
|
|
|
915 |
|
|
|
2,812 |
|
|
|
1,252 |
|
Total non-operating expenses |
|
(13,720 |
) |
|
|
(13,847 |
) |
|
|
(65,966 |
) |
|
|
(63,146 |
) |
Income before income taxes |
|
68,477 |
|
|
|
11,999 |
|
|
|
171,551 |
|
|
|
41,612 |
|
Income taxes |
|
2 |
|
|
|
1 |
|
|
|
(56 |
) |
|
|
(49 |
) |
Net Income |
$ |
68,479 |
|
|
$ |
12,000 |
|
|
$ |
171,495 |
|
|
$ |
41,563 |
|
Earnings allocated to Series B
Preferred Shares |
|
(2,384 |
) |
|
|
(1,248 |
) |
|
|
(8,263 |
) |
|
|
(3,995 |
) |
Net Income available to Common Shareholders |
$ |
66,095 |
|
|
$ |
10,752 |
|
|
$ |
163,232 |
|
|
$ |
37,568 |
|
Global Ship Lease, Inc.
Interim Unaudited Condensed Consolidated
Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
68,479 |
|
|
$ |
12,000 |
|
|
$ |
171,495 |
|
|
$ |
41,563 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
$ |
19,245 |
|
|
$ |
12,008 |
|
|
$ |
61,563 |
|
|
$ |
46,978 |
|
Impairment of vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8,497 |
|
(Gain)/loss on sale of
vessel |
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
|
|
244 |
|
Amortization of deferred
financing costs |
|
1,469 |
|
|
|
1,055 |
|
|
|
8,279 |
|
|
|
4,085 |
|
Amortization of original issue
discount/premium on repurchase of notes |
|
(119 |
) |
|
|
814 |
|
|
|
8,615 |
|
|
|
3,269 |
|
Amortization of intangible
liabilities-charter agreements |
|
(18,362 |
) |
|
|
(453 |
) |
|
|
(45,430 |
) |
|
|
(541 |
) |
Share based compensation |
|
1,205 |
|
|
|
358 |
|
|
|
3,510 |
|
|
|
1,998 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
(Increase)/decrease in
accounts receivable and other assets |
$ |
(10,656 |
) |
|
$ |
1,062 |
|
|
$ |
(33,211 |
) |
|
$ |
3,132 |
|
Increase in inventories |
|
(2,149 |
) |
|
|
(901 |
) |
|
|
(5,094 |
) |
|
|
(721 |
) |
Increase in derivative
asset |
|
(7,000 |
) |
|
|
- |
|
|
|
(7,000 |
) |
|
|
- |
|
Increase/(decrease) in
accounts payable and other liabilities |
|
7,111 |
|
|
|
(4,155 |
) |
|
|
5,939 |
|
|
|
(2,215 |
) |
(Decrease)/increase in related
parties' balances, net |
|
(1,444 |
) |
|
|
971 |
|
|
|
(1,107 |
) |
|
|
2,504 |
|
Increase/(decrease) in
deferred revenue |
|
102,602 |
|
|
|
(492 |
) |
|
|
104,160 |
|
|
|
(4,364 |
) |
Unrealized foreign exchange
gain |
|
(5 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net cash provided by
operating activities |
$ |
160,376 |
|
|
$ |
22,267 |
|
|
$ |
263,949 |
|
|
$ |
104,429 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of vessels and
intangibles |
$ |
(36,000 |
) |
|
$ |
- |
|
|
$ |
(463,750 |
) |
|
$ |
(23,060 |
) |
Cash paid for vessel
expenditures |
|
(1,853 |
) |
|
|
(520 |
) |
|
|
(4,611 |
) |
|
|
(4,089 |
) |
Advances for vessel
acquisitions and other additions |
|
1,043 |
|
|
|
(64 |
) |
|
|
(3,276 |
) |
|
|
(4,541 |
) |
Cash paid for drydockings |
|
(11,660 |
) |
|
|
(4,657 |
) |
|
|
(19,226 |
) |
|
|
(14,756 |
) |
Net proceeds from sale of
vessels |
|
- |
|
|
|
- |
|
|
|
16,514 |
|
|
|
6,852 |
|
Net cash used in
investing activities |
$ |
(48,470 |
) |
|
$ |
(5,241 |
) |
|
$ |
(474,349 |
) |
|
$ |
(39,594 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of 2024
Notes |
$ |
- |
|
|
$ |
861 |
|
|
$ |
22,701 |
|
|
$ |
20,054 |
|
Repurchase of 2022 Notes,
including premium |
|
- |
|
|
|
(32,356 |
) |
|
|
(239,183 |
) |
|
|
(91,971 |
) |
Proceeds from drawdown of
credit facilities and sale and leaseback |
|
30,000 |
|
|
|
- |
|
|
|
744,506 |
|
|
|
47,000 |
|
Repayment of credit facilities
and sale and leaseback |
|
(37,835 |
) |
|
|
(17,509 |
) |
|
|
(115,502 |
) |
|
|
(64,311 |
) |
Repayment of refinanced
debt |
|
- |
|
|
|
- |
|
|
|
(149,632 |
) |
|
|
(44,366 |
) |
Deferred financing costs
paid |
|
(1,885 |
) |
|
|
(231 |
) |
|
|
(13,790 |
) |
|
|
(1,193 |
) |
Net proceeds from offering and
repurchase of Class A common shares, net of offering costs |
|
- |
|
|
|
- |
|
|
|
67,549 |
|
|
|
(74 |
) |
Retirement of Class A common
shares |
|
- |
|
|
|
- |
|
|
|
(10,000 |
) |
|
|
- |
|
Proceeds from offering of
Series B preferred shares, net of offering costs |
|
(20 |
) |
|
|
11,811 |
|
|
|
51,234 |
|
|
|
18,647 |
|
Class A common shares-dividend
paid |
|
(9,235 |
) |
|
|
- |
|
|
|
(27,940 |
) |
|
|
- |
|
Series B Preferred
Shares-dividend paid |
|
(2,384 |
) |
|
|
(1,248 |
) |
|
|
(8,263 |
) |
|
|
(3,995 |
) |
Net cash (used
in)/provided by financing activities |
$ |
(21,359 |
) |
|
$ |
(38,672 |
) |
|
$ |
321,680 |
|
|
$ |
(120,209 |
) |
Net
increase/(decrease) in cash and cash equivalents and restricted
cash |
|
90,547 |
|
|
|
(21,646 |
) |
|
|
111,280 |
|
|
|
(55,374 |
) |
Cash and cash equivalents and
restricted cash at beginning of the period |
|
112,995 |
|
|
|
113,908 |
|
|
|
92,262 |
|
|
|
147,636 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
203,542 |
|
|
$ |
92,262 |
|
|
$ |
203,542 |
|
|
$ |
92,262 |
|
Supplementary Cash
Flow Information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
$ |
13,238 |
|
|
$ |
19,655 |
|
|
$ |
49,528 |
|
|
$ |
59,769 |
|
Non-cash Investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Unpaid drydocking
expenses |
|
5,799 |
|
|
|
1,061 |
|
|
|
5,799 |
|
|
|
1,321 |
|
Unpaid vessel
expenditures |
|
6,257 |
|
|
|
1,459 |
|
|
|
6,257 |
|
|
|
4,127 |
|
Unpaid advances for vessels
acquisitions and other additions |
|
1,499 |
|
|
|
- |
|
|
|
1,499 |
|
|
|
- |
|
Acquisition of vessels and
intangibles |
|
4,209 |
|
|
|
- |
|
|
|
96,344 |
|
|
|
- |
|
Non-cash financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Issuance of 2024 Notes for the
acquisition of vessels |
|
- |
|
|
|
- |
|
|
|
35,000 |
|
|
|
- |
|
Premium on the 2024 Notes
issued for the acquisition of vessels |
|
- |
|
|
|
- |
|
|
|
1,680 |
|
|
|
- |
|
Net unrealized gain on
interest rate cap |
|
227 |
|
|
|
- |
|
|
|
227 |
|
|
|
- |
|
Investor and Media Contacts: The IGB GroupBryan
Degnan646-673-9701orLeon Berman 212-477-8438
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