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 and nine month periods ended
September 30, 2022.
Third Quarter 2022 and Year to Date
Highlights
- Reported operating revenue of $172.5 million
for the third quarter of 2022, an increase of 24.5% on revenue of
$138.6 million for the prior year period. For the nine months ended
September 30, 2022, operating revenue was $480.6 million, up 63.2%
from $294.4 million in the prior year period.
- Reported net income available to common
shareholders of $89.6 million for the third quarter of 2022, an
increase of 42.4% or 1.4 times net income of $62.9 million for the
prior year period. Normalized net income (a non-U.S. GAAP financial
measure, described below) was $87.5 million, 1.4 times normalized
net income of $63.1 million for the prior year period.
- For the nine months ended September 30, 2022,
net income available to common shareholders was $210.8 million, an
increase of 117.1% or 2.2 times net income of $97.1 million for the
prior year period. Normalized net income for the same period was
$221.0 million, 2.1 times normalized net income for the prior year
period of $104.6 million.
- Generated $111.4 million of Adjusted EBITDA (a
non-U.S. GAAP financial measure, described below) for the third
quarter of 2022, 1.7 times Adjusted EBITDA of $64.5 million for the
prior year period. Adjusted EBITDA for the nine months ended
September 30, 2022 was $298.4 million, 1.9 times Adjusted EBITDA of
$158.1 million for the prior year period.
- Earnings per share for the three months ended
September 30, 2022 was $2.44, 1.4 times the earnings per share of
$1.73 for the prior year period. Normalized earnings per share (a
non-U.S. GAAP financial measure, described below) for the three
months ended September 30, 2022 was $2.38, as compared to the
normalized earnings per share of $1.74 for the prior year period.
Earnings per share for the nine months ended September 30, 2022 was
$5.75, 2.1 times the earnings per share of $2.80 for the prior year
period. Normalized earnings per share for the nine months ended
September 30, 2022 was $6.03, as compared to the Normalized
earnings per share of $3.01 for the prior year period.
- Declared a dividend of $0.375 per Class A
common share for the third quarter of 2022 to be paid on December
2, 2022 to common shareholders of record as of November 22, 2022.
Paid a dividend of $0.375 per Class A common share for the first
quarter of 2022 on June 2, 2022 and paid a dividend of $0.375 per
Class A common share for the second quarter of 2022 on September 2,
2022.
- During the third quarter, added $770.6 million
of firm contracted revenues with the addition of new forward
charter fixtures on 10 ships: four Panamaxes, each for a firm
period of five years, scheduled to commence between the fourth
quarter of 2022 and first quarter of 2023, and six ECO-6,900 TEU
ships, each for a firm period of five years with two 12-month
extensions periods at the option of the charterers, scheduled to
commence between the fourth quarter of 2023 and 2024. Year-to-date,
and including the above, a total of $920.3 million of contracted
revenues has been added to the Company’s forward charter cover,
assuming median redelivery dates for the charters. Included are 11
forward fixtures of four to seven years duration each (one 8,600
TEU ship, six 6,900 TEU ships, and four 4,000 – 4,250 ships), one
prompt fixture of just over three years for a 2,200 TEU feeder, and
three charter-extension options of 12 months each exercised by the
charterers on three ships of 5,900 – 7,800 TEU.
- Continued to utilize the $40.0 million
authorization (the “Buy-back Authorization”) for opportunistic
share repurchases, repurchasing a total of 875,956 Class A common
shares during September and October 2022 for a total investment of
$15.1 million. Re-purchase prices ranged between $15.51 and $17.95
per common share, with an average price of $17.22. A total of
1,060,640 Class A common shares have been repurchased under the
Buy-back Authorization, for approximately $20.0 million.
- Between July 14, 2022 and August 1, 2022 the
Company’s corporate family credit ratings were improved by Moody’s,
from B1 / Stable to B1 / Positive, and by S&P Global, from BB-
/ Stable to BB / Stable.
- On June 17, 2022, announced the full
redemption of the 8.00% Senior Unsecured Notes due 2024 (the “2024
Notes”) of $89.0 million aggregate principal amount. The redemption
was completed on July 15, 2022 at a price of 102.00% of the
principal amount plus accrued and unpaid interest, up to but not
including, the redemption date. Previously, on April 5, 2022,
completed the partial redemption of $28.5
million principal amount of the 2024 Notes at a price equal to
102.00% of the principal amount plus accrued and unpaid
interest.
- On June 16, 2022, an indirect wholly-owned
subsidiary of the Company closed the private placement of $350.0
million of privately rated investment grade 5.69% Senior Secured
Notes due 2027 (the “2027 USPP Notes”) to a limited number of
accredited investors. Pricing on June 1, 2022 was based on the 3.2
year Interpolated US Treasury Yield (ICUR3.2) plus a spread of
2.85%. A portion of the net proceeds was used to repay the
remaining outstanding balance of the Hayfin Facility, which bore
interest at LIBOR + 7.00%, and the outstanding balance of the
Hellenic Facility, which bore interest at LIBOR + 3.90%, resulting
in five unencumbered ships. The remaining net proceeds were used to
redeem all of the outstanding 2024 Notes in July 2022 and for
general corporate purposes.
- On May 12, 2022, announced the investment and
participation in a carbon capture initiative led by Aqualung Carbon
Capture AS (“Aqualung”), an innovator in carbon dioxide capture and
separation technology, alongside other industry leaders in
shipping, energy generation and infrastructure, and lithium
production. The Company was invited to invest in Aqualung and to
pool its technical expertise to support the application of
Aqualung’s carbon capture solution to the maritime sector, with a
particular focus on the development of containerized carbon capture
units to be retrofit-able to containerships and other seagoing
vessels.
- In February 2022, entered into USD 1-month
LIBOR interest rate caps 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, after entering a similar interest rate cap
in December 2021, on $484.1 million of floating rate
debt, which also reduces over time, leaving us fully hedged on our
floating rate debt.
- In January 2022, agreed an amendment to the
existing $268.0 million Syndicated Senior Secured Credit Facility
with an 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%. The three
vessels were subsequently used as collateral for a new $60.0
million syndicated senior secured debt facility, maturing in July
2026 and bearing interest at LIBOR + 2.75%, which was used to fully
repay our 10.00% Blue Ocean junior debt facility and for general
corporate purposes.
George Youroukos, Executive Chairman of Global
Ship Lease stated: “These are uncertain times, with the world
facing macro headwinds, geopolitical tensions, rising interest
rates, and inflation. Against this backdrop, we have continued to
focus on making Global Ship Lease as resilient as possible, by
building our forward contract cover, fortifying our balance sheet,
and positioning ourselves to weather the challenges and take
advantage of the opportunities that arise in a cyclical industry
such as ours. During the quarter, our high-quality ships, and
strong relationships with our customers, allowed us to forward fix
10 ships, on firm charters of five years each, off positions in
late-2022, 2023, and even 2024. These new charters add over $770
million of contracted revenues, and bring our total forward cover
to more than $2.2 billion, spread over almost three years,
providing further support for our sustainable annualized dividend
of $1.50 per common share. Our focus on long-term charters, and
deep customer relationships, will also underpin collective efforts
to decarbonize shipping, in step with an evolving regulatory and
commercial environment that will hinge on ever closer cooperation
between owners and charterers.”
Ian Webber, Chief Executive Officer, commented:
“Our conservative, risk-averse business model, and disciplined
approach to capital allocation, have continued to inform our focus
upon building and protecting shareholder value through the cycle.
Even as central banks have raised interest base rates to the
highest levels seen in over a decade, we have successfully reduced
our overall cost of debt to 4.53%, which is only slightly higher
than the Federal Reserve’s benchmark interest rate, and have fully
hedged our exposure to floating interest rates. Furthermore, we
have no re-financing requirements before 2026. During the course of
this year, we have added over $920 million of contracted revenues,
supporting our sustainable dividend and allowing us to repurchase
an additional $15 million of common shares since our previous
earnings release, bringing total share repurchases since we
established our $40 million buy-back authorization in second
quarter to $20 million.”
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
|
Three |
Three |
Nine |
Nine |
|
months |
months |
months |
months |
|
ended |
ended |
ended |
ended |
|
September |
September |
September |
September |
|
30, 2022 |
30, 2021 |
30, 2022 |
30, 2021 |
|
|
|
|
|
Operating Revenue
(1) |
172,536 |
138,574 |
480,623 |
294,425 |
Operating Income |
101,725 |
79,644 |
269,051 |
155,320 |
Net Income
(2) |
89,611 |
62,913 |
210,768 |
97,137 |
Adjusted EBITDA
(3) |
111,406 |
64,462 |
298,363 |
158,077 |
Normalized Net Income
(3) |
87,491 |
63,088 |
220,970 |
104,586 |
(1) Operating Revenue is net of address
commissions which represent a discount provided directly to a
charterer based on a fixed percentage of the agreed upon charter
rate and also 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 and Normalized Net Income
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 $172.5 million in the three months ended
September 30, 2022, up $33.9 million (or 24.5%) on revenue of
$138.6 million for the prior year period. The period-on-period
increase in revenue was principally due to (i) a 12.1% increase in
ownership days, due to the net acquisition of 22 vessels in 2021,
17 of which were delivered after June 30, 2021, resulting in 5,980
ownership days in the third quarter of 2022, compared to 5,334 in
the third quarter of 2021, (ii) increased revenue on charter
renewals at higher rates on nine vessels, (iii) a decrease in
unplanned off hire days from 137 in the third quarter of 2021 to
102 in the same quarter of 2022 partially offset by $15.3 million
reduction in the credit from amortization of intangible liabilities
arising on below-market charters attached to certain vessel
additions and $3.5 million reduction in the credit from
straightlining the effect of time charter modifications. The 102
days of unplanned offhire in the third quarter of 2022 include
mainly an incident of 49 days for diesel generators repairs in one
ship and the remaining days relate to operational and technical
incidents. The 47 days of planned offhire for drydockings in the
third quarter of 2022 were attributable to two regulatory
drydockings completed, while in the comparative period of 2021, the
190 days of planned offhire were mainly attributable to five
regulatory drydockings. Idle time was nil in the third quarter of
2022, compared to 13 days in the comparative period. Utilization
for the third quarter of 2022 was 97.5% compared to utilization of
93.6% in the same period of the prior year.
For the nine months ended September 30, 2022,
revenue was $480.6 million, up $186.2 million (or 63.2%) on revenue
of $294.4 million in the comparative period, mainly due to the
factors noted above.
The table below shows fleet utilization for the
three and nine months ended September 30, 2022 and 2021, and for
the years ended December 31, 2021, 2020, 2019 and 2018.
|
Three months ended |
|
Nine months ended |
|
Year ended |
|
September 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
|
Dec 31, |
|
Dec 31, |
|
Dec 31, |
|
Dec 31, |
|
Days |
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership days |
5,980 |
|
5,334 |
|
|
17,745 |
|
13,459 |
|
|
19,427 |
|
16,044 |
|
14,326 |
|
7,675 |
|
Planned offhire - scheduled
drydock |
(47 |
) |
(190 |
) |
|
(356 |
) |
(385 |
) |
|
(752 |
) |
(687 |
) |
(537 |
) |
(34 |
) |
Unplanned offhire |
(102 |
) |
(137 |
) |
|
(338 |
) |
(198 |
) |
|
(260 |
) |
(95 |
) |
(105 |
) |
(17 |
) |
Idle time |
nil |
|
(13 |
) |
|
(30 |
) |
(40 |
) |
|
(88 |
) |
(338 |
) |
(164 |
) |
(47 |
) |
Operating days |
5,831 |
|
4,994 |
|
|
17,021 |
|
12,836 |
|
|
18,327 |
|
14,924 |
|
13,520 |
|
7,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilization |
97.5 |
% |
93.6 |
% |
|
95.9 |
% |
95.4 |
% |
|
94.3 |
% |
93.0 |
% |
94.4 |
% |
98.7 |
% |
Two drydockings to meet regulatory requirements
were completed in the third quarter 2022 and, as of September 30,
2022, none were in progress. In 2022, we anticipate six further
drydockings.
Vessel Operating Expenses
Vessel operating expenses, which are primarily
the costs of crew, lubricating oil, repairs, maintenance, insurance
and technical management fees, were up 19.6% to $41.0 million for
the third quarter of 2022, compared to $34.3 million in the
comparative period. The increase of $6.7 million was mainly due to
646, or 12.1%, additional ownership days in the third quarter of
2022 as the result of the net acquisition of 22 vessels in 2021, 17
of which were delivered after June 30, 2021 plus increased crew
expenses as a result of COVID-19 and the conflict in Ukraine,
increased insurance costs and increased lubricant expenses as a
result of higher oil prices. The average cost per ownership day in
the quarter was $6,855, compared to $6,428 for the prior year
period, up $427 per day, or 6.6%.
For the nine months ended September 30, 2022,
vessel operating expenses were $121.9 million, or an average of
$6,869 per day, compared to $86.7 million in the comparative
period, or $6,441 per day, an increase of $428 per ownership day,
or 6.6%.
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 $5.1 million for the third quarter of 2022,
compared to $4.4 million in the third quarter of 2021. The increase
was mainly due to the commissions of the 22 vessels acquired in
2021, 17 of which were delivered after June 30, 2021, increased
commissions on charter renewals at higher rates plus additional
voyage administration costs and other voyage expenses mainly
related to COVID-19 port restrictions and additional operational
requests from charterers.
For the nine months ended September 30, 2022,
time charter and voyage expenses were $14.6 million, or an average
of $822 per day, compared to $8.3 million in the comparative
period, or $617 per day, an increase of $205 per ownership day, or
33.2%.
Depreciation and AmortizationDepreciation and
amortization for the third quarter of 2022 was $20.5 million,
compared to $16.8 million in the third quarter of 2021. The
increase was mainly due to the net acquisition of 22 vessels in
2021, 17 of which were delivered after June 30, 2021 and the 12
drydockings that have been completed since October 1, 2021.
Depreciation for the nine months ended September
30, 2022 was $60.6 million, compared to $42.3 million in the
comparative period, with the increase being due to the net
acquisition of 22 vessels in 2021, 17 of which were delivered after
June 30, 2021.
Gain on sale of vessel
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.
General and Administrative Expenses
General and administrative expenses were $4.2
million in the third quarter of 2022, compared to $3.4 million in
the third quarter of 2021. The increase was mainly due to the
non-cash effect of stock-based compensation expense due to vesting
recorded in the third quarter of 2022. The average general and
administrative expense per ownership day for the third quarter of
2022 was $695, compared to $642 in the comparative period, an
increase of $53 or 8.3%.
For the nine months ended September 30, 2022,
general and administrative expenses were $14.4 million, compared to
$9.6 million in the comparative period mainly due to the non-cash
effect of stock-based compensation expenses due to vesting recorded
in 2022. The average general and administrative expense per
ownership day for the nine-month period ended September 30, 2022
was $814, compared to $710 in the comparative period, an increase
of $104 or 14.6%.
Adjusted EBITDA
Adjusted EBITDA (a non-GAAP financial
measure) was $111.4 million for the third quarter of 2022, up from
$64.5 million for the third quarter of 2021, with the net increase
being mainly due the net acquisition of 22 vessels in 2021, 17 of
which were delivered after June 30, 2021 and increased revenue from
charter renewals at higher rates.
Adjusted EBITDA for the nine months ended
September 30, 2022 was $298.4 million, compared to $158.1 million
for the comparative period, with the increase being due to the net
acquisition of 22 vessels in 2021, 17 of which were delivered after
June 30, 2021.
Interest Expense and Interest Income
Debt as at September 30, 2022 totaled $999.5
million, comprising $498.7 million of secured bank debt
collateralized by vessels, $350.0 million of 2027 USPP Notes
collateralized by vessels, $150.8 million under sale and leaseback
financing transactions. As of September 30, 2022, five of our
vessels were unencumbered.
Debt as at September 30, 2021 totaled $1,093.4
million, comprising $820.0 million secured debt collateralized by
vessels, $155.9 million from sale and leaseback financing
transactions and $117.5 million of unsecured indebtedness on our
2024 Notes. As of September 30, 2021, none of our vessels were
unencumbered.
Interest and other finance expenses for the
third quarter of 2022 was $16.1 million, up from $15.0 million for
the third quarter of 2021. The increase in other finance expenses
was mainly due to the non-cash write-off of deferred financing
charges of $2.1 million plus $1.8 million premium paid following
the full repayment of our 2024 Notes in July 2022 offset by $1.3
million of accelerated amortization of premium, compared to a
prepayment fee of $0.2 million on the repayment of Hayfin Facility.
In addition, our blended cost of debt has decreased from
approximately 4.93% for third quarter 2021 to 4.53% for third
quarter of 2022, as a result of the refinancings despite an
increase in three month Libor in third quarter of 2022 to 3.0%, but
capped to 0.75%, as compared to three month Libor of 0.13% in third
quarter of 2021.
Interest and other finance expenses for the nine
months ended September 30, 2022 was $64.9 million, up from $54.3
million for the comparative period. The increase in other finance
expenses is mainly due to a prepayment fee and the associated
non-cash write off of deferred financing charges of $14.1 million
on the full repayment of the Hayfin Credit Facility, the non-cash
write off of deferred financing charges of $0.3 million on the full
repayment of the Hellenic Credit Facility, $0.6 million premium
paid on the redemption in April of $28.5 million of our 2024 Notes,
a $1.8 million premium paid on the full redemption of our 2024
Notes in July 2022, the associated non-cash write off of deferred
financing charges of $2.1 million and acceleration of premium
amortization of $1.3 million and a prepayment fee and the
associated non-cash write off of deferred financing charges of $4.1
million on the full repayment of the Blue Ocean Junior Credit
Facility compared to $5.8 million premium paid on the redemption in
full of the 2022 Notes in January 2021 plus the acceleration of
deferred financing charges of $3.7 million, and the acceleration of
amortization of original issue discount associated with the
redemption of the 2022 Notes of $1.1 million plus the prepayment
fee of $1.6 million paid on the partial repayment of the Blue Ocean
Junior Credit Facility, plus the prepayment fee of $1.4 million
paid on the repayment and completion of the refinancing of the
Odyssia Credit Facilities, plus a prepayment fee of $0.2 million on
the repayment of Hayfin Facility.
Interest income for the third quarter of 2022
was $0.7 million, up from $0.01 million for the third quarter of
2021. Interest income for the nine months period ended September
30, 2022 was $1.2 million, compared to $0.4 million for the
comparative period.
Other income, Net
Other income, net was $1.0 million in the third
quarter of 2022, compared to an income of $0.8 million in the third
quarter of 2021. Other income, net was $1.2 million for the nine
month period ended September 30, 2022, compared to $1.7 million for
the comparative period.
Taxation
Taxation for the three months ended September
30, 2022 was a credit of $0.05 million, compared to a debit of
$0.06 million in the third quarter of 2021. Taxation for the nine
months ended September 30, 2022 was a credit of $0.05 million,
compared to a debit of $0.06 million in the comparative period.
Fair value adjustment on derivatives
In December 2021, we 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 February 2022, we entered
into two additional USD 1 month LIBOR interest rate caps of 0.75%
through fourth quarter 2026 on the remaining balance of $507.9
million of floating rate debt. One of these interest rate caps
was not designated as a cash flow hedge and therefore the positive
fair value adjustment of $4.7 million for the third quarter of 2022
was recorded through our statement of income. The positive fair
value adjustment for the nine month period ended September 30, 2022
amounted to $11.3 million.
Earnings Allocated to Preferred Shares
Our Series B Preferred Shares carry a coupon of
8.75%, the cost of which for the third quarter of 2022 was $2.4
million, compared to $2.4 million for the third quarter 2021. The
cost was $7.2 million in the nine months ended September 30, 2022,
compared to $5.9 million for the comparative period. The increase
was due to additional Series B Preferred Shares issued under our
ATM program since July 1, 2021.
Net Income Available to Common ShareholdersNet
income available to common shareholders for the three months ended
September 30, 2022 was $89.6 million. Net income available to
common shareholders for the three months ended September 30, 2021
was $62.9 million.
Earnings per share for the three months ended
September 30, 2022 was $2.44, an increase of 41.0% from the
earnings per share for the comparative period, which was $1.73.
For the nine months ended September 30, 2022,
net income available to common shareholders was $210.8 million. For
the nine months ended September 30, 2021, net income available to
common shareholders was $97.1 million.
Earnings per share for the nine months ended
September 30, 2022 was $5.75, an increase of 105.4% from the
earnings per share for the comparative period, which was $2.80.
Normalized net income (a non-GAAP financial
measure) for the three months ended September 30, 2022, was $87.5
million. Normalized net income for the three months ended September
30, 2021 was $63.1 million.
Normalized earnings per share (a non-GAAP
financial measure) for the three months ended September 30, 2022
was $2.38, an increase of 36.8% from normalized earnings per share
for the comparative period, which was $1.74.
Normalized net income for the nine months ended
September 30, 2022, was $221.0 million. Normalized net income for
the nine months period ended September 30, 2021 was $104.6
million.
Normalized earnings per share for the nine
months ended September 30, 2022 was $6.03, an increase of 100.3%
from normalized earnings per share for the comparative period,
which was $3.01.
Fleet
As at November 8, 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 |
ZIM Norfolk (ex UASC Al Khor) (1) |
9,115 |
31,764 |
2015 |
ZIM (3) |
2Q27 (3) |
4Q27 (3) |
65,000 (3) |
Anthea Y (1) |
9,115 |
31,890 |
2015 |
COSCO |
3Q23 |
4Q23 |
38,000 |
ZIM Xiamen (ex Maira XL)(1) |
9,115 |
31,820 |
2015 |
ZIM (3) |
3Q27 (3) |
4Q27 (3) |
65,000 (3) |
MSC Tianjin |
8,603 |
34,325 |
2005 |
MSC |
2Q24 |
3Q24 |
19,000 |
MSC Qingdao (4) |
8,603 |
34,609 |
2004 |
MSC |
2Q24 |
2Q25 |
23,000 |
GSL Ningbo |
8,603 |
34,340 |
2004 |
MSC |
3Q27 |
4Q27 (5) |
22,500 (5) |
GSL Eleni |
7,847 |
29,261 |
2004 |
Maersk |
3Q24 |
4Q24 (6) |
16,500 (6) |
GSL Kalliopi |
7,847 |
29,105 |
2004 |
Maersk |
3Q23 |
4Q24 (6) |
18,900 (6) |
GSL Grania |
7,847 |
29,190 |
2004 |
Maersk |
3Q23 |
1Q25 (6) |
17,750 (6) |
Mary (1) |
6,927 |
23,424 |
2013 |
CMA CGM |
4Q28 |
1Q31 (7) |
25,910 (7) |
Kristina (1) |
6,927 |
23,421 |
2013 |
CMA CGM |
3Q29 |
3Q31 (7) |
25,910 (7) |
Katherine (1) |
6,927 |
23,403 |
2013 |
CMA CGM |
1Q29 |
2Q31 (7) |
25,910 (7) |
Alexandra (1) |
6,927 |
23,348 |
2013 |
CMA CGM |
2Q29 |
3Q31 (7) |
25,910 (7) |
Alexis (1) |
6,882 |
23,919 |
2015 |
CMA CGM |
2Q29 |
3Q31 (7) |
25,910 (7) |
Olivia I (1) |
6,882 |
23,864 |
2015 |
CMA CGM |
2Q29 |
2Q31 (7) |
25,910 (7) |
GSL Christen |
6,840 |
27,954 |
2002 |
Maersk |
3Q23 |
1Q24 |
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 |
Agios Dimitrios (4) |
6,572 |
24,931 |
2011 |
MSC |
4Q23 |
3Q24 |
20,000 |
GSL Vinia |
6,080 |
23,737 |
2004 |
Maersk |
3Q24 |
1Q25 |
13,250 |
GSL Christel Elisabeth |
6,080 |
23,745 |
2004 |
Maersk |
2Q24 |
1Q25 |
13,250 |
GSL Dorothea |
5,992 |
24,243 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (8) |
GSL Arcadia |
6,008 |
24,858 |
2000 |
Maersk |
2Q24 |
1Q26 |
18,600 (8) |
GSL Violetta |
6,008 |
24,873 |
2000 |
Maersk |
4Q24 |
4Q25 |
18,600 (8) |
GSL Maria |
6,008 |
24,414 |
2001 |
Maersk |
4Q24 |
1Q27 |
18,600 (8) |
GSL MYNY |
6,008 |
24,873 |
2000 |
Maersk |
3Q24 |
1Q26 |
18,600 (8) |
GSL Melita |
6,008 |
24,848 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (8) |
GSL Tegea |
5,992 |
24,308 |
2001 |
Maersk |
3Q24 |
3Q26 |
18,600 (8) |
Tasman |
5,936 |
25,010 |
2000 |
Maersk |
4Q23 |
1Q24 |
20,000 (9) |
ZIM Europe |
5,936 |
25,010 |
2000 |
ZIM |
1Q24 |
2Q24 |
24,250 |
Ian H |
5,936 |
25,128 |
2000 |
ZIM |
2Q24 |
4Q24 |
32,500 |
GSL Tripoli |
5,470 |
22,259 |
2009 |
Maersk |
3Q24 |
4Q27 |
36,500 (10) |
GSL Kithira |
5,470 |
22,108 |
2009 |
Maersk |
4Q24 |
4Q27 |
36,500 (10) |
GSL Tinos |
5,470 |
22,067 |
2010 |
Maersk |
4Q24 |
4Q27 |
36,500 (10) |
GSL Syros |
5,470 |
22,098 |
2010 |
Maersk |
4Q24 |
4Q27 |
36,500 (10) |
Dolphin II |
5,095 |
20,596 |
2007 |
OOCL |
1Q25 |
3Q25 |
53,500 |
Orca I |
5,095 |
20,633 |
2006 |
Maersk |
2Q24 |
4Q25 |
21,000 (11) |
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 |
3Q27 |
1Q28 |
22,000 (12) |
CMA CGM Jamaica |
4,298 |
17,272 |
2006 |
CMA CGM |
1Q28 |
2Q28 |
25,350 (12) |
CMA CGM Sambhar |
4,045 |
17,429 |
2006 |
CMA CGM |
1Q28 |
2Q28 |
25,350 (12) |
CMA CGM America |
4,045 |
17,428 |
2006 |
CMA CGM |
1Q28 |
2Q28 |
25,350 (12) |
GSL Rossi |
3,421 |
16,420 |
2012 |
ZIM |
1Q26 |
3Q26 |
38,875 |
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 |
35,600 (13) |
Matson Molokai |
2,824 |
11,949 |
2007 |
Matson |
2Q25 |
3Q25 |
36,500 |
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 |
3Q24 |
21,500 |
GSL Elizabeth |
2,741 |
11,507 |
2006 |
ONE |
4Q22 |
4Q22 |
18,500 |
Tbr GSL Chloe |
2,546 |
12,212 |
2012 |
ONE |
4Q24 |
1Q25 |
33,000 |
GSL Maren |
2,546 |
12,243 |
2014 |
Westwood |
4Q22 |
2Q23 |
19,250 |
Maira |
2,506 |
11,453 |
2000 |
Hapag-Lloyd |
1Q23 |
2Q23 |
14,450 |
Nikolas |
2,506 |
11,370 |
2000 |
CMA CGM |
1Q23 |
2Q23 |
16,000 |
Newyorker |
2,506 |
11,463 |
2001 |
CMA CGM |
1Q24 |
3Q24 |
20,700 |
Manet |
2,272 |
11,727 |
2001 |
OOCL |
4Q24 |
2Q25 |
32,000 |
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 |
Akiteta |
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 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) |
ZIM Norfolk (ex UASC Al Khor) & ZIM Xiamen (ex 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 and
third quarters of 2022, respectively, 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 Ningbo chartered to MSC at $22,500 per day to July 2023.
Thereafter, the charter has been extended by 48 to 52 months, at a
rate expected to generate annualized Adjusted EBITDA of
approximately $16.6 million. |
(6) |
GSL Eleni (delivered 2Q 2019) is chartered for five years; GSL
Kalliopi (delivered 4Q 2019) and GSL Grania (delivered 3Q 2019) are
chartered for three years plus two successive periods of one year
each, at the option of the charterer. For GSL Kalliopi and GSL
Grania the first option periods were exercised in May 2022. During
the option periods the charter rates for GSL Kalliopi and GSL
Grania are $18,900 per day and $17,750 per day respectively, with
these new rates to apply from 3Q 2022 for GSL Grania and 4Q 2022
for GSL Kalliopi. |
(7) |
Mary, Kristina, Katherine, Alexandra, Alexis, Olivia I were forward
fixed to Hapag-Lloyd for five years, followed by two periods of 12
months each at the option of the charterer. The new charters are
scheduled to commence, on a staggered basis, between late 2023 and
late 2024, following the expiration of existing charters. The
charters are expected to generate average annualized Adjusted
EBITDA of approximately $13.1 million per ship. |
(8) |
Contract cover for each ship is for a firm period of at least three
years from the date each vessel was 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. |
(9) |
Tasman. 12-month extension at charterer’s option was declared in
May 2022, at an increased rate of $20,000 per day. The new rate
applied from 3Q 2022. |
(10) |
Ultra-high reefer ships of 5,470 TEU each. 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) |
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. |
(12) |
GSL Susan, CMA CGM Jamaica, CMA CGM Sambhar and CMA CGM America. In
July 2022, these four vessels were forward fixed for five years +/-
45 days at charter rates expected to generate annualized Adjusted
EBITDA of approximately $11.3 million per vessel. The new charter
for GSL Susan is scheduled to commence in late 2022, while those
for the other three ships are due to commence towards the end of 1Q
2023. |
(13) |
GSL Valerie. Chartered to ZIM at an average rate 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. |
Conference Call and Webcast
Global Ship Lease will hold a conference call to
discuss the Company's results for the three and nine months ended
September 30, 2022 today, Wednesday November 9, 2022 at 10:30 a.m.
Eastern Time. There are two ways to access the conference call:
(1) Dial-in: (800)
715-9871 or (646) 307-1963; Passcode: 8514573
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
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 2021 was filed
with the Securities and Exchange Commission (the “Commission”) on
March 24, 2022. 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 November 8, 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, up
to November 8, 2022, the average remaining term of the
Company’s charters as at September 30, 2022, to the mid-point
of redelivery, including options under the Company’s control and
other than if a redelivery notice has been received, was 2.9 years
on a TEU-weighted basis. Contracted revenue on the same basis
was $2.23 billion. Contracted revenue was $2.65 billion,
including options under charterers’ control and with latest
redelivery date, representing a weighted average remaining term of
3.7 years.
Reconciliation of Non-U.S. GAAP Financial
Measures
To supplement our financial information
presented in accordance with U.S. GAAP, we use certain “non-GAAP
financial measures” as such term is defined in Regulation G
promulgated by the SEC. Generally, a non-GAAP financial measure is
a numerical measure of a company’s operating performance, financial
position or cash flows that excludes or includes amounts that are
included in, or excluded from, the most directly comparable measure
calculated and presented in accordance with U.S. GAAP. We believe
that the presentation of these measures provides investors with
greater transparency and supplemental data relating to our
financial condition and results of operations, and therefore a more
complete understanding of factors affecting our business than U.S.
GAAP measures alone. In addition, we believe that the presentation
of these matters is useful to investors for period-to-period
comparison of results as the items may reflect certain unique
and/or non-operating items such as impairment charges, contract
termination costs or items outside of our control.
We believe that the presentation of the
following financial measures is useful to investors because they
are frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in our
industry.
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, fair value adjustment on derivatives, the
effect of the straight lining of time charter modifications, 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 |
|
Nine |
|
Nine |
|
|
|
months |
|
months |
|
months |
|
months |
|
|
|
ended |
|
ended |
|
ended |
|
ended |
|
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Net income
available to Common Shareholders |
89,611 |
|
62,913 |
|
210,768 |
|
97,137 |
|
|
|
|
|
|
|
Adjust: |
Depreciation and
amortization |
20,522 |
|
16,799 |
|
60,647 |
|
42,318 |
|
|
Amortization of
intangible liabilities |
(9,305 |
) |
(24,607 |
) |
(32,725 |
) |
(27,068 |
) |
|
Gain on sale of
vessel |
- |
|
- |
|
- |
|
(7,770 |
) |
|
Fair value
adjustment on derivative asset |
(4,660 |
) |
- |
|
(11,308 |
) |
- |
|
|
Interest
income |
(680 |
) |
(5 |
) |
(1,195 |
) |
(369 |
) |
|
Interest
expense |
16,142 |
|
15,048 |
|
64,884 |
|
54,302 |
|
|
Share based
compensation |
2,222 |
|
150 |
|
7,882 |
|
2,005 |
|
|
Earnings allocated
to preferred shares |
2,384 |
|
2,384 |
|
7,152 |
|
5,879 |
|
|
Income tax |
(50 |
) |
58 |
|
(50 |
) |
58 |
|
|
Effect from
straight lining time charter modifications |
(4,780 |
) |
(8,278 |
) |
(7,692 |
) |
(8,415 |
) |
|
|
|
|
|
|
Adjusted
EBITDA |
111,406 |
|
64,462 |
|
298,363 |
|
158,077 |
|
B. Normalized net income
Normalized net income represents net income
available to common shareholders after adjusting for certain
non-recurring items. 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 |
|
Nine |
|
Nine |
|
|
|
months |
|
months |
|
months |
|
months |
|
|
|
ended |
|
ended |
|
ended |
|
ended |
|
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Net income
available to Common Shareholders |
89,611 |
|
62,913 |
|
210,768 |
|
97,137 |
|
|
|
|
|
|
|
|
Adjust: |
Fair value
adjustment on derivative assets |
(4,660 |
) |
- |
|
(11,308 |
) |
- |
|
|
Gain on sale of
vessel |
- |
|
- |
|
- |
|
(7,770 |
) |
|
Prepayment fee on
repayment of Blue Ocean Credit Facility |
- |
|
- |
|
3,968 |
|
1,618 |
|
|
Accelerated write
off of deferred financing charges related to full repayment of Blue
Ocean Credit Facility |
- |
|
- |
|
83 |
|
- |
|
|
Prepayment fee on
repayment of Odyssia Credit Facilities |
- |
|
- |
|
- |
|
1,438 |
|
|
Premium paid on
redemption of 2022 Notes |
- |
|
- |
|
- |
|
5,764 |
|
|
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 |
|
|
Accelerated write
off of deferred financing charges related to redemption of 2024
Notes |
2,104 |
|
- |
|
2,104 |
|
- |
|
|
Accelerated write
off of premium related to redemption of 2024 Notes |
(1,344 |
) |
- |
|
(1,344 |
) |
- |
|
|
Premium paid on
redemption of 2024 Notes |
1,780 |
|
- |
|
2,350 |
|
- |
|
|
Accelerated
stock-based compensation expense due to vesting and new awards of
fully vested incentive shares |
- |
|
- |
|
- |
|
1,346 |
|
|
Accelerated write
off of deferred financing charges related to full repayment of
Hellenic Credit Facility |
- |
|
- |
|
298 |
|
- |
|
|
Accelerated write
off of deferred financing charges related to full repayment of
Hayfin Credit Facility |
- |
|
- |
|
2,822 |
|
- |
|
|
Prepayment fee on
repayment of Hayfin Credit Facility |
- |
|
175 |
|
11,229 |
|
175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net
income |
87,491 |
|
63,088 |
|
220,970 |
|
104,586 |
|
C. Normalized Earnings per Share
Normalized Earnings per Share represents
Earnings per Share after adjusting for certain non-recurring items.
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 |
|
Nine |
|
Nine |
|
|
months |
|
months |
|
months |
|
months |
|
|
ended |
|
ended |
|
ended |
|
ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
EPS as reported (USD) |
2.44 |
|
1.73 |
|
5.75 |
|
2.80 |
|
Normalized net income
adjustments-Class A common shares (in thousands USD) |
(2,120 |
) |
175 |
|
10,202 |
|
7,449 |
|
Weighted average number of
Class A Common shares |
36,790,836 |
|
36,303,572 |
|
36,649,874 |
|
34,734,005 |
|
Adjustment on EPS (USD) |
(0.06 |
) |
0.01 |
|
0.28 |
|
0.21 |
|
Normalized EPS (USD) |
2.38 |
|
1.74 |
|
6.03 |
|
3.01 |
|
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 our
major charterers, 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)
|
|
September 30, 2022 |
|
|
|
December 31, 2021 |
|
ASSETS |
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
102,709 |
|
|
$ |
67,280 |
|
Time deposits |
|
17,400 |
|
|
|
7,900 |
|
Restricted cash |
|
28,802 |
|
|
|
24,894 |
|
Accounts receivable, net |
|
4,147 |
|
|
|
3,220 |
|
Inventories |
|
11,555 |
|
|
|
11,410 |
|
Prepaid expenses and other
current assets |
|
24,619 |
|
|
|
25,224 |
|
Derivative assets |
|
27,357 |
|
|
|
533 |
|
Due from related parties |
|
359 |
|
|
|
2,897 |
|
Total current
assets |
$ |
216,948 |
|
|
$ |
143,358 |
|
NON-CURRENT
ASSETS |
|
|
|
|
|
|
|
Vessels in operation |
$ |
1,640,788 |
|
|
$ |
1,682,816 |
|
Advances for vessels
acquisitions and other additions |
|
3,912 |
|
|
|
6,139 |
|
Deferred charges, net |
|
49,394 |
|
|
|
37,629 |
|
Other non-current assets |
|
27,693 |
|
|
|
14,010 |
|
Derivative assets, net of
current portion |
|
41,811 |
|
|
|
6,694 |
|
Restricted cash, net of
current portion |
|
113,996 |
|
|
|
103,468 |
|
Total non-current
assets |
|
1,877,594 |
|
|
|
1,850,756 |
|
TOTAL
ASSETS |
$ |
2,094,542 |
|
|
$ |
1,994,114 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
Accounts payable |
$ |
19,373 |
|
|
$ |
13,159 |
|
Accrued liabilities |
|
25,155 |
|
|
|
32,249 |
|
Current portion of long-term
debt |
|
193,619 |
|
|
|
190,316 |
|
Current portion of deferred
revenue |
|
17,172 |
|
|
|
8,496 |
|
Due to related parties |
|
552 |
|
|
|
543 |
|
Total current
liabilities |
$ |
255,871 |
|
|
$ |
244,763 |
|
LONG-TERM
LIABILITIES |
|
|
|
|
|
|
|
Long-term debt, net of current
portion and deferred financing costs |
$ |
789,264 |
|
|
$ |
880,134 |
|
Intangible liabilities-charter
agreements |
|
22,651 |
|
|
|
55,376 |
|
Deferred revenue, net of
current portion |
|
111,650 |
|
|
|
101,288 |
|
Total non-current
liabilities |
|
923,565 |
|
|
|
1,036,798 |
|
Total
liabilities |
$ |
1,179,436 |
|
|
$ |
1,281,561 |
|
Commitments and
Contingencies |
|
- |
|
|
|
- |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
Class A common shares -
authorized214,000,000 shares with a $0.01 par value36,292,765
shares issued and outstanding (2021 – 36,464,109 shares) |
$ |
362 |
|
|
$ |
365 |
|
Series B Preferred Shares -
authorized44,000 shares with a $0.01 par value43,592 shares issued
and outstanding (2021 – 43,592 shares) |
|
- |
|
|
|
- |
|
Additional paid in
capital |
|
691,438 |
|
|
|
698,463 |
|
Retained earnings |
|
187,317 |
|
|
|
13,498 |
|
Accumulated other
comprehensive income |
|
35,989 |
|
|
|
227 |
|
Total shareholders'
equity |
|
915,106 |
|
|
|
712,553 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
2,094,542 |
|
|
$ |
1,994,114 |
|
Global Ship Lease, Inc.
Interim Unaudited Condensed
Consolidated Statements of Income
(Expressed in thousands of U.S. dollars)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
OPERATING
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
Time charter revenue (includes related party revenues of $nil and
$38,990 for each of the three month periods ended September 30,
2022 and 2021, respectively, and $66,929 and $104,995 for each of
the nine month periods ended September 30, 2022 and 2021,
respectively) |
$ |
163,231 |
|
|
$ |
113,967 |
|
|
$ |
447,898 |
|
|
$ |
267,357 |
|
Amortization of intangible
liabilities-charter agreements (includes related party amortization
of intangible liabilities-charter agreements of $nil and $2,520 for
the three month periods ended September 30, 2022 and 2021,
respectively, and $5,385 and $3,524 for each of the nine month
periods ended September 30, 2022 and 2021, respectively) |
|
9,305 |
|
|
|
24,607 |
|
|
|
32,725 |
|
|
|
27,068 |
|
Total Operating
Revenues |
|
172,536 |
|
|
|
138,574 |
|
|
|
480,623 |
|
|
|
294,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
(includes related party vessel operating expenses of $4,077 and
$3,887 for each of the three month periods ended September 30, 2022
and 2021, respectively, and $12,686 and $10,755 for each of the
nine month periods ended September 30, 2022 and 2021,
respectively) |
|
40,997 |
|
|
|
34,286 |
|
|
|
121,883 |
|
|
|
86,692 |
|
Time charter and voyage
expenses (includes related party time charter and voyage expenses
of $1,696 and $895 for the three month periods ended September 30,
2022 and 2021, respectively, and $4,646 and $2,365 for each of the
nine month periods ended September 30, 2022 and 2021,
respectively) |
|
5,136 |
|
|
|
4,422 |
|
|
|
14,594 |
|
|
|
8,311 |
|
Depreciation and
amortization |
|
20,522 |
|
|
|
16,799 |
|
|
|
60,647 |
|
|
|
42,318 |
|
General and administrative
expenses |
|
4,156 |
|
|
|
3,423 |
|
|
|
14,448 |
|
|
|
9,554 |
|
Gain on sale of vessel |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
Operating
Income |
|
101,725 |
|
|
|
79,644 |
|
|
|
269,051 |
|
|
|
155,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME/(EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
680 |
|
|
|
5 |
|
|
|
1,195 |
|
|
|
369 |
|
Interest and other finance
expenses |
|
(16,142 |
) |
|
|
(15,048 |
) |
|
|
(64,884 |
) |
|
|
(54,302 |
) |
Other income, net |
|
1,022 |
|
|
|
754 |
|
|
|
1,200 |
|
|
|
1,687 |
|
Fair value adjustment on
derivative assets |
|
4,660 |
|
|
|
- |
|
|
|
11,308 |
|
|
|
- |
|
Total non-operating
expenses |
|
(9,780 |
) |
|
|
(14,289 |
) |
|
|
(51,181 |
) |
|
|
(52,246 |
) |
Income before income
taxes |
|
91,945 |
|
|
|
65,355 |
|
|
|
217,870 |
|
|
|
103,074 |
|
Income taxes |
|
50 |
|
|
|
(58 |
) |
|
|
50 |
|
|
|
(58 |
) |
Net
Income |
|
91,995 |
|
|
|
65,297 |
|
|
|
217,920 |
|
|
|
103,016 |
|
Earnings allocated to Series B
Preferred Shares |
|
(2,384 |
) |
|
|
(2,384 |
) |
|
|
(7,152 |
) |
|
|
(5,879 |
) |
Net Income available
to Common Shareholders |
$ |
89,611 |
|
|
$ |
62,913 |
|
|
$ |
210,768 |
|
|
$ |
97,137 |
|
Global Ship Lease, Inc.
Interim Unaudited Condensed Consolidated
Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
91,995 |
|
|
$ |
65,297 |
|
|
$ |
217,920 |
|
|
$ |
103,016 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
$ |
20,522 |
|
|
$ |
16,799 |
|
|
$ |
60,647 |
|
|
$ |
42,318 |
|
Gain on sale of vessel |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
Amortization of derivative
assets' premium |
|
370 |
|
|
|
- |
|
|
|
499 |
|
|
|
- |
|
Amortization of deferred
financing costs |
|
3,658 |
|
|
|
1,447 |
|
|
|
9,751 |
|
|
|
6,810 |
|
Amortization of original issue
premium of notes/premium on repurchase of notes |
|
436 |
|
|
|
1,598 |
|
|
|
762 |
|
|
|
8,734 |
|
Amortization of intangible
liabilities-charter agreements |
|
(9,305 |
) |
|
|
(24,607 |
) |
|
|
(32,725 |
) |
|
|
(27,068 |
) |
Fair value adjustment on
derivative asset |
|
(4,660 |
) |
|
|
- |
|
|
|
(11,308 |
) |
|
|
- |
|
Prepayment fees on debt
repayment |
|
- |
|
|
|
175 |
|
|
|
15,197 |
|
|
|
3,230 |
|
Share based compensation |
|
2,222 |
|
|
|
151 |
|
|
|
7,882 |
|
|
|
2,005 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts
receivable and other assets |
$ |
(7,821 |
) |
|
$ |
(16,922 |
) |
|
$ |
(14,005 |
) |
|
$ |
(22,555 |
) |
Decrease/(increase) in
inventories |
|
398 |
|
|
|
(2,806 |
) |
|
|
(145 |
) |
|
|
(2,945 |
) |
Increase in derivative
assets |
|
- |
|
|
|
- |
|
|
|
(15,370 |
) |
|
|
- |
|
(Decrease)/increase in
accounts payable and other liabilities |
|
(1,045 |
) |
|
|
1,976 |
|
|
|
(2,060 |
) |
|
|
(1,172 |
) |
Decrease in related parties'
balances, net |
|
364 |
|
|
|
784 |
|
|
|
2,547 |
|
|
|
337 |
|
Increase in deferred
revenue |
|
18,431 |
|
|
|
938 |
|
|
|
19,038 |
|
|
|
1,558 |
|
Unrealized foreign exchange
(gain)/loss |
|
(2 |
) |
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Net cash provided by
operating activities |
$ |
115,563 |
|
|
$ |
44,833 |
|
|
$ |
258,633 |
|
|
$ |
106,501 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of vessels and
intangibles |
$ |
- |
|
|
$ |
(329,349 |
) |
|
$ |
- |
|
|
$ |
(427,749 |
) |
Cash paid for vessel
expenditures |
|
(1,204 |
) |
|
|
(525 |
) |
|
|
(4,429 |
) |
|
|
(2,758 |
) |
Advances for vessel
acquisitions and other additions |
|
(511 |
) |
|
|
21,638 |
|
|
|
(2,835 |
) |
|
|
(4,318 |
) |
Cash paid for drydockings |
|
(4,463 |
) |
|
|
(3,385 |
) |
|
|
(19,716 |
) |
|
|
(7,566 |
) |
Net proceeds from sale of
vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16,514 |
|
Time deposits acquired |
|
(9,600 |
) |
|
|
- |
|
|
|
(9,500 |
) |
|
|
- |
|
Net cash used in
investing activities |
$ |
(15,778 |
) |
|
$ |
(311,620 |
) |
|
$ |
(36,480 |
) |
|
$ |
(425,877 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of 2024
Notes |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
22,702 |
|
Repurchase of 2022 Notes,
including premium |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(239,183 |
) |
Repurchase of 2024 Notes,
including premium |
|
(90,801 |
) |
|
|
- |
|
|
|
(119,871 |
) |
|
|
- |
|
Proceeds from drawdown of
credit facilities and sale and leaseback |
|
- |
|
|
|
252,700 |
|
|
|
60,000 |
|
|
|
714,505 |
|
Proceeds from 2027 USPP
Notes |
|
- |
|
|
|
- |
|
|
|
350,000 |
|
|
|
- |
|
Repayment of credit facilities
and sale and leaseback |
|
(37,162 |
) |
|
|
(23,829 |
) |
|
|
(117,080 |
) |
|
|
(77,667 |
) |
Repayment of refinanced debt,
including prepayment fees |
|
- |
|
|
|
(6,008 |
) |
|
|
(276,671 |
) |
|
|
(152,862 |
) |
Deferred financing costs
paid |
|
(391 |
) |
|
|
(3,989 |
) |
|
|
(9,655 |
) |
|
|
(11,905 |
) |
Net proceeds from offering of
Class A common shares, net of offering costs |
|
- |
|
|
|
(9,763 |
) |
|
|
- |
|
|
|
57,849 |
|
Cancellation of Class A common
shares |
|
(9,985 |
) |
|
|
- |
|
|
|
(14,910 |
) |
|
|
- |
|
Proceeds from offering of
Series B preferred shares, net of offering costs |
|
- |
|
|
|
16,909 |
|
|
|
- |
|
|
|
51,254 |
|
Class A common shares-dividend
paid |
|
(13,856 |
) |
|
|
(9,358 |
) |
|
|
(36,949 |
) |
|
|
(18,705 |
) |
Series B preferred
shares-dividend paid |
|
(2,384 |
) |
|
|
(2,384 |
) |
|
|
(7,152 |
) |
|
|
(5,879 |
) |
Net cash (used
in)/provided by financing activities |
$ |
(154,579 |
) |
|
$ |
214,278 |
|
|
$ |
(172,288 |
) |
|
$ |
340,109 |
|
Net
(decrease)/increase in cash and cash equivalents and restricted
cash |
|
(54,794 |
) |
|
|
(52,509 |
) |
|
|
49,865 |
|
|
|
20,733 |
|
Cash and cash equivalents and
restricted cash at beginning of the period |
|
300,301 |
|
|
|
165,504 |
|
|
|
195,642 |
|
|
|
92,262 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
245,507 |
|
|
$ |
112,995 |
|
|
$ |
245,507 |
|
|
$ |
112,995 |
|
Supplementary Cash
Flow Information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
9,173 |
|
|
|
11,743 |
|
|
|
34,470 |
|
|
|
36,290 |
|
Cash received from interest
rate caps |
|
2,993 |
|
|
|
- |
|
|
|
3,247 |
|
|
|
- |
|
Non-cash investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Unpaid capitalized
expenses |
|
7,334 |
|
|
|
- |
|
|
|
7,334 |
|
|
|
- |
|
Unpaid drydocking
expenses |
|
7,396 |
|
|
|
6,509 |
|
|
|
7,396 |
|
|
|
6,509 |
|
Unpaid vessel
expenditures |
|
- |
|
|
|
4,729 |
|
|
|
- |
|
|
|
4,729 |
|
Acquisition of vessels and
intangibles |
|
- |
|
|
|
89,565 |
|
|
|
- |
|
|
|
92,135 |
|
Advances for vessel
acquisitions and other additions |
|
- |
|
|
|
426 |
|
|
|
- |
|
|
|
426 |
|
Non-cash financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Unpaid deferred financing
costs |
|
- |
|
|
|
1,395 |
|
|
|
- |
|
|
|
1,395 |
|
Issuance of 2024 Notes for the
acquisition of vessels |
|
- |
|
|
|
35,000 |
|
|
|
- |
|
|
|
35,000 |
|
Premium on the 2024 Notes
issued for the acquisition of vessels |
|
- |
|
|
|
1,680 |
|
|
|
- |
|
|
|
1,680 |
|
Unrealized gain on derivative
assets |
|
12,349 |
|
|
|
- |
|
|
|
35,263 |
|
|
|
- |
|
Investor and Media Contacts: The IGB GroupBryan
Degnan646-673-9701orLeon Berman 212-477-8438
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