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,
2022.
Full Year and Fourth Quarter 2022
Highlights
- Reported operating revenue of $165.0 million
for the fourth quarter 2022, an increase of 7.5% on operating
revenue of $153.5 million for the prior year period. For the year
ended December 31, 2022, operating revenue was $645.6 million, up
44.1% from $448.0 million for the prior year.
- Reported net income available to common
shareholders of $72.6 million for the fourth quarter of 2022, an
increase of 9.8% on net income of $66.1 million for the prior year
period. Normalized net income (a non-U.S. GAAP financial measure,
described below) for the same period was $77.3 million, up 16.9% on
Normalized net income of $66.1 million for the prior year
period.
- For the year ended December 31, 2022, net
income available to common shareholders was $283.4 million, an
increase of 73.7% on net income of $163.2 million for the prior
year. Normalized net income for the year was $298.2 million, an
increase of 74.7% on Normalized net income for the prior year of
$170.7 million.
- Generated $100.0 million of Adjusted EBITDA (a
non-U.S. GAAP financial measure, described below) for the fourth
quarter of 2022, up 28.2% on Adjusted EBITDA of $78.0 million for
the prior year period. Adjusted EBITDA for the year ended December
31, 2022 was $398.3 million, up 68.6% on Adjusted EBITDA of $236.3
million for the prior year.
- Earnings per share for the fourth quarter of
2022 was $2.01, up 9.2% on earnings per share of $1.84 for the
prior year period. Normalized earnings per share (a non-U.S. GAAP
financial measure, described below) for the fourth quarter of 2022
was $2.14, up 16.3% on Normalized earnings per share of $1.84 for
the prior year period. Earnings per share for the year ended
December 31, 2022 was $7.74, up 66.5% on earnings per share of
$4.65 for the prior year. Normalized earnings per share for the
year ended December 31, 2022 was $8.15, up 67.7% on Normalized
earnings per share of $4.86 for the prior year.
- Declared a dividend of $0.375 per Class A
common share for the fourth quarter of 2022 to be paid on March 6,
2023 to common shareholders of record as of February 22, 2023. Paid
a dividend of $0.375 per Class A common share for the first quarter
of 2022 on June 2, 2022, paid a dividend of $0.375 per Class A
common share for the second quarter of 2022 on September 2, 2022
and paid a dividend of $0.375 per Class A common share for the
third quarter of 2022 on December 2, 2022.
- Between October 1, 2022 and February 28, 2023,
added $21.7 million of firm contracted revenues to forward charter
cover, with the addition of new short term charter fixtures or
extensions on four feeder ships. Between January 1, 2022 and
February 28, 2023, and including the above, a total of 19 charters,
added $938.8 million of firm contracted revenues. 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, two
fixtures of just over one year for two 2,200 – 2,800 TEU
ships, two fixtures of below one year for two 2,200 – 2,800
TEU ship and 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 582,178 Class A common
shares during January 2023 for a total investment of 10.0 million.
Re-purchase prices ranged between $16.12 and $18.17 per common
share, with an average price of $17.16. A total of 1,642,818 Class
A common shares have been repurchased under the Buy-back
Authorization, for approximately $30.0 million, with approximately
$10.0 million of capacity remaining.
- In February 2023, agreed to sell GSL Amstel, a
1,100 TEU feeder and non-core asset with imminent special survey
and dry-docking requirements, for approximately book value.
- On December 29, 2022 entered into a new At
Market Issuance Sales Agreement (the “ATM Agreement”) with B.Riley
Securities, Inc (the “Agent”) under which we may offer and sell up
to $150.0 million of our Depositary Shares (the “Depositary
Shares”), each of which represents 1/100th of one share of our
8.75% Series B Cumulative Redeemable Perpetual Preferred Stock, par
value $0.01 per share, with a liquidation preference of $2,500.00
per share (equivalent to $25.00 per Depositary Share) (the “Series
B Preferred Shares”) (NYSE:GSL-B). This new ATM Agreement
terminated and replaced, in its entirety, the former at-the-market
program that we had in place with the Agent for the Depositary
Shares. As of the date of this press release, no sales had occurred
under the ATM Agreement.
- 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 July 15, 2022, completed the full
redemption of the 8.00% Senior Unsecured Notes due 2024 (the “2024
Notes”) of $89.0 million aggregate principal amount 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 Secured 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 the fourth quarter of
2026 on $507.9 million of floating rate debt, which
reduces over time as debt amortizes 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,
to fully hedge 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: “While 2022 started strongly, macro headwinds
and negative sentiment subsequently put pressure on consumer demand
and thus on the container shipping industry. Despite the downward
pressure this is exerting on both charter rates and asset values
Global Ship Lease has continued to make important financial,
commercial, and strategic progress – including active cooperation
with our charterers to improve vessel efficiency and reduce
emissions – that will serve the Company well for the long term. Our
scale, relationships throughout the industry, and high-quality
fleet have enabled us to remain consistently active in fixing
vessels at profitable rates. During the course of 2022 and
year-to-date 2023, we have added almost $940 million of contracted
revenues, bringing our total contracted revenue as at year-end to
$2.1 billion over an average of 2.7 years. Throughout the peak
period, we maintained a long-term, through-the-cycle orientation,
taking steps to maximize overall earnings while minimizing residual
risk. Notwithstanding our excellent financial position and strong
long-term contracted cash flows, which gives us the option to be an
acquirer, we have remained disciplined in the face of the market
exuberance and elevated asset values of the last 18 months or
so. However, with the market now normalizing, we expect that
there may be additional opportunities to create shareholder value
through acquisitions.”
Ian Webber, Chief Executive Officer, commented:
“Throughout 2022, we strengthened our balance sheet; this will
serve the Company well throughout the cycle, but especially in the
current uncertain macro-economic environment. Building upon the
opportunities afforded by our extensive charter coverage and
significantly increased earnings and cash flow, we have reduced our
average cost of debt to 4.53%, have no material re-financing
requirements before 2026, have fully hedged our floating rate debt
through 2026, and have subsequently seen our corporate credit
ratings improve to B1 / Positive and BB / Stable, all while paying
an attractive quarterly dividend and making aggregate share
buy-backs over the last 18 months or so of $40.0 million. We
believe that this strong financial foundation positions us well to
continue providing shareholders with a reliable dividend while
continuing to allocate our capital dynamically to capture the best
value-generating opportunities as they arise.”
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
|
Three months ended |
Three months ended |
Year ended |
Year ended |
|
December 31, 2022 |
December 31, 2021 |
December 31, 2022 |
December 31, 2021 |
|
|
|
|
|
Operating Revenue
(1) |
165,022 |
153,529 |
645,645 |
447,954 |
Operating Income |
85,134 |
82,197 |
354,185 |
237,517 |
Net Income
(2) |
72,621 |
66,095 |
283,389 |
163,232 |
Adjusted EBITDA
(3) |
99,986 |
77,956 |
398,350 |
236,333 |
Normalized Net Income
(3) |
77,277 |
66,095 |
298,247 |
170,681 |
|
|
|
|
|
(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” (see below).
(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
measures to net income, the most directly comparable U.S. GAAP
financial measure, please see “Reconciliation of Non-U.S. GAAP
Financial Measures” below.
Revenue and Utilization
Operating revenue, primarily derived from
fixed-rate, mainly long-term, time-charters was $165.0 million in
the three months ended December 31, 2022, up $11.5 million (or
7.5%) on revenue of $153.5 million for the prior year period. The
period-on-period increase in revenue was principally due to (i) an
increase of 12 ownership days in fourth quarter of 2022 compared to
same period in previous year, (ii) increased revenue from charter
renewals at higher rates on nine vessels, and (iii) a decrease in
planned offhire days from 367 in the fourth quarter of 2021 to 225
in the same quarter of 2022, partially offset by (i) an increase in
unplanned offhire days from 62 in the fourth quarter of 2021 to 122
in the same quarter of 2022, (ii) $9.9 million reduction in the
amortization of intangible liabilities arising on below-market
charters attached to certain vessel additions, and (iii) $4.2
million reduction in the credit from straightlining the effect of
timecharter modifications. The 225 days of planned offhire for
drydockings in the fourth quarter of 2022 were attributable to four
regulatory drydockings completed, while in the comparative period
of 2021, the 367 days of planned offhire were mainly attributable
to eight regulatory drydockings. There were 122 days of unplanned
offhire in the fourth quarter of 2022 compared to 62 days in the
fourth quarter of 2021. Utilization for the fourth quarter of 2022
was 94.2% compared to utilization of 92.0% in the same period of
the prior year.
For the year ended December 31, 2022, revenue
was $645.6 million, up $197.6 million (or 44.1%) on revenue of
$448.0 million in the prior year, mainly due to (i) a 22.1%
increase in ownership days due to the net acquisition of 22 vessels
in 2021, resulting in 23,725 ownership days in 2022, compared to
19,427 in 2021, (ii) a decrease in planned off hire days from 752
in 2021 to 581 in 2022, and (iii) a decrease in idle time from 88
days in 2021 to 30 days in 2022, partially offset by an increase in
unplanned offhire days from 260 in 2021 to 460 in 2022.
The table below shows fleet utilization for the
three months ended December 31, 2022 and 2021, and for the years
ended December 31, 2022, 2021, 2020 and 2019.
|
Three months ended |
|
Year ended |
|
December 31, |
December 31, |
|
Dec 31, |
Dec 31, |
Dec 31, |
Dec 31, |
Days |
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Ownership days |
5,980 |
|
5,968 |
|
|
23,725 |
|
19,427 |
|
16,044 |
|
14,326 |
|
Planned offhire - scheduled
drydock |
(225 |
) |
(367 |
) |
|
(581 |
) |
(752 |
) |
(687 |
) |
(537 |
) |
Unplanned offhire |
(122 |
) |
(62 |
) |
|
(460 |
) |
(260 |
) |
(95 |
) |
(105 |
) |
Idle time |
nil |
|
(48 |
) |
|
(30 |
) |
(88 |
) |
(338 |
) |
(164 |
) |
Operating days |
5,633 |
|
5,491 |
|
|
22,654 |
|
18,327 |
|
14,924 |
|
13,520 |
|
|
|
|
|
|
|
|
|
Utilization |
94.2 |
% |
92.0 |
% |
|
95.5 |
% |
94.3 |
% |
93.0 |
% |
94.4 |
% |
Four drydockings to meet regulatory requirements
were completed in the fourth quarter 2022 and, as of December 31,
2022, one was in progress. In 2023, ten regulatory drydockings are
anticipated, three as scheduled and seven deferred from 2022 for
commercial or operational reasons.
Vessel Operating Expenses
Vessel operating expenses, which are primarily
the costs of crew, lubricating oil, repairs, maintenance, insurance
and technical management fees, were up 4.6% to $45.6 million for
the fourth quarter of 2022, compared to $43.6 million in the
comparative period. The increase of $2.0 million was mainly due to
(i) increased insurances due to higher insured values and (ii)
increased crew expenses as salaries were higher primarily due to
limited crew supply as a consequence of current container market
conditions, worldwide inflation and higher crew travel expenses due
to increased number of crew changes and higher airfare prices. The
average cost per ownership day in the quarter was $7,619, compared
to $7,308 for the prior year period, up $311 per day, or 4.3%.
For the year ended December 31, 2022, vessel
operating expenses were $167.4 million, or an average of $7,058 per
day, compared to $130.3 million in the comparative period, or
$6,707 per day, an increase of $351 per ownership day, or 5.2%. The
increase in daily operating expenses is mainly due to (i) increased
crew expenses due to higher salaries and crew travel expenses, (ii)
increased insurance costs due to higher insured assets values and
(iii) increased lubricant expenses as a result of higher oil
prices.
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 $6.6 million for the fourth quarter of 2022,
compared to $4.8 million in the fourth quarter of 2021. The
increase is mainly due to additional voyage administration costs,
increased bunkering expenses due to higher off hire days and
increased commissions on charter renewals at higher rates.
For the year ended December 31, 2022, time
charter and voyage expenses were $21.2 million, or an average of
$892 per day, compared to $13.1 million in the comparative period,
or $674 per day, an increase of $218 per ownership day, or 32.3%.
The increase was mainly due to increased ownership days – up 22% -
from the net increase of the 22 vessels which were acquired in
2021, increased commissions on charter renewals at higher rates and
additional voyage administration costs.
Depreciation and Amortization
Depreciation and amortization for the fourth
quarter of 2022 was $20.7 million, compared to $19.2 million in the
fourth quarter of 2021. The increase was mainly due to the 12
drydockings that were completed in 2022.
Depreciation and amortization for the year ended
December 31, 2022 was $81.3 million, compared to $61.6 million in
the comparative period, with the increase being due to the net
acquisition of 22 vessels in 2021 and the 12 drydockings that were
completed in 2022.
Impairment of vessel/Gain on sale of vessel
An impairment loss of $3.0 million was recorded
in the fourth quarter of 2022 on one vessel, which subsequent to
the year end we have agreed to sell. On June 30, 2021, the
2001-built, 2,272 TEU containership, La Tour, was sold for net
proceeds of $16.5 million resulting in a gain of $7.8 million.
General and Administrative Expenses
General and administrative expenses were $4.0
million in the fourth quarter of 2022, compared to $3.7 million in
the fourth quarter of 2021. The increase was mainly due to the
non-cash effect of stock-based compensation expense due to vesting
recorded in the fourth quarter of 2022. The average general and
administrative expense per ownership day for the fourth quarter of
2022 was $682, compared to $618 in the comparative period, an
increase of $64 or 10.4%.
For the year ended December 31, 2022, general
and administrative expenses were $18.5 million, compared to $13.2
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 year ended December 31, 2022 was $781, compared to $682
in the comparative period, an increase of $99 or 14.5%.Adjusted
EBITDA.
Adjusted EBITDA (a non-GAAP financial measure)
was $100.0 million for the fourth quarter of 2022, up from $78.0
million for the fourth quarter of 2021, with the net increase being
mainly due to increased revenue from charter renewals at higher
rates.
Adjusted EBITDA for the year ended December 31,
2022 was $398.3 million, compared to $236.3 million for the
comparative period, with the increase being due to the net
acquisition of 22 vessels in 2021.
Interest Expense and Interest Income
Debt as at December 31, 2022 totaled $949.5
million, comprising $470.9 million of secured bank debt
collateralized by vessels, $336.9 million of 2027 Secured Notes
collateralized by vessels, and $141.7 million under sale and
leaseback financing transactions. As of December 31, 2022, five of
our vessels were unencumbered.
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 the
2024 Notes. As of December 31, 2021, none of our vessels were
unencumbered.
Interest and other finance expenses for the
fourth quarter of 2022 was $10.4 million, down from $14.9 million
for the fourth quarter of 2021. The decrease in interest and other
finance expenses was mainly due to the effect of interest rate caps
that reduce net interest expense. As a consequence, and including
the effect of refinancing and repayment of certain of our debt
using the net proceeds of our 2027 Secured Notes, despite an
increase in three month variable rates LIBOR/SOFR in fourth quarter
of 2022 to 4.5% as compared to 0.16% in the prior year period, the
underlying blended cost of our debt has decreased from
approximately 4.82% for the fourth quarter 2021 to 4.53% for the
fourth quarter of 2022.
Interest and other finance expenses for the year
ended December 31, 2022 was $75.3 million, up from $69.2 million
for the comparative period. The increase in interest and 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
the 2024 Notes, a $1.8 million premium paid on the full redemption
of the 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 fourth quarter of 2022
was $1.3 million, up from $0.01 million for the fourth quarter of
2021. Interest income for the year ended December 31, 2022 was $2.5
million, compared to $0.4 million for the comparative year.
Other income, Net
Other income, net was $0.6 million in the fourth
quarter of 2022, compared to an income of $1.1 million in the
fourth quarter of 2021. Other income, net was $1.8 million for the
year ended December 31, 2022, compared to $2.8 million for the
comparative year.
Taxation
Taxation for the fourth quarter of 2022 was nil,
compared to a charge of $2,000 in the fourth quarter of 2021.
Taxation for the year ended December 31, 2022 was a credit of
$50,000, compared to a debit of $56,000 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 of 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 the fourth quarter of 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 negative fair value adjustment of $1.6 million for
the fourth quarter of 2022 was recorded through the statement of
income. The positive fair value adjustment for the year ended
December 31, 2022 amounted to $9.7 million.
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of
8.75%, the cost of which for the fourth quarter of 2022 was $2.4
million, the same as in fourth quarter 2021. The cost was $9.5
million in the year ended December 31, 2022, compared to $8.3
million for the comparative period. The increase was due to
additional Series B Preferred Shares issued under our at-the-market
program.
Net Income Available to Common Shareholders
Net income available to common shareholders for
the three months ended December 31, 2022 was $72.6 million. Net
income available to common shareholders for the three months ended
December 31, 2021 was $66.1 million.
Earnings per share for the three months ended
December 31, 2022 was $2.01, an increase of 9.2% from the earnings
per share for the comparative period, which was $1.84.
For the year ended December 31, 2022, net income
available to common shareholders was $283.4 million. For the year
ended December 31, 2021, net income available to common
shareholders was $163.2 million.
Earnings per share for the year ended December
31, 2022 was $7.74, an increase of 66.5% from the earnings per
share for the comparative period, which was $4.65.
Normalized net income (a non-GAAP financial
measure) for the three months ended December 31, 2022, was $77.3
million. Normalized net income for the three months ended December
31, 2021 was $66.1 million.
Normalized earnings per share (a non-GAAP
financial measure) for the three months ended December 31, 2022 was
$2.14, an increase of 16.3% from Normalized earnings per share for
the comparative period, which was $1.84.
Normalized net income for the year ended
December 31, 2022, was $298.2 million. Normalized net income for
the year ended December 31, 2021 was $170.7 million.
Normalized earnings per share for the year ended
December 31, 2022 was $8.15, an increase of 67.7% from Normalized
earnings per share for the comparative period, which was $4.86.
Fleet
As at February 28, 2023, 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) |
3Q27(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 |
1Q25(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(7) |
4Q28 |
1Q31(7) |
25,910(7) |
Kristina(1) |
6,927 |
23,421 |
2013 |
CMA CGM(7) |
3Q29 |
3Q31(7) |
25,910(7) |
Katherine(1) |
6,927 |
23,403 |
2013 |
CMA CGM(7) |
1Q29 |
2Q31(7) |
25,910(7) |
Alexandra(1) |
6,927 |
23,348 |
2013 |
CMA CGM(7) |
2Q29 |
3Q31(7) |
25,910(7) |
Alexis(1) |
6,882 |
23,919 |
2015 |
CMA CGM(7) |
2Q29 |
3Q31(7) |
25,910(7) |
Olivia I(1) |
6,882 |
23,864 |
2015 |
CMA CGM(7) |
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 |
1Q25 |
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 |
4Q24 |
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 |
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 |
1Q27 |
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 |
Confidential(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(14) |
1Q24 |
2Q24 |
18,500(14) |
GSL Mercer |
2,824 |
11,970 |
2007 |
ONE |
4Q24 |
2Q25 |
35,750 |
Athena |
2,762 |
13,538 |
2003 |
Hapag-Lloyd |
2Q24 |
3Q24 |
21,500 |
GSL Elizabeth |
2,741 |
11,507 |
2006 |
ONE |
2Q23 |
3Q23 |
18,500(15) |
Beethoven tbr GSL Chloe |
2,546 |
12,212 |
2012 |
ONE |
4Q24 |
1Q25 |
33,000 |
GSL Maren |
2,546 |
12,243 |
2014 |
Westwood (Swire) |
2Q24 |
3Q24 |
19,250(16) |
Maira |
2,506 |
11,453 |
2000 |
Hapag-Lloyd |
3Q23 |
4Q23 |
14,450(17) |
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
then-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 $16.1
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 as
each of the existing charters expire, on a staggered basis, between
approximately late 2023 and late 2024, following the expiration of
existing charters. The charters are expected to generate average
annualized Adjusted EBITDA of approximately $12.6 million per
ship.(8) GSL Maria, GSL Violetta, GSL Arcadia, GSL MYNY, GSL
Melita, GSL Tegea and GSL Dorothea. 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) GSL
Tripoli, GSL Kithira, GSL Tinos, and GSL Syros. 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
each forward fixed for five years +/- 45 days at charter rates
expected to generate annualized Adjusted EBITDA of approximately
$10.9 million per vessel. The new charter for GSL Susan commenced
in 4Q 2022, while the remaining charters are scheduled 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 next12 months and $32,000 for the remaining
period.(14) GSL Lalo. Chartered to MSC at $17,500 per day for a
period of 14 to 16 months, upon expiry of the preceding charter in
1Q 2023;(15) GSL Elizabeth. Charter extended to ONE at $18,750 per
day for a period of four to seven months, commencing late 4Q
2022;(16) GSL Maren. Charter extended to Westwood (Swire) for a
period of 11 to 14 months, commencing at the end of 1Q 2023 at a
rate of $17,200 per day for the first 2 months and for the
remaining period at a rate of $18,200.(17) Maira. Charter extended
for four to 6.5 months, commencing at the end of 2Q 2023 at a rate
of $17,750 per day. |
|
Conference Call and Webcast
Global Ship Lease will hold a conference call to
discuss the Company's results for the fourth quarter and full year
2022 today, Wednesday March 1, 2023 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: 9126711
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 February 28, 2023, 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 March 1, 2023, the average remaining term of the Company’s
charters as at December 31, 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 2.7 years on a
TEU-weighted basis. Contracted revenue on the same basis
was $2.09 billion. Contracted revenue was $2.50 billion,
including options under charterers’ control and with latest
redelivery date, representing a weighted average remaining term of
3.5 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 non-U.S. GAAP 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.
- 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 months |
Three months |
Year |
Year |
|
|
ended |
ended |
ended |
ended |
|
|
December 31, |
December 31, |
December 31, |
December 31, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Net income
available to Common Shareholders |
72,621 |
|
66,095 |
|
283,389 |
|
163,232 |
|
|
|
|
|
|
|
Adjust: |
Depreciation and
amortization |
20,656 |
|
19,245 |
|
81,303 |
|
61,563 |
|
|
Amortization of
intangible liabilities |
(8,433 |
) |
(18,362 |
) |
(41,158 |
) |
(45,430 |
) |
|
Impairment of
vessel |
3,033 |
|
- |
|
3,033 |
|
- |
|
|
Gain on sale of
vessel |
- |
|
- |
|
- |
|
(7,770 |
) |
|
Fair value
adjustment on derivative asset |
1,623 |
|
- |
|
(9,685 |
) |
- |
|
|
Interest
income |
(1,317 |
) |
(80 |
) |
(2,512 |
) |
(449 |
) |
|
Interest
expense |
10,405 |
|
14,925 |
|
75,289 |
|
69,227 |
|
|
Share based
compensation |
2,222 |
|
1,205 |
|
10,104 |
|
3,510 |
|
|
Earnings allocated
to preferred shares |
2,384 |
|
2,384 |
|
9,536 |
|
8,263 |
|
|
Income tax |
- |
|
(2 |
) |
(50 |
) |
56 |
|
|
Effect from
straight lining time charter modifications |
(3,208 |
) |
(7,454 |
) |
(10,899 |
) |
(15,869 |
) |
Adjusted
EBITDA |
99,986 |
|
77,956 |
|
398,350 |
|
236,333 |
|
Global Ship Lease, Inc.c/o Global Ship
Lease Services Ltd.Portland
HouseStag PlaceLondon SW1E
5RSUnited KingdomPhone: 44 (0)20
7869 8006
- 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 - UNAUDITED
(thousands of U.S.
dollars) |
|
|
|
|
|
|
Three months |
Three months |
Year |
Year |
|
|
ended |
ended |
ended |
ended |
|
|
December 31, |
December 31, |
December 31, |
December 31, |
|
|
2022 |
2021 |
2022 |
|
2021 |
|
|
|
|
|
|
|
Net income
available to Common Shareholders |
72,621 |
66,095 |
283,389 |
|
163,232 |
|
|
|
|
|
|
|
Adjust: |
Fair value
adjustment on derivative assets |
1,623 |
- |
(9,685 |
) |
- |
|
|
Gain on sale of
vessel |
- |
- |
- |
|
(7,770 |
) |
|
Impairment of
vessel |
3,033 |
- |
3,033 |
|
- |
|
|
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 |
|
- |
|
|
Accelerated write
off of premium related to redemption of 2024 Notes |
- |
- |
(1,344 |
) |
- |
|
|
Premium paid on
redemption of 2024 Notes |
- |
- |
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 |
- |
- |
11,229 |
|
175 |
|
Normalized net
income |
77,277 |
66,095 |
298,247 |
|
170,681 |
|
- 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 - UNAUDITED
|
|
|
|
|
|
Three months |
Three months |
Year |
Year |
|
ended |
ended |
ended |
ended |
|
December 31, |
December 31, |
December 31, |
December 31, |
|
2022 |
2021 |
2022 |
2021 |
|
|
|
|
|
EPS as reported (USD) |
2.01 |
1.84 |
7.74 |
4.65 |
Normalized net income
adjustments-Class A common shares (in thousands USD) |
4,656 |
- |
14,858 |
7,449 |
Weighted average number of
Class A Common shares |
36,073,240 |
35,891,587 |
36,603,134 |
35,125,003 |
Adjustment on EPS (USD) |
0.13 |
- |
0.41 |
0.21 |
Normalized EPS (USD) |
2.14 |
1.84 |
8.15 |
4.86 |
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 strength of 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 and their ability to
pay charterhire in accordance with the charters;
- the overall health and condition of the U.S. and global
financial markets;
- our financial condition and liquidity, including our ability to
obtain additional financing to fund capital expenditures, vessel
acquisitions and for other general corporate purposes and our
ability to meet our financial covenants and repay our
borrowings;
- our expectations relating to dividend payments and expectations
of our ability to make such payments including the availability of
cash and the impact of constraints under our credit
facilities;
- future acquisitions, business strategy and expected capital
spending;
- operating expenses, availability of key employees, crew, number
of off-hire days, drydocking and survey requirements, costs of
regulatory compliance, insurance costs and general and
administrative 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 our
capital base;
- our expectations about the availability of vessels to purchase,
the time that it may take to construct new vessels, or the useful
lives of our vessels;
- our continued ability to enter into or renew charters including
the re-chartering of vessels on the expiry of existing charters, or
to secure profitable employment for our vessels in the spot
market;
- our ability to realize expected benefits from our acquisition
of secondhand vessels;
- our ability to capitalize on our management’s and 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;
- changes in laws and regulations (including environmental rules
and regulations); and
- 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, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
120,130 |
|
$ |
67,280 |
Time deposits |
|
8,550 |
|
|
7,900 |
Restricted cash |
|
28,363 |
|
|
24,894 |
Accounts receivable, net |
|
3,684 |
|
|
3,220 |
Inventories |
|
12,237 |
|
|
11,410 |
Prepaid expenses and other
current assets |
|
33,765 |
|
|
25,224 |
Derivative asset |
|
29,645 |
|
|
533 |
Due from related parties |
|
673 |
|
|
2,897 |
Total current
assets |
$ |
237,047 |
|
$ |
143,358 |
NON - CURRENT
ASSETS |
|
|
|
|
|
Vessels in operation |
$ |
1,623,307 |
|
$ |
1,682,816 |
Advances for vessels'
acquisitions and other additions |
|
4,881 |
|
|
6,139 |
Deferred charges, net |
|
54,663 |
|
|
37,629 |
Other non - current
assets |
|
31,022 |
|
|
14,010 |
Derivative asset, net of
current portion |
|
33,858 |
|
|
6,694 |
Restricted cash, net of
current portion |
|
121,437 |
|
|
103,468 |
Total non - current
assets |
|
1,869,168 |
|
|
1,850,756 |
TOTAL
ASSETS |
$ |
2,106,215 |
|
$ |
1,994,114 |
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
Accounts payable |
$ |
22,755 |
|
$ |
13,159 |
Accrued liabilities |
|
36,038 |
|
|
32,249 |
Current portion of long-term
debt and deferred financing costs |
|
189,832 |
|
|
190,316 |
Current portion of deferred
revenue |
|
12,569 |
|
|
8,496 |
Due to related parties |
|
572 |
|
|
543 |
Total current
liabilities |
$ |
261,766 |
|
$ |
244,763 |
LONG-TERM
LIABILITIES |
|
|
|
|
|
Long - term debt, net of
current portion and deferred financing costs |
$ |
744,557 |
|
$ |
880,134 |
Intangible liabilities-charter
agreements |
|
14,218 |
|
|
55,376 |
Deferred revenue, net of
current portion |
|
119,183 |
|
|
101,288 |
Total non - current
liabilities |
|
877,958 |
|
|
1,036,798 |
Total
liabilities |
$ |
1,139,724 |
|
$ |
1,281,561 |
Commitments and
Contingencies |
|
- |
|
|
- |
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Class A common shares -
authorized214,000,000 shares with a $0.01 par value35,990,288
shares issued and outstanding (2021 – 36,464,109 shares) |
$ |
359 |
|
$ |
365 |
Series B Preferred Shares -
authorized104,000 shares with a $0.01 par value43,592 shares issued
and outstanding (2021 – 43,592 shares) |
|
- |
|
|
- |
Additional paid in
capital |
|
688,262 |
|
|
698,463 |
Retained earnings |
|
246,390 |
|
|
13,498 |
Accumulated other
comprehensive income |
|
31,480 |
|
|
227 |
Total shareholders'
equity |
|
966,491 |
|
|
712,553 |
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
2,106,215 |
|
$ |
1,994,114 |
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, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
OPERATING
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
Time charter revenue (includes related party revenues of $nil and
$39,686 for each of the three month periods ended December 31, 2022
and 2021, respectively, and $66,929 and $144,681 for each of the
twelve month periods ended December 31, 2022 and 2021,
respectively) |
$ |
156,589 |
|
|
$ |
135,167 |
|
|
$ |
604,487 |
|
|
$ |
402,524 |
|
Amortization of intangible
liabilities-charter agreements (includes related party amortization
of intangible liabilities-charter agreements of $nil and $3,358 for
the three month periods ended December 31, 2022 and 2021,
respectively, and $5,385 and $6,882 for each of the twelve month
periods ended December 31, 2022 and 2021, respectively) |
|
8,433 |
|
|
|
18,362 |
|
|
|
41,158 |
|
|
|
45,430 |
|
Total Operating
Revenues |
|
165,022 |
|
|
|
153,529 |
|
|
|
645,645 |
|
|
|
447,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
(includes related party vessel operating expenses of $3,956 and
$4,539 for each of the three month periods ended December 31, 2022
and 2021, respectively, and $16,642 and $15,294 for each of the
twelve month periods ended December 31, 2022 and 2021,
respectively) |
|
45,561 |
|
|
|
43,612 |
|
|
|
167,444 |
|
|
|
130,304 |
|
Time charter and voyage expenses
(includes related party time charter and voyage expenses of $1,643
and $1,218 for the three month periods ended December 31, 2022 and
2021, respectively, and $6,289 and $3,538 for each of the twelve
month periods ended December 31, 2022 and 2021, respectively) |
|
6,560 |
|
|
|
4,789 |
|
|
|
21,154 |
|
|
|
13,100 |
|
Depreciation and
amortization |
|
20,656 |
|
|
|
19,245 |
|
|
|
81,303 |
|
|
|
61,563 |
|
Impairment of vessel |
|
3,033 |
|
|
|
- |
|
|
|
3,033 |
|
|
|
- |
|
General and administrative
expenses |
|
4,078 |
|
|
|
3,686 |
|
|
|
18,526 |
|
|
|
13,240 |
|
Gain on sale of vessel |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
Operating
Income |
|
85,134 |
|
|
|
82,197 |
|
|
|
354,185 |
|
|
|
237,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME/(EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
1,317 |
|
|
|
80 |
|
|
|
2,512 |
|
|
|
449 |
|
Interest and other finance
expenses |
|
(10,405 |
) |
|
|
(14,925 |
) |
|
|
(75,289 |
) |
|
|
(69,227 |
) |
Other income, net |
|
582 |
|
|
|
1,125 |
|
|
|
1,782 |
|
|
|
2,812 |
|
Fair value adjustment on
derivative asset |
|
(1,623 |
) |
|
|
- |
|
|
|
9,685 |
|
|
|
- |
|
Total non-operating
expenses |
|
(10,129 |
) |
|
|
(13,720 |
) |
|
|
(61,310 |
) |
|
|
(65,966 |
) |
Income before income
taxes |
|
75,005 |
|
|
|
68,477 |
|
|
|
292,875 |
|
|
|
171,551 |
|
Income taxes |
|
- |
|
|
|
2 |
|
|
|
50 |
|
|
|
(56 |
) |
Net
Income |
|
75,005 |
|
|
|
68,479 |
|
|
|
292,925 |
|
|
|
171,495 |
|
Earnings allocated to Series B
Preferred Shares |
|
(2,384 |
) |
|
|
(2,384 |
) |
|
|
(9,536 |
) |
|
|
(8,263 |
) |
Net Income available
to Common Shareholders |
$ |
72,621 |
|
|
$ |
66,095 |
|
|
$ |
283,389 |
|
|
$ |
163,232 |
|
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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
75,005 |
|
|
$ |
68,479 |
|
|
$ |
292,925 |
|
|
$ |
171,495 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
$ |
20,656 |
|
|
$ |
19,245 |
|
|
$ |
81,303 |
|
|
$ |
61,563 |
|
Impairment of vessel |
|
3,033 |
|
|
|
- |
|
|
|
3,033 |
|
|
|
- |
|
Gain on sale of vessel |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,770 |
) |
Amounts reclassified from
OCI |
|
(1,091 |
) |
|
|
- |
|
|
|
(1,091 |
) |
|
|
- |
|
Amortization of derivative
assets' premium |
|
624 |
|
|
|
- |
|
|
|
1,123 |
|
|
|
- |
|
Amortization of deferred
financing costs |
|
1,482 |
|
|
|
1,469 |
|
|
|
11,233 |
|
|
|
8,279 |
|
Amortization of original issue
premium of notes/premium on repurchase of notes |
|
- |
|
|
|
(119 |
) |
|
|
762 |
|
|
|
8,615 |
|
Amortization of intangible
liabilities-charter agreements |
|
(8,433 |
) |
|
|
(18,362 |
) |
|
|
(41,158 |
) |
|
|
(45,430 |
) |
Fair value adjustment on
derivative asset |
|
1,623 |
|
|
|
- |
|
|
|
(9,685 |
) |
|
|
- |
|
Prepayment fees on debt
repayment |
|
- |
|
|
|
- |
|
|
|
15,197 |
|
|
|
3,230 |
|
Share based compensation |
|
2,222 |
|
|
|
1,205 |
|
|
|
10,104 |
|
|
|
3,510 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts
receivable and other assets |
$ |
(12,012 |
) |
|
$ |
(10,656 |
) |
|
$ |
(26,017 |
) |
|
$ |
(33,211 |
) |
Increase in inventories |
|
(682 |
) |
|
|
(2,149 |
) |
|
|
(827 |
) |
|
|
(5,094 |
) |
Increase in derivative
asset |
|
- |
|
|
|
(7,000 |
) |
|
|
(15,370 |
) |
|
|
(7,000 |
) |
Increase in accounts payable
and other liabilities |
|
8,247 |
|
|
|
7,111 |
|
|
|
6,187 |
|
|
|
5,939 |
|
(Increase)/decrease in related
parties' balances, net |
|
(294 |
) |
|
|
(1,444 |
) |
|
|
2,253 |
|
|
|
(1,107 |
) |
Increase in deferred
revenue |
|
2,929 |
|
|
|
102,602 |
|
|
|
21,968 |
|
|
|
104,160 |
|
Unrealized foreign exchange
(gain)/loss |
|
(1 |
) |
|
|
(5 |
) |
|
|
1 |
|
|
|
- |
|
Net cash provided by
operating activities |
$ |
93,308 |
|
|
$ |
160,376 |
|
|
$ |
351,941 |
|
|
$ |
267,179 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of vessels and
intangibles |
$ |
- |
|
|
$ |
(36,000 |
) |
|
$ |
- |
|
|
$ |
(463,750 |
) |
Cash paid for vessel
expenditures |
|
(1,031 |
) |
|
|
(1,853 |
) |
|
|
(5,460 |
) |
|
|
(4,611 |
) |
Advances for vessel
acquisitions and other additions |
|
(937 |
) |
|
|
1,043 |
|
|
|
(3,772 |
) |
|
|
(3,276 |
) |
Cash paid for drydockings |
|
(4,741 |
) |
|
|
(11,660 |
) |
|
|
(24,457 |
) |
|
|
(19,226 |
) |
Net proceeds from sale of
vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16,514 |
|
Time deposits
withdrawal/(acquired) |
|
8,850 |
|
|
|
(7,900 |
) |
|
|
(650 |
) |
|
|
(7,900 |
) |
Net cash provided
by/(used in) investing activities |
$ |
2,141 |
|
|
$ |
(56,370 |
) |
|
$ |
(34,339 |
) |
|
$ |
(482,249 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of 2024
Notes |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
22,701 |
|
Repurchase of 2022 Notes,
including premium |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(239,183 |
) |
Repurchase of 2024 Notes,
including premium |
|
- |
|
|
|
- |
|
|
|
(119,871 |
) |
|
|
|
Proceeds from drawdown of
credit facilities and sale and leaseback |
|
- |
|
|
|
30,000 |
|
|
|
60,000 |
|
|
|
744,506 |
|
Proceeds from 2027 Secured
Notes |
|
- |
|
|
|
- |
|
|
|
350,000 |
|
|
|
|
Repayment of credit facilities
and sale and leaseback |
|
(49,976 |
) |
|
|
(37,835 |
) |
|
|
(167,056 |
) |
|
|
(115,502 |
) |
Repayment of refinanced debt,
including prepayment fees |
|
- |
|
|
|
- |
|
|
|
(276,671 |
) |
|
|
(152,862 |
) |
Deferred financing costs
paid |
|
- |
|
|
|
(1,885 |
) |
|
|
(9,655 |
) |
|
|
(13,790 |
) |
Net proceeds from offering of
Class A common shares, net of offering costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
67,549 |
|
Cancellation of Class A common
shares |
|
(5,101 |
) |
|
|
- |
|
|
|
(20,011 |
) |
|
|
(10,000 |
) |
Proceeds from offering of
Series B preferred shares, net of offering costs |
|
(17 |
) |
|
|
(20 |
) |
|
|
(17 |
) |
|
|
51,234 |
|
Class A common shares-dividend
paid |
|
(13,548 |
) |
|
|
(9,235 |
) |
|
|
(50,497 |
) |
|
|
(27,940 |
) |
Series B preferred
shares-dividend paid |
|
(2,384 |
) |
|
|
(2,384 |
) |
|
|
(9,536 |
) |
|
|
(8,263 |
) |
Net cash (used
in)/provided by financing activities |
$ |
(71,026 |
) |
|
$ |
(21,359 |
) |
|
$ |
(243,314 |
) |
|
$ |
318,450 |
|
Net increase in cash
and cash equivalents and restricted cash |
|
24,423 |
|
|
|
82,647 |
|
|
|
74,288 |
|
|
|
103,380 |
|
Cash and cash equivalents and
restricted cash at beginning of the period |
|
245,507 |
|
|
|
112,995 |
|
|
|
195,642 |
|
|
|
92,262 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
269,930 |
|
|
$ |
195,642 |
|
|
$ |
269,930 |
|
|
$ |
195,642 |
|
Supplementary Cash
Flow Information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
17,019 |
|
|
|
13,238 |
|
|
|
51,490 |
|
|
|
49,528 |
|
Cash received from interest
rate caps |
|
5,998 |
|
|
|
- |
|
|
|
9,245 |
|
|
|
- |
|
Non-cash investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Unpaid capitalized
expenses |
|
9,022 |
|
|
|
- |
|
|
|
9,022 |
|
|
|
- |
|
Unpaid drydocking
expenses |
|
11,447 |
|
|
|
5,799 |
|
|
|
11,447 |
|
|
|
5,799 |
|
Unpaid vessel
expenditures |
|
- |
|
|
|
6,257 |
|
|
|
- |
|
|
|
6,257 |
|
Acquisition of vessels and
intangibles |
|
- |
|
|
|
4,209 |
|
|
|
- |
|
|
|
96,344 |
|
Unpaid advances for vessels’
acquisitions and other additions |
|
- |
|
|
|
1,499 |
|
|
|
- |
|
|
|
1,499 |
|
Non-cash financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Unpaid offering costs |
|
283 |
|
|
|
- |
|
|
|
283 |
|
|
|
- |
|
Issuance of 2024 Notes for the
acquisition of vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
35,000 |
|
Premium on the 2024 Notes
issued for the acquisition of vessels |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,680 |
|
Unrealized (loss)/gain on
derivative assets |
|
(4,042 |
) |
|
|
227 |
|
|
|
31,221 |
|
|
|
227 |
|
Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438
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