First Quarter 2020
- Reported operating revenues(1) of
- Reported net income(2) of
- Generated
- On
- On
- Between
- Since
“As the spread of COVID-19 has had an increasing impact on global supply chains, the containership industry is taking active measures to maintain market discipline and adapt to changing market conditions. During this time, Global Ship Lease’s highest priority remains the health and safety of our seafarers and staff on shore. While the full extent of the economic impact of the pandemic and the shape of the subsequent recovery remain to be seen, our strong contract cover, consistent operational excellence, and close relationships with our customers position us well to weather the current storm. Once the global economy turns the corner, we expect that the contraction in vessel supply of mid-sized and smaller vessels in recent years and the negligible order book moving forward will position
SELECTED FINANCIAL DATA – UNAUDITED (thousands of
Three | Three | |
months ended | months ended | |
Operating Revenues (1) | 70,947 | 64,514 |
Operating Income | 20,396 | 28,796 |
Net Income (2) | 621 | 9,623 |
Adjusted EBITDA(3) | 39,550 | 40,098 |
Normalized Net Income(3) | 10,477 | 9,623 |
The results for the three months ended
(1) Operating Revenues are net of address commissions. 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-US Generally Accepted Accounting Principles (US GAAP) financial measures, as explained further in this press release, and are considered by
Operating Revenues and Utilization
The fleet generated operating revenues from fixed-rate time charters of
The table below shows our fleet utilization for the three months ended
Three months ended | Year ended | ||||||
Days | 2020 | 2019 | 2019 | 2018 | 2017 | 2016 | 2015 |
Ownership days | 4,016 | 3,420 | 14,326 | 7,675 | 6,570 | 6,588 | 6,893 |
Planned offhire - scheduled drydockings | (224) | 0 | (537) | (34) | (62) | (100) | (9) |
Unplanned offhire | (39) | (5) | (105) | (17) | (40) | (3) | (7) |
Idle time | (56) | 0 | (164) | (47) | 0 | 0 | (13) |
Operating days | 3,697 | 3,415 | 13,520 | 7,577 | 6,468 | 6,485 | 6,864 |
Utilization | 92.1% | 99.8% | 94.4% | 98.7% | 98.4% | 98.4% | 99.6% |
There were three regulatory drydockings in first quarter 2020 and two scrubber installations in progress and none in first quarter 2019. A further seven regulatory drydockings are due in 2020.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were
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 vessel is off-hire or idle and miscellaneous costs associated with a vessel’s voyage. Time charter and voyage expenses were
Depreciation and amortization
Depreciation and amortization for the three months ended
Vessel impairment losses
We approved a plan for the vessels Utrillo and GSL
General and Administrative Expenses
General and administrative expenses were
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was
Interest and other finance expenses (including premium on 2022 Notes)
Debt at
Debt at
Interest and other finance expenses for the three months ended
Interest income for the three months ended
Other income, net
Other income, net is mainly comprised of gains in bunkers following deliveries and redeliveries of vessels from charterers and passenger income. Other income, net was
Taxation
Taxation for the three months ended
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the three months ended
Net Income Available to Common Shareholders
Net income for the three months ended
Fleet
The following table provides information about our fleet of 45 ships. One ship was delivered in
Vessel Name | Capacity in TEUs |
Lightweight (tons) |
Year Built |
Charterer | Earliest Charter Expiry Date |
Latest Charter Expiry Date |
Daily Charter Rate $ |
CMA CGM Thalassa | 11,040 | 38,577 | 2008 | 4Q25 | 1Q26 | 47,200 | |
UASC Al Khor(1) | 9,115 | 31,764 | 2015 | Hapag-Lloyd | 1Q22 | 2Q22 | 34,000 |
Anthea Y(1) | 9,115 | 31,890 | 2015 | COSCO | 2Q20 | 2Q20 | 39,200 |
Maira XL(1) | 9,115 | 31,820 | 2015 | COSCO | 3Q20 | 3Q20 | 39,200 |
MSC |
8,603 | 34,325 | 2005 | MSC | 2Q24 | 3Q24 | Confidential |
MSC |
8,603 | 34,305 | 2004 | MSC | 2Q24 | 3Q24 | Confidential |
GSL Ningbo | 8,603 | 34,340 | 2004 | Maersk | 3Q20 | 4Q20 | 18,000 |
GSL Eleni | 7,847 | 29,261 | 2004 | Maersk | 3Q24 | 4Q24(3) | Confidential |
GSL Kalliopi | 7,847 | 29,105 | 2004 | Maersk | 4Q22 | 4Q24(3) | Confidential |
GSL Grania | 7,847 | 29,190 | 2004 | Maersk | 3Q22 | 4Q24(3) | Confidential |
Mary(1) | 6,927 | 23,424 | 2013 | 3Q23 | 4Q23 | 25,910 | |
Kristina(1) | 6,927 | 23,421 | 2013 | 2Q24 | 3Q24 | 25,910 | |
Katherine (1) | 6,927 | 23,403 | 2013 | 1Q24 | 2Q24 | 25,910 | |
Alexandra (1) | 6,927 | 23,348 | 2013 | 1Q24 | 2Q24 | 25,910 | |
Alexis (1) | 6,882 | 23,919 | 2015 | 1Q24 | 2Q24 | 25,910 | |
Olivia I (1) | 6,882 | 23,864 | 2015 | 1Q24 | 2Q24 | 25,910 | |
CMA CGM Berlioz | 6,621 | 26,776 | 2001 | 2Q21 | 4Q21 | 34,000 | |
Agios Dimitrios | 6,572 | 24,746 | 2011 | MSC | 4Q23 | 1Q24 | 20,000 |
New Purchase One | 6,422 | 27,954 | 2002 | Confidential | 2Q20 | 3Q20 | Confidential (4) |
New Purchase Two | 6,422 | 28,070 | 2002 | Confidential | 2Q20 | 4Q20 | Confidential (4) |
GSL Vinia | 6,080 | 23,737 | 2004 | Confidential | 2Q24 | 1Q25 | Confidential (5) |
GSL Christel Elisabeth | 6,080 | 23,745 | 2004 | Confidential | 2Q24 | 1Q25 | Confidential (5) |
5,936 | 25,010 | 2000 | Maersk | 2Q22 | 3Q23(6) | 12,500(6) | |
Dimitris Y | 5,936 | 25,010 | 2000 | ZIM | 2Q21 | 3Q21 | 14,500 |
Ian H | 5,936 | 25,128 | 2000 | ZIM | 1Q21 | 2Q21 | 14,500 |
Dolphin II | 5,095 | 20,596 | 2007 | Feedertech | 3Q20 | 4Q20 | 12,500 |
Orca I | 5,095 | 20,633 | 2006 | Maersk | 2Q20(7) | 2Q21(7) | 9,000(7) |
CMA CGM Alcazar | 5,089 | 20,087 | 2007 | 4Q20 | 2Q21 | 33,750 | |
CMA CGM Château d’If | 5,089 | 19,994 | 2007 | 4Q20 | 2Q21 | 33,750 | |
CMA CGM Jamaica | 4,298 | 17,272 | 2006 | 3Q22 | 1Q23 | 25,350 | |
CMA CGM Sambhar | 4,045 | 17,429 | 2006 | 3Q22 | 1Q23 | 25,350 | |
4,045 | 17,428 | 2006 | 3Q22 | 1Q23 | 25,350 | ||
GSL Valerie | 2,824 | 11,971 | 2005 | MSC | 3Q20 | 3Q20 | 9,000 |
Athena | 2,762 | 13,538 | 2003 | MSC | 1Q21 | 1Q21 | 9,000 |
Maira | 2,506 | 11,453 | 2000 | MSC | 3Q20 | 3Q20 | 8,250 (8) |
Nikolas | 2,506 | 11,370 | 2000 | MSC | 3Q20 | 3Q20 | 9,000 |
Newyorker | 2,506 | 11,463 | 2001 | MSC | 4Q20 | 1Q21 | 9,000 |
La Tour | 2,272 | 11,742 | 2001 | MSC | 4Q20 | 4Q20 | 8,800 |
Manet | 2,272 | 11,727 | 2001 | COSCO | 2Q20 | 2Q20 | 9,900 |
GSL |
2,262 | 11,676 | 1999 | Confidential | 2Q20 | 2Q20 | Confidential (9) |
Utrillo | 2,262 | 11,676 | 1999 | 1Q20 | 1Q20 | 8,500 (10) | |
GSL Keta | 2,207 | 11,731 | 2003 | OOCL | 3Q20 | 3Q20 | 9,400 (11) |
Julie | 2,207 | 11,731 | 2002 | 2Q20 | 2Q20 | 8,500 | |
Kumasi | 2,207 | 11,791 | 2002 | 4Q20 | 1Q21 | 9,800 | |
2,207 | 11,731 | 2002 | 4Q20 | 1Q21 | 9,800 |
(1) Modern design, high reefer capacity fuel efficient vessel |
(2) Five-year charters which commenced 2Q2019. Approximately |
(3) GSL Eleni delivered 3Q2019 and is chartered for five years; GSL Kalliopi (delivered 4Q2019) and GSL Grania (delivered 3Q2019) are chartered for three years plus two successive periods of one year at the option of the charterer. Approximately |
(4) New Purchase One was delivered in late |
(5) GSL Vinia and GSL Christel Elisabeth delivered in |
(6) 12-month extension at charterer’s option callable in 2Q2022, at an increased rate of |
(7) 12-24 month charter (which commenced in |
(8) Rate increases to |
(9) A new short-term charter, on confidential terms, commenced on |
(10) Charter with |
(11) Charter extended from |
Conference Call and Webcast
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 9988266
Please dial in at least 10 minutes prior to
(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the call will be available through
Annual Report on Form 20-F
The Company’s Annual Report for 2019 is on file with the
About
Adjusted to include all charters agreed up to
Reconciliation of Non-
A. Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking costs and impairment losses. Adjusted EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its 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 US 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 Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands of
Three | Three | ||||
months | months | ||||
ended | ended | ||||
2020 | 2019 | ||||
Net income available to common shareholders | 621 | 9,623 | |||
Adjust: | Depreciation and amortization | 11,548 | 10,758 | ||
Vessel impairment losses | 7,585 | - | |||
Interest income | (638 | ) | (417 | ) | |
Interest expense | 19,555 | 19,352 | |||
Income taxes | - | 16 | |||
Earnings allocated to preferred shares | 879 | 766 | |||
Adjusted EBITDA | 39,550 | 40,098 |
B. Normalized net income
Normalized net income represents net income adjusted for impairment charges and the premium paid on redemption of 2022 notes. Normalized net income is a non-GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net loss for items that do not affect operating performance or operating cash generated. Normalized net income is not defined in US 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 |
|||
Three | Three | ||
months | months | ||
ended | ended | ||
2020 | 2019 | ||
Net income available to common shareholders | 621 | 9,623 | |
Adjust: | Impairment charges | 7,585 | - |
Premium paid on redemption of 2022 Notes | 2,271 | - | |
Normalized net income | 10,477 | 9,623 |
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide
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;
- the financial condition of our charterers, particularly
CMA CGM , our principal charterer and main source of operating revenue, and their ability to pay charterhire in accordance with the charters; - Global Ship Lease’s financial condition and liquidity, including its level of indebtedness or ability to obtain additional financing to fund capital expenditures, vessel 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 facility;
- 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 vessel operation, including piracy, discharge of pollutants and vessel 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 vessel employment arrangements;
- 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.
Interim Unaudited Consolidated Balance Sheets
(Expressed in thousands of
As of, | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 86,961 | $ | 138,024 | |||
Restricted cash | 4,569 | 3,909 | |||||
Accounts receivable, net | 2,252 | 2,350 | |||||
Inventories | 5,991 | 5,595 | |||||
Prepaid expenses and other current assets | 8,438 | 8,132 | |||||
Due from related parties | 6,018 | 3,860 | |||||
Total current assets | $ | 114,229 | $ | 161,870 | |||
NON - CURRENT ASSETS | |||||||
Vessels in operation | $ | 1,165,052 | $ | 1,155,586 | |||
Advances for vessels acquisitions and other additions | 9,620 | 10,791 | |||||
Intangible assets - charter agreements | 486 | 1,467 | |||||
Deferred charges, net | 17,576 | 16,408 | |||||
Restricted cash, net of current portion | 6,204 | 5,703 | |||||
Total non - current assets | 1,198,938 | 1,189,955 | |||||
TOTAL ASSETS | $ | 1,313,167 | $ | 1,351,825 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 10,672 | $ | 9,052 | |||
Accrued liabilities | 27,847 | 22,916 | |||||
Current portion of long - term debt | 89,841 | 87,532 | |||||
Deferred revenue | 6,678 | 9,987 | |||||
Due to related parties | 333 | 109 | |||||
Total current liabilities | $ | 135,371 | $ | 129,596 | |||
LONG-TERM LIABILITIES | |||||||
Long - term debt, net of current portion and deferred financing costs | $ | 760,412 | $ | 809,357 | |||
Intangible liability-charter agreements | 5,968 | 6,470 | |||||
Total non - current liabilities | 766,380 | 815,827 | |||||
Total liabilities | 901,751 | 945,423 | |||||
Commitments and Contingencies | |||||||
SHAREHOLDERS' EQUITY | |||||||
Class A common shares - authorized 214,000,000 shares with a 17,556,738 shares issued and outstanding (2019 – 17,556,738 shares) |
175 | 175 | |||||
Series B Preferred Shares - authorized 44,000 shares with a 16,074 shares issued and outstanding (2019 – 14,428 shares) |
- | - | |||||
Series C Preferred Shares - authorized 250,000 shares with a 250,000 shares issued and outstanding (2019 - 250,000 shares) |
3 | 3 | |||||
Additional paid in capital | 569,979 | 565,586 | |||||
Accumulated deficit | (158,741 | ) | (159,362 | ) | |||
Total shareholders' equity | 411,416 | 406,402 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,313,167 | 1,351,825 | |||||
Interim Unaudited Consolidated Statements of Operations
(Expressed in thousands of
Three months ended |
|||||||
2020 | 2019 | ||||||
OPERATING REVENUES | |||||||
Time charter revenues (include related party revenues of |
$ | 70,947 | $ | 64,514 | |||
OPERATING EXPENSES: | |||||||
Vessels operating expenses (include related party vessels operating expenses of |
25,512 | 20,955 | |||||
Time charter and voyage expenses (include related party time charter and voyage expenses of |
3,469 | 1,551 | |||||
Depreciation and amortization | 11,548 | 10,758 | |||||
Vessel impairment losses | 7,585 | — | |||||
General and administrative expenses | 2,437 | 2,454 | |||||
Operating Income | 20,396 | 28,796 | |||||
Interest income | 638 | 417 | |||||
Interest and other financial expense (including premium on 2022 Notes) | (19,555 | ) | (19,352 | ) | |||
Other income, net | 21 | 544 | |||||
Total non-operating expense | (18,896 | ) | (18,391 | ) | |||
Income before income taxes | 1,500 | 10,405 | |||||
Income taxes | — | (16 | ) | ||||
Net Income | $ | 1,500 | $ | 10,389 | |||
Earnings allocated to Series B Preferred Shares | (879 | ) | (766 | ) | |||
Net Income available to Common Shareholders | $ | 621 | $ | 9,623 | |||
Earnings per Share | |||||||
Weighted average number of Class A common shares outstanding | |||||||
Basic | 17,556,738 | 9,932,664 | |||||
Diluted | 17,682,453 | 10,022,041 | |||||
Net Earnings per Class A common share | |||||||
Basic | $ | 0.02 | $ | 0.42 | |||
Diluted | $ | 0.02 | $ | 0.42 | |||
Interim Unaudited Consolidated Statements of Cash Flows
(Expressed in thousands of
Three months ended |
|||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 1,500 | $ | 10,389 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | $ | 11,548 | $ | 10,758 | |||
Vessel Impairment losses | 7,585 | - | |||||
Amortization of deferred financing costs | 927 | 745 | |||||
Amortization of original issue discount/premium on repurchase of notes | 2,139 | 202 | |||||
Amortization of intangible liability/asset-charter agreements | 479 | 468 | |||||
Share based compensation | 429 | 429 | |||||
Changes in operating assets and liabilities: | |||||||
Increase in accounts receivable and other assets | $ | (208 | ) | $ | (94 | ) | |
(Increase)/decrease in inventories | (396 | ) | 442 | ||||
Increase in accounts payable and other liabilities | 6,595 | 3,719 | |||||
Decrease in related parties' balances, net | (1,934 | ) | (2,038 | ) | |||
Decrease in deferred revenue | (3,309 | ) | (481 | ) | |||
Unrealized foreign exchange gain | - | (5 | ) | ||||
Net cash provided by operating activities | $ | 25,355 | $ | 24,534 | |||
Cash flows from investing activities: | |||||||
Acquisition of vessels | $ | (23,060 | ) | $ | - | ||
Cash paid for vessel expenditure | (1,108 | ) | (637 | ) | |||
Advances for vessel acquisitions and other additions | (200 | ) | - | ||||
Cash paid for drydockings | (4,072 | ) | (50 | ) | |||
Net cash used in investing activities | $ | (28,440 | ) | $ | (687 | ) | |
Cash flows from financing activities: | |||||||
Proceeds from issuance of 2024 Notes | $ | 19,193 | $ | - | |||
Repurchase of 2022 Notes, including premium | (57,197 | ) | - | ||||
Proceeds from drawdown of credit facilities | 47,000 | - | |||||
Repayment of credit facilities | (13,452 | ) | (6,226 | ) | |||
Repayment of refinanced debt | (44,366 | ) | - | ||||
Deferred financing costs paid | (880 | ) | - | ||||
Proceeds from offering of Class A common shares, net of offering costs | (39 | ) | - | ||||
Proceeds from offering of Series B preferred shares, net of offering costs | 3,803 | - | |||||
Series B Preferred Shares-dividends paid | (879 | ) | (766 | ) | |||
Net cash used in financing activities | $ | (46,817 | ) | $ | (6,992 | ) | |
Net (decrease)/increase in cash and cash equivalents and restricted cash | (49,902 | ) | 16,855 | ||||
Cash and cash equivalents and restricted cash at beginning of the period | 147,636 | 90,072 | |||||
Cash and cash equivalents and restricted cash at end of the period | $ | 97,734 | $ | 106,927 | |||
Supplementary Cash Flow Information: | |||||||
Cash paid for interest | 11,189 | 9,563 | |||||
Non-cash Investing activities: | |||||||
Unpaid drydocking expenses | 2,037 | - | |||||
Unpaid vessel additions | 3,436 | - | |||||
Investor and Media Contacts:
646-673-9701
or
212-477-8438
Source: Global Ship Lease, Inc.