UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2023
Commission File Number: 001-34153
Global Ship Lease, Inc.
(Translation of registrant's name into English)
c/o Global Ship Lease Services Limited
25 Wilton Road
London SW1V 1LW
United Kingdom
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐.
Note: Regulation S-T Rule 101(b)(1) only permits the submission
in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐.
Note: Regulation S-T Rule 101(b)(7) only permits the submission
in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been
distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
Attached as Exhibit 99.1 to this Report
on Form 6-K is a copy of the press release of Global Ship Lease, Inc. (the “Company”), dated August 3, 2023, reporting the Company’s financial results for the three and six months ended June 30, 2023.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
GLOBAL SHIP LEASE, INC.
|
||
|
(registrant)
|
||
|
Dated: August 3, 2023
|
By:
|
/s/ Ian J. Webber
|
|
Ian J. Webber
|
||
|
Chief Executive Officer
|
||
Exhibit 99.1
Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438
Global Ship Lease Reports Results for the Second Quarter of 2023
Recent acquisitions come online, interest rate risk fully hedged, credit rating and outlook upgrades, sustainable quarterly dividend of $0.375 per common share
LONDON, ENGLAND – August 3, 2023 - 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 six month periods ended June 30, 2023.
Second Quarter 2023 and Year to Date Highlights
- Reported operating revenue of $162.1 million for the second quarter 2023, up 4.9% from $154.5 million for the prior year period. For the six months ended June 30, 2023, operating revenue was $321.4 million, up 4.3%
from $308.1 million in first half 2022.
- Reported net income available to common shareholders of $75.4 million for the second quarter of 2023, an increase of 41.2% on net income of $53.4 million for the prior year period. Normalized net income (a non-U.S.
GAAP financial measure, described below) for the same period was $74.0 million, up 11.8% on Normalized net income of $66.2 million for the prior year period. For the six months ended June 30, 2023, net income available to common shareholders was
$147.6 million, an increase of 21.8% on net income of $121.2 million for the prior year period. Normalized net income for the same period was $149.5 million, up 12.0% on Normalized net income for the prior year period of $133.5 million.
- Generated $108.2 million of Adjusted EBITDA (a non-U.S. GAAP financial measure, described below) for the second quarter of 2023, up 12.0% on Adjusted EBITDA of $96.6 million for the prior year period. Adjusted EBITDA for
the six months ended June 30, 2023 was $213.1 million, up 14.0% on Adjusted EBITDA of $187.0 million for the prior year period.
- Earnings per share for the three months ended June 30, 2023 was $2.13, up 44.9% on the earnings per share of $1.47 for the prior year period. Normalized earnings per share for the three months ended June 30, 2023 was
$2.09, up 14.8% on the Normalized earnings per share of $1.82 for the prior year period. Earnings per share for the six months ended June 30, 2023 was $4.15, up 25.4% on the earnings per share of $3.31 for the prior year period. Normalized earnings
per share for the six months ended June 30, 2023 was $4.21, up 15.3% on the Normalized earnings per share of $3.65 for the prior year period.
- Declared a dividend of $0.375 per Class A common share for the second quarter of 2023 to be paid on September 4, 2023 to common shareholders of record as of August 23, 2023. Paid a dividend of $0.375 per Class A
common share for the first quarter of 2023 on June 2, 2023.
- On May 8, 2023, announced an agreement to purchase four 8,544 TEU vessels for an aggregate purchase price of $123.3 million. All vessels were delivered during the second quarter of 2023 and are chartered to a leading
liner operator for a minimum firm period of 24 months, followed by a 12-month extension at the charterer’s option. The purchase price was financed by a new credit facility for a total of $76.0 million and cash on hand. The credit facility is priced
at SOFR + 3.50%, with SOFR fully covered by the Company’s pre-existing interest rate cap at 0.64%.
- On June 20, 2023, announced updates from three leading credit rating agencies. The Company’s Corporate Family Rating has been upgraded to Ba3 from B1, with a stable outlook, by Moody’s Investor Service. In addition,
S&P Global Ratings revised the Company’s outlook to positive and affirmed its long-term issued credit rating at ‘BB’, and the Kroll Bond Rating Agency affirmed both the Company’s BB corporate rating with a stable outlook, as well as the
BBB/stable investment grade rating and outlook for the $350.0 million 5.69% Senior Secured Notes due 2027.
Page 1
- Between January 1, 2023, and June 30, 2023, added $211.9 million of firm contracted revenues to forward charter cover, calculated on the basis of the median firm periods of the respective charters. For vessels in our
pre-existing fleet, new charter fixtures or extensions were agreed on eight ships between 2,200 and 3,500 TEU, charter extensions were exercised for two 7,800 TEU ships, a forward fixture was agreed for one ECO 9,100 TEU ship, and four 8,544 TEU
vessels were purchased with charters attached; firm charter terms range from a few months to two years.
- 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. During second quarter of 2023 a further 385,064 Class A common shares were purchased for an investment of $7.0 million. Re-purchase prices in 2023 ranged between $16.12 and $18.69 per common share, with an average price
of $17.56. A total of 2,027,882 Class A common shares have been repurchased under the Buy-back Authorization, for approximately $37.0 million. The Board has authorized a further $40.0 million for such share repurchases for a total of approximately
$43.0 million of authorization capacity remaining.
George Youroukos, Executive Chairman of Global Ship Lease, stated: “In the second quarter, GSL continued to benefit from our strong contract cover at attractive rates, even as prevailing market charter rates and vessel
values normalize. Chartering activity in the market has remained modest by historical standards, with limited capacity coming available outside the feeder segment, and idle capacity at quarter-end hovering around 1%. While this limited liquidity and
the current macroeconomic uncertainty make it difficult to predict the market over the quarters ahead, charters agreed in the second quarter have shown some stability at rates that compare favorably to those that prevailed before the COVID-driven
rate spike of 2021 and 2022. Mid-sized and smaller vessels such as those that make up the GSL fleet form the backbone of liner companies’ global networks, and we remain in active discussions with liners on additional opportunities to expand our
current forward charter cover of $1.97 billion over 2.3 years, with only a limited number of open days through the end of 2024.
“Set against the backdrop of reduced asset prices for the high-specification, workhorse vessels that make up our fleet, we were able to utilize our strong balance sheet to purchase, finance on competitive terms, and
take delivery of four post-panamax containerships with attractive charters attached; our first vessel acquisitions since before the period of sharply elevated asset values. Should current trends be sustained, we expect to see an increased number of
potential purchase opportunities come into the market over time. We intend to maintain the disciplined and risk-averse approach to acquisitions that has served GSL well, focusing on secondhand containerships with cash flow visibility, attractive
upside potential, and limited downside risk. Our strong balance sheet and contracted cash flows provide us with a strong platform from which to selectively pursue value-accretive growth opportunities, while also supporting our attractive dividend and
active share buy-back program.”
Ian Webber, Chief Executive Officer, commented: “As evidenced by the recent upgrades and supportive commentary from the credit ratings agencies, our efforts to deleverage, reduce our cost of debt, and increase our
overall financial strength and resilience have borne fruit, both in terms of our credit profile and our core business as a containership owner and lessor. Our recent acquisitions have reinforced these positive trends, as we raised debt at a margin of
just 3.50%, and made use of the headroom under our existing 0.64% SOFR interest rate cap to conclude our recent vessel acquisitions at a highly competitive cost of capital. With long-term visibility on our contracted cash flows, a diversified
portfolio of financially strong counterparties, floating interest rate exposure fully capped, and our proven ability to identify and execute accretive transactions, we remain well positioned to continue creating value for our shareholders through our
disciplined and dynamic allocation of capital, including the use of the recently authorized additional $40 million of share buy-back capacity.”
Page 2
SELECTED FINANCIAL DATA – UNAUDITED
(thousands of U.S. dollars)
|
Three
months
ended
June 30,
2023
|
|
|
Three
months
ended
June 30,
2022
|
|
|
Six
months
ended
June 30,
2023
|
|
|
Six
months
ended
June 30,
2022
|
|||||||
|
Operating Revenue (1)
|
162,080
|
154,456
|
321,371
|
308,087
|
||||||||||||
|
Operating Income
|
85,109
|
83,586
|
170,207
|
167,326
|
||||||||||||
|
Net Income (2)
|
75,392
|
53,351
|
147,612
|
121,157
|
||||||||||||
|
Adjusted EBITDA (3)
|
108,166
|
96,579
|
213,072
|
186,959
|
||||||||||||
|
Normalized Net Income (3)
|
73,975
|
66,186
|
149,539
|
133,479
|
||||||||||||
(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 and the effect of the straight lining of time charter modifications. 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.
Operating Revenue and Utilization
Operating revenue derived from fixed-rate, mainly long-term, time-charters was $162.1 million in the three months ended June 30, 2023, up $7.6 million (or 4.9%) on operating revenue of $154.5 million for the prior year
period. The period-on-period increase in operating revenue was principally due to (i) charter renewals at higher rates on a number of vessels and (ii) the acquisition of the four new vessels which were delivered in the second quarter. The increase
was partially offset by $8.9 million reduction in the amortization of intangible liabilities arising on below-market charters attached to certain vessel additions. There were 328 days of offhire in the second quarter of 2023 of which 236 were for
scheduled drydockings, compared to 266 days of offhire in the prior year period of which 82 were for scheduled drydockings. Utilization for the second quarter of 2023 was 94.5% compared to utilization of 95.5% in the same period of the prior year.
For the six months ended June 30, 2023, operating revenue was $321.4 million, up $13.3 million (or 4.3%) on operating revenue of $308.1 million in the comparative period, mainly due to the factors noted above.
The table below shows fleet utilization for the three and six months ended June 30, 2023 and 2022, and for the years ended December 31, 2022, 2021, 2020 and 2019.
Page 3
|
Three months ended
|
Six months ended
|
Year ended
|
||||||||||||||||||||||||||||||
Days
|
June 30,
2023
|
June 30,
2022
|
June 30,
2023
|
June 30,
2022
|
Dec 31,
2022
|
Dec 31,
2021
|
Dec 31,
2020
|
Dec 31,
2019
|
||||||||||||||||||||||||
|
Ownership days
|
5,930
|
5,915
|
11,773
|
11,765
|
23,725
|
19,427
|
16,044
|
14,326
|
||||||||||||||||||||||||
|
Planned offhire - scheduled drydock
|
(236
|
)
|
(82
|
)
|
(436
|
)
|
(309
|
)
|
(581
|
)
|
(752
|
)
|
(687
|
)
|
(537
|
)
|
||||||||||||||||
|
Unplanned offhire
|
(72
|
)
|
(154
|
)
|
(174
|
)
|
(236
|
)
|
(460
|
)
|
(260
|
)
|
(95
|
)
|
(105
|
)
|
||||||||||||||||
|
Idle time
|
(20
|
)
|
(30
|
)
|
(20
|
)
|
(30
|
)
|
(30
|
)
|
(88
|
)
|
(338
|
)
|
(164
|
)
|
||||||||||||||||
|
Operating days
|
5,602
|
5,649
|
11,143
|
11,190
|
22,654
|
18,327
|
14,924
|
13,520
|
||||||||||||||||||||||||
|
Utilization
|
94.5
|
%
|
95.5
|
%
|
94.6
|
%
|
95.1
|
%
|
95.5
|
%
|
94.3
|
%
|
93.0
|
%
|
94.4
|
%
|
||||||||||||||||
In 2023, we anticipate four further regulatory drydockings, including for three of the four recently purchased ships.
Vessel Operating Expenses
Vessel operating expenses, which are primarily the costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were up 4.8% to $43.4 million for the second quarter of 2023, compared
to $41.4 million in the comparative period. The increase of $2.0 million was mainly due to (i) increased crew expenses mainly due to global inflation and the limited supply of crew and (ii) increased cost of
insurances due to premium increases. The average cost per ownership day in the quarter was $7,320, compared to $7,006 for the prior year period, up $314 per day, or 4.5%. For the six months ended June 30,
2023, vessel operating expenses were $86.2 million, or an average of $7,319 per day, compared to $80.9 million in the comparative period, or $6,875 per day, an increase of $444 per ownership day, or 6.5%.
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 $6.7 million for the second quarter of 2023, compared to $5.1 million in the second quarter of 2022. The increase was mainly due to increased commissions on charter renewals at higher rates, higher costs
for bunker fuel for owner’s account due to increase in off hire days and additional voyage administration costs and additional operational requests from charterers.
For the six months ended June 30, 2023, time charter and voyage expenses were $12.1 million, or an average of $1,031 per day, compared to $9.5 million in the comparative period, or $804 per day, an increase of $227 per
ownership day, or 28.2% mainly to the factors noted above.
Depreciation and Amortization
Depreciation and amortization for the second quarter of 2023 was $22.2 million, compared to $20.3 million in the second quarter of 2022. The increase was mainly due to the 14 drydockings completed after June 30, 2022.
Depreciation for the six months ended June 30, 2023 was $43.4 million, compared to $40.1 million in the comparative period, with the increase being due to the 14 drydockings completed after June 30, 2022 and the
acquisition of the four vessels delivered during the second quarter of 2023.
General and Administrative Expenses
General and administrative expenses were $4.7 million in the second quarter of 2023, compared to $4.1 million in the second quarter of 2022. The increase was mainly due to higher stock-based compensation expense and a
one-off expense occurred in second quarter of 2023 due to social security costs related to settlement of shares under the Omnibus Incentive Plan. The average general and administrative expense per ownership day for the second quarter of 2023 was
$794, compared to $685 in the comparative period, an increase of $109 or 15.9%.
Page 4
For the six months ended June 30, 2023, general and administrative expenses were $9.5 million, compared to $10.3 million in the comparative period mainly due to lower stock-based compensation expense in the first
quarter of 2023 and a one-off expense that occurred in first quarter of 2022 due to social security charges related to settlement of shares under the Omnibus Incentive plan. The average general and administrative expense per ownership day for the
six-month period ended June 30, 2023 was $807, compared to $875 in the comparative period, a decrease of $68 or 7.8%.
Adjusted EBITDA
Adjusted EBITDA (a non-GAAP financial measure) was $108.2 million for the second quarter of 2023, up from $96.6 million for the second quarter of 2022, with the net increase being mainly due to increased revenue from
charter renewals at higher rates.
Adjusted EBITDA for the six months ended June 30, 2023 was $213.1 million, compared to $187.0 million for the comparative period, an increase of $26.1 million or 14.0%.
Interest Expense and Interest Income
Debt as at June 30, 2023 totaled $925.3 million, comprising $491.3 million of secured bank debt collateralized by vessels, $310.6 million of 2027 Secured Notes collateralized by vessels, and $123.4 million under sale
and leaseback financing transactions. As of June 30, 2023, five vessels were unencumbered.
Debt as at June 30, 2022 totaled $1,125.7 million, comprising $526.7 million of secured bank debt collateralized by vessels, $350.0 million of 2027 USPP Notes collateralized by vessels, $160.0 million under sale and
leaseback financing transactions and $89.0 million of unsecured indebtedness on our 2024 Notes which were fully redeemed in July 2022. As of June 30, 2022, five of our vessels were unencumbered.
Interest and other finance expenses for the second quarter of 2023 was $10.9 million, down from $30.0 million for the second quarter of 2022. The decrease in interest and other finance expenses was mainly due to (i) a
prepayment fee and non-cash write off of deferred financing charges of $14.1 million on the full repayment of Hayfin Credit Facility, (ii) the non-cash write off of deferred financing charges of $0.3 million on the full repayment of our Hellenic
Credit Facility and (iii) $0.6 million premium paid on the redemption in April of $28.5 million of 2024 Notes, all of which took place in the second quarter 2022. The blended cost of our debt, taking into account the interest rate caps, has increased
from approximately 4.51% for the second quarter 2022 to 4.53% for the second quarter 2023 due to the new credit facility for the four new vessels. Three month Libor increased in the second quarter of 2023 to 5.55% as compared to 1.30% in the prior
year period.
Interest and other finance expenses for the six months ended June 30, 2023 was $22.0 million, down from $48.7 million for the comparative period. The decrease is mainly due to (i) the 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, (ii) the non-cash write off of deferred financing charges of $0.3 million on the full repayment of our Hellenic Credit Facility and
(iii) the $0.6 million premium paid on the redemption in April of $28.5 million of 2024 Notes and (iv) a prepayment fee and the associated non-cash write off of deferred financing charges of $4.1 million on the full repayment of our Blue Ocean Junior
Credit Facility, all of which took place in the six months ended June 30 2022.
Interest income for the second quarter 2023 was $2.6 million, up from $0.3 million for the second quarter of 2022. Interest income for the six months period ended June 30, 2023 was $4.4 million, compared to $0.5
million for the comparative period.
Other (expenses)/income, Net
Other expenses, net was $0.4 million in the second quarter 2023, compared to $0.2 million in the second quarter of 2022. Other income, net was $1.2 million for the six month period ended June 30, 2023, compared to $0.2
million for the comparative period.
Page 5
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 positive fair value adjustment of $1.4 million for the second quarter of 2023 was recorded through our statement of income. The negative fair value adjustment for the six month
period ended June 30, 2023 amounted to $1.4 million. Interest rate caps have automatically transited to 1 month Compounded SOFR on July 1st, 2023 at a level of 0.64%.
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the second quarter of 2023 was $2.4 million, the same as in the second quarter 2022. The cost was $2.4 million in both quarters of 2023 and
2022 since there were no additional Series B Preferred Shares issued under our at-the-market program. The cost for the six months ended June 2023 was $4.8 million, the same as for the six months ended June 30, 2022.
Net Income Available to Common Shareholders
Net income available to common shareholders for the three months ended June 30, 2023 was $75.4 million. Net income available to common shareholders for the three months ended June 30, 2022 was $53.4 million.
Earnings per share for the three months ended June 30, 2023 was $2.13, an increase of 44.9% from the earnings per share for the comparative period, which was $1.47.
For the six months ended June 30, 2023, net income available to common shareholders was $147.6 million. Net income available to common shareholders for the six months ended June 30, 2022 was $121.2 million.
Earnings per share for the six months ended June 30, 2023 was $4.15, an increase of 25.4% from the earnings per share for the comparative period, which was $3.31.
Normalized net income (a non-GAAP financial measure) for the three months ended June 30, 2023, was $74.0 million. Normalized net income for the three months ended June 30, 2022 was $66.2 million. Normalized net income
for the six months ended June 30, 2023 was $149.5 million, as compared to $133.5 for the comparative period.
Normalized earnings per share (a non-GAAP financial measure) for the three months ended June 30, 2023 was $2.09, an increase of 14.8% from Normalized earnings per share for the comparative period, which was $1.82.
Normalized earnings per share for the six months ended June 30, 2023 was $4.21, an increase of 15.3% from Normalized earnings per share for the comparative period, which was $3.65.
Fleet
As at June 30, 2023, we had 68 containerships in our fleet.
Page 6
|
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
|
2Q27
|
4Q27
|
65,000
|
||||||||||||||||||
|
Anthea Y (1)
|
9,115
|
31,890
|
2015
|
COSCO (3)
|
3Q25
|
4Q25
|
(3)
|
38,000
|
(3)
|
||||||||||||||||
|
ZIM Xiamen (ex Maira XL)(1)
|
9,115
|
31,820
|
2015
|
ZIM
|
3Q27
|
4Q27
|
65,000
|
||||||||||||||||||
|
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)
|
||||||||||||||||
|
tbr GSL Alexandra
|
8,544
|
37,777
|
2004
|
Confidential
|
3Q25
|
3Q26
|
Confidential
|
(6) |
|||||||||||||||||
|
tbr GSL Sofia
|
8,544
|
37,777
|
2003
|
Confidential
|
3Q25
|
3Q26
|
Confidential
|
(6) | |||||||||||||||||
|
tbr GSL Effie
|
8,544
|
37,777
|
2003
|
Confidential
|
3Q25
|
3Q26
|
Confidential
|
(6) | |||||||||||||||||
|
GSL Lydia
|
8,544
|
37,777
|
2003
|
Confidential
|
2Q25
|
4Q26
|
Confidential
|
(6) | |||||||||||||||||
|
GSL Eleni
|
7,847
|
29,261
|
2004
|
Maersk
|
3Q24
|
1Q25
|
(7)
|
16,500
|
(7)
|
||||||||||||||||
|
GSL Kalliopi
|
7,847
|
29,105
|
2004
|
Maersk
|
3Q24
|
4Q24
|
(7)
|
18,900
|
(7)
|
||||||||||||||||
|
GSL Grania
|
7,847
|
29,190
|
2004
|
Maersk
|
3Q24
|
1Q25
|
(7)
|
17,750
|
(7)
|
||||||||||||||||
|
Mary (1)
|
6,927
|
23,424
|
2013
|
CMA CGM (8)
|
4Q28
|
1Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
Kristina (1)
|
6,927
|
23,421
|
2013
|
CMA CGM (8)
|
3Q29
|
3Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
Katherine (1)
|
6,927
|
23,403
|
2013
|
CMA CGM (8)
|
1Q29
|
2Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
Alexandra (1)
|
6,927
|
23,348
|
2013
|
CMA CGM (8)
|
2Q29
|
3Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
Alexis (1)
|
6,882
|
23,919
|
2015
|
CMA CGM (8)
|
2Q29
|
3Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
Olivia I (1)
|
6,882
|
23,864
|
2015
|
CMA CGM (8)
|
2Q29
|
2Q31
|
(8)
|
25,910
|
(8)
|
||||||||||||||||
|
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
|
(9)
|
|||||||||||||||||
|
GSL Arcadia
|
6,008
|
24,858
|
2000
|
Maersk
|
2Q24
|
1Q26
|
18,600
|
(9)
|
|||||||||||||||||
|
GSL Violetta
|
6,008
|
24,873
|
2000
|
Maersk
|
4Q24
|
4Q25
|
18,600
|
(9)
|
|||||||||||||||||
|
GSL Maria
|
6,008
|
24,414
|
2001
|
Maersk
|
4Q24
|
1Q27
|
18,600
|
(9)
|
|||||||||||||||||
|
GSL MYNY
|
6,008
|
24,873
|
2000
|
Maersk
|
3Q24
|
1Q26
|
18,600
|
(9)
|
|||||||||||||||||
|
GSL Melita
|
6,008
|
24,848
|
2001
|
Maersk
|
3Q24
|
3Q26
|
18,600
|
(9)
|
|||||||||||||||||
|
GSL Tegea
|
5,992
|
24,308
|
2001
|
Maersk
|
3Q24
|
3Q26
|
18,600
|
(9)
|
|||||||||||||||||
|
Tasman
|
5,936
|
25,010
|
2000
|
Maersk
|
4Q23
|
2Q24
|
20,000
|
||||||||||||||||||
|
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
|
Confidential
|
(12) | |||||||||||||||||
|
CMA CGM Sambhar
|
4,045
|
17,429
|
2006
|
CMA CGM
|
1Q28
|
2Q28
|
Confidential
|
(12) | |||||||||||||||||
|
CMA CGM America
|
4,045
|
17,428
|
2006
|
CMA CGM
|
1Q28
|
2Q28
|
Confidential
|
(12) | |||||||||||||||||
|
GSL Rossi
|
3,421
|
16,420
|
2012
|
ZIM
|
1Q26
|
3Q26
|
38,875
|
(13)
|
|||||||||||||||||
|
GSL Alice
|
3,421
|
16,543
|
2014
|
CMA CGM
|
2Q25
|
2Q25
|
20,500
|
(14)
|
|||||||||||||||||
|
GSL Eleftheria
|
3,404
|
16,642
|
2013
|
Maersk
|
3Q25
|
4Q25
|
37,975
|
||||||||||||||||||
|
GSL Melina
|
3,404
|
16,703
|
2013
|
Hapag-Lloyd
|
2Q24
|
3Q24
|
21,000
|
||||||||||||||||||
|
GSL Valerie
|
2,824
|
11,971
|
2005
|
ZIM
|
1Q25
|
3Q25
|
35,600
|
(15)
|
|||||||||||||||||
|
Matson Molokai
|
2,824
|
11,949
|
2007
|
Matson
|
2Q25
|
3Q25
|
36,500
|
||||||||||||||||||
|
GSL Lalo
|
2,824
|
11,950
|
2006
|
MSC
|
1Q24
|
2Q24
|
17,500
|
||||||||||||||||||
|
GSL Mercer
|
2,824
|
11,970
|
2007
|
ONE
|
4Q24
|
2Q25
|
35,750
|
||||||||||||||||||
|
Athena
|
2,762
|
13,538
|
2003
|
Hapag-Lloyd
|
2Q24
|
2Q24
|
21,500
|
||||||||||||||||||
|
GSL Elizabeth
|
2,741
|
11,507
|
2006
|
ONE
|
3Q23
|
3Q23
|
18,750
|
||||||||||||||||||
|
tbr GSL Chloe
|
2,546
|
12,212
|
2012
|
ONE
|
4Q24
|
1Q25
|
33,000
|
||||||||||||||||||
|
GSL Maren
|
2,546
|
12,243
|
2014
|
Swire
|
1Q24
|
2Q24
|
18,200
|
(16)
|
|||||||||||||||||
|
Maira
|
2,506
|
11,453
|
2000
|
Hapag-Lloyd
|
3Q23
|
4Q23
|
17,750
|
||||||||||||||||||
|
Nikolas
|
2,506
|
11,370
|
2000
|
CMA CGM
|
1Q24
|
1Q24
|
16,750
|
||||||||||||||||||
|
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
|
Footnote (17)
|
2Q25
|
3Q25
|
Footnote
|
(17) |
|||||||||||||||||
|
Kumasi
|
2,207
|
11,791
|
2002
|
Wan Hai
|
1Q25
|
2Q25
|
38,000
|
||||||||||||||||||
|
Akiteta
|
2,207
|
11,731
|
2002
|
OOCL
|
4Q24
|
1Q25
|
32,000
|
||||||||||||||||||
Page 7
|
(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)
|
Anthea Y was forward fixed to a leading liner operator for a period of 24 months +/- 30 days, with the new charter to commence upon expiry of the existing charter in 3Q or 4Q23. The new charter is expected to
generate annualized Adjusted EBITDA of approximately $11.9 million.
|
|
(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 $16.5
million.
|
|
(6)
|
Tbr GSL Alexandra, tbr GSL Sofia, tbr GSL Effie and GSL Lydia delivered in 2Q23. Contract cover for each vessel is for a minimum firm period 24 months from the date each vessel is delivered, with charterers
holding one year extension options. The vessels are expected to generate aggregate Adjusted EBITDA of approximately $76.6 million over the minimum firm period, increasing to $95.3 million if all options are exercised.
|
|
(7)
|
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. The first of these extension options was exercised for both vessels in 2Q 2022 and commenced for GSL Grania and for GSL Kalliopi in 3Q and in 4Q 2022, respectively. The second of these extension options was exercised
for both vessels in 2Q 2023 and will commence for both vessels in 3Q23. During the option periods the charter rates for GSL Kalliopi and GSL Grania are $18,900 per day and $17,750 per day respectively.
|
|
(8)
|
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 $13.1 million per ship.
|
|
(9)
|
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.
|
|
(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, from their delivery dates in 2021, 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 average annualized
Adjusted EBITDA of approximately $11.2 million per vessel. The new charter for GSL Susan commenced in 4Q 2022, while the charters for the remaining three vessels commenced in late 1Q 2023.
|
|
(13)
|
GSL Rossi. Chartered at an average rate of $38,875 per day-$42,750 for the first 18 months, $38,000 for the next 18 months and $35,000 for the remaining period.
|
|
(14)
|
GSL Alice. Chartered at $20,500 per day for a period of 24 months +/- 30 days at the option of charterer. The new charter commenced in May 2023.
|
|
(15)
|
GSL Valerie. Chartered 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.
|
|
(16)
|
GSL Maren. Charter extended to Westwood (Swire) for a period of 11 to 14 months, commenced 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)
|
Julie was forward fixed to a leading liner company for a period of 24 months +/- 30 days at the option of the charterer. The new charter commenced in 3Q 2023, after the vessel’s scheduled drydock. The new
charter is expected to generate annualized Adjusted EBITDA of approximately $2.0 million.
|
Page 8
Conference Call and Webcast
Global Ship Lease will hold a conference call to discuss the Company's results for the three and six months ended June 30, 2023 today, Thursday August 3, 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: 8238520
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 2022 was filed with the Securities and Exchange Commission (the “Commission”) on March 23, 2023. 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 June 30, 2023, Global Ship Lease owned 68 containerships ranging from 2,207 to 11,040 TEU, with an aggregate capacity of 375,406 TEU. 36 ships are wide-beam Post-Panamax.
As at June 30, 2023, the average remaining term of the Company’s charters, to the mid-point of redelivery, including options under the Company’s control and other than if a redelivery notice has been
received, was 2.3 years on a TEU-weighted basis. Contracted revenue on the same basis was $1.97 billion. Contracted revenue was $2.39 billion, including options under charterers’ control and with latest redelivery date, representing a weighted
average remaining term of 3.1 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.
Page 9
| 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
months
ended
June 30,
2023
|
Three
months
ended
June 30,
2022
|
|
Six
months
ended
June 30,
2023
|
Six
months
ended
June 30,
2022
|
||||||||||||
|
|
|||||||||||||||||
|
Net income available to Common Shareholders
|
75,392
|
53,351
|
147,612
|
121,157
|
|||||||||||||
|
Adjust:
|
Depreciation and amortization
|
22,172
|
20,273
|
43,356
|
40,125
|
||||||||||||
|
Amortization of intangible liabilities
|
(1,681
|
)
|
(10,565
|
)
|
(5,045
|
)
|
(23,420
|
)
|
|||||||||
|
Fair value adjustment on derivative asset
|
(1,417
|
)
|
(2,084
|
)
|
1,368
|
(6,648
|
)
|
||||||||||
|
Interest income
|
(2,582
|
)
|
(265
|
)
|
(4,394
|
)
|
(515
|
)
|
|||||||||
|
Interest expense
|
10,905
|
30,007
|
22,008
|
48,742
|
|||||||||||||
|
Share based compensation
|
2,505
|
2,231
|
5,179
|
5,661
|
|||||||||||||
|
Earnings allocated to preferred shares
|
2,384
|
2,384
|
4,768
|
4,768
|
|||||||||||||
|
Income tax
|
5
|
-
|
5
|
-
|
|||||||||||||
|
|
Effect from straight lining time charter modifications
|
483
|
1,247
|
(1,785
|
)
|
(2,911
|
)
|
||||||||||
|
Adjusted EBITDA
|
108,166
|
96,579
|
213,072
|
186,959
|
|||||||||||||
| 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.
Page 10
NORMALIZED NET INCOME – UNAUDITED
(thousands of U.S. dollars)
|
Three
months
ended
June 30,
2023
|
Three
months
ended
June 30,
2022
|
Six
months
ended
June 30,
2023
|
Six
months
ended
June 30,
2022
|
||||||||||||||
|
|
|||||||||||||||||
|
Net income available to Common Shareholders
|
75,392
|
53,351
|
147,612
|
121,157
|
|||||||||||||
|
|
|||||||||||||||||
|
Adjust:
|
Fair value adjustment on derivative assets
|
(1,417
|
)
|
(2,084
|
)
|
1,368
|
(6,648
|
)
|
|||||||||
|
Premium paid on redemption of 2024 Notes
|
-
|
570
|
-
|
570
|
|||||||||||||
|
Accelerated write off of deferred financing charges related to full repayment of Hellenic Credit Facility
|
-
|
298
|
-
|
298
|
|||||||||||||
|
Accelerated write off of deferred financing charges related to full repayment of Hayfin Credit Facility
|
-
|
2,822
|
-
|
2,822
|
|||||||||||||
|
Prepayment fee on repayment of Hayfin Credit Facility
|
-
|
11,229
|
-
|
11,229
|
|||||||||||||
|
Prepayment fee on repayment of Blue Ocean Credit Facility
|
-
|
-
|
-
|
3,968
|
|||||||||||||
|
Accelerated write off of deferred financing charges related to full repayment of Blue Ocean Credit Facility
|
-
|
-
|
-
|
83
|
|||||||||||||
|
|
Accelerated write off of deferred financing charges related to partial repayment of HCOB-CACIB Credit Facility
|
-
|
-
|
108
|
-
|
||||||||||||
|
|
Forfeit of certain stock-based compensation awards
|
-
|
-
|
451
|
-
|
||||||||||||
|
Normalized net income
|
73,975
|
66,186
|
149,539
|
133,479
|
|||||||||||||
| 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.
Page 11
NORMALIZED EARNINGS PER SHARE - UNAUDITED
|
Three
months
ended
June 30,
2023
|
Three
months
ended
June 30,
2022
|
Six
months
ended
June 30,
2023
|
Six
months
ended
June 30,
2022
|
|||||||||||||
|
EPS as reported (USD)
|
2.13
|
1.47
|
4.15
|
3.31
|
||||||||||||
|
Normalized net income adjustments-Class A common shares (in thousands USD)
|
(1,417
|
)
|
12,835
|
1,927
|
12,322
|
|||||||||||
|
Weighted average number of Class A Common shares
|
35,375,684
|
36,347,270
|
35,533,273
|
36,578,297
|
||||||||||||
|
Adjustment on EPS (USD)
|
(0.04
|
)
|
0.35
|
0.06
|
0.34
|
|||||||||||
|
Normalized EPS (USD)
|
2.09
|
1.82
|
4.21
|
3.65
|
||||||||||||
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 and willingness to pay charterhire to us in accordance with the charters and our expectations regarding the same;
|
|
•
|
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;
|
Page 12
| • |
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 loan agreements;
|
| • |
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 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 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);
|
| • |
potential liability from future litigation; and
|
| • |
other important factors described from time to time in the reports we file with the U.S. Securities and Exchange Commission (the “SEC”).
|
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 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.
Page 13
Global Ship Lease, Inc.
Interim Unaudited Condensed Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars except share data)
|
June 30, 2023
|
December 31, 2022
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
||||||||
|
Cash and cash equivalents
|
$
|
84,493
|
$
|
120,130
|
||||
|
Time deposits
|
12,600
|
8,550
|
||||||
|
Restricted cash
|
45,142
|
28,363
|
||||||
|
Accounts receivable, net
|
3,109
|
3,684
|
||||||
|
Inventories
|
13,399
|
12,237
|
||||||
|
Prepaid expenses and other current assets
|
36,252
|
33,765
|
||||||
|
Derivative asset
|
28,177
|
29,645
|
||||||
|
Due from related parties
|
48
|
673
|
||||||
|
Total current assets
|
$
|
223,220
|
$
|
237,047
|
||||
|
NON - CURRENT ASSETS
|
||||||||
|
Vessels in operation
|
$
|
1,716,778
|
$
|
1,623,307
|
||||
|
Advances for vessels' acquisitions and other additions
|
6,699
|
4,881
|
||||||
|
Deferred charges, net
|
69,106
|
54,663
|
||||||
|
Other non - current assets
|
31,572
|
31,022
|
||||||
|
Derivative asset, net of current portion
|
28,727
|
33,858
|
||||||
|
Restricted cash, net of current portion
|
116,767
|
121,437
|
||||||
|
Total non - current assets
|
1,969,649
|
1,869,168
|
||||||
|
TOTAL ASSETS
|
$
|
2,192,869
|
$
|
2,106,215
|
||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
CURRENT LIABILITIES
|
||||||||
|
Accounts payable
|
$
|
25,809
|
$
|
22,755
|
||||
|
Accrued liabilities
|
29,624
|
36,038
|
||||||
|
Current portion of long-term debt
|
204,140
|
189,832
|
||||||
|
Current portion of deferred revenue
|
29,661
|
12,569
|
||||||
|
Due to related parties
|
692
|
572
|
||||||
|
Total current liabilities
|
$
|
289,926
|
$
|
261,766
|
||||
|
LONG-TERM LIABILITIES
|
||||||||
|
Long - term debt, net of current portion and deferred financing costs
|
$
|
707,673
|
$
|
744,557
|
||||
|
Intangible liabilities-charter agreements
|
8,697
|
14,218
|
||||||
|
Deferred revenue, net of current portion
|
114,331
|
119,183
|
||||||
|
Total non - current liabilities
|
830,701
|
877,958
|
||||||
|
Total liabilities
|
$
|
1,120,627
|
$
|
1,139,724
|
||||
|
Commitments and Contingencies
|
-
|
|||||||
|
SHAREHOLDERS' EQUITY
|
||||||||
|
Class A common shares - authorized 214,000,000 shares with a $0.01 par value 35,165,914 shares issued and outstanding (2022 – 35,990,288 shares)
|
$
|
351
|
$
|
359
|
||||
|
Series B Preferred Shares - authorized 104,000 shares with a $0.01 par value 43,592 shares issued and outstanding (2022 – 43,592 shares)
|
-
|
-
|
||||||
|
Additional paid in capital
|
676,571
|
688,262
|
||||||
|
Retained earnings
|
367,311
|
246,390
|
||||||
|
Accumulated other comprehensive income
|
28,009
|
31,480
|
||||||
|
Total shareholders' equity
|
1,072,242
|
966,491
|
||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
2,192,869
|
$
|
2,106,215
|
||||
Page 14
Global Ship Lease, Inc.
Interim Unaudited Condensed Consolidated Statements of Income
(Expressed in thousands of U.S. dollars)
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
OPERATING REVENUES
|
||||||||||||||||
|
Time charter revenue (includes related party revenues of $nil and $27,266 for each of the three month periods ended June 30, 2023 and 2022, respectively, and $nil and $66,929 for each of the six month periods
ended June 30, 2023 and 2022, respectively)
|
$
|
160,399
|
$
|
143,891
|
$
|
316,326
|
$
|
284,667
|
||||||||
|
Amortization of intangible liabilities-charter agreements (includes related party amortization of intangible liabilities-charter agreements of $nil and $2,094 for the three month periods ended June 30, 2023 and
2022, respectively, and $nil and $5,385 for each of the six month periods ended June 30, 2023 and 2022, respectively)
|
1,681
|
10,565
|
5,045
|
23,420
|
||||||||||||
|
Total Operating Revenues
|
162,080
|
154,456
|
321,371
|
308,087
|
||||||||||||
|
OPERATING EXPENSES:
|
||||||||||||||||
|
Vessel operating expenses (includes related party vessel operating expenses of $4,556 and $4,230 for each of the three month periods ended June 30, 2023 and 2022, respectively, and $8,901 and $8,609 for each of
the six month periods ended June 30, 2023 and 2022, respectively)
|
43,407
|
41,442
|
86,169
|
80,886
|
||||||||||||
|
Time charter and voyage expenses (includes related party time charter and voyage expenses of $1,942 and $1,473 for the three month periods ended June 30, 2023 and 2022, respectively, and $3,662 and $2,950 for
each of the six month periods ended June 30, 2023 and 2022, respectively)
|
6,681
|
5,101
|
12,139
|
9,458
|
||||||||||||
|
Depreciation and amortization
|
22,172
|
20,273
|
43,356
|
40,125
|
||||||||||||
|
General and administrative expenses
|
4,711
|
4,054
|
9,500
|
10,292
|
||||||||||||
|
Operating Income
|
85,109
|
83,586
|
170,207
|
167,326
|
||||||||||||
|
NON-OPERATING INCOME/(EXPENSES)
|
||||||||||||||||
|
Interest income
|
2,582
|
265
|
4,394
|
515
|
||||||||||||
|
Interest and other finance expenses
|
(10,905
|
)
|
(30,007
|
)
|
(22,008
|
)
|
(48,742
|
)
|
||||||||
|
Other income, net
|
(422
|
)
|
(193
|
)
|
1,160
|
178
|
||||||||||
|
Fair value adjustment on derivative asset
|
1,417
|
2,084
|
(1,368
|
)
|
6,648
|
|||||||||||
|
Total non-operating expenses
|
(7,328
|
)
|
(27,851
|
)
|
(17,822
|
)
|
(41,401
|
)
|
||||||||
|
Income before income taxes
|
77,781
|
55,735
|
152,385
|
125,925
|
||||||||||||
|
Income taxes
|
(5
|
)
|
-
|
(5
|
)
|
-
|
||||||||||
|
Net Income
|
77,776
|
55,735
|
152,380
|
125,925
|
||||||||||||
|
Earnings allocated to Series B Preferred Shares
|
(2,384
|
)
|
(2,384
|
)
|
(4,768
|
)
|
(4,768
|
)
|
||||||||
|
Net Income available to Common Shareholders
|
$
|
75,392
|
$
|
53,351
|
$
|
147,612
|
$
|
121,157
|
||||||||
Page 15
Global Ship Lease, Inc.
Interim Unaudited Condensed Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||
|
Net income
|
$
|
77,776
|
$
|
55,735
|
$
|
152,380
|
$
|
125,925
|
||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
|
Depreciation and amortization
|
$
|
22,172
|
$
|
20,273
|
$
|
43,356
|
$
|
40,125
|
||||||||
|
Amounts reclassified from other comprehensive income
|
(137
|
)
|
-
|
(176
|
)
|
-
|
||||||||||
|
Amortization of derivative asset's premium
|
1,045
|
128
|
1,936
|
129
|
||||||||||||
|
Amortization of deferred financing costs
|
1,361
|
4,514
|
2,836
|
6,093
|
||||||||||||
|
Amortization of original issue premium on repurchase of notes
|
-
|
446
|
-
|
326
|
||||||||||||
|
Amortization of intangible liabilities-charter agreements
|
(1,681
|
)
|
(10,565
|
)
|
(5,045
|
)
|
(23,420
|
)
|
||||||||
|
Fair value adjustment on derivative asset
|
(1,417
|
)
|
(2,084
|
)
|
1,368
|
(6,648
|
)
|
|||||||||
|
Prepayment fees on debt repayment
|
-
|
11,229
|
-
|
15,197
|
||||||||||||
|
Stock-based compensation expense
|
2,505
|
2,231
|
5,179
|
5,661
|
||||||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||||||
|
Decrease/(increase) in accounts receivable and other assets
|
$
|
3,893
|
$
|
(4,350
|
)
|
$
|
(2,462
|
)
|
$
|
(6,184
|
)
|
|||||
|
Increase in inventories
|
(1,855
|
)
|
(968
|
)
|
(1,162
|
)
|
(543
|
)
|
||||||||
|
Increase in derivative asset
|
-
|
-
|
-
|
(15,370
|
)
|
|||||||||||
|
(Decrease)/increase in accounts payable and other liabilities
|
(1,090
|
)
|
4,839
|
(10,668
|
)
|
(1,015
|
)
|
|||||||||
|
Decrease in related parties' balances, net
|
890
|
3,311
|
745
|
2,183
|
||||||||||||
|
Increase in deferred revenue
|
4,028
|
2,109
|
12,240
|
607
|
||||||||||||
|
Unrealized foreign exchange loss
|
1
|
2
|
1
|
4
|
||||||||||||
|
Net cash provided by operating activities
|
$
|
107,491
|
$
|
86,850
|
$
|
200,528
|
$
|
143,070
|
||||||||
|
Cash flows from investing activities:
|
||||||||||||||||
|
Acquisition of vessels
|
$
|
(123,300
|
)
|
$
|
-
|
$
|
(123,300
|
)
|
$
|
-
|
||||||
|
Cash paid for vessel expenditures
|
(3,369
|
)
|
(1,238
|
)
|
(4,551
|
)
|
(3,225
|
)
|
||||||||
|
Advances for vessel acquisitions and other additions
|
(2,713
|
)
|
(1,202
|
)
|
(5,945
|
)
|
(2,324
|
)
|
||||||||
|
Cash paid for drydockings
|
(11,995
|
)
|
(5,938
|
)
|
(18,300
|
)
|
(15,253
|
)
|
||||||||
|
Net proceeds from sale of vessel
|
-
|
-
|
5,940
|
-
|
||||||||||||
|
Time deposits (acquired)/withdrawal
|
(3,000
|
)
|
100
|
(4,050
|
)
|
100
|
||||||||||
|
Net cash used in investing activities
|
$
|
(144,377
|
)
|
$
|
(8,278
|
)
|
$
|
(150,206
|
)
|
$
|
(20,702
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||||||||||
|
Repurchase of 2024 Notes, including premium
|
$
|
-
|
$
|
(29,070
|
)
|
$
|
-
|
$
|
(29,070
|
)
|
||||||
|
Proceeds from drawdown of credit facilities
|
76,000
|
-
|
76,000
|
60,000
|
||||||||||||
|
Proceeds from 2027 USPP Notes
|
-
|
350,000
|
-
|
350,000
|
||||||||||||
|
Repayment of credit facilities/sale and leaseback
|
(47,215
|
)
|
(39,007
|
)
|
(100,271
|
)
|
(79,918
|
)
|
||||||||
|
Repayment of refinanced debt, including prepayment fees
|
-
|
(246,498
|
)
|
-
|
(276,671
|
)
|
||||||||||
|
Deferred financing costs paid
|
(1,140
|
)
|
(7,018
|
)
|
(1,140
|
)
|
(9,264
|
)
|
||||||||
|
Cancellation of Class A common shares
|
(6,992
|
)
|
(4,925
|
)
|
(16,980
|
)
|
(4,925
|
)
|
||||||||
|
Class A common shares-dividend paid
|
(13,340
|
)
|
(13,836
|
)
|
(26,691
|
)
|
(23,093
|
)
|
||||||||
|
Series B preferred shares-dividend paid
|
(2,384
|
)
|
(2,384
|
)
|
(4,768
|
)
|
(4,768
|
)
|
||||||||
|
Net cash provided by/(used in) financing activities
|
$
|
4,929
|
$
|
7,262
|
$
|
(73,850
|
)
|
$
|
(17,709
|
)
|
||||||
|
Net (decrease)/increase in cash and cash equivalents and restricted cash
|
(31,957
|
)
|
85,834
|
(23,528
|
)
|
104,659
|
||||||||||
|
Cash and cash equivalents and restricted cash at beginning of the period
|
278,359
|
214,467
|
269,930
|
195,642
|
||||||||||||
|
Cash and cash equivalents and restricted cash at end of the period
|
$
|
246,402
|
$
|
300,301
|
$
|
246,402
|
$
|
300,301
|
||||||||
|
Supplementary Cash Flow Information:
|
||||||||||||||||
|
Cash paid for interest
|
16,875
|
12,708
|
33,329
|
25,297
|
||||||||||||
|
Cash received from interest rate caps
|
8,839
|
254
|
15,916
|
254
|
||||||||||||
|
Non-cash investing activities:
|
||||||||||||||||
|
Unpaid capitalized expenses
|
11,997
|
8,101
|
11,997
|
8,101
|
||||||||||||
|
Unpaid drydocking expenses
|
16,199
|
7,417
|
16,199
|
7,417
|
||||||||||||
|
Non-cash financing activities:
|
||||||||||||||||
|
Unpaid deferred financing costs
|
-
|
341
|
-
|
341
|
||||||||||||
|
Unrealized gain/(loss) on derivative assets
|
2,803
|
5,632
|
(5,231
|
)
|
22,914
|
|||||||||||
Page 16