Global Ship Lease Reports Results for the Third Quarter of 2022

Declares Dividend of $0.375 per Common Share

London - Nov 09, 2022





Global Ship Lease, Inc. (NYSE: GSL) (the "Company", "Global Ship Lease" or "GSL"), an owner of containerships, announced today its unaudited results for the three and nine month periods ended September 30, 2022.

Third Quarter 2022 and Year to Date Highlights

• Reported operating revenue of $172.5 million for the third quarter of 2022, an increase of 24.5% on revenue of $138.6 million for the prior year period. For the nine months ended September 30, 2022, operating revenue was $480.6 million, up 63.2% from $294.4 million in the prior year period.

• Reported net income available to common shareholders of $89.6 million for the third quarter of 2022, an increase of 42.4% or 1.4 times net income of $62.9 million for the prior year period. Normalized net income (a non-U.S. GAAP financial measure, described below) was $87.5 million, 1.4 times normalized net income of $63.1 million for the prior year period.

• For the nine months ended September 30, 2022, net income available to common shareholders was $210.8 million, an increase of 117.1% or 2.2 times net income of $97.1 million for the prior year period. Normalized net income for the same period was $221.0 million, 2.1 times normalized net income for the prior year period of $104.6 million.

• Generated $111.4 million of Adjusted EBITDA (a non-U.S. GAAP financial measure, described below) for the third quarter of 2022, 1.7 times Adjusted EBITDA of $64.5 million for the prior year period. Adjusted EBITDA for the nine months ended September 30, 2022 was $298.4 million, 1.9 times Adjusted EBITDA of $158.1 million for the prior year period.

• Earnings per share for the three months ended September 30, 2022 was $2.44, 1.4 times the earnings per share of $1.73 for the prior year period. Normalized earnings per share (a non-U.S. GAAP financial measure, described below) for the three months ended September 30, 2022 was $2.38, as compared to the normalized earnings per share of $1.74 for the prior year period. Earnings per share for the nine months ended September 30, 2022 was $5.75, 2.1 times the earnings per share of $2.80 for the prior year period. Normalized earnings per share for the nine months ended September 30, 2022 was $6.03, as compared to the Normalized earnings per share of $3.01 for the prior year period.

• Declared a dividend of $0.375 per Class A common share for the third quarter of 2022 to be paid on December 2, 2022 to common shareholders of record as of November 22, 2022. Paid a dividend of $0.375 per Class A common share for the first quarter of 2022 on June 2, 2022 and paid a dividend of $0.375 per Class A common share for the second quarter of 2022 on September 2, 2022.

• During the third quarter, added $770.6 million of firm contracted revenues with the addition of new forward charter fixtures on 10 ships: four Panamaxes, each for a firm period of five years, scheduled to commence between the fourth quarter of 2022 and first quarter of 2023, and six ECO-6,900 TEU ships, each for a firm period of five years with two 12-month extensions periods at the option of the charterers, scheduled to commence between the fourth quarter of 2023 and 2024. Year-to-date, and including the above, a total of $920.3 million of contracted revenues has been added to the Company’s forward charter cover, assuming median redelivery dates for the charters. Included are 11 forward fixtures of four to seven years duration each (one 8,600 TEU ship, six 6,900 TEU ships, and four 4,000 - 4,250 ships), one prompt fixture of just over three years for a 2,200 TEU feeder, and three charter-extension options of 12 months each exercised by the charterers on three ships of 5,900 - 7,800 TEU.

• Continued to utilize the $40.0 million authorization (the “Buy-back Authorization”) for opportunistic share repurchases, repurchasing a total of 875,956 Class A common shares during September and October 2022 for a total investment of $15.1 million. Re-purchase prices ranged between $15.51 and $17.95 per common share, with an average price of $17.22. A total of 1,060,640 Class A common shares have been repurchased under the Buy-back Authorization, for approximately $20.0 million.

• Between July 14, 2022 and August 1, 2022 the Company’s corporate family credit ratings were improved by Moody’s, from B1 / Stable to B1 / Positive, and by S&P Global, from BB- / Stable to BB / Stable.

• On June 17, 2022, announced the full redemption of the 8.00% Senior Unsecured Notes due 2024 (the “2024 Notes”) of $89.0 million aggregate principal amount. The redemption was completed on July 15, 2022 at a price of 102.00% of the principal amount plus accrued and unpaid interest, up to but not including, the redemption date. Previously, on April 5, 2022, completed the partial redemption of $28.5 million principal amount of the 2024 Notes at a price equal to 102.00% of the principal amount plus accrued and unpaid interest.

• On June 16, 2022, an indirect wholly-owned subsidiary of the Company closed the private placement of $350.0 million of privately rated investment grade 5.69% Senior Secured Notes due 2027 (the “2027 USPP Notes”) to a limited number of accredited investors. Pricing on June 1, 2022 was based on the 3.2 year Interpolated US Treasury Yield (ICUR3.2) plus a spread of 2.85%. A portion of the net proceeds was used to repay the remaining outstanding balance of the Hayfin Facility, which bore interest at LIBOR + 7.00%, and the outstanding balance of the Hellenic Facility, which bore interest at LIBOR + 3.90%, resulting in five unencumbered ships. The remaining net proceeds were used to redeem all of the outstanding 2024 Notes in July 2022 and for general corporate purposes.

• On May 12, 2022, announced the investment and participation in a carbon capture initiative led by Aqualung Carbon Capture AS (“Aqualung”), an innovator in carbon dioxide capture and separation technology, alongside other industry leaders in shipping, energy generation and infrastructure, and lithium production. The Company was invited to invest in Aqualung and to pool its technical expertise to support the application of Aqualung’s carbon capture solution to the maritime sector, with a particular focus on the development of containerized carbon capture units to be retrofit-able to containerships and other seagoing vessels.

• In February 2022, entered into USD 1-month LIBOR interest rate caps of 0.75% through fourth quarter 2026 on $507.9 million of floating rate debt, which reduces over time and represented the remaining balance of the outstanding floating rate debt, after entering a similar interest rate cap in December 2021, on $484.1 million of floating rate debt, which also reduces over time, leaving us fully hedged on our floating rate debt.

• In January 2022, agreed an amendment to the existing $268.0 million Syndicated Senior Secured Credit Facility with an outstanding balance of $213.2 million, to extend the maturity date from September 2024 to December 2026, favorably amend certain covenants, and release three vessels from the facility’s collateral basket, at an unchanged rate of LIBOR + 3.00%. The three vessels were subsequently used as collateral for a new $60.0 million syndicated senior secured debt facility, maturing in July 2026 and bearing interest at LIBOR + 2.75%, which was used to fully repay our 10.00% Blue Ocean junior debt facility and for general corporate purposes.



George Youroukos, Executive Chairman of Global Ship Lease stated: "These are uncertain times, with the world facing macro headwinds, geopolitical tensions, rising interest rates, and inflation. Against this backdrop, we have continued to focus on making Global Ship Lease as resilient as possible, by building our forward contract cover, fortifying our balance sheet, and positioning ourselves to weather the challenges and take advantage of the opportunities that arise in a cyclical industry such as ours. During the quarter, our high-quality ships, and strong relationships with our customers, allowed us to forward fix 10 ships, on firm charters of five years each, off positions in late-2022, 2023, and even 2024. These new charters add over $770 million of contracted revenues, and bring our total forward cover to more than $2.2 billion, spread over almost three years, providing further support for our sustainable annualized dividend of $1.50 per common share. Our focus on long-term charters, and deep customer relationships, will also underpin collective efforts to decarbonize shipping, in step with an evolving regulatory and commercial environment that will hinge on ever closer cooperation between owners and charterers."

Ian Webber, Chief Executive Officer, commented: "Our conservative, risk-averse business model, and disciplined approach to capital allocation, have continued to inform our focus upon building and protecting shareholder value through the cycle. Even as central banks have raised interest base rates to the highest levels seen in over a decade, we have successfully reduced our overall cost of debt to 4.53%, which is only slightly higher than the Federal Reserve’s benchmark interest rate, and have fully hedged our exposure to floating interest rates. Furthermore, we have no re-financing requirements before 2026. During the course of this year, we have added over $920 million of contracted revenues, supporting our sustainable dividend and allowing us to repurchase an additional $15 million of common shares since our previous earnings release, bringing total share repurchases since we established our $40 million buy-back authorization in second quarter to $20 million."

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About Global Ship Lease
Global Ship Lease is a leading independent owner of containerships with a diversified fleet of mid-sized and smaller containerships. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under fixed-rate charters to top tier container liner companies. It was listed on the New York stock Exchange in August 2008.

As at November 8, 2022, Global Ship Lease owned 65 containerships, ranging from 1,118 to 11,040 TEU, with an aggregate capacity of 342,348 TEU. 32 ships are wide-beam Post-Panamax.

Adjusted to include all charters agreed, up to November 8, 2022, the average remaining term of the Company’s charters as at September 30, 2022, to the mid-point of redelivery, including options under the Company’s control and other than if a redelivery notice has been received, was 2.9 years on a TEU-weighted basis. Contracted revenue on the same basis was $2.23 billion. Contracted revenue was $2.65 billion, including options under charterers’ control and with latest redelivery date, representing a weighted average remaining term of 3.7 years.

Global Ship Lease press release