Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q1 2024 Earnings Presentation
32 slides from Global Ship Lease Inc New's earnings presentation, May 16, 2024
Slide 1: 1st Quarter 2024 Results Presentation
| 1Q 2Q 2024 2023 Results 1 st 1 Quarter Results 2024 Presentation
Slide 2: Disclaimer
Disclaimer | 1Q 2Q 2024 2023 Results 2 This presentation does not constitute or form part of, and should not be construed as, an offer to sell or an invitation, solicitation, or inducement to purchase or subscribe for securities with respect to any transaction, nor shall it or any part of it form th
Slide 3: Safe Harbor Statement
Safe Harbor Statement | 1Q 2Q 2024 2023 Results 3 This presentation contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intent
Slide 4: 1Q 2024 Highlights & Results
1Q 2024 Highlights & Results | 1Q 2Q 2024 2023 Results 4 Macro & geo-political uncertainty remains high 1Q 2024 1Q 2023 Market firming as Red Sea disruption continues Revenue $179.6 million $159.3 million Focused on growing contract cover & cash flows Net Income $89.5 million $72.2 million Adjusted¹
Slide 5: $1.6 billion Contract Cover, Diversified Charterer Base, Established Counterparties
Contract Cover, Diversified Charterer Base, | 1Q 2024 Results 5 Established Counterparties Matson 1% Wan Hai 1% Others <1% ONE 1% COSCO / OOCL 3% MSC 13% CMA CGM 23% $1.6 billion Contracted revenues @ March 31, 2024¹ Share of 1.9 years of average remaining contract cover TEU-weighted cover @ March 3
Slide 6: Illustrative Scenarios (NOT Forecasts)
Earnings | 1Q 2024 Results 6 Illustrative Scenarios (NOT Forecasts) Re-chartering of open ships under different rate assumptions illustrates GSL’s potential Revenue and Adjusted EBITDA development through 2025 Scenario 1: Scenario 2: Scenario 3: Prevailing Market Rates¹ 15 Year Historic Average Rate
Slide 7: Dynamic Capital Allocation
Dynamic Capital Allocation | 1Q 2Q 2024 2023 Results 7 Capital allocation driven by relative Consideration of risks to cash flows, Focus on generating long-term value returns, adjusted for risk and sustainability and profitability of for shareholders business through the cycle Return of capital to i
Slide 8: Discipline & Cyclical Timing: Keys to Value-Generative Acquisitions
Discipline & Cyclical Timing | 1Q 2024 Results 8 Keys to Value-Generative Acquisitions June 2021 500 February 2021 June 2021 May 2023 4 x ultra-high Charter Rate & Asset Value Indices (100 = Average 2003 to 2023) 7 x 6,000 TEU ships 12 Borealis ships 4 x 8,500 TEU ships reefer ships 450 400 May 2019
Slide 9: 1Q 2024 Financials & YTD Highlights
1Q 2024 Financials & YTD Highlights | 1Q 2024 Results 9 P&L Balance Sheet Shareholder Returns Revenue: $179.6 million, up from $159.3 Gross debt: $771.1 million, down from Quarterly dividend: $0.375 ($1.50 million for 1Q 2023 $823.2 million at December 31, 2023 annualized) per Class A Common Share N
Slide 10: De-levering, Low Cost of Debt, Minimizing Interest Rate Risk
De-levering, Low Cost of Debt, | 1Q 2024 Results 10 Minimizing Interest Rate Risk De-Risking of Balance Sheet Continues¹ Reducing Cost of Debt² Financial Leverage Increasingly Robust³ 1000 950 8.00% 7.59% 9.0 8.4x Adj. Net Debt / Adj. EBITDA (x)³ Margin/Coupon 900 7.00% 8.0 Debt Outstanding ($ mm)¹
Slide 11: Mid-Size & Smaller Containerships: Flexible Assets & Backbone of Global Trade
Mid-Size & Smaller Containerships | 1Q 2024 Results 11 Flexible Assets & Backbone of Global Trade GSL focus High-reefer, mid-size & smaller containerships 73% Deployment of sub-10,000 TEU ships: everywhere¹ Proportion of global containerized trade volume in non - Mainlane trades² Sub-10,000 TEU Non
Slide 12: Supply-Side Trends: Idle Capacity Minimal, Scrapping Largely on Hold
Supply-Side Trends | 1Q 2024 Results 12 Idle Capacity Minimal, Scrapping Largely on Hold Idle Capacity of Global Containership Fleet is Currently Negligible¹ 3.0 12,000 + TEU 14.0% Idle Fleet Ratio (Green Line) 7,600-11,999 TEU 2.7 0.8% Idle Capacity (TEU mm) 5,200-7,599 TEU 12.0% 2.4 3,900-5,200 TE
Slide 13: Orderbook is Meaningful, but Fundamentals still Relatively Supportive
Orderbook is Meaningful, | 1Q 2024 Results 13 but Fundamentals still Relatively Supportive for our Segments Orderbook & Fleet Ratios, by Size Segment¹ Sub-10,000 TEU Deliveries v. Age Profile¹ 6.0 23.6% 2.5 Implied net fleet shrinkage (3.3%) through 2027 if all existing capacity 25+ years old were t
Slide 14: Re-routing Suez Trades via Cape of Good Hope Absorbs Effective Capacity
Re-routing Suez Trades via Cape of Good Hope | 1Q 2024 Results 14 Absorbs Effective Capacity, Tightening Supply 12,000 10,000 Distance (nm) 20% of global containerized trade volumes 8,000 Cargo passing via Suez, pre-Red Sea disruption¹ 6,000 4,000 2,000 0 Via COGH Via Suez 34% of global containershi
Slide 15: Market Rates & Asset Values were Normalizing, but Red Sea Disruptions Supportive
Market Rates & Asset Values were Normalizing, | 1Q 2024 Results 15 but Red Sea Disruptions Currently Supportive¹ Short Term (6 – 12 Months) Charter Market Index, 4Q 2020 – 1Q 2024² 250 Market Rates (Indicative) Charter Rate Index (100 = Average 4Q20 to 1Q24) Ship Size (TEU) $ / Day 200 2,200 – 2,800
Slide 16: Summary 1/2
Summary 1/2 | 1Q 2Q 2024 2023 Results 16 Extensive contract cover $1.6 billion & 1.9 years TEU-weighted contract cover as at March 31, 2024; working hard to further expand contract cover while conditions are supportive 2024 & 2025 debt service & CAPEX covered by contracted cash flows: no reliance on
Slide 17: Summary 2/2
Summary 2/2 | 1Q 2Q 2024 2023 Results 17 Elevated macro & geo-political uncertainty; normalization of charter market rates and asset values deferred by situation in Red Sea Macro-economic and geo-political uncertainty remains elevated Charter market rates softened in 2H 2023, but downward pressure w
Slide 18: Appendix
| 1Q 2Q 2024 2023 Results 18 ▪ Financial Statements Appendix ▪ ▪ EBITDA Calculator & CAPEX Guidance Reconciliation of Non-GAAP Financial Measures ▪ Debt Structure ▪ Decarbonization & Associated Regulations
Slide 19: Financial Statements: Balance Sheet at March 31, 2024
Financial Statements: Balance Sheet at March 31, 2024 (Unaudited) | 1Q 2Q 2024 2023 Results 19 (Expressed in thousands of U.S. dollars, except share data) March 31, 2024 December 31, 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 168,957 $ 138,640 Time deposits 14,000 14,000 Restricted cash
Slide 20: Financial Statements: P&L
Financial Statements: P&L for 4Q23 & FY 2023 (Unaudited) | 1Q 2Q 2024 2023 Results 20 (Expressed in thousands of U.S. dollars) Three months ended March 31, 2024 2023 OPERATING REVENUES Time charter revenue $ 178,058 $ 155,927 Amortization of intangible liabilities-charter 1,503 3,364 Total Operating
Slide 21: Financial Statements: Cash Flow
Financial Statements: Cash Flow for 4Q23 & FY 2023 (Unaudited) | 1Q 2Q 2024 2023 Results 21 (Expressed in thousands of U.S. dollars) Three months ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 91,890 $ 74,604 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY O
Slide 22: Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative)
Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative) | 1Q 2Q 2024 2023 Results 22 The table below presents our illustrative calculator for our fleet for 2024 and 2025, based on historical performance, contracted revenue, and assumed expenses, Capitalized and Drydocking Expenses, Finance
Slide 23: CAPEX Guidance
CAPEX Guidance | 1Q 2Q 2024 2023 Results 23 Indicative CAPEX, based on average costs FY2022 – FY2023 and adjusted for annualized inflation modelled at 3.8% and 0.93% for 2024 and 2025 respectively ▪ Average special survey & dry-docking for 2024 and 2025: ~$2.40 million (15 vessels) and $2.43 million
Slide 24: Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2) | 1Q 2Q 2024 2023 Results 24 (Expressed in thousands of U.S dollars) Reconciliation of Non-U.S. GAAP Adjusted EBITDA - Unaudited Financial Measures Three months ended Three months ended Adjusted EBITDA March 31, March 31, 2024 2023 Adjus
Slide 25: Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2) | 1Q 2Q 2024 2023 Results 25 (Expressed in thousands of U.S dollars) Normalized Net Income Normalized Net Income - Unaudited Normalized net income represents net income, after adjusting for certain non-recurring items. Normalized net inc
Slide 26: Year-End Adj. Net Debt to TTM Adj. EBITDA - Reconciliation
Year - End Adj. Net Debt to Trailing 12M (TTM) Adj. EBITDA - Reconciliation | 1Q 2Q 2024 2023 Results 26 (Expressed in thousands of U.S dollars) (Expressed in thousands of U.S dollars, except Adjusted Net Debt / LTM Adjusted EBITDA Ratio) Adjusted Net Debt / Adjusted EBITDA Year Ending TTM 31-Dec-20
Slide 27: EPS & Normalized EPS – Reconciliation (1/2)
EPS & Normalized EPS – Reconciliation (1/2) | 1Q 2Q 2024 2023 Results 27 (Expressed in thousands of U.S dollars, except share data) EPS – Basic & Fully Diluted Normalized EPS – Basic & Fully Diluted Three months ended Three months ended Three months ended Three months ended March 31, 2024 March 31,
Slide 28: EPS & Normalized EPS – Reconciliation (2/2)
EPS & Normalized EPS – Reconciliation (2/2) | 1Q 2Q 2024 2023 Results 28 (Expressed in thousands of U.S dollars, except share data) Reconciliations of Basic and Normalized Basic EPS Reconciliations of Diluted, and Normalized Diluted EPS Three months ended Three months ended Three months ended Three
Slide 29: Debt Structure as at March 31, 2024
Debt Structure as at March 31, 2024 | 1Q 2Q 2024 2023 Results 29 (Expressed in millions of U.S dollars) Outstanding Balance as of 31 Balloon Installment Collateralized Ship Interest Repayment Maturity March 2024 ($m) ($m) Interpolated interest rate 2027 USPP Notes 20 of GSL ships $271.25 15% p.a ($1
Slide 30: Decarbonization Update 1/3
Decarbonization Update 1/3 | 1Q 2Q 2024 2023 Results 30 Evolving Regulatory Environment (Highlights) EEXI - Energy Efficiency Existing Ship Index. Determined by ship’s technical characteristics. Pass or fail. Compliance required by ship’s first annual IAPP survey after January 1, 2023 CII - Carbon I
Slide 31: Decarbonization Update 2/3
Decarbonization Update 2/3 | 1Q 2Q 2024 2023 Results 31 Expected Implications for Global Containership Fleet Reduced operating speeds to disproportionately reduce fuel consumption and emissions. Decrease in average operating speed of global fleet by one knot would reduce effective supply by ~6% [Red
Slide 32: Decarbonization Update 3/3
Decarbonization Update 3/3 | 1Q 2Q 2024 2023 Results 32 GSL Actions to Maintain Commercial Positioning of Fleet¹ Engine Power Limiters (EPLs) installed, where appropriate, to facilitate compliance with EEXI Retro-fitting Energy Saving Technologies (ESTs) to ships, for regulatory compliance / commerc