Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q1 2022 Earnings Presentation
30 slides from Global Ship Lease Inc New's earnings presentation, 2022
Slide 1: First Quarter 2022 Results Presentation
First Quarter 2022 Results Presentation PwC 1
Slide 2: Disclaimer
Disclaimer 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 the basis of, or be relied on
Slide 3: Safe Harbor Statement
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, i
Slide 4: 1Q 2022 Highlights & Results, Transformative Up-Lift v. Prior Year
1Q 2022 Highlights & Results, Transformative Up-Lift v. Prior Year Macro uncertainty, but charter market still tight $153.6 million 2.1x 1Q21 Total Revenue in 1Q 2022 Supply chain disruptions tie up global capacity $ 94.5 million 2.1x 1Q21 GSL 65 ship fleet fully contracted Adjusted EBITDA¹ in 1Q 20
Slide 5: Strong Contract Cover & Forward Visibility on Cash Flows
Strong Contract Cover & Forward Visibility on Cash Flows 2021 2022 2023 2024 Vessel TEU Built Charter Agreed Charterer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Keta Julie 2,207 2,207 2003 2002 3Q20 / 3Q21 3Q20 / 1Q21 OOCL / CMA CGM Sea Consortium $9,400 $9,250 $20,000 $25,000 (to 1Q25) Averag
Slide 6: Forward Cash Flows Transformed by Ships Acquired in 2021
Forward Cash Flows Transformed by Ships Acquired in 2021¹ 2021 2022 2023 2024 Vessel TEU Built Delivery Date Charter Agreed Charterer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q GSL Amstel 1,118 2008 29-Jul-21 Legacy CMA CGM $11,900 $ 1.67 billion GSL Maren 2,546 2014 29-Jul-21 Legacy Westwood $
Slide 7: Illustrative Earnings Scenarios
Illustrative Earnings Scenarios Illustrative Scenarios (NOT Forecasts) Scenario 1: Prevailing Market Rates¹ 700 579 558 600 Scenario 1 assumes that ships coming open ? US$ (Millions) 516 448 in 2022 and 2023 are re-contracted at 500 398 market rates prevailing for multi-year 400 2022 ~Zero 2021 Actu
Slide 8: Dynamic & Disciplined Capital Allocation
Dynamic & Disciplined Capital Allocation Return of capital to investors: Sustainable dividends: indicated $0.12 per quarter in January 2021; actually paid $0.25 per quarter from 1Q21; increasing to $0.375 per quarter from 1Q22 Capital allocation driven by relative Opportunistic share buy-backs: $10.
Slide 9: 1Q 2022 Financials & Highlights
1Q 2022 Financials & Highlights Revenue: $153.6 million, up from $73.0 million for 1Q21 Adjusted EBITDA¹: $94.5 million, up from $44.2 million for 1Q21 P&L Related Net Income: $70.2 million, up from $4.2 million for 1Q21 Normalized Net Income¹: $69.7 million, up from $17.8 million for 1Q21 Cash as a
Slide 10: Improved Capital Structure: Lower Cost of Debt; Greater Stock Liquidity
Improved Capital Structure: Lower Cost of Debt; Greater Stock Liquidity Debt Outstanding, with Scheduled Amortization¹ Reducing Cost of Debt² 1200 Debt Outstanding ($ mm) 1,078 9.00% 7.72% 1000 913 8.00% 6.85% Cost of Debt 7.00% 6.33% 800 742 6.00% 4.70% 4.63% 600 5.00% 4.00% 400 3.00% 2.00% 200 1.0
Slide 11: Financial Statements: Balance Sheet at March 31, 2022 (Unaudited)
Financial Statements: Balance Sheet at March 31, 2022 (Unaudited) (Expressed in thousands of U.S. dollars, except share data) March 31, 2022 December 31, 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 88,485 $ 67,280 Time deposits 7,900 7,900 Restricted cash 21,325 24,894 Accounts receivable
Slide 12: Financial Statements: P&L for 1Q 2022 (Unaudited)
Financial Statements: P&L for 1Q 2022 (Unaudited) (Expressed in thousands of U.S. dollars) Three months ended March 31, 2022 2021 OPERATING REVENUES Time charter revenues (include related party revenues of $39,663 and $32,195 for each of the three month periods ended March 31, 2022 and 2021, respect
Slide 13: Financial Statements: Cash flows for 1Q 2022 (Unaudited)
Financial Statements: Cash flows for 1Q 2022 (Unaudited) (Expressed in thousands of U.S. dollars) Three months ended March 31, 2022 2021 Cash flows from operating activities: Net income $ 72,566 $ 5,643 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation an
Slide 14: Mid-Size & Smaller Ships: Flexible Assets & Backbone of Global Trade
Mid-Size & Smaller Ships: Flexible Assets & Backbone of Global Trade GSL focus High-reefer, mid-size & smaller containerships 70%+ Proportion of global containerized trade volume in non-mainlane trades² Deployment of sub-10,000 TEU ships: everywhere¹ Sub-10,000 TEU Non-Mainlane trades predominantly
Slide 15: Supply-Side Trends: Idle Capacity & Ship Recycling both Minimal
Supply-Side Trends: Idle Capacity & Ship Recycling both Minimal Global Containership Fleet Close to Full Utilization through 1Q 2022¹ 3.0 14.0% idle 0.8% Idle Fleet Ratio (Red Line) 12,000 + TEU 7,600-11,999 TEU Idle Capacity (TEU mm) 2.5 5,200-7,599 TEU 3,900-5,200 TEU 12.0% capacity¹ 2,900-3,899 T
Slide 16: Supportive Fundamentals: Limited Net Growth for our Focus Segments
Supportive Fundamentals: Limited Net Growth for our Focus Segments Orderbook & Fleet Ratios, by Size Segment¹ Sub-10,000 TEU Deliveries v. Age Profile¹ 27.9% 6.0 2.0 Implied net fleet growth of only 3.0% through 2024 if all existing capacity 25+ 27.9% orderbook to fleet¹ Cumulative Orderbook years o
Slide 17: Earnings in Charter Market Reflect Tightness of Supply
Earnings in Charter Market Reflect Tightness of Supply Short Term (6 – 12 Months) Charter Market Index, 1Q2019 – 1Q2022¹ 350 Charter rates continued to strengthen through 1Q22. Market Rates However, new charters are limited because so few ships Multi-Year Charters are coming open in the charter mark
Slide 18: Summary
Summary $1.67 billion & 2.4 years TEU-weighted contract cover as at March 31, 2022¹ Extensive contract cover Debt service for 2022 and 2023, CAPEX, and dividends covered by contracted cash flows: no reliance on charter renewals $222.4 million cash on balance sheet at March 31, 2022; $150.5 million c
Slide 19: Appendix
Appendix ▪ Growth Criteria & Track Record ▪ EBITDA Calculator & CAPEX Guidance ▪ Reconciliation of Non-GAAP Financial Measures ▪ Debt Structure ▪ Counterparty Diversification ▪ Additional Market Data PwC ▪ Environmental Regulation & Decarbonization
Slide 20: Accretive Growth Delivered in 2021, Consistent with Target Criteria
Accretive Growth Delivered in 2021, Consistent with Target Criteria 23 containerships of 1,100 – 6,000 TEU acquired YTD 2021, for $498 million Sweet spot: existing ships, Took delivery of 23rd ship on October 13, 2021 not newbuildings Charters expected to generate aggregate Adjusted EBITDA of $464 m
Slide 21: Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative)
Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative) The table below presents our calculator for our fleet for 2022 and 2023, based on historical performance, contracted revenue, assumed expenses, CAPEX, Finance Expense (interest, other) and Debt Amortization 1. 2022 2023 Rates prevaili
Slide 22: CAPEX Guidance
CAPEX Guidance (Expressed in millions of U.S. dollars) Revisions to the dry-docking schedule disclosed in our 20-F (for year ended December 31, 2021) ➢ Please refer to summary table below for revised guidance, updated May 8, 2022 ➢ Where possible, in order to minimize off-hire, we arrange for regula
Slide 23: Adjusted EBITDA & Normalized Net Income - Reconciliation
Adjusted EBITDA & Normalized Net Income - Reconciliation (Expressed in thousands of U.S dollars) Three Three Reconciliation of Non-U.S. GAAP Financial Measures months months ended ended Adjusted EBITDA Adjusted EBITDA - Unaudited March 31, March 31, 2022 2021 Adjusted EBITDA represents net income av
Slide 24: Net Debt to LTM Adjusted EBITDA/Operating Revenue/Normalized Net Income - Reconciliation
Net Debt to LTM Adjusted EBITDA/Operating Revenue/Normalized Net Income - Reconciliation (Expressed in thousands of U.S dollars, except Net Debt / LTM Adjusted EBITDA Ratio) Net Debt / Adjusted EBITDA / Operating Revenue for 12 Months to March 31, 2022 Gross debt as at March 31, 2022 1,078,460 Cash
Slide 25: EPS & Adjusted EPS - Reconciliation
EPS & Adjusted EPS - Reconciliation (Expressed in thousands of U.S dollars, except share data) Adjusted EPS – Fully Diluted Reconciliations of Basic, Diluted, and Adjusted EPS Three months ended Three months ended March 31, 2022 March 31, 2021 Numerator: Net income available to common shareholders 7
Slide 26: Pro Forma Debt Structure as at March 31, 2022
Pro Forma Debt Structure as at March 31, 2022 (Expressed in millions of U.S dollars) Outstanding Balance as of 31 March Balloon Installment Collateralized Ship Interest Repayment Maturity 2022 ($m) ($m) Hayfin Facility 20 of GSL ships $197.57 7.00%+L $6.56 million per quarter $92.61 15-Jan-26 Sinopa
Slide 27: Diversification of Charterers & Lenders
Diversification of Charterers & Lenders Evolution of Charterer Diversification: 2019 – 3M 2022 Sources of Debt Capital (March 31, 2022)¹ 31-Dec-19 31-Dec-20 31-Dec-21 31-Mar-22 CATHAY UNITED BANK BANQUE PALATINE Chailease MEGA INTERNATIONAL Proportion of Overall Charter Revenue, by Period (%) Taishi
Slide 28: Additional Market Data
Additional Market Data Containerized Trade Volumes have Grown Every Year in the Industry’s 65+ Year History, Except 2009 (GFC) & 2020 (COVID) (¹) 250.0 2009 20.0% Global 2020 COVID: After contracting significantly in the Financial first half of 2020, leaving global containerized Crisis volumes 6.6%
Slide 29: Additional Market Data (cont'd)
Additional Market Data (cont’d) Price Index for Vessels by Age YTD 1Q 20221 Global Containership Fleet-Age Profile by Size Segment (Years)1 100% Fleet Composition by 90% 350 Index, 80% 100 = Average since Newbuild Price Index 5 Yr Price Index 2000, Weighted 70% 25+ Yrs Age Band 10 Yr Price Index 15
Slide 30: Increasing Environmental Regulation & Momentum to Decarbonize
Increasing Environmental Regulation & Momentum to Decarbonize Decarbonization and Water Treatment Remain the Focus of Environmental Regulations ▪ In 2020 the International Maritime Organization (“IMO”) successfully introduced regulations to reduce sulphur emissions ▪ Decarbonization is currently a f