Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q3 2023 Earnings Presentation
31 slides from Global Ship Lease Inc New's earnings presentation, Nov 9, 2023
Slide 1: 3rd Quarter 2023 Results Presentation
| 3Q 2Q 2023 Results 1 rd 3 Quarter Results 2023 Presentation
Slide 2: Disclaimer
Disclaimer | 3Q 2Q 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 the bas
Slide 3: Safe Harbor Statement
Safe Harbor Statement | 3Q 2Q 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, intentions,
Slide 4: 3Q & 9M 2023 Highlights & Results
3Q & 9M 2023 Highlights & Results | 3Q 2Q 2023 Results 4 Elevated macro & geo-political uncertainty 3Q 2023 9M 2023 Market charter rates & asset values under pressure Revenue $174.5 million $495.9 million Strong contract cover & forward visibility Net Income $82.7 million $230.3 million Adjusted¹ Ro
Slide 5: Contract Cover, Diversified Charterer Base, Established Counterparties
Contract Cover, Diversified Charterer Base, | 3Q 2023 Results 5 Established Counterparties Matson 1% Wan Hai 1% Others <1% ONE 2% COSCO / OOCL 4% MSC 8% CMA CGM 26% $1.8 billion Contracted revenues @ September 30, 2023¹ Share of 2.1 years of contract cover ZIM 14% TEU-weighted cover @ September 30,
Slide 6: Illustrative Scenarios (Not Forecasts)
Earnings | 3Q 2023 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 2024 Scenario 1: Scenario 2: Scenario 3: Prevailing Market Rates¹ 15 Year Historic Average Rate
Slide 7: Dynamic Capital Allocation
Dynamic Capital Allocation | 3Q 2Q 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 invest
Slide 8: Discipline & Cyclical Timing: Keys to Value-Generative Acquisitions
Discipline & Cyclical Timing | 3Q 2023 Results 8 Keys to Value-Generative Acquisitions June 2021 May 2023 500 February 2021 June 2021 4 x ultra-high Recent Purchases Charter Rate & Asset Value Indices (100 = Average 1Q03 to 9M23) 7 x 6,000 TEU ships 12 Borealis ships reefer ships 4 x 8,500 TEU ships
Slide 9: YTD 2023 Financials & Highlights
YTD 2023 Financials & Highlights | 3Q 2023 Results 9 P&L Balance Sheet Shareholder Returns Revenue: $495.9 million, up from $480.6 Gross debt: $874.3 million, down from Quarterly dividend: $0.375 ($1.50 million for 9M 2022 $999.5 million at September 30, 2022 annualized) per Class A Common Share Net
Slide 10: De-levering, Low Cost of Debt, Minimizing Interest Rate Risk
De-levering, Low Cost of Debt, | 3Q 2023 Results 10 Minimizing Interest Rate Risk De-Risking of Balance Sheet Continues¹ Reducing Cost of Debt² Financial Leverage Increasingly Robust³ 1000 950 8.00% 7.56% 7.59% 9.0 8.4X Adj. Net Debt / Adj. EBITDA (x)³ Margin/Coupon 900 8.0 Debt Outstanding ($ mm)¹
Slide 11: Mid-Size & Smaller Ships: Flexible Assets & Backbone of Global Trade
Mid-Size & Smaller Ships | 3Q 2023 Results 11 Flexible Assets & Backbone of Global Trade GSL focus High-reefer, mid-size & smaller containerships 70%+ Deployment of sub-10,000 TEU ships: everywhere¹ Proportion of global containerized trade volume in non - Mainlane trades² Sub-10,000 TEU Non - Mainla
Slide 12: Supply-Side Trends
Supply-Side Trends | 3Q 2023 Results 12 Idle Capacity Limited, Scrapping Increasing Somewhat Global Containership Fleet Returned to Close to Full Utilization in 3Q 2023¹ 3.0 12,000 + TEU 14.0% Idle Fleet Ratio (Green Line) 7,600-11,999 TEU 2.7 1.1% Idle Capacity (TEU mm) 5,200-7,599 TEU 12.0% 2.4 3,
Slide 13: Fundamentals Still Relatively Supportive for Our Segments, but Orderbook Growing
Fundamentals Still Relatively Supportive | 3Q 2023 Results 13 for Our Segments, but Orderbook Growing Orderbook & Fleet Ratios, by Size Segment¹ Sub-10,000 TEU Deliveries v. Age Profile¹ 6.0 28.8% 48.9% 2.5 Implied net fleet growth of only 1.2% through 2027 if all existing capacity 25+ years old wer
Slide 14: Downward Pressure on Charter Market Rates, Normalization of Asset Values Continues
Downward Pressure on Charter Market Rates, | 3Q 2023 Results 14 Normalization of Asset Values Continues Short Term (6 – 12 Months) Charter Market Index, 4Q 2020 – 3Q 2023¹ Market Rates 250 (Indicative) Ship Size (TEU) $ / Day Charter Rate Index (100 = Average 4Q20 to 3Q23) 200 2,200 – 2,800 11,400 3
Slide 15: Summary 1/2
Summary 1/2 | 3Q 2Q 2023 Results 15 Extensive contract cover $1.8 billion & 2.1 years TEU-weighted contract cover as at September 30, 2023 Debt service for 2023 and 2024, CAPEX, and dividends covered by contracted cash flows: no reliance on charter renewals Strong balance sheet; rated BB Stable / BB
Slide 16: Summary 2/2
Summary 2/2 | 3Q 2Q 2023 Results 16 Macro uncertainty; downward pressure on charter market rates, while asset values continue to normalize Macro-economic and geo-political uncertainty weighing on sentiment Charter market rates softened in 3Q 2023, with downward pressure continuing into 4Q 2023 Liner
Slide 17: Appendix
| 3Q 2Q 2023 Results 17 ▪ Financial Statements Appendix ▪ ▪ EBITDA Calculator & CAPEX Guidance Reconciliation of Non-GAAP Financial Measures ▪ Debt Structure ▪ Decarbonization & Associated Regulations
Slide 18: Financial Statements: Balance Sheet at September 30, 2023 (Unaudited)
Financial Statements: Balance Sheet at September 30, 2023 (Unaudited) | 3Q 2Q 2023 Results 18 (Expressed in thousands of U.S. dollars, except share data) September 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS Cash and cash equivalents $ 98,086 $ 120,130 Time deposits 14,000 8,550 Restricted cash
Slide 19: Financial Statements: P&L for 3Q23 & 9M23 (Unaudited)
Financial Statements: P&L for 3Q23 & 9M23 (Unaudited) | 3Q 2Q 2023 Results 19 (Expressed in thousands of U.S. dollars) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 OPERATING REVENUES Time charter revenue (include related party revenues of $nil and $nil for eac
Slide 20: Financial Statements: Cash Flow for 3Q23 & 9M23 (Unaudited)
Financial Statements: Cash Flow for 3Q23 & 9M23 (Unaudited) | 3Q 2Q 2023 Results 20 (Expressed in thousands of U.S. dollars) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 85,071 $ 91,995 $ 237,451 $ 217,920 ADJ
Slide 21: Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative)
Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative) | 3Q 2Q 2023 Results 21 The table below presents our illustrative calculator for our fleet for 2023 and 2024, based on historical performance, contracted revenue, and assumed expenses, CAPEX, Finance Expense (interest, other) and Debt
Slide 22: CAPEX Guidance
CAPEX Guidance | 3Q 2Q 2023 Results 22 (Expressed in millions of U.S. dollars) Revisions to the dry-docking schedule disclosed in our 20-F Indicative CAPEX, based on average costs FY2021 – FY2022 and adjusted for Decarbonization (for year ended December 31, 2022) annualized inflation modelled at 6.1
Slide 23: Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2) | 3Q 2Q 2023 Results 23 (Expressed in thousands of U.S dollars) Reconciliation of Non-U.S. GAAP Adjusted Financial Measures EBITDA - Unaudited Three months Three months Nine months Nine months Adjusted EBITDA ended ended ended ended Sept
Slide 24: Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2) | 3Q 2Q 2023 Results 24 (Expressed in thousands of U.S dollars) Normalized Net Income Normalized Net Income - Unaudited Normalized net income represents net income, after adjusting for Three months Three months Nine months Nine months ce
Slide 25: Year-End Adj. Net Debt to TTM Adj. EBITDA – Reconciliation
Year - End Adj. Net Debt to Trailing 12M (TTM) Adj. EBITDA - Reconciliation | 3Q 2Q 2023 Results 25 (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 Period Ending 31-Dec-2018 31-D
Slide 26: EPS & Normalized EPS – Reconciliation (1/2)
EPS & Normalized EPS – Reconciliation (1/2) | 3Q 2Q 2023 Results 26 (Expressed in thousands of U.S dollars, except share data) EPS – Basic & Fully Diluted Normalized EPS – Basic & Fully Diluted Nine months Nine months Nine months Nine months Three months Three months ended ended Three months ended T
Slide 27: EPS & Normalized EPS – Reconciliation (2/2)
EPS & Normalized EPS – Reconciliation (2/2) | 3Q 2Q 2023 Results 27 (Expressed in thousands of U.S dollars, except share data) Reconciliations of Basic and Normalized Basic EPS Reconciliations of Diluted, and Normalized Diluted EPS Nine Nine Three Three Nine Nine Three months Three months months mon
Slide 28: Debt Structure as at September 30, 2023
Debt Structure as at September 30, 2023 | 3Q 2Q 2023 Results 28 (Expressed in millions of U.S dollars) Outstanding Balance as of 30 Balloon Installment Collateralized Ship Interest Repayment Maturity September 2023 ($m) ($m) Interpolated interest rate 2027 USPP Notes 20 of GSL ships $297.50 15% p.a
Slide 29: Decarbonization Update 1/3
Decarbonization Update 1/3 | 3Q 2Q 2023 Results 29 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 Intens
Slide 30: Decarbonization Update 2/3
Decarbonization Update 2/3 | 3Q 2Q 2023 Results 30 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% Vessel op
Slide 31: Decarbonization Update 3/3
Decarbonization Update 3/3 | 3Q 2Q 2023 Results 31 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 / commercial v