Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q1 2023 Earnings Presentation
32 slides from Global Ship Lease Inc New's earnings presentation, May 10, 2023
Slide 1: 1st Quarter 2023 Results Presentation
| 1Q 2023 Results 1 st 1 Quarter Results 2023 Presentation
Slide 2: Disclaimer
Disclaimer | 1Q 2023 Results 2 This presentation does not constitute or form part of, and should Recipients of this presentation are not to construe its contents, or not be construed as, an offer to sell or an invitation, solicitation, or any prior or subsequent communications from or with Global Sh
Slide 3: Safe Harbor Statement
Safe Harbor Statement | 1Q 2023 Results 3 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,
Slide 4: 1Q 2023 Highlights & Results
1Q 2023 Highlights & Results | 1Q 2023 Results 4 Macro-economic uncertainty 1Q 2023 1Q 2022 Charter market currently showing some stability Revenue $159.3 million $153.6 million Strong contract cover & forward visibility Net Income $72.2 million $67.8 million Adjusted¹ Delivering disciplined & value
Slide 5: Contract Cover, Diversified Charterer Base, Established Counterparties
Contract Cover, Diversified Charterer Base, | 1Q 2023 Results 5 Established Counterparties Matson 1% Wan Hai 1% Others <1% ONE 2% $2.11 billion COSCO / OOCL 4% MSC 8% CMA CGM 27% Contracted revenues @ March 31, 2023¹ Share of 2.5 years of contract cover TEU-weighted cover @ March 31, 2023¹ ZIM 14% C
Slide 6: Earnings Illustrative Scenarios (Not Forecasts)
Earnings | 1Q 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 | 1Q 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 investors
Slide 8: Discipline & Cyclical Timing: Keys to Value-Generative Acquisitions
Discipline & Cyclical Timing | 1Q 2023 Results 8 Keys to Value-Generative Acquisitions June 2021 500 February 2021 June 2021 New Purchases 4 x ultra-high Charter Rate & Asset Value Indices (100 = Average 2Q20 to 1Q23) 7 x 6,000 TEU ships 12 Borealis ships 4 x 8,500 TEU ships reefer ships 450 400 May
Slide 9: New Purchases: Strong Cash Flows, Low Risk, Upside Potential
New Purchases | 1Q 2023 Results 9 Strong Cash Flows, Low Risk, Upside Potential Ships Charters Financing 4 x 8,500 TEU, built 2003/4 Leading liner operator $123.3 million aggregate purchase price High specification 24 – 28 months firm, then 12 months (after To be funded with cash on hand and senior
Slide 10: 1Q 2023 Financials & YTD Highlights
1Q 2023 Financials & YTD Highlights | 1Q 2023 Results 10 P&L Balance Sheet Shareholder Returns Revenue: $159.3 million, up from $153.6 Gross debt: $896.5 million, down from Quarterly dividend: $0.375 ($1.50 million for 1Q 2022 $1,078.5 million at March 31, 2022 annualized) per Class A Common Share N
Slide 11: De-levering, Lowering Cost of Debt, Minimizing Interest Rate Risk
De-levering, Lowering Cost of Debt, | 1Q 2023 Results 11 Minimizing Interest Rate Risk De-Risking of Balance Sheet Continues¹ Reducing Cost of Debt² Financial Leverage Increasingly Robust³ 1000 950 8.00% 7.56% 7.59% 9.0 8.4 Adj. Net Debt / Adj. EBITDA (x)³ Margin/Coupon 900 Debt Outstanding ($ mm)¹
Slide 12: Mid-Size & Smaller Ships: Flexible Assets & Backbone of Global Trade
Mid-Size & Smaller Ships | 1Q 2023 Results 12 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 13: Supply-Side Trends: Idle Capacity & Scrapping Limited, but Growing
Supply-Side Trends | 1Q 2023 Results 13 Idle Capacity & Scrapping Limited, but Growing Global Containership Fleet Close to Full Utilization through 1Q2023¹ 3.0 12,000 + TEU 14.0% Idle Fleet Ratio (Green Line) 2.5% 7,600-11,999 TEU 2.7 Idle Capacity (TEU mm) 5,200-7,599 TEU 12.0% 2.4 3,900-5,200 TEU
Slide 14: Fundamentals Still Supportive for Our Segments, but Orderbook Growing
Fundamentals Still Supportive | 1Q 2023 Results 14 for Our Segments, but Orderbook Growing Orderbook & Fleet Ratios, by Size Segment¹ Sub-10,000 TEU Deliveries v. Age Profile¹ 6.0 30.0% 52.8% 2.5 Implied net fleet growth of only 1.1% through 2026 if all existing capacity 25+ years old were to be scr
Slide 15: Normalization of Charter Market Rates & Asset Values
Normalization of Charter Market Rates & Asset Values | 1Q 2023 Results 15 Still in Progress, but with Some Recent Stabilization Short Term (6 – 12 Months) Charter Market Index, 2Q2020 – 1Q2023¹ Market Rates 250 (Indicative) Ship Size (TEU) $ / Day Charter Rate Index (100 = Average 2Q20 to 1Q23) 200
Slide 16: Decarbonization Update 1/3
Decarbonization Update 1/3 | 1Q 2023 Results 16 Evolving Regulatory Environment 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 Intensity Indicator. D
Slide 17: Decarbonization Update 2/3
Decarbonization Update 2/3 | 1Q 2023 Results 17 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 opera
Slide 18: Decarbonization Update 3/3
Decarbonization Update 3/3 | 1Q 2023 Results 18 GSL Actions to Maintain Commercial Positioning of Fleet¹ Installing Engine Power Limiters (EPLs), where appropriate, to facilitate compliance with EEXI Retro-fitting Energy Saving Technologies (ESTs) to ships, for regulatory compliance / commercial val
Slide 19: Summary 1/2
Summary 1/2 | 1Q 2023 Results 19 Extensive contract cover $2.1 billion & 2.5 years TEU-weighted contract cover as at March 31, 2023¹ 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 / B1 Posit
Slide 20: Summary 2/2
Summary 2/2 | 1Q 2023 Results 20 Macro uncertainty; charter rate and asset value normalization currently plateauing Abrupt correction of freight rates, charter market rates, and asset values currently on pause Charter market fixtures mainly tactical and short during 1Q23, but slightly longer terms n
Slide 21: Appendix
| 1Q 2023 Results 21 ▪ Financial Statements Appendix ▪ ▪ EBITDA Calculator & CAPEX Guidance Reconciliation of Non-GAAP Financial Measures ▪ Debt Structure
Slide 22: Financial Statements: Balance Sheet at March 31, 2023
Financial Statements: Balance Sheet at March 31, 2023 (Unaudited) | 1Q 2023 Results 22 (Expressed in thousands of U.S. dollars, except share data) March 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS Cash and cash equivalents $ 125,157 $ 120,130 Time deposits 9,600 8,550 Restricted cash 23,784 28,
Slide 23: Financial Statements: P&L for 1Q23
Financial Statements: P&L for 1Q23 (Unaudited) | 1Q 2023 Results 23 (Expressed in thousands of U.S. dollars) Three months ended March 31, 2023 2022 OPERATING REVENUES Time charter revenue (includes related party revenues of $nil and $39,663 for each of the three month periods ended March 31, $ 155,9
Slide 24: Financial Statements: Cash Flow for 1Q23
Financial Statements: Cash Flow for 1Q23 (Unaudited) | 1Q 2023 Results 24 (Expressed in thousands of U.S. dollars) Three months ended March 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 74,604 $ 70,190 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIE
Slide 25: Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative)
Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative) | 1Q 2023 Results 25 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 Am
Slide 26: CAPEX Guidance
CAPEX Guidance | 1Q 2023 Results 26 (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% a
Slide 27: Adjusted EBITDA Reconciliation (1/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2) | 1Q 2023 Results 27 (Expressed in thousands of U.S dollars) Reconciliation of Non-U.S. GAAP Adjusted Financial Measures EBITDA - Unaudited Three months ended Three months ended Adjusted EBITDA March 31, March 31, 2023 2022 Adjusted EBIT
Slide 28: Normalized Net Income Reconciliation (2/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2) | 1Q 2023 Results 28 (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 ended Three months ended certain non-recur
Slide 29: Year-End Adj. Net Debt to TTM Adj. EBITDA Reconciliation
Year - End Adj. Net Debt to Trailing 12M (TTM) Adj. EBITDA - Reconciliation | 1Q 2023 Results 29 (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 ended TTM 2018 2019 2020 202
Slide 30: EPS & Normalized EPS – Reconciliation (1/2)
EPS & Normalized EPS – Reconciliation (1/2) | 1Q 2023 Results 30 (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, 2023 March 31, 2022 Mar
Slide 31: EPS & Normalized EPS – Reconciliation (2/2)
EPS & Normalized EPS – Reconciliation (2/2) | 1Q 2023 Results 31 (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 months e
Slide 32: Debt Structure as at March 31, 2023
Debt Structure as at March 31, 2023 | 1Q 2023 Results 32 (Expressed in millions of U.S dollars) Outstanding Balance as of 31 March Balloon Installment Collateralized Ship Interest Repayment Maturity 2023 ($m) ($m) 2027 USPP Notes 20 of GSL ships $323.75 Interpolated interest rate 2.84% plus margin 2