Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q4 2023 Earnings Presentation
32 slides from Global Ship Lease Inc New's earnings presentation, Mar 4, 2024
Slide 1: 4th Quarter 2023 Results Presentation
| 4Q 2Q 2023 Results 1 th 4 Quarter Results 2023 Presentation
Slide 2: Disclaimer
Disclaimer | 4Q 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 | 4Q 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: 4Q & FY 2023 Highlights & Results
4Q & FY 2023 Highlights & Results | 4Q 2Q 2023 Results 4 Elevated macro & geo-political uncertainty 4Q 2023 FY 2023 Red Sea situation deferring market normalization Revenue $178.9 million $674.8 million Strong contract cover & forward visibility Net Income $64.7 million $295.0 million Adjusted¹ Robu
Slide 5: Contract Cover, Diversified Charterer Base, Established Counterparties
Contract Cover, Diversified Charterer Base, | 4Q 2023 Results 5 Established Counterparties Matson 1% Wan Hai 1% Others <1% ONE 2% COSCO / OOCL 3% MSC 12% $1.7 billion CMA CGM 24% Contracted revenues @ December 31, 2023¹ Share of 2.1 years of average remaining contract cover TEU-weighted cover @ Dece
Slide 6: Illustrative Scenarios (Not Forecasts)
Earnings | 4Q 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 | 4Q 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 | 4Q 2023 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: FY 2023 Financials & Highlights
FY 2023 Financials & Highlights | 4Q 2023 Results 9 P&L Balance Sheet Shareholder Returns Revenue: $674.8 million, up from $645.6 Gross debt: $823.2 million, down from Quarterly dividend: $0.375 ($1.50 million for 2022 $999.5 million at December 31, 2022 annualized) per Class A Common Share Net Inco
Slide 10: De-levering, Low Cost of Debt, Minimizing Interest Rate Risk
De-levering, Low Cost of Debt, | 4Q 2023 Results 10 Minimizing Interest Rate Risk De-Risking of Balance Sheet Continues¹ Reducing Cost of Debt² Financial Leverage Increasingly Robust³ 1000 950 8.00% 7.56% 7.59% 9.0 8.4X Adj. Net Debt / Adj. EBITDA (x)³ Margin/Coupon 900 8.0 Debt Outstanding ($ mm)¹
Slide 11: Mid-Size & Smaller Containerships
Mid-Size & Smaller Containerships | 4Q 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
Slide 12: Supply-Side Trends
Supply-Side Trends | 4Q 2023 Results 12 Idle Capacity Limited, Scrapping still Modest Idle Capacity of Global Containership Fleet Began to Edge Up in 2H 2023¹ 3.0 12,000 + TEU 14.0% Idle Fleet Ratio (Green Line) 7,600-11,999 TEU 2.7 1.3% Idle Capacity (TEU mm) 5,200-7,599 TEU 12.0% 2.4 3,900-5,200 T
Slide 13: Orderbook is Meaningful, but Fundamentals still Relatively Supportive
Orderbook is Meaningful, | 4Q 2023 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 26.8% 45.0% 2.5 Implied net fleet shrinkage (2.2%) through 2027 if all existing capacity 25+ years old
Slide 14: Re-routing Suez Trades via Cape of Good Hope Absorbs Effective Capacity
Re-routing Suez Trades via Cape of Good Hope | 4Q 2023 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: Charter Market Rates & Asset Values Normalizing
Charter Market Rates & Asset Values Normalizing, | 4Q 2023 Results 15 but Red Sea Disruptions Currently Supportive¹ Short Term (6 – 12 Months) Charter Market Index, 4Q 2020 – 4Q 2023² 250 Market Rates (Indicative) Charter Rate Index (100 = Average 4Q20 to 4Q23) Ship Size (TEU) $ / Day 200 2,200 – 2,
Slide 16: Summary 1/2
Summary 1/2 | 4Q 2Q 2023 Results 16 Extensive contract cover $1.7 billion & 2.1 years TEU-weighted contract cover as at December 31, 2023 2024 & 2025 debt service & CAPEX covered by contracted cash flows: no reliance on charter renewals Strong balance sheet; rated BB Stable / BB Positive / Ba3 Stabl
Slide 17: Summary 2/2
Summary 2/2 | 4Q 2Q 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 weighing on sentiment Charter market rates softened in 2H23, but downward pressure was
Slide 18: Appendix
| 4Q 2Q 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 December 31, 2023
Financial Statements: Balance Sheet at December 31, 2023 (Unaudited) | 4Q 2Q 2023 Results 19 (Expressed in thousands of U.S. dollars, except share data) December 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS Cash and cash equivalents $ 138,640 $ 120,130 Time deposits 14,000 8,550 Restricted cash
Slide 20: Financial Statements: P&L for 4Q23 & FY 2023
Financial Statements: P&L for 4Q23 & FY 2023 (Unaudited) | 4Q 2Q 2023 Results 20 (Expressed in thousands of U.S. dollars) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 OPERATING REVENUES Time charter revenue (include related party revenues of $nil and $nil for each of t
Slide 21: Financial Statements: Cash Flow for 4Q23 & FY 2023
Financial Statements: Cash Flow for 4Q23 & FY 2023 (Unaudited) | 4Q 2Q 2023 Results 21 (Expressed in thousands of U.S. dollars) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 67,049 $ 75,005 $ 304,500 $ 292,925 ADJUSTMEN
Slide 22: Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative)
Adjusted EBITDA and Operating Cash Flow Calculator (Illustrative) | 4Q 2Q 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 Expe
Slide 23: CAPEX Guidance
CAPEX Guidance | 4Q 2Q 2023 Results 23 (Expressed in millions of U.S. dollars) 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 mil
Slide 24: Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (1/2) | 4Q 2Q 2023 Results 24 (Expressed in thousands of U.S dollars) Adjusted Reconciliation of Non-U.S. GAAP EBITDA - Unaudited Financial Measures Three months Three months Year ended Year ended ended ended Adjusted EBITDA December 31, Decem
Slide 25: Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2)
Adjusted EBITDA & Normalized Net Income – Reconciliation (2/2) | 4Q 2Q 2023 Results 25 (Expressed in thousands of U.S dollars) Normalized Net Income - Normalized Net Income Unaudited Three months Three months Normalized net income represents net income, after adjusting for Year ended Year ended ende
Slide 26: Year-End Adj. Net Debt to Adj. EBITDA - Reconciliation
Year - End Adj. Net Debt to Adj. EBITDA - Reconciliation | 4Q 2Q 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 31-Dec-2018 31-Dec-2019 31-Dec-2020 3
Slide 27: EPS & Normalized EPS – Reconciliation (1/2)
EPS & Normalized EPS – Reconciliation (1/2) | 4Q 2Q 2023 Results 27 (Expressed in thousands of U.S dollars, except share data) EPS – Basic & Fully Diluted Normalized EPS – Basic & Fully Diluted Three months Three months Three months Three months Year ended Year ended Year ended Year ended ended ende
Slide 28: EPS & Normalized EPS – Reconciliation (2/2)
EPS & Normalized EPS – Reconciliation (2/2) | 4Q 2Q 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 Three months Three months Three months Year ended Year
Slide 29: Debt Structure as at December 31, 2023
Debt Structure as at December 31, 2023 | 4Q 2Q 2023 Results 29 (Expressed in millions of U.S dollars) Outstanding Balance as of 31 Balloon Installment Collateralized Ship Interest Repayment Maturity December 2023 ($m) ($m) Interpolated interest rate 2027 USPP Notes 20 of GSL ships $284.38 15% p.a ($
Slide 30: Decarbonization Update 1/3
Decarbonization Update 1/3 | 4Q 2Q 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 Intens
Slide 31: Decarbonization Update 2/3
Decarbonization Update 2/3 | 4Q 2Q 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% Vessel op
Slide 32: Decarbonization Update 3/3
Decarbonization Update 3/3 | 4Q 2Q 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 / commercial v