Global Ship Lease Inc New · NYSE:GSL
Global Ship Lease Inc New — Global Ship Lease — Q2 2022 Earnings Presentation
29 slides from Global Ship Lease Inc New's earnings presentation, August 2022
Slide 1: Second Quarter 2022 Results Presentation
Second 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: 2Q & 1H 2022 Highlights & Results
2Q & 1H 2022 Highlights & Results Macro uncertainty growing $154.5 million $308.1 million Total Revenue in 2Q 2022 Total Revenue in 1H 2022 Substantial uplift in financial results v. 1H2021 $ 95.3 million $189.9 million New charters, adding $435 mm contract cover¹ Adjusted EBITDA² in 2Q 2022 Adjuste
Slide 5: Strong Contract Cover & Forward Visibility on Cash Flows
Strong Contract Cover & Forward Visibility on Cash Flows¹ 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 2,207 2003 3Q20 / 3Q21 OOCL / CMA CGM $9,400 $25,000 (to 1Q25) New charters 9 Julie 2,207 2002 3Q20 / 1Q21 Sea Consortium $9,25
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 $ 1.91 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 700 609 576 600 Scenario 1 assumes that ships coming open US$ (Millions) 501 448 in 2022 and 2023 are re-contracted at 500 395 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: increased to $0.375 per quarter from 1Q22 Opportunistic share buy-backs: $14.9 million total in last 12 months Capital allocation driven by relative De-levering to manage balance sheet risk and build equi
Slide 9: 1H 2022 Financials & Highlights
1H 2022 Financials & Highlights Revenue: $308.1 million, up from $155.9 million for 1H21 (2.0x) Adjusted EBITDA¹: $189.9 million, up from $93.8 million for 1H21 (2.0x) P&L Related Net Income: $124.7 million, up from $34.2 million for 1H21 (3.6x) Normalized Net Income¹: $137.0 million, up from $41.5
Slide 10: Improved Capital Structure: Lower Cost of Debt; Greater Stock Liquidity
Improved Capital Structure: Lower Cost of Debt; Greater Stock Liquidity Debt Outstanding, with Scheduled Amortization¹ Reducing Cost of Debt² 8.00% 7.56% 7.59% Margin/Coupon Debt Outstanding ($ mm) 1200 1,126 7.00% 6.53% Base Rate 1000 950 Cost of Debt 6.00% 760 4.82% 800 4.51% 6.29% 6.28% 5.00% 5.6
Slide 11: 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 12: 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 1H 2022¹ 3.0 14.0% idle 0.9% Idle Fleet Ratio (Red Line) 12,000 + TEU Idle Capacity (TEU mm) 2.7 2.4 7,600-11,999 TEU 5,200-7,599 TEU 12.0% capacity¹ 2.1 3,900-5,200 TEU 10.0%
Slide 13: Fundamentals Still Supportive, but Orderbook Growing
Fundamentals Still Supportive, but Orderbook Growing Orderbook & Fleet Ratios, by Size Segment¹ Sub-10,000 TEU Deliveries v. Age Profile¹ 29.9% 6.0 2.0 Implied net fleet growth of only 5.5% through 2025 if all existing capacity 25+ 29.9% orderbook to fleet¹ Cumulative Orderbook years old were to be
Slide 14: Charter Market Currently in Wait-and-See Mode
Charter Market Currently in Wait-and-See Mode Short Term (6 – 12 Months) Charter Market Index, 1Q2019 – 1H2022¹ 300 Market Rates Charter market continued to strengthen through 1Q22, but Multi-Year Charters Charter Rate Index (100 = Average 1Q19 to 1H22) lost upward momentum in 2Q22 250 Limited avail
Slide 15: Summary
Summary $1.91 billion & 2.6 years TEU-weighted contract cover as at June 30, 2022¹ Extensive contract cover, Debt service for 2022 and 2023, CAPEX, and dividends covered by contracted focusing on forward fixtures cash flows: no reliance on charter renewals $308.1 million cash on balance sheet at Jun
Slide 16: Appendix
Appendix ▪ Financial Statements ▪ EBITDA Calculator & CAPEX Guidance ▪ Reconciliation of Non-GAAP Financial Measures ▪ Debt Structure ▪ Counterparty Diversification ▪ Illustrative Investment Criteria PwC ▪ Environmental Regulation & Decarbonization
Slide 17: Financial Statements: Balance Sheet at June 30, 2022 (Unaudited)
Financial Statements: Balance Sheet at June 30, 2022 (Unaudited) (Expressed in thousands of U.S. dollars, except share data) As of, June 30, 2022 December 31, 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 181,202 $ 67,280 Time deposits 7,800 7,900 Restricted cash 14,630 24,894 Accounts rece
Slide 18: Financial Statements: P&L for 2Q & 1H 2022 (Unaudited)
Financial Statements: P&L for 2Q & 1H 2022 (Unaudited) (Expressed in thousands of U.S. dollars) Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 OPERATING REVENUES Time charter revenue (includes related party revenues of $27,342 and $33,308 for each of the three month period
Slide 19: Financial Statements: Cash Flows for 2Q & 1H 2022 (Unaudited)
Financial Statements: Cash Flows for 2Q & 1H 2022 (Unaudited) (Expressed in thousands of U.S. dollars) Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Cash flows from operating activities: Net income $ 56,915 $ 32,076 $ 129,481 $ 37,719 Adjustments to reconcile net income t
Slide 20: 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 21: 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 August 3, 2022 ➢ Where possible, in order to minimize off-hire, we arrange for reg
Slide 22: Adjusted EBITDA & Normalized Net Income - Reconciliation
Adjusted EBITDA & Normalized Net Income - Reconciliation (Expressed in thousands of U.S dollars) Reconciliation of Non-U.S. GAAP Financial Measures Adjusted EBITDA - Unaudited Three Three Six Six months months Months Months Adjusted EBITDA ended ended Ended Ended Adjusted EBITDA represents net incom
Slide 23: Adjusted EBITDA & Normalized Net Income - Reconciliation
Adjusted EBITDA & Normalized Net Income - Reconciliation (Expressed in thousands of U.S dollars) Normalized Net Income Normalized Net Income - Unaudited Three Three Six Six months months Months Months Normalized net income represents net income, after adjusting for certain non-recurring items. ended
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 June 30, 2022 Gross debt as at June 30, 2022 1,125,684 Cash an
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 Six months ended Six months ended Three Three Six Six months months months months June
Slide 26: Pro Forma Debt Structure as at June 30, 2022
Pro Forma Debt Structure as at June 30, 2022 (Expressed in millions of U.S dollars) Outstanding Balance as of 30 June Balloon Installment Collateralized Ship Interest Repayment Maturity 2022 ($m) ($m) 2027 USPP Notes 20 of GSL ships $350.00 Interpolated interest rate 2.84% plus margin 2.85% 15% p.a
Slide 27: Diversification of Charterers & Lenders
Diversification of Charterers & Lenders Evolution of Charterer Diversification: 2019 – 6M 2022 Sources of Debt Capital (June 30, 2022)¹ 31-Dec-19 31-Dec-20 31-Dec-21 30-Jun-22 First-Citizens & Trust Proportion of Overall Charter Revenue, by Period (%) Company CACIB 58.8% DB 2027 Secured Notes 51.1%
Slide 28: Accretive Growth Delivered in 2021, Illustrative of Target Criteria
Accretive Growth Delivered in 2021, Illustrative of 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 in 4Q21 not newbuildings Charters expected to generate aggregate Adjusted EBITDA of $464 million¹ Imme
Slide 29: 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