Global Ship Lease has grown the fleet by over 50% since the start of the year, with all acquired vessels now delivered and on charter
Container ship owner Global Ship Lease, Inc. today announced its unaudited results for the three and nine month periods ended September 30, 2021.
Highlights for the third quarter of 2021 and year to date
– Reported operating revenue of $ 138.6 million for the third quarter of 2021. Revenue for the nine months ended September 30, 2021 was $ 294.4 million.
– Reported net income available to common shareholders of $ 62.9 million for the third quarter of 2021 after a prepayment commission of $ 0.2 million on the repayment of the Hayfin facility, resulting in normalized net income (3) for the quarter of $ 63.1 million.
– For the nine months ended September 30, 2021, net income available to common shareholders was $ 97.1 million, after $ 5.8 million of premium paid on the optional full redemption of our senior secured notes at 9.875% outstanding due 2022 (“2022 notes”) on January 20, 2021, associated non-cash write-offs of deferred financing costs of $ 3.7 million and initial issue discount of $ 1.1 million of dollars, a non-cash charge of $ 1.3 million for accelerated stock-based compensation charges, a prepayment charge of $ 1.6 million on the partial repayment of the Blue Ocean Junior credit facility , a prepayment commission of $ 1.4 million on the finalization of the refinancing of the Odyssia credit facilities, a prepayment commission of $ 0.2 million on the repayment of the fa Hayfin utility and a net gain of $ 7.8 million from the sale of La Tour, giving a normalized net income (3) for the nine months of $ 104.6 million.
– Generated $ 72.7 million in Adjusted EBITDA (3) for the third quarter of 2021. Adjusted EBITDA (3) for the nine months ended September 30, 2021 was $ 166.5 million.
– Earnings per share for the third quarter of 2021, as reported, was $ 1.73. Normalized earnings per share (3) for the third quarter of 2021 was $ 1.74. Earnings per share for the nine months ended September 30, 2021, as reported, was $ 2.80. Normalized earnings per share (3) for the nine months ended September 30, 2021 was $ 3.01.
– Declared a dividend of $ 0.25 per Class A common share for the third quarter of 2021 payable on December 2, 2021 to common shareholders of record on November 22, 2021. Paid a dividend of $ 0.25 per Class A common share for the second quarter of 2021 on September 3, 2021 to common shareholders of record on August 23, 2021.
– During the third quarter of 2021, raised net proceeds of $ 16.9 million under the ATM program for the 8.75% Series B Preferred Shares (the “Series B Preferred Shares”). During the period of October 1, 2021 to November 9, 2021, an additional net proceeds of $ 0.03 million have been collected under this ATM program and since the launch of this ATM program in December 2019 , total net proceeds of $ 71.4 million were raised, providing non-dilutive financing and facilitating both growth and refinancing of more expensive debt. As of September 30, 2021, we had 43,579 Series B Preferred Shares outstanding.
– On June 8, 2021, announced the agreement to purchase 12 container ships from Borealis Finance LLC (the “Borealis Fleet”), with an average size of approximately 3,000 TEUs and a weighted average age of 11 years for an aggregate purchase price of $ 233.9 million. All of these vessels were delivered in July 2021.
– The total outstanding amount of our senior unsecured notes maturing in 2024 (the “2024 Notes”) as at September 30, 2021 was $ 117.5 million, which includes the issuance in July 2021 of a total principal amount of $ 35.0 million of the 2024 tickets to sellers of the Borealis Fleet, as part of the review. Since the launch of the ATM program for 2024 tickets in November 2019, total net proceeds of $ 50.9 million have been raised. We did not sell any 2024 tickets under our ATM program in the third quarter of 2021.
– On June 16, 2021, announced the agreement to purchase four Panamax ultra-high refrigeration capacity 5,470 TEUs with an average age of around 11 years for an overall purchase price of 148, $ 0 million. Three of these vessels were delivered to us in September 2021 and the remaining vessel was delivered on October 13, 2021. The 23 vessels acquired to date have now been delivered and are chartered.
– On August 20, 2021, S&P upgraded the rating of the family of companies from B + to BB-.
– On August 27, 2021, entered into a $ 12.0 million term loan facility with Sinopac Capital International (HK) Limited to refinance the Hayfin facility, which was the last facility maturing in 2022. There is no now has no significant debt maturities before May 2024.
– On September 1, 2021, announces the purchase and withdrawal of 521,650 shares for $ 10.0 million, reducing our issued and outstanding shares to 36,216,803 as of that date.
– Between January 1 and November 9, 2021, including charters on the 23 vessels purchased to date, 48 charters (including extensions) were added, representing approximately $ 1.25 billion in contract revenue and $ 929, $ 0 million of expected global adjusted EBITDA (3), calculated on the basis of the median firm periods of the respective charters. 25 charters concerned supply vessels of 1,100 to 3,500 TEU, nine for Panamax vessels of 4,250 to 5,470 TEU and 14 for post-Panamax vessels of 5,900 to 6,800 TEU. Charter durations ranged from approximately 21 months to five years, with shorter durations for smaller vessels and longer durations for larger vessels. The rates were significantly higher than those previously contracted.
George Youroukos, Executive Chairman of Global Ship Lease, said: “Driven by the continued strength of underlying containerized freight volumes, supply chain congestion showing few signs of near-term resolution and increased competition between liner companies to secure container capacity, the demand for high quality small and medium-sized container ships like those in the GSL fleet is greater than ever before. With few new vessels delivering in our target size segments until at least 2023/2024, shipping companies have been willing to pay attractive charter rates well above those available in the market in recent years. Additionally, shipping lines have strived to secure this capability for extended periods spanning several years, much longer than historically, and well aligned with GSL’s strategic preference to lock in value over time. time and provide forward-looking cash flow visibility while strengthening our long term relationships with our clients. As the factors driving container ship demand and limiting supply growth appear increasingly to be sustainable, especially as upcoming environmental regulations in 2023 are expected to reduce the speed of operation and therefore the effective capacity of the global fleet, we are confident that the conditions are in place to support this tight container market for some time to come.
“We have taken numerous steps to translate this extraordinary market environment into lasting, long-term benefits for GSL, adding 48 charters during the year to date for additional contract revenues of $ 1.25 billion. contract revenues and nearly $ 930 million in expected Adjusted EBITDA. (3) over periods ranging from 21 months to five years. In particular, we have increased our fleet by more than 50% while maintaining strict pricing discipline and selectivity with regard to vessel specifications, condition and charter prospects. All of the vessels we agreed to acquire earlier in the year have now been delivered with attractive charters in place and are expected to contribute fully to profits from mid-October when the 23rd vessel has been delivered. The economics of the twelve-vessel deal we announced in June are even stronger than initially expected, with five of the shorter-term vessels now fixed at term, at higher rates, on charters agreed since closing. of the transaction. Going forward, our long-term contracted cash flow from a diverse group of strong line counterparties puts us in an excellent position to maintain strategic discipline and selectivity with respect to additional growth opportunities, while at the same time offering an attractive and well-supported dividend to our shareholders. “
Ian Webber, CEO of Global Ship Lease, commented: “As we have expanded our portfolio of long-term contractual cash flows with our shipping line customers who themselves have rapidly improving balance sheets, we have repeatedly found opportunities to improve our own balance sheet. in a way that will benefit GSL in the long run. Year-to-date, we have refinanced $ 383.1 million of debt, reducing our combined cost of debt from 6.3% to 4.9%, while eliminating all debt maturities through to May 2024. This important progress was recognized more recently by the upgrade by S&P of Corporate Family Rating to BB- from B +, thus opening up new opportunities to maintain the virtuous circle of improving the balance sheet and reducing the cost of debt that we have achieved since our strategic merger with Poseidon in 2018. In the third quarter, we opportunistically repurchased and withdrawn 521,650 of our common shares at an attractive price, for a total consideration of $ 10 million. At the same time, our Executive Chairman purchased an additional 521,650 common shares for $ 10 million. In this very favorable environment, we aim to continue to seek a range of value-creating opportunities to strengthen our balance sheet, improve our financial and strategic flexibility and ensure that we obtain the greatest possible long-term benefit for our shareholders. “
Source: Global Ship Lease