Global Ship Lease Reports Results for the Second Quarter of 2024

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ATHENS, GREECE, Aug. 05, 2024 (GLOBE NEWSWIRE) — Global Ship Lease, Inc. (NYSE: GSL) (the “Company”, “Global Ship Lease” or “GSL”), an owner of containerships, announced today its unaudited results for the three and six month periods ended June 30, 2024.

Second Quarter of 2024 and Year to Date Highlights

– Reported operating revenue of $175.0 million for the second quarter of 2024, an increase of 8.0% on operating revenue of $162.1 million for the prior year period. For the six months ended June 30, 2024, operating revenue was $354.6 million, up 10.3% from $321.4 million in first half of 2023.

– Reported net income available to common shareholders of $85.6 million for the second quarter of 2024, an increase of 13.5% on net income of $75.4 million for the prior year period. Normalized net income (a non-U.S. GAAP financial measure, described below) for the same period was $86.7 million, up 17.2% on Normalized net income of $74.0 million for the prior year period. For the six months ended June 30, 2024, net income available to common shareholders was $175.1 million, an increase of 18.6% on net income of $147.6 million for the prior year period. Normalized net income for the same period was $175.7 million, up 17.5% on Normalized net income for the prior year period of $149.5 million.

– Generated $122.3 million of Adjusted EBITDA (a non-U.S. GAAP financial measure, described below) for the second quarter of 2024, up 13.0% on Adjusted EBITDA of $108.2 million for the prior year period. Adjusted EBITDA for the six months ended June 30, 2024 was $247.7 million, up 16.2% on Adjusted EBITDA of $213.1 million for the prior year period.

– Earnings per share for the second quarter of 2024 was $2.43, up 14.1% on the earnings per share of $2.13 for the prior year period. Normalized earnings per share (a non-U.S. GAAP financial measure, described below) for the second quarter of 2024 was $2.46, up 17.7% on the Normalized earnings per share of $2.09 for the prior year period. Earnings per share for the six months ended June 30, 2024 was $4.98, up 20.0% on the earnings per share of $4.15 for the prior year period. Normalized earnings per share for the six months ended June 30, 2024 was $4.99, up 18.5% on the Normalized earnings per share of $4.21 for the prior year period.

– Declared a total dividend, including the first payment of the Supplemental Dividend, of $0.45 per Class A common share for the second quarter of 2024, to be paid on September 4, 2024 to common shareholders of record as of August 23, 2024. Paid a dividend of $0.375 per Class A common share for the first quarter of 2024 on June 3, 2024.

– On June 26, 2024 announced upgrades by three leading credit rating agencies. The Corporate Family Rating for Global Ship Lease was upgraded to Ba2 from Ba3, with a stable outlook, by Moody’s Investor Service; S&P Global Ratings upgraded the long-term issuer credit rating to BB+ from BB, with a stable outlook; and the Kroll Bond Rating Agency (“KBRA”) upgraded the corporate rating to BB+ from BB, with a stable outlook. KBRA also affirmed the BBB/stable investment grade rating and outlook for the 5.69% Senior Secured Notes due July 15, 2027 (the “2027 Secured Notes”).

– Between January 1, 2024 and June 30, 2024, added $402.7 million of contracted revenue to forward charter cover, calculated on the basis of the median firm periods of the respective charters, on a total of 24 new charters or extensions: eight for ships between 2,200 and 3,500 TEU; 11 for ships between 5,000 TEU and 6,100 TEU; and, five for ships between 6,500 TEU and 8,000 TEU. Durations of these new charters and extensions for the median firm periods range between nine months and 40 months. A number of the vessels were forward fixed several months ahead of their expected availability in the market.

– During the first quarter of 2024, repurchased an aggregate of 251,772 Class A common shares for a total consideration of approximately $5.0 million. Repurchase prices ranged between $18.98 and $20.83 per share, with an average price of $19.84 per share. There were no such repurchases in the second quarter of 2024. Approximately $33.0 million of capacity remains under the Company’s opportunistic share buy-back authorization.

George Youroukos, our Executive Chairman, stated: “The positive industry momentum that marked the early part of this year accelerated through the second quarter of 2024. Demand for high-quality, mid-sized and smaller containerships such as those in the GSL fleet was further strengthened by continued disruptions in the Red Sea. Almost all of the containerships carrying the 20% of global container freight volumes that previously transited the Red Sea and Suez are now being re-routed for a longer, less efficient voyage around the Cape of Good Hope. The direct impact of these longer voyages and the increased congestion and delays throughout the supply chain are adding a further layer of demand, absorbing effective supply, and driving charter rates and asset values upward. Liner operators have been increasingly willing to secure multi-year charters at high rates, and we are capitalizing on this to lock in as much charter coverage as possible, on both a prompt and forward basis. Reflecting this highly supportive environment and our commitment to returning capital to our shareholders, we have introduced a supplemental dividend alongside our fixed quarterly dividend, thereby increasing our total quarterly dividend payments by 20%.”

Thomas Lister, our Chief Executive Officer, stated: “GSL’s strong cash flows and forward visibility have enabled us to materially strengthen our through-cycle resilience and profitability while also returning significant capital to shareholders and remaining poised to act on the right countercyclical growth opportunities when they arise. Our recent credit rating upgrades underscore our progress in de-levering our balance sheet and locking in long-term contracted revenues at good rates while remaining disciplined in our evaluation of growth opportunities. In a highly complex and dynamic geopolitical environment, with our strong platform and low break-even rates, we believe that GSL is well positioned to continue to build shareholder value now and for the long term.”
    
SELECTED FINANCIAL DATA – UNAUDITED

(thousands of U.S. dollars)

  Three Three Six Six
  months ended months ended months ended months ended
  June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
         
Operating Revenues (1)   174,997 162,080 354,558 321,371
Operating Income 93,842 85,109 190,941 170,207
Net Income (2)   85,643 75,392 175,149 147,612
Adjusted EBITDA (3)   122,349 108,166 247,712 213,072
Normalized Net Income (3)   86,657 73,975 175,712 149,539
         

(1) Operating Revenues are net of address commissions which represent a discount provided directly to a charterer based on a fixed percentage of the agreed upon charter rate and also includes the amortization of intangible liabilities, the effect of the straight lining of time charter modifications and the compensation from charterers for drydock and other capitalized expenses installation. Brokerage commissions are included in “Time charter and voyage expenses” (see below).

(2) Net Income available to common shareholders.

(3) Adjusted EBITDA and Normalized Net Income are non-U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) financial measures, as explained further in this press release, and are considered by Global Ship Lease to be useful measures of its performance. For reconciliations of these non-U.S. GAAP financial measures to net income, the most directly comparable U.S. GAAP financial measure, please see “Reconciliation of Non-U.S. GAAP Financial Measures” below.

Operating Revenues and Utilization

Operating revenues derived from fixed-rate, mainly long-term, time charters were $175.0 million in the second quarter of 2024, up $12.9 million (or 8.0%) on operating revenues of $162.1 million in the prior year period. The period-on-period increase in operating revenues was principally due to our acquisition of four vessels which were delivered to us in the second quarter of 2023 (the “Four Vessels”) and a decrease in off hire days and idle time, partially offset by a non-cash $1.9 million decrease in the effect from straight lining time charter modifications. There were 182 days of offhire in the second quarter of 2024 of which 153 were for scheduled drydockings, compared to 308 days of offhire in the prior year period of which 236 were for scheduled drydockings. Utilization for the second quarter of 2024 was 97.0% compared to utilization of 94.5% in the prior year period.

For the six months ended June 30, 2024, operating revenues were $354.6 million, up $33.2 million (or 10.3%) on operating revenues of $321.4 million in the comparative period, mainly due to the factors noted above.

The table below shows fleet utilization for the three and six months ended June 30, 2024 and 2023, and for the years ended December 31, 2023, 2022, 2021 and 2020.

  Three months ended   Six months ended   Year ended
  June 30, June 30,   June 30, June 30,   Dec 31, Dec 31, Dec 31, Dec 31,
Days 2024  2023    2024  2023    2023  2022  2021  2020 
                     
Ownership days 6,188 5,930   12,376 11,773   24,285 23,725 19,427 16,044
Planned offhire – scheduled drydock (153) (236)   (186) (436)   (701) (581) (752) (687)
Unplanned offhire (29) (72)   (69) (174)   (233) (460) (260) (95)
Idle time (2) (20)   (2) (20)   (62) (30) (88) (338)
Operating days 6,005 5,602   12,120 11,143   23,289 22,654 18,327 14,924
                     
Utilization 97.0% 94.5%   97.9% 94.6%   95.9% 95.5% 94.3% 93.0%
                     

As of June 30, 2024 three regulatory drydockings were in progress. In the second half of 2024, 10 further regulatory drydockings are anticipated.

Vessel Operating Expenses

Vessel operating expenses, which are primarily the costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were up 8.8% to $47.2 million for the second quarter of 2024, compared to $43.4 million in the prior year period. The increase of $3.8 million was mainly due to (i) the acquisition of the Four Vessels in the second quarter of 2023, (ii) increase in repairs, spares and maintenance expenses for planned main engine maintenance and overhaul of diesel generators as well as main engine annual spares delivery due to timing of planned schedule, (iii) increased cost of insurance due to increased premiums as asset values rose over the period, and (iv) impact of inflation on fees and expenses, including management fees. The average cost per ownership day in the quarter was $7,624, compared to $7,320 for the prior year period, up $304 per day, or 4.2%.

For the six months ended June 30, 2024, vessel operating expenses were $95.0 million, or an average of $7,679 per day, compared to $86.2 million in the comparative period, or $7,319 per day, an increase of $360 per ownership day, or 4.9%.

Time Charter and Voyage Expenses

Time charter and voyage expenses comprise mainly commission paid to ship brokers, the cost of bunker fuel for owner’s account when a ship is off-hire or idle and miscellaneous owner’s costs associated with a ship’s voyage. Time charter and voyage expenses were $5.4 million for the second quarter of 2024, compared to $6.7 million in the prior year period. The decrease was mainly due to (i) decrease in bunkering expenses due to fewer off hire days and (ii) decrease in voyage administration costs and operational requests from charterers offset by increased commissions on charter renewals at higher rates.

For the six months ended June 30, 2024, time charter and voyage expenses were $10.6 million, or an average of $859 per day, compared to $12.1 million in the comparative period, or $1,031 per day, a decrease of $172 per ownership day, or 16.7% mainly to the factors noted above.

Depreciation and Amortization

Depreciation and amortization for the second quarter of 2024 was $24.5 million, compared to $22.2 million in the prior year period. The increase was mainly due to the acquisition of the Four Vessels in the second quarter of 2023 and eight drydockings completed after June 30, 2023.

Depreciation and amortization for the six months ended June 30, 2024 was $48.8 million, compared to $43.4 million in the comparative period, mainly due to the factors noted above.

General and Administrative Expenses

General and administrative expenses were $4.0 million in the second quarter of 2024, compared to $4.7 million in the prior year period. The movement was mainly due to the decrease in payroll expenses following the retirement of our former CEO effective March 31, 2024 plus a reduction in the non-cash charge for stock-based compensation expense. The average general and administrative expenses per ownership day for the second quarter of 2024 was $654, compared to $794 in the prior year period, a decrease of $140 or 17.6%.

For the six months ended June 30, 2024, general and administrative expenses were $9.1 million, compared to $9.5 million in the comparative period. The movement was mainly due to the decrease in the non-cash charge for stock-based compensation expense offset by an increase in bonuses paid to our employees. The average general and administrative expense per ownership day for the six-month period ended June 30, 2024 was $738, compared to $807 in the comparative period, a decrease of $69 or 8.6%.

Adjusted EBITDA

Adjusted EBITDA (a non-GAAP financial measure) was $122.3 million for the second quarter of 2024, up from $108.2 million for the prior year period, with the net increase being mainly due to decrease in planned and unplanned off hire days and the addition of the Four Vessels in second quarter of 2023.

Adjusted EBITDA for the six months ended June 30, 2024 was $247.7 million, compared to $213.1 million for the comparative period, an increase of $34.6 million or 16.2%.

Interest Expense and Interest Income

Debt as at June 30, 2024 totaled $721.1 million, comprising $371.8 million of secured bank debt collateralized by vessels, $258.1 million of 2027 Secured Notes collateralized by vessels, and $91.2 million under sale and leaseback financing transactions. As of June 30, 2024, five vessels were unencumbered.

Debt as at June 30, 2023 totaled $925.3 million, comprising $491.3 million of secured bank debt collateralized by vessels, $310.6 million of 2027 Secured Notes collateralized by vessels, and $123.4 million under sale and leaseback financing transactions. As of June 30, 2023, five vessels were unencumbered.

Interest and other finance expenses for the second quarter of 2024 was $9.9 million, down from $10.9 million for the prior year period. The decrease was mainly due to lower interest expense following the principal repayments offset by amortization of premium paid for interest rate caps. The blended cost of debt, taking into account interest rate caps, has marginally increased from approximately 4.53% for the second quarter of 2023 to 4.57% for the second quarter of 2024 due to variations in amortization schedules.

Interest and other finance expenses for the six months ended June 30, 2024 was $20.3 million, down from $22.0 million for the comparative period mainly due to the factors noted above.

Interest income for the second quarter of 2024 was $4.1 million, up from $2.6 million for the prior year period mainly due to higher invested amounts.

Interest income for the six months period ended June 30, 2024 was $7.8 million, compared to $4.4 million for the comparative period.

Other income/(expenses), net

Other income, net was $1.0 million in the second quarter of 2024, compared to other expenses, net of $0.4 million in the prior year period.

Other income, net was $2.3 million for the six month period ended June 30, 2024, compared to $1.2 million for the comparative period.

Fair value adjustment on derivatives

In December 2021, we entered into a USD 1 month LIBOR interest rate cap of 0.75% through the fourth quarter of 2026 on $484.1 million of floating rate debt, which reduces over time in line with anticipated debt amortization and represented approximately half of the outstanding floating rate debt. In February 2022, we entered into two additional USD 1-month LIBOR interest rate caps of 0.75% through the fourth quarter of 2026 on the remaining balance of $507.9 million of floating rate debt. As a result of the discontinuation of LIBOR, on July 1, 2023, our interest rate caps have automatically transited to 1 month Compounded SOFR at a net rate of 0.64%. A negative fair value adjustment of $1.0 million for the second quarter of 2024 was recorded through the statement of income. The negative fair value adjustment for the six month period ended June 30, 2024 was $0.8 million.

Earnings Allocated to Preferred Shares

The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the second quarter of 2024 was $2.4 million, the same as in the prior year period.

The cost for the six months ended June 2024 was $4.8 million, the same as for the six months ended June 30, 2023.

Net Income Available to Common Shareholders

Net income available to common shareholders for the second quarter of 2024 was $85.6 million. Net income available to common shareholders for the prior year period was $75.4 million.

Earnings per share for the second quarter of 2024 was $2.43, an increase of 14.1% from the earnings per share for the prior year period, which was $2.13.

For the six months ended June 30, 2024, net income available to common shareholders was $175.1 million. Net income available to common shareholders for the six months ended June 30, 2023 was $147.6 million.

Earnings per share for the six months ended June 30, 2024 was $4.98, an increase of 20.0% from the earnings per share for the comparative period, which was $4.15.

Normalized net income (a non-GAAP financial measure) for the second quarter of 2024, was $86.7 million. Normalized net income for the prior year period was $74.0 million.

Normalized net income for the six months ended June 30, 2024 was $175.7 million, as compared to $149.5 for the comparative period.

Normalized earnings per share (a non-GAAP financial measure) for the second quarter of 2024 was $2.46, an increase of 17.7% from Normalized earnings per share for the prior year period, which was $2.09.

Normalized earnings per share for the six months ended June 30, 2024 was $4.99, an increase of 18.5% from Normalized earnings per share for the comparative period, which was $4.21.

Fleet

As of June 30, 2024, there were 68 containerships in the fleet.

Vessel Name

 Capacity
in TEUs		 Lightweight
(tons)		 Year
Built		 Charterer Earliest Charter
Expiry Date		 Latest Charter
Expiry Date (2)		 Daily Charter
Rate $
               
CMA CGM Thalassa 11,040 38,577 2008 CMA CGM 4Q25 2Q26 47,200
ZIM Norfolk (1)   9,115 31,764 2015 ZIM 2Q27 4Q27 65,000
Anthea Y (1) 9,115 31,890 2015 MSC 3Q25 4Q25 Footnote (3)
ZIM Xiamen (1) 9,115 31,820 2015 ZIM 3Q27 4Q27 65,000
MSC Tianjin 8,603 34,243 2005 MSC 3Q27 4Q27 19,000 (4)
MSC Qingdao 8,603 34,609 2004 MSC 3Q27 4Q27 23,000 (4)
GSL Ningbo 8,603 34,340 2004 MSC 3Q27 4Q27 Footnote (5)
GSL Alexandra 8,544 37,809 2004 Maersk 3Q25 3Q26 Footnote (6)
GSL Sofia 8,544 37,777 2003 Maersk 3Q25 3Q26 Footnote (6)
GSL Effie 8,544 37,777 2003 Maersk 3Q25 3Q26 Footnote (6)
GSL Lydia 8,544 37,777 2003 Maersk 2Q25 3Q26 Footnote (6)
GSL Eleni 7,847 29,261 2004 Maersk 4Q27 2Q29 16,500 (7)
GSL Kalliopi 7,847 29,261 2004 Maersk 1Q28 2Q29 18,900 (7)
GSL Grania 7,847 29,261 2004 Maersk 4Q27 2Q29 17,750 (7)
Colombia Express (ex Mary) (1) (16) 7,072 23,424 2013 Hapag-Lloyd (8) 4Q28 1Q31 Footnote (8)
Kristina (1) 7,072 23,421 2013 CMA CGM (8) 4Q29 4Q31 25,910 (8)
Katherine (tbr Costa Rica Express) (1)(16) 7,072 23,403 2013 Hapag-Lloyd (8) 2Q29 3Q31 Footnote (8)
Alexandra (1) 7,072 23,348 2013 CMA CGM (8) 2Q29 3Q31 25,910 (8)
Alexis (1) 6,910 23,919 2015 CMA CGM (8) 3Q29 4Q31 25,910 (8)
Olivia I (1) 6,910 23,864 2015 Hapag-Lloyd (8) 3Q29 3Q31 Footnote (8)
GSL Christen 6,840 27,954 2002 OOCL 4Q27 1Q28 20,500 (9)
GSL Nicoletta 6,840 28,070 2002 Maersk 1Q28 2Q28 35,750 (9)
CMA CGM Berlioz 7,023 26,776 2001 CMA CGM 4Q25 2Q26 37,750
Agios Dimitrios 6,572 24,931 2011 MSC 2Q27 3Q27 Footnote (4)
GSL Vinia 6,080 23,737 2004 Maersk 3Q24 1Q25 13,250
GSL Christel Elisabeth 6,080 23,745 2004 Maersk 3Q24 1Q25 13,250
GSL Dorothea 5,992 24,243 2001 Maersk 2Q25 3Q26 12,900 (10)
GSL Arcadia 6,008 24,858 2000 Maersk 1Q25 1Q26 12,900 (10)
GSL Violetta 6,008 24,873 2000 Maersk 4Q24 4Q25 18,600 (10)
GSL Maria 6,008 24,414 2001 Maersk 4Q24 1Q27 18,600 (10)
GSL MYNY 6,008 24,876 2000 Maersk 2Q25 1Q26 18,600 (10)
GSL Melita 6,008 24,848 2001 Maersk 3Q25 3Q26 12,900 (10)
GSL Tegea 5,994 24,308 2001 Maersk 3Q25 3Q26 12,900 (10)
Tasman 5,936 25,010 2000 Maersk 1Q25 1Q25 21,500
Dimitris Y (ex ZIM Europe) (22) 5,936 25,010 2000 ONE 2Q25 3Q25 33,900
Ian H 5,936 25,128 2000 ZIM 3Q24 4Q24 32,500
GSL Tripoli 5,470 22,109 2009 Maersk 3Q27 4Q27 36,500 (11)
GSL Kithira 5,470 22,259 2009 Maersk 4Q24 1Q28 36,500 (11)
GSL Tinos 5,470 22,068 2010 Maersk 3Q27 4Q27 36,500 (11)
GSL Syros 5,470 22,099 2010 Maersk 4Q27 4Q27 36,500 (11)
Dolphin II 5,095 20,596 2007 OOCL 1Q25 3Q25 53,500
Orca I 5,095 20,633 2006 Maersk 2Q25 4Q25 21,000
CMA CGM Alcazar 5,089 20,087 2007 CMA CGM 3Q26 1Q27 35,500
GSL Château d’If 5,089 19,994 2007 CMA CGM 4Q26 1Q27 35,500
GSL Susan 4,363 17,309 2008 CMA CGM 3Q27 1Q28 Footnote (12)
CMA CGM Jamaica 4,298 17,272 2006 CMA CGM 1Q28 2Q28 Footnote (12)
CMA CGM Sambhar 4,045 17,355 2006 CMA CGM 1Q28 2Q28 Footnote (12)
CMA CGM America 4,045 17,355 2006 CMA CGM 1Q28 2Q28 Footnote (12)
GSL Rossi 3,421 16,420 2012 ZIM 1Q26 3Q26 35,961 (13)
GSL Alice 3,421 16,543 2014 CMA CGM 2Q25 2Q25 20,500
GSL Eleftheria 3,421 16,642 2013 Maersk 3Q25 4Q25 37,975
GSL Melina 3,404 16,703 2013 Hapag-Lloyd (14) 4Q26 4Q26 21,000 (14)
GSL Valerie 2,824 11,971 2005 ZIM 1Q25 3Q25 32,000
Matson Molokai 2,824 11,949 2007 Matson 2Q25 3Q25 36,600
GSL Lalo 2,824 11,950 2006 MSC 2Q25 3Q25 18,000
GSL Mercer 2,824 11,970 2007 ONE 4Q24 2Q25 35,750
Athena 2,980 13,538 2003 MSC 2Q25 3Q25 17,500
GSL Elizabeth 2,741 11,530 2006 Maersk 2Q26 2Q26 20,360
GSL Chloe (ex Beethoven) (16) 2,546 12,212 2012 ONE 4Q24 1Q25 33,000
GSL Maren 2,546 12,243 2014 OOCL 1Q26 2Q26 16,500
Maira 2,506 11,453 2000 Hapag-Lloyd 3Q24 4Q24 16,000
Nikolas 2,506 11,370 2000 Maersk 4Q24 4Q24 14,250
Newyorker 2,506 11,463 2001 Maersk 1Q25 2Q25 17,250
Manet 2,288 11,534 2001 OOCL 4Q24 2Q25 32,000
Kumasi 2,220 11,652 2002 Wan Hai 1Q25 2Q25 38,000
Akiteta 2,220 11,592 2002 OOCL 4Q24 1Q25 32,000
Keta 2,207 11,731 2003 CMA CGM 1Q25 1Q25 25,000
Julie 2,207 11,731 2002 MSC 2Q25 3Q25 Footnote (15)
               
(1)  Modern design, high reefer capacity, fuel-efficient “ECO” vessel.
(2)  In many instances charterers have the option to extend a charter beyond the nominal latest expiry date by the amount of time that the vessel was off hire during the course of that charter. This additional charter time (“Offhire Extension”) is computed at the end of the initially contracted charter period. The Latest Charter Expiry Dates shown in this table have been adjusted to reflect offhire accrued up to June 30, 2024, plus estimated offhire scheduled to occur during the remaining lifetimes of the respective charters. However, as actual offhire can only be calculated at the end of each charter, in some cases actual Offhire Extensions – if invoked by charterers – may exceed the Latest Charter Expiry Dates indicated.
(3)  Anthea Y. The charter is expected to generate annualized Adjusted EBITDA of approximately $11.8 million.
(4)  MSC Tianjin, MSC Qingdao and Agios Dimitrios were each forward fixed for minimum 36 months – maximum 38 months. The new charters are expected to commence between 2Q 2024 and 3Q 2024, after the vessels are drydocked and are expected to generate annualized Adjusted EBITDA of approximately $6.9 million, $8.1 million, and $5.9 million, respectively. Agios Dimitrios new charter commenced in 2Q 2024. MSC Qingdao & Agios Dimitrios are fitted with Exhaust Gas Cleaning Systems (“scrubbers”).
(5)  GSL Ningbo is chartered at a rate expected to generate annualized Adjusted EBITDA of approximately $16.5 million.
(6)  GSL Alexandra, GSL Sofia, GSL Effie and GSL Lydia delivered in 2Q 2023. Contract cover for each vessel is for a minimum firm period of 24 months from the date each vessel was delivered, with charterers holding one year extension options. The vessels are expected to generate aggregate Adjusted EBITDA of approximately $76.6 million over the minimum firm period, increasing to $95.3 million if all options are exercised.
(7)  GSL Eleni, GSL Kalliopi and GSL Grania, were forward fixed with direct continuation for 35 – 38 months, after which the charterer has the option to extend each charter for further 12 – 16 months. The charter is expected to generate annualized Adjusted EBITDA of approximately $9.7 million per ship for the firm period.
(8)  Colombia Express (ex Mary), Kristina, Katherine (tbr Costa Rica Express), Alexandra, Alexis, Olivia I were forward fixed to Hapag-Lloyd for 60 months +/-45 days, followed by two periods of 12 months each at the option of the charterer. The new charter for Colombia Express (ex Mary) commenced in early 2024. The new charters for the remaining vessels are scheduled to commence as each of the existing charters expire, on a staggered basis, between approximately 3Q 2024 and late 2024. The charters are expected to generate average annualized Adjusted EBITDA of approximately $13.1 million per ship.
(9)  GSL Nicoletta and GSL Christen were forward fixed for 39 – 42 months and 38.5 – 41.5 months, respectively. The charters are expected to generate average annualized Adjusted EBITDA of approximately $11.4 million per ship.
(10)  GSL Maria, GSL Violetta, GSL Arcadia, GSL MYNY, GSL Melita, GSL Tegea and GSL Dorothea. Contract cover for each ship is for a firm period of at least three years from the date each vessel was delivered in 2021, with charterers holding a one-year extension option on each charter (at a rate of $12,900 per day), followed by a second option (at a rate of $12,700 per day) with the period determined by – and terminating prior to – each vessel’s 25thyear drydocking & special survey. GSL Arcadia, GSL Dorothea, GSL Tegea, GSL Melita charterer’s first options were exercised in 1Q 2024 and GSL MYNY in 2Q 2024.
(11)  GSL Tripoli, GSL Kithira, GSL Tinos, and GSL Syros. Ultra-high reefer ships of 5,470 TEU each. Contract cover on each ship is for a firm period of three years, from their delivery dates in 2021, at a rate of $36,500 per day, with a period of an additional three years (at $17,250 per day) at charterers’ option. GSL Tripoli, GSL Syros, and GSL Tinos charterer’s options were exercised in 2Q 2024.
(12)  GSL Susan, CMA CGM Jamaica, CMA CGM Sambhar and CMA CGM America are chartered at rates expected to generate average annualized Adjusted EBITDA of approximately $11.2 million per vessel.
(13)  GSL Rossi. Chartered at an average rate of $35,961 per day, $38,000 to 1Q 2025 and $35,000 for the remaining period.
(14)  GSL Melina. Chartered to Maersk for 27 – 28 months from July 2024. The charter is expected to generate average annualized Adjusted EBITDA of approximately $7.9 million.
(15)  Julie. Chartered at a rate expected to generate average annualized Adjusted EBITDA of approximately $2.0 million.
(16)  On January 3, 2024, Mary was renamed to Colombia Express. On January 26, 2024, Beethoven was renamed to GSL Chloe. On April 19, 2024, Zim Europe was renamed to Dimitris Y. On July 9, 2024 Katherine was renamed to Costa Rica Express.

Conference Call and Webcast

Global Ship Lease will hold a conference call to discuss the Company’s results for the three and six months ended June 30, 2024 today, Monday August 5, 2024 at 10:30 a.m. Eastern Time. There are two ways to access the conference call:

(1) Dial-in: (646) 307-1963 or (800) 715-9871; Event ID: 3980617

Please dial in at least 10 minutes prior to 10:30 a.m. Eastern Time to ensure a prompt start to the call.

(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com

The webcast will also be archived on the Company’s website: http://www.globalshiplease.com.

Annual Report on Form 20-F

The Company’s Annual Report for 2023 was filed with the Securities and Exchange Commission (the “Commission”) on March 20, 2024. A copy of the report can be found under the Investor Relations section (Annual Reports) of the Company’s website at http://www.globalshiplease.com or on the Commission’s website at www.sec.gov. Shareholders may request a hard copy of the audited financial statements free of charge by contacting the Company at [email protected] or by writing to Global Ship Lease, Inc, c/o GSL Enterprises Ltd., 9 Irodou Attikou Street, Kifisia, Athens, 14561.

About Global Ship Lease

Global Ship Lease is a leading independent owner of containerships with a diversified fleet of mid-sized and smaller containerships. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under fixed-rate charters to top tier container liner companies. It was listed on the New York stock Exchange in August 2008.

As of June 30, 2024, Global Ship Lease owned 68 containerships ranging from 2,207 to 11,040 TEU, with an aggregate capacity of 376,723 TEU. 36 ships are wide-beam Post-Panamax.

As of June 30, 2024, the average remaining term of the Company’s charters, to the mid-point of redelivery, including options under the Company’s control and other than if a redelivery notice has been received, was 2.2 years on a TEU-weighted basis. Contracted revenue on the same basis was $1.77 billion. Contracted revenue was $2.13 billion, including options under charterers’ control and with latest redelivery date, representing a weighted average remaining term of 2.8 years.

Reconciliation of Non-U.S. GAAP Financial Measures

To supplement our financial information presented in accordance with U.S. GAAP, we use certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with U.S. GAAP. We believe that the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business and financial performance than U.S. GAAP measures alone. In addition, we believe that the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as impairment charges, contract termination costs or items outside of our control.

We believe that the presentation of the following non-U.S. GAAP financial measures is useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

A.   Adjusted EBITDA

Adjusted EBITDA represents net income available to common shareholders before interest income and expense, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking net costs, gains or losses on the sale of vessels, amortization of intangible liabilities, charges for share based compensation, fair value adjustment on derivatives, the effect of the straight lining of time charter modifications, and impairment losses. Adjusted EBITDA is a non-U.S. GAAP quantitative measure used to assist in the assessment of our ability to generate cash from our operations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is not defined in U.S. GAAP and should not be considered to be an alternative to net income or any other financial metric required by such accounting principles. Our use of Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.

Adjusted EBITDA is presented herein both on a historic basis and on a forward-looking basis in certain instances. We do not provide a reconciliation of such forward looking non-U.S. GAAP financial measure to the most directly comparable U.S. GAAP measure due to the inherent difficulty in accurately forecasting and quantifying certain amounts necessary for such reconciliation, and we are not able to provide such reconciliation of such forward-looking non-U.S. GAAP financial measure without unreasonable effort.

ADJUSTED EBITDA – UNAUDITED

(thousands of U.S. dollars)

    Three Three Six Six
    months months months months
    ended ended ended ended
    June 30, June 30, June 30, June 30,
    2024  2023  2024  2023 
           
Net income available to Common Shareholders 85,643 75,392 175,149 147,612
           
Adjust: Depreciation and amortization 24,540 22,172 48,810 43,356
  Amortization of intangible liabilities (1,502) (1,681) (3,005) (5,045)
  Fair value adjustment on derivative asset 1,014 (1,417) 764 1,368
  Interest income (4,143) (2,582) (7,827) (4,394)
  Interest expense 9,893 10,905 20,343 22,008
  Share based compensation 2,156 2,505 4,460 5,179
  Earnings allocated to preferred shares 2,384 2,384 4,768 4,768
  Income tax 1 5 1 5
  Effect from straight lining time charter modifications 2,363 483 4,249 (1,785)
Adjusted EBITDA 122,349 108,166 247,712 213,072

B.   Normalized net income

Normalized net income represents net income available to common shareholders after adjusting for certain non-recurring items. Normalized net income is a non-U.S. GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported net income for items that do not affect operating performance or operating cash generated. Normalized net income is not defined in U.S. GAAP and should not be considered to be an alternate to net income or any other financial metric required by such accounting principles. Our use of Normalized net income may vary from the use of similarly titled measures by others in our industry.

NORMALIZED NET INCOME – UNAUDITED

(thousands of U.S. dollars)

    Three Three Six Six
    months months months months
    ended ended ended ended
    June 30, June 30, June 30, June 30,
    2024 2023 2024 2023
           
Net income available to Common Shareholders 85,643 75,392 175,149 147,612
           
Adjust: Fair value adjustment on derivative assets 1,014 (1,417) 764 1,368
  Accelerated write off of deferred financing charges related to partial repayment of HCOB-CACIB Credit Facility – –   108
  Forfeit of certain stock-based compensation awards – –   451
  Effect from new share-based compensation awards plus acceleration and forfeit of certain share-based compensation awards – – (201) –
           
Normalized net income 86,657 73,975 175,712 149,539

C.   Normalized Earnings per Share

Normalized Earnings per Share represents Earnings per Share after adjusting for certain non-recurring items. Normalized Earnings per Share is a non-U.S. GAAP quantitative measure which we believe will assist investors and analysts who often adjust reported Earnings per Share for items that do not affect operating performance or operating cash generated. Normalized Earnings per Share is not defined in U.S. GAAP and should not be considered to be an alternate to Earnings per Share as reported or any other financial metric required by such accounting principles. Our use of Normalized Earnings per Share may vary from the use of similarly titled measures by others in our industry.

NORMALIZED EARNINGS PER SHARE – UNAUDITED

  Three Three Six Six
  months months months months
  ended ended ended ended
  June 30, June 30, June 30, June 30,
  2024 2023 2024 2023
         
EPS as reported (USD) 2.43 2.13 4.98 4.15
Normalized net income adjustments-Class A common shares (in thousands USD) 1,014 (1,417) 563 1,927
Weighted average number of Class A Common shares 35,174,969 35,375,684 35,201,716 35,533,273
Adjustment on EPS (USD) 0.03 (0.04) 0.01 0.06
Normalized EPS (USD) 2.46 2.09 4.99 4.21
         

Dividend Policy

The declaration and payment of dividends will be subject at all times to the discretion of the Company’s Board of Directors. The timing and amount of dividends, if any, will depend on the Company’s earnings, financial condition, cash flow, capital requirements, growth opportunities, restrictions in its loan agreements and financing arrangements, the provisions of Marshall Islands law affecting the payment of dividends, and other factors. For further information on the Company’s dividend policy, please see its most recent Annual Report on Form 20-F.

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, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intend”, “may”, “ongoing”, “plan”, “potential”, “predict”, “should”, “project”, “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements are based on assumptions that may be incorrect, and Global Ship Lease cannot assure you that these projections included in these forward-looking statements will come to pass. Actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.
The risks and uncertainties include, but are not limited to:

  • future operating or financial results;
  • expectations regarding the strength of future growth of the container shipping industry, including the rates of annual demand and supply growth;
  • geo-political events such as the conflict in Ukraine and the recent escalation of the Israel-Gaza conflict;
  • the potential disruption of shipping routes, including due to lower water levels in the Panama Canal and the ongoing attacks by Houthis in the Red Sea;
  • the length and severity of the ongoing outbreak of the novel coronavirus (COVID-19) around the world and governmental responses thereto;
  • the financial condition of our charterers and their ability and willingness to pay charterhire to us in accordance with the charters and our expectations regarding the same;
  • the overall health and condition of the U.S. and global financial markets;
  • our financial condition and liquidity, including our ability to obtain additional financing to fund capital expenditures, vessel acquisitions and for other general corporate purposes and our ability to meet our financial covenants and repay our borrowings;
  • our expectations relating to dividend payments and expectations of our ability to make such payments including the availability of cash and the impact of constraints under our loan agreements;         
  • future acquisitions, business strategy and expected capital spending;
  • operating expenses, availability of key employees, crew, number of off-hire days, drydocking and survey requirements, costs of regulatory compliance, insurance costs and general and administrative costs;
  • general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand;
  • assumptions regarding interest rates and inflation;
  • changes in the rate of growth of global and various regional economies;
  • risks incidental to vessel operation, including piracy, discharge of pollutants and vessel accidents and damage including total or constructive total loss;
  • estimated future capital expenditures needed to preserve our capital base;
  • our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;
  • our continued ability to enter into or renew charters including the re-chartering of vessels on the expiry of existing charters, or to secure profitable employment for our vessels in the spot market;
  • our ability to realize expected benefits from our acquisition of secondhand vessels;
  • our ability to capitalize on our management’s and directors’ relationships and reputations in the containership industry to its advantage;
  • changes in governmental and classification societies’ rules and regulations or actions taken by regulatory authorities;
  • expectations about the availability of insurance on commercially reasonable terms;
  • changes in laws and regulations (including environmental rules and regulations);
  • potential liability from future litigation; and
  • other important factors described from time to time in the reports we file with the U.S. Securities and Exchange Commission (the “SEC”).

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Global Ship Lease’s actual results could differ materially from those anticipated in forward-looking statements for many reasons specifically as described in Global Ship Lease’s filings with the SEC. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Global Ship Lease undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this communication or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Global Ship Lease describes in the reports it will file from time to time with the SEC after the date of this communication.


Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars except share data)

    As of,
  June 30, 2024     December 31, 2023
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents $ 171,279   $ 138,640
Time deposits   53,000     14,000
Restricted cash   58,864     56,803
Accounts receivable, net   11,647     4,741
Inventories   15,571     15,764
Prepaid expenses and other current assets   39,418     40,464
Derivative asset   22,612     24,639
Due from related parties   886     626
Total current assets $ 373,277   $ 295,677
NON – CURRENT ASSETS          
Vessels in operation $ 1,631,405   $ 1,664,101
Advances for vessels’ acquisitions and other additions   21,488     12,210
Deferred charges, net   72,805     73,720
Other non – current assets   22,564     23,935
Derivative asset, net of current portion   13,834     16,867
Restricted cash, net of current portion   67,141     85,270
Total non – current assets   1,829,237     1,876,103
TOTAL ASSETS $ 2,202,514   $ 2,171,780
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable $ 18,398   $ 17,601
Accrued liabilities   29,105     28,538
Current portion of long-term debt   173,677     193,253
Current portion of deferred revenue   41,177     40,331
Due to related parties   621     717
Total current liabilities $ 262,978   $ 280,440
LONG-TERM LIABILITIES          
Long – term debt, net of current portion and deferred financing costs $ 539,008   $ 619,175
Intangible liabilities-charter agreements   2,657     5,662
Deferred revenue, net of current portion   66,815     82,115
Total non – current liabilities   608,480     706,952
Total liabilities $ 871,458   $ 987,392
Commitments and Contingencies   –     –
SHAREHOLDERS’ EQUITY          
Class A common shares – authorized
214,000,000 shares with a $0.01 par value
35,260,029 shares issued and outstanding (2023 – 35,188,323 shares)		 $ 353   $ 351
Series B Preferred Shares – authorized
104,000 shares with a $0.01 par value
43,592 shares issued and outstanding (2023 – 43,592 shares)		   –     –
Additional paid in capital   676,056     676,592
Retained earnings   636,785     488,105
Accumulated other comprehensive income   17,862     19,340
Total shareholders’ equity   1,331,056     1,184,388
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,202,514   $ 2,171,780

Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Statements of Income

(Expressed in thousands of U.S. dollars)

  Three months ended June 30,   Six months ended June 30,
  2024   2023   2024   2023
OPERATING REVENUES                      
Time charter revenues $ 173,495   $ 160,399   $ 351,553   $ 316,326
Amortization of intangible liabilities-charter agreements   1,502     1,681     3,005     5,045
Total Operating Revenues   174,997     162,080     354,558     321,371
                       
OPERATING EXPENSES:                      
Vessel operating expenses (include related party vessel operating expenses of $5,385 and $4,556 for each of the three month periods ended June 30, 2024 and 2023, respectively, and $10,808 and $8,901 for each of the six month periods ended June 30, 2024 and 2023, respectively)   47,180     43,407     95,038     86,169
Time charter and voyage expenses (include related party time charter and voyage expenses of $2,125 and $1,942 for each of the three month periods ended June 30, 2024 and 2023, respectively, and $4,317 and $3,662 for each of the six month periods ended June 30, 2024 and 2023, respectively)   5,386     6,681     10,631     12,139
Depreciation and amortization   24,540     22,172     48,810     43,356
General and administrative expenses   4,049     4,711     9,138     9,500
Operating Income   93,842     85,109     190,941     170,207
                       
NON-OPERATING INCOME/(EXPENSES)                      
Interest income   4,143     2,582     7,827     4,394
Interest and other finance expenses   (9,893)     (10,905)     (20,343)     (22,008)
Other income/(expenses), net   950     (422)     2,257     1,160
Fair value adjustment on derivative asset   (1,014)     1,417     (764)     (1,368)
Total non-operating expenses   (5,814)     (7,328)     (11,023)     (17,822)
Income before income taxes   88,028     77,781     179,918     152,385
Income taxes   (1)     (5)     (1)     (5)
Net Income   88,027     77,776     179,917     152,380
Earnings allocated to Series B Preferred Shares   (2,384)     (2,384)     (4,768)     (4,768)
Net Income available to Common Shareholders $ 85,643   $ 75,392   $ 175,149   $ 147,612

Global Ship Lease, Inc.

Interim Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

    Three months ended June 30,     Six months ended June 30,
    2024     2023     2024     2023  
Cash flows from operating activities:                        
Net income $ 88,027   $ 77,776   $ 179,917   $ 152,380  
Adjustments to reconcile net income to net cash provided by operating activities:                        
Depreciation and amortization $ 24,540   $ 22,172   $ 48,810   $ 43,356  
Amounts reclassified to/(from) other comprehensive income   311     (137)     551     (176)  
Amortization of derivative assets’ premium   1,154     1,045     2,295     1,936  
Amortization of deferred financing costs   1,138     1,361     2,322     2,836  
Amortization of intangible liabilities-charter agreements   (1,502)     (1,681)     (3,005)     (5,045)  
Fair value adjustment on derivative asset   1,014     (1,417)     764     1,368  
Stock-based compensation expense   2,156     2,505     4,460     5,179  
Changes in operating assets and liabilities:                        
(Increase)/decrease in accounts receivable and other assets $ (1,581)   $ 3,893   $ (4,489)   $ (2,462)  
(Increase)/decrease in inventories   (328)     (1,855)     193     (1,162)  
Increase in derivative asset   (28)     –     (28)     –  
Increase/(decrease) in accounts payable and other liabilities   5,945     1,240     (139)     (5,916)  
(Increase)/decrease in related parties’ balances, net   (739)     890     (356)     745  
(Decrease)/increase in deferred revenue   (7,526)     4,028     (14,454)     12,240  
Payments for drydocking and special survey costs (1)   (7,105)     (14,325)     (10,742)     (23,052)  
Unrealized foreign exchange (gain)/loss   (1)     1     (4)     1  
Net cash provided by operating activities $ 105,475   $ 95,496   $ 206,095   $ 182,228  
Cash flows from investing activities:                        
Acquisition of vessels $ –   $ (123,300)   $ –   $ (123,300)  
Cash paid for vessel expenditures   (948)     (3,369)     (4,703)     (4,551)  
Advances for vessel acquisitions and other additions   (5,894)     (2,713)     (7,527)     (5,945)  
Net proceeds from sale of vessel   –     –     –     5,940  
Time deposits acquired   (39,000)     (3,000)     (39,000)     (4,050)  
Net cash used in investing activities $ (45,842)   $ (132,382)   $ (51,230)   $ (131,906)  
Cash flows from financing activities:                        
Proceeds from drawdown of credit facilities $ –   $ 76,000   $ –   $ 76,000  
Repayment of credit facilities/sale and leaseback   (49,981)     (47,215)     (102,063)     (100,271)  
Deferred financing costs paid   –     (1,140)     –     (1,140)  
Cancellation of Class A common shares   –     (6,992)     (4,994)     (16,980)  
Class A common shares-dividend paid   (13,255)     (13,340)     (26,469)     (26,691)  
Series B preferred shares-dividend paid   (2,384)     (2,384)     (4,768)     (4,768)  
Net cash (used in)/provided by financing activities $ (65,620)   $ 4,929   $ (138,294)   $ (73,850)  
Net (decrease)/increase in cash and cash equivalents and restricted cash   (5,987)     (31,957)     16,571     (23,528)  
Cash and cash equivalents and restricted cash at beginning of the period   303,271     278,359     280,713     269,930  
Cash and cash equivalents and restricted cash at end of the period $ 297,284   $ 246,402   $ 297,284   $ 246,402  
Supplementary Cash Flow Information:                        
Cash paid for interest   14,724     16,875     30,626     33,329  
Cash received from interest rate caps   6,184     8,839     14,366     15,916  
Non-cash financing activities:                        
Unrealized (loss)/gain on derivative assets   (3,184)     2,803     (4,324)     (5,231)  
                         

(1) The Company has made reclassifications to the prior year statement of cash flows to correct and reclassify payments for drydocking and special survey costs from investing outflows to operating outflows which resulted in a decrease in investing outflows and increase in operating outflows of $11,995 and $18,300 for the three months and six months ended June 30, 2023, respectively. The Company evaluated the reclassifications from both a quantitative and qualitative perspective and determined the impacts were immaterial to the previously issued interim financial statements.

Investor and Media Contacts:
The IGB Group
Bryan Degnan
646-673-9701
or
Leon Berman
212-477-8438


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