GSL - Earnings call transcript Q2 2021 | Global Ship Lease, Inc.

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Ian Webber

Thank you very much. Thank you. Good morning, good afternoon everybody and welcome to the GSL Second Quarter 2021 Earnings Conference Call. The slides that accompany the presentation are available at our website at www.globalshiplease.com.

As usual, slides 2 and 3 remind you that, the call today may include forward-looking statements that are based on current expectations and assumptions, and are by their nature inherently uncertain and outside of the company's control. materially those forward-looking harbor described the presentation. differ many due section may slide including factors, in results from statements these to of Actual the safe

in attention XX-F, Form is on for filed Risk We March report was which to and the draw recent annual your Factors also section with our XXXX XX, most on year. the SEC this

website this obtain the by can or via our You SEC's.

by and All filed these don't statements of qualified and reports to SEC, are in duty with disclosures any the statements. we other undertake our forward-looking our update

Officer, environment. of issued your some Chairman, For please and GAAP, we the update begin morning. Chief take will George Officer, and on available Tom this current Executive presented you I our this George I'm and will non-GAAP current most reconciliations refer to Financial we with accordance refer the That's as Youroukos; which our we'll also through Tassos, to financial measures on call, commentary, usual website. pleased calculated Psaropoulos; high-level And be Chief Tom areas of and market recent and by quarterly Commercial financials in Tassos that, take our results then will Lister. the the achievements, to directly earnings our joined measures focus. comparable with After that during and our to call the an questions. release

call pass George. I'll So X, the to turning to now slide

George Youroukos

agreeing exacerbated to in heights have GSL of container of poor many concessions Thank good an benefit the been and XX XX we modest We're supply In be the come. XX for and freight charter excellent revenue. which first initially year-to-date of the of $XXX overburdened new and this fundamentals longer-term acquire quarter, from seen to proven well with securing market highly us and active billion will in and delivered in smaller to representing very years has based upon charters, XXXX the residual was ships, of attached charters environment, January. markets to ways industry chain million downside ships achieved in classes quarter to and you particular, new focus, $X.X features been that This than you, by expected. that or to midst an supportive red-hot approximately shipping have for dilution capital Ian. currently XX risk. After good in our been today. joining And morning or the have us equity The of be afternoon with raise specified reach vessel only which minimize continues that second continuing all are our midsize has

this a result, of and XX% As dividend originally than our we manner expected. was to driven per $X.XX record our higher sustainable have a dramatically fleet quarterly earnings levels year grown in more a initiated share over by twice than

and S&P have agencies also majority of in cost quality. our has upgraded Both XXXX The Moody's us upgraded have our We secured and expensive us significantly acknowledged improved the Moody's capital. of reducing including senior our X.XXX% maturity debt, refinanced rating notes, credit vast again. QX, the

So rating and are BX our Stable. B+ today Stable

served immediately and point. high continue improved in us seizing discipline to that getting the ahead us we to and Now positioned maintaining well position, accretive proven while growth this executing our this so us strategy strategic from are of additional standards materially have opportunities,

to nearly set lockdowns XXXX challenges, in second and half at higher X, demand you moment. seen is of and meaningfully diverse that Where better XXXX describe turn demand the COVID-driven classes if demonstrated at to growth rates getting at GSL. for above big And the of for the very are capacity underlying than recent Now, has X%. to supplemented rapidly growth up current recent midsize growth I'll such containerized global trade for be better supply as again nearly the in despite terms snapping robust overall resilience to smaller limited the and fleet industry our led projections charter owners levels in years picture show for effective increase demand by significantly Against once back this XXXX slide global widespread X%. such to speeding the and

record Beyond important earnings GSL, taking the market steps in their an to seen new the caused orders, four sheets. understand balance year fundamentals-driven has and strength guiding customers earnings company asset recovery value liner major but towards for reported has improvements has for improving and our vessel things uptick that the It is been to it here.

these been has vessels, new now, the non-main-lane our and are for orders often largest where participate case in as towards vessels weighted the do the years which cannot many operate. trades not heavily First,

late of times themselves, current least the to growth XXXX limitations to interim XXXX growth majority order book be interim. and significantly that with lengthy the augment scheduled supply construction expected the little in in at until capacity done the the little with and still is can be early Second there to contracted outpace because very demand in to addition face that is delivered recently supply capacity

when shipping XXXX-XXXX Third, outstanding situation peak a the orders made order are about of capacity. hit when inevitably comparisons we container talk the new XX% book of in to

compliance grown which due future ordering uncertainty from to this is difference it lenders learned of the far real that clear ordering on. not size vessel the their green recent kind the XXXX, extreme ordering chip that an fourth book obviously seen The IMO important face have is to. capped regulatory ships one Germany. owners to meant crisis. of the about often will a of but speculative of There's effect book reduce and stringent of of a on up and book bodies much and in increasing instance COX that number combination current lessons to supply is looking and the to such the distinction willingness the reducing so as make speed, its fuels current engage part order into the capital from of performance and to hand, only infinite undersupply fact, capacity other of I shortage to also imperative only order the clear January one come the driven has reduce that that more apparently governments achieve point The requirement, a the on be a of the comparison as fuel here of supercharged in able is and is XXXX-XXXX the to the to From us characterized it fraction set encourage. in Under to But the EU Let would that order increased financial container year between here global before of that are this decarbonize and EEXI. head this known is in the fleet by like on response growing a to burn, emissions hand, XXXX speculative the emissions. of regulation by which to

years. consolidation. average newbuildings supply-demand such the more as from exodus an owner that advantages, sizable to have benefit when to of great just scale there the acquisition Just in we capital deal offers sector remains players quarters unable final players some In Potentially, reduction excellent X% who speed optimistic Moreover, who capacity a or containership GSL. the impactful entered for is have this are we summary, reduction call is balance the a dozens and that coming global hugely being of as in would This still slightly delivered. to access in on profound listed fleet will opportunities effective note one with is highly of to decade turn the elevated of ago position a X%. levels see the effect publicly are equates of additional here One I believe much With our a potential platform that, regulation of proven. of about will The like a fragmented mainly often to Ian. in of to financial point and range I business. a make we that that subscale and be sector are to of we

Ian Webber

George. you, Thank

X. turn to slide Let's

additional value with materially La Tour acquired them slide, have this shortly, you'll first XXth charters our On above number this vessels you'll wanted pre-existing quite a I'll to June in to part of notice to that from June familiar few fleet. at been the If which spend these, that years those at show We've were year, we dark the the fleet, in GSL probably of this the that, and at beginning we multiple ships as of come XX before, those but which moments are continue rates above. that generate be are the less of in now that year. GSL, we've And year, you they're of follow for on end already for blue, fact. that the on all a came indicated instances year-to-date. dramatically we nearly agreed those sold the

a XX day revenue well a rate largely to time both you fourth increase through operating XXXX-built $X,XXX-TEU for in order of the in you, of of take year earning day because are become that charter Similarly, that vessel day Nicoletta short is to just day too By XXX% first XXXX-TEU old. day when when to the per to become the our leverage public. a bottom-line the into the will way goes list the be to she in years are can straight $XX,XXX operating it for XXXX fixed, and will from the will XXXX, GSL all years she'll highlight means $XX,XXX our Keta, charter inherent left, remind $XXXXX costs me earning earnings $X,XXX fixed. current down cash which our further any way, very and the per is time Let our that rate XX-year-old on a new business negotiate the And some quarter costs transition some this the per of XX new and old. currently

total some further rates XX settled included The $XXX fixtures charters ships to on all activity bring in the acquired and chart XX this market year million XXXX, So those below rates materially to? all ago The revenue. announcing most fleet available XX their that total in come during this off or ships, of market, the scheduled the this to presently cases we'll a were of GSL What current added long which our charters while of of over nearly billion point for today XXXX of central a of of does in across a when for duration years. $XXX entirety the we a remaining page were million fleet $X.X are Furthermore, have next we a weighted-average are revenue, lower. the in earning contracted emphasis cover rest existing the are come in contracted of year-to-date some contract year-to-date, our to in X.X amount of so. which

the of slide vessels finish more This million. agreed so purchase year to just than fleet grows turn far XX our X. of on let's So overview ships, year-end position. to $XXX the to XXXX, We'll that buy an our for aggregate increase an with this under we've price XX XX% fleet

generating in speak are and remaining the are months. and few we to these be of business. As four The the flow XX delivered going cash vessels for been delivered have revenue next

ratio accretive with times an these annual price-to-average the X.X estimated adjusted All range immediately times. of EBITDA are X.X of purchase to acquisitions in

have half the see payback eliminating downside in largely accounted for, of these acquisitions attractive bottom period remaining the purchase. even can charter ensure is long vessels those in durations that the risk which making generally GSL's particularly you As the at or or table, larger rates, limiting up

the but is we've For the charter market in table, acquisitions of the risk our profile with to a amount structured the to of ensure smaller exposure. vessels upside, upper certain also that half the near-term skewed

times red handsomely you three vessels signed on see charters those market those late on with acquire to secured year existing already here As bars provided agreement the with rates rates $XXX by strategy Slide to approximately exposure to to million from than vessels forward X total and subsequent of has adjusted durations see measured of on we've Page approximately far current illustrate the our charters more this based new the amounts have Page paid secured out X, these vessels charters XXXX. and three the X that from can at XX year-to-date their two XXXX the of revenue. slide. times new and and off extending added a we their fleet that you our Between is charter having on new the growth thus EBITDA charters which contracted

the we've We've Given these account that delivery across results to of charter ships, plugging fleet. XX charters run would new ships be and The scenarios. existing the To slide through of all XXXX Page the be and forecast. in that mathematical we both three a our which calculator, be or for our substantial impact or growth considered EBITDA are it by actual thought expected clear, of signing changes scenarios. the should in illustrate earnings existing on rates of XXXX for three usual helpful in acquisition our the rates new effective data XX none summarizes into of the the we appendix. dates different different very for dates takes simply and anticipated charter show for The done

of estimated charters; rates at at average XX-year historic XX-year current kind rates. of Firstly rechartering X this X, so market and Scenario at XX rates Scenario historic in months year average multiyear market July for the next rates;

As stronger to XX- are and market difference year is in leverage in for because at million here so step-change see difference in revenue the at historic between the or flow. charter difference scenarios impact rates historic EBITDA $XXX $XX million July I've a Overall, renewals as spot growth as revenue this than respectively. in before explains free for XX-year spot $XX those substantially rates the full mentioned, and between are operating and contracted July revenue higher XXXX of extent example, much the result rates, adjusted our those and rates XXXX. year you'll million compared The the the exactly, of our the and XXXX at that of terms of the of XXXX cash we averages, experiencing in

numbers, from Numerically, late For revenue common after slide EBITDA two for you adjusted even with $XXX our million spot adjusted this any rates. preferred cover and dividends dividends XXXX some at context, spot in our that in include remember, on our our flow million around on dollar as leaving EBITDA in amount. $XX increase XXXX was revenue stock flow Aggregate not million. preferred costs and XX current net if and but on counts and of which data, our $XXX debt do assume including of you can gives of at on net in full and revenue XXXX, – spot common of working as that no the revenue cash approximately flow. years of Poseidon anything of for and XXXX than $XX at And the $XX get adjusted XXX% CapEx, operating already our same out XXXX and million. to annual so million, share drives expected is EBITDA following note vessels, all the CapEx, revenue from Page ships the costs, that's service cash zero will ample this Whilst well every all by today's the operating contracted merger debt of more not service taking you please sorry XXXX income cash spot ships the all our and

know in which purchase adjusted which XX of which put year-to-date opposed just charter risk cash $XXX from compelling low multi-year are are place to net on or This earnings EBITDA risk-averse. generate mainly and approach can growth attached that come scrap ships ships footprint upside add cover EBITDA the them activity good We focused on of ships our will the It it adjusted as carbon and charters of we a to our life. between covered income on building year per the overall that as three makes new four as operating a as for with price ships funding to returns times, taking build XX This value us multiple their recycling as of ESG well then only Slide before to for industry the the value-accretive assets fuel whole under EBITDA. contracts We means million business some contract collectively or including our has then, from price during ships The We to We're for of existing owner ships Moving be account time the strategy. residual The share future purchase XX the sense an ships revisit optimize purchase look mentioned significantly. We're will align a and into flow lifecycle of last X. we and and depreciation, we and two economic to X.X economic definitely ships. newbuildings, aiming expected of the increase describes the charters existing think should and Until costs. additional to of have decent with all through strategy. to seems when cover, a limited our we downside ships. I $XXX disciplined. value a be. as the there million show it's and they accretive full of have look call economic the maximize part on strengths to to take the with online what strategy, more potential. wait to with preferable We certainty of added the our this life but and since economic growth immediately

generation adjust to the less. attractive environment. be allows to within out financials. to or aim with talk Tassos With legacy want they're This that, us you decarbonization the of next to say we want the green five to turn proven returns cash over problem-free We through our Finally, a position I'll for to mature over able GSL to decade. to the our investment position call to and technologies evolving on coming stay nimble. be years capitalize as We strong strategy

Tassos Psaropoulos

you, Ian. Thank

the been number with you financials. a of significant year As know active moving very of first the half in the has pieces

have the summarized EBITDA $XX.X was key last year. which for half $XXX.X adjusts the items $XXX.X first of $XX.X we first income, from first the XXXX from from of Similarly, quarter. million items, million, half commenced you now. $XX.X in the Normalized quarter, million in second up up refinancing incurred Revenue we a moment of net slide this refinancing. XX. the So, the material points was million, like the XXXX. adjusted million. to one-off to for million all on for up half $XX.X to the one-off relation fees In in debt maturities, which I was in spend would we completed prepayment We on $X.X million of first

In Tour, we XXXX gain ship La sold net our a recording million. addition, $X.X TEU XXXX-build of

Moving to points items, balance are to sheet there the various highlight.

position XXXX, June at cash was $XXX.X Our XX, million.

XXXX maturity As mentioned successfully last our have above, quarter I debt. have we material the in refinanced

have million of perpetual $XX.X $XX.X XXXX under the XXXX FEL, also the with notes million bringing facilities our tranches of and have flexibility. two for We our reducing annual the for Agricole new quarter and third about our to three Deutsche, we and refinanced million $XXX.X first down pushing our with facility maturities of increasing million this debt by further service our those X.X%. the X.X% and second margins Credit one $X.X in out of program from preferred credit XXXX raised CNB ATM Meantime, to

end. raised been Additional in funds quarter have the

February aggregate drawdown by of acquisitions, July. we ships a million, XXXX. million, for delivery Post-Panamax which million down final raised contracted delivered end for of purchase place we against to The June $XXX $XX.X drawn $XX.X ships, Regarding have XX, financing the took our in six of the seven have we

new and Post-Panamax deposits as mentioned of addition, the million. seven acquisition the quarter of before, sold million last to La we Tour of of $XX.X profits we XX our vessels contracted ships end, ships And the the the we $XX.X net purchase. for for paid of In as had

shareholders to and Also XX. declare a for in our second paid be statements for of through to $X.XX slides quarter financial per detailed strong to X on the the Board current the Our record September common on on dividend confidence August performance appear XX future allowed XX. has of full share

slide positive Now, the our moving capital forward. turning of to on have XX, summarized some now we major impacts structure and

the this of for XXXX, ships to is netting cash our before very XXXX the purchase, can on €XXX increase our earnings, million the slide time, to can amortize year cost leaves times new debt average the upside the the X.X XXXX. schedule is this but from you below and for debt agreed not that see being about see X.X is with year XXXX same illustrative from and vessels adjusted X.X% X% of EBITDA X times X.X set significantly significant line upper-right total year-end gross and have EBITDA the deliveries of reduced outstanding in then earnings the of in to a upper-left, to As chart you at end times the taking end to of to the through At by end the in that scheduled we is adjusted leveraged now its to the significantly full we on XXXX. aggressive and through debt end which Incidentally of debt track thereafter the assets. X.X times low to from from This of slide year. at numbers fall XXXX have

over $XXX from Kelso June. offering as this and our market; then to million as has large earlier the dramatically fleet with of quite continued On actively month as float our year a equity million just XXX we that our a the shareholder in to sold our business following amount our holdings as liquidity portion lower-left, ago has in have you the $X this stock trading thin a market developed year will the to transparently and times see increased again their once has engage into increased and legacy

the In Board and CMA, public more stock become clearly by CGM the of common is GSL held much traded has by current lower-right the split remainder accessible Kelso. stock and and the our investors. for ownership with management Our freely XX%

EBITDA will flow you slide as calculator can over With help intended Finally cash to on I on turn give And our it CapEx slide find XX, guidance on that, is you with modeling. which a we Tom. always to XX, appendix, and your spending. the

Tom Lister

Thanks Tassos. everyone. Hello,

Let's put slide focused, which the in we're on will to highlight context the which is XX, subsequent which ship move to intended sizes help slides.

and ranging for the So X,XXX ships, from ship”, TEU top which of the ships smaller emphasizes The shorthand their ships about left is up XX,XXX “our flexibility. we're under i.e. midsize TEU, of deployment XX,XXX operational on to on TEU. and focused shows sizes map

is the much top-chart capacity The to sector. try Ship As as the recycling chart you can idle a see capacity, ships shore outset they're deployed everywhere. TEU cargo the at said be employment ships The container of bottom June have X.X%, XX,XXX their been Why? to map mainlane liner than where outside but why has shows on or and pretty And the for where the market and note speed been up supply to the volumes by are trades to for at similar which infrastructure East-West operators scrapping Because red-hot. volumes global charter non-existent the demand. big has side The that ships, trades almost served generate those important larger like them. tend additional Slide containerized other tends George this which the can North-South year. shows had the words accommodate be these side story. which and trade support ships tells main roughly choice bottom moved to intermediate of that little effective to trends end in it's health ours. of full shows are was regional In lanes. barometer XX, XX% a deployed, to explains

of So a why out her. a squeeze scrap few ship millions you more of if can EBITDA

for XX. fleet slide, which slide full nicely the sets up that's So baseline; next us employment, the

see segments the over box segments on how sitting the underinvestment. even the segments growth can through years. seen the due carries focused the XXXX, negligible in minimal we're those have you delivery fleet the same the for left, have again have grown or red various The size red through on pipeline box, on fleet negative last in to our Here fleet right order few the shows the scheduled to books. The chart phenomenon segments

activity has order on not from heavily we which As that sector the above and over whole frankly our and X.X% book chart, been XX,XXX the as have segments big little about the in you This above XX%. XX,XXX ships, can TEU, read actually order explains infer X.X%, in focused TEU while focus that you a core compete. is ratios order why a for the respectively a book-to-fleet are for the

all to So rate to for very slide short bifurcated slide, rates, at direction the rates containership the the months charters over of of done at is periods into in values answer turn market showed For we on where slide the were unrepresentative. has market dollar very focused. what for past, the In earnings incredibly the XX. has enough, attractive years we're data high please rates the charters. this becoming for travel this themselves but that, next And multiple reason is the the XX-month and for provided this still for charter to This charters charter recent that well which the market? six-month of

charter the provide clearer up keep in multi-year rates a basket on were, we evolving, together index are July. ship sizes, moving at which of of picture charters rates the So, right-hand or paints the for a with is because a where least market today side based table how showing on

half than a XXXX. index can As first more has XXXX the see, during you XQ of by multiple in trough the since is up times and five charter the of doubled of rate

George? way George things a any that up. to market. at On look note, it wrap high you truly I'll back to So fantastic turn call the

George Youroukos

your be up Tom. across thank successful X.X then you years we cover an Tom. and have I will fleet. of briefly we summarize contract Yes, you rechartering average Thank revenue, and $X.X almost very Through of billion to questions. growth will contracted happy take our built

all fully least contracted at you. Importantly, service, dividends told covered cash are debt of Ian XXXX, and as CapEx our through by flows,

way we XX So the upon reliant excited in and our upside related rechartering that about no very confident and over next months, have are exposure while we it. we're

cash. Our with balance €XXX of very is million strong sheet

Our during credit market, be book of to midsize high both years of capacity reefer and and in container doing all remain as has our well a sweet that market. market, are and they only workhorse fleet play ratings believe continue Stable despite the successfully are B+ with already the spot debt the significantly trending nearly leverage look role And our in set ratios the that as been XXXX critical in our for cost high direction. Stable. red-hot to our We not BX Post-Panamax upgraded they underrepresented refinanced, demand represents while debt to have smaller strongly in come, ships to right many order to the but extremely in been this

onset the that regulations. expect may XXXX, effective the fact classes new steaming in slower environmental new comply emissions capacity these shrink vessel from regulations with With in to of reduce to we the of

have have second year. market the their results and they're the we in quarter rates said, times charter been up and customers XXXX, delivering lows our to five this remains also market are of the versus Relative of times freight year. and X.X liner very beginning As hot charter far outstanding approximately this so up

cannot doing to conditions and most global of is challenging performance have onshore, enough terms to the our last months sea moving. in worked fundamental safety consistently so who our that emphasize at excellent crucial personnel In priorities, the helping contribution. strongly and We keep deliver we their economy appreciate in and strategic the hard an welfare the of throughout XX

fleet our the growth delivering we're implemented in focused million giving addition, fleet the existing renewals grown opportunities is support process, accretive charter on there to year-to-date XX% $XXX lot are that that we on quarterly GSL by of happy strongly uniquely and to in seize. well-positioned along thus contracted still We've that, adjusted a over further we the adding there the of out dividend. questions. believe exciting recently will with In take to be your EBITDA With additional

Operator

Instructions] Jefferies. comes first [Operator Randy Giveans Thank you. with question from Our

Randy Giveans

going? Gentlemen, how’s it

George Youroukos

Randy. good, Very

Tassos Psaropoulos

you. Thank

Randy Giveans

right. All

terms to with release, the most as in in possible you've at And older pretty increases attached. of discounted kind thoughts what you do repurchases So presentation, point, direction press the or discussed tonnage; maybe these or path, levels? aggressive acquiring been vessels? obviously, look some throughout of charters other At that dividend continue this then selling through you've on are on look your share the

George Youroukos

-- are for still not to There start part We the the out pass on us. first then Randy will there and in do I Ian. mainstream go transactions. with deals it I'll

for sources mainly off-market our have executed. We like transactions ones that are we the have

We of direction. haven't off deals our do always the in great deals market And We deals really. there's done a stream coming market. any

and very selectively out very first growth grow carefully. the And stress accretive are We're So part there carefully. company, at accretive yes to is the word to deals do the opportunities very of sheet. rest? our and but want looking deals deals. we do only to not just a the I sake to doing accretive for do you sense the lot the to answer take they're of make that We Ian, balance

Ian Webber

levels then just to done everything successfully our accretive changes, But is changes as But growth does as allocation moment and But expecting we faster situation We're about earlier Sure. year-to-date on a the deploying and we've We've look indicated capital That so under we other if twice you compared sector. we pay delivery our dividend expecting. it ships rates as well. Randy you actually George charter in sure folks pretty far. there just we do, than little were our one than under what dividend. and second base I'm as that's review. our to take I up the our paid at the we're And yields said, dividend at review. well as case. actually a say we was up so And of has focus little capital we were keep moved took if only because,

Randy Giveans

it. Got

come the what kind of turning see or available continue those will will average Okay. vessels expiry outlook wait of then market short-term and increases to cause I closer guess over what at time? do know containership kind have your to that that. Fair. to chartering, charters is the you market two rates looking is And XX or I XX that months, parts And you next rates. maybe in to at are just will on wanting the XX of book those some the in until of increased for then meantime, and weeks in One now. end, that what row a what think when you forward-fix kind your don't to

George Youroukos

the I Let market, short-term go can in are you and is so me this -- because, in me there's of help in for What and from question apart all see This congestions cases what this. also try and on forth. think stratospheric to there that start the these numbers. market with fact Tom so then the the with become fundamentals We that because, will the problems believe is up some the are that crazily features COVID-related can future. market

for the at periods the time, and see periods, charters liner I see fundamentals. is need is to where the on whilst COVID COVID as going is going company think continue X to a and are these XXXX the and mean that X-year go same based these will you longer the anytime out chains more doesn't world, short-term fundamentals a They not consensus the I to a long going as so COVID in COVID-free is as three be for five is long away months out they with everything, fix as for unless personal my not to supply rates $XXX,XXX opinion, simply on see and So that in years disruptions to there the don't soon, the I could there it. full we to stratospheric day offer the ship get forward. three know

But even as you market opinion. a in will possibly feel my the year be the say I that us? be good going if we a this what would a believe on is and opinion long-term I for personal rates bit XXXX sustainable. Tom, purely talk to further, want more will my So forward about more more personal but And strategy

Tom Lister

Sure, sure.

with First George I of has said. everything all, agree

on one conservative the supply-side always and But and has fundamentals this as a during sizes served you model remain ups as is we're at news. downs, that one the supportive, the great the us business of If well data, for our cyclical extraordinarily the which is that well business. focused look conservative been a

supply-side equal, great. we're very all are being the fundamentals So things –

surprise well, has taken macro we've be can any events by has world forward any by and as one big one you over which the has As learned, no visibility. no learned, control,

believe that seeking. fixing long, and sense forward-fixing terms continue makes So in we long profile possible that where to of we're the risk/return

Randy Giveans

great deal. Hey, for. Got Keep the good that's it. work. you. up Thank it

George Youroukos

Randy. Thanks,

Operator

Thank you.

Our from Clarksons Securities. next with question Frode comes Morkedal

Frode Morkedal

add $X prevailing income had, is very and are looking is more rates if at Yes. this the you. share. approximately next than market How per chart $XXX net Looking at you're which I you interesting, you guess guys? million than EBITDA EBITDA Thank which on million you more year, $XXX

start open really that's out that how right? first next to year? of So you that the rates? these open chartering this quickly end expect say, huge, much at you by let's So so So how is covered question then have can year, prevailing speak capacity capacity to do of

George Giouroukos

And is more the may we is, balance the between get. the prompt I If position can higher open Obviously, risk the a try reward. get. is you come usually, that to answer the higher can charter vessel the the this the to and we shorter rate

the can safety say quite accurately. the market, months we as for let's see three we So see predict market, and ourselves with six to we

to six nine we months. to to try So three anything tend and fix-forward between

we the extension. see months. three might our I continues being things if it months you advance let's be three or without trending imagine equal, market go in ahead. and nine months. all That feel view let's to we'd – see would the for nine going expirations If downward flat, months looking the a tell if maturities So give would say trend, my we able say see to market that, your go would wouldn't say the response something is that, an things. to genuine you more be the question. today of upward upwards, If the the of anything of down, market we like between that we months the as bit specifically. could It's at we be market six charters, fixing to for I Because we we'd go you to for of the be a how

Ian Webber

open the the QX ships but end come runs of that next this X come open year, And and if at eyeballing end I QX between only latest you end the of any or this pages is year. to is of it, latest all XXXX year. charter Most the just and quarter-by-quarter, existing period just charters look next the open ships X, the of XXXX, know that and of

have call tonnage has chance what said, consistent George most QX we'll a by good have time the year-end wrapped this and So with we certainly the by that of there's up.

Frode Morkedal

the I be That's market expect of liner this news. few past the companies message they the from end would guess, weeks, Yeah. year. least to stay that is great strong that this the at the That message. to seems

Even should right? a your can me probably So personal the flow quite that, actually translate it's of That's means that million repayments $XXX quite build. actually that capture CapEx $XXX in good million cash That $XXX CapEx be reach. after would a it seems those. also to is it million opinion. substantial, chance my EBITDA But and lot to debt cash the maintenance you and that

And partly I the this first that of suddenly. answered there's you a I the -- active, what mean active going guess, Randy, themselves. by are companies So have lot liquidity? very buyers you've the question to like already but you liquidity all you except guess do liner been in I most with

the ship buying just the this steep moment a quite very the given that the so right? opportunity past over values so? past month we've or You've at lot And attractive in so about XX you what been or appreciation of do months seen at values, the ships think

Ian Webber

focus than whilst said We actually there's accretive uncertainty that We've that's do technology. to we builds as get We it's of our if got we time. this number to It's the on does cash not cash. on to and account over January. growth right course that all much ships. believe time. it got about solid, existing nevertheless earn And any thing to on to over an Well, we've would I so over already there basis. difficult said. it The right earn million we've to $XXX genuine want pretty say the hit we've are if but to more invest expect got still of position accumulates it. invest and in think Xst look that's mean time propulsion we to opportunities bank It's the

we and Now changes regulatory unable come in the we're XXXX the before if ensure to we're EEIX would I that are rest all of implied invest the coming But also our as at capital mindful kind the modifying allocation. it. with day years of us of look bad of We're up be is and not and We're thing. survivability around few sitting the cash huge to mindful And still. COVID uncertainties problem-free maybe over the next the legacy of for mindful around on decarbonization. flexibility massive uncertainties a such

George Youroukos

something And to then are look simple very is scenarios are look look How XXXX? one to going and all going be add I feel or less sure happy and going thinking I what everybody. to What going XXXX? guess three about. If today. for obvious. equal is is all to I'm there is we it to guys XXXX? may you XXXX We more very like think In in Scenario

high. to hand In is the money We're on solve but And fist. market money we're money. X,XXX investments We're to have problem. crazy over dividend sky grow medium to company the obviously if market money. be case not good So ships. then be this increase We're obviously to we keep very to going making making the make. we're not making is today, a continues our going going sky and to that goes Easy easy more we're two the to high Scenario to making market. are making

we we scenario a be we investing the low. So third sharing continue with in the And in to look have is also very the be what position are market shareholders. Then probably can two can at where strong combine you scenario going we little dividends and want that debt. very to where the

very strong maturities. fast. We We're very debt very, have debt paying down

fleet. cash-rich cheap worried at in this is which like doing This which want six we buy be we've scenario successfully. do to so And to that well our can is cows we what very vessels normally past been in not the we're have scenario So over all. what know about the cash we we this years do become today later

these Now we market scenarios are no always with charter. in deals carry market-related an together we're risk sale-and-leaseback which really buying because mind not three do as a you all transactions asset

high So very and the that residual on it's ships we risk fixed calculated end don't at the have value transaction usually period. it the do charter of

is rise market to always lot to a the money believe in of the a deploy accretively going we ability the or we regardless deploy high capital of we and So have on is low future. low market leaseback. a whether on or sale And market foreseeable a

Frode Morkedal

Thank very much. you sense. Make

Operator

with Our next Burke Riley. question B. comes from Liam

Liam Burke

you. Thank How today? is everybody

Ian Webber

Super duper.

Liam Burke

that It's particular you attractive the fleet class kind your more find any opportunities, do have others of within tough the to you than classes that ask any George preference see any vessel vessel you now? in questions, but

George Youroukos

vessels, spot Well we and We those ships the that core business our the with past been that's the Post-Panamaxes. is. and characteristics various arguments is arguments We built. ones. over those let's that have where heard we but of offer feeder vessels smaller special on years always first the choice our low-slot-costs also sweet felt That good it in and was over years the that of being course heard the the like were -- years call none

if We requirements and shipping. what not on needed. go we We know rely the know every built being that analysis know load because wrong. by We We and know the what focus more comes than the we were very on were what were what are. is the cargoes in. not analysis from do business. We ships general best are. day. know we container the But on we We maybe not So scenarios. And only they they don't our what focused what we were

the make we stuck the dividends the highest that which where and So we killing. a to are the now ships in demand they have proved are our ones model

what an these these more the on buying look love will buy We Ideally, ships what now. word ships workhorses. the high focus ships. have to transaction And on obviously asked will smaller to that are will or price deal But Post-Panamaxes that we're at we depends is forward It was the that answer. to the reefer believe specialized yes proven want ideal going we own on Post-Panamaxes much merits. actual like containers it So I be as continue very we if is me right its ships in at immediate be. you the each and would

Liam Burke

terms very Are at on of start in how evaluating you niche-oriented your assets know buy. competition you your acquisitions as for And seeing that you you opportunities? all any I are

George Youroukos

market companies. next to are this the for going Well, six charter-free competitors are in for that months main the be the prune’s to vessels three in ships liner

buyer after We being and in are second the companies market. the third first the liner largest

are want So not for on because extending not we not from transactions cover have liner deploy trade. the competing sale-and-leaseback can of their their of more liner seen you because imagine And companies make it's ship they're on ships to now nine as the competing interest. companies. coming have right competition and charter which But money than months they

as how make it's We we a forward. the different as from companies. competition of not manage from owners the the companies ship to strong Obviously Apart liner liner approach. liner navigate have through That's we companies. from money fellow competition the the ship chartering

Liam Burke

Great. Thank you, George.

Operator

next J. comes Our question Edge. Investor's Value from Mintzmyer with

J. Mintzmyer

on Congrats gentlemen. good quarter. excellent Hi morning a

this good this morning. belabor too won't So questions I much. lots of

here. question Just a niche

You disposed of the La Tour.

also those QX come you Are block, that ships Manet you haven't QX. you also don't older the also rechartering want that yet. those? have up ship that read but million. on And chartered a comes that or three for similar it sold do sales I to you vessels much on $XX very almost ships, You size same two have XXXX-built into too sister the potentially up plan

George Youroukos

Ian, why La sold Tour? we explain do the you want to

Ian Webber

answer mean to under keep is decision haven't. tactical purchase the not La to strategically, I our review ago made a of while we everything have an Tour Sure. Tour of short basis. a a that We ships. help is J. to I we of La newer and the old monetize all older tonnage? your the we adverse sold brought question renewed exit time. mean lady. But the down fleet made to sort to on doing we No, decision the age. finance average And deliberately We're her the

and a cetera on market it And wasn't furthermore the basis. is much et open very as it's Tour So charter that hot La as coming a cetera. now et had was case-by-case

So very dynamic circumstances.

Tom Lister

I reefer the acquisition that We wanted additional the can ships to of any if add And without make is equity. to Tom. issuing This high J. dilutive

a that So at mix we look financing sense. made had to

La of Tour sort is we roughly if day for to as frantically down a been her I've Julie, So fixed talking Ian, scribbling rate two a these at a numbers or $XX,XXX look of has been you at sister but which years so. the the

when back Tour. we a at rate transaction, looking we were $XX,XXX-a-day roughly La on assuming this were So the

remove EBITDA $X,XXX you about that results an roughly commissions of annualized for X% million. If $X.X assume OpEx in

of price-to-EBITDA Now if million $X.X you times. get of price $XX.XX by divide the purchase million you a multiple X.X

being with ships much box has pretty as said the the difference age result to specification the identical for that's [ph] much Ian high So reefer They have future Manet. higher of they're simply ships a the Manet. because they younger than the They're higher multiple four Manet. and higher half leverage and the generate as returns the better And than Manet. a than they're the can support specification higher

her assets selectively that's in one to generating was saw assets as when higher of, investment we the hope deciding better that helpful. not thinking whether really what I remonetize even or sell So our of returns. to our

J. Mintzmyer

$XX,XXX I four sold a it up. I million was $XX looking also the for I And vessel day million lot. at market have you reason when I the now the realize went $XX for sold years time can So But a Thank $XX,XXX values you now, is $XX,XXX same two at those the apiece. or before. helpful. is very or imagine three it's for those those Yes you could was would sell obviously, different guess but right? you now. you the get years mentioned or vessels maybe

million room sold you in getting rinse-wash-repeat? million big you another deal. if for do and that's can that? there those I'm vessels block relevered up could I that are you like is, Is guess, you $XX block that more what proceeds saying for at $XX deals three coming So

Ian Webber

Yes. at by would Possibly it selectively case. look case but we

J. Mintzmyer

it's charter I to but always to shares have Definitely. guys the markets improved few and Last much XX% in past The you. months there. XX% between But on a put depending the nicely how lagged question NAV. discount debatable NAV for somewhere you Price year-over-year a of you've over you price lot. have XX%

about Slide discount. So liquidity. ,it's I care you sizable appendix in you there mention It's -- has know your the clear liquidity on improved.

Kelso large a have also you block there. However,

also XX% float, have repurchase which great. your going some simply a is there here. of to huge that take room Kelso, take out You tender Is either public a arbitrage overhead or to discount share or for price? there's offer sort Because a on out

Ian Webber

We is. of agree there with kind Yes you.

using what grow support continuing to express from growth who to and us majority an value was the back hear go our and saying long-term creation. is for that but investors. what business we I I for Not the is However, about J. preference all opinion that earlier investors cash

what said, we strategy, apparent, comprehensively it I've review revise our the always it's capital Now meeting time as should every happen to time will to open And will. opportunities to review us call which we from policy, quarterly. allocation be growth you not at it Board and then

J. Mintzmyer

great good you, a Have the day up Certainly. Thank work. and gentlemen. keep

Tassos Psaropoulos

Thank you

Ian Webber

Thanks J.

Operator

Joe from question line Capital. have we with And the of Whitefort you. Thank a Kaplan

Joe Kaplan

you the of free -year the presentation cash comments. XXXX gentlemen. rates five execution Hi, long-term I for including through and the EBITDA XXXX on July questions the disclosures; for which the a shows page XX recharter fleet, three of of of right page of The a Yes. accretive of several of on forma of presentation. column have the are; pro page on the on particular the in XXXX generation thank rates. earnings based charter additional the illustrative couple then couple calculator, listed XX questions to July And acquisitions. particular presentation eight the in Congratulations vessel on the the

in up As the of XX%, is you Harpex the month are aware even Index July alone.

the beginning these so, of have? July we rates And of index the that to end of middle most rates recent reflect the July, do the July, or relative

Tom Lister

Joe. I day are that average Tom. hi, they would is for I July. -- say would rates This

Joe Kaplan

Okay.

some current charters will were charter spot the So earnings seem majority to mark the above of rates potentially if EBITDA on in illustrative to quarter off room next those, understanding that of for year, fourth it from scenario year XXXX that fair come of quarter don't given and you the necessarily $XXX that your million a we this even modeling that get the page to market and that eight. open of there's in perspective? of just first but would Is mathematical the

Tom Lister

Potentially.

Joe, sorry, time. in mentioned but was I one would think Ian I prepared to on is I charters However, this remarks, -- the going negotiations and thing would take potentially, but caution that, I say, you new

heads lag be, available fact when the that four charter to rates between is announced. it example, to are you documented have it's are a going announced doesn't actually when charters mean let's of and that going call, the the agreed Inevitably, for So today, necessarily and six-week market in there's to a on been today. have fixed terms

well, I So in that would market. as rising mind you to in a encourage particularly keep just

Joe Kaplan

My fleet basis. weighted-average XX the second weighted-average in acquisitions, correct? be calculate forma age terms based pro new question, to that Is of on on the approximately vessel we that a years ballpark

Tom Lister

Good presentation. it to slide of useful XX might at mind. question. I this in To I put quite be be had mistaken. context, XX.X may years in look the

composed been tend you have segments, older. see of materially by reference on and profile they you if they useful the how there. last can are slide over size in the fleet go the the is few that by segment to the see appendix years, midsize some sort and fleet the there age global of and be XX, So you to course points of because smaller large And underinvested can

So whenever that the that slide important assess it you it's XX the age regard. helpful you sort on our in age of is assess peer group. corresponding data of hopefully, And the fleet, of against the

George Youroukos

of of pro XXXX. of to the XXXX company a couple spot year recharter we $XXX regarding excess call full mathematically entire $XXX in for the through those for the EBITDA current questions we stock free XXXX. comments earlier would price XX recharters million Understand. more calculator XXXX of into allocation. value get of That cash On company implies TEV over enterprise approximately the $XXX XXXX gets that EBITDA a of forma implies of million the little the $X.X When on you billion. you million And capital flow some effectively a for than at years. run the going on And between assumptions and then earn back of pull-through just $XX the three in and page somewhere just the

As out. contract rechartering today George your for X.X years years new and five ships your is three you're weighted-average to alluded, cover

zero and ascribing So fleet the between something is are the of life XX that average life implies the these XX-year years. useful assets to effectively like residual to and XX.X life said value as you

an that valuation XX-plus years at imputed extra that into is all. So being not effectively the implies

back punitive company ton in XXXX $XXX we and discount $XXs XX% on discount mean just have I'm and that the XX-year XX% And operating a of forward rates the to beyond, impacts even alluded, small-sized stay through assumed anywhere and that terms off the as current low an ships current recharter if because that assume charter back-of-the-envelope gets and a the per leverage on charters in mid saying scrap were into plus trajectory, conservatively which still based the itself per you of going you a going recharters extremely liquidation is $XX earnings of to if the sort quite rates And share higher share beneficial were to mid is to the IMO a segment and XXXX given given on significant for just it growth that XX order the Harpex if to not and of values ran range at the of a because back where at when ratio reversion you so price. even XXXX potential fixed in the but XX% of for then look XXXX. to then just business incremental George stock discounted And to you per book-to-fleet longer you Index basis page upside scrap implies scenario approximately. of scenario that the you just that's that the average there's at lightweight you and price gets both the of stock in valuations

callers return couple a echo couple of to of takeaways. a capital terms and capital from So in allocation comments to prior the of shareholders

what going that least XX% first discount price that forward. stock to values of conservatively reflects contracted does current is on range seem it your The is NAV at largely a that

And ship would there then the the capital share from of ratio that remaining payout a is acquisitions. And the last pro the the one, stack $X or for the which you terms dividend approximately dividend forma of caveat a the next want few is so With be shareholders base billion have any terms a evaluating dividend a a the regard years, of vessel is supportive in equity is is variable solution yield which you tender only that high, or of we is XX% dividend. a return purchases suggests implies we to dividend of To flow, supportive concerns earnings accretive creative the against to with had impact in which that X% over free see dividends approximately though the Kelso payout is these variability XXXX they're a ratio potentially point of alluded issuance but room which about form any the for to levels. XXXX either a as in that. dividend. contracted debt low takeaways could a and not of largely $X primary potentially new targeting which that shares repurchases. of the cash cash combination payout extent are And we weighed approximately that your is of should quite substantial on you stock would target flow plus that free even increasing if we percentage at variable to And to for just and accretive be

to couple rapidly. free flow Given pay over debt contracted, portion very the which the the will cash that have of down significant levels are of years you of a next very ability stack

accretive And additional lower as so potentially the ability that your the or in in market well. structure market by flexibility to rates baby either would of preferred which issuing capital refinance that be cumulative get or debt stack bond supportive we at is

Joe Kaplan

Thank you.

Operator

session Ian our closing right. to concludes call today. Q&A Webber remarks. for All back would for like I the turn to this And

Ian Webber

on time. for engagement very everybody. Thanks Thank further QX look about months' for business be Q&A you your and update for you Thank in a which forward much giving the so will to in three We much. comments.

Operator

And with for may that, your Thank we call. you conclude participation and conference disconnect. now you today's

Global Ship Lease (GSL) 6 Aug 212021 Q2 Earnings call transcript