GSL - Earnings call 3 2023 | Global Ship Lease, Inc.

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Operator

Hello, and welcome to the Global Ship Lease Q3 2023 Earnings Conference Call.

[Operator Instructions]

I will now turn the conference over to Mr. Ian Webber, Global Ship Lease CEO. Please go ahead.

Ian J. Webber

much. very you Thank everybody. morning, Good to Global Call. XXXX Conference Third Ship Lease's Quarter Earnings Welcome

You today's that on slides can the find accompany at our www.globalshiplease.com. call website presentation and

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

We on most would to recent March XX. attention filed Form your our on Risk report was to XXXX our the also like annual XX-F, of year Factors this section which direct earlier

website the on find SEC's. form You can that or on our

our to of filed reports undertake the All and these are forward-looking by update in statements. any statements other do our disclosures SEC. not duty We with qualified

For call, on which reconciliations and accordance of the refer available refer with this measures release we morning, GAAP. also the to presented issued directly to during is which calculated in that Please website. to comparable will we earnings most the our non-GAAP financial measures this

high-level take recent to you our pleased that, industry. by today on usual, I'm a George our Chief Youroukos, GSL our Officer the our questions. will After will current results Tassos, your through and Executive we I then answer the and environment. market And and Tom As joined quarterly and of Commercial activity, Tom commentary our financials the be Lister. with begin call Chairman, Officer, Financial Chief and Tesaropolos; George will

the Slide to to over please now George. call turning I'll X. pass So

Georgios Youroukos

be all joining fixed global good uncertainty as remained the or muted agreed and significant on evening today. of to the macro market charter you, Ian In morning, activity geopolitical and previously created afternoon continued charters. Thank factors you and third quarter, fleet us to largely

ships as they successfully rechartered this we backdrop, our open. have against Now have come

That continue rates considerably, softening benefit on we and our said, from durations the have visibility smaller and are cover market charter available to forward shortened flows. cash contract Although ships. especially for robust

sheet with dividend debt rate balance XXXX. focused supported remains interest all that with cap well debt hedged attractive We interest and quarterly is contracted flows. cash our an and on refinancing requirements is floating an remain continue Our through until allocation strong and capital to pay by our no sustainable tightly XXXX,

our market opportunistic buyback We in have repurchase the an authorization our utilize on also continued shares to to basis.

meet on attractive strict We have criteria. our to they when acquisition ability demonstrated act opportunities our

importantly, we on selective Just also have that in as we demonstrated will doing creation focused value so. patient, and be long-term tightly

our attractive the to increasingly intend opportunities I'll in maintaining With cycle when be may that, out, the and resilience quickly time that acquisition expect comes ready back interim. plays the we the turn arise call move Ian. to We as to

Ian J. Webber

Thank to turn Please X. Slide you, George.

Here, liner the base, diversification we of top-tier spread companies. is our show composition which extensive across of charter

X of with revenues. of we months years. In new charters contracted of billion extensions average or an September XXXX, $XXX had $X.X first XX, year, remaining million of approximately XX duration revenue the in As signed X.X the adding we've a charter contracted

of rate future under earnings provides scenarios. our view an X potential Slide illustrative different

year end and the through to The quarterly is and emphasize forecast. extent our the in illustrate charts calls, The covered. market to time of charter exposure a As thus to days our already important the our limited of previous is at it's XXXX, contracted. XX% renewals current of that year XXXX fully this effectively to revenue ship that not with next contracted prevailing

multiple a see ago forward for some years. on signed strong typically incremental contribution time to Moving number forward, terms the from we extended we of charters the continue will that

earnings and considerable Our in us strong forward uncertain visibility, environment. cash charter a significant today's advantage flow with macroeconomic provides cover

the remained quarterly to time and our the Moving allocation share on opportunistic I Slide $X basis, an approximately underpinning year-to-date disciplined including million repurchased million and June annualized we've late We million totals $X.XX regularly. dynamic $XX which of XXXX, strategy, We dividend, execute our in over XXXX. which $XX share capital maintain review and since we in total the bringing since we consistent sustainable XX, thinking which per on X. continue buybacks. has worth shares -- began to to we revisit program

and weather ships. the us seen inherent good opportunities we've our made well to $XX the to with debt. which With capacity value able and We regulations remaining Directors debt opportunities position add under in uncertain great approximately authorization. be capitalize sheet of should fixed in environment current the million to fleet reduce We of balance our of and amortization strides we've reducing in our Board demands value the to performance, deleveraging on macro have scheduled consistent evolving commercial the to significant to and see an challenges in of emissions agreements, and market. decarbonization, improve our invest this

important also both particularly acquisition opportunities countercyclical optionality of to maintain We as increasingly arise. are is degree and it to a resilience that believe likely for cash liquidity

X acquisitions. approach to nimble long-term we remain demonstrates and Overall, to our intend focused disciplined shareholder patient, consistent Slide on value. and

But instead substantially, shares. elevated any for X model our charters years, lucrative a charters clear sharply and is element from vital level growth of focused interest through caps in attractive ship asset deploying to fleet, highly with securing back buying for business XXXX. year, a period our we vessels putting disciplined in asset make of May amortization, the values, purchases the in debt didn't sheet rate balance risk in for on had Only we're activity as growth. of once strong existing nearly we this Selective the compelling leading did capital will be up fundamentally, During normalized derisking our values our business so to of X risk-adjusted is attached mix. return continue returns, and the purchased we've generating

our call the discuss over to financials. Now Tassos I'll to pass

Tassos Psaropoulos

Thank you, snapshot On X is Slide a financials. of our Ian.

As advance and continued capital at is of the million million hire P&L gross to income line million adding sheet, our items, and which September needs. new vessels. debt debt to our this for of On XX, with primarily XXXX, despite X with closed acquired balance quarter our million the consisting for cash, $XX $XXX.X $XXX.X newly remaining $XXX.X million same the working covering year covenants liquidity we charter the normalized months in you million can of We minimum see, of $XXX.X received net the period versus restricted $XXX.X adjusted as reduced have revenue, improve EBITDA, year. from income major such last of net first

the points at the year. reduced our context We also XXXX runs XX to capital that put our of effectively efforts place now we value years basis at financial sheet. by contributed from interest of X.X% through year-end points, of ago important building continued as delivery. September and which provides derisk to ability debt right on of of time. to our We rate software achieve return basis have also side at this including balance to long-term at to we end which That The now a cap XX over has slide insight shareholders into Slide XXX amortization provides have our and to cost delevering in reduction debt maintain XXXX. while our X.X% leverage X.X an XXXX schedule X cost equity aggressive almost low XX

our now financial provides turned. discuss leverage the when and been SIP Tom at is will has our Our transformed business foundation of completely deployment. and market cycle robust a time the focus

Thomas A. Lister

you, Thank Tassos.

midsized high-specification Slide ranging ships XX. focus from smaller to Moving We our on to XX,XXX and about clear X,XXX reiterate TEU. container

in size a and reach. highlighting operational such at In previous of good east-west map sophisticated constrained times which of these, infrastructure. to deepwater structural lower ships which routes hedge is more deployment main the be TEU the flexibility, to deployment the quarters, port uncertain the widespread within illustrates higher, our tend larger arterial As as and map with shows contrast, the preferred their top in range, ships XX,XXX-plus

X.X% has their far. lives and ships 'XX and the uptick phenomenal vessels in lower of out in saw fourth at the for essentially been increase in idle capacity due charter capacity older idle by and X.X% this the thus, of by just effectively the at under and full trend long-term end, Idle quarter XX quarter's slight of to third limited extended view that Slide XXXX, accompanied ship container years. activity scale recycling. scrapping and markets we quarter. the upward idle place time prevents first took deferred albeit at that the since to capacity of From a during has into Logically, 'XX chartering The record-breaking saw scrapping a recent specification bottomed return utilization extensive driven continued the the earnings. many a thus

is be We'll by there is the in particularly through or couple obliged regulatory both, may poorly answer gets to will to an this However, and or a to come be are likely When X-year normalizes, a a vessel of market ships as ship that what a no, market investing a back justified the dockings a is consider moment. typically dollars aging, mean specified potential. there catch-up million owners forward cycle, on scrapped. prompt there earnings well the when scrapping, is challenging whether may which in expectation go dry outlook

is ratio participate. the the to towards over the the book is GSL ships, meaningful. and larger order which for the TEU much XX,XXX segments show to we segments not very of midsized order in XX, words, ship heavily does an but sizes. smaller, be Slide still are On clear, which With other container XX.X%, book-to-fleet order relevant GSL smaller which, In weighted book,

book fleet about were and and if dockings. the Here, of decisions assume was scrapping Extrapolating of scrapping midsized this versus XX what driven all the context profile regulatory ships age dye ties invest point, saying scrap that we is by important may in only I supply-side the be but over earlier with of net scenario, see smaller the valve industry old and for X.X% through deferred to older midsized downturn. through and the order XXXX a for would smaller numbers extreme the of XXXX, segments focus growth of those delivering our protracted against probably safety ships and the the in net and years out event admittedly, illustrative an

provide and the stood has things the -- further indicative values best as the usual, at the normalizing together extreme assessment right-hand of which Slide our we with but market, asset end These slide. XX reflect been charter some side on QX. XXXX at of and been looks into QX, highs this has of rates of there XXXX where after softening

combination So take pressure. some under an makes pinch macroeconomic the them geopolitical Frankly, it outlook the sold. in rates usual seasonal combined uncertain are a with market of weakness a that with and unsurprising

George turn Slides on I'll back to XX the remarks call and prepared Now our XX. to conclude

Georgios Youroukos

provide we a of XX, Thank key and On summary you, Tom. points. Slides XX

continued We of on the have back to forward upswing. our contracts attractive during signed market the grow EBITDA

We have our charter and no XXXX. cover service reliance through to debt renewals on additional dividends CapEx

We have hedging of rate the have strong benefiting delevering. smaller remained midsized on well-timed and and progress from excellent focused the financially made in to space, and throughout and the be we positioning containership flexible continued GSL city strategically floating debt squarely

on fortified balances. Macro though providing exert downward certainty guidance. continues liners so sentiment pressure they the are cautious significantly market do to and with

all container has presents been said having cyclicality always opportunities. Now that, cyclical, shipping and

preserve business designed through cycle. also very to the build, the both model lows value and of the Our highs but for is shareholders to importantly,

when disciplined purchase is doing also, to may opportunities the shareholders capitalize on the Aeris shares. selectively to building the value that business, capital us opportunistically to buy back allowing right sustainable pay arise. dividend now, allocation turns, cycle So and a And derisk but nimble,

to questions. we're your Now take ready

Operator

the Instructions] [Operator Your Jefferies. with from question Omar of line first comes Nokta

Omar Nokta

aligners of always, detail to strategy afternoon. think company's the here just George, good back, on latest that front. of discussion the of market gentlemen, cautious they've Thanks, and sort about recently general. both Hi, sort the and some in talking for good did about on comments want the in your always opportunities providing as I just had come update, and that

in the them of come up evidence order big chartering do cut delivery, lot the by them a where focus for to costs seems could on those refinance or liners as We been on catering and There's that end capital there's that recapitalize is of can. themselves a perhaps at an focus to and maybe increasing be of outright you on they lines? look is closer that as in liners And those you it participate their placed along part happening big for freeing coming them chance do there guys the to something to cost see book know back or something have a -- to those -- the have And moment? that -- maybe interest GSO industry? orders any and those they a or there

Georgios Youroukos

that believe happen mean, it new large that Thank I'd to I a but unlikely I their back. it's -- that will out Well, might say liner you, don't companies sell charter builds a with happen, extent in

I and been for is middle think costs they've it's older. what They doing always efficiently operate liner older companies more likely cannot years. will that age, ships do all them. companies ships, these very higher have liner

have a ship business because operate charter cut they as they that we on seen as things costs, for and because as us, be and lancers them focus different GSL like to is do So is back are can't an efficiently when taking when cost selling owners we older ships, ballgame. older, existing will like -- cut older them they X ships trying that in ship something millets this way, their

big see as we charter they the losing the of selling these their ships charter So the been the asset. in XX even XX so new because the with more ship than another that life, build, years, past optionality I we has think seeing regardless of rather deals they're give will of strategic have the years still and more a the if them assets,

Thomas A. Lister

Tom. is This

natural they to super secure Just add we companies liner saw XXXX, of "charter older the liner already eager think hot are not that, of lot tonnage were necessarily years capacity of of all the and those because I of market". that to -- a secondhand of during points by George holders to the companies tonnage. the has And so all out made, XXXX to

sale charter the So further spur a of that and back charter may potentially ships be send those by back. into market way

that see do we a opportunity. potential yes, area So as of

how see develops. Let's it

Omar Nokta

Interesting. fleet. it remarks this ships you wisely. follow-up that. in seems invested, the That's fronts color about always, a fashion. on in have guys perhaps actually the And maybe a your you on talk and I very GSL, just to both Tom global presentation. you, Tom, in very, very did say, in derisked older and would about interesting And Obviously,

do You starts maybe range that that in off a coming the a of roll of handful ships XX-year years to are have that couple charter. over

optionality, earmarked prefer do as to a able do kind they for isn't bit share so you in soon those plan of how for Any think you fleet? scrap know I but kind with if some color what away, vessels as off? open. as perhaps do Have it's readily already employment about even of still come sort roll available a to of the to you're maybe ways with thinking older you on vessels to of are them what them they you your or hold

Thomas A. Lister

contrary. is the point doesn't I vessel just first think the it a it make old, to Well, is vessel to make bad quite the Sure. that because

vessels. high to I have sure think we've reefer vessels selected vessels, particularly been high-specification capacity and make we vessels we're very careful that that selecting high-quality about the

sit to So groups. within specifications top their we of respective think within like that quartile age our the vessels

despite without market doubt the is a that the quite challenging. fact So outlook we

result, finding more stage, in of as commercially on our within ships. At we contracted of commercially have those ships continued ahead working upgrade make -- more and attractive conjunction vessels continued them them market And been quite this remain also, more employment our a already enhance employment attractive energy particularly confident charterers, the we've to more and hard with for efficient to valuable. and that

don't about think something at we're moment. actively ship I is that So that the recycling thinking

Operator

with Deutsche of line Your from the next Chris Bank. question comes Robertson

Christopher Robertson

secondhand I Amit. market is the back, I on for wanted guess, to ships. This current for just on Chris circle

at ships charters? provide vessels them? rolling are there a remaining the opportunities If of current landscape, charters the guys left years about as are of other to that more are kind to detail opportunity? you're middle-aged off there Or for a what's Or looking bit you few attached

Georgios Youroukos

ships we're with are there there Chris, looking Yes. looking we at are -- out mainly, evaluating and opportunities continuously charters. that

So charter a get from company new either a or from ships them. remaining would liner that charters

their -- a sellers was not might ideas as great slide good course, deal. yesterday, market deal and the change as the Of the downwards, price a be deal value that a tomorrow

this that be the we But the deals. there. and be the to choosing that So It's situation them criteria deals deals flow. are accretive evolving we immediately just in with to an is of quite have out want accretive plenty strict to company, the there's cash

are we evaluating this Tom So them Maybe way. in add. can

Thomas A. Lister

summary. I really. Not add much I can no, actually Chris, that, very to good given George has a think that

Christopher Robertson

Okay. is the guys on could Yes. that incredible wondering into question if on you getting the total you just detail level? total was I here about had an the could the I mean second comment And kind go ratio impact have level related if deleveraging today. leverage breakeven job cash is of to My down. done efforts. cash breakeven that's at what you

Tassos Psaropoulos

going fact see It when definitely if we the mean reality correctly, be XXXX. the we is amortization breakeven are that which, in first that of cost total have What not remember something loans, reduction I a I the fixed the debt of the at is that which material to least of levels the changing. helps extension a because we will is is reduced the have

Operator

[Operator line Ward UBS. for Ward of Blum your comes line Instructions] with is the question UBS, questions. Your from of open next

I Okay. remarks. call will turn to Ian This for will conclude session. the question-and-answer the Webber closing back

Ian J. Webber

year you everyone. your thank full in Thanks, next providing on forward an for update XXXX. look Thanks for questions. you. year and joining We us, you Thank early to

Operator

concludes today's for thank This you conference call. joining. We

lines. disconnect now may your You

Global Ship Lease (GSL) 9 Nov 232023 Q3 Earnings call transcript