First Quarter 2019
- Reported operating revenues(1) of
- Reported net income(2) of
- Generated
- Effected a one-for-eight reverse stock split of the Company's Class A common shares following approval at a special meeting of shareholders held on
- Agreed a three-year charter with
- Agreed a minimum 30-month / maximum 38-month charter with Maersk Line for the 2000-built, 5,936 TEU containership Tasman. The new charter is expected to commence in
- Agreed minimum 21-month / maximum 24-month charters with ZIM for the 2000-built, 5,936 TEU containerships Dimitris Y and Ian H. The new charters are expected to commence in June and July, 2019 in direct continuation of their current charters, and to generate approximately
- Agreed new five year charters with MSC for 8,667 TEU GSL Tianjin (built 2005) and OOCL Qingdao (built 2004) (to be renamed MSC Tianjin and MSC Qingdao). The new charters are expected to commence on redelivery of vessels by current charterers in late Q2 early Q3 and are expected to generate Adjusted EBITDA of approximately
- Agreed to retrofit scrubbers on three vessels against longer charters at premium rates, already announced.
SELECTED FINANCIAL DATA – UNAUDITED (thousands of U.S. dollars)
Three | Three | |||||
months ended | months ended | |||||
March 31, 2019 | March 31, 2018 | |||||
Operating Revenues (1) | 64,514 | 36,146 | ||||
Operating income | 29,225 | 15,491 | ||||
Net Income (2) | 10,052 | 4,192 | ||||
Adjusted EBITDA(3) | 40,527 | 23,653 | ||||
The results for the three months ended
(1) Operating Revenues are net of address commissions. Brokerage commissions are included in Time charter and voyage expenses.
(2) Net Income available to common shareholders.
(3) Adjusted EBITDA is a non-US Generally Accepted Accounting Principles (US GAAP) financial measure, as explained further in this press release, and are considered by
Following the Poseidon Transaction, minor reclassifications of expenses and balance sheet items have been made.
Operating Revenues and Utilization
The fleet generated operating revenues from fixed-rate time charters of
The table below shows our fleet utilization for the three months ended
Three months ended | Year ended | |||||||||||||
Mar 31, | Mar 31, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | ||||||||
Days | 2019 | 2018 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Ownership days | 3,420 | 1,620 | 7,675 | 6,570 | 6,588 | 6,893 | 6,270 | |||||||
Planned offhire - scheduled drydockings | 0 | (13 | ) | (34 | ) | (62 | ) | (100 | ) | (9 | ) | (48 | ) | |
Unplanned offhire | (5 | ) | (4 | ) | (17 | ) | (40 | ) | (3 | ) | (7 | ) | (12 | ) |
Idle time | 0 | 0 | (47 | ) | 0 | 0 | (13 | ) | (64 | ) | ||||
Operating days | 3,415 | 1,603 | 7,577 | 6,468 | 6,485 | 6,864 | 6,146 | |||||||
Utilization | 99.8 | % | 99.0 | % | 98.7 | % | 98.4 | % | 98.4 | % | 99.6 | % | 98.0 | % |
There were two regulatory drydockings in 2018 and four in 2017. Four regulatory drydockings are due in 2019.
Vessel Operating Expenses
Vessel operating expenses, which include costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were
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 vessel is off-hire or idle and miscellaneous costs associated with a vessel’s voyage. Time charter and voyage expenses were
Depreciation and amortization
Depreciation and amortization for the three months ended
General and Administrative Expenses
General and administrative expenses were
Adjusted EBITDA
As a result of the above, Adjusted EBITDA was
Interest Expense
Debt at
Debt at
Interest expense for the three months ended
Interest income for the three months ended
Other income, net
Other income, net is mainly comprised of gains in bunkers following deliveries and redeliveries of vessels from charterers and passenger income. Other income, net was
Taxation
Taxation for the three months ended
Earnings Allocated to Preferred Shares
The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the three months ended
Net Income Available to Common Shareholders
Net income for the three months ended
Fleet
The following table provides information about our fleet of 38 vessels as at
Vessel Name | TEUs | LWT | Year Built | Charterer | Earliest Charter Expiry Date | Latest Charter Expiry Date | Daily Charter Rate $ | ||||||
CMA CGM Thalassa | 11,040 | 38,577 | 2008 | CMA CGM | 4Q25 | 1Q26 | 47,200 | ||||||
UASC Al Khor(1) | 9,115 | 31,764 | 2015 | Hapag-Lloyd | 1Q19 | 2Q19(2) | 40,000(2) | ||||||
Anthea Y(1) | 9,115 | 31,890 | 2015 | COSCO | 2Q20 | 3Q20 | 39,200 | ||||||
Maira XL(1) | 9,115 | 31,820 | 2015 | COSCO | 2Q20 | 3Q20 | 39,200 | ||||||
GSL Tianjin | 8,667 | 34,243 | 2005 | CMA CGM | 2Q19 | 3Q19(3) | 13,000(3) | ||||||
OOCL Qingdao | 8,667 | 34,305 | 2004 | OOCL | 2Q19 | 2Q19(3) | 14,000(3) | ||||||
GSL Ningbo | 8,667 | 34,243 | 2004 | Maersk | 2Q19 | 4Q20 | 12,100(4) | ||||||
Mary(1) | 6,927 | 23,424 | 2013 | CMA CGM | 3Q23 | 4Q23 | 25,910 | ||||||
Kristina (1) | 6,927 | 23,424 | 2013 | Wan Hai | 2Q19 | 3Q19(5) | 19,500(5) | ||||||
Katherine(1) | 6,927 | 23,424 | 2013 | CMA CGM | 1Q24 | 2Q24 | 25,910 | ||||||
Alexandra(1) | 6,927 | 23,424 | 2013 | ONE | 2Q19 | 2Q19(5) | 20,750(5) | ||||||
Alexis(1)(6) | 6,882 | 23,919 | 2015 | Hapag-Lloyd | 2Q19 | 2Q19(5) | 20,000(5) | ||||||
Olivia I(1)(7) | 6,882 | 23,864 | 2015 | CMA CGM | 1Q24 | 2Q24 | 25,910 | ||||||
CMA CGM Berlioz | 6,621 | 26,776 | 2001 | CMA CGM | 2Q21 | 4Q21 | 34,000 | ||||||
Agios Dimitrios | 6,572 | 24,746 | 2011 | MSC | 3Q19 | 4Q23(8) | 12,500(8) | ||||||
Tasman | 5,936 | 25,010 | 2000 | ZIM | 2Q19 | 3Q19(9) | 11,500(9) | ||||||
Dimitris Y | 5,936 | 25,010 | 2000 | ZIM | 2Q19 | 3Q19(10) | 16,750(10) | ||||||
Ian H | 5,936 | 25,128 | 2000 | ZIM | 2Q19 | 3Q19(10) | 17,000(10) | ||||||
Dolphin II | 5,095 | 20,596 | 2007 | HMM | 2Q19 | 4Q19 | 7,700(11) | ||||||
Orca I | 5,095 | 20,696 | 2006 | ZIM | 2Q19 | 3Q19 | 11,750 | ||||||
CMA CGM Alcazar | 5,089 | 20,087 | 2007 | CMA CGM | 4Q20 | 2Q21 | 33,750 | ||||||
CMA CGM Château d’If | 5,089 | 20,100 | 2007 | CMA CGM | 4Q20 | 2Q21 | 33,750 | ||||||
CMA CGM Jamaica | 4,298 | 17,272 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 | ||||||
CMA CGM Sambhar | 4,045 | 17,355 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 | ||||||
CMA CGM America | 4,045 | 17,355 | 2006 | CMA CGM | 3Q22 | 1Q23 | 25,350 | ||||||
GSL Valerie | 2,824 | 11,971 | 2005 | CMA CGM | 2Q19 | 3Q19 | 9,000 | ||||||
Athena | 2,762 | 13,538 | 2003 | MSC | 1Q20 | 2Q20 | 9,000 | ||||||
Maira | 2,506 | 11,453 | 2000 | MSC | 3Q19 | 3Q19 | 8,500 | ||||||
Nikolas | 2,506 | 11,370 | 2000 | MSC | 1Q20 | 1Q20 | 9,000 | ||||||
Newyorker | 2,506 | 11,463 | 2001 | MSC | 1Q20 | 1Q20 | 9,000 | ||||||
CMA CGM La Tour | 2,272 | 11,742 | 2001 | CMA CGM | 3Q19 | 1Q20 | 15,300 | ||||||
CMA CGM Manet | 2,272 | 11,742 | 2001 | CMA CGM | 3Q19 | 1Q20 | 15,300 | ||||||
CMA CGM Matisse | 2,262 | 11,676 | 1999 | CMA CGM | 3Q19 | 1Q20 | 15,300 | ||||||
CMA CGM Utrillo | 2,262 | 11,676 | 1999 | CMA CGM | 3Q19 | 1Q20 | 15,300 | ||||||
GSL Keta | 2,207 | 11,731 | 2003 | ANL | 2Q19 | 3Q19 | 8,450 | ||||||
GSL Julie | 2,207 | 11,731 | 2002 | CMA CGM | 3Q19 | 2Q20(12) | 7,200(12) | ||||||
Kumasi | 2,207 | 11,731 | 2002 | CMA CGM | 4Q19 | 1Q21(13) | 9,800(13) | ||||||
Marie Delmas | 2,207 | 11,731 | 2002 | CMA CGM | 4Q19 | 1Q21(13) | 9,800(13) | ||||||
- Modern design, high reefer capacity, fuel efficient vessels.
- Thereafter, in direct continuation, three years at an implied Adjusted EBITDA of
$28.0 million for the period. - Thereafter, five years to MSC at an implied Adjusted EBITDA of
$25.6 million for the period. - Rate increased to
$12,400 per day fromApril 21, 2019 . Charterer has option to extend by 12 months plus or minus 45 days fromSeptember 21, 2019 at$18,000 per day. - Thereafter, five years to
CMA CGM at$25,910 per day - Previously UASC Bubiyan; renamed Alexis, effective
April 24, 2019 . - Previously UASC Yas; renamed Oliva I, effective
March 19, 2019 . - Thereafter, option for four years at
$20,000 per day, callable by us - Thereafter, new charter with Maersk Line for 30 - 38 months at an implied Adjusted EBITDA of
$5.3 million for the median period. Additional 12 - month extension at charterer’s option, for an additional implied Adjusted EBITDA of$4.4 million . - Thereafter, in direct continuation, 21-24 month at an implied Adjusted EBITDA
$4.4 million per vessel for the median firm period. - Rate increases to
$11,500 per day fromAugust 15, 2019 . $7,200 per day fromMarch 16, 2019 to betweenAugust 16, 2019 andOctober 16, 2019 , at charterer’s option, with an option in favour of charterer to extend fromOctober 16, 2019 at$8,500 per day for six months plus or minus 30 days.- Option at
$9,800 per day toDecember 31, 2020 plus or minus 90 days, callable by us.
Conference Call and Webcast
(1) Dial-in: (877) 445-2556 or (908) 982-4670; Passcode: 8458699
Please dial in at least 10 minutes prior to
(2) Live Internet webcast and slide presentation: http://www.globalshiplease.com
If you are unable to participate at this time, a replay of the call will be available through
Annual Report on Form 20-F
The Company’s Annual Report for 2018 is on file with the
About
The average remaining term of the charters at March 31, 2019, including subsequent announcements and to the mid-point of redelivery, including options under owners control, was 3.0 years on a TEU-weighted basis. Contracted revenue on the same basis is
Reconciliation of Non-U.S. GAAP Financial Measure
Adjusted EBITDA
Adjusted EBITDA represents net income before interest income and expense including amortization of deferred finance costs, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking costs. Adjusted EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its 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 US 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 Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.
ADJUSTED EBITDA - UNAUDITED
(thousands of U.S. dollars) |
Three | Three | |||||
months | months | |||||
ended | ended | |||||
Mar 31, | Mar 31, | |||||
2019 | 2018 | |||||
Net income available to common shareholders | 10,052 | 4,192 | ||||
Adjust: | Depreciation and amortization | 10,758 | 8,156 | |||
Interest income | (417 | ) | (269 | ) | ||
Interest expense | 19,352 | 10,793 | ||||
Income taxes | 16 | 15 | ||||
Earnings allocated to preferred shares | 766 | 766 | ||||
Adjusted EBITDA | 40,527 | 23,653 |
Safe Harbor Statement
This communication contains forward-looking statements. Forward-looking statements provide
The risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the future growth of the container shipping industry, including the rates of annual demand and supply growth;
- the financial condition of our charterers, particularly
CMA CGM , our principal charterer and main source of operating revenue, and their ability to pay charterhire in accordance with the charters; - Global Ship Lease’s financial condition and liquidity, including its level of indebtedness or ability to obtain additional financing to fund capital expenditures, vessel acquisitions and other general corporate purposes;
- Global Ship Lease’s ability to meet its financial covenants and repay its credit facilities;
- Global Ship Lease’s expectations relating to dividend payments and forecasts of its ability to make such payments including the availability of cash and the impact of constraints under its credit facility;
- risks relating to the acquisition of
Poseidon Containers and Global Ship Lease’s ability to realize the anticipated benefits of the acquisition; - future acquisitions, business strategy and expected capital spending;
- operating expenses, availability of crew, number of off-hire days, drydocking and survey requirements and insurance 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 its capital base;
- Global Ship Lease’s expectations about the availability of ships to purchase, the time that it may take to construct new ships, or the useful lives of its ships;
- Global Ship Lease’s continued ability to enter into or renew long-term, fixed-rate charters or other vessel employment arrangements;
- the continued performance of existing long-term, fixed-rate time charters;
- Global Ship Lease’s ability to capitalize on its management’s and board of 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;
- unanticipated changes in laws and regulations including taxation;
- potential liability from future litigation.
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.
Interim Unaudited ConsolidatedBalance Sheets
As of | |||||||||
Note | March 31, 2019 |
December 31, 2018 |
|||||||
ASSETS | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | $ | 97,966 | $ | 82,059 | |||||
Restricted cash | 3,023 | 2,186 | |||||||
Accounts receivable, net | 1,738 | 1,927 | |||||||
Inventories | 5,327 | 5,769 | |||||||
Prepaid expenses and other current assets | 7,162 | 6,214 | |||||||
Due from related parties | 5 | 1,086 | 817 | ||||||
Total current assets | $ | 116,302 | $ | 98,972 | |||||
NON-CURRENT ASSETS | |||||||||
Vessels in operation | 3 | $ | 1,103,604 | $ | 1,112,766 | ||||
Other fixed assets | 4 | 5 | |||||||
Intangible assets-charter agreements | 4,430 | 5,400 | |||||||
Deferred charges, net | 8,661 | 9,569 | |||||||
Other non-current assets | 291 | 948 | |||||||
Restricted cash, net of current portion | 5,938 | 5,827 | |||||||
Total non-current assets | 1,122,928 | 1,134,515 | |||||||
TOTAL ASSETS | $ | 1,239,230 | $ | 1,233,487 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
CURRENT LIABILITIES | |||||||||
Accounts payable | $ | 7,140 | $ | 9,586 | |||||
Accrued liabilities | 21,576 | 15,407 | |||||||
Current portion of long-term debt | 4 | 74,533 | 64,088 | ||||||
Deferred revenue | 2,637 | 3,118 | |||||||
Due to related parties | 5 | 1,548 | 3,317 | ||||||
Total current liabilities | 107,434 | 95,516 | |||||||
LONG-TERM LIABILITIES | |||||||||
Long-term debt, net of current portion and deferred financing costs | 4 | $ | 797,406 | $ | 813,130 | ||||
Intangible liability-charter agreements | 7,967 | 8,470 | |||||||
Deferred tax liability | 9 | 9 | |||||||
Total non-current liabilities | 805,382 | 821,609 | |||||||
Total liabilities | $ | 912,816 | $ | 917,125 | |||||
Commitments and Contingencies | 6 | — | |||||||
SHAREHOLDERS' EQUITY | |||||||||
Class A common shares - authorized 214,000,000 shares with a $0.01 par value 9,942,950 shares issued and outstanding (2018 – 9,017,205 shares) |
7 | $ |
99 | $ | 90 | ||||
Class B common shares - authorized 20,000,000 shares with a $0.01 par value nil shares issued and outstanding (2018 – 925,745 shares) |
7 | — | 9 | ||||||
Series B Preferred Shares - authorized 16,100 shares with a $0.01 par value 14,000 shares issued and outstanding (2018 – 14,000 shares) |
7 | — | — | ||||||
Series C Preferred Shares - authorized 250,000 shares with a $0.01 par value 250,000 shares issued and outstanding (2018 - 250,000 shares) |
7 | 3 | 3 | ||||||
Additional paid in capital | 512,379 | 512,379 | |||||||
Accumulated deficit | (186,067 | ) | (196,119 | ) | |||||
Total shareholders' equity | 326,414 | 316,362 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,239,230 | $ | 1,233,487 |
Interim Unaudited ConsolidatedStatements of Income
Three months ended March 31, |
|||||||||
Note | 2019 | 2018 | |||||||
OPERATING REVENUES | |||||||||
Time charter revenue | $ | 29,881 | $ | 5,770 | |||||
Time charter revenue-related parties | 5 | 34,633 | 30,376 | ||||||
64,514 | 36,146 | ||||||||
OPERATING EXPENSES: | |||||||||
Vessel operating expenses | 19,150 | 10,098 | |||||||
Vessel operating expenses-related parties | 5 | 1,805 | 322 | ||||||
Time charter and voyage expenses | 1,121 | 144 | |||||||
Time charter and voyage expenses-related parties | 430 | — | |||||||
Depreciation and amortization | 3 | 10,758 | 8,156 | ||||||
General and administrative expenses | 2,025 | 1,935 | |||||||
Operating Income | 29,225 | 15,491 | |||||||
Interest income | 417 | 269 | |||||||
Interest and other financial expense | (19,352 | ) | (10,793 | ) | |||||
Other income, net | 544 | 6 | |||||||
Total non operating expense | (18,391 | ) | (10,518 | ) | |||||
Income before income taxes | 10,834 | 4,973 | |||||||
Income taxes | (16 | ) | (15 | ) | |||||
Net Income | $ | 10,818 | $ | 4,958 | |||||
Earnings allocated to Series B Preferred Shares | 7 | (766 | ) | (766 | ) | ||||
Net Income available to Common Shareholders | $ | 10,052 | $ | 4,192 | |||||
Earnings per Share | |||||||||
Weighted average number of Class A common shares outstanding | |||||||||
Basic and diluted (including RSU’s without service conditions) | 9 | 9,932,664 | 6,001,217 | ||||||
Net Income per Class A common share | |||||||||
Basic and diluted (including RSU’s without service conditions) | 9 | $ | 0.44 | $ | 0.72 | ||||
Weighted average number of Class B common shares outstanding | |||||||||
Basic and diluted | 9 | nil | 925,745 | ||||||
Net Income per Class B common share | |||||||||
Basic and diluted | 9 | $ | nil | $ | nil |
Interim Unaudited Consolidated Statements of Cash Flows
Three months ended March 31, |
|||||||||
Note | 2019 | 2018 | |||||||
Cash flows from operating activities: | |||||||||
Net Income | $ | 10,818 | $ | 4,958 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 3 | 10,758 | 8,156 | ||||||
Amortization of deferred financing costs | 4 | 745 | 1,029 | ||||||
Amortization of original issue discount / premium on repurchase of notes | 4 | 202 | 201 | ||||||
Amortization of intangible asset/liability-charter agreements | 468 | (443 | ) | ||||||
Share based compensation | 8 | — | 45 | ||||||
Changes in operating assets and liabilities: | |||||||||
Increase in accounts receivable and other assets | (94 | ) | (1,104 | ) | |||||
Decrease (increase) increase in inventories | 442 | (1,783 | ) | ||||||
Increase in accounts payable and other liabilities | 3,719 | 7,850 | |||||||
(Decrease) increase in related parties' balances | 5 | (2,038 | ) | 1,838 | |||||
Decrease in deferred revenue | (481 | ) | (312 | ) | |||||
Unrealized foreign exchange (gain) loss | (5 | ) | 4 | ||||||
Net cash provided by operating activities | 24,534 | 20,439 | |||||||
Cash flows from investing activities: | |||||||||
Cash paid for vessel improvements | (637 | ) | (150 | ) | |||||
Cash paid for dry-dockings | (50 | ) | (373 | ) | |||||
Cash paid for vessel deposits | — | (1,128 | ) | ||||||
Net cash used in investing activities | (687 | ) | (1,651 | ) | |||||
Cash flows from financing activities: | |||||||||
Repayment of credit facilities | 4 | (6,226 | ) | — | |||||
Series B Preferred Shares-dividends paid | 7 | (766 | ) | (766 | ) | ||||
Net cash used in financing activities | (6,992 | ) | (766 | ) | |||||
Net increase in cash and cash equivalents and restricted cash | 16,855 | 18,022 | |||||||
Cash and cash equivalents and restricted cash at beginning of the period | 90,072 | 73,266 | |||||||
Cash and cash equivalents and restricted cash at end of the period | $ | 106,927 | $ | 91,288 | |||||
Supplementary Cash Flow Information: | |||||||||
Cash paid for interest | $ | 9,563 | $ | 648 | |||||
Cash paid for income taxes | $ | — | $ | 12 | |||||
Non-cash investing activities: | |||||||||
Unpaid capitalized expenses | $ | 826 | $ | — |
Investor and Media Contacts:
646-673-9701
or
212-477-8438
Source: Global Ship Lease, Inc.