Contracted revenue of $1.72 billion, interest rate risk fully hedged, sustainable quarterly dividend of $0.375 per common share, well-positioned for counter-cyclical opportunities

Global Ship Lease, Inc., an owner of containerships announced its unaudited results for the three months and year ended December 31, 2023.

Full Year and Fourth Quarter of 2023 Highlights

- Reported operating revenue of $178.9 million for the fourth quarter of 2023, an increase of 8.4% on operating revenue of $165.0 million for the prior year period. For the year ended December 31, 2023, operating revenue was $674.8 million, up 4.5% from $645.6 million for the prior year.

- Reported net income available to common shareholders of $64.7 million for the fourth quarter of 2023, a decrease of 10.9% on net income of $72.6 million for the prior year period. Normalized net income (a non-U.S. GAAP financial measure, described below) for the same period was $87.8 million, up 13.6% on Normalized net income of $77.3 million for the prior year period.

- For the year ended December 31, 2023, net income available to common shareholders was $295.0 million, an increase of 4.1% on net income of $283.4 million for the prior year. Normalized net income for the year ended December 31, 2023 was $319.7 million, up 7.2% on Normalized net income for the prior year of $298.2 million.

- Generated $127.1 million of Adjusted EBITDA (a non-U.S. GAAP financial measure, described below) for the fourth quarter of 2023, up 27.1% on Adjusted EBITDA of $100.0 million for the prior year period. Adjusted EBITDA for the year ended December 31, 2023 was $462.1 million, up $63.8 million or 16.0% on Adjusted EBITDA of $398.3 million for the prior year.

- Earnings per share for the fourth quarter of 2023 was $1.84, down 8.5% on the earnings per share of $2.01 for the prior year period. Normalized earnings per share (a non-U.S. GAAP financial measure, described below) for the fourth quarter of 2023 was $2.49, up 16.4% on the Normalized earnings per share of $2.14 for the prior year period. Earnings per share for the year ended December 31, 2023 was $8.33, up 7.6% on the earnings per share of $7.74 for the prior year. Normalized earnings per share for the year ended December 31, 2023 was $9.03, up 10.8% on the Normalized earnings per share of $8.15 for the prior year.

- Declared a dividend of $0.375 per Class A common share for the fourth quarter of 2023 to be paid on March 6, 2024 to common shareholders of record as of February 22, 2024. Paid a dividend of $0.375 per Class A common share for the third quarter of 2023 on December 4, 2023.

- Between January 1, 2023 and December 31, 2023, added $313.2 million of contracted revenue to forward charter cover, calculated on the basis of the median firm periods of the respective charters. Twenty-two new charter fixtures (including short re-charters of the same vessel) or extensions were agreed on eight ships between 2,200 and 3,500 TEU, one 6,800 TEU ship, and two 7,800 TEU ships; forward fixtures were agreed for one 6,600 TEU ship, two 8,600 TEU ships, and one ECO 9,100 TEU ship; and four 8,544 TEU vessels were purchased with charters attached. With the exception of one very short re-positioning charter, firm charter terms ranged from a few months to three years. Contracted revenue as of December 31, 2023, calculated on the same basis, was $1.72 billion.

- Ian Webber, our Chief Executive Officer, to retire from the CEO role he has held since our inception in 2007 and will join GSL’s Board of Directors, effective March 31, 2024, expanding the size of Board to nine members. Thomas Lister, who also joined the Company in 2007 and has held a number of senior executive roles, has been appointed to succeed Mr. Webber as CEO, effective concurrently with Mr. Webber’s retirement.

- During the three months ended December 31, 2023, repurchased an aggregate of 87,942 Class A common shares, at repurchase prices ranging from between $17.51 and $17.77, with an average price of $17.61. During the year ended December 31, 2023, repurchased an aggregate of 1,242,663 Class A common shares, at repurchase prices ranging from between $16.12 and $18.69 per share, with an average price of $17.68. Since March 2022, a total of 2,303,303 Class A common shares have been repurchased under the buy-back authorizations approved by the Board of Directors, for approximately $42.0 million, with approximately $38.0 million of authorized capacity remaining.

George Youroukos, our Executive Chairman, stated: “In a time of rising geopolitical uncertainty, Global Ship Lease has remained committed to its successful business model, combining operational excellence with a disciplined approach to preserving and building shareholder value through the cycle. Trade disruptions in the Red Sea significantly escalated towards the end of the fourth quarter of 2023, resulting in large-scale re-routing of containerships away from the Suez Canal and around the Cape of Good Hope, absorbing substantial effective supply. Meanwhile, water shortages in the Panama Canal have led to a reduction in the number of vessels that can transit that key waterway, adding further bottlenecks to the global supply chain. Taken together, these two developments have caused a meaningful tightening of containership supply and demand - arresting, and even reversing, the previous downward normalization of charter rates and asset values.

It is impossible to predict how long disruptions to the Red Sea and Panama will last, and significant macroeconomic, geopolitical, and regulatory uncertainty remain prominent features of the market outlook. In this environment, our fleet of high-quality, mid-sized and smaller containerships continues to provide liner companies with the flexible tonnage that is key to their service networks through the cycle – especially at times of uncertainty and disruption.

We have entered 2024 with strong charter coverage for much of the year and continue to work hard to capitalize on current market firmness to grow contract cover and strengthen forward cash flow visibility. Further, the steps that we continue to take to enhance our balance sheet, our extensive contract coverage, and our discipline in allocating capital have put us in a strong position as the sector transitions into the increasingly uncertain period ahead. And we remain as tightly focused as ever on maximizing long-term value for our shareholders: alongside returning capital in the form of both dividends and buybacks, we expect to see a growing number of interesting countercyclical investment opportunities in the months and quarters ahead.”

Ian Webber, our Chief Executive Officer, stated: “Throughout 2023, we made important progress in driving down our leverage, minimizing our cost of debt, and improving our cash liquidity. During the year we purchased four 8,500 TEU ships, with charters attached, which we believe have compelling risk and return characteristics. Our 0.64% SOFR interest rate caps on floating rate debt further enhance returns. We continue to benefit from the forward visibility and attractive fixed rates of our charter portfolio, much of which was agreed during the 2021-2022 super upcycle. As I transition to a position on the Board at the end of this quarter, I am confident that Global Ship Lease is not only well positioned to be resilient through the cycle ahead, but to create long-lasting value by combining proven discipline and financial strength with the ability to capitalize on value-accretive countercyclical opportunities.”

Full report: Global Ship Lease Inc.