ATHENS, GREECE, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Global Ship Lease, Inc. (NYSE:GSL) (the "Company", "Global Ship Lease" or "GSL"), an owner of containerships, announced today its unaudited results for the three and six month periods ended June 30, 2024. Second Quarter of 2024 and Year to Date Highlights - Reported operating revenue of $175.0 million for the second quarter of 2024, an increase of 8.0% on operating revenue of $162.1 million for the prior year period. For the six months ended June 30, 2024, operating revenue was $354.6 million, up 10.3% from $321.4 million in first half of 2023. - Reported net income available to common shareholders of $85.6 million for the second quarter of 2024, an increase of 13.5% on net income of $75.4 million for the prior year period. Normalized net income (a non-U.S. GAAP financial measure, described below) for the same period was $86.7 million, up 17.2% on Normalized net income of $74.0 million for the prior year period. For the six months ended June 30, 2024, net income available to common shareholders was $175.1 million, an increase of 18.6% on net income of $147.6 million for the prior year period. Normalized net income for the same period was $175.7 million, up 17.5% on Normalized net income for the prior year period of $149.5 million. - Generated $122.3 million of Adjusted EBITDA (a non-U.S. GAAP financial measure, described below) for the second quarter of 2024, up 13.0% on Adjusted EBITDA of $108.2 million for the prior year period. Adjusted EBITDA for the six months ended June 30, 2024 was $247.7 million, up 16.2% on Adjusted EBITDA of $213.1 million for the prior year period. - Earnings per share for the second quarter of 2024 was $2.43, up 14.1% on the earnings per share of $2.13 for the prior year period. Normalized earnings per share (a non-U.S. GAAP financial measure, described below) for the second quarter of 2024 was $2.46, up 17.7% on the Normalized earnings per share of $2.09 for the prior year period. Earnings per share for the six months ended June 30, 2024 was $4.98, up 20.0% on the earnings per share of $4.15 for the prior year period. Normalized earnings per share for the six months ended June 30, 2024 was $4.99, up 18.5% on the Normalized earnings per share of $4.21 for the prior year period. - Declared a total dividend, including the first payment of the Supplemental Dividend, of $0.45 per Class A common share for the second quarter of 2024, to be paid on September 4, 2024 to common shareholders of record as of August 23, 2024. Paid a dividend of $0.375 per Class A common share for the first quarter of 2024 on June 3, 2024. - On June 26, 2024 announced upgrades by three leading credit rating agencies. The Corporate Family Rating for Global Ship Lease was upgraded to Ba2 from Ba3, with a stable outlook, by Moody's Investor Service; S&P Global Ratings upgraded the long-term issuer credit rating to BB+ from BB, with a stable outlook; and the Kroll Bond Rating Agency ("KBRA") upgraded the corporate rating to BB+ from BB, with a stable outlook. KBRA also affirmed the BBB/stable investment grade rating and outlook for the 5.69% Senior Secured Notes due July 15, 2027 (the "2027 Secured Notes"). - Between January 1, 2024 and June 30, 2024, added $402.7 million of contracted revenue to forward charter cover, calculated on the basis of the median firm periods of the respective charters, on a total of 24 new charters or extensions: eight for ships between 2,200 and 3,500 TEU; 11 for ships between 5,000 TEU and 6,100 TEU; and, five for ships between 6,500 TEU and 8,000 TEU. Durations of these new charters and extensions for the median firm periods range between nine months and 40 months. A number of the vessels were forward fixed several months ahead of their expected availability in the market. - During the first quarter of 2024, repurchased an aggregate of 251,772 Class A common shares for a total consideration of approximately $5.0 million. Repurchase prices ranged between $18.98 and $20.83 per share, with an average price of $19.84 per share. There were no such repurchases in the second quarter of 2024. Approximately $33.0 million of capacity remains under the Company's opportunistic share buy-back authorization. George Youroukos, our Executive Chairman, stated: "The positive industry momentum that marked the early part of this year accelerated through the second quarter of 2024. Demand for high-quality, mid-sized and smaller containerships such as those in the GSL fleet was further strengthened by continued disruptions in the Red Sea. Almost all of the containerships carrying the 20% of global container freight volumes that previously transited the Red Sea and Suez are now being re-routed for a longer, less efficient voyage around the Cape of Good Hope. The direct impact of these longer voyages and the increased congestion and delays throughout the supply chain are adding a further layer of demand, absorbing effective supply, and driving charter rates and asset values upward. Liner operators have been increasingly willing to secure multi-year charters at high rates, and we are capitalizing on this to lock in as much charter coverage as possible, on both a prompt and forward basis. Reflecting this highly supportive environment and our commitment to returning capital to our shareholders, we have introduced a supplemental dividend alongside our fixed quarterly dividend, thereby increasing our total quarterly dividend payments by 20%." Thomas Lister, our Chief Executive Officer, stated: "GSL's strong cash flows and forward visibility have enabled us to materially strengthen our through-cycle resilience and profitability while also returning significant capital to shareholders and remaining poised to act on the right countercyclical growth opportunities when they arise. Our recent credit rating upgrades underscore our progress in de-levering our balance sheet and locking in long-term contracted revenues at good rates while remaining disciplined in our evaluation of growth opportunities. In a highly complex and dynamic geopolitical environment, with our strong platform and low break-even rates, we believe that GSL is well positioned to continue to build shareholder value now and for the long term."      SELECTED FINANCIAL DATA – UNAUDITED (thousands of U.S. dollars)   Three Three Six Six   months ended months ended months ended months ended   June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023           Operating Revenues (1)   174,997 162,080 354,558 321,371 Operating Income 93,842 85,109 190,941 170,207 Net Income (2)   85,643 75,392 175,149 147,612 Adjusted EBITDA (3)   122,349 108,166 247,712 213,072 Normalized Net Income (3)   86,657 73,975 175,712 149,539           (1) Operating Revenues are net of address commissions which represent a discount provided directly to a charterer based on a fixed percentage of the agreed upon charter rate and also includes the amortization of intangible liabilities, the effect of the straight lining of time charter modifications and the compensation from charterers for drydock and other capitalized expenses installation. Brokerage commissions are included in "Time charter and voyage expenses" (see below). (2) Net Income available to common shareholders. (3) Adjusted EBITDA and Normalized Net Income are non-U.S. Generally Accepted Accounting Principles ("U.S. GAAP") financial measures, as explained further in this press release, and are considered by Global Ship Lease to be useful measures of its performance. For reconciliations of these non-U.S. GAAP financial measures to net income, the most directly comparable U.S. GAAP financial measure, please see "Reconciliation of Non-U.S. GAAP Financial Measures" below. Operating Revenues and Utilization Operating revenues derived from fixed-rate, mainly long-term, time charters were $175.0 million in the second quarter of 2024, up $12.9 million (or 8.0%) on operating revenues of $162.1 million in the prior year period. The period-on-period increase in operating revenues was principally due to our acquisition of four vessels which were delivered to us in the second quarter of 2023 (the "Four Vessels") and a decrease in off hire days and idle time, partially offset by a non-cash $1.9 million decrease in the effect from straight lining time charter modifications. There were 182 days of offhire in the second quarter of 2024 of which 153 were for scheduled drydockings, compared to 308 days of offhire in the prior year period of which 236 were for scheduled drydockings. Utilization for the second quarter of 2024 was 97.0% compared to utilization of 94.5% in the prior year period. For the six months ended June 30, 2024, operating revenues were $354.6 million, up $33.2 million (or 10.3%) on operating revenues of $321.4 million in the comparative period, mainly due to the factors noted above. The table below shows fleet utilization for the three and six months ended June 30, 2024 and 2023, and for the years ended December 31, 2023, 2022, 2021 and 2020.   Three months ended   Six months ended   Year ended   June 30, June 30,   June 30, June 30,   Dec 31, Dec 31, Dec 31, Dec 31, Days 2024  2023    2024  2023    2023  2022  2021  2020                        Ownership days 6,188 5,930   12,376 11,773   24,285 23,725 19,427 16,044 Planned offhire - scheduled drydock (153) (236)   (186) (436)   (701) (581) (752) (687) Unplanned offhire (29) (72)   (69) (174)   (233) (460) (260) (95) Idle time (2) (20)   (2) (20)   (62) (30) (88) (338) Operating days 6,005 5,602   12,120 11,143   23,289 22,654 18,327 14,924                       Utilization 97.0% 94.5%   97.9% 94.6%   95.9% 95.5% 94.3% 93.0%                       As of June 30, 2024 three regulatory drydockings were in progress. In the second half of 2024, 10 further regulatory drydockings are anticipated. Vessel Operating Expenses Vessel operating expenses, which are primarily the costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were up 8.8% to $47.2 million for the second quarter of 2024, compared to $43.4 million in the prior year period. The increase of $3.8 million was mainly due to (i) the acquisition of the Four Vessels in the second quarter of 2023, (ii) increase in repairs, spares and maintenance expenses for planned main engine maintenance and overhaul of diesel generators as well as main engine annual spares delivery due to timing of planned schedule, (iii) increased cost of insurance due to increased premiums as asset values rose over the period, and (iv) impact of inflation on fees and expenses, including management fees. The average cost per ownership day in the quarter was $7,624, compared to $7,320 for the prior year period, up $304 per day, or 4.2%. For the six months ended June 30, 2024, vessel operating expenses were $95.0 million, or an average of $7,679 per day, compared to $86.2 million in the comparative period, or $7,319 per day, an increase of $360 per ownership day, or 4.9%. Time Charter and Voyage Expenses Time charter and voyage expenses comprise mainly commission paid to ship brokers, the cost of bunker fuel for owner's account when a ship is off-hire or idle and miscellaneous owner's costs associated with a ship's voyage. Time charter and voyage expenses were $5.4 million for the second quarter of 2024, compared to $6.7 million in the prior year period. The decrease was mainly due to (i) decrease in bunkering expenses due to fewer off hire days and (ii) decrease in voyage administration costs and operational requests from charterers offset by increased commissions on charter renewals at higher rates. For the six months ended June 30, 2024, time charter and voyage expenses were $10.6 million, or an average of $859 per day, compared to $12.1 million in the comparative period, or $1,031 per day, a decrease of $172 per ownership day, or 16.7% mainly to the factors noted above. Depreciation and Amortization Depreciation and amortization for the second quarter of 2024 was $24.5 million, compared to $22.2 million in the prior year period. The increase was mainly due to the acquisition of the Four Vessels in the second quarter of 2023 and eight drydockings completed after June 30, 2023. Depreciation and amortization for the six months ended June 30, 2024 was $48.8 million, compared to $43.4 million in the comparative period, mainly due to the factors noted above. General and Administrative Expenses General and administrative expenses were $4.0 million in the second quarter of 2024, compared to $4.7 million in the prior year period. The movement was mainly due to the decrease in payroll expenses following the retirement of our former CEO effective March 31, 2024 plus a reduction in the non-cash charge for stock-based compensation expense. The average general and administrative expenses per ownership day for the second quarter of 2024 was $654, compared to $794 in the prior year period, a decrease of $140 or 17.6%. For the six months ended June 30, 2024, general and administrative expenses were $9.1 million, compared to $9.5 million in the comparative period. The movement was mainly due to the decrease in the non-cash charge for stock-based compensation expense offset by an increase in bonuses paid to our employees. The average general and administrative expense per ownership day for the six-month period ended June 30, 2024 was $738, compared to $807 in the comparative period, a decrease of $69 or 8.6%. Adjusted EBITDA Adjusted EBITDA (a non-GAAP financial measure) was $122.3 million for the second quarter of 2024, up from $108.2 million for the prior year period, with the net increase being mainly due to decrease in planned and unplanned off hire days and the addition of the Four Vessels in second quarter of 2023. Adjusted EBITDA for the six months ended June 30, 2024 was $247.7 million, compared to $213.1 million for the comparative period, an increase of $34.6 million or 16.2%. Interest Expense and Interest Income Debt as at June 30, 2024 totaled $721.1 million, comprising $371.8 million of secured bank debt collateralized by vessels, $258.1 million of 2027 Secured Notes collateralized by vessels, and $91.2 million under sale and leaseback financing transactions. As of June 30, 2024, five vessels were unencumbered. Debt as at June 30, 2023 totaled $925.3 million, comprising $491.3 million of secured bank debt collateralized by vessels, $310.6 million of 2027 Secured Notes collateralized by vessels, and $123.4 million under sale and leaseback financing transactions. As of June 30, 2023, five vessels were unencumbered. Interest and other finance expenses for the second quarter of 2024 was $9.9 million, down from $10.9 million for the prior year period. The decrease was mainly due to lower interest expense following the principal repayments offset by amortization of premium paid for interest rate caps. The blended cost of debt, taking into account interest rate caps, has marginally increased from approximately 4.53% for the second quarter of 2023 to 4.57% for the second quarter of 2024 due to variations in amortization schedules. Interest and other finance expenses for the six months ended June 30, 2024 was $20.3 million, down from $22.0 million for the comparative period mainly due to the factors noted above. Interest income for the second quarter of 2024 was $4.1 million, up from $2.6 million for the prior year period mainly due to higher invested amounts. Interest income for the six months period ended June 30, 2024 was $7.8 million, compared to $4.4 million for the comparative period. Other income/(expenses), net Other income, net was $1.0 million in the second quarter of 2024, compared to other expenses, net of $0.4 million in the prior year period. Other income, net was $2.3 million for the six month period ended June 30, 2024, compared to $1.2 million for the comparative period. Fair value adjustment on derivatives In December 2021, we entered into a USD 1 month LIBOR interest rate cap of 0.75% through the fourth quarter of 2026 on $484.1 million of floating rate debt, which reduces over time in line with anticipated debt amortization and represented approximately half of the outstanding floating rate debt. In February 2022, we entered into two additional USD 1-month LIBOR interest rate caps of 0.75% through the fourth quarter of 2026 on the remaining balance of $507.9 million of floating rate debt. As a result of the discontinuation of LIBOR, on July 1, 2023, our interest rate caps have automatically transited to 1 month Compounded SOFR at a net rate of 0.64%. A negative fair value adjustment of $1.0 million for the second quarter of 2024 was recorded through the statement of income. The negative fair value adjustment for the six month period ended June 30, 2024 was $0.8 million. Earnings Allocated to Preferred Shares The Series B Preferred Shares carry a coupon of 8.75%, the cost of which for the second quarter of 2024 was $2.4 million, the same as in the prior year period. The cost for the six months ended June 2024 was $4.8 million, the same as for the six months ended June 30, 2023. Net Income Available to Common Shareholders Net income available to common shareholders for the second quarter of 2024 was $85.6 million. Net income available to common shareholders for the prior year period was $75.4 million. Earnings per share for the second quarter of 2024 was $2.43, an increase of 14.1% from the earnings per share for the prior year period, which was $2.13. For the six months ended June 30, 2024, net income available to common shareholders was $175.1 million. Net income available to common shareholders for the six months ended June 30, 2023 was $147.6 million. Earnings per share for the six months ended June 30, 2024 was $4.98, an increase of 20.0% from the earnings per share for the comparative period, which was $4.15. Normalized net income (a non-GAAP financial measure) for the second quarter of 2024, was $86.7 million. Normalized net income for the prior year period was $74.0 million. Normalized net income for the six months ended June 30, 2024 was $175.7 million, as compared to $149.5 for the comparative period. Normalized earnings per share (a non-GAAP financial measure) for the second quarter of 2024 was $2.46, an increase of 17.7% from Normalized earnings per share for the prior year period, which was $2.09. Normalized earnings per share for the six months ended June 30, 2024 was $4.99, an increase of 18.5% from Normalized earnings per share for the comparative period, which was $4.21. Fleet As of June 30, 2024, there were 68 containerships in the fleet. Vessel Name Capacity in TEUs Lightweight(tons) Year Built Charterer Earliest Charter Expiry Date Latest Charter Expiry Date (2) Daily Charter Rate $                 CMA CGM Thalassa 11,040 38,577 2008 CMA CGM 4Q25 2Q26 47,200 ZIM Norfolk (1)   9,115 31,764 2015 ZIM 2Q27 4Q27 65,000 Anthea Y (1) 9,115 31,890 2015 MSC 3Q25 4Q25 Footnote (3) ZIM Xiamen (1) 9,115 31,820 2015 ZIM 3Q27 4Q27 65,000 MSC Tianjin 8,603 34,243 2005 MSC 3Q27 4Q27 19,000 (4) MSC Qingdao 8,603 34,609 2004 MSC 3Q27 4Q27 23,000 (4) GSL Ningbo 8,603 34,340 2004 MSC 3Q27 4Q27 Footnote (5) GSL Alexandra 8,544 37,809 2004 Maersk 3Q25 3Q26 Footnote (6) GSL Sofia 8,544 37,777 2003 Maersk 3Q25 3Q26 Footnote (6) GSL Effie 8,544 37,777 2003 Maersk 3Q25 3Q26 Footnote (6) GSL Lydia 8,544 37,777 2003 Maersk 2Q25 3Q26 Footnote (6) GSL Eleni 7,847 29,261 2004 Maersk 4Q27 2Q29 16,500 (7) GSL Kalliopi 7,847 29,261 2004 Maersk 1Q28 2Q29 18,900 (7) GSL Grania 7,847 29,261 2004 Maersk 4Q27 2Q29 17,750 (7) Colombia Express (ex Mary) (1) (16) 7,072 23,424 2013 Hapag-Lloyd (8) 4Q28 1Q31 Footnote (8) Kristina (1) 7,072 23,421 2013 CMA CGM (8) 4Q29 4Q31 25,910 (8) Katherine (tbr Costa Rica Express) (1) (16) 7,072 23,403 2013 Hapag-Lloyd (8) 2Q29 3Q31 Footnote (8) Alexandra (1) 7,072 23,348 2013 CMA CGM (8) 2Q29 3Q31 25,910 (8) Alexis (1) 6,910 23,919 2015 CMA CGM (8) 3Q29 4Q31 25,910 (8) Olivia I (1) 6,910 23,864 2015 Hapag-Lloyd (8) 3Q29 3Q31 Footnote (8) GSL Christen 6,840 27,954 2002 OOCL 4Q27 1Q28 20,500 (9) GSL Nicoletta 6,840 28,070 2002 Maersk 1Q28 2Q28 35,750 (9) CMA CGM Berlioz 7,023 26,776 2001 CMA CGM 4Q25 2Q26 37,750 Agios Dimitrios 6,572 24,931 2011 MSC 2Q27 3Q27 Footnote (4) GSL Vinia 6,080 23,737 2004 Maersk 3Q24 1Q25 13,250 GSL Christel Elisabeth 6,080 23,745 2004 Maersk 3Q24 1Q25 13,250 GSL Dorothea 5,992 24,243 2001 Maersk 2Q25 3Q26 12,900 (10) GSL Arcadia 6,008 24,858 2000 Maersk 1Q25 1Q26 12,900 (10) GSL Violetta 6,008 24,873 2000 Maersk 4Q24 4Q25 18,600 (10) GSL Maria 6,008 24,414 2001 Maersk 4Q24 1Q27 18,600 (10) GSL MYNY 6,008 24,876 2000 Maersk 2Q25 1Q26 18,600 (10) GSL Melita 6,008 24,848 2001 Maersk 3Q25 3Q26 12,900 (10) GSL Tegea 5,994 24,308 2001 Maersk 3Q25 3Q26 12,900 (10) Tasman 5,936 25,010 2000 Maersk 1Q25 1Q25 21,500 Dimitris Y (ex ZIM Europe) (22)