Global Ship Lease reported first-quarter earnings that blew past analyst expectations, as the company worked to capitalise on a rising boxship charter market in a volatile freight environment.
The New York-listed container ship owner reported net income of $89.5m in the latest quarter, which was up from $72.2m in the first three months of 2023.
With items typically excluded by analysts factored out, normalised net income rose 17.9% to $89.1m.
That translated into adjusted earnings per share of $2.53, well above the estimate of $2.13 by three analysts polled by Yahoo Finance.
Executive chairman George Youroukos said the year started with positive momentum that was partly fuelled by rising demand.
“However, geopolitical events and environmental trends continue to have a pronounced impact on the macro-environment, adding further volatility to our already cyclical industry,” he said in the earnings release.
“Disruptions in and around the Red Sea, and to the Suez and Panama canals, have been at the forefront of all of our minds for the last few months.”
Revenue surged to nearly $180m, up from $159m a year earlier.
But Youroukos warned that just as quickly as geopolitical issues and disruptions can flare up, they can also pull back, expand or transform in ways that cannot be anticipated.
“Against this backdrop, we aim to continue to operate our business in the same risk-averse and prudent manner as always: keeping our seafarers out of harm’s way, staying close to our customers, optimising our operating performance and building forward contract cover and balance sheet strength while market conditions are supportive,” he said.
“Charter market rates have been firming thus far in 2024, and we are working hard to capitalise on that as our vessels come open. In the meantime, we continue to pay our sustainable dividend, buy back shares opportunistically and remain vigilant for the right purchase opportunities.”
For recently promoted chief executive Thomas Lister, that means staying both nimble and disciplined in how the company allocates capital.
The company declared an unchanged dividend of just under $0.38 per share and added $54.6m of contract cover during the first quarter.
“Container shipping is a cyclical industry, and that cyclicality presents both risks to manage and opportunities to grasp,” he said.
“De-levering builds equity value and business resilience while growing our cash liquidity provides both headroom under our covenants — if asset values correct — and valuable optionality to selectively pursue accretive acquisition opportunities.”
