Global Ship Lease (GSL) has boosted its bottom line by 15 times by achieving higher rates on numerous vessels and reining in debt expenses.
The Ian Webber-led owner of 65 container ships on Monday reported a first-quarter net income of $70.2m versus a $4.2m net profit for the same period last year.
Revenue came in at $154m, more than double the year-ago result of $73m, mostly because of the stronger rates but also due to increasing ownership days by 51.2% with 22 more ships.
Adjusted net income totalled $69.7m versus $17.8m in adjusted profit for the first three months of 2019.
Adjusted results for this year’s first quarter included a $4.6m increase in the value of derivatives that offset a $4.1m full prepayment fee tied to a credit facility.
Adjusted figures for the year-ago results, by comparison, accounted for $13.5m in prepayment charges on notes maturing this year and other debt.
“We have continued to eliminate our more expensive legacy debt, resulting in a reduction in our cost of debt from nearly 8% at the start of 2019 to 4.63% now,” chief executive Ian Webber said in a statement.
“Similarly, between late 2021 and the first quarter of this year, we have put in place interest rate caps for all of our debt, so we are now fully hedged against rising interest rates.
“With no debt maturities through mid-2024, our contracted cashflows provide us with highly reliable coverage for our debt service and our return of capital to shareholders.”
The adjusted results produced adjusted first-quarter earnings per share (EPS) of $1.91 versus a $0.56 adjusted EPS a year earlier.
Based on this performance, GSL declared a shareholder dividend of $0.375 per share for the quarter, payable on 2 June to common shareholders of record as of 24 May.
This payout is an increase from the $0.25 dividend given to shareholders for all four quarters of last year.
GSL’s positive results have also enabled the UK-based owner to buy back almost $5m in shares of our shares in the market, executive chairman George Youroukos said.
“Looking forward, we continue to see highly constrained supply growth for all but the very largest containerships, and a high likelihood of continued supply chain disruption and congestion, which — almost regardless of demand growth — give us confidence about our ability to continue securing and extending long-term, reliable, contracted revenues from our high-quality fleet.”
