Boxship owner Global Ship Lease (GSL) is again eyeing potential acquisitions now that the container market is normalising.
Executive chairman George Youroukos said the company’s strong financial position and long-term contracted cash flow “gives us the option to be an acquirer”.
“We have remained disciplined in the face of the market exuberance and elevated asset values of the last 18 months or so,” he said.
“However, with the market now normalising, we expect that there may be additional opportunities to create shareholder value through acquisitions.”
The New York Stock Exchange-listed company revealed a 75% jump in annual profits.
Normalised net income rose 75% to $298.2m in 2022, up from $170.7m. In the fourth quarter, profits increased by 16.9% to $77.3m.
Operating revenues, mostly from long-term charter income, were up 44% to $645.6m in 2022. The rise was a more modest 7.5% to $165m for the final three months.
“While 2022 started strongly, macro headwinds and negative sentiment subsequently put pressure on consumer demand and thus on the container shipping industry,” Youroukos said.
That was exerting downward pressure on charter rates and asset values, but the company continued to make “financial, commercial, and strategic progress”, he said.
GSL Amstel sold
That strategy has resulted in the sale of the company’s smallest vessel.
The 1,100-teu GSL Amstel (built 2008) has been sold with imminent special survey and dry-docking requirements, for approximately book value.
The vessel is worth $9.71m, according to VesselsValue estimates. It is on charter to French liner company CMA CGM through to the third quarter of this year at $11,900 per day.
The sale will leave GSL with 64 container ships from 2,207 teu to 11,040 teu, of which half are wide-beam panamax designs.
The fleet has total contracted revenue as of year-end of $2.1bn over an average of 2.7 years.
“Throughout the peak period, we maintained a long-term, through-the-cycle orientation, taking steps to maximise overall earnings while minimising residual risk,” Youroukos said.
Chief executive Ian Webber said the tonnage provider strengthened its balance sheet in 2022.
“This will serve the company well throughout the cycle, but especially in the current uncertain macro-economic environment,” he said.
“Building upon the opportunities afforded by our extensive charter coverage and significantly increased earnings and cash flow, we have reduced our average cost of debt to 4.53%, have no material refinancing requirements before 2026 [and] have fully hedged our floating rate debt through 2026…”
