Global Ship Lease, Inc. Q2 FY2025 earnings call

Industry Impact

• Uncertainty and volatility related to tariffs, trade disruptions and geopolitical tensions have materially impacted the global container shipping industry, making containerized supply chains less efficient, which increases demand for vessels.

Charter Portfolio

• As of June 30, $1.73 billion in forward contracted revenues with 2.1 years of average remaining contract cover, and 22 charters added in the first half of 2025 including extension options for nearly $400 million of contracted revenues.

Capital Allocation

• Believe in maximizing optionality to manage risks and capitalize on opportunities, reinforcing balance sheet, selectively investing in fleet, and returning capital to shareholders, with annualized dividend increased to $2.10 per common share.

Ship Acquisition

• Consistently bought ships opportunistically in situations where downside is limited and upside potential is significant, avoiding acquisitions during periods of elevated asset prices.

Financials

• First half 2025 financial highlights include earnings and cash flow rise, gross debt situation, cash position, $85 million refinancing to push weighted average debt maturity to 4.9 years and bring weighted average cost of debt to 4.18%, gain on sale of vessels, and progress in delevering with net debt-to-EBITDA at 0.7x.

As of June 30, Global Ship Lease had $1.73 billion in forward contracted revenues with 2.1 years of average remaining contract cover. Earnings and cash flow have continued to rise. Gross debt increased relative to year-end 2024 due to bringing 4 additional vessels into the fleet, but gross debt figure is down from a year ago. Cash position is $511 million, with $80 million restricted. Net debt-to-EBITDA is at 0.7x. The fleet of flexible midsize and smaller containerships has remained in high demand, with nearly $400 million of additional charter coverage secured in the first half of 2025, closing out 2025 market exposure and bringing 2026 coverage to 80%.

• Secured nearly $400 million of additional charter coverage in the first half of the year, closing out any 2025 market exposure and bringing 2026 coverage to 80%.
• Increased annualized dividend payment to $2.10 per common share.
• Believe maximizing optionality is the right course of action while reinforcing balance sheet, selectively investing in fleet, and continuing to return capital to shareholders.

• Uncertainty and volatility related to tariffs, trade disruptions and geopolitical tensions impacting the global container shipping industry.
• Red Sea situation with approximately 10% of global containership capacity absorbed by routing around The Cape of Good Hope instead of transiting Suez, and uncertainty regarding when service routing may shift back.
• Supply chain disruptions and their lasting impacts on containerized trade.

Q: I wanted to start with the modeling question. You mentioned that as of June 30, 2 dry dockings were ongoing and 6 additional were anticipated. Could you confirm whether the 6 additional dry dockings are to be pursued throughout Q3? Or does that include the fourth quarter?

A: That's a pretty granular question. Tassos didn't have the exact information to respond immediately, and we can respond to it off-line.

Q: I also wanted to ask about your B1 asset values. Your last acquisition in December focused on large vessels, especially relative to your fleet and looking ahead, to what extent should we expect you to focus on large vessels, let's say, above 4,000 TEU relative to feeders?

A: Generally speaking, our focus is on post-Panamax beam ship more than 40 meters. That's the majority of our fleet per TEU. Having said that, that does not exclude us from buying smaller ships if the deal makes sense, but would prefer post-Panamax ships between 6,000 to 10,000 TEU.