GSL in the Red
Global Ship Lease (GSL) has reported negative result for the third quarter of the year mainly due to impairment charges related to two vessels.
Company reported revenue of $42.18 million. The estimated revenue was of $39.92 million. Earnings per share were $0.08. Analysts had estimated an EPS of $0.06.
Revenue for the nine months ended September 30, 2015 was $120.9 million. Reported net loss of $41.1 million for the third quarter 2015, after $44.7 million non-cash impairment charge in respect to two vessels. For the nine months ended September 30, 2015, net loss was $38.2 million after the impairment charge.
GSL has purchased OOCL Ningbo, a 2004-built 8,063 TEU containership for $53.6 million. Immediately upon delivery on September 17, 2015, the vessel commenced a fixed-rate time charter to Orient Overseas Container Line (UK) Limited, an affiliate of the seller, for a period of 36 to 39 months at $34,500 per day.
The charter is expected to generate annual EBITDA of approximately $9.4 million and increases contracted revenue by between $37.7 million and $40.9 million.
It has agreed to sell Ville d'Aquarius, at $333.50 per ldt, following her re-delivery from charter on October 29, 2015 for estimated net proceeds of $4.5 million. The sale is expected to be completed by the end of November 2015.
Ian Webber, Chief Executive Officer of Global Ship Lease, stated, "In the third quarter of 2015, we successfully executed our strategy of identifying and seizing attractive growth opportunities with high-quality counterparties, adding a third 8,063 TEU vessel, OOCL Ningbo, to our fleet in mid-September."
"In addition to substantially increasing our EBITDA generation capacity, widening our multi-year contracted revenue stream, and expanding our strong relationship with OOCL, this enabled us to initiate a meaningful and sustainable dividend for our common shareholders and to guide to a 25% increase once the newly added vessel has provided a full quarterly earnings contribution," he added.
Subsequent to the quarter, and with challenging near-term employment prospects for the 4,113 TEU Ville d'Aquarius, the oldest vessel in our fleet, we made the decision to sell the vessel for scrap upon completion of her charter to Sea Consortium. We are thus further insulated from the volatility of the short-term charter market, with only one vessel out of 19 coming off charter before late 2017, he said.
