Q3 2021 Global Ship Lease Inc Earnings Call

Good day, and thank you for standing by.

Welcome to the global ship lease third quarter 2021 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one on your telephone.

Please be advised that this country is being weak or did.

If you require any further assistance please press star zero.

I would now like to hand, the conference over to your host Mr. Ian Webber.

Chief Executive officer of <unk>.

Global ship lease East go ahead.

Well, thank you very much good.

Good morning, good afternoon, everybody and welcome to the global ship lease third quarter 2021 earnings Conference call.

The slides that accompany today's presentation were posted to our website earlier today Ww Doffs global ship lease dotcom.

Slides, two and three of that presentation as usual remind you that today's call may include forward looking statements.

Based on current expectations and assumptions and all by their nature inherently uncertain and outside of the company's control actual results may differ materially from these forward looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation. We also draw your attention to the risk factors section of our most recent annual report on.

From 20-F, which is for 2020 and was filed with the SEC on March the 19th 2021, you can obtain this far in our websites or via the SEC's. All of our statements are qualified by these and other disclosures in our reports filed with the SEC, we do not undertake any duty to update forward looking statements.

For reconciliations of the non-GAAP financial measures to which we will refer during this call to the most directly comparable measures calculated and presented in accordance with GAAP. Please refer to the earnings release that we issued this morning, which is also available on our website.

I'm joined as usual by our executive Chairman George you root cause our chief financial Officer, Tussle surplus and our Chief commercial Officer, Tom Lister.

George will begin the call with a high level commentary on GSO and all my our industry.

And then Tassos, Tom and I will take you through our recent achievements quarterly results and credentials on the current market environment.

That we'd be pleased to take your questions. So turning now to slide four I'll pass the call over to George.

Thank you Anne and good morning, or good afternoon to all of you joining us today.

I have in recent quarters describe the containership market is red hot and with both rate and charter markets continue to set record high levels that certainly remains the case through to today.

See ample reason why this should continue for some time and we will come back to this theme throughout today's presentation.

But let me first highlight what is amazing.

Market has meant for GSL.

Year to date, we have grown our fleet by more than 50% acquiring 23 ships, but just under half a billion dollars.

With the last of those vessels delivering to us and commencing its charter in mid October we.

We have signed a total of 48, new charters, adding a total of $1 25 billion of contracted revenue and approximately 930 million of expected adjusted EBITDA, providing additional long term support the 25 cents a share dividend that we introduced earlier this year.

We have remained highly accretive active in managing our balance sheet refinancing a total of just under $400 million of debt. This year alone, bringing down our cost of debt from six 3% to four 9%.

In addition, all debt maturities through 2024.

As our industry.

I'll try to book and our balance sheet has continuously improved we have received yet another round of credit rating upgrades. The most recent of which was to double b minus from standard and poors.

I would like to highlight.

The increase in normalized earnings per share, which at $1.74 for the quarter is nearly four times the prior year period and at $3.01 for the year to date, approximately two and a half times, they probably could get period.

One we're of course very pleased with our results for the third quarter, which you can see in detail on the right side of the slide.

The full cash impact will really only be on display in the quarters ahead.

Moreover, our focus on locking in the present market conditions into long term charters means that GSL will benefit from these actions for years to come.

Even before the impact of any further acquisitions, which we are well positioned to continue pursuing on a disciplined selective basis.

In the meantime, we are working on some significant charter extensions, which we hope to conclude in the relative near term.

These together with the growth we have achieved year to date and our contracted cash flow.

For the next couple of years will help determine an increase in the sustainable dividend from Q1, 2022 we will make an announcement as soon as we can.

If you now turn to slide five I'll describe the big picture put our industry at this moment.

How did you have undoubtedly had the current market environment in the container shipping industry is truly extraordinary.

Contrary to early physician that economic economies opening back up following Covid Lockdowns would undermine containerized trade demand.

With the expectation that consumer would spend again on service rather than goods.

We have actually seen an additional acceleration alongside economic recovery, despite that recover being uneven.

Nevertheless, 2021 cargo volumes are expected to increase by eight 2% up from the prediction of less than 7%.

Already very pleased to share with you on our last quarterly call.

This strong fundamental rate of demand growth is double the rate of nominal cellular capacity growth.

That is the supply of container ships.

This imbalance is set to increase further through the at least at least next year, even before the significant impact of supply chain congestion.

It's absorbs capacity and amplifies it tightness of supply and demand.

And looks set to be prominent feature of the market for quite some time.

Now very important when you zoom in on the segment of the market, where we focus the sub 10000 Teu container ships.

Order book is even more limited.

And the advanced age of much of the global fleet is going to drive significant scrapping in the years ahead.

Particularly as scrapping of the global fleets oldest vessels is currently being deferred due to the strong market building backlog a very old ships.

Don will provide more detail on this later, but this is something I really want to emphasize upfront.

100% of container ships on the water today, which are 25 years old or older.

Under 10000 Teu.

So that mid size and smaller ship segment on which we focus our aging.

In fact by the end of 2024, roughly 7% of sub 10000 Teu capacity on the water today would be at least 25 years old.

This almost exactly mirrors.

Capacity on order through 'twenty 'twenty four for sub 10000 Teu ships.

What this means is that the full ships older than 25, where it'll be scrapped out which is a normal thing I would say net growth of the sub 10000 Teu fleet between now and the end of two incident default would be under 1%.

And that is without taking any any anything in account about cargo growth.

Year on year for the next three years.

Meantime earnings and asset values are on a clear upward trajectory with Atlanta companies delivering record earnings that continue to reach previously unthinkable levels.

And as we look for what the drawdown of U S retail inventories to fall below the normal level suggests that the vast amounts of restocking that is required we will provide further support to containership demand for sometime to come.

Speaking to you one week after the C O P 26 confidence and the many related announcements from industry regulators financiers and operating companies. It is very clear that ESG in general and Decarbonization in particular is going to play a growing role in shaping the future of all industries, including shipping.

As we have mentioned before we expect that the E X sight regulation coming into effect from January 'twenty, two 'twenty three will force the global fleet slowed down.

And one note redemption and global average container ship sailing speeds equates to a 5% to 6% reduction in effective capacity.

While there has certainly been some ordering of new vessels in our sector. There is significant uncertainty about which green fuels will become the standard for the future has continued to constrain speculative ordering this is a major difference from previous bull markets in container shipping.

Finally, while we have dramatically increased our fleet already this year, we continue to see the potential for selective growth that meets our high standards for vessel specifications forward visibility unemployment overall risk management and returns.

We have no intention of compromising our acquisition criteria or a required the tenancy in order to pursue growth for growth's sake.

But we continue to see potential for selective growth in a highly fragmented sector with many subscale players and with a continuous exodus of financial sponsors.

What's the opportunity exists to serve the long term interest of GSL shareholders by pursuing growth.

Our operating platform industry relationships and balance sheet puts us in an excellent position to seize that opportunity.

But and I cannot emphasize this enough days, if we don't like the risk return profile of a deal we will not do it.

With that I will turn the call to you.

Thank you George.

Please turn to slide six.

2021 has provided numerous opportunities for us not only to grocery vessel acquisitions.

So for us to fix much of our existing fleet significantly longer charters charter rates does or in many instances two or three times that previous levels.

This slide shows those vessels that we're not we're in a place at the beginning of the year with the dark blue bars, indicating where we have signed new or extended charters in the year to date.

On this status quo fleet, we've agreed 18, new chocolate so far this year, adding a little over $600 million of contracted revenue coupled.

As you will notice the number of these new charters have been agreed to commence in the months ahead. So new terms have been agreed one into one in advance of expiring, meaning that we've got good visibility on continued increased cash generation from this part of the trees and the remainder of the fourth quarter. This year.

And then to fall into the first quarter next year, even if we don't take any further action.

On the next slide let me say something similar for 23 vessels that we have acquired this year are they rule now being delivered the last one came oh, two or three weeks ago.

In the middle of October.

The majority have commenced new charters agreed on the railroad and the ship succeeding charters in place at the dates of acquisition and these new charters are again at considerably higher rates are growing on the water.

The 23 ships grew our on the water fleet by more than 50% <unk>.

Over $640 million of contracted revenue.

The dark blue bars on this page are those legacy charters that were in place when we agreed the transactions until a considerable benefit these below market rates translated into a below market purchase prices for the vessels.

The red bars on the other hand show the chances that we've agreed and a red hot market subsequent to acquiring the vessels capturing significant upside potential.

For GSL.

Once again these new chances are multiples of that prior rates and extending well into the middle class in a decade.

All in all with the new chances for the preexisting, please and existing and new charters on the 23 vessels acquired year to date, we've locked in an additional $929 million of total adjusted at all so far this year.

On total contracted forward revenue cover at the 30th September stands at $1 $6 billion spread over two and a half years.

As George mentioned this substantial additional multi year contracted cash flow has allowed us to revisit the dividend for common shareholders.

With the conclusion with some significant chocolate extensions, which we expect within the next short number of weeks.

Look to increase the dividend on a sustainable basis.

One or 2022 and beyond.

Moving onto slide eight.

The slide that we introduced last quarter and we think it's helpful. In illustrating why all of the new charters and vessels.

The acquisitions mean for our revenue and cash flow.

We show you this in three different forward rates scenario.

These three scenarios all of that for any vessels coming open in the next two years.

Back at rates prevailing in the market today or alternately at 15 year historic rates.

Alternately the third option 10 year historic rates.

To be absolutely clear these are not forecast of what will happen, but rather illustrations of how a number of different scenarios would flow through to GSO as financials.

I'd encourage you all to spend some time with the slides and for those of you who once you get through the final details with spells out the assumptions on the relevant factors in detail on slide 21 in the appendix.

For Malibu, a block to make just a couple of points.

First you will notice is that in.

<unk>, a negligible variation for us across the different scenarios for 2021, the current year as our remaining charter market exposure is less than one month on a single 2300 T shirt.

This higher proportion of already contracted revenue days persist through 2022 next year, where we have only 4% of our total days opened up the embankment payment.

The adjusted EBITDAR in each scenario for 2022 shows a dramatic.

The increase from 2000 charging ourselves.

I'll say that again with adjusted EBITDAR in each scenario showing a dramatic increase from the <unk> 2021 levels until.

To remind you every incremental dollar of salt revenues flow straight through to adjusted EBITDA and cash flow.

Our second for historical context.

Adjusted EBITDA in the year since 2019 merger with Poseidon has been around $160 million.

Now we've already exceeded that level in the first nine months of this year trying to 'twenty, one and we're well positioned to move dramatically higher.

Once again in 2022 based on my mind now fully delivered fleet of 65 ships.

In fact based solely on those charters already agreed assuming literally zero revenue from additional spot days open days, while still assuming opex on all of our fleets. Our adjusted EBITDA would be approximately $318 million for 2022 and 200.

Third $72 million in 2023 significantly on what we were running before this year.

This expansion of our cash flow as both transformative and.

Blasting.

Moving on to slide nine I'll summarize our strategy and focus.

We continue to believe that the sweet spots in the market as an existing ships log of new builds and particularly in the midsize and smaller sections.

We've put nearly half a billion dollars.

[noise] towards acquiring.

<unk> thousand three such assets this year and we've already secured nearly that entire amount in adjusted EBITDAR over the coming years related only to these newly acquired vessels.

We've been disciplined and selective in our acquisitions.

For both fleet renewal and growth.

Maintaining a risk averse approach that is consistent with the yield at compelling returns.

We focus on immediately accretive deals and have secure transactions with an estimated purchase price too.

Average annual adjusted EBITA.

Our ratios are between three six and four times.

We've also ensured that charter attached acquisitions that you might have not been reliance upon the rosy residual value scenarios.

Between the charters agreed and scrap out of your vessels, we have in many of these instances already fully covered the cost of the acquisition.

Well, we have been able to purchase older vessels.

But we have agreed subsequently plenty of transfer of rights of demonstrated extraordinary upside potential of that strategy.

As George mentioned in his remarks, both GSL and shifting industry in general are increasingly focused on decarbonization.

Our environmental commercial strategies are well aligned might take any full lifecycle approach to the carbon footprints of ships, we consider the impacts of building and operating the ships.

As well as just simply operating.

We see expanding the economic life of existing ships and optimizing their operation.

Until next generation sustainable fuels in propulsion technologies become well established and commercially available and economically viable.

It's being environmentally sensible.

Actually prudent.

Relatedly, we look to make sure that we are flexible and agile avoiding speculation or long term bets, we focus instead on a short to medium term horizon to drive returns, which in turn enable us to respond.

<unk> creates to an evolving decarbonization environments.

We also look to position the company.

To be in a strong cash flow to be in a strong cash position. So I think we can move quickly and decisively and capitalizing on opportunities ahead.

Yeah.

I'll turn the call over to Tassos to talk you through our financials.

Thank you Ian.

Our first nine months of the year has been very active with a significant number of moving pieces in the financials. So we have summarized the key points for you on slide 10.

Revenue for the first nine months was $294 4 million up from 212 8 million in the first nine months of 2020 'twenty.

Similarly, adjusted there'd be doubtful that nine months was $166 5 million up from $124 5 million in the same period of last year, including an material impact on total operating revenue from amortization of intangible liabilities had rising on below market charters attached to vet.

<unk> additions.

Normalized net income, which adjust for the one off items was $104 6 million for the first nine months up approximately 170% from $38 3 million in the prior year period.

I'd like to spend a moment on the material one off items within this quarter. We have completed the refinancing of the last 2022 debt maturity moving the next earliest to May 2024.

We have also completed within this quarter the scheduled purchase it finance of 16 vessels and with the last one being completed in October out of the total 23, new vessels, we acquired this year.

Moving to the balance sheet items, there are various points will highlight.

Our cash position at September 32021 was $113 million.

As I have mentioned that both in the quarter. We have successfully refinanced our last 2022 maturity debt of $5 8 million catering facility and concluded that 140 million facility of dwell Borealis vessels, and then 120 million for five and a half to your Panamax meantime, we have raised in the third.

Quarter on their ATM programs $16 9 million of our perpetual preferred further increasing our flexibility.

Regarding our acquisitions.

For the seven post Panamax ships, we have concluded in July the delivery of the last vessel with purchase price of $17 6 million and brought down the last $10 7 million of the arrange facility.

In addition within July also we have concluded the purchase of 12 container ships from borealis over an aggregate purchase price of $233 9 million, which we financed with the issuance of 35 million over the 2024 nodes to the sellers and senior secured loan of 400 million.

And cash on hand.

Finally for the 45 and a half that you panamax container ships, we contracted purchased for an aggregate price of 148 million. We have arranged financing of 120 million of which we have drawn down 90 million I guess at three seats to leave it by September 32021.

Lastly, I said it was delivered in October.

Now are we going to find that such statements appear in food in slides 11 through 13 on the basis of our strong contracted revenues. Our board has declared a dividend of <unk> 25 cents per common share for the third quarter to be paid on December 2nd to common shareholders of record as of November 22.

On Slide 14, you can see in the upper left off schedule of amortization in the coming years. So on the basis of our third quarter results our total gross debt.

The annualized adjusted EBITDA is approximately three seven times and this is scheduled to come down meaningfully from there.

On the upper right you can see the dramatic reduction in our cost of debt from seven 7% at year end 2018 to six 3% at the beginning of this year to high 4% now.

On the lower left you will see that the trading liquidity in our stock has increased dramatically over the last year, making it far easier for new vessels to take a position in GSM scenes, our public float now account just under 80%.

With that I will turn it over to Tom.

Thanks, Stefan and Hello, everyone.

Please turn to slide 15, which is intended to highlight the ship sizes on which were focused which will help put the subsequent slides in better context.

So GSL its focused on midsize and smaller ships, which is shorthand for ships ranging from about 2000 Teu up to 10000 Teu.

The top map on the left shows the deployment of quote unquote, our sizes of ship ships under 10000, Teu and emphasizes that operational flexibility.

As you can see they're deployed everywhere.

The bottom up shows where the big ships in other words those larger than 10000 Teu were deployed which tends to be on the east West main lane trades, where the cargo volumes and shoreside infrastructure can support them.

And it's important to note that roughly 70% seven zero percent of global Containerized trade volumes have moved outside these main lanes in the north South regional and intermediate trades, so by ships like ours.

George covered the demand side in his opening remarks, highlighting the rebound in containerized volumes driven by a progressive reopening of economies and ongoing restocking with continued supply chain disruption amplifying all of the above.

So the next slides are mainly supply oriented.

Slide 16 shows supply side trends that tend to be a barometer of health of the sector.

Top chart shows idle capacity, which at the end of September was 0.88%. This is pretty much full employment, which is a strong baseline.

The bottom chart tells a similar story ship recycling scrapping has been almost nonexistent for container ships. This year why because the charter market and earnings environment is so hot why scrap even on ancient ship. If you can squeeze a few more millions of earnings out of them.

I'll come back to this point on the next slide Slide 17, which looks at the order book.

You can see on the left the composition of the order book by size segment of.

As I'm sure you will have read in the industry press. The order book has expanded during the course of 2021, reaching an overall order book to fleet ratio of around 23%.

However, and this is an important however, this overlooks the facts, but the order book is very heavily weighted towards the bigger ships over 10000 Teu.

If you look at our focus segments of 2010 thousand Teu highlighted in the Red box you can see that the dynamic is very different for these sizes. The order book to fleet ratio is a modest 6% or so.

Another point to emphasize when discussing the order book is that the delivery schedule is back loaded.

What I mean by this is that the order book deliveries tend to be weighted more heavily towards 2023, and 2024, rather than in 'twenty, one or 'twenty two.

This back loading as significant as 2023 amongst the implementation of the new environmental regulations, which we expect to cause a slowing down of the global fleet and slowing down the fleet reduces effective capacity.

It also ties in with the point George underlined in his commentary on slide five that the midsize and smaller containership fleet is aging.

As you can see from the chart on the right. If scrapping will continue to be deferred by the end of 2020 for around 7% of sub 10000 Teu capacity currently on the water would be at least 25 years old and potential candidates for the recycling yards net this out against the total order.

Book of sub 10000, Teu due to be delivered from the fourth quarter of this year through to the end of 2024, and you would get implied and I emphasize implied net growth in these sizes of just 0.7% negligible.

The loan on the short of this is that we continue to see supportive supply side fundamentals for all focused size segments.

Which brings us neatly to slide 18, the charter market.

The chart here provides an index covering charter market rates for a basket of containership sizes and shows the general direction of travel for the market as a whole.

The index is up by almost four times on where it was at the start of this year and staggeringly between nine and 10 times since the lows of two Q2 thousand 20.

On the right of the slide we provide an indication of where market rates stood in October of this year for three to five year charters and all various sized segments. This is a bit of a.

Not really as the market is so tight at the moment the reference fixtures have been pretty limited.

Any case for simplicity, we have grouped some size categories. For example, the 2200 2800 Teu feed a category shows a raise of 34 and a half thousand dollars per day rates for the smaller vessels in this category would be lower than this while for larger vessels they'd be a bit higher hence the recent fixtures to about 2200 Teu ships.

For $32000 per day.

Anyway, returning to the Big picture any way you look at it we're seeing a truly fantastic market and with that I'll turn the call back to George to wrap up.

Thank you Tim.

To summarize and then we'll be happy to take your questions.

As we have grown our fleet by more than 50% over the course of 2021 and also signed a large number of long term charters on attractive terms, we have expanded our contracted revenue to over $1 6 billion with an average remaining duration of two five years.

Well, we see further upside potential in our fleet when certain vessels come into the charter market in the months and quarters ahead. Our extensive contract cover means that we are in a great position in any charter market.

We have very strong balance sheet with eight 2 million in cash following the delivery of all of our recent acquisitions, our credit ratings have been upgraded yet again, most recently the double b minus stable and all of our 2022 that has.

Has been successfully refinanced with no further maturities until may of 'twenty 'twenty four while both our leverage ratios and cost of debt continues to move to the right direction.

We have demonstrated our ability to utilize diverse capital sources on better and better terms.

And accretive growth and we have firmly established.

Society that their debt.

Midsized post panamax and smaller container ships with high Reefer capacity continues to be the sweet spot in the market with highly supportive supply side fundamentals.

The majority of new vessel ordering continues to be fulfilled large container ships that cannot compete in the majority of deals trade lanes, what mid sized and smaller vessels.

Workhorse.

The current spot market is causing a growing number of illness to defer scrapping of older ship.

Creating a large backlog of ships ready to be scrapped whenever the market eventually normalizes.

We expect total effect of containership capacity to shrink from January 2023, when Youll decarbonization regulations lead to reduced speeds.

In the meantime, though south of market rates continue to be truly extraordinary.

3.8 times since the beginning of the year and almost tenfold since the lows in second quarter 2020 with far longer durations.

That was previously available for anything but the new build.

We expect this market tightness lasts well into 'twenty to 'twenty, two and potentially straight through regulation driven supply reduction in 2023.

Our success in growing the fleet and I think substantially contracted cash flow over a multiyear period allows us to revisit the dividend, which we expect to increase from Q1 2022.

Atlanta customers continued to set records for profitability in a rapidly improving their balance sheets and credit profiles.

The safety and welfare of our personnel remains a top priority and we're working to embed and ESG culture in everything that we do.

Outside of the portfolio provides great support to the quarterly dividend that we introduced earlier this year.

We bought back a large block of stocks during the quarter, both GSL and I personally, making a great investment and just have some future while also reducing our large legacy shareholder council to below 5% of shares outstanding.

Having already grown our fleet by more than 50%. This year, we continue to evaluate additional growth opportunities in a disciplined highly selective manner.

Is it really sticking to our principles and being risk averse have served us very well to this point and we will not begin now to chase growth for growth's sake.

Rather we will keep our focus on using our platform and our balance sheet to maximize the long term benefit to our shareholders.

With that we'd be happy to take your questions.

Thank you Sir.

Again as a reminder, if you would like to ask a question over the phone simply press star one on your Touchtone telephone.

We have our first question from the line of Kevin.

Harry with Deutsche Bank. Please go ahead.

Hey, guys.

I just had a quick question you guys were talking about your dividend.

Policy and thinking about potentially increasing it.

How are you guys thinking about that.

Just thinking of more of it like a like a fixed increase or thinking about doing something where it depends on the available cash that you might have.

Yeah.

Kevin Let me take that.

It's Ian.

We're looking it.

A fixed increase are really were.

We're not convinced that a special one off dividends.

Our ride for us.

Today's circumstances at least.

And as we kind of said in the prepared remarks, we've got a couple of quite significant at least two of our mines.

Charters that were negotiating charter extensions, but we're negotiating right now.

We want to get back in the bag before we.

Absolutely.

Determine.

The new level of sustainable dividends.

And then we will announce this sustain.

Sustainable is important.

<unk>.

At the beginning of the year, when we announced a 12 and a half cent dividend.

We we stress that it was sustainable in those circumstances.

The market improve we acquire ships and we doubled the dividend when we actually pay you the first one.

From from 12 and half cents to 25 cents.

Now we're in a different environment.

Probably a little bit more.

And we think is right, but we allocate some of the extra capital to return to shareholders.

So sustainable.

And also wanting to preserve financial flexibility for the business.

Capital for growth.

As we explained in my prepared remarks that some others are continues to be a plank of our strategy going forward.

And maintaining the strength of our balance sheet.

Okay Gotcha Gotcha, that's all I ask the questions.

Yeah.

Thank you. Our next question is from the line of Randy <unk>.

With Jefferies. Please go ahead.

ATM GSL how's it going.

Thank you and good Randy how are you.

No I don't work very well too.

Two questions for me, maybe a third but.

First on the share repurchases nicely done there very good use of $10 million or so now your balance sheet clearly in great shape charter backlog I think it's like $1 6 billion or something provide you with substantial free cash flow visibility. So I guess my question why raise the $17 million in preferred at.

875%, which seems maybe like an expensive capital raise.

Although the repurchase of the common but still be accretive at these levels. So I guess why doing that and then going forward. What are your plans for further preferred ATM usage.

And then common share repurchases.

Yeah.

Ill take that.

Sure Hi, Randy.

Well as you know.

We've tried to make clear I guess on the prepared remarks. This has been a period of tremendous growth for us and we've grown by 50%.

And in that regard the <unk> the <unk>.

That's been a helpful source of non dilutive capital that has helped from that growth and in that respect we see it as extremely flexible capital whether or not we'll continue to raise it going forward, we'll we'll keep it under review, but we think it's extremely helpful to have access to various different pockets of.

Of capital.

Okay, and then on the share repurchase side.

On the share repurchase side I think that's that's once again something that we would look at them sort of selectively as a as we've shown it's something that we're willing to execute if we think the circumstances justify.

Okay.

And then secondly on the fleet the past year very active and growing it now all your acquisitions are fully delivered so where do you go from here in terms of acquiring additional tonnage versus maybe taking advantage of the high asset values and selling some older asset.

Yes, we always look at all the options shares so far it has always been the case that keeping us at some chartering long term, it's far more accretive.

Now on the acquisitions, we are looking at various fleets of ships.

And we are evaluating so far we have not reached.

Any let's say point, where any of the fleets that we are kind of looking at negotiating and.

It keeps up.

Criteria.

And.

So far we haven't moved.

Moved towards any of those things in certainty, but there are plenty of those fleets out there which have fleets that are many financial sponsors on exiting the sector and.

And maybe the ships with charters and stuff like that so deals that can can make sense for us.

But we're definitely not that pay a huge price or they could be great for the company. We would only do so if these deals.

Equally accretive.

As we have been doing so far.

On the guide I May add just a quick note to that Randy.

We as you may recall, we did in fact, so one of our older assets. One of all I think she was a 20 year old 2200 get to you assets.

At the beginning of the third quarter, because we saw the opportunity to as you say capture the you know the high values and reinvest that immediately in a deal, which we felt rented even more promising economics. So the equity surrendered from the sale of that ship was immediately reinvested.

In the four high Reefer 5004 hundred Teu ships that we acquired with with charters attached to most.

Got it.

I have one more question, but I asked here, so I'll hop off but I'll get back in the queue. Thank you.

Thanks Randy.

Thank you.

We have over next question from the line of Ferro D markets, all with Clarksons Securities. Your line is open.

Okay. Thank you.

Hi, guys.

Yeah.

<unk>.

I think you mentioned that you had secured EBIT.

909 million so far this year.

I'm curious what's the best.

Yeah.

Backlog at the end.

If you have that number.

We haven't put that into the into the public domain for this I'm not sure. We can provide that number now, but you could probably infer it by taking you know the the revenue to EBITDA ratio for them for what we've contracted this year.

And applying it broadly to the $1 6 billion of forward contracted revenues that we have but I I'm I'm, sorry, I can't pin a direct number on it now.

You can also go to page 21 in our Investor presentation, you know at adjusted EBITDA and operating cash flow calculated when actually you can make the small months because the fixed revenue net he's already there in the historical opex, so it would be easier.

Okay. Okay.

To be at least a billion public given that you have more already secured contracts from last year I would assume.

I'll I'll calculate it.

And you mentioned.

You are looking at securing a number of charters are waiting to complete it.

Any vessels are you looking at.

Okay.

Yes of course.

Question.

Sure.

Hi, Phil This is Tom again, I mean, if you look at the the charter cover slides in the presentation you can see that actually we've we've got comparatively few ships coming open during the course of the next.

Six to nine months, let's call. It so the most obvious candidates would be.

A couple of our high value.

Nine thousands.

Okay.

Well when I look at your chart on page eight.

Quite clear.

Next day would be very strong.

Basically, saying if you secure the currents.

Market rate.

You would have on EBITDA.

430 million.

And.

Yep.

Just above 300 million net profit if I'm not mistaken.

Yeah.

The $8.

For sure.

And.

After debt repayment and Katherine to basically the $200 million.

Free cash flow, which.

It was at $6 per share.

Which is great.

Even more interesting probably a little bit.

The tree.

On that same slide on page eight.

If you apply the 10 year historic rate.

Mistaken.

Yeah.

14000 per day or something on the panamax versus more than 60000 today.

You still would have.

<unk> hundred eight the Midland EBITDA in 2000 tons of <unk>.

And ER.

That's roughly 7.3 delay yeah.

And the five and half dollar free cash flow.

Like do you have basically.

Yeah.

Ft in dollar.

The next two years.

What.

Quite attractive and so on.

And it sounds like you're basically.

A lot of it already but.

How do you think about this.

Very secure cash flow.

When you are going to decide on buybacks.

Versus dividends.

Well I think as freighters.

Thank you for doing that analysis.

As we've already said.

We plan to share buybacks.

We've done it.

To a degree opportunistic.

But clearly where we're prepared to execute on those sorts of transactions difficult to sort of program of share buybacks and into the future.

We've also indicated.

<unk>.

We can.

Can't go into any more detail at this stage, but we've also indicated that we're looking to increase the dividends from Q1 next year.

Waiting on those charter negotiations that we've also touched on.

We've also indicated that we continue to have aspirations for growth.

So it's not a science and we keep capital allocation under review.

And where it's appropriate.

Allocate more to returning capital to shareholders, whether that's in the form of.

Increases in regular dividend or special dividend or share buyback.

On the circumstances at the time.

I don't think that's probably much more than that.

We can say.

No that's fair enough.

Great question being I guess.

Well. Thank you. Thank you.

Thanks for the.

Thank you.

Again as a reminder, if you would like to ask a question over the phone simply press star one on your telephone keypad.

We have our next question from the line.

Jim Burke with B Riley Your line is now open.

Yes. Thank you how is everybody today.

Lovely thank.

Thank you.

In your.

Utilization rates were off year over year.

Is that just a function of the lag between taking deliveries and actually getting the vessels to generate revenue or was there anything else in there.

Let me just remind myself.

Sure.

Yeah, a little bit off.

In the three months utilization.

This quarter 93, 6% last.

Loss per quarter 94, 8%.

But more importantly.

So guys a utilization of 95, 4% this year against a 19, 3% last year. So.

A touch down quarter on quarter.

Yes, it varies from year to date on some of this is.

Just the way you scheduled dry dockings pool, but as the fleet increases then you would expect that to average out.

But we did have.

For us quite a substantial amount of unplanned off hire.

The third quarter of this year with 137 days, which relates mainly to a couple of unusual incidents.

With main engine.

Willems, which took some time to resolve these things happen I'm afraid.

But again as we get bigger the impacts of these odd.

Rare recurrences becomes proportionately less.

Great. Thank you.

There have been some announcements in the industry about liner companies actually going in and buying secondhand smaller vessels container ships.

Does that affect at all how your opportunities to selectively go in and add assets.

And I will answer that no it doesn't because Atlanta companies. They are looking for ships that they can promptly take delivery and then blow it quickly and loaded with boxes and the stretching out of the out of with this.

These disruptions.

We are more focused on the ships with employment or chipset.

We're not right now following charter free opportunities because we feel there is a bit of an estimated risk reward.

While focused on structured transactions when the market is red.

The Red Hot.

So right now in the in the sale and purchase market you know when the acquisition market.

It's a monopoly of all the ships that are without charter charter free ships between the liner companies fighting between them who's going to get that any any available charter free ship.

As the economics, having the freight instead of the charter rate.

Different than our economics, and they can afford to pay.

Substantially bigger numbers than any shipowner religion.

And if I can just add a footnote to that Liam.

If you look at the 23 ships that we purchased during the course of this year.

The 11 of them. So seven that were acquired at the outset of the year and the foremost recent acquisitions were in fact ships that were purchased in the secondhand market by liner operators and then was spun back to us.

By way of a sale and charter back transaction. So we can actually drove deal flow.

The lines themselves acquiring ships.

It really moves the needle one way or the other.

The next part of my question as to whether or not that creates an opportunity for you because some of your most recent acquisitions were from the liners. Thank you.

Yes.

Thanks, Tim.

Yes.

Thank you. The next one we have a follow up question from Randy <unk> Jefferies. Please go ahead.

He didn't want to ask by 12 questions. There So hop back on real quick on the chartering front.

You have two bigger ships coming available in mid 'twenty two it looks like we've.

We've heard a fore fixtures beyond that right. So when do you expect to secure a new charters on this.

As you can imagine ramzi.

Regional demand for reality and competition Yeah. We're obviously working on all of our ships that we have open.

Currently and we hope to have good news in the foreseeable future.

But you.

You know, sometimes we might even be able to fix forward ships that don't look don't seem the obvious case.

Case.

You know, we have a large fleet and theres a lot of.

Combinations and permutations that we can reach with or without customers as we have a direct relationship with all of them.

<unk>, mostly.

<unk> talk directly with the liner companies so that allows us to have.

You know a bit of a different approach than than other competitors.

Okay.

I will stay tuned thank you.

Thank you. The next one we have the line of Brett Hendrickson with Nikko Me. Your line is now open.

Hey, gentlemen, thanks for taking my question and thanks for all your hard work.

Building up the free cash flow and grow into the fleet here I just wanted to touch on.

Kind of a topic that's been brought up from a little different angle I know.

There was a worry among maybe investors and maybe some people in the industry.

At the beginning of the year that you know well these charter rates are much higher than the old normal, but they're really for much short short term rates a lot of them are 12 months or.

18 months a lot from it at the highest rates were for the shortest ones.

I remember when you guys re chartered dolphin too.

From 7000 to 24500, a day people will say Oh, that's great, but it's a short term charter.

And now we fast forward to today and that 24500 that people thought.

Wouldn't hold up you just re chartered that.

We extended that out in time and range of 53500, so the rate tripled.

And then it doubled again and so that's great and then we're seeing I don't want to talk to you more offline I'm seeing other ships in that five to 6000 Teu range from your competitors get get three year charters and so.

Hum.

I guess, one do you agree with this that that that concerned about only.

That's been a COVID-19 driven shortage and these are only going to be 12 months of these higher day rates. That's obviously gone now and if it is I just want to throw my.

My name in the hat in terms of a green with the argument for more share repurchases I applaud George your personal purchase from the Companys purchase their new help clean up the overhang from Kelso, but even if we double the dividend from 25 to 50 cents a quarter.

Still tons of excess free cash flow here and you've got it you are increasingly locking in in your assets that aren't locked in.

Don't think I'm going to Jinx us by saying that when they do come up they'll get at least three chartered at least the rates. They are now in the coming 18 months, if things come up for re charter. So I would just ask that you continue to keep the pedal down on the share repurchase I think it can benefit you George and all of us and can be accretive to free cash flow per share and I think.

Want to get this stock at $45 $50, that's the path to doing that.

Doing nothing will get you close.

It is but taking down the share count while we can I think is.

I mean, it seems like the closest thing to a no brainer.

So as we talk more offline about some of the things I'm seeing from your competitors and some of these off market.

But the charter rates are just the start.

Shane and they're in the $50 $60000 range and so let's talk more offline, but just wanted to get that in there and let me know if you agree or disagree with my fall down on long term charters, becoming the norm. Thanks guys.

This is a this is Tom I'll just give you my twenty-five sense on almost sort of the sustainability of the choices.

Who knows what's going to happen with with demand going forward. So.

So far it's it's sort of surprised again and again to the upside which is which is fantastic, but what we do have forward visibility on the supply side dynamics, which we tried to provide some some data around you know in the in.

In the Gulf So the presentation. So so.

Looked at from that perspective.

Supply side, we do see reasons to be optimistic but.

This is a business that we're building for the long term and so obviously prudence informs absolutely everything that we that we do rather than making a big bet, one way or the other.

I'll leave it there just in case anyone else from the team wants to I don't think.

And if I may add.

In.

What we really care when we look at an investment then when we looked at all of our investments is the fundamentals.

I am not so sure I mean yesterday is if there's a COVID-19 element definitely but and maybe that element is a percentage of today's charter rates, but it's not all.

Fundamentals.

Which we showed that.

In our.

Presentation point to the fact that right now we're under we have well under supplied from ships in 2021 'twenty two.

And we're not going to get all.

Oversupplied in our sector.

For the foreseeable future I mean up to the order book that exists as of today and I don't see this order book growing anyway, and it dramatically going forward.

We are still under supplied I mean, as we've shown the older book effect.

At the end of it wherever they want to do it as we speak is 'twenty 'twenty four there is no further than that.

He's.

0.7% now if you take.

And modest category increased year on year historically.

Youre looking at least four 2%.

Let's say two to three two and a half usually so that's three times you know 'twenty two 'twenty three 'twenty four.

Something within six to eight.

8% when you only have a sub.

<unk> 0.7.

That is without taking into account at all.

All the slow steaming that is coming from the X items.

So these are the fundamentals now to what extent these fundamentals if you remove the COVID-19 effect, which by the way I don't think COVID-19 effects youre going to get away.

Very soon.

We all understand that.

The supply of the goods is coming from countries, where COVID-19 is not as regulated as the the the end user right Europe, United States, There's a little explanation, but not in the rest of the world vaccination is not not at these levels that we would expect for COVID-19 to be removed.

So I don't think Robby there's gonna go away at the end of 'twenty two.

I don't even think that Covid is going to go away by the end of 'twenty two 'twenty three.

And it really 100% way, which would bring everything back to normal.

But.

And I'm not sure given all of these numbers I gave you what is the how much COVID-19 plays into all of it whether the charter the $50000 for three years. He is going to become $40000 for three years with $35000 a year of 30000, who knows.

How much out of this 50 is COVID-19 and how much of this is fundamentals. So it's a difficult one, but but I think I feel very comfortable knowing that you.

We're not over delivered and whatnot.

Over building the fleet that is important always in shipping type of shipping.

Yeah.

Thank you.

Thank you.

Thank you.

No further questions at this time.

Mr. Ian Webber please continue.

Thanks, everybody for listening to our remarks and for your questions.

Look forward to giving you an update a further update on GSO.

With our fourth quarter results. Thank you very much.

Thank you. Thank you. This concludes the conference call. Thank you for participating you may now disconnect.

[music].

[music].

[music].

[music].

Good morning, good afternoon, everybody and welcome to the global ship lease first quarter 2021.

That's cool.

The slides that accompany today's presentation were posted to our website earlier I'm, sorry, somebody's already adopt global ship lease dotcom.

Slides two I'm, sorry presentation as usual remind you that today's call may include forward looking statements.

Based on current expectations and assumptions and all by their nature inherently uncertain and outside of the company's control actual results may differ materially from these forward looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation. We also draw your attention to the risk factors section of our.

Our most recent annual report on form 20-F, which is for 2020 I'm as filed with the SEC on March the unchanged 2000 insurance you want you can obtain this far in our websites or via the SEC's worldwide.

All of our statements are qualified by these and other disclosures in our reports filed with the SEC.

We do not undertake any duty to update forward looking statements for reconciliations of the non-GAAP financial measures to which we will refer during this call to the most directly comparable measures calculated and presented in accordance with GAAP. Please refer to the earnings release that we issued this morning, which is also available on our website.

I'm joined as usual by unexpected chairman, George you're really across our Chief Financial Officer Tassos.

And our Chief commercial Officer, Tom Lister.

George will begin the call with a high level commentary on GSO and on our industry and then Tassos, Tom and I will take you through our recent achievements quarterly results and financials and the current market environment.

After that we'd be pleased to take your questions.

Turning now to slide four I'll pass the call over to George.

Thank you Anne and good morning, good afternoon to all of you joining us today.

I have in recent quarters describe the containership market is red hot and with both rate and charter market continuing to set record high levels that certainly remains the case through the day.

We see ample reason why this should continue for some time and we will come back to this theme throughout today's presentation.

But let me first highlight what is amazing.

Market has meant for GSL.

Year to date, we have grown our fleet by more than 50% acquiring 23 ships, but just under half a billion dollars.

With the last of those vessels delivering to us and commencing its charter in mid October we.

We have signed a total of 48, new charters I think a total of $1 25 billion of contracted revenue and approximately 900 million of expected adjusted EBITDA, providing additional long term support the 25 cents per share dividend that we introduced earlier this year.

We have remained highly accretive active in managing our balance sheet refinancing a total of just under $400 million of debt. This year alone, bringing down our cost of debt from six 3% to four 9%.

And addressing all debt maturities through 2024.

As our industry.

South of the book and our balance sheet have all continuously improved we have received yet another round of credit rating upgrades. The most recent of which was to double b minus from standard and poors.

I would like to highlight.

The increase in normalized earnings per share, which at $1.74 for the quarter is nearly four times the prior year period, and a $3.01 for the year to date, approximately two and a half times, they probably could get period.

One we're of course very pleased without results for the third quarter, which you can see in detail on the right side of the slide the full cash impact will really only be on display in the quarters ahead.

Moreover, our focus on locking in the present market conditions into long term charters means that <unk> will benefit from these actions for years to come.

Even before the impact of any further acquisitions, which we are well positioned to continue pursuing one of disciplined selective basis.

In the meantime, we are working on some significant charter extensions, which we hope to conclude in the relative near term.

These together with the growth we have achieved year to date and our contracted cash flow.

For the next couple of years will help determine an increase in the sustainable dividend from Q1, 2022 we will make an announcement as soon as we can.

If you now turn to slide five I'll describe the big picture, but our industry at this moment.

How does he have undoubtedly had the current market environment in the container shipping industry is truly extraordinary.

Contrary to early possession that economic that economies are opening back up following COVID-19 lockdowns would undermine containerized trade demand.

With the expectation that consumer would spend again on service rather than glitch.

We have actually seen an additional acceleration alongside economic recovery. Despite that's recovered been uneven.

Nevertheless, 2021 cargo volumes are expected to increase by eight 2% up from the prediction of less than 7%. Although we were already very pleased to share with you on our last quarterly call.

This strong fundamental rate of demand growth is double the rate of nominal cellular capacity growth.

It is the supply of container ships.

This imbalance is set to increase further through the at least at least next year, even before the significant impact of supply chain congestion, which absorbs capacity and amplifies the tightness of supply and demand.

And looks set to be prominent feature of the market for quite some time.

Now very important when you zoom in on the segment of the market, where we focus the sub 10000 Teu container ships. The order book is even more limited.

And the advanced age of much of the global fleet is going to drive significant scrapping in the years ahead.

Particularly a scrapping of the global fleets oldest vessels is currently being deferred due to the strong market building backlog a very old ships.

Don will provide more detail on this later, but this is something I really want to emphasize upfront.

100% of container ships on the water today, which are 25 years old or older.

Under 10000 Teu.

So the mid size and smaller ship segment on which we focus our aging.

In fact by the end of 2024, roughly 7% of sub 10000 Teu capacity on the water today would be at least 25 years old.

This almost exactly mirrors total capacity or noted there through 'twenty 'twenty four for sub 10000 Teu ships.

What this means is that the full ships older than 25, where it'll be scrapped out which is a normal thing I would say net growth of the sub 10000 Teu fleet between now and the end of 'twenty 'twenty four would be the one.

1%.

And that is without taking any any anything in account about cargo growth.

Year on year for the next two years.

Meantime earnings and asset values are on a clear upward trajectory with Atlanta companies delivering record earnings that continue to reach previously unthinkable levels.

And as we look for what are the drawdown of U S retail inventories to five below the normal level suggests that the vast amounts of restocking that is required we'll provide further support to containership demand for some time to come.

Speaking to you one week after the C O B 26 conference and the many related announcements from industry regulators financiers and operating companies.

It's very clear that ESG in general and Decarbonization in particular is going to play a growing role in shaping the future of all industries, including shipping.

As we have mentioned before we expect that the E X sight regulation coming into effect from January 'twenty to 'twenty three will force the global fleet slowed down.

And one note redemption and global average container ship sailing speeds equates to a 5% to 6% reduction in effective capacity.

While there has certainly been some ordering of new vessels in our sector. There is significant uncertainty about which green fuels will become the standard of the future has continued to constrain speculative ordering this is a major difference from previous bull markets in container shipping.

Finally, while we have dramatically increased their fleet already this year, we continue to see the potential for selective growth that meets our high standards for vessel specifications forward visibility unemployment overall risk management and returns.

We have no intention of compromising our acquisition criteria or are required to dance in order to pursue growth for growth's sake.

But we continue to see potential for selective growth in a highly fragmented sector with many subscale players and with a continuous extra this will find the financial sponsors.

What does the opportunity exists to serve the long term interest of GSL shareholders by pursuing growth.

Our operating platform industry relationships and balance sheet puts us in an excellent position to seize that opportunity.

But and I cannot emphasize this enough days, if we don't like the risk return profile well the deal we will not do it.

With that I will turn the call to you.

Thank you George.

Please turn to slide six.

2000 times, you want is providing numerous opportunities for us not only to grocery vessel acquisitions, but also for us to take as much of our existing fleet on significantly longer charters charter rates that are in many instances two or three times that previous cycles.

This slide shows those vessels that were not were not treated at the beginning of the year with the dark blue bars, indicating where we have signed new or extended charters in the year to date.

On this status quo fleet, we've agreed 18, new charters, so far this year, adding a little over $600 million of contracted revenue coupled.

Okay.

You'll notice the number of these new charters have been agreed to commence in the months ahead. So new terms have been agreed wanted to win in advance of expiring, meaning that we've got good visibility on continued increased cash generation from this part of the fleet and the remainder of the fourth quarter of this year and into fall into the first quarter.

And next year, even if we don't take any further action.

On the next slide we show something similar for 23 vessels that we have acquired this year are they rule now being delivered the last one came oh, two or three weeks ago.

And in the Middle of October.

The majority have commencing new charters agreed under our ownership succeeding charters in place at the dates of acquisition and these new charters that were getting at considerably higher rates are growing on the water.

23 ships grew our on the water fleet by more than 50% and add.

Over $640 million of contracted revenue.

The dark blue bars on this page are those legacy charters that were in place from the agreed the transactions and provide considerable benefits. These bills.

Low market rates translated into below market purchase prices for the vessels.

The red bars on the other hand show the chances that we've agreed and a red hot market subsequent to acquiring the vessels capturing significant upside potential for.

For GSL.

Once again these new chances are multiples of that prior rates and extend.

Well into the middle class in a decade.

All in all with the new charters for the preexisting fleets and existing and new charters on the 23 vessels acquired year to date, we've locked in an additional $929 million of total adjusted EBITDA.

So far this year.

Total contracted forward revenue cover at the 13th of September stands at $1 $6 billion spread over two and a half years.

As George mentioned, the substantial additional multi year contracted cash flow has allowed us to revisit the dividend for common shareholders.

With the conclusion with some significant charter extensions, which we expect within the next short number of weeks.

Look to increase the dividend on a sustainable basis.

So one or 2022 and beyond.

Moving onto slide eight.

There's a slide that we introduced last quarter and we think it is helpful. In illustrating why all of the new charters and vessels with vessel acquisitions mean for our revenue and cash flow.

We show you this in three different forward rates in all areas.

These three scenario is all of that for any vessels coming open in the next two years, but I put back at rates prevailing in the market today or alternately and 15 year historic rates or alternately the third auction at 10 year historic rates.

To be absolutely clear these are not forecasts of what will happen, but rather illustrations of how a number of different scenarios would flow through to <unk> financials.

I would encourage you all to spend some time with the slides and for those of you who once you get through the final details with spelled out the assumptions I'm a relevant factors in detail on slide 21 in the appendix.

From Albert I'd like to make just a couple of points.

First you'll notice that.

<unk>, a negligible variation for us across the different scenarios for 2021, the current year as a remaining chaucer market exposure is less than one months on a single 2300 Teu ship.

This high proportion of already contracted revenue days.

Through 2022 next year, where we have only 4% or so of our total days open at the moment with adjusted EBITDAR in each scenario showing a dramatic increase from the 2021 levels.

To remind you every incremental dollar of spot revenues flow straight through to adjusted EBITDA and cash flow.

Our second for historical context.

Adjusted EBITDA in the year since 2019 merger with Poseidon has been around $160 million.

Now we've already exceeded that level in the first nine months of this year trying to 'twenty, one and we're well positioned to move dramatically higher.

Once again in 2022 based on my my I'll now fully delivered fleet of 65 ships.

In fact based solely on those charters already agreed assuming literally zero revenue from additional spot days open days.

While still assuming opex on all of our fleets, our adjusted EBITDA would be approximately $318 million for 2022 and $272 million in 2023 significantly on what we were running before this year.

So this expansion of our cash flow is both a transformative and lasting.

Moving on to slide nine I'll summarize our strategy and focus.

We continue to believe that the sweet spots in the market as an existing ships rather than new builds and particularly in the mid size and smaller sections.

We've put nearly half a billion dollars.

[noise] towards acquiring.

<unk> thousand three such assets this year and we've already secured nearly that entire amount in adjusted EBITDAR over the coming years related only to the newly acquired vessels.

We've been disciplined and selective in our acquisitions.

For both fleet renewal and growth.

Maintaining a risk averse approach that is consistent with the yield at compelling returns.

We focus on immediately accretive deals and have secure transactions with an estimated purchase price too.

Average annual adjusted EBITA.

Ratios are between three six and four times.

We've also ensure that the charter attached acquisitions that you might have not been reliance upon the rosy residual value scenarios.

Turning to Charles has agreed and scrap out of your vessels. We have in many of these instances already fully covered the cost of the acquisition.

Why have we have been able to purchase older vessels the chalk.

Is that we have agreed subsequently plenty of attractive rates have demonstrated extraordinary upside potential of that strategy.

As George mentioned in his remarks, both GSL and shifting industry in general are increasingly focus on decarbonization.

Our environmental congressional strategies are well aligned might take any full lifecycle approach to the carbon footprints of ships, we consider the impacts of building and operating the ships.

As well as just simply operating.

We see expanding the economic life of existing ships and optimizing their operation.

Until next generation sustainable fuels, and propulsion technologies become well established and commercially available and economically viable.

As both being environmentally sensible.

Actually prudent.

Relatedly, we look to make sure that we are flexible and agile avoiding speculation or long term bets, we focus instead on a short to medium term horizon to drive returns, which in turn enable us to respond.

Prints to an evolving decarbonization environments.

We also look to position the company.

To be in a strong cash flow to be in a strong cash position. So I think we can move quickly and decisively and capitalizing on opportunities ahead.

Yeah.

I'll turn the call over to Texas to talk you through our financials.

Thank you Ian.

Our first nine months of the year has been very active with a significant number of moving pieces in the financials. So we have summarized the key points for you on slide 10.

Revenue for the first nine months was $294 4 million up from 212 8 million in the first nine months of 2020 'twenty.

Similarly, adjusted there'd be doubtful that nine months was $166 5 million up from $124 5 million in the same period of last year, including an material impact on total operating revenue from amortization of intangible liabilities had rising on below market charters attached to vet.

<unk> additions.

Normalized net income with a basketball the one off items was $104 6 million for the first nine months up approximately 170% from $38 3 million in the prior year period.

I'd like to spend a moment on the material one off items within this quarter. We have completed the refinancing of the last 2022 debt maturity moving the next earliest to May 2024.

We have also completed within this quarter the scheduled purchasing finance of 16 vessels and with the last one being completed in October out of the total 23, new vessels, we acquired this year.

Moving to the balance sheet items, there are various points to highlight our cash position at September 32021 was $113 million.

As I have mentioned that both in the quarter. We have successfully refinanced our last 2022 maturity debt of $5 8 million catering facility and concluded that $140 million facility of dwell Borealis vessels, and then 120 million before five and a half to your panamax.

Meantime, we have raised in the third quarter under our ATM programs $16 9 million of our perpetual preferred further increasing our flexibility.

Regarding acquisitions.

For the seven post Panamax ships, we have concluded in July the delivery of the last vessel with purchase price of $17 6 million and brought down the last $10 7 million of the arrange facility.

In addition within July also we have concluded the purchase of 12 container ships from borealis over an aggregate purchase price of $233 9 million, which we financed with the issuance of 35 million over the 2024 notes to the sellers and senior secured loan of 400 million.

And cash on hand.

Finally for the iPhone five and a half you panamax container ships, we contracted purchased for an aggregate price of 148 million. We have arranged financing of 120 million of which we have drawn down 90 million I guess, it really seems to leave it by September 32021.

Lastly, I said it was delivered in October.

Now our detailed financial statements are peering floating slides 11 through 13 on the basis of our strong contracted revenues. Our board has declared a dividend of <unk> 25 cents per common share for the third quarter to be paid on December 2nd to common share holders of record as of November 22.

On Slide 14, you can see in the upper left off schedule of amortization in the coming years. So on the basis of our third quarter results. Our total gross debt to annual.

The annualized adjusted EBITDA is approximately three seven times and this is scheduled to come down meaningfully from there on.

The upper right you can see the dramatic reduction in our cost of debt from seven 7% at year end 2018 to six 3% at the beginning of this year to high 4% now.

On the lower left you will see that the trading liquidity in our stock has increased dramatically over the last year, making it far easier for new vessels to take a position in GSL scenes, our public float now account just under 80%.

With that I will turn it over to Tom.

Thanks, Stefan and Hello, everyone.

Please turn to slide 15, which is intended to highlight the ship sizes on which were focused which will help put the subsequent slides in better context.

So GSL its focused on midsize and smaller ships, which is shorthand for ships ranging from about 2000 Teu up to 10000 Teu.

The top map on the left shows the deployment of quote unquote, our sizes of ship ships under 10000, Teu and emphasizes that operational flexibility as.

As you can see they're deployed everywhere.

The bottom up shows where the big ships in other words those larger than 10000 Teu were deployed which tends to be on the east West main lane trades, where the cargo volumes and shoreside infrastructure can support them.

It's important to note that roughly 70% seven zero percent of global Containerized trade volumes have moved outside these main lanes in the north South regional and intermediate trades served by ships like ours.

George covered the demand side in his opening remarks, highlighting the rebound in containerized volumes driven by a progressive reopening of economies and ongoing restocking with continued supply chain disruption amplifying all of the above.

So the next slides are mainly supply oriented.

Slide 16 shows supply side trends that tend to be a barometer of health of the sector.

Top chart shows idle capacity, which at the end of September was 0.88%. This is pretty much full employment, which is a strong baseline.

The bottom chart tells a similar story ship recycling scrapping has been almost nonexistent for container ships. This year why because the charter market and earnings environment is so hot why scrap even on ancient ship. If you can squeeze a few more millions of earnings out of them.

I'll come back to this point on the next slide Slide 17, which looks at the order book.

Here you can see on the left the composition of the order book by Science segment.

As I'm sure you will have read in the industry press. The order book has expanded during the course of 2021, reaching an overall order book to fleet ratio of around 23%.

And this is an important however, this overlooks the facts, but the order book is very heavily weighted towards the bigger ships over 10000 Teu.

If you look at our focus segments of 2010 thousand Teu highlighted in the Red box you can see that the dynamic is very different for these sizes. The order book to fleet ratio is a modest 6% or so.

Another point to emphasize when discussing the order book is that the delivery schedule is back loaded.

What I mean by this is that the order book deliveries tend to be weighted more heavily towards 2023, and 2024, rather than 'twenty, one or 'twenty two.

This back loading as significant as 2023 amongst the implementation of the new environmental regulations, which we expect to cause a slowing down of the global fleet and slowing down the fleet reduces effective capacity.

It also ties in with the point George underlined in his commentary on slide five that the midsize and smaller containership fleet is aging.

As you can see from the chart on the right. If scrapping will continue to be deferred by the end of 2020 for around 7% of sub 10000 Teu capacity currently on the water would be at least 25 years old and potential candidates for the recycling yards net this out against the two.

The order book of sub 10000, Teu due to be delivered from the fourth quarter of this year through to the end of 2024, and you would get implied and I emphasize implied net growth and these sizes of just 0.7% negligible.

The long and the short of this is that we continue to see supportive supply side fundamentals for all focus size segments.

Which brings us neatly to slide 18, the charter market.

The child here provides an index covering charter market rates for a basket of container ship sizes and shows the general direction of travel for the market as a whole.

The index is up by almost four times on where it was at the start of this year and staggeringly between nine and 10 times since the lows of two Q2 thousand 20.

On the right of the slide we provide an indication of where market rates stood in October of this year for three to five year charters and all various sized segments. This is a bit of a of an.

Not really as the market is so tight at the moment that reference fixtures have been pretty limited in any case for simplicity. We have grouped some size categories. For example, the 2200 2800 Teu feed a category shows a raise of 34 and a half thousand dollars per day rates for the smaller vessels in this category would be lower than this.

While for larger vessels they'd be a bit higher hence the recent fixtures of two of our 2200 Teu ships for $32000 per day.

Anyway, returning to the Big picture any way you look at it we're seeing a truly fantastic market and with that I'll turn the call back to George to wrap up.

Thank you Tim I will briefly summarize and then we'll be happy to take your questions.

How should we have grown our fleet by more than 50% over the course of 2021 and also signed a large number of long term charters on attractive terms, we have expanded our contracted revenue to over $1 6 billion with an average remaining duration of two five years.

Well, we see further upside potential in our fleet when certain vessels come into the charter market in the months and quarters ahead.

Tensive contract cover means that we are in a great position in any charter market.

We have a very strong balance sheet with eight 2 million of cash following the delivery of all of our recent acquisitions, our credit ratings have been upgraded yet again, most recently the double b minus stable and all of our 2022 that.

Has been successfully refinanced with no further maturities until May 2024, while both our leverage ratios and cost of debt continues to move to the right direction.

We have demonstrated our ability to utilize diverse capital sources on better and better terms to fund accretive growth and we have firmly established.

It's a cycle that did that.

Midsized post panamax and smaller container ships with high Reefer capacity continues to be the sweet spot in the market with highly supportive supply side fundamentals as.

The vast majority of new vessel ordering continues to be fulfilled last container ships that cannot compete in the majority of trade lanes, where mid sized and smaller vessels the workhorse.

The current spot market is causing a growing number of illness to defer scrapping of the oldest ship.

And the last backlog of ships ready to be scrapped whenever the market eventually normalizes.

We also expect total effect of containership capacity to shrink from January 2023, when Youll decarbonization regulations lead to reduced speeds.

The meantime, low charter market rates continue to be truly extraordinary up 3.8 times since the beginning of the year and almost tenfold since the lows in second quarter 2020 with far longer durations.

That was previously available for anything, but a new build.

We expect this market tightness lasts well into 'twenty, 'twenty, two and potentially straight through regulation driven supply reduction in 2023.

Our success in growing the fleet and I think substantial contracted cash flow over a multiyear period allows us to revisit the dividend, which we expect to increase from Q1 2022.

Atlanta customers continue to set records for profitability in a rapidly improving their balance sheets and credit profiles.

The safety and welfare of our personnel remains our top priority and we're working to embed and ESG culture in everything that we do.

So that the portfolio provides great support to the quarterly dividend that we introduced earlier this year.

We bought back a large block of stocks during the quarter, both GSL and I personally, making a great investment and J S has future while also reducing our large legacy shareholder council to below 5% of shares outstanding.

Having already grown our fleet by more than 50%. This year, we continue to evaluate additional growth opportunities in a disciplined highly selective manner.

Is it really sticking to our principles and being risk averse have served us very well to this point and we will not begin now to chase growth for growth's sake.

Rather we will keep our focus on using our platform and our balance sheet to maximize the long term benefit to our shareholders.

With that we'd be happy to take your questions.

Yeah.

Thank you Sir.

Again as a reminder, if you would like to ask a question over the phone simply press star one on your touch.

Stone Allison.

We have our first question from the line of Kevin.

You Harry with Deutsche Bank. Please go ahead.

Yeah, Hey, guys.

I just had a quick question you guys were talking about your dividend policy.

Policy and thinking about potentially increasing it how are you guys thinking about that.

Thinking of more of it like a like a fixed increase or you are thinking about doing something where it depends on the available cash that you might have.

Yeah.

Kevin Let me take that.

Yeah.

We're looking at a.

Fixed increase are really were.

We're not convinced that sort of a special one off dividends.

Our ride for us.

Today's circumstances at least.

And as we kind of said in the prepared remarks, we've got a couple of quite significant at least two of our mines.

<unk> says that we're negotiating charter extensions, but we're negotiating right now.

We want to get back in the bag before we.

Okay.

Determine.

The new level of sustainable dividends.

And then we will announce it.

What is important.

As.

At the beginning of the year, when we announce that 12 and a half cent dividend.

We we stress that it was sustainable in those circumstances.

The market improve we acquire ships and we doubled the dividend when we actually pay you the first one.

From a from a 12 and a half cents to 25 cents.

Now we're in a different environment hours, we're putting a little bit more.

And we think is right, but we allocate some of the extra capital to sort of return to shareholders.

So sustainable.

And also wanting to preserve financial flexibility for the business.

Capital for growth.

As we explained in my prepared remarks.

<unk> continues to be a plank of our strategy going forward.

And maintaining the strength of our balance sheet.

Okay Gotcha Gotcha, that's all I'll ask the questions.

Yeah.

Thank you. Our next question is from the line of Randy <unk> with Jefferies. Please go ahead.

ATM GSL how's it going.

Thank you and good Randy how are you.

They don't work very well.

Two questions for me, maybe a third but.

First on the share repurchases nicely done there very good use of $10 million or so now your balance sheet clearly in great shape charter backlog I think it's like $1 6 billion or something provide you with substantial like free cash flow visibility. So I guess my question why raise the $17 million in preferred at.

875%, which seems maybe that can expensive capital raise.

Although the repurchase of the common but still be accretive at these levels. So I guess why doing that and then going forward. What are your plans for further preferred ATM usage.

And then kind of on share repurchases.

Yeah.

Ill take that.

Sure Hi, Randy.

Well as you know.

We've tried to make clear I guess on the prepared remarks. This has been a period of tremendous growth for us we've grown by 50%.

And in that regard the the preface being a helpful source of non dilutive capital that has helped fund that growth and in that respect we see it as extremely flexible capital whether or not we'll continue to raise it going forward, we'll we'll keep it under review, but we think it's extremely healthy.

Full to have access to various different pockets of of capital.

Okay, and then on the share repurchase side.

On the share repurchase side I think that's that's once again something that we would look at them sort of selectively as as we've shown it's something that we're willing to execute if we think the circumstances justify.

Okay.

And then secondly on the fleet the past year very active and growing it now all your acquisitions are fully delivered so where do you go from here in terms of acquiring additional tonnage versus maybe taking advantage of the high asset values and selling some older asset.

Yes, we always look at all the options. So far has always been the case that keeping us at some chartering long term, it's far more accretive.

Now on the acquisitions, we are looking at various fleets of ships and we're evaluating so far we have not reached.

Any let's say point, where any of the fleets that we are currently looking at negotiating and keeps that meets our criteria.

And.

So far we haven't moved.

So was there any of those <unk> in certainty, but there are plenty of those fleets out there which are fleets that are many financial sponsors that are exiting the sector and and maybe there are steps with charters and stuff like that so deals that can kind of make sense for us.

But we're definitely not that pay a huge price or take a big risk for the company. We would only do so if these deals.

Equally accretive.

As we have been doing so far.

I'm the Guy who May add just a quick note to that Randy.

We as you may recall, we did in fact, so one of our older assets. One of all I think she was a 20 year old 2200, Kathy you assets at the beginning of the third quarter, because we saw the opportunity to as you say capture the you know the high values and reinvest that immediate.

<unk> in a deal, which we felt rendered even more promising economics. So the equity surrendered from the sale of that ship was immediately reinvested in the for high Reefer 5004 hundred Teu ships that we acquired with with charters attached to most.

Got it.

Alright, I have one more question, but I asked here, so I'll hop off but I'll get back in the queue.

Yes.

Thanks Randy.

Thank you.

We have our next question from the line of priority markets All with Clarksons Securities. Your line is open.

Okay. Thank you.

Hi, guys.

Yeah.

Yeah.

Yeah.

I think you mentioned that you had declared EBIT.

$909 million so far this year.

I'm curious what's the best.

Yeah.

Backlog at the end of Q3.

If you have that number.

We haven't put that into the into the public domain for this I'm not sure. We can provide that number now, but you could probably infer it by taking you know the the revenue to EBITDA ratio for them for what we've contracted this year.

And applying it broadly to the $1 6 billion of forward contracted revenues that we have but I'm, sorry, I can't pin a direct number on it now.

You can also go to page 21 in our Investor presentation, you know adjusted EBITDA and operating cash flow calculated when actually you can make the small markets because the fixed revenue net he's already there in the historical opex. So it will be easier.

Okay. Okay.

It would be at least a billion public given that you have more already secured contracts from last year I would assume.

Hum.

All are calculated.

And you mentioned.

You are looking at the carrying a number of charters.

We're waiting to complete it.

Many vessels are you looking at.

Yeah.

Yes.

First question.

Sure.

Hi, Hi, Fotis. This is this is Tom again, I mean, if you look at the the charter cover slides in the in the presentation you can see that actually we've we've got comparatively few ships coming open.

During the course of the next.

Six to nine months, let's call. It so the most obvious candidates would be.

A couple of our high value nine thousands.

Okay.

Well when I look at your chart on page eight.

Quite clear.

Next day would be very strong.

And the thing if you will.

<unk> declines.

Market rate.

You would have on EBITDA.

Roughly 430 million yeah.

And.

That's.

Basically just above 300 million net profit.

Thank you.

Victor.

Now for sure.

<unk>.

Debt repayment and Capex at 200 million Cree.

Free cash flow.

Which is $6 per share.

Which is great and then we saw it.

Even more interesting probably a little bit.

On to chart the tree.

On that same slide on page eight.

Yeah apply the 10 year historic rate.

Mistaken lite.

Yeah.

14000 per day or something on the panamax versus more than 60000 today.

Still would have.

308 billion EBITDA in 2010 quickly.

And.

That's roughly $3 eight.

And the five and a half dollar free cash flow like so my point is like do you have basically.

Yeah.

In dollar.

Yeah next.

Next year.

Scott.

Quite attractive.

And so.

I understand that you basically are a lot of it.

Alright.

Do you think about this.

Very secure cash flow.

When you are going to decide on the buybacks.

Versus dividends.

Well I think that's a further.

Yes, thank you for doing that analysis.

Uh huh.

We've already said.

Open to share buybacks, we've done it.

To a degree opportunistic.

But clearly where we're prepared to execute on both of those transactions difficult to sort of program of share buybacks and into the future.

We've also indicated as we.

Disgusting.

We.

So any more detail at this stage, but we also indicated that we're looking to increase the dividends from Q1 next year.

Waiting on those.

The negotiations that we've also touched on.

We've also indicated that we continue to have aspirations for growth.

So it's it's not a science and we keep capital allocation under review.

And where it's appropriate we will allocate more to returning capital to shareholders, whether that's in the form of <unk>.

Increases in regular dividends special dividends or share buyback.

Depends on the circumstances at the time.

I don't think that's very much more of that.

But we can say.

No that's fair enough.

Great position to be in I guess.

Well. Thank you. Thank you.

Thanks for that.

Thank you.

Again as a reminder, if you would like to ask a question over the phone simply press star one on your telephone keypad.

We have our next question from the line of Liam Burke with B Riley. Your line is now open.

Yes. Thank you how is everybody today.

Lovely.

Got it.

Thank you.

In your.

Utilization rates were off year over year.

It just a function of the lag between taking deliveries and actually getting the vessels to generate revenue or was there anything else in there.

Let me just remind myself.

Yeah, a little bit off in the.

Three months utilization.

This quarter 93, 6% last.

Last quarter 94, 8%.

But more importantly.

Our utilization of 95, 4% this year against a 19, 3% last year. So.

Our tops tops down quarter on quarter up at all yet.

Yes, it varies from year to date on some of this is.

It's just the way scheduled dry dockings pool, but as the fleet increases then you would expect that to average out.

But we did have.

For us quite a substantial amounts of unclaimed, Ohio.

In the third quarter of this year at 137 days, which relates mainly to a couple of unusual incidents.

<unk> engine problems, which took some time to resolve these things happen I'm afraid.

But again as we get bigger.

Impacts of these odd.

Rare occurrences becomes proportionately less.

Great. Thank you.

There have been some announcements in the industry about liner companies actually going in and buying secondhand smaller vessels container ships.

Does that affect at all how your opportunities to selectively go in and add assets.

And I will answer that no it doesn't because Atlanta companies. They are looking for ships that they can promptly take delivery and then blow it quickly and loaded with boxes under the stress and how do they add with.

These disruptions we are more focused on ships with employment or shapes up.

We're not right now following charter free opportunities because we feel there is a bit of an asymmetric risk reward where.

More focused on structured transactions when the market is ready.

The Red Hot.

So right now in the in this sale and purchase market you know when the acquisition market.

It's a monopoly of all the ships that are without charter charter ships between the liner companies fighting between them who's going to get there and then any available charter free ship.

As the economics, having the freight instead of the charter rate.

Different than our economics, and they can afford to pay.

Substantially bigger numbers in any shipowner religion.

And if I can just add a footnote to that Liam.

If you look at the 23 ships that we purchased during the course of this year.

The 11 of them. So seven that were acquired at the outset of the year and the foremost recent acquisitions were in fact ships that were purchased in the secondhand market by liner operators and then was spun back to us.

By way of a sale and charter back transaction. So we can actually draw deal flow also.

Of the lines themselves acquiring ships.

It really moves the needle one way or the other.

The next part of my question as to whether or not that creates an opportunity for you because some of your most recent acquisitions were from the liners. Thank you.

Thanks Liam.

Thank you. The next one we have a follow up question from Randy <unk> with Jefferies. Please go ahead.

Hey, Phil it.

I didn't want to ask about 12 questions. There so hop back on real quick on the chartering front.

You have two bigger ships coming available in mid 'twenty two it looks like.

We've heard a four textures beyond that right. So when do you expect to secure a new charters on this.

As you can imagine Randy.

Regional demand reality and competition Yeah. We're obviously working on all of our ships that we have open.

Currently.

And we hope to have good news in the foreseeable future.

But are you.

You know, sometimes we might even be able to fix forward ships that don't look don't seem the obvious case.

Case.

You know, we have a large fleet and theres a lot of.

Combinations and permutations that we can reach with or without customers as we have a direct relationship with all of them.

We mostly.

Have talked directly with the liner companies. So we have that allows us to have.

You know a bit of a different approach than than other competitors.

Okay.

I will stay tuned thank you.

Thank you. The next one we have the line of Brett Hendrickson with.

Nicole Your line is now open.

Hey, gentlemen, thanks for taking my question and thanks for all your hard work.

Building up the free cash flow and grow into the fleet here I just wanted to touch on.

Kind of a topic that's been brought up from a little different angle I know.

There was a worry among maybe investors and maybe some people in the industry.

The beginning of the year that you know well these charter rates are much higher than the old normal, but theres really for much short short term rates a lot of them are 12 months.

18 months or less and then the highest rates were for the shortest ones.

I remember when you guys re chartered dolphin too.

From 7000 to 24500, a day people will say Oh, that's great, but it's a short term charter.

And now we fast forward to today and that 24500 that people thought.

Wouldn't hold up you just re chartered that.

We extended that out in time at a rate of 53500, so the rate triple than just <unk>.

<unk> and then it doubled again and so that's great and then we're seeing I don't want to talk to you more offline I've seen other ships in that five to 6000 Teu range from your competitors get get three year charters and so.

I guess, one do you agree with.

That concerned about only.

Being a COVID-19 driven shortage and these are only going to be 12 months of these higher data rates. That's obviously gone now and if it is I just want to throw my.

My name in the hat in terms of agreeing with the argument for more share repurchases I applaud George your personal purchase from the Companys purchase their new help clean up the overhang from Kelso, but even if we double the dividend from 25 to 50 cents a quarter, there's still tons of excess free cash flow here and you've got it.

Recently locking it in in your assets that aren't locked in.

I don't think I'm going to Jinx us by saying that when they do come up they'll get at least three chartered at least the rates that they are now in the coming 18 months, if things come up for re charter. So I would just ask that you continue to keep the pedal down on the share repurchase I think it can benefit you George and all of us and can be accretive to free cash flow per share and I think if you want to get the stock at $45 or $50.

What's the path to doing that.

Doing nothing will get you close.

Is that taking down the share count while we can I think it is.

I mean, it seems like the closest thing to a no brainer that that I think so.

Talk more offline about some of the things I'm seeing from your competitors and some of these off market things that haven't been announced but the charter rates are just astonishing and they're in the $50 $60000 range and so let's talk more offline, but I just wanted to get that in there and let me know if you agree or disagree with my father in on long term charters, becoming the norm. Thanks Scott.

This is a this is Tom I'll just give you my 25 cents on almost sort of the sustainability of the charters.

You know who knows what's going to happen with with demand going forward. So far it's it's sort of surprised again and again to the upside which is which is fantastic, but what we do have forward visibility on the supply side dynamics, which we tried to provide some some data around them you know in the.

In the Gulf So the presentation. So so.

Looked at from that perspective, the supply side, we do see reasons to be optimistic but.

This this is a business that we're building for the long term and so obviously prudence informs absolutely everything that we do rather than making a big bet, one way or the other.

I'll leave it there just in case anyone else from the team wants to add anything.

And if I may add.

In you know.

What we really care when we look at an investment then when we looked at all of our investments is the fundamentals.

I am not so sure I mean yesterday, there's a COVID-19 element definitely but and maybe that element is a percentage of today's charter rates, but it's not all.

Fundamentals.

We showed the two in our.

Presentation point to the two.

The fact that right now we're under we have well under supplied from ships in 2021 'twenty two.

And we're not going to get all.

Oversupplied in our sector.

For the foreseeable future I mean up to the order book that exists as of today and I don't see this order book growing.

And it dramatically going forward and.

We are still under supplied I mean, as we've shown the older book effect.

To the end of it wherever they are underway as we speak is 'twenty 'twenty four there is no further than that.

Is plus 0.7% now if you take and.

And modest category increase.

On a year historically.

Youre looking at least for 2%.

232 to three two and a half usually so that's three times you know 'twenty two 'twenty three 'twenty four you're looking at something within six to eight.

8% when you only have a.

Apply a beautiful and seven.

That is without taking into account at all the slow steaming that is coming from the X items.

So these are the fundamentals now to what extent these fundamentals if you remove the COVID-19 effect, which by the way I don't think COVID-19 effect youre going to get away.

Very soon as we all understand that.

The supply of the goods is coming from countries, where COVID-19 is not as regulated as the the the end user right Europe, United States, There's a little vaccination, but not in the rest of the world. The vaccination is not not at these levels that we would expect for COVID-19 to be removed.

So I don't think Covid, there's gonna go away at the end of 'twenty two.

I don't even think that Covid is going to go away by the end of 'twenty two 'twenty three.

In a really 100% way, which would bring everything back to normal.

But.

And I'm not sure given all of these numbers I gave you what is the how much COVID-19 plays into all of it whether the charter the $50000 for three years is going to become $40000 for three years with $35000 a year of 30000, who knows.

How much out of this 50 is COVID-19 and how much of this is fundamentals. So it's a difficult one, but but I think I feel very comfortable knowing that you.

We're not over delivered and whatnot.

Over building the fleet and that is important always in shipping in any type of shipping.

Yeah.

Thank you.

Thank you.

Yeah.

Thank you there are no further questions at this time.

Mr. Ian Webber please continue.

Thanks, everybody for listening to our remarks and for your questions.

Look forward to giving you an update.

One other update on GSO.

With our fourth quarter results. Thank you very much.