Good morning, ladies and gentlemen, and welcome to the Global Ship Lease First Quarter 2019 Earnings Conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Ian Webber, Chief Executive Officer of Global Ship Lease. Please go ahead.

Thank you very much. Good morning, good afternoon, everybody, and welcome to our quarter 2019 earnings conference call. The slides that are accompanying today’s presentation are available on our website at www.globalshiplease.com. Slides 1 and 2 as usual remind you that today’s call may include forward-looking statements that are based on current expectations and assumptions and are, by their nature, inherently uncertain and outside of our 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, which is for 2018 on Form 20-F and this was filed with the SEC on March 29, 2019. You can obtain this via our website 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. [Indiscernible] our Chief Financial Officer, Tassos Psaropoulos; and our Chief Commercial Officer, Tom Lister. George will provide opening remarks about GSL on our strategy and then Tassos, Tom and I will take you through quartering results, our financials and the current market environment. After which, we’d be delighted to take your questions. Turning now to Slide 3, I’ll pass the call over to George.

Thank you all for joining us. During this period of exciting earnings expansion for Global Ship Lease. It’s a pleasure to be with you today. Before my colleagues dive into the details of GSL in the market, allow me first to highlight the significant progress we have achieved this year capitalizing on attractive opportunities to generate shareholder value. In 2019, today we are pleased to have taken advantage of the strong demand for our high specification mid-sized post-panamax ships, which are under supplied and where market charter rates have increased 75% to 100% since Q4 2018. Specifically in year-to-date 2019, we have signed charters at strong rates securing 11 new charters or which six have multiyear terms enabled GSL to look in upside from a strong charter market. The new charters are an aggregate of 23 years of additional contractor charter cover and $97 million additional adjusted EBITDA over the duration of the newly contracted charters. Finally, we have increased contracted revenues of the fleet from $727 million at the end of 2018 to $826 million as of March 31, 2019, including subsequent announcements. Forward cover is now three years compared to 2.5 years of December 31, 2018, and effective increase of 0.75 years given three months have gone by since. Our success in further increasingly efficient employment of our fleet and achieving 99.8% utilization for the quarter is in part due to our superior commercial management platform, which has enabled us to continuously engage in discussion and competitive processes with all of the major players in the market. This has given us access to longer-term opportunities than more standard plain vanilla charter market transactions. By working closely with a measure line of companies, we can develop tailored solutions to meet the tonnage requirements. Our platform and deep experience make…

Thank you, George. If you could all turn to Slide 4, I’ll quickly run through highlights for the first quarter, which reflects our first full quarter as an enlarge business following our transaction with Poseidon in November last year. Operating revenues for the quarter were $64.5 million, was – net income was $10.1 million and adjusted EBITDA was $40.5 million. This is derived from vessel utilization of 99.8%, which is in line with our historic precedent and reflects both the consistent operating performance of our vessels, our strong contract coverage and our ability to promptly find employment for our ships when they become available in the charter market. As George said, we have in the year-to-date agreed attractive new charters or extensions for 11 of our vessels with Hapag-Lloyd, Maersk Line, MSC, CMA CGM and ZIM. Importantly, six a month year charters including the two five-year charters with MSC as an excellent rate that we announced yesterday, for the Tianjin and Qingdao both 8,667 TEU vessels. To remind you, incorporating all of these recent charters, our total contracted revenue has now reached $826 million and our weighted average forward charter cover is three years. Both much improved on the position as of December 31, 2018. Please note that we will retrofit scrubbers to three vessels as part of the agreement of the relevant new charters. This is consistent with what we have said previously. We will not unilaterally install scrubbers, but we’re willing to make the investment against an appropriate committed charter rates and duration. We continue to explore ways in which to optimize our balance sheets and reduce our cost of debt. Indeed, we have made some real progress in this area. Turning to Slide 5, you can see our fleet of 38 container ships, which range in size from 2,200 TEU to 11,000 TEU, this is what we refer to as mid-sized and smaller vessel classes. Those ships which are above 5,500 TEU, our post-panamax another term you’ll hear us use. The dark blue bars illustrates the extent of the re-chartering activity we have achieved in the year-to-date, with a number of these charters extending well into the future at attractive rates. We’ve also continued to diversify our charter portfolio, which is an attractive mix of leading global liner companies and more niche regional operators. With that, I’ll turn the call over to Tom for an update on the market.

Thanks, Ian. As always, let’s start by taking a quick look at the broader backdrop. At a global level, the IMF’s macro economic outlook is cautious. It’s April update pointed to a comparatively weak starts 2019 with global GDP growth projections notched down to 3.3% for the year. However, a pickup is expected in the second half of the year with supportive policies being implemented by major economies, including the U.S., the EU and China prompting the IMF to hold its growth expectations for 2020 steady at 3.6%. At the same time, emerging markets and developing economies are expected to continue to be the main engines of the global economy as they are for mid-sized and smaller containerships with the aggregate GDP growing by 4.4% in 2019 and 4.8% in 2020. World trade is forecast to grow by 3.4% this year and 3.9% in 2020. Meantime, despite negative overlying sentiment, supportive industry fundamentals for mid-sized and smaller containerships are presenting themselves, particularly for post-panamax tonnage providing the most competitive slot cost where earnings are strengthened significantly during the first quarter of 2019 where as mentioned, we have agreed several advantageous multiyear charters. The next few slides provide our usual market analysis with recurring themes summarize at the top of Slide 7. Essentially, our thesis is that, one, despite headwinds to sentiment, industry fundamentals are supportive with demand expected to grow faster than supply in 2019, particularly for the mid-sized and smaller fleet segments. Two, the containership order book remains extremely modest with zero order book and the size segments most relevant to us. Three, short-term negative sentiment is helpful to longer-term fundamentals limiting new orders. Also scrapping activity is picking up with demolition through April of 2019 almost matching that for the whole of 2018. Four, we see IMO 2020,…

Thank you, Tom. Turning on the financial section on slides 18, 19 and 20, you will find company’s income statement, balance sheet and cash flow for the first quarter of 2019 respectively. Let me point out to go some key items for this quarter. We generated revenue of $64.5 million and a net income of $10.1 million for the first quarter of 2019 versus $36.1 million revenue and $4.2 million net income for the same quarter in 2018. The $28.4 million increase in revenue is mainly due to the addition of the 19 Poseidon vessels. In this quarter, there was no schedule of higher or idle days and only five days of unscheduled of higher resulting on an overall utilization of 99.8%. Finally, the average operating expenses that ownership day including management fees has been reduced during the first quarter of 2019 by $305 to $6,127 from $6,432 on the same quarter in 2018. Turning now to Slide 21, in order to assist investors looking at GSL, we have included here and illustrative adjusted EBITDA calculator that can be used to see how different rates scenarios and we have provided certain historical datas outlined on the page flow through to our adjusted EBITDA. For example, if we applied the 10 years historical average rates to the open days of 2019, we will generate adjusted EBITDA of $166 million. I would now like to turn the call back to George for closing remarks.

Thank you, Tassos. Before opening up to the call for your questions, allow me to offer a brief summary on Slide 23 of why we believe GSL to be a compelling investment opportunity. Number one, our shares paid at very attractive levels, both on our navy basis where the current price is at an approximate 70% discount compared to our peers, which are either above par or much lower discount. And also on an EV to EBITDA market basis, where we’re trading at a couple of term discount to our peers. Number two, we’re focused on midsize or smaller fleet segments with well established and supported fundamentals, where the order book for the entire 2000 to 10,000 TEU fleet segment represents the only 2.8 of standing capacity. Zooming enclosure, there’s actually no order book whatsoever for the fleet segments are representing 80% of GSL’s fleet. After a year of limited scrapping in 2018, we’ve now almost matched the entirety of 2018 scrapping levels in the year-to-date 2019. With the onset of IMO 2020 and the anticipated slow down or vessel speeds, we expect an effective reduction in vessel supply. Number three, we have substantial downside protection from our $826 million contracted revenue. And other remaining charter time of three years. Four, one side of our fleet is comprised of superior white beam echo vessels, where more than half of best-in-class refer capacity and more than two-thirds of our capacity is in segments with charter rates have as much as doubled versus fourth quarter of 2018 rates. Five, our ships provide extremely competitive slot cost. The most important metric for liner companies in selecting vessels. In our fleet is in a competitive position to drive the cascade rather than be a victim of it. Six, we’re very focused on balance sheet…

[Operator Instructions]

Operator, we’re not hearing any questions.

Our first question comes from the line of Steve O’Hara from Sidoti & Company. Your line is open. Steve O’Hara: Yes. Hi, good morning.

Hi, Steve. Steve O’Hara: Hi. Just on the process of getting the supply side. I think you commented that despite that needs to get under control for the industry to be sustainably profitable. I mean where are we in that process? I mean it seems like we’ve at least made process – made some progress in the last couple of years. I’m just wondering where you think we are in that process. I mean is it – does the IMO 2020 – I mean seem like would speed that up a bit? But I mean, if you can talk about maybe based on current fundamentals for demand where you think we are.

Sure. Okay. First Point, the idle capacity across the fleet as a whole was 2.1% at the end of March and then since fallen further, very little slack within the system. Second point is the order book. As we’ve said, we’re focused on 2,000 to 10,000 TEU with our fleet with a particular focus on vessels of 4,000 to 10,000 TEU. And in those segments, there is zero order book. So capacity is already tight on the water. And it’s going to get tighter going forward, because the zero capacity in the pipeline. And in the meantime, although overall global trade is expected to grow somewhere between 3% and 4%. The demand growth within the non-main lane trades, so in other words, the intermediate and interregional trades including inter Asia, on which the sort of smaller and mid-sized vessels, which we focus on tend to be deployed are growing faster than the non-main lane. So the fundamentals for all vessels segments are very strong. What is overlying all of this of course is nervousness and negative sentiment. And that it’s actually helpful, we think going forward because it reduces people’s appetite for ordering, again which brings the supply side under control. And it also increases the incentive for people to scrap marginal tonnage further reducing capacity that’s on the water today. And on top of all of that, as you mentioned Steve, we have IMO 2020, due to be rolled out and we see that as a positive catalyst too, because as vessels are taken out of circulation to be fitted with scrubbers, which takes about six weeks per vessel that tightens supply upon the water. And going forward, we believe that there’s likely to be an incentive for liner companies to slowdown their vessels to reduce fuel burn, and as a result also to reduce fuel costs for them, again, that’s a very helpful adjustment to the supply side. So we have various positive parameters, which we expect to play out over the course of the next 18 months or so.

If I may add also to that, we all know that France is pushing into mandatory speed limits. And guys, this is the obvious thing. When you have – imagine you have a car, that has a huge engine. And there’s one of these American cars that have five or six, seven liter engines. And you want to try and reduce emissions, what you’re going to do? Are you going to let the driver of this car drive down the highway at maximum speed? What are you going to tell him? You know, you have to slow down. So that your admissions are controlled, because you cannot remove the engine from the car and put the smaller engine. The only thing you can do is ask him to drive slower, so produce less emission. That’s exactly the principle behind it. From reading the press, there has been 117 shipping companies that have counter sign this proposal by France to impose speed limits. You can imagine that if this happens, the mark is going to go through the roof, because that means you’re going to have a reduction of the total of global fleet substantially, not just in containers, but throughout.

And one further comment, Steve. The order book is pretty fixed for the next two or three years. It would be tough for any new orders of any magnitude to be placed, which would be delivered before two or three years out. The ship yards are all full, not just with containerships, but other types of vessels and also retrofitting scrubbers. Steve O’Hara: Okay. Thank you. That’s very helpful. And then just in terms of the rate parity that you pointed out with IMO 2020, just I mean, what type of assuming rates jump significantly. I mean, what type of consolidation would you expect or I mean how does the industry react you think in 2020 and beyond to this pretty massive increase in prices or costs?

What I’m trying to get that chart, that Tom discussed on Page 16 was theoretical. This isn’t a prediction that charter rates are going to up to $55,000 a day for 9,000 TEU unit would be fantastic if it did, but it’s just illustrating the capacity for charter rates to increase, yet, still provide efficient vessels to charters. The heart of your question is, what’s going to happen to the higher cost that liner companies bear from the increased cost of fuel. And everyone expects that low sulfur fuel will cost more than current heavy sulfur fuel, if you will, high sulfur fuel, heavy fuel oil. Nobody knows exactly what the premium is going to be. Is it going to be $50 a ton? Is it going to be $200 a ton? Nobody really knows. But what we do know is that the liner companies have been discussing with the major customers about how to spread the burden and liner companies can’t just swallow up the cost. They’re going to have to pass it onto the customers, the shippers and ultimately, its also the consumer who might have to pay an extra cent for a pair of Nikes or a bottle of beer in Downtown New York. And it’s a recovering variations in fuel prices, well established in the industry through bunker adjustment factors. Every liner company has a different approach to this. But this IMO 2020 is, everyone is in the same boat, everyone is going to have to pay more for that fuel. Everyone is going to try and seek to recover that from the shippers. Is it going to lead to further consolidation? I can’t see that it is a particular driver of additional consolidation. It may be a factor. And in terms of accessing, unit cost efficiencies or scale economies or purchasing power, but as a single item catalyst for consolidation, I don’t think so. Steve O’Hara: Okay, all right. And then maybe on the idle capacity and the recent contracts, have you seen in terms of I mean, it sounds like the movement rates has been fairly solid this year. I mean at what point do you get more – let’s say pessimistic on signing up a ship now and maybe holding out for higher rates? Or is it a matter of we want to have x amount of capacity kind of available to sign up at a higher rate, because we think rates are going higher versus hey, here’s our percentage of the fleet, we want to keep exposed the higher rates.

Yes. We don’t really have that approach. We don’t say we want 70% of the fleet covered and we want 30% exposed. We’re prudent business managers. George mentioned that we’re captured the upside and we’ve eliminated the downside, and when we’ve agreed these longer-term charters and that’s exactly what we’ve done, it’s opportunistic. There was an opportunity, so enter five-year charters with MSC for the Qingdao and the Tianjin at a rate that we felt was good enough to lock in, and we did. And that has been driven by the factors that Tom mentioned that the restricted supply of 7,000, 8,000, 9,000 TEU units and the decent demand for those units. It’s a fact that most of the exposure that we have in our fleet to renewals over the next couple of years are on the smaller ships, where again, it’s a fact charter rates have not moved up in the same way yet that we’ve seen for the larger units in the charter market. That said, the fundamentals of supply and demand that Tom talked about, relate to the smaller units, pretty much the same as the larger units. And over time, all things equal, we would expect to see charter rates for the 2,000, 2,500, 3,000, 4,000 TEU ships to move up as well being dragged up by kind of cascade of positive sentiment from the larger units. And we’ll take advantage of that as our smaller vessels when you, the charters over the next 12 to 18 months. Steve O’Hara: Okay. Thank you very much for the time. I’ll jump back in queue.

Thanks, Steve.

And the next comes from the line of Howard Blum with UBS. Your line is open.

Good morning. Good report. Thank you for the update. I have two questions. One is in the conference call following the merger announcement. I thought you said that you were going to expect to save about $5 million of costs and the consolidation. And I know you said you’re in the process of accomplishing that, but are you 90% done in the process? Are you going to fall short of that amount? Are you going to do better than that amount sort of an update on that question? And the last question, as a shareholder for many years I’ve been discouraged by the price action in the stock and you’ve done a great job of arranging the company in a way that can benefit all of us going forward. But in a number of the refinancings in the past and a number of accommodations you’ve made to debtholders, you’ve pushed out the ability of the company to either buyback stock or pay a dividend on a regular basis. And I know now from today’s call, you’re talking about consolidating the debt, and I wonder if you’d make some kind of a statement or a commitment about your willingness to retain that right going forward to payout dividends or buyback stock in a refinance negotiation.

Sure. Let me tell you what the cost saving question first. You’re right, we have articulated that we would expect some modest level of cost saving, and you’re right, it was $5 million as a kind of annual run rate. It’s going to take us a little time to get that. And it’s going to take a little bit of time for us to be able to demonstrate that. Because data at the moment is a little dirty and that we are transitioning ship manager, as you know, from the legacy GSL ship managers to Technomar. As of today, 15 of the 18 vessels have, sorry, 19 vessels have moved across. So we have four to go. And it’s inherent in the change of ship manager that there are some costs associated with it. There’s a doubling up on crew costs for a short period of time. We have to pay some exit fees to the old ship manager. The new ship manager has a startup costs. Notwithstanding that, we’ve delivered lower operating costs in Q1 2019, then in quarter one 2018, $6,000 – in around $6,100 per day compared to $6,400 per day. So notwithstanding extra costs associated with change in ship manager cost the OpEx – daily OpEx is down, which is a really good sign. The other area of cost saving we indicated was SG&A, and again, there is a transition at the moment. We’re still running two organizations, one in London and one in Athens. The London organization is scaling down. And we’ll be scaled down early summer or mid-summer. And then we’ll begin to see a better run rate for SG&A towards the backend of this year. So we remain confident in the $5 million figure. I’d be hopeful that we could surpass that. It’s…

Thank you very much.

[Operator Instructions] Our next question comes from the line of Konstantin Chinarov from Aptior Capital. Your line is open.

Hi guys. Thanks very much for the presentation. I’ve got two very quick questions. One, so you mentioned this 2020 maturity that you are working on. Could you please give some sort of further – some sort of highlights on that, maybe like timing of the deal, any terms you could comment on. And then secondly, if you could sort of concern the latest cash balance for GSL senior secured notes issuance guarantors as of Q1. Thank you.

I’ll answer to your first question. The Poseidon loans, Poseidon financials we have with a normal commercial banks. They have a balloon at the end of 2020. Under normal circumstances of an usual practices, commercial banks give you up to five years of finance. And there’s a balloon at the end, which once you arrive close the balloon, you refinance most likely with the same banks if not with some other banks and extend these balloons, probably for another few years. So what we’re doing right now is our standard practice. It’s a normal operation. We are working with our banks to refinance with commercial banks, the ones we already have. All these Poseidon and tries on packages that initially they have balloons at the end of 2020. So business as usual, nothing extraordinary in this respect. On your second question, could you please repeat it, because I didn’t understand exactly what you wanted us to tell you.

I understand the question, it’s not something that we’ve got at our fingertips, I’m afraid. So let us follow that up.

Okay, thanks.

What was it?

It was the cash balance for the GSL senior secure note holders in that box, not Poseidon box, but just that one.

Okay.

Yes. I’ll just say we don’t have that to happen.

Okay, thanks.

I’m showing no further questions at this time. I would now like to turn the conference back to Mr. Ian Webber.

Thank you everybody for listening to us. Now thank you for your questions. We look forward to giving you an update or further update on progress after the end of Q2. Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation and have a wonderful day. You may all disconnect.