Global Ship Lease, Inc. (NYSE:GSL) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 10:30 am ET
[Operator Instructions] Our first question comes from Liam Burke with B. Riley.
Yes. Thank you. Idle capacity, peak to 10%. It's coming down pretty steadily now. You mentioned, I believe, it was 6%. How do you view the short term -- I mean, it's implying that the traffic volumes, container traffic volumes are increasing or improving. How do you view the second half of the year, early 2021 in terms of anticipated container volumes up or down?
Well, I will try to answer that, and Tom can also give you his view. It is quite difficult to predict. I mean, this is the million-dollar question for all liner companies. But the consensus is that all liner companies are gearing up, trying to secure tonnage for low slot cost tonnage, which seems to me that what the expectation is that trade volumes are going to pick up in the second half of the year. Otherwise, we wouldn't be seeing so much activity -- chartering activity, so much liner companies trying to secure tonnage for the next six months or more.
Tom, do you have something else to add?
Thomas A. Lister
No, I think that pretty much covers it. All I'd say, Liam, is the liner companies are much closer to the underlying demand for the cargo flows than we are. And as George says, and as the charter rates show on Slide 9, a number of lines have been going long on tonnage, and that would suggest that they at least see some sort of recovery in volumes. But yeah, again, as George said, that's the multimillion-dollar question.
Fair enough. And then your opex per vessel per day dip below $6,000. How do you see directionally it going into the second half of the year?
Well, one aspect that we have seen that helped our opex go down a bit more than anticipated is the fact that we have not been able to exchange crews due to COVID. Was -- they were not allowed to changes to happen. Now we are going to -- we are doing, as we speak, more and more of these crew changes that were supposed to happen earlier, which we expect will increase a little bit, not materially, our opex for the second half of the year. Another item that might also increase a little bit the opex is the fact that the cost of tickets has increased about 100%. That is not a big number, of course, in our opex, but just to mention, since you asked the question, that's something that we expect that might increase in the second half. But all of that, nothing material really.
Great. Thank you.
Our next question comes from J. Mintzmyer with Value Investor's Edge.
Good morning, good afternoon, gentlemen. Thanks for taking my question.
So first of all, looking at your presentation, I noticed that you have a majority of your debt on floating terms with LIBOR down to really near all-time lows. What are the prospects of