GTT: H1 2020 results – Revenue and earnings up sharply; annual targets confirmed

Revenue and earnings up sharply; annual targets confirmed.

Key figures for the first half of 2020

Revenue: €203.8 million (+66.2%) and EBITDA: €136.6 million (+92.7%)
18 orders (12 LNG carriers, 2 FSUs, 1 FSRU, 3 onshore storage tanks)
Interim dividend payment of €2.50 per share

Orders that span the entire value chain
New service provision agreements
Sustained patenting effort
Continued targeted acquisitions
Outlook for 2020

Confirmation of 2020 targets, in terms of revenue, EBITDA and dividend

Paris – July 29, 2020. Gaztransport & Technigaz (GTT), an engineering and technology company specialised in the design of membrane containment systems for maritime transportation and storage of liquefied gas, hereby presents its results for the first half of 2020.

Commenting on the results, Philippe Berterottière, Chairman and Chief Executive Officer of GTT, said: “In a context of health and economic crisis, the first half of 2020 was characterised by sustained business activity. After two years of very strong activity, LNG carrier orders remain at satisfactory levels and are accompanied by orders for floating units and onshore storage tanks that demonstrate GTT’s ability to cover the entire LNG market value chain. This level of activity is reassuring as to the dynamics of the LNG market and its long-term prospects. However, GTT keeps a special focus on developments in the markets in which it operates.
In the field of LNG as fuel, the decline in fuel prices and the decline in new shipbuilding weighed on the six-month period. However, GTT continues to explore and support all possibilities for the development of this activity, which is a positive contributor to sustainable environmental improvement. In this regard, in order to highlight the importance of environmental factors in the Group’s conduct, we are now adopting a new base line for our logo: “Technology for a Sustainable World”.
From a financial perspective, revenue for the 1st half of 2020 benefited from the flow of orders over the last two years and results were up sharply. As a result, considering the backlog in our order book and shipbuilding schedules, we are confirming our outlook for revenues and EBITDA for the full 2020 financial year. We are also proposing an interim dividend of €2.50, in line with our long-term policy.”

Business activity

– Resumption of orders for LNG carriers

During the first half of 2020, GTT’s sales activity was marked by a number of successes, in particular in the field of LNG carriers: With 12 orders for LNG carriers booked during the first half of 2020, GTT’s core business activity now stands at a very satisfactory level, particularly given the context (Covid 19 and lower energy prices) that is very unfavourable to investment decisions. All of the carriers will be equipped with GTT’s recent technologies (Mark III Flex+, Mark III Flex and NO96 GW). They will be delivered between the beginning of 2022 and the end of 2023. It is worth noting, among these orders, those of two medium-capacity LNG carriers on behalf of the ship-owner “K” LINE destined for the Chinese market.

– A semester also marked by order diversification throughout the LNG chain

In early June 2020, GTT received an order from the Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) to equip a storage and regasification unit (FSRU) on behalf of Japanese ship-owner Mitsui OSK Lines Ltd. (MOL). This FSRU with a capacity of 263,000 m3 will be positioned in Wilhelmshaven, Germany.
In June 2020, GTT received an order from China Huanqiu Contracting & Engineering Co. Ltd. (HQC) for the design of two LNG membrane storage tanks, using GST® technology developed by GTT. Each with a capacity of 220,000 m3, they will be the largest onshore storage tanks in China. They will be located in the southern industrial zone of the port of Tianjin in China.
At the end of June 2020, GTT received an order from the Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) to design tanks for two floating LNG storage units (FSUs), the largest units ever built (361,600 m3), on behalf of the Russian company GTLK. These two FSUs will contribute to the Yamal and Arctic LNG 2 projects of Russian LNG producer Novatek.
At the end of June, GTT also received an order from China Petroleum Engineering and Construction Corp. North China Company (CPECCNC), for the design of a membrane onshore LNG storage tank that will incorporate GTT’s GST® technology. With a capacity of 29,000 m3, this tank is intended for the Heijan LNG Peak shaving project, located in the Chinese province of Hebei.
– New license agreement

At the end of June 2020, GTT signed a Technical Assistance and License Agreement (TALA) with the Russian yard Zvezda Shipbuilding Complex (Zvezda) for the construction of LNG carriers using GTT membrane tank systems. This contract represents another step forward in the deployment of GTT technologies in Russia. In July, five ARC7 icebreaking LNG carriers, equipped with GTT’s membrane containment system, were ordered. These highly innovative and unique LNG carriers are intended for the transport of LNG produced in Russia.

– Four new service provision contracts since the beginning of the year

In February 2020, GTT signed a service and support contract with the CMA CGM Group for the commissioning, operation and maintenance of its future giant LNG propelled container ships equipped with GTT membrane containment technologies. The GTT service provides training for the crews of the CMA CGM fleet through the provision of the G-Sim® training simulator, specially adapted to replicate the LNG operations of CMA CGM vessels.
In March 2020, GTT announced the signing of a framework service provision agreement between its subsidiary GTT North America and the shipowner Excelerate Energy. GTT will assist Excelerate Technical Management – ETM with the maintenance and operation of 9 FSRUs equipped with NO96 technology. This agreement provides on-site technical assistance to GTT teams during inspections, maintenance, repairs, operations and engineering, as well as access to the HEARS® emergency hotline.
In July 2020, GTT signed a framework service provision agreement with the Norwegian shipowner KNUTSEN OAS SHIPPING AS. This new contract covers a fleet of 17 vessels by 2022 (12 currently in service and 5 under construction), all equipped with Mark III Flex or NO96 technologies, developed by GTT. GTT will assist KNUTSEN with the maintenance and operation of the vessels. KNUTSEN will also have access to the HEARS® emergency hotline.
At the end of July 2020, GTT announced the signing of a new framework service provision contract with Fleet Management, based in Hong Kong, for the construction monitoring, maintenance and operation of vessels under management. Fleet Management is currently overseeing the construction of the next generation of very large capacity ethane carriers in Korea.
– Continued targeted acquisitions as part of the Group’s digital strategy

In February 2020, GTT announced the acquisition of Marorka. This company, based in Iceland and specialised in Smart Shipping, designs operational reporting and energy performance improvement systems aimed at reducing the environmental footprint of vessels. More than 600 ships are now equipped with a Marorka system.
In addition, GTT today announced the acquisition of French company OSE Engineering, specialising in artificial intelligence applied to transport. This acquisition complements the Group’s expertise in modelling complex systems, optimising engineering processes and reducing emissions. Its customers include leading names in the shipping, automotive and aerospace industries. Funded in cash, the transaction will have no significant impact on the Group’s financial structure.

Order book

Since January 1, 2020, GTT’s order book, excluding LNG as fuel, which at the time stood at 133 units, has evolved as follows:

13 deliveries of LNG carriers
2 FSRU deliveries
1 FLNG delivery
12 LNG carrier orders
1 FSRU order
2 FSU orders
3 orders for onshore storage tanks
At June 30, 2020, the order book excluding LNG as fuel, stood at 135 units, split as follows:

112 LNG carriers
6 ethane carriers
2 FSUs
6 onshore storage tanks
Regarding LNG as fuel, the number of vessels in the order book stood at 18 units as at June 30, 2020.
Source: GTT

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