GTT: H1 2020 results - Revenue and earnings up sharply; annual
targets confirmed
H1 2020 resultsRevenue
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
Highlights
- 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
- 5 FSRUs
- 2 FSUs
- 1 FLNGs
- 3 GBS
- 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.
Change in consolidated revenues during
H1 2020
(in
thousands of euros) |
|
H1 2019 |
H1 2020 |
Revenue |
|
122,637 |
203,767 |
|
|
|
|
Of
which royalties (new buildings) |
|
115,715 |
197,739 |
From
services |
|
6,922 |
6,027 |
Consolidated revenues for the first half of 2020
were €203.8 million, up 66.2% compared to the first half of
2019.
- Revenues from new construction were €197.7 million, up by
70.9%.
- Royalties from LNG carriers rose by 84.3% to €176.2
million and royalties from FSRU by 12.2% to €14.3 million. Revenues
for the first half of 2020 benefit fully from the flow of orders
over the last two years.
- Other royalties include FLNGs for €2.5 million (-0.6%), GBS for
€1 million and LNG as fuel for €3.7 million (+19.2%).
- Revenue from services decreased by 12.9% in the first six
months due to the sharp decrease in maintenance and work on vessels
in operation during the Covid crisis.
Analysis of the consolidated income
statement for the first half of 2020
Summary consolidated income
statement
(in € thousands, except earnings per share) |
H1 2019 |
H1 2020 |
Revenue |
122,637 |
203,767 |
Operating income before allocations for depreciation of fixed
assets (EBITDA1) |
70,855 |
136,553 |
EBITDA
margin (on revenue, %) |
57.8% |
67.0% |
Operating income (EBIT2) |
68,870 |
133,870 |
EBIT
margin (on revenue, %) |
56.2% |
65.7% |
Net
income |
56,603 |
115,527 |
Net
margin (on revenue, %) |
46.2% |
56.7% |
Basic
net earnings per share3 (in euros) |
1.53 |
3.12 |
Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) reached €136.6 million during the first half
of 2020, up 92.7% compared to the first half of 2019. The EBITDA
margin on revenue increased from 57.8% in the first half of 2019 to
67.0% in the first half of 2020. External expenses were up compared
to the previous half year (+28.3%), mainly due to the increase in
R&D and subcontracting costs linked to the increase in
business. It should be noted, however, that travel expenses were
down 20.1% due to traffic restrictions related to the Covid crisis.
Personnel expenses also increased by 33.2 %, reflecting the growth
in incentive plans and profit-sharing and, to a lesser extent, the
growth in the headcount.
Operating income totalled €133.9 million for the
first half of 2020 versus €68.9 million for the first half of 2019,
equivalent to a 94.4% increase.
Net income went from €56.6 million for the first
half of 2019 to €115.5 million for the first half of 2020 (+104.1%)
and the net margin from 46.2% to 56.7%.
Other consolidated financial
data
(in
thousands of euros) |
H1 2019 |
H1 2020 |
Investment expenditures (acquisition of fixed assets, including
acquisition of Marorka) |
(3,108) |
(6,994) |
Dividends paid |
(66,275) |
(64,873) |
Cash position |
155,616 |
199,049 |
As at June 30, 2020, the Group had a positive
cash position of €199 million.
Outlook for 2020
The Group has good visibility on its royalty
revenues4 from now to 2023 thanks in particular to the order book
for its core business as at the end of June 2020. This corresponds
to revenues of 832 million euros over the 2020-20235 period (374
million euros in 20206, 266 million euros in 2021, 151 million
euros in 2022 and 41 million euros in 2023).
Given the size of the backlog, and assuming
there are no major delays or cancellations of orders, GTT confirms
its targets for revenues and EBITDA for the 2020 financial year,
i.e.:
- 2020 consolidated revenues of between €375 million and €405
million,
- 2020 consolidated EBITDA of between €235 million and €255
million
Additionally, the Group is confirming its
dividend distribution policy, i.e. for the 2020 and 2021 financial
years a minimum distribution rate of 80% of consolidated net
income.
Interim dividend payment
The Board of Directors meeting of July 29, 2020
decided the distribution of an interim dividend of 2.50 euro per
share for the 2020 financial year, to be paid in cash according to
the following schedule:
- November 3, 2020: Ex-dividend date
- November 5, 2020: Payment date
Covid-19
Health of GTT employees and their
families
Although no severe cases have been identified,
the Group continues to implement the recommendations of the health
authorities and to update them regularly as the situation
evolves.
How the Group operates
Registered office: except for employees at risk
or close to a person at risk, all staff have returned to work on
site.
Subsidiaries and seconded employees: same policy
as the registered office, subject to local directives.
Main risks
For GTT, the main risk of the coronavirus
epidemic consists of possible delays to the timetable for the
construction of vessels, which may lead to a shift in the
recognition of revenue from one financial year to another. On the
date of this press release, GTT notes some delays, but without
significant impact on revenues for 2020.
The risks related to the impact of the epidemic
on the worldwide economy, and particularly on the market for LNG,
are currently difficult to assess. The Group nevertheless
reiterates that the LNG market is mainly based on long-term
prospects and financing.
GTT's activities are therefore functioning
normally, despite a particularly difficult environment. The Group
closely monitors any changes that could affect the markets in which
it operates.
Presentation of H1 2020 results
Philippe Berterottière, Chairman and Chief
Executive Officer, and Marc Haestier, Chief Financial Officer, will
comment on GTT's results, and answer questions from the financial
community during a conference call in English on Thursday, July 30,
2020, at 8:30 a.m. Paris Time.To participate in the conference
call, please dial one of the following numbers five to ten minutes
before the start of the conference:
- France: +33 1 76 70 07 94;
- United Kingdom: +44 207 192 8000;
- United States of America: +1 631 510 7495.
Confirmation code: 4064836
This conference will also be broadcast live on
GTT's website (www.gtt.fr/finance). The presentation document will
be available on the website.
Financial agenda
- Payment of an interim dividend of €2.50 per share for the 2020
financial year: November 5, 2020
- Publication of the Q3 2020 revenue: October 28, 2020 (after
closing)
About GTT
GTT (Gaztransport & Technigaz) is a
technology and engineering company specialised in membrane
containment systems used to transport and store liquefied gas, in
particular LNG (Liquefied Natural Gas). For over 50 years, GTT has
been maintaining reliable relationships with all stakeholders of
the gas industry (shipyards, ship- owners, gas companies, terminal
operators, classification societies). The Company designs and
provides technologies which combine operational efficiency and
safety, to equip LNG carriers, floating terminals, and multi-gas
carriers. GTT also develops solutions dedicated to land storage and
to the use of LNG as fuel for vessel propulsion, as well as a full
range of services.
GTT is listed on Euronext Paris, Compartment A
(ISIN FR0011726835, Euronext Paris: GTT) and is notably included in
the SBF 120 and MSCI Small Cap indexes.
Investor Relations Contact
information-financiere@gtt.fr / +33 1 30 23 20
87
Press Contact
press@gtt.fr / +33 1 30 23 42 26 / +33 1 30 23
80 80
For further information, please consult www.gtt.fr, and,
in particular, the presentation to be uploaded online for the
conference of July 30, 2020.
Important notice
The figures presented here are those customarily
used and communicated to the markets by GTT. This message includes
forward-looking information and statements. Such statements include
financial projections and estimates, the assumptions on which they
are based, as well as statements about projects, objectives and
expectations regarding future operations, profits, or services, or
future performance. Although GTT management believes that these
forward-looking statements are reasonable, investors and GTT
shareholders should be aware that such forward-looking information
and statements are subject to many risks and uncertainties that are
generally difficult to predict and beyond the control of GTT, and
may cause results and developments to differ significantly from
those expressed, implied or predicted in the forward-looking
statements or information. Such risks include those explained or
identified in the public documents filed by GTT with the French
Financial Markets Authority (AMF – Autorité des Marchés
Financiers), including those listed in the “Risk Factors” section
of the GTT Registration Document filed with the AMF on April 27,
2020, and the half-year financial report released on July 29, 2020.
Investors and GTT shareholders should note that if some or all of
these risks are realised they may have a significant unfavourable
impact on GTT.
Appendices (Consolidated IFRS financial
statements)
Appendix 1: Consolidated balance sheet
In
thousands of euros |
|
31/12/2019 |
30/06/2020 |
Intangible assets |
|
2,757 |
4,960 |
Goodwill |
|
4,291 |
7,088 |
Property, plant and equipment |
|
20,198 |
25,386 |
Non-current financial assets |
|
5,084 |
4,187 |
Deferred tax assets |
|
3,031 |
2,760 |
Non-current assets |
|
35,360 |
44,381 |
Inventories |
|
10,854 |
10,948 |
Customers |
|
139,432 |
146,596 |
Income tax assets |
|
41,771 |
31,904 |
Other current assets |
|
8,496 |
8,339 |
Current financial assets |
|
16 |
11 |
Cash and cash equivalents |
|
169,016 |
199,049 |
Current assets |
|
369,585 |
396,847 |
TOTAL ASSETS |
|
404,945 |
441,228 |
|
|
|
|
|
|
|
|
In
thousands of euros |
|
31/12/2019 |
30/06/2020 |
Share capital |
|
371 |
371 |
Share premium |
|
2,932 |
2,932 |
Treasury shares |
|
(11) |
(795) |
Reserves |
|
55,614 |
134,124 |
Net income |
|
143,377 |
115,536 |
Total equity, Group share |
|
202,284 |
252,168 |
Total equity - share attributable to
non-controlling interests |
|
(3) |
(12) |
Total equity |
|
202,280 |
252,156 |
Non-current provisions |
|
5,001 |
5,282 |
Financial liabilities - non-current
part |
|
2,089 |
5,822 |
Deferred tax liabilities |
|
120 |
106 |
Non-current liabilities |
|
7,210 |
11,210 |
Current provisions |
|
1,583 |
1,693 |
Suppliers |
|
16,791 |
19,552 |
Current tax debts |
|
6,192 |
5,328 |
Current financial liabilities |
|
16 |
675 |
Other current liabilities |
|
170,872 |
150,613 |
Current liabilities |
|
195,454 |
177,862 |
TOTAL EQUITY AND LIABILITIES |
|
404,945 |
441,228 |
Appendix 2: Consolidated income statement
In thousands of euros |
|
H1 2019 |
H1 2020 |
Revenue from operating activities |
|
122,637 |
203,767 |
Costs of sales |
|
(2,627) |
(2,823) |
External expenses |
|
(23,932) |
(30,700) |
Personnel expenses |
|
(24,859) |
(33,107) |
Tax and duties |
|
(2,575) |
(3,438) |
Depreciations, amortisations and
provisions |
|
(1,943) |
(2,984) |
Other operating income and expenses |
|
2,281 |
3,190 |
Impairment following value tests |
|
(111) |
(35) |
Operating profit |
|
68,870 |
133,870 |
Financial income |
|
1 |
(87) |
Share in the income of associated entities |
|
- |
35 |
Profit before tax |
|
68,871 |
133,818 |
Income tax |
|
(12,267) |
(18,292) |
Net income |
|
56,603 |
115,527 |
Basic
earnings per share (in euros) |
|
1.53 |
3.12 |
|
|
|
|
In thousands of euros |
|
H1 2019 |
H1 2020 |
Net income |
|
56,603 |
115,527 |
|
|
|
|
Items that will not be reclassified to profit or
loss |
|
|
|
Actuarial Gains and Losses |
|
|
|
Gross amount |
|
(624) |
139 |
Deferred tax |
|
92 |
(14) |
Total amount, net of tax |
|
(532) |
125 |
Items that may be reclassified subsequently to profit or
loss |
|
|
|
Conversion differences |
|
27 |
(57) |
Other comprehensive income for the year, net of
tax |
|
(505) |
68 |
|
|
|
|
Comprehensive income |
|
56,098 |
115,595 |
Appendix 3: Consolidated cash flow
statement
(in thousands of euros) |
|
H1 2019 |
H1 2020 |
|
Group profit for the year |
|
56,603 |
116,129 |
|
Removal of income and expenses with no cash
impact: |
|
|
|
Allocation
(Reversal) of amortisation, depreciation, provisions and
impairment |
|
(723) |
2,763 |
|
Proceeds on
disposal of assets |
|
- |
- |
|
Financial expense (income) |
|
(1) |
87 |
|
Tax expense (income) for the financial year |
|
12,267 |
17,655 |
|
Free shares |
|
822 |
1,419 |
|
Cash-flow |
|
68,969 |
138,052 |
|
Tax paid out in the financial year |
|
(10,170) |
(8,422) |
|
Change in working capital requirement: |
|
|
|
|
- Inventories and works in progress |
|
(1,770) |
(23) |
|
- Trade and other receivables |
|
(1,585) |
(6,371) |
|
- Trade and other payables |
|
1,719 |
1,517 |
|
- Other operating assets and liabilities |
|
(3,911) |
(21,180) |
|
Net cash-flow generated by the business (Total
I) |
|
53,252 |
103,573 |
|
Investment operations |
|
|
|
|
Acquisition of non-current assets |
|
(3,108) |
(4,426) |
|
Disposal of non-current assets |
|
- |
- |
|
Control acquired on subsidiaries net of cash and cash equivalents
acquired |
|
(0) |
(2,568) |
|
Financial investments |
|
(1,839) |
(5) |
|
Disposal of financial assets |
|
28 |
804 |
|
Treasury shares |
|
582 |
(2,189) |
|
Change in other fixed financial assets |
|
- |
47 |
|
Net cash-flow from investment operations (Total
II) |
|
(4,338) |
(8,338) |
|
Financing operations |
|
|
|
|
Dividends paid to shareholders |
|
(66,275) |
(64,789) |
|
Repayment of financial liabilities |
|
(46) |
(375) |
|
Increase of financial liabilities |
|
3 |
(11) |
|
Interest paid |
|
(25) |
(18) |
|
Interest received |
|
124 |
115 |
|
Change in bank lending |
|
(172) |
- |
|
Net cash-flow from finance operations (Total
III) |
|
(66,390) |
(65,079) |
|
Effect of
changes in currency prices (Total IV) |
|
(88) |
(125) |
|
Change in cash (I+II+III+IV) |
|
(17,564) |
30,033 |
|
Opening cash |
|
173,179 |
169,016 |
|
Closing cash |
|
155,616 |
199,049 |
|
Cash change |
|
(17,564) |
30,033 |
|
Appendix 4: Consolidated revenue breakdown
In thousands of euros |
|
H1 2019 |
H1 2020 |
Revenue |
|
122,637 |
203,767 |
Royalties (newbuilt) |
|
115,715 |
197,739 |
LNG carriers/VLEC |
|
95,625 |
176,203 |
FSRU |
|
12,709 |
14,254 |
FLNG |
|
2,546 |
2,530 |
Onshore storage |
|
1,355 |
- |
GBS |
|
- |
1,020 |
Barges |
|
349 |
- |
LNG Fuel |
|
3,131 |
3,733 |
Services |
|
6,922 |
6,027 |
Appendix 5: 10 year order estimates
In units |
|
Order estimates* |
LNG carriersEthane carriers |
|
285-315**25-40 |
FSRU |
|
10-20 |
FLNG |
|
Up to 5 |
Onshore storage tanks and GBSs |
|
15-20 |
* 2020-2029 period. The Company points out that
the number of new orders may see large-scale variations from one
semester to another and even one year to another without the
fundamentals on which its business model is based being called into
question.** Includes the replacement market.
1 EBITDA defined as EBIT before amortisation and impairment of
fixed assets.
2 EBIT means "Earnings Before Interest and Tax”.
3 For the first half of 2020, earnings per share were calculated
based on the weighted average number of shares outstanding
(excluding treasury shares), i.e. 37,064,997 shares.
4 Royalties from core business, i.e. excluding LNG fuel and
services. Of which 194 million euros recognised for the first half
of 2020.
5 Of which 194 million euros recognised for the first half of
2020.
- IR-PR-H12020-29 07 2020_EN
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