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information-financiere@gtt.fr
01 30 23 47 89

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Company name

Gaztransport & Technigaz (GTT)

SIRET

662 001 403 00

ISIN

FR0011726835

Address

1, route de Versailles
78470 Saint-Rémy-lès-Chevreuse

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+33 (0)1 30 234 789

Compartment

A

Industry

Pétrole et gaz intégrés

Website

www.gtt.fr/

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GAZTRANSPORT & TECHNIGAZ (GTT)

Gaztransport & Technigaz (GTT)

Company : Gaztransport & Technigaz (GTT) ISIN : FR0011726835
Document type : Communiqués d'information permanente/Résultats et CA
Publication date : 26/02/2019 17:45:00

Compartment : Compartiment A
Wire : Thomson Reuters ONE

GTT: 2018 Annual Results - 2018 Annual Results Record level of new orders and increase in earnings

GTT: 2018 Annual Results - 2018 Annual Results Record level of new orders and increase in earnings

2018 Annual Results
Record level of new orders and increase in earnings

Highlights

  • Orders at record level in core activity:
    • 50 new ship orders in 2018 compared to 21 in 2017
    • 1 onshore storage tank
    • 11 new LNGC orders since 1st January 2019
  • Ongoing growth in the LNG fuel market:
    • 1 bunker ship
    • 1 icebreaker cruiser

Key figures for 2018

  • Consolidated Revenue of €246 million
  • Proposed dividend of €3.12 per share[1] (compared to €2.66 per share in 2017)

Outlook for 2019

  • Consolidated revenue target: between €255 million and €270 million
  • Consolidated EBITDA[2] target: between €150 million and €160 million
  • Dividend target, in respect of FY2019 and FY2020, amounting to a payout rate of at least 80% of consolidated net income[3].

Paris, 26 February 2019 - GTT (Gaztransport & Technigaz) - an engineering company specialised in the design of membrane containment systems for maritime transportation and storage of liquefied gas - hereby presents its results for FY2018.

Philippe Berterottière, Chairman & CEO of GTT, made the following statement:"With 50 orders for LNG carriers and FSRUs, 2018 stands out as the best year of the decade for our core business, thus confirming our vision of market needs. The strong growth in LNG demand throughout the past two years, in particular in Asia, shows the current ongoing dynamics of the LNG market. The pace of future orders will notably depend on FIDs in new liquefaction trains.

On the promising market of LNG fuel, we achieved further successes, which once again confirmed our ability to meet the needs of ship-owners in this area. Less than a year away from the Global Sulphur Cap, and in an increasingly stringent regulatory environment, especially in the main trading ports, the interest of ship-owners for our LNG propulsion solutions is becoming clear. In conjunction with our partners, we are continuing our efforts to become a long-term player in this new ecosystem. I wish to reiterate that, beyond the benefits for GTT, the adoption of LNG as a fuel for merchant vessels is a major step forward for the planet in terms of reducing polluting emissions.

For our new activities, as well as for our core activities, we are continuing to prepare the future by developing new variants of our flagship technologies, such as NO96 Flex, and by creating new ones, such as LNG Brick®. The Group anticipates, for 2019, an increase of around 25% of its R&D expenses. Consequently, 2019 will be a year of innovation for GTT.

We will also continue to develop our service offering, particularly in the field of Smart Shipping.

Concerning our outlook for the year in progress, given our healthy order book in 2018 and for the beginning of 2019, as well as the efforts made by the Group to prepare the future, we expect our 2019 consolidated revenue to be between €255 million and €270 million, with consolidated EBITDA between €150 million and €160 million. Furthermore, we maintain our commitment to pay out dividends amounting to at least 80% of our net income[4] for FY2019 and FY2020."

Business activity

  • Main "vessel" activity

With 50 ship orders in 2018, GTT sales hit a ten-year high.

  • 48 orders for LNG carriers. Most of these orders are intended for natural gas liquefaction units under construction, in particular in the United States. All of the vessels will be equipped with GTT's recent technologies (NO96 GW,
    NO96-L03+, Mark III Flex and Mark III Flex+).
     
  • Two orders for FSRUs. Announced in early 2018, these orders reflect the great interest for these regasification vessels which represent a highly flexible and very economical solution, in particular for new LNG-importing countries.
     
  • Onshore storage activity
     
    • In September 2018, GTT received an order from CERN (the European Organization for Nuclear Research) for the design of the containment system of a 12,500 m3 onshore storage tank for liquid argon intended for experimental purposes.
       
  • LNG fuel activity 
     
    • An order for a bunker ship with a capacity of 18,600 m3 was recorded at the beginning of the year. Operated by ship-owner Mitsui OSK Lines Ltd. and chartered by Total Marine Fuels Global Solutions (TMFGS), this ship will be dedicated to supplying LNG to the future container ships of CMA CGM.
       
    • In July 2018, GTT also recorded an order from the Vard shipyard to build LNG tanks for the Commandant Charcot, the first LNG-powered cruiser icebreaker.

  • Services business
     
    • In January 2018, GTT completed the acquisition of Ascenz, a Singapore-based company specialised in Smart Shipping. This is an emerging activity notably in the field of the management of merchant vessels' fuel consumption.
       
    • Among its various service activities, in the first half of 2018, GTT was commissioned to conduct preliminary engineering studies for new GBS (Gravity-Based System) underwater tanks projects. 

                         
                         
New Technical Assistance and License Agreements (TALAs)

  • In April 2018, with Sembcorp Marine, a company based in Singapore, to design and build FSRUs, medium-capacity LNG carriers and Sembcorp Marine's Gravifloat platforms using GTT's membrane containment systems.
     
  • In September 2018, GTT signed a TALA with Keppel Offshore & Marine to equip LNG carriers, bunker ships, LNG-powered ships and floating storage regasification unit (FSRUs), with a special focus on vessels with a capacity of 30,000 to 80,000 m3.
     
  • In September 2018, with South Korea company Hyundai Mipo Dockyard to equip gas tankers, particularly small and medium capacity ships (up to around 50,000 m3), as well as LNG tanks dedicated to ship propulsion.

Technologies

  • In the third quarter, GTT obtained an approval in principle from the Bureau Veritas certification agency for the development of a new NO96-type cargo containment system. Called NO96 Flex, this new system has the benefits of the proven NO96 technology, as well as benefiting from the use of foam panels, which reduce the boil-off gas rate to 0.07%V per day, i.e. a level in line with that of GTT's most efficient technologies.

CSR performance 

  • GTT won a GAIA award for its CSR performance. GAIA is an organisation specialised in the non-financial rating (based on environmental, social and governance criteria) of listed mid-caps and SMEs. GTT was ranked 21st out of the 230 companies rated, and 3rd out of the 78 in its revenue bracket. GAIA has also created an ESG index of the top 70 best-rated companies, including GTT.
     
  • Moreover, following an audit by the Ethic Intelligence agency, GTT obtained a certification for its anti-corruption management system, based on ISO 37001 requirements.

 Order book

Since 1 January 2018, GTT's order book[5] - which comprised 89 units at the time - has changed as follows:

  • 51 orders received: 48 LNG carriers, 2 FSRUs and one onshore storage tank
  • 42 deliveries: 36 LNG carriers, 5 FSRUs and one barge
  • In Q4 2018, cancellation of an LNG carrier order (dating back to 2015)

At 31 December 2018, the order book comprised 97 units, of which:

  • 83 LNG carriers[6]
  • 9 FSRUs6
  • 2 FLNGs
  • 3 onshore storage tanks
  •  

Moreover, in 2018, in the field of LNG Fuel, GTT received an order to equip a bunker ship and an order to equip the Commandant Charcot Icebreaker cruise ship, bringing to 11 the number of units recorded in its LNG order book to 31 December 2018.

Financial performance

GTT has been publishing consolidated financial statements since FY2017. The consolidated subsidiaries are the following: Cryovision, Cryometrics, GTT Training, GTT North America, GTT South East Asia and Ascenz. The first five are wholly owned by GTT, while Ascenz is 75% held. All of the subsidiaries are fully consolidated. Moreover, following the adoption of IFRS 15 on 1 January, 2018 and to make the 2018 IFRS consolidated financial statements easier to read, the Group's 2017 data is presented proforma in accordance with IFRS 15.

Change in consolidated revenue in 2018

 (in thousands of euros)  Proforma 2017 2018Change
Revenue 240,801 245,987 +2.2%
  Of which newbuilds227,590231,505+1.7%
  From services13,21114,481+9.6%

Consolidated revenue amounted to €246.0 million in 2018, compared to €240.8 million in 2017, representing an increase of 2.2% over the period.

  • Revenue from newbuilts amounted to €231.5 million in 2018, up 1.7% compared to the previous year, which had been impacted by the low level of orders in 2016. Royalties on LNG carriers amounted to €198.8 million (-2.1% compared to 2017), while royalties on FSRUs totalled €25.1 million (+30.6%). The other royalties, which totalled €7.6 million (+43.7%), stemmed from FLNGs, onshore storage tanks, the barge and LNG fuel.
  • Revenue from services also increased (+9.6%), mainly due to the consolidation of Ascenz.

Analysis of 2018 consolidated income statement

(in € thousands, except earnings per share) Proforma 2017 2018Change
Revenue 240,801 245,987 +2.2%
 EBITDA 151,259 168,699 11.5%
EBITDA[7] margin (on revenue, %) 62.8% 68.6%  
Operating income (EBIT) 147,516 159,901 +8.4%
EBIT margin (on revenue, %) 61.3% 65.0%  
Net income 124,034 142,800 +15.1%
Net margin (on revenue, %) 51.5% 58.1%  
Basic net earnings per [8]share in euros 3.35 3.85  

Net income reached €142.8 million in FY2018, up 15.1% compared to the previous year. The net margin amounted to 58.1%.

The change in net income compared to 2017 is mainly attributable to non-recurring items, in particular the 2018 reversal of a tax risk provision of €15.2 million booked in 2017, and tax income of €5.7 million following a claim relating to the tax on dividends during 2015 and 2016.

Excluding these non-recurring items, net income would amount to €127.2 million in 2018, and the net margin would reduce from 58.1% to 51.7%.

Operating expenses increased by €9.9 million, of which €3.7 million due to the change in scope following the acquisition of Ascenz, €2.1 million from the rise in sub-contracting expenses on a like-for-like basis, and €1 million from an increased in fees, particularly for patent filings.

Other 2018 consolidated financial data

 (in thousands of euros)  Proforma 20172018Change
Capital expenditure
(including the acquisition of Ascenz in 2018)
(3,434) (11,819) ns
Dividends paid (98,592) (98,549) -1.0%
Cash position 99,890 173,179 +73.4%

At 31 December 2018, the Company's net cash position amounted to €173.2 million. This increase is mainly due to the change in working capital.


Dividend in respect of 2018

On 26 February 2019, after approving the financial statements, the Board of Directors decided to propose the payout of a dividend of €3.12 per share in respect of FY2018. This dividend, payable in cash, is subject to approval by the Shareholders' Meeting of May 23, 2019. As an interim dividend of €1.33 per share was paid on 28 September 2018 (in accordance with the Board decision of 26 July 2018), the payment of the outstanding balance, i.e. €1.79 per share, will take place on 29 May 2019 (ex- dividend date for the remainder of the dividend: 27 May 2019). The proposed dividend corresponds to a payout ratio of 80% of distributable profits.

Moreover, in accordance with the indications given by the Company upon its IPO, an interim dividend should be paid out in September 2019 in respect of FY2019.

Outlook

The Company has visibility as regards its revenue from royalties out to 2021 based on its order book at the end of 2018. In the absence of any significant order delays or cancellations, this corresponds to a revenue of €524 million for the 2019-2021[9] period (€251 million in 2019, €224 million in 2020, €49 million in 2021 and €49 million in 2021).

In a highly favourable environment for the LNG market, GTT is confirming its innovation strategy aimed at optimising its technologies marketed within the scope of its core business, and its growth strategy for LNG fuel and services. To this effect, the Group has decided to step up its efforts, particularly in 2019, in innovation and research & development.

On that basis, the Group: 

  • Announces a target of between €255 million and €270 million in consolidated revenue for 2019,
  • Announces a target of €150 million to €160 million in consolidated EBITDA[10] for 2019,
  • Targets the payment of dividends amounting to a payout rate of at least 80% of consolidated net income for FY2019 and FY2020[11].

***


Presentation of results for FY2018

Philippe Berterottière, Chairman & CEO, and Marc Haestier, CFO, will comment on GTT's annual results, and will answer questions from the financial community during a conference call in English on Wednesday 27 February 2019, 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 20 7192 8000
·             United States of America: + 1 631 510 7495
Confirmation code: 8382024

This conference call will also be broadcast live on GTT's website (www.gtt.fr) in listen-only mode (webcast). The presentation document will be available on the website.

Financial agenda

  • 2019 first-quarter results: 16 April 2019 (after the close of trading)
  • General Meeting of Shareholders: 23 May 2019
  • Payout of the remainder of the dividend (€1.79 per share) for FY2018: 29 May 2019
  • Publication of the 2019 half-year results: 25 July 2019 (after the close of trading)
  • 2019 third-quarter results: 17 October 2019 (after the close of trading)

About GTT
GTT (Gaztransport & Technigaz) is an engineering company expert in containment systems with cryogenic membranes 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 47 31

For further information, please consult www.gtt.fr/en and, in particular, the presentation to be uploaded online for the conference call of 27 February 2019.


NOTE
GTT's full-year IFRS financial statements have been audited, The auditor's report will be issued before the company's registration document is filed with the AMF scheduled for end-April 2019.

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 25 April 2018, and the half-year financial report released on 26 July 26 2018. 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  Proforma
December 31, 2017
December 31, 2018
Intangible assets   1,097 2,457
Goodwill   - 4,291
Property, plant and equipment   17,483 16,634
Non-current financial assets   3,240 3,158
Deferred tax assets    1,784 3,049
Non-current assets 23,60529,590
Inventories   6,682 7,394
Customers   110,461 96,006
Income tax assets   18,975 34,079
Other current assets   5,098 6,556
Financial current assets   - 16
Total cash and cash equivalent   99,890 173,179
Current assets 241,105317,229
TOTAL ASSETS 264,710346,819
      
      
In thousands of euros  Proforma
December 31, 2017
December 31, 2018
Share capital   371 371
Share premium   2,932 2,932
Treasury shares   -3,728 -1,529
Reserves   11,301 34,852
Net income   124,034 142,798
Total equity - Group share 134,910179,424
Total equity - share attributable to non-controlling interests   - 17
Total equity 134,910179,441
Non-current provisions   3,967 4,075
Financial liabilities - non-current part   244 2,100
Deferred tax liabilities   222 210
Non-current liabilities 4,4336,385
Current provision    15,604 3,372
Suppliers   10,574 11,483
Current tax debts   6,194 6,988
Current financial liabilities   379 337
Other current liabilities   92,617 138,813
Current liabilities  125,367 160,993
TOTAL EQUITY AND LIABILITIES 264,710346,819


Appendix 2: Consolidated income statement

In thousands of euros  Proforma 20172018
Revenue from operating activities 240,801245,987
Costs of sales   -1,830 -2,998
External expenses   -36,806 -40,951
Personnel expenses   -41,191 -45,817
Taxes   -4,183 -4,325
Depreciations, amortisations and provisions   -16,807 8,874
Other operating income and expenses   7,927 4,632
Impairment following value tests   -394 -5,502
Operating profit 147,516159,901
Financial income   423 55
Profit before tax 147,939159,956
Income tax   -23,906 -17,156
Net income  124,034142,800
Net income, Group share   124,034 142,798
Net income attributable to non-controlling interests   - 2
Basic earnings per share (in euros)   3.35 3.85
Diluted earnings per share (in euros)   3.34 3.84
      
In thousands of euros  Proforma 20172018
Net income  124,034142,800
Items that will not be reclassified to profit or loss      
Actuarial Gains and Losses      
Gross amount   300 126
Deferred tax   -45 -19
Total amount, net of tax 255107
Items that may be reclassified subsequently to profit or loss   
Conversion differences   -59 139
Other comprehensive income for the year, net of tax  196246
Income statement 124,230143,046


Appendix 3: Consolidated cash flow statement

(In thousands of euros)  Proforma 20172018  
Group profit for the year   124,034142,800  
Removal of income and expenses with no cash impact      
Allocation (Reversal) of amortisation, depreciation, provisions and impairment   17,368 -3,180
Proceeds on disposal of assets   - 191  
Financial expense (income)   -423 -55  
Tax expense (income) for the financial year   23,906 17,156  
Free shares   830 266  
Cash-flow   165,714157,177  
Tax paid out in the financial year   -18,274 -33,199  
Change in working capital requirement:        
  -Inventories and works in progress   47 -466  
  -Trade and other receivables   -23,357 15,122  
  -Trade and other payables   1,997 545  
  -Other operating assets and liabilities   -9,601 45,076  
Net cash-flow generated by the business (Total I)   116,526184,255  
Investment operations        
Acquisition of non-current assets   -3,434 -2,890  
 Disposal of non-current assets   -   -  
Control acquired on subsidiaries net of cash and cash equivalents acquired   - -8,929  
Financial investments   -2,821 -6,637  
Disposal of financial assets   13,257 6,645  
Treasury shares   -3,005 -6  
Change in other fixed financial assets   - 15  
Net cash-flow from investment operations (Total II)   3,957-11,802  
Financing operations        
Dividends paid to shareholders   -98,592 -98,549  
Repayment of financial liabilities   -488 -919  
Increase of financial liabilities   13 40  
Interest paid   -34 -31  
Interest received   366 178  
Change in bank lending   - -57  
Net cash-flow from finance operations
(Total III)
 -98,736-99,338  
Effect of changes in currency prices (Total IV) -65174  
Change in cash (I+II+III+IV)   21,68173,290  
Opening cash   78,209 99,890  
Closing cash   99,890 173,179  
Cash change   21,68173,290  

Appendix 4: Consolidated revenue breakdown

In thousands of euros  Proforma 20172018
Revenue 240,801245,987
of which new builts (royalties) 227,590231,505
LNG carriers/VLEC    203,060 198,778
FSRU   19,212 25,087
FLNG   3,397 3,605
Onshore storage   1,535 1,433
Barges   386 962
LNG Fuel   0 1,640
Services   13,21114,481 

Appendix 5: 10 year order estimates

In units  Order estimates (1)
LNGC Carriers/VLEC   280-310
FSRU   30-40
FLNG   5
Onshore storage tanks and GBSs   10-15

(1) 2019-2028 period. The Company points out that the number of new orders may see large-scale variations from one quarter to another and even one year to another without the fundamentals on which its business model is based being called into question.



[1] Subject to approval by the Shareholders' Meeting of 23 May 2019.

[2] EBITDA: earnings before interest, taxes, depreciation and amortisation, in accordance with IFRS.

[3] Subject to approval by the Shareholders' Meeting of 23 May 2019 and the amount of distributable profits in the corporate financial statements of GTT SA.

[4] Consolidated net income, subject to the amount of distributable profits in the corporate financial statements GTT SA, and subject to approval by the next Shareholders' Meeting

[5] Excluding LNG fuel

[6] Including the conversion of a LNGC order in FSRU

[7] EBITDA: earnings before interest, taxes, depreciation and amortization, in accordance with IFRS.

[8] The calculation of net earnings per share is based on the weighted average number of shares outstanding, i.e. 37,052,681 shares at 31 December 2017 and 37,043,099 shares at 31 December 2018.

[9] Royalties from the main business line, i.e. excluding LNG fuel and services , in accordance with IFRS 15.

[10] EBITDA: earnings before interest, taxes, depreciation and amortization, in accordance with IFRS.

[11] Subject to approval by the Shareholders' Meeting and the distributable profits in the corporate financial statements of GTT SA.

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Source: GTT via Globenewswire