Good afternoon. This is the conference operator. Welcome, and thank you for joining the GTT Third Quarter 2022 Activity Update conference call and webcast. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Philippe Berterottière, CEO. Please go ahead, sir.
Well, thank you very much. Good evening, ladies and gentlemen. I'm very pleased to present to you the Q3 2022 activity update of GTT. With me this evening, we have Virginie Aubagnac, the Group CFO, Jean-Baptiste Garnier, who is Investor Relations, and Julien Mino, who is working also in Investor Relations. Well, I would like first of all to present to you the key highlights of this third quarter. We've obtained in our core business 134 LNG carriers in the past nine months. It's a record. It's by far the highest figure we ever achieved. LNG as fuel, 42 orders in nine months.
We achieved a turnover of EUR 222 million, -7.5%, but perfectly in line with our expectations. The third quarter, our revenues have amounted to EUR 77.8 million, an increase of 4.1%. Well, we find two new license agreement in China. Now we have five active shipyards in China. We obtained not less than five AIPs in this quarter, perfectly highlighting the very important innovation activity we have. Elogen has secured a subsidy of EUR 86 million from the French state. Let's go into details about that. Order book, it's a new record. Last year, at exactly the same time, we had 134 orders in our core business.
We are now at 269, which is exactly the double of where we were one year ago. It's perfectly highlighting this strong momentum. In energy as a fuel, we are at 17. Last year we were at 42. Also highlighting the increase of activity in this segment. If we look at the energy demand, we can see that it's strongly rising in Europe. Of course, the geopolitical situation is perfectly explaining that phenomenon. We can see that many cargos are rerouted from China to Europe. But still, we are strongly believing that in a medium term, China will increase its imports of energy.
The contracting activity has been also very strong in the past quarter, mainly supported by the European demand. You can see that the traders are still representing about 50% of the activity, but Europe has now become a very important player in terms of long-term contracts. Regarding the new capacity which is required, we can see that the average growth, as expected by Wood Mackenzie, is passing from 3.6% to 4.6% per year. Meaning that by 2040, there is a need on top of what has been currently decided, a need of 275 million tons per annum. It's very significant and, in order to support that, more FIDs are needed.
If we look at that, we can see that there are many ongoing projects which are in the offings. Beyond those which have been decided earlier this year, we can see that two of them can be decided fairly shortly. Plaquemines phase two, with 70% of its capacity already contracted, and Rio Grande from NextDecade, where 75% of its capacity are already contracted. They are in a pretty favorable situation. We can also talk about Corpus Christi stage three from Cheniere, which is at 85%. We can say that they are fully contracted, and they can be decided very shortly.
For energy as a fuel recently, we can see on the graph that definitely year 2022 has been the year of takeoff with a very strong increase of orders in that segment. We can consider that for larger container ship, more than 60% of these vessels are LNG fueled. Currently, we can see that with the spot term prices, there are some questions about LNG as a fuel. We continue to believe that in spite of these spot prices, the long-term perspectives are very promising, as LNG is the solution of choice for reducing the emissions from shipping. We had a strong innovation activity in this quarter.
We introduced VLCC, a very large crude carrier, LNG fueled and compatible with ammonia. We obtained authorization in principle from Bureau Veritas for this design which is ready to be installed. As far as our digital solutions are concerned, we obtained also an authorization in principle from Lloyd's Register for new POWER digital solution, which is facilitating the decision-making and which is also improving the safety for transfer operations, ship-to-ship operations. We have obtained also two AIPs from Bureau Veritas and from DNV for LNG carrier with three tanks instead of four. That helps to reduce the cost of the ship and to increase the boil off. We obtained also the confirmation that we...
Elogen is going to receive EUR 86 million from the French government for building a gigafactory in Vendôme, and for expanding its R&D efforts to have a better and more efficient electrolyzer. Now I would like to hand over the floor to Virginie.
Thank you, Philippe. Hello, everyone. A few comments on GTT nine months consolidated revenues. Consolidated revenues for the first nine months of 2022 stand at EUR 222 million, showing an expected decrease of 7.5%. This is due to an unfavorable comparison base. Strong order inflow from H2 2021 is starting to materialize in H2 2022, and will continue to do so more significantly from 2023 onwards. As a matter of fact, the third quarter revenues are up 4.1% compared to Q3 2021. Our new builds revenues amounted to EUR 200.5 million, minus 10.7% versus the same period last year. Over the past nine months, GTT booked EUR 174.7 million revenues for LNG and ethane carrier.
Most other membrane applications saw stronger revenue increase with floating storage units up 14.6%, onshore storage up 218% at EUR 4.7 million, and GBS up 31%. The FLNG has been delivered in June, explaining the decrease versus last year. LNG as fuel revenues amounted to EUR 2.9 million over the first nine months, taking into account the high order intake in 2021 and 2022 from Q3 2022. Elogen booked a revenue of EUR 3 million with an increasing commercial dynamic. Services revenues rose sharply by 50.2% to EUR 18.7 million, driven by growth in digital solutions and engineering studies. Let me now give you an update on GTT's exposure to project in Russia or dedicated to Russian projects.
Work is currently continuing on project in which GTT is involved in Russia, in strict compliance with the applicable sanction regime. First, regarding the project being built in Russia, 15 ice-breaking LNG carriers with Zvezda Shipyard as of October 1st, these represent EUR 74 million of revenue to be recognized by GTT by 2025, including EUR 4 million in Q4 2022. Three gravity-based structures with SAREN B.V. as part of the Arctic LNG 2 project, representing as of October 1st, EUR 12 million of revenue to be recognized by 2026, including EUR 1 million in Q4 2022. As previously announced, SAREN B.V. informed GTT in July of its intention to terminate their contract.
The termination date has not yet been finally set, and GTT continues to review solutions to ensure the proper implementation and integrity of its technology in strict compliance with international sanctions. Regarding the Russian Arctic project built in Asian shipyards, six ice-breaking LNG carriers and two floating storage units. As of October 1, this project represents EUR 31 million of revenues to be recognized by GTT by 2023, including EUR 7 million in Q4 2022. Finally, eight LNGs under construction in Asian shipyards are intended for our Arctic LNG 2 project, but can operate in all types of conditions. Let's now move on to our full year 2022 guidance. On February 17, 2022, we published the following revenues and EBITDA objective for 2022. Consolidated revenue in a range of EUR 290 million-EUR 320 million, consolidated EBITDA in a range of EUR 140 million-EUR 170 million.
Given delays in the construction schedules of certain vessels during the first nine months of 2022, we confirm our 2022 targets with revenues and EBITDA expected to reach the lower half of ranges indicated last February. Our dividend target gate remains unchanged, with 2022 dividend amounts at least equivalent to the 2021 dividend. I now let Philippe Berterottière conclude this presentation.
Well, thank you very much, Virginie, for that. We are ready now to answer to your questions about this presentation, the situation of the market and our results. Thank you.
Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Jean-Luc Romain with CIC Market Solutions. Please go ahead.
Good afternoon. Two questions actually, if that's possible. One on LNG as a fuel, the other about Elogen. On LNG as a fuel, I think IMO is to decide within the next two years about the kind of trajectory or about what kind of fuels would be preferred. I read recently an article saying that LNG as a fuel might be threatened. I would like to have your color on what the IMO could decide. The second question is about Elogen. Do you think there was kind of in the hydrogen sector kind of a waiting game of companies waiting to order new electrolyzers before the European subventions were decided?
It looks like the order intake for hydrogen companies this year is a bit slower than last year.
Thank you, Jean-Luc. LNG, I would say that we are expecting this market takeoff for years. I mean, we've started to work on these solutions many years ago. We saw in the last couple of years a start of this market, and definitely in 2022 a strong increase. I would say that in the recent months, between a certain slowdown compared to the beginning of the year and in other containership, and also quite high energy spot prices, the figures are not as strong as at the beginning of the year.
It's not changing anything about our confidence in the fact that energy is the solution for reducing the CO2 emissions. It's ready, it's available, it's proven. It's really making sense in terms of investments with reasonable prices. Now it's a bit more, it's a bit difficult, but we really should make the difference between short-term situation that we are experiencing and the long-term trend we work on for many, many years with accompanied and which is going to continue over the next years. For Elogen, yes, we saw that there was a certain kind of marketing waiting for us and for some others. I don't know really why.
It's something which very much linked to decisions from buyers. What we can say is that is over. We can see many tenders now. We can see quite a strong interest from the market for our solutions. We may expect much stronger commercial results in the next months.
Thank you.
The next question is from Kevin Roger with Kepler Cheuvreux. Please go ahead.
Yes. Good evening. Thanks for taking the question. The first one, sorry if I missed the update, I joined the call later on. Did you mention the capacity on the yard side and the fact that if you already know the current capacity, if it has increased to 80 units per year, if you have any updates for us on that side? The second one is a kind of follow-up. Assuming and just talking about the LNGC, excluding the revenue that you can generate outside it, what would be the revenue potential of GTT when the yards are running at full capacity, please?
On the second question, I will let Virginie answer this question. On the first one, I would say that now we are effectively at a potential of 80 units per year. It's a quite significant change compared to where we were at the beginning of the year, much closer to 50-55 units per year. You saw that in fact we moved from a situation where in China we had 1.5 active shipyards to a situation where we have now 5 active shipyards in China. It's making a big difference.
Also the other shipyards, the usual shipyards where with whom we are working for many years, have tried to increase significantly their production.
Yeah. In terms of revenue potential, again, it's as you can see today. Orders, there are orders for deliveries in a quite long time, so mainly by H2 2026 and 2027. Now, in Q3 that is what we saw. Then, you know, the accounting rules where we take the linear revenue from steel cutting and delivery for a period of time between a year and a half to two years. That gives you our revenue potential behind.
If I can follow up, Virginie, on that side. Would you be stupid to think that if you have, let's say, the industry running at full capacity in 2025, 2026, 2027, to basically just take the 80 units and to multiply it by EUR 6.5 million, the average pricing of the vessel, that would be the potential revenue of GTT?
It's very theoretical, which we are talking about, right? I mean, if you have 80% for a couple of years because the revenue accounting is through two years, booking is through two years, so therefore you have to have really a continuous momentum like this.
Okay, thanks for the time.
As a reminder, for questions you may press star and one on your keypad. The last question is from Edward Bottomley with Berenberg. Please go ahead.
Hi, good evening, and thanks for taking my questions. I just have two kind of similar questions. Firstly, the total Russian backlog exposure appears to be roughly EUR 117 million from the release. How does that compare to the total updated backlog as of Q3? Could you give us an idea on how your order backlog for the core revenues looks for 2023 and 2024 on the back of all the strong order wins you added in Q3?
On Russia, as you already saw, from December 31, 2021, to June 30, 2022, you saw that actually the total order book from Russia was becoming negligible. That's what it is now. It's something that we have absorbed for a long time. In terms of core revenue in 2023 and 2024, 2023, it's deliveries until 2025. You know, shipyards are at full capacity at that stage, so hardly to say that it can increase more. 2024, it's already almost done.
We gave you the numbers in June, I mean, in July for the end by the end of June, and now you add 46 orders to that.
That are again for quite not vast majority, but for some of them, you add delivery. You compute the fact that they are delivered H2 2026 and 2027. The impact of revenues in 2024. There is an impact, but it's not the full capacity, full impact in 2024.
Okay. Thank you very much.
Excuse me. We have one more question registered. Do you have time to take it?
Yes.
Okay. The next question is from Jean-François Granjon with Oddo BHF. Thank you.
Yes, thank you. Good evening. Just a question regarding the order intake coming from Qatar. You mentioned 58 units from the Qatar project on the backlogs in the beginning of this year. What do you expect for the coming weeks or months? Do you expect another strong order intake coming from Qatar for the coming month or not? Can you just remind us of the size of the project for the Qatar expected? Thank you.
You said 54. We consider that between Qatar and Golden Pass, Qatar needs fairly urgently something like 60 ships. On top of that, they have to replace, let's say 7 old, fairly old ships. They may even look for additional capacity, both for new projects and for having more flexibility with smaller ships than those they are currently operating, which are Q-Max and Q-Flex, very large ships. We expect some additional orders. Now, for us, it's difficult to say whether they are going to come in the next weeks or in the next months or sometimes in 2023 or a bit later. That's the situation.
Okay. Thank you.
There are no more questions registered at this time.
We have a couple questions coming from the web also. The first one is from Nicolas Sallier from Invest Securities. Good afternoon. Could you tell us more about the three tank LNG carrier market size royalties potentials? Also, could you update on Elogen business plan? Thank you.
Okay. The three tank it's simpler to build a ship with three tanks. You may. The shipyard may have a slightly shorter production process. The cost of the ship is costing a little bit less. Royalties are slightly less. The major improvement is in terms of boil off. For a boil off, you reduce the boil off. You can go down from 0.085% down to 0.08%. It seems to be marginal, but we are keeping on introducing those kind of marginal improvements, which finally, when you add them up, are making a significant difference.
Let's see whether the owners are going to be sensitive to that, especially as the quantities which are going to be delivered per tank are not going to be the same as on all ships. We think that it's not so important. This solution, which is really contributing to the improvement of the economics of LNG carriers may make sense. Let's see whether it's going to take off. On the Elogen business plan, well, what we can say is that we expect an increase in order book in the months to come. We have currently the facility which can accommodate that. We are going to invest in this gigafactory in Vendôme, which is going to be ready by 2025.
Still, 2025, it's three years down the road. With our current facility, we should be able to accommodate a significant increase in the market. As we said, we expect to be cash positive by 2026.
Thank you. We have a new question coming from the web from Nicolas Roye from Portzamparq. Could you please give numbers concerning order intake of Elogen?
Order intakes from Elogen, we are not particularly specific on that. We highlighted that some significant contracts at the beginning of the year. We did not communicate on less important contracts. We are going to report about that, about our order intake on the occasion of our annual results in February. While we what I can say is, well, the market is pretty dynamic. We were talking about the momentum in this market and we are going to take our share of this situation.
Thank you. We have a final question, also coming from the web from Prashant Premkumar from Buffalo Thorn Capital . The question is, does the sabotage of the Nord Stream pipeline structurally impact the industry? That's the first question. Second question is, have you noticed any change in buyers or pricing for services after this event? If there is a peace deal with Russia in the next six months, do you expect CapEx trends to continue or to decline?
Impact, I would say that we did not see any impact. We have to keep in mind that LNG or energy is a long-term concern. That's huge investments. You're making these investments based on the long-term analysis of what the situation is. This situation about the submarine gas pipes has not changed the situation, which is that Europe, Western Europe has not enough diversified energy mix. It should rely much more on energy in order to cope with the uncertainty of imports of gas from Russia. Also to cope with the intermittency of the renewables which are prone to be developed in Western Europe. For that, you need gas.
The gas you need now for the particular reasons of Russia is LNG. Well, change on prices. We did not see a change on prices on services and so on. We saw a change on energy carrier prices earlier this year. Since after this problems on gas pipes, we did not see any change. Peace deals, I think, for the reason I was mentioning, this long-term analysis, it will not change anything. Europe has rediscovered the necessity of having a very diversified energy mix and is not going to forget the lesson for a while. I don't think that any peace deal will change something.
Probably Europe will be able to get some gas, but will enter long-term efforts to increase its LNG import and its energy import facilities.
Okay. Thank you. We have no further questions. Mr. Berterottière, yeah, you may conclude.
Well, I would like to thank you all. As you can see, it's a very exceptional year in terms of achievements, in terms of number of orders in energy carriers, in energy as a fuel. In terms of innovations also, the number of innovations that we've introduced in the recent months is quite amazing. In terms of our strategic move, the strategic move we made in hydrogen is fully justified by the current situation in energy and is going to be very much helped by the subsidy we've obtained from the French government. I would say that all that is pretty encouraging. Thank you very much.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your lines.