Good day, and thank you for standing by. Welcome to the GTT Q1 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link at any time during the conference. Please be advised that today's conference is being recorded, Thursday, the 21st of April, 2022. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Philippe Berterottière. Please go ahead.
Thank you very much. Good evening, everybody. I would like to tell you that I am with Virginie Aubagnac, the Group CFO, Jean-Baptiste Garnier, Investor Relations, and Virginie Amiot is also working with Jean-Baptiste Garnier. You have our presentation with the key highlights on page three. I will not go through this slide as most of the elements we are going to talk about them later on. Just the last line highlighting the fact that the Engie stake has been reduced and is now amounting to 21%, including 10% which is linked to an exchangeable bond. The order book, what is remarkable is that in this Q1, we obtained 34 orders for LNG carriers, while six LNG carriers had been delivered. It's a net increase of 28 LNG carriers. In our order book now, we have 165 of them.
Another very important point concerns the last line, the LNG as a fuel. We received in the Q1 20 orders, 20 tanks, in fact, LNG as a fuel tanks, and we delivered two ships with GTT membrane LNG tanks. So it's a net increase of 18 tanks in LNG as a fuel. Quite simple. As far as the LNG supply is concerned, we don't have actually real FID, but what we can see is that three projects are already starting construction or getting prepared for starting the construction, clearly saying that the FID is not so far away. So they are probably in some kind of formal process for deciding this FID or for announcing this FID, but they are starting the construction in order to be ready as soon as possible to produce LNG.
We can say that we see many long-term contracts passed with developers of projects, and that is very much supporting the decision for launching new projects. So we can be quite positive about that. On the next page, we are analyzing the competitiveness of LNG as a fuel. It's a new graph, so I would like to ask your attention to look at it. We can see the oil price, as you know, it's quite high for the time being, and the LNG price. On the bottom of the page, you have the detail of the prices we are talking of. As the oil price is very high, LNG, LNG as a fuel is very competitive compared to oil. And in fact, you can pay back the investment in an LNG tank and the associated equipment in a very short period of time, in less than two years.
So while it's a very compelling story for the time being, and it can explain, in fact, why we are receiving so many orders for LNG as fuel tanks since the beginning of the year. A point on innovation, you know that we are keeping on investing in research, development, and innovation. And a way of highlighting that is that in the last quarter, we announced that our designs for dual fuel car carriers, car and truck carriers, have been approved by two major classification societies. So it's a very positive element for having our designs adopted by shipyards. It's a ship segment we would like to enter into. In LNG as a fuel, again, we obtained an AIP for jumboizing an LNG carrier, retrofitting an LNG.
Container ship in adding a tranche with an LNG tank. So it's a solution that we are proposing. Still, again, on LNG as a fuel, we obtain an AIP, an authorization in principle, to increase the pressure holding capabilities of membrane tanks. Normally, they are at atmospheric pressure, and if you can have a bit of pressure inside the tank, you have more flexibility in handling the boil-off. So that is quite positive for these car and truck carriers we were speaking of or for cruise ships. Finally, we announced this quarter a
cooperation agreement with Shell in order to develop a liquid hydrogen ship and to have that ready in a not too distant period. Elogen, talking about Elogen, we've decided recently where our gigafactory is going to be built. It's going to be in Vendôme, in the Centre-Val de Loire region, south of Paris. We've been selected by Storengy for providing an electrolyzer in a system for methanation unit to be installed. It's a significant contract for Elogen. We passed an agreement with Saipem in order to see how we can provide green hydrogen for the steel industry. So things are moving and adding there. Virginie?
Yeah. Thank you, Philippe. Hello, everyone. A few comments on GTT's Q1 consolidated revenues. Q1 2022 revenue stands at EUR 68.2 million, showing, as expected, a 22% decrease due to a base effect. This came as no surprise as Q1 2021 revenue recognition was still in the wake of 2020 high level with 24 deliveries, while Q1 2022 revenue is not yet taking into account 2021 strong order inflow. Over the Q1, GTT booked EUR 53.8 million revenue for LNG and ethane carriers, EUR 18.4 million less than the same period last year. Most other membrane applications saw strong revenue increase with FSU up 84% at EUR 3.6 million, onshore storage up 76% at EUR 0.7 million, and GBS up 111% at EUR 2.1 million. LNG as a fuel revenues amount to EUR 0.8 million in Q1, not yet taking into account 2021 orders.
Elogen booked a revenue of EUR 0.9 million in line with the same period last year. Services revenue rose to EUR 5.5 million thanks to an increase in maintenance and assistance services and Smart Shipping solutions. Let me now give you an update on GTT's exposure to projects dedicated to Russia. There are three kinds of projects. First, the project being built in Russia, three GBS as part of the Arctic LNG 2 project, and 15 ice-breaking LNG carriers. As of March 31st, 2022, this project represents a total of EUR 97 million to be recognized by 2026, including EUR 21 million in 2022. Second, the project dedicated specifically to Arctic conditions built in Asian shipyards, six ice-breaking LNG carriers, and two FSUs. As of March 21st, these projects represent a revenue of EUR 48 million to be recognized by 2024, including EUR 30 million in 2022.
And third, finally, the projects which are being built by Asian shipyards for Russia but that can operate in all types of conditions. There are eight LNGCs. So as of April 21st, today, the execution of our contract for this project continues to perform normally in compliance with the applicable sanction regimes. Philippe Berterottière will now present the outlook and conclude this presentation.
We published in February in the publication of our 2021 results, our guidance for 2022. We maintain our guidance. For revenue, we plan to have a revenue estimated in the range of EUR 290 million-EUR 320 million. For our EBITDA, we plan to have an EBITDA between EUR 140 million-EUR 170 million. The dividend for 2022 should amount at least to the one proposed for fiscal year 2021. We consider that our revenues from 2023 and our results should be significantly higher than in 2022, driven by the robust order momentum we are experiencing. Having said that, the group may need to revise its 2022 targets if risks regarding the Russian projects were to materialize.
Nevertheless, as I was saying, the crisis highlights the importance of gas globally and the need for European countries to achieve energy independence in respect of Russia and, more specifically, the strategic importance of maritime transport of energy, which is, as you know, our core business. The group, therefore, expects the current robust order momentum to continue. So now we are going to answer to your questions.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, please press the hash key. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jean-Luc Romain from CIC Market Solutions. Please ask your question.
Good evening. Thanks for taking my questions. I have two on Russia. The first one is, in the Q1, how much of your sales were related to the Russian projects, both for Zvezda and both for the Japanese customers? That's the first question. And the second question is about, it seems that Novatek has said, at least it was mentioned in the Russian press, and Reuters talked about that, that Novatek has had its work after the first phase of the first train Arctic LNG 2 project. Did you receive any notice about that from your customer, which is Saipem, if I'm correct?
On the first question, we booked a bit more than EUR 10 million revenues in Q1 2022 on Russian projects, project being built in Russia and project dedicated to Arctic conditions. It's normally, as expected, we booked all we had to book.
On the second question, Novatek, you said that in the newspaper, I did not get you perfectly. Could you repeat, please?
Okay. According to the newspaper, Novatek hasn't halted work on expansion projects on top of the first stage of Arctic LNG 2 as it is three trains. My understanding is that the work on trains two and three is halted on that, but I'm not sure. So I was wondering if you received any notice from your customer.
No. Well, I'm not sure to follow you perfectly, but I can tell you that we did not receive any notice.
Okay. Thank you very much.
Thank you. Your next question comes from the line of Guillaume Delaby from Société Générale. Please ask your question.
Yes. Good afternoon, all. Quick question regarding basically new energy projects. So you mentioned a few of them for a total capacity of 41 million. My question is, what is your view in terms of timing for other projects, i.e., in the Middle East? There are a lot of discussions between European officials and Qatar. What is your take regarding Oman, regarding Rovuma, any view on that in terms of timing? Do you rather see them in H2 2022 or 2023? Thank you.
Well, you know that we are pure LNG carrier technology providers. We are not in the board meeting rooms. So we can give you our feelings. What can be decided in 2022 and 2023 is what is pretty much ready. You know that for taking a final investment decision, you've got to have performed a quite complete engineering study work in order to see quite precisely, quite accurately whether the project is feasible and how much it's going to cost. You've got to have customers, which probably currently is not that difficult in
order to have long-term commitments which are going to allow the financing. And then you've got to set up the financing. So all that, coming more or less at about the same time, is very much favoring those who are ready for taking the decisions. And these ones are mainly, in our opinion, the American projects. And so those you are referring to probably are not those who are going to be decided in the first phase. They could come later on.
Okay. Thank you very much. I turn it over.
Thank you. Your next question comes from the line of Edward Bottomley from Berenberg. Please ask your question.
Good evening, and thank you for taking my question. In February, you guided for 330-360 LNG carrier wins over the coming decade. This now looks like it might be a bit stale given the 34 order wins in Q1 and the improved outlook beyond that. Would you be willing to give us an idea of how much higher order wins over the coming decade could go? And then my second question would be about shipyard capacity in South Korea and China. Given the strong order book that you have and the strong rate of order wins, it seems like we might be at quite a high capacity utilization rate. How are you seeing new capacity coming online, and how much do you think that could increase by? Thank you.
Okay. On our long-term guidance on the orders we should receive over the next 10 years, that is something we are publishing once a year. So I do recognize that we published that one week before the beginning of the war between Russia and Ukraine, and that is a kind of game changer in the situation. We are not really in a situation where we can review our 10-year guidance. We are going to see whether we can do it later on in the year. But usually, we do that on a yearly basis. And I do recognize that the war in Ukraine has changed the fundamental element in this forecast. On the shipyard capacity, we said already that current yards are working on increasing their capacity. They could add something. Basically, they were at 55, and they could add, in our opinion, probably 10 additional ships.
In China, other yards are going to enter into the LNG carrier production, in our opinion. And there are other yards in the world which are contemplating whether it's making sense to venture into the LNG carrier construction. So having said that, we may consider that we may reach a level of 70 ships a year. Let's see whether all these plans are going to materialize in 2022 with the current very strong demand. We are going to help people who would like to build the new LNG carriers, wherever they are, in Korea, in China, or elsewhere, in order to cope with the very strong demand.
Thank you.
Thank you. As a reminder, if you do wish to ask a question, please press star one on your telephone. We have a question on the web, and the questions are: When you say that 2023 earnings would significantly increase, would you say that they are likely to increase the present record of 2020 in terms of top line? The second question is: The EUR 400 million order intake has been at record level in Q1. Which level should we assume in the next quarters? And question three: Any update on the potential capacity at yards?
So, potential capacity at yard, I think I just answered to this question. So, we are going to look at question number one. I will ask Virginie to answer to it.
In 2023, would it reach 2020 level? I mean, I think if you compute the number of orders and make the classic delays between construction periods, I think you can compute and make your estimates and opinion on it. But what we say is that it's going to be significantly higher than 2022. And on the. To do?
Yeah. Well, definitely, the demand currently is strong. As all of you have felt, the issue of the shipyard capacity is central. So let's see how we can address this very strong demand with our partners in shipyards. We can accommodate that, but it may be a kind of limiting factor to go beyond what we did in the Q1. Another question on.
Yeah? Clarification on my initial question. March 25, from Reuters. Russia's largest liquefied natural gas producer, Novatek, has halted work on all expansion projects other than the first stage at Arctic LNG 2. The Kommersant newspaper reported on Friday, citing unnamed sources, the company planning to launch the first stage of Arctic LNG 2 next year, followed by the second and third stage in 2024 and 2025, respectively. If only one out of the three phases is completed, that would mean only two out of the six GBS LNG tanks would be needed. My question was whether GTT received any notice from Saipem. My understanding is the answer is no.
Thank you for that. First of all, we have a contract for three GBS, not for six. And I can tell you, having visited Murmansk last year, that three GBS are currently in construction in three docks and not six. And I can further confirm that we did not receive any kind of notification from our customer, joint venture between the Saipem company and the Renaissance company.
Thank you, very clear.
Thank you. Once again, if you do wish to ask a question, please press star one on your telephone. Please stand by. We're capturing the details of the participant who wishes to ask a question. Apologies for the delay. You have a further question from the line of Jean-Luc Romain from CIC Market Solutions. Please ask your question.
Yeah. A new question, what about Elogen? Do you see an increase in customer consultations or in potential orders? Do you see increased competitions? Who are your main competitors for Elogen for the size of electrolyzers you are producing so far?
So currently, I mean, most of the electrolyzer companies, whether it's NEL, Plug Power, Siemens, ThyssenKrupp, ITM, or McPhy are competing for the same orders. I think that all of us agree on the fact that hydrogen is going to experience a very strong development, a very strong growth, while for the tank, the demand is not as large as we would like to see it. So we are going to see what are the orders we are signing for. You saw that we had already an order this year. And yes, we are working on different tenders in order to confirm the market penetration of Elogen in the electrolyzer business.
So should I understand that the acceleration is not there yet?
The acceleration is not there yet, neither for us nor for anybody.
Okay. Thank you.
So we have a new question coming from the web from Tom O'Donnell from Alliance Bernstein. Considering current sanctions against Russia, how are GTT able to continue recognizing revenues from Russia? Are revenues being earned from partners that are not in Russia?
In terms of revenue recognition, yes. And just for you to know, we actually invoiced more than what we recognized because we are not at the beginning of construction, but on the average, rather at the beginning of construction than very near to delivery. So that's why we recognize revenue as milestones are passed, we invoice, and we are paid. Today, we are paid from our customers. So as long as projects are not sanctioned and that construction continues, yes, we will recognize revenue.
Okay.
Thank you very much.
Thank you. Have a good evening.
Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.