Hey everyone, welcome to the GTT third quarter 2019 activity update. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Marc Haestier, CFO. Please go ahead.
Thank you. Good evening, everybody. I will give you a brief overview of the key highlights of the first nine months of 2018, following which I will be happy to take your questions. I will skip over the disclaimers, you are obviously well aware of this, and go straight to page four, the key highlights for the nine months of 2018. We recorded revenues in the first nine months of EUR 184 million, which is up 7.1% compared to the same period last year, and we're experiencing, as no doubt you have seen, a very strong flow of orders. The order book now stands at 92 units. We've had basically 35 new orders during the nine months: 32 for LNG carriers, two FSRUs, and one onshore storage facility. Deliveries were 32: 28 LNG carriers, three FSRUs, and one barge. This is for the core business.
For the new business, LNG as a fuel, we have an order book which now stands at 11 units, which includes the nine container ships ordered last year by CMA CGM. And this year, we've had two orders: one for a bunker ship, which will be used actually to refuel these container ships, and one cruise ship, the so-called PONANT icebreaker cruise ship. Service activity: we've had FEED studies for gravity-based systems during the first half of 2018. We've also been able to sign three new licensing agreements in the third quarter, three TALAs as we call them, with Sembcorp Marine, Keppel Offshore & Marine, and Hyundai Mipo Dockyard. We've also received an approval in principle from Bureau Veritas for the development of a new technology called NO96 Flex approval, which was received in 2018.
Now let's have a look at some market indicators, really to update from our previous communications on this subject. Clearly, demand is still strongly driven by Asia. The top five importers, which are shown on the chart there, represent two-thirds of the global imports. They have increased by 13% the imports over the first eight months of the year. We haven't got the numbers for September yet. China, which is the number two importing country, is still very active, with a 48% growth. Other countries, such as India and Korea, have also increased their imports quite significantly. This growth, as you know, is mainly driven by, in China in particular, by coal-to-gas switch in power generation due to the environmental considerations and problems in China. This is also helped by the competitive price of LNG versus coal, which clearly helps.
China also develops LNG transportation by truck and are increasing progressively their importing capacity with seven new regasification terminals under construction. A word about Japan, maybe. You see there's a slight decrease in imports, but only very slight, 1%. Clearly, the nuclear restart is going to affect consumption, but at probably a very slow pace. If I move now to slide number six, we were talking of the competitive price of U.S. LNG. This competitive position has increased since last year. As you can see from the chart, this has been helped, of course, by the increase in the oil price. But you see that the price of U.S. LNG delivered to Asia is now currently at $7.1 per million MMBtu, whereas the Asian price, which is oil indexed, is $10.7 per million MMBtu.
Just a comment on that: even if there are tariffs imposed by the U.S. administration on LNG, you see that even a 10% or 15% tariff will not change this competitive position. Of course, this situation supports clearly the outcome of new projects, new liquefaction projects in the U.S., which actually leads me to a word on liquefaction projects on slide seven. There are currently 19 LNG projects under construction, including 11 in the U.S. This includes the two FIDs which were taken in 2018, one in the U.S. at Cheniere, Corpus Christi, train number three, and one in Canada, LNG Canada. We expect more FIDs in the next two years for volumes up to 100 million tons per annum. You see on the chart the dark blue area are the projects which are likely to reach their FIDs in the coming months.
There are also a number of additional projects which are currently being considered, a large number of which, again, are in the U.S. This, of course, sends a very strong signal and is positive to support the dynamics of the energy market and help satisfy the increase in demand we are obviously seeing in the long term. A word on the shipping market, and you know the indicator we look at for this is basically charter rates for ships. First of all, the spot charter rates, average spot charter rates, have increased quite dramatically, and in fact, we sometimes have trouble following up on our charts. Here we are showing $140,000, $150,000 per day on the spot market.
Recent information today, in fact, even shows higher prices than that, up to $180,000, which are obviously very, very high prices, and also a reflection that there are hardly any vessels available on the spot market. Contemplating that situation, some ship owners have tried to obtain slightly longer charters, three, six months, one year, and you see that that also has impacted on the one-year charter rates, which are now getting close to the $100,000 mark. So again, this is a strong driver to incentivize ship owners to place orders for new ships. I mentioned in my opening comments the recent development in our technology, the new NO96 Flex, which has received recently the approval in principle from BV, which will allow us to pursue development of this new technology.
A new version which benefits from some of the advantages of the historical, I would say, NO96 proven technology, as well as the use of efficient foam panel insulation. The guaranteed boil-off rate for this technology is expected at 0.07% per day in volume. So to conclude, almost to conclude on the first nine months' consolidated revenues on page 10, I mentioned total revenues at EUR 184 million, up 7.1%, and you see how that breaks down in terms of new builds, EUR 173 million, mainly driven by FSRUs and LNG carriers. Revenues from services stand at EUR 10.6 million, up 6.6% compared to the same period of last year due to good results in engineering studies and also the impact of the Ascenz operations. So this, again, allows us on page 11 to confirm our guidance to the market.
In terms of revenues, we are looking at 2018 consolidated revenues in a range of EUR 235 million-EUR 250 million. This, as customary, is, of course, excluding any major delays or cancellations. In terms of EBITDA, we are looking at EBITDA in a range of EUR 145 million-EUR 155 million. In terms of dividends for 2018, we will be proposing to our shareholders meeting a dividend equivalent to the previous years, i.e., €2.66 per share, and for the following for 2019, for the following year, a payout of at least 80% of net profits. So that concludes my short presentation, and of course, I'll be happy to take any questions you may have.
All right. And if you'd like to ask a question over the phone, you can do so at this time by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you'd like to ask a question. We'll pause for just a moment to allow everyone a chance to signal. We'll take our first question from Guillaume Delaby with Société Générale.
Yes. Good afternoon. Thank you for taking my question. In fact, I have two questions. First, your commercial activity has been very dynamic over the first 9 months. We all know that there is a very, very strong outlook for LNG, but just in terms of, I would say, short-term commercial dynamics, let's say for the next six to nine months, is it really reasonable to expect that it is going to continue at this rhythm, or could it pause a little bit? When I say pause, I just say maybe still some orders and quite a few, but maybe not to such rhythm. My second question is a little bit different.
You announced, I think, 10 days ago that you signed an agreement with a Korean company to develop the LNG Brick technology or to commercialize the LNG Brick technology. So it has been done with the French Ministry of Finance. Should we read something on that regarding the current investigation from KFTC? I just would like to have your thoughts on those two points. Thank you.
Thank you, Guillaume. I guess you are expecting the answer I'm going to make on your first question, which is that we do not make a forecast on orders in the short term. But if I go just a little step further from that, I mean, clearly, yes, we've had a very strong momentum of orders, which doesn't seem to be abating for the time being. There is one element which you need to take into consideration. It is true that the new FIDs will take some time to come on stream, but then, of course, you have to factor back the time it takes to build these ships between order and delivery. But also, another factor which we have discussed at our half-year presentation is the market for replacement of older ships, which we see coming up in the near future.
That's what I can say as far as that is concerned. As far as your second question, I guess the fact that people from Korea were in France made it a good occasion to sign commercial agreements, as is customary in those situations, but I wouldn't draw any other conclusions from that.
Okay. Thank you very much.
Next, we'll go to Jean-Luc Romain with CM-CIC Market Solutions.
Thank you. I have a very short technical question on the difference between the service line, the pro forma of the first nine months of 2017, and what was published last year. Where does the difference come from? That's my first very small question. The second one is about the non-core business orders. You had nine last year, two so far this year. How do you see the market dynamics in that area? I understand there are several technologies competing for reservoirs, which can be with membrane or without membrane. Are you getting to think you will be gaining more market share with your Brick technology compared to non-membrane reservoirs?
Okay. Thank you. As far as your first question is concerned, these, of course, yes, are pro forma numbers because if you remember, last year, we didn't produce consolidated numbers. We only produced numbers at the perimeter of GTT SA. So that's what explains the different number. As far as LNG as a fuel is concerned, there are several questions, basically, in your question. I think, generally, this is clearly a promising market. The question is at what speed it's going to actually penetrate. There is a strong incentive, obviously, linked to the implementation of the new IMO regulations, which will come into force on the 1st of January 2020. I guess a number of ship owners are beginning to stress a little bit around that situation. As you know, we look at this market in various segments, in different segments.
First of all, the segments for the very large ships with large tanks, as for example, the CMA CGM container ships. This market clearly is a new market. There haven't been very many orders except for these nine ships for CMA CGM. So it's not so much a question of market share there. I mean, clearly, our membrane solutions are well designed for these types of ships. It's a question of how quickly new orders come in. When it comes to the smaller tanks or the medium-sized tanks, let's say, clearly, we are, in fact, yes, introducing this LNG Brick, which will be competing in a market where, as you know, there are different kinds of technical solutions available. So again, it's a question of how quickly this market will grow. So it's very difficult at this point in time to give specific views on that.
Thank you very much. And once again, everyone, that is star one if you'd like to ask a question. We'll next go to Siwei Ma with Segantii Capital.
Hi. Thanks for taking my question. I have just a few questions. First of all, regarding just the previous question, can you just help us quantify how big is the opportunity for replacement ship? And then my second question is that I think we see a few new players in the LNG transport industry that is ordering new ships, right? So do you think that given that they are new to this industry, do you think that there is actually a risk of over-ordering the sector right now? And then thirdly, can I just understand how much rebate should we expect from the recent order wins that you have announced? So that's all my question. Thank you.
How much can we expect from recent orders? Okay. First of all, your first question today?
Replacement.
Oh, yes, replacement. Sorry. Excuse me. Replacement.
Sorry.
Well, no, no, that's okay. It's me. We did give some information on that in our previous communications. What we can say at this stage is there are about 50-plus aging vessels with charter contracts which will end by 2022. So that's the first kind of indication. Clearly, what we see also is that a number of oil and gas players are now setting stronger standards or more stringent standards in terms of ship performance, both in terms of size and boil-off, etc. So that's pressing basically also ship owners to provide them with adequate ships. So that's the situation on the replacement market. I'm not sure I actually caught your question on new players. You were mentioning new ship owners?
Yeah. I think there's a few new ship owners that never do this LNG transport before, right, but they are coming into the market, and they seem to be ordering without a contract yet, right? So do you think that this is a sign of speculation in the market where there may be a risk of over-ordering?
Okay. Okay. Yes, indeed, there are new players coming in, which obviously is a sign of the sentiment the market generally has for LNG. And I think in the number of orders we received, there indeed are some, I would say, so-called speculative orders, i.e., which are not immediately flagged, if you like, to a specific facility, exporting facility. But this is also a sign that the market is understanding that new ships will be required irrespective. So we see that also as a strong signal. And perhaps, if you will excuse me, could you just repeat your third question? Oh, yes. It was about new orders and how those would okay. Yeah. Well, normally at Q1 and Q3, we do not give indications of how the order book is phased over time in terms of revenue.
We gave a picture again at the end of June, and we will be providing a new picture at year-end. But clearly, what I can say, perhaps to guide you a little bit on that, is that clearly the orders we have received this year will impact revenues in 2019, 2020, and to some extent in 2021. So clearly, this puts us, I guess, in a good position going forward. If you look at what we showed at the end of June, we were already showing for the core business revenues of EUR 200 million for 2019 already in the order book. So clearly, there is more to come, and similarly in 2020.
I see. I see. But just to follow up, because from my understanding, there's a different rebate being given in terms of the series of the ship, right? So from the ships that you get, the new order you get recently, is those the new series, or is that the older series, or how should we think about that?
Okay. Well, actually, it's a mix because shipowners may order a number of ships in a series. Perhaps I can give you also a kind of indication of the pattern between first ships in a series and series ships in terms of kind of average price because that avoids you from trying to segregate. I guess we are looking on average at a price of royalties in the amount of EUR 7.5 million-EUR 8 million.
I see. Okay. Thank you. Thank you very much.
Once again, star one if you'd like to ask a question. We'll next go to Kevin Roger with Kepler Cheuvreux.
Yes. Good evening. Thanks for taking the question. Two on my side, please. The first one is if you could precise on the number of vessels that you have secured year to date, how many are not directly linked to a project that have already been sanctioned? And the second question is regarding the potential impact of a trade war between China and US. So you say that basically a 10% tariff will not make strong impact, but a 25% potentially could have. I was wondering if you could give us a color on your commercial discussion with clients, ship owners, if you have seen a kind of slowdown since that you have the risk of a trade war on the LNG, please.
Okay. On your first question, I probably will not give you a precise indication on that. I mean, the strong majority of ships are not speculative orders. And again, when I use the term speculative, it means that they are not yet contracted, but they could well be affected to projects under construction in any case. In terms of trade war, it's difficult to look into a crystal ball here, but the momentum on the market is such that at least at this stage, I don't see any or we don't see any particular concern, and we certainly don't feel anything in our discussion with ship owners, etc.
Okay. Thanks.
Next, we'll go to Guillaume Delaby, Société Générale for a follow-up.
Yes. Thank you. I have another question which basically came to my mind. The replacement market, so the 50+, to what extent are there or aren't they included in your turnover guidance?
They are not included, Guillaume.
Okay. Okay. Thank you very much.
I should mention that we will obviously be revising that guidance. It's not a guidance, actually. It's an indication, as I like to.
Yeah. Absolutely.
But we will be reviewing that indication at year-end. We provide it once a year. So clearly, we will see whether we include some replacements in that number.
Okay. Thank you very much.
Okay. And as a final reminder, that's star one. If you'd like to ask a question at this time, we'll pause for just another moment. Looks like we have another follow-up from Siwei Ma with Segantii Capital.
Hi. Just a follow-up question. Because if I look at the liquefaction facility under construction, right, there seems to be a fall-off in terms of liquefaction startup from, say, 2021, 2022 onwards. There seems to be not much activity. So is there a risk to your order book or revenue, say, in 2020 time because it takes a few years to construct a ship, right? And there doesn't seem to be much liquefaction facilities coming on stream in 2023 or 2022.
Okay. Yes. Well, one thing is clearly when liquefaction trains come on stream, they do not start at full production. So there will be a ramp-up over time. So those projects which come into 2022, let's say, will ramp up in the following years. Again, I mean, if you work backwards, when the new capacities will come on stream and work backwards to three years, plus take into consideration the replacement market, then you can take a view on that. Again, we will not give firm indications on the short-term orders.
I see. Okay. One last question. In terms of your contribution, say the new contract, the new agreement with Keppel, Sembcorp, and Hyundai Mipo, where should we see some more commercial activity or new orders from them?
I wouldn't want to be flippant and then take it as such. It's more a question to ask them. But clearly, if they have agreed to enter into licensing agreements, it is clear that they would want to develop business and to order ships. They may be looking at more specific ships, maybe smaller-sized ships for some of them. So in fact, it will provide us with some kind of diversification. However, from that point to pinpoint that we will get orders in one month or in six months from one of these shipyards, yes, is again not something we can say.
Okay. Great. Thank you very much. Very helpful.
Thank you. If there are no further questions, all that remains for me is to thank you very much for your attention. I wish you a very good weekend.
Thank you very much, sir. Again, that does conclude today's conference. We thank everyone for their participation.