NETI - Earnings call transcript Q2 2021

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Operator

Hello, and welcome to the Eneti, Inc.

Second Quarter 2021 Conference Call. I would now like to turn the call over to Hugh Baker, Chief Financial Officer. Please go ahead, sir.

Hugh Baker

Thank you, Operator.

joined the today Blair time David me of Bugbee, Chief is CEO Lauro, Chief our Tim Managing with Executive and Operating Operating call also who Sebastian and James the Sanger, of Robert Director; Officer; President; Director; first Officer the Financial Analyst; Seajacks; are are Brooke, Chairman for Emanuele and the we Chief by Officer; Ainslie, Doyle, On Senior Managing Morant, Cameron Mackey, who Seajacks. is Earlier today quarter press we issued our earnings our release, second on available Web which is site, www.eneti-inc.com. this is risk today, involve may on discussed information as XXXX, forward-looking information contain on and of uncertainty. The the and XXth, call based that the statements August statements. Actual results differ in from may materially those set such forth

are risks review and Web as today SEC as of you recorded being being broadcast the be filings, uncertainties, two available our in disclosure which www.sec.gov. Call discussion the well webcast is the conference An our statement of as press a also on is site. the weeks advised release site this of we should earnings participants for archive and Web are will Eneti's at Scorpio, as Internet playback live For call purposes. these for available audio that forward-looking the on that well issued and on

can and If offline. you have any specific you can discuss them we financial me later modeling contact questions,

I'd Lauro. like Now, to Emanuele introduce

Emanuele Lauro

being and for everybody, Thank afternoon with today. you, Hugh. morning Good thanks us or

And quarters execution to plan. exit One Our and plan our ago, bulk out final that of business. we rationale quarter steps divestment from second release year of the dry reflects cargo. largely press our several illustrates our the last the laid

today find is However, our exciting what most future. we

value. and our to be as now We compelling Seajacks history, first of position and shareholder closed, not and the these In could industry. and has of in in acquisition full fundamentals turbine of more more installation turbine Seajacks United drive leadership turning Seajacks our pleased but announced Taiwan, recently to platform the the the its of a in wind Japan, installation; respect, are the tenacity first brief Our offshore business respected in focus deliver represents we're we importantly and by of has clearly to that our customers. commitment the first standards first highest a all established service in that's "Firsts" really the U.K., States, with

the to features ago. that and So, install being we world I to large able Please transaction, And Hugh Blair previously work on days and could mentioned best the only this mentioned join has table said, bring will that and fleet integrated today. anywhere starts call questions. our more announced I'm than It's us ever will the before. really Eneti's success. high mind in to that quicker, the our answer Seajacks announcing newbuilding to just us this make both Seajacks closed a acquisition that be in will to a fleet August specification Seajacks's the together, on be on leverage as call year. up today. X, our the enhanced Eneti and to further introduction versatile the And bear Sebastian do full this in efficiently for turbines few modern delighted as by his

to would asking like now So, I Robert. keep But that, when turn that in mind with call to questions. the

Robert Bugbee

Thank much, Emanuele. you very

out to we'd all to Thank and all just just With near have for to really with echo merger it open Thank great respect. future. questions. Blair Just and their this in joining, to you. forward really managed meeting you Seajacks. looking in Sebastian not groups, words like the Emanuele's to We're to that, like do

Operator

from BTIG. [Operator Lewis Greg is of line Instructions] the with question Your first

Gregory Lewis

trying everybody. build this on to I you for asked and thank good out hi, I model next believe any think year, the our good morning call, color, kind about start any I and think, just of to for we this guys last you afternoon, Yes, utilization maybe vessels kind guess assumptions as these in to or about, just color we 'XX? revenues on want and how thinking of however should we for about, the less coverage some talk want smaller however be have contract in to -- that year later of

Emanuele Lauro

prospects it smaller Sebastian, with think overview vessels, to those So, what start what I worthwhile they of and us would their an be are. giving do, perhaps

Sebastian Brooke

Sure.

primarily So, engaged obviously horizons sector, their the short. but in typically maintenance are in contracting the activities, smaller are vessels European quite

the end year. of So, each at the cycle budget starts

granular be But difficult in as next we'd utilization would be year And to continue forward. expect the going substations installed rates, increase day place accordingly. will turbines historical of So, to utilizations it's we about expect increases, and what year. and capacity contracts to following in very on based those

Gregory Lewis

Okay.

when bit these as year, more for fair daylight a it's And expect to that that about it? maintenance of of industry, comfortable maybe start utilization be kind so, a And think weaker. the of in I bulk periods the little utilization to when more and becomes more when the kind there's way is hours. the at and lot more is it be track of of going gas weather of vessels, -- a of think about harsher, as then, Is where time utilization kind oil to and longer the a that's we of working similar that to environment,

Sebastian Brooke

on fair and that side. also way fact I caveat there it. substation with number at the term that look a of But the to maintenance out are I'd a longer contracts there commissioning that's also think for

there longer to two has in seasonal open generally but been been term go market, So, years, recent to yes, and you available years. it back historically contracts has if

Gregory Lewis

you and Seajacks Seajacks to Eneti, now a through we for Eneti, is, how to of question a at as then public i.e. types, should it's may And going -- as really lot just ability see be should merge. part great. be Okay, I this think you the what think more that interesting mean must as how a I about we guess about mean about platform company to two Seajacks welcome I companies bigger, you're I think Eneti, opportunities there? I thinking this, the team to But mean growth private a expanding standalone be about existing that you're previously leverage company that be Seajacks' be weren't maybe inside the and

Sebastian Brooke

the being as a where market operating from Yes, as very Eneti in I and growth of Europe, a at well you of multi in opportunities be single leverage platform industry industry, able Asia-Pacific, gone see plans or that a market opportunities a kind the think that kind I expansion think, moment combination. powerful the America, with has see being Europe, is to you to have, whole plans as off in our number of in a

Gregory Lewis

existing then, -- And maybe Seajacks terms an work has we about? market Seajacks, the there in with had do any ability the Dominion, exclusivity prior realizing merger understanding to with forward is there thinking menu go there to or sort to in you've around company's of discussed of with has the exclusivity Okay. still Is some the with done is that need Dominion need things to U.S. beyond be relationship done be Eneti. things Dominion, the

Emanuele Lauro

story. the to like take U.S. that Cameron, you'd if

Cameron Mackey

Sure.

Emanuele Lauro

ahead, Go Cameron.

Cameron Mackey

can the obviously, it's benefit Dominion. may together I going where expectations that are it's necessarily lie the of are early is. certainly how is the with give and to we fulfill forward. our a on very important and are that in stepping their very our that to them just first we're obviously, don't what understand, draw going relationship doubt potential priority aspirations tied line every so where to their down to work sit destiny a plans states into. And to Dominion exactly and Yes, to see we is think and understand But

Gregory Lewis

Okay. Perfect, all you great, time for the gentlemen. thank

Operator

Your the of Platou. Turner next question is from Holm Clarksons with line

Turner Holm

taking for contract good Zaratan model out I some shaping going the Greg's 'XX 'XX follow-up how regards looks the afternoon, understanding morning. as wanted getting outlook we this of for, vessels, up exposure? building about business. think I guess about Seajacks where just to larger Scylla, have Good guess assumptions still you With is And forward. and questions like, on the open Hey, to it I better and the the questions. and gentlemen. a just the Thanks

Emanuele Lauro

going Yes, so 'XX, have lot conversations we of over a and work about that to on 'XX, with regards period.

All of different strategies. our clients have contracting

not they're of out, trying impossible to work difficult, It's contracts, when time. that signed challenging best. when at to just awarded. But going conversations rest going if lot work and gauge, again, that those we to award about a So is there are at on contracts assured,

Turner Holm

for can perspective, a and the available guess that. I is some us up walk over think in data of a the the rate go And kind the seen evolution it guess, assets near-term picking in Sure. the we've I you in I and hundreds mean, high of where so for the year per couple day euros last of future? or day publicly kind larger might rates kind points of follow-up through of picture you

Emanuele Lauro

too could the on that, give I wish can't varies honest, much markets. but it detail I between I because be

is to Europe. supply demand the So demand very picture in different Asia-Pacific the in supply

a wide say looks of all a outcomes. know up. is is vessels picture that, there a range would I what of for like. the wide, picking big that So, kind quite macro generally but We demand

prospects for newbuild seller, And are that like a it's the market. good. the so, And strengthening we think capable and units

Robert Bugbee

like you take David, that? David? to

David Morant

very that's answer. comprehensive think Yes, I

only tonnage of we'd market that, Turner think the vessels. the track on that just in the add And to to thing the I'd that projections base we're around our water expectations very very I we've is closely. newer the to on outlined, expect confident level

confident of in term perform as we think ability in line or we very tightening the and both are terms markets, I and certainly So above what the And those rates. expectations. market direction Seajacks to referenced we and of Sebastian's in can see to the presented travel,

Turner Holm

Excellent.

same [Catalier] Scylla, vessels, you then Olsen, one that of about Scylla, think they're capable or And or Okay, fitted David. units upgrade the market the Undoubtedly, time, just thinking the today. the of guess [Ph] is you I assets the already think most seen consider even some thanks, the your for future? that in which Fred it's has at competitors even we've fully with smaller with their class obviously something

Robert Bugbee

tweaks, our some them. to configuration kind the or we're upgrades the for make that always capacity possibilities do and We're megawatt happy technical on at class capabilities. of of or forward. requirements each looking different XX the turbines on of at tweaks contracts, sites depends and the of but going There looking modify bulk as of It moment, if to upgrading operating Scylla, technical is to with booms all vessels the required, and

Turner Holm

sort can I one completed dry bulk completed then transaction the financing. guess it's Seajacks about you company's And would especially sure. the as as far you are couple of have covering me, of next CapEx just as that all the years, for how you newbuild? is characterize last sales kind the I the Sure, tell, one think financing of the with schedule on the more just structure, in and with

Robert Bugbee

first the merger, we or actual discuss first here if add, shareholders, there's can and that's no whereby pressure to fine, merger. will the a this for we've And else step done bank, I at us we between equity got raise can like structure the to IMG the think refinance. anyone to the is existing point to I do

the or whether of flag see U.S. some going We the that. markets, clearly, really time being in has have take company advantage returns that's do international markets. as to forward, in ambitions exceptional But the pretty we what to

Scorpio so, we quite the and advantage shareholders also of that actual opportunity we Seajacks company with done with We're et take got first the more a structure and cash good and cetera we have expect strong And going the an terms great seek equity to Seajacks And and most operation have think and I financing really at now capital openly to listing, put capital. the the industry that many as wanting importantly to that to shareholders said, in U.S. with be would too, is position this, by the of And into over is capability. we markets. debt growth, of a in we've take a total side, quo. and leader of returns we We're stay on markets the to the increasing permanent growth in time, we to have would just have equity Emanuele good flows mean status have leader. hasn't being

Turner Holm

Perfect.

I'll Robert. you, Thank Okay. back. turn it

Operator

is line Randall Your with next from Giveans question Jefferies. the Randy of

Christopher Robertson

our Hi, this Robertson for Randy, Chris for is on thanks call. taking

Emanuele Lauro

Thank you, Chris.

Christopher Robertson

additional thinking guys about the I WTIV? to ask for just does the you acquisition, exercising are option wanted this the following the Seajacks's change way

Robert Bugbee

just forward the cover quite market quickly to without our increased ability, the we anyone said in. on I'll without certainly with is developing, going and contracts were options, Well, our we I the very certainly, ways because first, Seajacks. can else it the on chime mean, think contracts then presence and win hard we Flagship working of certainly

more in our as to able hasn't being we're to not Blair, being that not also add, what us ahead. Cameron, front customer profile take confident that that's go put look to through and people, world. so, its but product opportunities they there changed Seajacks now can only has the Sebastian, their have forward like other and is and And Yes, well the new a in operating customers itself the David, zero you'd they to Seajacks only questions the and capability. Eneti have we of please answer customers, make pretty could if than their view

Blair Ainslie

here. could haven't last little, general say and about seen the been from class for for forward a now a But for and I takeover Korea just and add shareholders. Seajacks, or just exciting and has for for of a with us with where looking Eneti. through grown four are the straight on It's the years little Robert. last a very reinvigorated, five merger exciting it's the future a two bit we Hey, that with our we've companies. Eneti current indeed, Maybe very the period update Blair vessel and actual of comment actually here the our company is we onshore times first all guys new have to bright times away offshore exciting of out stuff and coming board growth our

Christopher Robertson

describe the that. the just you then some you for differences in talked I of differentials trying I but could know understand thanks X,XXX generally earnings in between classes, asset of up, the terms here terms regional potential, earnings that to scale? X larger guess the had maybe about Yes, following Okay. and just the of guys vessels maybe

Emanuele Lauro

Sebastian?

Sebastian Brooke

Yes.

you again? I not run Can through sure I'm Sorry, totally question. the understood that

Christopher Robertson

Yes.

of X,XXX earlier So, understand between of between market Kraken, mentioned regional I'm earnings vessels, and markets, you differences Hydra versus and vessels? the the some guys the potential the the trying the Leviathan, differences European smaller but the had X some to larger Asian vessels,

Sebastian Brooke

Yes. It's really scope. work just that

of Asia, into to tonnage between disparities easy it's because that markets, get Europe tonnage to the and So, Asia. the you not in the have move out

and a kind for between the unrelated what those which markets. kind dynamics, region. market to So, depending in regards rate commissioning in the With totally tight demand the the at demand primarily of and of kind similar far-end differ installation way whereas substations accommodation on in it's North Scylla, the totally in and markets Zaratan, and of who then very X,XXX, has you and is of supply supply of own are markets unique again is to Japan, characteristics in vessels a X,XXXs in turbine the a its the Sea, the in work, maintenance and that, -- utilization market has the market that geo-tech and which and operating you, some have and have of almost

increase across they drivers the regions. industry for and the have uptick capacity but all the kind all in installed and benefit So, of different from the utilization, they of their in rate continuing all

Christopher Robertson

that. back on I'll color additional over. the for thanks Yes, Okay. turn it

Operator

is with question Stifel. of next from Nolan Your line the Ben

Frank Galanti

operated, plug smaller Hi, is vessel you wanted give And and guess the for but Yes. for kind so, those, over the Galanti Ben. this of on different dynamics there about some growing if guess, I supply/demand segments through of ask market around walking those those abatement can to of I is Frank vessels, thanks the smaller the for expectations I next on kind years? vessels? then, for couple the color is

Robert Bugbee

I'll try answer that. to

to months for demand the NGXXXXs, exact over and years, last, actually supply for two I vessels, from the analogous decreased XX those supply think, six the On units the the four. has

So, the market who operator. Sea by taken the to East two out have Middle been GMS, East is of Middle North a of Southern them based

gone So, supply down. has

everyone of a to but and Sea the around But and pent lots of the on crews abandonment is couple I side, up. that North demand demand on think and ability for get years, strange the impacted both has of the the renewable side plug been demand it's that on and obviously, side. the

And foreseeable so, future. demand we and would for next stabilize world, a the see expect that would things we to as normalize the see around in the over pick-up

Sea, lot Sea plug time. hope the the generally abandoned and able with installations abandonmentis in be the and in transition. I to participated the for a abandonment And as be we that rule to and There's trend to and to upwards continue would plug old a that the North that think of in increasing Southern do as fairly accepted is general to part in North in plug need way, demand energy work, have in the very be of major we so a future.

Frank Galanti

great. really Okay, helpful. That's

appreciate that's the time. I had. think I I Thank you. all

Operator

Okay.

of Burke question the final Your is Liam B. Riley. from line with

Liam Burke

Thank you. morning. Good

mentioned geography you are the deployed. once they're pretty to much committed each As earlier, assets

As where return get think you add world these you new opportunity best assets, to the highest do long-term investments? the is from the in

Robert Bugbee

come difficult also slightly of of not up execution, it's demand dynamic just also is or of a answer but a capacity year because supply is acceleration the the again years function to long-term -- the and kind where it's two that, opportunities It's ahead that required.

market, acceleration a in has way the of tonnage been the to requirements those delayed the acceleration the than trying you if might if in for are actually trying commercially only whatever installation taking these say, has or future. capacity a foundation's -- positive Asia-Pacific, a situation region the foundation's book vessel been reasons, out delayed, has taking book in delayed, been maybe tight contracts project more So, be application or to that that kind in

clear clear is and there you isn't I but I that opportunities its in are mean, contract lot be work answer there term nuances, to So, kind Europe. answer, honest, find a on there. there, that'd a high-end but I of I there give limited is there vessels, be has that over could that Asia-Pacific longer own easy. think of might wish you and a of going equally supply not

clear sadly it's apologize not a So, but for answer, I that.

Liam Burke

of newbuild slated? terms that's newbuild the very thinking no, I of and slated context fair. the that's then road, down No, potentially second in just was the the that's

Robert Bugbee

we our bid fit. find open, I we keep markets will and think all the options right into until

Liam Burke

you Thank Great. very much.

Robert Bugbee

Liam, first I when same think subject this him question. talk that to I the about I Blair, asked him and exactly

me I tell think and to answer Blair, was you you'd if it gave really me short the like sweet.

Blair Ainslie

need all with basics with And at your doesn't that think cover the I We match in opportunity It of vessels. matter up your you thought. to where world comes availability that every it look the out. is. that you simple if time done then do; some conditions continue And enough to all are right that. in the you we'll to order your and to point you're that new always market at what that's have fortunate have contracted, tells vessels, vessels that

Robert Bugbee

and think got advantage. proven because afraid of times the be experience wide I -- feel into many And first markets have we way in many this have commercial we the have a We very markets. those simple that's not to been different seeing received

wide really too. net on the able be commercial us basis, spread the a allows pretty everything that the at end and is So, judge to of day, to

Liam Burke

you, Robert. Blair. you, Thank Thank Great.

Operator

Okay.

question is the a follow-up final from Holm. line of Your Turner

Turner Holm

how [Multiple the sort can I just to Yes. the name, how assets, that thanks hesitate to mean, Dominion you're but is a for try follow-ups. small back special I'd pronounce of to give that guys, you in for et relationship What's might had me in. couple I on foothold explain one work, maybe Hi, a [indiscernible], of market? speakers] is the sneaking cetera, you going U.S. and this doing that working Dominion? just

Robert Bugbee

call, provide to you was been they of time. a install were to keen there. that's as relationship up back Jones it's -- know, and period such, what them, in themselves. this I it vessel we to them takes XXXX, the jobs to is time their the they X.X-gigawatt ready which December yard obviously as quite managing so have -- a U.S. specification, like. vessel build coming bring How a Act-compliant. mean, thing field organization, We farm first we assist to So to residents create team large design need there U.S. we're operate Dominion and We knowledge for ensure been Well, their over a the also They're unforced brought supervision we've operating needs on but for and market that what citizens [indiscernible] a and it? the have we in people construction to that work to an vessel as and wind of the will expertise, to deliver look the At build on budget. of them Texas, they

arrangement, the got quite So, it's a operating advise it's kind a type will of involved. And them but on consultancy work of we vessel post-delivery, as significant scope well.

Turner Holm

further mean, you I on to decide pursue in head U.S. it else? start that you growth think give do will that you do a if the everyone Sure.

Robert Bugbee

I'd like so. think to

Turner Holm

sure. And Sure, then…

Robert Bugbee

on working the working personally, U.S. been I've been XXXX. on the stuff -- since I've

overnight. start. some that kind in happen that doesn't me And give years of doesn't seven of it work personally head I've hate to the put I'd think So,

David Morant

I hope so. hope so… I

Emanuele Lauro

then -- please. jump going go if ahead And David, on asset, the no, to you're Japanese in, --

David Morant

and was I this growth relates option that going to just around the to opportunities. add, it really the question call don't on the earlier all Turner, Sorry, asked Chris

being is in the business. there's right significant in very whether with to us, I firmly thing the that's quickly in but see like the opportunity have opportunities at attract of primary I to take into the very we important institutional in expertise the the position you're option really the believe capital providing I place capital think at additional both take the Sebastian a right advantage very newbuild time right it's business moment growth a this we equity, whether think And mentioned, have exercising incumbent with think also the the very Jones as of that within we at the referencing have really trajectory group And that And have. think of [indiscernible]. think valuable we'd at And SME, some in And think the the there terms strong Blair what away, ability we we but we that whether and to the competitions are had terms that that's expertise options, excited with with growth platform for of industry. the that U.S. our Act, evolution also quickly, and the that in it's which this along to as really option a debt think, we're the shareholders. we that yards very the and industry basis, are, which puts U.S., a that's healthy newbuilds, very now organization. growth about, and very, is opportunity, capital profile this the broader I build the here I newbuild Chris you a business

Turner Holm

future? that tell guess works? Scylla, basically Japanese good to said. kind hesitate it than you on Japanese mean, how the has flag. not you but asset a expect would I question bit -- smaller the David, the I on one this us foreseeable of I but almost remain do it's Japan in Can for the asset, this end It's on just had Well to those Zaratan. the had I words, I

Robert Bugbee

than at that the latest Japanese we market Zaratan generation of the smaller take basically. its I'll is Yes, assets, on supply look based demand and one. So, but

any Japanese that farm-related limited to vessels assist market closed can of very work. of operate a you There's because wind offshore a there it's you So, able flags. only almost supply with have if type

that location turbine the geotechnical to wind at includes go have a that call in; farm every site. to on take So, of wind every each you works that has

to just installed there's is that so in would demand much quite one of each Zaratan. of a preparatory number the that of And there. limited you that such these suit kind -- farms grow vessel. operation wind So, of And also there's anticipated isn't lot over work need by vessels

may have they install work can may whatever that is. ancillary commissioning You with it help vessels TPs work or or

it the very a look Japanese, if we set installation in largest is at that Zaratan really market, foundations, and different that not has with the a closed or which in number closed work being of is market, of the very it a capable largest So, a can in asset makes perform, which turbines Japan streams has if even sense.

Turner Holm

to Jones So, it's comparable situation? the Act

Robert Bugbee

like it's a very… Yes,

Turner Holm

For future, yes. the foreseeable

Robert Bugbee

Yes, closed market. it's a

not to are Japanese under down have We cruise, work EPCI so will which Japanese -- couple of larger create amount some of Zaratan of And satisfy newbuildings flag. the by able contractors, construction while to big pipeline, Japanese coming in there opinion the a it's enough opportunities the be to, our that's to Zaratan.

Turner Holm

gentlemen. you, Thank

Robert Bugbee

you. Thank Unfortunately, we have David's recorded. words

questions? Thank [Ph]. So, much. Are you other any be [timing] there so lost there won't ever

Operator

no showing this questions further time. at am I

Robert Bugbee

some we it up you Great. Emanuel, remarks like should there? closing wrap would or

Emanuele Lauro

in think today. with And wrap thanking touch we up, and time develop. I be as we looking things it can No, lot being in touch. their forward a for to for us Thanks being everybody will

Operator

conference today's you Thank participation. gentlemen, your call. Okay. concludes Ladies this for and

You now disconnect. may

Robert Bugbee

you. Thank

Eneti (NETI) 17 Aug 212021 Q2 Earnings call transcript