GTT, a manufacturer of cryogenic membranes for natural gas transport, anticipates strong 2024 sales and profitability, expecting to meet the upper end of its targets due to better-than-expected nine-month results. Sales surged by 54.9% to €464.7 million, primarily driven by new construction orders. With a robust order book of 350 units, including LNG carriers, and no significant shipbuilding delays, GTT’s outlook remains optimistic, prompting an upward revision of Ebitda estimates and a 3.1% rise in share price.
(BFM Bourse) – GTT, a leader in cryogenic membrane manufacturing for natural gas transport, anticipates achieving impressive sales and operating income figures for 2024, aiming for the upper limits of its previously set targets.
The year 2024 is shaping up positively for GTT, following an unexpected surge in sales during the first nine months. As of September 2024, GTT reported sales of €464.7 million, reflecting a remarkable 54.9% increase compared to the same period in 2023. This figure surpassed the €458.8 million forecast by Oddo BHF and the €454.9 million predicted by consensus estimates.
The new construction sector, which constitutes 92% of the company’s total sales, soared by 57.4% year on year, totaling €429 million. GTT attributes this growth to the rising number of LNG carriers currently under construction.
‘The growing demand for LNG is indeed driving the need for additional LNG carriers, supported by ongoing investments in liquefaction plants and increasing construction capacities at shipyards,’ stated Jean-Baptiste Choimet, CEO of GTT.
‘Exceptional visibility for the coming years’
‘This growth trajectory aligns with an exceptionally robust order book,’ highlighted Oddo BHF. GTT currently boasts an impressive order book, which excludes LNG fuel, comprising 350 units—325 LNG carriers and 16 ethane tankers. When focusing solely on LNG vessels, there are 61 units on order as of September 30, 2024.
‘Since the commencement of the second half of the year, GTT secured 16 new orders for LNG carriers, compared to 52 in the first half, alongside 8 ethane tankers. In total, the company has recorded 68 new LNG carrier orders this year, slightly lower than the 73 orders in 2023, which marked a peak year,’ reports Oddo BHF.
The company’s order book ensures strong future visibility, as a majority of these orders are projected to be delivered by 2027, contributing an additional €545 million to secured sales for 2026 and nearly €300 million for 2027, according to the research firm.
Stock performance rises
GTT also reported no significant delays in shipbuilding schedules, allowing the company to confidently project reaching the upper end of its originally forecasted sales and gross operating income (Ebitda) for 2024, first shared in February.
At that time, GTT aimed for sales between €600 and €640 million, an Ebitda range of €345 to €385 million, along with a dividend payout for 2024 set to be at least 80% of net income.
In response, Oddo BHF upgraded its 2024 Ebitda estimates to €384.5 million, reflecting a 2% upward revision.
‘We expect consistent news flow, and the current market valuation is based primarily on existing core operations rather than emerging markets like LNG Fuel. Additionally, it’s important to note the currently limited share of the renewal market, which accounts for just 8% of the existing backlog but has the potential to reach 50% in the long run,’ concluded Oddo BHF, raising its target price to €180 while keeping its outperform rating.
On the Paris Bourse, GTT witnessed a 3.1% increase in share price around 3:30 PM, recovering from a slow start earlier in the session.