Eneti Inc. (NYSE:NETI) Q3 2023 Earnings Call Transcript
Eneti Inc. (NYSE:NETI) Q3 2023 Earnings Call Transcript November 14, 2023
Eneti Inc. beats earnings expectations. Reported EPS is $0.48, expectations were $0.31.
Operator: Good morning, and welcome to the Eneti Inc. Third Quarter 2023 Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to James Doyle, Head of Corporate Development and Investor Relations. Please go ahead.
James Doyle: Thank you for joining us today. Welcome to the Eneti Inc. Third Quarter 2023 Earnings Conference Call. On the call with me are Emanuele Lauro, Chief Executive Officer; Robert Bugbee, President; Cameron MacKey, Chief Operating Officer; Hugh Baker, Chief Financial Officer; Michael Ferrante, Chief Accounting Officer; and Sebastian Brooke, Chief Executive Officer of Seajacks. Earlier today, we issued our third quarter earnings press release, which is available on our website, enetiinc.com. The information discussed on this call is based on information as of today, November 14, 2023, and may contain forward-looking statements that involve risk and uncertainty. Actual results and events may differ materially from those set forth in such statements.
For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release issued today as well as Eneti Inc.'s SEC filings, which are available at enetiinc.com and sec.gov. Call participants are advised that the audio of this conference call is being broadcast live on the Internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days. After opening remarks, we'll go to Q&A. Now I'd like to introduce our Chief Executive Officer, Emanuele Lauro.
Emanuele Lauro: Thank you, James. Welcome, everybody, and thank you for joining us today. The third quarter was a productive quarter for the company on many different levels. We have generated more than $53 million of revenue and an adjusted net income of $18.5 million. Since September, we have announced 3 employment contracts which are expected to generate between $250 million and $330 million of revenue. This is figures after project costs. For our new buildings, we have secured 2 major contracts at rates in excess of $350,000 per day. And even more impressively, we've secured $255,000 per day contract for the Scylla, which is starting in 2024 with a perfectly timely start upon conclusion of our current employment. Recently, the increasing attention on the U.S. offshore wind market and its challenges has somewhat overshadowed the strength in Europe and Asia for offshore wind.
We do expect the U.S. to overcome these challenges, but we must highlight that this is a global market and one in which the U.S. represents only a portion of the overall demand. And this is where our Eneti via Seajacks makes a difference with its global presence in markets like Asia and Europe as well as the United States. The day rates on our new contracts are reflecting a tightening of supply and demand for offshore wind on a global level. And in addition, they are rates which generate significant returns on equity. Today, our total contractual backlog, including options for 2024 to 2027, it is just shy of $450 million. On the operational front, we expect to close very shortly, the previously announced $436 million new building financing for our 2 vessels, which are currently under construction in Korea.
In October, so last month, we completed the sale of the first NG 2500 vessel, the Seajacks Kraken, and we've delivered her to our new owner. In conjunction with this, the company has repaid $12.6 million of debt related to all 3, the NG 2,500s. And thus, the subsequent delivery of the 2 additional sister vessels will not have any further debt repayments. On the merger front, as we all know, in June, we've entered into a business combination agreement with Cadeler, the transaction remains on schedule. All antitrust and foreign direct investment regulators have either cleared the transaction or confirmed that they have no intention to do more work on this file. Last week, Cadeler announced the commencement of the share exchange offer for Eneti's outstanding shares.
The merits and rationale of the transaction remain the same as a combined entity. The scale and our respective capabilities will create significant value at a time when offshore wind needs reliable partners and reliable solutions. We are confident that this combined entity will continue to drive positive outcomes for our shareholders as well as our customers. Scorpio Holdings will remain the second largest shareholder after the BW Group in the combined entity. And I myself will be nominated to serve as Vice Chairman of the company. Before turning the call over, I would like to ask you to continue to support us by tendering your shares in the exchange offer in support of the business combination. Thank you very much, and I would like now to open the call for questions, if any.
Thank you.
See also Top 10 Most Religious Catholic Countries With Highest Church Attendance In The World and 20 Countries That Have the Largest Oil Reserves in the World Heading into 2024.
To continue reading the Q&A session, please click here.
