Wind turbine installation vessel (WTIV) owner Eneti fell to a loss in the first three months of the year but nonetheless did better than Wall Street analysts expected.
The New York-listed Scorpio Group-backed company reported a net loss of $17.6m, or $0.48 per diluted share, on revenue of $13.8m.
The result reversed a gain of $4.2m, or $0.11 per diluted share, in the first three months of 2022 on revenue of $22.4m.
However, the year-ago figures included a gain of about $18.5m and $200,000 in dividend income, or $0.11 per share, on Eneti’s investment stake in sister company Scorpio Tankers. Eneti has since cashed out that position.
Chief executive Emanuele Lauro told equity analysts on a conference call on Thursday that the results had been dampened by a decision to perform seasonal vessel maintenance during the quarter after a busy 2022.
The fleet is now well prepared to carry out contract work for the rest of 2023, he said.
Lauro also made some news in revealing that Eneti has begun to market for sale three NG2500 vessels that are the smallest in its fleet and were declared “non-core” about a year ago, yet have attracted some of the strongest recent interest in the marketplace.
The NG2500 units are commonly used for maintenance work in the wind sector and offshore oil services and are benefiting from a shortage of such vessels in the North Sea.
“They’re non-core because we want to keep the renewables side for Eneti and Seajacks,” Lauro said, referring to the UK-based subsidiary acquired in August 2021.
“A straight sale is what we would pursue.”
The results nonetheless were better than what was expected by equity analysts, who on average forecasta loss of $0.86 per share on revenue of $13.8m — $2.03m less than actually recorded.
Stifel analyst Ben Nolan has described 2023 as something of a “gap year” for Eneti as it secures contract work for its existing fleet of WTIVs while awaiting delivery of two larger newbuildings under construction at South Korea’s Daewoo Shipbuilding and Marine Engineering.
They are scheduled for delivery in late 2024 and early 2025.
The earnings statement contained no updates around employment for the second of those units, although managers said contract work is being negotiated.
“There is very high interest in both vessels,” chief operating officer Sebastian Brooke told analysts. “We’re talking about contracts through the end of the decade. We’re talking about potentially multi-year maintenance contracts. We’re not waiting to be the last taxi cab. Interest is very high.”
Eneti also reported a previously announced tie-up with US drilling giant Transocean to jointly install WTIVs.
“The company has been making progress on new opportunities such as with Transocean and there have been a number of strong contracts awarded in the market which should drive up the future earnings potential of Eneti,” Nolan told clients in a note on Thursday.
“Consequently, we expect management is likely to be optimistic on the earnings call, which should be helpful to share price.”
Eneti closed at $9.21 on Wednesday on the New York Stock Exchange, down more than 4% on the day. It has a 52-week price range between $4.81 and $11.20.
Shares started slowly, however, falling 4% to $8.83 in morning trading.
