Q3 2023 Bristow Group Inc Earnings Call
<unk> of Investor relations and financial or closing right.
Thank you dad.
Everyone and welcome to Bristow groups third quarter of 2023 earnings call I am joined on the call today, with our President and Chief Executive Officer, Chris Bradshaw, and senior Vice President and Chief Financial Officer, Jennifer Whalen before we begin I'd like to take this opportunity to remind everyone that during the course of this call management may make forward looking.
Once that are subject to risks and uncertainties that are described in more detail on slide three of our investor presentation.
You may access our investor presentation on our website, we will also reference certain non-GAAP financial measures such as EBITDA and free cash flow a reconciliation of such measures to GAAP are included in the earnings release, and our Investor presentation.
I will now turn the call over to our President and CEO Chris.
Thank you Ed and welcome to the call everyone.
As always I will begin our prepared remarks with a note on safety, which is Bristow is number one core value and our highest operational priority.
The company has achieved our target of zero air accidents through the first 10 months of 2023.
With respect to workplace safety.
We're pleased that our total recordable incident rate as decline and.
And we have experienced fewer incidents, resulting in loss over time.
While this represents excellent safety performance year to date.
We of course understand that our safety record must be earned a new each and every day.
I want to thank and commend all our team members around the world for their continued dedication to Bristow is target zero safety culture.
Turning to operational and financial highlights.
We're very pleased to announce a significant earnings beat this quarter.
And guidance raise for full year 2023.
Consistent with our outlook that the second half of 2023 would mark the positive inflection point for <unk> financial results.
Q3, adjusted EBITDA of 57 million.
Looting asset dispositions and foreign exchange losses.
<unk> represents a 45% sequential quarter improvement.
And supports our expectations for stronger financial results in 2024 and beyond.
We will have more to share on our future outlook later in this call.
For now I will hand, it over to our CFO for a review of the quarter's financial results Jennifer.
Thank you Chris.
Today, I will begin with an analysis of the sequential quarter comparison address the financial results.
EBITDA adjusted to exclude special items asset disposition and foreign exchange was $56 6 million for the third quarter of 2023 compared to $39 million in the second quarter or an increase of approximately $17 6 million.
Operating revenues increased $18 7 million, primarily due to higher utilization in offshore energy and higher lease payments received from carrier.
Operating expenses are consistent with the prior quarter higher personnel and fuel costs were offset by lower insurance costs repairs and maintenance and other operating expenses.
General and administrative expenses were $1 6 million higher primarily due to higher professional service fees.
Earnings from unconsolidated affiliates are $2 4 million higher.
Earnings at Kroger.
As noted in previous earnings calls.
Other income line item is primarily comprised of noncash foreign currency gains and losses, which we have excluded from our adjusted EBITDA calculation.
As a result of the third quarter's earnings we have raised our 2023 adjusted EBITDA guidance to 170, <unk> $65 million to $175 million.
As we move into Q4 of 2023, we anticipate the fourth quarter adjusted EBITDA to be somewhat lower than the third quarter, primarily due to seasonality.
Particularly from Cougar in Canada, and our airline in Australia.
This typical seasonality pattern will be somewhat offset by increased activity level.
Therefore, we reaffirm our 2024 financial outlook that we announced in June of this year the.
The midpoint for adjusted EBITDA for 2024 is 20% higher than midpoint 2023. This is primarily being driven by growth in our offshore energy line of service.
In 2023, and we started new projects in Brazil, Norway, and the Gulf of Mexico with the full year EBITDA impact of that is reflected in 2024.
In addition, we have been successful in achieving more favorable rate compared to our expiring contracts and we expect to benefit from higher five hours from short term exploration campaign.
Further details are available on slide 10 of the presentation.
Finally, Bristow continues to benefit from a strong balance sheet and liquidity position as of September 30, our available liquidity with $274 million.
As we have noted in our earnings presentation, we have a capital investment of approximately $300 million related to successful award of a contract with the UK and Irish Coast Guard.
Much of this capital investment is expected to happen in 2024, as we will be adding 11, new helicopters to our fleet.
Our search and rescue contracts are long term in nature, typically 10 years with attractive return.
And once we're through with the investment period, we have a long term cash yield as noted on slide 16 of our presentation.
We plan to fund this investment with cash on hand, operating cash flows new debt financing at a similar structure to what we currently have with not last <unk>.
Our aircraft leasing.
The nature of these long term cash generative contracts, we have access to competitive financing and sufficient flexibility in how we structure it.
As we've stated before we believe this business model will continue to generate strong cash flows.
At this time I will turn the call back to Chris for further remarks.
Chris.
Thank you.
As Jennifer noted the mid point of Bristow is 2024, adjusted EBITDA guidance range of $190 million to $220 million.
<unk> represents a growth rate of 20% over the upwardly revised 2023 midpoint.
This demonstrates our very optimistic outlook for the future versus business.
Before expanding upon our positive forecast I would like to note that there are some headwinds, including the adverse impact of a strong U S dollar versus financial results.
In addition, we continued to experience supply chain challenges, particularly related to significant parts delays for S. 92 helicopters, which is a challenge impacting the entire offshore helicopter industry.
With that said the fundamentals for bristols business continue to improve in.
And our conviction about a multi year growth cycle has strengthened commensurately.
And our fixed wing business activity levels have recovered from pandemic impacts.
And we are seeing benefits from an ongoing food enhancements.
And our government services business, we have grown from the foundational U K SAR contract to a larger and more diverse portfolio of government search and rescue contracts in multiple countries include.
Including the recent addition of an important mandates with the Irish Coast Guard.
Scheduled to commence in late 2024.
These are long term contracts with high credit quality government customers, providing stable high returning cash flows for Bristow.
In our offshore energy business.
Q3 results demonstrate that the positive inflection point has occurred and.
And we continue to believe the offshore market is in the early stages of a multiyear growth cycle.
We expect aircraft utilization and rates to continue to increase which will drive significant improvements in cash flow generation.
With the largest and most diverse aircraft fleet in the industry.
And the largest operational footprint.
Bristow is well positioned to benefit from current and future opportunities in this up cycle.
With that let's open the line for questions Dan.
Thank you Chris the floor is now open for questions did you have a question. Please press star five formula telephone coupons, if you would like to remove yourself from the queue. Please press star five pumps again, we.
We do ask that you pose your questions. Please pickup your handset to provide optimal sound quality.
The first question comes from Josh Sullivan with Benchmark Company. Your line is now open.
Hey, good morning, congratulations on the strong quarter.
Good morning, Josh Thank you.
For the first question I guess I'll, just get right to it but for the remainder of the year.
What are the factors to get to the higher end of the 'twenty three outlook versus the lower end.
We've provided a range for the full year in terms of what could move that to one end or the other some of the key variables would be foreign.
Foreign exchange.
<unk> the relative exchange rate between the U S dollar and the great British pound.
Another factor would be the supply chain challenges that we referenced.
If either one of those situations would deteriorate that would bias results to the lower end of the range. If we get some help.
It's from foreign exchange or an easing of the supply chain challenges that would bias is more to the higher end of the range or higher.
And just on the supply chain issues for the S 92.
You been mitigating those in.
Those efforts been effective.
They have been effective in the sense that we've continued to provide safe and reliable service to our customers meeting their needs.
Been a multifaceted response to the supply chain challenges, which really are the result of significant delays in the delivery of parts and services for the S 92 helicopters.
We've mitigated these by in sourcing parts leveraging.
The large global fleet, we have.
To take parts from certain aircraft and move them to others to keep contracted aircrafts working in <unk>.
Flying for our customers. We've also gone out into the secondary market and purchased certain components.
Brought them into our inventory, which we really should not have to do under the terms of our pool to tell power by the hour or PVH support agreement with Sikorsky for the S. 92, before we've done that nevertheless, again to make sure that we're delivering reliable service.
Along with the rest of the industry have also in some instances slot extensions on life components to keep the helicopters in service. So it's been a multifaceted approach I think we have benefited at Bristow because we have we do have.
The largest fleet of S 90, twos operating globally. So we have been.
We have more resources to self help through this challenge, but it has been a challenging time and certainly a dynamic one with changes.
Really thank our and commend our team around the world for continuing to deliver reliable service. Despite these challenges on the supply chain.
And then I guess, a similar question on the OEM side, what about delivery timelines for the new aircraft on order.
The delivery timelines and lead times are significant on average would be about 18 months.
It could be a little less than that could be more like 'twenty four but we're still looking at about an average of 24 month lead time for new aircrafts.
The ones that we're bringing in to support our successful wins on the government services side, we have secured those delivery slots and are moving forward on time to deliver those new contracts per the schedule.
Got it.
And then just on the overall duration of your oil and gas contracting base.
Is there a way to think about what year is the centerpoint.
And then is there a way to think about how much pricing has generally increased since then.
There's a pretty wide spectrum in terms of duration of contracts, but to use the rule of thumb.
Contract may be five years and linked so.
In any given point in time, there, maybe roughly two and a half years of maturity left across the portfolio.
As contracts are expiring, we are renewing them at significantly higher rates.
To your question.
Those rate increases could be in the mid 20% or higher depending upon the situation in terms of geography aircraft pipe.
Et cetera. So these are meaningful increases.
We have captured some of those during 2023 2024, we'll have a full year impact of those also the opportunity to.
Recent new contracts for elsewhere in the portfolio. So we see the benefit of this really being a step change that will compound as we progress through the next couple of years.
And then just one last one on the higher lease payments in the quarter from from Cougar can you can you just provide some color there.
Yes, I'll, let Jennifer talk about what we've done on the accounting side.
Given the situation at Cougar over the last few years during a difficult period of time, but the good news is that their business has improved and trending in a positive direction, which is why we are collecting more cash from them. This quarter. Jennifer do you want talk about the county sure just as a reminder, we did place them on a cash basis of accounting when their business secured.
David.
Carrying them through the pandemic, so that is really truly based on that.
Out of cash that we received from them is how we recognize revenue so it can be.
Lumpy, but.
As Chris noted their business has improved which is showing up.
The cash payments as well as in our equity earnings.
Related to Canada.
Got it thank you for the time.
Thank you Josh.
Our next question comes from <unk> Kim from Barclays.
Your line is now.
Hi, Good morning, just wanted to ask.
What your outlook is on the offshore energy market in the Gulf of Mexico, just based on commentary we've been hearing from the offshore drillers and it seems like the incremental demand that they're seeing is coming out of Brazil and Africa, mostly.
Curious what your outlook is based on your conversations.
In the U S Gulf of Mexico.
Good morning, and thank you for the question as you referenced we are seeing significant growth rates in places like Brazil, where the overall market is increasing.
Our share of it has increased with the addition of.
Some new contracts in the last couple of quarters.
Also West Africa, we do see good.
A good growth rate there a strong recovery from some of the lows during the pandemic and the oil downturn. We've benefited from that we've also benefited from an increasing share in Nigeria. So that market has really improved significantly for us and we continue to have a positive outlook going forward specific to your question about the Gulf of Mexico, We are seeing.
Growth in the Gulf of Mexico. It. It's obviously, a very large market. So from a growth rate standpoint, it's the rate won't be as high as some others.
Whether thats West Africa, the Caribbean, but in terms of the addition of the number of units. We have started some new contracts recently in the Gulf of Mexico, one being an AWS three nine another being an S. 92 that started during Q3 for us.
I would say.
Aircraft availability.
Is a challenge for us for us in the Gulf of Mexico.
If we had for example.
More serviceable S 90, twos today, we'd be able to put them on contract that we would be generating more revenue and cash flows. So while it's certainly the rates aren't as high as other regions. We are seeing a growth in demand for helicopters to support Gulf of Mexico activity.
Got it got it thanks for that color.
My follow up is just on <unk>.
Kind of a higher pricing you mentioned in response to the prior question on higher pricing on renewals with pricing up in the mid 20% range.
Higher in some cases are you seeing this incentivize new aircraft to enter the market.
If you're not is it something you expect to take place in the next month.
The 18 months.
The order book right now for offshore configured helicopters is quite small there are not many on an order from the various participants in the industry.
In terms of where we see that trending I would expect it to increase pricing levels are have increased.
In certain areas and increasing number of areas to levels that would support Newbuild economics, and I think importantly, because of the tight supply chain or sorry supply and demand balance in the industry for particularly heavy and medium helicopters.
Going to need to be more aircraft that come in to meet the.
The existing demand you will have some attrition of some S 90 twos.
Naturally age out.
Likely that Super mediums.
Otherwise known as lighthouse will be a big part of the solution to both replace.
<unk> 90 twos that are currently working but also to meet the future growth that we're seeing in the market.
Got it great. Thank you very much I'll turn it back.
Thank you.
The next question comes from Savi <unk> from Raymond James.
Hmm.
Hey, good morning.
Kind of inflated slightly longer term question in regard to that bounce around mobility I was curious what your expectation was unlike the timelines of taking delivery and launching operations.
Depending on kind of certification plan.
What happens with your partners.
Thank you for the question because we are.
<unk> very excited about the potential for advanced mobility.
And we think that for Bristow has been a global leader in vertical flight for the last 75 years.
A big opportunity for us to remain a leader in the adoption of new technologies like advanced their mobility.
And we see.
A number of opportunities where they can be complementary and really additive to what we do with our business. So we don't see them substituting existing missions with current aircraft, but really is additive to our business.
There's a timeline specific to your question, we would expect to take the first delivery in 2025 is what we anticipate from both a certification and production standpoint, so that 2025 late 'twenty five timeframe will be the first time that we're probably operating them.
In the real world in Bristow suite generating revenues.
That's super helpful and just a.
Follow up to that just do you have any thoughts on geographically, where you might be decline does first and what the considerations are in.
And thinking through where you would deploy those.
Yes, we do and it's been it's really been interesting to watch the developments of this from a regulatory certification standpoint in the different jurisdictions. Our current view is that we see euro.
Europe will likely.
Approve these aircraft types.
And certify them prior to the U S market. So we think that Europe may be the first place that we at Bristow are deploying them in real world emissions.
And just from a regulation standpoint, and infrastructure is that way you seem to kind of the most progress itself, obviously regulation, but maybe on the infrastructure side.
Yes I.
I mean infrastructure still has a long way to go I think and really all jurisdictions to be fair, but Europe is taking some prudent steps to think about how that will actually be introduced and operated in the real world. We think youre going to see E. VTOL aircrafts lying in Paris at the Olympics next year. So.
This is coming preparations are being made but still in terms of infrastructure broadly speaking.
A lot of work in capital.
And time to still be invested.
For the infrastructure.
That's all helpful. Thank you very much.
Our next question comes from payments Smith.
<unk> energy partners.
Your line is now open.
Hey, good morning.
Congratulations on the strong quarter and thank you for having me on the call.
Hi, Good morning, David and thank you.
Yes.
Can we start just considering the strong Q3 result.
And the better 'twenty three outlook.
Thats why Youre 24 guidance wasn't biased higher but this was more about some positive second half 'twenty Teresa Bryce.
Or if maybe we should talk to us up to a little bit of conservatism.
Yes. Thank you for the question, David We did affirm our guidance range for 2024, including adjusted EBITDA of $190 million to $220 million some of the factors that would drive.
In 2024 to one end of the spectrum or the other.
Would include foreign exchange.
So since we initially published guidance range when the.
The pound to dollar exchange rate was about $1 27.
The dollar strengthened considerably versus the pound and.
And so that's probably.
Eroded about $10 million or so of EBITDA, just mark to Mark on the FX side, so depending on what happens with the pound to dollar exchange rate in 2024 that could bias.
So the lowering of the range or if there is some recovery in the pound that would push us more to the higher end of the range.
Fly chain is another consideration that we're dealing with in the business.
As I noted earlier there are markets for example in the Gulf of Mexico.
K North sea with the others, where if we had more serviceable S. 90, twos, we would be able to put them to work today on revenue generating contracts. So depending on what happens with some of those supply chain challenges again could bias us more to one end of the range versus the other but if we could get some help on the foreign exchange side.
Some help and easing of some of the supply chain challenges again that biases biases us more to the higher end of the range as we look into 2024.
Yeah. It makes a lot of sense I appreciate the color.
A follow up if I may.
I think there was a lot of investor focus around the increase in deepwater rig count.
On the onshore and interest.
I wanted to ask about the production support side of the business and maybe specifically.
Production related demand looks for you over the past year or so.
And maybe any color on how that demand factors into the 'twenty four outlook.
Yes, it's been quite stable for us the production support over the last 12 months.
We tend to you on the production side have more visibility in what's going to be required once the platforms are producing an online they tend to produce for a very long period of time, there can be variations in the number of people that are working in that particular platform that will drive some variations in flight hours, but for the most part are production related support.
<unk> is quite stable provide some visibility and to the second part of your question what that means looking into 2024 as we expect a similar level of production related support.
What we're doing here in.
In the later part of 2023.
That provides some nice stability to the business.
Really coming more from the exploration and development activity, which as you referenced we have seen an increase in the rig count and expect to see a further increase in the rig count over the next year.
Year to two year period.
Oh.
Great segue, if I can slip one more in I did like the slide in your Investor presentation, showing the long lead times for reactivation of the wholesale.
Deepwater rig.
Want to ask as operators are signing contracts for rigs with longer and longer lead times stretching out to 'twenty five 'twenty six decades.
Windows Bristow get brought into the planning or maybe said differently are you seeing in your contract lead times extend as well.
Yes, that's a great question, David typically we are contracted well after the rig is lined up the offshore drilling rig is tends to be a much higher percentage of spend.
For the end customers. So they typically line that up first before looking to other services.
Whether that would be.
Boats helicopters other services.
I would say.
That.
The industry as a whole the customers maybe got a little too comfortable during the downturn that the aircraft would be available when they needed. It that's.
That's changed and I think a much higher percentage of the customer base now understands it's fundamentally changed we have a supply.
Very tight supply demand balance for the aircraft now.
And people I think are pushing out their planning.
Now realizing that the helicopters are not just going to be there they need to line it up in advance to make sure that they have the support because.
Youre not going to be very.
Effective are productive on the rig if you can't get your people to and from the rig. So we are seeing an increase in lead times for the planning and contracting activity.
Great to hear.
Thank you very much. Thanks, that's all for me.
Thank you.
The next question is from Chris Li from Evercore ISI. Your line is now.
Good morning team.
Hey, good morning.
Just curious if you could provide more details on the newly initiated offshore energy contract in Brazil in Norway.
How are things going with the operations.
Yes. Thank you for the question we were very pleased to start up a significant new contract in Norway, supporting Ecuador's search and rescue needs in the southern part of Norway that started at the beginning of September the team there through a lot of work was able to start on time safely and reliably and we've gotten a.
A lot of positive feedback from the customer there in Norway for that.
In Brazil significant increase in scale in our operations. There in Q3, we opened up two new basis, we launched six new contracts for AWS three nine helicopters and again I want to thank and commend the team there for doing that safely and reliably and we think theyre going to be more opportunities as Petrobras and <unk>.
Others in the Brazilian market have an increase in activity and demand for aircrafts over the next few years.
Gotcha.
My follow up question is with regards to your agreement with Airbus to purchase five new <unk> hundred 35 helicopters.
Can you can you provide us some color on contrary economics for <unk> hundred 30 fives.
And potentially incremental EBITDA per fleet basis.
Yes. Thank you for the question. So those 835 light twin helicopters to be delivered from Airbus.
For one of our largest oil and gas customers.
For an identified need that they have there.
They are increasing the scope and demand that they have for the services.
Are needed to support their levels of activity.
In terms of Directionally.
Again significant increase in rates relative to historical.
And that is providing the returns that make it attractive for us to bring in.
These aircrafts so it will be a positive improvement to EBITDA.
On a high returning contract with a very large and important customer for us.
Need for light twins really being driven by the size of the platform that they are going to serve.
Can't support the weight of a heavier medium.
The 135 that we're bringing in.
Which is really a category leader globally in the lightweight category in the helicopter industry is the right aircraft for this mission.
Great. Thank you. Thank you for taking my questions.
Thank you.
Our next question is from silver Steve from August Research. Your line is now open.
Good morning, everybody eventually detailer, but.
I just like all from my congratulations on the quarter as well and on the team finalizing the Irish Coast Guard contract.
While 2024 is primarily going to be a period of capital investment towards this project as well as in the UK could you remind us if the 2020 for EBITDA outlook includes any impact from the implementation of these contracts in the second half of the year or whether these will pretty much begin in 2025.
Hey, good morning, Steven Thank you for that question and.
And thank you for the congratulatory note we are very excited about the.
The addition of this important search and rescue contract with the Irish Coast Guard.
It's going to be the second largest contract that we have at the company globally behind only U K SAR, So certainly a significant win for Bristow.
In terms of timing.
The contract does not commence until late 2024, so it's really a de minimis impact on 'twenty for that small impact is contemplated in the guidance range we provided.
But again really de Minimis and next year, it's really 2025 and beyond the next 10 to 13 years that we'll see the benefit from the addition of the Irish Coast Guard contract.
Great that's helpful and one more if I may.
Preparatory remarks mentioned the potential for additional financing over time.
Just curious as to whether there are any target levels for net debt to EBITDA that we should be thinking about as you contemplate these kind of options.
Sure. Thank you Steve.
As noted high credit quality customers with.
With attractive long term contract. So it gives us a lot of flexibility in financing and we've been advancing discussions with the banks and we do expect something in <unk>.
Place in the next few quarters, something similar to what we have with Natwest.
Our.
Net debt to EBITDA ratio today.
Two six range.
We.
Like where we're at today, we will always continue to protect our balance sheet.
And we'll be conservative in what we what our target net debt to EBITDA numbers are.
Great. Thank you very much and congratulations again.
Thank you Steve.
The next question comes from Vincent <unk> from Deutsche Bank.
Hum.
Hey, Thank you for taking our questions wanted to ask a bit on the Aam's strategy, you've obviously interacted with many of the upcoming players and I'm curious if you could elaborate on why you chose while account there and what kind of potential routes in the future or are you.
Cases.
You may use that the aircraft for.
Hey, good morning, and thank you for the question as you noted over the last several years. We've spent a lot of time analyzing the various companies that are developing these new generation of aircrafts tried to assess them in terms of the capabilities of the aircraft itself.
Team management team their track record experience and capabilities their access to financing because it does take a lot of money as you know to certify and bring into production a new aircraft type.
So we've evaluated those factors thats all informed the different companies that we've decided to partner with there is a spectrum of companies that we've decided to partner with <unk>.
Much like in our fleet today Theres different aircraft types that before certain missions well, we see that being the case for these new type of aircraft as well and Thats why these partnership ranges can range from a piloted fully electric.
It's all too and unmanned autonomous hybrid powered aircraft just depends on the mission that we're looking to perform well.
Briefly specifically to your question on lower cost are both off to really has been and remains one of the leaders in the advancement of the.
Design development and certification of.
Electric vertical takeoff and landing aircraft early on their thought was that they would be virtually vertically integrated.
So they would both develop manufacture but then also operate these aircrafts.
But over the course of our discussions with them over the last few years I think that they've they've seen the value of partnering with an operator like Bristow and what we bring to the table and are 75 years of operating vertical aircraft safely efficiently and reliably and.
And Thats really led to this partnership so the type of mission for Volvo Copter and the current aircraft specifically would be that the movement of people over short distances.
Which can be done.
More efficiently.
Certainly faster than a lot of ground transportation options.
And with the.
The low carbon or zero operating.
Mission profile than electric aircraft operates.
We see potential to launch with them in Europe, but we're also discussing partnerships in certain regions of the U S. So really strong.
Capable aircraft developer there and.
And one where we think that.
Could be a nice partnership between Willow Copter and Bristow as these aircrafts are certified and coming into the market.
I appreciate the color one follow up on that in terms of the.
The cargo market.
Very good relation with elroy.
How do you sort of see the size of that opportunity.
Think from from our end, we have difficulty sometimes kind of quantifying that do you think this is.
Potentially as big of opportunity is it.
We're going to be smaller naturally or how you think about that.
Yes, Directionally, we think it could be as big of an opportunity.
There are a lot of uses for an aircraft like alloy, which obviously you know well, but for the benefits of others on the call. This is an economist we operated.
Hybrid powered so both conventional as well as electric.
Aircraft that has a.
Our high payload for this type of.
Aircraft platform, which could really be effective in moving.
Cargo and a number of instances so we think it's.
A potentially huge market for disaster relief in response huge market for servicing military and government customers as well as commercial customers, whether that'd be middle mile logistics.
The companies, whether it be retail operations et cetera that have big logistics needs and particularly middle mile ones.
For us at Bristow, we actually think the first application of these aircrafts will be for our existing large oil and gas customer base.
The large oil companies that we service around the world.
Massive logistical needs currently we're servicing the need to transport their people from onshore basis, two offshore platforms and back but they also have huge logistical needs onshore whether that's regional movement of people.
For example, an example to get them from say a major international airport to the heliport and which we operate for the movement of cargo today, they relied mostly upon.
18, wheelers or lorries to move this cargo from again major points of access distribution out to sports that will eventually make it to the offshore platform.
And our discussions with them. They are very keen to have a more efficient solution that with these type of aircraft could provide.
And they also.
Have very ambitious ESG targets that they've announced in terms of when they want to get to net zero on their carbon emissions. So anything that we can do as a service provider to help them meet those initiatives. They have a lot of time to talk about and it really keen to hear what these new aircraft can do for their logistical needs. So we do see.
Great amount of potential for products like the <unk>.
Alright, thank you.
Thank you.
I don't want my further questions in the queue I will now turn the call back over to Christopher Bradshaw for closing remarks.
Thank you Dan and thanks for everyone for taking the time on the call today. We appreciate the questions look forward to speaking again next quarter and in the meantime, hope you all stay safe and well.
This concludes today's call you maintenance now disconnect at any time.
[music].
Okay.