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Scorpio Bulkers Inc (SALT) Q3 2020 Earnings Call Transcript

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Scorpio Bulkers Inc (NYSE: SALT)
Q3 2020 Earnings Call
Oct 27, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello, and welcome to Scorpio Bulkers Inc. Third Quarter 2020 Conference Call.

I would now like to turn the call over to Hugh Baker, Chief Financial Officer. Please go ahead.

Hugh Baker -- Chief Financial Officer

Thank you. Thank you, operator. Thank you all for joining us today. Welcome to the Scorpio Bulkers third quarter of 2020 earnings conference call. On the call with me are Emanuele Lauro, Chairman and Chief Executive Officer; Robert Bugbee, our President; Cameron Mackey, Chief Operating Officer; James Doyle, Senior Financial Analyst; and David Morant, Managing Director.

Yesterday, after the market closed, we issued our third quarter earnings press release, which is available on our website. The information discussed on this call is based on information as of today, Tuesday, October 27, 2020 and may contain forward-looking statements that involve risks and uncertainty. Actual results 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 that we issued this morning, as well as Scorpio Bulkers' SEC filings, which are available at www.scorpiobulkers.com and www.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.

In addition to the call, there will be a -- we have produced a supplementary earnings press release presentation, which is available on our website in the Investor Relations page under Reports & Presentations. If you have any specific financial modeling questions, you can contact me later and we can discuss them offline.

Now, I'd like to introduce Emanuele Lauro.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Thank you very much, Hugh. Good morning and/or afternoon to everybody and thank you for being with us today. On August 3rd, we announced a radical transformation of our company, a transition which moves the company forward to sustainably higher, less volatile and more predictable returns. This transition is now accelerating.

In the space of 12 weeks, we've commenced our dry bulk fleet sale and continue to refine the most complex aspects of our newbuilding order. I'm pleased with the commitment and the energy of the organization.

The wind turbine installation vessel contract signing is now imminent only days away. And shortly after that, we will be able to give more clarity on how fast we will be exiting the dry cargo business. Whilst we are willing and purposeful sellers, we're conscious of the responsibility to preserve the enhanced -- and enhance shareholder value through this process, all the more as the largest shareholder of the company ourselves. The proceeds and deleveraging in a slowly strengthening dry bulk market set the stage for the transition of the company on the front foot.

In terms of the focus on wind energy, the justification for our pivot has only become stronger, even accelerating during this period of significant economic uncertainty. The United States has targeted 28 gigawatts by the end of the decade and the impact for this opportunity is increasingly understood on both sides of the political divide.

As the only US listed wind turbine installation vessel player, we feel we are optimally positioned to bring forward durable solution for this market and our teams are working hard to make this a reality.

The European Union has announced a $750 billion post-COVID recovery plan with green energy at its heart. The stated objective is for wind power to provide half of the EU electricity supply by 2050.

The United Kingdom has announced intention for every home to be powered by offshore wind by the end of the decade. This would mean one turbine installed every day between now and 2030. At the same time, substantial new markets are emerging like Ireland, the Baltics, South America and many Asian countries.

Major energy companies have announced -- and in some cases have made -- their very first move into this market. Over the last six months, to meet these demands, new larger turbines have been announced by the major manufacturers. We believe there is more to come. Together with this announcement, the industry moves to a mid-water focus with more consistent wins and greater scale.

This plays to our strength of increasing maritime complexity and high-quality modern tonnage. Our new buildings wind turbine installation vessels will enable the world to install large, modern, game-changing turbines quicker, safer and more efficiently than ever before. We expect around 17 hours per installation.

With this in mind, we have been finalizing the details of our new building order. We expect to announce more information imminently, as previously mentioned, together with our partners at Daewoo in Korea.

We've received warm engagement even at this early stage from our prospective customers. We have confidence, therefore, in our ability to deliver this best-in-class vessel on time, on budget into a market facing a significant shortage of specialist tonnage beginning 2024.

Finally, I would like to add that our shareholder engagement of impact, renewable and ESG funds is just beginning. Many of you on this call will be new to us. As you consider our company, please bear the simple truth in mind -- for the benefit of our generation and the future generations the world needs green energy; in particular, offshore wind energy. This is no longer controversial. Indeed, it represents the only way that most national green policy commitments, many of which are legally binding already can be met.

With this, I have ended my initial remarks. And operator, I would like to turn the call to questions, please.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Your first question comes from Omar Nokta with Clarksons Platou Securities. Your line is open.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Thank you. Hey, guys. Clearly, it looks like you're well on into transition mode. You spoke about it in August and for the past couple of months we've been seeing you start to really execute on the shift and the firming of the contract imminent from what you're saying Emanuele. Clearly, the offshore wind industry has a strong outlook, especially with a lot of the wind farm projects we're seeing discussed in Europe, here in the US, and also in the Far East. Right now, you're preparing to move into the wind turbine installation side of things. Are there any other parts of the value chain you see yourselves getting involved with?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

That's a very good question, Omar. I think that we focused on the wind turbine installation in order to cater for the new turbines that manufacturers are coming up with in the next few years. However, as we know, fortunately or unfortunately, the lead time to build these vessels is two-and-half years. And we take this period of time as an opportunity to actually look at which other segments of the industry we could or would get involved with.

There are a variety of assets that are operational on the water, which are perfectly fine assets to provide services to the industry, such as foundation, maintenance or others. But they would not -- those same assets would not be in a position to actually cater for the installation of the turbines of the future.

So, with this in mind, we decided to focus on installation and build those assets which are going to be required by the market starting 2024, maybe end 2023. And in the meantime, this allows us to actually look around at which opportunities are with incumbents or existing assets in order to differentiate into different segments.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Very good. Thanks, Emanuele. You guys have gotten some of this and we've gotten some pushback as analysts, I'm sure you have as well that Scorpio is embarking on a new industry in which you don't really have much prior experience or activity. How do you -- and then the questions are obviously about how do you properly manage the operations? How do you respond to that?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

I think there are different ways to respond. I will give it a shot, Omar, and then maybe my colleagues can add to them.

We've discussed in the past, we are very realistic, we are very well aware that this is a different industry. We're not talking shipping. We've done work for a number of years in order to consider this investment prior to actually executing on it. We are extremely comfortable that we can put together the right team in order to be able to become first-in-class in this industry.

As a matter of fact, we've already beefed up our team with five individuals, which are coming from the wind industry, some of which have joined already, some of which are under garden leave prior to joining us. Plus, there are all the opportunities that we were discussing before in your previous question Omar, as we look at entering this industry and there are a number of players which are either looking for a partner or look eventually to shift away or adjust, and this could be the opportunity for us to actually step into somebody else's shoes.

Now, we wouldn't do this unless we thought that that was the right opportunity for us. In the meantime, we are building organically what we think will become a first-in-class operation.

And I take this opportunity as well, Omar, to mention something, the Scorpio group has had -- has been involved in shipping for many years in many different asset classes as a ship manager, as an owner, an investor and others. Since the Scorpio group did not have in-built its capabilities on this industry, on the wind turbine installation vessel industry, what we decided is to build an integrated company. So, you will see that actually Scorpio Bulkers will be an integrated company with its own management that will manage and cater for the wind installation vessel industry itself, rather than going, as we were prior, with a management company outside -- or outsourcing the management to third parties.

I think it's quite intuitive when, for example, Scorpio Bulkers had started its activities, the Scorpio Group was managing around 200 vessels. Today the Scorpio Group is managing around 300 vessels, but it doesn't have in-built wind turbine installation capabilities or knowledge that is specific to the industry. So, we've started building this as an integrated company.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Thanks, Emanuele. That's helpful color that you've got the organization in place and coming with a first-class asset obviously helps attract the right people and build the right operation. Thanks. I'll leave it there, Emanuele. That's very helpful.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Sure. Thanks.

Operator

Your next question comes from Greg Lewis with BTIG. Your line is open.

Greg Lewis -- BTIG Research -- Analyst

Yes. Thank you and good afternoon, everybody, and good morning. Just following up on Omar's question about -- as you think about building the business. At this stage the company is new in the wind, or -- like, as I think about the customer base the company is trying to target, clearly, there are a lot of established wind companies and there's also some more companies that are, I mean, newer to this space. As we think about -- any kind of color you can give around customers. Are you largely focused on the existing major wind players? Are you also thinking about working with new entrants into the space?

We're realizing that it's still early days, but I guess, as we move forward with the first vessel, I guess, sometime later this year, just kind of curious as you start thinking about lining on potential customers for that.

David Morant -- Managing Director

Emanuele, it's David. Should I take that?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Please.

David Morant -- Managing Director

Thanks for the question, Greg. I mean, we've been obviously focused very clearly on the pipeline from the vessel delivery in Q1, 2024. I think one of the great things about this industry, as Emanuele referenced in his opening comments, is that you can see a pipeline of significant investment coming in from 2024 and it really starts to build from there right the way through to the end of the decade.

So, the visibility that we have around these projects and the lead time and commitment to them in terms of financial and governmental commitment is really unparalleled. And that enables us to plan commercially to ensure that our vessels are the right vessels for those particular fields that are being developed, and also they are positioned in the right geographies. And by the way, also even at this early stage to partner with our prospective clients in many of the details of the design. And that partnership is extremely important, because what we want to ensure is that we've got vessels which are relevant and highly efficient for what is a new step for the entire industry in terms of the size of the turbines and the commensurate economic returns that these offshore wind farms can deliver.

So as a result, we have an opportunity with our blank sheet of paper to really design these vessels with a full capability and ensure that they have a long life and are able to deliver best-in-class service, in turn ensuring that our shareholders can see much more predictable higher and better quality returns over multiple years.

So yes, and the short answer to your question, we've been very, very pleased with the engagement we've received from prospective customers and the level of detail that they've -- and time that they've given us in helping us to further step up the design of the vessel.

Greg Lewis -- BTIG Research -- Analyst

Okay. Great. And then just one more for me. I mean, clearly, we have -- you have the first vessel and the options for the additional vessels. I mean, obviously, I don't envision you guys entering in this space to just have one vessel. I guess, realizing that it is still moving target, like what do we think we -- what is kind of like the minimum number of ships on the wind farm and installation vessel side that you think you actually need to be relevant in the industry? Two, is there kind of a minimum number, or is it -- could we just see this company with one vessel as it looks to participate in the sector?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Robert, do you want to take it?

Robert Bugbee -- President and Director

Sure. I think, the first thing that I would say and we're going to see this increasingly over this next couple of weeks, so really, really important for us. And I think we're going to outline that we're really, really committed to becoming a market leader in this space.

Emanuele has indicated already in his opening position that we're accelerating the sale of the dry bulk, that we're going to change the very way that we -- that Scorpio Bulkers would do its operation and you're not going to have this outsourcing to related party transactions. It's all going to be brought in-house. It's going to much better match the prospective shareholders and the new environment that we're seeing related to ESG etc., that this company is going to, sort of, be a forefront of.

And I think that is because this is us building a business. This is not just doing a trade here. The company is -- the insider group here, as the largest shareholder, has been willing to forgo it's, let's say, management positions related to this and be literally the largest investor, and that's it. And that's because we believe that the opportunity in this is tremendous.

I think when it comes to what is the optimum size is a difficult one. But I think that you've got to really think of this as four to six to eight as we move through into 2004, 2005, if for no other reason then one of the benefits of this is going to be a change in the quality of EBITDA that this company has in the sense that the quality of it will be better.

And one thing to improve that even more is that if you have more units, you will cover perhaps an operational risk. So, if you're only having two units, then one vessel for whatever reason goes off higher or there's a -- it's still an industrial -- marine industrial position working by definition in the open sea. You start to even improve your quality further to the extent that you have more units to cover any accidents and the ability also to get deeper into the customer.

Greg Lewis -- BTIG Research -- Analyst

Okay, great. Thank you very much.

Operator

Your next question comes from Randy Giveans with Jefferies. Your line is open.

Randy Giveans -- Jefferies -- Analyst

Howdy gentlemen, how is it going?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Hi, Randy.

Randy Giveans -- Jefferies -- Analyst

Hey. So, obviously, on the last earnings call you mentioned that you're committed to drybulk as your kind of Elvis child. So, maybe what changed here in the last months as you're now maybe guiding to sell all of the drybulk vessels in the next maybe a quarter or two? And then with that, with the first WTIV now expected in maybe 2023, why not kind of slowly sell your drybulk vessels over that two- to three-year timeframe?

Robert Bugbee -- President and Director

I could answer -- let me answer the last question. And there are a number of benefits we think of doing this. The first benefit is we can concentrate. We can completely focus. It's not quite as extreme as Cortes burning his boats when he arrived in America, but it's somewhere along that theme that you get the benefit of absolute focus that our future renewable shareholders are really understanding the commitment this Company is making to that space to the future. They don't have to start to worry about whether or not the -- what the dry cargo market is doing. They don't need that extra worry. They don't need to have that extra depth of research.

The second aspect, it shows the customer that you're committed. I mean, we're literally going to be sitting in front of these customers having -- in a short time now having ordered the first vessel, without them having to question whether or not we are really making a business and whether we're going to become a long-term partner to them. Because without that they could quite happily question, are you really committed to what we want to do?

The next is the lending side of it. If we clear the drybulk position and we have all cash, from that and we're looking into this. The financing side is improving every day in this offshore wind different ECA projects, different government-sponsored green funds, etc. But we all know, again, that it's much easier to model for finance and you're always in a better position to get financed to the degree that you've got a clean balance sheet with cash and a non-core business, which our core business then will become offshore wind non-core business risk. The -- and another very important element is the shipyard. The shipyards themselves, whether it's the shipyard we're with now or perhaps if we move to where a natural advantage for us, which is going to be the developing American market, which could well really kick-off very hard and fast depending on what happens in the US election in a few days' time. We're able to show those yards that we are a committed partner.

And then the last part is operational. It's very, very difficult to manage responsibly, to maintain the quality and under environmental and safety risk. If you are running down your operation over a long time and an indeterminate time, it's a tough on the internal morale. It's tough on operations. You have people who are wondering what they're going to do. You, obviously, reduce your commitment. So, there are just so many advantages in terms of ripping the bandage off as opposed to just pulling it off generally.

Randy Giveans -- Jefferies -- Analyst

Okay. And, I guess, to expedite that process instead of maybe wanting to as you've been looking at some kind of larger block sales four, five, six, eight, [Indecipherable]?

Robert Bugbee -- President and Director

Emanuele, are you willing to say on that one?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

There is a variety of interest that has -- the few initial sales have generated with other industry participants. So, we have received all sorts of interest, I would say. So, yes, we have looked at, or are looking or considering block sales, as well as individual sales. It all depends on what suits really. But Randy, yeah, there is interest on blocks, as well as individual vessels.

Randy Giveans -- Jefferies -- Analyst

Got it. Okay. And then one quick question last question on the WTIV. How much cash do you expect to need for that? I mean, let's just assume the price is maybe $285 million. And what kind of payments are you looking at here for the next, I don't know, 12 months or so?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

We disclosed that there are no meaningful payments to be made until 2022. So, I would leave it at that for the purpose of disclosing unless Cameron or Robert want to add to this.

Robert Bugbee -- President and Director

No. Other than just to assure that more detail around the whole of this, whether it's the disposal schedule, Randy, or related to payment schedules or anything else we maybe able to reveal will be -- would be fairly promptly forthcoming after we've actually signed the contract, which Emanuele -- as Emanuele said earlier, it's a matter of days or imminently.

Randy Giveans -- Jefferies -- Analyst

Got it. I'll stay tuned. Good luck. Thank you.

Robert Bugbee -- President and Director

Thank you.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Thank you.

Operator

Your next question comes from Ben Nolan with Stifel. Your line is open.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Hey. Good morning or afternoon. So, I have a couple of questions. The first is related to something that Robert you -- I think were alluding to about being involved in the Americas, which from my understanding requires Jones Act compliant equipment. Could you maybe talk through that a little bit in terms of your eligibility or Scorpio Bulkers eligibility to participate in the Jones Act and the capacity of US shipyards to actually build vessels at this time?

Robert Bugbee -- President and Director

Cameron, would you like to do this?

Cameron Mackey -- Chief Operating Officer

Thanks for the question. We're not in a position to go into great detail except to say that, number one, there are a unique set of requirements, customer requirements, legal requirements, around operating in the American market. The Jones Act is only one of them. And it's our belief that successful players will be offering unique value-added products and services to the customers over here. It's not so simple to say that the European competitors or the Asian competitors will simply walk in and do great business. It's going to require a lot of collaboration, innovation, and frankly, markedly [Phonetic] to succeed in the US market. And so, we are evaluating quite carefully a Jones Act compliant solution for US customers and developers. We won't go into detail about Jones Act compliant except to say that we're fully confident that we will comply. And we are already in initial discussions with some customers over here about providing them what we think is a compelling solution for their needs here.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Okay. And you don't foresee there being any issues building this type of equipment in the US? I assume there's at least several spots that would be happy to do that.

Cameron Mackey -- Chief Operating Officer

No. That the -- yeah. No, thank you. Sorry, there are several yards that can do it. Everything is difficult. Everything has its own challenges. It's the way you approach and navigate those challenges, which sets you apart, which is why we're attracted to this sector in the first place. So, we have some relationships with US ship builders. We're not afraid of those challenges. We believe we have the competence and the presence here and again the ability to navigate those challenges. So more to follow, I guess, is the way to answer that. But no, there are a number of yards that can construct suitable vessels for the US market.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

All right. That's helpful. Thanks, Cam. And then from a -- sort of sticking with a similar topic about the development of this equipment. It's still obviously relatively in the early stages. And one of the things that we've seen historically within shipping is anytime there's a new ship there's a little bit of a learning curve, specifically around the cost. And so, over the course of about a decade or so the cost -- you see this in LNG applications or other things tends to come down pretty dramatically to the detriment of early adopters. How big of a risk do you think that might be here, or do you think that already what you're seeing and being offered by the shipyards is pretty efficient?

Cameron Mackey -- Chief Operating Officer

Maybe I could take a stab at that. There is, say, two simple components to the cost curve. One is cyclical, the builders of these vessels still overlap with conventional shipping and offshore assets. And we are at a very low point in the cycle as far as pricing pressure and their margins are concerned to our benefit. So, from a cyclical perspective, we feel very confident that we've gotten a very good deal with the shipyards for our vessel.

Then there is, let's call it, the more technology-sensitive part. Because at the end of the day this vessel has a lot of components, specialized components that aren't so cyclical, the jacking system, the crane, some of the dynamic positioning and navigational equipment, for example. And, yes, there is some prospect that those could decline over the very long-term, but we think that's over, let's say, five- to 10- to 15-year periods, not one to two to three.

Again, to the extent that there's demand for these orders in the future, those two forces, the cyclical and call it, the more secular forces will combine and play out. But we're not worried at this point that we're going to be facing a discounted vessel value in one, two, three, five years. We just don't see it that way based on what the suppliers and the yards are telling us.

Robert Bugbee -- President and Director

Also, Ben, it's not a -- the actual sizing of these vessels that we're building may be new or the new generation of turbines may be new, but the actual industry itself is 15 years old or so.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Right.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

The technological shift happens on the turbines is not happening on the installation vessels. The installation vessel shift is on size to be able to accommodate the technological development in the size of the -- and weight of the turbines.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Right. Right. Okay. And then last for me and I'll turn it over. Robert you had mentioned financing. I'm curious how this differs when you think about loan-to-value or even the lending group, I mean, how much should we think about -- is the appropriate level of financing given the nature that you don't really have contracts and it's a bit more of an opaque market so forth?

Robert Bugbee -- President and Director

Sure. I think at the moment, it's -- I think we'd like to hold where you would exactly think about financing, because the actual financing side in terms of positions is generally improving quite a lot. And there is a reason to think that the actual contract quality, as we move forward, may improve well as well. I mean, I think David if you'd just like to sort of detail the speed and the growth of, whatever you want to call it, direct financing this for all tenant wide is, let's say, different from traditional rig or traditional shipping financing potentially in the future.

David Morant -- Managing Director

Yes. It's a good point Robert. I think if you look at the way that -- to answer your question on the lending side, a lot of these lenders are really learning from the experience in the offshore oil business are applying effectively cash flow approach. So, although, you're not looking at long contracts, you are looking and you can see that from the guidance we gave on the last quarter August 3, 4, very decent levels of EBITDA and very high levels of cash conversion. And I think on that basis, there's really two things that come out of that. One is, this asset will deliver a very good return at very -- at comparatively low levels of leverage, very good returns to equity. The second thing is, using a cash flow approach even on the relatively short contract horizon will still provide leverage without necessarily sort of NAV-led approach or LTV-led approach that you've referenced Ben.

And then I think the third thing that I'd add to that is that, we are also in the foothills of the evolution of the green finance -- of green finance. I think we're very hopeful and expecting that this is an asset, which, as was referenced, will significantly accelerate the transition and, as such, will qualify for a lot of that new style much more capital-light lending, which is particularly coming in for the European Union. So, again, we don't feel that there's a shortage of finance. We appreciate and respect that it's a specialist asset that's married with the predictability, the growth part, the cash generation of the asset and the return profile we think that equity can derive from it, I think, we'd say we're fairly comfortable about the evolution of this capital structure.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

All right. Thanks, David.

Operator

Your last question comes from Liam Burke with B. Riley. Your line is open.

Liam Burke -- B. Riley FBR, Inc. -- Analyst

Thank you. Robert, does it concern you that now that you've announced the acceleration of the sale of the Bulker assets that you won't realize the full underlying value of those vessels?

Robert Bugbee -- President and Director

No. I mean, the -- whether or not, we -- I mean, the last people to know is probably you guys. I mean, the actual sale and purchase markets themselves are, as Emanuele alluded, they're very active. I mean, we haven't -- hadn't had to appoint a banker. We haven't had to appoint any shipbroker to market the fleet or market individual vessels. We have been -- all of what we've done so far has been responding to inbound inquiry in one way or another. And that itself is a pretty healthy sign related to that.

And I think it's also worth noting that the vast majority of assets in dry cargo is a huge market. I mean, it's a very big market itself owned by private owners. So, it's a very accurate liquid market anyway.

The second thing is that, there are not so many opportunities out there for people to acquire well-maintained, good quality, modern vessels anyway. So, it doesn't -- the market sale and purchase market itself will act exactly the same after this conference call as it did before.

Liam Burke -- B. Riley FBR, Inc. -- Analyst

Great. Thank you. And on the installation -- on the wind installation front, there is no -- there seems to be no concern about overcapacity at least beyond the 2023 time frame. It's an older industry as you mentioned earlier. Is it the technological barriers? Is it the time to deliver the next generation? Is it talent shortage, or what's going to sustain these barriers?

Robert Bugbee -- President and Director

David?

David Morant -- Managing Director

Thank you, Robert. I would add -- I think that firstly the challenge of developing the newbuild project and delivering the vessel on time and on budget is clearly something that, as an organization, Scorpio has significant expertise in. And that is, at least initially one of the major barriers. I would then say, as Cameron said earlier in the call, the provision -- this is effectively a service business and we're working very hard both with existing, but importantly, new entrants into this market. Many of them have announced their participation and their interest over the period, which we think is a very important step. And by the way, a lot of those oil companies and integrated energy companies as they now are major counterparties of our organization. So I think as you look into the future, there will be knowledge barriers, they already are in terms of the commissioning of new vessels and there will be service barriers. But most of all, if you look at the organization and what we have at Scorpio, building best-in-class vessels, operating them to an extremely high standard in terms of HFTQ [Phonetic] and contracting them. We feel that this is an industry on a growth path, and a growth path that plays to our strengths, right the way through to the end of the decade at least in terms of the forecast period.

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Great. Thank you, David, and thank you, Robert.

Robert Bugbee -- President and Director

Thank you.

Operator

And I'd now like to turn the call back over to Hugh Baker for closing remarks.

Hugh Baker -- Chief Financial Officer

Thank you, everyone, for your questions. I think that ends the call. So thank you very much for listening, and we look forward to speaking to you all soon.

Operator

[Operator Closing Remarks]

Duration: 40 minutes

Call participants:

Hugh Baker -- Chief Financial Officer

Emanuele A. Lauro -- Chairman and Chief Executive Officer

David Morant -- Managing Director

Robert Bugbee -- President and Director

Cameron Mackey -- Chief Operating Officer

Omar Nokta -- Clarksons Platou Securities -- Analyst

Greg Lewis -- BTIG Research -- Analyst

Randy Giveans -- Jefferies -- Analyst

Benjamin Nolan -- Stifel Financial Corp. -- Analyst

Liam Burke -- B. Riley FBR, Inc. -- Analyst

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    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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