Macquarie Infrastructure Corp (MIC) Q2 2020 earnings name transcript – Motley Idiot

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Macquarie Infrastructure Corp (NYSE: MIC)
Q2 2020 name for outcomes
August 5, 2020, 20:00. AND

Contents:

Ready remarks
Questions and solutions
Name the individuals

Ready remarks:

Operator

Women and gents, thanks to your availability and welcome to Macquarie Infrastructure Company & # 39; s second quarter 2020 earnings name. [Operator Instructions] Please be aware that in the present day & # 39; s lecture is being recorded.

I’d now like to show the ground over to our host, Mr. Jay Davis. Go forward, sir.

Jay davis – Head of Investor Relations

Thanks. And welcome to the Macquarie Infrastructure Company earnings convention name, which covers the second quarter of 2020. Our name in the present day is webcast and open to media. Along with discussing our quarterly monetary efficiency throughout this name, we issued a press launch summarizing the outcomes and filed a monetary report on Kind 10-Q with the Securities and Trade Fee. These paperwork had been launched this morning and copies may be downloaded from our web site at www.macquarie.com/mic.

Earlier than giving the ground to the President and CEO of Macquarie Infrastructure Company, Christopher Frost, enable me to remind you that this presentation is unique and that each one rights are reserved. Any recording, rebroadcasting, or different use of this presentation in complete or partly with out the prior written consent of Macquarie Infrastructure Company is prohibited.

This presentation is predicated on data usually out there to the general public and doesn’t comprise any materials personal data. The presentation has been ready for data functions solely and doesn’t represent a solicitation of a suggestion to purchase or promote any security or instrument.

This presentation incorporates forward-looking statements. We could, in some instances, use phrases that mirror the uncertainty of future occasions or outcomes to determine such forward-looking statements, together with these used to explain the precise and mixture impacts of COVID-19.

The forward-looking statements contained on this presentation are topic to quite a lot of dangers and uncertainties. An outline of the identified dangers that might trigger our precise outcomes to vary is proven beneath the Threat Elements part on our Types 10-Ok and 10-Q.

Our precise outcomes, efficiency outlook or alternatives could differ materially from these expressed and / or implied in forward-looking statements. Extra dangers of which we aren’t presently conscious might additionally trigger our precise outcomes to vary. The forward-looking occasions mentioned on this presentation could not happen. These forward-looking statements are made as of the date of this presentation. We assume no obligation to publicly replace or revise any forward-looking statements after the completion of this presentation, whether or not because of new data, future occasions or in any other case, until the legislation requires it.

In in the present day's convention name, we will probably be referring to non-GAAP measures, earnings earlier than curiosity, taxes, depreciation and amortization, or EBITDA, and free money circulation as outlined by us. . A reconciliation of those non-GAAP measures to essentially the most comparable GAAP measures may be present in our 10-Q and within the tables hooked up to our earnings press launch.

Macquarie Infrastructure Company CFO Liam Stewart can also be on in the present day's name.

With that, it’s my pleasure to welcome MIC Managing Director Christopher Frost.

Christopher frost — Normal supervisor

Thanks, Jay. And thanks to these of you who joined our name this morning. Hope you and your households keep protected and sound.

As you already know, earlier this morning we launched MIC's monetary and working outcomes for the second quarter of 2020. I’ll start our name by commenting on a few of the highlights of those outcomes and the actions we’re taking to beat the challenges posed. by the present pandemic. Liam will present additional particulars on our monetary outcomes and I’ll conclude our ready remarks by discussing our outlook for 2020 earlier than opening the decision to your questions.

The efficiency of MIC and its actions within the second quarter of 2020 displays; first, enhancing using our IMTT, which averaged just below 95% and ended the quarter at 95.7% and a secure stage of ancillary companies ; two, the month-to-month sequential enchancment on the whole aviation and aviation exercise on the airports the place Atlantic Aviation operates from 21% of the degrees recorded in April 2019 to round 77% of the degrees recorded in June 2019; and third, the affect of the discount in tourism to Hawaii as a result of state's mandate of 14-day quarantine that remained in place all through the interval.

In the course of the quarter, we continued to give attention to the 4 priorities recognized in our first quarter name. First, shield the well being and security of our staff and prospects; second, to make sure the protected and environment friendly operation of our companies; third, enhance our liquidity and cut back our prices; and fourth, to guard the worth of our companies whereas persevering with to proceed to promote one another.

In the case of well being and security, we’re lucky to have a low incidence of COVID-19 amongst our staff. We attribute this to the well timed and efficient choices made by our administration groups and the diligence of our staff. To guard our staff and prospects, we proceed to keep up an applicable bodily distance, clear and disinfect our amenities repeatedly, and require using private protecting tools by all staff. Now we have additionally up to date our working procedures and made adjustments to the bodily structure and infrastructure of our amenities, the place relevant. A good portion of our staff proceed to work in our amenities to make sure continuity of service and a portion continues to work remotely. Now we have developed our return to work protocols and intend to implement them when native situations allow.

I take this chance to as soon as once more publicly thank our staff for his or her resilience and dedication to offering the important companies supplied by our companies. Collectively, these steps have enabled all FBOs, terminals and working amenities in Hawaii to proceed to serve prospects safely and with out disruption in the course of the pandemic.

Relating to our liquidity and value controls. First, as reported in our first quarter cellphone name, we pulled virtually $ 600 million from our holding firm's gun. In view of Atlantic Aviation's higher than anticipated efficiency, notably within the second quarter, and given our obligations, we don’t plan to make use of this money. Second, the fee discount initiatives applied in April had a major constructive affect on our outcomes. Our companies, primarily Atlantic Aviation, had been capable of understand annualized price financial savings of roughly $ 50 million within the second quarter. A lot of the financial savings consisted of reductions in working bills, which is according to the decrease exercise ranges we noticed in April.

With the rise on the whole aviation flight actions, some Atlantic Aviation employees who had been working diminished hours returned to regular hours and a few who had been fired had been recalled . These measures diminished the annualized financial savings to roughly $ 25 million.

In the case of the gross sales of our enterprise, we continued to maneuver ahead with the gross sales processes over the past quarter, though COVID-19 clearly had an affect on the logistics and timing of course of. As soon as once more, we consider that gross sales from our working actions stay one of the simplest ways to generate further worth for shareholders. We proceed to be inspired by the extent of curiosity in our actions. As foreclosures cancellations proceed, we plan to work with potential bidders to facilitate on-the-ground due diligence and face-to-face conferences with our administration groups to advance the gross sales course of.

In observe, a deal for MIC Hawaii could also be achievable in in the present day's surroundings given the scale of this enterprise, however it will likely be knowledgeable by a view of what the resumption of tourism within the state appears to be like like.

IMTT is clearly functioning and demonstrating the resilience of storage property, whereas potential consumers of Atlantic Aviation will seemingly have to see further information relating to the resumption of common aviation flight exercise with the intention to that we are able to maximize the worth of this enterprise.

As I stated in our first quarter cellphone name, the steps we’ve got taken over the previous 2.5 years to strengthen our stability sheet and enhance our monetary flexibility have positioned us effectively to deal with the enterprise. affect of COVID-19 on our operations and gross sales processes. .

When it comes to second quarter operational highlights, the advance on the whole aviation flight exercise within the second quarter was supported by the gradual decline in foreclosures measures throughout the US The advance was pushed by leisure exercise in markets, together with Florida and Colorado, the place Atlantic Aviation has a major presence. We consider a considerable portion of this exercise mirrored the quarantine of shoppers outdoors of main cities.

The quantity of gasoline Atlantic Aviation bought within the second quarter of 2020 declined greater than the discount in airline exercise. We consider that is the results of adjustments in journey habits and that these are non permanent. Particularly, we’ve got seen smaller planes in single-destination flights along with decrease exercise ranges. We additionally consider the pandemic has had a disproportionately unfavourable affect on long-haul flights, together with worldwide home and transcontinental journey, a goal marketplace for Atlantic Aviation.

Collectively, we consider these components clarify the distinction between the extent of the restoration in airline enterprise and the variation in gasoline gross sales.

As anticipated, rental earnings from tenant sheds remained secure within the second quarter. As we mentioned in our first quarter cellphone name, roughly 20% of Atlantic Aviation's gross margin was generated by hangar leases to tenants in 2019. Tenant hangar leases helped Atlantic Aviation to generate constructive EBITDA each month of the second quarter and offers us confidence that the corporate will proceed to satisfy its obligations with the sources generated internally.

Our MIC Hawaii enterprise carried out as anticipated within the second quarter [Technical Issues] of the continued requirement of a 14 day quarantine on arrival. Vacationer visits to the island have declined by over 95% in the course of the interval. Seashore resorts and eating places represent an vital a part of industrial and industrial gasoline consumption. The considerably decrease stage of tourism led to a decline in gasoline gross sales of round 40% in comparison with the earlier comparable quarter, according to our feedback on our first quarter name.

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MIC Hawaii additionally generated constructive EBITDA in every of the three months of the second quarter, and we stay assured that this enterprise will proceed to satisfy its obligations with internally generated sources. IMTT & # 39; s continued good efficiency supported our total outcomes for the quarter. Though utilization has remained sturdy and is predicted to common within the low to mid vary of 90% for the 12 months, with comparatively few storage contracts to resume for the remainder of the 12 months , tariffs are unlikely to extend considerably in 2020.

Ancillary companies revenues, akin to circulation, mixing and heating, remained secure within the second quarter of 2019 and forward of our expectations mentioned in our first quarter name. Along with the excessive stage of utilization, these enabled IMTT to generate an EBITDA enhance of 6% in comparison with the earlier comparable interval.

In abstract, given the higher than anticipated exercise ranges of Atlantic Aviation so far and the efficiency of IMTT, we stay assured that we will fund our operations and contractual commitments. with out exterior capital and with out utilizing funds drawn from our revolving credit score facility of the holding firm.

At this level, I'll flip it over to Liam for the highlights of our monetary efficiency in the course of the second quarter.

Liam stewart — Monetary director

Thanks Chris and hiya everybody. For the second quarter of 2020 in comparison with the earlier comparable interval, Adjusted EBITDA, excluding non-cash gadgets, decreased by 35%, primarily reflecting the affect of COVID-19 associated journey and different restrictions on Atlantic Aviation and MIC Hawaii, offset by improved efficiency at IMTT. The second quarter of this 12 months additionally included a web provision of $ 7 million recorded in promoting, administrative and different overhead prices at Atlantic Aviation for the environmental remediation in a of our FBOs.

Adjusted free money circulation decreased by 48%. Free money circulation was diminished by decrease EBITDA and better upkeep investments, however partially offset by a tax profit. We proceed to anticipate our corporations to deploy a complete of roughly $ 60 million in upkeep investments over the course of the 12 months, with the vast majority of these occurring at IMTT.

MIC's board of administrators has decided that it’s applicable to keep up the suspension of any dividend. Relating to the efficiency of our operational actions. The sharp discount on the whole aviation flight exercise in the course of the quarter resulted in a considerable discount within the quantity of gasoline bought by Atlantic Aviation, though this was partially offset by secure gross profit generated by the rental of hangar by tenants.

For the quarter, Atlantic Aviation generated EBITDA and free money circulation of $ 17 million and $ 12 million, respectively, every down considerably from the comparable interval in 2019. The group of individuals Atlantic Aviation rapidly grew to the precise measurement of the enterprise price base on the enterprise stage they noticed in early April and maintained these financial savings all through the second quarter regardless of the rise in exercise. Naturally, these prices will enhance as present exercise ranges are sustained.

As Chris identified, at present exercise ranges we’re assured in Atlantic Aviation's skill to satisfy its monetary obligations utilizing internally generated sources. Hawaii noticed important drop in gasoline consumption in the course of the second quarter with a discount within the variety of vacationers visiting the islands. With fewer individuals staying in lodges and consuming in eating places, gasoline mileage is down about 40% from the second quarter of final 12 months.

MIC Hawaii generated EBITDA of $ 7 million for the quarter, down 50% from 2019 and free money circulation of $ three million, down 70% from the prior comparable interval. Along with the discount within the quantity of gasoline bought, Hawaii Fuel additionally recorded realized losses of $ 2 million on a few of its commodity hedging contracts in the course of the quarter. These losses diminished each EBITDA and free money circulation for the quarter. As is the case with Atlantic Aviation, we’re assured that MIC Hawaii will proceed to satisfy its obligations from internally generated sources.

IMTT was a serious driver of our monetary outcomes for the quarter. With round 90% utilization and a largely regular ancillary companies income stage, IMTT generated $ 68 million in EBITDA, a rise of 6% over the earlier comparable interval and a Free money circulation of $ 44 million in comparison with $ 45 million final 12 months. The modest lower in free money circulation displays a rise in upkeep investments of $ 5 million for the quarter, which is extra of a timing concern as we proceed to anticipate IMTT to speculate between 40 and $ 45 million in upkeep capital for the 12 months.

Going ahead, we consider that IMTT will proceed to contribute stably to our outcomes for the rest of the 12 months. Utilization is predicted to common within the 90% vary and we anticipate charges to stay secure all year long. IMTT continues to advance quite a lot of development initiatives. Progress initiatives are supported by long run contracts and each reposition the enterprise and enhance connectivity with new and present prospects.

Initiatives which were or will probably be commissioned in the course of the 12 months are anticipated to generate roughly $ four million of further EBITDA in 2020. The expansion initiatives beneath improvement at IMTT are a part of our program plus extensive deployment of capital aimed toward investing within the infrastructure of our corporations and enhancing their resilience. We proceed to anticipate to deploy between $ 200 and $ 225 million in development capital this 12 months, of which roughly $ 180 million will probably be allotted to initiatives with IMTT. By the tip of the second quarter, we had efficiently deployed $ 119 million of the entire quantity.

Lastly, we recorded a decrease quantity of unfavourable EBITDA and a barely larger quantity of unfavourable free money circulation in our Company and Different section. As anticipated, SG&A bills remained secure from 2019, however down sequentially, as we reported in our first quarter name once we noticed skilled companies prices had been larger initially of our gross sales course of. An earnings tax legal responsibility this 12 months versus a tax profit final 12 months resulted in unfavourable free money circulation technology of $ 15 million in comparison with $ 10 million in 2019.

We ended the second quarter with $ 874 million in money, of which $ 599 million was taken from our holding firm's revolver. We stay assured within the liquidity and funding place of our enterprise. Reflecting the affect of COVID-19, our consolidated monetary leverage elevated to four.eight instances web debt over EBITDA on the finish of the quarter. We assume that leverage will enhance by means of the tip of the 12 months, as a result of continued affect of COVID-19 on our operational efficiency. With that, I'll return the decision to Chris.

Christopher frost — Normal supervisor

Thanks, Liam. Earlier than I open the decision to your questions, I'll spend a couple of minutes discussing our outlook for the rest of 2020. First, we're assuming no further quarantine or lockdown measures associated to COVID- 19 just isn’t applied. Whereas adjustments in client desire for using non-public quite than industrial aviation or a sustained enhance in pleasure journey by non-public jet might result in additional will increase in exercise common aviation flights and Atlantic Aviation efficiency, we have to see a extra complete return of lockdown measures. This may seemingly have a constructive affect on enterprise and company flight exercise in main metropolitan areas, worldwide journey, and resumption of in-person occasions and conferences.

We consider that the resumption of such a exercise is probably going obligatory if flight exercise is to return to 2019 ranges, particularly in markets akin to New York, Chicago and Los Angeles. Second, in Hawaii the federal government has prolonged quarantine guidelines and journey restrictions till the tip of August. Beginning September 1, guests to the state will probably be required to reveal that they’ve just lately examined unfavourable for COVID-19 previous to their arrival. I be aware that the state quarantine guidelines have been prolonged a number of instances. Our resumption of gasoline gross sales to industrial and industrial prospects, particularly lodges and eating places, could take time. Above all, gasoline gross sales to residential prospects ought to stay secure.

Lastly, we consider we’ve got good visibility on the outlook for IMTT. The surroundings stays constructive for the storage enterprise and given the comparatively modest variety of contracts to be renewed, we’re assured within the continued stability of the enterprise of the enterprise over the remainder of the 12 months. With that, thanks as soon as once more for taking part in our attraction this morning. At the moment, I’ll ask our operator to open the cellphone traces to your questions.

Questions and solutions:

Operator

[Operator Instructions] And our first query comes from Tristan Richardson's lineage with Truist Securities. Go forward, sir.

Tristan richardson – Truist Securities – Analyst

Hello guys.

Christopher frost — Normal supervisor

Hi there, Tristan.

Tristan richardson – Truist Securities – Analyst

I actually recognize all the main points about exercise that you just see in AA. And be aware that the remark you made round June solely went down 23% year-over-year. Are you able to discuss a bit about what you see in July and even the previous couple of weeks?

After which, are we to imagine that this transformation in combine persists? I imply, it appears to be like like, because the restoration continues, it appears to be like like a return to greater planes and / or larger, longer legs might delay this restoration. However simply interested in your ideas?

Christopher frost — Normal supervisor

Yeah. Look, I believe, Tristan, that's a great abstract. Buying and selling as much as July has been broadly according to June, though we clearly noticed a great enhance in flight exercise over the July 4th weekend. And I believe it was really going up 12 months by 12 months. However as I stated within the ready remarks, for our personal liquidity and planning functions, we assume that we gained't essentially see this pickup in enterprise or company journey, the occasion journeys. And by occasion journey I imply massive sporting occasions and in-person conferences, in addition to worldwide journey. So whereas we stay assured within the outlook for this enterprise and the resilience of the GA flight enterprise, for our personal inner planning functions, we suspect that – these markets could take slightly longer to get well. .

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Tristan richardson – Truist Securities – Analyst

Helpful. After which only a fast on aviation. Simply across the environmental expense at one of many OPs. Ought to we consider this as a one-time kind and that $ 7 million is the entire estimated price to repair the problems there?

Liam stewart — Monetary director

Yeah. Tristan, it's Liam. So this pertains to an incident from April 2019. And the rationale it was recorded this quarter is that we’ve got readability of the remediation plan and readability of the estimated price of this remediation as effectively. And in order that represents our present kind of considering across the plan. There could also be some variation relying on how the plan rolls out, however the recognition this quarter actually is our greatest estimate of the entire environmental legal responsibility to scrub it up.

Tristan richardson – Truist Securities – Analyst

Helpful. Thanks, Liam. After which only one final for me, simply round strategic initiatives. I recognize all of the incremental suggestions you might have supplied on the operational enterprise gross sales processes. Are you able to discuss in regards to the tax concerns right here because it appears to be like just like the sale of the only proprietorships might be the seemingly consequence quite than an outright sale of the enterprise? And the way do you propose this?

Christopher frost — Normal supervisor

Why don't I tackle the final one right here after which Liam can take the primary one. I believe that is precisely the place we’re in the present day that it’s extra prone to be a sale of the only proprietorships than one. A sale of the set. And the rationale I say that is that I check with the feedback within the ready remarks, with respect to Atlantic Aviation. I don't assume it's applicable to maneuver this course of ahead at this level, on condition that I anticipate that potential consumers might want to see further proof of the resumption of enterprise within the enterprise. common aviation in order that we are able to maximize the worth of this enterprise.

So, subsequently, that might counsel that at this level a sale of the corporate as a complete could also be much less seemingly than a sale of the person working companies. And by that, we'd type of be saying sale of MIC Hawaii and IMTT, then Atlantic, could be bought by means of a listed entity's withdrawal, which might proceed to carry Atlantic Aviation. Simply when it comes to how we’d price that. I imply, clearly, our aim is to maximise shareholder worth. And as I stated in our first quarter name, the way in which we’d actually do that might be to actually have a look at what the present worth of the product is predicted to shareholders to shareholders within the totally different promoting setups or promoting buildings being thought of. So the judgment as to which gross sales construction we in the end pursue will probably be one which we consider maximizes worth, taking into consideration any capital positive aspects tax that will probably be payable, that would be the sale of the companies beneath. -jacent.

Liam stewart — Monetary director

Sure, Tristan, and I believe like Chris stated, there are sorts of permutations in promoting sole proprietorships that generate a extra tax-efficient end result than simply promoting three sole proprietorships from the dad or mum firm. listed on the inventory alternate. So the instance that Chris talked about the place the newest divestment would successfully be a public firm pullout is a more practical instance than merely promoting all three corporations out of MIC. And sure, clearly, we’re targeted on maximizing after-tax worth.

Tristan richardson – Truist Securities – Analyst

That is good. Thanks so much guys.

Christopher frost — Normal supervisor

Superior. Thanks Tristan.

Operator

And our subsequent query comes from TJ Schultz's lineage with RBC Capital. Go for it.

Christopher frost — Normal supervisor

Hi there, TJ.

TJ Schultz – RBC Marchés des capitaux – Analyste

Salut. Hi there. Tout d'abord chez Atlantic, quel était le mélange de voyages d'affaires et de loisirs en 2019? Et lorsque vous pensez essayer de revenir aux niveaux de 2019, lorsque vous pensez à la réduction des voyages d'affaires et des événements en personne, il semble que vous prévoyez une récupération plus lente là-bas, ce qui est logique. Mais peut-être que vous pouviez simplement donner une idée de ce à quoi le flux de trésorerie peut ressembler dans un environnement de voyage d'entreprise plus lent?

Christopher Frost — Directeur Général

Alors pourquoi ne pas prendre la première partie de ça? Écoutez, le style de réponse courte est que, pour ce qui est de la répartition entre les loisirs et les affaires, il est très difficile d'évaluer cela sur la base que nous ne savons tout simplement pas. Je veux dire, clairement, l'un des attributs du pilotage de l'aviation privée est que nous n'avons pas de visibilité quant au however de ce voyage. Ce que je dirais, et je le rattache aux remarques préparées, en juin, nous avons constaté une baisse de l'activité aérienne de 23 p. 100 par rapport à la période comparable précédente. Nous pensons qu'une grande partie de la reprise a été tirée par les voyages de loisirs et l'absence de voyages d'affaires ou plus axés sur les affaires. Ce que je dirais, c'est que ce trafic worldwide et événementiel, selon nous, représenterait environ 15% du trafic de l'Atlantique au cours d'une année normale.

Dans la mesure où nous voyons un retour en arrière complet et que les entreprises et les entreprises reviennent à une activité plus normale, alors je prévois que nous verrions en quelque sorte une substitution de ce que nous supposons être un trafic axé sur les loisirs par un trafic plus axé sur les affaires, ce qui ont été l'avantage supplémentaire d'être pris en cost par des avions plus gros qui volent sur de plus longues distances avec plusieurs locations et, par conséquent, utilisent plus de carburant. Nous n'avons donc pas de visibilité quant au however ultime d'un voyage, par exemple, contrairement aux compagnies aériennes commerciales. Et je pense que vous apprécierez, je veux dire, clairement, que c'est l'un des attributs des passagers qui utilisent l'aviation privée. Mais comme je l'ai dit, je pense qu'en termes de trafic worldwide sur événementiel, nous considérons que cela représente environ 15% du trafic. Et l'autre reprise viendra vraiment d'un déplacement du combine des loisirs vers une plus grande partie de l'activité en entreprise.

TJ Schultz – RBC Marchés des capitaux – Analyste

D'accord. Maintenant c'est utile. Simplement changer de vitesse sur les contrats de stockage chez IMTT. Quel pourcentage de la capacité sous contrat doit être renouvelé en 2021? J'essaie juste de comprendre si nous devrions nous attendre à une baisse notable de l'utilisation l'année prochaine par rapport aux contrats d'un an que vous avez peut-être conclus en raison de perturbations liées au COVID? Thanks.

Christopher Frost — Directeur Général

Oui. Ce à quoi je voudrais en quelque sorte faire référence, ce sont les commentaires précédents que nous avons faits qui diraient en quelque sorte que dans le cours regular, nous voyons normalement un tiers du livre de shoppers à renouveler chaque année. Je dirais également que là où nous en sommes aujourd'hui, nous voyons un marché constructif pour le stockage et bénéficiant d'une bonne demande à la fois des acteurs du système et des négociants en volatilité qui jouent leur rôle en termes d'équilibrage des marchés des matières premières. Je pense qu'à mesure que nous commençons à voir une reprise de l'économie américaine et des économies mondiales en général, nous nous attendons à voir une certaine volatilité sur certains des marchés des produits pétroliers. Et comme nous le savons, les périodes de volatilité sont fréquentes – les opérateurs de terminaux en bénéficient souvent.

Et donc je pense que, alors que nous voyons en quelque sorte la reprise prendre racine, nous nous attendons à ce que nous continuions à voir une forte demande de la half des acteurs du système, en particulier autour du carburant et de la mer. Et nous sommes également susceptibles de voir une bonne demande de la half des merchants de volatilité qui chercheront à profiter de toute opportunité d'arbitrage sur ces marchés. Nous nous sentons donc plutôt bien – certainement satisfaits des views pour 2020. Et le marché est actuellement constructif pour le stockage et pour de nombreux produits pétroliers qui se poursuivront jusqu'en 2021.

TJ Schultz – RBC Marchés des capitaux – Analyste

D'accord. Merci beaucoup.

Opérateur

Et notre prochaine query vient de la lignée de Jerome Han [Phonetic], Investisseur. Allez-y.

Jérôme Han

Oui, bonjour. J'appelais pour savoir quand vous pourriez restaurer les dividendes?

Christopher Frost — Directeur Général

Je vous remercie. Merci pour la query. Écoutez, clairement, le dividende est une query pour le conseil. Et comme toujours, notre Conseil considère la efficiency actuelle de l'entreprise et la efficiency future attendue de l'entreprise dans une gamme de différents scénarios et exams de résistance, ainsi que de l'état de notre bilan ainsi que de nos engagements financiers et obligations contractuelles. En ce qui concerne le trimestre en cours, le conseil a évalué tous ces facteurs et a déterminé que le maintien de la suspension du dividende était la resolution la plus appropriée. Il ne serait pas approprié pour moi de spéculer sur ce que le conseil d'administration peut décider à ce stade en ce qui concerne le troisième ou le quatrième trimestre.

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Jérôme Han

Oui. Malheureusement, j'avais hâte d'avoir un rendement annuel de 40 00zero $ sur mon investissement sous forme de dividendes. J'ai 78 ans. Je voulais l'utiliser pour ma retraite, et c'est un coup dur pour moi. C'est pourquoi j'ai posé la query.

Christopher Frost — Directeur Général

Non, j'apprécie cela, mais je pense que, compte tenu de l'environnement actuel dans lequel nous sommes, les mesures que nous avons prises sont vraiment conçues pour nous assurer que nous disposons de liquidités suffisantes pour traverser cette crise et pour garantir que nous protégeons la valeur de notre entreprises pour réaliser plus tard cette valeur par la vente de chacune des entreprises en exploitation. Merci pour vos questions.

Jérôme Han

Merci beaucoup.

Opérateur

Et notre prochaine query vient de la lignée de Thomas Shen avec Golden Tree. Allez-y.

Thomas Shen – GoldenTree Asset Administration – Analyste

Salut. En ce qui concerne le style de juillet, voyez-vous de grandes différences dans les emplacements et remark ils se rétablissent du côté de Atlantic Aviation?

Liam Stewart — Directeur financier

Oui, donc Thomas, c'est Liam. Comme Chris l'a dit, en termes de efficiency commerciale jusqu'en juillet, ce qui est globalement conforme à ce que nous avons vu en juin en termes d'activité de vol, soit environ 23% de baisse d'une année sur l'autre. Nous n'avons pas encore vu une sorte de grande variation géographique par rapport à ce que nous avons observé à la fin du deuxième trimestre. And my guess is that whereas college holidays are nonetheless beneath method throughout the majority of the nation it was, and it’ll actually be type of as we get deeper into the third quarter that we may even see some differential relative to what we noticed from a location — on a location foundation within the second quarter.

Thomas Shen — GoldenTree Asset Administration — Analyst

I suppose intuitively, I’d assume, like in July, the Northeast would have accomplished higher than like Texas, Florida, type of reverse of possibly what you’ll have thought in late Might or Might. Is that type of the proper method to consider it?

Liam Stewart — Chief Monetary Officer

No. Type of broadly talking, the extra leisure-oriented locations quite than the industrial locations within the Northeast have been one type of carried out slightly higher, however type of case counts and that kind of stuff relative to COVID-19. However I believe, sure, type of usually, you’ll see slower exercise within the Northeast presently of the 12 months, simply given individuals on holidays, and so forth, and so forth. Additionally, it's slightly bit laborious to bifurcate what could also be COVID-specific relative to what could be a perform of the truth that individuals are on trip and out in resort areas and so forth.

Thomas Shen — GoldenTree Asset Administration — Analyst

And also you talked about when enterprise exercise does come again as a substitution for leisure journey. I suppose, why would it not be a substitution essentially versus simply added type of demand?

Christopher Frost — Chief Govt Officer

I believe that's a great level. I imply as I stated within the ready remarks, it could be that given the benefits that personal aviation has over industrial airways that we’ll proceed to see leisure visitors rising. What we’re summizing is that numerous the flight exercise we’ve got seen is probably people quarantining out of the metropolitan areas whereas enterprise and company exercise is suppressed. I believe to the extent we see a whole rollback of the lockdown measures and companies return to extra regular exercise there possibly people who’ve relocated to these resort areas return to regular exercise.

Thomas Shen — GoldenTree Asset Administration — Analyst

Acquired you. Thanks.

Christopher Frost — Chief Govt Officer

Thanks.

Opérateur

And our subsequent query comes from the road of Jonathan Reeder with Wells Fargo. Allez-y.

Jonathan Reeder — Wells Fargo Securities — Analyst

Hey good morning gents.

Christopher Frost — Chief Govt Officer

Good morning Jonathan.

Jonathan Reeder — Wells Fargo Securities — Analyst

Chris, did you say you thought the sale of MIC Hawaii might transfer ahead sooner quite than later, even with out seeing a restoration in Hawaiian economic system, simply given the small measurement of the enterprise?

Christopher Frost — Chief Govt Officer

Sure I believe, Jonathan, what I stated within the ready remarks is, in the end, it's going to learn by a restoration in tourism. And I believe the vital factor that we have to see is the governor lifting the 40-day quarantine restrictions. And as I stated within the ready remarks, that may also allow us to work with the bidders to facilitate their on the bottom due diligence and face-to-face conferences with the administration group and I believe that’s the vital step that we have to see as we advance that course of going ahead. My remark round Hawaii was additionally associated to the scale of that enterprise relative to the others.

Jonathan Reeder — Wells Fargo Securities — Analyst

Okay after which remind us, what are you assuming when it comes to time to shut any sale of that enterprise, as presumably, you want the state utility regulatory fee approval?

Christopher Frost — Chief Govt Officer

Sure, that's right. And maybe that can also be one other think about our considering that it could make sense to advance that course of ahead, given the time it is going to take for PUC approval. And for our personal planning functions, we’re assuming that from getting into into definitive agreements with the client by means of to acquire PUC approval is prone to take 12 months as they’ve usually accomplished within the state of Hawaii.

Jonathan Reeder — Wells Fargo Securities — Analyst

Nice, thanks for extra colour. I recognize it.

Christopher Frost — Chief Govt Officer

It's my pleasure.

Opérateur

And our subsequent query comes from the road of Matthew Marks with Jet Capital. Allez-y.

Matthew Marks — Jet Capital — Analyst

Salut. I had a query, which is in 2019, at AA, are you able to communicate to type of what utilization was as a share of theoretical potential type of flight capability or flight volumes? How a lot was your restoration, assuming a significant pickup in non-public aviation demand? How a lot busier might these FBOs be?

Christopher Frost — Chief Govt Officer

Sure, I believe, one of the simplest ways to reply that query is simply coming again to the place we're type of seeing flight exercise in the present day. As I stated, June is down 23% in comparison with the identical month final 12 months. Buying and selling by means of July is in keeping with what we're seeing in June. As I stated within the ready remarks, what we aren’t essentially seeing is worldwide non-public aviation exercise, given numerous the journey restrictions on inbound arrivals into the U.S. and we're not seeing numerous the in-person occasion, sporting occasions and conferences visitors. As I stated beforehand, we estimate that, that’s price about 15% of flight exercise.

And so I believe as I stated, I believe to ensure that us to see a return to 2019 ranges, I’d wish to see that full rollback, notably that orientation of the combo to extra company journey and I'd additionally wish to see the worldwide markets opening up in addition to seeing the type of the rescheduling of in-person conferences and sporting occasions, which we’d type of counsel would most likely drive round 10% of our 2019 exercise stage. I believe not like industrial airways, I believe it’s tough to really have a look at the theoretical seat capability inside the market and subsequently, how a lot addition you can decide up.

Matthew Marks — Jet Capital — Analyst

Okay, thanks.

Opérateur

And our subsequent query comes from the road of Kyle Chung [Phonetic] a investor. Allez-y.

Kyle Chung

Salut. Thanks for the extra colour on the gross sales course of. I believe you beforehand talked about and also you talked about in the present day that you just're inspired by the extent of curiosity. Are you able to characterize the type of mixture of the potential consumers there? Is it primarily non-public fairness? Is it primarily strategic? Or any colour you possibly can cowl there?

Christopher Frost — Chief Govt Officer

Sure Kyle, I would like to not get drawn on the — both the type of the extent of curiosity or the traits of the potential consumers. I believe we have to protect the diploma of confidentiality to not prejudice MIC's place in a gross sales course of.

Kyle Chung

I perceive that.

Christopher Frost — Chief Govt Officer

Thanks.

Kyle Chung

With respect to the company revolving facility, I believe it matures in roughly 12 months and a half. Do you anticipate that you’ll want to push out that maturity or do you anticipate that a lot of gross sales course of — or there will probably be some finality for the sale course of previous to the maturity of the revolver?

Liam Stewart — Chief Monetary Officer

Kyle, it's Liam talking as effectively. Look, you'll recognize, as you talked about, that’s our nearest maturity, however that we’ve got the money proceeds from the draw down sitting on our stability sheet. We’re presently evaluating extending that facility.

Kyle Chung

Merci beaucoup.

Opérateur

Thanks. And now I want to flip the convention again over to Mr. Frost for any closing feedback.

Christopher Frost — Chief Govt Officer

Thanks for taking part in our convention name in the present day. We sit up for talking with you on our subsequent quarterly name or previous to that because the circumstances warrant. With that, we want you an ideal day.

Opérateur

[Operator Closing Remarks]

Period: 44 minutes

Name individuals:

Jay Davis — Head of Investor Relations

Christopher Frost — Chief Govt Officer

Liam Stewart — Chief Monetary Officer

Tristan Richardson — Truist Securities — Analyst

TJ Schultz — RBC Capital Markets — Analyst

Jerome Han

Thomas Shen — GoldenTree Asset Administration — Analyst

Jonathan Reeder — Wells Fargo Securities — Analyst

Matthew Marks — Jet Capital — Analyst

Kyle Chung

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