Akastor ASA

Good afternoon and welcome to the presentation of Acastor's third quarter results. My name is Øyvind Polske, CFO, and I'm here together with our CEO, Mr. Carl-Erik Kjellstad. As usual, we have with us HMH, represented by Tom McGee, CFO, and David Bratton, SVP Finance. Kalle will, as usual, start with some key highlights before Tom and David will go through HMH. I will then focus on Akastor Consolidated Financials before I turn it back to Kalle. Towards the end, we'll open for questions through the new web solution where questions can be posted at any time. I will then leave the word to Kalle. Please, Kalle.

Thank you, Eivind, and good afternoon and good morning to our U.S. participants, and thank you to everyone for joining us here today. We are pleased with our third quarter results, and we remain positive for the outlook for 2024 for all of our portfolio companies. Slide two. Let us start with the key highlights for the third quarter. Our portfolio companies had a strong quarter with good operations and corresponding results. We are pleased to see continued positive development of HMH in the quarter, demonstrated by a 32% year-over-year growth in EBITDA to US dollars 46 million in a quarter. This is in fact equal to the level recorded in the fourth quarter last year, and does on par with the highest quarter results since HMH was established three years ago. If we look at the rolling LTM, Adjusted EBITDA was USD 167 million per the third quarter, significantly higher than one year ago. The continued profitable growth for HMH continues to be an important foundation for a future HMH liquidity event. On this note, HMH continues to keep its so-called S-1 filing prospectus with the SEC in the US updated. The timing of a potential launch of an IPO continues to be dependent on market conditions and the IPO sentiment. HMH remains to be our most valuable investment. The book value of our shareholding in HMH remains around 70% of our total net capital employed, with a book value of NOK 3.4 billion per the end of the quarter. or NOK 12.3 per Acosto share. Arcus Offshore delivered good operations in the quarter with a high revenue utilization despite a planned maintenance stop for Arcus Santos. Our book value of Arcus was around 1 NOK per Acosto share put at the end of the quarter, reduced from the second quarter driven by negative profit in the company. DDV Offshore had all three vessels in operation through the quarter and generated solid earnings. We were pleased to see that DDV secured new engagement for two of its vessels post the third quarter, with a total firm contract backlog now of around $3 million, providing a solid visibility going forward. The value of our investment in DDV Offshore is 1.4 Norwegian kroner per Acosta share, and this is based on the book value per vessel of modus $11 million per vessel. Acosta maintains a net cash position through the quarter, with no draw on corporate credit facilities. In total, and including value of our listed holdings that had a value of close to one NOC per Acosto share per the end of the third quarter, our book equity value per the end of the period was around the same level as the previous quarter. That means about NOC 20 Kroner per Acosto share. With that, I'm very pleased to introduce HMH's CFO and EVP, Thomas McGee, that will take us through HMH's third quarter earnings. So Tom, the floor is yours.

Thank you, Karl-Erik. Obviously, we are very excited about this quarter. I saw a strong top-line growth and strong EBITDA growth, as Karl-Erik just mentioned. Very good margin performance. Orders a little soft. I think what's happening there is the drillers are—we talk about white space, even though some of the drillers are still the aftermarket revenue for a couple of quarters. So we did see a little bit of lightness there, but really offset by really, really strong margin performance. And if you think about how that develops, when we're out meeting with investors, we talk about that aftermarket business as we continue to optimize the cost structure of HMH and grow the aftermarket side, that pulls your margin up. But as we continue to grow the land business and do growth initiatives, that can actually dampen margin performance. So over the long run, you know, we do expect to see margins as strong quarter to quarter. It's going to continue to fluctuate, and I don't think we should set the expectation over long periods of time. So anyway, as you look at the quarter, really strong execution on aftermarket, raising the margins and really leading to what is for us a record quarter on the margin side. And again, still making progress on land. And so that does include some of the land execution that we're continuing to get better at and continue to deliver some of those We're making good progress on all fronts there. We also appointed a new chairman, Dan Rabin. We're very happy to have him join as part of our overall approach to the IPO this year that Carla has talked about. Continue to monitor conditions there and look at it. But from our perspective, we keep our S-1 updated. We continue to be ready. we're very happy with the progress we've made there. And then finally, we got stuck here, but we have a lot of our other colleagues who are in the Middle East right now celebrating an opening of our Saudi facility. So we continue to make really great strides there. And then finally, I know it's listed as the first bullet point. We'll talk about it here as we flip the page. We'll talk about the drill form acquisition. And we're out meeting with investors. We've got a page that shows our global footprint. We talk about how we took two effectively subscale global businesses, combine them into one, optimize cost structure, but maintain this incredible network globally, be able to push product and service through anywhere in the world in the oil field. And so you take something like this, you take a technology and you can read the slides. I'm not going to read it to you, but you take the technology that we have here. It's a commercial technology. we're deepening our relationship with a very important client, Helmer and Payne in the U.S. And then we take that technology and we push it through that global network we've been talking about. And so in the long run, this gives us tremendous growth opportunity, particularly in the Middle East and South America. We're including the products in some bits there. And so it's just a classic example of what we built this business to do. So we're excited about that opportunity. We welcome the team on board. So with that, I'll pass it on. David, to touch on some numbers.