Bonheur Asa

and welcome to the second quarter presentation for Bonheur. My name is Annette Olsson. I am the CEO of Bonheur and Fred Olsson & Company. Today, I have Øyvind Engesrønning with me. He is the Vice President of Fred Olsson Finance and also the CEO of Fred Olsen Investments. He will do the presentation as usual. And then we also have the CEOs for the different companies that will come and present to you. We will then continue with questions at the end. So, Erwin, go ahead.

Thanks, Annette. Richard Olavo was unable to attend today, so I'm taking this in his place. Just a few reflections before we go into the figures on this quarter. I would say it's been overall a very good quarter across all segments, both financially and operationally. In fact, looking back, it's the best second quarter we've had since 2016. So that's quite well. But as you probably say, there's still room to improve. So if you just then move on to the highlights of the quarter and focus on each segment from the left to the right. If you look at renewable energy, the segment generated an EBITDA of 259 million Norwegian kroner. That is a reduction from last year's EBITDA of 277 million. Last year, there was a positive impact stemming from the revenue recognition or a reversal of accrued high price contribution fee, which at that quarter was 80 million kroner. So the underlying EBITDA is actually an improvement of 62 million kroner over the quarter. Of course, this EGL, as the fee is called, is now no longer relevant. Reasons for the performance this quarter was a 36% lower power price on average across our markets and a 32% higher generation across our wind farms. So good performance on generation. Also positive to note, and Sofia will come back to this in her presentation, a final investment decision was taken on a new wind farm in Scotland, the Crystal Rig 4, which will have an investment cost of approximately 81 million pounds. So that's good. Moving on then to the wind service segment. Obviously, the result is very strong. This quarter, as you will see, they generated an EPDA of 763 million kroner, which represents a 443 million improvement from this quarter last year. Now, during this quarter, we have received, or Perils and Wind Carrier have received a cancellation on a contract, which then has been recognized and impacts the EBDA this quarter with 290 million Norwegian kroner. Except for the termination fee There are other also positive impacts this quarter, which stems from the contract, which has been in place this quarter on the Blue Wind vessel, which was not there last year, and also the revenue recognition of a reservation fee on a reservation contract entered into last quarter, which was lapsed this quarter. Obviously, with the termination on a contract in place, that impacts the backlog which is down now from 514 million euros in the previous quarter, i.e. the first quarter this year, and is now down to 325 million euros for the turn vessels, with an additional 71 million euro in backlog on the blue wind vessel. Okunbana Uda, the CEO of Nelson Wind Carrier, will come back to both the termination fee and also the impact on the backlog and the development backlog with the new contract that are also in place now. Braveturn is still undergoing an upgrade and the conversion is expected to be finished during the third quarter this year. Obviously, with a vessel in the yard, it's impossible to get 100% utilization, but with the turn vessels that were in operation, they achieved close to 100% utilization. Again, Håkon Magnum will come back to this. So then moving on to crews, a good quarter, as mentioned already, actually by generating an EBTA of 212 million kroner, which is up from 132 last year, This is actually, at least for me, the best second quarter result I've ever seen since I started working here 12 years ago. So very good to see Fred Olsen Cruise Line starting to firing on some cylinders and now after the COVID. But still rooms for improvement, we have to say. The performance is explained by, in most part, the achieved higher occupancy rate, now at 77% in the second quarter, which is up eight percentage points compared to last year. If you look at the average second quarter occupancy rate between 2014 and 2019, that was at approximately 77%. So we're now at par with the occupancy rates we saw before the pandemic came in, and we're very glad to see that. Ticket price development has also been positive, albeit not as positive as the occupancy improvements. So the net ticket income per passenger day during the second quarter was £196 million. Sorry, that wouldn't be great. £196. Up from £191 last year. Fellowship cruise lines continue to see good booking numbers and good customer satisfaction. The final segment then to cover is the other investment segment. Impact on the EBITDA is of fairly negligible, with a minus 4 million EBTA generated in the quarter, whereas it was 3 million negative last year. In NHST, we've seen an improvement in EBTA, up from 22 million last year up to 44 million in this year's quarter, and that's great to see. Fred Olsen, 1848, continues to undertake and progress their technology initiatives and commercialization initiatives. And Fred Olsen Investment continues to manage and undertake and look into more investments for the Bonaire Group. So this gives consolidated revenues for the group of 4.3 billion Norwegian kroner, up from 2.8 billion last year. EBITDA consolidated at 1.2 billion kronor approximately, up from around 700 million last year. An EBIT of 938 million, up from 458 million last year. And the net result after tax of 594 million, up from 554 last year. Sorry, 694 million this quarter. First of all, also just to reflect on the equity situation in the parent company. So the equity ratio remains rock solid at close to 71%. It's down from 75.6% this quarter last year. That change is due to a bond issue, which was undertaken by Bonheur in the third quarter last year. In fact, the equity level in Bonheur as a parent company has increased during the period. Cash in the parent company also continues to remain very solid level, close to 3 billion kronor, up from around 2.3 billion last year. So I will not dwell too much on the consolidated summary, as I've already been through many of these figures already. Perhaps just noting some changes from the previous quarter, just to explain some of those. If you look at the net finance effects, there's been a change since the previous quarter of 233 million and negatively. In fact, I would say that the net finance cost this quarter are more in line with where we would expect them to be. So last year's result, I would say that the big change stems from a big swing in unrealized exchange rate differences this quarter. Also, unrealized impact from the revaluation of swaps in federal renewables, and also sort of positive impact from actually net interest costs. Obviously, as you know, Bonheur has a very strong cash position, and any change in interest rates impacts us positively, you could say, due to that. On the tax side, this quarter had 109 million in tax, and you see the swing of 170 million negative lift versus last year. That is due to that we last year had the recognition of deferred tax assets in the second quarter. So that explains this. It all ends up, as I mentioned, in a net result of the group consolidated of 694 million kroner where the shareholders of the parent company sit with 596 million of that. The rest is for the minorities. Then looking at the segments a little bit more. I've already been through much of this, but I'll do some repeat and additions on this. Within renewable energy, we saw an improvement in the revenue side of 70 million kroner. As mentioned, this stems mostly from the improved generation on the wind farms. In the wind service segment, we have an improvement in the revenues of close to 1.2 billion kroner. So this quarter delivers 2.45 billion kroner in revenues. Now, the big change from last year already touched upon it. This relates to the recognition of the termination fee, as well also as the contract for the Blue Wind vessel, which was not there last year, and also the reservation fees that have been recognized this quarter. Some negative impact by Global Wind Service, but all in all, a positive change of close to 1.2 billion kroner. For the cruise segment, The improvement is 188 million. Again, this relates to occupancy. So this quarter delivers revenues of 1 billion and 43 million Norwegian kroner. All in all, total revenues of 4.3 billion kroner. Then moving on to the EBITDA. Looking at renewable energy, they delivered 259 million in EBITDA, down 18 million from last year. Already mentioned that had it not been for the recognition or the diversion of accrued EGL fees in prior year's quarter, this change would have been positive by 62 million, more or less reflecting the uplift in the top line for the company. On the wind service side, 763 million of EBITDA. The change from last year of 442 million 290 million of that reflects from the termination of the contract that Håkon Mange will come back to. Other items relate to, as I mentioned, good performance on the contract on the Blue Wind vessel, and also reservation fees received. On cruise, the 212 million in EBITDA, the increase is explained by the higher occupancy, as already mentioned. Just to add on Fred Olsen Cruise Lines and the cruise segments, this quarter's performance on the cost side was negatively impacted by the outcome and the conclusion of an arbitration dispute between Holland America Line and the vessel-owning companies for Bollett and Borealis, which resulted in net costs of 27 million Norwegian kroner related to legal fees. So had not been for that, the improvement would have been bigger as well. Then to move on to the balance sheet items and the group capitalization. Many of you are already familiar with what the strategy is, but just to reiterate, the group has a target and objective to secure long-term visibility and flexibility through the business cycles. And we achieved that through optimizing and remaining, having a strong balance sheet. There is a green financing framework in place for Bonaire and its subsidiaries, under which also the Bonaire bonds are issued, and that's being used by several of the group companies. This table shows you on the top side the cash and debt position in the companies that are 100% owned by Bonaire, and on the bottom side, the companies that are between 50% and 100% are associated by Bonaire. As you can see then on the top half, renewable energy on the 100% owned entities, they have 356 million in cash and zero debt. That's a good position to be in. Wind service now, obviously a big change from prior quarters. The net cash flow impact from the reservation fee and the termination fee this quarter was 955 million kroner. And that is then reflected in the high cash balance in the wind service segment. So now we see that there is actually a net cash position of 1.2 billion kronor, which is remarkable and super strong. On the cruise segment, glad to see that they're building cash now. So they have a cash balance of 628 million kronor and a remaining vendor financing on the two vessels that were acquired in 2020, now at 198 million kronor. Bonheur and other companies 100% own have close to 3.2 billion in cash and close to 3 billion in debt, which relates to the bond debt that Bonheur has. So all in all for these companies, a net cash position of close to 2.2 billion kroner, which is strong. Then on the bottom half, where we try to make sure that we optimize the financing structure as good as possible. you'll see that within the renewable energy segment, there is 365 million in cash, but 5,020 million kroner in debt. And that is mostly project debt related to the wind farms that they have with long, secure, visible cash flows and where we try to optimize and make sure we have long duration financing in place. On the wind service segment, for the other companies that are not 100% owned, there is 578 million in cash. and 918 million in debt. So for these companies as a whole, there is a net debt position of close to 5 billion. Then, Annette, are you through the numbers?

Okay, good. We will now move to the segments. And Sofia Olsen-Jepsen, CEO of Fred Olsen Renewables, is next.