Paratus Energy Svcs Ltd

I will now hand you over to your hosts.

Good day, everyone.

Welcome to this fourth quarter and unaudited full year 2024 results presentation for Aperitus Energy Services Limited. My name is Robert Jensen, and I am the CEO of Aperitus. Joining me on the call today is Baton Hajimemedi, our CFO. Before we begin today's presentation, I would like to remind all participants that some of the statements on this call may involve forward-looking statements. Forward-looking information involve risks and uncertainties by nature that may cause actual results to differ materially from those projected in such statements. I therefore refer you to our latest public filings. Now let's start with a summary of the key highlights for 2024, including the fourth quarter. As you know, 2024 was a transformative year for Paritas. Early 24, we finalized the transition from Cedral and established Paritus as a fully independent organization. In June, we successfully completed a $500 million partial refinancing in the Nordic bond market, shifting the majority of the vast majority of our debt to 2029. Later in the same month, we also began life as a public company following an IPO on the Euronext Growth Oslo. This initial listing was followed by an uplisting to the main list of the Oslo Stock Exchange towards the end of last year. We also initiated our shareholder return program and declared quarterly dividends of 22 cents per share for both the second and the third quarter. In total, we returned approximately 10% of our market capitalization to shareholders during the second half of 2024. Today, we announced another quarterly dividend, again at 22 cents per share, and launched a $20 million share buyback to be conducted as a reverse book building process. The $20 million buyback marks the first step in utilizing part of the previously announced $100 million share repurchase program, which will further increase our return to shareholders. In Q4, we invested $12 million and participated with our prorated share in a private placement in Archer Limited to fund the acquisition of wellbore fishing and rental tools. Beyond growing into a highly attractive P&A market, the reasoning behind this investment was that it would strengthen the company and allow them to refinance at a lower cost of capital. Earlier this month, Archer successfully completed a $425 million bond refinancing. And yesterday, the company announced the initiation of a quarterly cash distribution to shareholders. Based on the public commentary from the company, we expect the direct annual cash yield on our shareholding to start at about 10%. As of yesterday, our shares in Archer were worth approximately $54 million. In early February, we received a full payment of approximately $209 million following a transaction with an international bank that allowed us to collect overdue invoices in Mexico at a cost well below 10%, which we deemed attractive in the context of the company's cost of capital and other considerations. So while we exited Q4 with a cash balance of $99 million and $677 million in net debt, our cash balance, net debt and net debt pro forma for this transaction stood at $294 million and $482 million as of year-end 2024. This transaction was strategically important to the company, first in the monetary sense, whereby we were able to materially strengthen our cash position. As of early February, our cash balance stood at 277 million. To put this into context, this represents more than 40% of our market capitalization. Secondly, the transaction illustrates that there are ways to monetize the receivable balance outside of the ordinary collections from the client. We believe that there will be opportunities to pursue this type of structure again in the future, should we wish to do so. This is important to keep in mind when considering that Fontys still maintains a receivable balance with a customer of about 155 million. Combined, our current cash at hand and the receivable balance corresponds to approximately two-thirds of the company's market capitalization. We remain focused on maintaining a strong balance sheet to support our operational priorities, while at the same time having a policy to provide shareholders with stable long-term and sustainable distributions. As a result of this, and again declaring a $0.22 per share quarterly dividend, as already mentioned, the company and the board of directors have decided to offer to repurchase shares for an amount of approximately $20 million. The buyback will be conducted by way of a reverse book building commencing today. The book building is expected to end on March 4th, which is Tuesday next week. Full details on how to participate in this buyback can be found in a separate press release that was released earlier today. Our two largest shareholders, Hammond and Lodberg, holding about 50% of the shares in the company, have informed us that they will not be selling shares in the buyback. However, we look forward to receiving tenders from any other shareholders wanting to sell shares to the company. Please note that any additional future share repurchases within the previously announced mandate to acquire shares for up to $100 million will be announced separately. Turning to the financial results for the fourth quarter and full year 2024, we reported Q4 revenues of 109 million, largely in line with Q3 revenues of 110 million, which included 8 million of variable revenue previously not recognized in Mexico. Q4 adjusted EBITDA came in at 63 million, the same level as Q3 EBITDA. And for the full year 2024, we reported revenues of 452 million compared to 430 million in 2023. 2024 EBITDA grew 8% year over year from 233 million in 2023 to 252 million for 2024.