Sea1 Offshore

Good day everyone and welcome to the review and presentation of our results for the second quarter 2022. My name is Bernd Domdahl and I'm the chief executive officer of the company. I'm joined by our CFO Vida Jasta and together we will take you through this presentation. CM Offshore's report for the second quarter 2022 was released prior to the market opening today. In this presentation, we will cover the main highlights of the report and we will refer to the presentation issued together with the financial report. At the end of the presentation, we will open up for questions. Looking at the highlights for the quarter, we had 28 vessels in operation and all vessels delivered a positive EBITDA margin. We had US dollars 75.3 million in revenue and we delivered an EBITDA of 32.2 million US dollars. This is equivalent to 43% EBITDA margin. Our cash position was 72 million US dollars at the end of the quarter and our book equity ratio was 34%. In addition to short-term work concluded, we secured one long-term contract in the quarter. That was the CM Spare Fish, who was awarded a contract with Deep Ocean, securing continued utilization until end of 2023. Subsequent events, we have managed to get in place a contract for the oil spill recovery vessel, CM Maragogi, The duration of the contract is three years with commencement in direct continuation of the current contract. First of two options is also declared for the CM Atlas and CM Giant. Both PSVs are no firm until end of 2023. A three months option is declared by Equinor for CM Opal, with commencement in September this year. They also have received a contract extension for Avalon C, 18 months extension upon completion of the current contract. This is ensuring continued operation well into second quarter 2024. Vidar Jasta will now give some more details regarding the results for the second quarter. Vidar.

Thank you, Vant. In the second quarter, CM Oxio generated $75.3 million in revenue and an operating margin of $32.2 million. Both figures represent a decent uplift from previous quarter and same quarter last year. Depreciation was $16.6 million. There were no impairments or reversal of impairments in the quarter. Operating profit ended therefore at $15.6 million. Interest rate expenses were $5.3 million. However, unrealized currency gains flips net financial items into positive territory. Net financial items were positive by $4 million. Net profit before taxes and also after taxes ended at $19.6 million. After adjusting for minority shareholders in one of our subsidiaries, we end up at $19.4 million. This slide shows operating margin before G&A distributed on segments. Please note that the OSCV well intervention and anchor handling vessels has had a considerable increase in margin compared to same quarter last year. The OSCV and well interventions vessels had an operating margin of $20.7 million. Anchor handling vessels had an operating margin of $6.2 million. The PSDs generated 2.4 million and other vessels $8.3 million. And let's take a quick look at the balance sheet. The book equity of the company is $352 million. This represents the equity ratio of 34%. Gross interest bearing debt is $595 million. And net interest bearing debt is $522 million. CM Offshore's financial position is good and continues to improve. CM Offshore should be an attractive counterpart and business partner going forward. And on the next slide, we take a look at the year to date cost cash flow in the company. We started the year with a cash balance of $92 million. We have received $36 million from operations. We have paid $7 million in interest. We have invested $19 million in CapEx. We have invested in the vessels. We have repaid debt of $26 million. We have received some external funding from a minority shareholder in one of our companies of $1 million. And we have some currency effects of $4 million. We ended with a cash balance of $73 million. Note that the first half year has been very CapEx intensive. and this is not representative for the second half of the year. CapEx Investments will not absorb the same amount of cash as it has done in the previous half year. And now, the contract backlog. At the end of the first quarter of 2022, the backlog amount is $411 million. The OECD and VAL intervention vessels dominate with 65% of the backlog Our anchor handling vessels are represented by only one percent of the backlog.

Thank you. On this slide we have listed all the vessels in operation for the OSV segment. Currently we have 28 owned vessels in operation and in addition we have three vessels on management. There are no major changes to the fleet composition, thus we will not go into the details here. This slide covers our geographical footprint in terms of office locations and vessel locations. We continue our operations around the world, moving vessels to locations where we find it safe to operate and where we are able to sign favorable contracts for the company. We're starting with the anchor handler fleet. We have currently three anchor handlers working out of Australia. We have one anchor handler working in Taiwan, and in Canada, we have one anchor handler working on a term contract there. In the North Sea, we have the CM Opal, which is still working for Equinor on a firm contract. And in the North Sea spot market, we have CM Ruby and CM Pearl trading. In addition, we have the CM Emerald still in layup. When it comes to the construction vessels, all vessels are on contract. CM Stengelrei is working in European waters on a firm contract. CM Barracuda is still in Taiwan, working there on a firm contract. and as mentioned CM Spare Pitch is now on a firm contract taking around the end of 2023. CM Dorado is also on a contract working in the North Sea. The two well intervention vessels CM Helix 1 and CM Helix 2 are both on long-term contracts working in Brazil as mentioned. The PSV fleet, most of them are on long-term contracts. CM Tima and CM Pilot, both working in Australia. CM Pride still in the North Sea on a long-term contract. And the CM Symphony, she's trading favorable North Sea spot market. In Brazil, we have the CM Atlas and CM Giant still trading on contracts. In Brazil, we also have a smaller fleet, as we call it. We have two vessels in layout, that is the CM Pendutiba and CM Piata. CM Goggi and CM Maratices are both on term contracts. In addition, we have our core drilling vessel, George's Resolutions. He continues working around the globe on long-term contracts. And then we have the well-stimulating vessel, Big Orange, which is currently working in the North Sea. Looking at the availability under each segment, you will see we have a good coverage for this year. Under the current improving markets and continued focus on energy security, we believe the available capacity going forward represent an extractive earning potential. As you can see from 2023 and 2024, we have approximately half, 50% of the leads available for new improved contracts. We continue to focus on ESG. A lot of good work has been done by our onshore and offshore staff. There is full focus on reducing our carbon footprint and a new ESG strategy is being carved out as we speak. Just a small and short market update. There is a general increase in activity in all offshore support segments worldwide. The anchor handler market in the North Sea, sport market, has experienced really high day rates driven by low availability, mainly due to increased project work. We saw day rates close to 2 million Norwegian kronor per day in the sport market. The PSV segment was tied for most of the period and performed better than in recent years. The USV market was more or less sold out already from Q1 this year and the few contracts that were concluded reflected high day rates and favorable contract terms. The expected increase in activity in Brazil, West Africa and the North Sea are now finally showing signs of realization. The longer term outlook has strengthened for the OSV market on the back of increased oil price projections, where EU is targeting to reduce its dependency on Russian oil and gas. So to summarize, because there has been a strong quarter with high activity. We continue to improve our financial position. Positive market outlook in all segments. We deliver first class operations with an excellent HSEQ performance. And we have a strong backlog with quality counterparties. So that was really presentation. I know we will open for questions. Remember to unmute if there's any questions. One question here in the chat. How do you see the winter shaping up for the subsea vessels with availability? Are winter rates higher than last year? Well, there is still a little bit of uncertainty with regards to what day rates that are obtainable during the winter months. But what we see in general now is that our clients are asking for 365 days contract and not only contracts covering the summer season. Any other questions, please? There is one more question here. Three anchor handlers are about to complete contracts in Australia. How do you see prospects in 2022 for these vessels? We believe that it will be challenging winter months for the anchor handlers, but still we are positive. We see that there is a demand for lessons going forward. Please feel free to ask any questions. I don't see any more questions in the chat here. Yeah, well, the vessels in layup, I mean, that is being monitored on a weekly basis, whether or not to reactivate those. No firm work available time being for those vessels. Okay, if no further questions, we thank you all for attending this presentation and we wish you all a good day. Thank you.