Sea1 Offshore

Good day everyone and welcome to the review and presentation of our results for the fourth quarter. My name is Bernd Domdahl and I am the CEO 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 fourth quarter 2023 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 issue 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 26 vessels in operation and all vessels delivered a positive EBITDA margin. We had close to 85 million in revenue, and we delivered $40 million in EBITDA, which is equivalent to 47% EBITDA margin. Our cash position was close to $97 million at the end of the quarter, and our book equity ratio was 49%. Book equity impacted positively by reversal of impairments and revaluation of deferred tax assets. We continue to deliver safe and efficient operations in all regions. This is a result of high focus on safety at all levels in the company. The utilization of the fleet in the fourth quarter was 87%. This is excluding vessels in layup. We had two vessels in layup at the end of the quarter. We signed a term contract for the anchor handler CM Sapphire for operation in Australia and we recently signed a long-term contract with Helix for the two well intervention vessels CM Helix 1 and CM Helix 2. This is long-term contracts with a duration of six years for each vessel with commencement 1 January 2025 and 1 January 2026 replacing existing contracts. We also recently signed a one-year contract with Options with the PX Geo for the vessel CM Spare Fish. Vidar, Jasta will now give some more details regarding the results for the fourth quarter.

Thank you Bernd. CM Offshore's fourth quarter report is yet another report confirming that we are in a positive market trend. The company had 85.2 million in revenue in fourth quarter. That's up from 64.3 million, same quarter last year. Operating margin for the quarter was 40.1 million, up from 20.8 million. Depreciation was 16.4 million. There were no impairments. However, there were $67 million in reversal of impairments, mainly related to our subsea vessels. Operating profit ended at 19.5 million, up from 5.5 million. Net financial items were negative by 9.1 million. Net profit before taxes ended therefore at 81.4 million. As our deferred tax asset is revalued, taxes add positively to our P&L by 18.7 million. Net profit is therefore $100.1 million. After adjusting for minority shareholders, we end up at $100 million. This slide shows operating margin distributed on segments. The figures are before G&A expenses. On the left-hand side, we see operating margin in the quarter. That is up around 19.4 million or 71% from last year. Graph to the right represent full year figures and shows a total increase in operating margin of $61 million or 49%. After G&A expenses operating margin is up 59%. We see improvements in all segments. And the balance sheet, the company has now $529 million in book equity and a book equity ratio of 49%. The book equity is impacted positively by reversal of impairments and revaluation of deferred tax asset this quarter. Gross interest bearing debt is $462 million. $170 million of outstanding debt under certain facilities mature in December 2024 and is expected to be refinanced during the year. We are comfortable with the situation and our position and we see good interest from a variety of lenders. Net interest-bearing debt is $365 million. We can conclude that CM Offshore's financial position is good. And then the cash flow for the full year. and it shows the following. We started the year with $95 million in cash. We have generated $157 million from operations. We have paid net interest of $20 million. We have invested $33 million in the vessels and we have repaid $114 million in debt. Some other adjustments and we end up with $97 million in cash at the end of the year. Note that CM Offshore's capacity for repaying debt is good. And now the contract backlog. Today the backlog amount is 854 million with quality counterparties. The subsidy segment consists of seven vessels and dominate with 89% of the backlog. The CM Helix 1 and CM Helix 2 are part of this segment. Over six PSVs has 4% of the backlog. Over nine anchor handling vessels represent 6% of the backlog. Over past crew and oil spill recovery vessels has 1% of the backlog. And on this slide, you see firm contracts and options in green and vacant vessel capacity in blue. Anchor handling vessels represent the largest exposures to the market, implicated market risk and market opportunities going forward. However, under the current long-term trend of improving markets and continued focus on energy security, we believe the available capacity going forward in general represent an attractive earnings potential. And now back to you, Bernd.

Thank you. Our OSV fleet consists of 26 own vessels, as listed on this slide. And in addition, we have three vessels under our own management. Looking at our geographical footprint, the company has a good global footprint, which is important for the utilization of the fleet. We will continue to move vessels around the world where we can perform safe operation with sustainable conditions. For the anchor handler segment, there are mainly shorter contracts and campaigns. Currently, we have CM Opal, CM Pearl, CM Emerald and CM Ruby trading the North Sea spot market. CM Sapphire, CM Amethyst and CM 2 Pass and also CM Aquamarine. They are all anchor handlers and they are trading in Asia. Anchor handler Avalon Sea is on a term contract in Canada. Moving on to the construction vessels, we have CM Barracuda in the North Sea. CM Spearfish is on a firm contract which gives utilization until the end of February 2025 and currently she is operating in European waters. CM Stingray is operating in the North Sea on a long-term contract and CM Dorado is on a firm contract currently operating in Brazil. The well intervention vessels CM Helix 1 and CM Helix 2 are both on long-term contracts working offshore Brazil. We have six PSVs in our fleet, most of them on long-term contracts. CM Tima and CM Pilot both on long-term contracts in Australia. CM Atlas and CM Giant on term contracts in Brazil. CM Pride is on a long-term contract in the North Sea. And then we have the CM Symphony, which is currently trading the North Sea spot market. For our smaller Brazilian fleet, we have the oil spill recovery vessels, CM Maragogi and CM Maratices, both on term contracts with Petrobras. And we have the fast crew vessels, CM Pendutiba and CM Piata. They are both on long-term bare boat agreements. Then we have the core drilling vessel, Jordis Resolution. She's continuing working around the globe on a term contract. As shown on a previous slide, we have a good contract coverage for this year. At the same time, it's important to have vessels available in an improving market to increase the potential earnings. The fourth quarter was, as expected, characterized by reduced activity as we move into the low season for offshore operations. The North Sea sport market was particularly challenging for the anchor handler segment. The PSV segment was more stable, especially for large, sophisticated vessels. Large anchor handler vessels in Asia and Australia have experienced increased activity and contributed positively to the segment. The subsidy segment was tight with good utilization and high day rates. What we see that is demand for both oil and gas and the renewable sectors resulted in a good quarter and we believe it will continue like this. Most segments are experiencing an increased number of multi-year contracts hitting the market. This is a signal that charters are positioning themselves for future projects. The expected increase in activity for all segments indicates good market prospects for our high end fleet. So to summarize, it was a strong quarter with relatively high activity. We continue to deliver first class operation with excellent HSEQ performance. We continue to improve our financial position and we have a strong backlog with quality clients. There are positive long-term market outlook in all segments. This was the end of the presentation and we will now open up for questions.

Any questions, please?

Seems like there's no questions. We give it another 30 seconds. So if there is anybody having any questions, please. Please let us know. OK, if there's no questions, we will end this session and we thank you all for attending. Thank you.