Sea1 Offshore

Welcome to the review and presentation of our results for the third quarter. My name is Bernd Domdahl and I'm the CEO of the company. Together with me, I have our CFO, Vida Jasta, and we will take you through this presentation. C1 Offshore's report for the third quarter 2024 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. Please type your questions below the slide window. Looking at the highlights for the quarter, we operated 34 vessels. 17 of these are fully owned by C1 Offshore. and all of our fully owned vessels delivered a positive EBITDA margin. We had close to 82 millions in revenue and we delivered the US dollars 45 million in EBITDA, which is equal to an EBITDA margin of 55%. The margins are higher than the same quarter last year, even though we have less vessels in our fleet. Some operational highlights. We continued 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 third quarter was 91%. In the quarter, we managed to extend the contract for CM Dorado with another two years and four months. Other highlights worth mentioning, the sale of the nine vessels announced back in April was completed on the 5th of July and the repurchase shares were cancelled. Certain part of our debt was refinanced and restrictions and undertakings removed. We signed a management agreement for six anchor handlers owned by Viking Supply Ships. And furthermore, a dividend payment of Norwegian Kronos 5 per share took place in September. We also received the final settlement of 25 million US dollars for the sale of CM Marlin. Moving on to subsequent events. We recently secured a multi-well contract for three anchor handlers in Australia with commencement in second quarter 2025. The duration is between 380 and 670 days per vessel. C1 Offshore will as a minimum support the project with one vessel from our own fleet. Our research vessel has been put in layup pending potential contract opportunities. And the management contract for the CM-owned vessels has been terminated with effect from 1st of April 2025. Vida Gerstad will now give some more details regarding the results for the third quarter.

Let's take a look at the income statement, which confirms a continuation of the positive market trend. However, when comparing the 2024 figures to 2023 figures, please remember that the number of vessels owned by C1 has decreased by 9 vessels. The company had 81.6 million in revenue in the quarter, compared to 85.6 million same quarter last year. Operating expenses were 30.8 million. Administrative expenses were 5.7 million. Ebitda for the quarter ended at 45.1 million, up from 41.5 million. Depreciation of vessels was 14.4 million. Operating profit ended at 30.2 million. Net financial items ended negative by only 2.2 million. Financial items were positively affected by a reversal of former impairment by 2.8 million. Interest rate expenses were 6.9 million. Profit before taxes ended at 28 million. Net profit after taxes ended at 27.7 million dollars. After adjusting for minority shareholder, in our anchor handling subsidiary, we end up at 25.9 million. This is an increase by 93% from same quarter last year or equal to an increase of around 200% per share compared to same quarter last year. This slide shows operating margin distributed on our three main segments. The figures are before G&A expenses and include only vessels owned by C1 today. There is a positive development and market trend in all three segments. On the left hand side we see operating margin in the third quarter this year compared to same quarter last year. On the right hand side we see the development in the first three quarters of 2024 compared to same period last year. Both bar charts confirm that markets are still improving. Please pay attention to the anchor handling vessels in the third quarter in particular. Margin is higher by $14.3 million or more than 300%. On this slide, we see the financial position of C1 Offshore at the end of the quarter. The company has a very solid financial position with book equity of 49%. Gross interest-bearing debt was 371 million. Net interest-bearing debt was 244 million. The refinancing in third quarter and thereby the removal of restrictions imposed on the company in the 2021 restructuring This enhances the company's flexibility with regards to financing, investments and distributions going forward.

C1 Offshore has a firm contract backlog of 815 million US dollars. In addition, there is 643 million US dollars of option. The largest part of our backlog is related to the subsea fleet. We have a good coverage for our fleet for the remaining part of this year. For 2025 and 2026, we have 100% coverage for the PSV fleet. For the subsea fleet, we have good coverage as well. We are in a position to secure more work for some of our subsea vessels, and we expect that the rate levels will be higher than what we see today. For the anchor handler segment, we believe we will see more term opportunities in the near future and hopefully we will be in a position to conclude term contracts for those as well. Our fleet consists of 17 owned vessels as listed on this slide. In addition, we have 17 vessels under our management. C1 Offshore own six large anchor handlers we have two offshore construction vessels we have two well intervention vessels we have two PSVs and we have four oil spill recovery vessels and fast crew vessels and in addition we have a scientific core drilling vessel So on this slide, we have listed all the vessels operated by us. 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 based on sustainable conditions. For the anchor handle segments, they are mainly short of contracts and campaigns. In Australia and Asia, we currently have Daenco handlers CM Sapphire, CM Aquamarine and CM Amethyst. Avalon C is operating in Canada. Both CM Emerald and CM Ruby are on term contracts in Brazil and Argentina. Moving on to the construction vessels, we have CM Spare Fish on a firm contract until the end of February 2025 and she is currently operating in the Gulf of Mexico. CM Dorado is on a firm contract currently operating in Brazil and the well intervention vessels CM Helix 1 and CM Helix 2 are both on long-term contracts working offshore Brazil. We have two PSVs in our fleet, that is the CM Atlas and CM Giant, both on term contracts in Brazil. For our smaller Brazilian fleet, we have the oil spill recovery vessel, CM Aragogi and CM Maratices, both on term contracts with Petrobras in Brazil. And we have the two fast crew vessels, CM Pendo Tiba and CM Piata, they are both on long-term bare boat agreements. Our core drilling vessel is now in a lay-up in Norway. And as shown on the previous slide, we have a really good contract covered for this year. At the same time, it is important to have vessels available in an improving market to increase the potential of earnings. Some comments to the market. The second quarter showed granular strength for the offshore support vessel segment with several contracts and transactions. The North Sea market was volatile and slightly below expectations as there was less drilling activity than predicted, which penalized the spot market for both anchor handlers and PSVs. For the anchor handle segment in general, it is Australia and South America that contributes with long-term contracts as these areas do not have the opportunity to take vessels from a functioning, well-functioning sport market. The offshore construction vessels were sold out and the competition between renewable projects and traditional oil and gas campaigns is impacting utilization and day rates within the subsea segment. The expected increase in activity for all segments indicates good market prospects for our high-end fleet. So to summarize, we delivered a strong quarter with high activity. We now have normalized the bank governance and enhanced the flexibility following refinancing. We deliver first class operation with excellent HSAQ performance. We have a solid financial position. We have a strong backlog with quality clients. And we have a positive long-term market outlook for all segments. That was the end of our presentation. We will now open up for questions. So we have received some questions in this chat function. First one is, do you expect 2025 options within the Subsea and PSV segment to be declared? Yes, we expect that the CM Giant will be extended and the same goes for CM Spare Fish. Another question asked is, can you just remind us when the Avalon Sea will complete the current contract? We reckon that she will head back to the North Sea from Canada end of November. Another question here, how do you see the opportunity to bring CM Amethyst back in operation after several months idle in Singapore? She will soon enter into a short job in Malaysia. Another question here. Any plans to grow the company? Well, after the refinancing, we are again in a position to make new investments to grow the company. That could be either through new buildings or second-hand tonnage. And we are again in a position to optimize our capital structure. And then there is a question regarding the backlog for the anchor handlers. When do you expect clarity for which vessels is going on the contract in Australia? There is some notice mechanisms in the contract so that is not yet decided which vessels it will be. And then there is a question regarding the JOIDES resolution that recently entered into layup. We are marketing, of course, the vessel for further work, and hopefully we will be able to conclude some additional work for her in the near future. It's a very specialized vessel, so it's not a huge market out there for that vessel. And then there is a question regarding if you have any plans to buy the Viking vessels. There is no such plans. Let me see. Let me see. Yeah, the backlog, the anchor backlog that is only including one vessel down in on a term contract in Australia. That was another question. And there is another question regarding the joy this whether we market her for for sale. We haven't done so yet. We hope to get the contract in place.

And there is another question here regarding investments and dividend and how is the balance between that? The important thing is that after the refinancing and after the removal of the restrictions, C1 is again in position to optimize. We can optimize the capital structure, we can do investments, and we can do new bills, and we can also pay dividend. And all this is up to the board, of course, to decide. But yeah, that's it.

All right. If there is no further questions, then we will end this session. And we thank you all for attending. Thank you.