Solstad Offshore ASA

Good morning and welcome to Solstad Offshore's third quarter 2025 presentation. It has been another quarter of solid operational and financial performance and with a continued high activity across our fleet. Today's presentation will be held by myself, CEO Lars-Peder Solstad and CFO Kjetil Ramstad. And after the presentation, we will open up for Q&As. So please submit your questions in the chat. If we take a quick look at the disclaimer before we move over to the third quarter highlights and a business update, it has been another quarter of solid operational performance for Solstice Offshore. with a fleet utilization of 97% in the quarter, and that is also the number for year-to-date, so 97% utilization year-to-date. And while the long-term demand remains positive, and we see several longer-term opportunities, we also see that in the short-term market, we experience a slower or lower demand than we previously expected, and that is also in line with what we communicated in the business update in 9th October. Following the Solsta Maritime's reduction in full year 2025 adjusted EBITDA guidance, we have then also updated the Solsta offshore guidance for the year accordingly, with operational guidance still intact. while the share of associated companies and joint ventures are slightly reduced, as earlier communicated. If we look at this quarter, and earnings has then been adjusted EBITDA of $29 million, and that is compared to $28 million in the same quarter last year. We have secured several new long-term contracts in Brazil, contributing to a total order intake of $222 million in the quarter, and that includes one South American vessel that will go on long-term contract to Tetrabras. In addition, we signed a TRIA contract for Norman Turmalina, one of our Brazilian-built anchor handlers, for a TRIA contract starting in first quarter 26, and also our client on the CSV contract. Norman Superior exercised their option to extend the contract with one more year. It is also nice to mention that the board proposes a third quarter 2025 dividend of 0.05 US dollar per share, totaling approximately 4 million dollars. which is more or less equal to Solstead Offshore's share of the Solstead Maritime Turkwater dividend. If we take a closer look at the market, Solstead Offshore maintains a very strong foothold in Brazil, where long-term demand for offshore energy services remains robust. and Brazil continues to offer both long-term and project opportunities for the CSV and the anchor handling fleet. Globally, and in addition to Brazil, the activity is good and offers more opportunities for our fleet. In 2025, it has been the North Sea that has had lower than expected activity. And as we continue to underline, to be able to sign contracts and to be a part of the global markets, it is essential to have a local presence. And Solstead Offshore has, particularly in Brazil, a very, very strong position. The long-term offshore energy services remain positive globally, but we have to keep in mind that the oil price development seen in the last months could introduce some uncertainties to activity level going forward. If we look at our backlog and earnings visibility, We divide, Solstice Offshore divide its backlog in two. One is the backlog we have on the owned fleet. The other is the backlog on Solstice Maritime vessels that utilize the Solstice Offshore structure for Brazilian contracts. And both continue to strengthen. The new three-year contract for Norman Turmalina and the one-year option for Norman Superior have increased our direct backlog this quarter. And there was also a material increase in the backlog for Solstice Maritime Vessels due to a new four-year contract for the CSV Norman Commander with Petrobras that starts early next year. So the firm backlog for Solstrand offshore vessels is $280 million, which is a doubling of the backlog compared to last year. And for Solstrand maritime vessels, it is at $640 million. In fourth quarter this year, we will have some vessel availability. That is due to one vessel has come off a contract and is now exposed to the shorter market, while one is at a planned yard stay. So that will influence the utilization in fourth quarter 2025. But looking into 2026, the earnings visibilities are very good. And we also see that for the available vessels we have, we see that there are quite a few market opportunities that we are chasing for those vessels. So, Kjetil, can you take us through the financial highlights?

I will, Lars, so let's start with the third quarter financial highlights for Solsta Offshore. It has been a quarter with high activity in third quarter, with 97% utilization for the fleet, compared to 97% last year. Here to date, we have an overall utilization of 97% versus 96% last year. On the revenue side, for the quarter, $73 million compared to $68 million last year. Year-to-date revenue was $220 million compared to $197 million. Adjusted EBITDA for the third quarter was $29 million. compared to 28 last year. Year to date, adjusted EBITDA of 91 million dollars compared to 89 last year. The net result was for the quarter 26 million dollars compared to 11 million dollars last year. Year to date, 88 million dollars versus 52 million dollars last year. For a backlog for the Solsta offshore owned vessels of 280 million compared to 42 million last year. This of course excludes the vessels on bear boat from Solsta Maleteam. Book equity in the third quarter of 375 million, up from 203 million last year, and it gives an equity ratio of 44% for the company. Adjusted net interest bearing debt of 57 million compared to 206 million last year. And the large reduction is mainly caused by Norman Maximus residual claim, which was approximately 185 million dollars. Cash position at quarter end was $87 million compared to $60 million last year. Plan to distribute dividend of $4 million in the quarter. Then if we have a closer look at the net interest bearing debt and lease commitments in Solsta offshore, we see that we have the regular bank facility of $90 million that was drawn in November 24. There's a five year amortization profile with the majority in November 27. And then we have the financing for our Brazilian fleet, $51 million with BNDS, with maturity between 26 and 31. The lease commitments in the debt side of the balance sheet includes the normal Maximus Baerbo charter lease of $55 million, And also the purchase options that is at $125 million and included in leasing with $105 million at the present value. Other leases is mainly the vessels that Solstamare team bear boat to Solstafshore for Brazilian operations and contracts. And the operational risk for these vessels are with the ship owner, Solstad Maritime. Then, if we move over to the financial investments that we have in Solstad Offshore, and start with Solstad Maritime, which Solstad Offshore owns 27.3% of, there will be paid a dividend of approximately $15 million in Solstad Maritime. And the share that Solstar Offshore will receive is $4 million. Share of the result in the quarter is $9.3 million, compared to $13.1 last year. Book value of the shares is $212 million. Then if we move to Norman Installer, which is a joint venture on the 5050 with SPM Offshore. The vessel is predominantly utilized on SPM Offshore's FPSO projects. First half of the year the vessel had low utilization and in the third quarter the vessel had a planned maintenance dry dock. We expect that the rest of the year will be fully utilized. NISA is in a net cash position, and the share of the result in the quarter was negatively 0.3 million dollars compared to positive 0.6 last year. The book value of the shares is 20 million dollars. And the last investment that Solstafshore has is Omega Subsea, where Solstafshore owns 35.8% of the shares. And Omega Subsea has 12 ROVs per quarter end, and 12 more scheduled to be delivered in 2026 and beyond. Share of the result in the quarter was $1.4 million, and $4.2 million year-to-date. The book value of the shares is $16 million. Then if we go to financial guidance for Solstad Offshore, as mentioned and communicated 9th of October, we adjusted the financial guiding based on the change in guidance from Solstad Maritime. So the overall guidance on adjusted EBITDA is $115 million. The operational part of the guidance was unchanged at 60 to 70 million, 53 million year to date. And the share of the result from associates companies and joint ventures was adjusted to around 50 million dollars compared to the previous of 60 to 80 million. As mentioned, there is a proposed dividend payment in the third quarter of US dollar 0.05 per share, totaling $4 million. And then if we go to the dividend dates, the summons to the EGM will be 3rd of November, and then the EGM will be 24th of November, last day of trading to receive dividend, 24th of November, the exit date will be the 25th, record date the day after the 26th, and then distribution date will be on or about the 28th of November this year. So with that, I leave the word back to you, Lars-Pedder, to summarize.

Thank you, Kjetil. To summarize our presentation and the third quarter, we have had a a project or a quarter with solid operational... Sorry about that. Now we have the correct slide. To summarize the presentation, another solid quarter operationally and financially for Solstad Offshore. We have had a strong order intake that increases the visibility for 2026 and beyond. We also see several market opportunities for the available vessels we have into 2026. But as I have said already, we have to also keep in mind that the recent oil price development represents a source of uncertainty going into the coming quarter and beyond. We are also very pleased to announce that the board proposed a dividend payment for the quarter which is also in line with earlier indications. So all in all a solid quarter for Solstad offshore and also the visibility for the coming year is solid. So by that we conclude the presentation and let's see if there are some questions, Kjetil.

Yeah, let's take the first one. What is the plan for Norman Tonjer and Norman Tupaciu?

Yeah, that is a relevant question and those are... the two vessels that we have availability on or idle time on in Fort Water. If we take to Norman to pass you first, that is one of the Brazilian built anchor handlers we have operating in Brazil. That vessel is on a planned yard stay at the moment that will influence the utilization in fourth quarter. It is officially known that we were on top of the list on the Petrobras auction for a long-term contract. Those discussions are ongoing, and let's see how that develops in the coming weeks and months. But we are positive to achieve a good utilization for that vessel, either on that contract or on alternative opportunities in Brazil. For the Norman Ponyer, that is a vessel that Solstead Offshore owns 56% of and has been operated on a contract for TGS on a seismic project for several years. That vessel is now re-delivered to us and we operate the vessel in the... We are preparing for operations in the short-term market in the North Sea right now, but... We are also in some discussions for longer-term opportunities for the vessel in, let's say, into 26. So that's what I can announce on those two vessels.

Thank you. Then there is a general question on the market of the fleet that we have in Solstad offshore. How do you see the rate development on the contracts that we have? Is there escalations? Do we see a development from 2025 to 2026? And what do you expect on the secure contracts?

I think on the contracts we have, they are sort of going on their, let's say, original terms with the natural cost escalation clauses included. On the rate level we see for vessels that we have available, I would say it's quite reasonable. stable on a high level I would say so I don't see much difference or let's say downward pressure on the day rates for the vessel types that we have availability on

And then there is a question on Petrobras and cost-cutting. Can you update on the discussion on Petrobras with reference to the exposure that we have there with the four vessels, the three vessels? Yes.

Yeah, Petrobras is a large client of us, and we have had discussions with them, as most others in this business, and I would say it's very constructive discussions, where it's about Are there any place where it's naturally to cut costs? That could be for mobilizations or preparations for new contracts. It could be on manning level. It could be on other specialities that you see on Petrobras contracts. Constructive dialogue and no sort of red light are linked to those contracts in terms of uncertainty. So I think that answers the question, I hope.

Yeah, thank you. And then on Norman Maximus, it's on contract to the end of 2026. Can you say something about the plans for Maximus below this? And how do you see the market for a vessel like this long term?

Yeah. It's correct. The vessel is still committed for another 14 months or so. We have discussions ongoing with the present client, but also with some others. So this is in a way one of a kind, let's say one project enabler and one of the few that has availability into 27 in the market. So the position we have on that vessel is very solid and quite confident that we will be able to secure some interesting work for the vessel also beyond 26.

Thank you. Let's have some more questions here. In the backlog for Solsta Offshore, we are showing a portion of Solsta Maritime vessels. Can you just explain why we look at Solsta Maritime vessels on the backlog of Solsta Offshore?

That is simply because Solsta Offshore is the contact holder with Petrobras or other clients in Brazil. And so the Solstice Maritime vessels are then bare-boated to Solstice Offshore. So you will get, let's say, a bare-boat backlog into Solstice Maritime, while you will get also, let's say, a backlog into Solstice Offshore due to the structure where we in Solstice Offshore are the contact holder with Tetraboss. So that's the reason, and it's a back-to-back, so the operational risk, even if it's a bare boat, lays with the vessel owner and not with Solstad Offshore on those vessels.

Thank you. And then let me have a look. I think that concludes the questions for today.

Okay. So thank you very much for listening in and have a nice day ahead.