Solstad Offshore ASA

Good morning and welcome to the presentation fourth quarter and full year 2025 from Solsta Offshore. This presentation will be held by CFO Kjetil Ramstad and myself Lars-Peder Solstad, CEO of the company. There will be a Q&A session after the presentation, and you see the QR code on the screen, so please use that to enter the chat to ask your questions during the presentation. We take a quick look at the disclaimer before we move on to the business update for the quarter and for the full year. And the adjusted EBITDA for the year came in better than we guided in October 2025. mainly due to improved results from Solstheim Maritime. Operationally, we had a lower utilization in Anibeta in fourth quarter than you have seen in previous quarters. And this is due to two vessels being between contracts. And that is the Norman Tonjor, which came off a contract in early October. has been doing some upgrades and are preparing now for a contract that starts next week that we announced recently and that will secure utilization for the vessel up to the end of 2026. And that contract is, as we have announced, in Asia Pacific. So a good improvement will be seen there on the utilization side from mid-February and onwards. The other vessel is the Norman Topacio. That came off a contract in Brazil in early fourth quarter. We have done some upgrades and some class work on the vessel. and then the vessel will start on its new four-year contract with Petrobras at the end of March. So utilization-wise, she will, and EBITDA-wise, starts to contribute from second quarter 26 and onwards. But as I said, those two vessels are the reason for the lower utilization in fourth quarter. Okay. But we have, also from Solstad Maritime side, we have, there are four vessels fixed to Petrobras through the Solstad Offshore setup in Brazil. So those vessels will also start on their new four-year contracts. Some has already started and the fourth one will start very, very soon. We have in general experienced an increase in demand for our services the last four to five months. And this seems to continue also into 2026. This goes for project related work, but also for longer term opportunities. And the main focus for Solstad Offshore is of course to secure a new contract for the large CSV Norman Maximus after the present contract which is expiring by the end of this year. And it's good to see that there is a firm interest already now. and we are quite confident to secure further work well ahead of of present contract expires. Also for your information and also to keep in mind that the vessel will have its main class renewed either at the end of this year or at the beginning of 2027. looking at some of the numbers utilization in fourth quarter for reasons already explained was lower than the previous quarters and also the year before this also affected the adjusted EBITDA this having said we deliver within the original EBITDA guidance range of US dollar 120 to 150 for the year, both operationally and financially. And that is also thanks to a solid contribution in fourth quarter from the ownership in Solsta Maritime. The order intake has been solid in the fourth quarter with two contracts signed in Brazil. And for the year, and including the Solstice Maritime vessels with Tetrabras, the contract value signed in 2025 was more than 700 million U.S. dollars. Solstafshore will receive about $4 million in dividend from Solstaf Maritime for fourth quarter and suggest paying the same amount as dividend to Solstafshore shareholders for the fourth quarter, meaning that $8 million has been distributed to shareholders the last two quarters. If we move on to the market outlook and Take a look at the fourth quarter and despite a volatile oil price, we did not experience any slowdown from our clients, more the opposite. And it seems like that the record high backlog held by the subsea contractors starts to give an increased positive effect now to the ship owners. We also see that there has been a much better supply-demand balance on the anchor handling side by reducing the fleet in the North Sea by mobilizing to other regions. also in combination with quite high project activity, which is then benefiting the utilization and, of course, also then the rates in the spot market in the North Sea for those who has spot exposure there. We see that Sea Brazil is still very active. From the Solstice side, we have And the combined fleet, the Solestar of your Solestar Maritime, we have about half the fleet in Brazil at the moment. Some are on long-term contracts. Some are there for project-related work. But about 20 vessels from the Solestar fleet is in Brazil at the moment. And if we combine the present order book that we have and the bidding activity that we see, that is a strong indication of a decent year ahead for the company. Looking at the backlog. We have nearly all the capacity sold out for 2026, especially if we include the newly announced contract for Norman Tognor. That is not included in the graph you see on the screen right now. So the main focus when it comes to new contracts and to building backlog is for 2027 and onwards. And as I already mentioned, the Norman Maximus is presently uncommitted after year end 26, and a new contract for that vessel will have a massive impact on the 2027 and beyond backlog. We are working on it, and we see some interesting opportunities for longer-term work for the vessel from 2007 and onwards. For the three Brazilian-owned anchor handlers, they are all fixed on long-term contracts now, all on healthy rates, and they will contribute significantly to the company earnings in the coming years, as also shown on the graph to the left. And if we take a look at the backlog or the graph to the right, you see that we have the quarter by quarter, we have steadily increased the backlog of the company, which gives a solid foundation for the company into 27 and also onwards. Leave it to you, Kjetil, to take us through the key numbers for the company. Thank you, Lars.

So if we start with the financial highlights for Solstafsjord for the fourth quarter and full year, we had in the quarter lower utilization of the fleet of 71% compared to 91% last year. And the main driver for the low utilization is that both Norman Tonnier and Norman Topacio was idle for majority of the quarter. For the full year, we had an overall utilization of 90% compared to 95% last year. Revenue for the fourth quarter was 70 million, up from 65 million last year. The revenue for the full year was 290 million compared to 262 million in 2024. The adjusted EBITDA for the fourth quarter was 35 million compared to 44 million last year. The year-to-date 2025 adjusted EBITDA came in at $126 million compared to $132 million last year. Net result for the fourth quarter was $53 million compared to $66 million in 2024. 2025 net result was $141 million compared to $118 million last year. The firm backlog of 325 at year end compared to 227 million last year. An increase of almost 100 million. And the figures here excludes the backlog from the vessels on bare boat from Solstam Maritime on the Brazilian contract. Book equity at the end of the year was $425 million, up from $288 million last year, representing an equity ratio of almost 50%. The cash position at year end was $74 million compared to $34 million last year. The adjusted net interest bearing debt is reduced to $51 million compared to $124 million last year. This is a result of repayment of debt in combination with increased cash position. The company will distribute approximately $4 million to its shareholders subject to the general meeting approval. And for 2025, the company has distributed approximately $8 million to its shareholders. Then if we go and look at the depth and lease structure in Solstafshore, Solstafshore has a regular bank facility of $80 million, drawn in November 24, with a five-year amortization profile, maturity in November 27. Also has a $44 million financing for Brazilian-built vessel with BMDS. Matures between 2026 and 2031. The lease commitments in Solstad Offshore includes the present value of the Norman Maximus Bear Bay Charter, approximately $49 million until October 27, and the present value of the purchase option of $125 million, and the present value there is $107 million. Other leases of 96 million dollars mainly consist of commitments for the Solstad maritime vessel, operate through the Solstad offshore Brazil setup. And then we also have a graph showing the net interest bearing debt overview of the year end and also the amortization overview for the two mentioned loans at the bottom. If we go to the investment in associated companies in joint venture in Solstafshore, we start with Solstafshore Maritime where Solstafshore owns 27.3%. And as we see, Solstam Maritim has declared a dividend of approximately $15 million, and that means that Solstam's offshore share of this will be $4 million, approximately $4 million in fourth quarter. Soft share of result in the quarter from Solstheim Martin is $25 million and $61 million for the full year. The book value of the shares is $233 million and market value was per fourth quarter around $230 million. And then we have the Norman Installer, which is a 50-50 joint venture with SPM Offshore. The vessel Norman Installer is predominantly utilized on SPM's FPSO projects. First half of the year, the vessel had low commercial utilization. And for the second half, the vessel was in Breidakke in the third quarter. However, it had good utilization in fourth quarter. The financial result in the fourth quarter was negative $0.4 million and negative $2.3 million for the full year of 2025. We believe that the vessel has a good backlog and good visibility for 26, so it looks to be a strong year ahead. The company has a net cash positive position, and the book value of the shares is around $20 million. Solstice Offshore also owns 35.8% of the shares in a company called Omega Subsea with Omega 365 as the majority shareholder. Omega Subsea owns and operates 12 ROEs as of end of 2025 with 12 more ROEs to be delivered in 2026 and early 2027. Solstad share of results in the quarter was 0.1 million dollar and total for the year 4.3 million dollars. The book value of the shares in Omega was 16 million dollars. Then if we move to the financial outlook and guidance for 26, Solskjaer Offshore will from 26 onwards only provide financial guiding on operational EBITDA. This means that guidance excludes the share of results from associated companies and joint ventures, which is included in the reported adjusted EBITDA. The 2026 operational adjusted EBITDA guiding is between $50 and $70 million. One important factor to take into consideration is that the timing of the 10-year class renewal of Norman Maximus. It will be in a lower range if the docking takes place late 2026, and in the higher range if it takes place early 2027. As mentioned, proposed dividend payment for the fourth quarter of $0.05 per share, totaling $4 million. It's also worth mentioning that Solstafser is preserving cash for the normal maximum purchase option to be exercised fourth quarter 2027. So then we move to the dividend dates. As mentioned, the company proposed to distribute cash dividends for the fourth quarter of $0.05 per share, totaling $4 million. The dividend will be paid in NOC, and the NOC amount will be announced prior to the payment. The key dates for the fourth quarter dividend, we need to issue summons to the EGM, will be done 16th of February, and then the EGM will be held at the 9th of March, 26th, and the last day of right to dividend is also 9th of March. The X date is the 10th of March, and record date 11th, and then the distribution date on or about 13th of March, 2026. So with that, I leave the world to you, Lars, to summarize the presentation.

Thank you, Kjetil. And as mentioned a few times already, we have had a fourth quarter that ended better than we guided back in October of 25 and ended up with an EBITDA for the year of 126 million dollars, which is then also within the original guided range that we gave early 2025. And despite the weak utilization due to two out of seven vessels being between contracts, the full fourth quarter, we experienced marketing improvements and this was also reflected in the order intake we had of 84 million US dollars in the fourth quarter. And those are on good EBITDA margins and these are also giving increased visibility for 26 and beyond. The positive market trend we have seen has also continued into 2026 and where we already have signed an important contract for the Normantonior with the immediate commencement. And we see several opportunities in the market for the vessels we have with availability from 2027 and beyond. And as Kjetil said, we continue to distribute dividend to our shareholders on a quarterly basis, 4 million in total for fourth quarter. And that concludes our presentation, and we then move over to Q&As. Any questions so far, Ketil?

Yeah, we have one question on Norman Maximus. Do you expect to exercise the option on Norman Maximus and how do you plan to finance the option if it's exercised?

Well, the optional price is well in the money compared to the value of the vessel. it will be very natural that we use that option and that it has to be declared by fourth quarter this year and with effect from fourth quarter 27. And on finance, it will be a combination, if we do it, of most likely of bank debt, but also some equity. And that is also the reason why we are preserving cash in the company to contribute with the equity part of the financing of that purchase option. And, of course, with the short, at the moment, the contract we have on the vessel is expiring by the end of the year. If we manage to secure a longer contract on that vessel, we can also look a bit differently on how much cash we need to preserve for the equity part of the financing. So those are linked together.

And a little bit same question on Maximus and Tonja. How do you consider the market opportunities for those two vessels from 27 and onwards?

I think the – I mean, the Maximus is a – field installation vessel and a key enabler for for a for for for for deep water subsidy projects uh one of one of very few in the market uh and uh we are we we are positive to to to a contract extension uh uh beyond beyond uh what we see today we have We have interest from clients already, and I'm not concerned about the commercial future for the vessel after its main class renewal coming up end of the year. I'm not concerned about that at all. When it comes to Tonja, what we do now is that we are repositioning the vessel to Asia-Pacific, taking on an okay contract there. The plan is to keep the vessel in that part of the world. And we see some interesting opportunities also there. So, yeah.

Thank you. That concludes the Q&A for today.

Okay. So thanks for listening in, everyone, and have a nice day ahead. Thank you.