Solstad Maritime Asa

Good morning and welcome to Solstahl Maritimes first quarterly presentation as a listed company. And with the picture of our subsea construction vessel Norman Navigator just outside our office in Skudenäs. It has been a quarter that is very much influenced by the extraordinary high planned maintenance activities we have had. But taking that into consideration, the quarter and the half year has been OK. Today's presentation will be held by CFO Kjetil Ramstad and myself, Lars-Peder Solstad, as CEO. After the presentation, we will open up for Q&As and please ask questions in the chat. And then keep in mind that this is a Solstice Maritime presentation, so leave the Solstice Offshore questions for the next presentation that will start at 10 o'clock. If we take a quick look at the disclaimer on the next slide before we move on to the highlights and business update for the quarter. Obviously, the listing of Solstern Maritime mid-May was an important milestone for the company. And I'm happy to see that Solstern Maritime has been well received by investors and by analysts. The outlook and the market fundamentals are still positive, but the steep activity increase we saw a year ago or so has leveled out for now. But it has leveled out on a relatively high level, and the day rate we achieve in the market is still on healthy levels. We have had several of our main EBTA contributors in for main classing in the quarter, which explains the lower than normal utilization on the fleet. From end of July, the majority of these planned maintenance stays will be completed, and as such, the second half of 2025 and beyond looks strong. The EBITDA for the quarter is on the same level as second quarter last year, but more positive is that we continue to build our position in Brazil, with three new four-year contracts signed in second quarter. And these will contribute very positively from first quarter 26, but will also have a slightly negative effect in fourth quarter 25, as mobilizations for the new contracts will start in November, December. We signed new contracts worth of $267 million in the quarter. giving a book-to-bill ratio of 1.8. I'm also pleased to announce that we continue to distribute dividends to shareholders on the same level as for first quarter, meaning that $35 million will be distributed to shareholders later this month. On the market, the long-term outlook for our industry, for our company, looks positive, and especially South America and West Africa offers opportunities for the subsea fleet. And feedbacks we have from many of our clients is that 2026 will be a more active year than we have seen in 2025. In the first half of 2025, we have experienced a more competitive subsea market, especially in the North Sea, and the market continues to be very project related with typical contract durations of one to six months. Rate levels for CSVs are on a stable high level. And during the last month, we have seen an increase in number of new requirements. From July on, we have five of our operational vessels that is now being fully mobilized with our service delivery on board. And for those with the exposure to the short and to medium term market or medium term project market, we expect to keep a steady high utilization onwards. And this is based on projects we have already signed after quarter end during negotiations and its tender activity. and we also see some longer-term prospects that may materialize. For the anchor handling fleet, the North Sea market has seen reduced rig activity first half year, giving lower utilization on the fleet. and on that basis we will reduce the North Sea exposure by allocating one of the four vessels we have in the North Sea market to a four-year contract in Brazil that I spoke of just now. And also in Australia, we see that the rig activity is being reduced. But on the other hand, the project market is more active, meaning that we managed to keep the anchor handling fleet in Brazil at a good utilization and still at healthy rigs. But still, and to improve visibility, we will transfer one of our anchor handlers in Australia also to Brazil to cover one of the four-year contracts we have signed there, as mentioned. And talking about Brazil, Brazil continues to offer opportunities for both CSVs and for anchor handlers. and that goes for long-term contracts and it goes for shorter projects and we have a strong position in Brazil and the contracts we have signed so far this year will have a positive effect from first quarter next year and build visibility into the next decade and there are many more opportunities in Brazil for Petrobras and for others and the key to be able to win contracts in Brazil is to have a strong local presence and in Solstice we have invested into our position in Brazil for nearly 30 years and that definitely pays off now. If we Take a closer look at the backlog and the earnings visibility. The order intake in the quarter was strong, and we estimate that the total source of maritime backlog has an average EBITDA of about 75%. The main reason for that is that the contacts in Brazil where Solstar Maritime vessels are on bare boat. The main reason is that we bare boat the vessels we have on contact in Brazil to Solstar Offshore and by that achieving a very high EBITDA margin on those vessels. And it's worth noticing that the EBITDA in hand for the company is higher than the gross debt of the company. Also worth mentioning is that around $400 million of EBITDA is already in hand for 2026 and 2027 combined. On the utilization, we have about 22% available days for second half of this year, excluding the North Sea project slash spot anchor handling fleet. After quarter end, we have already signed shorter term contracts, have ongoing negotiations and sea prospects. that points to a strong utilization, especially from August and onward this year. On the anchor handling fleet, we will reduce the North Sea spot exposure, as shown on the graph in the middle there, from 2026 and onwards by one vessel, as mentioned. We signed new contracts worth of $267 million in the quarter, giving a book-to-bill ratio of 1.8. And this is mainly Brazil contracts that will contribute from early next year. But it will also give us a slightly negative EBITDA effect in fourth quarter this year due to mobilizations for those contracts. Bottom line is that we continue to build backlog at good levels, and that gives us a strong visibility for the remainder of this decade. Kjetil and I leave the world to you to take us through the financials.

Thank you, Lars. If we go through the financial highlights of the second quarter, we will start with vessel utilization. We had a quarter with vessel utilization of 78%. And due to a large docking program that affects the utilization negatively in combination with a slow spot market for the anchor handlers in the North Sea combined for the anchor handling fleet, the second quarter utilization was 63%. Revenues in the second quarter of 152 million dollars compared to 140 million dollars same quarter last year. Revenues year to date of 279 million dollars compared to 266 million dollars last year. Adjusted EBITDA of 78 million dollars compared to 77 same quarter last year. First half gave an adjusted EBITDA of 159 million, approximately 23% increase compared to first half 2024. Net result of 44 million in second quarter compared to 28 million same quarter last year, also represent an increase of approximately 57%. As Lars mentioned, the backlog increased to 929 million in the quarter, up from 848 at the same time last year. The order intake of 267 million in the quarter. Book This gives us an equity ratio of 49% at the end of second quarter. The adjusted net interest bearing debt in the financials are $592 million, down from $691 last quarter, or last year. Solstamarity currently have a leverage ratio of 1.8%. The cash position of $98 million, excluding the RCF. And please note that in the course, or so far this year, we have paid quite some dividend and also repaid a large portion of the debt. This amounts to approximately $123 million. The company will also distribute dividend to its shareholders this quarter with the 35 million dollars and approximately 9.5 of those will be paid to Solsta Offshore. Then if we go to the financial guiding, Solstam Maritim maintains its guiding from previous levels. However, it's expected to be in the lower range of the guiding due to lower utilization first half and an effect on upcoming mobilizations for contracts in Brazil. The adjusted EBITDA range for 2025 has been narrowed down due to improved visibility. Second half adjusted EBITDA is assumed to increase compared to the first half because of the majority of the maintenance program has been completed in the first half. for tax, capex, interest and repayment of loans, we assume no change to the guiding provided previously. Then on the key dates for dividends, as mentioned, we will in second quarter pay US dollars $0.075 per share, totaling $35 million to be paid out to shareholders. And the last day to receive dividend is the 14th of July 2025. The X date is 15th July, record date is the day after the 16th, and distribution date is on about 21st July 2025. So with that, I leave the word back to you, Lars Petter, to summarize.

Thank you, Jethil. And to give a summary of this presentation and the second quarter and first half year, I would just repeat that the outlook and the market fundamentals in our industry is still positive. but the steep activity increase seen earlier has leveled out for now, but it has leveled out on a relatively high level and with the day rates still being at healthy levels. We have had several of our main EBTA contributors in for classing in the quarter and in first half year, which explains the lower than normal utilization. and from end July most of these planned maintenance will be completed and as such the second half of 2025 and beyond look more robust. The EBITDA for the quarter is on the same level as for second quarter last year but More positive is that we are continuing to build on our position in Brazil with three times four-year contracts signed in the quarter, and they will all contribute very positively from 2026. And as mentioned, but also have a slight negative effect end of this year. We continue to sign new contracts, 1.8 in book-to-bill ratio for the quarter, which is positive. And I'm also pleased to announce that we will continue to distribute dividends to shareholders on the same level as for the first quarter, meaning that we will continue our shareholder-friendly approach and distribute also $35 million for this quarter. This concludes our presentation, and now we move over to Q&As. Have we received any questions, Jetlu?

Yes, we have. We have a few. We'll then go ahead with the first one. Can you please give an update on Norman Mermaid and Norman Sentinel now ready for work from classing and upgrades?

Yeah, Norman Mermaid and Norman Sentinel are two of the vessels that we have our own ROV systems on board in and that we are offering the service models to our clients from. Both vessels have been through main classing, and Norman Mermaid has also mobilized recently the ROVs on board. They are ready to work now from within the next week or so. And as I said earlier, is that we have some contracts signed some negotiations ongoing and quite a few projects that we are looking at, meaning that we are quite confident on the utilization for those vessels going forward. So they will start on projects and we see good utilization for them going forward.

Thank you Lars. Then it's a question on the anchor handling spot market in the North Sea. With the soft spot market for anchor handlers in the North Sea, are there plans to adjust the locations for some of the anchor handlers currently located in the North Sea?

Yeah, and I agree it has been a weak spot market for the anchor handlers and it still is. And as I mentioned, we have already decided to relocate one of the four vessels we have in the North Sea to Brazil. the Norman Sigma will start mobilizing in fourth quarter this year and start on a four-year contract in Brazil. So that is the firm plan we have. Other than that, we are bidding and chasing projects all over the, let's say, mainly the Atlantic Basin with the anchor handlers. So we are aiming to reduce the spot exposure by taking on more projects, mainly on the outside of the North Sea. But the most firm measure we have done is to remove the Norman Sigma to Brazil late this year.

thanks Lars next question on the overall cost picture for Solstam Maritime do we experience increase in the general cost base for the company compared to previous years yeah I mean as the there's no doubt that the cost level the last

has increased quite a lot. That goes for technical costs, that goes for salaries, that goes for most of what we are doing. But that is all. I mean, we have seen that increase year by year and the cost of dockings and the cost of operation is higher than it used to be. But also, when we look at How is the cost level compared to our budgets, for example? There's no big deviations on that, but there's no doubt that cost level in general has increased. And that goes to operation in Norway, but also all other places in the world.

And then we have another question on Normandrott. Did you upgrade Normandrott with an active compensated crane?

Yes, we have done, we have had a quite comprehensive yard stay on the Normandrott, which where we have, where we have, there are especially two Two things we have done that will improve the technical specification of the vessel. One is the crane. We have installed a 25-ton crane that can operate down to very deep waters that is now mobilized on board. In addition, we have upgraded the vessel with a battery system that also will improve the ball uphill of the vessel with about 30 to 40 tons. So this is a significant upgrade of the vessel that we have done now lately.

I think that was the last question. So with that, we can conclude.

Okay, so thank you very much for listening in. And for those who are interested, the Solstice Offshore presentation will start at 10 o'clock. So thanks to everybody for listening in.