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spk06: Welcome, everyone. With me on the call today are John Evans, our CEO, and Mark Foley, our CFO. The results press release is available to download on our website along with the presentation slides that we'll be referring to during today's call. May I remind you that this call includes forward-looking statements that reflect our current views and are subject to risks, uncertainties, and assumptions. Similar wording is also included in our press release. I'll now turn the call over to John.
spk04: Thank you, Catherine, and good afternoon, everyone. I will start with a summary of the third quarter of 2022 before handing over to Mark to cover the financial results. Turning to slide three, in the third quarter, Subsea 7 delivered a robust performance in subsea and conventional, whilst our performance in renewables stabilized. We announced an important transaction We also announced an equity raise and new lending facilities for Seaway 7. Turning to slide 4, in the third quarter, we continue to make progress in decarbonizing our fleet with a commitment to convert the 7 Arctic to hybrid power. Conversion will take place at the time of the vessel's class survey next year and will reduce our CO2 emissions by around 5,000 tons per annum. Turn to slide 5 for the customary update on our largest projects. In Turkey, the Fast Track Sakarya project has reached 73% progress, up from 50% at Q2. The main shallow water umbilical scope was completed during the quarter, and the seven arctic sailed into the Bostra Straits, commencing installation activities in Q4. Sangamar reached 64% complete with the spooling of the pipelines at our base in Vigra, Norway, and mobilization of the CERN Vega and CERN Oceans to Senegal, followed by pipeline activities in the field. In Brazil, we continue to manage fabrication of the CRA pipeline for the Bacalao project, and we are preparing the Ubu spool base to commence welding operations. At Mero 3, procurement continued. Our vessels were also busy on Topra project in Trinidad and Tobago, on the Cobra East Gecko project in Norway, and on Equinor's Northern Lights carbon capture project. In renewables, we have installed 65 foundations and 43 cables for the Sea Green project by the end of September. All 114 jackets have been dispatched to the UK from yards in China and the Middle East, and we remain on track to complete the work around the year end. Finally, we commenced offshore activities on Dogger Bank A and B with the Seaway Strachanov and reached 29% completion at the end of September. The vessel will leave the field for the winter season as planned and will return in 2023 to continue the offshore phase. Turning to slide six, in Q3, we rolled out Make Possible, A way of simplifying how we communicate our strategy to our stakeholders, both internally and externally. Our strategy continues to be built around our foundation of our six values. Wherever we operate and whichever sector of the energy landscape, these are the six principles that guide us. On the right, we have the key enabling elements that make our strategy possible. namely early engagement, collaboration, integrated services, sustainable delivery, digital solutions, and enabling product. These apply across all the sectors in which we operate, whether we are addressing surf, wind, CCUS, or hydrogen. Ultimately, our ambition is to support our clients by delivering energy transition solutions of a lower cost, a lower carbon, oil and gas, and the growth of renewables and emerging energy. Turning to slide eight on our joint venture with Schlumberger and Acker Solutions. The Subsea Integration Alliance has been the cornerstone of our integrated offering in Subsea and has been a great success with $4 billion of awards net to Subsea 7 since January 2020. In September, we announced that Subsea 7 will be investing $306.5 million for a 10% stake in a new joint venture that will combine Schlumberger's OneSubsea and AccuSolutions' Subsea operations into one new co. Our payment will be made in two equal installments post the completion of the deal in the second half of 2023 and in 2024. The joint venture will become Subsea 7's new partner in the Subsea Integration Alliance, replacing Schlumberger. So what does this mean for Subsea 7? First and foremost, the aim of the transaction is to strengthen our long-term position in the Subsea market. We do this with a view to both the near-term opportunities that will result from the current upcycle, as well as the longer-term of the energy transition. The transaction is part of the strategic jigsaw that will keep Subsea 7 at the forefront of the industry and ensure we maximize value creation and ultimately free cash flow generation for our shareholders. By acquiring a 10% stake in the joint venture, Subsea 7 will be cementing its relationship with our partners in the SIA. We will take one of the six seats We will also become part owner of an umbilical manufacturer, a key element in our supply chain. And of course, we will receive a dividend from the new code. Turning to slide 10, and the funding of Seaway 7. In recent weeks, a $200 million equity raise has been completed, as well as the finalization of debt of $650 million. This is sufficient to cover the upcoming CAPEX commitment related to Seaway 7's new build program as well as minor vessel upgrades and dry docks. It leaves Seaway 7 fully funded and the two state-of-the-art offshore installation vessels due for delivery by the end of 2023. Reflecting the strong outlook for offshore wind and reaffirming our belief that Seaway 7 shares are materially undervalued, Subsea 7 subscribed to 72% of the equity raised, maintaining our shareholding. This was mirrored by the two other large major shareholders in Seaway 7, Songer Offshore and Lotus Marine. The two steps in Subsea and wind together strengthen our position across the energy landscape at a time when demand for both traditional and new energy resources continues to grow. I'll hand over to Mark to now run through the financial results.
spk10: Thank you John and good afternoon everyone. I'll begin the financial results review with some details of group performance in the third quarter before turning to the business units. Slide 11 summarizes the backlog position at the end of the third quarter. Order intake was one billion dollars bringing the year-to-date book-to-bill to 1.1 times, resulting in a group backlog at the end of the quarter of $7.1 billion. All of their intake included $600 million of new awards, including Gas to Energy in Guyana, Trail and Cleaner in Norway, and the Moray West Offshore Wind Project in the UK. The renewables backlog of $600 million excludes projects for which Seaway 7 has been selected as a preferred bidder. Escalations of approximately $400 million comprising variation offers and contractual price escalations across several projects were partially offset by unfavorable foreign sterling and the euro against the dollar of approximately $200 million. $1.3 billion in backlog is expected to be executed in the fourth quarter and $3.2 billion in 2023. Coming to slide 12 and the headline results for the group. Revenue was $1.4 billion, broadly flat year on year, as we continue to execute our large EPCI project in both subsea and conventional and renewables. Adjusted EBITDA of $171 million was down 7% compared with the prior year period, and the margin decreased to 12.2% from 12.8% reflecting the high level of contract closeouts in the prior year quarter. Other gains and losses was negative $23 million, driven in part by non-cash embedded derivative foreign exchange movements. This, together with a high effective tax rate, due to a shift in operational profitability towards high tax jurisdictions, and the impact of irrecoverable withholding taxes, combined to impact net income break even in the quarter. I will now discuss the drivers for the group results in the next few slides. Slide 13 presents the key metrics for sub-CN convention. Order intake was $700 million, equating to a third quarter book to bill of 0.7 times, resulting in a slight sequential dip in backlog to $6.5 billion. Revenue was $1 billion, broadly flying year-on-year, reflecting good progress on the Fast Track to a Career project, as well as our other large EPCI projects. Adjusted EBITDA was $142 million, with a margin of 14.3%, down from the 15% in the third quarter of 2021. This reflects a continued strong underlying a lower contribution from project closeouts year on year. Selected renewable performance metrics are shown in slide 14. Order intake in renewables was around $200 million, taking the backlog to $600 million. As I mentioned earlier, Seaway 7 has been awarded preferred supplier status on several projects, and these should rebuild the backlog over the coming months. Revenue from renewables was $374 million, flat year-on-year, reflecting continued high activity on the Seagreen project. During the quarter, Formosa 2 and the foundation scope of Hull and Zaku South were completed. Adjusted EBITDA was $21 million, up slightly year-on-year, resulting in an adjusted EBITDA margin of 5.5%. Slide 15 shows the cash flow waterfall for the third quarter. Net cash generated from operating activities was $210 million, including an $87 million improvement in working capital. Year to date, the build in working capital has been just $9 million as a result of projects refacing into 2023, notably procurement related to Mero 3 and Marjan 2, as well as management's further efforts to optimise cash. Cash conversion, measuring the conversion of adjusted EBITDA into adjusted operating cash, was 1.4 times. Net cash used in financing activities was $76 million, mainly attributable to purchases of property, plant and equipment associated with vessel dry docks and upgrades. Pre-cash flow in the period was $131 million. Net cash used in financing activities was $60 million. This included $27 million of lease liability payments, mainly related to charter vessels, and $21 million of share repurchases. At the end of the quarter, cash and cash equivalents was $533 million. a net debt was $33 million, which included lease liabilities of $204 million. The group's liquidity includes $1 billion of committed undrawn borrowing facilities. In March, as part of our commitment to return excess cash to shareholders, we announced our share repurchase programme of approximately $70 million. As of market closing yesterday, $45 million, had been utilised. To conclude the financial review, slide 16 shows our expectations for the full year 2022, as well as some preliminary guidance for 2023. Consistent with our update in July, revenue and adjusted EBITDA in 2022 are expected to be broadly in line with 2021. We now also expect net operating income to be broadly in line with 2021. We have updated our guidance regarding taxation. We expect taxation to be between 80 and $90 million, adjusted upwards from between 50 and $60 million. The revision is driven by a shift in forecast profitability towards higher tax jurisdictions, together with an increase in forecast withholding taxes. In some instances, these withholding taxes will be recoverable under the contractual terms with our clients. There have been no other changes to the financial guidance since the second quarter 2022 earnings presentation. Turning to our preliminary guidance for 2023, we expect revenue and adjusted EBITDA to be higher than 2022, and we are comfortable with the current We expect group capital expenditure to be within a range from $480 to $500 million, including $310 to $330 million associated with . I will now pass you back to John.
spk04: Thank you, Mark. On slide 17, we have a reminder requiring little growth capex. The investment in the subsea joint venture gives us an even stronger base from which to generate cash flow during this upcycle and beyond. On the right, we have Seaway 7, which, as a result of the Q3 funding plan, now has a firm foundation from which to become financially independent. On slide 18, we have a reminder of our track record of dividends and buybacks over the past 11 years which has seen over $2.2 billion returned to shareholders. We were amongst the first of our peers to reintroduce returns after the oil price shock of 2020, with a regular one knock per share dividend and a buyback of $70 million, which, as Mark said, we aim to execute before the Q4 results announcement in March. And now we'll move on to our outlook slides, on slide 19. Tendering activities remain high, with a tender pipeline of around $16 million, up 20% for the prior year, and discussions with our clients remain positive, despite uncertainties in the global political and economic environment. Regionally, the story remains consistent, with customer spending focused on three hot As we near the end of the year and the cutoff for the Norwegian government tax relief scheme, we anticipate the conversion of feed studies, deferred EPCI projects. In Brazil, Petrobras continues to move ahead with its planned FPSOs. Having a remaining focus on the delivery of its ambitious plans, we do not expect any material changes to this strategy under a Lula presidency. Finally, in the US, the subsea tieback market remains active. Whilst in Guyana, the award of our first substantial project bodes well for our future in this new region. Overall, we're encouraged by the way the recovery is progressing and remain confident in the outlook for subsea and conventional. Availability of our vessels is tight for 2024 and tightening for 2025 and beyond, which is driving improved pricing of our On the next slide, we have our wind prospects. As we noted before, Seaway 7 is the preferred supplier on East Anglia 3, Sea Green 1A, Piperite in Germany, and the US Wind Project. We expect this pre-backlog to convert to firm awards during the end of the year and early next year, adding visibility to our fleet utilization into 2025. In addition to the pre-backlog, We are currently tendering fixed offshore wind projects worth around $7 billion. To wrap up, we turn to slide 2021. In subsea, demand is underpinned by a drive for energy security after a prolonged period of underinvestment by the industry. Meanwhile, we see little risk of new vessel additions in our core subsea market, suggesting the potential for a sustained upturn. With a fleet of young vessels requiring only maintenance levels of reinvestments, we believe the subsea business is poised to generate strong cash flows from 2024 onwards. In renewables, Seaboy 7 is well-placed to capture a share of the growing fixed offshore wind market with a fully funded new-build program. Delivery of new vessels should coincide with a step change in the pricing and risk allocation on new projects, including those in our pre-backlog. to generate EBITDA margins of 10% or more. In new energies, we have strong positions in floating wind and carbon capture. This strategy leaves us well positioned to generate returns for our shareholders over the long term as the energy transition unfolds. And now, we'll be happy to take your questions.
spk05: Thank you. As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Your first question comes from the line of Kevin Rodger from Kepler Chevro. Please ask your question.
spk11: Yes, good afternoon. Thanks for taking the question. The first one will be related to the subsidy business, please, and notably the wording that you had in the press release saying that the markets start to be very tight for 2024-2025, and so the conditions on which you secure projects are today much better than before. I was wondering if you can provide us more color on what kind of margin you can embark new orders that you get in the subsea business, please, for the coming years. And not only one question, also on a specific project related to the pricing power of the industry, it has been said that the discussion on a project that is named Mero 4 in Brazil has been ended in the third part between Saipem and So is it the kind of work that you can do in 2024 or 2025, if you can give us also some elements on that side? And the last question on my side, you have a pre-backlog that is quite large, something like $1 billion in subsea, if I'm correct, and $1 billion in wind. Do you have more visibility on the timing for this pre-backlog to get the official FID and so coming up?
spk04: into an order please okay thank you Kevin let me work back backwards and then we will take the questions in reverse order in oil and gas we have positions in an break that requires video submission by the 31st of December so the oil and gas work we would expect that to turn into work hopefully the latest Q1 next year so that has a path for us in terms of the wind the wind prospects are primarily related to UK projects where our clients understood that their CFD, sorry, their own internal FID reviews. And again, we expect those to be back end of this year, early part of next year. The only slow cloud in the horizon there is any potential tax changes that may come out of today's budget in the UK, again, is part of the timing in which all that fits together. So we can see a path Mero4, I can't speak on behalf of SciPem. We know that they had bid that package. We had not bid that package as we had no availability in the original windows, but we have availability slightly later if the windows were adjusted in the new bidding process. So again, we've indicated, we've been asked by Petrobras our availability, so we've told them what our availability is. So we'll see how they engage offer on Mero 4. In terms of margins, Kevin, I think I'll give you the usual answer that I give, that every project is a step-by-step adjustment. So as each project goes in the backlog, it generally has a slightly better margin than others. It is not a huge step change that we are seeing, but it works its way upwards. We're at that lowest point in the cycle, in the double-digit EBITDA margin, but not much higher than that. way and we expect our margins to be heading towards the high EBITDA teams as this margin accretion works its way through. So I think just keep thinking of it as incremental movements quarter on quarter. has been about liquidating the last of the lower margin work and i think in our prepared remarks we talked about our inflection and our profitability is the second half of 2023. so hopefully that gives you a little flavor how to think about it perfect thanks for that thank you we will take our next question the question comes from the line of nikhil gupta from city please ask your question
spk08: Hi, my question is, you know, in terms of, you know, when you say capacity for the vessels is, you know, quite tight in 24, 25. So how does that compare, you know, like how much is already booked for 23, 24, you know, for subsea seven and, you know, for the industry? So, you know, just comparing like subsea seven and the industries. That's my first question.
spk04: I think the way to look at it at the moment is this is about the key enabling assets. We have a large pool of assets, but we are very clear that our big rigid pipe layer and our very largest heavy construction vessels are the key enablers. Generally, those assets then spin off work in a fixed ratio down towards our smaller asset base. As we sit here today going into 2023, we're comfortable with our backlog. We know where our key competitors' assets are and what work they have awarded themselves. So it's tightening. That's the message we've given. It's definitely tightening, not just for us. It's tightening for everybody in that market. And that's been for us. It's the tightening that allows the pricing to adjust. And as that tightening gets closer there, as Kevin said, projects like Mero3, though, obviously one of our competitors did put
spk08: project so that's the dynamics of a market on the upward tick and that's the way we need to think about it okay thanks that's clear and you know if I could on just on 2023 guidance you know when you know you say EBITDA higher than 2022 like consensus is already 30% higher so you know just you know probably a bit more color around there would be helpful
spk10: Yeah, sure. Thank you. As I remarked in my prepared statement, we are comfortable with the current 2023 adjusted EBITDA of $663 million. So that gives you an indication of the movement from 22 into 23 around our EBITDA expansion.
spk08: Okay, thanks. I will turn it over. Thank you.
spk05: We will take our next question. Your next question comes from the line of Jorgen Olfheim from Pareto. Please ask your question.
spk03: Hi, guys. Thanks for taking my question. Just a quick one on the funding. Is the committed funding from Subsea 7 to Seaway 7?
spk10: addition to the already drawn 195 million unsecured working capital facility or will the new facilities replace that the facility thanks yeah thank you for your question this is Mark so as part of the new funding arrangement for Seaway 7 Seaway 7 will pay back the amount drawn from the subsea 7 working capital there are 300 million RCF. Similarly, there is a 150 million shareholder loan, RCF, facility in place as well. However, the firm expectation for that bridge financing is that it will not be drawn, but instead replaced by other sources of core debt. So the idea through the financing of sub C7 through the packages which would announce both debt and equity, is that the amounts drawn from the sub C7 working capital will be paid back.
spk03: Thanks.
spk05: Thank you. We will take our next question. And your next question comes from the line of Christopher Mullican from Spare Bank One Markets. Please ask your question.
spk02: Yes, good afternoon. This is Christopher Moller-Locken from Sparabank One Markets. The backlog for the renewable business remains low in 2023, but as you alluded to in your prepared remarks, there are some potential contracts here which are expected to be awarded relatively shortly. But could you just remind us how that will impact 2023, or will those contracts mainly come for execution in 2024 and thereafter. Thank you.
spk04: Thank you, Christopher. I think I gave part of the answer to Kevin, but again, I can just reiterate here. We have declared publicly TNI type project, so that will not have clear at the moment, but again, that will not be material to 2023. The main areas for 2023 will be Sanger and Sea Green 1A, and they will be the ones that will have an impact there, as well as continuing to liquidate the work we're doing, as we discussed earlier, on Dogger Bank A and B, as well as the portfolio of Taiwanese cable project contracts there. As I said in Kevin's question, those projects will go through their final investment decisions with their operators in the next few months and the only thing that we're all keeping an eye on is what will happen in parallel to this call with a UK Chancellor's discussion about his taxation plans. If there's any major changes in people's views on taxation and things, that may or may not speed up or slow down the award of those contracts. So for us, we are reasonably comfortable that we have a fair plan for next year as to how things fit together. And we're in dialogue with all our key clients. And it's one where, again, the exact time in which this turns into award is in January, February, March. But we're pretty clear that we have a plan here.
spk02: Thank you.
spk05: Thank you. We will take our next question. The question comes from the line of Guillaume Delaby from SG. Please ask your question.
spk12: Yes, good afternoon. Two questions on the tightening once again. So if I'm listening carefully to you and if I'm listening carefully to your peers, I got the impression that there is a step change between what you have been saying and what your peers have been saying in Q2 and what you are saying now regarding tightening in 2024. So am I correct to assume that over the last three or four months, there has been basically some massive acceleration of securing assets? This is my first question. And the second related question I understood from your answer to Kevin's question that at this stage, this tightening is not yet really translating into future higher margin. Should we understand that this ramp up in tightening should nonetheless translate in higher margin by 2025 or 2026? Thank you very much.
spk04: Let me take your second question. The point is, it's all about the blended set of projects that we have running through each year, and my answer has been pretty consistent over the last three quarters is that each project is better margin than the other. It's all the blend. So direction, absolutely, we're heading to higher margins, and we're pretty comfortable here that we can see good higher margins for the business in 24 and 25. I think we quoted the last two quarters that we can see our peers, projects one by one are getting awarded, which is tightening the vessels. If we come back to the question on Merode 4, what happened on Merode 4? Well, you know, we couldn't bid Merode 4 because we had no vessels available in the window that was originally offered. So, which again means there's a tightening happening there. So, I think it's not a massive tightening, but it's the logical conclusion as different awards get made to the market, whether it's to been pretty consistent from our side, and I think it mirrors what our peers are saying, but the effect of the tightening is now real. Our projects are now awarded quarter-on-quarter, which takes very capacity.
spk12: Okay. To be just maybe to be more correct, it is more your peers where I noticed a change in the tone, to be honest, yes.
spk04: Yeah, I don't think we're misaligned, by the way. It's just the fact that we said for the last two quarters, the previous two quarters, that we could see a tightening coming in 24 and 25. I think everybody has now seen it. It's there. And then I think everybody in the industry sees the same situation.
spk01: Thank you very much. Good question. Thank you.
spk05: Thank you. We will take our next question.
spk07: question comes from the line of james thompson from jp morgan please ask your question great um thanks very much for your answer so far uh james um just firstly john um just in terms of sort of progress through projects i mean i'm sure it's a very quarter by quarter but it didn't seem like you made an awful lot of progress on on things like mirror 3 and and baccala particularly versus know Sakharov's obviously you know relatively fast project anyway but maybe could you give us some some views there I mean I'll obviously a lot of political change happening right now you know is there a bit of a risk to the rate of which Petrobras does things here yeah James I think like all these things you know project like Sangam are and TPO and Sakharov made progress because we got a whole
spk04: ramp up through very quickly, as we said in the prepared remarks. Mero 3 is about procurement. Baccalaureate is more advanced than that. So those two projects are going exactly as per the plan. We're not slowing down. We're not speeding up. Baccalaureate is getting ready to start the UBOO school base to weld up all the materials that we've done So we're not seeing any change in any pace in Brazil. And in our prepared remarks, I made the comment that we One that I've got is we've been through many changes politically, but the machine has kept moving in terms of its plans, and we see no wavering in terms of their ambitious plans. They've ordered a bunch of FPSOs, the conversation on that report. As a matter of fact, they've ordered an FPSO, and now they're trying to secure their search capacity to go with it. are all moving to a plan. And yeah, there's a lot of challenges in the world politically and economically, but certainly it's more about acceleration than slowing down is what we're seeing at the moment.
spk07: Okay, thanks. And then maybe, you know, just in terms of kind of capital allocation, John, I mean, what do you think about potential to kind of increase distribution to one way or another over the next couple of years? I mean, obviously you've committed funds to 307 this year and you're going to commit significant funds over, over 23 and 24 to the new, uh, subsidy JV, you know, maybe what could you say really about whether that, that limits or not ability to kind of grow distribution, uh, to shareholders, um, and maybe following on from that, actually, I've kind of asked these questions together. I just wondered, you know, obviously a lot of questions about a tight market in 24, 25, clearly upstream companies have remained relatively capital disciplines now for some time. And I know she, you know, both yourselves and other old services too. I just wondered, you know, do you see any kind of ambition to build new kind of enabling assets within, you know, yourselves, your peer group, and does this kind of commitment to the sub-CJV maybe restrict your ability to do that if it is getting very tight?
spk04: Okay. Many, many questions, and I will pick up on one there, Roger. Okay. New assets, we see nobody building new assets. I think the joint venture on the subsea hardware will just strengthen our position in that and the entry barriers will be higher. So I think for us it's about pretty comfortable that at the moment we've got some very good years ahead of us there. Capital discipline from operators, absolutely. But we've been through many cycles in the past where, again, they will try to remain as capital disciplined as they can. Ultimately, today, the world is trying to solve a set of equations and a set of problems here about energy supply and energy demand and how they want to do that. There's many choices in which they choose to do that, that they need more wind or more oil and gas. We're pretty sure the world needs a bit of everything that's on offer. For us, we're cognizant of the fact that our clients will always make the best decisions for their shareholders. In terms of distributions, I'll have Mark to talk about just the way to think about that.
spk10: So, as you're aware James, in March we introduced our dividend policy, one NOC per share. In addition, we have paid around 30 million NOCs to shareholders as a dividend payment in May, and with $45 million through our $70 million share repurchase programme. As we've indicated, we do expect 24 and 25 cash flow generation to be strong, and I'm sure the board will reflect upon that around our capital allocation policy around returning excess cash to shareholders. So hopefully we will remain committed to our policy of ensuring that shareholders are well rewarded for their investment in Subsea 7.
spk07: Okay, thanks both. I'll hand over.
spk05: Thank you. We will take our next question. Please stand by. The question comes from the line of Horkham Munson from ABG Sundale Collier. Please ask your question.
spk13: Hello, guys. Two questions for me, please, just on cash flow. You did have some comments on working capital in your prepared remarks, Mark, but I just want to clarify, has the overall picture in terms of change in working capital improved due to your efforts in that regard? And secondly, when you carve out the COE7 portion of your 2023 guided capex, it looks like the the running maintenance capex is a little bit up on Subsid7 level. Is that just inflation or is there any special elements to that? Thank you.
spk10: So let me answer the working capital piece first, Håkan. Firstly, yes, we are pleased with the results of our efforts so far this year to optimize cash, particularly working capital. But what we have seen is the primary of the working capital outflows that we expected in 2022 into 2023, and primarily that relates to the Mero 3 project in Brazil and the Marjan 2 project in Saudi Arabia. But I can assure you that management and everyone in Subsea 7 is very focused on improving working capital because we want to convert as much profitability in a period to cash as possible. In terms of your second question, yes, there has been an uptick in the non-Seaway 7 capital expenditure. Partly that has to do with inflation, but more importantly is to do with a number of strategic initiatives that we have ongoing within the organisation. So that could be the vessel hybridisation of certain assets within the fleet, as your commitment to digitalisation, as well as our investment in a new
spk05: underlying topics and you saw this year okay okay thank you thank you we will take our next question and the question comes from the line of Mark Wilson from Jefferies please ask your question okay good morning gents and I would like to a good afternoon even
spk09: I'd just like to ask a second question on capex, please, and that is the guidance for this year unchanged at just over 400. Should we expect that capex to come through in 4Q, the delta versus what you spent? That's the first question. And then the second one, you mentioned how the working capital facility for Seaway 7 is going to be repaid. Is that also something that will happen in 4Q. Thank you.
spk10: Okay. So Mark, we have some material discrete cash capex payments in Q4. Our current view is that that cash will leave the organisation. However, as you know, these items could slip into Q1. So the guidance that we've given at the moment is our best view. However, some of that could slip into early next year. If you then move on to your Second question, I would expect the working capital facility from Seaway 7 to be reduced over time. So I wouldn't expect an immediate readjustment in quarter four. Some of that will drift into 2023. All right, thank you.
spk09: And maybe then if that, on the CapEx point, if that could slip, because it stayed very consistent all through the year, but... but you've only spent less than half of it. So maybe you could just say how much of the spend so far this year of CapEx has been renewables then.
spk10: Yeah. So in terms of Q4, the majority of that will be renewables in terms of payments that we have for the alpha lift and to a lesser extent the dentist. So those are the primary materials, the items that I referred to some moments ago.
spk09: All right. Thank you. I'll hand it over.
spk06: Can we just take one more question, please, operator? Thank you. Thank you.
spk05: And the question comes from the line of Joe Cherry from Bank of America. Please ask your question.
spk01: Thank you, guys. I won't keep you waiting. All of my questions have been asked already. Thank you very much.
spk10: That's yours. Bye.
spk04: okay well thank you very much everybody for uh joining us on this call um hopefully we've been able to uh give you the answers to your various different questions as ever catherine is available to support uh offline any other questions or comments you may have on sub c7 thank you very much uh and we look forward to talking to you about our q4 uh results uh early in 2023 so thank you very much all the best thank you goodbye
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