As the CFO of Cenergy Holdings, I welcome you on this hot August afternoon to our 2026 First Semester Financial Results conference call. Let's see first our major highlight points of the semester that has just ended. First of all, we have a record backlog figure following IPTO's frame agreements on the North Aegean and the Dodecanese interconnections. The project execution was very good in the semester, delivering high margins in most projects. We continue to build up capacity since our backlog is expected to grow even further. The returns to our shareholders remained attractive, and our leverage profile is also solid, even after expending a significant amount for CapEx in the first semester. The numbers that are highlighted in our press release and in our financial results are as follows.
First of all, we have an increase in revenue of 13% year-on-year above the threshold of EUR 1 billion at a level of EUR 1.15 billion. This higher revenue actually doubles in terms of profitability delta. We have an increase of the operational profitability of 26% compared to the first semester of 2025, reaching a number of EUR 216 million. Again, once more, it shows that our focus is on value and not on volume. Margins remain high, around 19%, almost 200 basis points higher than the corresponding semester of last year, slightly lower than the 19.7% that we had in Q1. As we had already forecasted, the introduction of land cables, extra capacity in Thiva and Eleonas has driven slightly down those margins since in Q1 we had a disproportionately high percentage of offshore cable in our revenues. Our backlog reaches EUR 3.9 billion.
This is mostly due to the IPTO interconnection of the four interconnections in Greece, which is valued at EUR 1.15 billion. I will come back to it in a while. CapEx for the first semester was EUR 165 million, an important number with EUR 67 million out of which were in facilities outside Greece. We reiterate in that way our commitment to a global positioning, both for our cable segment that is expected to start its U.S. operations in the second semester of 2027, which means 12 months from now, or a little bit more than 12 months, 12-13 months from now, as well as the new pipes facility in the U.K. The bottom line is at EUR 177 million, 43% higher than last year, and an EPS of EUR 0.65, 45% higher than last year.
Given these very strong results of H1 and the growing backlog, the company has decided to upgrade its full year 2026 guidance for operational profitability to EUR 390 million-EUR 420 million range of adjusted EBITDA. Let's look into a little bit more detail the figures for 2026, starting from revenue. As I said, the revenue exceeded EUR 1.1 billion. The strongest change is found in the cable products business unit at EUR 352 million for the first six months, a 20% increase from the corresponding semester of 2025. The largest share of revenue is, of course, in cable projects, more than 40% of total revenue, and this is the most profitable segment, as you all know. There is a strong increase in steel pipes projects of 13% in money terms.
The only constant part of our business line is hollow sections, but as I told you quite often in the past, this is not a focus point for our group. It's more of a continuing business from the 20th century years of Corinth Pipeworks, and it's really a very small part of the Corinth Pipeworks business right now. The sales are dispersed. Of course, the larger part is still found in Europe. We're a Europe-centric company. More than 60% of our sales are in Europe for the last two years. The rest of the world has shown quite a considerable increase. It now takes 14% of our sales from 7% in the corresponding semester of 2025. The U.S. is constant at around 7%, and the increase of 13% of revenue, as I said before, has led to a 26% increase in operational profitability at EUR 216 million.
That operational profitability is further boosted by EUR 7 million of a positive metal result for a total EBITDA of EUR 223 million. Of course, that metal result, as you all know, is only an accounting profit number, and it's not considered to be a recurring amount. How do we go from last year's first semester to this year's one? It's really the cables providing most of that change in the profit before tax, EUR 52.3 out of the EUR 53.5 million change. The SG&A are higher as sales have increased, but also as labor costs have gone up, and this is partly due to our good performance in 2025, which led the company to really contribute and give some bonus payments and incentive payments to our staff. Because as we always say, the most important part behind our factories and our products is our people.
The company wanted to congratulate the staff, all the labor, both workers and white-collar workers in the group, congratulate by some extra payments for the good performance of 2025. The operational profitability, of course, trickles down to PBT at EUR 177 million, and that, of course, also trickles down to a profit after tax of EUR 138 million, 45% higher than the corresponding semester last year. Most importantly, however, it is the view that we have on our backlog. The first reading of the numbers show just a EUR 500 million increase from December 2025. You all know the projects that we have announced in the first quarter, the project in the Netherlands and the project in Poland.
A much more important landmark for us was the frame agreement that was signed between Hellenic Cables and IPTO, ΑΔΜΗΕ in Greek , of EUR 1.15 billion, which relates to the connection of four important connections in the northern and eastern part of the Aegean. First, the connection between Thrace and Lemnos, then between Lesvos and Lemnos, Lesvos and Chios is the third one, and between Kos and Rhodes, the fourth one. These are really strategic projects for the country. The project includes almost 700 km of submarine cables and another 230 km of land cables. It's an EPCI project, as we call it, a turnkey project. We are very confident that there is more to come in project awards until the end of the year. How is this backlog distributed? In cables, the backlog is really European and Greek, and the largest part of it is interconnections.
A smaller part is offshore wind farms. That is important because the interconnections give us much more stability and visibility for the future. We have clients in interconnections, which are semi-public entities that do invest a lot in important projects for their countries. They have much higher credit worthiness than offshore wind farm developers. That gives us a much better degree of confidence for the visibility of our backlog. For the steel pipes, the steel pipes backlog remains around EUR 500 million. EUR 500 million is almost a year and a half of revenue, and it is this year concentrated in the Americas and the rest in Europe. It is diversified, I would say, evenly distributed between oil, natural gas, hydrogen, and a small part in CCS, around 10%.
Given the backlog that we do have and the growth that we do want to achieve in the medium term in the future, we have spent an important amount of money, I would say EUR 165 million in the first six months, to support that next growth phase of the group. These are all strategic investments split between cables and steel pipes, with cables having the lion's share. EUR 50 million was spent for the new Maryland plant in the U.S., and another almost EUR 90 million spent for Corinth and Thiva, the two factories in Greece. These two last parts were concerned, actually, the optimization of the new capacity that we have installed since 2024. In the U.S., the story I've described it quite often in the past, it is getting a local base for that important, large, and growing market for cables in the U.S.
There is another amount of almost EUR 30 million, which was spent by the steel pipe segment. The largest part being the acquisition and the start of recommissioning for the Hartlepool LSAW pipe facility in the U.K. That is also an important project for us. It gives us additional capacity in LSAW pipes and as I will make a little bit clear in a while, the LSAW pipes are the most valuable projects for the group and for globally, not just for us. It is also a door to a very interesting market, which is the U.K. for us. The CapEx is spent, but it is spent to support the next growth phase of Cenergy. Despite that CapEx, the leverage remains very manageable at 1.1x EBITDA for the six months.
Clearly, there is an increase of almost EUR 180 million from working capital, which translates to a EUR 230 million difference in net debt. We expect these figures to normalize by the end of the year and the leverage to hover around one, the level of 1x EBITDA by the end of the year. We believe that we have really offered some good returns to our shareholders. The returns remain attractive. We have a 45% increase in earnings per share since the corresponding semester of 2025, and more than 15% upside in the share price since December 2025, despite some hiccups that we've seen in the share price in June and July. The return of capital employed remains very strong at 28%, as it was also in 2025. Turning at the segments.
Clearly, as I said until now, the important contributor of Cenergy, profitability, and growth up to now is the cable segment. We have a turnover of EUR 842 million of sales, most of it in projects, so more than 50% in projects and the rest in products. That turnover is converted actually to EUR 164 million of operational profitability, with margins reaching 19.5%. This average margin includes both the margins from projects which, as I stated quite often in the past, are above the 20% mark, and the margins from products which are lower. We have an average of 19.5%. The increase of 36% in EBITDA is, as is clear, due to the disciplined and successful execution of important projects for the segment, as well as trying to give the best and the most profitable solution, the most efficient solution for Hellenic Cables to our clients.
Working capital has increased, of course, by almost EUR 170 million since December. That also boosted net debt by EUR 155 million. Still, the profitability of the segment is strong enough to keep the leverage profile at very sound levels. For steel pipes, the story is a little bit different. There is an increase in turnover at EUR 312 million. That increase in turnover by 11% is actually volume driven, so it is not a result of higher prices. I would say that prices are slightly lower from the last semester of 2025. The profitability stays around EUR 51 million to EUR 52 million, as was last year, but the margins are lower. Don't forget that 2025 was really the annus mirabilis of Corinth Pipeworks with extraordinary operational profits of EUR 108 million.
This year, we are keeping close, I think, to those levels, but we are not supposed to actually reach those, EUR 108 million, but it's still a very strong year for CPW, despite the fact that the market does not really enjoy the positive tailwinds that you have in the cables segment. Let's turn now to, I think, the most important part of this presentation, which is the outlook for the rest of the year and for 2027. I would say that starting from cables, that the most interesting growth themes for cables are as follows. First of all, the transmission projects. HVDC, subsea transmissions, these are the most attractive profit pool for cables, not only for Hellenic Cables, but also for the other cable operators.
The growth is driven mainly by the European interconnectors, the export cables of offshore wind farms, some island interconnections, like in our case, and grid security. Margins remain structurally superior to other cable businesses. We're talking about margins which are close or higher than 20% for all of competitors and ourselves, and the importance of that growth point is that it will remain. It is driven not by fading choice in energy sourcing, but from a much more stable choice of energy stability and energy resilience. The second growth theme, which evolves, the second major growth engine for cables is AI and data centers. They emerge as that growth engine, not only as an electricity story, but also as demand for fiber optic cables, for connections of the data centers to the grid, of upgrades to the transmission mechanisms.
That is an important step because it gives, at least for us, a very good argument for our North American foothold because the data center story is much hotter in the North American continent, and that's where a large part of the demand is expected to come. Third point is the modernization of the grid. The International Energy Agency actually has identified that grid congestion and delays in connections are one of the biggest bottlenecks to the energy transition. That's why utilities in Europe and in North America, they accelerate investments in transmission networks, underground cables, especially for areas which are struck by tornadoes or by large physical phenomena, distribution upgrades. We all know the stories about the lack of charging stations in urban areas in Europe, but also in the U.S., and the resilience of the grid.
All of these growth themes are important for the cables. The geographic winners, I would say, are in Europe, the offshore wind in the North Sea, the interconnections in the Mediterranean, and the grid reinforcement programs. Whereas in North America it would be data center upgrades in the grid and medium and high voltage land cables since submarine is much rarer in the U.S., as you all know. What is the key takeaway of our outlook for the next year and a half? We have a very strong demand from the grid and high quality earnings from transmission projects. The growth thesis is now broadening. It's not anymore renewables and electrification. It's becoming AI data and electrification. This is important because it gives us a much more stable and a wider range of possible projects for Hellenic Cables in the future.
Steel pipes is a slightly different story as I said. Steel pipes, first of all, it's clear that Corinth Pipeworks is playing a role as a top tier one player. It's not there to target every new pipeline that will come up in the Middle East or elsewhere. To be very clear, Corinth Pipeworks is not really targeting the pipelines that you might have read about in the news and which are planned in Saudi Arabia or the Gulf. For many reasons, one of which being that these countries have their own local producers. There are already seven or eight different steel pipe factories in the Middle East, in the Gulf, and we're also talking about onshore pipelines, which are clearly lower margin bringing than the offshore pipelines. Secondly, with our acquisition of the U.K. facility, we are putting a lot of interest in the LSAW market.
The LSAW market, the market for pipelines, which are welded across the pipeline, so it's not a spiral welding, it's a longitudinal welding, is the most profitable and growth promising segment of the oil and gas pipelines. Geographically, we would say that the projects are concentrated in the U.S. Gulf Coast and in the U.S. in general, and also, of course, in Asia. In the former, we have a very good positioning, whereas in the latter, in Asia and in Saudi Arabia, as I told you, we are not that much interested for projects there. The market volume is so large. Actually, Global Energy Monitor talks something about more than 200,000 km of gas pipelines in development globally. Half of them are in areas where we are present and in areas where we are leaders.
Just that part of the story is enough to keep us growing for the next medium term. Secondly, LSAW drives a lot of projects that are related to LNG and energy security. Clearly, it is related to the local changes that happen in the transportation of oil in the Middle East, as I said, we will not be present there. The margins are very attractive for LSAW, they are attractive for booked and for high spec players. We are not trying to underwrite the margins in order to get some business.
The level of quality and the level of delivery that Corinth Pipeworks is offering to its clients, which are all the major oil and gas companies around the world, means that we can keep margins to the good sound double digit levels, even though we will not be, of course, able to reach the 19% and the 18.7% that we had in the past. In a nutshell, the LSAW market is not a broad commodity market. It is a selective market, a market that is working on tier 1 oil and gas approvals, on strong backlog, on high utilization, on the ability to actually pass through a part of the steel cost to the final client. CPW is very well-positioned to take advantage of that market. Third point in steel pipes is the U.K. market.
Actually, the U.K. market is a very interesting situation because our acquisition in Hartlepool has actually allowed us to enter a market which is closed, quote unquote, to everyone else. What do I mean by that? I mean that all the competitors of Corinth Pipeworks, whether they are German or Indian or South American, they are shut out of that market because of local content clauses, which means that the acquisition of Hartlepool offers an almost captive market, which of course, is not booming in terms of oil and gas development, given the U.K. government's decision on renewables, but it is a very promising market to other projects such as hydrogen and CCS, carbon capture. Also it is a very good opening for the transatlantic market due to the proximity to the U.S. Corinth Pipeworks will continue to select projects in a disciplined way.
Some important awards are on the way, hopefully, I will be able to say more during our next meeting in November. It's always the focus of Corinth Pipeworks is disciplined execution, niche projects, and really exploiting our top quality producer of steel pipes. The combination of very good H1 results and a growing backlog has led the company to upgrade our guidance for the end of 2026 by EUR 20 million in both ends of the interval. We are now forecasting that our operational profitability will be between EUR 390 million to EUR 420 million for the year with the usual assumptions, of course, a smooth execution, no material deterioration in the availability or the cost of key inputs, that the demand remains healthy for products, that we have a limited impact from major geopolitical risks. I will finish the presentation with our financial calendar.
Our next appointment is for mid-November. On 16th of September, of course, we will publish our interim report for the six-month period of 2026. Mid-November, we will have our appointment for the Q3 trading update. Early March 2027 come the full year financial results with the general meeting following at the end of May. I now turn back to our operator to start the Q&A section. Thank you very much.
Ladies and gentlemen, before we begin the Q&A session, we would like to briefly explain how questions will be managed. If you wish to ask a question live, please use the raise hand button. Alternatively, you may submit your question in writing through the Q&A panel. You can find both options at the bottom of your screen. Thank you for your participation.
I see we have some raised hands here. I start with Mr. Marios Bourazanis in an alphabetical order. I'm sorry, I start with Mr. Marios Bourazanis. Marios, you have the floor.
Thank you. I hope you can hear me, thank you for your presentation. Just a couple of questions from my side. The first one is on the order intake following the strong H1 intake. I'm wondering how we should think about the backlog development through the year end of 2026 and how tendering activity has gone so far in H2. If there is scope for meaningful awards for the rest of the year, that's my first question. My second question is as the group moves past the peak of the current CapEx cycle, I was wondering how you're thinking about the next phase of growth. Are you assessing any opportunities to expand the cables footprint more ambitiously, either in Europe or in the U.S.?
If any attractive opportunities arise, how do you think we should think about funding capacity across your cash flows, your debt headroom, and potentially any other sources of capital? Thank you.
Sure, Marios. Thank you. First, yeah, the order intake was really good for the first H1, and I'm very confident that it will be even better in the second semester, not only for cables, but also for steel pipes. We expect our backlog to grow significantly in the second semester. We also, I forgot to say, and this is maybe related to the new awards that Hellenic Cables, I think it has already disclosed that it was officially certified for the 525 kV cable solutions. That's a very important result, and it will, of course, affect the awards that we will get in the second semester. As for the CapEx cycle, it is true that we do still have some strategic CapEx to do in the U.S. Until the end of the year, we expect construction works to finish.
A couple of equipment is already on their way, or they have already arrived in the U.S. and will be installed by the end of the year, by December, so that the objective is that by February 2027, we will start producing samples, first medium voltage samples, and later on high voltage samples, because as you know, we need some certification for that. The CapEx cycle is expected to go back to a much lower level of CapEx in 2027, but since there will be some excuse me, some good cash flow generation in 2027 and 2028, of course, the opportunities are open. We may examine some further investment in the U.S. to actually grow the business there or some expansion of our facilities in Greece with further optimization. That will be done following important awards in our backlog so that as we always follow that same path.
We first have the awards, and then we plan our expansion of capacity accordingly. I ask Mr. Thijs Berkelder to take the floor, please.
Can you hear me?
Yes. We can hear you, Thijs.
Okay. It's Thijs Berkelder, ABN AMRO ODDO BHF. Can you maybe give CapEx guidance for the second half of the year and maybe also explicitly for the Maryland factory for the second half of the year and the press release. You just stated you expect sort of end of construction before year-end. Does it mean so much lower CapEx than in principle for the U.S. next year? Second question, just the data affects assets under construction in terms of value end of the first half. How large was the amount? For now, the third question is on the margins within cables. Is it real that product margins have improved to 10% or so?
Okay. I start with the CapEx. You're right. In the second half, of course, we still have an important part of CapEx to be spent. Let me clarify that this slight delay in spending the CapEx is due to invoice delays. It is not due to work delays. Whereas in theory, one could say that if you want to spend almost EUR 170 million for the U.S. plant in 2026, that would be split in equal parts between each semester. It wasn't. It's a little lower in H1. It's EUR 50 million in H1. The rest, the other EUR 120, will be spent in the second semester. The works will be finished by December, which means that what is left for 2027 is much lower. 2027, we are only expecting certain expenditure for peripheral units or commissioning of the equipment, but not something important in the U.S.
As for the margins, it is true, Thijs, that products have shown quite a strong level of around 10% in the first quarter. However, the margin expansion is, as I said before, due to the mix shift, to what is the mix between projects and products and how that mix shifts. The importance for us is that our backlog is composed right now of interconnection projects mostly. This is important because it gives us the security of a higher margin. Offshore wind, as you know, might lead to some repricing of the projects and so on, and that might be a little bit kind of changing the forecast of the margin. Grid projects, transmission projects give us a higher stability.
The fact that we have expanded the facilities in Greece, the land facilities in Greece as well, does not mean that we will focus on products, but at the same time, it doesn't mean that we will not focus on products. The approach of Hellenic Cables is a balanced approach. We do not want to become a project-only company. We don't want to go back to a commodity cable commodity company. It is important for us to keep growing more in the areas where the margins are better. CF, Offshore, so submarine interconnections and so on, but without leaving behind the foundation of our company, which are cable products, land cables, and so on. It's all, I believe, right now the market in project is supply constrained. The market in product is related to a business cycle. It has some good results in H1.
We expect it to have good results in H2 as well, and we do have the capacity to serve a higher demand for products for land, medium voltage, and low voltage in the second semester. We expect these margins to stay where they are for the rest of the year and the beginning of 2027. There is a question, there was a question, a written question by Mr. Katsios of Optima Bank. He would like an update on Maryland and Hartlepool. I believe, Mr. Katsios, I've answered the question on Maryland. About the Hartlepool plant in the U.K. The Hartlepool plant was a plant that was non-operational for nine months. We've acquired it, we've cleaned it up, we brought back all the labor back to the factory.
There are some important commissioning works that have to be done, maintenance of the machines, putting back some raw material so that it can start working. We expect, sorry, to commence operations there even by September this year. Of course, we are not expecting to have high utilization rates for Hartlepool. Hartlepool was an investment decision made in terms on the basis of a very low cost and on the basis of the opportunity that such acquisition was opening up for the segment. We did not have an order book already built for the U.K. facility, but as I told you, it is an opening to an almost reserved market locally and a very good facility in terms of proximity for the U.S. market.
Since we are very active in the U.S. and we expect more awards to come from there, including the famous Alaska Pipeline, we are more than confident that some of that demand will be serviced by the U.K. facility. Mr. Testa, Peter Testa is asking some questions on the capacity added in Corinth and Eleonas. In Corinth, the Corinth facility, when we started in 2024 and finished in 2025, in two years, we can actually say that we doubled the capacity for submarine cables. We are now working at a capacity which could be measured in terms of kilometers, but that might not be a very good expectational forecast because it supposes, actually, that you will be producing only one kind of cables in the Corinth facility.
If you assume that we produce one type of cables, we could say that the offshore capacity of Corinth is now close to 2,000 km of interarray cables and another 800 km of DC export high voltage AC and DC cables. For Eleonas and Thiva, things are different. In Thiva, we have actually doubled again. We passed from three to five insulation machines and now to six insulation machines, which means again that we have doubled capacity. We're talking about Thiva having a capacity of more than 60,000 tons in land cables and Eleonas a similar amount. Will there be some progress in the high voltage market? Well, the high voltage market, we're already there for the European market. In the U.S., this is our next phase II.
The U.S., we will first wait to see how the medium voltage land cables market evolves, and we will go to a later phase, some development of the high voltage there in 2028, 2029, some investments there. There is another question. There is a question by Mr. Kaparis, Stathis Kaparis. Stathis, you can have the floor, and then I will go on with the other written questions.
I thank you. Thanks a lot for taking my question. I've got two, if I may. The first one is on the margin, the cable margin. I don't know what you could say. I'm trying to isolate the one of timing impact. Can you hear me?
Yeah, we lost you a little bit, Stathis.
I see.
Yeah.
I was actually asking about the cable in H1. It's significantly stronger. You have explained the reasons, but I wanted to isolate the one effect of mix and potential timing, project timing, just to understand what the underlying cable margin is expected. What was it in Q2 potentially versus Q1? What was the difference? That's number one. Number two, on the cash flow. I'm trying to reconcile the pretty much stable net debt between H1 and H2. I suspect the 1.121 leverage is justified by the increased LTM EBITDA. That leaves us with net cash flow of zero. If my calculation is correct, you should generate EUR 150 million operating cash flow.
Working capital is a reversal of probably more than EUR 100 million, and then you have EUR 20 million of dividend, and then the CapEx you mentioned is probably EUR 120 million, because if I remember well, the Hartlepool you guided for EUR 15 million-EUR 20 million, you've already paid that.
that leaves EUR 100 million, EUR 150 million.
Let's start with you understand, Stathis, that I cannot really give numbers here.
No, just direction.
Focus.
Thank you. Yes.
Just directions. Okay.
Yeah.
The cable margin, it was right now at above 19%. That cable margin is a combination of the projects and the products. It is true, as Thijs mentioned before, that the products have given us almost a 10% margin, which is good, and that combines with the 20-plus margins from projects to give a level of 19%. What we expect the levels to be at the end of the year is around that level, around the 18%-19%. It all depends on the product mix and on which projects will be executed until year-end. These are the ranges, the trends that we expect. The cables are expected to turn in around 18% margins for the year, 18.5% margins for the year. The free cash flow, you're right, we have another EUR 120 million to spend on the U.S.
This is out of the share capital increase, it doesn't really affect the cash flow generation. The overall story that you are describing is more or less correct. There will be less than almost, I say less than EUR 30 million, in a sense, EUR 25 million-EUR 30 million left for CapEx, non-U.S. related in the second half. That will allow us linked, of course, to the generation from profitability, that allow us some good cash flow production by the end of the year. In 2027, things will be better in that sense, since we do not expect to have the same CapEx levels as we had in the past, the EUR 235 million of 2025 or even more than EUR 235 million this year, including the U.S. This is the correct trend for the future.
I turn to some written questions because time is a little bit limiting. There is a question by Mr. Bruno Raguer. How could I describe the current pipeline of opportunities in steel pipes? Is it bigger, more attractive than a year ago, or about stable? I believe it is more attractive than a year ago, not because the market has grown up a lot, but because we have been able to show to our prospective clients that we can be there in the very difficult projects that they are thinking about. In projects that are demanding and that either local producers or lower quality producers cannot deliver. It is an attractive market for 2027, and we are very close to some awards that can actually give us visibility further in 2028 for steel pipes. Cables, correct. We announced that our HVDC capabilities have been certified.
That opens up additional project opportunities, you are absolutely right, because it opens up the opportunity for more HVDC projects in Europe, not only in Greece, but also in Europe. Absolutely correct. There is a question by Mr. Tanush Shekhar on future acquisitions in the U.S. in the next five years. Well, we could theoretically talk about that around a cup of tea, but the market and the U.S. market is actually so fluid that there could be opportunities. You are right, some other large manufacturers, our large competitors, have acquired companies in the U.S. The U.S. market and the U.S. producers will have a lot of consolidation in the years to come. Once our facility there is stable and produces good revenues, we may, of course, examine acquisition opportunities over there. Mr. Yannick Naf.
Does the somewhat higher oil price change the outlook for steel pipes a bit over the next few years compared to the beginning of the year? I would say yes, because you have, excuse me, new oil routes being designed, but not very much for our side since we are more axed around demanding projects, offshore projects and so on. I do not. It is good to have a high oil price for us, for this segment. A low oil price means that exploiting new, developing new fields is not interesting, and therefore, if it is not interesting, you do not need pipelines to actually transport the oil or the natural gas. Clearly, higher oil prices are important, but it is the more general picture that we get in the international oil and gas market and not specific news that may come in the Gulf or in Saudi Arabia or elsewhere.
The more general picture is clearly positive. There is then a question, actually a couple of questions by Mr. David Longo. He asked me to confirm EUR 120 million of CapEx for H2. The EUR 120 million is what I mentioned is the CapEx for the U.S. plant, and I confirm that clearly for the U.S. plant in the second semester, but I cannot really confirm anything else for the second semester. But clearly for the U.S. plant, that is the amount of money we will need to finish up construction by December. The working capital dynamics. The working capital dynamics are quite seasonal because we do have milestone payments and advance payments throughout the year, especially in the last two months of the year.
It is, we are expecting to get back to a lower level of net debt to EBITDA around one by the end of the year, even lower than one. But it will depend on the scheduling of milestone payments that will also affect working capital by the end of the year. And finally, again, the CapEx for 2027, since the U.S. will not be there, and most of the large capacity expansions in Greece have been completed, the CapEx in 2027 will be much lower. We are talking about around EUR 60 million to EUR 70 million maintenance CapEx for both segments, plus a small number for optimization projects here and there. I do not include in these numbers either the U.K. plant that may need maybe EUR 10 million to EUR 15 million for full commissioning or the small amounts that may be needed in the U.S. in 2027.
Unless, of course, the scope of our U.S. presence changes, and this is still under discussion. No decision has been made. Since we are kind of limited in time, I would like to give the floor to certain people that have not asked questions before. Mr. Testa and Mr. Berkelder, you will excuse me, but I have to give the floor to a couple of participants that have not asked questions in the past. Mr. Balwant Thakur, you have the floor, please.
Much for taking my question. I have one on your outlook as to what you're assuming on the low end and the high end of your adjusted EBITDA outlook. If I recollect your commentary about cable margins remaining strong in 2H, plus U.K. Hartlepool facility becoming operational from September onward, though at a lower utilization level.
Can you please share what you're assuming at the high end and the low end? What is keeping us away from the high end, to be honest?
Well, what is keeping us away from the high end is the uncertainty around the global market, to be very honest with you. If that uncertainty is not there, we are closer to the high end for sure. The first semester, the EUR 216 million has already given us a very good foundation on which to base the profitability for the year. There are a lot of factors which are unknown at the time, one day we're reading about something in the Straits of Hormuz, next day we're reading about AI being a total bubble, and so on. The cautiousness that we want to keep is what makes us put down a lower end in our profitability interval. You're right. If these things do not exist, we will be above the midpoint of our interval, for sure.
Thank you so much. One more from me. On your subsea cable capacity utilization, could you share an approximate where the current utilization may have been in 1H?
The subsea cable utilization is very close to full utilization. The Corinth plant is working six days a week. The seventh day is really for maintaining and tuning up the equipment. Three shifts a day. It is at full utilization. There is no question on that. The land cables are a little bit lower because we are still ramping up the last insulation machine, which will be fully operational by early September, that will also go towards 85-plus utilization. We are working at very good levels for cables. Steel pipes is different. LSAW is very well utilized, the capacity, at three shifts a day, five days a week. Spiral and ERW is a little bit lower, and we do have space for the larger projects to come, like the Alaska Pipeline.
Thank you so much.
Finally, Mr. Athanasakis, I ask you to be quite brief because we are already at 4 o'clock. Thank you.
Thank you very much for giving me the opportunity to ask a question. I wanted to come back to the cable margins. The participation of projects in the mix executed this half was similar to last year.
The sound is not very good, George. Could you please repeat? Because the sound is a little bit muffled.
I said that I wanted to come back to the cable margin.
The participation of projects in the first half this year was similar, actually a bit lower than last year, but the margin was a lot higher. Even if one assumes that the projects have a margin of close to 10%, which is higher than in the past, the resulting margin for the project is a lot higher. I was wondering, is this due to the execution of specific projects or is this a permanently higher pricing level that we should expect to continue going forward? Whether this sort of margin is embedded in your backlog.
Right. Okay. No, it is not-
It looks more like -30% than +20% in the project.
Yeah. I get the question. Okay.
Okay. Thank you.
It is not an increase. It is not due to a permanent price increase in projects. No. It is due to the mix of projects we have executed, let's not forget that executing a project means that in certain cases, we have a larger share of the installation part. Which means that without a significant cost, you do have a part of the profitability. What may happen is that being in the installation part, even without your vessel, if the subcontractor has the vessel, the Hellenic Cables, that is the project manager, can actually make a good profit on a part where it is not spending money because it is not actually using a vessel, since we don't have a vessel. It is not spending money for raw material or other production, it is getting a part of the profit after paying the installer as a subcontractor.
There have been a couple of projects like that, where the non-production, there were projects with a lower production part. The margins that you may think about, 19%, 20%, 25%. 25% is when I have a cable, I produce it, then I install it, I make a profit on the full amount. If I produce a little bit, I take a higher part of profit on the installation, these margins can go much higher. I cannot say more than that, you understand the small detail which comes out of that. It's not a permanent price increase. It is clearly a product, a mix effect, not a permanent price increase. We were very happy to have very good projects this first semester.
That's why I said that overall in the year, we expect the margins to stay between the 18%-19% level for cables.
Thank you so much. Thank you.
Ladies and gentlemen, thank you. Sorry for being over the time. Thank you so much for being with us in this August afternoon. I wish everyone a very happy and relaxing vacation. I reiterate our next appointment for mid-November. Thank you very much. Have a nice afternoon.