Good afternoon, everybody. Thanks again for listening in as we give our Q2 results. I hope you've all had a good summer break and ready for the New Year ahead of us. This will hopefully be the last time that we have to give a prerecorded webcast as travel restrictions are now starting to release and hopefully we can get back to live updates going forward. As usual, I'll be giving this presentation with Dejan Suchic, our CFO, and he will concentrate on the trading numbers, while I'll focus on operations.
Once again, because it is pre recorded, it will not be possible to take Q and A at the end. So if you have queries, then please get in contact with us afterwards, and we'll be happy to respond. Moving to Slide 2. Just to remind of our disclaimer, since there are some forward looking statements within our presentation. Moving to Slide 4.
So highlights. I have to say we've had an excellent quarter, not only with our trading, but also with the behind the scenes activity that has continued after our merger. Both revenues and adjusted EBIT are the best that we have achieved, a significant achievement, I feel, given all the disruption from the effects of the pandemic. Our revenues are up 9% Q on Q, driven by excellent trading from our Renewables, which is up around about 30% quarter on quarter, but also healthy trading from our other business lines. Adjusted EBIT of €2,800,000 is strong and a $400,000 improvement from Q1.
We ended the quarter with a cash balance of 24,500,000 after paying a NOK 0.25 dividend per share and also paying off the first two installments of our bank loan. The merger has gone well, and as I stated at the last quarterly meeting, we started trading together from April. Currently, management focus is on the back office, mainly on introducing a common ERP reporting system, and we hope to have this largely in place by the end of Q3. We have now identified some $4,000,000 of annual cost synergies, up from our original estimate of 3.5, and these will start to kick in from around about Q4 of this year. So all in all, I think we've had a good quarter, and we're quite pleased with these results.
Moving to Slide 5. For those of you who don't know us, I'll just run quickly through our markets. We focus on 3 markets: the renewables the maritime, which has affected shipping and the oil and gas sectors. We'll break this into detail by moving to Slide 6. Our service portfolio is relatively simple and recorded under 3 service lines: First of all, Consulting and Engineering, which is related to a variety of activities such as engineering, design, Maritime Operations, technical due diligence, work associated with cables, T and I, construction monitoring of new build assets, site investigations and similar activities.
Secondly, we cover loss prevention, which looks after inspections and audits and marine warranty work, where we aim to focus on risk mitigation and reductions, mainly to the insurance markets and prospective charterers and buyers of assets. And thirdly, on loss management, where we provide a 24 hour call out service into casualty support and management and where we provide expert witness and dispute resolution capability and loss adjusting services for energy claims. Moving to Slide 7. Our strategic vision is minimalistic and straightforward and can be summarized in 3 simple areas of focus. Firstly, to grow both in the offshore renewables sector and within the energy transition space for the oil and gas and maritime markets.
We have set ourselves an ambitious target of 50% of our revenues to be driven by the green sector by 2025 and this is clearly an area of focus. Secondly, to continue to leverage and expand our market leading position in more mature markets of maritime and oil and gas and to improve our profitability. And thirdly, and most importantly, to enhance our capital efficiency and to reward our shareholders through return of capital. Moving to Slide 8. If we break the sector down into the last 12 months, We can gradually see things are starting to change.
On the left hand side, by service line, We now see that our revenues are less than 50% for oil and gas. Renewables has now become our 2nd most important sector with 22% of our revenues followed by shipping and adjusting making up the remainder. If we break this down into regions, Europe still remains our largest region at a little over 26%, with Asia Pacific, Americas and Middle East a close start behind. 12% of our revenues is driven by Our renewables dedicated companies, OWC, Innosy and EPG, with the remainder from longitude, our engineering arm. I think what's quite important on this particular pie chart is that past 12% of our revenues are driven by our of directly focused renewables companies.
10% of our revenues come from the regions where we're also doing renewable activities. Moving to Slide 9, our global footprint. So during the course of the quarter, we've increased by 2 new offices, 1 in Marseille, which I'll talk about shortly, and the other one in Melbourne and Australia, where we're focused on providing services to the maritime market. So we now have 62 offices in 38 countries. Our global footprint is extremely important to us, particularly in these current markets.
Having people around the world is extremely beneficial to our clients and reduces costs significantly. On top of where we have offices, we have approximately 300 locations around the world where we have people who represent us. In addition, during the quarter, we have increased the number of employees working for us and we ended the quarter with 9 22 full time equivalents, approximately a 3% increase Q on Q, and I'll give a little bit more detail later on. Moving to Slide 10. So we've opened up an office in Marseille under our Innosy brand, which is the company that focuses on engineering design and R and D for the marine renewable market.
The purpose of this office is twofold. First of all, we want to be fairly close to France's largest floating solar PV plant. And secondly, on the Mediterranean coast, there are plans for 1.5 gigawatts of floating wind power to be developed offshore France, Italy and Spain, and we see this office as being close to those locations. We have found previously that by being ahead of the game and getting people in place before these activities really take off This proved beneficial for us, and we're there to service when the clients come in. Moving to Slide 11 and sticking to Renewables to give some ideas of some of the projects that we've been working on.
This first one is also by Innosy, who have developed with partners leading edge software to design optimal solutions for floating wind farms and improvement of efficiency. This focuses on turnkey solutions for defining the best mooring design and inter array cabling. Floating wind is becoming increasingly considered around the world as being the cutting edge of the industry, and it's excellent to have software especially focused on this area. Moving to Slide 12, The next project that we have won is a marine warranty project on behalf of Tennant in Germany for the Dolwin 5 export cable installation. This cable will have a capacity of 900 Megawatts and it's the first project where wind turbines are connected via a 66 kilowatt cable to the offshore platform.
The interesting part of this project is this effectively does away with substations and significantly reduces costs of the wind farm installation. Our work in this one will concentrate on the marine transportations and the cable lay installation, including approvals of all the green spread. Moving to Slide 13. China has become a very dominant area for wind farm installation. As we can see on the right hand side, 50% of the new installations in 2020 were positioned in the Chinese waters, and our Chinese offices are very busy at this time in support of that operation.
As we talk, we're involved in free Construction supervision monitoring of new builds and jackup conversions for units that will be used in the installation works. And on top of that, we're providing design, T and I and site supervision on the Qingzhou Phase 3 Offshore Wind Farm for Guangdong Power Renewables. This is on top of all the additional marine warranty projects that we have been doing previously and ongoing at the moment. So I think you can see from these last three slides that our focus on provision of consultancy in the renewables market goes right across the spread of the industry and it's one of the reasons why OWC and the other companies are now the first point of call for many of our clients. Moving to the next slide, on the oil and gas market.
Oil and gas at the moment is in a very interesting juncture. The OpEx market is very busy with lots happening, whereas the CapEx market is still a little bit slow. We watch these two graphs with great interest because they are indicative of expectations. On the left, we can see that CapEx spending It's expected to be significantly up in 2021 compared to 2020 and even further up in 2022. On the right hand side, on the rig market, which is a very important business line for us, The statistics are confirming that the low point of rig utilization is now behind us and that things are improving, and we're certainly starting to see some of this in the jackup rig market that we service.
Moving to Slide 15. Whilst projects are not that frequent at the moment, we've just won a major project in Australia for provision of marine warranty services with Navigia's start that focuses on the installation of subsea facilities, including pipelines, a production system and a surf element. This project will last until 2024. One of the interesting things about this project It will need to have site attendances in Australia, UK, Norway, Italy, Malaysia, India, Singapore and Indonesia, locations where we are represented. I'd like to think that our global footprint, which I talked about earlier, as one of the driving factors for our award of this particular project.
And having won this project, we are expected of getting more awards on the same investments on additional work. It's a great piece of work for our Australian office. Moving to the maritime sector on the next slide. Our London office has just won a call out framework agreement with Transport for London for the provision of marine engineering consultancy services associated with various marine assets, peers and includes the Woolwich Ferry. This is a 3 year agreement with an additional 1 year option and will involve our engineers, our mariners and our label architects.
It's a good piece of work for our maritime sector. We tend to focus a lot on call out projects, but to have a framework agreement is also very useful. Moving to Slide 17. Our Adjusting division has recently won a series of awards for string of well losses around the world, including in China, Malaysia, Mexico, U. S.
And Canada. These are located on both onshore and offshore locations and include both underground and surface blowouts. All of them are unfortunate instances, likely to be quite expensive, and some of them are extremely complicated. Moving on to Slide 18, backlog. I'd like to spend a bit of time talking on this particular slide.
If we look at our backlog, it currently stands at US65 $1,000,000 a 9% reduction since Q1. To put this in perspective, the reduction that we see in the first half of twenty twenty one represents about 6% of our annual revenues, so it's not overly significant in the grand scheme of things. Our backlog really captures only the renewables on oil and gas market sectors. As we know already, the renewables sector is strong and we have and we expect continued market wins. Oil and Gas is an interesting place where focus is mainly on brownfield sites, which is mainly captured in OpEx.
This, we service and have always relied upon through framework agreements. The work is often fast and completed before we capture it in backlog It covers things like rig moves, vessel inspections, audits and those sort of things. Oil companies or as yet limited in the new CapEx aspirations. Some projects are coming to the market, and I advise you about 1 in Australia already, but opportunities are limited. I should actually add here that I think we're very likely to win some major projects very shortly, and hopefully in Q3, I can advise on those ones.
So I think what I'm trying to say, whilst we've always captured backlog and we portray this as a metric for the quarterly meetings. It's quite limited in what it tells us and gives a small window into our overall operations. I can add, at the end of it, that our pipeline of opportunities is extremely good, so we are confident for the future. Moving to Slide 19. With respect to our staff, We finished the quarter with 9 22 full time equivalents, an approximate 3% increase on the previous quarter.
For a company that's just been through a major merger, this is satisfying. It shows the good effects of both increased work and increased revenues that we have achieved in Q2, especially in Renewables. These numbers also show an increase in number of subcontractors on our books and confirms that we're maintaining a flexible cost base such that we can easily follow market trends. At present, we're very focused on additional recruiting right across the group. So with that, I'd like to pass you across to Dan, who will give you some more color into our trading results.
Thank you, David. Let me just run you through the numbers quickly. If we go to Page 21, our revenue Has increased. Let me just mention to start here that we consolidated LOC from Q1 of this year. So all numbers that were reported prior to Q1 of this year do not include LOC.
If we look at the reported numbers, we can show an increase of 99% in revenues Last year Q2 compared to this year. 2nd quarter pro form a adjusted with LS revenues, We can show a healthy 9% increase. Revenues up 4% quarter on quarter on total comparable numbers. So we're obviously satisfied with that. Our adjusted EBIT came in at a healthy $2,800,000 which is equivalent to a 7.2% margin, Up $400,000 from Q1, following the normal seasonal pattern results that we are satisfied with.
Page 22, please. If we look at the underlying revenue growth Across our segments, it's obvious that all of our segments are growing, Particularly renewables, which David has already mentioned, which in Q2 of this year comprises almost 30% of our overall revenues. Single digit EBIT margin across Europe, OWC, which is a renewables Sure. The double digit margin in the Americas and Middle East. Both Americas and Middle East had very strong had a very strong quarter this year.
America, a bit influenced by some special effects related to tax reversals In Brazil, even adjusted for this, shows a very healthy performance. Worth mentioning here is Asia Pacific, which has seen a decline in the adjusted EBIT Q1 to Q2. Asia Pacific has been a difficult region, Difficult part of the world, the Q2, mainly due to the restrictions related to COVID-nineteen 'nineteen, where basically the whole region is closing down again. It's been impossible to transfer people between countries and to travel. So we have had to use subcontractors in some of the countries In order to deliver on the projects that we have ongoing, this again leads to higher costs and to lower utilization on our own staff since they cannot get out to the projects and work there.
We don't really know what to expect in the second half of this year. We think that the Far East is It's going to be a very difficult in the region given that more and more countries are actually closing down and tightening restrictions related to COVID as we speak. OWC, the renewables arm, So worth mentioning here, we margin we have an increase in EBIT, Which is a which was a bit lower increase than what the revenue increase is. The reason for that is that we are investing in the future in the renewables business. It's the fastest growing business, I mean, line.
We opened 4 new offices and have increased staff with 50% people in order to be positioned To work on the increasing activity that we see coming as we do believe the growth in the renewables will continue going forward. So So we're building the organization and building presence. Next page, please. The income statement, lot of this has already been commented, 99% increase in revenues in reported revenues, Up to €38,300,000 this year, up from €19,200,000 Of LOC, adjusted revenues 9% up pro form a. EBIT reported EBIT of 2.3, meaning that we'd have adjustments So 500,000.
There is a table in the back of the document that shows what the adjustments are. But let me mention quickly, we have Some relatively minimal integration costs. The bulk of this, almost four $100,000 is related to share option awards or warrant awards to the LSE employees that were charged in Q2. In addition to this, we also have around $100,000 in amortization related to the acquisition of LOC and customer contracts that were booked on the balance sheet. The integration costs, as I mentioned, were, I mean, relatively small during the quarter.
Approximately €600,000 of the depreciation is related to the right of use assets, Which we'll continue to stay at that level. You could expect it to actually be reduced somewhat Going forward as we do merge the 2 organizations and reduce the number of offices, which would be the bulk of the synergies that we expect to take out in Q3 and Q4 of this year. Next page, please. We have a strong financial Position, euros 24,500,000 in cash at the end of the quarter, which is a slight reduction From the 28.3 that we had at the end of Q1, the reasons for the reductions are partly payment of dividends And the repayment of debt, which sold almost SEK 4,500,000 in Q2, but we do have a negative cash flow from Operations, which is seasonal, of CHF 1,200,000. You can expect the operating cash flow to be positive in the second half of the year.
SEK 13,300,000 in bank debt, down from SEK 15,100,000 at the end of Q1 as we have paid an installment of SEK 1,700,000 Capitalized It's also reduced somewhat as we're not renewing rental contracts on, I mean, offices. They're down at 3,500,000 at the end of the Quarter. Our working capital has increased to 93% of quarterly revenue. This we of course, we are not satisfied With this, there will be continued focus on pushing down the working percentage As we go, I mean, forward. This is a driver for us.
Next page, please. Dividends, we paid out a dividend NOK 0.25 in Q2, Which is up from 0.2 in the same period of last year. Returning capital to shareholders remains a priority for Aqualis Brehm Mar, we have gone over to semiannual dividends. We had 2 payouts So, 0.2 last year was 1 in the first half of this year of 0.25. The board has an authorization to approve a second dividend in the second half of this year based on profitability and on improved working capital.
So You can't expect a second dividend, but in the second half, but no decisions have been taken. I mean, as I said, EUR 0.2 1st half last year, we paid EUR 0.25 1st half of this Next page, please. After the reporting period, should I also need to mention that we have issued 1,000,000 warrants to Bremer. They had an agreement that could have awarded them with a maximum of The award of warrants was renegotiated related to the LSC acquisition, Where a minimum vesting of 1,000,000 warrants was given to Bremer. We have settled now the warrant exercise and the result is that So Berenberg did get got 1,000,000 warrants awarded.
They are to be subscribed at a subscription price of NOK0. NOK 10 per share. The registration is around the corner. They have been paid. We are just waiting for the registry office to register the main option.
So the amount of shares related to these warrants will increase with 1,000,000 up to almost 97,000,000 shares. Relating the other outstanding warrants, there are 2,000,000 warrants 2 LSE sellers that have been awarded that vest in June 22 December 20 3, respectively, at a exercise price of $0.10 and the deferred settlement to Eastpoint Geo, which also invested Size price of 0.10 between the years of 20242028, 664,000 options there. That would add up to a total number of diluted shares of 98,900,000. We have also issued employee options, euros 7,800,000 at an exercise price of €3,400,000, a vest in June 22 €11,000,000 with an exercise 5.9 percent that vest in December of 2023. They're, of course, all in the money today.
So outstanding options to employees add up to 18,800,000 Thanks. Next page, please. Now I give the word back to David to run us through the outlook.
Thank you, Dion. Much appreciated. Okay. So just to close out, I just want to spend a little time expressing how we see things in the short term. So to start with, just want to reiterate, we are pleased with our Q2 results, not only financially, but also with the progress that we've made internally following our mergers with not only LOC, but also the smaller acquisition of Eastpointe Geo.
To achieve record results in this crazy market is quite satisfying, I have to say. I would point out that Q2 Tends to be our seasonally strongest quarter. And going forward, Q3 does tend to be affected and disrupted by holidays and the effects at the monsoon in the Indian subcontinent. Looking forward, we believe that there's a positive outlook in the market. Renewables remain strong, and we see no reason that that's going to change in the short term.
And we are increasingly going to be focused on energy transition. We do believe that the effects of COVID, which are particularly restricting in Asia Pacific at the moment and seem to be going in the wrong direction, We do believe that they will gradually reduce and return the market to some semblance of normality. This will be good for us if this happens because it means so we can increase the utilization of some of our permanent staff who are having difficulty traveling and have less reliance on subcontractors around the world that we have to hire in to help us do some of the work. We believe that the oil and gas market is starting to strengthen, though we believe that the CapEx side of it Involving major new investments will continue to be slow until 2022 or perhaps even 2023. Having said that, as I've talked before, we do see a lot of activity in the brownfield sites and a lot of work in the OpEx market.
Our focus remains on capital efficiency and returning cash to shareholders. And as Diane has just briefed you, We do expect to maintain our semiannual dividend subject to Board approval. Finally, to close out again, there is still overcapacity in the consultancy market. We do expect that there will be opportunities for further consolidation in the short term and also for expansion for the company. So if we see opportunities that give great shareholder value or are very beneficial to us, we will be considering those.
So I will conclude here. Many thanks for listening. As I said right at the beginning, we can't take the Q and A now. So if you have any questions, please contact either myself or Dejan or drop us an email, and we'll be pleased to give any clarifications that you may be seeking. Otherwise, we look forward to talking to you in Q3, hopefully face to face.
And many thanks for listening in, and we'll see you then.