Good morning, everyone. My name is Reuben Segal. I am the CEO of the ABL Group. I'm delighted as well to let you know I'm joined by our CFO, Dejan Zuzic today. We'll be taking you through the ABL Group Q1 presentation, our figures, and our expectations for the market. Like I said, I'm gonna give you some highlights of where we were during Q1, some of the new projects that we've been working on, and some of our ideas for the market, and in particular our performance and what you can expect from us going forward. Dejan will give you more information on our financials, and at the end of the presentation, I will give you a summary and a wrap-up of what we expect for Q2 as well.
As usual, please, note our disclaimer. It is available in our presentation, and you're very welcome to read it in your own leisure. Now we will get onto the financials and our performance during Q1. First of all, I would like to say a big thank you to all our team. It has been a record-breaking quarter. It is record-breaking in revenues, record-breaking in EBIT, record-breaking operational cash flow. In fact, it is the highest margin EBIT margin that this company has ever had in Q1. A big congratulations to our team, and thank you for all the hard work. Let's go through the numbers. The revenues for Q1 were just under $40 million, $39.6 million, and this was an 8% increase over the same period last year.
As I also said, it is a record-breaking EBIT margin and EBIT for Q1 for the group of $3.4 million adjusted EBIT and $2.8 million EBIT. We also have net cash of $10.4 million, which is two million up on the same period last quarter, and $21.2 million of cash, which again is around about $1.4 million up on Q4 2021. Excellent cash as well. A lot of hard work put in to improve our cash position, which we did say that we would try and do this quarter, and that will continue going forward. We also continue to pay our loans.
I'm pleased to announce that we paid our latest installment, and that now brings us down from $11.7 million to $10.8 million. Finally, as we've also said, we've stated on many occasions, we do pay dividend. We will announce and will continue with our 0.30 NOK dividend, which will be paid during H1, approximately June, and this will be subject to our AGM coming up in June. All in all, an excellent quarter for this organization. Record-breaking across the board. It's a lot of hard work, it's a lot of dedication by our team, and we hope to take that performance forward into the rest of the year as well. For people who are not familiar with the organization, we operate in three market segments.
We operate in the renewables segment, the maritime segment, and the oil and gas sectors. As I've stated in the past, and I'm going to tell you through some of the projects, all three sectors are booming right now, and we foresee that going forward, throughout the rest of 2022. In the consulting and energy business which we operate in, we are continuing with the same business lines. We are seeing much more work in the energy transition in particular, some of the engineering projects for hydrogen consulting as an example, I'm gonna show you some of those projects, and other niche engineering activities. This is one of the largest parts of the organization, particularly in the renewables business, and this continues to flourish.
Renewables, as I did not mention in the last slide, is already up 50% year-over-year in terms of revenues. In the loss prevention side, we are the market leader and continue to be the market leader in the marine warranty space. Marine warranty space, particularly in the oil and gas sectors, as well as also in the renewables sectors, where we're seeing more and more work being generated. Three, we are the market leader in the loss management side. We're the market leader in hull and machinery, P&I, and other insurance-related activities. This is a strong position of the organization, continues to be a strong position of the organization, and will continue to be for the foreseeable future. For the first time, I think we actually have not opened an office in a quarter.
We have been on a big drive, a big growth. We have been opening offices, but actually not for this one quarter. Our head count is 946 full-time equivalent employees. We are presently within 63 offices in 39 countries across the globe. This very strong network that we have across the organization allows us to continue our growth in both the renewables and the oil and gas sectors, and it was also a big part of the way we operated, particularly during COVID. This expansion will continue going forward. Where are we and where are we sitting in terms of the markets? Last time I presented this to you, we demonstrated that our renewables business was approximately 25% of our revenues.
We have made it clear, and we continue to make it clear, that we continue to drive our renewables business, and we would like that to be around about 50% of our revenues. Right now, at the end of Q1, we're now up to 30%, just sitting below 30%, of our revenues from renewables sector and over 50% still within the oil and gas. The other nice part of our business is that it is now very diversified across the group. A few years back, as I mentioned last time, we were very much into seasonal variations, whether or not it be Easter or Eid or monsoon seasons. That is no longer the case. No one region of the company is now greater than 25% of our revenues.
The one point I must point out, though, is that around about 40% of our revenues come from the Europe region, whether or not that's renewables, whether or not it's oil and gas or Longitude, our engineering division. As we continue to grow across the globe, particularly in Asia, where we see more expansion in renewables, this margin will continue to go down and eventually will be even more well-distributed across the organization. This is an excellent position for us to be in. To give you some examples of projects that we've done, been through in the last quarter and some of the key highlights. As I again mentioned last time, we do see our renewables business moving more and more to the east.
There's more expansion going on in Taiwan and in Japan and Korea, and this is just a typical example of that. I'm very pleased to announce that we've been awarded the owner's engineering project on behalf of Samkang M&T over in Korea. This is a new wind farm being installed, the Southwest Phase Two Wind Farm. We've been appointed as the owner's engineers. The nice thing for us on this is that this is a repeat customer. This is the third project for the Samkang M&T, and that just is a testament to the good teams that we have, the good people that we have, and the value service that we create on behalf of our clients. This is an excellent win, and we'll go through until its completion in 2026.
Another example of our renewables and the sort of diversification we have these days is the marine warranty of the Viking Link. One of the reasons for explaining this is because the work is done here in our Stavanger office in Norway, and it's the main interconnector. It's a 740-kilometer cable between the U.K. and Denmark. We hit a milestone this quarter where it actually made landfall in Denmark of the 650 kilometers subsea cable. So well done to our teams. This is a landmark job. This is a very large interconnector between the U.K. and Denmark. Oil and gas, we can't forget what's been happening in oil and gas.
Oil and gas has seen a strong resurgence over the last 12 months in particular, and as I mentioned last time, it continues to be a strong resurgence. Last time I mentioned the E&P spending is increasing, but also the OpEx side of the business is increasing too. The utilization of rigs, semi-subs, jackups is a big key indicator for us in our organization. We're heavily involved in rig moving as an example. So when we start to see big increase in utilizations of the world fleet, this is a big indicator for us on where our business will go. We've seen an increase of 9% in rig utilization over the last 12 months, and we're expecting that to continue throughout 2022. Again, another example, this is on the E&P side.
The reason why I've mentioned this one, this is the Scarborough project on behalf of Woodside. We have been awarded the marine warranty. This is for 13 platforms, and we've been given the whole marine warranty, including the FPU, which will also be installed down in Australia. One of the key reasons for demonstrating this project, it is one of the first large oil and gas new projects that we've seen come online that we've been involved in, and also within Australia. Both these type of projects in Australia and across the globe have seen a bit of a downturn over the last few years, and this just demonstrates that the oil and gas sector is coming back. It's a fantastic project to be involved in. This will take us through until 2025, and beyond.
I'm thankful Woodside is one of our very excellent clients that we work with, and this will be a very good project going forward. We're looking forward to working with Woodside on this. It's not only about oil and gas and renewables. We've also started to push our maritime business into new directions too. This is one of the first services, products that we've developed within the company and that we've also pushed out into the market. This is a project, a software called emiTr. What it allows us to do is to monitor the hydrocarbons and the carbons across the various ports or facilities, or it doesn't have to be ports, could be airports for that matter.
This is particularly working with Shoreham Port in the U.K., and we're able to monitor the carbon footprint within the port and able to reduce their carbon emissions. This is the first time we've used this and developed this in-house. It's just a new tool for us, and it continues our quest into energy transition and to take us more into the renewable sector, but through our maritime division. This is an excellent first project and the first type of product that we're offering as ABL Group. Lastly, another type of project, again in our maritime division, but just shows you the diversity that we have as an organization these days. We're working on behalf of the Asian Development Bank and with Pertamina in particular.
We're looking to see how we can reduce their carbon footprint and how we can develop their vessels and their fleet to reduce their carbon emissions, and in particular, how to use new fuels and hydrogen-related fuels in their domestic shipping fleet. Hopefully, it will develop their fleet, and hopefully it reduce their carbon emissions and their carbon footprint. Again, just another example of how we're using our engineering services with our renewable services and our maritime services across our group. Lots of interesting things happening in Q1, and that has ended up with us having record profits, record revenues, record cash flow, and it's been so far an excellent quarter. Last thing but not least, to talk about internal processes as well.
Although we have not grown our overall headcount in Q1, we have grown our full-time employee headcount during Q1, and we continue to do that. We are actively recruiting, actively trying to bring more people into the company. Just to give you an example, we have actually gone out and tried to get more interns into the organization. In the last few weeks alone, more than 1,400 people have applied to the organization to be as part of the ABL Group. That is a testimony not only to the type of work we're doing, but the fact that the organization is a leading provider of energy consultancy. That's just a clear demonstration of where we're going. Overall, we continue to be very flexible. We want to continue to use subcontractors.
Like I said, it is also very, very important for us to keep that recruitment going because the boom that's ahead of us, we need to be ready for it. We will continue that active recruitment going on across the globe. On that point, I'm gonna hand you over to Dean, and he's gonna take you into more detail of our financials, and I'll be back with you, when he's concluded. Thank you.
Just a quick run-through of the financials. As Reuben has already mentioned, record revenues. This is the best first quarter revenue-wise and EBIT-wise that we have had. Revenues increasing by 8% from the same quarter of last year. We see a significantly higher jump in our EBIT, adjusted EBIT. Went from NOK 2.4 million to NOK 3.4 million, which is almost a 40% increase. If we look a bit at our segment revenues and our EBIT, what you can see, there's been revenue growth primarily driven by the renewables consultancy. It's up 56% this quarter compared to the same quarter last year. Improved EBIT margins across the board relative to Q4.
We had an especially strong contribution, EBIT contribution from the Asia-Pacific region, from the Far East, and from the Middle East. 12% and 14% margins, which are the highest in the group and the highest ever. We're very satisfied with the development in all of our regions this quarter. Look at the income statement. A lot of this will be repetitions, but as we have already said, revenue is up to NOK 39.6 million, which is an increase of 8% compared to the same quarter last year where we had NOK 36.7 million. An EBIT of NOK 2.8 million compared to NOK 1.9 million the same quarter of last year.
Adjustments of $500,000-$550,000 approximately, related to the share-based incentive scheme and our amortization of intangible assets from the acquisitions of LOC, which are $89,000 every quarter. Adjusted EBIT of $3.4, 8.5% Adjusted EBIT margin. I would like to basically repeat that again. It's the largest EBIT margin, the highest EBIT margin we've ever had in Q1. It's a good signal that we are on the way to achieving our double-digit EBIT margin, which we have announced earlier.
The depreciation, amortization, and impairments of $0.8 million includes approximately half a million dollars related to the depreciation of the right-of-use assets following the IFRS 16 standard. As I said, $89,000 rounded up to $0.1 million amortization of intangible assets from the acquisition of LOC. Strong financial position still. We are as we have said, there's a lot of focus on cash flow. We had a net cash of $10.4 million at the end of the quarter, which was up $8.2 million from the end of the year. Calculated by reducing $10.8 million bank debt from $21.2 million in cash.
Cash also increased from $19.8 million from December, while we have repaid, as Reuben mentioned, $833 ,000 of our debt, which is a repayment schedule we have every quarter, $833 ,000. Capitalized leases are relatively flat, $3.8 million at the end of the year, $3.9 million now at the end of quarter one. We had a net cash flow of $1.5 million. Operations contributed with $3.4 million, which we are satisfied with. $0.4 million in investing activities. This was mainly related to us moving to new offices, new office premises in London, and the refurbishment of the new spaces by half a million dollars.
$1.4 was the net cash flow from financing, which has a cash element of $900 ,000 and then a repayment and then a reduction of the basic right-of-use assets, which is also a cash element in principle. Working capital is $36.4. A bit high. Again, we have said that we have a target of getting this down to 80%. The reason why we don't see a reduction in Q1, there is a table at the back of the presentation that you can have a look at, which shows that basically the Far East is the explanation for why our working capital has not decreased more.
Again, that has been related to shutdowns in China following COVID. That has made it extremely difficult to collect anything in China in March, and that has continued in, I mean, April, as we all know. All of the other regions have a reduction in working capital in Q1. Except for, I mean, OWC also has a slight increase, but that again is a result of the high increase in activity in Q1, which we have seen has increased by 59% compared to the first quarter last year.
As I said, there is still full focus on this and we keep our target of getting this down to 80%, which we believe will start to materialize as COVID restrictions get hopefully, I mean, lifted. 80% is what we are looking for here. Dividend, we continue increasing our annual dividends. The NOK 0.3 is what is proposed for 2022, 2x a year. Needs to be approved by our annual general meeting. I see unfortunately that there is a typo here. It's not on June second, it's on June first. We updated that yesterday. Sorry for not updating it here.
June 1st is our AGM, which hopefully will approve the two semi-annual dividends of $0.3 per share, corresponding to approximately $3.3 million, now in the first half of this year. Totally paid out last year was $0.5. We plan paying out $0.6 this year, which is an increase of 20%. Again, return capital to shareholders remains a strategic priority. We have said that. We do plan to continue with semi-annual dividend payments. Then back to Reuben again.
Dean, thank you. I'm just going to wrap up the presentation and just with our thoughts and feelings going forward. I'm gonna leave the top line to the end actually, because I wanna make a statement at the end. What do we see going forward? As we said last time, I repeat this time and all what we can see, all segments of our business are flourishing right now. The oil and gas sectors are booming across the globe, whether it be Australia, whether it be in the Middle East, whether it be down in Brazil, oil and gas is back with a boom. We are there. 51% of our revenues do come from oil and gas as it is today, and it is going to continue with strong growth going forward. The renewable sector is exploding.
We mentioned last time that it is increasing by 8x, sorry, 4x over the next eight years. There is no letup. The number of projects which keep coming online in the U.K., across Asia continue, and we continue to be at the forefront of that for owner's engineering, marine warranty services, et cetera. We've seen a very hard depreciation of rates over the years, 35%-40% reduction in rates. We now see a rebound for this. We have seen it from the start of the year, and we continue to see strong growth in rates going forward. Yes, inflation is very high. Yes, it is running very high at the present moment.
I'm glad to see that we are seeing an increase in rates across the board, which is also good for our business, and you can see that in our financials. We continue to pull out our cost synergies. We said that we would do $4 million. We now have realized about $3.4 million of those synergies, and we continue to pull out the balance of those synergies as well. Again, that's partly contributes to the improved EBITDA across the group. As Dean mentioned, we are a dividend-paying organization. We will be paying back 0.3 NOK subject to the AGM coming up in June, and that continues. We have also said that we want to be 50% renewables revenues by 2025. That is still our ambition. That is still our target.
However, they have a good challenge ahead of them because oil and gas is starting to boom. Maritime is also very, very busy. For us to achieve that 2025 target of 50%, that means a lot more work is required to get there. Exciting times ahead for us to achieve those targets. The other point we mentioned last time, and I'm gonna reiterate this time, we also intend to do M&A. We do intend to do consolidation. We are very active in this market. We are very active to look at organizations, but we will continue to be active in organizations that meet our strategy and our focus on what we want it to be. We will not go off willy-nilly looking for companies that do not fit our strategy, our ethos, and our way of working.
We are very active, and we continue to be active across all parts of the organization. Finally, I would like to come back to the very top line. It has been a very busy Q1, and it's going into Q2. If you look at our historical figures, Q2 is traditionally a higher quarter because of what happens in the pre-monsoon season in the Middle East, which is one of our very strong regions, particularly on the EBIT margin. We've had record revenues, record EBIT, record cash flow, record EBIT margin in Q1. It's a lot of hard work, a lot of dedication by our staff. I thank them. We thank them as an organization for the hard work that they've put into this organization. We look forward to presenting our Q2 results.
We look forward to be able to tell you some more positive news going forward. It's been a great quarter so far, and we look forward at the next presentation to give you further exciting updates for Q2 and for the balance of 2022. From me and from Dean, thank you very much. And we are happy to take any questions you may have. Thank you. Are there any questions from inside the room?
Yes. This is Christopher Møller-Langen from SpareBank 1 Markets.
Morning.
Could you tell us a bit more about what kind of companies or competencies you would look for in potential M&A targets? Thank you.
Sure. As you're well aware, I think everybody's aware in all industry, getting your hands on good technical people is not so easy. We started going after recruitment from universities, interns, graduates, et cetera. We're in all sectors. We're in the maritime sector, renewable sector, and oil and gas sector. We're looking for people that have the right competence, whether or not be engineers, master mariners, good graduates from universities with say two or three years or straight from university as well. The thing is they must be in with our ethos. They have to be with the way that we like to work. There are many companies out there that are looking to potentially merge with us, or could be a good acquisition target, but they may not necessarily fit.
We do want to go off and look for more digitalization as well going forward. We do want to offer more products going forward. So it's not that we're looking for only pure headcount. If there are targets out there which do fit with what we want to do as growth strategy, we will look at them. But that generally is with people, technical people in oil and gas and maritime and renewables background. But it could be from products as well, digital products, for instance, like we've done with emiTr. So it's a bit of a mix of all. I can't give you one simple answer and say it's that person or this individual or this type of software, but yeah, we're active. We're very active. I hope that answers the question. Thank you. Any more online?
We have a few questions from online. The first few are from Anders Björkstål at Solarstein Capital. Have you consolidated all the offices that were overlapping following the acquisition of LOC at this point, or are you expecting to streamline this further?
The offices themselves we've brought together. We've brought the people together. We brought the ERP system together, which we completed in the back end of the year. Other systems are together, but there is still more consolidation to be done, in particular on the integration and the merger of the legal entities that sit behind. There's still a lot of work to do. You know, you can't just close down a company overnight. It's not that simple. We are still merging some of the back office side in terms of the organizations. The key thing that you see going forward is the business, the people, that's all in place. ERP systems are in place. That part of the integration, that part of the merger is all done. It's more the back office.
Yeah
Systems that still need to be finished off.
If I can add a comment on that. Even if all decisions related to the consolidation have been taken and have been initiated, you don't see the full financial effect of it yet, because as we said, Reuben said earlier, we have realized $3.4 million of the $4 million that we have announced in, I mean, synergies following-
Yeah
The consolidation. There's $600,000 left that will run through the P&L in the following upcoming quarters.
We have reduced a lot of the number of entities.
Yes
Down. We continue to do that.
The second question, how is the availability of skilled labor within oil and gas and renewables? There have been reports that within oil and gas it's very hard to find licensed labor for offshore rigs. Is the same true for engineers, as many have left the sector over the last eight years when the industry has been weak?
I think that's not only our industry. That is everywhere. Finding good skilled labor, I won't call them labor, good skilled people is not easy to do. We've actually enhanced our shared services, so we now have people that are actively looking for recruitment. We had head of talent acquisition, which we've brought into the organization in the back end of Q4. Heidi, along with the rest of our organization, is very active. We can find them. It's not that you can't find them. Many people are coming. We have gone actively after the universities as well to look for graduates and undergraduates. It's not only taking people with 10, 20 years of experience. We do take people from sea as well.
You have to keep refreshing the people that we have as well and bringing on new blood. We do find them. It is available. We are active. People do wanna work for ABL. I think that's one of the nice things. People are coming to us. It's not that we have to keep going out there and begging. People are coming to ABL. They do see what we offer. I won't say it's overly difficult, but it's not easy. I think that's the answer.
A third question from Mr. Björkstål. How high do you believe that billing ratios can go to? Is 80% feasible or is the mid-70s the peak level?
There's a limit to how you can go. I mean, we have billing ratios of permanent staff, and we have billing ratios of permanent plus subcontractors. Of course, our subcontractors do run at 100%, or else we don't bring them on board. I think the trick for us is to have a good level of subcontractors with permanent headcounts. We can't have all our permanent staff running at 80% every day of the week. They will struggle. They will suffer. It will take its toll. We supplement them with the subcontractors. It's a very nice model for us.
Yeah. I mean, I think it's fair to say that experience shows that 75% is pretty close.
It's a good number.
to what you can expect to, I mean, achieve. There's always some bid writing and unpaid work that you, I mean, need to do. We've seen that when we approach 75%, we're kind of reaching.
Yeah.
The ceiling. Yeah.
You don't want to go higher than that, 'cause once you go above that, we don't grow. You get to the point you've got no excess capacity in your system to grow more. We don't want to go above 75% necessarily. In some parts, yes, of course, particularly in engineering, but on rig moving, as an example, and niche services, 75% is a good number.
We have a question from Olav Reinen. How is the Chinese lockdown affecting your operations?
I can't say it's had no effect. That would be impossible for me to say. I think our staff in Shanghai themselves have been locked up in their apartments now for a month. You can't say it's had no impact. If you look at our financials, you could say it's had very little impact. But I do know it's had a mental impact more than anything else. I think that's the issue.
Yeah. It's had more of an impact on, I mean, not on the financial numbers.
Correct
per se, but it has been challenging, you know, invoicing in China.
Yeah.
It has been challenging collecting cash in China because people are simply not in the, I mean, in the offices.
Yeah.
You can't get a hold of people. Banks in Shanghai have been closed certain, I mean, days. Just conducting the payment side of it has been challenging.
In terms of what you see in P&L-wise.
Yeah
It's okay. I mean, we have people in shipyards. Remember, we're not only in Shanghai. We're also based in Shenzhen. We're based in Tianjin. We're based in Dalian. We're based in Qingdao. We're not totally affected by it. As Dean quite rightly pointed out, handling things like banking is much more complex when everybody's locked up in an apartment. It's had its challenges.
You can see the tables in the back of the, in the appendix of the Q1 presentation that our accounts receivables in China have increased by $2 million almost this quarter compared to the end of last, I mean, year, and that is a result.
It's been difficult to get a hold of people.
to conduct payments.
Yeah.
That money won't disappear. It's just a question of when they open up.
Yeah.
Okay. There are no further questions online at this point.
Okay. On that point, again, just to reiterate, it's been an excellent quarter. We've been very happy with our results. Been very happy with the work that's taken place with the organization. I look forward to Dean and I presenting Q2 to you in a few months' time. As always, many thanks for your time, many thanks for your participation, and we look forward to seeing you again. Thank you.
Yeah. Thank you.
Thank you.