Good morning, and thanks for joining us in the Q3 update for Arendals Fossekompani. My name is Benjamin Golding, and I am the CEO. Together with me here today is CFO Lars Peder Fensli. Arendals Fossekompani is a long-term industrial investment company. We drive sustainable value creation in our portfolio companies through active ownership and invest in healthy companies within energy, industrial technology, communications, and defense. Today, Arendals Fossekompani holds six main investments. Our companies have a presence across the globe. Over time, AFK has built a diversified portfolio. Volue is a software company operating in the intersection of technology and energy. ENRX and Tekna are world leaders in cutting-edge industrial technologies related to advanced materials, additive manufacturing, and induction heating solutions. NSSLGlobal delivers secure satellite communication services, and Hydropower is our oldest business, producing a yearly output of around 500 GWh.
In addition to this, AFK also owns a real estate portfolio consisting of properties related to our businesses as well as local real estate development projects. Our portfolio is well-positioned vis-à-vis megatrends shaping global markets. The energy transition is driving growth in Volue, ENRX, and our hydropower business. Digitization and AI are accelerating growth in Volue, NSSLGlobal, and ENRX, while deglobalization and rising defense spending is supporting demand for both NSSLGlobal's secure communications and Tekna's advanced materials. We have controlling interests in all our companies except Volue, where we hold 36% and co-own the company together with Advent International, TA Associates, and Generation Investment Management. Our portfolio focuses on growth, equity, and mature companies. They are material in size, have mature business models, and access to a wide range of financing options to fuel growth.
Our priority for these companies is to develop value using a typical private equity toolbox while at the same time maintaining the unique benefits that come with our long-term ownership horizon, our deep industrial roots, and our flexibility in terms of partnership models. The mature businesses generate cash to be used for dividends, acquisitions, and driving organic and inorganic growth in the rest of the portfolio. Our business model is to create value through forward-looking investment, disciplined capital allocation, and active ownership. We are an industrial investor, and our strategy is to continue to reduce our exposure to early-phase businesses over time. We work to optimize our portfolio composition to ensure sustainable balance between cash generation on the one hand and attractive capital allocation options on the other. Let us take a look at the highlights from the quarter.
In Q3, we saw strong operational results across our core portfolio companies. Group revenue ended at NOK 892 million for the quarter. The 5% top-line growth was primarily driven by Hydropower and Tekna. Operating profit, on the other hand, came in at NOK 104 million, up from NOK 33 million in the same quarter last year, and corresponding to a 12% operating margin. The strong result was driven by Hydropower, profitability improvements in ENRX, and reduced exposure to early-phase companies. Volue delivered well above Rule of 40 in the quarter, with 24% revenue growth, 25% recurring revenue growth, and an adjusted pro forma cash EBITDA margin of 25%. ENRX continued focusing on operations, delivering profitable growth and healthy order intake. Tekna delivered a very strong quarter with 61% revenue growth and an adjusted EBITDA margin of 22%. NSSLGlobal reported a softer quarter, primarily due to delayed project invoicing.
The Hydropower business delivered operating profit of NOK 64 million due to high power prices. Let's take a closer look at our main portfolio companies. Volue is one of Norway's largest software companies and a leading provider of software solutions for energy and grid in Europe. The company aims to become the number one technology provider for the European energy system before 2030. Volue recorded another strong quarter, with revenue up by 24% year-on-year to EUR 38.7 million and recurring revenue growing 25%, reflecting an acceleration in organic growth communicated in Q2. The effects of increasing operational leverage are also coming through. With an adjusted cash EBITDA margin of 25%, the company delivered well above Rule of 40 performance in the quarter. Volue also adjusted cost of EUR 7.5 million out of its operating profit, as they were related to non-operational one-off expenditures.
The majority of these costs were related to the recapitalization transaction with TA Associates, which was completed in July 2026. Volue entered 2026 with a strengthened commercial and leadership platform, following significant investments in 2025 to support the company's next growth phase. These investments are increasingly translating into commercial momentum, with 49 new customer contracted in the quarter. During the first nine months of 2026, Volue also made significant progress in adopting artificial intelligence, both to enhance internal productivity and to strengthen its product portfolio and unlock new market opportunities. Internally, close to 90% of code development and modifications are now AI-assisted, delivering substantial improvements in development speed and productivity. On the product side, Volue has developed a range of embedded agentic AI capabilities, including a back-testing agent, AI analyst, and time series agent.
Some of these capabilities are already in production with customers, while others are undergoing pilot and beta testing. In parallel, Volue has developed an agentic gateway, enabling AI agents to interact with Volue's applications and connect to third-party systems. Building on these capabilities, Volue is developing an AI agent orchestration platform specifically for the power industry, currently in early-stage testing with a selected group of customers. Volue will continue to prioritize strategic investments in its SaaS platform, its AI initiatives, and expansions into new markets to capture market opportunities arising from the energy transition. For the remainder of the year, the company expects to see further progress in AI adoption. Volue expects continued organic growth in Q4, supported by signed backlog of recurring contracts, a healthy pipeline, and continued demand across its markets.
With the investments in its commercial and organizational platform largely in place, the company expects incremental growth to continue to translate into operating leverage, driving year-on-year cash EBITDA margin expansion. Volue will continue to combine disciplined organic growth with an active M&A agenda to strengthen its market positions and capture the significant opportunities created by the energy transition. ENRX is a leading manufacturer of industrial heating solutions based on induction technology. Revenue came in at EUR 33 million, a 7% growth year-on-year, driven by improving market conditions. Operating profit also improved significantly to EUR 2.8 million, up from a negative 0.9 million. This corresponds to an 8% operating margin. The strong profitability improvement was driven by the cost reduction initiatives executed in the fourth quarter flowing through, together with the elimination of the Charge division's operating losses. Net operating costs year-to-date is down by 19% compared to last year.
An order intake for the quarter was EUR 41 million, corresponding to a book-to-bill of 1.2 and a 33% increase year-on-year, driven by North America and Asia. The order backlog stood at EUR 73 million, up 19.5% year-on-year, reflecting the pickup in order intake. Looking ahead, we expect induction heating market to remain uncertain in the medium term. ENRX's cost base is well aligned to the current activity level. Cost and capital discipline remain a key priority for the company. Further actions will be taken should it be needed. ENRX is well-positioned to navigate this environment and deliver on profitability and cash generation. NSSLGlobal provides secure satellite communication solutions to defense, government, and the maritime sector. Revenue for the quarter came in at GBP 24.5 million. Operating profit for the quarter ended at GBP 3.8 million, down from GBP 4.6 million.
The decline was largely due to delayed project invoicing in the quarter. NSSLGlobal secured GBP 38.6 million in contracts across corporate, government, and marine sectors, including GBP 14 million in new business. Timing of tenders and contract renewals drive variability between periods. The pipeline remains strong, with 11 multi-million-pound tender opportunities lined up for 2027 and onwards. In the quarter, NSSLGlobal closed the acquisition of MetOcean Telematics, a U.K.-based provider of global security surveillance and IoT asset tracking solutions. Looking at the broader industry, LEO constellations is putting sustained pressure on airtime margins. In response, NSSLGlobal is shifting its mix toward higher value-added services. These are structurally lower margin, but they strengthen our long-term relevance for military, government, and maritime customers. Geopolitical dynamics continue to drive elevated governmental activity, which we expect to persist in the near term.
Tekna is a leading manufacturer of plasma systems and metal powders used for additive manufacturing for defense, aerospace, medical, and automotive industries. The company delivered 61% total top-line growth in the quarter, driven by sustained aerospace and defense demand in materials and order and project execution in systems. Adjusted EBITDA came in at $2.9 million, corresponding to a 21.5% margin versus 5.6% last year and 12.8% last quarter. The profitability improvement was driven by higher revenue, better contribution margins, and the sustained effects from the company's cost reduction program. Restructuring measures in the quarter are expected to generate recurring annual cost savings of approximately $1 million. The commercial development of the nano nickel MLCC program has not progressed as initially anticipated. Tekna therefore decided to discontinue further development activities and to concentrate its resources on the significant opportunities within its core materials and systems businesses.
The carrying amounts of the related assets, together with other assets no longer aligned with the group's strategic priorities, were written down to their recoverable amount. This resulted in a non-cash impairment of $3.8 million recorded below EBITDA in the quarter. Order intake doubled year-over-year to $10.6 million, driven by robust materials demand across aerospace, defense, and medical. Total backlog remained high at $25.5 million, up 40% year-on-year, extended revenue visibility into 2027, and underpinning product planning for the year ahead. Looking ahead, reshoring and localized manufacturing trends bolster growth in additive manufacturing and long-term demand for Tekna's products. Materials order intake, growing customer order sizes, and the expanding systems pipeline, combined with current market trends, support Tekna's long-term ambition of double-digit annual top-line growth through 2030.
AFK Eiendom is a property company which owns and develops properties in and around Arendal and in connection with Arendals Fossekompani portfolio companies. In the quarter, AFK Property took the final investment decision on a commercial swimming facility, as well as a residential development project with 51 new apartments. Q3 hydropower production was 74.2 GWh, down 11% year- on- year. The average power price, on the other hand, was EUR 121.4 per GWh , up 83% year- on- year. As a result, revenue ended at NOK 90 million and operating profit ended at NOK 64 million, corresponding to an operating margin of 71%. I will now hand over to CFO Lars Peder Fensli, who will provide additional comments on the financials.
As Benjamin mentioned, we are very pleased to report a solid quarter across the portfolio. Group revenue was 892 million, and consolidated operating profit landed at 104 million, corresponding to an operating margin of 12%, up from 4% in the same quarter last year. The margin improvement mainly reflects higher revenue in AFK Vannkraft and improved profitability in ENRX. NSSLGlobal reported lower operating profit this quarter. Delayed project invoicing put pressure on gross margins. Tekna delivered solid growth and an improved adjusted EBITDA margin. However, impairments and one-off items weighed on reported operating profit. Our share of profit from associates was 68 million. This includes a financial gain of 82 million from the partial sale of shares in Faraday Topco in connection with the TA transaction. Consolidated profit before tax was 179 million, and profit after tax landed at 118 million.
As a reminder, the group's tax expense reflects the high effective tax rate on Norwegian hydropower, which includes the resource rent tax. Arendals Fossekompani parent company's financial position remains solid. Available cash end of quarter amounted to 941 million. In addition, the parent company has undrawn credit facilities of 2.1 billion, securing available liquidity of 3.1 billion. Net debt, which excludes shareholder loans, was negative at quarter end. In other words, representing a net cash position of 209 million. Total revenue for 2026 is expected to be in line with 2025, while operating profit is expected to be significantly higher, driven by margin recovery in ENRX and higher hydropower revenue. Looking into the portfolio, NSSLGlobal expects operating profit in 2026 to be lower than 2025, while the rest of the portfolio companies expects operating profit to improve compared to last year.
With that, I will hand it back to Benjamin.
Thank you, Lars Peder. Finally, let's recap our priorities. Our overarching goal is to deliver an attractive total shareholder return through actively building net asset value over time. We do this by working on three key priorities. We develop value in our existing portfolio companies through active ownership. We work to optimize the overall portfolio, both to ensure a best possible risk-adjusted return, but also to ensure a good balance between cash generation and attractive capital allocation options. We identify and execute value-creating transactions and structural opportunities, both at the portfolio level and at the parent company level. An underlying prerequisite for this is a strong balance sheet that gives us financial flexibility to support our existing portfolio, but also captures opportunities as they become actionable. We'll move on to the Q&A session, and we'll take a couple of minutes to review the questions before we begin.
Okay. Welcome back. We'll move to the Q&A. We have received three questions, as I can see it. First one being, profit before tax is up, but profit after tax is down year-on-year. What explains this? I can take that one, Benjamin. Profit before tax was up from NOK 169 million in quarter three last year to NOK 179 million this quarter. As already commented, this quarter includes a gain of NOK 82 million from the TA transaction in Volue, recognized as share of profit from associates. However, share of profit from associates in quarter three last year was higher, NOK 143 million related to gain on the sale of Volue's infrastructure business.
This quarter, a larger share of profit before tax comes from Hydropower, which has a high effective tax rate, resulting in profit after tax ending at NOK 118 million compared to NOK 141 million in the corresponding quarter last year. Okay. We'll move to the next one. Volue adjustments. You report significant adjustments in Volue this quarter. Could you elaborate?
Yeah. We do report significant adjustments in Volue this quarter. And I think the short answer to that is that 4.1 million of those adjustments are directly related to the TA transaction. The remaining about 3.5 are primarily related to M&A processes and post-merger integration. About 4.1 of the 7.5 are directly related to the TA transaction. As such, not a recurring or repeating adjustments that we expect to see going forward.
Yeah. On the capital side, your balance sheet is strong with a net cash position of NOK 3 billion of liquidity. Should we expect AFK to become more acquisitive or return more capital to shareholders?
Yeah. As mentioned in my presentation, our priorities remain unchanged, and our main priority is to develop our existing portfolio companies, the ones we own already. That, of course, includes doing add-on and bolt-on acquisitions into those existing portfolios, as the acquisition of MetOcean by NSSLGlobal this quarter demonstrates. Those smaller acquisitions will typically be funded directly by the portfolio companies. However, if the portfolio companies have opportunities for more transformative M&A, then we are certainly there to and able to support that, should we find that to be attractive capital allocation opportunity for AFK. Then, of course, we do always look for new platform investments for AFK itself on parent company level. But such transactions will typically be larger and less frequent. We do continue to have a high degree of capital discipline.
When it comes to dividend, the board considers that in connection with the annual results each year in the spring, and in line with our dividend policy, and so we do not preempt that decision here.
Okay. Good. That concludes the Q&A. So again, thank you all for attending.
Thank you.