Good afternoon and welcome to the presentation of Akastor's first quarter results. My name is Øyvind Paaske, CFO, and I'm here together with CEO Mr. Karl Erik Kjelstad. Also, as usual, we're happy to have with us from Houston the HMH team represented by Tom McGee, CFO, and David Bratton, SVP Finance. As usual, Kalle will start by taking us through the key highlights of the quarter before the HMH will take you through their quarter. I'll then go through the Akastor consolidated financials before Kalle will wrap it up. At the end, we'll open for questions through the webcast solutions where questions can be posted at any time during the presentation. I will now leave the word to Kalle, so please, Kalle.
Thank you, Øyvind. Good afternoon and good morning to all U.S. participants, and thank you everyone for joining us for this presentation. We are quite pleased with our first quarter results, and we remain positive on the outlook for 2024 for all of our portfolio companies. Let's move to slide 2. A short overview of our key highlights for Akastor in the first quarter. We saw a continued positive development for HMH in the quarter demonstrated by a 75% year-over-year growth in EBITDA driven by increased aftermarket activity. HMH delivered an EBITDA result of $33 million in this quarter, and they also cleaned down their $22 million RCF draw. The continued profitable growth for HMH continues to be an important foundation for a future potential HMH liquidity event. HMH is our most valuable investment.
The book value of our shareholding in HMH post the DRU award equals around 60% of the total net capital employed, with a book value of about NOK 3.2 billion per the end of the quarter, or just about NOK 12 per Akastor share. And yes, Fircroft is continuing to grow both in terms of results and revenue with 17% and 12% growth respectively. The outlook for the business remains promising also going forward, and the value of our investment in NES Fircroft is estimated to NOK 2.8 per Akastor share. AKOFS Offshore delivered a somewhat disappointing operational performance in the quarter with downtime on both AKOFS Santos and AKOFS Seafarer, affecting revenue utilization and thereby the financial result in the quarter. The maximum downtime was partly due to specific technical issues.
Due to the ongoing five-year special survey and the reactivation of Skandi Peregrino, as well as Skandi Emerald coming off the contract early in the quarter, DDW Offshore delivered a low revenue utilization in the first quarter. However, market remained solid for the DDW fleet, and we expect good revenue utilization for all the three vessels going forward. Last but not least, the DRU award was finally received last week, resulting in an accounting gain of NOK 599 million in the quarter with a corresponding increase of the value of our DRU exposure to NOK 4.1 kroner per Akastor share. As you see from the overview on this slide, the book equity value for Akastor at the end of the first quarter 2024 was up by NOK 2.6 per share compared to the previous quarter.
That means from NOK 14.6 last year to NOK 17.2 per share by the end of the quarter. This is driven primarily by the effects related to the DRU award with a corresponding mentioned accounting gain of NOK 599 million. Let us then move to slide 3 for some more color on the DRU award. The outcome of the DRU award resulted in about $108 million awarded as a payment of termination fees and reimbursement of certain costs. Based on the instruction given in the award, MHWirth together with its claim consultants calculated interest part that comes in addition to the termination fee, and this calculation shows an additional $65 million in payment due. This detailed calculation of interest has been shared with the counterpart, who has responded that they do not agree on the calculation, but our counterpart have yet not shared their calculation with MHWirth.
In the case that MHWirth in a timely manner is not able to agree on the interest calculation with the counterpart, the arbitration tribunal may be asked to issue further instruction. The award payment is due immediately, and payment of the $108 portion is awaited in the near future. Payment of the interest portion might require some more time due to the mentioned potential process to align the interest calculation with the counterpart. So with that, I'm pleased to introduce HMH CFO and EVP, Tom McGee. That will take you through the HMH first quarter earnings, key priorities going forward. So Tim, Tom, please, the word is yours.
Thank you. If we could flip to the next page, please. Overall, it was a good quarter. And as we've talked about, we have historically seen a little bit more seasonal weakness in Q1. We kind of went through that, which is why you see a huge year-over-year growth from Q1 of last year to Q1 of this year. Again, decline versus Q4 because of the seasonality of Q4, including the bonus payments. But overall, we look at this as an exceptionally strong quarter across the board. Aftermarket continues to grow, and its rigs are reactivated. Our revenue grows. We get opportunities for follow-on sales. You get more and wear and tear on the rig. That turns to more money for us. So we've got a lot of tailwinds as our customers continue to do exceptionally well in this offshore environment, and we're the beneficiary of that.
So we feel very good about that. We'll talk a minute about some of the other growth initiatives we're working on now. Our RCF was paid down as planned. So we've had, I think, two quarters in a row. And David will talk a little bit about some of the collections that got pushed out, which is why our cash isn't exactly what we thought it would be, but I think it's just a timing issue. But I think we've had two quarters in a row where we have delivered what we wanted to do on a cash flow basis and on a debt basis to where we continue to have the flexibility of our balance sheet to grow and not be overlevered. So we feel very good about that. Continuing to look at different service agreement structures where we can grow our CSA business.
That's a big benefit for us. It provides a little more predictability to the revenue stream. Some chance for bonuses, but also provides the customer a great way to smooth out their payments. So we continue to grow that business and round out our contract structures. Then finally, talk a little bit about growth. I mean, it's not just land, but it is part of our strategy in the Middle East, which is to attack both the jacket market there and the land market there. We formed a joint venture in Saudi Arabia. We're making a big push across the board on land, new equipment, and land aftermarket, particularly in the Middle East region. And I think that's a great path for us, and we're starting to see some real meaningful things like this that are happening that can help us grow the business.
With that, pass it on, but we're excited about the quarter.
Great. Thanks, Tom. I'll be with the total company results and then move on to the segment details. Revenue for the quarter was NOK 193 million, up 4% year-on-year, driven by an increase in aftermarket services and offset of lower project activity, and down 7% quarter-on-quarter, driven by lower product volume and a non-repeat of prior quarters' service performance bonus. Adjusted EBITDA on the quarter was NOK 33 million, up 75% year-on-year, driven by aftermarket services volume and improved mix, and down 28% quarter-on-quarter, driven by lower product volume and performance bonus non-repeat. Adjusted EBITDA rate for the quarter was 17%. Orders for the quarter were NOK 209 million, up 5% year-on-year and up 6% quarter-on-quarter, driven by an increase in product orders.
Finally, on cash flow, free cash flow in the quarter was positive NOK 8 million, an improvement of NOK 22 million versus 1Q2023, but lower than 4Q2023 due to timing of customer collections. We ended the quarter with NOK 49 million cash and cash equivalents on hand. On the next page, we'll walk through the segment results in more detail. In aftermarket services, revenue was NOK 146 million, up 19% year-over-year, driven by increased overhaul and repair activity, and down 7% quarter-over-quarter, driven by lower spares output. Aftermarket order intake was NOK 149 million in the quarter, down 8% year-over-year, driven by timing of spare and repair orders related to reactivation projects that were delayed, but up 2% quarter-over-quarter. In projects product to another, revenue in the quarter was NOK 47 million, down 24% year-over-year, and down 8% quarter-over-quarter, driven by progress on projects.
Lastly, moving to the next page on net interest-bearing debt. As previously mentioned, we fully paid down our RCF in the quarter as planned. And with that, we ended the quarter with NOK 49 million in cash and cash equivalent, with a net debt of NOK 151 million. Overall, very proud of the team's performance in the quarter and, like Tom said, continue to be optimistic about the macro trends in the market. And with that, I'll turn the call back over to Tom.
Yeah. So just wrapping up, happy with the quarter, happy with the progress we've made on really getting integration behind us, standing up a unified ERP system across the organization, being ready to meet any reporting standard in the world. And so the entire team has done a great job getting us here over the past couple of years, and it's exciting to be able to then now focus on what else we can do offshore as our customers continue to thrive, adding to our land business and continuing to invest in new technology. So we feel great about where we are and are excited about the rest of the year. And with that, I'll wrap it up.
Thank you very much, Tom. I will then take you through the Akastor financials, starting then on slide 10 with our net capital employed. We are, as mentioned, pleased to see a significant increase in our net capital employed this quarter, primarily then driven by the DRU award, which had a positive accounting effect of NOK 599 million, which together with a positive FX effect increases our net capital employed related to the DRU case to NOK 1.1 billion. The value of DRU is expected to be converted to cash within the near future. Please note that the award, the interest compensation, which is calculated then to $65 million, has been treated as a Q2 event and is thus not included per Q1.
HMH remains our largest investment, and through Q1, we saw the carrying value of HMH increase, mainly driven by FX as well as positive earnings in the period. The net capital employed of NES and DDW has also a positive effect by the USD NOK rate, as these holdings then are also USD denominated. Our book value related to AKOFS Offshore was reduced in the period, driven by negative net profit in the company in Q1. Other net capital employed includes the value of our smaller financial investments as well as pension accruals and various provisions related to previous transactions. The values here remained at around the same level as per last quarter, with only smaller movements related to our other investments. With all that, our total net capital employed increased with almost NOK 900 million in the period.
If we then turn to the next slide for the overview of the net debt movements in the period. Net bank debt increased by NOK 189 million in Q1. Other cash flow in the quarter included a negative non-cash foreign exchange effect of NOK 54 million related to our USD debt. With this, our reported total net bank debt came in at NOK 1.373 billion per end of Q1, including the net debt position of DDW Offshore of NOK 232 million. Net debt in DDW was up from last quarter due to cash flow and FX effects. Going forward, we expect DDW the net debt to further increase somewhat as a result of the CapEx related to the SPS of Skandi Peregrino, recently completed, which will have negative cash effect in Q2. Net interest-bearing debt per end of the quarter was NOK 811 million, including then our interest-bearing positions towards AKOFS Offshore and HMH.
An overview of our external financing facilities. Including accruals, the total outstanding amount on our corporate facilities was around NOK 1.1 billion as of end of Q1, including a NOK 135 million draw under the subordinated liquidity facility from Aker Holding AS as of end of the period, increased from last quarter driven by corporate costs, which also included certain legacy cash effects. Our undrawn corporate credit facilities as of March were NOK 240 million in addition to NOK 98 million in cash held through DDW Offshore. As announced in connection with our Q4 release, our corporate facilities were in Q1 formally extended to June and July 2024. With this, we also got in place a new structure with banks and Aker to refinance these facilities at the receipt of the DRU proceeds.
Based on the now received DRU award, we expect to execute this refinancing in Q2 with the new agreed facilities providing a solid liquidity headroom going forward. Then over to our consolidated P&L on this slide. As always, bear in mind that our largest holdings, HMH, NES, and AKOFS, are not consolidated in our group financials, and thus the consolidated revenue in EBITDA represents a minor part of our total investments. DDW delivered revenues of NOK 39 million in the quarter, decreased compared to last quarter and year-on-year, driven by the fact that only one vessel was in operation in Q1. EBITDA came in at negative NOK 8 million in Q1, affected by the low utilization, in addition to certain specific cost elements of around $1.5 million accrued in connection with the yard stay of Skandi Peregrino and Skandi Emerald in the period.
Other income in Q1 then includes the DRU gain of NOK 599 million, which then relates to the effect from awarded termination fee and compensation for suspension and legal costs, totaling $108 million. Other EBITDA includes the same NOK 599 million positive effect with a net of NOK 581 million after corporate costs in the period. With that, our consolidated revenue and the EBITDA for the first quarter came in at NOK 642 million and NOK 573 million, respectively. Then a closer look at our net financials. Net financial items came in at a positive of NOK 48 million in the period. This then includes a positive FX effect of NOK 96 million related to the strengthening of the US dollar versus the Norwegian krone, increasing the value of our holdings in NOK, which we've seen in the net capital employed overview.
The positive FX effect was partly mitigated by a negative effect of NOK 14 million related to value decreases among our holdings in ABL, Maha Energy, and Awilco Drilling, and the interest expenses of NOK 33 million. Share of net profit from equity accounted investees contributed negatively with NOK 21 million, consisting then of our 50% share of net profit in HMH and AKOFS Offshore. AKOFS contributed negatively with NOK 76 million in Q1, while HMH contributed positively by NOK 57 million, driven by positive net profit in the period, as well as certain adjustments related to previous periods, totaling about $2 million for Akastor's share. With that, I'll pass the word back to Kalle.
Thank you, Øyvind. Let me round off this presentation with some ownership reflections for our portfolio companies. Slide 16 shows that our portfolio of investments remains unchanged since previous quarter, and we continue to hold investments in nine companies. Let us move on to slide 17, HMH, where most has already been covered in Tom's presentation. As mentioned, we continue to be pleased with both the performance and the outlook for HMH business. As HMH owners, our key focus, together with our co-owner Baker Hughes, is to support the HMH management's effort to grow the company both organically and through M&A, within a line target of making the investment in HMH liquid.
We continue to believe that HMH at some point will be an attractive company for the equity market based on HMH's track record of robust recurring revenue base that is delivering double-digit margins, strong cash conversion, enabling growing dividend capacity combined with further growth potential both organically and through M&A. HMH is well on track to be ready for potential liquidity event in 2024, but it is dependent on that the equity market is offering attractive valuation for the oilfield sector in general and specifically for HMH. Over the last period of time, both peer valuation and the IPO sentiment have shown some signs of positive development. However, we probably need to see some further improvements before a liquidity event is actual. No decision regarding a potential liquidity event had yet been made, and we are still assessing different options together with our co-owner.
Let us then move to slide 18 covering NES Fircroft. NES Fircroft continues to deliver strong results, and NES Fircroft is, as mentioned before, exit-ready, with different exit alternatives being explored, including a potential IPO, subject also here that the equity market is offering attractive valuation for a quality company like NES Fircroft. Then let's move to AKOFS Offshore. For AKOFS Offshore, the key focus going forward is to continue to deliver high-quality operations with a high revenue utilization for all three vessels. All vessels of the AKOFS fleet were on contract through Q1. Aker Wayfarer delivered a revenue utilization of 96%. AKOFS Seafarer had a technical uptime of 82%, affected by around 15 days of downtime in connection with a specific incident requiring change of a wire winch that now has been completed.
AKOFS Santos delivered a disappointing revenue utilization of 59% in the period, affected by certain operational incidents in the period. The company is working hard to improve utilization of Santos, and we expect higher utilization in the second quarter. With this, total revenue of AKOFS ended on $32 million with an EBITDA of $9 million, both down compared to the previous quarter because of the mentioned lower utilization. Due to the weak utilization in the first quarter, AKOFS needed additional funding from the owners of $2 million in April. Further, Seafarer will be mobilized for coil tubing operations in the second quarter, which will lead to around 20 days at an 80% mobilization rate, which also will affect revenue somewhat in the quarter.
The current contract order book for AKOFS Offshore is, in a way, capping the financial result for the company based on that these contracts were all taken in a weaker market in order to stay in the game. However, with a positive market development for the subsea vessel sector, we are hopeful that contract renewals for the AKOFS Offshore's fleet will offer substantially better terms from 2026 onward. Further, the asset values of the AKOFS Offshore's vessels due to the market development have increased substantially for some time now and will likely and hopefully continue to increase. Based on this, we are assessing our options for the investment, including our ownership strategy. This could include a potential longer-term approach targeting to enhance the value for our investment in AKOFS Offshore. Then, DDW Offshore, slide 20.
Following the refinancing of DDW Offshore in 2023, Akastor is focusing on optimizing the DDW Offshore values and thereby optimizing a future realization of the 3 remaining vessels. Our strategy for DDW Offshore is to capitalize on the strong momentum in the market with attractive day rates that generate attractive cash flow, combined with continuously monitoring the market to optimize the sale of the remaining 3 vessels. As mentioned, first quarter was weak for DDW Offshore. However, the market momentum is still strong, illustrated by the 7-day contract secured for our Skandi Atlantic commencing June 1 at an attractive rate. We are hopeful that this development continues and expect to see better financial performance for DDW Offshore from the next quarter through a higher fleet utilization. And then, finally, on slide 21, the key priorities for Akastor going forward.
We're always happy to see the DRU award finally being issued and expect to collect the proceeds within the near future. Going forward, we target a further realization of our holdings with our financial investments, such as monetizing our shareholding in NES Fircroft. For HMH, the target remains to carry out a separate listing of the company as soon as the equity market is offering attractive valuation of the oilfield sector in general and, as mentioned, for HMH specifically. No decision has been made, and we will carefully assess the market and options here together with our co-owner and revert to the market once a decision has been made. With that, we are through the presentation, and we will move to a Q&A session. Øyvind, I guess we will pause for a minute or two in order to provide time for questions. Thanks.
Yes. We'll be back in just a few seconds. Thank you.
Yeah. So we'll start with one question for HMH. And Tom, I guess you can touch upon this. Could you please elaborate around the momentum you saw in the service business in Q1 and how you see this further develop into 2024?
I mean, I think we've got to be careful not to talk forwardly. We just talk conceptually about the market. I mean, clearly, we saw continued momentum in the aftermarket business, and it's been really two years of that. So we, again, see our customers' day rates starting to touch $500,000. We've been able to hold price in that environment and do quite well with our customers in that regard. And as these rigs are working, we get more business. So I think it's going to be choppy quarter to quarter. You never know exactly what to expect there. But the long-term trend has continued to progress. And again, like I said, it's pretty simple. As rigs work, as more rigs work, we get paid more. As they work harder, we get paid more. And it's really that simple.
I think I've got to stop short of giving anything on the forward-looking side.
Thanks, Tom. Then another question for you. With regards to cash flow, after a good Q4, we now saw some weakening in Q1. How do you see this trend developing?
Yeah. And that's a good question. And David touched on it a little bit. I think that, first of all, we did accomplish what we wanted to accomplish in terms of paying down the RCF. So I do feel like that was a positive event. We did have, and I think we haven't disclosed what that is, we did have two very specific collections issues that have been resolved. And so we had a little bit of a timing mismatch. And we have a third that is outstanding. So we just had kind of an unfortunate end-of-quarter timing around three different collections that we're working to resolve. We have already resolved some of it, and we're working to resolve the last one over the next couple of weeks. So I think, as we said, what eats cash in our business, it's not CapEx. It's the balance sheet.
It's rare that this happens. I mean, because the inventory is pretty stable at this point. I think we've gotten to that. We've got a lot of the GMGS stuff behind us. There was still some noise from that this quarter. That's largely in the past. So really, what we have is just AR moving. And if it moves at the end of a quarter, this is what happens. So we continue to hold to kind of what we thought would happen this year over the course of the year, just some choppiness from quarter to quarter.
Thanks, Tom. Then we have one last question to Akastor, which I can answer myself, which is, can you elaborate around the refinancing of the corporate facilities post-DRU proceeds? And as mentioned, we have facilities in place that mature now in June, July. But we then expect to receive the payments from DRU before that. And as also mentioned, we have then in place a structure that we will execute on at receival of such proceeds. And based on this structure, the facilities will be reduced compared to the current size to around NOK 500 million post-receival of the termination fee, with a potential further reduction when we receive interest.
And then, again, based on the awarded amounts, including our calculation of interest and cash flow going forward, we expect to be in a cash position with the facilities serving only as a buffer with a solid liquidity headroom. And with that, I think we are through the questions. And we would just like to thank you all for your attention and welcome you back for our presentation of the second quarter results on July 11. Thank you very much.