Good afternoon and welcome to the presentation of Akastor's first quarter results. My name is Øyvind Paaske, CFO of Akastor and I'm joined by our CEO, Mr. Karl Erik Kjelstad. We're also pleased to have HMH with us from Houston represented by Tom McGee, CFO, and David Bratton, SVP Finance. Karl will start by taking us through the key highlights, followed by Tom and David with an update on HMH, then cover Akastor's consolidated financials before handing it back to Karl. We'll wrap up with a Q and A session. Feel free to submit questions at any time during the presentation. With that I'll hand it over to Karl, please.
Thank you Eivind and good afternoon and good morning to our U.S. participants and thanks to everyone for joining us for this first quarter Akastor earnings call. Let's start on slide 2 with some key highlights for the first quarter. We are pleased to deliver another good quarter marked by solid performance across our portfolio. HMH reported an EBITDA of $33 million in line with the first quarter last year and with a free cash flow of $15 million. Order intake was $198 million implying a book-to-bill of 1. The continued financial performance with a robust performance of HMH continues to be an important foundation for a potential future liquidity event. HMH is keeping its S-1 filing with the SEC updated and timing of potential launch continue to be dependent on market conditions and sentiment. HMH remains our most valuable investment.
The book value of our shareholding in HMH remains at around 70% of our total net capital employed with a book value of NOK 3.4 billion by the end of the first quarter or NOK 12.4 per Akastor share. This is somewhat down from previous quarter due to currency effects. All the AKOFS Offshore vessels remain on its contract through the quarter and delivered solid operations for its clients. As mentioned in the last quarterly presentation, our cost of ownership in AKOFS Offshore increased to 66.7% in the first quarter following the completion of the buyout of Mitsui 25% stake and then followed by the sale of 8.3% of the stake to Altera in the quarter. AKOFS Santos was nominated as the winner of the Petrobras reverse auction for a four year MPSV contract starting July 2026 that had been followed by ongoing negotiations with Petrobras.
No contract has yet been signed and remains subject to the mentioned negotiations, but we are hopeful that AKOFS Santos will continue to deliver quality services for Petrobras for another four years immediately after the current contract period ends. Further, early April the refinancing of AKOFS Seafarer vessel was completed through a non-recourse $110 million facility with a maturity in December 2028. Our book value of AKOFS was around NOK 0.4 per Akastor share by the end of the quarter. DDV Offshore in the quarter, DDV Offshore entered into an agreement to sell Scandi Peregrino for $25 million with a completion expected in 2Q 2025. Upon closing, Akastor plans to distribute a significant portion of the net proceeds as dividend to shareholders. The book value of our investment in DDV Offshore is NOK 1.4 per Akastor share based on an average book value per the vessel for about $11 million.
Our total book equity value for the end of the period was NOK 20.2 per share, which is somewhat down from the first from last quarter. This is again mainly due to currency effects. Akastor continues to be in a solid financial state with a positive net cash position and no draw on corporate RCF. With that, I'm pleased to introduce HMH's CFO and EVP Tom McGee, that together with SVP Finance David Bratton, will take us through the HMH first quarter results. So Tom, the word is yours.
Thank you, Karl Erik. Thank you. Good morning. Good afternoon. I'm going to timestamp this for you. It's 8:05 A.M. Central Standard Time in Houston, Texas April 30th. The reason for that is if something I say in the next 15 minutes will be rendered completely obsolete and wrong by something that happens in the world in the next 48 hours. That is the level of uncertainty we're dealing with. That's kind of how we'll kick this off too. Despite that, we've got some pretty good performance. Let me start by talking about the markets and this will be. We can't talk about forward guidance given what, given the regulations we're under right now, I can't talk about the market and give you a picture for what we see, both good and bad. Let's start with the bad. The trade situation. We'll get this on the table.
We know we already got a question on this. The tariff impact, just the first order impact. Had it been in place, the current regime, to the best of our knowledge, as it exists today, not tomorrow. If it were in place in 2024, it would have been about a 3%-6% hit to EBITDA. We think we can mitigate most of that. That gives you an idea of what it would have looked like in 2024. The first order effects are negative, but they're not, not significant. I think obviously we're more concerned and we've taken some questions from some of you already over the, you know, since this has been in. Third order impacts are what we concern ourselves a lot more with. That's the macro. You got recessionary data coming out of the U.S. this morning.
You know, oil price, we've got an OPEC meeting next week. We feel like there's a lot of bearishness already built into oil from that. There's a lot of stuff we can't control there. This is stirred up. We're definitely worried about what kind of macro impact that has, you know, that would, they would have on us. There is also potential for further supply chain disruption. That's unclear. There's a little bit of unknowns there. If you think about freight falling and seeing some of the weird things that are occurring as a potential impact there. Finally, you get into some customer behavior. I'll categorize that in two different areas. One would be you can't make that in the US or you can't make that in China and having some of those discussions which everyone is having right now.
You have the secondary effect of some of the customers just restraining spending and saying, I'm going to wait and see what happens. Right. That is sort of the negative market backdrop. Let's go to the positive. Despite all of that, you've seen positive offshore drilling data points over the last few weeks. If you're watching earnings reports, you saw new backlog being issued at what I think are pretty good day rates. You know, you think about we're 80% offshore, 75% aftermarket. That resilience in this, in light of all of these macroeconomic challenges, is pretty impressive.
When we saw positive data points over the past few days on that offshore market, albeit probably more geared towards 2026, and it's talking about the drillers getting contracts and starting to erase that white space in 2026, it just shows the resilience of that market. We do think there are a lot of positive things happening at the same time as a backdrop. Obviously it's a challenging environment, but despite that, we got a book-to-bill of one and we had an EBITDA that was flat year over year and, you know, we don't release a budget but that, that was our budget. It was absolutely on budget. The market behaved exactly as we expected to despite all of the turbulence that we saw. We thought that was a very good, very good result. Unlevered free cash flow came in strong.
I think we have gone really after two things. One is inventory and trying to, as we peaked inventory last year, trying to bring that back down. We're doing a great job of that and I think receivables have gone from, we've gone from underperforming to outperforming on collection. We are very happy with free cash flow performance and that will continue to be choppy as you have seen over the years. I think coming out of the gate strong first quarter of the year is a big message to send that they were serious about bringing that EBITDA to the cash flow line. We signed a new multi-year service agreement supporting long-term, multi, sorry, multi-year service agreement for Riser Getting, continuing to grow that business and we will talk at the end a little bit more.
We are growing businesses now despite the challenging market and we're adapting these trends through productivity and cost. We've got a lot of things, if you think about what you can do in this market, you find ways to grow, you control costs and we're doing a lot of work around bringing manufacturing costs of products down to open new markets for us. Despite the challenging environment, good performance and a lot of opportunity on the price. On to you, David. Great.
Okay, I'll begin with the total company results and then we'll move into the segment details. Revenue for the quarter was $198 million, up 3% year on year driven by project activity, partly offset with lower services volume, and down 14% quarter on quarter driven by lower services volume and non-repeat of prior quarter contract. Service agreement performance adjusted EBITDA in the quarter was $33 million, down 2% year on year driven by lower service volume, and down 31% quarter on quarter driven by lower service volume and a non-repeated contract. Service agreement performance adjusted EBITDA rate was 16.5% in the quarter, down versus 2023-2024 driven by product mix. Orders for the quarter were $198 million, down 5% year on year driven by lower spares orders, and down 6% quarter on quarter driven by lower equipment volume.
Finally on cash flow, unlevered free cash flow in the quarter was a positive $15 million driven by improved collection efforts by the team and progress on working capital management. We ended the quarter with $47 million.
Caps and caps equivalents on hand.
Next I'll walk you through the product line. Results in more detail in aftermarket services revenue was $84 million in the quarter, down 10% year on year, driven by lower overhaul and repair volume, and down 19% quarter on quarter, driven from contract service agreement performance in the prior quarter and lower digital technology volume. Aftermarket service order intake was $102 million in the quarter, up 22% year on year and up 12% quarter on quarter, driven by overhaul and repair order intake. Spares revenue was $60 million in the quarter, flat year on year and up 8% quarter on quarter, driven by improved convertibility of existing backlog, and spare order intake was $61 million in the quarter, down 17% year on year and down 2% quarter on quarter.
Following restrained spending by our customers and project product and other revenue in the quarter was $55 million, up 34% year on year driven by project milestones and down 25% quarter driven by product volume. Lastly, moving to net interest bearing debt, winning the quarter with $47 million in cash and cash equivalents and a net debt of $153 million. Happy to note that the RCF was undrawn per 1Q2025 with net $15 million repaid during the quarter. As Tom said, overall we're very proud of the team's performance in this quarter and I'll turn this back over to Tom.
Yeah, and good place to start. You know, capital structure is solid. To the extent there is downside risk in the market, well prepared to weather it. We have a very resilient base business. You know, when we're out on the road we talk about that all the time and I think that it's really showing in this environment. That said, we're also getting ready to launch, you know, some growth initiatives which is, you know, exciting and we look to take advantage of this weakness in the market and make sure we find ways to improve this business not just on the cost side but on the growth side. Again, challenging environment. We're very well positioned, great performance so far, resilient base business and we're going to keep finding ways to improve and grow the business. With that I'll turn it over back to Øyvind and Karl.
Thank you very much Tom. I will then take you through the Akastor financials starting at this slide with our net capital employed. HMH, as Karl mentioned, remains our largest investment with the Akastor net capital employed equal to 50% of the book. Equity value in HMH. Our carrying value of this investment decreased by NOK 168 million compared to Q4 driven by currency partly mitigated by positive net profit in the period. The net capital employed of NES and DDV Offshore was also somewhat down in Q1 driven by FX. The net capital employed of AKOFS, as Karl mentioned, was NOK 109 million down from NOK 138 million in Q4. The reduction reflects our share of net profit in the period, partly offset by an increase from the investment made during the quarter which raised our equity stake to 66.7%.
Please however note that most of the investment cost related to the AKOFS transaction was allocated towards shareholder loans taken over from Mitsui, included in the reported net debt of NOK 729 million of cash position at Q. Looking ahead, continued net losses in AKOFS driven by the current contract portfolio will further reduce our book value of AKOFS. We consider this book value however to be a historical and conservative measure which does not fully reflect the underlying asset value of that company. We see meaningful upside potential and will continue our efforts to ensure that this is increasingly reflected and understood over time. The value of our listed holdings which include Odfjell Drilling, Maha Energy and Nautilus Drilling increased by NOK 2 million in the first quarter.
The negative value of other, which includes smaller financial investments, pension accruals, and various provisions, was reduced by NOK 79 million in Q1. The main driver here was the conclusion of the remaining guaranteed preferred return to Mitsui O.S.K. Lines related to the Seafarer contract originating from the AKOFS Offshore transaction back in 2018. This was paid out and netted as part of Akastor's transactions during the quarter. The remaining balance of other per Q1 is mainly related to pension, with the larger component tied to HMH following the carve out of certain pension plans at HMH's inception. In total, net capital employed then decreased by NOK 221 million in Q1, primarily then driven by non-cash FX effects. I'll then turn to the next slide for an overview of the net debt movements in the quarter.
In Q1 we had a total net cash position including about NOK 270 million of cash held at the corporate level which decreased to a net cash position of NOK 19 million at the end of the period. This reduction was primarily driven by reinvestment in AKOFS as well as payment of the mentioned guaranteed preferred return to Mitsui and MOL, partly mitigated by positive cash flow and FX effects in DDV Offshore. Remember that the net cash position per Q1 includes a net debt position of NOK 253 million in DDV Offshore following the announced sale of Scandi Peregrino. This is expected to be reduced in Q2 as one-third of the gross debt will then be repaid.
Our total net interest bearing debt at the end of the first quarter with this came in at a net cash position of NOK 729 million including our interest bearing positions towards AKOFS and HMH. Compared to last quarter our shareholder loans towards AKOFS increased by around $10 million following the transactions mentioned, partly offset by the $7.5 million seller credit towards Mitsui payable in Q2 and Q4 this year as well as negative FX effects on the US dollar loan holdings. Our external financing facilities remained as per end of 2024. The DDV term loan was reduced to about NOK 27 million following one installment paid during the period. Our corporate bank RCF remained undrawn and fully available per end of Q1. Our available liquidity per end of the quarter was NOK 617 million including then NOK 33 million of cash held through DDV then our consolidated P& L.
As always, bear in mind that most of our holdings, including HMH, NAS, and AKOFS, are not consolidated into our group financials, and thus the consolidated revenue and EBITDA represent a very minor part of our total investments. DDV Offshore delivered revenues of $75 million in the quarter with two out of three vessels on contract for most of the period. Scandi Peregrino delivered no revenues in the period as commencement of her new contract was delayed. EBITDA came in at $28 million in Q1, up year on year as a result of low utilization last year.
The down quarter on quarter due to mobilization of Peregrino to Australia and costs in connection with the delay as well as specific positive one-off effects last quarter. Other revenue in Q1 came in at NOK 1 million with an EBITDA of negative NOK 25 million, and with that consolidated revenues and EBITDA for the quarter came in at NOK 76 million and NOK 3 million respectively. Our net financial items came in at negative NOK 154 million in the period. Financial investments contributed negatively by NOK 2 million driven by a small adjustment to our valuation of NAS as well as certain effects of our smaller listed holdings. Odfjell Drilling delivered a positive effect of NOK 11 million including dividends received in the period.
The FX accounting effect in Q1 was negative NOK 159 million and is explained by the strengthening of the NOK versus the US dollar which has a P&L effect primarily on our US dollar denominated receivables. Share on net profit from equity accounted investments contributed negatively by NOK 31 million, consisting then mainly of our relative share of net profit in HMH and AKOFS Offshore. AKOFS contributed negatively with NOK 50 million while HMH contributed positively by NOK 24 million. With that I'll pass the word back to Karl Erik. Please Karl Erik.
Thanks Øyvind . Let me then roll off this presentation with some ownership agenda reflections. Let's move to Slide 15. We continue to have a portfolio of nine investments of which four are liquid listed holdings worth mentioning. Our ownership position in Avilco Drilling has in the second quarter more or less been converted to cash through a distribution of dividends to the Avilco Drilling shareholders where we and our customers received around $3.5 million in April. Milk Co Drilling has announced its intention to delist and dissolve and will thus no longer be part of our portfolio going forward. Let's move to Slide 16. HMH, where most have already been covered by Tom, overall ownership agenda for HMH remains firm. It is to expand the business through organic growth and value adding acquisitions.
It is to maintain the leading market position via customer centering R&D catalyzed by digital technologies and we continue to target to make HMH an investment that is liquid. HMH is, as mentioned already, keeping its S-1 registration filing updated and is as such continuing to prepare for potential listing. Timing of possible public offering is subject to a variety of factors and it's difficult to comment timing at this time. Let's move to slide 17 covering NES Fircroft. NES Fircroft continues to deliver growth in revenues year on year despite a more challenging environment for recruitment and especially permanent placements. Given the turmoil that we experience in the market, the company is, as mentioned before, exit ready with different alternatives being explored including a potential listing, also here subject to that the market is offering an attractive valuation for a company like NES Fircroft.
A key priority in addition to making the investment liquid is to continue to grow the company both organically and through M&A to enhance value for all shareholders. Slide 18, AKOFS Offshore, we were happy to see that AKOFS Offshore delivering solid operation in yet another quarter. AKOFS Seafarer delivered a revenue utilization of 94%. However, affected by four days out of operation in connection with the flu outbreak on board the vessel, AKOFS Seafarer delivered a technical uptime of 95% but with a revenue utilization of 85% due to weather conditions as the charter rate is reduced by 50% during periods where we have waiting on weather, and we have not been through the winter season, and hopefully waiting on weather will be a minor factor going forward. AKOFS Santos delivered revenue utilization of 98% in period and continued its improved trend seen over the last quarters.
With this, total revenues for AKOFS ended up 34 with an EBITDA of $10 million in line with previous quarters. AKOFS Offshore have all its vessels on contract with solid clients and is well positioned for attractive renewal post existing contracts, and this has already been demonstrated by the new Seafarer contract awarded in the fourth quarter last year as well as the current process with the renewal of the Santos contract. As already mentioned, we are very pleased also with the completion of the refinancing of the AKOFS Seafarer vessel in April, the NOK 110 million bank facility. The new facility has been used to refinance the previous bank loan as well as the NOK 105 million shareholder loan where Akastor held 67%, and this facility will also be used to finance the upcoming five year periodic survey that the vessel will go through this fall.
The refi improves liquidity of the company and also demonstrates the solid position of the company. Then DDV Offshore, with the backlog secured last year, the three DDV Offshore vessels now all have contracts in Australia. These contracts will deliver good growth in both revenue and EBITDA going forward. In the first quarter, Scandi Atlantic began its new one year contract, achieving an 88% utilization in the period. Scandi Peregrino, however, recorded 0% utilization as the startup of its new contract was delayed due to certain technical issues, with commencement not being expected in the second quarter. Our strategy for DDV remains to maximize the value of our investment by leveraging the attractive day rates that drive solid cash flow while we actively continue to assess second hand market opportunities for potential additional vessel sales. Finally, let's look at slide 20 with our key priorities going forward.
Our custom strategy continues as before with our key target being to develop the companies in our portfolio and when the time is right and values are attractive, execute value enhancing exits. We are currently in a net cash position with no draw on corporate facilities enabling us to time transaction when values are attractive. With a goal of returning proceeds to our shareholders, we look forward to start delivering on our ultimate goal in 2025 returning proceeds from transaction to our shareholders and with that we are through the presentation and we will move over to a QA session and I believe that we will pause for a minute or two to provide you the opportunity to place Questions. Thanks.
Yeah, thank you. Yeah. We'll start with the Q and A session. We have received a question or a few questions on the same topic regarding the HMH listing and whether the timeline is affected by the current macroeconomic conditions. I think as both Colin and Tom has touched upon, it's very difficult to comment, both based on a legal position and also based on not knowing how the markets will develop. I think we'll leave it at that. Move on to another question where you can touch upon this topic, maybe in color. How do you view potential shareholder distributions going forward and has this changed in light of the recent market disturbance?
As mentioned already, our customers though in a strong position with no debt at the corporate level and with a net cash position. Also as mentioned, following the expected second quarter closing of the announced sale of Per Guino, we plan to distribute a significant portion of the net proceed as dividend with payment anticipated shortly after the closing of the transaction. This I would like to mention is a major milestone representing Akastor's first ever distribution to shareholders and aligns with our stated strategy to return value to realizations. We remain committed to this approach and aim to distribute additional capital enabled by future realizations and realization will depend on the market, obviously.
Thank you. A question to HMH and I guess to Tom. I know you touched upon this, Tom, but the question is, could you please elaborate around the impact you see from tariff environment both in terms of direct cost effects and potentially also implications for revenue development. Also what measures are taking with regards to optimizing supply chain in this regard. I will hand that over to you to comment on, Tom.
Sure. I think I gave you the directional impact of the tariffs that we set 3-6% of EBITDA on last year, although you can mitigate that in a couple of ways. I think we are looking at supply chains and we always are doing that. Ultimately, the way our supply chains are set up, our legacy ESS product lines, topside equipment is largely kind of shielded from a lot of this. You have a little bit of protection there. PCs product line is a little bit more hit. Even that, you know, with the way we manage it, bring it back and forth around the world, we have pretty good coverage. Our supply chain overall is not particularly exposed to this. We will continue to look at ways to optimize it if we need to.
Again, if we have specific requests, customers saying we need to work around some things. There are some manufacturers that are in far worse position. We have a pretty good scenario and we continue to follow it. We're not really concerned about the base impacts and secondary effects that can hurt. What would hurt, what a tariff could do on the revenue side is talk about customer, just say, hey, I'm going to stop spending till I get certainty. If your rig's working, you kind of have to spend. I think that's why you saw a good first quarter as you saw people continue to spend on their rigs. I think that was good.
I can't give forward guidance, but I can point to the drillers and say that, you know, over the last few days, the next couple of years outlook for our customers, the drilling contractors, has actually improved. I think we've got to look through all of this and say like there is, there are good things happen. The drilling contractors underneath this now, you know, there could be some revenue hits in terms of being locked out of a market or something like that, which is, which is, you know, I guess possible. Again, when you look at the base we have with that resilient offshore base, you can look at the drilling contractors and see how that's continuing to function quite well. There are a lot of unknowns here.
We've done the best we can in terms of mapping out the impact, but we continue to think that, you know, it's pretty light and what are you worried of? What are we worried about? We're about the price of oil. I mean, it's like that's a bigger driver. Right now even that volatility has not slowed down contract negotiations for the offshore drillers with operators who still want to go forward with those projects. I think that's probably the best way to say it.
Thank you very much, Tom. I guess you partly answered this question through your last answer, but I'll pass it on anyway. Maybe you can say something about it. Given the current muted offshore drilling outlook, can you please provide some more color on how you assess the potential going forward overall and if there's anything specific to comment on regarding the fleet of rigs equipped with the ORE system particularly.
No, I think we've said everything in terms of what the contractors are saying.
Agreed. So thank you. With that, I think we have received the last question regarding potential to distribute proceeds from the Wilco drilling dividend that Karl mentioned. I think I'll just comment that it's relatively small, so there's no plans for a specific dividend from Akastor in that regard, but it of course adds to our cash buffer and potential for distributions going forward. I'll leave that by that. With that, I think we are through the Q and A session and we'll just thank you all for your attention and welcome you back to our presentation of the second quarter on July 10th. Thank you very much.