Hi, everyone, and welcome to the presentation of Aker's second quarter results 2024. My name is Fredrik Berge, and I am Head of Investor Relations. We will start today's presentation with Aker's President and CEO, Øyvind Eriksen, who will take you through the quarterly highlights and recent developments in the portfolio. Our CFO, Svein Oskar Stoknes, will then take you through the quarterly financials in more detail. After the presentation, we will host a prepared Q&A session, and in case you have further questions or feedback, please do not hesitate to get in contact after the presentation. With that, I hand it over to Øyvind Eriksen.
Thank you, Fredrik, and good morning, everyone. The first half of 2024 was marked by high activity across the Aker portfolio, and we continued to progress on the strategy to focus and streamline of a portfolio of investments. We also returned value to our shareholders in the form of NOK 1.2 billion of dividends paid during the second quarter. Several important transactions and partnerships were announced during the first half. Some of the main developments included the completion of the refinancing of Solstad and establishment of Solstad Maritime, creating value through the formation of a global carbon capture player in the JV between Aker Carbon Capture and SLB, and realizing value through the agreement to sell Philly Shipyard to Hanwha, with expected closing in the fourth quarter. Furthermore, Aker BP delivered solid production and increased its production guidance for the full year.
Aker Solutions secured order intake of NOK 15 billion and increased its full-year revenue guidance to grow 40% from last year. Cognite continued to accelerate its solid commercial development, with both annual recurring revenues and monthly active users reaching record highs in the period. After quarter end, Aker BioMarine announced the agreement to sell its ownership position in the feed ingredients business area to American Industrial Partners with Aker as a minority shareholder. Following the sale, the company estimates to pay an extraordinary dividend of between NOK 35 and NOK 45 per share, corresponding to around half the Aker BioMarine's market value at the time of announcement. As 78% shareholder, Aker will receive a corresponding proportion of the dividend paid.
For Aker Horizons, the main development in the period was the mentioned JV between Aker Carbon Capture and SLB, which I will come back to in more detail. On the less prosperous side, Aker Horizons continued to face the negative sentiment in a renewable sector that is ripe for further consolidation, and where larger entities and balance sheets are likely to be a competitive advantage moving forward. Moving on to the share price development. In the second quarter, the Aker share decreased by 1.4% to NOK 615 . However, including dividends paid, the shareholder return was 1.1%. This compares to a 7.1% increase in the Oslo Stock Exchange benchmark index and a 2.4% decrease in the Brent oil price. Aker's value-adjusted equity ratio was 85% at the end of the period.
Aker's net asset value ended the second quarter at NOK 63.9 billion, after a NOK 1.2 billion paid in dividend. This was up from NOK 60.4 billion last quarter. The increase was mainly driven by our investments in Aker Solutions, Aker BioMarine, Aker BP, and our listed financial investments. Year to date, the net asset value increased from NOK 63.2 billion to NOK 63.9 billion after dividends paid. This was mainly driven by our investment in Aker BioMarine, which increased NOK 2.6 billion in the period. This was somewhat offset by a value reduction in Aker BP of NOK 1.4 billion. Now, taking a closer look at Aker's gross asset value, which increased to NOK 75.1 billion at the end of the quarter.
The industrial holdings portfolio, valued at NOK 63 billion, accounted for 84% of the total gross asset value, while financial investments and cash, valued at NOK 12 billion, accounted for 16% of the total. With 75% of our gross asset value in listed assets and cash, our portfolio remains liquid. As announced last quarter, we are working to streamline Aker with a stronger focus on larger portfolio companies and cash-yielding investments. As part of that strategy, a key objective is to increase and diversify our upstream dividends. And recent transactions, including Solstad, Aker Carbon Capture, Philly Shipyard, and Aker BioMarine, demonstrates that we are delivering on our more focused approach. But we will not stop here. We will continue to build on this momentum to further focus and streamline Aker, with a relentless focus on shareholder value creation, also moving forward.
Over to Aker BP, which in our opinion, has had an underserved negative share price development year to date, performing worse than peers. In our view, Aker BP is not only the most compelling returns-focused exploration and production company on the Norwegian Continental Shelf, but also one of the most innovative and efficient independent offshore E&P companies globally. Let me start with Johan Sverdrup, which makes up 50% of Aker BP's total production. It has been a true pleasure to see how well that field keeps on performing, with increased production again in the second quarter. This giant field was originally designed to, for gross oil capacity of 660,000 barrels per day. Last year, this was increased to 755,000 barrels per day.
Including natural gas, the field has the capacity to deliver close to 800,000 barrels of oil equivalents per day, which is by far the largest production of any field on the Norwegian Continental Shelf. In fact, this single field accounts for 30% of all daily oil production in Norway. Ongoing drilling activity will help to maintain the elevated plateau at Sverdrup until late 2024 or early 2025. And we are also approaching a concept select for phase three, which will involve new subsea wells with a production startup targeted from late 2027. And the performance has been nothing but remarkable. With high production efficiency, very low production cost of around $2 per barrel, and with probably the lowest emission intensity in the industry of less than 1 kg of CO2 per barrel.
The investment proposition that Aker BP offers can be described along three main themes: attractive growth, attractive industrial value, and attractive returns. First, let's look at the attractive growth. Aker BP is currently investing in robust 25% or higher annual rate return projects in a very attractive fiscal system. With these projects, the company's daily production is expected to grow by more than 20% from 2024 to 2028. The projects are on track, thanks to some of the best project leaders in the industry. Furthermore, Aker BP has additional upside potential on expanding existing fields and pursuing new value creative transactions over time. Secondly, Aker BP's attractive industrial value. The Norwegian Continental Shelf is arguably one of the most attractive and prolific offshore basins in the world.
The NCS has the most supportive tax regime for investments, with almost 90% of Aker BP's CapEx being deducted immediately under the current system. Aker BP has a best-in-class portfolio, being involved in the best performing and largest fields with the lowest costs and lowest emissions. The portfolio also has a very high oil and gas ratio, which means higher price per barrel. Also, on a global scale, Aker BP delivers industry-leading metrics. It has $6.2 per barrel in production costs, 3 kg of CO2 per barrel of emissions intensity, and $35-$40 per barrel in portfolio breakeven. Aker BP is delivering high production efficiency of 94% year to date, which means the fields are operating extremely well and cash generation is high.
All of this is enabled and enhanced due to Aker BP's innovative approach to working with its suppliers through alliance models, through digitalization, the use of AI, and now moving into remote and more autonomous operations. Aker BP is also backed by solid owners in Aker, Lundin, and BP. Thirdly, attractive returns. As mentioned, Aker BP is investing heavily into new high return projects. To exemplify the tax impacts, the company is investing around $5 billion in 2024. However, this translates into a figure of less than $1 billion after tax deductions. Aker BP has a resilient balance sheet with a clear policy of growing dividends at least 5% annually. The company already delivers 9% increased dividends in 2024 from last year.
In sum, the attractive growth, attractive industrial value, and attractive returns makes Aker BP a world-class independent E&P company, with Aker as a long-term main shareholder. Now, let's take a closer look under the hood at Cognite and the strong commercial development and rapid growth that is taking place as we speak. The company's revenue continued to increase in the second quarter, displaying growth across industries, geographies, and verticals, and with strategic partnerships yielding solid returns. Annual recurring revenue, or ARR for short, is a key performance metrics for a software as a service company like Cognite. It represents the next 12 months expected revenue from all active recurring software subscription contracts.
In the second quarter, ARR reached all-time high at Cognite, with a 42% growth compared to the same period last year, and ARR has now grown close to 140% since the start of 2022. So what does this mean? Given that this key metric indicates what lies ahead, it means we expect the revenue and profitability to accelerate on the back of an increasing share of software-as-a-service contracts in the revenue mix. Another important metric also reaching all-time high during the first half of 2024 was the number of active users of Cognite software products. Active users more than doubled in June versus the same month last year, as yet another evidence of the strong underlying commercial development.
I'm also happy to share that Cognite has been awarded the Microsoft Energy and Resources Partner of the Year award for 2024. Cognite received this recognition among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. This is truly a strong testament to Cognite as a globally recognized authority in data and AI for industry. This award marks the third year in a row that Microsoft has recognized Cognite as a global leader for its ability to deliver meaningful, scalable industrial transformation through its industrial data platform, Cognite Data Fusion. Over to Cognite's product offering. I have previously discussed how AI is nothing short of a game changer for Cognite, and in June, the company announced its latest strategic offering called Atlas AI.
It enables industrial organizations to use generative AI to boost productivity by carrying out more complex operations with greater accuracy, including robotics, workflow, automation, and decision-making support. This accelerates efficiencies that can generate tens of millions of dollars in business impact. Furthermore, we are currently expanding Cognite's presence in the U.S., the global epicenter for the tech industry. The U.S. market offers strategic advantages in terms of access to customers, partners, talents, and in driving economies of scale. We believe this will be a significant strength for Cognite and boost long-term performance. Last quarter, I mentioned that Aker will have a more focused approach moving forward. During the first half, we have taken several steps to further streamline our portfolio, and Aker is working with the portfolio companies to conclude on capital allocation. Starting with Aker Carbon Capture, which closed its JV transaction with SLB in the second quarter.
With the JV, Aker Carbon Capture crystallized value and created a diversified global, a carbon capture player, building on the long-standing collaboration between Aker and SLB. The company remains a 20% owner in the JV and has NOK 4.5 billion of cash, plus possible future performance-based payments of up to NOK 1.36 billion. For Akastor, value realization for its different holdings is well on the way. During the period, Akastor was paid NOK 1.9 billion from the DRU arbitration settlement. This allowed for debt repayment and Akastor shifting to a net cash position of NOK 240 million . The company has also initiated a process for the potential U.S. IPO or HMH later this year. This, combined with other ongoing initiatives, should pave the way for the company's target of future shareholder distribution.
Next, Philly Shipyard, which has also been an attractive value creation journey for Aker, with an annual return of investment around 15% since 2007. The company agreed the sale of its business to Hanwha for a total cash consideration of $100 million. This corresponds to NOK 87.24 per share. The implied value of the transaction for Aker is NOK 631 million. Over to Aker BioMarine, which, after the quarter end, announced the agreement to sell its feed ingredient business to American Industrial Partners and Aker. Based on excess cash after closing of the transaction, expected in the third quarter, Aker BioMarine plans to pay an extraordinary dividend of NOK 35-NOK 45 per share. For Aker, this would mean around NOK 2.4 billion-NOK 3.1 billion NOK in cash and dividend.
Aker will invest in the new entity, but effectively through the transaction, Aker reduces its ownership in the feed ingredients business from 78% to 40%. Thus, Aker's estimated net cash proceeds from the transaction is between NOK 800 million and NOK 1.5 billion. Aker will continue to support Aker BioMarine's efforts to further streamline, align, and focus the remaining business segments, including exploring potential partnerships and additional transaction opportunities. Next, Solstad, which completed the share issue in Solstad Maritime during the quarter. Following the completed refinancing, Aker's direct ownership in Solstad Maritime is 42%. Solstad Offshore owns 27.3%, and AMSC owns 19.4%. Solstad is now well-positioned in an attractive industry with positive market outlook. Fleet utilization is at record high levels. Day rates are high, and there are limited investments in new building of supply vessels.
Solstad Maritime has the intention to initiate quarterly dividends from the third quarter this year, aligned with Aker's objective of increasing and diversifying upstream dividends, and the intention is still to list the company within 12 months from now. In summary, Aker started the year with high activity across the portfolio. We demonstrated our more focused approach, which we will continue moving forward. The key words are larger portfolio companies, prioritizing cash-yielding investments, evaluating strategic alternatives, which all supports our target of delivering attractive shareholder value creation. That concludes my portion of today's presentation. I now hand it over to Svein Oskar, who will walk you through the quarterly financials in a greater level of details.
Thank you, Øyvind, and good morning. I will start out spending a few minutes on Aker's financial investments before I go through the second quarter results in some more detail. The financial investments portfolio accounted for 16% of Aker's total assets or NOK 12.2 billion, up NOK 668 million from the previous quarter. As before, the main components under financial investments are cash, listed financial investments, other equity investments, real estate, interest-bearing receivables, and non-interest-bearing assets, all of which I will now go through in some more detail. Then, as usual, starting with cash. Our cash holdings represented 1% of Aker's gross asset value or NOK 459 million. This was down NOK 240 million from the previous quarter.
The cash inflows were dividends received of NOK 1.3 billion, of which NOK 878 million from Aker BP, NOK 388 million from Aker Solutions, and NOK 14 million from AMSC, and a repayment of loan from Akastor of NOK 181 million. The main cash outflows in the quarter were primarily payment of dividend of NOK 1.2 billion, and loans and investments in portfolio companies of NOK 144 million, of which NOK 60 million in Solstad Maritime. The change in net debt was related to repayment of bank debt of NOK 596 million, offset by the issuance of a new NOK 500 million, Norwegian kroner-denominated bond. Cash outflow for operating expenses and net interest were NOK 296 million kroner in the quarter.
Listed investments included in our financial portfolio represented about 3% of Aker's total assets at the end of the quarter, or NOK 2.5 billion. This was an increase of NOK 0.8 billion from the previous quarter, driven by value increases of all our investments within listed financial investments. As a reminder, our investment in Solstad Offshore is reported as part of industrial holdings from the first quarter 2024, and the comparative figures have been represented. Next, other financial investments that combined represented 12% of Aker's gross asset value, or NOK 9.2 billion in total. Interest-bearing receivables totaled NOK 4.4 billion, down from NOK 4.6 billion in the previous quarter. The decrease was mainly driven by the repayment of a loan from a customer of NOK 181 million.
The total amount of interest-bearing receivables include a NOK 2 billion loan and a NOK 1.3 billion convertible loan to Aker Horizons. Non-interest-bearing assets total NOK 0.9 billion, up from NOK 0.7 billion in the previous quarter. The increase was mainly driven by a positive value adjustment on the total return swaps in AMSC of NOK 129 million. Then let's move to the second quarter financial highlights for Aker ASA and holding companies. Let me start with the balance sheet. The book value of our assets totaled NOK 35.2 billion, up NOK 1 billion in the quarter, partly explained by value increases in Aker BioMarine of NOK 634 million, and Akastor NOK 499 million. This was partly offset by a value decrease in Aker Horizons of NOK 135 million kroner.
In our accounts, we use the lowest of historic cost and market values. The book value of our equity was NOK 24.1 billion, up NOK 2.3 billion, explained by profit before tax in the quarter. The fair value-adjusted assets or gross asset value totaled NOK 75.1 billion. Subtracting for debt, the net asset value was NOK 64 billion at the end of the quarter. This equaled NOK 860 per share, and the value-adjusted equity ratio was 85%. Aker had liabilities of NOK 11.1 billion at the end of the quarter that mainly consisted of bond debt and bank loans totaling NOK 10.8 billion. Non-interest-bearing debt is down NOK 1.2 billion in the quarter, mainly due to dividends paid.
Aker's financial position remains robust, with a total liquidity buffer of NOK 5.8 billion, including undrawn credit facilities. The net interest-bearing debt was NOK 5.2 billion at the end of the quarter, up from NOK 5 billion in the previous quarter. Our loan to value was 14%, and 75% of our gross asset value is in listed assets and cash. In terms of our debt maturity profile, the weighted average debt maturity was 3.3 years at the end of the quarter. During the quarter, we have successfully issued a new NOK 500 million senior unsecured bond, maturing in 2031 at competitive terms. We have also repaid bank loans in the quarter, resulting in a net reduction in debt of NOK 123 million.
Taking available credit lines and the extension options on the bank loans into consideration, the implicit maturity of our total loan portfolio would be more than five years. Then to the income statement. The operating expenses in the second quarter were NOK 104 million. During the quarter, Aker booked a total dividend income from Aker BP, Aker Solutions, and AMSC of NOK 1.3 billion. The net value change in the quarter was positive NOK 1.1 billion, mainly explained by value increases in Aker BioMarine of NOK 634 million and Akastor NOK 499 million. This was partly offset by value decreases in Aker Horizons of NOK 135 million. Our net other financial items were positive NOK 15 million, and the profit before tax was then NOK 2.3 billion in the quarter. Thank you.
That was the end of today's presentation, and we can then move on to Q&A.
Thank you, gentlemen. Perhaps to start things off, Øyvind, in your letter today, you mentioned partnerships. Has any of your partnerships developed differently than you expected?
Well, partnerships have been a great value driver for Aker in recent years. A tipping point was the transaction with BP back in June 2016. The collaboration with BP remains to be excellent, without any friction whatsoever. When Lundin joined us as a fellow shareholder, they actually just strengthened the very positive collaboration and drive from the main shareholders in Aker BP. The numbers are speaking for themselves. But also Cognite and other parts of the group have enjoyed the benefits of joining forces with global leaders in their respective developments. Then it goes without saying that we're ending up with some discussions, some differences of opinions.
But the strength of a great partnership will always not only be tested, but also proven by how it's resolved. And looking back, I think we only have one failed partnership. But then we also took action and moved on.
Mm-hmm. Thank you. The next question is about also JVs, and that you have several cash holdings in the portfolio currently in various companies. What is the overall plan regarding these moving forward? And is there anything you can share on how you are working with this topic?
Well, that's a question to be answered by the boards of each of the relevant portfolio companies. So, Aker's role is basically to engage with each of the companies and express our expectations, but also our recommendations.
Mm-hmm
To the respective boards. I see it only as an opportunity. I can tell you, the other financial position, the opposite position, is much worse than having some deep pockets of capital around in the group.
Clearly. Switching to Aker BP, you talked a bit about the company today in the presentation. You mentioned the share price performance. Do you think the market has misinterpreted certain aspects of the company's investment proposition?
Well, we should never second-guess the market, but we should also be clear about the questions raised by the market and respond proactively. And in my presentation, and earlier today, I shared with you all Aker's perspectives on some of the questions raised, like, Johan Sverdrup and the production profile, and the high amount of greenfield development projects.
Mm-hmm.
I'm continue to be impressed by Aker BP every single day. The way they're working with their assets in order to enhance production from existing fields, including Johan Sverdrup, operated by Equinor. But also how they're engaging with suppliers in order to safeguard successful execution of the all-time high greenfield development portfolio on the Norwegian Continental Shelf. Makes me very, very confident.
Mm-hmm
That Aker BP is not only one of the most attractive E&P investments offshore today, but it will continue to be so for several years to come.
Yes. Given the large declines in market values in the renewable sector, is the sector ripe for consolidation, do you think? And if so, could it involve Aker in some shape or form?
Well, transactions and consolidations will definitely happen also in the renewable industry globally.
Mm-hmm.
And our mindset in renewable is not nothing different from our mindset in any other industry segment Aker operates in. So yes, consolidations will happen. Yes, Aker will do whatever we believe is in the best interest of our shareholders. And the only thing in mind is to create shareholder value also in the renewable space, which has been very difficult short term.
Mm-hmm
But there's no doubt about the longer-term trajectory. The amount of investment in renewable continues to grow year on year. And that creates opportunities for Aker, both to develop new industries, new companies, but also to pursue M&A transactions when we see value-creating opportunities to do so.
Mm-hmm. Thank you. And switching gears to digitalization, you talked about Cognite's impressive commercial development in your presentation today. You also mentioned the center of gravity for the company is shifting to the U.S. Any comments you can add on the way forward?
Well, that's by design. When we established Cognite, back in 2017, we established internally that in order to succeed in building a world-class software company, you need a strong presence and success in North America.
Mm-hmm.
So when we recruited Girish as the new CEO. We only looked for CEOs in the North American market, and fortunately, Girish, the best candidate available, accepted the job and opportunity. And now, we will continue to develop and grow, and the Cognite offices all around the world, in Norway, India, and a number of other places. But with a U.S. based CEO, we will gradually see more and more leadership, or more and more of the leadership team being also located in the United States. And at least short term, and my expectation is that the center of gravity on the commercial side will move more swiftly than on the engineering side.
All right, the next question is about Solstad. The refinancing has been completed, and it looks like a positive market outlook for the industry. What is next? Will the companies be merged, and will Solstad Maritime be listed?
Well, there's nothing new under the sun. When we announced the refinancing of Solstad, we also expressed an expectation for Solstad Maritime starting to pay a dividend, and during the course of the second half of this year. We also expressed an intention to list Solstad Maritime within the next 12 months. So nothing new. As far as merger is concerned, the Maximus claim is still an issue.
Mm-hmm.
I do not see any opportunity to merge the two Solstad companies unless that claim has been settled or solved by the courts.
Thank you. To round things off, you announced the plan for a more focused Aker, and you have been very active in the first half related to, to that this year. What should we expect to see from Aker in the second half?
Well, I almost became a bit tired by listening to myself, listing all the transactions completed since we met the last time.
Mm-hmm.
But it's fair to assume that we will continue to streamline Aker along the lines we have communicated to the market. Larger cash dividend-paying entities will be the focus area. But how to get there will depend partly on the work conducted by ourselves, but also third parties and their willingness to engage.
Mm-hmm.
It's very hard to predict exactly, at least quarter by quarter, what will happen when.
Mm-hmm.
We are working day and night to deliver on the strategy and basically create even more shareholder value.
Well, thank you very much, Even. That was our final question today. Thank you to the audience for listening in, and see you next time.