Hello, everyone, and good morning. Welcome to this presentation of ACR's 2nd Quarter and Half Year Results for 2021. We will start today's presentation with ACRE's President and CEO, Ewen Erlikhsson, who will walk you through the highlights in the quarter and how the industrial holdings portfolio developed in the period. Our CFO, Svenn Oskar Stoknes, will then cover the financial investments portfolio and the 2nd quarter and half year accounts in more detail. There will be a Q and A session following the presentation.
You can submit your questions in the chat function on the webcast. And with that, I hand it over to Eiven Eriksen.
Thank you, Kristina, and good morning, everyone. In the Q2, Aker's net asset value ended at 66,900,000,000 Kilometers, The highest net asset value on record for the company. The value increase was mainly driven by growth in AKBP, Which was up 14% including dividend, and by Cognite following the 150,000,000 by the leading venture capital firm TCV. In general, we are seeing high activity across the portfolio, With record high tender activity in Aker Solutions, Aker Horizon's company is entering into several important strategic partnerships And good momentum for growth across our industrial segments. Aker's net asset value increased by kur5.6 billion or 9% in the second quarter Prior to payment of dividend, for the first half of the year, the net asset value increase was 27% Or CHF 14,400,000,000 including dividend, driven by growth both in renewables, Exploration and production and industrial software.
The main contributor to the value of Aker BP is positively impacted by higher oil prices, which led to a record high operating profit For the company in the second quarter. The Aker share decreased 1% once again including dividend in the second quarter to 635 koumid. This compares to a 5.9 percent increase in the Oslo Stock Exchange benchmark index. Aker's value adjusted equity ratio at the end of the period was 84%, and 90% of our gross asset Values were in our industrial holdings portfolio. Our liquidity reserves stood at NOK 1,900,000,000 And cash amounted to 529,000,000.
Aker's portfolio is highly liquid with nearly 83% in listed assets and cash. Aker BP remains the largest asset In our portfolio at nearly SEK40 1,000,000,000 and continues to be an important value and liquid investment in our portfolio, Providing valuable upstream cash as we stake out our path in the ongoing energy transition. This week marks 1 year since Aker's entry into renewable energy space with the establishment of Aker Horizons And its portfolio companies, Aker Offshore Wind and Aker Carbon Capture. This was followed by entry into hydrogen With AkerClean Hydrogen and the acquisition of mainstream renewable power with a global portfolio Of solar and wind projects early this year. During the same period, we have seen a strong Regulatory push in the US and China as well as the Green Deal in Europe, including the Fit for 55 package And IEA's net 0 by 2,050 report.
We welcome such Global regulatory developments and data that pushes us in a greener direction. It offers support to a growing market, But also highlights that the renewable energy market is still in a period of maturing. As one reference point, Annual clean energy investments worldwide will need to more than triple by 2030 To around $5,000,000,000,000 We have thus not surprised, no drag, by the green market volatility in recent months. Aker Horizons is Aker's 2nd largest asset. Our priority is to continue to utilize Aker's industrial track record and learnings to withstand turbulent times.
This means ensuring that our portfolio companies have robust capital structure and liquidity reserves, Building solid and competent organizations and maintaining the overall ability to seize value accretive investment opportunities When they arise. A key priority, which is becoming increasingly important to our general ownership agenda, Is to secure and build solid long term partnerships for growth. During the first half of the year, We have seen good examples of Aker's collaborative advantage, with Aker Horizon's companies forming partnerships With great companies like Yara, Statkraft, Microsoft, BP and Shell. Investments and strategic partnerships can also serve as a testament to the growth potential and significant value creation Taking place across Aker's portfolio. During the quarter, this was perhaps Best exemplified by the investment in Cognite by TCV.
We are very pleased to see the momentum for our software portfolio, And it will surely be a busy year ahead for both Cognite and ACE. Aker has growth platforms in multiple segments. While oil and gas related industries still make up the majority of our industrial holdings, We are allocating more and more resources to industrial software, renewables and clean technologies. For Aker BP, the overall picture is that the company continues to develop according to plan. This includes efficient operations that results in reduced and better safety and increased Production as well as reduced cost.
In the Q2, the company saw record high operating profits And is on track to deliver on its plan for profitable growth. During the quarter, Aker BP and its license partners submitted a plan for development and operation, a PDO, for the Cubra East and GECO project. The development will contribute to extending the lifetime of the Alvheim field, improve production and reduce unit cost. Alvheim is among the most cost efficient fields on the Norwegian continental shelf. Its Resource base has been multiplied since start up as a result of Aker BP's targeted exploration And the business development, technology innovation and cooperation with suppliers.
Another important project on deck for Aker BP is the development of the Nuaka area, which is progressing well and ahead of schedule. Nuaka, one of the largest remaining field development opportunities on the Norwegian continental shelf, will be a hallmark For collaborative efforts between partners and with suppliers to have low emissions through power from shore And make extensive use of digital solutions, both in the development and operational phases. Aker Solutions has had an eventful period with several important contracts secured related to the energy transition. The record high tender activity in the period has a good balance between oil and gas and energy transition related work. And the market outlook is developing positively.
The overall high activity illustrates A gradual change in Aker Solutions exposure as the company tilts further towards renewable and low carbon solutions With a target of reaching 1 third of revenues from these segments by 2025. Moving on to Aker by Marlin. Harvesting variations is in the nature of its business. While harvesting the last two periods has been lower than expected, Aker BioMarine continues To expand its sales and marketing efforts to develop existing and new markets with the prospective leads and new customers, In addition to further increasing sales to the current customer base, the company continues to build its position in the US Customer market. Asia is also likely to be an important region for both Serperba And Krill Aqua going forward despite the recent setbacks in South Korea.
Now back to Aker Horizons. In the renewable energy space, securing strategic Partnership has become the name of the game. The search of partnership competing for bids on renewable projects highlights both The joint efforts for more sustainable development as well as the fierce competition shaping up globally. Aker Horizons companies are positioned to succeed in that race. In parallel, We are focused on driving organic growth and ensuring robust long term capital structures.
Now moving on to our unlisted assets, including the industrial software portfolio. Starting with Cognite. The company grew its revenues in the quarter supported by continued fast growing customer base. Many of the customers are highly sophisticated heavy asset industry companies with complex decision making processes. Hence, the exact timing of individual contract awards is somewhat unpredictable.
Cognite is nevertheless on track to deliver on its revenue target for 2021. Over Fine. The company will gradually move to an increased share of customers on software as a service license agreements, which will positively support long term recurring revenues. During the last quarter, TCV joined us as a co shareholder in Cognite through a $150,000,000 investment In both TCV and our other co shareholder, Accel, we identified highly Skilled partners with a shared ambition to digitalize global industries. Their quality as investors and partners is unparalleled, And their experiences in scaling enterprise software companies globally marries perfectly with Aker's industrial expertise to accelerate Cognite's Growth.
Our other software company, ACE, specializes on application development for asset intensive is using Cognite's CDF technology. AACE software applications operate on top of CDF to integrate and manage Data and information related to field development and to enable seamless exchange of data Through the value chain and life cycle of fuels. The company is actively working on the Nuaka development alongside Cognite, Aker Solutions and Aker BP. We believe this can be a landmark project for the development and use of industrial software Lastly, over to Aker Energy. The company has matured a revised development concept.
CapEx and breakeven costs of the project is substantially reduced. The target is still to submit a revised PDO to the Ghanaian government by the end of 2021. That concludes my portion of the presentation. I now hand it over to Svenn Oskar, who will take you through the financials
Thank you, Ewin, and good morning. I will start off spending a few minutes on Aker's financial investments before I go through the second quarter results in some more detail. The financial portfolio accounted for 10% of Aker's total assets or 7.6 £1,000,000,000 which is down £300,000,000 from the previous quarter. As before, the main components on the financial investments are cash, Listed and unlisted financial investments, real estate investments and interest bearing receivables, all of which I will now go through in some more A detail. Then starting with cash.
Our cash holdings represented 1% of Aker's Gross asset value or SEK 500,000,000. This is down SEK 300,000,000 from the previous quarter. The main cash inflows were a SEK 600,000,000 drawdown on one of our revolving credit facilities And dividends received from Aker BP, Ocean Yield and American Shipping Company of the equivalent To SEK 440,000,000. The main cash outflows in the quarter were Dividend paid of 873,000,000 and investments in and loans issued to portfolio companies totaling 3.55 1,000,000 kronor. Payments for operating expenses and net interest were 135 1,000,000 in the quarter.
And our liquidity reserve was SEK 1,900,000,000 including undrawn credit facilities of SEK 1.4 The total value of this portfolio decreased by 105,000,000 during the Q2, mainly explained by the value decrease Of our positions in Philly Shipyard and Solstad Offshore. The value of the equity investment in American Shipping Company was Stable quarter on quarter and Aker posted a total dividend income from American Shipping Company of NOK 25,000,000 in the quarter. Next, real estate and other financial investments. Combined, the 2 represented 8% of Aker's gross asset value or SEK 6,200,000,000 in total. The value increase is mainly explained by increased investment in Aker Property Group as Aker provided 1 in Aker Property Group as Aker provided a DKK 175,000,000 in new equity to the company.
In the quarter, Aker Property Group broke ground and started construction of Aker Tech House at Fornebu. Expected completion of the office building is in 2023, and it will be the future hub for industrial software and renewable energy companies. Our financial investments include a DKK 2,000,000,000 loan and a DKK 1,200,000,000 convertible loan to Aker Horizons as well as unlisted equity investments, fixed assets and other receivables. Then let's move to the Q2 financial highlights for Aker ASA and holding companies. And let me start with the balance sheet.
The book value of our investments increased by SEK 0.6 billion in the quarter. This is mainly explained by reversed Write downs of the investment in Aker Solutions and the conversion into equity of a convertible loan in Cognite. The total book value of our assets was €38,000,000,000 And in our accounts, we used the lowest of historic cost and market values. The fair value adjustment showed in gray color on this slide increased by SEK 5,100,000,000 in the quarter to SEK 41,500,000,000. This is mainly explained by the value increases of the investments in Aker BP and Cognite, partly offset by value reductions in Aker BioMarine And Aker Horizons.
The gross asset value stood at 79 point 5,000,000,000 at the end of the quarter, up from 74,200,000,000 at the end of the first quarter. Aker's liabilities mainly consisted of bond debt of DKK 5,000,000,000, a US dollar denominated bank loan of kEUR3.9 billion. Norwegian kroner denominated bank loans of 2,600,000,000 and a kEUR1 billion denominated loan. The book equity was €25,400,000,000 up €500,000,000 explained by the profit before tax in the quarter. If we adjust for fair value of our listed assets and Cognite, we get our net asset value of SEK 66,900,000,000 at the end of the second quarter, Up 5,600,000,000 from the Q1, including the dividend paid.
The Net asset value per share was NOK 901 and the value adjusted equity ratio remained at 84%. Our total interest bearing debt was SEK 12,400,000,000, which is up 0.6000000000 from the previous quarter, due to the DKK 600,000,000 drawdown on one of the revolving credit facilities. The average debt maturity at the end of the quarter was 2.6 years, and we still have significant headroom with regards to our debt Covenants. Then to the income statement. The operating expenses for the 2nd quarter were 68,000,000 kronor.
The net value change in the quarter was positive 78,000,000. Our net other financial items were positive SEK463,000,000, mainly explained by dividend income of SEK 440,000,000. And the profit before tax was then $466,000,000 in the quarter. Thank you. That was the end of today's presentation, and we will now move on to Q and A.
Great.
Thank you, Svennos Galvan. We've received a few questions on the chat. I'll start with the first one, which is when we're planning to list Cognite.
Well, Listing of Cognite, most likely on NASDAQ, is still a part of the strategic long term plan anchored well with Both Axcel and TMCV and our core shareholders. But we have not defined The target date for listing that will depend on the market development as well as development of Cognite. And the focus, Both Aker as well as for our core shareholders. To support the development and growth of Cognite in order to build A world class industrial software company, which will be well received by the markets upon listing.
Great. Thank you. The next question is on Aker Energy and whether you're still aiming for $30 per barrel breakeven.
Yes, we are.
Okay. Next question on ACE. Is it possible to indicate what kind of growth ambitions the company has going into the next year?
Well, the short term focus in ACE is to develop software applications Partly based on the portfolio acquired from Aker Solutions last year. And partly and more importantly, The software applications developed as a part of the Nu Aker project, both for greenfield development And later on for the operational phase. So we are more focused for the time being on technology development And implementation than sales and marketing. And that's from my perspective The right priority to make in order to demonstrate the importance of and the functionality of the set applications, Which will again be the basis for a go to market strategy.
Great. Thank you. The next one on Cognite Or two questions here. The first one is how long does it typically take from a contract is signed until you start recognizing revenue? And the second is on Aizen Cognite, which is whether you can indicate the current share of revenues that can be defined as recurring?
Well, I'll start with Cognite. So what I said in my presentation is that it's Somewhat, hard to estimate the time it takes to conclude contract negotiations. Due To a large extent to the decision making process with our customers, which Typically, some of the largest industry activities in the world. When a contract It's high and we will recognize revenue according to that individual agreement. But revenue recognition could start shortly after a contract award.
Then as far as Recurring revenue is concerned. The business model, both in ACE and in Cognite, Is to deliver technology based on so called software as a service license agreement, which by nature will generate recurring revenue. So what you should expect to see is year on year a growing proportion of Software as a service recurring revenue and reduced revenue from so called services, Which is typically the payment for an installation and development of solutions For customers on top of CDF.
Very clear. Thank you. The next question is about Aker by Marine. Will there be any changes to strategic priorities of Aker's ownership agenda following the disappointing short term operational development?
No. Aker's Commitment to Aker BioMarine and our support to the company's strategy is unchanged. But it goes without saying that we have Engaging discussions with the board and the management of Aker BioMarine about how to Take BioMarine forward and realize its full potential. And Aker BioMarine today Has 2 main challenges. The first one is harvesting and volatility in harvesting is To a large extent, the nature of its business.
And Aker believes that over time, harvesting will come back And that we will see normalized activity in that part of the Aker BioMarines business. And the other challenge has in the last Couple of years or in the recent year being the sale of Superba partly due to the regulatory Changes in South Korea. As far as SUPerba is concerned, we support The sales and go to market strategy in the relevant market, the US and Asia Pacific in particular. And I'm convinced that the sales of Superba will also come back. So it's a temporary setback.
Unfortunate, But it doesn't change Aker's commitment to Aker Member Inn and support to their strategy.
Great. And, the next one is if you can provide some more information about Aker and the long term potential to the Aker universe of companies.
Well, I believe it's a trading platform for currency and ethics Trading technology outside the regulated space. And I believe it provides technology and solutions Of relevance to Aker Companies. So we will encourage Aker Companies to collaborate with Eberli, but the Eberli business case It's not dependent on the Aker Group. We already see a growing portfolio of customers Outside Aker and also for Eberli.
Great. And then the final question is on Akastor and the plans the plan to list the JV between MH Wych and Baker Hughes SDS and the potential distribution of share to Akastal shareholders. In such case, what owner perspective will Aker have as a shareholder in the listed JV?
As a short term, the main focus is To complete the merger, we're making good progress together with big use on fulfilling the closing conditions Including the relevant regulatory requirements. So the target is to close that Merger by the end of this quarter. Thereafter, we will develop The joint venture together with our new and co shareholder and partner with a target to list The JV in a not too distant future. Aker as a main share will Become a main shareholder in the JV from day 1. And Aker's The strategy and an ownership agenda is to maintain that role also post listing.
Great. That concludes the Q and A. I thank you all for following along today and wish you all a great summer.
Thank you. Bye bye.