Aker BP ASA (OSL:AKRBP)

Investor Day 2015

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Mar 17, 2015

Hello. Good morning, everyone. My name is Lars Christian Hilal. On behalf of all the Aker companies present here today, I would like to wish you all welcome to this Aker company's Investor Day. Before we start on the program, I would like to mention that there is no fire drill planned for today. In case if the fire alarm is activated, please evacuate to where you came from through the reception or through that door. The fire assembly point is behind Building 5 which is outside to the garage. Then moving on to the program. We will start off today with Aker ASA's President and CEO, Eiriksson, who will give you a presentation of Aker ASA and share with you Aker's ownership agenda for the respective Aker companies. We will then move on to the other companies. 1 by 1, they will all be presented by the respective CEOs and CFOs. Following each of the company presentations, we will have a Q and A session. For those of you in the audience, we ask you to please wait for a microphone to be passed on to you. For those of you following us via the webcast, we invite you to ask questions there. For those of you who have dialed in, unfortunately, we can't take the questions through dial in. With that, I'll leave the floor to you, Evan. So good morning, everybody, and welcome to the Aker Investor Day. We have this time invited you to London for two main reasons. Our international shareholder base continues to grow, and this is a pretty important location for our future. As we speak, some 100 engineers are working on the floors above to design the parts of the great Johan Sverdrup field on the Norwegian continental shelf. As both the Neuschke, Aker Solutions and Klarid will elaborate on later today, that field is pretty important to our future. By performing some of the work with our employees here, we're expanding our international footprint. That's in line with the trend in recent years and will continue in the years to come. Today, the most important Aker companies will be presenting. And hopefully, they will give you available insight to their respective businesses. But first, we'll start with Aker ASA, the industrial investment company that is setting the direction for the entire Aker Group. Aker's mandate is to create value and maximize shareholder return. We spend a lot of time on deciding the direction, targets and structures for each of our portfolio companies. We address the strategic direction and main actions. We review M and A and restructuring opportunities. We consider alternative funding and capital structures. We develop the human resource base, in particular to manage the top management teams and we initiate operational improvements. So here you can see the 5 bullets I would like you to at a minimum remember from this presentation. I will describe what we have, in other words, our current portfolio and financial strength and I will explain what we offer in addition, I. E. The pillars in Aker's shareholder value proposition and add some color to each of these. So let's start with what we had our portfolio. The recent turmoil in oil and gas has reminded us of the importance of having a balanced portfolio, not only in terms of sector exposure, but also in terms of investment characteristics. This is a new slide. On one axis, industrial holdings, where we have a long term ownership horizon versus opportunistic investments, where we have a more transactional approach. So what do I mean by that? It means creating values through transactions and partnerships similar to a private equity approach and not only divestments. On the other axis, growth investments versus yield investments. Upstream cash flow is important to an investment company, both to preserve investment capacity, but also to cover operational costs and dividend to our shareholders. Today, Aker has a comfortable level of upstream cash flow, and that will be maintained in the years to come. Then to our financial strength, which again provides us with optionality. Financial strength is not only measured by a solid cash position and a high equity ratio, but also in terms of liquidity, upstream cash, freely tradable assets and debt capacity. Even though we have ownership covenants for some assets like parts of our shareholdings in Aker Solutions, Akastor and Kvaernerd, more than 60% of our assets could be monetized within less than 3 months without asking anyone else. In order to sell the remaining 40% of our assets, we would need some more time or approvals from 3rd parties. All of our assets are unpledged and our financial commitments towards portfolio companies are next to 0. So to put it succinctly, Aker is in a unique position in terms of flexibility, optionality and financial strength. So why should you make an investment in Aker ASA? First of all, you need to share our view that despite the current market uncertainty, the longer term industry fundamentals for our portfolio companies remain prosperous. Then I strongly believe that the 3 additional arguments for what we offer makes it compelling. 1st, our M and A capabilities and track record for creating share of the value through transactions. Second, the cash generating capacity in our portfolio and finally, our policy of returning dividend to shareholders. First, Aker's track record for long term value creation by M and A. Aker has a significant transactional focus and experience. Since re listing in 2004, Akko has executed more than 50 large M and A, Equity Capital Markets and restructuring transactions. Without going into details of these transactions, let me briefly mention 2 different nature of value creation. Firstly, M and A has contributed to our net asset value development. The list of examples is long, but the most prominent is probably still our divestment of ARKU Drilling a few years ago. Value to shareholders doubled by a transaction. Secondly, transactions transformational to our portfolio of investments. The two recent examples are the transformation of various stranded shipping assets into what's today Ocean Yield and the journey from the merger of Aker Maritime and Tvarnik to watch today quite different value propositions in Aker Solutions, Akastor and Kvaernernerd respectively. With more optionality in Aker than I've ever seen before and a strengthened investment team in this particular respect. It's a fair assumption that we have just started. Oil prices are fluctuating. I've learned that the hard way myself. When I was offered the job as CEO in Aker, the oil price was almost USD 150 per barrel. When I started, 5 months later, it was down in the low 40s. So the recent drop in prices is in my mind not that abnormal. It's actually the nature of the business we operate in. The question that comes to then comes to how can we best take advantage of the cyclical markets? What we learned from the previous downturn is the importance of being financially prepared. May I have your attention please? May I have your attention please? The testing of the fire alarm shall commence shortly. Staff are required to take no action at this time. I repeat, the fire alarm shall be tested shortly and staff are required to take no further action at this time. It's a fire alarm, not an oil price alarm. Okay. We're discussing the oil price and how we can best take advantage of the cyclical markets. So what we learned from the previous downturn is the importance of being financially prepared to pursue new investment opportunities that tend to materialize in times like this. May I have your attention please? May I have your attention please? The fire alarm test has now concluded. I repeat the fact Well, we don't need that alarm to confirm that this time we are in Aker financially prepared. And as you understand, I consider optionality structurally to be significant. As an investment company, we're spending a significant amount of time on evaluating how we best can take advantage of this cycle. Even though we have seen re pricing of stock exchanges, it takes times for bids and asks to meet. So we strongly believe that the coming months will offer some attractive opportunities. The cyclicality favors those who have the capability to adapt and move swiftly. In Akio, we have already taken measures to reduce costs significantly. Operating expenses are being reduced with more than 15% with full effect from 2016 and onwards, representing about NOK 35,000,000 in annual savings. Executive salaries and board remunerations will not be adjusted this year and other salaries will not be adjusted above inflation. And bonus payments will be reduced compared to recent years. Although these actions are specific to Aker, we expect our portfolio companies to follow our example. For our companies in oil and gas, it's particularly important that we continue to pursue operational excellence, less complexity, cost reductions and flexibilities in terms of cost base and capacity. This will be crucial in order to improve the competitiveness in a continued low and volatile oil price scenario. A diversified and solid financing is equally important. Most of our companies already had that in place prior to the downturn, whereas the Neurkke is in the process of obtaining it. This slide is illustrating Akio's underlying earnings. Financial strengths can be measured in different ways. Our balance sheet provides one answer. The quarterly share price development in our holdings provide another. But ultimately, everything relies on the financial portfolio the financial performance of the companies we own. That's why we also keep an eye on Akis' Parata share of revenues, EBITDA and the dividend from our entire portfolio. As you can see, those grew significantly last year and we're expected and are expected to grow further in 2015 based on Bloomberg consensus estimates. Yet another sign of robustness and progress in arkite regardless of market turmoil and more uncertainties. This is a slide showing our upstream cash flow and dividend track record. A key observation is that our upstream cash exceeds dividend payments last year. Our dividend proposal for 2014 is to pay NOK 10 per share and half with optional share settlement. This represents a nominal decrease compared to last year, but is still at the highest end of our dividend policy range of 2% to 4% of net asset value. Going forward, you should expect us to manage the dividend policy actively based on performance and market output. So let me now move on to our ownership agenda for our respective key industrial holdings with which we'll also present later today. Starting off with the Norskoye. For Aker, a 50% shareholding in the Norskoye is a main building block, short and longer term. DNOXK is a growth investment in our portfolio, but with a clear ambition to become a yield investment down the road. We own DNOXK because we strongly believe in the company's unique asset base and the E and P opportunities on the Norwegian continental shelf. The combination of approximately 60,000 barrels of daily production at a lifting cost below US10 dollars per barrel. And the robust field developments in Ivarossen and Johan Sverdrup, which will almost double production, makes the Norske an extremely attractive investment for us and others. The key focus for the Norske going forward is the Johann Sverdrup unitization process and field development, operational excellence with respect to day to day operation and project execution and securing a diversified and robust financing. When it comes to the latter, Donorske has identified alternative sources of funding. Negotiations are going on as we speak. Rather than rushing a conclusion, Aker has encouraged Donorske to spend the time required to put in place the most value accretive solution possible. I'm pretty sure that the Norske management will provide us with even more comfort when they present later today. Aker Aker Solutions is a dividend paying growth investment in Aker's portfolio. The split of the old Aker Solutions last year coincided with a sharp drop in the oil price and cutbacks in our customers' spending. This delayed the anticipated revaluation of the company. However, I believe that over time, the market will appreciate the strength of the company as it demonstrates improved operational performance. Our ownership agenda for Aker Solutions is unchanged. It's all about reducing cost and complexity, operational excellence and margin improvements. I urge you also to listen carefully to Louis later today. He was promoted to the CEO position to drive operational excellence hands on. My expectation is that he will express clear targets and some sense of urgency when he enters this stage. Next Akastor. Our investment in Akastor is industrial in terms of perspective as the nature of Akastor's own business model is opportunistic. We own the company because we believe in the underlying value of the portfolio companies as well as the management team's ability to unlock the full value potential, be it through organic growth, strategic partnerships or M and A. Same message goes for Akastor as it does for Aker Solutions. Operational excellence and proactive measures to reduce cost and adjust capacity is necessary to remain competitive in a tougher market. In addition, Akastor will pursue transaction opportunities as they materialize. We support the divestment of some real estate last year and we welcome future and further portfolio adjustments to come. Moving on to Kvaerner. During the last 4 decades, Kvaerner has been a key player on the Norwegian continental shelf based on a reputation of delivering on time and on budget. The company has recently worked on its cost structure, but unfortunately the loss of the first Johan Sverdrup topside contract was a setback to the company when it comes to its competitiveness. Tender processes currently going on will decide whether or not there is a future for Kvaerner as an EPC topside supplier. On the positive side, Kvaerner's bracket business holds a solid and healthy order backlog. Later today, Jan Lardver will elaborate on the company's priorities going forward. So let's move on to Ocean Yield. Ocean Yield has become a cornerstone investment in our portfolio. And it's not only our single biggest investment as we speak, but it's also our most prominent yield investment. The company's business model is very much about financing, a core competency in Aker. Since inception, the company has consistently delivered on its mandate, expand and diversify its portfolio of assets and grow its cash dividends to shareholders. We own the company because it pays and will continue to pay an attractive quarterly cash dividend to shareholders. In addition, we expect share price to continue to develop favorably due to the inherent growth profile in the backlog and through yield compression. Our ownership agenda is basically to enjoy the ride. If new capital is needed to further accelerate growth, we're still open minded to own a smaller share of a bigger company. Listen to and admire Lars when he presents this afternoon. The Ocean Yield performance tells that he and his team are pretty good. Finally, Hafizk, the star performer in our portfolio with share price more than doubled since Verbi joined us as CEO less than 6 months ago. 2 years ago, our investment in Hafiz represented approximately 1% of Aker's gross assets. Today, Hafisk represents 7% of our assets. The company delivered record high results in 2014, driven by continued favorable whitefish prices, increased harvesting volumes and improved operational excellence. Last week's announcement that Hafiz won the appeal in the Glitney lawsuit was yet another positive news from this company. In our oil and gas centric portfolio, Hafisk has lately proved the importance of some diversification. So far, Hafisk has been a growth investment. With the progress made in recent months, I also expect the company to yield a decent returns by start paying dividend hopefully and probably already this year. So let's spend also a few minutes on some investments in our portfolio that are not represented here today. And firstly, Aker BioMarina. The company is a pure growth investment. With its inherent operational leverage, the name of the game for this company is to build and expand the markets for its products and hence the top line. The journey has been longer than originally anticipated, but giving in is not our nature. We have earlier communicated that potential U. S. Listing of AKIBU MARINA. The timing is dependent on continued growth and increased visibility on earnings. Let's move on and take a brief look at our U. S. Jones Act Investments. Our ownership agenda for both American Shipping Company and ARCO Philadelphia Shipyard is to develop and maximize values and gradually seek to monetize these assets. In what way remains to be seen. We can either sell fully or in part or we can seek a more yields nature of these investments. As a consequence, each of the 2 companies have an ongoing process to evaluate strategic alternatives to maximize shareholder value. This is still work in progress. Lastly, our real estate exposure through Fornebu Puken. Following the sales of the Aberdeen offices last quarter, The main asset in this real estate portfolio is the 2 office buildings under construction at Fornburg in Norway. In addition, the company owns more land both at Fornebu and in Aberdeen, which carry a significant option value in the case of additional regulatory approvals. For Aker, our investments in Forneborten provides us with financial and strategic optionality. We can sell and monetize the investments or alternatively benefit from the yield characteristics of these assets. So to summarize it all. Aker S. A. Is positioned both for growth and yield despite the uncertainties in oil and gas. We consider the portfolio as attractive with companies well positioned in their respective market segments. In addition, we have financial strength and flexibility which creates optionality. The Aker share provides our shareholders with a competitive yield by cash or scrip dividend. At the same time, there is significant financial capacity to invest and thereby securing the basis for short term stock appreciation and longer term value creation in the Aker portfolio. So that's Aker ASA for now. Let's open up for questions. Okay. We'll start with questions from the audience. Anyone who would like to start? Okay. Thank you. It's Danak Styben from UBS. I wonder if you could talk about your financial capacity and willingness to extend either additional equity or debt to your subsidiary companies if required? Thanks. As the principal shareholder in all the companies I have reviewed this morning. And Aker will also continue to support their development. However, each investment will need to be justified by its own merits and yield an attractive return to Aker and our shareholders. As far as the need for additional equity concerns, we have, as I also said in my presentation, the view that basically all companies are fully funded and we follow the ongoing discussions and negotiations in the Norskoy to strengthen the Norskoy's long term financing closely. Any other questions? Are there any questions from the web? No questions from the web? It's now you have the opportunity. Okay. Then we'll move on with the Norske represented by the CEO, Karl Johan Harshvik and CFO, Alexander Kranne. Okay. Good morning, everybody, and thank you, Eevind. Thank you all for taking the time to come here today and listen to our investment proposals and opportunities. I'm going to talk a little bit about DNOske give you some highlights and a bit of an overview and a little bit of a deep dive into some of the projects as well. And then the CFO, Alex Alekana, will take you through the financial state and then I'll come back and give you a little bit of guidance and updates on the outlook going forward as of the rest of 2015. So I thought I'd start by basically giving you a bit of an overview of what is Dynavske. The company went through a significant transformation this year and last year as we acquired Marathon and the transaction was completed as you remember on the 15th October in 2014. We are now a fully fledged DMP company with about 500 employees and our operations are solely focused on the NCS and most of our licenses are in the North Sea. We have a very strong reserve base of 206,000,000 barrels at the end of last year. And if you include the Johan Sverdrup field, the reserves will be around 500,000,000 barrel of oil equivalents. Last year, we produced roughly 67,000 barrels of oil equivalents every day actually outperformed our own forecast which was roughly 60. In addition to a solid production base, we have a world class asset. And in the development phase, you will see that there is a large potential for production growth with strong underlying cash flows in the years to come. The Novski currently has a market cap of about US1 $1,000,000,000 and an enterprise value of about US3 $1,000,000,000 Now to start out, what are the key investment considerations for the Norske? And I'd like to spend a little bit of time on this as this is kind of the key issue for us here today. The Noske is among the leading independent E and P companies listed today. For an expected production level in 2015 of roughly 60,000 barrels of oil equivalent, the development assets we have in our portfolio will have the capacity to lift oil production above 100,000 barrels of oil equivalents after Johan Sverdrup reaches the plateau. Moreover, these same projects will ensure very competitive netbacks from Lenovskja for many years to come. Johan Sverdrup as an example has a breakeven price of below $40 per barrel and are among the top discoveries on the Norwegian gunpowder shelf ever made. Once Johan Sverdrup is in production, the Noskru will generate a significant free cash flow for many years to come. And even at today's forward curve, Dendorsk will deliver more than US5 $1,000,000,000 in operating cash flow in the 6 year period from 2020 to 2025. We are currently working as Eivind talked about to increase our financial flexibility and robustness by optimizing our capital structure. We are confident that we'll be able to fund our the planned developments in a good manner in order to reap the benefits of the aforementioned strong cash flow for many years to come. Now I'll spend a little bit of time on our assets, as I think this is the key to understanding the Inovska as a company. 1st and foremost, as I said, we are solely Norwegian continental shelf, but we're also concentrated in 2 core areas. The projects are located either in the Utsira High where Johan Sverdrup and Iverossen are the main assets and also in the Greater Alfheim area where we just tied back the Beula field to the Alvheim FPSO. Now if we move to reserves and then I'll go back to the assets a bit. 2014 was an extraordinary year for the Norskoye. We went into the year with 66,000,000 barrels of certified reserves by the end of 2013 and this has increased to 206,000,000 barrels during 2014. As some of you may recall, Marathon had a 2013 year end reserve number of 126,000,000 barrels. During 2014, we produced about 24,000,000 barrels and revisions accounted to an increase of 28,000,000 barrels about half of that from Alvheim and half from reserve revisions related to Eeva Rosen. That means that the reserve ended in 2014 with 206,000,000 barrels and our reserve replacement rates in 2014 was 1.16, meaning a 16% increase in base run reserves from the same assets that we're currently developing, not that bad. After the submission of the Sverdrup PDO in February, the Norskoye sales have more than doubled and the P50 reserves are 279,000,000 barrels of oil equivalent. We have then assumed that the preliminary working interest of $11,800,000 to the North Sea. The split here in the light and the gray indicates the first and the second phase and about 80% of the reserves are related to the 2nd phase to the 1st phase 20% to the 2nd phase. Now if we move to production, we can see how these reserves will come into play in terms of cash. As you've seen before, we have given a production guidance in 2015 in the range of 58,000 to 63,000 barrels a day. Almost all of this is produced through the Alvheim FPSO with very low production costs. In total, we actually expect production costs of 2015 to be in the range of $8 to $10 per barrel. The exciting thing about this outlook is not the low production cost, but it's that we continue to develop projects with low breakeven costs that will continue to secure strong cash flows for decades. As you see on the graph, we have an increasing production curve for the next 10 years. Actually, if you balance this production curve and reserve slide I just show you, you will see that the RP the reserves of our production are roughly 20 years of flat production. This is just based on the reserves that are in the ground today in terms of Alfheim, Ivarossen and Johan Saldot. No new projects that have yet to be discovered are added to this production graph. This will then in turn generate a large cash flow to the Noske after 2020 after the investment program for the MOS passed have been completed. And as I said to illustrate the example in the 16th period from 2020 to 2025, the NOSCA will deliver an after tax operating cash flow of about 5,000,000,000 dollars at $80 of oil equivalent. We actually think that that is quite a significant cash flow. Now moving on to a little bit of a deep dive in our production assets. The Alvheim area is a group of fields that are all produced through the Alvheim FPSO. And in total, these fields produced 97% of our production in 2014 and will continue to be our producing backbone until the development projects on the Utsira High come on stream. The Alvheim area contains about 90% oil and are all tied into the Alvheim FPSO. This production unit is fully owned by the partnership and has a very low production cost as I said of roughly $8 to $10 per oil equivalent. The FPSO has actually performed astonishingly over the years with uptime just short of 100%. And that track record has continued through the integration and through the Q1 of this year. We aim to continue this trend and are in the best position possible to do so with an outstanding operation team that has been working on the Alvheim FPSO since it started producing back in 2008. For 2015, we estimate productions in the range of 58,000 to 63,000 barrels and the range are reflecting the fact that we are putting 4 wells on stream this year. Actually the most wells have been put on stream on Alvheim in a single year since 2008. Now, we continue as we said in June when we announced the transaction, we intend to continue to develop the Alvheim area and the Bela is the first in line. The first well commenced production in January this year and it is a 30 kilometer tieback to the Alvheim FPSO and it was hooked up with no shutdown to the FPSO in on the 19th January. This is a 36 month development project and it's commenced production 4 days after the scheduled date. I don't think that's too bad in a world where cost overruns and delays seems to be the norm. The second well are currently being drilled and will be completed and put in production during Q2 2015. Now what we try to do here is to standardize the subsea tires rollover team after team and then do one development on the back of an order. The Vipacobra and the IR project are excellent examples of just that. During 2015 early 2016, we will complete and drill the remaining 3 infill wells on Alvheim. The first will start producing later this quarter. These IOR projects will contribute significantly to the production in 2015 and are important and I must point this out very, very profitable projects to us. The projects are of course sensitive to weather and available diving vessels in the market and that is why we have such a wide range from 58,000 to 63,000 barrels every day. Now Waipacobra is one of these tie in projects. And as I said, we will continue to develop the Alvheim area with low breakeven and highly profitable projects. This La Percuba project was recently sanctioned. The field contains about 9,000,000 barrels of oil equivalent and will build on the existing organization and utilize the same resources that developed Beyla. This is an excellent example of standardization and utilization of the same development organizations time and time again. It may seem strange that we choose to sanction projects in the current macro environment, but we must keep in mind that this is a very, very profitable project. The breakeven are in the 30s and the execution phase is just 18 months from sanction the commencement of production. And indeed this proves my point that the Alvheim is an extremely profitable and interesting area to be a part of. Our other big development projects are the Iverhausen on the Utsira High. And if you look beyond the Alfheim area, we just discovered that the majority of the remaining employees in Inovskja are in some way shape or form actually working on or with the Iver Orsen development. We are the operator of this development and it is on schedule to deliver oil in 2016. We are about to complete the engineering phase. Most of the key sub modules are being completed and construction of the top sides have reached a stage where the decks are now being stacked. The first deck has already been stacked and I'll go down and see the stack of the second deck actually next week. We have basically reached a point where you can see by your own eyes every time you visit the yards the progress as the modules grow bigger, better equipped every single day. It's actually something special when you worked on this project for a long time really hard and see this progress every single day. And the fact that there are about 1400 workers on this sub module is also a fascinating sight. I must say that the progress we've seen over the last few months has actually impressed me quite a lot. Now a project such as this consists of many different pieces to the puzzle. The first piece of the puzzle has actually been completed and is ready to load out from the Arbatax yard on Saipem in Sardinia. The jacket was completed in January on time and below budget following a period of an impressive team effort and outstanding HSE performance on the yard. The jacket will sail to Norway during April before being installed on the Ivarossen field this summer. After the jacket is being installed, we will commence drilling pre drilled wells injectors and producers through the jacket. Eamon put strong emphasis in his presentation on operational performance. And I can tell you from the bottom of my heart that I completely and utterly share his view on operational performance. We spend a lot of time on the NOSCA talking about how we are going to increase our performance in every single part of the business. The drilling on the Iverossen field has already started. Maersk interceptor is currently drilling pilot wells in order to further appraise the Eva Orson subsurface and make sure that we have a robust planning for the pre drilled producers and injectors. The results from the 1st year pilot is broadly in line with expectations and 2 more pilots will be drilled before the drilling of producers and injectors commence this summer. I must say that the rig has so far performed admirably and the cooperation with Maersk has been nothing less than outstanding. The rig itself is actually also an outperformer. We've seen the statistics here from the Rochemore database. And there are only 2 rigs in the relevant category that have drilled faster than 115 meters a day of dry hole since 2007. And I can assure you neither of those rigs were cold rigs straight out of the yard. I got a message as the well was completed from the offshore supervisor. The subject said it's an acceptable start. Now construction of topside. At the SMOE yard in Singapore, the topside is currently getting in ship. These are recent pictures where we are preparing to stack the last deck the so called vetted deck. The engineering is now close to complete. We have just completed the 90% 3 d model review and are closing out actions as we speak. Most of the main pieces and the sub equipments have arrived in Singapore and the construction itself is now roughly around 50% complete. As I said, the cellar deck was intermediate deck was stacked on top of the cellar deck in January and that was just in line with the target on the previous plan revision that we set out this summer. And the next deck will then be stacked later this month. And as I said, I'm looking forward to going down and witnessing the event myself. We are now entering a very hectic period where a lot of equipment installation would go on. Clear drums, emergency generators, process separators are all being installed as we speak and sit here today. Our team is also spending quite a lot of effort to follow-up all the key parts of this puzzle and make sure that we have no issues and no worries later on in the construction phase. And then moving on to another excellent project. When Ibroxo starts producing in 2016, the other giant on the UCR High will go into the main development period. The company benefits from being a partner in nothing but outstanding field the Johan Sverdrup field. And we are sure that the company and its owners will benefit largely from the large scale cash flow that will come from this field once it is producing in late 2019. The plan for development and operations was submitted to the ministry a month ago and a plan confirmed project's time line. The field will be developed in multiple phases. The first field will extract roughly 80% of the resources and the recoverable reserves are now estimated to be between 1.70000000003000000000 barrels of oil equivalent. The partnership will invest NOK 117,000,000,000 in the first phase and another NOK 80,000,000,000 to NOK 100,000,000,000 in the future phases. This is obviously quite a lot of money to invest, but we are here developing a field that will produce up to 650,000 barrels of oil equivalent on plateau and is expected to produce for 50 years. With a breakeven price in the 30s, this is a field that will be profitable in every conceivable long term oil price scenario and we are looking forward to working with the operator of plateau to develop this field in the best way possible. Now, however, the Johan Sverdrup stretches across several licenses and the field had to be unitized. And as well known by now, the Noske did not sign the unitization agreement. The reason is very simple. For Denovsky, it's always been a decisive principle that the combination of volume and value will be decisive factors when the Western side with the thick oil column is cheaper to develop than the thinner and more distributed Eastern side. When the proposal from the operator did not reflect what we believed to be the underlying value in the various licenses, the Norske could simply not sign the agreement. And let me make this very clear. This administration is committed to protect and develop shareholder values. And we are and that means all the values and we are deeply committed to ensuring that all our shareholders get their fair share of this outstanding project. The ministry will now conclude on the unitization. And meanwhile, we will work constructively with the will work constructively with the partnership to develop the field and simultaneously work to get the fair share of the ownership in the license. Now moving on to exploration. Amid the current macro environment, our drilling schedule has been somewhat scaled back in 2015 and we expect to spend roughly $115,000,000 to 125 $1,000,000 on exploration this year. We will however be a part of a couple of exciting exploration prospects also in 2015 with the Skirne East prospect a potential fast track development to Heimdall probably the most exciting one. The reduction in wells in 2015 does not mean that we're not seeking to replace reserves. However, we are taking the benefit of this downturn as an opportunity to thoroughly revamp our exploration strategy. We are spending time on reassessing prospectivity in all our exploration areas and step up our seismic acquisition our seismic acquisition and processing. We are working actively to assess potential in the 33 licensing round as well as looking at ways to working up new potential core areas and optimizing our portfolio. We look forward to revert to the market with more flavor on this as time goes by. But for now, I'll leave you to the floor to our CFO, Alexander Karne to give you an update on funding and liquidity. Alexander, the floor is yours. Thank you, Karam. Good morning, all. At year end 2014, we had a cash position of 290 $6,000,000 The book value of our bank debt was just north of $2,000,000,000 and the not $1,900,000,000 unsecured debt NOK 2 bond was accounted for at $253,000,000 In total, this sums up to a net interest bearing debt of just below $2,000,000,000 Including our undrawn credit on the company's reserve based lending facilities, available liquidity then amounted to around $900,000,000 at the end of the year. In connection with the acquisition of Marathon last summer, the company secured a $3,000,000,000 reserve based lending facility or RBL that replaced the company's previous bank debt. The company had drawn $2,100,000,000 on this facility at the end of the year and we had availability up to $2,700,000,000 The RBL is a 7 year facility with a bank consortium consisting of 17 banks. The available amount under the $3,000,000,000 RBL facility is determined twice a year and it stems from the value of the company's borrowing base assets based on certain assumptions. We believe we have a very robust RBL. The drop in oil prices since the last summer does affect the available borrowing base under the RBL. However, this is only partially so due to how this RBL is structured. First of all, Johan Sverdrup, which makes up about a third of the original borrowing base is included on a U. S. Dollar per barrel multiple. This is a fixed multiple. Then under the Norwegian fiscal regime, oil companies are effectively allowed to depreciate 89% of their investments for tax purposes. The company's historical tax balances are not sensitive to changes in commodity prices and thus will soften the impact of any reduced revenues by a reduced tax burden. And thirdly, the borrowing base includes a mechanism that allows the company to borrow against the expected CapEx for the next period. We have a comfortable headroom to the RBL covenants. Net debt over EBITDAX was well below the covenant level of 3.5 and EBITDA over interest expense was significantly above the covenant of 3.5. At year end 2014, we had an adjusted equity ratio of 15.5%, below the covenant level of 25% in the Detnor 2 bond agreement. Now defaults only exist when the ratio is below 25% on 2 consecutive quarter dates and the covenant bridge is not remedied within the following quarter reporting date. The strong operating cash flow from the Alvheim assets, the RBL facility and the equity issue from last summer made the company well equipped when the oil prices started to drop last autumn. But with increased production come also increased sensitivity to oil price fluctuation, even though the company benefits from a world class low breakeven cost asset base that Kalle went through. We are therefore taking steps to further strengthen our business to adapt to the current market situation and ensure that we come out of this downturn as a stronger and more robust company. Carla will revert to you with how our cost efficiency initiatives will contribute to this, but securing an optimal capital structure is also a vital piece of this puzzle. We are continuing to work on increasing our financial flexibility and robustness for the longer run. As evidenced in the financing of the Marathon acquisition, the support from the company's bank group is strong and we're having constructive dialogues in order to optimize this capital structure. We are confident that we will be able to fund the planned developments, but we will have to revert to the markets with more details as this work progresses. We are addressing the current challenging macro environment by putting in place risk reducing measures for some of the key risks facing the company. Firstly, the risk of dependency on only one producing hub is reduced after entering into a loss of production insurance for the Alvheim FPSO. This is a market standard insurance that addresses the impact of an accidental Alvheim FPSO shutdown, both in 2015 2016. The company has also increased its foreign exchange hedging activity in 2015 and we've taken advantage of the development in the U. S. Dollar NOK FX rates over the last month by securing CapEx and tax payments in NOK. We have also used the minor uptick seen in the oil prices until last week to initiate a hedging program to secure the downside in the event that oil prices should fall further. For 2015, from March onwards and 2016, we have bought put options at $55 a barrel strike. We are about halfway into this program at this time where about 15% of 2015 volumes are covered and the target is to have 30% of the volume covered. As you know, the petroleum revenues are taxed at 78% in Norway, while financial items including put options are taxed at 27%, thereby achieving the desired after tax effect when securing 30.1% of your production volumes. In the final part of this section, I would just briefly take you through the previously announced CapEx guidance for 2015. In 2015, the company expects CapEx in the order of $950,000,000 to $1,000,000,000 This can broadly be split into Ivarossen with 45 percent Alvheim 30% and Johan Sverdrup 15%. The 2015 CapEx for Ivarossen includes drilling of the geopilot that commenced in January, construction of the topside and living quarters, transportation and installation of the jackets and some other project On Alvheim, there are 3 infill wells that will be drilled during 2015 and LLIs for 2 planned infill wells on Vollun will also incur some costs. On Bala, the second well will be completed and the Viper Cobra project as Karl mentioned is well underway. On the Johan Sverdrup development, the key focus will be on awarding contracts and start a detailed engineering and procurement in 2015. Concept studies for future phases will also commence and some costs attached to that. In the other buckets, the company will incur some expenses on Gyna Krog. There's some IT costs and other minor costs and Utsira pipelines as well. The company also expects to have an exploration spend between $115,000,000 $125,000,000 this year. Production costs fairly low between $8 $10 per barrel. Where we end up in these ranges will depend on how successful we are with the cost efficiency program that has been initiated. Karl will cover this in a bit more detail in his outlook sessions. That concludes my section and lead to Karl to wrap it up. Thank you. So even if we were quite well equipped to meet the sudden downturn, we are by no means shielded by the macro environment. And as I said, we are committed to operational excellence in every part of our organization. We have just initiated a cost efficiency program where we are attacking every part and every cost in this company. The first phase here is will be concluded by this summer and the goal is to take off more than $100,000,000 of cost from our bottom line either by reducing activity, by reducing costs or by optimizing our processes. And this is just the first stage. And then as we conclude this and there's no rolling into the execution phase, All the actions have been detailed out and there are more than 43 actions that are now being rolled out into the organization, whereas we have continued and are now discussing Phase 2 which will commence over the summer. I think the key issue here is that the top management run and own this process as my team is being measured on their success on this program And we follow this in every meeting. So far, we have realized about 50% of this volume. I'm not going to break it down into buckets. But a lot of this has to do with activity program, but it also has to do with the way we're working with our vendors. We're continuing to work with our vendors and our contractors to optimize both the schedule, but also the cost profile and the effectivity of our operations going forward. We firmly believe that this is not just an activity that we have started because of the downturn. This is an activity that will produce a healthy back bone to operational excellence when the oil price comes back up. And that's the overriding priority to why we are executing this with the amount of management attention that we offer. Now I'll wrap up by trying to walk you through the key priorities. Strategies has a tendency to become pretty big. In this company, we like to keep things focused and we like to keep things simple. So in many ways, we have split our agenda for 2015, but also for the 1st part of 2016 in 2 simple buckets. The first one is to drive execution. We are committed to delivering Everossen on first production in Q4 2016 and we're spending much of our time doing so. We have said when we acquired Marathon that we are committed to developing and maximizing the value of the Alvheim area and we are delivering on just that promise as we speak. As Andreas has said, we are continuing to work with the Johan Sverdrup execution, but we're also simultaneously working to maximize our share of the field. On the other side, we are continuing to develop the optionality. As Eivind talked about, we believe that this is a period of time where there will be a lot of opportunities as well. That means that the work on optimizing our capital structure is going forward with full speed. We are going to deliver that I'm quite confident on this on the cost efficiency program and we are going to roll that directly improvement program to improve our operational excellence as well. And as I said, we are continuing to work on our reserve replacement strategy going forward to make sure that we are replacing reserves with as valuable reserves in the future. I think we'll end by that. And I'll invite Alexander back up in stage and we'll try to answer questions as best we can. Perfect. Okay. First question here. Thanks. It's Dan from UBS again. Questions on the financial flexibility and the sort of efficiency of the capital structure as you describe it. You've got about $2,900,000,000 of available debt facilities at the moment. What is the sort of level of overall headroom that you're both looking for in order to deliver your strategic objectives? Is it 3.5? Is it 4? Is it something totally different? And secondly, it's quite easy for us to assess what the cost of equity being charged at the moment is in your stock price. I think we've got less visibility on negotiations with potential debt providers. Obviously, you've been testing that market. How would you assess your effective cost of debt versus equity in the current environment? Thanks. You'd like to answer that? I'll start with the second one. Yeah. I think that if you look at the debt that we've been raising historically that gives you a measure on what the cost of that debt has been. And I think after the acquisition of Marathon, at that point, we'd assume that raising additional debt wouldn't be more expensive than the previous debt that has been raised. Now, of course, we are mindful of where debt markets are today. But we think that especially working closer with the bank group and the core banks that we have that will be the most efficient type of debt funding. Exactly what the price of that would be and how much will be secured debt versus the more unsecured, we're not prepared to give that exact guidance on that kind of detailed costs at this moment. Now the first question remind me again? How much funding would we have? How much funding? Okay. Also that's a very difficult depending on all the upsides and all the projects that you would like to sanction going forward. But I think it's fair to say that we think embarking on this development phase that the company is going into, it should be a robust balance sheet and it should be more robust than the level that we have today. But if it's SEK 500,000,000 or if it's more than that, it also depends on the cost of that. We think the funding is available, but it's a matter of cost. Okay. I think we have the question all in the back. Teilhard Nitsen, Swedbank. Karl, you discussed Swadrup. A couple of questions on Sverdrup. What should we expect in terms of time frame? When will you be able to announce refined loaner share? And how should we think around the range of possible outcome? How low could it be and how high could the owner share become? Well, in terms of time frame, I think the Ministry has stated that it will try to resolve this as quickly as possible. And I don't think I'll try to speculate on what the Ministry means with as quickly as possible. And then the question how high can it go? As high as possible, I hope. Again, it's a very difficult speculation to make sitting here today. What I can say is that we will work hard to maximize our share of the Johan Sverdrup field. So there's no downside risk on your current on the SEK11.89 HMAS share? Well, I don't think I said that there was no downside risk. But I think it's a matter of fact that we haven't signed the agreement because we don't feel that the fair share has been distributed. And that's our starting point. And then one final on CapEx. I guess that the obviously CapEx guiding of $117,000,000,000 This may be not fully taking into account the potential for cost deflation. Any thoughts around potential for loan CapEx on Sverdrup? I think it's NOK 170,000,000,000 not dollars. But I also believe that there is there should be ample opportunity to reduce costs on the Johan Sverdrup development. However, I think it's also important to say that it is it's important to develop this project in such a manner that we realize the start up of production in 2019. And the cash flow of that project is such that the balance between cost reductions and securing the schedule needs to be carefully thought through when making those kind of assumptions. Thank you. On the owner on the spot, Capital Markets. I have two questions if I may. First one, what's been the cost or all the cost in holding for putting together these oil price hedges and the production insurance hedges. And the second one, when you mentioned US5 $1,000,000,000 in free cash flow in the period 2020 to 2025 to assume $80 oil. Is that real term or in nominal terms? I can take the first one first. When we started putting in place the puts for the commodity hedging, we did that when oil prices moved over 60 dollars So the pricing for 2,000 and the balance for 2015 2016, it varies between $2 to $3.5 per barrel. And then the assumptions that we made when forecasting that cash flow is basically in line with the forward curve and that is roughly an average $80 but I think it's nominal over that 6 year period of time. Hi. This is Alex Topazoglou from Exane BNP Paribas. So on Slide 7, you're showing your base reserves and then your upside scenario in terms of production. What incremental investments must Detnos make to access those barrels and those upside? And then what appetite does Dettnost have to make those investments in the current oil price environment? Could you repeat that first part of the question? So it's just on Slide 7, you show your base reserves production and then the upside scenario. And so just what incremental investments must you make to access those barrels and the appetite for you to do so in the current oil price environment? Thanks. Okay. I think a lot of these projects actually tie in projects to the Alvheim area. And the appetite will develop of course based on the oil price, but also based on availability of infrastructure based on availability of infrastructure both in the Greater Alfheim area and for gas in the Hamdal area as well as the decline in the remaining production infrastructure. So far, we are foreseeing that quite a significant part of this upside will actually be actionable under the current forecast of future oil prices. Okay. So if we look at your hedging of a downside, you're limiting your downside to $55 over $15 $16 Is that enough to justify those investments? Keep in mind those are puts in place for 2015 2016 whereas these upsides are more in the longer term after that hedging program. Okay. Thanks. Okay. May I have a question here? Hi, there. Good morning. It's James Thompson from JPMorgan. Just wanted to ask Alex's question in a slightly different way. In terms of the Alvheim area, obviously, you spent about 6, 9 months looking at that now. What in terms of you've sanctioned the VIPER COBRA. In terms of further reserves upside and capital that you might have to invest in that, can you give us those two numbers? And then second question on Sverdrup, if the ministry decides that your 11.89% is the right number, will you be signing that unitization agreement at that point? Okay. I'm not sure I'm prepared to give you the number. But every time we've done such an acquisition, we go back and we look at what was the valuation case that we made the decision on and what are the actual case after we've actually made the acquisition. And we've done that in this case as well. And let me put it this way, we underestimated when we did the evaluation of the Almirall, we underestimated both reserves and upsides, upsides more significantly so than the reserves. So the case that we made when we made the investment has subsequently been strengthened by the observations that we've done after acquiring the assets. So we still believe that this is a very good investment opportunity and a very good business case going forward. And then will we sign? I think we'll come back to that when we see the result and we see the process. I think our key driver here is to secure that this is a good and transparent process and that all opinions are being heard. And then bear in mind, the agreement as it stands now, the oil in place will be redetermined in 2025. The discussions we're having now is basically related to cost and value as a weighing factor going into the final utilization. Okay. Thank you. Okay. Microphone here for Eivind sitting there. Hi, good morning. David Merzaj, Societe Generale just at the back here. Can we move on to costs in Norway? You've had your leading shareholder saying he was disappointed that Kvaerda didn't win Phase 1 topside for the Johan Sverdrup project. You're going to be followed by a number of Norwegian oilfield service companies. How well placed do you think the Norwegian do offer services industry is to adapt to this lower oil price environment? And how much do you think it will have to change its business model and move away from larger projects towards smaller high technology projects? And do you think the shipyards have a future in Norway to supply large modules to your upcoming development? I think there are people following me who will be much better equipped to answer that last question. The first question, do I believe that Norwegian oilfield service industry is well positioned to be competitive in the future? I definitely think so. And remember even if we're building the Eeva Rosen in Singapore, more than 50% of all the equipment actually coming out of Norwegian companies and yards while being put together in Singapore. And what we've seen so far is an industry that is very eager to turn around also in the cost efficiency program and initiate improvement project and increase their competitiveness. So yes, I believe that Norwegian oilfield service industry does have a very bright future. Okay. And then we have time for one question from Eivind and then we have a couple of questions from the the web. Sure. Eivind Arvind with ABG. I have a question on the timing of the hedging program. Is the initiation of the hedging program at all to be seen in connection with the ongoing discussions that you have with your bank syndicate? Prudent financial risk management strategy for the company to have that in place. And I think that's important just for securing operating cash flow, but it doesn't negatively impact RBL price mix, etcetera. So it has that added benefit to it. Okay. And then I've been told that we will get the questions from the web up on the screen. On Sverdrup, there is no unit agreement. Is this common, kerns in other oil fields? Or is Sverdrup more delicate because of the huge size? When do you expect this uncertainty to be resolved? I have two points to that. The first one is and we have had PDOs without unit agreements that have progressed and the answer to that is yes. That actually also happened on Ivarsson. And it's not an abnormal occurrence that commercial issues are not resolved while the development projects are ongoing. I believe that this is actually the first time the ministry will make a ruling over unitization or so called track participation in Norway. And I think the timing here is I won't really answer that question. Is it because of its huge size? Well, this is of course a very important issue both to the Norscan to the other companies. And as I said, for us, this is a very principled thing about protecting our shareholders and the value of our shareholders in this field. However, we feel that this is based on the differences inherent in the field between the East and the Western part of the Johan Sverdrup field. Okay. There's one more question. Karl, you talked about optionality. Does this include non organic growth? Well, for somebody who's worked with BD for the last 10 parts or 10 years of my professional life, I think I basically equate organic and inorganic opportunities. We will basically be value driven and focused and do what is value accretive to the company independent of whether it's organic or inorganic. Then the last question before we take the break. RBL Slide 19, can you please tell us what the USD per Boe multiple actually is and what volume is its baseline? Well, we can't disclose the exact amount. But if we say it's about it counts for 1 third of the original borrowing base, I think it's you can do the math on the two factors for that impact. Okay. Thank you. Then we will have a short break. And ask you please to be back here a quarter past for Aker Solutions. Okay. Then welcome back. We'll now move on to Aker Solutions, which will be presented by the CEO, Ui Aradjo and Sainos Karl Stocknes, the CFO. Okay. Good morning. Actually after a movie like that, Oeyvind told me that's the easy way to do it. I'll just stop now and then just get the emotion. So thank you for being here today. It's good to see such a great interest in our company. I'll be here today to update you because you see the beautiful images, but what's behind this is 16,000 very well qualified people. And according to all, we deserve better margins. So that's absolutely true. Anyway, there's no question that these are challenging times for industry and for ARCA solutions. And we are not shying away from making the tough choices needed, far from it. We are in fact ahead of the curve in many respects after the split in September last year. Here's the usual disclaimer. Moving on, I guess you don't need to read all those letters. What the split has done is reduce complexity, realize synergies and bring down costs. Today, Aker Solutions is a more simplified and focused company with 2 main reporting segments, Subsea and Field Design. We are now much better equipment that's responding to the needs of customers in 22 countries that we operate. We are expanding globally and we are supremely positioned to capture growth in the offshore subsea fuel design markets in Sub Saharan Africa, Brazil, Atlantic Canada, the Asia Pacific to name a few. Thanks to key subsea projects in Congo and Angola, Africa accounted for 37% of our older backlog at the end of 2014 compared with 30% for Norway. That's the first time we have had more orders in a single region outside Norway and is in line with our strategy to grow in key international markets. This steep slump in oil price last year was unexpected in the scope for producers that were already seeking to lower costs. We anticipate a continuous slowdown in the Norwegian markets over the next 1 to 2 years, especially in NMO, where we have reduced capacity. But major projects such as Yauriz Red Rock development will help offset some of the decline. It's actually a great project to be involved. I'll talk more about that going forward in the presentation and some good news for you. Looking ahead, we expect to grow with our key markets and at least maintain our market share in our core businesses. We see margins remaining robust in engineering and gradually recovering in MNO. We aim to achieve peer group margins over in Subsea over time in Subsea. Long term, we are optimistic. Our leading technology, engineering and project management skills put us in a prime position to benefit from a shift towards more complex offshore resources And few companies are better placed in the global deepwater subsea segments, which are among the fastest growing external offshore markets. In fact, according to external analysis, the markets in subsea, equipment and service is expected to grow 8% to 10% annually over the next 5 years. So that's a pretty good place to be even in the current business environments. So what's the game plan? Here are the 5 main points I'd like to raise. 1, we will continue to push for the highest level of safety and performance in all we do as we seek to be the part of choice. 2, we will build on our leading positions in deepwater, subsea and harsh environment markets through our technology, engineering, project management skills, strong customer relationships and a global delivery model. And 3, we will pursue a strategy to spread international in key markets and we are on track to generate 60% of our revenue this year from contracts for delivery outside Norway, up for about 40% in 2013. And 4, we want to strengthen our project portfolio to diversify our customer base and contract mix across the key locations. And 5, we will be unrelenting in our efforts to realize the full benefits of Aker Solutions' new leaner business model. This means achieving deeper synergies across the business across the company, reducing costs and strengthening our financial performance. We had a near record order backlog of DKK 48,000,000,000 at the end of 2014. Our job now is to deliver on this to a seamless focus on operational excellence, cost control as we push to take advantage of our streamlined business. So you'll hear a lot about operational excellence today. You start hearing from Marciano and Larry today and that's what we're focused on. Very important, you can see some examples later in the presentation today. So in fact, what I just listed are our main strategic objectives briefly described. One of our key visions is nothing less than to revolutionize subsea and deepwater production. We offer the ideas and the technology to make this happen. We are both an innovator on our own and a solid sharing in this partner that will be a key player in creating energy industry of the future. A prime example of this is the Aspen subsea compression project. This is a strong collaboration across the company business areas that's enabling us to deliver the world's first subsea subsystem for STATO IO this year. Our engineers dreamed up this project decades ago, long before technology needed was even existence. This will help to extract an extra 282,000,000 barrels of oil equivalents from that particular field, not a bad result for one of our key clients. Going forward, we see more of this. The whole company is focused on developing the future advanced subsea production systems from design to construction, maintenance and upgrades. Actually this type of collaboration across business areas is also a key of our front end spectrum work, which combines skills from all over the company to benefit our clients. Front end spectrum is about getting involved in early develop as early as possible developments at the appraisal and feasibility stages. We use our technical experience from the full spectrum of field development and our life cycle knowledge to evaluate the total development rather than just the near parts of that project. This increase the potential for us to develop solutions to improve the overall economics and value of development. In other words, lower the breakeven cost of fields by optimizing capital expansion and production. As an example, our front end inspector teams were involved in early concept studies in several fields like Johannes Vedrup, Edouard Greg, Ephesus, Hibernia, White Rose, just to mention a few projects. I can safely say that our efforts and close cooperation with the clients were instrumental in finding cost effective solutions for these fields. Our teams in Houston, Oslo, Kuala Lumpur, Perth and London are front end teams are seeing growing interest in our offering as customers increasingly seek more effective solutions at the moment in the current environment. In fact, I'm very pleased to announce the news that we actually signed an agreement with Statoil to deliver a concept study for future phase of the orange envelope developed in Norway. So we're getting one more more involvement in that particular giant field that was explained in more details by our Michael Yasser here from one of our clients. Okay. Technology, I'll talk about technology which is core to this company. Our technology development is also focused on adding value to our customers. That's what we do. Our research and development investments have shift from our focus in filling product gaps as we did in the past. Now we're focused on cost effective products, technology and services needed to address the challenge the industry faces now. From aging fields, more complex reservoir, stricter regulations and higher costs. Think by now we are all convinced that the costs are high and have to be lowered. Our R and D work now sits in 4 main areas. And these are advanced MSC production processing solutions, a new generation of subsea controls and automation systems, offshore greenfield concepts and offshore brownfield modifications to increase oil recovery and extend life of fields. As part of this overall effort, Aker Solutions last year formed an alliance with Baker Hughes to develop solutions that will boost output, increase recovery rates and reduce cost of subsea fields. This partnership has made a strong start and recently introduced Power Jump among several other technologies. Power Jump is a fast track and cost effective boosting system that's particularly well suited to increasing production for maturity fields. It's built using proven technology for both Aker Solutions and Baker Hills and complements and broadens our subsea boosting technology portfolio, which is very important at this time of low oil prices. Now to the improvement agenda. As we spoke quite a lot already in this before in previous sections, but we are seeking to bring the very best technology and solutions to our clients. I think I mentioned that before. We are also constantly working to improve everything we do internally as we more than ever focus operational excellence and cost control. We intensified this effort last year after the split and progress is being made in all key areas. We have introduced new cost saving programs in all business segments and corporate functions and these are well underway. You see some examples also when Ivan also talk about our corporate costs at the present moment compared to our previous larger and more complex company. As an example, our engineering business is on track with our goal to reduce engineering and procurement service costs by 30% by the end of 2017. Our MMO team is also making good progress in meeting targets to lower the cost of modifications by 30% by 2016 by the end of 'sixteen. Our subsea business is targeting a 15% improvement in operational efficiency each year and has achieved this in both 2013 2014. We have also renegotiated contract terms with suppliers and contractors to adapt to the changing environment. That's a norm in the industry right now and we are not different than our clients as well. We have adjusted our workforce capacity to counter a slump in the Norwegian MRO market and we will continue to keep our close eye on capacity in all areas. We have reorganized functions such as supply chain, technology, construction management to better use the expertise throughout the business to prevent duplication and strengthen processes. And we have continued a major push to improve quality and execution. This is key for this company, quality and execution delivered according to client specification on time, on budget. This includes start initiative based on lean principles to test the work methods, process in key projects, so that we can develop new best practice in the industry and improve significantly execution of our projects. The results so far are encouraging as we're expanding the program to include 20 more projects this year in addition to the 4 projects we started last year. Together, these internal initiatives are expected to help increase our margins and to help our clients to develop projects in a more cost effective way. The improvement agenda has twofold internally with our clients. We also work externally with our customers to achieve operational and cost saving improvements. As an example, are collaborating broadly with Start Oil on the step improvement program by taking part in the ongoing efforts as well as preparing for the future of Step Wave 3 as we call it. Our engineering business is also working with Sartoyo on the on his development to lower costs to more efficient and industrialize solutions, standardized solutions. Standardization across the whole field is the norm now. And we also have to simplify technical requirements and reduce supply chain costs. That's what we're doing together with Statoil. We have also contributed to significantly lower facility costs for the Yonge Catzberg project as announced by Statoil recently to our concept study for the balance sheet development, working very close with them to review the specification, make sure that project has an economical a lower breakeven point going forward. Our NMO business is in collaboration with a customer recently lowered the estimated cost of a major tie in project by more than DKK 300,000,000 and has succeeded in making some production process up to 60% more efficient. And our Subsea business too is leaving no stone unturned as we work with clients to find improvement areas. Give an example on that front, the process and standardization we have put in place at our subsea plant in Agoutmes in Norway have enabled us to cut the average time spent in refurbishing a Christmas tree from 17 weeks to 1 year. So big improvement for the clients when the time they need to produce oil faster. Another example, we actually recently we bid on a subsea production system project where our price was based on customer specifications. But also in parallel, we proposed an alternative, a different bid based on reduced specifications and copy technology, which decreased the cost of the production system by more than 50%. I guess it's not very difficult to realize which one they choose. This type of improvements can be achieved, I would say, in a greater scale in the industry. As long as we have an open and two way dialogue with our customers so that we can understand each other's drivers and cost benefits. This is how we can truly create value for our customers and somehow I just start your presentation fine, sorry about that, so that we can understand each other's drivers and cost benefits. This is how we can truly create value for our customers and shareholders through the right technology development, cost control and quality execution and by entering a project as early as possible, as I mentioned some examples today. This way we're going to find the most cost effective solutions and we are actually primed to be involved early. We're the only company in this market who gets involved in all phases of the project from concept feasibility studies up to the end when you produce more oil from the assets for maturing assets. Okay. Next, I guess I will let Sven talk about the financials and the guidance and then I'll come back for wrapping up and remind you all the points that I raised today. Sven? Is there? [SPEAKER STEPHEN ROBERT BINNIE:] Thank you. Okay, Luis. Okay. These numbers will be familiar to some of you here today as they were presented just a month ago. So I will go quickly recap the main figures for 2014. And as usual, all amounts are in Norwegian kroner. Both top and bottom line earnings developed extremely favorably in the year compared with 2013. Revenue grew 13% in the year to NOK 33,000,000,000 as sales rose in all areas. EBIT increased 27 percent to SEK 2,000,000,000 The EBIT margin widened to 6.1% from 5.4% helped by improvement programs. Adjusted for one off items, the margin was 6.5 percent in 2014. Earnings per share rose to $4.71 last year from $4.31 the year before. The order intake was SEK 37 billion, down from a record SEK 44,000,000,000 in 2013. But the backlog rose to SEK 48 billion from SEK 41 billion the year before as we won key contracts in Norway, Brazil, Angola and the U. K. To name a few. And finally, the Board proposed paying a NOK 1.45 a share as a cash dividend to our shareholders. Now I want to spend a few minutes on our order intake and backlog performance. Our 2014 year end order backlog is down somewhat from the record NOK 54,000,000,000 we reported at the end of the Q2 of last year. However, it was at almost 1.5 times last 12 months revenue and provides very good visibility into 2015 and also quite good visibility in the medium term. New orders in 2014 included a $14,000,000,000 contract from Total for a subsea production system at the Kliombo field offshore Angola, a more than $300,000,000 order from Petrobras for subsea manifolds in Brazil, a framework agreement to provide engineering maintenance and modification services to BP in Norway and 2 contracts for the Mariner oilfield development in the U. K. Overall, the backlog has a mix of greenfield and brownfield projects and a diversity of customers in different markets. Going forward, we aim to strengthen that diversity even further. Looking ahead, we see some awards sliding to the right in the current market environment, but also a number of significant projects on the horizon. Tendering remains steady in most of our markets and our major projects are progressing as according to plan. I would also remind you that the 2014 backlog number does not capture the SEK4.5 billion EPMA contract we were awarded in January 2015. And as Luis mentioned, we have now secured a concept study for the future phases of this major development. Next, a quick reminder of the financial guidance comments that we have made in recent quarters. Our 2015 CapEx will be in the range of NOK 1,500,000,000 to NOK 2,000,000,000. There is some flexibility in this number as about 30% of the plant spending is still uncommitted or not yet initiated. Included in this total is maintenance CapEx and capitalized R and D which together are expected to comprise around 3% of revenue this year and moving forward. Reflecting these ongoing investments and progression as planned, our depreciation will be higher than last year at about SEK 700,000,000 to SEK 750,000,000 Our record low working capital position will as we guided last month unwind this year and next to a more normal level of €1,500,000,000 to €2,000,000,000 We continue to see net finance costs per quarter of about €60,000,000 to €70,000,000 and we expect P and L tax rates to be in the low to mid 30% range in line with previous guidance. Our medium term financial guidance is unchanged. We aim to at least keep our market share in our core field design and subsea markets. We expect continued robust margins in engineering and a gradual recovery in MMO. We aim to gradually move toward peer group margins in Subsea and we aim to improve our return on average capital employed in Subsea to 20% to 25% from 15% at the end of 2013. We exceeded this target in the Q4 of last year with return on average capital employed in Subsea of 27%, but this was influenced by a record low level of net current operating assets and hence on our calculation of average capital employed. This will normalize as major projects progress through this year. Our other policies around topics like leverage, gearing, working capital and dividends remain unchanged. The proposed dividend payment of NOK 1.45 per share is equal to payout ratio of 30% of net income. Rounding off, I will touch on the financial outlook this year for our business areas. In Subsea, we see a relatively flat progression for revenue and no expansion in margins when compared with 2014. Note that Subsea now includes the umbilicals unit, so this guidance is not directly comparable to our previous comments for Subsea alone. We continue see operational improvements strengthening Subsea EBIT margins by on average 0.5 to 1 percentage point per year over the medium term. At the same time, we do see some market headwinds that are likely to offset some of these expected bottom line improvements in the near term, in addition to the expected effect of higher depreciation and amortization. The outlook for MMO reflects a challenging market in Norway. We see revenues for this business area down about 20% as guided previously. And we see EBITDA margins remaining under pressure, but moving towards the mid single digits level towards the end of the year. As we communicated shortly after our Q4 results, due to lower market activity, we are now in the process of further adjusting our Norwegian MMO workforce capacity by 300 people. In Engineering, we see moderate top line growth this year and EBITDA margins on a similar level to 2014. And finally, on a divisional basis, our corporate charge should be around $30,000,000 to $40,000,000 per quarter this year. That was our financial guidance. I will now let Louise go through the broader market outlook and sum up. We all know that these are challenging times for the industry and many of our clients to reduce the spending. There is still, as we mentioned, steady tailing activities on projects in our main markets, but there is a risk of some to be delayed. There's no question about that. Activity in the North Sea, our largest regional market, expect to be sluggish over the next 1 to 2 years, but some key developments like the onset will support our business on that important market. As I mentioned earlier, we adjust our workforce capacity in order last year that we are adjusting right now as we just mentioned. And we will continue to be vigilant about capacity in our areas as we face more in certain markets going forward. But as we spun globally, we are well positioned to capture growth in deepwater and services segments through projects with major clients, our focus on lower content and our deepwater technology and global delivery model. Our M and M business is also gaining ground internationally in countries such as U. K. And Brunei and there is a robust demand globally for engineering capabilities as I mentioned throughout the presentation. In fact, by the end of last year, half of revenue was generated outside our whole markets, up from 40% in 2013. And going forward, we expect this year to keep rising. We maintain we are strong in Norway, but we're growing international. That's the message I would like to leave with you. Aker Solutions emerged from 2014 as a leader and more streamlined company, primed to excel with the port and subsea markets to benefit from a shift towards more complex hydrocarbon reservoirs in the future. Our simple structure enables us to realize deeper synergies across the company and today's Aga solution is uniquely positioned to deliver the next great leap, the total SLC production and processing systems. Nobody is better placed than this company. We are in a position of strength as we face the current market environment with a healthy order backlog and growing international presence, Our continuous effort to strengthen operational and financial performance. I should thank you. I'm very conscious that we have some time for questions now. That's the last thing between I'm the last thing between you and lunch, but we have time for good questions. I know there are several there. And Zvi and I will try and be happy to try to answer those questions. Maher? Yes. Hi. Turner Holm, RS Plateau. Yes, I was just curious in the current market environment if pricing on new subsea projects has gotten more competitive versus what maybe you saw a ago? Okay. This is a competitive business. There's no question about that. I was being competitive. And of course, now that the main language now is cost efficiency. Yes, we have very few data points to be honest. Not many projects has been awarded. If you follow to the industry, it means we have not lost many, but we have not won many items. But there are a few projects that we believe is going to be sanctioned very soon. We see, as I mentioned today and it's true, there is twofold to the actions we see from clients and not every client behave the same way. We see clients that realize that what the industry needs now is to change the way we work. And I gave several examples there, where we can use standard configuration, existing technology, existing tooling, standardized processes and to reduce engineering, introduce the risk. I think early on, I saw one of my clients that Norsk mentioned how quickly brought well on stream, 18 months. I'm sure they use I know they do, they did use ton of technology. So we have, as an industry, stop to reinvent the wheel and use what's available and we see clients doing that. Because this industry has a lot of waste, we know that. And when we develop a new technology, like we did in several locations, sometimes you have to do it. We've done that in Brazil 3 years ago. We had to develop new technology. There was no technology available. But the risks are always larger, especially when you're trying to develop technology at the same time you're doing the project. Right now in our portfolio, I can say that the best project we have is a standard project we've done before. Almost no engineering at all. The client just want to produce oil. So that's one of the points. The second point is, of course, after all the discussion comes to procurement. So oil companies have procurement departments and they are putting the pressure to their work. So of course, we are looking into that scenario as well. And I like to say that I prefer to deal with the clients who are looking for bigger picture rather than just trying to save 2%, 3%, 4%, 5% because that's our margins these days for the whole industry. And to continue with that theme, besides sort of an operator procurement driven exercise on lowering breakeven costs, I mean, are you confident that the steps you're taking now can move some of these large subsea project breakeven costs sort of low enough to make them economic in the current environment? I imagine many of them are probably breakeven pretty close to where we are now or perhaps even a bit higher. There are projects and projects, as you know. And when I review the opportunities with my team, we actually have a very interesting graph that we have, I guess, Michael Ryding, our strategic guy at the front here, there's a big line showing where is the breakeven for the oil price and then that line of course moves. So we and we I guess some examples there. Some of those projects, I mentioned, Katzenberg it's no secret that still things to be done. And we're not alone. I have to believe that what we do is 15%, 20% of field development. There's a lot of work to be gained on drilling in other parts of the business, construction, so forth. So I think the industry will be more competitive. That's my view. We see that in our company, big push from the management team. We own that. We are more streamlined company. Our management team now has 6 people versus 16 in the past. So we have we are doing more with less people in all levels. So of course, we have to be vigilant to make sure that there is no unused capacity as I mentioned before. But I'm confident this industry has proven before. One of the fields I was just discussing with the clients the other day was is a step out for the field and that field was sanctioned at $17 a barrel. So it's possible as long as you don't try to over engineer again. Thank you very much. We have a question in the back there. Yes. Hi. It's James Evans from Exane BNP Paribas. A question on market share and your ambition to maintain it particularly in Subsea. I guess with FMC still signing up new framework agreements, 1 Subsea probably being stronger than it was 2, 3 years ago under Cameron, GE targeting Africa very, very aggressively as an organization, what gives you confidence that you can actually maintain market share? And secondly, I guess, in this current tough environment where there are giveaways on margins and given your backlog, is maintaining market share the best value creating approach for you? Okay. I think you asked your question, but you want to say you almost asked the question a little bit at the end. I think to be honest personally, I think the market share is vanity. I want the good projects. And of course, we need to I want the faithful clients, I mentioned here, the ones that work with you all the time and the ones that we understand, we know the drivers. And I don't worry so much about the market share. Maybe I don't worry so much because we gain a lot of market share. So we usually tend to not worry about things you are winning. So I think we grew this company. If you look back, when I joined this company in 2011, we had far less fit for clients than we have now. So that gives you some confidence that we are doing the right thing. So I mentioned that we have to deliver because as I mentioned to my team, very simply, this is a company that think about we have to think about in a simple way. Nobody give you a second car if you haven't finished the first car. You don't put your second car in the garage if you don't finish the first one. So what to do now is deliver and get the next project. That's what I believe. So I think we are very well positioned. I'm very confident in our technology. We have hired more than 2,000 engineers and trained in the last 5 years. So we have a very strong workforce. We're talking about reducing people. We are protecting a lot of capacity. We are reducing a lot of contractors. We haven't touched on that point on the presentation, but we did. We usually carry 25% to 30% contractors. We are actually up to 9% in some locations. Because that's how it was designed to be done. So I'm very confident in our position to be honest. Okay. Any more questions? Hi. I'm Rupaul in from Morgan Stanley. Since the question on market share has been asked and answered, I was wondering in terms of the request for price cuts, cost efficiencies from your clients, to what degree can you pass that on through your own supply chain? So I believe there's been some integrated oil companies sending around letters asking for 20%, 30% cost reductions. Can you achieve the same from your suppliers? Thank you. I like to approach that question. There are cases and cases, right? We have started to reduce our costs, as I mentioned, in September when the oil price was over $100,000,000 still. And we continue doing that. This part of the savings we make, they are passed straight to the clients, and that's how it's designed for. We are, for example, discussing with clients to use to use our global execution model. I mentioned here without many details, but we do have a very more and more a very global execution model. We have a lot of knowledge, as we know, in Norway, that's Norwegian heritage, a lot of good people there, but we mix that with low cost countries. For example, the order is being done in Norway here in the same building, it's been done in India. Very a lot of bright, young and eager workforce in India, impressive to see how those guys want to work, how much value they add, how quickly they learn. And when it comes to Suri Sea, our plants in Suri Sea in Brazil, in Port Lanca or in Norway, they're exactly the same plant. One of my clients actually, Spectro Bras, walking to the plant in Norway. This is amazing how it looked like the other one. Because with standardized, that's important to be able to mix and balance. And it goes to supply chain as well. There is a limit you can take from the supply chain, especially when we are taking we used to be taking a lot on the supply chain. But of course, everybody has to give a little bit of the I would say, a little bit of the blood on that market environment. But there are ways of doing things. Same way we work with our clients, we do work with our suppliers. And of course, there's a lot of possibilities, opportunities now when you have the volume. We are buying some large volumes because we're facing actions with the down cycle with a very large order backlog. They repeat orders, which is very important, taking Petrobras in Brazil, taking in Quiombo, exactly the same as Momo in a way. So it can go to those clients with large volumes and that helps for them to also push one level down to the suppliers and also for us to gain this economy scale. Of course, going forward, we have to question ourselves how much volume is going to come. But I think that's what I like to say. We are pushing. 30% can be ambitious sometimes if you don't do something different. If you just look into the margins, we won't achieve 30%. Nobody, I don't think we will achieve, I don't think Cavani will achieve, any of the other engineering contractors. If you just keep doing what we did before, we won't achieve 30%. But if we change, as I mentioned, some examples here, I think we can. And I give examples, a real example. A client come with a specification, you look, you get your engineers. If you just do what they just give them what they want, they'll be 50% more expensive than if you just say, okay, you can just produce with that particular technology, you can use this. So that's that goes along lines a lot of other things that we add on top. Documentation, when I started this industry, I started as an engineer many, many years ago, 32 years ago, I was amazed the amount of information have not changed. That's increasing for the amount of paperwork. One of the jokes was common to hear in Brazil was that if one day we have apocalypse and this whole civilization disappeared and somebody else comes, they will find out we had a paper we had oil in just to fill the paper industry. So we have to change that kind of environment. The clients understand that. I think they do understand now and now is the time to understand. And as Karl mentioned earlier on here, then sustain that for the future. Don't relax when the oil price goes up because we all believe it's going to go up. Okay. We have one question here. Louis, it's Alex Brooks from Canaccord. You've put a lot of focus on having successfully diversified out of Norway, but one of the big successful customers of course is Petrobras, which currently has some very high profile and ugly problems. And I wonder if you could give us some reassurance as to how your current payment and relationship is running with Petrobras operationally? Okay. First of all, I'm born in Brazil, so I live half of my life outside and in Brazil. So I'm used to that fluctuation and like a co dependent effects in Brazil. So I believe that's my whole life. There's been a big stability in the country for many, many years, which was good, but now they are facing challenge for several reasons. Our relationship with Petrobras has never been better. It's a very good relationship. It's a client who trusts us. In fact, almost 100% of the press out, which is a great success story. And of course, you have to all competitors separate the unsourced stories into success stories. Press out is a great success story. Almost 800,000 barrels in 6, 7 years. That's actually half of took to North Sea and actually more than 20% was done in Gulf of Mexico with all the companies, all the investments. So it's a very successful story. And all that oil is flowing through 3 is made by Aker Solutions and Design Micro Solutions so far. Now the other guys are catching up, develop technology. So it's very successful story. Brazil last year, we delivered record throughput for that plant with very good results coming from a very tough challenge in 2011. So that's what we did operationally. That plant produced 32 trees last year, very, very significant milestone. And as you know, we're building a new facility to replace the old facility now. And we believe that in that country long term. I guess, if you look to exploration success is nowhere else and nobody else has so much success in exploration as Brazil. So in the future, that oil will be produced. So back to assurance about the payments, we have been paid. We are in a good position. Petrobras needs our components. Our backlog is very secure because we are actually after the split, just give you some numbers, our backlog is about 11% in Brazil, 10% in Brazil, small portion compared to the rest. And it's all pressed out. So there's no question that's going to be developed. There are some delays, as we know, we already papers and we talk to clients. We are discussing them to delay some deliveries, which is going to help us because we are moving to a new plant this year. So for us, it's a positive trend. So we have I can assure you that we are working very close to the client. We are monitoring the situation on a daily basis. I guess by speaking Portuguese helps. Sometimes I can have quicker conversations. But we are in a good position in that country. Perfect. I think looking at the time, we will now have a lunch up in the canteen. So the easiest way to get there is with the elevators. And we'll be back here after lunch in half an hour where Kvaerner, Ochsneel, Haffisk and Akastor will present. Okay. Welcome back. We will now continue with Akastor represented by the CEO, Frank Reichsen and the CFO, Leif Borje. Thank you for the introduction and good afternoon everyone. It's a pleasure to be here to present Akastor. Akastor was established as a standalone company late last September after the split with Aker Solutions. Our mandate. Akastor is an oilfield service investment company with a flexible mandate for long term value creation. Our portfolio, we have 8 portfolio companies. And even in today's challenging market environment, we see many interesting opportunities in our portfolio, Especially within operational improvement, there are still a lot of things our portfolio companies can do. That's include significant cost savings, improved operational efficiency and strategic positioning in the market. We will use the downturn in the oil market to strengthen our competitive position. It's important to remember that economic downturns in an industry will create opportunities for those who adjust and prepare well. Our approach, we are constantly looking for strategic opportunities for our portfolio companies. Short term, we especially have an opportunistic approach towards our financial holdings and our real estate portfolio. Our goal is to create as much shareholder value as possible. A short glance at our portfolio. It's 8 portfolio companies with a capital employed of SEK 13,000,000,000, 7,600 employees and with revenues of SEK 21,400,000,000 last year. The 3 largest investments in our portfolio are MHWirth, Akos Offshore and Frontigra Business Solution. MHWirth is a global provider of drilling systems and service and aftermarket services to the drilling industry. ALCOS Offshore, 3 specialized vessel within well construction and well intervention services and Frontera Business Solutions, a provider of business and corporate services. Then we have Fjords Processing, Cope Surface Products, First Geo, Step Oil Tools and some real estate assets and a financial portfolio of financial holdings. If we look at our investments, the net capital employed MHWirth and AKOFS makes up around 75%. If we look at the revenues, MHWirth and Fronteka makes up around 75% of the revenues. Systematic value creation, the Akastor Way. All the companies in our portfolio are new in this context. We have started a systematic journey and the work is so far progressing well. We are pragmatic and opportunistic in our approach. Phase 1 is to assess the situation, get to know the companies, get to know the environment we are operating in and benchmarking us with a competitive environment. Then it's to define a value creation plan. Where do we want these companies to be in 3 years' times? It's about setting clear goals and be able to measure these goals. All our value creation plans includes operational improvements, organic growth. We are looking into portfolio companies if there is add ons we can do or if there are divestments of parts of the portfolio companies that should be done. But during financial engineering, the long term goal is to have separate financing in each and every of the portfolio companies. And then most importantly, the ownership strategy for each portfolio company. What does we as an owner want for the company? And what can we make out of it? To be sure that we are able to follow-up and measure on the progress in the value creation plan, we have developed a set of tools and reports to support the execution and the measurement of the progress we are making. We have also established a new corporate governance structure within Akastor. All our portfolio companies now are separate entities with its own management that is responsible for the portfolio company's day to day operation. We have established separate Board of Directors for the portfolio companies and there is also there we are also included external Board members in the different portfolio companies. These reporting procedures allows us to closely monitor each company. The current market environment puts more pressure on terms and conditions. The customers of our portfolio companies are requesting different payment terms today than what they did 6 months ago. There is much more cash focus throughout the whole value chain we are operating in. For the companies in our portfolio, this is resulting in more upward pressure on our net current operating assets. As a consequence of that, we might see an increase in our net interest bearing debt. And to be able to have a healthy cash reserve will be more and more important going forward. We have put together an experienced team. At Akastor, we are now 23 people working every day to create as much value out of those portfolio as possible. There are 8 CEOs heading different portfolio companies. And I'm quite sure that we have a really good team in place to deliver on the opportunities we see in the market. If we look into our portfolios and we start with MHWirth, it's a NOK 10,000,000,000 business with an EBITDA of NOK 941,000,000 in 2014. Approximately 28% of our revenues are from the aftermarket, but a substantial part of our earnings comes from the aftermarket activities. Then it's very important that we have an installed base that support our aftermarket business. At the end of 2014, we had 78 installed units and we expect that to grow with 10 units this year. If we look at our installed base, above 50% of our installed base is younger than 10 years old. And if we look at our older part of the installed base, around 45% of that is on fixed platforms. And even in the current environment, we expect the fixed platforms to continue to produce oil and continue to use our equipment. So this makes a good fundament for a continued healthy aftermarket business for MHWirth. If we look into the filter market, there are currently an oversupply. We have seen a steep drop in the utilization of the drilling rigs. And there are still quite a number of units under construction. However, we see that more and more rigs get stacked and also the scrapping activity is picking up. If the scrapping activities will continue to pick up, sometime there will be a balance in the market again and we will be prepared to be a key player in this market going forward. So for Amerskweets, it's now all about focusing on its core business. It's a challenging market and we need to adjust to the market. We have significant cost focus in Amberswirth. And we announced when we announced our Q4 number that we are producing our capacity between 500, 750 people. This is progressing as planned and most likely we will be in the upper part of this range. This will give us a yearly savings of €500,000,000 to €600,000,000 As you saw, Brazil is a very important market for Amexwirth. Today, we have between 15 20 drilling rigs in Brazil with Amexwirth equipment. Ameshwirth has a contract with Jurong to deliver 7 packages to drill ship that Jurong has under construction for Brazil. We are monitoring that situation day by day and we have a very close and good dialogue with Yaron. Currently, we have significant construction works ongoing on 3 out of the 7 units. However, if there will be delays in the construction work that will result in additional capacity cost for Amex Wirth. So what's important for Amex Wirth now going forward and how to create values is to protect its aftermarket business, the life cycle business. We need to be sure that we are delivering good service to our customers so they come back to us. It's all about standardization and streamlining the production process. We are going to strengthen our customer relationship. We are using the downturn to have and establish a very good dialogue with both existing customers and new customers. And we are making the organization more international that one what has been in the past. And then we need to use the current market to prepare and create opportunities for the future. Then we have AKOS Offshore, 3 specialized vessels. And we can basically divide it into 2 segments. We have subsidy installation. We have had Skandes Santos in Brazil for 5 years. The vessel has performed very, very well, 98% utilization in 2014. It's currently undergoing a 5 years classing that we expect takes around 30 days. And then it will start on the new contract with new 5 years contract with Petrobras. Last year, the vessel created an EBITDA of NOK 120,000,000 after we have paid all charter hire on the vessels. Based on the track record and based on the success Petrobras has had with using this vessel, we got a 5 years contract for Aker Way farer to put it into operation in Brazil doing the same work as Scan de Santos. There will be a reconstruction of the vessels, will start late this year and the vessel will be ready for operation second half twenty sixteen. In the meantime, the vessel is in the spot market. It's a very tough spot market out there, but so far this year we have had 100% utilization of the vessels. And I'm pleased to announce that we have extended the current contract throughout July this year. So, Q1 1st and Q2 will be good for that vessel. Then we have Aker Seafarer. We bought the hull in February for $122,500,000 So now we own both the hull and the topsides that gives us more flexibility going forward. We had a lot of focus there to reduce the CapEx and to reduce the OpEx level and we've been quite successful with that. And we are now in the neighborhood of $50,000 a day in OpEx for that vessels. It's extremely important now to pursue all the opportunities we see in the market for that vessel. So roadmap for value creation for AKOFS, it's to capitalize on our Brazilian operation, Brazilian business and fix the AKOFS Seafarer to get the vessel on a long term contract. Then we have Fronteka Business Solution. It's a NOK 5,700,000,000 business with around NOK 300,000,000 in EBITDA last year. It's a manpower and service provider for the oil and gas industry. We are managing a portfolio around 3,000 highly skilled engineers and every day we are managing 30,000 IT users. The company is also making sure that people are getting their paychecks and that people have an office to come to every day. They have a global delivery model, but local presence. Going forward there, we need to leverage on the current platform and be more efficient and also be able to cut cost. So we are also cost competitive going forward. When that is in place, we need to gradually broaden the customer base for the company. Fjords Processing, a NOK 2,300,000,000 company with an unsatisfactory EBITDA of NOK 52,000,000 last year and we had one project that we lost over NOK 100,000,000 on last year. Shores Processing, it's a provider of complete processing systems both for offshore and onshore industry. They have quite some good products. They're market leader in certain segments and we need to continue to work in those niches. What's important there to create values is to avoid these kind of projects they had in the past where things have gone really, really bad. So we need to secure the operation. Furthermore, there should be an opportunity to grow the life cycle services. The company is delivering complex equipment, but someone else is doing the aftermarket and doing the service on these projects. Our goal there is to build up an aftermarket business. Then we have COPS surface products based out of Singapore, a NOK 1,100,000,000 company with NOK 156,000,000 in EBITDA last year. COP has been remarkable growth stories, 26% growth year over year. They have some really reliable products and with a great production facility at Batam in Indonesia and has been able to get a very, very good foothold in the Asian market. There we are working on expanding the production capacity and it seems like we can expand the production capacity by up to 25% with very, very limited CapEx. We still see cost synergies, the possibility to cut cost in COP and then we need to grow it into new markets. Then we have a portfolio of real estate. It includes 8 real estate assets, 5 of them on long term leases with Aker Solutions. We have First Geo, Step Oil Tools and then a box with other holdings including our shares in Dov Deepwater and our shares in Esra. Then Leif will go through some of the numbers. Thank you, Frank, and good afternoon to all of you. I don't intend to go through last year's figures. Those were presented 2, 3 weeks. And also I will focus on the asset base, the portfolio and net debt situation. As we have already seen, Kaltura has an asset base of NOK 13,000,000,000. 75% of asset base is tied up in 2 investments MHWirth and AKOFS Offshore. While the capital in AKOFS Offshore is tied up in 3 vessels, The capital in MHWirth is tied up in working capital. SEK 2,600,000,000 as at end of last year is a quite high level compared to where it has been historically. In addition to that, MHWirth has around SEK 1,600,000,000 in fixed assets. Thus the capital structure of the portfolio companies varies quite a bit. While we had hoped and believe that the working capital of MHWirth would be reduced when delivering several projects during 2015, I'm afraid to say that we are less optimistic now, partially due to the general market conditions of course, but also due to the wrong projects and the risk of that project tying up more working capital going forward. The capital employed of SEK 13,000,000,000 is financed with SEK 9,400,000,000 in equity and SEK 3,600,000,000 in net interest bearing items. We consider the debt level to be on a comfortable level based on the underlying asset values. Having in mind that we then have an unleveraged real estate base of NOK 1,000,000,000. We have assets in AKOFS Offshore. We have $2,500,000,000 working capital in MHWirth. And then of course the underlying values in all of the other businesses. When we established Akastor, we put in place more or less all of the funding on the group level. But as already mentioned by Frank, the intention is over time to push down the debt into the businesses. The debt on the group level is established with a negative pledge in all of the underlying assets. The debt then also kind of reflects the intention of pushing down the debt into the entities with 3 years or remaining 2.5 year term loan with a credit facility of NOK 2,000,000,000, 5 year or remaining 4.5 year credit facility. And also with a new loan that was put in place in order to finance the AKOFS Offshore acquisition, which was in case converting an operational lease where we paid around $140,000,000 annual lease cost, taking over the AKOFS vessel and financing it with a new loan of $125,000,000 a 2 years loan than with maturity in February 2017. In addition to this loan, we have one loan in Brazil, partially funding or funding roughly 50% of the new plant in Brazil, facility of SEK 129,000,000. So far we only drawn around SEK 20,000,000 on that loan. Once again, the intention is to gradually push down the debt into the businesses and capitalize each of the business with an optimal capital structure. And that's also taken into account in the terms and condition of the existing loans. So we may take on new loans with pledge in the businesses, but then the proceeds from that loan will be used to repay the term loan. In other words, we replace the term loan with new debt. We may sell assets, any kind of assets company or assets in the portfolio companies. But then 50% of the proceeds will be used to repay the term loan. In fact, the only divestment that will trigger refinancing of all of the debt is in case we sell the shares in MHWirth. There's a strong link between the existing funding and MHWirth and any other of the assets. The overall debt level will has now of course increased in the Q2 due to the acquisition of AKOFS Seafarer. We acquired that vessel for $122,000,000 In addition to that, the debt level will most likely increase somewhat during 2015 due to the fact that AKOFS Offshore is still in an investment mode. Talking about the CapEx in Wayfair preparing the vessel for the operations in Brazil next year. And of course also taking into account more uncertainty on the working capital in MHWirth. However, we will prioritize to avoid the debt level to increase too much. It's of course important to have financial flexibility going forward. This may of course also impact how proceeds from potential divestments of assets will be used either repaying debt or paying dividends share buyback. So that was actually what I have prepared on the numbers. So then Frank we open up for some questions. Hi, Kvothee from DNB Markets. Can you talk a little bit about the flexibility you have in the cost base in MHWirth? In particular, what's how much of the total cost base is used for procurement and also outsourcing of fabrication in manufacturing? [SPEAKER LARS CHRISTIAN BACHER:] Well, we have a quite a quite flexible cost base in MHWirth due to the fact that we are outsourcing quite much of the manufacturing. And historically, we have also had 15% to 20% of the employees as hired in that also create flexibility. Around 15% to 20% of the cost base is indirect costs, so it's SG and A and attributable costs. But of course also a major part of the 4,000 employees in MHWirth are working directly in projects, R and D or customer driven projects. So the pure variable cost in MHWirth is of course all the material, all the procurements, all the subcontracted work in the product part of the business. So when we are now taking out around 7.50 people, reducing the cost base in MHWirth with around SEK 600,000,000, we are in fact taking down the total cost base with around 15% as an indication of our own cost base. And do you think the people you have laid off already is first round? We have reduced the workforce as if we are not getting any new drilling packages. Of course, we get new contracts all the time on service and some single equipment, but complete integrated drilling packages. So if execution of the existing backlog goes on as planned, there shouldn't be any needs to reduce the cost base further this year. But of course there is in today's market some uncertainty also on the backlog. And just one last question. The 750 people that are fixed employees that's not higher than people, right? No, it's a mix. It's a mix. Yes. Thank you. Okay. We have a question also back there. Hi, it's Mick Pickle here at Barclays. Couple of questions if I may. Just on the lifecycle services in MHWirth, what pressure is your clients putting on to you? And do they have any possibility of descoping or de timing changing the timing of the work? And secondly when you came into existence clearly the world was different. Your active ownership I think most people at that stage probably thought it was through develop and divest these business. I'm just wondering if the market has made you change that approach. This isn't the time to be selling. When it comes to the aftermarket, the 5 year blasting on rigs are a very important part of the aftermarket. Our equipment is very specialized. So we basically have close to 100% of the aftermarket on our equipment. But it's also important to use this downturn to work very closely with the clients so they get a good impression of us. So we will be around the table when they sometime in the future we'll order new rigs. When it comes to the ownership strategy for MHWirth, we will not comment on our plans for that. Okay. Any more questions from the audience? And I think we have one question from the web. Will we get that up on the screen? This is obviously a challenging opportunity. Which portfolio company has the greatest operational turnaround opportunity? Well, where is it? If you start with AKOS where we have one vessel idle, if you can get that one into work that will be a great opportunity. So good. Okay. We will then move on to Kvaerner represented by the President and CEO, Janard Rehavgern and the CFO, Eilif Vjasta. Okay. Good afternoon, everyone. Okay. Now I try again. Good afternoon. On the screen you see a picture of our yard at Stord on the West Coast of Norway. And you actually see 2 of the 3 modules that we are going to deliver to the Edvard Grieg field development managed by Lundin and the delivery is now in April. To the left, you see the utility module. And in the hall, the main deck and the process module is where the life pods are installed. This topside contract was actually won back in 2012, 34 months ago. And it represents a typical delivery from our topside facilities. And the contract was won on the back of 2 big jackets and also the huge contract that we won for Shell at Niela. But today, I will start with running through the operational highlights. Then Eilif will take us through some of the key figures. And then I will try to guide you a little bit about the future. Before I go into the details, this is a picture showing Kvaerner's portfolio today. We are still a leading contractor to deliver complete offshore platforms and also onshore plants. And our focus is mainly on the upstream oil and gas industry. We deliver the substructures both in concrete and steel, but we also do hookup projects. We call it project completion or platform completion and of course the decommissioning operations. We do have a proven track record. We are saying that we have 40 years of experience executing complex development projects. Currently, we are 3,000 employees. And above that approximately 1400 contract staff that are working now in 8 different countries. And we do we have a flexibility when it comes to the workforce and we are flexible manning up and down. As we continuously remind ourselves and also the market, the good HCC performance or safety performance is a that's a license to operate. That's for us as well. However, early last Saturday morning or not last, but 7th March, I got the message that we had a fatality at our yard at Stord during decommissioning of the Shell Draugen platform or not the platform, but offloading by Boeing. Such an accident is not acceptable. I hope that everybody understands me when I'm very emotional on this. We will of course investigate this. First of all, the police will have an investigation, but we also have an independent investigation including our main competitor when it comes to decommissioning in Norway. And our overall effort is to try to find out what was the reason why this happened and what can we do to avoid something similar in the future. That is absolutely mandatory for us. And we share this with everybody, because safety work that's not proprietary competence. During 2014, we produced for more than 20,000,000 manors. 25% of that was our own workforce and 75% was done by some contractors or partners. In 2014, we recorded 18 serious near misses. And even though it didn't result in any dire consequences or harm, we have investigated all these 18 incidents. And we have summarized them in lessons learned and we have shared that not only with our own company or colleagues, but also with all our competitors and partners. So I can assure you that even though we had the tragic situation 2 weeks ago, I'm working very hard to continue to improve our safety performance. That is absolutely necessary for us. Over the last 3 years, we have accomplished a wide range of successful projects and project deliveries. And just to show some of them on this picture here. In this market with many players, it's this is our competitive edge. We have a group of people in our company with expertise and experience from many different projects and from many different regions where we operate. Efficient management and to handle all these thousands or probably millions of interfaces between the feed process, the detail engineering process, the procurement process through to construction and final completion and commissioning that is our proven execution model or project execution model or HEM as we call it. When we established Kvaerner as an EPC contractor back in 2011, we had an advantage that with our experience in the industry, we could set up a business model enabling us to utilize the flexible cost base. The flexible cost base is of course to control our projects and together with the expertise and execution make sure that we continuously are a predictable supplier. In this industry you cannot in the long run have success if you only are attractive on the bid price. Over time, you also have to deliver as committed on the contract. I believe that the deans of our company is the predictability. We deliver as agreed. We deliver the specified quality and there is no delays. I will just give you some highlights on the figures here now, because Eilif will come back to some of the more details. But the revenue last year was SEK 14,000,000,000 But then if you add on the Hebron project, it's SEK 17.5 million which is actually the highest in our activity in the history of this EPC business. The EBITDA was SEK 828,000,000 for 20.14 and that's a margin of 5.9%. At the year end, the order book was $16,500,000,000 and I've got approximately 50% of that is actually going to be done during 20 15 and the remaining in 2016 later. But as you have heard earlier today, which I will also come back to, we now need a refill. Just very quickly, a close look at some of the major ongoing projects, all of them on track to deliver. We do have high activity at our yard at Stord at Newfoundland and at Niramma. However, a little bit more lower utilization rate at Vardal. The Edvard Grieg topside as I just talked about when we saw the opening picture that's now nearing completion. And we are going to deliver this project to Lindin now in April. It's a tight schedule, 34 or 35 months from contract award to final delivery and then again completely completed when we deliver to Lundin. We are also going to use participate in the offshore completion and we are well into the detailed preparations of that. The current largest project that we have is of course the expansion at Niama. The contract was awarded pretty much in the same spring as we won the Edward Glig jacket sorry Edward Glig topside and it was announced to SEK 6,000,000,000 Currently the value is more than SEK 11,000,000,000 That plant is going to be upgraded together with full operation. However, there is going to be a shutdown now in the second quarter and we are on schedule to order all the pre assemblies and all the packages for to do the integration of the critical activities during that shutdown. The fabrication is being executed. The most complex ones are actually at our own yards both at Stull and at Verdun but also here in the U. K. And in China. At the Hebron project, which you see here at the bottom right hand corner, we are now currently completing the mechanical installation. And again, a typical topside could be close to 20000 or 25000 tonnes. Mechanical outfitting in the GBS is actually 8,000 tonnes. And it's a lot of pipe pumps and of course control systems and also steel structures. We are we completed the slip forming, major slip forming, the 2nd biggest after Dulphurax B in October last year. We have concluded all the detailed design and now follow on engineering is being executed at St. John's. At Bularm where the picture is from, we are now completing to make sure that the domes are closed and the slip forming will start in approximately half a year for the remaining shaft up to the top of the platform. Then finally, before I go into some of the financial details with Alif, since the letter of intent for 2 Sverdrup jackets was signed last summer in June, We have now committed the first one into an EPC lump sum contract close to NOK 2,000,000,000. And of course, it was an important step change for us to also revise the delivery model and in order to secure the performance of such a project. And we are of course, subcontracted now more than we have done before. And we have recently signed a subcontract with Dubai Dry Docks in Dubai in order for them to both weld the big clusters, a huge amount of welding to be done and also the flotation tanks. And this is then for us to ready for assembly at our yard in Varal and early next year is the starting of the assembly period. Well that takes us through the operational highlights so far. And now I will give the word to Eilif, who will take us through some of the key figures. [SPEAKER KARL HENRIK SUNDSTROM:] Thank you, Jan Over, and good afternoon, everyone. This business, our jacket typically 2 year execution time a top side 3 year execution time a concrete substructure maybe 4 years execution time And the Nihamda onshore upgrade is a 6 years contract. Therefore, I will start with giving you some of the longer term development of Kvaerner to date. Then I will talk a little bit about the capital structure of the company and finally the outlook for 2015. If we look closer at the order backlog development, we started out in 2011 at a level around SEK10 1,000,000,000. We have since then both won and lost outbound projects. In our segments, there are few large projects to be awarded every year and you win or you lose. This of course creates fluctuations. In the winter of 2012, 2013, we lost out on key tenders, but we managed to fill up the backlog with other projects as well as growth in the portfolio. The backlog split at year end was 50% for execution in 2015 and 50% for execution in 2016 and later. And for those of you that wonder about what is 2016 and what is later, later is approximately 25% of that amount. Our business is, as I said, and you know, a portfolio of large projects, meaning that our activity level as well as results are defined by our project portfolio. Being a project business implies that every quarter and every year depends on the development of single projects. And the results we deliver are the summary of the portfolio. The revenues and profitability have fluctuated in the past and we assume some fluctuations going forward as well. We came from a level of quarterly revenues of around $2,000,000,000 And last quarter, we delivered more than $4,000,000,000 if we include airborne activity. The margin development has shown an improvement since early 2012. However, we have not been able to realize the full potential from an improved project portfolio and the scale effect of peak revenues. In the period of high activity, we have also seen some negative cost development in projects. Our working capital requirement is for all projects to be at least cash neutral at all times. The business should thus be cash positive at all times. The working capital has fluctuated within the band of negative $500,000,000 to about negative $1,500,000,000 and it will continue to fluctuate from quarter to quarter with the project facing and the project portfolio as we have seen historically. As announced in connection with Q4 results, the Board has proposed a dividend of NOK0.67 to the general meeting in April. The proposal is in line with the announced frequency and targeted growth of 10% annually. The EPC business is capital light. In its core, it's a people business and it's customer financed as the deliveries are tailor made according to customer specifications. As seen on the previous slide, the working capital fluctuates significantly and this is the main factor explaining changes in cash. However, you see that we have cash in excess of the negative working capital and net other non interest bearing assets. The main balance is the Longview claim where we have received $48,000,000 in a partial settlement after year end. As you have seen, the backlog at the end of 2014 was SEK16,500,000,000 providing us with a sound foundation for the next years. The revenues for 2014 were exceptionally high, as you also see from the chart. The activity at Stord will decrease when the Edvard Grieg topside is delivered in April. And Verdal, the prefabrication of the first Sverdrup jacket is not due to start until after the summer. For 2015, we aim at activity levels of $10,000,000,000 to $11,000,000,000 including revenues from the Hebron project. The first half of twenty fifteen is expected to be challenging with results temporarily on the low side of what has been delivered historically. This is due to the phasing of the current project portfolio and timing of new contract awards. Internationally, we continue to focus on business development and tender activity with costs contributing negatively to the results this year or actually last year and into 2015. The Sverdrup jacket is expected to reach 20% completion in Q4, while new contract awards with a limited margin contribution in 2015. We do not recognize margin on projects until we reach 20% completion. All in all, this reflects that the EPC business is lumpy and fluctuations will have to be expected from quarter to quarter. Margin improvement in second half of the year is dependent on new contracts as well as successful execution of the current project portfolio. And it's especially challenging to estimate developments in the current volatile market. Yeah. I will Lon, sorry. I promised to give him some update about the future and probably about the EPC top side business. That's why people are sitting here. So but at least let me try. Oh, thanks a lot. Okay. I have experienced a number of downturns in my part of the industry as well. Probably I heard Eivind talking about his experience earlier today. And I remember I was also doing a lot of projects to try to be profitable at $10 some years ago, well, many years ago actually, but okay, I remember it. So I'm not going to go into the details, but just to make sure that you understand that we are dividing the challenges up into a number of pieces as well. First of all, when we lost the bids to Korea and to Singapore, but also to Europe for the decades back in the previous high season for bidding, we immediately initiated cost cutting programs based on the portfolio that we had of projects. And in particular, we did what we call aftermath recalculation of the Elfis project that we delivered last year and of course on time delivery and with very high quality to ConocoPhillips. And as you probably have heard, they started the oil production earlier this year as planned. But we did the recalculation and we identified immediately just to remove cost or quality glitches, we can reduce the cost by 17%. So we humbly called said that by only doing improvements ourselves, we can reduce our cost by 15%. But of course in order to continue to improve, we need to optimize our delivery model. And I think that what you have heard about Dubai drydock being our subcontractor for the jackets is a typical example for that. And our intention is to continue to drive a repetitive business with our subcontractors. We do have a number of other subcontractors as well, but of course this is important step for us. Same with procurement. We do see that having been into a very, could you say, hot market period, we now see a little bit cooler market. So subcontracting or procurement and procurement of bulk is obviously improving going forward. But and I think this was briefly said by Luis and it was also covered with color that you have to work together. It's in the interfaces between the different players you really can reduce cost in this industry. And I think if we don't work together with the clients or the clients work with us and with the subcontractors, we will never be able to materialize or actually get new projects on stream. And that's why we believe that the expertise and the competence that we are in possession of should be a very important contributor to future improvements as well. That's why when we talk about standardization, it's almost like people in Norway talking about the weather. Everybody talks about it, but just a few do anything about that. So we try to at least convert when we talk about standardization, we try to convert that into okay what we do. And mainly we are focusing on standardized processes and repetition of different processes. Yes, and it's obvious that for us we need to look at further optimizing our delivery model. On this picture, you see an indication of how we can reach out to get even further low cost fabrication through strategic partnerships. I can assure you that the disappointment that we had in February when it was announced that one of our competitors were much cheaper than us and won the drilling platform, we saw that, well, somebody else have actually been even more clever than us in cutting cost. And of course, for us, we announced then that well, we have to realize that we are not cheap enough, but we strongly believe in our delivery model. But we also have to challenge our own cost base. And based on that, we need to look further outside our own, let's say, standard delivery model and find new opportunities. And again, Dubai Drydocks was one of those solutions for the jackets. And of course, we have to do that also for other delivery models including the topside. The differentiator for us is our flexibility. And we have had periods in the yard where it's been pretty empty and we have managed to do other jobs. Currently we have the new Hummer job and of course that is important for us. When I look a little bit more into the market, we still believe that there is a need for our expertise. There is a number of uncertainties when the market will pick up again, whether it will be very quick or 10 years. But we have analyzed the market and in particular in our, let's say, home market and we do see a need for new platforms and upgrading our existing ones. But also in the international regions, there are opportunities for us to continue to deliver products and in particular when the projects are schedule driven. And I think Karl pointed at that also earlier today. If you can reduce the execution time for projects, you do have a differentiator. We have in addition to the riser jacket, we have a letter of intent for the drilling jacket for Sverdrup. And we expect this contract to be converted from a letter of intent into an EPC lump sum contract later this year hopefully during the summer. And we also realized that the Sverdrup project will need at least 2 more jackets. So we are of course working very hard to see if there are synergies within the frame agreement to also promote that for the Sverdrup license. In addition to Sverdrup, there are a number of other prospects in the North Sea. And in particular, we were very positively, let's say, communicated some few weeks ago when Stottol announced that this unmanned wellhead platform or we call it subseaonestik was chosen as a concept for the Hoseberg Future project. There are a number of projects, but due to competition I will not go into the details. But of course the platform projects for or GBS projects are just a few. We have started to develop some solutions for nearshore LNG terminals and in particular for the Arctic regions. But then again in the current volatile situation about the geopolitical situation, but also the future in the Arctic is of course the time is probably the biggest X factor in the future. So before I sum up, for us it is overall most important to execute on the current backlog. Yes, it's a high uncertainty about the market and in particular throughout the next few months probably half a year we will see what the future will bring. But I can assure you that we are working very hard to win new contracts based on our delivery model, but also optimizing the delivery model. And of course the cooperation that we have with KBR for the Sverdrup projects are still at hand and we work very hard together. We do still believe that our competence and the expertise is going to be valued in the marketplace. And we do see that we need to step up ourselves. And we have also announced on the backdrop of the loss of the drilling platform that we need to do substantial mining reductions in order to be able to handle the future cost situation. But we will continue to develop our business. And of course, again, HSSE, it's a core value for us. And in spite of the tragic fatality that we had, we need to continue to work relentlessly on the focus on that. Our home market is obviously without any doubt our main priority. And we need to continuously look for a delivery model that reduces our cost base, because we do see that the prime evaluation criteria is more and more cost and cost reductions. And again, we continue to train ourselves on hands on management and make sure that everybody reports the deviation before they become problems. Based on that, I think now you are ready. Okay. Are there any questions for Conor? Your dividend yield is 20%, which implies the market doesn't believe you will keep paying the dividend. But you do have a big cash position. So what's your view on maintaining the dividend policy in light of the in certain market environment status? [SPEAKER KARL HENRIK SUNDSTROM:] I think clearly the dividend policy as such is for the board to decide. But when I've received this question before, I've said that the bidding season now is important also in that respect, because when we put in place the dividend policy, it was on a longer term view for the company. And then this bidding season is important and it is a topic to be evaluated I would think after the bidding season. But you are right. We are in a net cash position. So we have a healthy balance sheet. And when we put in place the dividend policy, it was because we were going into what we call a transitional year. So clearly, we have the funding if we don't see the opportunities ahead of us. And just a bookkeeping question. But the cash on Longview, has that been converted to not? Or is that in dollars still? [SPEAKER STEPHEN ROBERT BINNIE:] It's a timely question. And it has not been converted to NOK yet, but it's soon to be. Okay. Any other questions? We will then have the last coffee break and then we'll return at 2 for the 2 best performing companies in our portfolio Harvitzke and Ozanil. Okay. Welcome back to the last session today. Now Ocean Yield represented by the CEO, Lars Sorgbakken. Thank you. Welcome everyone to the presentation of Ocean Yield. The company was established by Aker in March 2012 with a portfolio of vessels all with long term charter. Intention was to build a relatively large dividend yield company. After adding a few projects, we listed the company on the Ostrach Stock Exchange in July 2013. And the company currently has a market cap of about $815,000,000 We have a diversified portfolio of modern fuel efficient vessels all with long term charters, giving us quite substantial contract backlog thereby enabling us also to pay stable and hopefully increasing dividend. We have a growth strategy and have committed to investments of about SEK 1,300,000,000 since we started and expect to continue to grow our portfolio going forward. We're currently offering a very attractive dividend yield of 9.4% and earnings yield is currently 13 point 3%, which is quite attractive compared to Per. Looking at the portfolio. Up to the left, we have the FPSO Durby, which was part of the initial portfolio to go from Akkir. Vessel was built in 2,008 and entered into a 10 year contract in India to Reliance Industries. They own the field together with BP and Liquin Resources. The contract runs until September 2018. But more important is that this vessel will stay on the fields until the field is empty. It's producing gas and the vessel is linked to the grid in India. Next vessel is the Wayfarer, which is on long term charter until 2027 to Akastor. Akastor has got a 5 year contract with Petrobras starting in mid 2016 And we will do a modification of this vessel before that and the cost of that is estimated about $90,000,000 Next vessel is the construction vessel, Nivit Connector, which is a cable laying vessel on long term charter to Astra Holding, which is listed in Singapore. It's doing work in the North Sea. It has had a framework agreement with ABB and it's doing cabling work. Next project is 2 Angra Hendrix, which we have on long term charter to Vashtar, built in 20 13 and have a 10 year or 12 year contract to Farstad, 10 years remaining. Then we have the diving support offshore construction vessel SPM installer, which is on a 12 year contract to SPM. On the right hand side, we have 6 car carriers, which are on long term charter to Hoegh Auto Liners. Hoegh Auto Liners is owned 62.5% by the Hoegh family and 38.5% by EPAMuller. It's 2 of the vessels are under construction and will be delivered in 2016. Then we have 3 more gas carriers also under construction in China. Then we also own bonds in American Shipping, book value $181,000,000 $194,000,000 in nominal value. These bonds have a coupon of LIBOR plus 6% and maturity is in February 2018. This was also part of the initial portfolio, which we took over from Aker. If we look at the employment of our assets, we see that we have very long term employment. In average 9.5 years, a contract EBITDA backlog of $2,200,000,000 This gives of course a very stable income. And the newbuildings also adds about 30% growth in EBITDA. If you look at the counterparties, we feel that we have relatively strong counterparties and we don't foresee any negative surprises in the short term. As an example for some of the projects we have done recently, picked here the SPM installer, which we bought from SPM in December 2014. It's a diving support introduction vessel. We bought it for $150,000,000 a relatively attractive price. It's financed by $110,000,000 non recourse bank loan. Banks were willing to do that non recourse to Ocean Yield because of the strong credit of SPM. SPM retained 25 percent ownership in the vessel. It's on a 12 year Hell and High Water debut and they have purchase option starting after 5 years. Another project that we did last year is a 3 liquid hydrogen carriers, which is under construction in China. These vessels are relatively advanced technically. They have the new Mann dual fuel engine, enabling them to run on ethane. Also new tank construction adding about 30% extra cubic. We see that the deck is higher than normal. So very fuel efficient vessels is saving making substantial savings on the fuel. There's a 15 year contract, but it's a 10 year with fixed rate and there's sub it's chartered to the Hartmann Group in Germany, but all based on the sub charter to SABIC, which is the large Saudi Arabian petrochemical company. It will transport gas from the U. S. To the U. K. And SABIC has made a 10 year purchase contract of Itane for the cracker in Teesite. If you look at the growth in our portfolio, as I just said, we have added about $1,300,000,000 in new projects. Last year, we added 540,000,000 new projects. We did 3 gas carriers, 2 car carriers. The way power modification, we entered in agreement with Akastor, which is about $90,000,000 And we bought the SPM installer for $150,000,000 totally about $514,000,000 new investments. We plan to continue to grow our portfolio in a prudent manner with a strong focus on modern fuel efficient assets, on long term charter to relatively strong counterparties. We target an equity return about 14%. And typically our lease terms will be 10 to 12 years, but we're also looking at some projects with up to 15 year contracts. Looking at the risks for this type of company, we have all our vessels on long term charter. So it's we're not directly market exposed. So it's it's really counterparty risk that is the main risk for Ocean Yield. We have reasonably strong counterparties. So we don't expect any negative surprises in the short term. Long term, you can never know how the markets will develop. But currently we're quite comfortable with our counterparties. With respect to operating risk, we only have operation on Dhirubhai, which is the FPSO in India. There we took over the organization from running the vessel from Aker. We have 13 persons in the office in Oslo following up the operation of that vessel. With respect to currency risk, we are dollar based company and we have some kroner exposure which we then have basically hedged. So we have very limited currency risk. Interest rate risk. We tried to hedge a reasonable portion of the interest rate risk. That is through interest rate hedge agreements. We have some fixed rate loans. And we also do some of our leases with floating interest rate. So there is adjustment in the so we then push the interest rate risk over to our counterpart. With respect to financing risk, we typically finance the vessel as we do new commitments. Currently, the only open financing is for the gas carriers where we have received very attractive financing offers and actually much more attractive than we based our investment decision on. So that we plan to do later this spring. Then we have residual value risk. As we do very long term charters, it's relatively low residual value risk. The most important residual value risk is the is on the Durobi, which is end of the fixed charter in September 2018. But we expect that vessel to stay on the field until the field is empty. We have not been guiding on our expectation for how long will that be, but we expect that to be beyond the fixed contract. If we look at the outstanding bond, we have NOK 1 billion bond outstanding. Our rating for Ocean Yield is for most investment banks, we have a shadow rating of BB- of the company. Danske Bank just released a new credit report with a clean BB for Ocean Yield. The loan was done 1 year ago. NIBR plus 3.90 and we did a tap issue in July at 3.65 NIBR plus 3.65 Last trade is about NIBR plus 4.63. Percent. Maturity of the loan is in 2019. So it's about 4 years remaining on that loan. Covenants, we have 25%. We have close to 40% equity ratio. Minimum cash is $25,000,000 We had $76,400,000 at year end, but also undrawn 50 $1,000,000 in the credit line. And EBITDA to interest expense was 2 times and we had 7.3 times. So it's very comfortable margins. We intend to continue to use the bond market for financing the company and we'll probably hopefully next year issue more bonds as part of the funding. If you look at the results, EBITDA has developed quite nicely. It is a very stable earnings. EBITDA has increased from $38,000,000,000 in Q3 to 2012 to basically $53,900,000 in Q4 2014. Q4 was negatively impacted by a reclassification of the Wayfarer, which was early on operating lease. But because we extended the contract to from 2020 to 2027, this it went the wafer went from an operating lease to a finance lease that had a negative impact on the result of $3,400,000 Then we had to close down the Dhirubhai because of the cyclone, Hud. And that has a negative impact of $1,100,000 If you look at the net profit, we have had a very positive development from 2.12 Q3 of 2.12 of $12,000,000 was $30,500,000 now in Q4. There we had some one offs of so adjusting for one offs it's about $27,100,000 if we adjust for one offs in Q4. Important to note here is that we have 5 new buildings under construction and we have the modification of Wayfarer. So when the new buildings are delivered, our EBITDA will grow about 30%. And this is there's no need to raise any additional equity to fund those investments. So we have a very strong built in growth in Ocean Yield. If you look at the adjusted net profit and dividend per share, you see that we the adjusted net profit per share is stable, growing slowly, $0.81 and we paid for the Q4 and we paid out $0.57 This gives a dividend yield of 9.4%, 70% payout ratio and a very, very strong earnings yield of 13.3%. This is way above any of our peers. If you look at share price development since the IPO in July 13, we see that in Trondor, the share price have increased 79% if we on an accumulated basis for 1 half year. If we include dividends paid, it's about 102%. In dollar terms, share price has increased 35%, if we include dividends 52%. But you see that from last summer because of the strong the strengthening of the dollar against NOK, the share price in dollar is actually somewhat lower today than it was in the summer of 2014. If we look at the development in dividend yield and earnings yield. On the dividend yield, which is the red, we're currently trading at 9.3%. Last summer, we traded about 7.5%. And it is a combination of the strengthening of the dollar and increased dividend that have pushed up the dividend yield. Earnings yield is also at the very high level, 13.2%, which is substantially above where it traded last summer, which was about 11%. We just included a slide to show a little bit because we feel that often the share price sensitivity for this kind of company is often underestimated. We are paying now $0.1425 was the dividend for the 4th quarter. With the 9.3%, we were have a share price of about DKK 50. You see that if we come back to the dividend yield we had 6 months ago, we would trade at about 62%, 7.5% which is then 62%. If we can deliver on our dividend policy to continue to increase our dividends as in accordance with our policy, you see that there's very substantial upside in the stock. When we included $0.20 which is our earnings for the Q4, So we see that that is about NOK 69 at 9.5%. It's about more than NOK 70 at the current yield. So I think that this shows a little bit of the potential. Then we will need to deliver on our dividend policy. If you look at the outlook, although we may have some challenging oil service market in 2015, we do not expect this to have any negative impact on our earnings this year as we have all our vessels on long term charter to relatively strong counterparties. Current market may provide quite interesting opportunities for a company like Ocean Yield. We continue with our conservative investment strategy, the focus of investments in modern fuel efficient assets on long term charters. We feel the company has capacity to continue to increase its dividends. We have increased the dividend every quarter since the IPO and it's our plan to continue with that. We have 30% EBITDA growth from projects under construction. We also have a quite strong balance sheet with about 40% equity, enabling us to add more projects without raising equity, should further increase our earnings. And we have a payout ratio of 70%, which gives us room also to increase the dividend. Most of our peer companies are paying basically close to 100% or have a payout ratio a bit close to 100%. So we feel comfortable that we can deliver on our dividend policy going forward. Thank you. Then I think we can open up for questions. [SPEAKER LARS CHRISTIAN BACHER:] Are there any questions to Lars? Hi, Lars. Theodor Berg from Coscom. A quick clarification question on the Dhirubhai. Did you say that, that was a life of field contract? And if No. No, the firm contract runs until September 2018. But we expect it to that they either exercised their option of $255,000,000 in September 2018 or that we agree on an extension to continue because it makes no economic sense to replace that vessel with any other vessel. It costs about $1,200,000,000 to $1,500,000,000 to build such a vessel and it would be too costly to basically replace it. So it will it makes economic sense to keep that vessel on the field for the life of the field. Do you have an updated expectation of the life of the field? No. We have not guided on our expectation of the life. But we expect that to be longer than or to continue to produce beyond September 2018. Okay. Alma? Thank you. Since the dividend yield is as high as 9.4% here, at least the market is pricing in that it's a significant risk that is not going to continue. So even though you comment about the strong coal departures, I wonder if you can elaborate a little bit about the contract if it's kind of a risk of termination of contract. You have kind of a 12 year, 15 year contract and the oil service company, for example, has no job for the vessel three years from now? I think all our contracts with the exception of the Dubai which is where we have operations is a different kind of contracts are what we call high end hell water bareboat contracts. That means that basically it should not be possible to terminate such a contract. It's more written like a loan agreement. And the experience from earlier downturns is that it's not been any issue that such contracts are canceled. There is no cancellation rights in such contracts. Then for the nearby it's a slightly different type of contract because there is also operation. So there we have an operating contract plus the bareboat contract. But that is slightly different structure. Okay. Then we'll move to the last company today Harfist. Please welcome the CEO, Bjorn Barta. Thank you and good afternoon. So I'm going to speak about present Hafizt, a fishing company. And we are basically targeting fish in the sea as opposed to many of the companies that are working on the seabed or below the seabed or on the surface of the sea. So our focus is slightly different from some of the other companies you've seen. First a few words about the Norwegian fishing industry and Hafizk within the context of the Norwegian fishing industry. Then turning to some key financial deliveries and a few words about what actually drives the value of our company and finally, some outlook comments at the end. So as you know Norway is a small country. We have a population of about 2 thirds of the population of London. But we have a relatively long coastline and this gives us access to very big ocean areas. So in actual fact as a fishing nation, we are the 10th by volume in the world in terms of catches. And as a seafood trader, we're number 2 in the world in terms of export value only beaten by China. So Norway is actually quite a big player in the seafood industry globally. We have the world's largest cod stock. Cod is, as you know, highly priced fish in the U. K. And also the Norwegian fishing industry has over the last, well, 20 years or so gone through fairly significant strategic or structural changes. So whilst amongst the EU 27 countries, there is now 127,000 fishermen fishing from nearly 80,000 vessels landing about 4,000,000 tonnes. This gives EU average cash per year of 31 metric tonnes per fisherman. In Norway, we have now just about 9,000 fishermen, fishing from 4,000 vessels giving catches per fisherman of about 2 55 metric tons per fisherman. So it's as you can see, it's an industry that has structured itself very well over recent years and now is well positioned for profitability. Norway is also a high cost country probably one of the most expensive places on earth when it comes to workforce costs and many other costs. So high costs calls for high-tech solutions. We are working very hard on energy efficient operations and also to man the vessels with as few people as possible and let the technology take care of production in the factory. We are very focused on the environment on both with respect to emissions from the vessels and also with respect to management of the fish resources. So all the major fisheries in Norway are now labeled under the Marine Stewardship Council Ecolabeled, a seafood labeling system based here in London, which is by far the biggest certifier in the world on seafood. This is a slide showing the 35 largest harvesting companies in Norway. And as you can see, Hafisk is on the left. We are about 2.5x the size of number 2 in revenue terms. So obviously, Hafisk then is well positioned within the Norwegian industry and in the Norwegian industry being well positioned within the global seafood industry. So we are the largest harvesting company and quota holder in Norway holding about 11% of the Norwegian whitefish quotas. We also have 7 licenses for fishing shrimp in the Barents Sea and one license for shrimping of East Greenland. We have 10 rollers in operation, 3 of which are newbuilds and were delivered in 20132014. We have now 3 90 people in the company, about 365 at sea. And in addition to the vessels, we also have ownership to 5 fish processing facilities in the northern part of Norway. But these processing facilities are operated by our sister company Norway Seafoods. So we are only we are an owner, but we are not actually operating them ourselves. Our shares are noted at the Oslo Stock Exchange and Aker holds 73.25 percent of the shares. The fleet structure is basically placed in 2 in sorry, 3 daughter companies in the north of Norway, in the region of Nuland and in the region of Finnmark. And the head office is in Olsson on the West Coast of Norway. If you look at the route to market for our products, mainly the majority of our fish goes as frozen headed gutted fish blocks into the export market for further processing abroad. China is by far the biggest seafood producer in the world. So a lot of our fish goes to China, but also to various European countries and in the to the U. S. About 28% of our catches, this is the figure for last year, 28% went to fresh fillets as fresh fish unfrozen delivered to Norway Seafoods and processed in our factories in the north of Norway into various types of fish fillet products. And another 15% is sold frozen to the Norwegian saltfish producer or bakalau producers. This is quite a strong industry in Norway and normally this happens on the West Coast of Norway. At this point, I would have invited you on board the Gardas Neptun, our maintenance newbuild, but unfortunately the Wi Fi speed is a little bit slower. So I'm not going to be able to do that. But I can just refer you to our web page if you want to see what a modern Trola looks like today. Enter harfisk.anoorharfisk.com and you can actually walk around inside this wonderful vessel and check out the technology and also run a film showing how the factory works, etcetera. It's quite interesting if you find the time. So turning then to some key financial deliveries and also focusing on what are the actual value drivers in our company. Just some highlights first. We had last quarter of last year, we had a record high EBITDA for any 1 quarter and also we had a record high EBITDA for the year last year. We had the highest cash values per operating day in any quarter and indeed for any year in Hafizk. We had record high volumes of catches last year. We continue to see a positive price trend and indeed the price rises were actually highest at the end of the year. And also last year, we completed our newbuilding program, 3 new vessels, increasing our cash capacity and our flexibility to participate in various fisheries to a greater extent than we've been able to in the past. So our turnaround came in at NOK 1049,000,000 just under NOK 90,000,000 giving an EBITDA of GBP 299,000,000 last year. Profit before tax came in at GBP 260,000,000 However, at this point, I should point out that this includes the reversal of a provision that was made in the accounts for 2013 and also for the in the 4 quarters of 2014 for the so called the Glickner case. I don't know if you're familiar with that, but we had a court proceeding that's been going on in Iceland for the last few years involving a currency and interest rate swap agreement that Hafiz terminated in 2,008. And the short version is that the administration committee of Lithuania sued Hafisk for currency earnings on this contract. They won in the first quarter instance in the district court in Reykjavik in December 2013 and Hafisk appealed. The appeal was treated in it was treated in the Supreme Court in March 4th March of this year and the decision of the Supreme Court came Thursday last week and Hafisk won the appeal case and consequently a total of NOK 195,000,000 that we have made provisions for in the accounts for the 2 last years have are now being reversed giving this pretax profit of $260,000,000 So if there was no glitnir case, the pretax profit of 2014 would have been $103,000,000 for 2014. Obviously, this also gives us a very positive and favorable cash situation. The liquidity situation is now much clearer than it was last week. So obviously that also gives an improved ability to pay dividends to the shareholders, which is a goal that we are working for. Total catches last year came in at just under 60,000 tons of heavy glutted fish and that's about 83,000 tons of live fish weight. So then turning to the value drivers of our company. We aim all day every day to optimize our operations so that we can maximize shareholder values. And in doing so, we are paying particular attention to some relatively few key value drivers, which I will run through with you now. First of all, the costs, of course, high focus on operational costs. This is just a slide showing the 6 main cost groups. As you can see, personnel costs and fuel costs are the 2 most important cost factors. Personnel costs are actually related to how much income you have. The fishermen have what you call a share of the cash pay system. So the higher the value of the cash is the higher the income for the fishermen. But it's a fixed percentage. So both for personnel cost and also for freight and packaging, it's actually a strong relationship between the revenues and the actual costs. For the remainder of the cost groups, it's more a question of how many days in operation, how much for example, how much fuel do you use per day in a trawler, how much fishing gear is actually worn out and needs to be replaced, etcetera. So that's more volume related than the few first groups. 2 of the main value drivers for our company is the catch efficiency and the prices for fish. If you look on the left part of this diagram, you can see it's an illustration of how we need to catch roughly 10,000 kilos per day on a troller to breakeven, if you like. And then anything above that level would give us a yield margin of around 60% at the EBITDA level. Last year, we averaged 19,200 kilos per day roughly. And on the right hand side, you can see the significance of price. If the average increase in price of NOK 1 would give us about NOK 0.6 in increased EBITDA. So again price and cash efficiency are very key to value development in our company. And this slide shows you the increase that we had in cash efficiency over the last few years from 2008 up until now. Basically, we have had a very strong increase. This is caused by the changes in the fleet, taking out the older vessels and building new ones and also to some extent the availability of fish. The last year is actually well, it's even the 2 last years on the same level. The cod quotas came down from 2013 to 2014, but we still managed to maintain the catch efficiency through targeting other types of fish. Cod is by far the easiest fish to catch, but when quotas come down, we have to compensate by other fisheries. And we managed to do that within the same level of catches last year. So obviously then the fleet renewal program has given us much more flexibility to take part in other fisheries and to be efficient there. Hafisk is we are part of the world. And what you see here is another important 2 important observations really. First, you can see in the period 2,008, 2,009 very severe price drop for cod, our main fishery, caused by severe financial downturn in cod eating markets, very key markets for cod. The price was reduced to half of the top level. Again in the end of 2012, just into 2013, the prices dropped quite a lot for cod. This was caused by a strong increase in the quota allocation for 2013. So the market obviously was afraid that there will be an oversupply of cod. That didn't happen though. The fish was sold and you can see how the price bottomed out in the Q1 of 2013 and is now rising relatively strongly. But still you can see that the cod price is only back to sort of medium levels of the past. So there should probably be some possibility to have further increases in the future. Okay. Turning down at the end to some outlook thoughts. I would say, well, it's also a value driver, but more in sort of a megatrend context. Fish is if you look at the table to the right and the bottom line, you can see how fish is incredibly there's very low environmental costs from producing fish as source of protein. Compared to any other food type, fish is very ethically correct. Fish is also healthy. So we are sort of riding on the health trend in addition. And fish is certainly the Norwegian fisheries are very well managed. So we are a sustainable industry, always taking care of the stock resources, not taking out too much fish so that there will also be fish to catch in the future. In addition, you could say that the fishing industry has been much better at producing fish as a convenient food item. You don't anymore get the big round fish to go home and cut in yourself. It's already made meals and easier to prepare. So all of these trends are favorable to the to a company such as ours. Looking at some revenue and earnings potential then for the near future. Quotas are at historically high levels now. The cold quotas were reduced by 10% from last year to this and it will probably be reduced by another 10% next year change. But still, if you look at a graph covering the last 100 years or so, we are on very high levels for the cold stock. So this is just natural changes that we go through every year on every period. Hadock and Seid, 2 of the other more important species for us is practically stability. Hopefully, maybe we will receive some increases in the Hadak and Seiko that's given 2 or 3 years ahead. Prices are firm. Demand is good. There's no stock building. So the market seems to be favorable. And our fleet renewal program has given us the capacity and ability to exploit our full portfolio of quotas better than in the past. So we can now target shrimp. We can target redfish, green and halibut. We're working in international waters. We can do a lot more than just fish, cod and haddock and say when these most important species are fluctuating. Also in January, the government actually increased the quota ceiling. We have a maximum permitted number of quotas per vessel. It used to be 3. It was increased up to 4 quotas in January. Obviously, this gives us then an opportunity to take down costs by taking out vessels if we so desire. In the short term, we are planning on rather using that opportunity to optimize our own our internal portfolio of quotas better. We will take quotas from the older and smaller vessels and transfer them over to the most efficient vessels and be able to fully utilize all our quotas. We will then use excess capacity to target other species like shrimp, like redfish. And we will see how that works before we start taking out vessels because we still have a big quota portfolio to harvest from. So we're not going to be too quick taking away capacity because it could be just as profitable to retain the capacity we had just now. But if it doesn't work, we do have that possibility. We're also working on improving our performance on bycatches, producing chins and tongs, etcetera, taking special products and also fish meal from the new builds. And obviously, we are focusing on our costs as I showed you earlier and our key value drivers. So I will leave you at that a small piece of advice at the end. Eat more cod. It's good for your health. It's good for the fishing industry. And in brackets, it's good for half of fiscal year. Thank you very much. Okay. Send the last chance for asking questions. Hi, this is Foyde, Carnegie. Two questions actually. After you on the Britney case, you have a pretty stronger balance sheet. And with no more CapEx and with rising coal prices, the outlook for strong cash flows is pretty good next couple of years. So you said that the fleet renewal program was completed. But how likely is it that we are going to see you order new fishing vessels in the next couple of years? And second, what are the dividend ambitions for the company? [SPEAKER STEPHEN ROBERT BINNIE:] Well, first last question first then. We have had an ambition to pay dividends on the 2015 results. As I said, the Glittmann case has left us in a much more favorable position than we were in when that goal was set. However, I'm the CEO. It's the Board that decides on dividend policies. So I'll leave that to the Board. When it comes to newbuilds, it is so that although we have completed the newbuilding program of the 3 new vessels, we still have older vessels in our fleet and we need to continuously work with the renewal of the fleet. So it is my intention to start a planning process through this year, but we will not be making any decisions. We have nothing concrete at the moment, and we will not be making any decisions not before we've done a full appraisal. We've gone through the experiences of the last newbuilding program and have decided on what type of vessels to build and how to go forward. So at the moment, it's nothing concrete. But obviously, we need to always be working with considering whether our fleet is more than enough. Okay. Any more questions?

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