Good morning, everybody, and a very welcome to the first quarter presentation for Bonheur ASA. Today, as usual, Richard Olav Aa, our CFO in Fred. Olsen & Company, will present the figures to you. Then afterwards, we will have three of our CEOs for three different companies talk a little bit more in detail about the different companies.
Today we have Ivar Brandvold, Co-CEO of Fred. Olsen Renewables here with us. In addition, we have Lars Bender on Teams. He will talk to you about Seawind, Fred. Olsen Seawind. We also have Sofie Olsen. She will present Fred. Olsen 1848. Alexandra Koefoed will talk to you about Fred. Olsen Windcarrier. Hopefully you will learn a little more today. Now I will give the word to Richard to present.
Thank you. Thank you, Anette, and also, a hearty welcome from me to this first quarter presentation. Before we go into the figures, I think I would like to put the quarter in a little bit of a context. It is a quarter. It's a good quarter. It's a good quarter on the financial development, it's a good quarter on the strategic development, and it's also a quarter with very solid execution.
I will dwell a little bit with each one of these before we take the numbers. On the financial side, we have very good results due to the strong results of Fred. Olsen Renewables with good production and prices. Strategically, I think the award in Scotland, that together with the other assets we have in Fred. Olsen Seawind, now has transformed Fred. Olsen Seawind into a significant player in offshore wind development.
Also strategically, which I hope you'll find very interesting today, is the formation of Fred. Olsen 1848, which are now aiming to solve significant technology issues within floating wind and solar areas we have worked on for many years.
On the execution side, I would very much like to highlight, and that will be also, illustrated a lot more in detail with Alexandra, a very solid execution in Fred. Olsen Windcarrier. All the three vessels now have been at yard stays, but also Fred. Olsen Cruise Lines that have operated very well during Omicron and also bringing now the third ship into operation. That's a little bit context to the figures. I think we can be very proud of this quarter's development.
Starting then to the right on this slide that you've seen many times before, the layout of it with revenues this quarter of close to NOK 2.5 billion and EBITDA of NOK 926 million, a very solid development in the quarter. Starting with the segments, and these will be covered a lot more in detail, but just the main events in the quarter.
Renewable energy, EBITDA of more than NOK 1.2 billion as a result of continued high power prices, good wind conditions in the quarter, and also the successful implementation of the Högaliden wind farm, adding 18% generation. I already mentioned the importance of the Seawind award in Scotland or the Muir Mhòr site, which is a capacity close to 800 MW floating offshore wind outside of Aberdeen.
Then Fred. Olsen wind service, more a break-even result this quarter, but that was actually ahead of expectations as all three Tern vessels were scheduled at the yard in the quarter and also in between contracts. We had a new contract coming in, which led to utilization of 16%. I think what is more important is that now all the three vessels are expected to be ready for the market with their yard stays and coming into a very solid contract portfolio starting now up in Q2 this year and stretching all the way into 2025.
The outlook is very solid. Just cover it quickly. Alexandra Koefoed will go more in detail. We have Brave Tern, which are in between projects in Taiwan. She's under class renewal in Singapore, and she will leave the yard next week, expectations.
Bold Tern, the main program with the new crane and the conversion of the vessel to be ready for the new and larger turbines. She's now estimated to be completed with some minor delays, but still estimated now to be completed within the quarter, which is a major achievement, and you'll see some of the dimensions of that project later in the presentation, and also at budget. Very important to underscore all these programs are at budget.
Blue Tern left the yard in Denmark mid February and very good. Went straight into a new contract in German waters, the Kaskasi contract that's led to the utilization of 16%, which was budgeted much lower. Also on Fred. Olsen Windcarrier adding significant to the backlog. The backlog at year-end was slightly above NOK 300 million.
The backlog now stands at NOK 540 million due to, among others, a record high contract that Alexandra will say a little bit more about during her presentation. Global Wind Service operated in line with expectations. A very solid execution quarter in the wind service, with now all the three major assets being ready for entering the significant backlog.
Then, Cruise financially very weak, NOK 246 million negative. But operationally a strong quarter, where Cruise Lines have managed to keep the two cruise ships in the waters during the Omicron, and has done that without compromising any health and safety issues, and keep them now ready for the high season that starts now in the summer.
Balmoral coming out of yard now and entering her first cruise to Canary's now as we speak. This is important because we see good demand for cruises now in 2022 and 2023 coming out of the COVID pandemic. On the other investments, not so much to report on the financial side, more or less in line with expectation.
Very importantly, we'll come back to that more in detail in the presentation, is that Fred. Olsen 1848 is now a company incorporated under directly under Bonheur under other investments, which then is focusing on technology development and innovation, especially within floating wind and solar, and that's where Sofie will cover more in detail in her presentation. Adding to our ecosystem of investments and activities within renewables, we also established Fred.
Olsen Investments, a small team, which are taking positions in renewable energy related companies with the aim of strengthening our whole ecosystem within renewables. Finally, on this slide, the parent company solvency remains strong, and also the cash position remains strong with close to NOK 2.1 billion in cash, coming back to how the cash is now distributed in the group, because that is quite important to understand the overall cash position.
On the consolidated figures, we already covered the revenues and the EBITDA. On depreciation and impairment, there's nothing special to report this quarter. On the net finance, it's a quite good result on net finance that we have unrealized gains on interest swap contracts and also some of our share portfolio.
Taxes, we're now starting to pay significant taxes in the UK related to the good results on the wind farms. The net results end up at NOK 430 million. Little bit more deep dive into revenues and EBITDA. We see on the revenue side, it's up by more than NOK 1.1 billion compared to last year, and then close to NOK 2.5 billion in the quarter.
The main driver is renewable energy, adding almost NOK 1 billion in revenues, but also now Cruise Lines coming back into the waters with close to NOK 200 million in, or a little bit more than NOK 200 million in revenues in the quarter. EBITDA, the main contributor to the improved EBITDA is the renewable energy segment with an improvement of close to NOK 900 million.
We see Global Wind Service is down by NOK 79 million. We have quite high activity among others on the blade repair campaign in first quarter last year. While now we have all three vessels at yard or in clean contracts.
Cruise Lines, you can say the more we cruise, the more we lose. But you have to take into account that this quarter is a quarter with very high activity related to mobilizing, marketing and also managing the whole Omicron situation.
I think we have been much worse off now entering into the high season if we hadn't taken these costs in the first quarter and having the full fleet ready for the high season. All in all, a very good EBITDA, NOK 926 million.
On the group capitalization, I will start with the policies because they cannot be reiterated too many times. They're unchanged from last quarter. We have the three sub-bullet points on the top there, which are very important to us. First of all, that the parent should have a strong financial position with conservative leverage and a solid liquidity position.
Second one is that we have some subsidiaries now, especially within the renewable energy area, which have high growth and are very capital intensive. They are now being tasked, and we're supporting them heavily from Fred. Olsen & Co., to find the correct and best external capital sources to fuel that growth and considering a broad set of equity options.
The third bullet point is that the subsidiaries are to optimize their own funding without any recourse back to Bonheur, and also looking at the risks and the cost of capital for each segment. I think we walk as we talk here.
If you see the numbers at the bottom, we have the mother company's cash position plus everything Bonheur controls 100% and can access the cash freely is a cash position of NOK 2.9 billion by the end of first quarter, while external debt is NOK 3.3 billion . Almost unlevered.
On what everything Bonheur owns 70% or what Bonheur has in their own balance sheet. On the joint ventures on the top, it's quite important this quarter to look especially at the renewable energy, where we see by the end of first quarter an accumulated cash position of NOK 1 billion, a little bit more than NOK 1 billion.
You can say, "Why isn't that dividend up to renewable energy and then ultimately to Bonheur?" That is related to the bank agreements of the joint ventures, where the cash is paid out semi-annually. That is just a matter of timing how that cash will flow up to the owners of the joint ventures. I think that covers the numbers.
Ivar Brandvold. Co-CEO of Fred. Olsen Renewables.
Yeah. Good morning, everybody. I'll go through our, should we say some of the aspects of the, Fred. Olsen Renewables company and activities. This is an introduction to our portfolio, so to speak, that, you know, we have been in this business now for more than 25 years and have steadily grown a portfolio of wind parks, and are today operating 12 wind parks with a capacity of 788 megawatts.
We have had a very strong track record, as also Richard has alluded to, in terms of on-time, on-budget project, which is a proud legacy, I would say. Also, we have a pipeline of around 3.8 gigawatts of development projects.
I would say that our competence is that we cover the entire value chain, from early site investigation up until construction, operations, and also then, position optimization. The operations of the wind parks are going quite well, and we are trading around 97% availability on a yearly average basis throughout.
I would draw your attention to the bottom left graph where you show the production growth through the years, and just to point out that 2021 was really an odd year with a low production generally on all the wind farms except for Högaliden in Sweden, which produced above budget. 2021 was really affected by the wind and the low winds through the entire season.
In 2022, we expect to be more in a normal situation, and then also Högaliden is 100% operating, so that should reflect the results now going forward in 2022. I think it's fair to say that first quarter we are on track in terms of these assumptions.
The business model, as has been explained also on previous presentations, it covers the entire, should we say value chain, from early site investigation up until operation. As also been pointed out by Richard and also my colleague Anders that previously, there is also now a strong focus on new technologies, and we believe that offshore solar floating has a high potential and has a high focus in our early stage work.
As I mentioned, we have a development pipeline on 3.5 GW, and we are operating 788 MW. I'll make a comment then as to where we are now in terms of constructing new sites. In Northern Sweden, we just by the end of the year have finalized the Högaliden.
All the turbines have been installed and are now in operation, and there are some reinstatement work that will be undertaken in the spring after the snow has melted and the ground is stable, so to speak. For all practical purposes, Högaliden has now been completed. We embarked also on Fäbodliden II, which is an extension to the Fäbodliden site.
There we had to go into a re-consenting due to should we say a conflict with radio links in the area. Fäbodliden II has now been re-consented in April this year, and we're now looking at potential development of the Fäbodliden, construction of the Fäbodliden .
In Scotland, we have three project which have been consented over the last year, which are now in what we call the pre-construction phase. That is the Crystal Rig IV, it's the Windy Standard III, and the Brockloch Rig III , and it's Paul’s Hill II , which you can see on the map to the right here.
We are in a scope and specification definition phase just being completed in Q1, and are now embarking on further pre-construction activities, which is pre a final investment decision and then at a later stage. If you look at the top left graph, you will see the capacity factors and the generation. The capacity factor is generally how much we are able to utilize the wind farms, and that has been at a very high level in the first quarter, reflecting also the performance of the turbines and the wind.
You can also see that the production in all three areas, both Norway, Sweden, and Scotland, has been at high levels in the first quarter. If you then look at the lower slide, you will see the prices in our markets in this period.
It's a very distinct price regimes where there has been a high price, as you know in Europe in general and also in Southern Norway in this period, which is also linked to the interconnectivity between Southern Norway and the continent.
Whereas in Northern Sweden, there is a lower price regime, and that is related that there is a capacity constraints in terms of moving the electricity or power out of Northern Sweden. If you then look at what are the, shall we say, the main drivers for the prices generally in the market, in Europe and in U.K., it's very strongly linked to the gas prices and also to the CO2 pricing, which you can see to the top right.
When it comes to Nordic, it's also strongly linked to, particularly northern, areas. It's strongly linked also to the hydrologic, should we say, balance, and capacity. If you see the graph at the bottom, the right-hand side there at the bottom, you can see the capacity above or below normal.
We have been through a long period of overcapacity, then a period of low capacity, and now it's about neutral in terms of the balance in Scandinavia. There is a concern that because of the dry weather and relatively little snow, that there will be a pressure on the availability in terms of capacity hydrologically.
With the price situation on gas and the hydrologic balance, it's a strong market in terms of the power prices as we speak and also going into the next quarters. Then of course, we have the situation with the post-pandemic and Ukraine, which is affecting the markets as such, which is then on top of the general market parameters as I just mentioned. That should cover my part or the presentation, Anette.
Thank you, Ivar.
Thank you.
Next one is Lars Bender. He will join us on Teams. He is the CEO of Fred. Olsen Seawind.
Thank you very much, Anette. I hope you can all hear me. I will give an update on the highlights in Q1 for Fred. Olsen Seawind. If we go to the first slide. I will start with updating you on the project activities we have, starting out with the Codling project.
As a small recap, as before, I've mentioned the Codling wind farm. It is the largest project in Ireland offshore. It is also one of the largest in Europe, so a very important strategic project for us. It is a project we are developing in a joint venture together with EDF Renewables on a 50/50 basis.
The project is maturing more and more, and particularly in this quarter, we have been happy to see that the legislation is progressing according to the timeline set out by the government. More specifically, the Marine Area Consent application framework has been progressed. In addition to that, the TSO and EirGrid have progressed on grid application regime.
Both of these things naturally means that the offshore wind regime in general is on track, and it also means that the timeline for the CFD auction, which we expect to be in 2022 or 2023, is still on track. Very positive that we see the government actually delivering on the commitments they've given to the market and to the developers.
The third point, which is important about Ireland in this quarter, is that we do see the Irish market developing into a long-term market. Earlier, it has been mostly around the first projects, the phase I projects, which we are a part of with Codling. We now see the Irish government opening up for a phase II set of projects, a phase II auction, but also an enduring regime, which means that the Irish market will be a long-term offshore wind market.
That is naturally very positive for us in Fred. Olsen Seawind. We have a very solid position with the Codling wind project. We are the largest phase I project, so it will be natural for us to look at Ireland as a long-term market, leveraging the position we already have with the Codling project. Next slide, please.
If we then turn to Scotland, it's been another hectic quarter. We have signed the ScotWind auction lease agreement. That is a very important and positive milestone. We look back at several years of work preparing a ScotWind application, succeeding in the competition, and now it's finally signed. That is an important milestone and of course marks that we now have several projects in development where we have security and exclusivity around the development.
As I've mentioned before, the project is a 800 MW project or 798. It is developed in a 50/50 joint venture together with Vattenfall. We have an integrated team across the two companies. Besides the signing of the agreement in this quarter, it's important also to note that the development activities are speeding rapidly up.
We have the integrated team starting to work together. We are, of course, aiming to develop this project in a very fast and swift manner. The potential of this project is becoming one of the first commercial scale floating projects. Overall positive quarter on this. We are looking forward to develop the project together with Vattenfall.
Next slide, please. If we then turn to Norway, where we, as we have mentioned before, have established a partnership together with Ørsted and Hafslund Eco. It is a long-term partnership, so not only a partnership around the current leasing rounds, but also the future Norwegian market. The reason for that is, was and still is that we have a very good projection on the Norwegian market. We have a long-term belief in the Norwegian market.
There is favorable wind conditions. There's a really long coastline, so there's a huge potential for offshore wind in Norway. Currently, the team is focusing on the upcoming lease rounds both on Sørlige Nordsjø II and also Utsira Nord. We have around 25 people across the three companies working with this.
They are working with everything from constraints analysis to business case analysis, but also supply chain development. In this quarter, we made a further step on the supply chain development. We entered into a partnership with Rosenberg, a well-known Norwegian yard in Stavanger with a long track record both in shipbuilding and in oil and gas.
The reason for this partnership is that we want to be part of developing a supply chain in Norway, but we also want to be part of making the right solutions for Norway. It is important that when we develop these projects in Norway, that we develop sustainable, competitive, supply chains, which are not only able to compete in the Norwegian market, but also internationally.
That is part of the purpose to look at such solutions together with Rosenberg. A positive partnership, and something we'll be working on going forward. Next slide, please.
If we then look a bit to the future, but before doing that, maybe dwelling a bit on where we are, because we do now have Codling Wind Park in very mature development stage, getting ready for a CFD auction later this year or early next year.
We have secured exclusive rights over the Muir Mhòr site in Scotland. We currently hold a portfolio of 2.3 GW of offshore wind in partnerships. I think that is a very solid platform as an offshore wind developer. It gives us the substance to build further from that. That is also our ambition and intention. From that platform, we will of course look to develop sites and secure exclusive rights in Norway.
We will look at developing from our position in Ireland, looking at further sites than the Codling Wind Farm. That's a very natural step, as I mentioned before, given the position we have in Ireland. In addition to that, we also wanna use the platform we have, the knowledge we have to go into new markets. We see, of course, offshore wind from various governments across the world getting a lot of attention.
There's a lot of interest in developing offshore wind, and for us as a developer, that is very positive. The knowledge we have and the history we have of developing wind onshore, but also offshore, gives us a good position to go into such countries. The potential is definitely there. We also see that we are able to source opportunities at a good level.
Also on a future pipeline, we have a quite positive outlook. To recap the quarter, in three key points. Point one, the signature is now done for the ScotWind agreement, and we secured that site. Second part, the Marine Area Consent legislation and the grid system is progressing in Ireland, which is very positive for our Codling project.
The third, the outlook for securing new sites and opportunities, is very positive. Overall a good quarter for Fred. Olsen Seawind. With that, back to you, Anette.
Thank you, Lars. Richard, a few words before we continue.
Yeah. I think what we're going to do now is present the Fred. Olsen 1848, but 1848, sorry for the Norwegian. Before we do that, maybe we should dwell a little bit where Fred. Olsen 1848 fits in.
This slide we have developed here, I don't think we have shown this in this audience before, but it's a slide that I think gives a very good overview of the position and the ecosystem that has been built up now over the last 25 years and where the new companies fit into this. In the total system now, we have more than 2,400 employees working with renewables and activities in more than 40 countries.
We have very strong positions, both directly in the renewables, where we develop wind farms and solar farms to own and produce electricity. But on the service side, we have very strong companies taking world leading positions within their fields. There we have covered before in the midsection. Then we have the technology innovation, where we have added a few initiatives recently.
Building on what Lars said, the formation of Fred. Olsen Seawind under renewables, where we now see that floating wind will be a big part of the energy solution going forward, and where we see that Fred. Olsen Seawind can be well-positioned. Also with the addition of what Ivar covered, that over the last few years they've worked a lot on floating solar in harsh weather conditions.
Renewables have taken real positions in floating solar and floating offshore wind. That leads us to the technology and innovation part where we a while ago made a strategic choice to gather all the initiatives we have on the technology front relating to floating wind and floating solar in a new technology and innovation company called Fred. Olsen 1848.
That fits very well into both the support of what we're trying to achieve in Fred. Olsen Renewables and Fred. Olsen Seawind, but not least that we see a strong commercial potential externally for the activities in Fred. Olsen 1848. I thought it was good for the audience to see where now what Sofie is going to present, where it fits in. With no further ado, I give the word to Sofie.
Thank you, Richard. Fred. Olsen 1848 is a newly established technology and innovation company, and I wanted to start out by showing you this picture, which is one of the technologies we are developing, the Brunel foundation in the Oslof jord. What is quite striking about the picture is that the height from the bottom of the foundation and up to the nacelle where the wings are fastened, that's 164 meters.
In comparison, the Oslo Plaza, which is one of the tall buildings in the back, is actually 111 meters. It just shows how large these structures are and why there is a big fuss about getting governments to put frameworks in place, et cetera, for these industries to take off.
We are a newly established innovation and technology company, and we say that we're dedicated to develop tomorrow's sustainable energy solutions. Actually, we have been working on these solutions for quite a long time, and now, as Richard said, it's put into a separate company to put more focus on them and to be able to commercialize them in a better way. We are a good environment of engineering and maritime people with long experience.
What we're working on is to try to solve the industry challenges within both floating wind and floating solar. As you see from the right here, at the moment, that is linked to fabrication, it's linked to assembly, integration or installation, and also operation and maintenance, which is one of the large challenges in these fields. Some wonder why the name Fred. Olsen 1848, and actually that stems from the year that the Fred. Olsen ship owning companies were formed in 1848.
We like to say that we've been in the forefront with all renewable or all industry shifts since then. We've went from sailing ships to steam to motorized vessels. We've been in shipyards, in aviation, in tankers, in oil and gas, and then in the early 90s, entered renewable energy again.
We would like to say that we want to continue to stay in the forefront, and that's what Fred. Olsen 1848 is all about, and that's why we have this name. Thank you. We have a vision and a mission, and that is that we want to develop tomorrow's energy technologies.
We're creating a really innovative and creative environment to make this happen and trying to inspire our employees as well. One of the technologies that I will present to you today is the Mobile Port Solution, which is solving many of the critical infrastructure constraints within floating wind. It is a mobile installation solution for floating wind turbines.
As you see from the picture, it centers around a jack-up vessel and a North Sea barge, which they together form a mobile port. Then you have feeder vessels coming in with the different components and installing then the turbine. What this solution does is that it frees up land and space for other activities within floating wind.
For example, the assembly of these huge foundation structures so that you can actually increase the amount of floating wind activity and local content in the area. As you all know, the supply chain is highly under pressure at the moment, especially as the industry is building up. We think this is a very good solution for this phase that we're now going into, especially.
The Mobile Port Solution, it builds on proven and safe methods from bottom-fixed offshore wind, which we call they're ready to go, and you can just utilize them in floating wind. It's important to say also that this is done in a sheltered area, so it's not a lot of waves and other things affecting the installation. It can be done for all, or it can work on all semi-submersible foundations.
Furthermore, it has local benefit. You can choose the level of local footprint that you want because you can add the number of local wind technicians, tugboat anchoring, mooring, and other to adjust that because local footprint is quite important in these projects.
This solution was an integral part of Fred. Olsen Seawind's supply chain development statement for the Muir Mhòr project that Lars has talked about in Scotland, where they won the site. We had a very good collaboration about that.
Furthermore, we see that it's supported by the port of Cromarty Firth, which is on the east coast of Scotland. It brings a lot of benefits to local parties, and we see that that is also recognized. The second technology that I wanted to introduce today is the Brunel Floating Foundation.
This is a semi-submersible structure that we are developing. It's designed for harsh North Sea conditions, and it has a modular design based on the steel tubulars, as you see on this exploded view picture. Those are the same steel tubulars that are used for monopiles and wind towers today. It has a turret in front, and the structure is weathervaning around this turret.
That has a lot of advantages, and it also has a passive ballast system. The philosophy with Brunel has all the way been to utilize these modular building blocks of tubulars. They already have an existing global supply chain, and this makes it very suitable for serial and mass production, which we believe is one of the key challenges and constraints within floating wind.
Secondly, we're building on existing and proven technology, but we're taking it to a new level and deploying it in floating winds. This is a very good point of time to launch Brunel because we recently just received the statement of feasibility from DNV, which is sort of a stamp that the technology works. We've also performed significant tank tests and lab tests in SINTEF Ocean in Trondheim.
A bit more about the advantages of Brunel. As mentioned, it has a global sort of outreach of manufacturers that can produce these tubulars, as you see on this map. These fabrication facilities are now adjusted to fit the current monopiles and towers with eight-meter diameter. Once the turbine grows, the facilities will need to be changed.
The existing diameters, that's what we need for Brunel, so we can actually extend the lifetime of these facilities. Furthermore, Brunel can be deployed all around the globe, as you see from the bottom map here. We can put Brunel in all the green and yellow areas. It's very easy to scale.
We can do that by just adjusting the size of the areas where the red rings are on the other picture here. Brunel also has a low draft, so we can get it easily in and out of port. Furthermore, we have a solution for operation and maintenance of Brunel, which involves changing main components at site and not towing it into shore, which is quite costly.
I think I wanted to show a film which we have produced so that you can get a bit more insight into the foundation. Thank you. You can start the movie now.
Building on experience since 1848 as industry leader in the maritime and energy sector, we continue to develop tomorrow's energy technologies to shape a sustainable future. That is why we are proud to introduce Brunel, a pioneering floating foundation designed for the next generation of wind turbines to unlock the potential of floating offshore wind. Fred. Olsen 1848 is determined to solve the main challenges within floating wind, industrialization, and deployment at scale.
With Brunel's semi-submersible structure and modular design based on steel tubulars, also used for monopiles and wind towers, we can manufacture and assemble foundations at a volume needed for the floating giga parks. The modular design enables us to leverage the existing supply chain and help create a sustainable industry. Brunel utilizes proven technologies and is built as an integrated structure from nacelle to mooring. This reduces interfaces and simplifies design responsibilities.
Featuring a single point mooring through a turret, the weather vaning function allows for a passive ballast system and a structure optimized towards the wind thrust force. Brunel is designed with a radical focus on serial and automated mass production and offers several assembly methods that are flexible and adjusted to fit specific projects and customer needs to optimize the use of local port infrastructure.
This results in the most efficient use of resources, low LCOE, and competitive pricing. Brunel, taking floating offshore wind into the industrial era.
Very good. Thank you, Sofie. Not often we have the chance to show a small video, so that was very nice. Alexandra Koefoed is next, CEO of Fred. Olsen Windcarrier.
Thank you. Good morning, everybody. Just firstly, very, very briefly, for those of you who might not know Fred. Olsen Windcarrier, we are a leading turbine installation and service contractor with a global track record and strategy.
Our strength is a solid organization. As you see on the screen, we have a solid track record. We have, like, executed projects in all three continents, the majority clearly in Europe, with now 60 projects completed, but also projects executed in Asia and the U.S., and w e have a very solid backlog built on the three vessels we have on the water today.
Very brief introduction to Fred. Olsen Windcarrier. The activity in the quarter that Richard already mentioned, it has been high activity, but not on the project generating side, but high activity with three vessels in the yard.
Bold Tern, we've talked about that previously. She is doing a major conversion and upgrade, which I'll come back to, but that's an upgrade that will take her into the future with a new crane and suitable for new generation turbines. Brave Tern, she's been between projects, but we've also spent the time on the 10-year class renewal.
Blue Tern, she finished her 10-year class renewal and some project upgrades and went straight on contract. Clearly that impacts the revenue and EBITDA for the quarter because we have only had one vessel working 16%, so that's total utilization on the quarter. As mentioned, we have a very solid outlook for the next three quarters in 2022, which I'll come back to when we look at the backlog.
The upgrade program is progressing, so we are preparing for the future and new turbines coming to market. Bold Tern, she is the first vessel. She is currently in Singapore, and the picture you see on the screen is the new crane being installed on Bold Tern. I think last time we had a presentation, we were waiting for her to leave China, and we are very happy that we actually did get her out before we had sort of the lockdowns that we now see.
The crane is now on the vessel. It is commissioning of the crane remaining, but we do expect her to leave yard in Q2, as previously communicated at budget. In terms of upgrades on Brave Tern, we do have the crane on order, and the selection of upgrade and conversion yard is initiated.
Blue Tern, we are planning an upgrade for 2025, but still optimizing the concept. We are still undertaking planning activities for a potential new build. I've saved the best for last in terms of the developments in the quarter, and that's related to the backlog, which has significantly improved in this quarter. Firstly, we have now announced our first contract in France, but this contract was actually signed in 2020.
It's been sort of an undisclosed European contract for two years, more than two years now. I think this exemplifies how we are sometimes limited to what we can say by our clients with various motivations for that. I can be open enough to say it's not a coincidence that it's announced days after the French election.
Secondly, the backlog we have previously communicated that has included two reservation agreements linked to backlog in 2022 and 2023. In the last quarter, both contracts are now converted into firm contracts. What you're now seeing as dark blue on the screen, firm contracts. Lastly, we have secured a large new strategic contract with a firm revenue of approximately EUR 150 million.
That is by far the largest contract signed in Fred. Olsen Windcarrier history. It has a significant sub-supplier proportion to it. I think that's prudent to mention. It will be executed with a vessel with a new crane, fully converted for the future, and it is linked to next generation turbines. We will say more about this contract once our client actually allows us to.
We would like to tell the market about this, but there are reasons why we can't. I think that concludes where we are, but we are working on our strategy to be a leading global turbine installation and service provider in a global market, seeing the same good outlook as Lars.
Thank you. Richard.
Yeah, thank you. That brings us to Global Wind Service, which, likewise, as Fred. Olsen Windcarrier, which Alexandra said, is a global leading company within offshore wind installation. Global Wind Service has the same position on the manpower, being number one in offshore wind power installation. Activity level in Global Wind Service is quite high this quarter.
At the end of the quarter, it's 1,431 employees in the company executing large projects both in Europe, but more recently, the last three to four years, we also built up a very strong position in the U.S. and executing some large onshore projects in the U.S. and also being positioned for the significant U.S. offshore market that we expect now to come to fruition over the next years.
A little bit of challenge in the industry and maybe particular for Global Wind Service, which are so dependent on the employees, is that the lack of manpower in the industry.
We're very happy that we have focused on training and have established a training center in Szczecin in Poland for Global Wind Service to be able to train technicians ourselves. As we see, this is becoming more and more of a challenge for the installation industry.
Over to Cruise. I think we are very proud of what Cruise Lines have achieved in this quarter. It's been now more than two years since we had the Omicron putting all four cruise vessels into lay-up.
The Cruise Lines have undergone tremendous changes in these two years while selling two ships and also buying two new ships from Carnival, and then gradually phasing the new fleet into the waters and have done that successfully within very difficult operating conditions.
Borealis and Bolette, they came into the waters last year and were immediately hit with the Omicron outbreak in the first quarter, where we had expected them to have a more smooth operation than they had with Omicron. Having said that, the Cruise Lines' crew and management have managed during the quarter to cater for this Omicron outbreak in a very good way with no health and safety issues.
Had to cancel a few cruises, but also were able to contain this in a very good way on the ships. They are now ready for coming out of this. They are now ready for the high season cruising and ticket sales are good demand for both these vessels. Also very importantly is the third vessel, Balmoral, which is the largest one from the old fleet and a very historically been a very good earner.
She's now coming back cruising early May and been successfully taken out of yard and had a trial cruise just now and starting the first real cruise down to the Canary's as we speak. That looks good.
I think the way the crew and management in the Cruise Lines have managed this period and also now bringing all three three cruise ships in a good shape back into cruising when they now hopefully then hit a much better, cruising environment for the next year, and finally can start bringing Cruise Lines into into black figures.
That was the last slide covering the segments. Again, reiterating, very, before we go to Q&A, a good quarter financially, a good quarter strategically, maybe especially around Seawind and Fred. Olsen 1848, and on the execution side, on the Cruise Lines and Global Wind Service. With that, I think we can open up for questions.
Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, please press star one if you wish to ask a question. The first question comes from the line of Anders Rosenlund from SEB. Please go ahead.
Thank you. It's Anders here. I presume you are spending quite some money on the development efforts in the renewable energy segment. Can you comment on how much that represents of annual spending? As a follow-up, is development spending expensed or capitalized in your accounts?
I think, Anders, I can lead you then to the just recently announced annual report. There you will under Fred. Olsen Renewables and the notes there see how much we capitalize our development spending. It's specified there. I don't remember the figure exactly now, but I think it's between NOK 400 million and NOK 500 million on the onshore wind and floating solar side being built up over the years.
We typically capitalize the development cost on the project while the management manpower we expense. When it comes to the Seawind on the offshore wind, the main expense up to now has been cabling. That is also capitalized, but that is reported under associated companies.
You have to look in the notes and look at how much is capitalized on cabling under associated companies, and then you'll find the number there. I think when you take those two numbers into account, they have covered most of your question.
Okay. Thank you.
Thank you. Next question comes from the line of John Olaisen from ABG. Please go ahead.
Hey, good morning, everybody. I have a couple questions to Lars Bender. I wonder if you could elaborate a little bit to us about the auction round in Norway. When do you expect it to take place, and what should we expect from the outside? I didn't like milestones announcements from the government.
I guess the next step is for the government to discuss this, but would that be done over the summer, before the summer or after the summer? A little bit on details what the process is on auction round in Norway, please.
Yeah. I can try to give a view on that. I think it will be speculative in any case. I think everybody is following this very closely. All the developers are definitely following it. We are, of course, as a developer in our consortium, offering any knowledge and insight we can, both to OED and others. I think it's fair to say that it has been delayed a bit compared to the original plan set out by OED.
From our perspective, that's probably not unusual in a new market, so we are quite comfortable with that. Our feeling is that OED is progressing this as fast as they can, but also taking into consideration that they need to get it right.
The worst thing that can happen for the Norwegian market is that we don't get the first auction system right, and that causes further delay to the market. The approach they are taking, I think we support that. Naturally, as a developer, we want to see things progress as fast as possible, but we also need to respect that there is a process.
To be a bit more specific, I think we see it as unlikely that there will be auctions this year. If there is auctions this year, it will be end year, but more likely, early next year. That's what we are planning for. We have deployed a team. We are also ready if it comes before that, but realistically end this year or early next year. Does that answer your question?
Yeah, very good. It's a little bit of insight on that. Similar in Ireland, the CFD seems to be delayed, continuing to be delayed. What are the milestones for the CFD in Scotland? What is the process? If you could elaborate a little bit on the process there as well, please. Be great.
Yeah.
Just John, you said Scotland at the end. Are you meaning Ireland?
Sorry, I meant Ireland. Sorry. Yeah.
Yeah. Right.
Sorry.
Yeah. I don't think, compared to our expectations, you will see that we've guided roughly timeline-wise on the same timeline for quite a while, which is end this year or next year on the CFD. If you go some years back, I would agree with you.
Of course, there's been potentially some delay. When we look at it in the last year or year and a half, the government has actually managed to keep track with the schedule they've set out. Our expectation have for a while been either late this year or early next year for the CFD auction.
as I said in my presentation, what is positive now is that we see the legislation and the processes that need to be in place before the CFD auction, that the government is delivering on that. That is the grid, and that is the Maritime Area Consent Legislation.
Okay, thanks. My final question is regarding Phil from Windcarrier. I just wonder we're seeing more supply coming into the market. I just wonder if you could give us an update on your appetite to build a new build after the. Some of your competition has announced new builds and also the failed IPO. If you could elaborate a little bit on the appetite for more turbine installation vessels, please.
As I mentioned in the presentation, we are still working on planning on a new build. We still see a very positive market, particularly sort of second half of the decade in front of us. There is still a supply-demand gap, and we are still working towards that.
Fair enough. Okay. Thank you. Thank you, everybody. That was all from me. Thank you.
Thank you. Next question comes from the line of Nikolai Ødegaard from Clarksons Platou Securities. Please go ahead.
Good morning, everyone. It's Nikolai here. My first question relates to the renewable energy segment, 'cause your wind farms are now currently benefiting, you know, really strongly from the elevated power prices, both within the U.K. and Norway. I'm just wondering, is it possible to lock in prices at these elevated levels for longer period of time? And if so, is that something you are currently considering?
I think we all see present power prices. I think everybody in the market are, of course, focused on having a good view on what is going to be the market going forward. When it comes to locking in the power prices, we have done some smaller contracts.
But, presently, when it comes to doing more and how we deal with it, I think this is something that we continually look at and evaluate. If you look back, it used to be the longer PPAs that was the norm. Now it's very much a market situation. So far we are fairly happy that we have the market prices and that we are able to benefit from them.
Okay. Thank you. One more question from me if that's okay. Returning to Cruise, 'cause you mentioned that you were seeing good demand for cruises both remaining in 2022 and 2023. Can you comment on some details on where we could expect the segment to break even and turn back to positive earnings trajectory?
Yeah, I mean, that depends now a lot on all the high season this summer, how that will pan out. Normally, if you look back in history, cruise lines have their earnings generation in the second and the third quarter, while the shoulder quarters, quarter one and quarter four has been more kind of break-even, challenging quarter also when all four ships are in operations.
It depends how well we are able to now fill up the three vessels during the summer and autumn and at what prices. What we see so far is solid bookings and at good per diems, but it's still a way to go.
Yeah. The bunker price is not helpful at the moment.
Yeah, that's a very good reminder, Anette, that we see of course that with the $100 plus fuel cost, it's more challenging.
Okay. Got it. Thank you. That was it for me today.
Thank you. Next question comes from the line of Emma Pinchbeck from Energy Watch. Please go ahead.
Thank you, and good morning. I was wondering, how do you see the future for Universal Foundation?
Universal Foundation has been through a difficult period. Certainly we had the two Mono Buckets on a demonstration project, and they were aborted when put into water. Presently a lot of headwind and how we take it forward, we need to really look at that. I think at the moment this is where we are.
Okay. Thank you. That was all for me.
Thank you. There are no more questions at this time. I would like to hand the conference back over to the speakers for final remarks.
I don't know if we have more than we have said already, but thank you very much, everybody. I hope you have had a good run-through of the different companies. Certainly, when it comes to the ecosystem in the renewable energy segment, very interesting times, both challenges but also lots of opportunities. Cruise, we have a way to go, but at the moment, very much getting the ships operating in a normal way is the focus. Thank you.