Good morning and welcome to the quarter two financial presentation for DOF. We will start with the presentation, and after the presentation, we open for the Q&A session. Questions must be asked in the Q&A part of the webcast system. We need questions in writing. We also have a few questions received prior to the webcast, which we will answer in the session after the presentation. Once again, welcome, and we start with the operational or with the highlights in the quarter, please. First, the financial highlights in quarter two. As you see, we had an operating revenue of NOK 2.5 billion, up NOK 500 million compared to same quarter last year.
Net gain on sale of assets, NOK 32 million compared to NOK 31 million, giving us an EBITDA of NOK 848 million compared to NOK 680 million. Depreciations NOK 346 million, leaving then NOK 501 million in EBIT. As you see, we have high unrealized currency losses in the quarter due to strengthening of U.S. Dollar towards NOK and Brazilian reals. Leaving a profit or loss, you could say, for the quarter at -NOK 1.3 billion. As a consequence of the strengthening of U.S. Dollar, the debt in NOK has increased, so we have a net debt now of close to NOK 22 billion. The equity is negative, and equity ratio -7%. A few words on the financial debt restructuring. We will come back to that later in the presentation.
As you all know, we signed a restructuring agreement with the secured lenders and the group, or bondholders representing 40% of total outstanding bonds. The main terms that has been agreed was conversion of approx NOK 6 billion in debt to equity across all major silos within the group. The DOF joint venture excluded. The holders of the shares will receive 4% of the shares after the conversion. I'll leave it like that. We will, as I said, come back to the restructuring later in the presentation. When we look at the operational highlights, the average utilization of the fleet was 85%. That's up from 80% last year. We have seen a good performance in the Atlantic and Brazil sub-regions.
We have seen softer performance in the U.S. and North America and Asian Pacific region. Stable performance from the pipelayer fleet in the joint venture with TechnipFMC. In Brazil, in particular, we have had high costs also in quarter two from COVID, from the outbreak we had on. We had 10, 11 boats hit by COVID outbreak in quarter one, and cost has also been in the P&L in quarter two. We see high tender activity globally, and we have also seen an improved North Sea spot market for OSVs. We have to mention that we have had very little exposure to the spot market in quarter two. The fleet, 55 vessels, 47 owned, two vessels sold in the quarter.
By the end of the quarter, the last of our lay-up boats left the lay-up and now trading the North Sea spot market. It was an older PSV that left and was the last boat out to lay-up. We have built backlog in quarter two. I think we have around NOK 4.5 billion in new awards in quarter two. The backlog now stands at NOK 19 billion by the end of the quarter. For quarter three this year, we have secured NOK 2.5 billion in backlog. As you saw from the previous page, we had a turnover in quarter two at NOK 2.5 billion. The backlog secured for quarter three is the same as the turnover in quarter two.
For the remainder of the year, we have NOK 4.5 billion, meaning we have NOK 2 billion in backlog for quarter four. After the balance date or just earlier this week, we sent a press release that we have been awarded a large contract in Brazil with a total of NOK 253 million that will then be added to the backlog. Meaning that at the time we're talking, we have around NOK 21 billion in backlog in the group. The table below shows how that is distributed. As we don't mention 2022 as already mentioned, but then we see for 2023 we have approximately in total between six close to NOK 6.7 billion in backlog then for 2023. A good foundation for 2023.
Of course, hopefully we're gonna build a bit more backlog before we start 2023. If you look at the next page, please. We have a slide here showing some of the selected contracts and projects we have won lately. On the left-hand side is Hywind Tampen, which we have done all the marine operations, meaning you know, including the project management and engineering. We have done you know, the pre-lay mooring of all the anchor systems and then tow out and hookup of the floating turbines for Equinor on that project. That has been going well and of course it's a very important reference project for future work within the floating wind market.
We extended the off Africa with TechnipFMC at lower rates now full month till 2024. We also did five long-term contracts in Brazil for Brazilian-owned and flagged anchor handlers. Total estimated revenue over the firm period is $330 million.
We did an extension or a new contract in Brazil on what we call a PIDF project which is IRM project, inspection project, for Petrobras in Brazil, where we deliver the full scope project management, small part of engineering, and then the offshore scope, and the total value of that contract over $100 million and we execute that with the prime vessels Skandi Carla and Geoholm, and then we will use another boat for a part of the project. Very happy with that extension and it's been a good first PIDF number one has been a very good project for us.
Finally, we just released a contract for 3 RSVs which is also working in the IRM market in Brazil for Petrobras. Today have been extended. The existing contract extended towards end of the year, and then 2 of the boats will commence a new 3-year contract in January, and the last boat, Skandi Commander, then will commence. We extended to November, then she will work on the PIDF until August 2023, and then they start the new 3-year contract. Very happy with that then, and also we see a decent rate increase on the new contract compared to the existing contract. We turn the page, and this slide is well-known, and you have seen it before.
It shows, you know, some key info on DOF operating from six continents, 20 offices globally in all the main oil and gas markets. 55 vessels, as mentioned before, head office in Norway and around 4,000 employees. 29 subsea vessels, 15 anchor handlers, and that is large anchor handlers and of course a lot of them are equipped with ROVs and of course do quite a bit of work also in the subsea market. 11 PSVs, and then we have one of the world's largest fleet of ROVs and also AUVs. So in total we have 73 ROVs and AUVs. We have two AUVs.
Interesting enough, one of the AUVs will on the new RSV contract work permanently on one of the boats for the entire three-year contract. This is the first time we actually receive such a long-term contract for an AUV. We find that very encouraging and look forward to that. If you look at what we do globally, we you know in the North Sea, we mainly you know the PSV fleet mainly operates in the North Sea.
You know, the anchor handling fleet works in the North Sea and mainly in Brazil and then globally, we do what you can call subsea services and also some service within renewables globally, some all the way from a lot of IRM contracts, but also subsea construction and then gradually, you know, more SURF work globally. I leave it like that page. I don't want to spend too much time on this, but of course, this is very important for us, and we focus a lot on ESG globally, and of course, you can see on the bottom or on the right-hand side here, you'll see we get recognition globally for our work in this space.
For instance, Financial Times has nominated us as the European Climate Leaders 2022, where we have a very high standing with Amnesty International and so on. We are proud of the results we achieve in that space. Please, next page. I leave it to our CFO, Hilde Drønen, to do the financial part of the presentation.
Thank you. I will start on the restructuring. First, with the background, the key principle for the restructuring, and then a summary of what it includes. As you can see here, the background is that the DOF Group's financial position is not sustainable, and the equity is lost. That's why we have negotiated with the group's creditors since June 2020, meaning that we have had standstill arrangement with no payments of interest and installments since June 2020. The target has of course been to agree a restructuring solution and to allow the group to continue as going concern.
The relevant debt is in DOF ASA, the holding company, in the subsidiaries DOF Rederi, Norskan Offshore Ltda., and the debt in DOF Subsea Group, both secured and unsecured, but excluding the debt in the DOFCON JV. All these groups has not served normal debt service since June 2020, and it now totals approximately NOK 21 billion. It's also worth mentioning that the vast majority of the NOK 21 billion is based on standstill agreement with no payments of installment and interest. The majority of debt will fall due in the absence of the restructuring. Even though the markets have improved since June 2020, we also see it, this quarter, the group is still not in position to service its debt without a significant conversion of debt to equity.
I will go a bit to the key principles of the restructuring. Next slide, please. What is the most important for the restructuring is to keep the group as one group, and that is the best way to protect and maximize values. That is something that the group's creditor have agreed upon. Of course, ensuring a sufficient runway for the group to focus on the operation and improve its market position. One important key principle for the restructuring has also been equal treatment of all the shareholders in DOF ASA. The DOF Subsea Group represent the majority of the asset value and the EBITDA generation of the DOF Group. You will see that further down in the presentation.
Just to exemplify it, the DOF Subsea has represented, for several quarters, more than 70% of the group's EBITDA. A conversion of the bond debt, which is in DOF Subsea and not in DOF ASA, would result that DOF ASA will lose its ownership in DOF Subsea. Hence, an agreement with DOF Subsea bondholders is required to protect DOF ASA's ownership of DOF Subsea and to continue as going concern. If we then go to next and the main transactions, it's described in the press release and in the presentation attached to the press release. I will just summarize the main transaction, and that is that approximately NOK 2.5 billion of the DOF Subsea bond will be converted into equity in DOF ASA.
The remaining debt of NOK 675 million will stay in DOF Subsea with PIK interest and where the margin has been reduced to 2% from approximately 10%. Approximately NOK 3.2 billion of the DOF Rederi and DOF ASA debt will be converted into equity in DOF ASA. Bear in mind that DOF ASA is a guarantor for the total debt in DOF Rederi, as well as the total debt in Norskan Offshore. The DOF ASA guarantee portion of the Norskan Offshore debt will be reduced to approximately 70% of the debt outstanding. We have also agreed amendments to the Norskan's existing loan facility include softer amortization. Currently it is 25% and it will be reduced to 50% of normal amortization.
DOF Subsea will enter into a syndicated loan facility, the DOF Subsea Group, including soft interest and amortization terms, and the facility matures in January 2026. DOF Rederi will enter into a new fleet loan, including the same soft interest and soft amortization, and the fleet loan matures in January 2026. After the restructuring, the pro forma equity split will be 43% for the lenders, the secured lenders, 53% approximately, or approximately 43% for the existing lenders, approximately, 53% for the bondholders and 4% for the existing shareholders. We can summarize the numbers. Next, please. As shown in the highlights, the operational EBITDA for the group is NOK 848 versus NOK 680, and the average utilization is higher than same quarter last year.
The split is 84% in the PSV segment, 82% for the anchor handlers and 86% for the subsea. As you see in Q2 2021, 75% of the EBITDA in the group was from the DOF Subsea and 78% is the EBITDA from DOF Subsea this quarter. Just emphasizing again, DOF and continued ownership in DOF Subsea for DOF ASA is vital. Here you see the split NOK 648 million from the DOF Subsea and NOK 202 million from DOF Supply, which includes DOF Rederi and Norskan. Utilization 85% for Subsea and 84% for the supply respectively. The PSV fleet, we have sold 2 vessels. It's 2 old vessels and not of strategic importance for the group. We have reactivated the last vessel in layup.
The vessel is from Q3 operating in the spot market. We have seen improved utilization versus last year, but this part of the fleet has been little exposed to the North Sea spot market, meaning that the vessels has mostly been operating on firm contracts in the period. In the anchor handling segment, we have had stable operation in Brazil, but we have suffered from high operational costs, already explained due to COVID, a big COVID outbreak on 11 vessels in Q1 has unfortunately impacted the cost also in Q2. In addition, we have had some class renewals on 2 vessels, and we have started the mobilization on the new contracts within the anchor handling segment.
In the North Sea spot market, we have achieved good earnings and better performance compared to last quarter and also stable operation on the own vessels working in on a firm contract. By the end of the quarter, these vessels actually completed planned class renewal. In Subsea, already mentioned very good performance from Brazil and the Atlantic regions, and very high performance and utilization of the fleet in the North American, Asia regions. In the PLSV fleet, we have had good performance but reduced utilization due to mobilization for one vessel to a new contract that's Skandi Niterói, and she is currently operating on a new firm contract with Petrobras. If you go to the P&L.
Operating revenue of NOK 2.5 vs NOK 2 in Q1 last year, and an EBITDA of NOK 848 vs NOK 680. The thirty-two million in gain from sale of vessels represent the sale of the vessel, the two PSVs. We have also had achieved an improved operational result for this fleet compared to last year, even with fewer vessels. In the anchor handler, the operational result is in line with last year, but the margin is down due to high cost in Brazil. As already mentioned, improved operational result from the vessels in the North Sea.
The main reason for increased revenue is from the Subsea segment and especially our PIDF project in Brazil. Well, we had a high activity, but also in the Atlantic region and especially related to the Hywind Tampen project and other projects in the North Sea and also an FSV project in West Africa. Already mentioned stable operation from the PSV fleet. The depreciation is NOK 346 versus NOK 313 last year. No impairment this quarter. We have received updated broker estimates for our fleet, and they have slightly increased, and on average just below 2% for the entire fleet. The financial costs has increased versus last year, and this includes paid interest and also capitalized interest due to standstill arrangements.
The main loss this quarter is an unrealized loss of NOK 1.5 billion due to a significant strengthening of the U.S. dollar to NOK and BRL, which was also mentioned in our Q1 presentation. If you go to the segments, here you see the result for the three segments. The PSV, an operating result of NOK 53 versus NOK 12, and that includes the gain from sale of two vessels. On the Anchor Handler is NOK 122 and NOK 129. Here you see that the margins has been reduced due to high costs especially for the fleet in Brazil.
Looking at the Subsea, you can see that a significant increase in revenue from NOK 2 billion to NOK 1.6 billion, and that gives depreciation of NOK 673 versus NOK 539. The margin is in line of the previous year due to more project activity versus time charter activity. If you go to next. These are the DOF Subsea segment. DOF Subsea reports 2 segments, one for Subsea IMR project and one from long-term chartering. The long-term chartering segment includes the 7 PLSV and one diving vessel working on a long-term contract in South America.
If we start on the Subsea project, we have achieved revenue of close to NOK 1.5 billion and an EBITDA of NOK 300 million and a 20% in margin, where particularly two regions have performed. The backlog for this part of the business is NOK 6.5 billion by end of the quarter. It's close to 700 employees, and the number of employees in this segment has increased during the quarter due to increased activity. It includes 16 vessels in operation, of which two are hired in from external parties.
On the long- term, it's NOK 483 million in revenues, and with a 72% margin gives NOK 347 million in EBITDA, and the backlog is NOK 5.3 billion, and it represent eight vessels in operation in Q2. Next, please. If you look at the balance, and if you compare the balance from last quarter and this quarter, you can see that the long-term assets, meaning vessels and ROVs mainly, has increased. The main reason for that is strengthening U.S. dollar to NOK and BRL. The FX effect on the tangible assets is mainly close to NOK 1 billion.
It's depreciated by NOK 346 million, and we have there are CapEx and others, mainly class dockings and some conversion of NOK 244 million. The deferred taxes is mainly related to the DOFCON JV. That gives total current assets, non-current assets of NOK 19.5 billion versus 18.6. The receivables has increased from NOK 2.7 to NOK 3.1 and reflects a high activity in some of the regions. The cash is NOK 2.2, which is more or less the same or slightly lower than Q1, even though we have had standstill on interest and installments for the majority of the secured and unsecured debt.
On the equity, it's negative from NOK 780 to NOK 1.8 due to a weak result this quarter. The non-current interest-bearing debt mainly or only represent the DOFCON JV liabilities and a few leases in Subsea. The current portion of debt of close to NOK 21 billion represent the holding debt in DOF ASA of up to NOK 1.3 billion. It includes the DOF Subsea secured and unsecured debt of NOK 10.5 billion. It includes DOF Rederi secured debt of NOK 3.4 billion, and it includes Norskan secured debt of NOK 5.5 billion.
The reason, as already explained, why this is current is because we have negotiated a restructuring alternative for the group, and the group has not been able to service this debt with normal amortization. The majority of this debt is also under the standstill arrangement. If you go to next. On the cash flow. The cash flow achieved this quarter versus last quarter is NOK 671 versus NOK 395. The main reason for an improved cash flow is less working capital tied up in the quarter, which. The working capital tied up in Q2 2021 was significant. The interest paid is NOK 110, but that doesn't represent the actual cost.
The capitalized cost this quarter is approximately NOK 328 million, and that is due to the standstill agreements. Sale of the tangible assets are the sale of 2 PSVs. Purchase of tangible assets are mainly class dockings, but there are some cost- related to conversion due to new contracts. Payment of borrowing, borrowings are NOK 582 million, of which approximately NOK 100 million comes from the DOFCON JV. We have some minor debt service in Norskan, and we have some debt service in DOF Subsea, and that also include nothing of restricted cash on certain facilities. The sale of the vessels of six seventy-six million, the proceeds from the sale has gone to pay down the debt. The restricted cash by end of June is approximately NOK 180 million.
If you go to next. This is what we normally show, and here you see the quarterly EBITDA. It's of course very positive to see that the EBITDA performance is increasing. It's mainly an increased activity within project activity, where we have normally a lower margin than on the time charter activity. It's also important to see that the equity is now negative with NOK 1.8 billion, and the current debt has increased. The short-term debt has increased from NOK 4.6 billion to NOK 23 billion in total during these quarters. The net interest bearing debt of close to NOK 22 billion. If you go to next. These are the key financials, and here you can see that the revenue has increased.
The EBITDA, the last 12 months is slightly above NOK 3 billion, and the backlog, as reported, is approximately NOK 19 billion and does not include contracts awarded after balance sheet. I give the word to Mons.
Thank you, Hilde. A few slides on the market and then finally the outlook. I don't read all of this. It's just a few highlights that we expect both offshore CapEx and offshore OpEx to increase going forward. Then also in the wind market, wind turbines and substation also we expect an increase in 2022, but then be slower in 2023 and 2024 and then an uptick in 2025. Of course, the full renewable market is especially, you know, the fixed bottom fixed market is only. We are only a niche player in that in certain segments, so more relevant for us is the offshore floating market.
Of course, we expect that market to after 2025 become, you know, a more important part of the group's activities. As mentioned, we have been involved now on Hywind Tampen, which is so far the world's largest offshore floating wind farm. On the next page, it shows demand predicted by the offshore vessel report in quarter two. It shows expected demand in oil and gas and wind, and there of course we see. You know, we expected a growth both in oil and gas and in wind, comparing 2023 with 2022. On the next page, it's a split within the different vessel types, anchor handlers, PSVs and so on.
Also here we see a positive, expected positive trend on all vessel types comparing 2023 with 2022. We also see a dip, then comparing 2024 with 2023. On the next one, it's a few comments on the outlook and the outlook is focused now on the next quarter as we normally do. First, a bit on the markets and then finally some on the financial side. In the PSV market, of course, it's been a fairly strong few months in the summer with a strong market both in the U.K. and in Norway. What we have seen in the last few weeks is that the market, especially in the U.K. sector, has turned softer.
We expect a softer market in quarter three too compared to the strong market we saw in part of quarter two. On the anchor handling side, it's still high activity in Brazil. It was a good spot market during summer, especially in June, July. But what we see now is that the good market has been followed by a much softer market and of course, rate levels has fallen a lot. Last fixtures is below GBP 20,000 a day. We expect for quarter three a softer market and a more volatile market. We expect lower earnings from the spot exposed anchor handlers in the North Sea. On the subsea side, we have had high activity, as mentioned, in Brazil and at the Atlantic region.
We expect that to continue in quarter three. The activities we have had in the North American AP region have been mixed in first half. We do expect increased activity on our own operations in quarter three compared to first half. As mentioned, the group's backlog so far for quarter three is NOK 2.5 billion. As you all know, can remember, that's the same as the turnover we had in quarter two. It's a very high backlog for quarter three. For the last quarter, it's NOK 2 billion in backlog per today. You could say a very high backlog then for remainder of the year in the DOF Group.
Looking at what numbers we expect, we do expect that the operational EBITDA in quarter three to be in line or slightly better than what we saw in quarter two. Some final comments on the financials. As we all know, the restructuring agreement has been signed in June with the secured lenders and 40% of the bondholders. The restructuring, as we know, is necessary to secure a sufficient runway and a sustainable balance sheet for the group and is expected to be closed in quarter four. That was the last page of the presentation. We move to the Q&A session and we will start with some frequently asked questions we have received before the webcast.
As mentioned, questions can be asked in the webcast system. We will do them after we have done the pre-asked questions. I'll start with the first question we have got before the webcast then. That is, "How would an increase in book value of ships and book equity impact the restructuring?" Book values and book equity does not impact the restructuring. The restructuring is necessary because the group has and has had insufficient cash flow to service debt, and most of the debt will fall due absent the restructuring.
The group has total debt of approx. NOK 21 billion, excluding the DOF joint venture, of which the majority is past its stated maturity date and absent the restructuring must be repaid immediately. Question number 2: Can DOF refinance on ordinary market terms without the restructuring? It is not possible for the group to refinance approx. NOK 25 billion in bank or the bond market. Our existing debt has been sold at significant discounts to face value, leaving no rationale for banks or investors to buy new debt at full price. Under the restructuring, as Hilde has mentioned in the presentation, the reinstated debt will have better terms, you know, amended financial covenants, lower interest rate, 2% margin and lower amortization than market terms. New loans at market terms would require considerable new equity, which is unlikely available.
It's also worth mentioning that of course a lot of the banks that have financed this industry have communicated that they will no longer finance and enter into new loans in our industry. Moving to question number 3. We have a question: Why can we not revert to the 2019 restructuring proposal? The 2019 refinancing proposal was presented before the 2020 market downturn, and it also only covered DOF Subsea. It did not include DOF ASA, DOF Rederi or Norskan. Question, new question number 4: What support do you have for the restructuring agreement? The agreement is supported by, 1, the board of directors. 2, the largest shareholders, the largest shareholder Møgster Offshore and primary insiders representing approx 35% of the shares.
All secured lenders, banks and all bondholders involved in the negotiation, representing approximately 40% of all bonds. Question five: What will happen with a no in the EGM? In Norwegian, the extraordinary generalforsamling. The answer is, it is agreed with lenders that the board shall explore if there are any alternative realistic solutions available to avoid bankruptcy proceedings. The things stand, it is not considered likely that any such possible alternative will provide a better solution for shareholders than the agreement we have on the table. It is further likely that any alternative solution will be detrimental to the shareholders. We have a question: What is the new debt repayment structure?
Here we refer to, you know, as described in more detail, it's described in more detail in the presentation attached to the press release we sent in June regarding the restructuring. As mentioned, the terms are significantly better than the current terms of the loans. We please kindly ask you to study that presentation attached to the press release. Question number 7: Why not use cash from DOFCON to reduce debt in DOF Rederi? The answer to this is that any payments from DOFCON 2020 are paid to DOF Subsea AS. Bondholders in DOF Subsea will naturally not accept that such proceeds are distributed to any other companies outside the DOF Subsea Group unless the bond debt is repaid first.
Further, the secured lenders of DOF Subsea will naturally not approve of using cash to repay bond debt unless their secured debt, which is guaranteed, is repaid first. Question number eight: How much free cash does DOF Group have? As Hilde showed when she went through the financials on the balance sheet, as of third June 2022, our cash position was NOK 1.8 billion across the group, which of course is significantly below the total debt of approx. NOK 25 billion that will fall due absent the refinancing. The final pre-asked question is: Does any of DOF's top management own bonds or bank debt? The answer to that is no. I don't know, Hilde, if there are any questions.
No. Yeah, but let me just sum up the key messages and your answers, Mons. The point is that the DOF Group has significant debt with a current value of NOK 21 billion, of which the majority will fall due absent the restructuring. The group is not able to pay such debt. As already mentioned by Mons, the available financing resources have been very limited and are also decreasing going forward. That is due to less banks willing to have exposure in the oil industry, which is an additional challenge for the group. The group therefore has to restructure a significant amount of its debt and to reduce its debt level. The equity required to refinance the group without significant debt conversion is not available.
Consequently, the proposed restructure is considered to be only possibility for DOF ASA to continue as going concern and avoid bankruptcy. Pursuant to the proposed restructure, the shareholders will retain 4%, even if the equity is lost, as long as the group is not in position to pay its debt and the book equity is negative by minus NOK 1.8 billion. If the restructure is rejected by the shareholders in the EGM, that will be detrimental for the existing shareholders, and the likelihood for leaving with no value is high. We have received some questions.
Yeah. I see them myself here. Yeah. Perhaps the first question is: Do you know that just the current main shareholder hold position in DOF's debt facility or bonds? You know, it's not public who owns the bonds, and so really we have no comment on that question, really.
We don't know.
We don't know. Yeah. You have to ask the main shareholder about that. Next one: How much of your restructuring costs have already been paid, and what is the total cost estimate? I don't know really if we.
We don't have the exact number on that, and that's something we have to come back to. It's a significant cost. That's what I can say, but I don't have the exact number.
there is a question: Is it correct that bondholders would get 53% from converting NOK 2.5 billion of debt while senior lenders 43% for converting NOK 3.2 billion? Hilde , you have already answered that-
Well, I think.
Answered that question, yeah, in the presentation.
Yes, the number is what it is. This is a negotiation that the company nor the management has participated in. As I said in my presentation, the value of DOF Subsea is the most important for the group. As you also saw in the presentation that DOF Subsea represent a 78% of the EBITDA in Q2, hence it's very important for the group or it's for the group to continue as going concern, it's important that the bond debt is converted into DOF ASA. I think this, yeah, this is my answer.
We have a question here: What is the EBITDA margin for the new contracts? Of course, there is a lot of new contracts, smaller and larger. Perhaps could you, John, scroll back to the slide where we showed you know, some of the highlights on the contracts, please. You know, the Hywind Tampen and the Africa extension, we have disclosed the value and couldn't comment on the margin either. On the PIDF extension, you know, we expect an EBITDA margin somewhere in you know, above 30%, so 30%-35%, depending how good we execute. On the RSV contract, we expect the margin you know, somewhere in the high 20%.
Between 25% and 30%. That's for the, you know, the group, that income on the vessels, on the subsea equipment and on the, let's say, on the project. On the other hand, I have to say I don't remember the margin on that one, but that is highest. That do not include too much, you know, project revenue. It's mainly a TC, but also then remember that it's including, you know, all these contract includes ROV and ROV services from DOF Subsea. I think if you could be patient with us, we can perhaps in the next presentation talk more about some of the key contracts on margins.
I'll leave it like that for now.
I can take the two next one. The question is repayment of borrowings in the Q2 is lower than it is in the presentation. Explanation is simply that in the presentation, we show all the numbers based on management reporting. That means that we include 50% of the DOFCON JV in all the numbers, both in cash flow, balance and P&L. In the financial report, we take the net result from the DOFCON. That explains the difference. The last question is, the 2022 EBITDA already far above NOK 2.7 billion that is used and is that used for the basis for the restructuring proposal? As you saw in the presentation, the last twelve months, it's above 2.7.
It's around NOK 3.8 billion. Nevertheless, a restructuring is necessary for the entire group. It's necessary in DOF Rederi, DOF Subsea and Norskan, because all these companies are too high leverage, even in an improved market when we have a better EBITDA. I want to remind you again that the company or the group has, since June 2020, not paid interest and installments of the majority of its debt due to that the company is not in a position to service the debt normally. That's why the equity in the company is lost. Due to that, we are in a restructuring with our creditors and not able-
Perhaps a small comment to that question. They are really questioning the 2022 EBITDA is already far above the NOK 2.7 billion. I have to say, of course, that is not correct. We have so far delivered the two Q1s, and of course the two Q1s is not above NOK 2.7 billion. It remains to see what the 2022 EBITDA will be. It's correct that the two Q1s has delivered above NOK 1.5 billion in the EBITDA. It's worth to mention that NOK 2.7 billion we are not above that yet. Let's see how it ends when we have done quarter three and quarter four. Could you say something about the leads in the projects pipeline?
Y ou saw what we have in backlog for the remainder of year. Total NOK 4.5 billion. Of course the pipeline for remainder of year is pretty high when it looks to what is in the books. As mentioned on the comments to Q2 and also then in the outlook, we expect the activity in the Atlantic and Brazil region to continue on a high level, and we expect then North America and Asia Pacific to see higher activity in quarter three compared to quarter two. I don't know if that was an answer to that final question. I don't know. Are there more questions here? I'm not.
There is one more. According to previous reports from Nordea, although not interesting about the EBITDA, it seems good. What kind of debt should DOF have to service that? I can just repeat that, with the current balance, DOF is not in position to service its debts. That's where we are. I think that was the last one.
Well, it is difficult for us to comment what Nordea have said in the past. I don't know when they said that, but I think what we have to remember, of course, is that is that the age of the fleet, if you compare, like if Nordea said this in 2014 or whenever they said it, of course, the average age of the fleet, the DOF fleet, but also across all the OSVs in the market has increased a lot, yeah. Meaning that that remaining life for these vessels are much shorter than it was in 2014 before the downturn started then.
T hat also tells you that you need the net debt to EBITDA needs to be lower than it was in 2014.
Okay. I think that was it.
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