Hello everyone and a very warm welcome to this third quarter 2025 presentation from DOF Group. It will be the tried and tested format which includes operational and financial highlights presented by CEO Mons Aase and CFO Martin Lundberg followed by a Q& A session. You can ask your questions through the Q& A function in the webcast player and you can do that at any time and then we will cover them at the end. With that I leave the word to you Mons. I assume you want to spend a few moments on this beautiful front page to start us off.
Thank you, Eric. Thank you very much and welcome to all. Yeah, of course I want to do that. This is. This can implement us a one out of four what we call I-class boats. So big construction boats with 400 ton crane and this is the first Red Eye class. Yeah. It's finally in the DOF colors with the DOF lube on. And of course it also perhaps and she is. This is. She is actually today working for a client in U.S. and then she will head to Mexico later in November.
Yeah, so happy to see her done. I guess also, you know, perhaps I've been reading all the analyst updates on DOF this morning, and of course I see a few of the analysts talk about, and you know, I probably told you that before, but every Monday I have a follow, our commercial BI guys globally on equally, and I don't see any weakness in the markets we operate in. You have to remember 85% of our business is services. Yeah. It's project, it's engineering. It's not the boat. We see continued strong market, and I have to say when I left the guys on the phone on Monday, I got pretty optimistic on filling the remaining white spots in 2026 and also 2027. Yeah. We have.
We have very high tender activity. We have strong leads on all the boats and I think we will have continue decent order intake the next week and months. That meaning that for instance the 2026 backlog will be, you know, at the highest level of when we end this year. I also read that the analysts, you write a lot. There have been a lot of writing on Petrobras and of course I don't quite also, I don't quite recognize what some of them are writing. Yeah. I think we will show later in this presentation that for us it's more an opportunity than anything else. We will also show, of course, that somewhat weak, you know, vessel market, you know, on occasions are good news for us.
So because we over third party fleet this will be growing and of course you know we have an example here on project that we have saved quite a bit of money compared to one we bid. Yeah. I'll come back to that. It was a long speech on the first page but I guess that is what I want to remember, that we don't see any softness in our markets and we are still very positive on Brazil going forward. We can change page and this, I guess it's an old one because the main events from last quarter is of course that the backlog has been growing a lot. By another quarter we had $4.7 billion in backlog, which is the highest ever and of course gave a very, very good foundation for 2026 and 2027.
Also, we keep growing, measured on the number of employees. I think it is the first time DOF have more than 6,000 people working for us. It is a milestone. Yes, it is the first quarter we are above 6,000. I guess the last 12 months EBITDA is still growing and the last 12 months, of course, earnings are still growing. All in all, positive development for us. The next one is actually this is what we are doing, and I think I am going to spend a few moments on this slide just to rephrase it because what we are offering to our clients is, you know, projects, services, engineering, diving, and so on. Our sales are not, you know, the vessel is only a small part of a typical sale DOF are doing.
Yeah, and of course that means that, you know, we have fewer competitors and we have, you know, for IRM work in the North Sea, it might be two, three competitors. For a subsea job in APAC, that might be two. It's a very different ball game than being only a pure ship owner. Yeah, and as I said on the front page, we will grow our shorter-term fleet because on many occasions we will actually really do better if there is a bit of underutilization on certain parts of the global USB fleet. And of course, here we show the last 12 months. You know, we have split out what we are able to earn on the subsea radiance or subsea employees, but that is showing on what we are.
What you also have to remember is that the subsea projects increase utilization on the vessels and of course reduce the risk for utilization on the vessels. It is all linked and you could of course have a long discussion whether a ship owner or a service company. In my head we are a service company, whether we perform or work with our own boats or third party boats. You know, it is the same services we are doing. It might be, and I cannot answer that, it might be that if the weakness seen lately, especially in the North CSV market, continues, it might even be an advantage for North because we utilize those boats to serve quite a different market than pure ship owners are doing. I leave it like that.
I think it's important to understand, especially when I read these analyst reports, that you have to understand that we operate in different markets. Yeah. We go to the next. This is done quarter three and we had an EBITDA of $205 million that included $12 million in gain on two vessels. We sold two older vessels we sold off Denmark delivered 54 and you have to adjust for the sale and you are at 42. It is of course much better than quarter three last year. You know, we call it a good quarter and according to our expectations. Yeah, as I said, backlog very good of taking in the what we have one after balance date we have nowhere below $5 billion and then we have a very high backlog of course for quarter four.
For the reason I'm narrowing the guidance from $750 million- $760 million. It's still the same midpoint, $755 million, depth level now towards the mid area. Now in the range we have said between one and a half and two, we are now at 1.9. Yeah, and Mr. Lundberg was CFO because he had been busy in the quarter. We did a five-year bond, and perhaps even more interesting is that we financed this kind of Norseman. This will be the name of the Canadian newbuild. You know, 100% financing, securing her $140 million in that for her. And I think that is the first time in my life and after the maybe actually where we actually don't spend a single dollar on a newbuild. So it's pretty good. But Martin will talk more about that later.
We also referred close to $80 million in of the debt in NEWSCON and you know being delivering a good quarter, having a very high backlog for both Q4 and and 2026, and still see a very strong market. We also decided to increase the dividend to $0.35 per share, to be paid on November 27th. We move to the next. This is done, you know, some of the work won in the quarter. Yeah, and yeah, I do not go through all of them, but you know, I start when I won in the middle Skandi Patagonia. Sometimes people ask us what is the expected life of what type of boats. I think the Patagonia here is a good example. She will.
She is built in year 2000 and was now extended from January 26 and on the three plus two year deal. Unlikely she will be serviced in that contract when she turns 30. That means that the technical lifetime of these vessels are more than 30 years. The interesting of course is also that having the right specification, that boat is equipped with crane, towing, diving, etc. Of course we also were able to increase the rate quite a lot on that boat. Perhaps also mentioning the discontinued inventor here, which you know, we won a one year contract with a very large oil company in Australia. You know, first time we, us, DOF operate one of the high class boats in APAC. I will come back to the assumed Victoria extension.
I also come back to the PRF but I think also good to see here that we have done contract in the North Sea, we have done contracts in Argentina, we have done contracts in. We extended two boats with one year in Guyana, we have done contracts in Mexico. Of course it's and I think that's also you know perhaps one of the reasons why we, why we still think that there is a lot of opportunities. Of course it is the, the unique global pricing for what we have here. We of course see much more than a reading player will do. It's been a good quarter in all regions and a lot of opportunities also in all regions. The next one please.
This is done, you know this is done what we have ended up with after the Peter Boss discussion, roughly comment from the analysts and of course this is, you know, we got a bit more than one year extension on the Skandi Neptune, roughly half a year on the Assyria. Then starting their three-year contracts after that. Now all three are now working into 2030 and the consequences for the DOF P&L, I guess very nice to have a full 2029 cover. The consequence then for the P&L in 2026 is that the cash flow is almost the same. It is plus minus zero. On the EBITDA for 2026 you are talking single-digit million dollars. Yeah. It is more than a year. I think at least I would have done that deal any day in the week.
If that's the cost of getting, you know, firm backlog into 2030 on these bots, the next one is done. The backlog. Yeah. Here we see it, it's no build additions after, on September we are at a bit more than $5.1 billion. Yeah. I have to say, you know, we, of course with the pipeline we have and with the opportunity we see, you know, there will be more contract won this year and some more. I'm pretty interesting as well. That means that it will be difficult of course to fill much more in quarter four. You see we have $496 million in the book for quarter four. Of course that is on the midpoint, on the revenue guidance, we are at 99%. We have to admit of course that we expect the revenue to be a bit higher than the midpoint. Yes. It's probably not 99%, probably a few percentage less so it's very few voice spots on very few boats in quarter four. For 2026 we are now roughly $1.5 billion. Of course that is done. 75% of let's say $2 billion. Yeah. As I say, and of course already know that this record high, I think when we started, started 2025, we were below 75%. Yeah.
I think it will continue to grow the next few months. I guess the starting point we will have when we end this year for 2026 will be, I think, the best we ever had. Likewise, I think 2027 also we will see that growing towards year-end and into next year. As you understand, I'm pretty optimistic on the continuing winning book. Yeah. Especially now covering the voice ports we have on a handful of vessels in 2026. I think that was the last one. No, I have one more done. It's more than. Yeah. This is a PIDF project. It's a very interesting project we have been executing in Brazil since 2021. I think this is a two time within that and it will go over three years.
It's more than 4,000 inspections and the contract value is approximately slightly less than $400 million. It's of course a big contract. And. You know, the core fleet we need on that boat is three boats to be able to execute it. Of course, in the past we have executed that partly with our own boats and with the Street Explorer that we have shot at India, but our own boats now that have done the job now in 2025, they are going on long term contracts, us on ROV support. Meaning that we have to replace them. Yeah, and likely they will be replaced or replaced with the two third party we already shot at in the C1 Atlas. We are negotiating two and both on the project. Interesting here is that when we bid this and I'll be bad, I don't remember, we probably bid this, you know.
You know long before, you know in first half this year, might or even be as early as fourth quarter, first quarter this year. We of course had the cost assumption on boats, but then we know the bus market being a bit slower. The rates we have got in here is, you know, less than we had in the cost when we bid. The effect on that project is $15 million, the cost side on that project. It's quite large numbers for us. That market has been a bit softer for these type of boats and of course that's good in this occasion and it, I think it will be good in more occasions for DOF going forward. We have one more from me. Yeah, this is done. We have sold three anchor handlers and I guess this is in line with what we have communicated, that we want to sell the older and lower spec and can last. As you see here in the red here, the three boats are much less than 200 ton bollard pull and on average, these are not young boats. It's part of our strategy to high grade anchor and fleet, and of course the earnings so far this year for these three together in total are less than $1 million in EBITDA.
Of course, it's if you will not see it on the bridge from 2025- 2026 when we have sold this boat. When we first have this slide here, I think, then we are left, I think I counted 25 anchor handlers, and the interesting one is that 19 out of those 25 boats are all on long-term contracts. Either in the North Sea or in Canada or in Brazil or elsewhere. There are 19 AHTS, 25 vessels are on long term charter, three of them are the Hercules constant. They are equipped with large cranes. Of course they don't trade the, let's say, the normal rig move market. They work on global mooring projects or on subsea projects. Yeah, and of course they are enablers for us to win and execute quite a few other, more importantly, we do globally. Now we are left with three, and it's done, our anchor handlers with all the crane and then with all long term contracts, but they are today in Congo on subsea project, mooring project, so we need them for heading control and towing, one to support those projects.
As we said on the last presentation, we all know where we plan to be on the anchoring fleet. I'm pretty satisfied with the backlog we have on those boats and with the composition we now have. I think we have, of course, the leading AHTS fleet in the world market, and now with the backlog and with an exposure that we are really happy with. Martin Lundberg, you can talk.
Yes, thank you once, and as you started alluding to, it has been an active quarter on the finance side with a few highlights on top of the very strong operational results. I would say I agree with you, Sea Dragon, the Northman newbuild financing being one of them, issuance of the bond loan another, and also repaying the last bit of the restructured debt with the international facility in Norsegal. A good one to have done. On the next slide, we see that this is another strong quarter across the segments. It is largely in line with our own internal expectations, and if we compare it to the same quarter last year, it is still an improvement.
Of course it is particularly good to see the DOF Group fleet delivering consistent strong numbers and this is in line with the explicit guidance we provided in December of last year on that fleet. That is really good. $194 million worth of EBITDA if we exclude the $12 million sales gain O n the leverage side we are now as Mons said within the target range of 1.5x-2x net interest-bearing debt to EBITDA on the last 12 months the number is now 1.86 or 1.9 and the net debt is $1,332 million. So relatively flat slightly down from the last quarters. Main drivers on the debt changes this quarter as I mentioned financing so $148 million net effect from the issuance of the bond loan $79 million from the private placement on the Sea Dragon financing that is offset by the repayment on the Nordea syndicated facility of $73 million. And also the sold vessels contribute a repayment of $11 million. Other than that it is the normal amortization, normal payment on lease debts and so on. The cash increased by $120 million- $520 million. So a very solid liquidity position.
This is the Norseman financing. We have shown this before. A few more details this time around, NOK 79 million in the quarter, all-in interest cost of 7.24% for the duration of the 15-year contract. Something that the offshore markets rarely see and that we have not signaled on previously. It is a very favorable financing package. It provides 100% leverage and it is served solely by the charter from the end client. No contributions from the wider DOF Group. It is no recourse, so no guarantees or anything that goes back to the wider DOF Group on this one. On a standalone basis, a very, very strong financing package. This is of course what we mentioned on that w e have resolved the first or the only near term balloon maturity with the Norseman facility that was previously due in January of next year.
There are no balloons in the near term and all of the restructured debt has been repaid. Some of the vessels remain on a quite steep repayment profile. In particular a couple of the vessels in the JV are amortized to zero within the years 2027 and 2028. In addition to this mandatory amortization there is the well known sweep mechanism in Norseman that of course may affect the numbers but that is provided sufficient cash in that case. And operational cash flows very strong $152 million. Although there is a small further increase in working capital that is of course linked to the high activity levels particularly in the project business. The CAPEX or the net investment investing activities is $35 million. That is a CAPEX of $71 million. $29 million of that is related to the new build and the Canadian new build and the rest is maintenance, docking and ROVs. That is offset with $29 million from the sale of the two vessels that was delivered during the quarter movements. On debt we covered on the previous slide. The net effect from financing activities is $7 million on the positive due to the financings but that include a dividend of $73 million and a cash position of $520 million at the end of the period.
With the strong operational results, strong backlog visibility, the confidence in the market and the further strengthening of the financial positioning or position, we are increasing the dividend to be paid in November to $0.35 per share. With that dividend, the total shareholder distribution of 2025 is at $234 million. With that, I will hand it back to you Mons.
Thank you, Martin. We are here at our updated guiding for the year, and my guess on revenue, we are $1,092.2 million. As I said, I think we will be towards the very up and all that on revenue. On the EBITDA, we have narrowed the guidance from $740 million-$770 million down to $750 million-$760 million, so same midpoint, $755 million. Depreciation untouched, and then net operating income increased. We also now already go in on that. Same midpoint, and then same interest cost, a bit less tax payable, so reduced that a bit. On the CapEx side, overall figure being the same, but a change on the maintenance side, we are down $10 million, and then on the growth, we are $10 million.
Of course it's due to some movement on some dockings and then we have purchased a couple of roes more to serve our own fleet but also of course done to have on third party boats like the ones for the PIF. So but I guess main here is that the guidance is now 750- 760. That's our last page and yeah I don't repeat that 750 to 760 all time high backlog that we said no one and a half billion dollar in the book for for 26 which should be around 75% and then above 50 no for 27 of course also done large number of prospects and high tender activity and I could add a very optimistic global commercial team that see opportunities and so maybe I guess we can't guarantee anything but we expect to continue to build a boobs scan and of course today so we are I have to say I'm very optimistic on next year and the following year based on what we see in the already in the schedule and also all the opportunities you have on each boat for going forward. So it looks good and as normal we have some pictures here just on the highlights.
So goes the one on the left here up is. Is the first red eye class and and which is let's say a milestone for us and and and also a first long term contract for an I class in. In Australia. The one next one is Tuscany Patagonia As I said 25 year old boat will probably be 30 years when that contract ends if it's not extended further and utilize your cost of maintenance level. We have also been able to I would say you know increased the rate quite considerably. So she will, she will contribute to higher earnings in next year then. Scottish constant here. 2 comments on her you know moments in the fleet. Very good backlog for the anchoring fleet. They have high quality fleet and Sconson has had a fantastic year.
You know being the, the main enabler to doing the global waring projects and we see a good opportunity list for similar projects in 2026. Then this is Blue Board 3 electoral representing the BLF where we actually see that of taking advantage of somewhat weaker bustle market for some of the Russell classes. Then we have the constructor which was together with the new MOD that was extended one year in, in Guyana. And then you have the PSVs where we have secured backflow for three out of the six owned PSVs into 2020. So I think then we write in the press release I seem to remember that we now have 17 boats in Brazil that working towards UN 29 and into 2030. So it's, it's pretty good. Yeah, it's pretty good. Then I say thank you and we open for the Q and A session.
Very good, thank you both. So as I mentioned at the start you're free to send in questions through the Q and A function in the webcast. We have quite a few already. So let's kick off. The first one goes to you Mons. With almost no capacity in the near term on your own fleet would you consider leasing in vessels on a speculative basis to have capacity or will you only do the this against contracts if you don't. If you're unable to cover that with your own fleet.
Of course I think the answer to that is what you mean by speculative. Yeah, well we have like we did on the, the mask installer before we actually bought mass supply service because we, we took that boat on, on the long term shorter without having a full back logo on her. But of course it was based on the market knowledge and opportunities we saw. So, so I think the, the I think it mainly it will be boards like on the PIDF and like we did in Guyana elsewhere towards you know back to back on long term contract. But of course we have, we have. I will not reload that. We you know if we have a good business plan that we will take boats on short of it out having let's say a full, full coverage on that boat. And of course we have done that as I mentioned on the mask installer and of course we have. We have been doing that also in us on the couple of Jones exports. We have on charter on that. So the answer is if the rate is right, right is correct and the spec is correct and we see opportunities. We will probably do that.
Thank you. And again to you Mons. You mentioned that you don't see any weakness in your market but the analysts do. Just from my understanding. Does that mean that you think the analysts are looking at the wrong market or do you disagree with the market view that they have on the. On those markets that they are talking about?
Of course it's. Of course it is. You see of course the North CP3 market is a bit weaker. You see that the spot and garnering market has been the disappointment this year. And of course you also see some owners having less utilization and earnings on pause on CSVs. So. So. So was the analyst is correct that someone of us in the market are weaker but we are not exposed to them because we are selling quite a different services. Yeah. So the answer is that they are correct on but they are wrong on what market DOF operate in. Yeah, sorry.
Yeah, no, thank you. Down to you, Mons. Are you able to provide any update on recent dividends from DOFcon and expectations in the near to medium term?
There of course that is not something that we control on our own and we will not give any firm guidance on that. What we can say we received 30 million per partner in Q2 of this year. Historically we have had the 2. 2 dividends per year. And I. I think we can also say that we looked at the extended contracts and. And our confidence in that market of course tells you that from the operational and cash flow perspective there is no reason why this by the level should be any lower going forward than they have historically.
Thank you. Back to you Mons. What are the most important vessels that remain without contract in 2026? Related to that, we can also combine with another question, which is what is your level of confidence on securing work for the I-class in 2026?
Yeah. No, I guess we can start with I-class done. So I guess as per. No, what we have made public is you know that that one of them is 365 in APAC. And then you know that we have I guess most of first quarter cobalt on on two or number. Then maybe we have you know Subsea's backlog on the fourth. Yeah. And as it looks today with the recent update from the Bago is with the dialogue we have on the clients, you know, it's reason to be fairly optimistic that those boats will deliver more in 2026 than what they did in 2024. Meaning that I think we will build a good schedule on what is left to be booking on those boats. And of course that is not based on guessing. That is based on what we see in the tender pipeline and in the, let's say, in a clarification. We have the clients already.
Thank you. You've now sold three low end anchor handling vessels. Would you consider selling remaining vessels with similar capabilities?
Yeah, I guess. You know, if you look at the slide we had here on the video anchor handlers. Here it is. Would you see, I guess, the similar capabilities? I guess then you are talking about boats less than, I think it's, Daniel, you're talking either the two Brazilian built and flag boats which are both on long term contracts, and you are talking about Cutter and Clipper that are also both on long term contracts in Canada. Yeah, of course, earlier this year we won a new long term contract for her at the higher rate. I think the answer to that question is that we are probably done selling boats as they are. Of course, we have had offers on the Brazilian boats, the Utafogory of luminance. But of course we, we see the, it's more value for us to. To put them now on these new contracts. So the earnings, you know the values we have been offered has not reflected actually the earnings we can get on the board. So I think we, we are done selling. So the plan on what we were to sell on Yankee Analas is behind us. But of course if there is somebody put anything here is for sale. If the price is high enough. Yeah. So of course, but to high grade a fleet. That has been done yet.
Right. Thank you. Now on the dividend, you've taken that up to a very decent level. Now how should we think about that going forward? Is there still room to increase and how often would you look to assess the level on a quarterly or annual basis? I don't know.
I can start first on you, my dad. I think your first of all is of course it's the board that decides to divide on you. And, and the decision. No. 1.35 of course is, is, is a decision based on. On the situation right now. So I think it, as I understand it it will be a quarterly decision at least for now. And then you know what happens in 26 of course will depend on. On what we. It depend on. All right. You know, is the backlog is the earnings, is the market and so on. So I think you the people asking that question has to be patient. I think you know, you have to wait for. For February when we reveal quota for earnings and when we present 26 guiding and of course hopefully you know, news on the backlog side as value. I don't know if you want to add something, Martin.
Oh, I think that covers it. Well.
Great, thank you. Can you comment on the lower margin in the subsea region segment for this quarter?
No, I. I don't have much comma. I don't think that that should be any. You know, it's not something you have to worry about. It's. I think it depends on when you finalize projects, you know, where in the projects you are and how do you decide to let's say the booked income and profit on it. So I think it's not a sign. That w e will have VK earnings in that segment going forward.
Thank you. Gsell done with discussions with Peter Bras or could we expect adjustments to other existing contracts going forward?
You know, of course when you have 2000 people on close to 30 boats soon in Brazil, of course you will never be final discussions with Ketter boss, but there will be more deals like extending existing contracts against a rate increase and postponing the new contracts. I think that we will have to comment if and when it arrives in.
Okay. And then further on Brazil and Peter with us. Do you have any update on the new build, the tender for the RSVs and will you participate in the Anchorage handling new build there.
[Olio rv?] I guess it is still discussions. Yes. So it's not really any update other than it is under discussion and on the handling Thunder. I guess still a few weeks before that they do. So I think we will answer that, you know, later on.
Okay. Thank you for the pidf. What kind of vessel would you consider for the last spot there?
I think it's. It's. It's not a very high spec boat. We need. We need a certain number of bats and the ability to mobilize one ROE or two. So it's. It's. Not. It could be. It could even be a. Let's say a PSV with some extra, extra bats on it. All right.
The debt amortization profile for next year, while quite uneventful, is still fairly steep and would imply a rapid reduction in depths. Are you considering looking into ways to change the current amortization profile?
Yeah, I think we touched on that very briefly on the capital markets day as well. We do agree that the amortization profile on leverage at this level is quite steep. Due to the fact that we are now already within the range of our target leverage, it's natural for us to have a discussion with a few of the lenders to smoothen that profile or to take other measures to make, call it, the average amortization a bit longer than it is currently.
All right. Another question on the shareholder base, are you able to shed any light on how much is still owned by former creditors and how that has developed during the year?
Yeah, that's a good. It's a good question. Of course on the financing side we said that we let go of the last restructured facility this quarter and I think it's fair to say that we are very close to the. To saying goodbye to the final credit to shareholders as well. I think we are bending entered into this year we were around 5% of the shareholder base being former creditors and I guess we are just short of 2% or something like that for the time being. One of the largest creditor originally largest creditor shareholders sold in the. Yeah around 7 million shares during the last couple of months. I think it's. There is no. Of course we've never been very worried about an overhang but now I think it's fair to say that there is no overhang or credit to shareholders left in the. In the shareholder base.
Thank you. After a busy quarter on financing activities, what are your key priorities on that front going forward?
I think now we've done quite a few of the big project that we had. I'm not gonna go through it again. However of course the amortization. Smoothing of amortization profile could be one of the aspects that we will need to look into going forward. And I think also we do have a substantial working capital. It is not normal in. In high activity but of course it is a big number. So that's also something that we have high on our agenda to try to optimize.
All right, Mons Aase, you emphasize the subsea regions and projects as a key differentiator. Who do you see as your main competitors in this segment?
Because it's. I think it's a very few global players in that market. Yeah, I think we have shown in the past the slide on. So it's more regional based operators of course in the. In the North Sea of course is the typical suspects like the portion of. On some other scope, you know in eight packets. It's a bit 77 and it's a bit fugue is a bit Sapura in brass in U.S. it could be oceaneering. So it varies a lot and would it and perhaps also it varies a lot of course on the type of work. Of course if you go to the global mooring market because it's if it's, it's a few other names. Yeah. So it's if it's let's say a smaller serve produce all the names than the than the oil rum space. So it is not one single competitor globally. It's depending on segment and radiancy. It's one or two or three. We compete within each region.
Okay, thank you. That was the last question we had. So thank you all for providing questions and thank you to Mancer Muhten for presentation and the Q& A session.
Thank you very much and thank you for listening.