Good morning, everybody. Welcome to HAV Group ASA's first quarter financial results presentation. Presenting today together with me is Pål Aurvåg, our CFO. As usual, we will speak about the highlights of the first quarter. We will say something about the group and the business segment updates. Pål will go through the financials with you, and we end up, before we have a Q&A, with a summary and our outlook for the future. First quarter was a quarter with a lot of events, a lot of positive events. The revenue was NOK 127.1 million, up approximately 9% from last year. The EBITDA was - NOK 18 million, and we had a cash balance of NOK 128 million.
In this quarter, we won multiple large contracts, and we reached an order intake of more than NOK 500 million. We had a book-to-bill of 4.2 . Some of these contracts was the ship design and integration equipment package for the SOV for the offshore wind farm to ESVAGT. It was the ship design and engineering package for four autonomous vessels for the Lavik-Oppedal ferry. It was also that NES got the system integrator role for the Lavik-Oppedal ferries. These recent contracts are still in the startup phase, so that also is a part of the explanation of the negative EBITDA in the quarter, in addition to a postponement of some of the existing projects.
The order backlog now is actually historically high for HAV Group since we started, more than NOK 1 million in order backlog, and it was up 67% from year end. In addition, we have also very positive order intake after Q1. We got the contract for design and smart control system to Havila Kystruten's contract, worth in excess of NOK 200 million . We also signed a cooperation agreement with a European owner called Maris Fiducia, with the objective to develop and building and operating hydrogen-based hydrogen-powered dry bulk vessels. I will say more about that also when I speak about the hydrogen segment. And we also, finally, we signed the contract for the autonomous navigation scope for the Lavik-Oppedal ferries.
So in total, it was a very, very positive Q1, and also after Q1, with regards to order intake and the prospects for the future. An update of what has happened in the Lavik-Oppedal contract. As we signaled already at the end of last year, it was very, very important contracts for the group. And we also promised that we would give an indication on the contract's value of these contracts when most of the contracts has been signed. And we have now signed contracts for only this project for close to NOK 600 million. In March, we signed contracts to design the ferries, and also the energy design and system package we signed with the shipbuilding yard, Tersan.
And now, just, in the beginning of this week, we also announced that we got the full contract for the autonomous delivery to these vessels, which is a very important contract also for us in order to exploit the possibilities within autonomous ship operation. As you see from our order intake and backlog, we have had a very strong growth. The order intake for the quarters was up 122% from last year, and we have increased our order book from the year end with 64%. And these figures are not including the contracts that we have got after the end of Q1. Many of you know our company well now. Some of you might be new to the company.
But in brief, we are enablers of optimized vessel performance, safety, and operating costs. Our value proposition, what we give to our customers, is that we will improve their competitiveness by providing advice and also optimize solutions throughout the lifetime of the vessel. And we have a very strong objective to take care of the customers from we secure the contracts till he operates the vessel in the lifetime. And in that way, we can also have a better possibility to make sure, if he's satisfied, that he will come back and order more from us. Our vision is a sustainable future at sea, and we consider ourselves to be experts in guiding the marine and maritime industries towards low and semi-zero emission shipping. We have a headquarters in Fosnavåg in Norway.
We have 165 employees, and at the end of the day, last yesterday, our market cap was NOK 410 million. Our technology segments is ship design, energy design, and smart control, hydrogen-based energy systems, and water treatment systems. We aim at these segments primarily, which is offshore wind, oil and gas, ferries and RoPax, aquaculture, fishery, and short sea cargo. A little bit more about each of the segment and what has happened, especially in Q1. Our hull design and ship design technology segment, they have again shown that they are amongst the leading suppliers of energy designs to the offshore wind segment, securing yet another contract, including also an integrated equipment package to ESVAGT.
They also secured the design for the four autonomous ferries for Lavik-Oppedal. Energy design and smart control systems. Maybe some of you have heard from before that we see that that is one of the most potential segments that we have with regards to growth. Our investment in technology and people and knowledge is now giving payback. As you see that we are increasing our order book in this segment significantly. We got the contract in Q1 as a subcontractor for the ship design business to ESVAGT. We secured the ship integrator package to the Lavik-Oppedal ferries, which is built at Tersan in Turkey.
And after the Q1 closing, we have also secured two large contract, including one large contract to the Norwegian shipyard, Havyard Leirvik, and the autonomous delivery to the Lavik-Oppedal Ferries. For the hydrogen-based energy system, it's still a growth company, a development company, but also in Q1 for this company, we have had some significant milestones. In order to prove our technology and to develop the technology further, we have started building a prototype of the hydrogen-based energy system, ZEPOD, the containerized-based hydrogen energy system. And we also got funding from Norwegian government in order to finalize the prototype building.
Last but not least, we signed a cooperation agreement with a major player within short sea cargo, Maris Fiducia, and with the aim to develop hydrogen-based hydrogen-powered dry bulk vessel to operate in Europe. The eventual contract is subject to investment funding, but if that funding is in place, then we have a very good chance to finally realize some contracts in full hydrogen. So we are looking very much forward to the result of this cooperation. In the water treatment systems, we have had call-off from already engaged fleet agreements. Here is exemplified with Misje Rederi.
We are also pursuing, especially now as the growth segment within this, technology segment, the aqua-based, the land-based aquaculture segments. In Norway, we have seen, a postponement of contracts within aquaculture in general for quite a long time, also, a little bit influenced of the Norwegian tax, system. But we now see that more and more projects are going to be realized. We still think that this is the potential growth segment, within, water treatment systems. This is a summary of the, order backlog, backlog development within each segment. As you see, both the ship design, segment and the energy design and smart control segment, has had a significantly growth in first quarter. With that, I, give, the word to our CFO, Pål Aurvåg.
He will talk about the financials, and then afterwards, we talk more about what our thoughts are about the future. Pål?
Good day. I will take you through the highlights of the quarter. If you look at the revenue, the revenue was 127.3 million in the first quarter.
... NOK 127.1 million in the first quarter and with an EBITDA of -NOK 18 million. If you look at the more in details, we see that operating income in the quarter was NOK 127.1 million, with an EBITDA of -NOK 18 million , EBIT of -NOK 22 million, a net finance of NOK 0.7 million, and that accumulates into a net profit of -NOK 21.3 million, and with an EBIT margin of 17.3%. If you look at the different segments, ship design had an operating income of NOK 39.3 million, with an EBITDA of NOK 1.6 million, and a profit before tax of NOK 3 million. Water treatment system, operating income of NOK 28.5 million, EBITDA of -NOK 0.8 million, and a profit before tax of -NOK 2.6 million.
The energy and design and smart control system segment had a turnover of NOK 59.8 million, an EBITDA of -NOK 9 million, and a profit before tax of -NOK 10.2 million. The hydrogen area had a turnover of NOK 0.3 million in the quarter, an EBITDA of -NOK 3.4 million, and a profit before tax of -NOK 3.6 million. If you look at the balance sheet, we see that the main changes in the quarter is related to the total receivables on the left side, and on the right side, we see that the current liabilities has also more or less the same changes. And this is related to accounts payable from the new orders on the receivable side, and it's a prepayment on the other side.
So the main changes is related now to the new orders coming in, and that is visible in the balance sheet, and we see that the balance sheet has increased from NOK 427 million -NOK 561 million during the quarter. The equity is related to the periodic result. Then, if you look at the cash flow, you see there is an operational cash flow on - NOK 28.9 million, and this is mainly based or related to the periodic result. The cash flow from investments is related to investments in R&D, and the cash flow from financing activities is related to that we sum up our smaller loans into one pot and had a positive cash flow related to that transaction.
In sum, we had a net change in cash and cash equivalents of - NOK 23.7 million, but still, there is NOK 128.2 million in cash at the end of the quarter. Yes, back to you, Gunnar.
Thank you, Pål. So, we have this slide to try to sum up what is the key points for investing in HAV. From the start, we have said that we have a very good toolbox. We have competence, we have knowledge, we have technology, and we can assist the shipowners in their desire to reduce the vessel's operating cost, and also, not at least, their environmental footprint. We still see that international and national maritime regulations and also other global trends support HAV Group's business case. We have a solid balance sheet, and not at least now we see finally that we have the growing order backlog positions. That sets us in a much better position also to create even more value for the future.
So the global megatrends, regulatory changes, as I said, they are supporting our markets. We have technology that will assist the shipowners in satisfying the regulations and also optimizing their vessels with regards to efficiency, safety, and reducing environmental footprint. We already have, and we are developing constantly, technologies and products that will enable shipowners to optimize the vessel's performance, operational, financial, and environmental. The capacity utilization have been we have spoken about our capacity utilization for quite a long time, and that is also what you see, still an effect on our margins for first quarter. But we now see that our order book is growing, as we have predicted, and we still see a good, solid pipeline.
That means that we, as we have said also in the, in the last quarter, we expect a growth in the revenue for 2024 and onwards, and we reiterate our target for 2026 and think that we are able to reach approximately NOK 1.3 billion in revenue in 2026. The result for the quarter was not positive, but we see very positive with regards to order intake and also our outlook for the future. With that, we have finalized the presentation. Now it's up to you to ask questions. As normal, we have had a link that you can send in questions, both in advance of the presentation, and maybe somebody has also sent in some questions now.
So, Pål, if you come up, then we will answer your questions to the best of our knowledge.
Yes.
There we are. Yes. Yes, Pål, so what are our investors interesting, interested in this time?
Yeah. Let's see. Let's look into the questions. Yes. You have previously, previously stated that you don't want to disclose any contract value for competition reasons. What's your policy related to this?
We have a policy that we don't give exact contract values. We are indicating values of the contracts, so that we have done fairly often. With regards to the Lavik-Oppedal contract, we said that also that contract value would be indicated when we have secured a significant contracts in that project. And that what was. We did last Monday, which was a substantial contract, as. And as we said earlier, maybe the largest in HAV Group, at least the largest since we started HAV Group, of NOK 600 million. So we will not give exact figures for competitive reasons, but we will continue to indicate the important value for important contracts.
Yes. Then there is one related to HAV Hydrogen. What development do you see for the HAV Hydrogen in the future? Does the contract open the doors, or does the frequency increase? This is related to this Maris Fiducia announcement.
Yes, the Maris Fiducia announcement that we did was not a contract. It may turn into a contract, but it's a cooperation agreement, where we have an agreement to develop hydrogen-based energy systems for them to operate vessels, well, dry bulk vessels with hydrogen energy systems. Subject to funding from governments, then this also may result in a contract. In general, we see still and growing interest in the technology that HAV Hydrogen is marketing. And we are very hopeful that something will realize in a contract, but for this type of market, which is a developing market, it's very difficult to predict when and into what extent.
Yes. Then there is a question related to dividend. We know that this question has also been asked before, but this has a bit different question, and that is: "Will HAV Group prepare a dividend policy?" Then I want to refer to the board statement on the corporate governance that's available on our websites, and this includes dividend policy. And at present day, the company is in a growth phase, and most likely will not pay any dividend in the short or medium term. But long term, we will, of course, strive to have a favorable dividend policy. Yeah, then, "What technologies does HAV Group want to become a more complete company?
What we have said all the time is that we are looking for technologies that will be complementary to what we have already. Within our newest segment that we are targeting, the digital products, we are now entering into a phase where we are going to develop autonomous functionality. That can be, of course, a segment, technology segment that we are looking into. In general, we are looking for something that can either consolidate and grow our technology that we already have, or that can fit in as a new building block besides what we already have.
So we are. I cannot be specific for other type of technology that we are looking for, but it is a technology that will fit into the total scope that we have, that can enable us to be an even more integrated supplier of design and systems.
Yes. Then there's a question related to, "Which countries are most interesting for HAV Group?
That depends on the technology segment, also. For instance, the water cleaning segment, they are operating in most countries in the world, because the ship types that they are aiming for, the ballast water treatment systems, can be operated by ship owners all around the world. While for the other segments, we are concentrating on Norway, we are concentrating on Europe, and also, North America is a very interesting segment. And also, we see now that within oil and gas, where we are trying to assist the ship owners to have a greener oil and gas business, we see that South America, like Brazil, for instance, is also a growing market that is...
It is very important, interesting for us, maybe especially for the ship design, technology segment.
Yeah, then there's the question, you know, related to, the job advertisements-
Mm
... that's public. Yeah, public. And what is the availability of the expertise you are looking for?
Yeah, that is something that our business is, is a challenge for all the business, of course. We are looking, for instance, for computer experts, for the autonomous part. We are looking for more expertise within ship design. And, we see that the, our business is growing. It's not only us, it's also our competitors. And what we strive to do is to be the best place to be for that type of competence and that type of knowledge also. And we see that, the type of contracts that we have had, for instance, this Lavik-Oppedal autonomous operations contract, is very interesting also for, highly skilled people that want to take part in developing the future.
Also, our focus on a sustainable future at sea is attractive for the people that want to use their knowledge in order to achieve something. Not only working in a company, but also making effort and setting a footprint.
Yes. Yeah. What is the status for the FreeCO2ast Project?
Yeah, the FreeCO2ast Project was a very important project. It was already entered into when HAV was Havyard. We entered into this project in 2018. The objective was to develop and get approved hydrogen-based energy systems for larger ships. In that project, we have developed a lot of knowledge. We have developed a lot of tools, and also products that we are using now, both in the HAV hydrogen segment, but also in ship design and in energy design and smart control segments. The project itself has now come to an end. It has been finalized.
So we are not working anymore with that project, but as I said, we have harvested a lot of results from the project, and it's a foundation for what we are doing now, especially within new type of low and zero emission fuels, and hydrogen in particular.
Yes. Yeah, then I can answer this. Is there a plan for the use of the, of own shares? And the status is that we now own the maximum. We have 10% of the, the total stock. And, but the purpose was, buying our own shares was, of course, the... We thought that it was a lower level that, than that, we had in the, when we started up the company. And, of course, it was used, we wanted to use it as a, as a payment related to M&A activity, activities. So, so far we have used some for, for, the smaller activities we have done. So that is the main answer. Yes. Then, what margin is expected within hydrogen's business area? And, then I think I could take that.
We want to sell systems, and the margin will depend on the scope of the system and size of the project. If you have a very extended scope, this will give higher turnover, but it will be lower margin due to higher share of traded parts. Then, Gunnar, does HAV Design develop its own ship designs that they can sell, or do they just work project-based?
It's a combination. We are working mainly in close cooperation with the customer. We can work, as you say, project-based. Either we can work when they are trying to find out what kind of vessel they will build, more on speculation to be a standard vessel that can be competitive in a broader market, or up against specific tenders. It can be one-off vessel, or it can be a small series. We are also working with designs that we can sell and market in general. It's a combination of working particularly in project, but we also have a portfolio of designs that we can sell to anybody.
We are working also on finding out what kind of what type of vessel, what type of configuration a vessel should have within a special market segment, so we can go out and market that to potential owners that want to build and invest in that kind of vessels.
Yes. Then there is another question: What competitive advantages does HAV Group have over its competitors?
... And in addition to that, all the technology segments, they are really good, and they have their particular competitive edges. One of the largest competitive edge that we have is that we can cooperate within this, between these technology segments. And when you combined, this complementary technology and technology, and knowledge, you get an added value to, the customer, that gives us possibility to have, higher margins. And we also, as a group, have possibilities to take out synergies that, companies that we compete with, the separate companies and the specialists do not have.
Yep. So let me see here then. Then there was a question coming in just now. "At the general meeting yesterday, it was decided HAV Group should be able to buy back shares one more year, but why? HAV have already bought back the amount, allowed 10% of total shares.
Yeah, maybe I can answer that, Pål.
Yeah.
As we have said, the reason that we are buying our own shares, one of the reasons, is that it can be used to also buy for mergers and acquisitions, to use as the trading or as the currency for buying stocks and buying companies. And that is still our aim. So we have to have this possibility in the general agreement or general arrangement general meeting, that we can buy. If we use our shares, we can buy back to the same level that that we have before. So we have the possibility to continuously, even if you are using the shares, to buy back and have this amount of 10%.
Yeah. I think I will sum it up. "Based on the quarterly figures, why do you maintain an increased cost?
Yes, we have had. I think we have asked for the investors' patience, and we have tried to rationalize why we have not cut costs. I think the answer is what you see now. We finally see that what we have expected for a long time, that the market will give us growth in the order book. Now you see it; it's a substantial growth. And when you have a growing order book, you need the people to execute the contracts. And with the contracts that we have got now, we need more people. So we think it has been a good investment. We hope to show you also in the coming periods that it has been a good investment.
We are hopeful that the order book will continue to grow, and then we need the people. And with the competition between our competitors and to get the this kind of competence and knowledge, it would be very hard for us to get back the people if we had reduced and cut cost previously. So we think it has been a good investment, and we are really looking forward to showing that to you also.
Yeah. Then there's this, yeah, a couple of questions related to the figures or the prognosis for the 2024 figures. And, let's say, we don't guide on short term, so, that's the policy, yeah.
No, the guiding that we have done is our 2026 goal for revenue.
Yeah. Let's see. I think we have taken more or less everyone.
Okay. I thank everybody that has followed our presentation. I hope you will continue to follow our company. We are looking forward to meeting you again, talking to you again, the next quarter in August, isn't it, Pål?
Correct.
Thank you for the big interest that you have, and thank you for today.