Good morning, and welcome to HAV Group ASA's presentation of third quarter results. We are going to speak about the highlights of the quarter, go through the briefs for the group and for the subsidiaries. Together with me, I have Pål Aurvåg, CFO in HAV Group. He will present the financials. We close up with the market outlook, and we have a Q&A session at the end. For Q3, we had a revenue of NOK 137 million, an EBIT of NOK 1 million, cash from operations was negative by NOK 52 million, and the cash balance today or by third quarter was NOK 258 million. Extended backlog was NOK 481 million, and the market cap as per reporting date was NOK 386 million.
The key developments of Q3, some of the developments, we had the approval documentation for the deck-based containerized hydrogen energy systems was filed to submitted to DNV for Approval in Principle, which is a process that takes us to the final approval of this product. We announced earlier this year that we were in negotiations with Høglund to acquire the company. That process was stopped also in Q3 when we did not reach final settlement with the owners for the purchase. We have also hired an head of R&D that started working in the third quarter, which has done focus on the development of R&D within the companies in the group.
Pål will say more about the financials later in the presentation. HAV Group ASA, we are an international provider of sustainable marine and maritime technology and services. Our vision is a sustainable future at sea. We comprise of four subsidiaries, all with several decades of combined industry experience. We consider ourselves to be a special expertise in guiding the marine and maritime industry towards zero emissions. As a company, we are focused on exploiting synergies and developing complementary technology and value through developing complementary technology. We stimulate intercompany business development and R&D processes. We are pursuing value accretive growth through organic and through consolidation.
The management team consists of a group management team and the managing directors of each of the subsidiaries. We also have a very experienced board of directors. Going into the details of the subsidiaries, HAV Design is the ship designer in the group. They have developed a very advanced design philosophy based on simulation-based ship design. The numbers or the figures in the quarter is NOK 61.8 million in operating income with a EBIT of NOK 2.1 million and a profit before tax of negative NOK 1.9 million.
The income and the result in the quarter reflects also a fairly low or lower than expected activity level due to less new, few new orders in the previous quarters. Still, the outlook for this subsidiary is positive. With except for maybe aquaculture, which has got a small setback from the new tax proposals from the Norwegian government. The main drivers for the other segments that we are operating in is very positive due to the still the need of new technology in order to reduce energy consumption and emissions.
Especially within offshore wind and electric ferries internationally, and also short sea cargo transport, we still see a lot of positive development within the markets for HAV Design. Norwegian Greentech, they are the experts in ballast water treatment systems and also other water treatment technology. They are the company with the biggest growth in the group as per today. The operating income in the quarter was NOK 40 million with an EBIT of NOK 4.1, and a profit before tax of NOK 5.4 million. It's a little bit lower than the previous quarters of this year, still we are far ahead of last year when you look at year-to-date Q3.
We still see a very good development in the ballast water treatment market for retrofits for existing vessels. There is also the new building markets and the aftermarket for ballast water treatment systems. In addition, we have a market within aquaculture, both for live fish carriers with treatment systems on board vessels and also an emerging market for the land-based aquaculture sector. The focus is market development and product development for new products within those market, in addition to exploiting the existing ballast water treatment market. Norwegian Electric Systems, they are a supplier of low and zero emission energy, propulsion, and control systems for a wide range of vessels. Also within this company, the revenue and operating income and EBIT is characterized by low capacity utilization.
We have a lot of projects in the pipeline, but we have seen postponement in the market as we have seen now for most of this year due to the uncertain situation worldwide. We expect that the postponement will stop and that the pipeline will materialize in more orders in the near future. The main drivers still for the services and technology of this company are the same, as they also deliver technology within complete power systems, smart control systems, integrated navigation and vessel control systems that will help ship owners when either retrofitting old vessels or investing in new vessels to make the ships more energy efficient and reduce emissions.
Norwegian Electric Systems have technology for a wide range of vessels, so they can operate in most markets. Norwegian Hydrogen, sorry, HAV Hydrogen is their main activity has been up to now is product development and market development. They had a soft launch of their hydrogen energy container in the quarter, which is now under approval for Approval in Principle with the launch of that early next year. We have seen a very good response with the launch of this technology, getting a larger pipeline on new project. We are very hopeful to see orders within this company during next year.
They are very well situated with regards to delivering complete energy, hydrogen energy systems on board vessels, larger vessels, both fully integrated systems and also containerized systems, which will make it easier also to retrofit vessels with hydrogen energy systems and also doing a faster installation on new builds because the modules that are put on board will be ready containerized and ready approved. We expect a good development of this company next year. They still have a focus on building the markets, building the products. We are excited to see what happens onwards. Pål, I'll let you say something about financials.
Yes. If we look into the quarter, as a sum for the group, there's an operating income, NOK 137 million for this quarter, EBITDA of NOK 5 and EBIT of NOK 1, net finance of NOK 0. The net profit for the quarter is NOK 1 million , representing 0.6% EBIT margin. If we compare to the previous quarters, this is lower. As Gunnar said, this is mainly due to lower capacity utilization due to lower order intake and postponed projects that hopefully will come into the order book within the coming months.
If you look into the cash, sorry, into the balance sheet, we see quite, yeah, stable balance sheet related to the intangible assets. We have some R&D projects, and we are booking cost into it and but we also have a quite high depreciation related to previous investments. If you look at fixed assets, it's smaller changes. Current assets, we see a reduction in the. Sorry. Sorry. Yeah. I think I have to take off my pen. We see an increase in total receivables, but we see a reduction in cash deposits if we look and compare to the start of the year.
The total balance is reduced from NOK 588 to NOK 493. If you look at the equity side, we see also a reduction, but year-to-date we have a positive margin and should be an increased equity, but this is due to the purchase of our own shares and also that we have acquired 100% of Norwegian Greentech during this year. Looking at the long-term liabilities, we see the reduction month-by-month, and we have a total depth of NOK 57 million per third quarter. The current liabilities or total liabilities is also quite reduced from the start of the year.
If we look at the cash balance, we see there's quite negative figures from year to date on the operational side. This is due to increased stock level, reduction in account receivables, reduce in account payables. Also we see an increase in advanced payment to suppliers, a reduction in advanced payment from customers, and also an increase in accrued revenue. All of this is related to projects, and we see that we have a lower activity and a lower order book. Then we see also the figures coming through the balance. If we look at the cash from the investments, this is related to the R&D and also a purchase of the shares in Greentech.
Net cash from finance activities are the payment of debts and mainly also our purchase of our own shares this year. We see that the cash is NOK 258 million per end of third quarter, and let's say that's a reduction related due to all these activities that is in sum. Of course, we see that the lack of new projects with prepayment and in general lower activity is let's say we then have a lower level of cash. If you look at the order backlog, we see a reduction this quarter. We have a reduction from NOK 557 to NOK 481.
Norwegian Greentech is more or less on the same level, but the order book for Design and Norwegian Electric Systems has been reduced this quarter. This is one of the main issues or highlights, or in the period, and this is one of the main concerns that we have to be able to build a stronger order book for the future. Yes.
Thank you, Pål. That I think is a good introduction to the market outlook. As a summary of the financials also, even though the cash balance is lower, the free capital and the working capital in the company is positive or on the same level, and we have the same, let's say, financial muscle still to do the business development and the development of the group further. We have said from the early beginning that the strongest drivers for the technology and for the development of our group is the general need for new technology with regards to reducing emissions and reducing energy consumptions. Those drivers are at least as strong today as they have been before.
The focus has maybe shifted a little bit from the environmental side to the energy side, they are very closely related, we need to solve both issues in order to have sufficient energy and also a sustainable future on the sea. We are established with companies that deliver technology already to this market to supply these needs, we are constantly also developing new products and new markets towards zero emission and low emission and low energy consumption technology. We are profitable, we have a good financial situation to finance our further plans.
We see that several of the markets that we are in, there is, as I said earlier, there is some, let's say, disturbance because of the world situation. We had the pandemic. We now have the energy crisis and the crisis in Ukraine, the war in Ukraine. We see that from, let's say the last two quarters where there was more hesitance in the market, the customers are now coming back with more inquiries, and the pipeline is filling up. We expect that. HAVe good expectations that the order book will fill up now onwards for most of the companies.
For the longer picture, we see that these drivers, we have not changed our, let's say, medium-term goal. We continue to say that we have a target to have a NOK 1.3 billion turnover in 2025, and the growth will come in all of the companies or all the subsidiaries in the group. That's the summary or the wrap up of the presentation. Now we also have Marius Koksvik from HAV Group here together with us, and he has collected the questions that has come in through the link that was sent out before the presentation. Now me and Pål Aurvåg, we will try to answer to the best of our knowledge to the questions that you have.
Yes. The first question is regarding a possible uplisting from Euronext Growth to Oslo Børs or the main list. Do we see this as an option for HAV Group going forward?
I think we addressed these questions previously also, and we are considering that. We see Euronext Growth as a good place to be for HAV Group at the moment, and if certain things development is driving it, we will also consider the main list. At the moment, we are comfortable being on Euronext Growth.
In this presentation, you have described the postponements as a short-term problem. Are these postponements for HAV Group only, or is this a general trend in the market?
From our people that are out in the market and talking also to competitors, we have seen very much the same situation for the last half year at least, that customers, they are postponing their investment decisions, not canceling them. We also see that, and that's the same impression we get from other in the industry also, that now things are picking up. We expect, I think, together with everybody, that the market will pick up. We also see the main drivers are still there, and we are, we have the same challenges with too little energy and too high emissions. We expect, and I think also the market expect, that this will pick up now onwards.
For the last couple of months, it seems like, we have slowed down the buyback process of shares. Is this a change in strategy?
No, the strategy for the repurchase is the same level, and we are restricted by safe harbor rules. Let's say we see that the total turnover or the trading in the stock is lower than it has been the month before, and that also naturally will be a reduction in our own purchase. So, t his is done by external brokers, according to their rules.
Can you elaborate some more on why the acquisition of Høglund Marine Solutions did not go through?
Yeah. We cannot go into details of what was the reason, but we did not come to a final agreement with the owner of the final terms of the eventual acquisition. That is what we can say, and unfortunately not more about that.
What is the reason that the HAV Group delivers its quarterly results so late? HAVe you considered moving the reporting date?
The dates, they are, let's say, planned in a financial calendar one year ahead. Yes, we has been this year reporting at the end of, let's say, very close to the due dates. But this is, the financial calendar for 2023 is going to be a part of, the plan, and will be, launched during December. We will take this, let's say, this will be taken into discussion and, it have to be approved by the board.
Can you expand a little bit on your general outlook for 2023?
Yeah. We do not guide for 2023. We have a medium-term guidance for 2025.
We expect, as I said, more activity on the sales side, even more positive pipeline and expect a good order income. What we can say, of course, is that for some of the companies, the lead time from order until delivery is fairly long. So the effects of new orders will mainly be at the end of 2023 and onwards. But the general outlook and expectations for the market is positive.
How is the market for attaining labor? Is it challenging?
Yes, it's challenging. Maybe we will see a development in that now, for the really good people with the special knowledge, the special competence, it's always a competition. We have an advantage, even though being a small company, we are located in several places. We have the possibility to hire people, for instance, in Bergen even though they would be working in Ålesund and the opposite around. Up till now, it has not been a big issue, and maybe also the general development will make it not, at least not more difficult, onwards.
This also ties into the next question. NES has opened an office in Turkey over the last year. Is it relevant or strategic with any other new sites geographically for HAV Group in the future?
That is, constantly, yeah, under evaluation and in planning with regards to our market plans. For instance, for NES, it is very good to have, let's say, bridge heads or spear heads in important markets. We have already expanded to Turkey. We have plans to expand to also further markets. That will not be, let's say, published until the plans are ready and we are ready to go ahead.
HAV Group has not completed any M&A transactions this year so far. Is this still part of your strategy, or is it not relevant anymore?
Growth through M&A is still very much a part of our growth strategy. Unfortunately, we didn't succeed with what has been published this year. We are looking at several options still, and we are also looking at new options. Acquiring companies that will add value and synergies to the group is still very much a strategy onwards.
Could you elaborate a bit more on HAV Hydrogen's interest in the market? How is their concepts fairing?
The interest for HAV Hydrogen is growing and has been very positive, I would say that this last, at least this last year, last six months. After the launch of the hydrogen energy container, it has picked up even more. We see that there is demand for the product that they have developed. It's a part of the value chain with regards to hydrogen energy systems on board that is not covered by so many. We are very excited about the development of the company and see very positive prospects also onwards. A little bit difficult to exactly pinpoint when things are going to take off, depending on several factors, but we are hopeful that during next year, you will see a lot of development within HAV Hydrogen.
How does HAV Group look at the long-term dividend policy?
The dividend, the policy is to have a sound dividend to the shareholders. We still are looking at prospects with regards to M&A, for instance, and business development, that we feel is the best investment for our investors also to spend the money that we have. Of course, from quarter to quarter, an actual dividend will always be evaluated. As long as we feel that the return of investment is better to put into developing the company, that we feel is the best dividend policy also for the investors.
Okay, the last question that we have time for today is about the lower capacity utilization that we mentioned. What is this capacity internally used for when it's not used on projects?
The capacity is, of course, evaluated all the time, and what we are using it mainly for is two things. It's development of new products and also development of new markets. The capacity, much of this capacity can be spent, for instance, assisting the sales force in order to reach out to more markets and secure the hit rate with regards to achieving a bigger order book. Yes, okay. Thank you very much again for following our presentation. We hope you will follow us also for the future.
We are looking back, and we're looking forward to coming out with news about the company when relevant, and also hope to see you at the next presentation, which is the Q4 presentation that will be next year. Thank you very much.