Morning, everybody, and welcome to HAV Group 's Presentation of Financial Results for the Second Quarter and the First Half-Year of 2025. My name is Gunnar Larsen, and I'm here today, as usual, with our CFO, Pål Aurvåg. Today, we will talk about the highlights of the quarter, some information about HAV Group in general. We will go more into detail on the business segments. Pål will give you more details about the financials. We will sum up and give you our outlook for the future for HAV. At the end, as usual, we will have a Q&A session where you have already sent in and can still send in questions that we will answer. The key developments in the quarter were that we had a very solid quarterly revenue of NOK 193.3 million. The EBITDA was NOK 4.1 million. That is the third consecutive quarter with positive EBITDA.
The energy design and smart control systems segment continued to have very strong performance. The balance sheet was steadily strengthening. Cash balance was NOK 293 million, up from NOK 124 million at the same time last year. The order intake was NOK 215 million in the quarter, and that was including three charging stations for Norled ferries, an EUR 8.5 million contract with Hassan Shipyard for power and automation systems, and, very gladly, a ship design project for North Salmon Service. That resulted in that we maintained a very strong order backlog of close to NOK 1.3 billion as of the end of the quarter. Also, we have formalized the collaboration with Havila Voyages for the next generation of coastal route ships. After the quarter, we have contracted to deliver five container-based water purification systems to Greenland. We have been awarded three integrated navigation systems to Hassan Shipyard.
Here you see the order intake compared to the last quarters. Both the order intake for the quarter is good. Also, you see that we keep a steady order book, a steady high order book totally for the whole group. I will give you some more information again about HAV Group , what we are. We are an international provider of maritime systems and solutions to shipowners and shipyards all around the world. Our value proposition is to improve vessels, cargo, and owners' competitiveness by providing advice and optimized solutions throughout the ship's life cycle. We are headquartered in Fosnavåg. We are about 160 people in Norway, in Poland, and in Turkey. We consider ourselves to be experts guiding the marine and maritime industries towards low and zero-emission shipping. We concentrate on four different technological segments: ship design, energy design and smart control, hydrogen-based energy systems, and water treatment systems.
I will give more insight into the development of these segments later in the presentation. Here you see the main industry segments that these segments are focusing on: offshore wind, oil and gas, ferries and roof docks, aquaculture, fisheries, and short sea cargo. I go over to more details about each of the technological segments. Ship design, the ship design segment had a very important contract win as the design provider for our new live fish carrier for Norwegian aquaculture logistics operator, North Salmon Service. The majority of this design and engineering work will be executed in 2025. We have unutilized capacity in this business, and we are focusing very much on sales in the segments that we are focusing on. We also had a management change in the segment.
Stig Magne, a long-time Managing Director for the company, has gone to a new role as Senior Vice President of Design in the company. I am appointed as an Interim Managing Director, and we are now in the process of hiring our new permanent Managing Director. The energy design and smart control systems segment had another quarter with solid financial performance. Some of the important contract wins in the quarter were the EUR 8.5 million contract for energy design and smart control systems for two new build vessels. We have got a contract for delivery of three charging stations for ferries. As I mentioned earlier, we had a very important contract also for three integrated navigation systems to Hassan Shipyard, which was the first separate sale of our Raven integrated bridge and navigation system. The water treatment system had improved financial results compared to previous quarters.
We had new contracts to supply five separate ballast water treatment systems to various shipyards in Norway. We see also that new regulations for land-based aquaculture and reopening of license applications announced in July create market opportunities for the products that we have in the water treatment business. After the end of the quarter, we also contracted to deliver five container-based water purification systems to Greenland, which is also entering into a new potential market segment. As we mentioned earlier, for the hydrogen-based energy system, we have taken down cost and activity levels due to the market situation in general for hydrogen energy for ships and also for some of the projects, the progress in some of the projects that we were working on.
We keep the intellectual property rights and safeguard them to be positioned to capitalize on future market opportunities for the technology that we really believe are there. It's a matter of timing. The responsibility for the maintenance of the technology and expertise has been transferred to HAV Group 's ship design business. When taking down this activity level, we expect an annual saving of approximately NOK 10 million for this segment until we ramp up the activity again according to the activity in the market. Here you see the order backlog, total order backlog, NOK 1.288 billion in total. The ship design in the quarter had NOK 160 million backlog. Energy design and smart control systems maintains an order backlog of over NOK 1 billion. The water treatment system has increased their order backlog from the same time last year to NOK 89 million.
It is a very good development of our order backlog. Pål will give you some more details about the financials for the quarter.
Morning. I will guide you through the financial performance for the quarter. We delivered a relatively high turnover on the back of a good activity level in the second quarter, which was at the same level as the second quarter of 2024, but significantly higher than the previous quarter. This is the third quarter in a row with positive EBITDA, which is pleasing, but there is still room for improvement in some of our business segments. If we look at the key financials, high activity level in the quarter, improved EBITDA and net profit compared to the same quarter last year. First half-year revenue is 6.5% higher than first half 2024. Year to date, improvement in all main financial KPIs versus the first half-year 2024. Based on the order backlog, operating income is expected to increase in the second half of 2025 versus the first half of 2025.
Looking at the segments, ship design performance is impacted by low capacity utilization. The recent contract win improves utilization for 2025, but the business needs to win more contracts in order to reach the profitability we expect. Energy design and smart control systems is the main contributor to both the return turnover and the margin. In addition to winning new contracts, the segment has good progress on projects and delivers significantly improved financial results. The water treatment segment is impacted by lower than expected sales in the marine segment. However, it's pleasing to see that the business has returned to positive EBITDA figures in the second quarter. If we look at the balance sheet, the main changes in the balance sheet are driven by operational activities. On the asset side, the current assets increased by approximately NOK 140 million year to date.
This is caused mainly by an increase in receivables by NOK 98 million and an increase in cash by NOK 43 million. On the liability side, the current liability has increased by approximately NOK 140 million year to date. This is caused by an increase in advance payment from customers by NOK 140 million. As you can see, our cash balance has grown to a very healthy NOK 293 million, which is more than double the cash balance at the same time last year. To sum up and look at the cash flow, strong positive cash flow with a NOK 46 million increase from the first quarter, summing up to NOK 293 million. This is mainly driven by operating activities and especially a reduction in net other current receivables. The negative cash flow from investing activities is investments in R&D and equipment.
The negative cash flow from financing activities is related to repayment of non-current debt. Back to Gunnar to sum up the quarter.
Thank you very much, Pål. To sum up, we had a very positive EBITDA in Q1 2025, with growth and solid results in the energy design and smart control segment. Totally, also, the EBITDA was positive for the third quarter in a row. We had strong and improved cash generation in the quarter. We had new orders for NOK 215 million signed in Q2, which gave a solid order backlog of NOK 1.288 billion at the end of the quarter. Very positively, we had an important contract win for the ship design business. We have executed the necessary strategic alignment to downscaling of the hydrogen business, waiting for the market to come back. The outlook for HAV still looks very strong. The green transition, stricter regulations, and increasing competition continue to shape the maritime industry.
We are very well positioned to address these challenges with the technology that we have that will enhance the vessel's operations, profitability, and environmental performance. There is a lot of uncertainty in the geopolitical situation and tariff issues. They create some turmoil and some headwinds. We see that the global shipbuilding market is still predicted to remain at a stable level in the coming years, and also for the segments that we are focusing on. Our market presence is mainly in Europe and in Norwegian markets. That reduces our exposure to intercontinental trade conflicts. Based on this and what we are presenting of results and what we see from our order book, we maintain our guidance and we expect solid revenue growth driven by recent contract awards and the active tendering that we are doing. We also expect corresponding margin improvements. That was the presentation.
Now, we will go over to the Q&A session where I will be joined by Pål and we will answer the questions that you have sent in. Pål, have we got any exciting questions this time?
We have to go through and see if there are some new questions that's coming up here. Yes, we can start with the first one. HAV Design competitors are delivering vessel designs to customers all over the world. Why doesn't HAV Design deliver ship design to customers in Asia and America, for example?
If you look at the reference and what we have delivered in HAV Design over the years, since the startup in 2005, we have delivered more than 130 vessels. Many of those have been delivered to Asia, to South America, to America, different types of places in Europe. Also today, we are delivering to American shipyards and we are delivering to Danish owners. We are also focusing on both shipyards and shipowners, not only in Norway but abroad. I would not be surprised if we have more international customers also for the ship design segment in the future.
This is maybe one or the same. You mentioned in your stock exchange announcement that HAV Design must win new projects. How are you working to win new projects, and which market segments are you targeting?
The segments that we are targeting in general are the same as we presented in an earlier slide. What we are doing is that we are extending the number of potential clients that we are targeting in each market. We are focusing on the marketing, and we are also strengthening the sales activity towards these targeted markets. We see the results from how we have been working in some of the markets lately, that the lead portfolio or the pipeline of leads, sales leads, is becoming stronger. That is increasing the chance for getting new orders. I would not be surprised if we have more than one new order also this year. It remains to be seen.
There is also one market question. What measures have HAV Group taken to attract new customers during 2025, including new customers from different international markets?
We are trying, of course, to get our message through. What we are focusing on is what kind of value that we can deliver to our customers. Becoming even more precise, becoming better to tell that market message, to target both through social media, through other digital channels, targeted meeting with customers. We are using all the efforts that we can. We see the results. We have seen the results, especially in the energy design and smart control segment. I'm quite sure we will see the results also in the other segments. We are constantly evaluating how we are working and adapting to the new and modern sales and marketing technologies in order to reach customers and generate leads.
Yes, please roll down. You are guiding on significant revenue growth in 2025. Can you provide some indications on what the third and fourth quarter looks like in terms of activity level?
Yeah, maybe you can answer that, Pål.
Yeah. As we have said, if we compare the first and second half, we think that the second half will be on a higher level. If we look at the third and fourth quarter, we think that the fourth quarter will be the strongest of the two ones. I think we will see an increasing activity level if we look at the turnover side in 2025. Yes. Despite a generally strong market for new builds and green ship designs, HAV Design continues to underperform with low utilization and limited contract wins. What are the key reasons behind the segment?
I don't like to talk about luck and unluck. In football, you can hit the post and the ball goes either in or outside the goal. We have had some of these cases lately also. We have been very close and then not hit the goal. Strengthening the market and sales presence, as we have done now for a period, will give results. If you have been working with shipowners, you know that they start their investment investigations long before they take their investment decision. We are working together with the clients for a long time and have to establish relations and work with the projects for a long time until they finalize contracts. We have been doing that. We have a pipeline.
I'm quite confident that the work we have done, the work that we have been, we will continue to do and improve how we are working, will result in new contracts for the future.
Yeah. There's a question. What is the status progress of the LNGameChanger study?
Yeah, the LNGameChanger study is a very interesting and potential project that we are taking part in. It's a feasibility study to prove the theories that we have that we can very efficiently collect carbon and store carbon from LNG-fueled fuel cells. We are now in the startup of this feasibility study. We will be working throughout this year and into next year before we can present so much results. We will also keep you updated, the market updated, if we have some milestones that we feel it's interesting for the market to know in this project. At the end, if our theories are proven, there might lie a very good business potential for HAV Group to productify this product. It can be applied both for retrofits of existing vessels and for new vessels that want to use LNG as a fuel.
It's also a very, very good means in order to reduce emissions and a shorter and cheaper way to reduce emissions than many other of the measures that we have today. We are really looking forward to see the development in this project.
Yes. Are there any new questions coming in?
No, I think that was the questions. Thank you very much again for following our presentation. We will see you again at least at the next presentation for the Q3. Thank you very much and have a very nice day.