Good morning, and welcome to the presentation of HAV Group ASA's second quarter and half-year financial results for 2023. As we normally do, we're going to go through the briefs from Q2 and highlights. We tell a little bit about mega trends and strategy. We give you a business update on each of the product segments. We present the financials in more detail. We go to a summary and outlook for the future, and afterwards, we have a Q&A session, where you have had the possibility to send in your questions via our web channel. Together with me today, I have Pål Aurvåg, which is the CFO, and my name is Gunnar Larsen, and I am the CEO of HAV Group. HAV Group, we are the enablers of the green transition at sea.
We are an international provider of green technology and services for the maritime industries. Our vision is a sustainable future at sea. We are an experienced and renowned provider of maritime products, systems, and integrated solutions, and we are experts in guiding the marine and maritime industry towards the zero emission. Q2, the key figures, we had an operating income of around NOK 200 million, and the EBIT in the quarter was NOK 59.6 million, and we had a profit before tax of NOK 58.7 million. The cash balance for the half year was NOK 259.4 million. The external backlog was NOK 514 million, which gives a book-to-bill of 0.35 in the quarter. Some of the key developments in the quarter, we experienced a good improvement in the revenue and EBIT versus the previous quarters of this year.
There was a special provision with regards to the EBIT and to the turnover where we had a reversal of a previously accounted provision of NOK 46.9 million. Other highlights of the quarter was that we started the process of acquiring Undheim Systems, which is adding dynamic positioning capabilities to HAV Group's products portfolio, and also the very exciting partnership with the Pherousa Green Technologies, which is developing an ammonia cracker capable of converting ammonia to fuel quality, fuel cell quality hydrogen. The order intake in the quarter was NOK 53.3 million, and we also had a very good subsequent event with a large contract for HAV Design for NOK 200 million, which is ship design and a large equipment package for a service vessel for offshore wind production.
The maritime megatrends are still very much in favor for what we are doing in HAV Group, and we see that they will still continue to accelerate the growth of green technologies. Exemplified here with the large need for new vessels for the offshore wind industry, and also that the order book or sorry, the world fleet is continuously aging because of the low new building of vessels in the past years. And that together with the requirements for technology for reducing emissions and reducing energy consumption, gives a big potential for the products and technologies that we deliver in HAV Group. And that makes us perfectly positioned to leverage the green maritime megatrends.
We take the role as an advisor for the ship owners and the cargo owners, and how to invest in maritime technology, and we are designing optimal vessels, taking consideration of their needs in each of the jobs that they are doing. We are pioneers in innovative designs and construction of zero-emission and low-emissions ships. We are a world leader of low and zero-emission energy propulsion and control systems, and we are also a supplier of highly energy-efficient water treatment systems. As a group, we add value compared to the separate companies in the group. We take an active part in the strategic development of each of the companies so that the total strategy is in line with the group strategy. We utilize the complementary in technology and competence in the companies.
In order to add value to our customers, and also generate value for the company and our stakeholders. As a group, we also extract synergies through economies of scale and standardization of systems, and we have a clear strategy on growth based on organic development and M&A transactions. We are enabling the green transition at sea, and we are doing that by having state-of-the-art knowledge about ship design, energy design, and smart control systems, hydrogen-based energy systems, and water treatment systems. And what we put as a top layer on top to create additional value is to integrate these solutions in a total package. And we want to be the advisors for ship owners and ship and cargo owners from their investments decision through the construct design and construction of the vessels and the whole lifetime of the operating the vessels.
And that gives us a competitive edge towards our competitors, and it also gives a competitive edge for our customers by reducing risk and increasing their profitability. Recently, as we have announced, we are working with two processes to add even more technology to our package. We are in the final stages of completing the purchase of Undheim Systems, which will add dynamic positioning capabilities to our group, especially within the smart control, which will, among other things, enable us to develop and deliver semi-autonomous solutions.
The cooperation with Pherousa will give us a competitive edge, that we are also entering into the ammonia market for ship fuel, where we see that that can be one of the first drivers in energy-based energy systems on board vessels, and especially on board larger vessels for deep sea shipping. For the ship design segment in our group, they deliver highly efficient vessels and have an experience in delivering low and zero-emission vessels for more than 120 vessels globally, as per today. They have a leading position within offshore wind, electric ferries, and aquaculture, among others.
And, I would especially like to mention the subsequent event in July, where we got repeat order for ESVAGT, for building at a Turkish shipyard, for the design and a large equipment package for an SOV operating in for wind farms for offshore wind. And that is another example and proof that we are very well established within the offshore wind market, which is also a very potential market for the future. For the energy design and smart control system segment, the Undheim acquisition is a very strategic, important acquisition for both the group and for this segment. It adds dynamic positioning and autonomous vessel capabilities. It allows us to provide solutions that control all vessels' speeds and enable semi-autonomous functionality, and we are expecting this to be closed rather soon.
And we see also that, for a part of the product portfolio in this segment, we have experienced some both termination and postponements of battery packages due to that the Norwegian Enova has stopped the subsidies for these kind of installations. But we still see that the ship owners use this the battery containers in order to reduce the emission to meet the requirements for the future. We also have expectations that the latest IMO revised greenhouse gas reduction strategy for global shipping will drive and also accelerate the need for low and zero-emission solutions. So this is also a big potential for this segment, for the ship design segment, and also for the hydrogen-based energy design, energy system segment.
So we see that continuously, the requirements for lowering emissions, for lowering, reducing, energy, in order to reach the temperature goals for 2050, becomes stricter, and that gives us a possibility for delivering more technology. For the hydrogen-based energy systems, we still see a very high interest in working with, several projects now, several leads for the Zero Emission Pod, the, complete plug-and-play, hydrogen-based energy system. And the ammonia cooperation with green technology, with, Pherousa Green Technologies is also, a very potential, possibilities where HAV Hydrogen will take the role as the total integrator utilizing the technology that is in, within, Pherousa Green Technologies. And we have high hopes that, we can see some projects being realized there, in the future.
That is also based on the research, the report that we have had from Mærsk Mc-Kinney Møller Center, showing that they expect there will be high need for ammonia-fueled vessels in the future, especially for the deep-sea shipping segment. For the water treatment segment, it's a good, continuous business. We see that the recurring revenue from the aftermarket, the percentage of the total revenue there is growing, based on the continuously increasing install base. We delivered the first system to oil tanker, the first systems, based on a new approval that we have for explosion-proof systems that is needed on board these vessels. That opens a new market for the water treatment system segment.
We delivered contracts for 4sytems+ 2 systems to the European frigate system, and also we have delivered 2 large systems for Havf ram's wind farm installation vessel. And this wind farm installation vessel is installing wind farms for floating wind farms, and that is also a new segment both for Norwegian Greentech and also for the whole group. So then our CFO, Pål, will talk you through the details for the financials.
Good morning. If you look into the details for the finance, we see that both the revenue and the EBIT for the second quarter is highly affected by the one-off effect, one-off effect, related to the reversal of the provision mentioned earlier. But anyway, if you look at the underlying business, we see that the profit and the revenue is quite good if you compare with the previous quarters, the quarters. If we look at the same figures in a table format and focus on the second quarter, we see there's a turnover of NOK 200 million, an EBITDA of NOK 63.8 million, an EBIT of NOK 59.6 million, and a net profit on NOK 58.7 million. If you exclude the one-off effect, we see that the adjusted EBIT is NOK 12.7 million.
If you compare to the last... the quarter on the same period in 2022, and exclude the one-off effect, we see that we are more or less on the same level. But we want to say that the business is largely project-driven, and periodic fluctuations is normal. And also, that the second quarter in this year is quite an improvement from the first quarter this year. And we still focus and, let's say, we maintain a capacity to be able to fully utilize the capacity, or capacity on forthcoming growth opportunities, and this is still affecting the figures. If you look into the different designs, sorry, segments, we see that ship design has NOK 105.9 million in turnover this quarter, with an EBIT of NOK 55.3 million.
If you exclude the one-off effect, we are on NOK 60 million turnover and an EBIT of 14%. So it's still a quite good quarter for the ship design. And if you compare with the activity level related to last year, we see that is much higher activity in the second quarter, and this is mainly related to trading activities. If you look at the water treatment systems, we see that the operating income in the quarter is NOK 53.9 million. It's a bit lower than last year's quarter, and we see also that the operate, the EBIT is NOK 2.7 million, is lower than last year. This is mainly due to the product mix, and also that we have increased the upscaling of the organization for further growth.
The energy and design and smart control systems, we have a NOK 42.6 million turnover, an EBIT of NOK 6.1 million, and profit before tax on NOK 6.6 million. This is a bit lower turnover related to last year in quarter two, but we see that the margins has increased, and we see anyway if the turnover is lower, but this is normal fluctuations. If we look at the hydrogen-based energy systems, this is still a company focusing on R&D, and we see that the turnover is more or less nothing, but the EBIT is -1.6, and I think just say that this is according to the plan.
If you look at the balance sheet, and we then look at the difference from start of the year, we see increase in cash on NOK 35.5 million, and also that the total receivables increased by NOK 42.7 million, and this is related to accounts payable. And on the total liability, we see that we have increased from NOK 367 million-NOK 425 million, and the main reason is increase in advance payments from customers and increase in account payables. The effect of the reversal is linked to the total current liabilities, and is let's say, the detailed transaction or the effect is into the total current liabilities that was reduced by NOK 46.9 million.
If you look at equity, the equity has increased by NOK 29.3 million in this year, and this is related to the retained earnings. We have to also say that the purchase of the own shares has reduced equity by NOK 16.8 million this year. But the equity ratio has increased from 23.5%-25% during this year. If you look at the cash flow, and then focus on the second quarter, we have a net positive cash flow from operating business of NOK 32.7 million, and this is caused by increase in advance payments from customers. And, again, the reversal of the previously accounted provision has net zero effect on the cash. The negative cash from investments is mainly related to investments in R&D.
The negative cash from financing is NOK 8 million, related to purchase of own shares of NOK 2 million, and installments and interest payments of NOK 6 million in the second quarter. We look at the order intake. The order intake has been quite low, but as we can see also historically, it fluctuates a lot between the quarters. So the backlog development, we had a reduction from NOK 640 million to NOK 540 million, but we have to say that this NOK 200 million contract that was signed with HAV Design is not included in these figures. We look at the breakdown. We see the ship segment has NOK 177 million, and as I said, the NOK 200 million could be added on to see the whole picture.
Energy design and smart control, NOK 285 million, and water treatment system has NOK 57 million. As we have commented, the fleet agreements that has been signed up by water treatment, the Norwegian Greentech Company, under the water treatment system segment, they do not add the fleet agreements into the backlog. Yes. That was all in finance, and then back to Gunnar.
Thank you, Pål. So, we sum up the presentation and give you some insight in what we expect for the future. We still see that the fundamentals for a megatrend for Maritime Green Tech is very, very strong, and it's becoming only stronger. And we are perfectly positioned to leverage these megatrends. We have a track record already of profitable operations, and we have a very robust balance sheets, and that gives us a solid position for continuous value creation. The future, what we have said already now for a long time, the global megatrends, they are that there is need for green technology, and we see that it becomes continuously more challenging to reach the climate goals.
That means that we expect that the needs will accelerate, and the need for our technology will be even higher for the future. We see the strengthening from the greenhouse gas strategy from IMO introduced this summer also will just speed this up. So overall, the global megatrends are still very positive. And as I said—as we have said, we are very well positioned, and we possess the technology to help the shipowners enter into the green transition. The global maritime market outlook is positive, but we still see certain investment decisions are being delayed.
And this, in combination with the difference in project mix of our orders, which is related to our combination of high hourly output and transactions for packages, for instance. See this combination. See that we are expecting a weaker margin in H2, in the second half, compared to the first half of 2023. We have still decided to utilize our excess capacity in projects aiming to improve our competitiveness in order to utilize and capitalize on the forthcoming growth opportunities. Our long-term guiding is still that we expect to reach turnover of NOK 1.3 million in 2025.
As we have seen prehistorically, we'll also see onwards, there will be periodic fluctuations due to that we have a very project-driven business. So with that, that concludes the presentation. And then we have a Q&A session. We have our Vice President of Business Development, Marius Koksvik, which is the moderator who has collected your questions. So Pål, if you join me, then we, Marius, we are ready to answer the questions from our stakeholders.
Yes. Hello. There are some questions regarding the Zero Emission Pod. Could it be used other places than on board a ship?
Yeah, the main usage is on board ships, but we have projects now already also, where customers, for instance, need shore power, clean shore power. And we can also use the same container, placing it on shore, producing clean shore power for vessels at the quayside provided by hydrogen. So it has several possibilities for utilization, but the main aim for us is, of course, the maritime industry.
How do you experience the demand in the market for the Zero Emission Pod? Is it nearing a sale?
The demand and the interest is very high because we experience that the low complexity by installing a container compared to an integrated system is very interesting for the customers. Also, when we show the knowledge that we have about hydrogen-based energy systems, we get a lot of interest. Then, of course, there is still a whole value chain that needs to be developed with regards to production of hydrogen, and also the systems for on board the vessels. So, we still think that there will be more pilot projects in the beginning, maybe subsidized by governments also. We are working with several of these also, and the market, but as we have said earlier, the market will come a little bit later.
So the first project that you will see from us is most probably a pilot project in cooperation with a customer.
It looks like HAV Group in general is experiencing low sales, as shown by the low book-to-bill in this quarter. What are you doing to boost sales going forward?
One thing that we are doing is, of course, that we are putting as much effort as we can into sales. We are utilizing, as we say, the capacity, over capacity that we have, to put the company in position to get the new orders. We are developing new technology. We are utilizing all the resources we can in sales, and we are constantly looking at how to reach the new markets. We see that we are in a very good position. We talk to many of the right customers, and we expect that when they take their investment decisions, we are in a very good position to utilize from those opportunities, and that many of the leads that we already have, we'll realize in orders.
Could you elaborate on where the one-off effect comes from?
Pål?
I think we just say, let's say there is more information in the quarterly report, and there is a link to also the annual report.
Regarding India, is that a potential market for HAV Group in the future?
Yes, it is. India is a market with both shipbuilding and a strong shipowner business. So, India is very much a potential for some of the segments within HAV Group.
There's also a focus on the tightening of the IMO regulations. How will this affect HAV Group directly in the future, do you think?
... it affect us that the, as I said, there will be more need for technology reducing emissions, and everything we do is reducing emissions. So, that both this IMO strengthening, but in general, that if we are going to reach the climate goals, there needs to be a lot of reductions, means that the potential for our technology will just be growing for the future.
What are our plans, or HAV Group's plans for the treasury shares that HAV has accumulated? Will some of them be deleted, or are they still planned to be used in M&A?
What we have communicated so far is that they can be used as in transactions for M&A. We are using some of them in the share programs for employees, and that is what we have communicated so far. What we will do in the future, and that remains to be seen.
Okay, and then the last question for this session is regarding HAV Design. How do they work in general? Are they developing new designs for sale, or are they just reacting to client orders, project-based?
That is a combination. We generate or develop concepts, especially in new markets, in order to get attention from clients in new markets. And then, of course, we want to come in close contact with particular owners in order to offer him the best solution, and that is done in a very close dialogue. So there is a combination of specially developed designs for clients, and that we develop a design that can be sold in larger numbers in a more, let's say, generic market, where the specialization to each client is not so needed. So we are doing both. So that seems to be the last questions for this session.
Again, I thank you very much for those of you who are following our company or following our presentations. We are looking forward to seeing you again, at least at the next quarterly presentation, and thank you very much for attending today.