Good morning, everybody. Welcome to Moreld's first quarter 2025 presentation. I'm pleased to say that Moreld has a very strong start to 2025, driven by high activity levels across all business areas and close to full utilization of vessels and personnel. The first quarter profit was also driven by the phasing of major projects and profit recognition on projects that were initiated in the previous quarter or in quarter four 2024. Before I continue, let me give you some brief introduction of Moreld. It is very relevant in this quarter. We are a company engineering-based with a workforce of about 3,000 people. Our operations and our revenue and profits mainly come from the North Sea and Mediterranean, Western Africa. We do have offices in more countries, but those are the main areas for our income.
That are also areas where we see a strong future, even with the current conditions in the world economy. We have three companies in the group. We have Moreld Apply, a maintenance modification company. Moreld Apply has long contracts with blue chip operators that are, in practical terms, exclusive, very good forward-looking, and very stable income. We have the subsea and installation company, Ocean Installer. That is more of a SURF and EPCI company with very strong income. Moreld Apply stands for about 30% of our EBITDA. Ocean Installer is 65% of our EBITDA. Ocean Installer's projects are of a nature that can—the startup and the finalizing of those projects depends on external factors. That is something I want you to be aware of.
For example, if there is a project or a vessel that we are working on and there is a drilling rig moving something, we always need to wait for that drilling rig. We sometimes need to wait for weather and other events. That is very relevant for this quarter where we did see that startup of operations in West Africa on the project that you see on this picture were delayed for various reasons. The last company is Global Maritime. It's an offshore engineering expert. I'm not going into more details on that now. Okay, back to the figures. Very strong revenue, 18% higher than quarter four 2024. Very pleased with that NOK 2.9 billion . We have increased our personnel base by about 400 persons to take off all that work. The EBITDA, fantastic.
NOK 300 million up from last quarter at NOK 428 million, which is something we are obviously very satisfied with. The profitability is driven partly by the finalizing of several projects for Ocean Installer that was started in the previous quarter. Trond, CFO, will come back to more details on that later on. In the last quarter, we said we were going to refinance the company, and we have done so. We have done a refinancing. We have a cash balance now of NOK 924 million. With the refinanced bond, we have an interest-bearing debt of close to NOK 1.4 billion. The net interest-bearing debt factor is increased to 0.3x . Trond will explain why there are good reasons for that. When it comes to the backlog, we have now been kind of eating off the backlog in the last quarter. We have had an order intake of NOK 1.3 million.
You may think, "Oh, that's low." To that, I'm going to come back on more details, but we are all having an all-time high bidding, which is a—so the year as such will end up, we are sure, with significant awards of contracts. I will discuss that a little bit more in detail later on. The main recent events this time, we have issued a new bond, as I said, NOK 130 million bond. One important aspect with that was to have the possibility to pay out dividends. That is now in place. I'm very pleased with that. I will come back to that later down. The previous bond on NOK 225 million has been fully redeemed, and Trond will explain more on that. Let me tell you a little bit more on vessel charters.
That is a prerequisite for Ocean Installer in order to have capacity and facilities available, or vessels available to execute their work. We did execute an 18-month option now in this quarter because we need to make sure that we have vessel capacity for the future projects that we have won, but also future projects that we are bidding. Therefore, we not only secure future charters, but we also make sure that we have options to call for that are fixed priced. That is very important for the company's bidding activities. Yeah, it is good to pay out dividends now. We will pay out—we are proposed to pay out NOK 0.42 for this quarter. That will be finally approved at the AGM next week.
If approved, I need to say, then the share will be traded ex-dividends on the 21st of May, and the payout will be a week later or around the 26th of May. The next quarterly dividend is expected to be roughly on the same level and then in August. I did have a talk to the chairman yesterday, and he's clear that he also wants to see that kind of dividends for the next three quarters. Okay, a little bit more of each of the companies. As I said, Apply is going very well. I think for me, one of the more important parts with the Moreld Apply is that they have managed to enter stronger into the onshore market. That opens up some nice opportunities. Also, that means that we have been invited for some long-term contracts for bidding on onshore activities this year.
That are nice opportunities that we have some good hope for winning. I'm going to come back on the tender activity later down, so I'll wait. I'll go to the next company because the tender activity is key for us, but I need to do that on a later slide. Ocean Installer, I think it's no surprise that that is the main driver of these significant results that we see. NOK 329 million . Very high utilization, and especially on the big project that we executed for Total in Angola. Let me give you an example of how profits are recognized and how we ended up booking all the profits for that project this year. The vessel that you see here started the work to pick up goods already in end of November last year. It picked up various items and sailed down to Angola.
When we came to Angola, we did not get access to the port. This was just before Christmas last year. That is not unusual, but that happens. We cannot predict it, but it happened. We waited outside for one and a half weeks, and then it went into this year. That is how things are working in contracts like that. We needed to pick up more equipment on that port, and it ended up then starting its operations on the site in January. It finished it before this quarter was ended. It was a very good project. It went all very fine. We managed to do very well on it. I'm very, very proud on behalf of the people in Ocean Installer. That is one of the main drivers for this strong quarter. Global Maritime is stable.
It's more sales of hours, engineering hours, sometimes larger projects. That business was going as expected in the quarter. Okay, here is a slide that is very important for us now. The backlog that we see is now about around NOK 8 million or nearly NOK 9 million. We have currently an extraordinarily high activity on bidding. We are about at an all-time high level of bidding. That is in Norway for Apply's large maintenance modification contracts. It is also for Ocean Installer, large EPCI SURF contracts internationally. We expect to contribute, what should I put, to a meaningful backlog increase this year for the company based on this activity. Obviously, I can't go into details. This is confidential, but it's a very strong development. With that, Trond, I'll give the word to you.
Thank you, Geir.
Okay, I'll continue with going through the financials, starting off with the group financials, and I will also cover the three segments afterwards. As Geir mentioned, Moreld delivered a very strong result for the quarter, driven by high activity levels and profit recognition on large projects. This is also a quarter with historically lower seasonal activity for the group. With that, we are very satisfied with the result for the quarter. Revenue came in on NOK 2.9 billion and EBITDA at NOK 428 million. Also note that this EBITDA number is exclusive of IFRS 16 adjustments, meaning that the cash vessel lease cost, which is a significant cost component for the group, is included in this EBITDA number.
A significant portion of Moreld's operations consists of large-scale projects where revenue and margins may vary from quarter to quarter and depending on project phase and the level of pass-through of equipment and material. Due to the phasing of profit recognition, there was a steep incline in the margin compared to the previous quarter due to a catch-up effect, as Geir also mentioned, on one of the larger projects that we are executing. This catch-up effect amounts to NOK 80 million of EBITDA in Q1. Leverage ratio slightly increased to 0.3x , mainly due to one-off costs related to the bond refinancing we concluded in February, but also an increase in working capital. In terms of EBITDA guidance, we are on track to reach our EBITDA guidance.
With a strong Q1 result, we have also slightly revised our guiding upwards, but remain cautious due to the general market uncertainties. Over to the financial performance for Apply in the quarter. Apply has continued a positive trend from last quarter, reaching revenue of NOK 1.1 billion and EBITDA of NOK 95 million. EBITDA margin increased to 8.5% compared to Q1 last year. Revenue is up 48%. Apply has experienced significant growth over the last two quarters, reflecting increased activity in the Draupner project portfolio, as well as high activity for Boliden Odda on the zinc plant upgrade project. The increase in EBITDA margin compared to the previous quarter is mainly driven by a lower share of pass-through revenue from equipment and materials. The amount of equipment and materials and pass-through will vary from quarter to quarter.
Ocean Installer, as Geir also mentioned, delivered a very strong result in the quarter, partly driven by the degree of completion of major projects and profit recognition that we have already talked about, and the catch-up from Q4 last year. As already mentioned, the catch-up effect in this quarter is an EBITDA effect of NOK 80 million. Revenue for the first quarter amounted to almost NOK 1.6 billion, while EBITDA reached NOK 329 million. This also represents a significant increase compared to Q4, when the two key vessels were on long intercontinental transits, combined with the startup of several new projects. Global Maritime delivered a revenue of NOK 205 million in the quarter and an EBITDA of NOK 5 million. Revenue increased by 7% compared to the first quarter last year, while EBITDA was considerably lower.
This is mainly due to the Highland Scotland project, which started during Q1 last year and was a key contributor to Global Maritime's high profitability in that quarter and also for the remainder of 2024. Over to the balance sheet, starting with the development in the networking capital. As you may be aware, the group operates with a capital-efficient model with a high degree of customer prepayments. At the end of Q1, we had NOK 291 million of prepayments on the balance sheet, which is down from NOK 447 million end of last quarter. That is following substantial progress made on the larger projects during the quarter. Current level of working capital is less negative than the last 12-month average, but within the indicated normalized band that we have indicated on this slide. On the debt side, obviously, post the IPO, we have a very low debt level.
Gross interest-bearing debt, that includes the $130 million bond that we refinanced back in February and which also opened up for dividends, as mentioned by Geir. The gross interest-bearing debt also includes lease liabilities accounted for under IFRS 16. That is mainly the vessels and the two CSVs that we have on long-time charter, but also some office leases are accounted for under IFRS 16 liabilities. Cash balance at the end of the quarter was NOK 924 million, down from NOK 1.5 billion at the start of the year. Net interest-bearing debt, excluding IFRS 16 liabilities, is NOK 448 million, which is a leverage ratio of 0.3x , up from 0.1x from the last quarter, mainly driven by the one-off costs from the refinancing, paying the premiums and the make-all, but also an increase in the working capital.
I will conclude by going through the main developments on the cash flow. Starting, as I mentioned, we have NOK 1.5 billion of cash at the start of the year. We have NOK 480 million of EBITDA, excluding IFRS 16. We have a negative change in net working capital of NOK 567 million, which ties back to what I mentioned on prepayments. We have a reduction in prepayments, but we also have some timing effects between Q4 and Q1 related to supplier payments, but also payments on the receivable side, as well as a large milestone invoice for work performed in Q1 that was executed and invoiced after quarter one. Net cash used in refinancing, NOK 371 million of cash outflows. That mainly consists of what I already mentioned, paying the premiums and the make-all. We also raised $15 million of less bond than we had in the previous bond.
So we have used around NOK 160 million to NOK 170 million of our own cash as part of the refinancing. So NOK 924 million of cash at quarter end. On top of that, we also have NOK 200 million of untapped credit facilities within our super senior facility. With that, I hand it back to you, Geir.
Thank you, Trond. All right, I want to say a few words on our EBITDA guidance for this year. The strong quarter one supports an increase in our guiding. We already know that the quarter two will also be strong. Good trading, good projects. Based on those events that we see, we take the lower side of the guiding from NOK 900 million-NOK 950 million, NOK 50 million up. We also increase the upside by NOK 100 million, NOK 1.1 billion-NOK 1.2 billion. You can always ask, could we have increased it more based on the fantastic results?
To that, I want to say that we still have days that are not sold for the vessels at the end of the year, quarter four mainly. That is a normal situation. We do not want to assume that we have a full coverage of those vessel days at this point in the year. We need to have that open. I'm sure everyone says it's market uncertainties, blah, blah, blah. Yes, that is of course a part of it, but there are opportunities out there. We need to secure them, and we have not done that yet for the last part of the year. Therefore, we are keeping that guiding at the level that I just said. We need to come back to further updates on the guiding later on. It is also depending on a very strong tender line, of course, pipeline.
That is more something that is a longer-term part. The tenders that we are now working on predominantly are on contracts that will run this year, but run down this year and start up again next year when it comes to Moreld Apply. For Ocean Installer, the tenders we're working on, the large tenders are for next year onwards. There are spot market tenders out there for this year for Ocean Installer. That is something we are really hoping to win, and then we can also have a re-look at the guiding based on the outcome of that. Okay, I think that is the end of the presentation. I just want to finish off with a couple of upcoming corporate events that we want to highlight to you. The first AGM, as I said, will be conducted on the 20th of May.
All of you that are shareholders have been invited for that event. Please participate and make the possibility to vote and to be active. The key topics, we have been through it already, but of course it's the dividend approval. It's also authorization for share buybacks. I think that is important. I want to highlight that and share capital increases. For share buybacks, partly we are also looking at incorporating a share option program for employees. We are still working on that, so it's too early to say the details about it, but that's something we want to do for several reasons, but it's positive for our employees to have that in place in the future. We will elect new board members. That you can find in the call for the meeting. We will also convert the company to an ASA company.
I think one very important part to the right-hand side here is the uplisting of the company. That is something we have been working for ever since we started being listed on the Euronext Growth. We always had the intention, and we have said that, to uplist to the main list. That is very, very likely to happen in quarter two, so in this quarter, of course, pending on regulatory bodies. That is definitely the plan now. In the end, I want to remind you all that the lock-up period of more than 60% of the shares expires on the 19th of June. That is, of course, an important event for the company. We think and hope that that will also increase liquidity in the company's shares. With that, I thank you for your attention, and thank you very much, all of you.
Yes, then we can move on to the Q&A. First, if we have any questions from the audience? No? Okay, we can move directly to the online questions. We got quite a few, but I'll start with one for you, Geir, and that is linked to the guiding. You beat the fact-set consensus for Q1 with over NOK 200 million, but guidance is only increased by NOK 75 million. Could you please explain why the guidance isn't raised even further?
I think maybe I answered that already, but as I said, the jobs that Ocean Installer is going to win that will take us to the higher part of the guidance is on the spot market.
The spot market, I need to say, has shown signs of being a little bit softer now, but there are very strong opportunities out there still that we are working on. We want to be cautious in increasing our guiding until we see that we have some more of those jobs that we need to do in the last quarter of the year.
Yeah, with such a strong first quarter, how should we think about the phasing of EBITDA in the remaining three quarters? Should we expect Q2 to be a soft quarter with relocation of vessels and limited margin on new projects?
Yeah, that's a good question, of course. As I said, the timing of when we take the profits for the, especially for the Ocean Installer work, is always a little bit difficult to project.
I think that is not so easy to answer, but as Trond said, we have already, we are seeing good activity levels in this quarter. I'm not sure if you have more details there, Trond.
No, but obviously, we have better visibility in the short term on Q2. Obviously, yeah, we have good visibility on Q2, but I don't think we should go into kind of any indications or guiding on the quarters.
When it comes to the cyclicality in Ocean Installer, could we say that the results in Q4 2024 and Q1 2025, is an average of the two quarters representative for Ocean Installer's run rate going forward?
I hadn't thought about that one before. I think Trond can answer it, but I want to say one thing on that question, which you remember last quarter.
I did say that we have now established a business model where we are taking our vessels from, in Ocean Installer, from the North Sea down to West Africa and the Mediterranean. That is something that started this year and partly only last year. We have seen very positive effects of doing this, but I think being very, very kind of exact on how that will work year on year, I do not think that, I think that is too early to say, and it is also depending a lot on which kind of projects do we win. I would be careful in anticipating a copy at this point in time.
Yeah, no, I agree with that. Obviously, the catch-up effect in Q1 could kind of be moved back to Q4 kind of to normalize, but I agree with Geir.
It depends on the kind of project that Ocean Installer is executing and also when the key vessels are in transit between the North Sea and West Africa.
Let me add one. I like that question a lot. It's a very good question. I think going forward with the project, large projects that Ocean Installer are doing, we do expect that there will be quite large variations on quarters. I would almost say that looking at individual quarters and then anticipating how the rest of the year would be based on one quarter, that is kind of something I would not recommend. It is for the whole group since Ocean Installer represents two-thirds or more of the EBITDA. You need to look at it on a little bit more or a longer basis than just a quarter on a quarter basis.
Very good.
We can move on to some questions on the backlog and the bidding. It seems like Ocean Installer is set with two key vessels on long-term contracts. Why not increase to three or four vessels to increase the capacity and set up the company for growth?
Yeah, that is something we definitely have thought about. Yeah, spot on. It's an assessment on what we see of the future market. I think even more important, the availability of that kind of vessels. That kind of vessels are not very available at all in the market. We have certain requirements that we need. You can find the same vessels with cranes, just to be a little bit more technical, but having the equipment or the carousels, as they are called, to enable the kind of operations that we need to have them for, it's very scarce availability.
It's something we are assessing, but it's the kind of type of vessels that are hard to get hold of in the market.
You mentioned that you're bidding for many contracts now. Could we say something about which contracts and customers we are approaching? And based on your track record with these customers, what would you consider likely in terms of success ratio and order intake from these tenders?
Yeah, of course, I know the answer to the question, but this is also very confidential. I think for the project for Ocean Installer, I don't think I can share that. I think for Apply, we are bidding to all the major oil companies, the operating companies in Norway at the moment. I don't think that's a big secret in this. Those are large contracts, long durations.
You know we are in the middle of the bidding, and I cannot share which companies or what kind of contracts it is, unfortunately.
Regarding those contracts, why not increase the range of the guidance for this year based on the possible contracts you might get?
Yeah, that's easy to answer. Those contracts are being bid for startup from 2026 onwards and not from the start either. There will be no effect on those new contracts this year.
In terms of the more long-term outlook, what are you thinking on the subsea market from 2027 and beyond?
Yeah, that's a good question, of course. If I knew it, I would have been a rich man now.
Now it's, how should I say, it is, if we look at the larger, our large competitors, they are very positive, very forward-leaning on EPCI type of SURF projects, and we are as well. We are working on, I can only see what we are working on, and we are working on very good, very strong projects for those years. We have seen, I think it's right to say that possibly the spot market is a little bit more uncertain these days, but that is on the very short term. On the longer term, the SURF and EPCI project that we are working on with Ocean Installer, that's a very strong market.
Finally, some questions related to the dividends and share buybacks. I'll direct those to Trond.
According to your dividend policy, the company aims for a distribution ratio between 40-60% of adjusted net profits over time. What adjustments are typically made to the net profits?
Typically, adjustment we will make to the net profit is, for instance, amortization of excess values as part of the M&A activities we have done. That would be other kind of one-off costs. If we had kind of refinancing costs, such kind of cost, we will adjust for those or normalize for those kind of costs.
Finally, will the company consider share buybacks?
Yeah, absolutely. We will consider share buybacks, and that is also why we have this separate, we are asking for a proxy on the annual general meeting taking place next week. The board is asking for a proxy to do share buybacks going forward.
That was the final question.
With that, we conclude the Q&A.
Thank you very much.