Welcome to Moreld's Second Quarter and First Half of the 2025 Presentation. My name is Geir Austigard, I am the CEO of the company, and next to me is Trond Rosnes, the CFO of the company. The first half of 2025 was very good indeed for the company. We had strong financial results, and we also reached some very important milestones for the group in this quarter. We've had quite a few new investors since the last quarter, so I want to give some more information about Moreld before I continue. We do have three different segments. All the operations here are based on engineering, and the segments are maintenance and modification. The second one is subsea installation. You can see the boat in the middle of this slide. The third one is consultancy, high-level marine consultancy.
The by far biggest contributor to the result, to the net profits, is Ocean Installer at two thirds. Then Apply, as we call the company, on maintenance and modification, it's about one third, just less than one third, and Global Maritime has a smaller part of about 5%. The business model of the group is asset light. We do not, despite the fact that we do have large assets, big boats, we are building equipment, building facilities, or equipment for facilities. We don't own our own shipyards. We don't own, we are using subcontractors for fabrication. We do need big boats, construction vessels for our operations subsea. We don't own those either. We charter those vessels for longer periods of time, and we also have options to extend the charters that we can call upon.
That is to make sure that we can serve the big projects that we have and also bid projects for the future. That model has served us very, very well indeed. There is a slide here on more details about the company. You can look at that later on. I'm not going to go into more details on that just now. Now, back to the good results. The first half year, we've had NOK 5.5 billion of revenue and NOK 2.6 billion in the second quarter. How is that possible? We have seen a very strong contribution from projects on the North Sea, especially with our Apply company, but also projects, subsea projects in West Africa have been contributing very strongly indeed. That gives us an EBITDA for the half year of NOK 791 million, which we are very, very happy about, of course.
It is a strong performance also in quarter two of NOK 363 million. I think it's, I need to comment on these strong results. We have had large projects, especially subsea installation projects, being finalized in quarter two. That means that we have been able to recognize profits. That is of, I would say, an extraordinary character, having so many projects being finalized. Later on, we will also see at the future of operations, and in quarter two, going forward, quarter three, quarter four, we will also see that we are starting up more projects on that, on the subsea part, and they will not be profit recognized as we see it now until 2026. That's a very important detail to have with you. Now, the interest-bearing debt is about the same as it was last time. Trond will go into more details there.
On the backlog side, we are eating up on the backlog, which is expected. We have large contracts that are now about to expire on the maintenance and modification part for Apply. That is to be expected. We are seeing nearly all the large operators going out for tenders now. Those tenders are being bid by many companies, also our competitors, and several companies will win those bids in the near future. We think that by the end of the year, these large bids on maintenance and modification will be awarded. We do think that we will take at least our share of those bids. There were some other important highlights, and of course, the uplisting to the main board at the Oslo Stock Exchange was very important for us.
We have seen a positive impact on the share price, and we see that this was a very good thing for the company and for the shareholders. We also listed the bond, NOK 130 million senior secured bond that we had at the site, or the day after, I think it was. Going forward, Ocean Installer was awarded a good project with Vågerneski in Norway recently for the Balder Phase VI project. We have had a Balder Phase V previously. Don't mix it up with that one because that was finalized in the previous quarter. This is a new Balder project that is now starting up. We have started already activities on that project. That's going to be a good project for the future. On the dividends, we are paying out NOK 42.42. Again, same as last quarter. The stocks will be traded ex-dividend on the 18th of August.
We do see in the future that we will continue with the same level of dividends, and Trond will come more back on those details. Okay, a little bit more on each of the companies we have. Moreld Apply, as I said, is in the middle of large bids that is shaping the future for Moreld Apply, definitely. There is one main contract that we still have that is not out for bidding. That is the FLX contract. It's very important for us. That is a modern contract which we do see is working very well, a contract regime, I should say. In the continuation, we are, as I said, and I want to stress this, we are comfortable that we will keep the level of contract that we have with the three companies that are out for bidding. It's Aker Solutions, it's Equinor, and it's ConocoPhillips.
We do definitely believe that we can maintain our activity at least also in the future when these big contracts are awarded. There is a good activity on the maintenance modification for Apply. As I said in the last quarter, we are still working on a large compressor project that is important for the export of gas from Norway to the continent. That's Trautner. Very, very intense project that's going to continue all the way this year. As we see it, also a little bit into next year on some additional work that is there. It's a very good project. There is also, and that goes for several operators throughout the type, new small findings or fields that are going to be tied back to installations in the coming year, and that Moreld Apply is going to be also participating on a few of those.
Now, let's move on to Ocean Installer. Obviously, very strong results as this is the main engine, if I can say so, on providing results for the group. It says here we have high utilization with five vessels. I did say in the start we have two main vessels. The thing is, Moreld is also taking quite a few vessels every year from the spot market. That is an important capacity that we really rely upon. That is that we see is always available. That enables us to take larger projects, and sometimes we even do projects without those two large construction vessels. We can take them standalone on vessels from the market. I did mention the Balder, so I'm not going into more details there. What I want to explain is a little bit on the phasing of projects. Excuse me.
The three projects that I talked about that was finalized and profit recognized in the first two quarters of the first half, we cannot decide when those projects finalize. That is based on events on the fields, events on the platforms that we're working towards. This is out of our control. It's a little bit of a coincidence that we had all these three large projects being profit recognized in one half year. We have started working on some other big projects, one of them being the Balder VI that I said. That will not be profit recognized very much at all this year. That will be next year and also quite late next year for some of it.
The phasing of projects, I want to stress because that is an explanation of the net profits of the group that will vary depending on when these large projects with a large EBITDA have the profit recognition and the phasing. That's the nature of the business. We will, as much as possible, inform you of how we see this will also be in the future. It's something I want the investors to be very much aware of. Therefore, we are now saying that the activity is still strong in the next two quarters for Ocean Installer, but the profit recognition will be less. Global Maritime has had, I would say, some not satisfactory results over the last half year. It is now improving. They're working more focused, and the margins are now up to 3.8% EBITDA. That's not good enough, let's be fair.
We want it to be at least 8% for that company. We are bidding for some quite nice contracts now, and the outlook is strong. There is more activity also at the moment. We're happy with the development of this company now. I touched upon the backlog already. 2025, $3.3 billion. In 2026, we have some quite nice contracts there already, as you can see. We are closing up to 50% of the anticipated volume of contracts now for next year. We are quite happy with that. The good thing is that there is good tender activity in the market, especially for subsea activities. Not only for the Apply part and the maintenance and modification is extreme because of these large frame agreements.
We also see that despite there was a little weakening in the subsea market bidding in the first and into the second quarter, we now see that there is very strong activity again, which is very important for Ocean Installer. Right, Trond, over to you.
Yes. Thank you, Geir. I will cover the financial part, and I will also comment on what Geir also mentioned about the dividend, but I'll come back to that as well. Moreld has indeed delivered a strong result for the quarter. EBITDA is positively influenced by the timing of project milestones, partly offset by pass-through revenue and project mix within Apply. Revenue exceeded NOK 2.6 billion, and EBITDA ended at NOK 363 million for the quarter. For the first half of 2025, revenue reached NOK 5.6 billion, while adjusted EBITDA was NOK 791 million, as Geir also mentioned.
As we have mentioned in earlier presentations, when we are presenting the EBITDA, this EBITDA number is the EBITDA 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 cash EBITDA proxy number. Leverage ratio maintained at 0.3x . Net interest-bearing debt has been reduced by approximately NOK 80 million in the quarter. As Geir also mentioned, we are on track to reach our full-year EBITDA guidance, and with a strong Q2 result, we have revised the floor in the guidance upwards from NOK 950 million to NOK 1 billion, meaning that the updated guidance therefore is giving us a range between NOK 1 billion to NOK 1.2 billion for the full year 2025.
If we look into more details for Moreld Apply, the high momentum from Q1 continued into Q2 with Moreld Apply reaching a revenue of approximately NOK 1.2 billion. Revenue was 31% higher compared to Q2 last year, mainly due to a high degree of pass-through revenue with limited markup. The second quarter was characterized by high activity on the major maintenance and modification contracts, the installation contract for the Boliden sink plant onshore project that we also talked about in Q1, in addition to the execution of the important Aireen tieback project for Equinor. The EBITDA dropped from about 9% in Q2 last year to 5.2% this year. For the first half of 2025, the EBITDA margin was 6.8% compared to 8.6% for the first half of 2024.
The reduction in the EBITDA margin in the quarter was primarily driven by a high share of pass-through revenue that I already mentioned, but also a lower gross margin contribution from projects due to a project mix and partly by the revision of the incentive mechanism on one of the company's major frame agreements. The new mechanism will reduce and postpone the payout of certain efficiency bonuses to the second half of the year. The order backlog declined from NOK 4.2 billion to NOK 3.5 billion during the quarter. Order intake was around NOK 550 million with the execution phase for E-Mod project at the Gudrun field as the largest award in the period. As Geir also mentioned, securing future backlog for Apply is a key priority, and multiple key bids on long-term multi-billion frame agreements were submitted during the quarter where decisions are anticipated in Q4 this year.
If we continue with the financial performance for Ocean Installer, they delivered another strong quarter, partly driven by completion of major projects, both in Norway and internationally. As expected, as Geir also talked about, when projects are executed and closed out successfully, we are able to recognize profits and release unused contingency, which positively affects the numbers. Revenue for the second quarter of 2025 amounted to NOK 1.25 billion, while EBITDA reached NOK 291 million. Sorry, some hiccups. We expect activity levels to remain high for Ocean Installer in the second half. Just to reiterate what Geir also talked about, there will be more projects in early phase and less projects completed in the second half of 2025. Due to this, we expect the EBITDA recognition in the second half to be lower than in the first half due to this recognition and phasing effect.
Order intake for the quarter was approximately NOK 800 million, with the order backlog at the end of the quarter declined to approximately NOK 3.2 billion. Ocean Installer's tender pipeline at the end of Q2 remains strong with numerous processes due to be decided within the second half of 2025. Global Maritime's revenue in the quarter ended at NOK 213 million and EBITDA at NOK 8.5 million. Revenue was 9% lower compared to Q2 last year, and EBITDA remains lower compared to Q2 last year. The decline in margins compared to the first half of 2024 is primarily due to the Hive in Scotland project that we executed in 2024, and which also was a key contributor to Global Maritime's high profitability last year.
Activity in the company's global business lines of marine services and marine warranty remained at high levels during the quarter, with marine warranty in particular delivering strong revenue volumes and profitability. Combined, these two businesses showed revenue growth of more than 10% compared to the same quarter in 2024. If we look at the networking capital development, as we have talked about before, Moreld operates with a capital-efficient model where the working capital on a normalized level is negative. We have indicated with a band on this slide the range we estimate the normal level to fluctuate in between. The main driver for the negative working capital is front-loaded milestone payments on larger projects, where a high degree of customer prepayments means that the group operates with a negative working capital. Obviously, the negative working capital is then a liability on the balance sheet.
At the end of Q2, we had $128 million of prepayments on the balance sheet, which is down from $291 million in the First Quarter. This follows what we have just talked about. We have closed out several of the larger projects in Ocean Installer during the quarter, which also have a knock-on effect on the level of prepayments. Gross interest-bearing debt includes the $130 million of senior secured notes we issued earlier this year. It also includes the lease liabilities accounted for under IFRS 16, which is the vessel lease, mainly the two construction support vessels we have on long-term charter, but it also includes the office leases. Cash balance at the end of the quarter was $945 million, up from $924 million in Q1. I will come back to the cash flow bridge on the next slide.
Net interest-bearing debt at $367 million when the IFRS 16 lease liabilities have been excluded. As already mentioned, that is a leverage ratio of 0.3 x, maintained at the same level as for Q1. Finally, on the cash flow bridge between Q1 and Q2, as mentioned, coming into the quarter, we had a cash balance of $924 million. We have generated EBITDA profits, the cash EBITDA of $351 million. That's the reported cash EBITDA. We had a negative change of $94 million in our working capital, where the majority is connected to the reduced prepayments, but also partly offset by some other timing effects in our working capital. We have a CapEx of $24 million in the quarter connected to IM IT improvement initiatives, but also the ERP upgrade projects we are working on in Moreld Apply.
We have paid taxes of $61 million, of which the majority is connected to withholding taxes related to the Girasol project. We paid $75 million of dividend back in May. We have some other outflow, which is mainly linked to currency fluctuations on our USD deposits. As mentioned, that gives us a total cash balance of $945 million, an increase of $15 million compared to Q1. If we exclude the prepayments from our cash balance, the increase is net of $184 million. With the untapped credit facilities we have of around NOK 200 million, the available liquidity at the end of the quarter was NOK 1.1 billion. Let me just close off my session with a comment on the dividend, as also mentioned by Geir. We announced this morning that we declare a dividend of NOK 0.42, ex-dividend date 18th of August, payable on or around 26th of August.
We expect to pay out the same dividend in November and in February next year. Those three dividends are connected to the net income of 2024. We expect the level to remain at the same level. What then about any increase? When we have finalized our 2025 accounts and also dependent on our outcome in terms of our guidance, there could be a possibility that we could increase the dividend, but that is something we will have to come back to when we have finalized our 2025 accounts and will obviously also have to be decided finally by the General Assembly. With that, I hand the word back to you, Geir.
Thank you, Trond. One add on the dividend. We have in our policy stated that we will distribute a certain part of the net profits. Obviously, that stands, so that also underpins what Trond just said.
Let me finalize the presentation by looking a little bit more at the guiding. We are, how should I say, realistic careful in our guiding. Therefore, we haven't upped the, we have taken or higher the lower part of the guiding. We haven't upped the top part of the guiding. The reason being that we simply want to be fairly sure that this is realized, can be realized. It is so that in the latter part of the year, there are still open spaces in the schedule for the large enabling construction vessels of Ocean Installer. We could have increased the guiding if we had had filled those up, but we haven't. We may still fill those spaces up. Of course, then we need to relook at the top of the guiding, but we haven't done that. That carefulness is something that we want to maintain.
There are opportunities out there, but we haven't closed any contracts for those open spaces yet. We have closed spaces, but not sufficient to increase the guiding. I just want to finish off with stating that we need to come back on that guiding on the next quarter. Hopefully, of course, we can take it beyond the NOK 1.2 billion. With that, thank you for listening, and we have now time for a Q&A session. Is there any questions come up there?
Any questions from the audience?
Yeah.
Hello there. Erik Aspen Fosså , SB1 Markets. I have at least one question. The backlog has come down a little bit now. I guess that's partly due to the current tenders out for Apply. I would guess most of it is due to Ocean Installer. My question is, given the high tender activity that you see, when could we kind of expect those or the timing of new potential contracts for Ocean Installer coming in? I guess that would also be for work mainly next year.
Yeah, that's a very important question, of course. We are in the middle of bidding for several projects, also large projects and very large projects. It's always hard to say exactly when will bids be finalized or awarded. We do expect that in the next four to five months, we will have closed some of those bids already. There are also some bids that will be a year ahead. Yeah.
We can move on to the online questions. There are some questions here on more of the growth prospects and the long-term picture of the business. Geir, you indicated earlier that you expect a fair share of the MMO work that is currently being tendered. Does this mean that we should expect that Moreld Apply's revenue will remain at the same level, or are there any opportunities for top-line growth in that business?
When it comes to the bids we are in at the moment, let me be precise. We expect to maintain the same level of contracts, at least. That is precisely what I said. Is there an upside? Yes, there is an upside. Of course, there are parts of those bids we have been invited to where we have not been participating before. I do not want to speculate, and I do not have any information that I can share, or I don't have information as of yet on those processes, unfortunately.
Over the next years, what other growth avenues are you looking at for the group? Is M&A an alternative or other prospects?
Yeah, that's an interesting question. In the last quarter, we were in an uplisting process, and we had to really maintain the same kind of operational activity due to the uplisting and the requirements there. Now we are, of course, done with the uplisting, and we can develop our future outlook. We are working on this. We will be more clear on what our intentions are, but I will not say no to any M&A activity anymore. There is a possibility. Yeah.
Moving on, there has been launched a share buyback program. This is a question for Trond. Could you say something more about that buyback program and if we can expect there to be an increase in any buybacks going forward?
Yeah, no, it's correct. We launched a share buyback program some weeks ago. It's currently ongoing. What I can say is that we currently don't have any plans to increase it. That is something we will have to also evaluate going forward. Let me add one thing. I strongly believe having employees as shareholders in a company, owners in a company, I strongly believe that is a very good thing. I am proud and I'm very positive that we now are in a position that we can launch a program for employees, and that will happen in the near future. I think that is good news for the company. It's good news for the shareholders. I really look forward to doing that.
With that, we can conclude the Q&A session. Thank you.
Thank you very much.
Thank you.