Good morning, everybody, and welcome to Moreld's Third Quarter 2025 presentation. My name is Geir Austigard. I'm the CEO of the company, and with me, coming later up on the scene, is Trond Rosnes, who is the CFO of the company. Moreld's Third Quarter 2025 was very good. It was in line with our expectation. The financial performance was according to our plan. Not the least, we met important milestones for the company. We are continuing to position the company for larger projects in the subsea segment, which is very important for the future. First of all, let me say a couple of words on Moreld on more general terms. Moreld consists of three main segments, all focused on engineering and, more specifically, maintenance, modification, subsea installation, and high-level marine consultancy.
Moreld has an asset-light business model, which means that we have opted to not own our own construction yards. We don't own the vessels. We rather buy manufacturing services and charter key vessels on long-term contracts, always combined with options to secure the future ability to serve large projects and obligations towards our customers and to our shareholders. Right, let's go into some highlights for the quarter. The quarter three revenue was NOK 2.1 billion. And on a year-to-date, that sums up to NOK 7.6 billion. The activity level was expected in the quarter, and projects were primarily executed in the North Sea. We have been moving our assets or our main vessels from West Africa to the North Sea in this quarter. On the EBITDA level, our Adjusted EBITDA is NOK 178 million, which brings the year-to-date EBITDA to NOK 969 million.
We are then NOK 31 million away from the lower band that we're guiding for the whole year. The margin was at 8.6%, and that reflects a larger mix of maintenance modification activities. Especially, there has been some larger pass-through in that EBITDA on goods for the MMO business. We are then ahead of the EBITDA as opposed to last year, which was NOK 947 million at this time. Now we are at, as I said, NOK 969 million. That is something we're very pleased with. If we also look at the net interest-bearing debt at NOK 314 million, that is where we have been in a couple of quarters at the interest-bearing debt EBITDA at 0.3, which we are very pleased with. I know that many of you will question the backlog, and the backlog has been reducing.
The good news is that we had expected to see a reduced backlog because we are in very major bidding activities on both our activities on the maintenance modification with the Moreld Apply and on Ocean Installer on the subsea installation projects. I will come back on the outlook for that later on in the presentation. Again, I want to stress that this is as expected. I have chosen three highlights for the quarter that I want to discuss a little bit more. First of all, we had a very important award of a contract one week ago. That was the BaltA Next award. This award is not part of the figures because this came after quarter three. Ocean Installer secured a large contract for Vår Energi that covers engineering and product deliveries. This is important. This is not subsea installation.
It's product deliveries for the BaltA Next development, which means that there will be a subsea installation part coming later on. The award builds on the strategic partner agreement we have with Vår Energi. We have not booked the subsea installation part of this contract yet. That will come after a final investment decision that's going to be taken by Vår Energi in next year. It brings the order backlog for Ocean Installer above 60% before we enter the year 2026, which is very urgent. We launched a share program for our employees in this quarter. You are all aware of that, so that's no big news. What I want to bring to your attention is that 25% of all staff signed up for that share program.
They only had two or three weeks to decide, but we had to do it in a short period of time. On top of that, 50% of the employees at Ocean Installer signed up for the program. I want to mention that because there is nobody that has better insight in the outlook for the company than the staff. They really, really believe in the company by this very high signing up for shares. I wanted to share that with you. I'm very proud that we have gotten such a good interest in our share program across the group. We bought 3.3 million shares. That's more a technical thing during Q3, which will be used for this purpose. When it comes to the dividend, the board yesterday decided to pay out NOK 0.42 per share, as was announced.
We are guiding on that to be paid out also in February 2026 or in the next payout. This means that we are paying out about 10% annualized yield on dividends. Let's go a little bit more into details on the different companies in the group. Ocean Installer contributes to about two-thirds of the EBITDA contribution to Moreld. It has been an excellent year for Ocean Installer, where they have delivered significantly beyond our expectation, both on revenue and EBITDA. Due to project phasing, we knew that the first half would be considerably better than the second half of the year for Ocean Installer. That is because of project phasing.
Where we have now finalized two of the main projects in quarter one, quarter two, we are about to enter a new large project phase, but that will be as from quarter two next year onwards. We will see a lower activity in this quarter and the next quarter for Ocean Installer, but then it picks up and we have a strong order backlog going forward beyond that, from quarter two next year onwards. I also want to inform you that we are having one of the vessels, the key vessels, the North Sea Giant, for our planned and necessary or required dry dock in the early part of next year. That is a five-week dry dock.
That, of course, puts some limitations on the time before the dry dock starts and after the dry dock starts because we cannot count on working with the boat the day the dry dock starts. We need to have room on both sides of that five-week dry dock. It is something I want you to be aware of. I am very happy with the backlog that we have secured so far. We are definitely looking at some record-high pipeline of bidding, both in the North Sea and internationally. I will come a little bit back on that in a minute. Let me say a couple more words on the BaltA Next project. The strategic partnership that we have with Vår Energi, with Ocean Installer and Vår Energi, is a strong partnership. We are able to mature projects very quickly inside that partnership.
I think that if you look at Nick, the CEO of Vår Energi, outlook for the future, also with satellite hookups, with the major activity for the company, I think that on its own, since we are holding a strategic partnership, gives a strong security for us, or security, but a strong outlook for projects for the future. Let me talk a little bit more about the utilization of the vessels that we have in Ocean Installer. They are key, obviously, for our performance going forward. We have long-term charters with those vessels, as you can see on this slide. We have extended both vessels. We extended one in February and one in October. We extended the one in October earlier than was required. We now have a firm period till start or end 2027 for Vision and first quarter 2027 for Giant.
Look at the options. That is what we were after now. We needed to see a full 27 of firm charters, but we also needed to see 28, 29 with priced options. I think you understand why. We are bidding projects that are so big and lasting such a long time that we have to have this in our hand in order for us to qualify for those projects. Those opportunities are what I'm talking about when I say we are building a strong situation for the future for the company. We haven't won everything there yet. We do think that there is a very high likelihood, obviously, for the installation work for the BaltA Next project. There are some even bigger projects that we are in very close dialogue and bidding for on the international arena.
Therefore, I am confident that the picture that we see on backlog for Ocean Installer will be very much different going across the next one or two quarters. Okay, let's move over to Moreld Apply. Moreld Apply continues to be about one-third of the EBITDA for the group. The main activity, as you know, is maintenance and modification. Those contracts are normally three to six years plus options. We are, as everyone knows, bidding major contracts now for extension of the current agreements that we have. The current agreements are running towards the end of this year. The main agreements, maintenance, modification. We are definitely in the race of continued and renewed contracts for maintenance modification. We have strong indications that we will, and I expect that we will at least have the same level of contracts going forward as we have today.
Everyone will, of course, ask, when will this happen? Because I said last quarter, we would know probably by end of the year. That is now being delayed somewhat. We cannot control that. That is entirely down to two companies that we are bidding to. I do expect to see awards within the next coming months. I cannot be more precise than that. I do not know it, as you understand, but we are not far away from awards. Let me remind you, though, that the awards for the maintenance modifications do not go for the FLX contract. The FLX contract is running for several more years to come. That will go on regardless of the outcome of this bidding.
I'm quite confident that if you look at the backlog going forward, we will see a very significant increase on maintenance modification contracts. When it comes to Global Maritime, very well-reputed marine specialists, we see that we are successful in bidding in several areas, especially in the Middle East. I'm not going to go into details on contracts here, but we have secured some good contracts for the company. The outlook for next year is very good. We have managed to have, we had a humpy ride, I would say, with the company for the last two or three quarters. We are now seeing a more stable activity level going forward for the company. The contribution is, of course, only 5% or 6% for the group, but it's still worthwhile mentioning it to you.
Okay, I said I was going to come back to more details on the backlog. We are currently looking at a backlog of NOK 5.7 billion, as I stated earlier. The distribution of this is seen on this slide. You can see the majority of backlog is for 2026. Beyond that, it is much lower. The reasons are mainly that the maintenance modification backlog is not present there because it stops this year. That is what we are waiting now to see a significant uptick on. For the subsea contracts, they are also going to contribute strongly to this view. Bear in mind, we did mention that this BaltA Next project, which is a NOK 1 billion-NOK 2 billion contract, is a large contract. That is not on this list because this is the list as it was by the end of the quarter.
What is also not on the list is we have not taken in the subsea installation of the BaltA project. That will be another large contract that is also not on there. Then a more, or should I say, personal guesstimate from my side. I am quite sure that when I stand here in the end of quarter one next year, we have more than double this backlog. Right. Trond, financials.
Thank you, Geir. Good morning to you all. Just to reiterate what Geir also mentioned, we are delivering a result for the quarter in line with expectations. Revenue ended at NOK 2.6 billion and Adjusted EBITDA at NOK 178 million for the quarter. Revenue is somewhat reduced compared to previous quarters when the subsea offshore activity was higher.
EBITDA margins reduced to 8.6%, mainly due to a lower gross margin contribution with a higher proportion of pass-through, mainly Apply, but also less profit recognition and closeout of larger projects within Ocean Installer. Year to date, revenue have reached NOK 7.6 billion and Adjusted EBITDA of NOK 969 million. As we have also mentioned in previous presentations, please note that the EBITDA number that we are presenting is exclusive of IFRS 16 adjustments, meaning that we have included all the cash vessel lease cost into this cash proxy EBITDA. Leverage ratio maintained at 0.3x, as also Geir mentioned, and net interest-bearing debt reduced by approximately NOK 50 million in the quarter. Ocean Installer delivered a quarter according to plan, mainly driven by the offshore campaigns in the North Sea. Revenue for the quarter ended at NOK 741 million, while EBITDA reached NOK 116 million.
Year to date, Ocean Installer has delivered a revenue of NOK 3.6 billion and revenue of NOK 736 million of EBITDA. The decline from Q3 last year reflects exceptionally high offshore activity in that comparable quarter last year. That was, as you maybe remember, driven by the closeout of the Marine 12 project for E&I, the fast track project last year, as well as key milestones on other projects. During this quarter, Ocean Installer has successfully completed the offshore components of several projects. We have utilized five vessels in the quarter. Equinor Oskar Compression modular replacement was successfully completed in August. Equinor Eirene tieback to Gina Krog was also completed, utilizing two vessels during the quarter, doing installation of spools, tie-in, and pre-commissioning. Order intake for the quarter for Ocean Installer, NOK 117 million, resulting in an order backlog at the end of the quarter of NOK 2.6 billion.
Ocean Installer's tender pipeline at the end of the Q3 remains strong, as Geir also mentioned, with numerous tender processes to be decided over the next months. Just to repeat that after quarter end, Ocean Installer received what we have classified as a large contract from Vår Energi, the contract related to BaltA Next project. This scope includes then the early phase engineering and product supply ahead of the client's final investment decision. If a final investment decision is taken on the BaltA Next project, this project will be reclassified to a major project, meaning that the value is above NOK 2 billion. Over to Moreld Apply. Apply reached a revenue of NOK 1.1 billion in the quarter. Revenue was 21% higher compared to the same quarter last year, which is a continued increase in activity year- over- year.
Offshore activity remained high, driven by active periods for several M&M and EPCI contracts. Moreld Apply, I think it's fair to say, also experienced a general reduction in the frame agreement volume in the M&M market, more kind of the base M&M frame agreement volume. EBITDA margin dropped from 6% in Q3 last year to 4.9% in this quarter. For the first three quarters of 2025, EBITDA margin was 6.2% compared to 7.7% for the first three quarters last year. The reduction in EBITDA margins in the quarter was primarily driven by a continued high proportion of pass-through revenue, as I mentioned. A lower gross margin contribution from projects due to project mix and some increased risk provisions in some of our projects. Order backlog declined from NOK 3.5 billion to NOK 2.7 billion.
Also, as Geir mentioned, we are tendering on several large maintenance and modifications framework agreements where the awards are expected within the next couple of months. Obviously, extension and awards of new long-term frame agreement represent a significant potential order intake, adding to the backlog for 2026 and beyond. Global Maritime delivered a quarter of increased activity and improved margins, supported by strong performance across several areas. Revenue was reported at NOK 216 million, down 15% from Q3 last year, and EBITDA of NOK 12.5 million versus NOK 25 million last year. The margin decline reflects the absence of a Highwind Scotland component exchange project that we were executing last year and which exceptionally drove the profitability in the prior year for Global Maritime. Contracted backlog for Global Maritime increased slightly despite high execution levels, with two key frame agreements renewals expected to be finalized soon. Additional wins are anticipated.
On the working capital level, as we've also talked about in previous quarters, we operate with a capital efficient model where the working capital on a normalized level is negative. We have indicated the range we estimate the normal level to fluctuate in between. At the end of Q3 2025, the working capital was negative with NOK 290 million. The main driver for the negative working capital is, as we have talked about before, the front-loaded milestone payments on larger projects, but also the fact that we have a non-recourse factoring solution in place for Apply. At the end of Q3, we had NOK 90 million of prepayments on the balance sheet, which is down from NOK 128 million in Q2. Gross interest bearing debt includes the $130 million of senior secured notes we issued earlier this year.
It also includes our lease liabilities accounted for under IFRS 16. That is then basically the vessel leases and then the two key CSVs we have on long-time charters, but the results of some office lease liabilities included in this. Cash balance at the end of the quarter, NOK 985 million. I will come back to a breakdown of the net cash flow on my next slide. Net interest bearing debt, excluding the IFRS 16 liabilities, NOK 314 million, as already mentioned, which is then the leverage ratio of 0.3 times, maintained at the same level as for the last quarter. Cash balance going into the quarter was NOK 945 million. The reported EBITDA, the cash EBITDA, was NOK 174 million. We have a positive change in net working capital of NOK 35 million.
We have a CapEx spend of NOK 19 million, where the majority is related to the ERP upgrade in Apply, going from IFS on-prem to IFS Cloud, but also some IT improvement initiatives. We have paid interest on the bond for six months, so that is the NOK 66 million. We paid out the dividend in August, amounting to NOK 74-75 million. Meaning that total cash balance end of quarter, NOK 985 million, which is an increase of NOK 40 million compared to Q2. Total available liquidity then, close to NOK 1.2 billion when we include the NOK 200 million of untapped credit facilities. Before I conclude my part of the presentation, I will talk briefly about our capital allocation strategy and how we are working with our shareholder base. Our approach to capital allocation is disciplined and designed to create long-term shareholder value.
We prioritize returning capital to shareholders through a consistent and sustainable dividend policy. Predictability is key. Investors know what to expect. We maintain a prudent balance sheet to ensure financial flexibility and resilience across cycles. This gives us the capacity to invest when opportunities arise. We're disciplined when it comes to M&A, focusing only on opportunities that fit within our defined strategic space and clearly add value. M&A has always been part of our growth story, but it's done thoughtfully. We pursue complementary acquisitions that strengthen our core business and can be funded from retained earnings or in a combination with debt. When or if larger strategic opportunities arise that are truly value accretive, we're open to using equity to fund them, but always with shareholder value at the forefront.
In short, our capital allocation strategy is about balance, rewarding shareholders today while positioning the company for a sustainable growth tomorrow. As we continue to develop our company, we're focused on developing our shareholder base that supports our long-term strategy. We want a healthy mix of shareholders, investors who understand our business, share our vision, and value long-term shareholder returns. We're targeting institutional and professional investors who have experience in the subsea and MMO sectors, those who appreciate the dynamics and opportunities within our space. This approach helps ensure stability in our share register and aligns us with partners who support measured growth rather than short-term gains. Ultimately, building a balanced shareholder base strengthens our company. It gives us the right kind of support to execute our strategy and deliver consistent value over time. With that, I hand the floor back to Geir, who will summarize and conclude our presentation.
Thank you, Trond. Let's start on the guiding for the future. We are, and for this year first, we maintain our guiding for the company, NOK 1.0 billion-NOK 1.2 billion on the EBITDA. We are very close already to be at a lower band, and we do not wish to do anything about the guiding for now. We think that this is the area in which we expect the company to land. We have a strong tender pipeline, as I said. That will give us the strategic outlook for investors that Trond mentioned. We expect to have much more information and outlook on that within the next months. We know that that's very important for investors. We also know that that's very important for the company.
I can assure you, we have not seen that type of, well, the maintenance modification, that is a business that we know, that is contracts that we know, and there will not be enormous changes there despite Equinor is doing a lot of work now on the 2035 strategy, etc. We know that the maintenance, the modification on those facilities will have to continue. We are well positioned to continue that work because we are asset light. We can make changes quickly, and we can really serve those installations very well. The part that I think is even more interesting is the bidding activities that Ocean Installer is doing. We are moving the company into a higher class of projects that are now the potentials. Unfortunately, I cannot share details as to what are those customers or what are those projects.
I can only say that the bidding there is very far come, and we are extremely forward-leaning on the future for the company, building a strong outlook for our shareholders and an even stronger positioned Ocean Installer for the future. That is why we say that Moreld is positioned for resilience. We have a broader type of contracts that we can now reach with Ocean Installer. We have a strong footprint on the Norwegian Continental Shelf. Combining that with the international opportunities that we have, I am quite sure, and I know for sure that the contents of what we are now doing, the preparations we are doing on contracts on the future will bring Moreld to a really, really good future. With that, our presentation has come to the end, and we open the floor for questions. Any questions from the audience? I can do that. Yeah.
Hello. Erik Aspen Fosså
I can take that one. What we also mentioned during the last presentation was that we intend to keep the dividend level for Q3 and Q4 on a consistent level. So that is the NOK 0.42 per share. Going into the next year and when we have concluded 2025, we need to come back to the dividend level going forward. That is not something we can say much more about for the time being. The next two quarters, or this plus the next one, the intention is to keep the same dividend level.
Let me add, we have a policy of retaining a certain cash on our accounts, but we will distribute surplus cash. That is given in our guidelines for the company. That must be very clear. We will assess that situation going forward also. If there is, how should I say, an abundance of cash on our accounts, we will, of course, look at what we need to do on distributions. It should be according to our philosophy regardless.
Yeah. Just to reiterate what I also talked about as part of the capital allocation policy, it is to kind of deliver a dividend consistently over time. We think that is kind of an important part of it.
All right. We can move on to questions on the web portal. There are a couple of questions on the backlog.
You reported an order backlog for 2026 of NOK 3.8 billion. That is around 40% of revenue for this year. How does this compare with the outlook for 2025 at this time last year?
Yeah. In order to answer that question, I need to give some background on how these specialty maintenance modification contracts are set up. Our main customers on maintenance modification typically will have contracts that are running for, say, six years. The mechanics is that when we then win a project or maintenance modification agreement, the year we win it, we will have an annual revenue times six as the backlog because that is the duration of the contract. If it was NOK 1 billion, we would add NOK 6 billion to our backlog.
From the year we win it, going forward, we will take off NOK 1 billion every year all the way down to zero when the contract stops. That is exactly where we are now. The contract we have been having, the biggest one is from 2016, so it has been running for 10 years. That has gradually increased until now. Till now, the so-called VEM contract is coming down to almost zero. Then it will jump up again when we renew the contract. This is the methodology. It is our customers that decide how many years they want to have the duration, i.e., also the backlog. That is the mechanics of it. We are expecting then a jump back up again when these contracts will be renewed in a few months' time.
If we look at Ocean Installer's prospects, you mentioned some multi-billion project opportunities. Can you say something about what type of projects they are and where they are, those projects?
Yeah, I think, yeah, that's a good question. The type of projects, it's SURF activities. So it's subsea activities with installation of new equipment on production equipment between the wellhead and up to the vessels. It could be umbilicals, it could be flexible flow lines and related activities. That is what it is about. You also asked where. That is getting more into a confidential part of it. I can say so much that the bigger ones, the very big ones are outside of the North Sea.
Okay. If we look at the next quarter, we see that Ocean Installer's revenue and profit, they have quite significant variation from quarter to quarter. What should we expect for Q4? Will it continue further down or turn upwards?
For this quarter, we are still executing jobs with Ocean Installer, and the duration is somewhat uncertain how long. It is not the SURF activity. It is more, yeah, I would say smaller projects that have various variations. It is hard for us to say exactly where we will end up on the revenue. We would not go into the details at this moment, but there are still good activities ongoing as we speak. That is then determining the result. The best thing I can answer you there is that the guiding we are maintaining on the NOK 1 billion-NOK 1.2 billion. The question is, where do we end up in there? That we have to wait and see.
Final question. If we then look at 2026, can you say anything about the revenue profit levels that you expect at this point in time?
That is too early to talk about. I do not want to go into details of 2026 in this meeting today. Maybe Trond wanted to add something.
What I can add is that that is something we will have to come back to during the next presentation. That will be then in mid-February next year. Yeah.
I want to say one thing because I understand this is a very important question, of course, and I would have asked the same if I was you. We are seeing a lower activity because we have one of the vessels on dock, and that speaks for itself.
It's going to be out for five weeks plus some time before it's this year, but also after because it's not easy to hit a project exactly when it's finishing its dock services. The first quarter will definitely be a lower one for Ocean Installer, that is, than what we have had before. We are seeing some good projects starting up after the first quarter. That's how much I can tell you about it now.
Just to add to that, based on the order backlog we have today, we have for Ocean Installer approximately or just north of 60% of the revenue covered for 2026. For Apply, the backlog as Geir has talked about is kind of artificially low due to all these frame agreements that are out for tendering.
Normally for Apply going into the year through the budget process, we normally have 80% of the revenue coverage, right? This is kind of a special year and it ties to, yeah, these major contract awards that we expect over the next couple of months.
Good. Thank you, Trond and Geir. With that, we conclude the Q&A session.
Okay. Very good. Thanks a lot for coming.
Thank you.