Good morning, everyone, and welcome to this first quarter presentation for Nekkar. I'm Ole Falk Hansen, and the CEO of Nekkar. I will give you a brief presentation of our first quarter results, and as normal, we will round off with some Q&A after the presentation. The Nekkar Group now consists of five companies in addition to the SkyWalker venture project, as you can see illustrated on this slide. The Nekkar operating companies are exposed to four main end markets, with defence and maritime being the largest. The target market revenue mix is also fairly balanced across these segments. We have seen a steady growth in defence through our operating company, Syncrolift, through the recent years and also in the future pipeline to come. Also, the other markets have a positive outlook. Let's look at some of the highlights for the first quarter.
It was pleasing to see Techano Oceanlift sign a repeat order for a 150-tonne crane in the quarter, and subsequently to the quarter, an award of a 70-tonne repeat crane. With these repeat order contracts, we are able to standardize products and improve operational efficiency. The importance of building a market track record and proven products was underscored by a NOK -13 million EBITDA impact in Techano Oceanlift during the first quarter from the two first market entry projects that have been signed over the last couple of years. For FiiZK, we are positive to see the increased focus on fish welfare and sea lice reduction in the proposed Havbruksmeldingen by the Norwegian government. Let's move to some of the key financial figures.
The revenue for Nekkar came in at NOK 111 million, which is down from NOK 152 million same quarter last year, and the EBITDA ended at NOK -12 million for the group as a whole. The negative EBITDA in the quarter is disappointing and does not align with our performance goals. The figure was primarily driven by progress in Syncrolift projects, currency, and the mentioned Techano Oceanlift projects. However, at Nekkar, we continue to see a positive underlying development in our operating companies for the coming quarters to come. Net profit was negative at NOK 8 million, which was positively impacted by currency effect that helps to partly offset the negative currency contribution in the EBITDA. Nekkar still maintains a strong balance sheet with solid cash of NOK 182 million, NOK 62 million in treasury shares, and no debt.
The order intake was NOK 155 million in the quarter, driven by Techano Oceanlift business. As you can see, the first quarter revenue and EBITDA is far below our historical track record and also our own expectations. However, given Nekkar business activities, there will be some quarterly fluctuations due to both phasing of projects, project mix, currency developments, and also other factors. The order intake was NOK 155 million in the first quarter, with NOK 85 million coming from the 150-tonne Techano Oceanlift project. Please note that the second contract was signed in April and is not included in the figures. The order backlog at the end of the quarter was NOK 757 million, which provides decent visibility for the coming quarters. The majority of backlog is still related to Syncrolift, but more than NOK 100 million is now from other companies.
Let's move to some business updates from our operating companies, and we start with Syncrolift, which is our largest company. For market and sales, the tender activity remains high and is increasingly driven by growing demand in the defense market, which now represents a substantial share of tendering activities. These often large contracts do, however, carry with them some uncertainty related to the exact timing of award, as they are impacted by government planning and general infrastructure requirements. This means that contract awards can slide in time independently of one another, but due to a similar mechanism and without decreasing the likelihood of the contract actually coming to award. As such, no contracts have been awarded in the quarter nor lost in the quarter for Syncrolift.
For financials, the Q1 revenue was lower than expected, driven by phasing of activity on awarded projects, which was lower than expected, coupled with lower order intake last year. The EBITDA margin in Syncrolift was also negatively impacted by the depreciation of the U.S. dollar. However, the operational activities and also the performance in the projects are as normal otherwise. Service activity held up well, both in terms of revenue margin and order intake for the quarter, and I'm also happy to say that the construction of Syncrolift's new demo and training center in Vestby is progressing well, with customer activities already started up. Our capital markets day for Nekkar during the second half of 2025 will be at this location when it's fully finalized and in operation.
We continue to see a healthy outlook for Syncrolift activity levels, and the backlog remains above NOK 600 million, and we see high tendering activity in the new build upgrade segment. From last quarter, total tender activity and volume has increased, while the tender levels for 2025 have decreased somewhat to NOK 1.3 billion, as some projects are expected to take longer time for award. Let me give you an example. Increased defense spending for a government may very likely impact Syncrolift's market for shiplifts and transfer system, but time to award is impacted by decisions on vessel classes, construction and service yards, and the following infrastructure developments of such yards. These are processes that take time and are linked with some uncertainty on specific timing and volume.
In this quarter, we have also taken the liberty to split our view on contract awards for 2026 and 2027 to add some transparency to our near-term market views. As you can see, the total tender portfolio is increasing. The large amount expected for award in 2026 will, of course, continue to be at risk due to changes, but has also included the increase of awards expected due this year, which we showed last quarter. I would also like to take a moment to highlight the exposure of Syncrolift to the defense as a key end market and also being the largest end market for Syncrolift. As a leading defense and naval supplier, Syncrolift directly and indirectly works with some of the world's largest navies, specialized naval yards, and commercial yards working on government contracts.
Syncrolift's defence exposure can be split into three segments, as you can see on this slide: navy surf vessels to the left, navy submarines in the middle, and also service and maintenance bases for such vessels. Syncrolift's core products, shiplifts, fluid transfer system, and the lifecycle services are embedded in all these three categories. Working for these clients demands precision, quality, and the ability to deliver at the highest levels, and I'm therefore proud of Syncrolift's ability to deliver on large contracts to such an important sector over time. Let's move to Techano Oceanlift, our offshore lifting and handling technology provider. So far this year, we have good order intake with two orders awarded, totaling NOK 144 million, and the company also continues to tender for a handful of solid leads.
On the revenue side, the NOK 11 million were on par with previous quarters, as market entry projects signed the last couple of years are nearing completion, but newly awarded projects have not yet ramped up in activity. The EBITDA was, as mentioned, negatively impacted by cost increases in the market entry projects. For these first deliveries, we have entered with lower prices and, in addition, experienced one-off costs for engineering and manufacturing. While the margin mix in the first quarter still only contains market entry projects, these contracts are expected to near completion with newly signed contracts generating more reasonable project margins from Q2 and onwards. The recent award of both the 150-tonne and the 70-tonne active heave compensated crane highlights the benefits of repeat awards. For such contracts, we will experience lower engineering costs and lower complexity.
With the design work and technology developments already completed in previous projects, a cost and uncertainty driver is removed. Furthermore, we will improve efficiency in project execution by utilising existing production setup and sub-suppliers. Let's move over to Intellilift, which is the industrial software and automation provider. In the quarter, we signed a NOK 10 million contract with an oil co. to remotely drill with a digital twin by use of Intellilift simulator and integration of third-party software. The Hanwha project signed last year is now successfully installed at the drill ship in Korea, and the project demonstrates Intellilift's capability as an integrator on drilling rigs for both control system and human-machine interfaces, as I will show you on the next page.
Furthermore, we also received a new automation contract awarded from Hanwha for the said drill ship, and we are tendering for drilling automation and order drilling projects through both Intellilift and our joint venture InteliWell. The NOK 19 million revenue in the quarter is primarily driven by external drilling projects and shows a steady increase from previous quarters. On the operational side, Intellilift is progressing work on the mentioned projects. As mentioned on this slide, you can see pictures from the newly installed human-machine interface system delivered by Intellilift to the title action drill ship in Korea. The drill ship will be operated by Constellation Oil Services in Brazil on behalf of Hanwha Drilling, and it's a good showcase to demonstrate Intellilift's wide range of capabilities.
In Globetech, which we acquired in the third quarter last year, we continue to observe high customer activity on the market side, with sales driven by new vessels and deliveries to existing clients. Revenues for the quarter were NOK 27 million, which is up 25% year on year for the company, with continued solid profitability. The company is now strengthening the team with senior hires across multiple functions as part of its business plan for future growth. Moving on to FiiZK, following last quarter's breakthrough contracts for the delivery of two protective closed fish cages to a leading Norwegian fish farmer, FiiZK continues to see interest in closed cages, particularly within post-smolt production strategies.
New award has, however, been pushed in time, as customers have been awaiting new regulations on both Havbruksmeldingen , which were published now in April, and also the implementation of the Miljøfleks-ordningen, which was published in December last year, which I will return to on the next slide. The first quarter revenue was NOK 24 million, which is primarily driven by the startup of the two protective projects awarded in the fourth quarter, and these units are scheduled for delivery in the second half of this year. While the revenue is a decrease year on year, it's worth mentioning that last year's figures had business units that have since been divested. The profitability of FiiZK is still impacted by costs for market entry projects for these two projects and also current volume levels.
In April, the government released its Havbruksmeldingen , outlining its wishes for impacting the aquaculture industry going forward. While the regulation will take some time to pass through the parliament, its headlines are positive for FiiZK, which includes focus on lower mortality, increased focus on sea lice, and increased attention to fish welfare. The Miljøfleks-ordningen, which was announced just before Christmas last year, is expected to be approved in parliament in the near term and will remain as the main government regulations while we are awaiting the further progress on Haverbrugsmeldingen. FiiZK meets all the requirements of the proposed Miljøfleks-ordningen, hence fish farmers could regain lost capacity by taking the solutions from FiiZK in use. With this, we will move to some more financial details. Let's start with the revenue.
The revenue for the quarter came in at NOK 111 million, which is a 27% decrease compared to the same period last year. The decline is primarily due to the lower progress in the ongoing Syncrolift projects, which are driven by external factors combined with lower than expected order intake last year. On a positive note, both Intellilift and Globetech delivered solid contributions. For the profitability, the EBITDA ended at a disappointing NOK -12 million compared to a NOK +30 million in the first quarter last year. This is below our performance expectations but reflects previously communicated factors. The low project activity in Syncrolift, increased costs in market entry projects in Techano, and also negative impact from the currency development for the NOK versus the dollar. The net financial items of NOK 7 million are driven by the currency effects and Nekkar's share of FiiZK quarterly profit.
As a result, the net profit for the quarter was NOK- 8 million. Moving on to the balance sheet, if we look on the asset side, as you can see, there is an increase in right of use asset this quarter. That is primarily due to a renewal of a lease contract in Vestby for Syncrolift, and this also explains the corresponding increase in lease liabilities. The financial assets are mainly tied up to the ownership in FiiZK. For the working capital, the working capital is at NOK 57 million, which is unchanged from year-end. During the quarter, there have been various changes on the respective working capital parts, but overall, the working capital is steady at NOK 57 million.
Nekkar's total balance sheet amounted to NOK 774 million at the end of the first quarter, and we remain debt-free and have a robust equity of NOK 466 million, or a 60% equity ratio. Turning to cash flow, the cash flow from business was negative at NOK 8 million, which is mainly due to the negative EBITDA, although partially offset by positive contributions from financial items. We also had a cash outflow of NOK 15 million in the quarter related to the share buyback program. In total, this resulted in a net cash outflow of NOK 23 million in the quarter. As mentioned, we remain a healthy assets-balanced company with cash at NOK 182 million, NOK 62 million in treasury shares, and also an undrawn credit facility of NOK 200 million. For the Q1, I will make some conclusion remarks.
In the quarter, we had soft revenues driven by Syncrolift due to phasing of activity on awarded projects, which also impacts the EBITDA, which was below a satisfactory level for Nekkar. Our solid balance sheet, combined with order intake for Techano and high tendering activity in Syncrolift, provides a solid outlook for the business going forward. With Globetech and Intellilift, we continue to see growth with good profitability in both companies. With FiiZK, we are expecting increased commercial activity from favorable regulatory changes proposed. Before we round off, I will just take a moment to recap the strategic ambition for 2027 that we first presented in our third quarter last year. As announced, we aim to reach over NOK 2 billion in revenue by 2027 through a diversified and well-balanced portfolio.
We plan to expand to six to eight platform companies, creating a more diverse and balanced portfolio. The focus is still to deliver financially solid results from this larger and more diversified portfolio. To the right, you can see the current developments from 2023 with a 45% growth to 2024 in order to reach the NOK 2 billion ambition. With this, I will round off the presentation from the first quarter, and we will move to some Q&A questions.
Good, we have a couple on the line. First off, can you elaborate a little on the Nekkar defense exposure and Syncrolift's role here, how much that is, and how you see this developing?
Yeah, I think if you look on last year's official figures in the annual report, Nekkar's total defense share was about 45%-46%.
Of course, with Syncrolift, this is 60+% of the business last year. I think if you look on the current tender portfolio, we see the same level or also higher level of share of defense. As I illustrated on the slide for Syncrolift, these are due to either new build projects for respective government countries' navies or also part of larger upgrade maintenance service bases in such respective countries. I think if you look on the current pipeline of projects which we are working on now, more than half of these are linked to such activities.
Good, and then there's a couple of questions on Globetech. I will merge them together. It's great to see Globetech doing well. Can you elaborate a little on future activity drivers here and will defense be a potential factor?
Yeah, so of course, the business activity of Globetech is linked to, you could say, the number of vessels being served from Globetech, whereby normally Globetech has a service agreement with a contract to kind of be the service partner for IT and communication on board the vessels. Of course, the business is likely to scale with the number of vessels being in the portfolio, both from the existing clients making new builds and acquiring vessels, but also new clients coming into the portfolio. At the moment, we do not have defense customers in the Globetech portfolio. However, that's of course something we are looking into. The majority of the customers are offshore and commercial vessels in oil and gas, wind, and tankers, and yeah, more commercial activities.
Great, then there's a question on service agreements.
Do you observe any development or growth in service agreements that drives recurring revenue? And how do you work to develop this in general for Nekkar?
Yeah, I would say that all our companies today have service contracts with the clients in various degrees and of course also in various shares due to the number of installed products being in the market. FiiZK has service agreements for its previously delivered projects. Techano will now sign that for the new cranes being delivered. Of course, for Globetech, that's the majority share of their business. For Syncrolift, we are continuing to add on service activity and service contracts.
We see a trend that we are moving towards more long-term contracts whereby clients leave a larger scope and responsibility on us as the product and service provider, whereby there is a share of fixed revenues and then also additional ad hoc scope which will be built based on activity levels.
There is a couple of questions on Syncrolift. While we do not give guidance, you are asked to comment in general on how you see the phasing of projects developing going forward in 2025.
Yeah, as mentioned, especially now in the first quarter, we had lower than expected progress on a couple of projects which we kind of were normally expected to drive more activity and revenue on.
These are due to some customer build-out projects whereby we either have to wait for another contractor to finalize or there are other kind of obstacles in the way in order for us to deliver, for instance, a shiplift. I think we, of course, expect the progress to come back again. Of course, it's not lost. It's just moved a bit out in time. Of course, also we are expecting to sign new contracts in Syncrolift as we move on later this year.
There's also a few on Syncrolift. There's also a few questions related to the changes in the tender pipeline. If you can comment a little on the moving between 2025 and onwards and if this is related to recent tariff discussions, particularly with the U.S.
Yeah, no, the tariffs are not a key reason.
I believe there are non-U.S. projects in the pipeline for 2025 and 2026, as I can recall. As mentioned in previous quarters, the main regions are Middle East and Southeast Asia. When we kind of published the numbers now for the tender portfolio, we have seen that some projects have kind of been pushed one or two months or three months out in time. We decided we move them to next year in order to provide a more kind of balanced and fair view on the 2025 picture. It is important to say that there could be surprises, both positively and negatively, due to our indicated timing of award. That is, of course, something we will continue to update on when that happens.
Can you elaborate a little bit on the difference in earnings in market entry projects and repeat projects in Techano Oceanlift?
Yeah, no, and that's, of course, an important factor. When we entered as an owner in Techano for now a couple of years back, of course, Techano needed to gain a track record in the market and to be established as kind of a, yeah, a well-known provider of products and services. In order to do so, we were in position to take on a few projects whereby we on pricing had to be very competitive in order to kind of convince the customers.
Of course, also for us, in order to deliver a product from the first time, there are additional costs due to design, engineering, and of course, also the production and testing methods whereby we now in the new contracts we have signed, which are repeat contracts in terms of products and the specifications, are able to avoid. Of course, both on the cost side, but also on the pricing side, we now have a more competitive position than we had a couple of years back. We expect that we will be able to benefit from that going forward.
Great, there is a question of how you view Nekkar's ability to draw synergies in terms of revenue between the different companies, like working together or at least drawing benefits from each other.
Yeah, I think that's, of course, we are all our businesses and our key mandate is within ocean-based industries. We try to explore and extract various types of synergies when it's the right time and event to do so. We don't enforce synergies, but we stimulate and support driving that together. You could say on the new build side in terms of vessels, you could say both Techano and Intellilift are working together to deliver the crane control system. Also, you could say that Globetech is a perfect IT and service provider for such vessels when they get into operations. There are other opportunities working together on sub-suppliers whereby we produce various types of products at same production sites.
But it's also important to say that each operating company within Nekkar stands on its own feet and should kind of have a primary standalone business in addition to being part of the Nekkar family.
Changing to FiiZK, following the recent government announcement you mentioned in your slides, the Havbruksmeldingen , how do you expect to see dialogues with customers changing going forward?
Yeah, we have, I think we have dialogues with all the major and also many of the smaller fish farmers, primarily in Norway. That's our key focus at the moment. We had a customer demo day last week with many of these represented. This week, we are visiting a lot of them in Barcelona, where there is the key kind of seafood expo year by year.
Of course, what we see is that there are stimulus and drivers to kind of push, yeah, more closed containment type systems into especially regions where you have a very high sea lice adoption rate. Many of these are now either in the stage of ordering as we are producing or in the stage of evaluation in terms of which systems to use. Also, some are already in the application process in order to kind of make new sites ready for such solutions.
On your communicated 2027 ambition, can you elaborate a little on your work with your M&A pipeline?
Yeah, as you will see from the slide, we kind of have about NOK 500 million in inorganic growth activities. I think we work with M&A on kind of two, from two angles.
One is additional M&A, which kind of bolts on or rolls up into our existing operating companies like with Globetech. We are looking for whether there are companies we could add to the portfolio as an example, or we look for new platform companies, which will be additional to the existing five companies in the group. Of course, this is a mix of both incoming requests, which we evaluate, and also our own research and our own outreach to interesting companies. Of course, it's fair to say we are continuously in processes of evaluations or due diligences, but of course, it's to make the right decisions and of course be both restrictive and balanced on pricing and so on. When we have good opportunities, we try to get into the final picture.
Back to FiiZK, there's a question on how should we think of FiiZK's capacity going forward?
Yeah, so as part of the growth strategy in FiiZK, we have a plan to be able to significantly ramp up the number of units being able to be delivered. The production strategy is primarily based on outsourced production, whereby the floating collar is produced at sub-suppliers and the bag, the plastic bag, basically being the containment, is produced at the FiiZK facility in Norway. We believe at both such places, we have capacity to grow with multiple deliveries at the same time. We say kind of as of now, delivery time for the new deliveries are 10-12 months for similar systems that we now are producing.
On Globetech, are you currently working to expand Globetech's offering, or is it more a focus on developing the offering that Globetech has today?
Yeah, I would say it's kind of a continuous effort to build services and also some software products around what Globetech is serving today. I would say that's more an evolution than we are kind of trying to capture a completely different type of market or solution. I think with Globetech, we believe they are a focused provider of IT maritime services. We believe that will be a key strength to maintain focus and rather build volume and of course additional services around that. That's the plan.
Okay, I think we will wrap it up there. Thank you to everyone who posted questions.
Yes, thank you everyone for listening to the first quarter presentation.