Morning, everyone, and Welcome to This Fourth Quarter Presentation for Nekkar and also our Full Year Results for 2022. I am Ole Falk Hansen, and I'm the CEO of Nekkar. Today's presentation will start with giving you a short recap of Nekkar company and value proposition. Then we will move into the key highlights from our fourth quarter, and finally, we will present you with the financial results for the quarter and the full year of 2022. And before we round off, we will take the time to answer questions that you may have during the session. So let's start to give a short summary and recap of the Nekkar company and value proposition. As you can see on this slide, Nekkar consists of four business areas.
Shipyard Solutions is still the main driver of our financial results, and Shipyard Solutions with its brand, Syncrolift, is the global market leader when it comes to vertical and horizontal ship lift systems. The foundation for Nekkar's new business areas is our background and competence from the offshore oil and gas industry, and based on that, we have formed new business areas within aquaculture and renewables. Finally, the digital solutions business area underpins everything we do in all our business areas and delivers services and software to the other three business areas, in addition to being a standalone business and commercial offering on its own through our Joint Venture with our partners that we will come back to later on.
For the fourth quarter, we have seen yet another quarter with solid execution in the Shipyard Solutions business area, generating revenue of NOK 125 million. In the quarter, about 80% of the revenue were generated by new build projects in Shipyard Solutions. The Operational EBITDA came in on NOK 13.5 million which was negatively impacted by U.S dollar depreciation versus the NOK in the fourth quarter. However, the Reported EBITDA became strong of NOK 38 million. Nekkar has a strong balance sheet, and we have a solid cash position of about NOK 180 million. We have no interest bearing debt, and we have also a undrawn credit facility of NOK 200 million.
In the quarter, we saw strong Order Intake, which was the second quarter in a row where we have seen Order Intake of above NOK 100 million. We were glad to report in December that we signed a $10 million new build and upgrade contract for Dubai Maritime City. Furthermore, we are in multiple tender processes with further larger ship lift projects. Based on that, we have an Order Backlog of NOK 824 million, which creates a good visibility for the coming quarter. As previously announced, SkyWalker signed an innovation agreement with the installation company BMS Heavy Cranes in the fourth quarter, which will give further insights and development of the SkyWalker lifting machine.
Finally, today, we are excited to announce that InteliWell, our Joint Venture, has secured a breakthrough four-year contract with a major undisclosed drilling operator. If we look further into the financials, as mentioned, we have seen solid revenue in Q4, reflecting high activity in both the new build and the aftermarket service projects in Shipyard Solutions. The Operational EBITDA of NOK 30 million represents a margin of about 10%. As the majority of Nekkar's projects are invoiced in US dollars, the Operational EBITDA is negatively impacted by the depreciation of the U.S dollar against the NOK in the fourth quarter. The EBITDA margin for the full year on an operational level ended at solid 18%, which shows good underlying operational and financial performance.
Let's move into the first business area, Shipyard Solutions, which is represented by our Syncrolift company and brand. In December, we announced a $10 million contract to perform a significant upgrade. Today, we can share that the client is Dubai Maritime City. and we are treating this as a new build project as we are retrofitting two third-party ship lift systems with our own Syncrolift system in the Dubai port over the coming two years. The scope and the contract is about $10 million, and it's on the level with other larger new build projects that we are having. I think this shows our ability to deliver new build projects and winning larger upgrade contracts also for systems delivered by competitors.
Also it underpins the quality and the position of Syncrolift as the leading ship lift brand. Finally, we see Dubai Maritime City and its owner, which is DP World, which is a global champion in the operations of port and logistics around the world as a very interesting customer and partner to work along with in the future. Of course, we hope that this gives us a position to also supply further projects and services to both Dubai Maritime City and its owner, DP World. We saw high Order Intake for the second quarter in a row, and the second half of 2022 had Order Intake of about NOK 222 million, which is more than four times as high as the year before.
Going out of the fourth quarter, we see a solid backlog of about NOK 824 million. I will revert a bit to the backlog on a couple of minutes later on. As presented earlier, the service strategy is a key part of Shipyard Solutions and Syncrolift. During the last three years, we have focused a lot of getting a better understanding and also a better execution on our service platform. We see now that with our install base of more than 200 systems, we are building step by step a much larger and more competent service offering for our customers. In the end, this will of course lead to also more steady revenue and long-term customer commitments.
If we look a bit into the financial situation on the service side, we see here that the service strategy in the Shipyard Solutions has continued to pay off in 2022. We saw a strong Order Intake of service-related business of about NOK 95 million , which is almost a 30% growth versus the last year. With this Order Intake, this also gives a good outlook for 2022 revenues and further growth in the service business domain. In terms of the revenue, we ended at NOK 68 million , which represents almost a 50% increase from the year before. To the right, you can see now that service revenue for the last year represented about 17.5% of the total revenue in Shipyard Solutions, which is an increase from about 10% historically.
This also shows our direction towards a target of growing this to 20% and furthermore in the coming year. I would like to give you some more background of both our backlog situation and also some numbers on the tender portfolio. On the left side, you will see our backlog and our current expectations in terms of execution year. You can see that roughly half of the backlog is expected to be executed in 2023, while the remaining is to be executed later on. Of course, this gives us a solid starting point for 2023 with the current backlog we already have in place. Then on top of this backlog situation, we experience high tendering activity in the new build and upgrade segment. We see a strong tender portfolio going forward.
As illustrated on the right-hand side, if we sum up the current tender portfolio, we see tenders around NOK 2 billion, which is expected to be awarded in the coming two years. We are confident that Shipyard Solutions will continue to secure a fair portion of these awards. Finally, I would just like to mention also that, of course, the tender award and the execution progress are items which also is impacted by external factors outside of Nekkar's control. Let's move from Shipyard Solutions into our impact technologies. Let's start today with digital solutions, which is our software control and services for both Nekka business areas and also the external market.
As you have heard before, Intellilift, which is our company, is a Joint Venture partner with Transocean and Viasat in terms of optimizing and automation of the drilling business area. Today, we are excited to share that InteliWell has entered the first four year contract with an undisclosed major rig operator. The rig will be equipped with InteliAutomate solutions, which will automate and optimize both stand building and tripping sequences. The contract value will consist of a fixed project price for installation, plus a recurring service fee throughout the period. The contract and the delivery is set to go into operations in 2023. We are soon able to share more information about the contract and the customer. The project is already kicked off, and entering this first contract for the Joint Venture and for Intellilift is a major milestone.
We also expect this to open new doors in the global rig market as we will soon have the first system in operation for a major drilling operator. Moving on to renewables. Within renewables, our focus is on within the wind industry. We have developed SkyWalker, which is an innovation wind turbine installation machine. The design of the onshore version of SkyWalker has been completed and also tested in a downscaled prototype. We are now ready for a full-scale version. Through our announced partnership with BMS, which is a Danish installation company, we are pursuing relevant onshore wind projects to create proof of concept. That said, we are also seeing increasingly focus for the offshore wind market for our SkyWalker machine.
Together with clients and customers, we are performing feasibility studies at the moment exploring how SkyWalker can play a role in the offshore installation and operation. Particularly, there's a high focus of replacement of major components offshore during the operational phase. As you might know, the offshore wind supply chain is immature and less established than the onshore part. This creates also opportunities for us to enter the market and also help the players bring down the Levelized Cost of wind energy offshore. To do so, new technology is needed, both to install new capacity and as industry numbers refers to about 1,000 wind turbines are to be installed yearly in Europe going forward. Furthermore, when all this comes into operations, the equipment and the turbines needs maintenance.
As the global offshore wind turbine fleet ages, almost 10,000 units will require operations or major component replacement by 2030. Most of this takes place in Europe. On top of these feasibility studies, we are also discussing partnerships now in order to position SkyWalker for the upcoming auction in Norway for both Utsira Nord for floating and Sørlige Nordsjø II for fixed structures. Let's move to the final business area, aquaculture, as illustrated here by our Starfish Closed Cage solution. In 2022, we completed a successful test of our downscale Starfish without biomass, and we are now planning a full-scale test with biomass together with a fish farmer. The fish farmer will operate Starfish at one of its existing locations, so we can collect data and compare it to traditional open cages.
A successful test period will provide a solid case for how Starfish improves fish welfare and also makes the solution more sustainable. We believe by having a test pilot on a full-scale version together with a fish farmer will put us in a strong position to enter the commercial phase for further deliveries. Let's move into some financial highlights. As already mentioned, we experienced high activity in the fourth quarter with a solid revenue of NOK 125 million, which represents a decrease of about 9% compared to last year, where we had a lot of projects being finalized. Full year revenues for 2022 were NOK 388 million, compared with NOK 480 million in 2021.
The same reason for the decline versus last year is due to a number of projects were finalized in 2021. The fourth quarter Operational EBITDA ended at NOK 13 million in the quarter, which represents a margin of 10% on an operational level. As already mentioned, the operational margin in the fourth quarter are negatively impacted by the U.S dollar depreciation against the NOK in the quarter. However, the Reported EBITDA were strong at about NOK 38 million in the fourth quarter, represented a strong margin of 30%. Also here the Reported EBITDA is positively impacted by gains on our hedging contracts, which are accounted for at fair value on the balance sheet date. As already highlighted, we saw strong Order Intake of NOK 105 million in fourth quarter, compared with NOK 28 million in the same period last year.
The backlog is healthy going out of the quarter and the year with NOK 824 million at the end of the quarter. In terms of development cost, our net development cost after our soft funding received is only NOK 1 million in fourth quarter and NOK 19 million for 2022 as a whole. During 2022, we have received soft funding from Innovation Norway and other funding schemes of about NOK 12.5 million . Looking at the balance sheet, we see total assets of just north of NOK 500 million compared to NOK 451 million at the end of 2022. The group has a solid balance sheet with no interest-bearing debt and an equity ratio at the end of the quarter of about 68%.
Bank deposits amounted to NOK 181 million at the end of 2022. As mentioned, we also have secured financing facilities of NOK 200 million. Pointing out to one of the larger changes from 2021, I would just like to mention the accrued non-invoiced projection, which increased from NOK 20 million in 2021 to NOK 160 million at the end of 2022. This is related to projects in Syncrolift that was close to reaching a larger invoice milestones at the year end. The majority of this balance sheet item has already been converted to receivable at the moment and is expected to be converted to cash during the first quarter of 2022.
Moving on to the cash flow statement, we had operating cash flow positive with NOK 38 million in 2022 compared with a negative cash flow of NOK 55 million in 2021. Cash flow from investing activities was negative with NOK 22 million in 2022, and this is related to our investments into our impact technologies, primarily. Cash flow from financing activities are impacted by the currency volatility and is negative of about NOK 10 million. Total cash flow for the year was positive with NOK 7 million as a total, and we have a strong balance of NOK 181 million of cash at the end of the year. Let's try to summarize the fourth quarter and look a bit further into the coming months and the year.
I think we have seen a strong revenue in the fourth quarter. We have good Order Intake and good backlog compared with the high tender activity, which we also have showed you some more details on, which creates good visibility going forward for the Shipyard Solutions business area. In subsequent to the quarter, we signed the first commercial contract for InteliWell and Intellilift. We believe this will open further doors for new contracts when the technology becomes proven and in operations on the first commercial rig. For the other impact technologies, we have promising customers discussions in both renewables and aqua for validating the technology and secure proof of concept for these two business areas as well. Summarized, going forward, we are positive to the fundamentals of our business area and also the internal execution within our businesses.
With this, I would like to round off the presentation of the fourth quarter, and we will open up for some Q&As at the end.
Thank you, Ole. We received some questions, quite a few about impact technology, so we'll start with those. Can you say anything about how close you are from seeing revenues from Starfish and SkyWalker?
Yeah. I think, as I mentioned for Starfish and SkyWalker, we have several customer engagements and discussions which will lead to projects that will secure proof of concept and further validating the technology. In terms of revenue, we believe revenue will not be very high in 2023 on these technologies. I think in terms of revenue, it's the digital solutions business area with its new contract now, which we'll see kind of somewhat of an uptick and some significant revenues compared to previous years.
Thank you. That was good, cue for the next question. Could you say anything about the value of the InteliWell contract?
Yeah. At the moment, we cannot disclose further information about the value. It's an upfront payment for installation, and it's service software fee during operations over four years' time. We are soon ready to share some more information about the customer and the setup as we have those aligned with our partners.
Thank you. A couple of questions about currency effects. Can you explain the difference between Operational and Reported EBITDA and how currency fluctuations affect those metrics?
I will try to do that in the most simplistic way as possible. As Nekka has a cash flow hedging policy, that means that the cash flow on the overall group is hedged according to the exposure, quarter by quarter, both on the revenue side and on the cost side. That means that on an operational level, the projects, both the revenue and the cost, will have fluctuations in its remaining revenue and remaining cost, depending on the currency at the end of the quarter, where the revenue and the remaining cost will be adjusted according to that. So that will impact the operational side.
On the Reported EBITDA side, you will also take into account the effects of the value of the FX portfolio, which is accounted for with the fair market value, which means the actual value of the hedging portfolio at the end of the quarter. In a quarter like this, we have seen kind of a negative effect on the operational side, which is then more than compensated on the Reported side through our hedging policy.
Thank you. Question about Starfish. What's the timeline for the Starfish full-scale testing, and have you secured a partner for the testing?
We are in process of securing a partner on Starfish. That means we are in discussions but we have not yet signed any contracts on it. Our target is to have a partner on board during short time and that we will, during the next coming year, have a full-scale Starfish in seawater.
Thank you. Another question about the InteliWell contract. Can you share what type of rig this is?
At the moment we cannot, but we will soon share more information both about the drilling contractor, the rig, and of course also the operator oil company on this.
In addition, what are the next steps for rolling out this, the InteliWell solution in a broader scale?
Of course, we are pursuing customer initiatives around the globe together with our partners. That's one of the advantages with the partnership. You have Intellilift from our side which is based in Norway on the Norwegian continental shelf with its home ground. You have Transocean in U.S. and the U.S. Gulf of Mexico and also Viasat through its subsidiary Intelie has a strong position in Brazil. Our target is of course to have a reference customers in all these three areas. We are pursuing that now with the first one in place in one of these and then of course we would like to add a reference contract also in the other two areas.
Okay. A question about service intake. Can the service revenue intake be considered as recurring revenue?
I think, you can sort of look upon it as that. Of course, we have a mix of long-term service contracts where you actually have a recurring fixed revenue over five to 10 years. Of course, we are working to increase the share of long-term service contracts because then you are definitely at a fixed level. In addition, we know what a shiplift needs of services roughly year by year. It's about putting focus, hard work, and of course, having people out there on the relevant shipyards and ports in order to deliver what the customer needs when you need it.
We are quite confident that the service revenue will continue to see good results and also we still have an untapped potential with our existing install base that we can tap into.
Thank you. A question about tender pipeline and Order Intake. The tender pipeline is high, for a Syncrolift. Do you expect to see any contracts of size being awarded in the sort of next couple of quarters?
We are positive to have contracts awarded during 2023. We have illustrated the magnitude of the portfolio and I think people following Nekkar have also learned that kind of whether it's in one month or in the next month or in one quarter or in the next quarter, is kind of heavily dependent on the end customer. I think we would like more to focus on kind of within the coming year we expect contracts to be awarded based on the portfolio we are seeing at the moment.
Thank you. Question about capital allocation. When it comes to capital allocation, are you looking at possible acquisition opportunities going forward?
I think with the portfolio, we have in place, we are represented in kind of high growth promising business areas. We would like to further strengthen those business areas and build more size and businesses within this. That includes both internal developments with our team and also looking into acquisitions within these business areas. I think with the current balance sheet we have in place, we are ready to execute on opportunities that may arise within this.
Another question about the contract with Syncrolift contract with Dubai Maritime City. Is there also a service component in this contract?
Yeah. The kind of the way contracts are awarded at least today is that you kind of separate both the kind of the new build, the installation project with the aftermarket service project. The contract we have now is for the installation and upgrade of a new ship lift. Having said that, of course, we see this as a very good opportunity to have a long-term service contract attached to it. It's something we would focus on together with Dubai Maritime City going forward. Of course, we have established a couple of years back an office in Dubai.
Of course this is both to get new build contracts as we have announced now and also to perform service work in the region.
Thank you. There are a couple of questions about whether Nekkar will start paying dividends and whether you will look at the opportunity of share buybacks, I guess that's, those are questions that should be addressed to the board of directors, right?
Yes, please.
I think with those that covers all the topics and the large majority of the questions we have received today. Thank you, Ole.
Thank you all.