Good morning, everyone, and welcome to this first quarter presentation for Nekkar. I am Ole Falk Hansen, the CEO of Nekkar, and today I'm with you live from our new offices in Kristiansand. Today's presentation will start with a recap of Nekkar's value proposition and our company. We will move into the key highlights from our first quarter for the group, and I will give you an update on each of our portfolio companies afterwards. Finally, you will have the opportunity to submit Q&A questions during the sessions, which I will be able to answer towards the end of the presentation. Let's start with a short introduction and recap of Nekkar. We are an industrial technology company, and we have a portfolio of established businesses combined with new impact technology ventures.
We have a team of world-class engineering expertise, which, combined with our digitalization competence, gives a strong value proposition towards solutions and products for sustainable ocean-based industries. Nekkar has a strong industrial ownership, with Skeiegruppen as the largest investor, and we also have a solid financial situation in terms of cash, order backlog and other items. This slide shows the Nekkar portfolio, and as you can see, we are targeting four business segments on the top. In our portfolio, we have three established portfolio companies, and in addition, we have two impact technology ventures targeting these business segments. To start with, Syncrolift is the global market leader for both new build retrofit service for the ship-lifts business to both merchant and naval shipyards.
The second company, Intellilift, is our software and automation provider of systems to all business segments in the Nekkar Group, in addition, through our joint venture, Inteliwell, which I will come back to later on today. Finally, the third portfolio company, Techano Oceanlift, is our newly acquired company that provides cranes and lifting solutions for both renewable and the aquaculture space. In addition to these three portfolio companies, we have SkyWalker and Starfish Technology Development Programs. The Nekkar portfolio is spread across the business life cycle, providing a balanced exposure towards generating solid financial performance in the short term and providing strategic opportunities for the future. As you can see, starting from the left at the innovation stage, we innovate new solutions and products in partnership with customers or industry partners.
As the solutions are new and innovative and also could imply a new business model, the time to market is longer. Getting soft funding is an important part of the business and the development. Here we will find both SkyWalker, our wind turbine installation machine, and Starfish, our closed cage fish farming solution. Moving on to the growth phase, we find businesses which are starting to generate financial results through commercial contracts. The target for our companies in this group is to broaden customer base, scale the business, and expand products and services. Both Intellilift and Techano Oceanlift are positioned in the growth category. For the established business phase, Syncrolift represents the niche market leader for shiplifts. The business is associated with an installed customer base to target both new builds, upgrades, and executing services with a solid financial results.
Overall, this means that Nekkar now, going forward, will have three portfolio companies generating financial results in the future. For the first quarter, we have seen yet another quarter of solid execution in Syncrolift, generating total revenues of Nekkar of about 100 million NOK. The revenue is primarily driven by new build projects in Shipyard Solutions and Syncrolift, representing around 80% of the revenue. The operational EBITDA margin was solid at 23 million NOK or 23% of revenue, which is close to doubling compared to first quarter last year. Nekkar still has a strong balance sheet, with a solid cash position of around 188 million NOK, and we have no interest-bearing debt, and we also have an undrawn credit facility of 200 million NOK.
In the first quarter, the order intake came in at 27 million NOK, mainly driven by the breakthrough four-year contract for Inteliwell for the drilling automation system to Transocean and Wintershall. The order backlog is at just north of 800 million NOK, which creates good visibility for the coming quarters. In this quarter, we also were glad to announce and close the acquisition of Techano, which strengthens our position within smart electric lifting and handling solutions, which I will give you some more details on afterwards. On top of this, earlier this week, we announced that Techano signed a crane contract for the offshore wind market for approximately EUR 4 million to execute on.
If we look into the key financials on a quarter-by-quarter basis, you will see that we have a solid revenue of just about NOK 100 million in the first quarter, which represents about a 20% year-over-year increase, which reflects that we have a good operational performance and high activity in both new build and aftermarket in Syncrolift. The operational EBITDA of NOK 23 million or 23% is a good performance and is above the historical averages for the last quarters, and a solid growth also year-over-year, as you can see illustrated to the right. The order intake in first quarter is mainly driven by the booking from the Inteliwell contract through Inteliwell towards Transocean and Wintershall. There are no other large contracts booked in the first quarter.
The backlog for the quarter, as you can see to the right, it's solid at above 800 million NOK, and it's also adjusted to the currency development through the quarter. Let's move to Syncrolift, which is our main financial driver in the numbers. In December 2022, we announced a $10 million contract to perform a significant upgrade for Dubai Maritime City, which is owned by DP World, a global leader in operating ports and shipyards around the world. Earlier this month, about two weeks ago, we had held a formal signing ceremony in Dubai with both Dubai Maritime City and DP World present. The project is already well underway in terms of execution and progress.
The reason for bringing this up again is that we see this contract as the start of a long-term partnership with both DMC and DP World, and also enables building a stronger presence in Dubai and the Middle East for Syncrolift businesses, both for new builds, retrofit and services. Going forward, we see a good outlook for the activity level for Syncrolift. On the left slides, you would see our backlog and our current expectations in terms of execution year of the total backlog of about NOK 800 million. As you can see, we expect that around NOK 300 million of the backlog is expected to be executed in the remaining of this year, while the remaining is to be executed next year and onwards.
On top of the backlog, we experience still a high tender activity in the new build upgrade segment. We see a strong tender pipeline. We expect that tenders worth around NOK 2 billion are to be awarded over the coming two years, meaning this year and next year. We are confident that Syncrolift will continue to secure a significant portion of this. Compared to last quarter, where we also put up this illustration, we have not lost or won any tenders. Our pipeline is more or less intact without any significant changes and still looks very solid going forward.
I would just like to mention that, of course, the timings are on these tenders are of course indicative as both the award and also execution progress and timeline are impacted by external factors which are outside our control. Let's move on to Techano Oceanlift. About a month ago, we announced that we acquired a company called Techano. The company is now part of the Nekkar portfolio, and we have slightly renewed the name to Techano Oceanlift, and as you can see, made it part of the Nekkar group and branding. With Techano, we found a complementary specialist team that, combined with Nekkar software and automation competence, gives a good platform for solving customer and industry needs.
Techano has a solid position within aquaculture and renewables, with a proven track record with deliveries of products to both business segments. The acquisition were performed for an undisclosed immaterial amount. Going forward, we will position Techano Oceanlift as a leading player in the development of smart offshore load handling and lifting equipment. In particular, we are targeting, firstly, offshore wind vessels with 3D cranes and gangways, and secondly, offshore fish farms with cranes and fish transfer systems. With the help of Intellilift, we will leverage software sensors and cameras to enable remote steering and high degree of automation in order to provide safe and efficient operations. Nekkar has a strong track record delivering advanced motion compensated equipment to tackle harsh offshore environments. Based on the Techano acquisition, we are now developing a suite of products tailored for offshore wind vessel.
Nekkar has previously developed gangways for the offshore wind market. We are re-entering the market with new and improved all-electric and lightweight design. We have developed a completely new patent-pending 3D crane that dramatically reduced the weight of the crane, and the crane is specifically designed to deal with demanding tasks of servicing floating offshore wind farms around the world. We already have a market-leading control system in place that is proven and in operation today in order to steer and automate both gangways and cranes. The Phoenix control system can enable that both the crane and the gangway can be controlled from the same operator chair on the ship's bridge. Combined with all these products in the portfolio, we believe that we will have a highly competitive offering to service the markets with these products.
Looking into the markets, we see that there are strong fundamentals in the global space. Offshore wind turbine installations is expected to grow with about 12% annually until 2030, as you can see illustrated on the left-hand side. Looking into the vessel side, both the construction and the service operation vessel supply side is lagging the expected demand, which creates a need for further new builds with such equipments installed. As earlier announced this week, we are glad that Techano Oceanlift, our newly acquired company, has secured a contract to supply a high-end offshore crane with both Active Heave Compensation and 3D functions to the offshore renewable market. The software and automation will be delivered from the sister company, Intellilift.
We think that this contract gives a good foundation for the new company in the Nekkar group, and will also act as a reference case towards the market in terms of further awards. That's, that's a bit about the renewable offering within the newly Techano Oceanlift company. The second business segment is the aquaculture side, and Techano has just recently finished the delivery of a fish transfer system to Ocean Farm 1, the world's most advanced offshore fish farm, operated by SalMar Aker Ocean . The fish transfer system is developed to ensure safe and efficient transfer of live fish between the offshore fish farm and the vessel, far out in harsh offshore environments. The systems were delivered and commissioned recently through the upgrade of the Ocean Farm 1 at the Verdal.
This case example just shows that there is a breadth and also a high-end offering within the Techano Oceanlift portfolio. Moving on to Intellilift, which is 51% owned by Nekkar. Intellilift offers software controls and services to all Nekkar business companies, and is also an important contributor in parts of the deliveries to these business segments. As earlier announced, Intellilift is a joint venture partner with both Transocean and Viasat to create an offering towards digitalizing drilling operations around the world. The first contract for Inteliwell is now installed, commissioned, and in live operation at Transocean Norge, which is operating on a 4-year contract for Wintershall and OMV on the Norwegian continental shelf.
The contract for Inteliwell and for Intellilift consists of a fixed sum for installation, plus a four-year SaaS fee throughout the contract period. We are glad with this first breakthrough contract, which is now in live operation, that we will have an install base which proves a validation of the Inteliwell software and platform, and we expect this to open new doors in the global rig market going forward. Finally, let's touch on the impact technology ventures. Let's start with SkyWalker, our wind turbine installation machine. As reported last quarter, we see increased focus on offshore wind developments and use for major component exchange. Major component exchange is basically how to reduce the operational cost by exchange of major components like blades, gearboxes, et cetera, offshore, compared to towing a floating windmill to shore to do the exchanges.
A solution for this will include both SkyWalker, a 3D compensated crane, which Nekkar can deliver, installed on a floating vessel, all integrated by high-end digital automation technology. Within the first quarter, we have formed partnerships and MOUs with multiple of the consortias bidding for the Norwegian Offshore Wind Development Projects. For Starfish, which is our closed system for sea-based fish farming, we are still finalizing our concept, making smaller adjustments, and we are preparing for the build phase of the first full-scale system. Let's recap some of the financial highlights for the first quarter. As mentioned, we have seen good activity, with revenue of around 100 million NOK, representing an increase of 20% year-over-year.
The operational EBITDA came in of about 23 million NOK, compared to 12 million NOK in the same period last year, which is also a good development. The net capitalized development costs is of about 6 million NOK, and is about our expectations for the quarter. Let's move to some of the summary and outlook. We think that combined with our operational performance and the solid backlog we have in Syncrolift, this gives a good visibility going forward. Secondly, we have received and executed the first commercial contract for Inteliwell and Intellilift, which will open new doors for new contracts going forward.
Thirdly, Techano Oceanlift is now becoming an immediate revenue contribution for Nekkar, which means that going forward, we are positive to the fundamentals, with revenue now coming from three portfolio companies within the Nekkar group. With this, I will conclude my Q1 updates, and we can move on to some questions and answers before we round off.
Thank you very much, Ole. There are a couple of questions that have come in. I think we'll start with a question on the cash position. Why is your cash position similar to the last quarter, even though much of your accrued non-industry production has been converted to cash?
Yeah, we, as. It's correct to say that the cash is quite equal to the last quarter. We still have a working capital, meaning outstanding receivables and accrued revenues, which we anticipate will come in throughout the coming quarter and quarters. We should expect that the cash position will build upwards in the coming quarter.
Thank you. A very technical question about the SkyWalker, Ole. For SkyWalker, the prototype looked a bit simpler than the latest drawing we've seen on your website. How confident are you in being able to complete this project? I'm thinking, for example, about the arm that will attach the blades to the wind turbine. I think we should probably add that the latest drawing on the website may not actually be the latest version we're operating with towards clients.
Yeah, no, that's correct. I think there's a lot of developments taking place towards the offshore wind market for SkyWalker use over the last, let's say, half a year, nine months' time. There has been done modifications and changes to that in order to accommodate the offshore conditions. We are working now with two of the consortias bidding for the Norwegian projects, which are both national and international players. Through these partnerships, we get good developments and of course, technology improvements in terms of the solution. SkyWalker still have some time before the complete package and system, including the 3D crane and the vessel is ready to go offshore for wind turbine major component exchange.
Thank you, Ole. There were a couple of questions about asking us to give details on margins, margin expectations for the second quarter. I know you don't normally comment specifically on that, but do you want to add a comment about some generic developments for the second half of the year, maybe?
I think the first quarter is quite a normal quarter for us in terms of execution, which means we have kind of no significant projects being finalized, which normally provides some extra margins, and there is also no significant downside in the projects which has been revealed. I would say that's kind of the comments to the first quarter. Going forward, we, of course, target the same type of execution level. As some of you remember, there is also some currency exposure in terms of the operational EBITDA numbers, which could, of course, influence the numbers going forward.
Thank you. A question about Techano. Is Techano a profitable business, and how much do you expect their operations to affect your margins and revenue? I know you won't answer that to the specific numbers, but maybe you can say something about the revenue contribution from Techano going forward.
Yeah, I think, of course, with the secured contract now for the offshore wind crane that we received and announced earlier this week, that gives a very solid starting point and should make Techano profitable from what should we say? day one and onwards. Of course, the level of revenue and margins will, of course, depend on both the execution of this project and also new projects that we are targeting for the group.
What we have also done is to supply and merge some of the Nekkar existing offshore handling and lifting groups together with the Techano group, meaning we are now all gathered in one company, in one building, which also gives us some more capacity and knowledge in terms of executing this contract, and also are able to target further contracts as we have some more capacity.
Thank you, Ole. There is a question here: Is the revenue from Inteliwell and Intellilift included in the expected revenue for 2023? I think this question may be referring to the order backlog by execution year, slide 11 in your presentation.
Yeah.
Yeah.
If you go to the slide 11, it's not included in that slide, as that's a kind of a separate slide for the Syncrolift business only. Intellilift and Inteliwell have generated revenue in the first quarter of this year and will generate revenue in the coming quarters of this year, as the contract is now in operation and generates revenue day by day.
Thank you. Question about Inteliwell. How quickly do you expect further Inteliwell contracts going forward, giving a successful execution of the first contract with Transocean Norge?
Yeah, of course, we are in continuous dialogue with several oil companies and drilling contractors around the world. I think I last quarter said we would like to have a reference case in each of the three offshore basins. Now we have this contract in the Norwegian continental shelf, and we are targeting similar contracts both in Gulf of Mexico and in Brazil. I don't want to give an exact answer to the timing, but it's a continuous work, and we are believing now that the first contract now will pave the way for new signings going forward.
Thank you.
Yeah.
A question about R&D costs. Do you expect R&D costs to increase in the future or lay stable at approximately NOK 6 million per quarter? I think it's probably worth mentioning that that's referring to net capitalized development costs.
Yeah. In the first quarter, just to add, we didn't receive any soft funding payouts, so the NOK 6 million is both the gross and the net number. We expect that that will be a kind of a stable number going forward. We don't expect any significant increases to that number in the coming quarters.
One more question about working capital. Do you expect the working capital to decrease in the coming quarters?
Yeah. Yes, as I mentioned about the cash position, we are expecting to build more cash in the coming quarters this year, which, of course, will imply that the working capital will correspondingly reduce.
Thank you. Those are all the questions that we have received today, Ole. With that, I think we will conclude today's webcast. Just a reminder, feel free to send additional questions you may have to ir@nekkar.com if there are other questions that you would like to ask. Thank you, Ole.
Thank you, all.