Good morning, everyone, and welcome to this second quarter presentation for Nekkar. I am Ole Falk Hansen, the CEO of Nekkar, and will share with you our highlights for the second quarter and the first half of this year. Together with me today is also Rolf-Atle Tomassen, our Managing Director of Syncrolift, our largest portfolio company. He will give us a deep dive on Syncrolift markets, customers, unique offering, and competitive edge. Finally, we will round off with some Q&A, which you may submit through the webcast during this presentation. Nekkar in brief: we are an industrial technology company which consists of a portfolio of established businesses, combined with new impact technology ventures. We have a world-class engineering expertise team, which, combined with our digital competence, gives us a strong value proposition towards sustainable ocean-based industries.
The financial situation is strong, and we have a strong backing from our main owner, the Skeiegruppen. The Nekkar portfolio is targeting four business segments, as you can see illustrated here. Now, we have three established portfolio companies and in addition, we have two impact technology ventures targeting some of these business segments. To start with Syncrolift, that's the leading, market leader for ship lifts, for new build retrofits and services to both commercial and naval businesses. Techano Oceanlift, which is our, newly acquired company from earlier this year, provide cranes and lifting and handling solutions for both renewable and the aquaculture. And Intellilift, which is the software and automation provider, provides systems to all business segments, in addition to, targeting the drilling market through our InteliWell joint venture.
And on top of this, SkyWalker, as the wind installation machine, and Starfish as the aquaculture solution. 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 illustrated here, we see that the Nekkar businesses and the impact technology ventures are both in the innovation, growth, and the established business phase. So let's move to some highlights for the second quarter. We have delivered a solid second quarter of 2023. Revenue is up 32% year-over-year to NOK 132 million, with an operational EBITDA of NOK 27 million. If you also include currency gains, we have delivered a reported EBITDA of NOK 36 million and a margin of 27% reported EBITDA.
Our operations are generating cash, and in Q2, we added NOK 49 million to our cash account, now totaling NOK 236 million. We have no interest-bearing debt. We see strong fundamentals going forward. We had an order intake of NOK 148 million in the quarter, and we ended the quarter with a backlog of NOK 864 million. In terms of the operational highlights, Syncrolift continued to deliver solid project execution and services to our global customers. We are also proud to report that Syncrolift signed three new contracts with a combined value of NOK 85 million in the quarter. Additionally, we signed a new contract last week of additional NOK 30 million, bringing the total order intake to NOK 115 million for these four contracts.
Intellilift have delivered and installed the installation for automation on the Transocean Norge. The system is live and working well. Additionally, the customers has sent us additional purchase orders, which we are now delivering for the same rig with further automation requirements. Techano Oceanlift is progressing well with the production of the active heave-compensated 3D crane for the renewable vessel, and we target a successful delivery for that crane for the coming year. With SkyWalker, we have signed agreements with three consortia for potential use of SkyWalker as a tool for major component exchange on the Norwegian offshore wind farms. And finally, today, we are glad to share a transformative transaction for Starfish that I will revert to within a couple of minutes.
As mentioned, in the second quarter, we have delivered a solid revenue of NOK 132 million, an increase 32% year-over-year, reflecting good operational performances and high activity in both the new build segment in shipyard solutions, and also Intellilift and Techano Oceanlift generating revenues. Also, the operational EBITDA of NOK 27 million is good, representing a margin of 21%, which is above the historical averages for the last quarters and a solid performance for Nekkar. The order intake in the second quarter is mainly driven by the mentioned three Syncrolift contracts of NOK 85 million and the Techano Oceanlift active heave-compensated 3D crane for EUR 4 million. The backlog at the end of the quarter is adjusted for currency developments through the quarter and is solid at NOK 864 million....
So this morning, we are excited to announce an investment into FiiZK, which is a leading provider of closed cage system and aquaculture software. This is a strategic move for us, with the objective of firstly, providing a good home and growth platform for Starfish within an established company and value chain. And secondly, this will strengthen our positioning within the aquaculture industry on both hardware and software solutions. We are co-investing with BEWI Invest and the Bekken family, and together we look forward to leveraging the strengths of both companies to drive innovation and provide even greater value to our customers and stakeholders. Some information about FiiZK. It's a leading provider of closed cage solutions and software for aquaculture.
The company had last year above NOK 300 million in revenues, and going forward, the group will consist of close to 100 dedicated employees and will have three main business units. Closed cage, which deliver closed cage solution for fish farming, and already has 20 installed system, and is by far the market leader for these systems. Secondly, the protection of technical textile segments include products such as lice skirts and other, protection, products. And finally, digital, which is software products for aquaculture planning, optimization, and analysis, with leading products such as Horizon, Omnia, and Control. Some transaction details. Nekkar will own 39% and BEWI Invest will own 41%, and together we will become the two largest shareholders of FiiZK.
In total, Nekkar invests NOK 50 million, whereas NOK 25 million is cash and NOK 25 million through contribution in kind through the transfer of our Starfish technology and company into the FiiZK group. BEWI invests the same NOK 25 million , and other existing minority shareholders will invest NOK 10 m illion in cash. Going forward, both we and BEWI will take active roles in continuing developing FiiZK together with the management group. So to round off, this shows Nekkar capabilities of developing cutting-edge technology and leverage it for strategic M&A transactions to create leading industry partnerships. So with this, let's move over to Syncrolift and the Managing Director, Rolf-Atle Tomassen.
Thank you. Good morning, everyone. My name is Rolf-Atle Tomassen. I'm the Managing Director of Syncrolift. In my presentation, I will give some more insight into the Syncrolift business. Syncrolift have built a 60% market share over the last decade. With an installed base of some 200+ Syncrolifts, our local service offices are well positioned for harvesting from this potential. In addition to our head office in Norway, we currently have service offices in the main ship lift clusters of Dubai, India, Singapore, and U.S.A. We have, for the last 10 years, changed the ship lift business. With our continuous improvement approach, we have built a solid financial performance, going from NOK 200 million in 2017 to NOK 470 million in 2021. We have more than doubled the EBITDA in the same time period.
Our mission is to improve shipyard docking efficiency. By improving efficiency, our customers are handling more ships per year. Any solution minimizing docking and repair time is a Syncrolift solution. Without going into details, we have in principle two different product groups. One is the vertical lifting from sea to land, and the second one being the horizontal transfer of ships from seaside to the land side. A shiplift is often the heart of the shipyard, so a local service office is key to maintaining a high operational availability. So how do we make shipyards more flexible and more profitable? If we first look at a traditional shipyard, the bottleneck is very often the ship dock. As you can see from the middle picture here, the dock, you can see that it's only possible to service one to two ships at a time.
A ship lift and transfer system from Syncrolift can increase this capacity to anywhere between three and 50 ships. So what used to be the bottleneck in the seaside is now the bottleneck on the land side. Utilizing available land area requires smart transfer solutions, such as the Syncrolift Flex Trolley. A Flex Trolley is capable of moving ships anywhere on land, thereby utilizing all available area and thereby increasing business for our customers.... Our demand is mainly driven by commercial and naval yards. On the left, you see a Panamax vessel of some 200 meters, 32-meter width, weighing in the area of 18,000-20,000 tons. In the middle picture, you see a naval vessel, a destroyer of around 16,000 tons, whereas on the right side, you see a mega yacht weighing less than 2,000 tons.
Commercial yards are influenced by how the market in general cycles, whereas navy yards are not following market cycles, but are more influenced by geopolitical instability. Syncrolift is committed to our customers worldwide. We have over 200 shiplift and transfer systems installed globally. Syncrolift is unique in its approach to service these systems through our local offices in every major shiplift cluster. Syncrolift have, over the last decade, won 60% of all shiplift contracts. As you can see from this graph, there will be fluctuations from year to year, but through our cycle, we are confident that we are the leading shiplift and transfer system provider. We continue to win contracts. Four new contracts are recently signed with a total contract value of NOK 115 million. Going forward, we see a good outlook for the activity level for Syncrolift.
On the left side, shows our backlog and our current expectations in terms of execution. From a backlog of NOK 838 million, we expect about NOK 300 million of backlog to be executed in the remainder of this year, i.e., 2023, while the remaining will be executed in 2024 and onwards. On top of this solid backlog, we experience a high tendering activity in the new build upgrade segments, and we see a strong tender pipeline in the coming years. We estimate that tenders with potential worth around NOK 2 billion will be awarded over the coming two years. We are confident that Syncrolift will continue to secure a significant portion of these awards. Syncrolift has won three contracts in the previous quarter. We have not lost any tenders from our pipeline.
As a note to this, tender pipeline, it's worth mentioning that the timing are indicative, as execution period and timing of contract awards are impacted by external factors outside of Syncrolift's control. In my final slide, I'd like to emphasize the Syncrolift approach, and that is that we innovate continuously. Whether this is products, cost reduction, or logistics, doesn't matter. We improve anything we can get our hands on. This culture has awarded us with a solid market share and made us a reliable partner, which down the line, contribute to more service business for us. The service business is important for our customers and for us. We learn from the challenges our customers have, and this insight is fed right back into our innovation pipeline. Thank you.
Thank you, Rolf-Atle. So, to summarize, we see some clear, strong fundamentals from the Syncrolift company and team. We have seen a 30% annual revenue growth over the last five years. The margin is strong. They have delivered 27% EBITDA margin over the last five years, and few companies in the project and service business can replicate these results. Going forward, we have a solid backlog of more than NOK 800 million, and as mentioned, there are tenders worth more than NOK 2 billion coming up in the coming years. The service revenue, which is at an important baseline, is picking up and represented close to 20% of the revenue last year. The cash from the operations is strong, and the EBITDA to cash from the Syncrolift operations is more than 90%.
Finally, we have a strong and robust management team with long track record in this industry, and a supply chain which can make the business model scalable also in the future. Let's move to Techano Oceanlift, which we announced at the end of the first quarter as an acquisition into the Nekkar group. Since then, we have spent the time well, and the team is now fully integrated into the Nekkar group. It's especially worth highlighting that the collaboration with Intellilift to develop a joint value proposition for advanced load handling equipment is working well with a combination of both the mechanics and the digital control system. Going forward, we are fully focused on establishing a solid market position within the defined segments, as you can see illustrated here... and we are pursuing sales opportunities in all these segments with our key product offering for Techano Oceanlift.
Techano Oceanlift secured a EUR 4 million contract in the second quarter to supply a high-end offshore crane with both active heave compensation and 3D functions. The software and automation will be delivered from Intellilift, and the contract gives a good foundation for our new company and acts also as a reference case towards the market. The project is progressing well and are on track to deliver through the next year. Moving on to Intellilift, which is 51% owned by Nekkar. Intellilift offers software controls and services to all Nekkar business areas, and is an important contributor in these business areas in terms of increasing competitiveness and develop new products. Intellilift is a joint venture partner with Transocean and Viasat, with the company InteliWell, creating a powerful offering to digitalize drilling operations.
The first contract for InteliWell is now installed, commissioned, and in live operations at the Transocean Norge rig, operating for Wintershall and OMV on the Norwegian Continental Shelf. Furthermore, we have received additional purchase orders for installation of additional automation software to be implemented now in the third quarter of this year. The contract for the Transocean Norge consists of a fixed sum installation fee, plus a four-year software as a service fee throughout the contract period. Entering this first rig operation is a major milestone and validation of InteliWell and Intellilift's people and software, and we expect this to open new doors in the global rig market. The following video will give you an introduction to the benefits the customer is having with the InteliAutomate now being in operation, and we are utilizing this customer success story towards other customers in the future.
Please see the presentation and the video in the presentation video, being broadcasted now.
InteliWell is an automated control system that connects to the drilling control network and takes control of the joysticks and the keypads. So this allows for any manual operation to be replicated and automated. The number of button pushes to build a stand has significantly decreased.
The stand building goes faster because the automation takes over and is in a very steady mode. Human errors are eliminated or reduced, and it helps to reduce the stress level, of the operator and the focus that he has to put on this operation. The humans are only there to observe and correct, if required, and that is a really good step forward in being safer and more efficient.
It's an easy system to implement, and it's a low-code platform, which allows for swift creation and editing.
So let's move over to Impact Technology Ventures and SkyWalker, which is our wind turbine installation and maintenance machine. SkyWalker is now part of several studies and projects for offshore wind developments, where the benefits in terms of costs and efficiency are significant. The following applications of SkyWalker for offshore wind is being explored, as you can see illustrated on this slide. Firstly, installation of tower sections for bottom fixed offshore. Secondly, installation of floating turbines on a floater at quayside, and then out at sea, major component exchange, both for bottom fixed and floating offshore wind solution. As an example, exchange of major components on site offshore, for instance, blades and gearboxes, without disconnecting the foundation and towing the turbine to port, can give significant benefits. And for us, this will include both a 3D compensated crane and SkyWalker, all integrated by digital automation technology.
This solution will be a combination of deliveries from several of Nekkar portfolio companies. Nekkar have now signed three agreements with consortia, which are positioned to develop offshore wind in Norway. Blaavinge, consisting of Ørsted, Hafslund, and Fred. Olsen, is one of them, where we have worked closely to study the benefits and operational aspects of the technology. Common for all this is the fact that the partners are seeing SkyWalker as a key tool to reduce the cost and increase field economics in the installation and maintenance phase for offshore wind. Let's move to some key financials. In the second quarter, our revenue reached NOK 132 million, which is a 32% increase from the same period last year.
The growth reflects high activity in Syncrolift, and underscores that Syncrolift's operations are no longer hindered by the customer-driven delays affected the business in 2022. Additionally, Intellilift and Techano are starting to generate revenues, impacting the overall Nekkar revenue figures. In terms of profitability, our operational EBITDA ended at healthy NOK 27 million for second quarter, representing a margin of 21%.... Additionally, our reported EBITDA was positively influenced by unrealized gains on foreign exchange contracts, totaling to NOK 8 million, giving an EBITDA margin of 27%. These robust financial results shows solid performances in both Syncrolift and the other Nekkar businesses. In terms of sales, during the second quarter, we achieved order intake of NOK 148 million, which is also an increase from last year's same period.
Furthermore, the backlog at the end of the quarter is healthy at NOK 864 million, which secures a good visibility for future periods. We continue to invest in innovation, but at a slightly lower scale, but with a prudent and focused approach. Our capitalized development cost was NOK 2 million in the second quarter, compared to NOK 9 million in the same period last year. These investments are mainly related to development of 3D crane and gangway for the SOV market, in addition to our impact technology ventures, Starfish and SkyWalker. Our balance sheet is solid and strong, and the consolidated balance sheet shows total assets of close to NOK 515 million.
The working capital is at a healthy state, at NOK 58 million at the end of the quarter, and cash conversion has been strong in large Syncrolift projects over the past half year, which shows a significant reduction in accrued non-invoiced production, as you can see. The bank deposits amounted to a total of NOK 236 million at the end of the quarter, and the cash flow in the second quarter and the first half of 2023 was positive, with NOK 55 million. So in summary, Nekkar is in a very favorable financial position, with an exceptionally strong balance sheet, strong cash balance, and no debt at the balance sheet. The equity ratio at the end of the quarter was 75%.
As mentioned, the company experienced robust cash flow during the first six months of the year, resulting in NOK 55 million increase in cash in the period. The positive cash flow is driven by a strong EBITDA, combined with a reduction in working capital. That sums up the financials in the period. More insights are also available in the first half report, which can be found on the Nekkar website. To round off, a few comments about our capital allocation strategy. In the current market conditions, Nekkar is seeing several opportunities to grow our businesses with organic investments into our existing portfolio companies and, in addition, M&A for new businesses within our defined segments. Today, we have announced our second M&A transaction for this year, and we will continue to search for value-generating transactions.
We will continue to invest in impact technology investments, such as SkyWalker, at current levels, with focus on market validation and seeking investor partnerships. On top of this, yesterday, we announced a share buyback program of up to NOK 80 million . Our board is of the opinion that utilizing a portion of our available cash for a share buyback program would be in the best interest for the company's shareholders. So before we round off and move to the Q&A, let's make some conclusion remarks. As mentioned, the financial performance of the quarter is strong, both in terms of revenue and profit margins. Our backlog, combined with high tender activity, creates good visibility for all our companies, and especially for Syncrolift. And also, InteliWell, with the first installation of the system, will open up further opportunities in the coming quarters to come.
Finally, as announced this morning, the Starfish and the aquaculture business is strengthened through a strategic M&A deal with BEWI Invest into the leading aquaculture company, FiiZK, which we expect to share more information about at a later point in time. With this, I will conclude the second quarter presentation, and we will have time for some Q&A questions.
Thank you, Ole. We have a couple of questions. Let's start with one on the latest subject you covered in your presentation about share buybacks. What are you going to use the... How will you use the shares you acquire through the share buyback program? Will you cancel them? Will you buy dividends, or will you use them for M&A purposes?
Yeah. So, we see several opportunities to utilize the shares, and they will be used for company purposes. At the moment, we have not made a decision on which of these purposes it will be leveraged, but we will continue to evaluate that going forward.
Thank you. Question, congratulations on a very nice and strong quarter and a very smart approach in monetizing Starfish. Two questions, firstly related to Starfish joint venture with BEWI. What kind of normalized margins should we expect from the new or from the FiiZK business? I guess it's a bit too early to tell, but I'll let you respond.
Yeah, no, so this is hot off the press as the acquisition was signed only a few hours ago. We expect to be an owner in FiiZK to develop the company in a strong and stable situation going forward, which kind of balances growth and profit margins. FiiZK has a portfolio of kind of different businesses with different economics and opportunities. And I think we can share more information about this at a later point in time. Now, we are kind of eager to be an owner together with BEWI Invest into the FiiZK company and develop the company together with the strong management team.
Thank you. Question to Rolf-Atle. You mentioned in your presentation that the geopolitical uncertainty is driving investment in the naval shipyard segments. Can you elaborate a little bit about how you have seen activity in the naval shipyard segment in the last couple of years following Russia's invasion of Ukraine?
Yeah, we have actually seen reactions or preparations for the last five years, six, seven years. Of course, with the escalations from the Ukraine-Russia war, we see even further preparations of navies. So there are new projects coming going forward.
Thank you. A question about SkyWalker, Ole. Relates to the bidding consortiums for the SkyWalker projects. And I assume this person is referring to Norwegian Continental Shelf, the license auction process. What are the timeline expected for the bidding process?
Yeah, so, as announced from the Norwegian government, the bids for the licenses for both the floating and bottom fixed is due later on this year. And of course, as part of these bidding processes, we see that SkyWalker is a tool that will be leveraged into the bids in order to improve field economics. And of course, after the bidding rounds, of course, there will be rounds of further discussions and yeah, and evaluations.
Thank you. Question about Intellilift. Intellilift increased revenue from NOK 5 million to NOK 9 million in the quarter. How much of this comes from InteliWell? And have you started to generate revenue from the InteliWell business yet?
Yeah, so, for InteliWell, the primary revenue driver through 2023 is coming from InteliWell. And, throughout this year, the InteliWell installation for the first rig contract has kind of consumed most of the personnel and the focus of our company.
Question about the FiiZK transaction. According to the presentation, Nekkar will invest NOK 50 million, but BEWI Invest will invest only NOK 25 million. Can you explain the difference, given that the ownership is about equal post-transaction?
Yeah. So, as mentioned, Nekkar will invest NOK 50 million as a combination of 50% in cash and 50% contribution in-kind from Starfish. And then for BEWI Invest, they are already a significant shareholder in FiiZK. So of course, they already owns a fair portion of the shares in addition to their equity injection now together with us.
A question to Rolf-Atle. What type of activity can we expect the most of in terms of new projects going forward? Is it ship lifts or ship transfer systems, or a combination?
All three. When it's a floating dock, it's a transfer system. Or it can be a shiplift and transfer system, or only a shiplift. All three are very active.
Thank you very much. There was also one question here about, did you say anything about how much of the income, Syncrolift's income comes from service revenues? And I believe you mentioned 18%, approximately, Ole, during the presentation.
Yeah, that was the average of 2022 numbers. And services is still a key part of the Syncrolift revenue also this year.
How do you expect service revenue to develop for Syncrolift going forward?
Yeah, as Rolf-Atle has explained, service is an important part of the business in terms of serving our customers in a good manner. So we have an ambition and a budget to grow the service revenue from last year's revenue further up, also for this year and also the coming years. And I think the potential is the install base, which we showed, of more than 200 systems installed, and utilizing our local dedicated team in our service hubs around the world.
Thank you. That was the last question that has come in through the webcast. So with that, we will conclude today's session. I say good morning and thank you.