Good morning, everyone, and welcome to this Third Quarter Presentation for Nekkar. I am Ole Falk Hansen, the CEO of Nekkar, and today I'm with you from our offices in Kristiansand. Today's presentation will start with a recap of Nekkar's value proposition and our company. Furthermore, we will present the key financial highlights from our third quarter. We will give you an update on each of the portfolio companies' developments in the quarter, and we will round off with some more financial highlights and also have the opportunity for Q&A for all of you. Nekkar, we are an industrial technology company with focus on efficiency and sustainable solutions for ocean-based industries. We have world-class expertise within engineering, industrial software, and complex project execution, to mention a few. Nekkar is an engaged, long-term, active owner.
We are focusing on building profitable growth in all our companies, and we have an active agenda, including both operational and structural tasks in our companies. Nekkar is also flexible in terms of ownership and operating model for our different companies and investments. As an introduction, let's start with a short recap of our current business portfolio. Syncrolift is the global leading provider of shipyard solutions for safe and efficient ship docking worldwide around. Intellilift delivers industrial software solutions, focused on digitalizing workflows through automation and remote control system for both drilling and offshore load handling. Techano Oceanlift, which was acquired at the start of the year, delivers intelligent load-handling systems, such as cranes, gangways for both renewable subsea and the aquaculture market.
And finally, the latest acquisition, our co-investment into FiiZK, which is a leading provider of closed cage solutions, technical textiles and software for the aquaculture industry. And finally, we have Skywalker, our disruptive wind turbine service and installation machine for both onshore and offshore use. The Nekkar portfolio is targeting four business segments, as you can see illustrated here. Syncrolift towards the shipyard business segment, Techano, both towards renewables, aquaculture and offshore energy, and Intellilift, both a supplier and a key builder in all Nekkar companies, in addition to targeting the offshore energy segment through its InteliWell joint venture. For FiiZK, it's primarily aquaculture, which is the focus for both hardware and software solutions. And finally, Skywalker, as the wind turbine service machine towards the renewable wind market.
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 and industry partners. Here we will find Skywalker, our wind turbine installation machine. In the growth phase, we find businesses which are starting to generate financial results through commercial contracts with customers. The target for our companies here is to broaden the customer base, scale the business, and also expand products and services and aftermarket business. Both Intellilift and Techano Oceanlift are positioned here, and additionally, our investments into FiiZK, including the merge of Starfish into the FiiZK group, is also a growth positioned company as we define it.
And finally, to the right, for the established phase, Syncrolift represents the niche market leader for ship lifts, and the business is associated with a large installed customer base and targeting both new builds and upgrades, and are executing aftermarket services, delivering solid financial results. So let's move over to the highlights for the third quarter, and we are proud that we have delivered yet a solid quarter. The revenue is up over 100% YoY , NOK 262 million in the third quarter, which is also an increase of more than 20% from the last second quarter this year. EBITDA came in at NOK 29 million , equivalent to a roughly 18% margin, which is a 71% increase from last year's results.
We are still maintaining a strong balance sheet with NOK 166 million in cash, and in the quarter, there has been some working capital buildup related to the project business in Syncrolift. We see a strong fundamentals going forward with a backlog of about NOK 750 million . Additionally, yesterday, we are glad that we could announce the signing of a new new build ship lift contract to the Indonesian government player, PT PAL, of roughly $15 million, which actually adjusting the backlog to above NOK 900 million as of today. In terms of operational highlights, in Syncrolift we continue to see steady execution of projects and services. A NOK 30 million contract was signed in August, and we continue to see high tender activity, as illustrated with yesterday's award.
Intellilift are finalizing the full scope on the Transocean Norge rig and are receiving good customer feedback. Techano Oceanlift is progressing well with the production of the offshore crane awarded earlier this year, and are also taking parts in many tender processes for both subsea and renewable vessels. With Skywalker, we are discussing cooperation models for targeting Skywalker as a tool for major component exchange on both bottom fixed install base and also future new wind turbines. Finally, for our latest co-investment, FiiZK, we have finalized the transaction at the end of the third quarter, and also moved our Starfish technology into the FiiZK group. The restructuring is progressing as planned, and FiiZK are now actively marketing their services in all business segments.
As I mentioned, in Q3, we have seen a solid revenue of NOK 162 million, a more than 100% increase YoY, reflecting good operational performance and high activity in both new build and also aftermarket business in Syncrolift. Also, the EBITDA of NOK 29 million represents the margin of about 18%, which is in line with the historical averages for the last quarters, as illustrated to the right. The order intake in the third quarter is mainly driven by Syncrolift service and a NOK 30 million contract. The backlog for the quarter is adjusted to the currency development through the quarter and is solid at about NOK 750 million.
Please note that these figures does not include last day's announcement of the $15 million contract, where the backlog is more around NOK 900 million at the current point in time. So let's move over to Syncrolift and some company highlights. And let me start with yesterday's news. The order confirmation for the $50 million ship lift contract to PT PAL Indonesia shows Syncrolift's clear global market leading position. And we are glad that the contract in Indonesia is yet another large ship lift contract awarded to Syncrolift. Additionally, in the beginning of the quarter, we signed a $30 million contract for an advanced ship transfer system to a European naval yard, and we continue to see high tendering activity within both new builds and services.
If you look on Q3, in the three months, no major tenders were awarded nor lost in this quarter. We have established offices in Australia and India throughout this year as part of our global reach and working closer with our customers on a global basis. For the financials, the revenues sees an 88% revenue growth versus the same quarter last year for Syncrolift. The service activity is somewhat increased from the previous quarter, and we are expecting a solid service quarter at the end of the year. In terms of operations, we have good progress on ongoing projects, and we also see that our establishment in India gives good sourcing opportunities in the region. Finally, we also see high customer activity in our innovation lab in Vestby outside Oslo.
As mentioned, yesterday, we announced an order confirmation for a new build ship lift and ship transfer system to a government-owned Indonesian player, focusing on both naval and commercial ships. The contract value is about $50 million, and Syncrolift have received an order confirmation, and we expect to sign the contract within short time. Delivery is expected to be within approximately 2 years, and we will construct and do project management engineering sourcing from our Syncrolift headquarters in Vestby. So going forward, we see a good outlook for the activity level of Syncrolift. On the backlog, on the left-hand side, you see our current expectations in terms of execution of our total backlog of about NOK 700 million .
You can see that about NOK 500 million of the backlog is expected to be executing in the remaining of this year and also into 2024, as the coming year. Please note that we have not included the latest award in these figures. On top of this, as you can see on the right-hand side, we are still having a very high tendering activity in both new build and upgrade segment, and we still see a strong tender pipeline in the coming months and quarter. So far, in the fourth quarter, Syncrolift have won one contract, which actually is included in the tender pipeline figures for 2023 and 2024. We hope that we can secure more contracts in the coming quarters and years.
Let's take a look at Techano Oceanlift, which came into Nekkar from the start of the second quarter this year. For marketing and sales, there is high tendering activity for equipment deliveries to both subsea and renewable vessels. The financial figures from Techano is impacted by the execution of the large offshore crane, which Techano were awarded in April, May, earlier this year. We see still a solid execution of the 70-ton offshore crane, as I mentioned, and also Techano has delivered two smaller offshore cranes to SalMar Arctic Offshore Farming in the second and third quarter. For Intellilift, the InteliWell joint venture with Transocean and Viasat is still pursuing new contracts for automation systems. In addition, we have tendering for simulators and other drilling controls directly from Intellilift to our customers.
The activity level in the third quarter is primarily driven by the Transocean Norge scope, which are now in the finalization stage. And last quarter, I showed you a video from the rig, and now we are also glad to share. We can give some good customer feedback related to this contract. And as the project and the rig is now working on a month-by-month basis, we expect that the good customer feedback will also be a positive in terms of receiving new customer contracts for Intellilift and IntelliView. So let's look at some more detailed financial. First, for the revenue. The revenue for the quarter ended at a solid NOK 162 million , which is more than 100% increase compared to same period last year.
Year-to-date revenue is close to NOK 400 million, which is about 50% YoY growth from last year. Our EBITDA margin remains healthy at close to 18% in the third quarter, although it's slightly down from the 22% in the third quarter last year. Year to date, EBITDA is 43% up year over year from last year's figures. The net financial items are driven by gains and losses on FX contracts, not qualifying for hedge accounting and other effects. These are now reported as financial items and were previously reported under EBITDA, and you will also be able to see in the appendix for the historical figures with the new reporting method.
Profit for the period is NOK 22 million, compared with NOK -2 million in the same period last year, resulting in a third quarter EPS of 0.2 and year-to-date Q3 EPS of 0.49. In terms of sales, we have already mentioned the order intake in the third quarter was about NOK 61 million, and the order backlog is solid at NOK 750 million. And please note that yesterday's contracts are still not included in the figures. In terms of capital spending, the net capitalized development cost remains unchanged in the third quarter. And the reason for this is that the CapEx was offset by received soft funding of about NOK 7 million.
So the net effect of these two items is zero in the third quarter financial items. So let's take a look at our assets. The intangible assets decreased of about NOK 21.5 million in the third quarter, and this is mainly due to the Starfish technology, which we utilized as part of the FiiZK transaction with a contribution in kind, taking it out of Nekkar's intangible assets, where we evaluate at NOK 25 million. And as you can see, the financial assets is now just about NOK 50 million, which are linked to our investment into the FiiZK group in the third quarter. Moving on to the working capital. At the end of Q3, we have a working capital of about NOK 121 million, which is mainly related to the projects in Syncrolift.
This is an increase with about NOK 60 million from last quarter. This increase is driven by accrued non-invoiced production, especially from projects where we are approaching key invoicing milestones, but we have not met the actual invoicing milestone. I think it's fair to say that for a project execution business, like the Syncrolift business, there will be natural fluctuations from quarter to quarter, where you will, at some times, have a very good cash flow generation from the projects like we had last quarter. You will also have some quarters where there will be working capital buildup before you again can invoice and redeem the invoice and, of course, the cash from the customer.
We have still no interest-bearing debt, and we have a solid equity of about NOK 400 million, representing a 74% equity ratio. So let's move on to the cash flow. The operating cash flow for the third quarter is negative, with NOK 35 million, driven by an increase of the working capital, as I mentioned, and of course, offset by the positive EBITDA in the period. Cash flow from investment is negative at about NOK 25 million, which is primarily related to the NOK 25 million cash contribution into FiiZK, in addition to the Starfish contribution in kind, which does not have a cash flow impact.
You will also see that the share buyback program, which we launched at our last presentation, has resulted in about NOK 6.5 million in cash spending in the quarter. In summary, despite the negative cash flow outflow in the quarter, we have still a financial position which remains sound. The available cash reserve assures continued operational stability and gives also strategic flexibility for the Nekkar group. To round off, a few comments about our capital allocation strategy.
In the current market condition, Nekkar is seeing several opportunities to grow our businesses within organic investments into our existing portfolio of companies, and also M&A for new businesses within our defined segment. On top of our investments, we are executing the share buyback program of up to NOK 80 million, as described in the last quarter's presentation. So let's try to sum up before we move to the Q&A section. I will make some conclusion remarks. I think we have a strong revenue and EBITDA in the third quarter, and also shows a significant growth from last year's figure. The order backlog, combined with high tendering activity and also yesterday's award, creates good visibility going forward, especially for Syncrolift as the key financial driver.
Nekkar is still maintaining a strong financial position, and we are also seeing that our investments this year, both in the Techano Oceanlift and also in FiiZK, are positioning Nekkar towards new products, new customers, which we are expecting to generate positive results in the coming quarters and years to come. So with these conclusion remarks, I will open up for Q&A. So please, Andre, let us guide us through it.
Thank you, Ole. There's been a few questions that have come in. Firstly, a question about the FiiZK business. In Norwegian media, there has lately been a lot of media coverage about the fish farming industry's negative impact on fish and fjord health in Norway. How does this impact the FiiZK business?
Yeah, I think as many of us have read and highlighted in newspapers lately, there at least seems to be some sentiments towards changes in the industry. And as some of you know, FiiZK and also Nekkar with its Starfish technology is a provider of new, more sustainable solutions. Basically, both collecting sludge and waste from the harvesting process in order to prevent the fjords and the surroundings from the waste, and in addition, providing a better environment for the fish health through the harvesting. And I think actually, FiiZK has more than 40 production cycles where there has been no sea lice development, and also have a very low mortality rate.
So we believe this is positive for the products and solutions that the FiiZK group is targeting.
Thank you, Ole. There is also a question about, what's the reason for the slightly lower EBITDA margin this quarter compared to previous quarters?
Yeah, I think we will have some fluctuations, like, we are presenting this quarter, and there will be some quarters where there will be higher EBITDA margins related to project execution and also a mix of businesses and services. And I think if you look on the last seven or eight quarters financials, I think the average is close to where we reported this quarter. So there are no kind of signs of worries that we should kind of expect significantly lower EBITDA margins going forward, but there will be some natural fluctuations from quarter to quarter.
Thank you. You've addressed the net working capital, but there's a question here about: do you expect the net working capital to decrease again in the fourth quarter?
Yeah, I think more in general, of course, when you build up working capital in one period, of course, as I mentioned, you are approaching invoicing milestones, but you are not yet there. And of course, in theoretical and in actual sense, you would expect then that in the coming days and weeks and months you will hit that milestone. So that's why I said that there will be fluctuations from quarter to quarter, where you will some quarters have a somewhat build-up, and some quarters you will have a decrease again after you have hit those milestones. And of course, these we are not building up inventory or kind of more kind of long-term working capital level.
This is primarily related to project execution, and of course, projects goes day by day, and when the project is finalized, you will end up with zero in working capital for that project.
Thanks. There's also... I think it's worth clarifying, if it's not been clear to everyone, how large is the contract that you mentioned that you have won in the fourth quarter? And by that, I assume he, that person refers to the contract announced yesterday.
Yeah. The contract value is $15 million. So, of course, this is a significant contract for Syncrolift and, of course, also something which provides good visibility and also is a good sign for the total shiplift market, that Syncrolift is the leading provider of new shiplifts and upgrades and services all world around. And I think that's also why, as I mentioned, we are now building setups in both India and in Australia to be closer to our customers, enabled to both serve them on new builds, upgrades, and aftermarket services.
Thank you. A question about Skywalker, Ole. There seems to be lower interest than initially expected in offshore wind auctions in Norway. Has this affected market interest in Skywalker?
... Yeah, I think first of all, for Skywalker, we are now targeting the service and upgrade market for offshore wind. And that means that our kind of key focus, after we have commercialized the technology, is to target the install base of primarily bottom fixed turbines in the European market. So you could say in kind of bringing Skywalker into the market and getting products and services and contracts later on, I would say it's not critical in terms of whether Norwegian offshore wind will be developed in 2030 or later. But of course, we are all seeing positive news in terms of getting this development.
Of course, we hope that the Norwegian programs are progressing at least as planned for now.
Thank you. There are also a couple of questions about share buybacks, and one question about why there hasn't been acquired any shares in the past two weeks.
Yeah, so the share buyback program is kind of regulated in terms of when you're able to make the purchases, and we are following those regulations. So there will be periods where there will not be acquired shares. And then, of course, the program is still live and we continue to plan for that until the annual general assembly the coming year.
Yeah. There is also a question about the status of the buyback program, the number of shares, and so on. If you don't have those numbers by heart, Ole, I can share them with you, but do you want to give it a go first?
No, please, please do.
Yeah. Okay. So the status is that Nekkar has purchased a total of... or currently owns a total of 1,365,965 own shares, corresponding to 1.27% of the total shares in the company.
Thanks.
Uh-
I mentioned it's about NOK 6.5 million of cash outlay in the third quarter, representing the third quarter effects.
Yeah. Yeah. There's also a question about: how are Syncrolift new build margins compare to after sales and service margins?
Yeah, actually, they are quite corresponding or in line. And I think normally you would probably expect that you would have a higher after-market's margin in, I would say, most industries. In the ship lift business for Syncrolift, they are quite in line in terms of what you say, the gross project margins. And I think the key effect there is that, of course, the project margin in Syncrolift are very good, and I think also we are gradually building up the service business over the last few years. And of course, in the longer term, both increasing the top line for the service business and of course, also increasing the revenue, you know, the margin level is part of that.
And as I mentioned, like setting up an India entity, having people on the ground in India, and also could do local sourcing for simpler parts and equipment, will also be positive in terms of increasing the margins for the service business.
Thank you, Ole. There is a question here about: where is the Excel sheet with updated EBITDA number to be found? And I assume that will be published in the investor relations sections on the Nekkar website, correct?
That's correct. And as I mentioned, we have now in the third quarter made a decision whereby all the effects, hedging effects, are now reported under financial items in order to present the more kind of clean EBITDA margin with no adjustments, as we previously have presented an operational EBITDA margin in addition. So now we have said that the foreign exchange effects, including agio, are now reported under net financial items, which I would say is probably what more you would expect it to be.
Just to add to that, there is also a slide in the appendix of the Q3 presentation, which provide historic quarterly results with the updated EBITDA definition. Yeah, a question about: what's the update on the Darwin tender, please?
Yeah, I think, of course, we cannot disclose any key project specifics related to that. We have submitted a bid for Darwin earlier this year, and we are still waiting for the final decision from the Northern Territory Group, which is the contracting party.
Thank you. I think that covers the large majority of the questions today. There is one very specific question about the accounting of the share buyback. I'm not sure if you, if you can answer that, Ole, but we'll try. Under which line in the balance sheet can we find the shares that you have acquired? I thought it was under financial assets line, but it seems like there is only FiiZK under that line. Are you able to answer that, or is it too detailed?
I would have to get back on that question if to answer that one.
Yeah, but I think, in general, I think if I'm guessing, they will be accounted as a separate line under equity, because own shares should not be accounted as assets. It's a sort of base case gut feeling here, but we can verify that later. I think-
That's, that's true.
Yeah. I think that covers all questions today. So with that, it remains to say thank you for joining this morning.
Thank you, everyone.