Good morning, and welcome to our fourth quarter 2025 webcast for Reach Subsea ASA. Our report and presentation were released this morning, and I'm Jostein Alendal, CEO, and I'm here with our CFO, Birgitte Wendelbo Johansen. Let me start by being direct. Our financial results this quarter are below our targets, and Birgitte will give you more details and cover our financials in a bit. On the bright side, though, we have made significant progress in the introduction and deployment of new technology. Most notably, the Reach Remote program has taken another major step forward, moving well beyond initial field trials and is now proving its capabilities in real commercial use. We are the first in the world to run fully unmanned vessels of this size, operating now live in both Norway and Australia.
This advancement confirms that our unmanned vessel concept is no longer just validated, it is operational, scalable, and ready for a broader implementation. I will return to what this means for our strategy and growth potential shortly. Please submit questions via the webcast player, and we will address them in the Q&A session after the presentation. Our fourth quarter results are below target and not satisfactory. Lower vessel utilization, directly influenced by delayed client decision, has been a key driver also this quarter. Looking at the full year of 2025, and with a weaker second half of that year, our revenues were at the same level as 2024, but with less than half the EBIT. This is highlighting the need for us to learn and improve planning, execution, and our ability to secure work.
On the other hand, the Reach Remote program has achieved major milestones last quarter, and while implementation costs impact us in the short term, these investments are relatively low when viewed over the longer term. Combined with a fast time to market and a solid performance, this significantly strengthen our long-term outlook. These achievements are also building strong confidence in our scaling program, where we are progressing according to plan and preparing for the next phases of expansion. With that backdrop, let's look at how we will navigate a softer market while sharpening our own performance. Fleet capacity on our manned vessels remains unchanged for the coming year, as the option for Olympic Taurus is now extended throughout 2026.
On the unmanned side, the Reach Remote fleet will become an increasingly important part of our overall capacity and the service offering. Reach Remote one and two will add capacity in 2026, and Reach Remote 3 and 4 are planned to join the fleet in mid-2027. Speaking of joining the fleet, it is worth noting how certification and implementation timelines have developed over time. From around 7 months for Reach Remote one to be certified, to roughly seven weeks for Reach Remote two to be certified, and based on these learnings, we expect the onboarding of Reach Remote three and four to be measured in days rather than months.
We maintain ownership of a few strategic assets, 50% of the Viking Reach, 33% of the Newb uild 76, and full ownership of the Reach Remote vessels. Our order backlog remains stable year-over-year, and tender activity is rising. Encouraging is to see that around NOK 1 billion of the total NOK 10 billion in tenders now specifically call for USVs. To give you a better understanding of what we do, Reach Subsea operates on the two connected fronts: conventional subsea services and the introduction of new technologies that change how the industry works. These are not separate tracks. Our operational experience is what enables successful technology development. Practical offshore understanding is essential to deploy solutions like Reach Remote. At the same time, the remote technology development strengthens our traditional operations.
Across all markets, oil and gas, offshore, wind, and emerging ocean space industries, the core challenge is safe and efficient asset planning, installation, operation, monitoring, and in the end, decommissioning. Our combined approach supports every part of this life cycle. With that in mind, let's look at Reach Remote. The value it delivers today, how it integrates across our businesses, and the role it will play going forward. The certification of our onshore control centers has been a key achievement this last quarter, enabling us to manage remote operations safely and reliably across regions and countries. Reach Remote is steadily building its track record. Across our two vessels, we have now gained over 370 days of unmanned operations, generating essential learnings for the whole remote model.
This quarter, we have showcased two key commercial campaigns: the successful campaign at Ormen Lange for Shell with the Reach Remote 1, and the ongoing campaign in Australia for Woodside with Reach Remote 2. These operations clearly show how quickly the Reach Remote platform is maturing and how reliably it performs offshore. At the same time, we are seeing a real double tech magic in action. Throughout the Australian campaign, the Reach Remote team in Perth and the gWatch team in Bergen are jointly connected online around the clock. Closer to home, Reach Remote 1 has supported Statnett over the past few weeks with important subsea work in Norwegian fjords, helping safeguard power infrastructure and showing how Reach Remote is already a part of critical national operations. The results in these past campaigns speak for themselves.
More than 90% emission reduction and fully unmanned offshore execution, eliminating human exposure and setting a new safety benchmark for offshore operations. But the Reach Remote model is far more than unmanned vessels and subsea robotics. It represents a complete operational ecosystem built around our onshore control centers, our in-house software, and our remote-ready fleet. With the combined capabilities of Reach Horizon, our data and mission management platform, and our remote operations infrastructure and experience, we now deliver an integrated solution that fundamentally change how offshore work can be executed. As we move into 2026, Reach Horizon will advance further, expanding its analytical automation and mission planning features. This evolution strengthens our remote operations, but also, as mentioned, it's feeding into our traditional offshore services.
The result is a model where operational expertise and innovation reinforce each other, enabling us to deliver offshore work with lower complexity, reduced cost, and a significantly smaller environmental footprint. And with this, I will hand word over to Birgitte, who will take us through our financials.
Thank you, Jostein. Good morning, and thanks for joining our webcast. As always, feel free to post questions in the chat while we speak. Q4 is weaker than last year due to lower utilization, reduced project margins, startup costs for Reach Remote, foreign exchange movements, and higher depreciation. Revenue came in at NOK 606 million versus NOK 685 million in Q4 2024. EBIT was NOK -60.5 million versus NOK 79.9 million in Q4 2024. The negative swing is mainly the utilization, mix impact, the initial cost of scaling remote operations, and foreign exchange and depreciation. Profit after tax was NOK -57.5 million versus NOK 21.8 million in Q4 2024. We delivered strong operational cash flow, and we closed a new NOK 735 million loan facility in December 2025, further strengthening liquidity.
Quarter-end cash and cash equivalents were NOK 514 million, and the equity ratio, 33.8%. So in summary, our quarter was impacted by idle time and an unfavorable project mix, alongside foreign exchange and depreciation, while cash generation and funding capacity remained solid. Let's look at our bridge. The sequential EBIT walk from Q3 to Q4 is explained by three buckets. One, utilization and mix. There are fewer vessel days and lower project margins. Two, Reach Remote ramp-up, startup, and scaling costs are booked in the quarter. Three, foreign exchange and depreciation. We had some adverse currency movements and higher D&A from new assets. We expect a normalization in 2026 during the campaign ramp-up and the remote unit economics to improve as we increase our efficiency....
Now, if we look at the bridge from last year, same quarter, year-on-year, the step down reflects lower activity, weaker project margins, and startup costs for remote operations that were not present last year. It's partly offset by efficiency and cost discipline elsewhere. Foreign exchange and higher depreciation are additional headwinds versus the fourth quarter in 2024. If we look at our segments, solutions share is higher and data lower year-on-year. Renewables have grown and helped offset softer oil and gas activity. Norway is down, balanced by stronger international markets. These shifts contributed to the margin compression we saw in Q4. The broader point is resilience. The revenue profile is more diversified, which supports stability through cycles. The equity ratio at 34% underlines the solid capital structure after a year with significant investments.
Cash and net working capital are lower versus peak levels, reflecting asset investments, debt service, and fund placements, but liquidity remains strong. The NOK 500 million bond issued in July 2025, and the new NOK 735 million loan facility that we signed in December, provide long-term financing flexibility for our fleet, equipment, and the remote scale-up. Now over to Jostein for the summary.
Thank you, Birgitte. As we close out 2025, we acknowledge that the market has been turbulent, and it will likely remain so in the short term. But we are actively positioning ourselves to navigate this landscape. At the same time, throughout 2025, we have moved the Reach Remote model from concept to commercial reality. Taking delivery of Reach Remote one and two, piloting them in demanding environments, establishing regulatory pathways, and securing the necessary approvals, and in the end, placing both units onto commercial operations, and all this within the same year. We are now operating in the most demanding and challenging parts of the world, the Norwegian fjords and the far offshore northwest of Australia. And this pace of development is exceptional within our industry.
These breakthroughs give us a robust platform to grow from and increase confidence as we continue building the next phases of our remote capabilities. The milestones we have achieved this year are not just technical achievements. They mark a significant step towards delivering on our long-term vision of sustainable access to ocean space, and also redefining how offshore operations can be carried out in the future. Please continue to submit your questions in the webcast player. We will be back shortly to address them. Yes, Arne? Do we have some questions?
Yes, thanks for listening to our webcast. We have a couple of questions. First two are both related to Reach Remote. So, first one, are the two remote vessels making money today? And what is our contract strategy for the remote vessels?
Yeah. Yeah, they are they isolated in the the projects they are doing. They are making money, and the contract strategy going forward is... Yeah, we we are using them as a tool where we price it as a normal normal jobs and and and so on. So we... But in the long term, there will be both spot market and long-term contracts for these for these vessels, so.
Good. Another one, for you, Jostein, any news about the scale-up of further remote units?
Yeah, we are working on that, and that's a long-term plan. Of course, introducing something new and making sort of a different way of approaching subsea and offshore work, we
... there will be a demand coming, so we have to be prepared for a bigger scale-up. Of course, we have the Reach Remote three and four coming next year. So, that's a small scale-up, so to say. But we are working on the big plans for the next five to 10 years. But we will come out with news as soon as we have them.
Yes. Thank you. A question related to Reach Remote two, down in Australia. Are there any plans after the Woodside contract that it's currently working on?
Yes, we have a schedule, or I think to June. There are some IMR work and also seabed mapping work and so on. So the schedule is laid for the next half year, so.
Very good. Question about vessel utilization in 2026 and going forward. If we can say anything specific about what aims we will take in order to increase the vessel utilization in 2026 and going forward?
Yeah, it's, it's the same. It's a turbulent market, and, we just have to be better in, in selling, on it. That's the, that's the thing. So well, so we keep the, the same capacity as, as we see it. It's just the, to be, to be, a bit more clever on, which regions we are in and, and so on, when it comes to the, the, traditional services and, and the manned vessels.
Indeed. Thank you. So a question about the, the first quarter in 2026. Whether we expect the weak Q4 to be reversed in Q1 2026?
Well, it's a question of guiding again, and we don't have a tradition for that, so.
No. So we have to wait and see. There is a question that I can answer. Which measures will be taken to improve the financial result? I think if you have a look in the presentation and the EBIT bridges, both from Q3 2025 and from Q4 in 2024, there were many headwinds specific to the last quarter. Utilization is one thing, project margins another. We also had some one-offs, and we had some currency headwinds, some FX headwinds. So, the measures we need to take, it's about utilization and project margins, where we need to get back on track.
That will, obviously help. There is a question, Jostein, where maybe you can elaborate. It's about exercising options on the chartered vessels, with such a low utilization environment.
Yeah. It's back to keeping the capacity for the coming years. We don't see that the activity in 2026 will be good. So, time will show there as well, but we have that picture. So, when you see in the longer picture, we have the change out of vessels when the new builds are coming and so on. So we are preparing for... You can say we are preparing for the 2030, so to speak, with unmanned vessels and also more modern vessels when we are coming there, so.
Absolutely. And we also had the delay of Viking Vigor, which was communicated, so it's about keeping the-
Yeah
... fleet capacity at level.
Exactly, so.
Yep. Yes, another question about Reach Remote. Has that got a long-term contract, and will it stay in the Norwegian market?
No long-term contracts yet, so but the Reach Remote one will be here in Norway in the short term. At least, as we can see now, regulations will open up for international sort of transit and operations in more yeah European countries and so on. So, and also we have interests in other parts of the world, so to speak, which. So, but no long-term contract yet, but we are working on that.
Yes, thank you. There's a follow-up question to measures will be taken to improve the financial result. Asking if we will do anything ourselves on the cost side, that is. And obviously, we are working with the entire organization to keep the cost level at the sound level. And we already see that SG&A, for example, is flattening out.
Yeah, of course.
Uh-
We have to. Yeah, we have to look at the cost side in this market, and it's yeah, natural thing to do.
Yes. That's good. Thank you, Jostein. There is a question here, Jostein: "Can you share your long-term software engineering plan, seeing how big part this is of your product?
Yeah.
Specifically, which efforts will be taken to increase profitability from software, and to incorporate recent groundbreaking, groundbreaking technology developments within AI for robotics?
That was a long question, but in short, yes, the software part, now we are introducing a complete robotics offshore with subsea robotics and maritime robotics, and the software we are developing and it's like, it's like training the brain to be autonomous in the future. So, we see that the connecting everything together here, we are doing exactly the same as other robotic companies around the world. It's just a type of robotics we are using. But the software is learning day by day. So the track record we are building up with our totally unmanned operations is just speeding up.
And I guess the AI for the past couple of years has also sped up everything when it comes to software. So the software we are building in the long term it will be a good income source when we are there when we have learned the brain so to speak in autonomous operations. So it's a exciting exciting combination, and now it's good to see that our robotics the marine robotics and the subsea robotics and the software is working excellent together. So it's exciting times, equally exciting times for us as for the other robotic companies.
Absolutely. Good. What is the competition within the remote vessel segment? And how do we look at the prospects of entering into long-term contracts for the remote vessels?
I think the competition in this marine subsea robotics is limited to maybe five international big companies. When we are looking at where we are really ahead, we have spent less time and money compared to the competition. So we are ahead, but we have to stay ahead of competition, of course. That's why we have the plans on further developing both software and also scaling up and so on.
Thank you. There's a question about the cash flow and working capital. "Can you help us understand the large movement in working capital?" I think the biggest change there, if you look into our cash flow statement, there is a large change in accounts receivables and prepayments. We also made a few investments in the fourth quarter. We purchased shares in associated company that's related to one of the new building vessels, where we have an ownership share. We also purchased some fixed assets, and we also made a fund placement, as we have had some excessive cash sitting in our accounts for a little while. So you can see that in the cash flow statement as purchase of short-term investments.
For detailed questions like that, send an email as well, and we can work on it together. Jostein, do you plan for a sales division scale-up in order to... I think that question was cut, so I don't have the last part of it, but I think it's about the commercial side and specific sales organization for the remote setup to penetrate new segments across the globe and secure new customers.
Yeah. Well, for the time being, we are selling this through our traditional services, and that's the low-hanging fruit, so to speak, into the asset owners and specifically, oil and gas industry and so on. But into the future, we're gonna lower the sort of threshold for ordering or buying information from the sea and from subsea. So, there will be a separate. Or we're gonna aim for the emerging industries and also a new type of clients when it comes to know-how about the subsea and the oceans and so on.
So, definitely, for the time being, we are selling through the traditional services, but soon we will be selling offshore services and subsea services to a new type of clients. And that's the exciting part. When we introduce something new to the world, there will be a new, new type of industries and new type of clients.
Very good, Jostein. I think you partly answered the next question, so it goes on the sales development. How do we enter the defense market and targeting IT infrastructure, if we have any specific strategy?
Yeah, that's an interesting, well, surveillance and patrolling areas and so on is a increasing demand. So we have worked on that for the past two years, and it's now showing fruits, of course, when we are allowed to sail and have shown that the both vessel and subsea robotics and everything is working. So it's opening doors also in that segment.
Absolutely. I think that was the last question for today. So thank you to the audience, and for the questions coming in.
Yep, and we have to go back to work on.
Yes.
Yeah. Thank you, all.
Thank you.