Good morning, and welcome to this presentation of the Third Quarter 2021 Results for Reach Subsea ASA. My name is Jostein Alendal. I'm the CEO of the company, and with me is our CFO, Birgitte Wendelbo Johansen. She will go through the financials and results a bit later. We have started webcasting our quarterly presentations as we want to reach as many as possible. Welcome also to our new followers on the web. Some practical information in that matter, there will be a live Q&A session after this prerecorded presentation. Please submit your questions in writing through the webcast player. Our report was released earlier this morning together with the material for this presentation. I hope you all had the time to take a look.
Before we dive into the numbers and details of this specific quarter, I just have to take this opportunity to give you a quick insight into who we are, what we do, and not least our potential. Trying to connect past and present to the future, so to speak. This might be a repetition for some, but I have added a bit of history for you, and it will be also useful for any new viewers. Bear with me for some minutes. I jump over the disclaimer, of course, and go directly to slide number three. A bit of history. Our company was established in 2008 by a small group of people with a passion for the exciting combination of remote technology and the subsea world. A group of ROV nerds, some may say.
Subsea operations and technology has it all, advanced robotics, automation, advanced sensors, big data, and combined with the fascinating depths of the oceans. Over the years, we have built a company around this and how should I put it? In a soul if you like. To build a company, you need also other types of competencies to make it all work together, and more and more dedicated people and equipment has been added over the years. Today, we are almost 100 employees, and Reach is a truly experienced subsea company. With growth also comes more and more complex work and exciting operations worldwide. The journey has not been easy, I must admit. It is no secret that the offshore industry has been through some tough years.
I strongly believe that what has enabled us to actually grow in such a period is based on three things. One, we have the passion for and kept focus on what we are doing. Secondly, we maintained a balanced risk management, and not least a solid financial discipline. Maybe also a bit stamina or stubbornness, if you like. This is what's behind our secret ingredients. Have this in mind later when I will talk about the future. That was, of course, the short version. Where are we now? Our expertise lays now in the planning of complete offshore operations, choosing the right tools for the job, sometimes invent some new ones, but also putting the right teams together. Reach is a subsea service company for all and any types of offshore and subsea assets through their whole life cycle.
We could say that all and any asset owner is a potential client. Whether it is an offshore wind farm, oil platform, subsea template, pipeline or power cable, they all require the same subsea services in various forms. From planning and engineering through installation phase and documentation of as built and installed, but also further throughout the long operational phase with regular inspections, scheduled and unscheduled maintenance and repair, and all the way through to decommissioning and removal. We have today a strong focus on the inspection and survey side. In short, collecting data subsea, make a digital twin and provide the client with accurate reports. Maintenance and repair also plays a big part of our daily work scopes, and subsea is a harsh environment and has a tendency to tear down installations a bit quicker than we like.
Equally important to bring our personnel and equipment safely out to the workplace at sea, we also need the right vessels. I will come back to the vessels in a bit. Who is buying our services? I will try to illustrate that on slide number four. If we go to that slide. We have worked for most of the major international energy companies and have, in addition, long-term frame agreements with, for example, Wintershall, BP, Shell, and Equinor, both for their oil and gas installations, but also offshore wind farms. Our services, equipment and methods and procedures are developed for the Oil & Gas sector, known to have the highest standard of safety and efficiency. This is where we have our history, and you could say that this safety culture and efficiency thinking is in our DNA. Oil service is a good school, despite this.
Despite how bad oil service sounds these days. In fact, this is a huge advantage for us as we broaden our services to the other sectors. I will not go into the huge debate regarding the destiny of the oil and gas industry, of course, that will take too long. Seen with our eyes, the sector is expected to remain stable for many years, as the requirement for regular inspection, maintenance, and repair will be there until decommissioning. Offshore wind, on the other hand, is set to see enormous growth in the coming years. We have all seen the global plans. No need to go into details there. In short, there is just a mountain of work coming, and we already find a good portion of work in that segment. Further, offshore cables is a growth area.
Enormous numbers of cables will be installed in the years to come as the world electrifies. Also there we will be an important partner for survey installation and maintenance. Finally, fish farming is moving further offshore to deeper waters, and subsea mining will come in the future with really exciting subsea work. It is also important to mention the increasing ocean awareness around the globe. About time, I would say. It is good that ocean environmental surveillance will be more and more important. Business-wise, we can serve also this market with our low carbon technology and efficiency. The world map on slide five shows where all this has brought us over the years. If you go to slide five. Even though we are headquartered in Haugesund and our home market is the North Sea, we have managed to export our services and know-how globally.
You might think that Norwegian oil service is too expensive, but we win on overall efficiency and technology. We have now branches in the U.K., U.S., and Trinidad, and over the years we have had numerous of exciting projects. Just to mention a few, from construction work outside Australia and West Africa to pipeline inspection outside Hammerfest in the north to cable repair in the Mediterranean. To spice it really up, searching for shipwrecks in the depths of the Black Sea. To give you a really good example of how oil service efficiency and technology can serve offshore wind, I can mention a huge survey project with the Stril Explorer on the U.S. East Coast last winter. Enormous areas were mapped at record speed. Initially, daily cost for the spread were high, but the customer saved substantial time and money in the overall project.
That is thanks to the machine you see behind me. It is the ROV we call Surveyor Interceptor, or SROV in short, and maybe I can tell more about that the next quarterly webcast. Now let us dive into the results of this quarter. Before I let Birgitte take you through the good numbers, I will shortly comment on the operations and the vessel fleet. We start with the highlights on slide number six. I am very happy to see that we have yet a quarter with strong operational performance and solid financial results. Operations have been excellent, with zero incidents in the quarter, showing that our high focus on being best in class on safety and environmental impact is paying off. If any of my colleagues are watching this webcast, I can only say be proud, this is world-class.
For the record, safety at sea is our priority number one, no compromises on that. Sales in the Renewables segment are steadily increasing. As I mentioned, offshore wind is really picking up. 44% of project days were generated from non- Oil & Gas clients this quarter. Another quarterly event, we have finally firmed up the two-year ROV bareboat contract, earlier announced as letter of intent. It's good to see the world is slowly opening up and we are back in Trinidad for maintenance work with BP and BHP with the Stril Explorer this year. Talking about backlog, the overall offshore market, even though showing good signs of improvement, has also this year been what we call short term, meaning short time from order to execution.
This has been the case for the last five, six years, so you could say we are very drilled in that type of market. However, we now see that the tide is turning, and we expect the market condition to significantly improve going into 2022 and onwards, paving the way for a good organic growth for us. COVID-19 is definitely not a quarterly highlight, but still has to be mentioned. It still gives us and the rest of the maritime industry some operational challenges and consequently additional OPEX. But the situation is rapidly improving, though. Hopefully, we have this behind us next year. The overall utilization has been good in the quarter and year so far, which brings me over to slide number seven. As a part of our investor communication, we have been releasing operational figures for a monthly basis for the past year.
Raw numbers with no explanation or comments, but I can take this opportunity and quickly give you some colors around these figures. ROV days sold at 77% in the quarter is good. We like it to be 100%, of course. It's worth mentioning that the two Escos, which we now own 100%, were taken into the numbers from April this year. Our total fleet counts therefore at present 10 owned systems and two leased in on the Olympic Delta. The utilization for the nine-month period though is 67%. The relatively low number is mainly due to the fact that we had two own ROV systems waiting on the quay side for startup for our long-term bareboat contracts, and one is now on its way this quarter as mentioned. Offshore man days sold is where we clearly see the variation in project type.
This can vary a lot from quarter to quarter and even year by year. Last year we had more labor-intensive projects, and the additional man-days are from sub-suppliers and hired in operators. For comparison, our baseline for internal resources is approximately 7,000 man-days for a nine-month period. The vessel utilization so far this year is 92%. Despite the fact that we had some idle vessel days in June and July this year, the overall vessel utilization is very good. Talking about vessels leads me over to slide number eight. Our fleet in 2021 is shown here. Please note that the Olympic Challenger was in use only for the first half of the year, and on the Viking Neptun, the construction vessel, we have two world-class ROVs on board, and the vessel itself has not gone through our P&L.
The fleet for next year will most likely also look like this, and we announced last week the extension on the Havila Subsea charter for two more years. We are in discussions with Olympic on their vessels for next year as we speak, and as always, news on our fleet will be announced when finalized. We might also expand our fleet next year given market and the right specifications and economics. We need demand for vessels also in the years to come, and as I mentioned, the marine crew is part of our team. Sustainability is high on our agenda, and we work continuously with the vessel owners to reduce fuel consumption and CO2 emission, firstly by improving operational efficiency and secondly long-term changes of the energy sources for the vessels.
I urge you to read through our sustainability report where we line up our zero emission targets and progress. With this, I will give the word over to Birgitte for a run-through of the financials and this quarter, but before I return to talk about the future. Birgitte?
Thank you, Jostein, and good morning, everyone. We're proud to present another strong quarterly result and the best first nine-month result ever for Reach. Result is again strongly driven by high utilization and good project execution. This time also a higher share of complex projects compared to the same period last year that gives us an improved margin as well. Third quarter revenue was NOK 224 million, a little higher than the same period last year, which was NOK 201 million. Year-to-date revenue is almost NOK 0.5 billion , which is in line with the first nine months last year. Compared to 2020, the main drivers are a higher number of vessel days, basically no non-utilization, and a few complex profitable projects resulting in a better operational result and an EBIT year-to-date of NOK 53 million compared to NOK 36 million last year.
For the third quarter, we delivered an EBIT of NOK 23 million, roughly in line with last year's NOK 24 million, but please note that last year's Q3 EBIT included NOK 2.6 million in charter termination gains. We have a positive tax effect on our P&L of NOK 20 million for 3Q 2021. This is based on an updated assessment of probability of future use of unutilized tax losses. Based on strong financial results the past two years and a positive business outlook, these tax losses have now been capitalized. This gives a total comprehensive income for 3Q of NOK 44 million compared to NOK 33 million for last year. While last year's comprehensive income included NOK 20 million in positive tax effects, last year's comprehensive income included NOK 11 million in termination and currency gains.
Total comprehensive income for the first nine months of 2021 ended at NOK 71 million compared to NOK 30 million year-to-date in 2020. Again, the NOK 20 million tax effect explains some of the improvement, but the underlying improvement is still some NOK 20 million. Our activity within the non- Oil & Gas segment varies over the quarters as we prioritize utilization of all our vessels. In the third quarter, 24% of our revenue was related to Renewables and Other, a little lower than the third quarter last year. If we look at the same figures, year-to-date, the Renewables/Other revenue is 30%. We have an ESG target of increasing the level of project days, which is a number related to activity more than turnover, to 50%, and the year-to-date level is, as Jostein mentioned, almost 45%.
50% is ambitious, in particular with renewed strength in the Oil & Gas sector, but we are on track to position Reach to achieve this target. Next slide, please. As Jostein showed earlier, our sold ROV days and utilization are at similar levels as last year and well above previous years. While utilization is one key driver for our profitability and something you can follow through our monthly operational statistics, the quality of our project execution and the pricing of our projects are other key profitability drivers. Our EBITDA per sold ROV day is a good measure to capture the effects of all these drivers. As you can see from the graph, for the first nine months of 2021, we have achieved NOK 42,000 per ROV day, which is well above the NOK 24,000 achieved for the same period last year.
The combination of high utilization and strong execution is what drives our profit improvement so far, this year. A good project execution has another important side effect, which is also illustrated in our results this year. When the quality of our services are perceived as high by our clients, as evidenced by our high post-project client satisfaction scores, they tend to give us more work under tenders where the price is not the main award criteria. Next slide, please. As we have presented to the market, we have quite substantial growth plans with the Reach Remote. We have a strong balance sheet, and we have delivered to our shareholders with paying dividend according to our policy.
With a cash and working capital position of nearly NOK 200 million and limited financial debt, we have a good foundation for addressing both the challenges and the opportunities we face. Next slide, please. We are among the first listed companies to report quarterly on our sustainability targets. We have ESG targets within environment, being a responsible employer and always doing business in a responsible way. Our ESG reporting is partly based on the United Nations sustainability goals and also the GRI standards, which we have adjusted to suit our business model. The sustainability report for 2020 includes a full description on our targets for 2021 and beyond, and also how we plan to achieve them.
A few are quite ambitious, but we are on track to reach our targets, as you can see on the slide, and we see that this is also a huge inspiration throughout our organization. If you recall, I mentioned the client satisfaction score a couple of slides back, which is also one of our ESG targets. On a scale from one to five, we have so far this year achieved an average score of 4.7, which we are quite proud of. I now give the word back to Jostein.
Thanks to Birgitte, and I will sum up and say some words about our strategy going forward and our outlook. First, some words about Reach Remote. We're starting on slide number 15. This is definitely the future unmanned vessels alone or together with manned vessels working on all oceans. As most of you know, Reach Subsea has worked with this for the past couple of years, and we named it Reach Remote. The project is carried out with the cooperation with well-known industrial partners like Kongsberg Maritime and Massterly. A huge enabler for the trend in unmanned vessels is of course the increasing number of satellites giving better and better communication and connectivity at sea. There are endless numbers of subsea operations that could and should be done with remotely operated vessels, and we have already used smaller USVs up to 7 meters already in several projects.
Our Reach Remote USVs are in the so-called mid-class 24-meter length, capable of carrying a full work class ROV and operate in high seas. If they had been available today, some 50% of our work could have been done with these unmanned USVs. These unmanned vessels will do the same as our manned vessels do today, bring our subsea equipment out to the work site and supply our subsea equipment with power and communication. Our subsea services and deliveries will remain the same. It's just the ROVs, they become even more remote as the operators are onshore. It is really exciting to look at the future unmanned market. The desire for information and data is endless, and we expect to see a boom in the survey and inspection market. In other words, collecting data subsea as the total cost is becoming more and more affordable.
Next slide for us a good summary of why we are branching into unmanned vessels. Their impact on CapEx, OPEX, and CO2 emissions are pretty drastic, shown here on slide number 16. More than 90% reduction in CO2 emissions compared to a manned vessel, no personal risk with the offshore operations, and not least significant reduction in cost of subsea survey and inspection services, as I mentioned. Where do we stand on the Reach Remote project today? Next slide, number 17, will sum up where we are today. As I mentioned last quarter, our global supply chain issues had impacted us and our decision to wait with the startup of building the USVs. We see that the bottlenecks seem to be less now, and our comfort levels are therefore improving and expected to be 100% soon.
The work and cooperation around the use of unmanned vessels with the Norwegian regulatory bodies and other maritime regulatories are ongoing and are progressing well. What has been really positive is the increasing client and partner interest we have experienced worldwide. The project is proceeding in accordance with the latest timeframe I gave in August. We are on track to launch in 2023. Massterly, our bridge and navigator, is on track with the building of their operational center in Horten, and we are on track with our remote ROV operation center in Haugesund. We will also, during next year, test many of the subsystems in our manned operations. A quick summary on slide 19 of where we are as a company today. Birgitte went through the nice numbers, but we also have excellent operational performance and continue excellent safety track record.
We have a strong quarterly result with limited long-term debt, and therefore a robust dividend capacity. We see clear signals of market stabilization and improvement, and this leaves us well-positioned to capture growth and opportunities going forward. Which leads me to the outlook on the last slide, 20. Our 10 years of spotless operational execution, combined with our global customer network and robust financial position today, let us now confidently take a bet on the long term and further create value for all our shareholders. Remember what I said in the start about our secret ingredients? We will use the same phrase in the coming 10 years. On one hand, we will grow further organically and at present, we are recruiting more dedicated personnel, both in Haugesund, in the U.K., and in the U.S. Basically, continuing building the company brick by brick.
On the other hand, we are also actively looking at M&A opportunities. We are seeking bolt-on businesses that will add value to our business in the form of specialists or technology that fit our expertise. This will also expand and widen our services and value chain. All in all, we are in a very good position and have an exciting journey ahead. That concludes our presentation, and we can now go over to the Q&A session.
Thank you. Now we have a Q&A session. Birgitte, there have been some questions. Birgitte will read them, and then we can answer as good as we can.
Yes.
Birgitte?
The first question is from Christian. He asks, "How is the outlook for the fourth quarter 2021 and first quarter 2022 versus the same periods of last year when it comes to order backlog, tenders, and so on?" I guess what we can say is that the order backlog is NOK 150 million, which is basically in line with what it should be at this time of the season. The tender volume is as it has been the past quarters, and also just about NOK 2 billion. It's quite a comfortable situation. I guess that's what we can say for the coming quarters. Then Kjetil Fladmark has a question regarding the dividend policy.
We have written something about that in the investor relations section in our report, the dividend policy stance, basically. Some minor changes to the wording of it, but all in all, it stands as it has been, as you know from last year. When it comes to the margins, contracts, and capacity, Jostein, I think you should comment on that.
Yeah. The capacity will be more or less, well, same as this year. We are recruiting, as I said. We are sort of building up, brick by brick, but, I think we're gonna expand our capacity, together with the market, so to speak.
Yep.
We have some more questions. Yes?
Yes. There is a question from Øystein Waagen regarding the EBIT margins, which were lower in 3Q than the same quarter last year, which is correct. The EBIT level is the same, but the turnover is a little bit higher this year, so that leaves the margin a little bit lower. What I can say is that normally that is due to some flow-through of costs or added sales to the clients that doesn't give very much of a margin. However, if you look at the EBIT figures for the year to date, there's a good improvement from last year. Øystein also has some questions regarding the Reach Remote that you could answer too, Jostein.
Next milestone for the Reach Remote project is, of course, to start building the first two units, as I said, hopefully in the near future.
Yeah, I guess we could add that, we're awaiting an investment decision. Hoping for that to come in not too long time. And delivery in 2023, as we have announced before. I received some questions regarding financing of the Reach Remote, and we can also confirm that there is a term sheet present from banks. There is also good interest from both banks and investors and also Eksfin, which is the old Export Credit and GIEK, as this fits right into quite a few criteria for financing such a project. That's a good place to be when we plan for the Reach Remote investment. That's another question. Projects executed year-to-date, a higher share has been complex projects. Has this primarily been in Oil & Gas or Renewables?
Well, as we state in our report, the Oil & Gas share has been increased since the last quarter. Yes, there has been a few large oil and gas projects for Equinor and other major oil companies that generate quite a lot of the turnover in the third quarter. I think there is another one from Audun Navestad. Is it possible to give more flavor on the funding of remote vessels, especially the first two vessels?
That was-
I guess I touched a little bit upon that. There has been some questions regarding whether we have some industrial potential partners, and the answer to that is yes. We haven't decided anything yet. We're still looking at how we shall close the funding and the financing of Reach Remote. So there's still an opening, but we're quite content that this will come to a good solution that is in the best interest of Reach Subsea's shareholders, which is our main focus. I think that was it.
Yeah.
At least the questions I received.
Yeah.
Yeah.
With this, thank you all. See you next quarter.
Thank you.