Thanks. I'll be back. We had some technical problems here. Sorry about that. So we are a bit behind schedule, but I can start all over.
My name is Jussan Arnold. I'm the Managing Director of REIT Subsea. And with me is CFO, Brigitte Venbo Johansson, who will give the go through the financial and results. And thanks to Fearnley for hosting this. Despite the technical problems in the start here, it's It's a nice place to be.
They have a new building here in the center of Oslo. Some short comments on the result and so far this year. 5th quarter in a row with a possibility of the result. We're working day and night to keep that row, of course. Brings us to a solid financial position.
Most importantly, Excellent performance so far this year, and I expect that to continue forward. No operational incidents and the winner of all satisfied clients. This position us for future growth. We can No capture opportunities. New geographical areas or investment in new technology.
I come back to some news on that after the year. But just a quick reminder of where the revenues are coming from. We are a subsea service company serving all types of offshore assets and also through their whole life cycle. Whether it's a wind farm, oil platform, Any installation pipelines, power cables, all of the car are the same services in various degrees. From planning and engineering through installation phase and documentation that build and installed.
Further throughout the long operational phase with regular inspection schedule and unscheduled maintenance and repair to the end of the decommissioning and removal. So all asset owners are our clients. Coming for all these phases. It's the need for accuracy in measurement, positioning and documentation. 20 years ago.
We documented with blurry analog video tapes. For those who are on my age. It's the old BCRs, and the accuracy was around 10 centimeters. Today, we delivered digital twins. We are in that data age with submillimeter accuracy.
So this is getting increasingly better. Our offshore operations varies a lot in complexity, and we charter in special built service vessels, and that is to bring our personnel and equipment safely out to the workplace on-site. All operations are performed with the remotely operated vehicles. That's our so called ROVs. And sometimes, we operate as deep as 3,000 meters.
So here are some big pictures from the just to illustrate, there are huge differences. An example here is the installation of a suction anchor for Wintershall, suction anchors for Wintershall, and that's in the installation phase. Requires a lot more people on back deck, and the total crew on board can sometimes be up to 50 personnel plus the marine crew just to perform our task. The other example is Smaller team, around 10 people, but we try to break a record of deploying seismic bottom nodes, just as an example. So our services equipment methods and procedures are developed in the oil and gas this industry.
So yes, we are an oil service company moving slowly towards the other sectors, of course. There is a big advantage for us, having the learning curve and all the history from oil service because The services we provide and the efficiency and the safety methods of doing offshore operations. Benefits the other sectors a lot going forward. Offshore wind, a well known market, enormous growth forecast in the coming years. And we also have an increased the revenues from Offshore Wind.
And we'll most likely have most of our revenues from offshore wind, the common in the near future. BMW for most of the international energy companies and have an additional long term frame agreements with a number of them. For instance, for example, BP, Shell, Equinor. This is both in oil and gas and also in offshore wind, where the energy companies are moving over to the Renewable Energy Sector. So even though our whole market is North Sea, We have managed to export our services and know how internationally.
Projects from Australia in the East to Gulf of Mexico in the West, have been performed over the years. And with main office in Hoeghuson and branches in U. K, U. S. In Trinidad.
We have a good standing with our international clients like BP and Shell in Trinidad, for example. And I think I have just a crystal because when we have the map up, I have to mention the pandemic, of course. Naturally, this event caused created and caused an extremely difficult situation for also our industry, but the whole marine industry. Travel bans and quarantine restrictions as the most challenging. Today, the situation with Dix is well, as under control as it can be, and it's manageable.
But we do see some other strange effects with, for example, disruption in Global supply and transport. So increasing worry about the global supply chain, not only for us, but for the whole world. But on a good side with the pandemic, when it It was possible to travel to the workplace as we all have experienced, not only the offshore industry, but Everybody with a home office for the last year and a half has experienced this. This has pushed us to move even quicker into the remote operations for our part. And over the years Last year and this year, we have performed several inspection campaigns with the inspection engineers located in U.
K. And Norway with upgraded home office, so to speak. We're working online with the vessels on-site both in Trinidad and in the North Sea. So we are So I had in other words, partly remote and down manned operations there. So Every day, we are working to move operations from the vessels to onshore.
The pandemic speeded that up a bit, you can say. But I'm coming back to our larger remote initiative. So Hold the thought of remotely operated operations, and then I'll give the word over to Birgitte for the financials. Vascevar?
Yes. We are proud to present another strong quarterly results and also the best First half results ever actually for Veech Subsea. The result is strongly driven by high utilization combined with good Project execution. The 2nd quarter revenue was NOK 170,000,000, a little lower than the same period last year, which is driven by the nature of As you have seen in the operational figures, we had higher number of sold RV days and man hours in the Q2 last year, which happened to be exceptionally good. And this illustrates the complexity of the projects.
This year, we've seen a few more pure vessel project days than last year. This covers the commitment, which is profitable, of course. However, it reduces the possibilities for added sales and also increased revenue. So the year to date revenue is NOK 270,000,000, Also slightly lower than the 1st 6 months of last year due to the same reasons. Looking at the operating results, we had good utilization both in the 2nd quarter and also year to date, resulting in a year to date EBIT of NOK 27,000,000 compared to negative NOK 4,000,000 in the same period last year.
It is worth mentioning that the first half year result last year was influenced by currency fluctuations as well as some of higher days in the Q1. I think it's worth also focusing on our activity within the non oil and gas sectors, which is basically renewables. We have an ESG target of increasing the level of project days to 50%. This is quite ambitious, But we are on track to position Reach to achieve this target. For those following our operational figures, you have seen that the year to date number of RV days are in line with last year.
Man hours are a bit down The vessel days sold are higher than the last 2 years. Again, utilization is the key to profitability. And as you know, we have 2 vessels with commitment For the time being and having those active is our utmost focus area in the day to day operations. Even though the number of man hours is lower than previous years. It's important to say that the utilization is above 100% for our own offshore pool.
We hire in about 50% extra personnel, mostly in high seasons, which is basically from April to September. Our order book figure is, as always, influenced by the nature of our business, which is rather short term. We have, as per today, an order book of just above NOK 250,000,000 and a quite stable tender volume of around NOK 2,000,000,000. As you may have noticed, we issued a contract update yesterday, and our schedule now indicates good utilization throughout the Q3. We have about 1500 project days booked, mostly for the rest of the year, but also some activity secured for the next year.
Expected call off extensions on frame agreements and also option periods are not included in that figure, which could give substantially more work. As Jochen mentioned, we have big plans for the future with the Reach Remote. Tell you a little bit more about that also afterwards. We believe that having a strong balance sheet and a good relationship with our bank and also our investors is the key to succeed with the growth that we have planned with the Reach Remote. We have delivered to our shareholders with paying dividend and also to our financial providers through the market turbulence.
We have, for time being, dialogue with several potential industrial partners who wish to cooperate and or invest in Reach Remote And could also be part of both funding and commercialization of the project. Still early stages. This dialogue form part of evaluating which financial strategy we should choose for each remote to obtain the best value for our shareholders. Again, our present balance sheet is a reasonable place to be, preparing for what lies ahead. And as you can see, we have a sustainable liquidity position and basically no debt.
Finally, we are among the 1st listed company 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 in all parts of the world. Our ESG targets are based on United Nations Sustainability Goals as well as the GRI standard. The full report is available on our webpage for 2020. It includes the targets we have for 2021 and also how we plan to achieve those.
A few of our targets are quite ambitious, but we are on track to reach the targets. And also, most importantly, we see that our ESG Targets is a huge inspiration throughout the organization. So I'll give the word back to Joosten and our Reach Remote Project. Yes.
Thank you, Birgitte. We have gone through the present, and I'm delighted to talk a bit about future. But as the illustration shows, going totally unmanned It requires focus on the bridge. By removing the Captain and the navigator from a manned vessel, It creates a totally different situation. It's not Yes.
Yes, please. But Let's look at the our services. Our end product and our services and reports and how we do the subsea operations will not change by changing out the manned vessel with an unmanned vessel. But the benefits are clear. As you see illustrated here, when you change out all the people, A bigger vessel, higher fuel consumption to a smaller vessel, minimal fuel consumption.
And you see the benefits are obvious. For us, it's the transport of our equipment our subsea equipment that is important. It's going to be out on-site subsea. So for the year. Our isolated services, the change in vessel It's actually quite easy.
But it's not easy back to the technical stuff. The technology by going unmanned has to show and prove to be better than demand vessel. So Yes. The work with autonomous and remotely control ships has been going on for years, and it's growing fast. The field is wide and the whole narrative industry from cargo vessels, ferries, smaller special units like our USB.
All this is, of course, enabled by development of data processing, cheaper data processing and also sensor technology. As I mentioned, the difference between 20 years ago with VCRs and today with digital videos. But also the accelerated development in satellite communications, of course. The Connectivity at sea is very important when you go unbanned. On the other hand, national and international rules and regulations are required.
We cannot go unregulated. There are many smaller unmanned vessels, but when you're going up in size, The need for international and national cruise is there. The maritime industry Cannot let the Automotive Ministry and the authorities cannot let this go unregulated to start with. So we have to wait for the regulators and the certification. So verification and certification of technology is quite important.
We are a part of this work, and we work in parallel with the authorities, of course, and other industry parties. So it's a good thing. Last week, there was Norway's turned test area for U. S. Vis was established in Haugesund.
Good for us from Haugesund, I would say. But this shows that the Norwegian Governmental and Martin authorities are really ahead of the development. So we are part of this. Quite excited for the next couple of years. We're going to have some testing outside Haugesund.
But moving over to the hardware. Our Reach Remote project was launched earlier this year. But during the springtime or this summer, As I mentioned, the unexpected effect of the pandemic, the disruption in world supply chain and etcetera, etcetera Gave us a bit worry before start building these units. The worst thing we could do was to start building and then have to wait for a small chip or any other small component in the end. So I don't like that.
I want to have everything in control before we start building the technologies. So we announced last week that we're going to postponed a bit the start of building and then in the end the start of delivery. It was an easy decision to make. As I said, we don't like to start something that have a big risk of missing a small component in the end. All components of the USB is important, so we can't miss a single one.
So but no losses, no economic consequences to the project. It was just to add further confidence and solidity. Same feedback from our clients, of course, advice decision. It's no loss in future clients and the relationship we have with our current clients. So no loss economic or client wise.
It's just adapt to reality, so to speak. So but it is encouraging to also Have a look at the future unmanned market. The desire for information and data is endless. You see, all we do when we have access to cheap data, we just absorb it. And And so obviously, the offshore industry and I know our clients, as I said, through the whole lifetime of offshore asset, You need inspection and you need to or want to know how the status of the asset is.
So the desire for information and data is endless. Retromote will make collecting data cheaper. We can easily see a boom in survey and inspection and other at new areas when the data collecting becomes more and more affordable. We see new clients already with the oil and gas efficiency bought into new segments. So still all the fundamentals are there, even stronger tailwinds, I will say, with the ESG awareness and new reports on to stop using fuel.
So and our Capabilities, of course, we are on track record every month and every week. So as nothing delayed by that. We have the right partners, That's from the start, Komsberg with their portfolio of technology and also masterly with the ambitions of being exactly the bridge and the navigator for our U. S. V.
Stay. Also, bridge and navigators for other vessels, ASCO vessels, early movers like Jarabirchland and so on. The economics environment, of course, Lower CapEx, better return on investment for us. Cheaper for the client. It's a winning formula.
The environment, as I mentioned, The fuel consumption is a higher focus all over the margin industry. Going smaller is the right thing to do. So do we have a short animation to show.
The sea is the future, and it needs intelligent, Clean and efficient solutions. Reach Subsea has a solid history of disruptive technology. Now introducing Reach Remote, An innovative solution for over the horizon, unmanned subsea operations. Together with our partners, We have combined human interaction with engineering and risk management to reach a sustainable next generation subsea solution. A robust unmanned surface vessel and ROV fully connected, managed by reliable control systems under human supervision.
Reach Remote is capable of performing an unrivaled range of survey, intervention and inspection services. With advanced Tools, sensors and communication systems, we provide the information needed for accurate decision making. We are on a mission to deliver competitive and carbon efficient subsea operations that ensures a Safe work environment for all personnel. We welcome you to explore this maritime adventure.
Yes, hope you liked the animation. To sum up, We have some investment highlights. And just to summarize the whole company and the way we are going. So we have a solid track record of Growth and also a strong customer base over the past 7 years with a sort of a downturn and everything. We have managed to grow and also performed very well with the clients and also had and get new clients.
We are an asset light company. That means we are not investing in larger vessels and so on. But The light asset light strategy has definitely been a good one for the years up to now. So and also going forward, we will stay on the same asset light strategy. We have a solid balance sheet.
As Baggett, I've been through all the good numbers. We are well positioned to the green energy transition. As I mentioned, The history and the education, so to speak, from oil and gas and oil service is a huge advantage moving into the new energy sectors and other exciting sectors. ESG, part of REACH Subsea DNA, we get to mention beyond the early move was in reporting on ESG, but it's not the reporting. It's back to also to the culture and the way we are trained and like to do our operations.
So we have a strong focus on no incidents, no spill to the sea. So sea is our life, so to speak. So, Reach Up C, ready to expand, so to speak. And I'm a strong believer in if you're going to expand, expand on a solid foundation and reach is now a solid foundation. It takes time to build a solid foundation, but When you are ready, you can easily expand in any directions.
So that was the summary. And Let's have some questions. We have some questions from the audience.
My name is Oostein Wagen from Fearnley Securities. And I have a few questions on Reach Remote. So there's been a slight delay in delivery of the first two USVs, but it's my understanding that the full subsea portfolio or the autonomous subsea portfolio It's still expected in 2025. And I was wondering how that is, if you could explain this. And also, in what segments are you seeing Most interest for Richer Remote.
Yes. First, a slight movement in the start point. This gives the effect of moving the target for a full fleet, of course. So I think the plan with the full fleet and ambition is still there, but a slight move in the start point. The most interesting area for the first units are collecting data in survey of the seafloor and inspection of any assets.
That's the easy targets where you don't require a big manned vessel to do that. So the first jobs will be survey and inspections. And as we illustrated, routine inspections on wind farms can easily be done with a USV instead of having a manned vessel in that area.
And then I also have a question on margins. So you've had an increased activity in renewables lately. And from what I can see, just quickly and correct me if I'm wrong, is that the margins are quite similar for the oil and gas and Renewables. So I was wondering if you have any Margin development expectations for the 2 segments going forward.
Well, we haven't been guiding on margins going forward. And I think now is probably not the time to do that for the first time. So but you're correct. The margin is Approximately the same in Renewables and in Oil and Gas, and that's mostly because it's kind of a lot of the same clients and also the same suppliers. So that creates kind of a basis for having the same margin because the competition is basically the same.
So And as you see, we have published our order book figure. So we have some activity. But the outlook is quite short term, Which it has been for the past 4 years, 5 years. So it's a little bit difficult also to say Anything specific about margins to come? That's also one of the reasons why we are not guiding on margins.
This is Gustav Amle from Foren Securities. I have a couple of questions related to your We have chartered in from Havila, the Havila Subsea. Could you give some color on what utilization levels you expect for 3Q and into 4Q? And so what we can expect for this market as we progress into 2022?
Yes. We can't comment on For the coming period for that vessel specifically. For those of you following the AIS, The navigator or the indicator shows where the vessels are at all times. You've seen that the Havilah Subsea has been very active throughout the whole year. And there is nothing that indicates that she will not continuously being active.
However, we can't comment specifically on contracts for that vessel Specifically.
Can I just ask a follow-up question to that, Wes? So it's I see that from Havillah's webpage, it's under agreement with you guys until sort of early next year. Do you have any options in the back end of that contract to sort of exploit probably the low day, which it's you are getting it at today, right?
Well, Havilah Subsea has been in our fleet now for 3 foyers. And so it has had very high utilization. So we were, of course, in the middle of negotiations with the ship owners on with regards to prolonging that contract. I think it would be a wrong time to take that discussions with the audience here now. But of course, it has been a vessel that has been very successful in our projects and is very popular by our clients and also by our employees.
So yes, I think that's what we should say about that right now unless you have some
That's fine.
This is Fredrik, also from Fearnley. Thanks for your presentation. I wanted to follow-up on the reach remote as well. Has there been any changes to the project cost or estimates? So I see you mentioned that in the previous presentations, but not now.
And And you mentioned some of these potential supply issues you wanted to avoid. Have you seen any changes to the project cost?
No. Not the Cost itself, everybody's worrying that the steel prices are low and everything. But it's on the same level because But it's just the missing parts that is worrying. So actually supply, It's not the price of the missing chip, but it's actually the chip missing, so to speak.
So yes. Yes. And how can you elaborate on how you see the financing strategy for that? How is, a, the contract negotiations going? Our banks responding to lending again to the oil service industry, albeit in a more environmentally friendly segment of it.
Yes. We are discussing with different parties. What I can say is that the bank, on one hand, they have their subsea vessel Problem assets. And on the other hand, they would you could say that they would be reluctant investing in new subsea assets. We will be competing with the old subsea assets.
On the other hand, the USVs are coming. So the banks can choose to participate or they can choose to We don't do it. And what we have seen from our banks is that and also by Giek, is that they are willing to invest. They're not willing to take technical risk, which is obvious. I guess our shareholders are not that interested either.
So as long as we come up with a product that is Tested technically, and it's also commercially approved by our clients, which we are working on. This is absolutely bankable. And also, we're discussing, as I mentioned, with potential partners, both on the financing side or funding side And also commercialization partners. So that's a process that's ongoing as we speak. And we will give more information about that as soon as there was anything firm to say.
Yes. Thank you. More regarding the operations. We saw earlier this summer that reported that They saw an increasing need for maintenance on like 10 of their wind farms, specifically relating to the cables. Is that something you have after that kind of bombshell seen an increased activity for?
Is it a common problem across Europe? Because all the wind farms?
Yes. The wind farms are positioned exactly where they not should be positioned. They are capturing wind and the seafloor is moving as well. So it's The cables are a known problem.
Yes. And this is an area where you can provide both the surveys and the maintenance of it? Yes.
It's Quite important, our wind farm and the interconnection cables and everything, the knowhow of the seafloor there inside Wind farm is very important. That's why we have the picture of wind farm with the reach remote.
Yes. I can understand that on several fronts.
Yes. So there is, as I said, asset owners, they are very dependent on know how about the assets.
Yes. But as you started with 5th quarter in a row with positive results and yet another record breaking half year or periodical reporting. Is it the market recovering? Or are you just capturing a lot of market share because of your asset light, cheap vessels? Why are you performing so well when The market at large seems to be struggling.
The market is we can call it bottom out after 7 years. Everybody is a bit worried about is this the start of going up or is it just the bottom, so to speak. We don't have cheaper vessels than the on than our competitors. The vessel market has been hit the bottom last year or the year before that. So everybody well, our competitors have same rates on their vessels when chartering in.
The market is it's will we are colored by the decisions of the oil companies and the Norwegian incentive, the tax incentive for investments. So exciting through the next winter is how many new fields and investments with the oil companies do for the next couple of years. And if the wave of which is came come true. I think there will be a tight market in 'twenty three, 'twenty four, 'twenty five and so on. But rest of the year is dependent on a lot of decisions in the oil companies, of course.
No doubt. I didn't see you show a vessel chart of what you have chartered in and the duration of them. But how does that you're saying the vessel market bottomed out a year ago or more, and now you're postponing the REIT remote. How does that tie into your total vessels That's availability and will you have to pay up for the vessels going forward?
No, I said, I beg your attention. We are discussing with a lot of vessel loan off this year again. It's a yearly exercise, and we have changed out some of the vessels over the years. And so We adapt our fleet to the future. So to the next year by year because the market is quite Yes, it's still floating a bit.
So we're going to come off with the news. The normal time is from now and up to New Year when we set a new next year fleet, so to speak. So
Okay.
But as you know, there's always a struggle between seller and buyer. So it's nothing unusual.
And banks?
Yes. And banks and Nothing unusual in that. And then we have no other questions. So then we just