Welcome to the Presentation of Our Results for the Second Quarter. My name is Bernt Omdal. I'm the CEO of the company. Together with me, I have our CFO, Vidar Jerstad, and we will take you through this presentation. Sea1 Offshore's Report for the Second Quarter 2025 was released prior to the market opening today. In this presentation, we will cover the main highlights of the report, and we will refer to the presentation issued together with the financial report. At the end of the presentation, we will open up for questions. Looking at the highlights for the quarter, we operated 16 fully-owned vessels in the second quarter. All of our vessels in operation delivered a positive EBITDA margin. We had $71 million in revenue, and we delivered close to $40 million in EBITDA, which is equal to an EBITDA margin of 55%. We have a book equity ratio of 50%, and our net interest-bearing debt is $225 million. It's worth mentioning that these numbers are delivered with less vessels than the same quarter in 2024. We continue to deliver safe and efficient operations in all regions, and this is a result of high focus on safety at all levels in the company. The utilization of the fleet in the second quarter was 92%, excluding one vessel that was in layoff. We sold the 2014-built OFCV Sea1 Spearfish, and the vessel was transferred to the new owner in May. We recorded $41.4 million in gain. All vessels operated on behalf of CM is now redelivered to them. It's also worth mentioning that the two new board members were elected yesterday. Mr. Otto Moltke -Hansen, he's an investment analyst in Kistefos. He's replacing Ørjan Svanevik. And Mr. Rune Magnus Lundetræ , he's CEO in Blystad Group, and he's replacing Fredrik Platou. Vidar Jerstad will now give some more details regarding the results for the second quarter.
Let's take a look at the income statement. When comparing figures to 2024, please note that Sea1 's own fleet has decreased by nine vessels and that the number of shares sharing the profits of the company has been reduced by more than 35%. In the second quarter, the company had $71.3 million in revenue. Operating expenses were $25.3 million. Administrative expenses amounted to $6.4 million. EBITDA for the quarter ended at $39.6 million, $5.2 million higher than what the same vessels generated in the same quarter last year. This even though the scientific core drilling vessel, JOIDES Resolution, is in layoff, and Sea1 Spearfish was sold in mid-May. Depreciation on the ships in the second quarter was $12.3 million. On the other hand, the company has recorded a gain related to the sale of Sea1 Spearfish of $41.3 million. This leaves us with an operating profit of $68.6 million. Net financial items were negative by $3.3 million, which includes a currency gain of $3.1 million. Profit before taxes ended at $65.3 million. Net profit after taxes ended at $64.9 million. The next slide illustrates the operating margin across the three primary segments. Left-hand side shows second quarter, and right-hand side shows year to date. The figures shown are prior to G&A expenses and reflect only the vessels owned by Sea1 in the quarter. The decline in the subsea segment in the second quarter compared to the same quarter last year is due to the previously mentioned layoffs of the scientific core drilling vessel and the sale of the Sea1 Spearfish in mid-May. Adjusting for this, we see an increase in revenue and operating margin in all segments compared to the same quarter last year. This slide presents the financial position of Sea1 Offshore. The company maintains and improves a strong financial standing with a book equity ratio of 50%. Gross interest-bearing debt stands at $324 million, while net interest-bearing debt is $226 million. The company has additional cash available through an undrawn revolving credit facility established in January. Now, the cash flow so far in 2025. We started the year with $68 million in cash. We have received $74 million from operations. We have paid net interest of $3 million. We have invested $44 million in existing vessels and the new building program. We have net reduced debt of $14 million. We have received net proceeds from the sale of Sea1 Spearfish of $113 million and paid dividend of $94 million. Some smaller adjustments of $2 million, and we end up with $98 million in cash at the end of the second quarter.
Looking at our contract backlog, Sea1 Offshore has a firm contract backlog of $756 million. In addition, there is $589 million of options. As you can see, the largest part of our backlog is related to our subsea fleet. For the remaining part of 2025, we have a firm backlog of about $112 million. For 2025, we have 100% coverage for both the PSV fleet and for the subsea fleet. For 2026, we have 100% coverage for the subsea fleet and close to 50% for the anchor handler and PSV fleet. We are targeting more firm work for the anchor handler segment. We see more and more firm tenders in the market, and hopefully, we will be in a position to conclude the long-term contracts. Our OFCV fleet consists of 16 owned vessels, as listed on this slide. In addition, we have four vessels under construction and six vessels under technical and commercial management. One more vessel will be added late September. Sea1 Offshore has now two well-intervention vessels. We have two PSVs. We have one offshore construction vessel. We have the scientific core drilling vessel. We have fast crew vessels and oil spill recovery vessels, in total four. We have six anchor handlers, and we have a new building program of four construction vessels. In addition, we operate six vessels on management on behalf of Viking Supply Ships. Let's look at our areas of operation as per today. On this slide, we have listed all our fully owned vessels and vessels operated commercially and technically by us. The company has, as mentioned before, a very good global footprint, which is important for the utilization of the fleet. We will continue to move vessels around the world where we can perform safe operations based on sustainable conditions. For the anchor handler segments, there are mainly shorter contracts and campaigns. In Australia, we currently have the anchor handlers Sea1 Sapphire, Sea1 Aquamarine, Sea1 Emerald, and Andreas Viking. They are all operating on term contracts. In Malaysia, we have Sea1 Amethyst. In Canada, we have Avalon Sea. The remaining anchor handler vessels are operating in the North Sea spot market. Moving on to the construction vessel, we have Sea1 Dorado on a firm contract operating in Brazil. The two well-intervention vessels, Siem Helix 1 and Siem Helix 2, are both on long-term contracts, also working offshore Brazil. We have two PSVs in our fleet. That is Sea1 Atlas and Siem Giant. They are both on term contracts in Brazil. For our smaller Brazilian fleet, we have the oil spill recovery vessels Siem Maragogi and Siem Marataizes, both on term contracts with Petrobras. We have the fast crew vessels Siem Pendotiba and Siem Piata. They are both on long-term bareboat agreements. We have our core drilling vessel, JOIDES Resolution. The vessel has been in layoff for some months, and we have decided to scrap that vessel. As shown on the previous slide, we have a really good contract coverage for this year. A few comments to the market. The North Sea anchor handler market was strong at the start of the quarter, with rates significantly higher than the previous two years. Spot demand declined in May and further into June, and we expect to see a spot market that will be weak for the remainder of this year. For the construction support vessel market, long-term demand fundamentals remain strong, with subsea backlogs from conventional EPCs at record highs. In the short term, however, we have observed decreased activity in the North Sea and a reduction in projects within deepwater regions. The semi-rig activity in Australia is seeing a temporary decrease in 2025. In the short term, this is expected to result in more available support vessels in the region, putting pressure on rates and utilization, with some migration of vessels to other regions. Rig activity is expected to grow again during next year. A limited further increase in OFCV utilization is expected over the next years, based on moderate demand growth and stable fleet numbers. To summarize, we delivered another strong quarter. Sea1 Offshore continued to deliver first-class operations with excellent HSAQ performance. We have a solid financial position. We have a strong backlog with quality clients, and there is a positive long-term market outlook in all segments. That was the end of the presentation, and we will now open up for questions. The first question that we have got here is, can you say something about a possible merger between Sea1 and Viking? That is something we cannot comment on. The next question received is, how long will you have the JOIDES Resolution in layoff before exploring other options? We have been exploring options for quite some time, and it's now decided that the vessel will be scrapped.
There is a question regarding the revenue sharing agreement for our anchor handling vessels. In reality, the sharing agreement is a margin sharing agreement based on the number of vessels, or actually the number of vessel stays these vessels are available. You can also note that the vessels enter into the revenue share agreement as they complete contracts initiated before the agreement was established. This is to avoid any transfer of any previously recorded contract backlog between the two groups. This means not all vessels were part of this agreement in the second quarter.
Yeah, there was also a question about the length of the term contracts. The three vessels sailing on a contract in Australia, that goes until September next year, as it looks now. You state the next question. You state more and more term tenders. This is very different than market comments about the bleak outlook in anchor handling tug supply vessels. Andreas, maybe you will give a short comment to that question.
Yes, I think that my name is Andreas Kjøl. I'm CCO of Sea1 Offshore. On the market side, I think the outlook for North Sea is weak, but we see more and more project work and also short, medium-term contracts are coming now. We see clearly that the activity levels are rising, especially from the large EPC contractors.
Good. The next question is, when does Sea1 Atlas firm contract end? Was an option removed in 2026 as there are no available days? Did you cover that one as well, Andreas?
Yes, the firm date is ending mid-December, and we have a 75-day option on the Sea1 Atlas after that. We are in dialogue with several opportunities for the Sea1 Atlas. As we know, the Brazilian PSV market is very tight.
The next question, are some options used on your anchor handling tug supply vessels in Australia, and could you provide when the firm contracts are due? Yes, some options have already been taken, and as mentioned earlier, the contract expires in September next year. There are still options that can be declared, but that is the outlook just now. Another question about JOIDES Resolution, which we have already covered. How confident are you on an increase in the Australian rig market activity next year? This is just based on reports from analysts, and also when we are speaking to clients and potential clients, it seems like there will be some more activity next year. This is not 100% certain. The next question, can you elaborate on the opportunities you see for Sea1 Amethyst? We have just concluded a short contract for Amethyst. She will go back to Australia and help out on the rig consortium contract that we have with the three other vessels. In total, there will be four vessels now operating in Australia. The next one here is, what are your thoughts on the offshore subsea construction vessel market balance in 2027? One more new build has entered the market. We are still optimistic about the market from 2027 and further on. We see a lot of work being concluded by our potential clients. We are in a good position with the delivery early 2027, and we are quite confident that we will secure term work for our new builds.
There is a question here regarding financing of the new builds. We have not concluded yet, but we see good interest from parties that want to help us with the financing of the new builds. We are now in no immediate hurry. We have a modest debt amount, a good cash position, and an undrawn revolving credit facility, so we are not in a hurry.
There is one more question. When should we expect the contracts on your new builds? The steel cutting will start mid-September, and we expect to start potential negotiations in 2026, not before. The last question here on Amethyst again, is that an incremental contract, or will it share revenue with the other three working on that rig consortium contract? All the anchor handling tug supply vessels are sailing on a revenue share basis for all anchor handling tug supply vessels. Yes, there will be a split also on that new contract. That was the last question we have received. If there are any other questions, please feel free to ask. All right. If no further questions, we will end this session, and we thank you all for attending. Thank you.