Good morning and welcome to the First Quarter Presentation of Solstad Offshore. The presentation will be held by Kjetil Ramstad, CFO, and Lars Peder Solstad, myself, CEO of the company. This is the first quarterly presentation after the refinancing that was concluded in January. It has been a quarter with very high activity, a continued positive market development, and a steep share price increase year to date. We deliver a financial report where the numbers are in line with our own expectations, and so are the market developments. Keep in mind that this quarter includes the P&L from the former structure, the first 16 days of the quarter, while the new structure is valid for the remaining 75 days. Kjetil will come back to this and other details of the numbers later in this presentation. A quick look at the disclaimer before we move on to the company structure.
As should be well known, Solstad now consists of two main shareholding structures: Solstad Offshore and Solstad Maritime. Solstad Offshore owns seven vessels and has one vessel on a bareboat contract. They are also owners of 50% of the ROV company Omega Subsea Robotics. While Solstad Maritime owns 33 vessels, whereof 32 are operational and one vessel is in layup and held for sale. But we are operating as one company, with a common management, one brand, and operate under one document of compliance. The main part of the onshore organization is in the Solstad Maritime structure, while the Brazil organization is under the Solstad Offshore structure. Meaning that management services are provided between the structures both ways. In this presentation, when we are talking about the market, the fleet, clients, ESG, HSE, and other operational subjects, it is common for the Solstad Group.
But on the financials, we will, of course, separate what is Solstad Maritime and what is Solstad Offshore. If we take a look at a few of the highlights in the quarter, the markets continue to be good. We have high bidding activity, and we see that the market shows strength globally in all geographical regions where we operate. First quarter is normally the, let's call it, the maintenance season, where we have the main part of our CapEx program. And we have also this quarter had quite a few planned dry dockings. But despite that, we achieved 88% utilization on the fleet. That is an average. It is slightly higher on Solstad Offshore and slightly lower on Solstad Maritime. We ended up then with an adjusted EBITDA of NOK 247 million in Solstad Offshore and NOK 668 million in Solstad Maritime.
Kjetil will come back to more details on the numbers later on. In total, we see this as a good result for the first quarter, and it is in line with our own expectations. We continue to see high activity within all offshore energy sectors. With recent awards to Solstad Maritime vessels in Southeast Asia, within offshore wind, and oil and gas contracts in West Africa that we recently announced as examples. We are also actively bidding for contracts in Brazil and with several vessels, and we expect imminent contract awards. We also continue to build our service division, and this has been very well received by our clients. We had two vessels operational with our own ROV systems on in first quarter, and two more will be added in second quarter.
To recap quickly the financing we did in January, we draw a new bank facility of NOK 9.7 billion in Solstad Maritime. NOK 3.25 billion came in in new equity from Aker Capital and AMSC. We managed to postpone the majority of the Maximus residual claim in Solstad Offshore. We extended that to 2027. The remaining NOK 750 million in Solstad Maritime will be finalized in second quarter and is fully guaranteed. The share issue will be directed to shareholders in Solstad Offshore per 27th October 2023, excluding Aker Capital. The subscription period is expected to start before June. The eligible shareholders will be notified by VPS, as well as stock exchange notice from Solstad Offshore. More details of the practicalities can be found in the first quarter report.
When we take a look at the Solstad Group now, as I said, we continue to operate as one company, but with two shareholder structures. The entire fleet we have can work both offshore wind and oil and gas. In 2023, we actually had NOK 1.8 billion in revenue from renewable energy activities. It will be significant also this year. That is without having invested directly into offshore wind at all. This also shows the importance that the oil and gas fleet has, as well as the competence in the type of companies like Solstad. Show the importance of those vessels when we are going to deliver on the energy transition. We have seven offices around the world. I will highlight in this presentation Australia and Brazil. That is because of the markets that are there and the growth we see.
The importance of being present and the importance of being able to deliver on the very strict local content requirements. I would also like to highlight the services that we are expanding. Services are additional sales that we are adding on top of the vessel time charter itself. We established this less than two years ago, and we are now targeting a NOK 1 billion in revenue by latest 2026. On the market, there are a few things I will highlight. If I start with the CSV market. One of the things I would like to highlight is that the vessels are in demand from both offshore wind and from oil and gas. Both segments are very active, and both segments continue to grow. The other thing is that the supply side is stable. A lot of vessels were taken out during the downturn.
Yes, there have been announced a few new buildings lately. But the delivery of those is still a few years ahead. The supply side is for all practical purposes given the next three years or so. The subsea contractors are reporting historically high backlogs. They also report a huge amount of opportunities. Meaning that the demand for CSVs is likely to continue to be high for several years to come. The utilization rate is already at 90%+ level, and the rates continue to be strong. Using a 250-ton crane vessel as an example, on a project or seasonal rate contracts, the rate levels are around $80,000 a day. There are also long-term opportunities where the rate level is on that level or slightly below. But still, very healthy numbers.
We don't really see any difference in day rates between oil and gas and offshore wind when it comes to the construction part of the services. When it comes to the, let's say, more easier part, like the CSOV type of scope, oil and gas rates are higher than we see within offshore wind. On the anchor handling market, our fleet of anchor handlers is mainly on term contracts in Brazil and Australia. Or they are working in the global project or spot market with the North Sea as the base. The global market is tight. But I will highlight the Brazilian term market and also the mooring market as main drivers for the activity at the moment. There are long-term tenders in the market now. Some awards have been made already. More are likely to follow.
In addition, we see that the FPSO mooring market will require North Sea tonnage this year and also in the years to come. The rate levels are continuing up, and long-term rates in Brazil are already well above the numbers showed on the graph on these slides. The mooring market is also very active in other areas, especially West Africa, which is a key market for Solstad. We have one project we are working on there on moorings right now. We are also targeting several more. It is likely that oil and gas will still be the main market for this type of vessels for years to come. This having said, demo projects and also maintenance of floaters require anchor handling tonnage. We have two of our vessels on this type of project now in second quarter.
Floating wind in commercial scale will require a huge amount of anchor handling services. But it is probably still a few years ahead until we see this effect. I mentioned that there have been announced a few CSV new builds. But within anchor handlers, there are no vessels under construction. Many vessels in this category have been taken out during the downturn. Thereby, it is also very likely that the supply side that we see now is also given for the next 3 years-4 years, at least. Solstad already has a very solid position in the geographical regions that we find most attractive. Particularly in Brazil and Australia, where the local content requirements are very strict. To be able to operate in those areas long-term, local presence is a necessity. The trend is seen from a vessel point of view that it is becoming one global energy market.
Where we do more transits between regions, and we shift from oil and gas projects one month to offshore wind projects the next, using the same vessels, the same crew, and the same equipment. But if we take a closer look at the various regions and some of the characteristics in those, and start with the North Sea, what we see is that the activity here is both within oil and gas and offshore wind. Both segments are very active, and we see continued growth. The spot market for anchor handlers is volatile, as usual. But we are, as Solstad, less dependent on the spot market, as we are increasingly targeting the project market. In Asia-Pacific, it is also a combined market with the more traditional gas market in Australia and the offshore wind activity in Taiwan as the main areas.
The activity is high, and rate level in the region has picked up. From our side, we are involved in several tenders at the moment. In West Africa, that area is for us a combination of long-term subsea maintenance contracts and the FPSO mooring market. There are several projects we are involved with right now, and we are also bidding on several more. Brazil is very important for us and for oil service companies in general. There is a huge investment program in the country, and we expect high activity going forward. Petrobras is in the market now for several vessel types for long-term contracts. Also, other clients have ambitious programs. We expect to grow our activity in Brazil going forward. Another country, north of Brazil, Guyana, is also very interesting, especially for the CSVs. New FPSOs will be installed the coming years, and we see many opportunities in Guyana.
On our clients in oil and gas, our clients are the oil companies directly, like Petrobras and Woodside as examples. Or the subsea contractors like Subsea 7 and Saipem. Within offshore wind, it can also be the wind farm owners like Ørsted, the turbine manufacturers like Siemens Gamesa or Vestas, or the contractors like Seaway 7. In addition, it is the cable contractors like Prysmian within power cable and Global Marine on fiber optics. There is a large variety in clients and markets that require the type of vessels that we in Solstad operate. Examples of projects we are involved with now or have recently been involved with are, for example, in Guyana, where we have been involved with all the FPSOs being installed so far via our long-term joint venture with SBM.
Others are the Tango FLNG project, where we in Congo, where we utilized five of our vessels during last winter. That was on a project-only basis. There is a variety of long-term and project-by-project contracts. Within offshore wind or non-oil and gas activity, we support the construction of wind farms in Taiwan. We are involved with building of fiber optic networks with Global Marine in Asia. Right now, we also have the contract with Equinor to disconnect, tow, and connect again the Hywind Scotland wind turbines that are being towed to shore for maintenance. I've already mentioned services a few times. This I find very interesting. As we see it, there is a large potential for us here. The day rate or the business model in Solstad continues to be the same. It's time charter of vessels on day rates on low operational risk.
We continue that model also when we are adding on services. But we see that clients see it as beneficial if we can deliver a larger package of services on top of the vessel itself. It has been well received by many. We have teamed up with the company Omega in this business. They have the people, they have the software, and they have ambitions to grow in subsea. It's a very good match with our vessels and our position in the global subsea market. The joint venture has now ordered the 12 ROV systems that are being mobilized onto our vessels. When the market is developing like now, we are not only benefiting on the vessel day rate itself, but also adding EBITDA from the services.
As you can see an example of to the left here, where the day rates are increasing from 2022 to 2024 quite nicely on the rates. But the same is the case for services. The business case that originally was quite strong is even stronger when we are providing a larger package, as we now are doing. We strongly believe that this will benefit us as a company going forward. Then, Kjetil, I leave the word to you to take us through the financials.
Thank you, Lars. Let's start with Solstad Offshore and the first quarter financial highlights. We had a quarter with high utilization for the vessels in operation of 94%. Only one vessel performed dry dock during the quarter. Operating income from continued operations ended at NOK 768 million. Operating result before depreciation ended at NOK 392 million.
EBITDA adjusted from continued operations of NOK 247 million for the quarter. In the EBITDA adjusted number, we have assumed that the IFRS 16 leases will become operational. That relates to Normand Maximus, some of the vessels in Brazil, ROVs, and office leases. This amounts in the quarter to NOK 137 million. On the other side, on the debt side, we also need to adjust the debt with taking the debt in Solstad down to NOK 2.4 billion. For Solstad, this improves the net debt figure over adjusted EBITDA. The multiple in total will improve Solstad numbers. As Lars mentioned, we have introduced service division this quarter, adding additional services like ROV, tooling, project personnel, and engineering support. This new service line delivered an operating income of NOK 60 million in the quarter. On equity, Solstad Offshore has booked equity of NOK 1.7 billion, giving an equity ratio of 21%.
Net interest-bearing debt in the financials amounts to NOK 4.7 billion. However, as mentioned, if we apply the adjusted net interest-bearing debt, it will be at NOK 2.4 billion. To compare it with the adjusted EBITDA number, this needs to be done. Cash is at NOK 700 million in Solstad Offshore after the deconsolidation of Solstad Maritime. This is in line with the plan. In Solstad Offshore, we have a limited amortization the next three years. Normand Superior is being refinanced by half a year with a new four-year tenor. In Brazil, the company is performing better than planned, paying down the debt locally in Brazil faster than we originally anticipated. In general, we see that the company is in a position to attract attractive financing on attractive terms.
If we go to Solstad Offshore backlog for the first quarter, Solstad Offshore has a backlog of NOK 3.1 billion and NOK 4.4 billion if you include the options, which is likely to be taken in a strong market. A large part of the backlog, as you can see, has been added after the upturn started, approximately 85%. However, we have a few vessels that have potential for higher earnings going forward. In 2025, most of the older contract has been finalized. If you look at the vessel available days in 2024, 94 of the days have already been booked. But if you look at 2025 and 2026, we see that we have more room to book backlog at attractive margins in today's strong market. Then, if we go over to Solstad Maritime, first quarter financial highlights, we had a utilization of 87% in the quarter.
On Solstad Maritime side, there has been a busy quarter with several dry dockings in the quarter, affecting the utilization rate. Operating income in the first quarter was NOK 1.2 billion. EBITDA adjusted from continued operation ended at NOK 668 million. Also, here in the EBITDA adjusted, we have done the same thing in Maritime, adjusted for the IFRS 16 leases. This is mainly Maximus, ROVs, and office leases. That means that we add back net NOK 55 million in the quarter. This gives an adjusted EBITDA margin of 54% in a quarter with 87% utilization. Backlog at the end of first quarter was 6.4. I will come back to that on the next slide. If you look at Solstad Maritime, there is a booked value of NOK 13 billion, excluding Maximus.
That gives an average booked value of approximately a little bit more than NOK 400 million per vessel per the end of first quarter. After the refinancing and equity injection, as Lars mentioned, equity is at NOK 5.3 billion, giving an equity ratio of 32%. This is before the share issue of NOK 750 million. Net interest bearing debt in the financials of Solstad Maritime is NOK 8.7 billion. If we apply the adjusted net interest bearing debt with the same principle as we did for SOF, and adjust for the IFRS 16 leases, the net interest bearing debt will be NOK 8.5 billion. Again, this gives an average net debt per vessel of approximately NOK 270 million, excluding the vessel Normand Maximus. Cash in Solstad Maritime is at NOK 1.4 billion.
On the Solstad Maritime fleet loan of NOK 9.7 billion, we see we have a repayment schedule of approximately NOK 1.4 billion over the next three years. In 2027, we assume repayment or refinancing to take place. Please also take into consideration that the guaranteed NOK 750 million share issue will strengthen both the cash and liquidity and equity further. If we go to Solstad Maritime backlog, we have a firm backlog of NOK 6.4 billion. Further, if you include the options, it is NOK 14.3 billion. Again, the options are likely to be taken on mostly increased rates. A large part of the backlog has been added after the upturn started, approximately 90%. Still, we have a few vessels that have potential for higher earnings going forward. Also, as for Solstad Offshore in Solstad Maritime, the most of the older contracts will be finalized during 2025.
In 2024, we have already booked 74% of the available vessel days. However, in 2025 and 2026, we have room to add more backlog at today's improved market terms. Good quarter for backlog in Solstad Maritime. We have a book-to-bill ratio of 2x revenue that we had in the quarter. So that was a strong quarter on backlog, adding backlog. With that, I give the word back to you, Lars, to finalize.
Thank you, Kjetil. And to summarize this presentation, Solstad is now refinanced. And we are entering what is probably the strongest offshore energy market ever, with a very strong financial position. The activity is global, with high investment activity, which gives many new contract opportunities for us in all the main geographical regions where we operate.
Also within all vessel segments. The supply-demand balance is getting in favor of the shipowners. With the quite slim new-building list, it could last for a longer period. As we see it, at least in short to medium term, Solstad, or the main growth potential we see is within services, where we continue to see a lot of opportunities around the globe. So that concludes our presentation. We're now moving over to Q&A. Has there been any questions, Kjetil?
Yes, there is. Let me check. First question here is, the cost of administration is very high in Q1. Is this related to the refinancing process, or is this the level that we will see also going forward?
That is mainly related to the refinancing process.
Yeah, and of course, you can also see in Solstad Offshore adjusted EBITDA number, there are details of that. Some of that has been added back to EBITDA. Then, next question is, Maximus has left Italy, after about five months of standstill. Can you give some color to what is next for Normand Maximus?
Sure. The vessel has been for an extended period in the Mediterranean, for to as a standby between projects. We have been on hire all the time. But now the vessel actually left yesterday, go to a northern European port for mobilization, and then on to projects in Brazil thereafter. So the vessel is fully booked for quite some time ahead.
Okay, then next question. There is a cancellation fee or a legal fee award in the presentation.
Is that included in the numbers?
You know more about this than me, Kjetil, but it's related to a... It's not in the numbers. It will be a subsequent event. It will be second quarter. It's related to a legal case of a termination of a contract from 2017 or something. Yeah, so that's... Yeah, so that will be booked in second quarter.
It's not in the numbers. It's a subsequent event in the financial report for first quarter. So that's... and then... Has there been any news on Maximus PLSV, Petrobras development?
No, I don't think that is... I don't think that we will be contracted on that position with the Maximus. It's a...
We have quite high expectations on the day rate for the vessel. And we are looking at other opportunities that are more likely for us than the PLSV opportunity.
In the presentation, it was mentioned that there was some dry docking activity in Solstad Maritime in first quarter. Can you add some color to how many vessels and approximately what this will affect, how this will affect EBITDA?
Yeah, well, it's a there's quite a few dry dockings going on both in the vessels in Brazil and also here in Europe. We have had at any given time since January, we have had at least one vessel in dry dock. And that is planned.
And it makes sense because we do it at least for the, let's say, for the European trade. It makes sense to do it in, let's say, in the low activity season. It comes up for classing now and then. And that's something that just has to be done for all vessels. And the main part of our CapEx program is in first quarter. Some also in second quarter, but not as much as in first. And then the third and fourth is less. So yeah. So without mentioning the exact number of dry docks, I can at least say it's quite a few.
Then, there is a question on guiding for 2024.
Yeah, well, we gave a guidance by the end of last year. We haven't changed that. What I can say is that the activity and the market and our position is developing as we expected. And there is no changes to the guidance we gave at that point.
And then, there is some feedback to the company. Fantastic result. Industry leading margin. And then, to go to the question, could you give some color on the listing of Solstad Maritime?
The plan is to list Solstad Maritime one way or the other within 12 months from the second share issue we're doing now in June. That is also according to what we announced already. How and when is too early to say.
But within 12 months, it's going to be a listed shares.
And then, we have a new question. On contract terms, are you seeing improvements to contract terms, termination clauses, etc., on new contracts versus older legacy contracts?
Yeah, definitely. And that is very important that we as an industry also... It's like when the market is very poor, all those types of contractual clauses are in the favor of the client. And when the market is in our favor, we have to make sure that we not only are pushing up the rates, but also that we have to take back all the contractual terms that we have given away in the weaker market.
So that is also why signing contracts can take quite a long time, or the contract process, because we have to make sure that we are also doing our job on the contracts itself.
I think that concludes the Q&A.
Okay, so thanks a lot for listening in and have a nice 17th of May tomorrow. Thank you. Thank you.