Good morning everyone and welcome to the presentation of the third quarter result for Solstad Offshore. The presentation will be held by CFO Kjetil Ramstad and myself, Lars Peder Solstad. There will be a Q&A session after the presentation, and you can send in your questions as the presentation goes on as well. It has been a very active quarter and with high activity, solid operations, and further improvements on earnings. The outlook has been also further strengthened during this quarter. If we take just a quick look at the disclaimer before we move on to the financial highlights, to start with the negative first, currency fluctuations have a large impact on our bottom line.
The U.S. dollar to NOK varied between 9.50 and 10.90 in the quarter and actually had its highest level on the last day of the quarter. This gave a non-cash negative currency effect of about NOK 950 million in the quarter and of course also increases the debt and reduces the equity. As an example, if we used today's exchange rate, the result or the net result would have been improved with approximately NOK 1 billion. Looking at the other key indicators, revenue and EBITDA are significantly up and at record levels. The EBIT came in at NOK 800 million, where reversed impairments and sale of two vessels contributed with about NOK 400.
We continued to build backlog, and the backlog are at improved margins, and the firm backlog at the end of the quarter was NOK 7.6 billion compared to NOK 5 billion one year ago. On the business side, it has been a solid quarter, as I said, and we have experienced high and increasing demand for our services. Our 80 operational vessels achieved a utilization of 92%, and the EBITDA came in at NOK 721 million, which is the highest we have ever had. Also worth mentioning is that 28% of the quarterly EBITDA came from renewable energy activities, and that is without having any purpose-built vessels for this segment.
This shows that vessels originally built for the oil and gas markets are very central also when it comes to development of offshore wind. Especially this goes for the CSVs. As floating wind continue to develops, also the anchor handling vessels will be very central. We have sold two vessels in the quarter, two PSVs. These vessels had been in layup for several years. As ship values increases, we decided to sell and booked a profit, a combined profit of about NOK 100 million for the two PSVs on these sales. We have signed up many new contracts.
This was the sixth consecutive quarter with the book-to-bill of more than one, and the total order intake in the quarter was NOK 2.3 billion. More important is that the new contract in general are far better, have far better margins than the previous contracts the same vessels had. All these are very positive, but we also have to keep in mind that everything that drives the revenue also drives the cost, and the global inflation influences our cost side, both on the OpEx side, but also on the CapEx, especially linked to dry dockings. Looking at the market, there is a very active tendering activity in all vessel segments and across geographical regions.
Still, it is within the CSV segment we see the highest activity, as these vessels are in demand both from oil and gas and from offshore wind. Clients are willing to enter into longer commitments. This goes mainly for the CSVs and for the PSVs segments. While the anchor handling market in general is more spot and project-oriented in the North Sea, while there are also longer-term opportunities for these type of vessels, but then mainly in Brazil and in Australia. Latest yesterday we saw that the investments in or the expected investments in 2023 in Norway was adjusted upwards.
We saw that one of the main subsea contractors reported a very upbeat outlook for their services. Which is again very positive for us coming from the vessel side. Offshore wind will continue to utilize many vessels built originally for oil and gas. This is for cable laying, it's for trenching, it's for commissioning services, it's for survey, et cetera, et cetera. This demand will also continue to increase going forward on top of what we expect within oil and gas. If we combine this with the supply side that is stable and will continue to be so for years, it looks quite good for the vessel industry going forward. There will still be seasonal variations, but less variations than we have seen the previous years.
Um, these are a few examples of, uh, of contracts we have, uh, we have signed the, in the, in the, in the quarter, uh, and in the, in the, in the various segments. Uh, on the subsea side, we signed a new contract or we-- our client in, in West Africa extended, uh, exercised all the options for, for the Normand Energy and also added on another year of firm contract and, and at healthy rates. Um, Normand Mermaid, another CSV, a smaller one, uh, was, uh, was, uh, also got a new contract with present client for, for two more years. Uh, within most of the work will be within, with, uh, renewable energy. Again, the, the terms, uh, the rates are improving quite, uh, significantly.
On the PSV side, we signed up a 2+2-year contract with Shell in Australia for the Normand Swan. Again, a healthy rate. On the anchor handling side, we signed up a contract in Norway for the Normand Falchion. Actually it is the 16th year on the same contract for this vessel. They exercised an option for another year. In Brazil, one of our locally built medium-sized anchor handlers, the Normand Topazio, was extended for about a year or a new contract for about a year with the Enauta, again, at decent rates. We see quite good improvements across the segments and across the geographical regions.
These are just examples, few examples. I could have mentioned other examples as well. Moving on to the backlog. As mentioned, this was the sixth consecutive quarter where we are signing more new contracts than we are invoicing. The NOK 7.6 billion in firm contracts in hand now, NOK 15.5 if we include options. It is also worth mentioning that approximately NOK 1.5 billion of backlog are for execution in this quarter, in fourth quarter, while about NOK 4 billion are booked for execution in 2023. After quarter end, we have already booked contracts for a higher value than we did in third quarter, but they are not included in these numbers.
One thing is to have a backlog, but in a growing and improving market, it is also important to have available capacity. We have quite a few available vessel days available for 2023. About 1/3 of potential days are uncommitted, while 2/3 of potential days are either booked on firm contracts or on optional days. About 32% available vessel days across the segments in 2023. I give the word to you, Kjetil, to take us through the numbers.
Thanks, Lars, and good morning to everyone. If you start with the income statement, as Lars mentioned, we had a very high activity in the quarter with almost NOK 1.9 billion of revenues. It's good to see that we are able to grow the top line with approximately 24% compared to last year. That is a good development. We see on the corresponding cost side as well that increases compared to last year.
Of course, it's also influenced by selling more additional services out of the vessels. A good operating result for the quarter. A strong EBIT also in the quarter. As you see, we have a reversal of NOK 323 million of previous impairments. It's good to see that we also sold two vessels in the period. We're giving a gain against the book value of approximately NOK 100 million.
EBITDA is also growing compared to last year with almost 50%, the highest EBITDA number in the company's history for a quarter. On the right-hand side you see the split on EBITDA per segment. It's good to see that renewable is a large portion of the quarterly EBITDA together with a strong quarter of subsea. CSVs are performing well, but also anchor handling and PSV had a good quarter. Yeah.
On the financing cost, worth mentioning as well, you see it's a big number. The big driver there is the unrealized currency effects that we have on our accounts, mainly driven by that we have 70% of our debt in U.S. dollars. It's also worth mentioning that interest rates, as we all know, is also increasing. That is giving an increased interest cost of approximately NOK 100 million compared to last year. On the balance sheet, we see that the asset side is quite stable.
We have a little bit less cash than last year, but it's according to plan and of course that is also influenced by the higher interest rates that we see. Equity is under pressure. I will come a little bit back to that on next slide. Of course that the main driver there is also linked to unrealized currency loss. Also the long-term debt is very much as you can see it is increasing. That is also driven by U.S. dollar NOK movements.
In the quarter we have repaid quite some debt. When we sell vessels, we of course repay the debt that is corresponding to those vessels. Yeah. You see the equity ratio that is now below 5%. That is something that we will come back to in next slide.
Talking about equity, when we look at the starting point 12 months ago, we had approximately NOK 3.5 billion of equity, and then you see that the two large drivers for the reduced equity is related to currency. Takes it down by approximately NOK 2.5 billion, down to the NOK 953. Of course, a lot of this is unrealized and with the fluctuations that we see, there is also possibilities that this will come back as we have seen also after quarter end.
Long-term debt started with, as you see, a NOK 21 billion a year ago and has now grown. You see that the main driver there is also that when we translate our accounts into the consolidated currency which is NOK, it gives an effect of approximately NOK 3.2 billion. There you can also see that we have done, yeah, some repayment and other movements on the debt.
The debt structure itself worth mentioning that the plan is to start to pay installments first quarter of 2023 on the fleet loan, which is the main loan of the group, which is then consist of the 73 vessels. Maturity is then the first quarter of 2024 on the fleet loan. The other loans that we have in the group, they have different maturity. Yeah.
Also you can see that the fleet loan is approximately NOK 17 billion and the fair market value as of end of third quarter is at around NOK 19 billion. With that, I think I will give the word back to you, Lars, to summarize.
Yeah. Thank you. To give a brief summary before we move on to questions. It has been a strong quarter with high earnings and EBITDA, and the contracts we have signed the last 6-12 months are at healthy levels and now starts to show in the accounts. We continue to build backlog, and we do so at improved rates. It is also a very clear trend that clients are now willing to commit longer. I cannot see that the supply side will increase the coming years except for purpose-built vessels for the wind industry.
This should give a balanced market and also improve pricing power going forward. With strong energy prices, a continued focus on the energy security and the ongoing energy transition, it bodes well for a high offshore activity level also going forward. Thank you, thanks for listening in and this concludes our presentations. We now move on to Q&A, and we have got some questions already, Kjetil.
Yeah, we can start from the top. The first question is, can you discuss a little bit of the fleet of 80 vessels? Where has the reversal of impairments been done in the third quarter?
Yeah.
I can answer that. Of course, when we do a reversal of an impairment, that is based on a value-in-use calculation that we do every quarter. The driver for doing this is that we win contracts and good contracts that give room for additional impairments. That's how it works. When we win contracts that exceeds increase the earnings, we are in a position to reverse impairments.
I guess we can say also that in general terms, we have done some adjustments on the subsea fleet.
Yeah.
W hile the anchor handling fleet and the, and the PSVs has been, uh, very little so far.
Yeah.
Yeah.
There is a question on far better terms on new contracts. Can you illustrate or add some colors on what this means? Maybe with the latest long-term contract on the important Normand Vision, what is the annual EBITDA, for example?
Mm.
Yeah.
I think we say it's on significantly improved terms and it is. It's, if you compare it with the, let's say, how the rates were on peak level some years back, we are getting closer to that. New contracts are now maybe done on the subsea side, at least, on levels very close to peak level back in 2013, 2014. The EBITDA margins are healthy, and they are definitely on sustainable levels. Yeah, I guess that answered the question.
Yeah.
Mm.
There's a question on subsea contractors now saying 2024 is tight and already 2025 is becoming tight. Do you expect to secure more long-term contracts with these type of companies?
Yes. The simple answer to that is yes. We see it that it's getting tighter and tighter every week and especially for the bigger vessels, and looking into 2024-2025, it looks quite good. I'm pretty sure we will see more long-term contracts at healthy levels in the subsea segment for that period.
There is a question, can you update on how vessel values have trended in 2020? Is there any segment that shows more improvement?
Yeah. I guess it was 2022.
2022.
Yeah, I think we have already answered that. What we have seen is that especially on the vessel values or on how we judge them in our books has gone up. That is reflected in our booking of the vessels. Also seen on sales on various vessels types. The sales value you can get now has increased quite a lot compared to one year ago.
There is a question on Brazil. Can you update how pricing on new contracts in Brazil are changing?
Yeah. I mean, it's not only Brazil but everywhere. The good thing with Brazil is that you can get long-term contracts there, and if you look at the PLSVs that were announced recently or not, at least the official numbers that we saw from the bidding compared to what was awarded, let's say, one to two years ago, it's on a completely different level. We see it on the anchor handling tenders as well that the rates are going up quite significantly.
That is improving and, as it looks, both Petrobras and many of the IOCs in Brazil are increasing their activity and will probably need more vessels going forward.
There is a question on PSVs. It seems that PSVs can generate better EBITDA outside the North Sea. Do you expect to be able to reposition vessels for contracts outside of the North Sea?
Yeah. I mean, in general, our main geographical areas are Asia-Pacific, Brazil, and the North Sea and also partly in West Africa. We are bidding on contracts everywhere. We go where we get the best margins. If that means that we transfer our vessels from the U.K. to West Africa, for example, we will do that. We will go where the margins are better.
There is quite some questions about Normand Maximus.
Yeah.
What is the next assignment for her?
Yeah. Well, the vessel came off its present contract just recently. There are quite some bidding activity ongoing. What was on an earlier question with the long-term opportunities for 2024 and onwards will be very. Let's say I'm sure Normand Maximus will be an attractive vessel for clients for that activity increase. Also for 2023 work there are quite some bidding activity. I will be surprised if we don't find a new contracts for the vessel also in the near term.
We have a little bit question on the backlog. As we stated, we have a lot of options available in the backlog, including options.
Mm.
What is Solstad strategy around pricing of options?
I mean, nearly on all contracts, I would say, there are. If we give options, that would be on a higher price level than the firm period. Nearly all, not all, but the majority of the contracts are priced at the higher level on the optional periods. Yeah, with the cost or with the inflation, we have to keep that in mind also when pricing a contract. We have to make sure that we have good escalation clauses in the contracts, and we have to make sure that we can.
If we give away options, that needs to be on a higher level, so we also can take potential cost increase into the picture on top of the escalation clause.
Mm.
Yeah. That's it for now.
I think that.
Yeah
With that, I think we conclude the Q&A for today.
Okay. Thanks for listening in. Thank you.