Hello, and good morning, everyone, and welcome to Soiltech's Third Quarter 2026 Conference Call. There will be a Q&A session at the end of the presentation. If you would like to ask a question, please press the Ask a Question button. Before we begin, I would like to remind all parties that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. Our comments today also include non-IFRS financial measures. Additional details and reconciliations to the most directly comparable IFRS financial measures can be found in our third quarter press release, which is on our website. With that, I will hand the word over to you, Jan Erik.
Thank you. Thank you, Tove. Well, it's good to be back in Oslo again at Hegnar Media. In fact, it will be the second time that we are in Oslo presenting directly instead of sitting in our office at Forus. We really look forward to this. Let's start with the headlines for the quarter. I would say that we are quite pleased with this quarter. We had revenues of NOK 132 million, EBITDA was NOK 39 million, and profit before tax was NOK 21 million. The revenue was in line with the last quarter, but the EBITDA and profit before tax were higher, so we are quite pleased with that. We delivered solid operations during the quarter. We saw that we had a very strong activity across all operations, which is a good sign. We have about 30 running operations, so there is quite a lot to handle.
We had very high operational efficiency during all projects, means that we did not have any downtime. We had 100% revenue utilization across the lines. The margin side, we have been working with, and we are pleased to see that we are able to increase the margin while we are growing. This is an important target for us. Tove will come back to the details on that later on. Other things that I would like to focus on is, of course, the investment side. We have been investing quite heavily in 2026 in order to capture the growth opportunities. year-to-date, we have invested NOK 250 million in total, and out of this was about NOK 50 million in this quarter. I would say that we are investing a little bit ahead of the curve.
Normally, you would perhaps take this level of investment over two years, over 2026 and 2027, but the reason that we have speeded this up is that we see near-term opportunities, but also opportunities into 2027 and 2028. I would expect that the level of investment will go a little bit down if you look into 2027 and 2028, because the focus that we will have now is to deploy the assets that we have invested in, secure that we have a good utilization of those assets, and that will be sufficient to maintain the continued growth. Obviously, when we are getting, how can I say, sold out of the equipment, we will start investing again. We have a very strong market visibility at the moment. This is something we talked about before, and this is why we think that now is the time to invest.
We see that the clients that we have are increasing their activity, which is good for us. We are working with, I would say, in Norway, then we are working with all the leading players there, and we have a very good dialogue with them. We see all the time that our clients are looking for, what can I say, additional projects to support their targets. Not least in this quarter, we are introducing a revised dividend policy, and we are pleased to be able to do that. We have got quite a lot of questions over quite a long time about when are we going to start paying dividend. What has been a key criteria for us is to make sure that we have, what can I say, a strong financial position, and we have a good market outlook.
Now we see that we are in that position. What we will do is that we will start paying dividend with 30% of the net profit after tax, starting with the coming quarter. I think that this will not go at the expense of the current growth opportunities. We see that there is room in our company with the available financing and with the cash flow that we will generate to continue investing in growth opportunities while paying this dividend. Going over to operations and markets. I think I would like to point out the two contracts we have signed this quarter, or been awarded this quarter, which are not so many, but they are very, very important for us, because it's exactly in the line what we want to achieve, and that is to have the full scope of work on the rig.
The latest contract that we disclosed was an undisclosed rig name, but this is with a leading operator on the Norwegian continental shelf, and we are very pleased with that contract. The scope there includes the full service, the fluid treatment, and solid waste management on the rig, and including then SmartTransfer on the rig with remote operations as well, which is a key focus area for us. Later on, subject to the client's need, this could also be complemented with boat transfer of cuttings, but that is a decision that is being made project by project. The estimated start-up of this one is in the second quarter.
The other one, which maybe has gone a little bit under the radar, is the Deepsea Yantai, where we announced that the scope would be expanded from fluid treatment to include solid waste management on the rig, and also the boat transfer of drill cuttings to shore by PSV. This project is a little bit delayed, according to the initial or estimate of the start-up, but it is expected to start up later in this quarter. These are contracts that we like to have more of going forward. If we then, going back to the market outlook, I don't need to spend so much time on it, but of course, it continues to strengthen all the time, and there are a lot of attractive growth opportunities that we see with existing clients and with new clients. Unfortunately, in the Middle East, the situation is not so much changed.
We are treating waste there, and we are getting good feedback from our client, Estedama and Aramco, but the volume is not there yet. But we expect that to it will increase once the situation normalizes in that region. In addition, of course, we have global ambitions, so we are doing initiatives in selected markets to see how we can have a, what can I say, a good start-up and a good strategy in those specific markets. Contract status, not so much change here since last time. We have had really one new rig coming in, which is the undisclosed one that you can see, but we also then had extensions on the Transocean Enabler, which is extended until 2030. It is quite stable. The only project that has been completed since last quarter is the West Elara project for ConocoPhillips on Ekofisk Field.
That rig is now going over to accommodation rig. So, it was a good project for us, and it is completed. So, we have a very good contract portfolio there, and obviously, we would like to increase that too. Going over to the international activity, there is one rig that was finished, was the Paul B. Loyd Jr., it was quite a short job. But we have seen that there is an extension on the Transocean Barents, which is in the Black Sea. It has been extended until the end of first quarter 2027. We are obviously working on opportunities for that rig, following the completion in Romania, offshore Romania. And then we have there was also an extension on the Deepsea Atlantic. That finalizes my overview. Then I give the word to Tove, please.
Yeah. Thank you, Jan Erik.
Thank you.
I am very pleased to take you through Soiltech's financial performance this quarter. All figures I refer to are in Norwegian kroner unless otherwise stated. We maintained the record revenue level achieved in the second quarter while improving our margins. Third quarter revenues was NOK 132 million, which represented a 30% year-on-year growth. Adjusted EBITDA came in at NOK 39 million, a year-on-year growth of 61%, which also corresponds to a margin of 29%, which also is the highest we've had in a single quarter ever, up from 24% in the same quarter last year. Profit before tax came in at NOK 21 million and more than doubled compared to last year. This corresponds to a margin of 16%, also here the highest margin in a single quarter.
If we then look at the results for the first nine months, the revenues was NOK 363 million, which is up from NOK 300 million in 2025, which is a 21% increase. Adjusted EBITDA came in at NOK 99 million compared to NOK 69 million in 2025, equal to an increase of 44%. This corresponds to an adjusted EBITDA margin of 27%, which is up from 23% in the same period last year. Profit before tax was NOK 48 million compared to NOK 29 million in 2025. Profit margin improved to 13% in 2026, increasing from 10% last year. If we move to the business segments, both segments delivered year-on-year growth. Fluid treatment revenue was up 19% year-on-year, and solid waste management was up 24%.
As Jan Erik highlighted in the Q3 report, tank cleaning contributed to growth in fluid treatment segment this quarter, which demonstrates the value of expanding our services to existing clients. Fluid treatment accounted for 53% of the total revenue, which is up from 51% for the first half year. If we move to the graphs, these are some of the key metrics for Soiltech. Here we have seen very positive development over the last six year in revenue, EBITDA adjusted, and profit before tax. We have almost tripled the revenue from 2022 until today. Adjusted EBITDA increased from NOK 26 million- NOK 127 million for the last 12 months. If we look at the profit before tax, we have the same development. If we see from 2025 to 2026, we have grown approximately 50%. This shows Soiltech's ability to grow the business while maintaining profitability.
For reference, 2023 and 2024, if you look at the profit before tax, there were some one-off effects impacting the results, and this you also see on the graphs. 2024, we had expenses of approximately NOK 18 million related to merger and IPO expenses. In 2023, we had a net gain related to the Sorbwater transaction of NOK 10 million. If we then turn to dividends, as Jan Erik mentioned, we plan to hold an extraordinary general meeting before Christmas. The purpose here is to authorize the board to approve dividend payments under the new policy. I would also like to highlight that with this policy, we emphasize that investing in further profitable growth remains our main priority. Our strong financial position combined with our confidence in the outlook gives us the flexibility to do both, invest in growth and provide shareholders with a regular cash return.
If we then turn to the next slide and look at the key financial for this period, which is also included in the quarterly report. Overall, margins improved compared to last quarter and 2025. This is mainly due to good execution of our projects and good cost control. SG&A represents 16% of revenue for the first nine months, unchanged from last year. However, in the quarter, this was down to 15%.
As the business grows, we expect to see further economies of scale for the SG&A. Just to put these results in some perspective, after nine months, revenue reached NOK 363 million compared to NOK 401 million for the full year of 2025. Yet adjusted EBITDA and profit before tax in the same period, we have already exceeded last year's full results, and this reflects the improvements in our margins. Our balance sheet remains strong with an equity ratio of 44%.
Total assets increased to NOK 689 million from NOK 541 million last year, which is primarily driven by the investment program. During the first nine months, as Jan Erik mentioned, we placed equipment orders of approximately NOK 250 million. Of this, approximately NOK 81 million had been paid by the end of September. The remaining payments and deliveries are expected in Q4 2026 and Q1 2027. Earnings per share increased to NOK 4.34 per share for the first nine months from NOK 2.76 in the same period last year. Return on capital employed was 16% on a rolling 12-month basis, which is up 1% from last quarter. This remains a very important measure as we invest in additional capacity. If we look at the net interest-bearing debt- to- EBITDA, this was 2.05x at quarter end. Compared with our covenants limit of 3.5x, we are well within.
We monitor this, of course, very closely now during this investment program. If we then turn to the next slide and look at the cash flow and the available liquidity. If we then start on the left, we see that in the beginning of the year, we had approximately NOK 200 million, including cash and undrawn bank facility. During the first 9 months, we generated an operating cash flow of NOK 41 million.
Operating cash flow was affected by increased working capital, and then particularly trade receivables, which is again primarily due to the higher activity and the growth. Investing activities amounted to NOK 81 million. Financing activities, including repayments of loan, lease, and interest payments, is NOK 35 million. And then we have NOK 25 million in proceeds related to employee share option exercise. We also spent approximately NOK 5 million on treasury shares for our employee share purchase plan.
Participating employees will pay for their shares through monthly salary deduction over the next 12 months. We are very pleased to see that 99 employees participated in this, representing approximately 64% of all our employees. And then, not least, we had an additional NOK 150 million in loan facility given for the Q3, which increased our available financing capacity. That gave us, at quarter end, NOK 41 million in cash and total available liquidity of NOK 294 million, including the undrawn facilities. This gives us a good financial flexibility as we continue to invest in growth. And with that, all good news, I will hand it back to Jan Erik for discussion on the market outlook.
Thank you, Tove. Let's have a look at the outlook for Soiltech going forward. There is really not much change, the way I see it, regarding the position that we are in. We are well-positioned for continuing the profitable growth that we have had. We have a strong order backlog that we have seen. We have a good financial position, and we also have, and not least, a strong operational reputation, which is really key. We talked about this before, but for me, the key for Soiltech is to deliver on all projects with the same quality, and we are not better than the execution on the latest projects. We are on critical line in many projects, and we have big expectations from our clients, which is good, and we need to deliver all the time.
We have a very motivated team in Soiltech, both on land and in all operations, which is a really good starting point. An example of that is the strong participation in the employee share purchase plan. The outlook is good for our core market, Europe, including Norway, and I think that we will take care of a lot of the near-term growth, which again, is key for us to capture the necessary market shares when we see how the segment in Norway develops. However, we see that there are growth opportunities definitely in the Middle East region and also in other selected regions in the world. Summarizing this, based on the way we see the project outlook today, we think that the revenue in the next quarter, in Q4, will be in line with Q3. However, it will be subject to the startup of the awarded contracts.
We talked a little bit about this, and in all cases, it will be deferring some revenues to January. There is still going to be a solid operation from our side. If you look into 2027, compared to this year, we see a very solid growth. That summarizes, Tove, our presentation, and then we can take some questions, if there are any questions.
Yes. There are some questions.
Okay.
Okay. If we start with question number one. Your EBITDA margins have improved significantly. How much further operational leverage do you believe is possible as revenue grows? Can Soiltech maintain or even improve margins while expanding internationally?
Yeah, that's maybe two questions.
Yes, the margins, they have improved, as we talked about. We have a very strong focus on that. We don't like to grow at the expense of our margins. So, we really are focusing on when we are involved in tenders, that we keep the current, what can I say, level of pricing.
I believe that there are possibilities to continue improving the margins as we scale up. Tove talked about the SG&A and the economies of scale. This is something which is important. One key element also is how we organize the operations and make sure that we have a high utilization of our personnel. But I'm optimistic that we are going to see some margin improvements. We are very much focused on, EBITDA is one thing, but we like even more to focus on what we can achieve on the bottom line. This is really the key for us. We had 16% net margin in this quarter. This is something we like. We like to see that increase, and we like to maintain those numbers, or perhaps there is some possibilities to further improve upon those numbers.
We like to see that we make money after all costs have been accounted for, to put it that way.
There was one other question about international, how this would impact us going internationally. Yes, it is a good point because going internationally, we must make sure that we are adapting our solutions to the local needs. I think we are quite good at that, and we know what we need to do. We need to look at our investment costs, maybe to see that we are bringing those down to adapt to international pricing levels. So, definitely our target would be that we can maintain our margins that we have today when we go international. We need to work very hard on the cost levels to achieve that. Yes.
Yes. There were so many questions.
Yeah.
That is good. I tried to summarize a little bit. I think there are several questions covering, what are the reasonable expectation of growth in 2027 and a couple of years ahead, 2027 and 2028? How do you see that?
I see no reason why we should stop going, really, because we are continuously expanding our client base, which is good. The market is enormous, and the key for us is to establish good relationship with international players so we can expand upon that. We have good relationship with Noble, we have with Transocean, we have with all our other clients. We are trying to do one step at a time. But I feel that I cannot give any percentages or anything, but obviously we have strong targets. We have stated that we have a target of achieving NOK 1 billion in revenue in 2030.
Yeah.
You can figure out how much that would take to grow to achieve that target. This is a stretch target that we are working towards for the next years.
We could also maybe mention, because you mentioned internationally, but I think also in our home market, there are huge growth potential. What has been mentioned several times here is also adding services to already existing clients is also one of our main targets. Could you give us some color on what you're seeing in the Middle East region and how you expect the market here to develop going forward?
Yeah, the Middle East region, I think what's interesting there is that we see that there is a potential for all the services that we have in our portfolio. Currently, we are deploying our fluid treatment technology on treating water and taking out the oil and the solids from that, mainly from jack-up rigs. But we are going to start one contract, it's currently planned to start in January in Dubai with Dubai Petroleum, which is swarf treatment, which is something that we do off and on in Norway in projects. It's in connection with treating the residues when you are milling through the wall of a steel pipe, when you have to do something there. In this case, it's in connection with plug and abandonment of a field in Dubai. This is a three-year contract. This is one example.
We see also that the cuttings handling or solid waste management is something that's being done there as well. It's a global service. We think that there's huge possibilities there. We have a strong partner in Saudi. The other countries, we are doing it straight by ourselves at the moment. Yes, the potential is good.
Yeah.
Let me see, there are some questions-
Yeah
down here.
I just saw also one up here.
How diversified is the customer base today, and how dependent is Soiltech on a relatively small number of major operators?
Yeah, that's an interesting question. Obviously, we have If you go onto our website and look at one of the recent presentation, you can see that we have about, what can I say, 15?
Yeah.
15 or so clients. We are working on Of course, we take the jobs that we get, but we'd like to have a diversified portfolio. We see that- We are pretty well diversified because even if maybe you can say Equinor is our largest client, but there are so many different rigs that we are working on there, so we feel a good diversification. We have very solid counterparties. I feel, I know when we have expanded so much, I don't feel It's not something that keeps me awake. I'm more focused on the good quality and the good counterparties that we have.
Mm. Okay, next one. Obviously, you have delivered strong growth over the past few years. Looking ahead, what do you see as the main constraints to maintaining this growth? Is it primarily equipment capacity, personnel, or the availability of new contracts?
What is the main constraints? I think, I don't see anything of that. As a capacity, equipment capacity is, of course, something we talk about all the time because we need to have equipment available, and the companies expect that we have it. If Equinor calls us, they expect that we have the equipment in store. So the key is, which has always been a focus in Soiltech, is to monitor that so that we always stay ahead of the curve, so to speak, so that we know that we have enough equipment. At the moment, we talked about we are quite happy with what we have invested in. The equipment has been started to be delivered to us and will be completed, the delivery in the first quarter. So we are on stock. We have equipment available to compete on contracts.
With personnel, we are a very popular company to work for, it seems, so we always have more applicants than we see that we need, which is a good position to be in, really.
Okay.
I think we are getting a little bit
Yeah, I know. Then we can say maybe one last question here. Could you give some insight into how much of your current investments have already been committed to firm contracts?
Yeah, I don't want to talk about a specific number there, but a substantial part of what we have invested in is committed to contracts starting up in 2027. This has been one of the key reasons that we made those equipment orders ahead of getting the contracts, but we saw that there was a strong possibilities that we're getting those contracts. This means that we are getting a good start with that. I think that we go into 2027 with a good part of it kind of tied up, but also we see that we have enough ammunition, so to speak, to kind of expand the operations.
I think that wraps it up.
Yes, I think there are also more questions, but in fact, our time is running out.
Are we going to say thank you or?
Yeah.
You can do that.
Yeah. Thank you all, and have a nice day and weekend ahead. Thank you.