Welcome to this second half year 2023 presentation. Today I'm also joined with Tina Tønnessen, our CFO. She will run through the financials, but first I will start by showing this picture. It's a picture I took myself in January. I was invited on board Icon of the Seas by the senior management in Royal Caribbean. It's a very prestigious project for Royal Caribbean. It's a groundbreaking project, and it's also a very important project for Vow as a company. The ship is actually fully equipped with our technology from bow to stern, and I will have a separate slide explaining more about the net zero technology we have delivered on board that ship. Looking back at 2023, taking stock forging ahead, we are delivering a growth on the revenue plus 17% to NOK 918 million. Significant.
But I regret to face you with a negative number, and it's even frustrating that we had to dig deeper in the fourth quarter down to the bedrock. It's been a very important process. It's been a painful one, but I will ensure you we will come through stronger, and we're starting 2024 with clean sheets. But for the period, minus NOK 23.4 million EBITDA. On the strong side, backlog is robust at NOK 1 billion with another NOK 920 million of options. Reassessed. We have delivered a long list of projects in the period successfully, and we have entered into milestone contracts confirming and securing basis for increased profits in years ahead. I will also show you the rich list of potential projects we have in the pipeline. And Tina will go more into that as well. We are on track to getting fit for 2025.
Never have we in the business delivered so many systems during 2023. A 18 shipsets of advanced technology to the cruise industry, 17 to cruise newbuilds under construction at shipyards, and one for a retrofit project. And we have undergoing 12 large commissionings, meaning that we are starting up systems, we are tuning them, we're making sure that they're getting into compliance, environmental compliance, and handing them over to shipowners. Again, it's been a very, very busy year, and we have demonstrated our position and made sure that we are a leader in this industry. And what follows is high activities within aftersales. Now this business in 2023 has grown to NOK 180 million of revenues, recurring revenue, building up as we are delivering more and more ships, and we are enjoying favorable positions with leading cruise operators and this large install base.
What do we actually deliver within this industry segment? We deliver parts to our systems, consumables, and operational assistance. I would say one of the reasons why we have this strong foothold in this industry is that we have this one-stop service provision, and we're located very close to the center of this industry in Florida. You see, revenues for the second half is up 29% compared to last year. For the full year, almost 50% up. This is a nice development, and we are increasing the focus on this side, and we also want to obtain better margins in this segment.
But not only does the cruise industry play an important role for us going forward, we see that our heat treatment part of the business is now increasing significantly, and that industry, those customers that our subsidiary is working with, is faced with high energy costs and cost of emissions. And the heat-demanding or heat-intensive industries, they need to decarbonize, and one way to do that is to electrify their processes. C.H. Evensen has that offering, and we're delivering on that. And we have secured a stronger position in that space, and this subsidiary is really working with blue-chip companies delivering our electrified heating processes. And you see, demonstrated by a good development, after they came into the group, we have doubled their revenues within this segment, and we have also a backlog that supports the revenues going forward, the growth going forward.
Important wins did we have last year? It was a milestone for us to get our first large land-based contract in the U.S. with Quonset Soil Solutions, owned by Green Development, this renewable company that had been working with solar and wind, and are moving now into this interesting field of converting biomass into clean energy and biochar for carbon sequestration. This contract, $27 million, is where we are delivering technology to produce biochar and renewable energy, and it's actually one-to-one with what we're doing at Follum for VGM. So we're reducing actually the risk here, and it's a very standardized system, and we're leveraging this on what we actually have been now working on for several years with VGM in Norway. Detail engineering, including process equipment, piping, and electrical, is well underway, and the main equipment delivery from our end will be Q1 2025.
Not in our contract, but our client is now constructing all the civil works in the U.S., ready to receive our equipment. When this system is commissioned and operational, it will convert green waste into 6,000 tons a year of biochar. It's a significant project, and it's well recognized in the U.S. these days. Another one, speaking of Vow Green Metals, we confirmed phase two, so the existing contract was increased to NOK 332 million, and with that, VGM are now capable of producing 20,000 tons of biocarbon to the metallurgic industry with this change order. Part of this change order is the large C.H Evensen reactor that will be delivered as part of this new factory, and it was actually the main reason why we made sure that we got C.H. Evensen on board a couple of years ago.
Also, very important, that plays a tremendous importance for us and for VGM, is that we have the demonstration plant up and running. And you see the picture here, is there the demonstration plant installed during the fall of 2023 and now operational, producing biocarbon for the metallurgical industry, but also we have invited a lot of our clients to this site. So it not only demonstrates the capability of VGM going forward, but it also demonstrates the capability for Vow as a group. And for us, Vow as a shareholder in VGM, it's very important to say that they have very good progress in their buildup. They have, during the latest weeks actually, confirmed partnerships and funding from energy producer Vardar, and SIVA is on board to fund the civil works at the site.
So I would say this project is really now moving forward, and we just have to imagine what we have done in the latest years is that we're building for us, Vow. Just looking at our numbers, today we are working with the metallurgical industry vertical with projects around NOK 400 million. Amazing. Cruise is also; we have had some important wins. Over the last months, we have signed up contracts for an accumulated volume of NOK 350 million. We signed an important contract with Carnival for retrofits. There will be more retrofits. The cruise industry is moving forward in making sure that the existing fleets are environmentally compliant. We have a strong history there, and we are well positioned to take more contracts within the retrofit space. We do sign up new contracts in the new building space.
We got two contracts in France for a total value of EUR 8 million, and a couple of weeks ago we signed two additional contracts with a system, the most advanced system, for almost EUR 20 million. And look at the numbers. You see the average value on the conventional system in France is almost doubled in size because we are now implementing more advanced technologies, making sure that these systems will have a much higher environmental impact. Speaking of the Icon of the Seas, this really sets a new standard, and we see that the cruise industry is moving along.
What Icon demonstrates has really paved the way for a lot of new projects that are also requesting not only advanced waste treatment, waste management, and food processing from Vow, but also technology to convert this into clean energy on board, biochar, clean energy to replace fossil energy on board, and biochar to offset some of their CO2 emissions. It resonates well with the cruise industry's ambitions to reduce their carbon footprint, and we are a key supplier in that transition. You see some pictures of the technology. As I said in the introduction, we have really equipped this vessel from bow to stern with our advanced technology, and it's highly recognized in the industry, highly recognized. Tina, you have done a tremendous job together with your team. Please run us through the financials, and I will be back with a market update. Look forward to you.
Thank you. 2023 was a clean-up year for us. We met our guiding of above NOK 900 million in revenues. However, we continued to increase our cost prognosis in our contract portfolio during the fourth quarter. This led to a reduced gross margin in the second half, and also for the full year of 28.1%- 28.1%, sorry, from 37.8% last year. The adjustments that we have done during the second half have two main effects. One of the effects is that we are reducing recognized revenue as a result of a reduced percentage of completion for the entire lifetime of the contract. And the second effect is that we get a cost increase in the period. The margin in the remaining backlog, despite this correction, remains solid, and we have a solid backlog of above NOK 1 billion, and we have intensified our project reviews.
EBITDA before non-recurring costs came in at NOK 23.4 million negative. This is highly influenced by the corrections that we made. We have non-recurring costs of NOK 31.3 million for the year. Non-recurring costs is what we see as not related to our operations and one-offs. The majority of these was recognized during the first quarter, amounting to NOK 28 million, and this was mainly due to a balance sheet cleanup in contract accruals. We have initiated a comprehensive cost-cutting program, which we will get back to shortly, which will secure our margin and also maintain the targets that we set towards achieving an EBITDA margin of 15% towards the end of the year. We recorded a depreciation cost of NOK 52 million, up from NOK 32 million the year before.
The increase is due to that we've closed some of our development projects and started to depreciate them, and also the inclusion of our new office in Tønsberg, and starting to depreciate our new ERP System. Net financial items came in at negative NOK 41.8 million and include our share of the net result from VGM and also interest costs. Result before tax ended at negative NOK 148.7 million. Moving over to our segments. The Industrial Solutions segment represented 40% of our revenue. Maritime Solutions 41% and after-sales 19%. The after-sales segment has delivered a solid and good performance during the year, and we also expect this to continue. EBITDA for this segment came in at NOK 22 million, representing a margin of 12.5%, and we expect good development also going forward for this, as Henrik said earlier.
The two remaining segments are the places where we see the effects of the corrections that we've done during the second half. For Maritime Solutions, we have had all-time high activity level during the year, but due to the corrections that we've done in the contract portfolio, EBITDA ended at NOK 11.8 million and 3.1% mark. The backlog is solid of NOK 584 million. This also includes the contract value of Icon 3. And we also, in addition to this, have an option backlog of NOK 921 million. Industrial Solutions increased its revenues by 20%, up to NOK 364 million for 2023. However, due to the capacity buildup that we've had during the year for future growth possibilities within the segment, and also the corrections on the contract portfolio, EBITDA before non-recurring ended at negative NOK 12.5 million.
The backlog within the segment is NOK 450 million and consists mostly of our VGM Follum contract and also our Rhode Island projects and C.H. Evensen. Moving over to our balance sheet, the increase in assets is mainly related to investments in new technology. We have reduced our working capital at year-end, following a working capital release during the fourth quarter and also the deconsolidation of Ascodero. Due to the negative net result that we've had, our equity ratio has decreased to 25% at year-end, compared with 36.5% at year-end 2022. Note that we have renegotiated our loan agreement and received an amendment covenant level. We are aware that we have high leverage, and we expect this to remain high during the first half of the year, but then towards the end of 2024, we expect to be down at more normalized levels.
Our operating cash flow was neutral for 2023. This also is a result or a proof of that the corrections that we've made during the second half of the year have not had a full cash effect. In addition to this, we have also worked extremely well with our working capital and received a working capital release during the fourth quarter. Investments for the period came in at NOK 100 million. This includes the investments that we've done in R&D and also our net proceeds from the sale of Ascodero. The net proceeds amounted to NOK 20 million and was used to repay that in January. Cash flow from financing includes the refinancing that we did this summer or the summer last year, and also leasing and interest payments.
Available liquidity at year-end amounted to above NOK 100 million, which is up from around NOK 80 million during our capital market stay in November. Now over to the cost-cutting program that we have initiated during the second half to secure a controlled and profitable growth. We have, during the second half, done a complete mapping of our organization with the aim to identify the targets that we need to move towards and also extract more synergies and efficiencies in our delivery model. We have intensified our project reviews, not only to secure the margins in our projects and reducing costs by benchmarking suppliers, but also working towards our working capital to improve our own payment terms and also get an improved contract structure in the form of higher prepayments. We have two concrete examples that we want to go through.
We have the investments of Ascodero, which has led to freed up management capacity and other resources, and also a reduced cost base for the group. We have also, during the beginning of the year, done a reduction in our capacity and initiated a temporary layoff process in Scanship. Together with securing new contracts, we believe that these initiatives will lead us towards the targeted EBITDA level of 15% from 2025.
Thank you so much. Tina, thank you for a fantastic job you have done and your team in the period, as I said when I introduced you. Moving on, market's outlook and concluding remarks. I want to show you a slide that I'm very proud of. It's the order backlog and the activity in the cruise newbuilding space. We have a strong backlog. It's reassessed. We're delivering technology to 32 cruise ships from this year onwards to 2028. You know that market share is 71%. And another 15 ships are options that naturally are called upon.
We're tendering for new projects, 28 ships, and you see the gray parts. That means that we are in a very good position to grow the order book. Another point that I want to address is that 18 of these 28 ships are requesting now more advanced technologies from us. That includes the Vow pyrolysis systems, larger contracts. And doing underway three retrofit projects with Carnival. The retrofit side is also well. It's a solid foundation. It was, of course, a painful process, as I said, to reassess. We have the projects. We're working on them, and we are maintaining a very strong position in cruise. We said it before. We are relevant for new markets. We have done important investments to get there, to position the business.
If you look at our investments over the latest years, NOK 300 million in total, it's for a reason. We are positioning the business to expand and to do more environmental impact, not only in cruise but in other industry verticals. Look at this, for example. 48% is the development on the application in the metallurgic industry space. Already, we have revenues in a ratio of NOK 400 million because we did this type of investment. We are working now with new projects that you will find on the list here. You see end-of-life tires. You see PFAS on the sludge side. And other initiatives that are very important for us to proceed the opportunities we have. Again, we did it for a reason. This is the response. I talked about this slide many times. We are faced with opportunities that we have never seen before in this size.
We're working on prospects that are 10 times larger than our order backlog. This really motivates us to, in the future, grow the business profitable, and create value while we're doing environmental impact. Here, 43% of this portfolio is the metallurgic industry space. Important. ELT is a large part of it. Waste valorization, sewage sludge valorization, etc.. And we see the industries responding. We really see the industries responding. Outokumpu, we talked about. They were part of our third quarter trading update. They're really committing to replacing their fossil coking coke using biocarbon. And to demonstrate that commitment, they invested in Envigas in Sweden. Envigas in Sweden, do you know what kind of technology they are using? They're using our technology. And they are working alongside with VGM because together, we need these types of companies to help this industry decarbonize.
We have a very good position to grow within this segment. Elkem finally came along and confirmed the offtake with VGM. It also demonstrates the viability of these business cases. You saw what happens latest with VGM. They were able to raise more capital, get more funding in place in these periods. We all read newspapers. We know what we're going through. In this period, they have raised funds to move forward. Pay attention to that. We are developing very interesting projects going forward. We talked about it. End-of-life tires, we have teamed up with the third largest distributor of natural rubber to the tire manufacturers. We're teamed up with a company that collects two-thirds of all the tires coming off the roads in the UK. We're now working with them on two projects in the U.K.. It takes a longer time, but it's an important progress.
We're working closely with them. This will, I assure you, this will materialize. This is not something we recently started with. When we acquired ETIA back in 2019, we had that technology with the client already. So they have had many years now to verify technology and to demonstrate recovered carbon black for the tire manufacturers. We are really moving forward within that vertical. Another very important trend we see and the enormous challenge we have to recycle sewage sludge as an organic fertilizer, to maintain the nutrients such as phosphorus and nitrogen, and to deal with the PFAS, the forever chemical problem. We already have a feed, a client that has committed us to fully engineer a system so they can make a final investment decision on a large plant. This project alone, it's larger in size of what we're delivering as revenue last year.
So we are moving ahead. And thirdly, Cirque Energy, that was part of our third quarter update, they are progressing. I received an email this morning. They are really progressing. And we, on our side, we are helping them in their dialogue with their investors and with authorities to document our technology. So the future is very interesting for us. Pay attention to that. So let's conclude. All-time high activity. It's so high activities in 2023. And we have a long list of successful deliveries. We haven't failed on the deliveries. They're coming in at a higher cost, but we haven't failed on the deliveries. We are maintaining our position. And milestone contracts confirm that we are relevant, and that secures the basis for increased profits in the years ahead. And we have invested in technology to position the business.
A substantial investment, but it will pay off, I assure you. It will pay off. Now, Tina, as we said, we're going to focus the business and operation on profitable growth. Thank you so much.
Do we then open for questions? We have quite a few questions from our online audience. While we're waiting for them to type in more, we'll just check with the audience in the room. There's a question all the way in the back.
Thank you. Thank you for the presentation. How will you work now to rebuild trust to the market, considering, will we get more details on how long the misreporting has been? You write that margins will now normalize. What are normalized margins? I saw also in this quarter that in the Q3 report, you disclosed that this was an issue within the maritime industry. I see now that gross margins are down also in after-sales and in Industrial Solutions. Will we get more details? Will there be published a report where we can see how this actually happened? Or yeah, any comments on that will be great.
Tina Tønnessen, you can respond to some of these questions.
Yes. We also made a correction to our industrial portfolio during the fourth quarter. We have done a reassessed margin, and we have a solid margin in the remaining backlog. So it's not that we have negative projects, but the correction that we do during the period has a significant effect. But we do it to correct the margin for future periods so that we can deliver on a more stable performance going forward. We do expect, however, that the first half will be slower than the second half of next year b ut then we maintain our target of an EBITDA level of 15%.
Yeah. Just to fill in, as we said, it's a painful process when we have to do these adjustments. But again, we're delivering on our projects, and we have very interesting projects ahead of us. So of course, we have to walk our talk. We have to walk our talk going forward when it comes to getting the business back on a profitable level again. And that's the main target and main objective for the Vow team in the coming months.
Okay. We'll then turn to questions from the online audience. And the first comes from Nicolai Roland. In regards to the backlog solidity, are there contractual mechanisms in place to secure the margins? It hasn't.
Of course, the inflation we've had, we haven't been able to forward some of these costs to the customers, obviously, as we are taking that hit. What I would say is that we have been able to increase our pricing in the market going forward. And the project we signed up two weeks ago was signed up with higher prices to absorb some of the inflation we've had. So yes, in that sense, we are able to improve margins. But another important thing is that we have, of course, we are in close dialogue with our supply chain, and we're really working to mitigate and to get price levels back on time. And we also have, of course, an extensive benchmarking ongoing and value engineering throughout the organization to make sure that we are lean in execution and perform better on the margin side.
Then there are quite a few questions from Gard Aarvik. First, is the EBITDA target for 15% in 2025 driven by revenue expansion from current levels or gross margin expansion beyond historic levels?
It's a combination, I would say, Tina, really.
Yeah. It is a combination. We also need to secure new projects in addition to completing the program. So a combination of both.
Next, you state that you've been working well with working capital during Q4, reducing net working capital. What else besides finally getting paid from Vow Green Metals has been done to improve the situation? Is it better payment terms, for instance?
Well, we have increased our focus on it. And we're working really hard both on future payments. But there's no concrete thing I would like to exemplify during the period. But we are intensifying our focus on it. And it's a result of that.
I would perhaps add that leads us to the fact that in 2023, we have had a large number of supplies to the cruise industry. Some of these contracts is, of course, naturally a back-end loaded when it comes to the cash flow. As you see, the account receivable is really building up, and cash is on the way.
The next question is actually about the high number of deliveries in 2023. Gerd wonders if this means that we should expect a revenue drop in maritime in 2024 and 2025 given the lower number of ships entering service in those years.
No, we shouldn't expect that.
Are you confident with the current financial position given that working capital likely will build up with new orders that we're expecting in the industrial segment? The industrial segment is not the main segment that builds working capital.
So in that sense, we should expect more favorable terms, actually, in terms of working capital.
This is where we have our prepayments. So that's important to state.
And then the final question from Gerd. At the capital markets update, you stated that some of these projects you have highlighted in the industrial segment should turn to orders in the first half of 2024. Is this still the case?
It's still the case. Of course, we have done our part of it, making sure that we are tendering on these projects. We're working closely, supporting them in whatever they need to make their final investment decisions. Of course, the entire timeline, we couldn't control. But what we said in third quarter, we don't see the need to adjust that.
Okay. Thank you. That concludes the questions from the audience online.
I don't think there are any more questions from the conference here. Thank you.
Thank you so much. Thank you so much for the attention. We will be back.