Welcome to Vow's trading update for the first quarter 2024. This presentation will be held by Tina Tønnessen, our CFO, and myself. Tina, this really marks a little anniversary, actually. We have been listed 10 years on the Oslo Stock Exchange, and this is the 40th quarterly presentation I'm holding, and I'm enjoying holding it together with you. Moving to our first slide. To support the main statement of this quarter on Steady Course, I have some key points I would like to mention. Revenues are in line with first quarter last year, but it is actually the highest revenues we ever had within the cruise industry segment, combining Aftersales and projects within cruise. Maritime Solutions and Aftersales deliver double-digit EBITDA margins. Industrial Solutions still, I would say, still impacted by costs related to capacity buildup and some delays in the order intake.
Comprehensive cost savings are initiated, and more are underway. Also important to make note of, several R&D, business development, and improvement projects have successfully concluded, and this has strengthened Vow's market position, and it will also allow for leaner operations going forward. We will elaborate more around that in the coming slides. Another shift we see is cruise operators are renewing their fleets and preparing to place new orders at yards for ships with bigger capacity and more advanced systems. This is in our favor, and it also replaces options with lower margins that have now expired. I will also talk more about that in the coming slides. We have encouraging feedback from customers within the Circular Solutions business segment, and I would highlight three large industry projects that are nearing financial investment decisions.
We have earlier talked about this large portfolio of prospects, and the market remains unchanged for us. The potentials going forward are large, but of course, we need to sign up new contracts within that space to demonstrate the growth. Key financials: on the left side, you have the revenue and the revenue split between Maritime and Aftersales. Those are the business segments within the cruise industry. And Industrial: industrials are separated between Heat Treatment, Circular Solutions, and Food Safety. The cruise activity, but the Industrial side is lower. It's still not having the revenues to support the cost structure we have in that business segment. We're guiding, and we're saying actually, the note we're making in the first quarter is that we have a soft start when it comes to the profits, but I will say that we have a strong recovery leaving behind us 2023.
We're back with black numbers on the EBITDA level. That's good. Our backlog of orders are solid, and here we see the shift that we are experiencing within the cruise industry space, where shipowners are renewing their new building programs with new ships, and shipyards want to exit older options because those have been having a negative development with higher cost. The effect of that is that options are coming down, coming off, but this is actually good news for us, and I will elaborate more on that on coming slides. It's good news for us that these options are coming off. Looking at the business segments, 13.2% EBITDA margin within the cruise maritime side, back to double digit, 46% of the total revenues of the group. After sales, we are now approaching NOK 200 million of recurring revenues in the business, 12.3% EBITDA margin, 20% of the business.
Solutions: ongoing measures to increase efficiency, and we are awaiting future contracts. Cost will be coming off that business segment. Cost will be coming off that business segment to improve. Today, that's 34% of the revenues. That's also an area where we foresee larger growth going forward. Looking at the maritime cruise industry space, numerous options, as I said earlier, have expired, and it frees up new slots for new ship designs, larger ships that we are now tendering in Scanship. These tenders are being negotiated, indicating updated cost levels and enhanced margins. That's good for us, that we expect that the margins within the cruise industry project side will increase. Industry is transitioning towards larger ships. We announced in February our biggest contract to date within the cruise industry space, and it's because of more sophisticated clean ship systems on board.
We have, over the years, developed new technology within waste valorization, reinforcing our position in the cruise industry space as a technology leader. We will see that this is leading to significantly larger contracts going forward. Going into the details: NOK 107 million of revenues, EBITDA of 14.2%, double digit EBITDA, and the backlog is at NOK 641 million. As I said, we entered into contracts of nearly EUR 20 million in the first quarter in the cruise industry space, the biggest contracts to date for these two projects. And it contains a full system from Scanship, not only within wastewater purification, food waste processing, and conventional garbage handling, but also advanced systems for solid handling to prevent discharge overboard. That includes dewatering, thermal hydrolysis, dewatering, and pyrolysis, the most advanced systems being installed on ships today.
This is also a project that we signed up in February, and we have deliveries already this year. So the projects are speeding up that will sort of these orders that we are entering into this year will also provide revenues within the year. It's a busy year for us within the cruise industry space. We are delivering main equipment to 16 cruise ships, and we are handing over, we are doing commissioning startup and handing over of nine ships, in total 25 ships this year. You see the map here where we have the Meyer Werft both in Germany and in Finland, five ships in total. We're working with 12 ships for the Fincantieri Group that have operations in Monfalcone, Marghera, Ancona, and Sestri Ponente. We are working in France for Chantiers de l'Atlantique, in total 23 ships.
Those 23 ships are ships for Royal Caribbean. Eight of those ships are for Royal Caribbean Group. Four ships are for Viking. Viking did a very successful IPO last week, listing on the stock exchange. This is the fourth cruise operator that is now listed in New York. It was a very successful one. The biggest shareholder is Norwegian, Torstein Hagen, and he's doing fantastic. We are doing four ships with them. Norwegian Cruise Line, we are doing four ships this year. MSC, we're doing four ships. In NYK Line at Meyer Werft, we're doing one ship, and we are doing for a new shipowner, Ritz-Carlton Yacht Collection, in France, we're doing two ships. Then we are doing two retrofit projects for Carnival. So we are busy in cruise. That also reflects the revenues that are coming up.
This backlog, we have today 34 confirmed projects in our backlog of ships that will enter operations this year and onwards towards 2028. eight this year, 10 next year, etc. On top of that, we have now seven remaining options, and we are tendering for 29 new builds. Just looking at that graph, you see the potential for Scanship and Vow to grow within the new building space. The addressable market is getting bigger. Already signed project for EUR 20 million this year, and we expect to sign more. Aftersales: on an annual basis, we are now approaching NOK 200 million. We believe we will pass that number. It's a stable, steady business built on service and technology leadership. It's very important that we have a strong offering within aftersales because it gives us also new builds.
One thing is the technology leadership, but just being there, working with shipowners, it's important to be preferred on new projects that will be signed up. It's growing with the installed base. As I said, this year, nine ships will enter service, one from the retrofit side and eight from the shipyards. This is growing the backlog for us. We want to improve the margins in that business area. We're working on ways to improve the margin. We have double digits, but we will do better than 12.3% going forward. That's the ambitions. Industrial Solutions that contain Heat Treatment, that contain Food Safety, and Circular Solutions, still impacted by costs related to capacity, cost of building, I would say, market position.
We have to realize the fact that we have developed technology for more than NOK 300 million in recent years, and we are developing the business along several new industry verticals. It has come at a cost. We now have a large potential of new contracts, but of course, the timing of it is something that we cannot control. Heat treatment, by the way, is doing very good. The C.H. Evensen business unit south in Norway are performing well with good margins and a strong order intake. As I said, cost will come off in this business segment, and we have a comprehensive cost-saving program and programs for operational efficiency in being implemented. We want to bring that business area into profits as well, along with what we are already seeing now in cruise. We're faced with several large projects nearing final investment decisions, so it looks promising.
One important client for Vow, where we have been working with projects in size of around NOK 400 million, has been Vow Green Metals. Lately, they have secured financing, and this is good news for us. They have secured financing on the early production line that we have delivered to Vow Green Metals. The lease agreement gives us direct payment on that first plant, and they have also an indicative financing announced for phase one and further on phase two on the large project at Hønefoss. They initiated some weeks back the strategic process to raise capital for building more projects. All these things are very positive for the industry vertical metallurgy, where we have a strong offering of technology.
Another important project we are working on is the Rhode Island project in the U.S., one of the biggest land-based contracts to date we're working on, $27 million, where we deliver technology for biochar and renewable energy production in Rhode Island. It's progressing. Detail engineering, including process equipment, piping, and electrical, is wrapping up, as written. And major deliveries will now take place during the second half of this year, during the fall. That means more revenue will be recognized from this project. And this project will be started up early 2026. But this project signals our capability to deliver larger-scale projects, and especially in the U.S. It's a very important signal, along with these projects that we have been working on.
Not to forget, just as a reminder, we have been working with Envigas for some years, delivering technology in the metallurgic industry space that gave us the ambition to support the establishment of Vow Green Metals. We're working in Japan with sewage sludge. We're working in Sweden with NSR for green waste. We're working with Philip Morris on the decarbonization of their operations using our technology. And we have been, for some years, working with Murfitts Industries within end-of-life tires. And lately, Repsol, as a large energy company in Spain, is using our technology in their quest to convert plastic waste into olefins in the petrochemical industries. So we have been relevant for many players, and those projects are actually opening doors to new opportunities for us.
I would highlight three focused concrete opportunities that we are working on these days that have a combined contract value of potentially NOK 120 million for the first phases of these projects, first stages. One is the End-of-Life Tire together with Itochu ETEL, Murfitts. There's a project we're developing in the UK, the first factory to produce recovered carbon black from End-of-Life Tires. Our partners in the UK, where we will be the technology provider to, are the biggest collector of End-of-Life Tires in the UK. It means that more than 60% of all tires coming off the roads in the UK are handled by our partners. We're continuing to work on the FEED study for sewage sludge. This is a paid assignment. We're getting paid to make sure that we are offering a total solution to the customers. And it's a very interesting project. It's a large project.
The third one is what we announced in the third quarter, the Caribbean Carbon Refinery for Circon Energy. That will, for us, be where we are more an equipment supplier to Circon. So these three projects alone have the potential, in the short run, to give us an order intake accumulated of NOK 127 million. So we are working on things that can move the needle for us within this year, both on the order intake side and on the revenue side. With those words, Tina, could you give us some more insight to the financials?
Yes. I will be back with some concluding remarks.
So we delivered revenues for the group amounting to NOK 232 million for the first quarter, which is in line with the same period last year. The gross margin ended at 31.5%, which is up from 25.3% during last year. 2023 was highly influenced by the reassessments that we did in our project portfolio, leading to a temporarily reduced margin. We see that the margin is now back at a more stable level and also in line with the current backlog that we have. EBITDA ended at NOK 5.6 million, corresponding to a margin of 2.4%, which is up from -6% for last year. We are continuing to execute on our cost reduction program, and we aim to give you more details on this in the next presentation. And we also expect that there will be some one-off costs related to this during the second quarter of this year.
Moving over to depreciation, we do expect an increase going forward as several of our R&D and development projects are now successfully completed, and we will start to depreciate. With a depreciation cost of NOK 10.3 million for the quarter, operating profit ended at negative NOK 4.7 million. Net financial items came in at negative NOK 12.3 million, which consists of net interest payments and our share of the net profit from our associated company, Vow Green Metals. Result before tax ended at negative NOK 17 million. Moving over to the balance sheet, we see an increase in intangible assets and goodwill related to the investments that we've done during the quarter and also currency effects. We experience a buildup of net working capital during the quarter.
We are focusing on working capital for the group and continuously monitoring it, but we will experience fluctuations also going forward due to milestone payments in our contracts, and also that we will experience timing effects from quarter to quarter related to this. Our leverage is still high, and we expect it to remain high for some time, but we do aim for a more normalized leverage level from year-end and going into 2025. Equity ratio came in at 26.1% at the end of the quarter, which is slightly up from year-end due to a neutral total comprehensive income and a reduction of the total balance sheet. As of Q1, we were in compliance with our bank covenants. Our operating cash flow came in at negative NOK 8.8 million, mainly driven by the buildup in working capital.
Our investments amounted to negative NOK 11.2 million and have come down compared to historic levels, and we expect it also to come down going forward compared to previously. Net cash flow from financing activities amounted to negative NOK 19.2 million and consisted of debt repayment, interest, and leasing. Our total net cash flow for the period amounted to negative NOK 19 million, and we are proactively managing our liquidity situation. Our available liquidity, being cash on balance sheet and on-run credit lines, as of the end of the quarter, amounted to NOK 44 million. Note also, as we said earlier, that we are expecting a payment from VGM during the second quarter in excess of NOK 40 million. As we have been communicating earlier, we are executing on a comprehensive cost improvement program to improve our financial performance. This is a combination of both improving our cost and securing new contracts.
When it comes to cost savings and cash discipline, we are improving our margins in our existing contracts. We have, during the fall and also continue to do that going forward, increased our project reviews, both with focus on margins, but also to improve our payment terms with our suppliers and customers and reducing working capital. In addition to this, we are also executing on a comprehensive cost reduction program to reduce the operating expenses in the group. In the Q4 presentation, we announced that we have introduced temporary layoffs in Scanship. This has an effect or had an effect from March this year and will continue to give an effect for some time. In addition to this, we are also working on other initiatives that we will give you more information on in the next presentation.
As we also have proven during Q1, is that we have a disciplined approach towards investment. We expect this to come down as we have successfully concluded several of our projects, and we're also reallocating resources towards project execution. Along with these initiatives and also securing new contracts, we aim towards an EBITDA margin of 15% from 2025. We have a solid remaining order book above NOK 1 billion, and we are also actively supporting and bidding for contracts with an amount of up to EUR 200 million. Our goal and our target is to secure these contracts.
Thank you, Tina. We can have a last slide to conclude. Concluding our part on a steady course. Stable revenues, double-digit EBITDA in two of three business segments, further cost saving underway. And we're, as you said, Tina, improving our financial performance by a combination of securing new contracts. That's important for sure, improved margins, and increased efficiency. Cruise operators are renewing their fleets, ordering new and bigger ships, and asking for more advanced systems and solutions for Scanship. And these days, we are actively supporting and bidding for projects with around EUR 200 million in the shorter run of potential order intake for the business. And looking at our backlog of orders, looking at the orders that we expect to sign, and looking at the cost-saving measures we are working on, we believe that we can reach an EBITDA of around 15% next year.
It's an ambitious target, but taking these three things into consideration, we expect to be going in that direction. With this, we conclude our presentation, and we will open up for some Q&As. Okay, we have some questions from the online audience, but maybe we should start here in the room if there are any questions. Apparently not. Then we'll go straight to our online audience. Anders Rosenlund has three questions, actually. He says, "Do I understand you correctly on the following? You aim to deliver 15% EBITDA margin before unallocated costs. Second, the NOK 100 million of annualized development spend will continue. And third, revenues will grow year on year in the coming years." So maybe I should repeat the first question. You aim to deliver 15% EBITDA margin before unallocated cost. Yeah, we have elaborated on that for next year.
We are executing on the cost program that we have communicated now, and we expect this to deliver an increasing margin going forward. We will have some one-off costs related to this this year, but from 2025 and onwards, that is our goal, yes.
The annual capitalized development spend will continue around the NOK 100 million level?
No, as we said, we are slowing down our investment level. We do expect a lower investment going forward.
Revenues going forward?
Revenues going forward. We are working with growth. We had significant growth last year, and we are working to continue that pattern. But of course, now with much more focus on cash flow and profits.
There is a question from Eric Bublat. "What has happened to the allegations of incorrect numbers since 2019? It is difficult to understand that resulting massive price drop is enough with a simple justification from Vow, especially since there was no real price recovery afterwards. Can you comment on this?
Yes. Well, our opinion is that the numbers are correct. We have been through audit each year, and we have no reason to believe that it's not correct. We experienced a reassessment during 2023 leading to a temporarily reduced margin. We are now recovering. So that's what I would like to comment on that.
That concludes the questions from the audience. Thank you so much.
Thank you. Thank you so much.