Nekkar ASA: third quarter 2021 interim financial results

24 November 2022 – Continued high tendering activity resulted in a third quarter 2022 order intake of NOK 117 million, an increase of almost 70 percent from the same period last year (Q3 2021: 69) and the highest quarterly intake since 2020 for Nekkar ASA (Nekkar). Solid operational performance resulted in an operational EBITDA margin of 27.1 percent (30.9%) from revenue of NOK 79 million in this year’s third quarter (Q3 2021: NOK 128 million).

“Our operational performance was solid, which is reflected in the high EBITDA margin. Revenue in the quarter was lower than expected due to previously mentioned client-side delays. The healthy order intake underlines a buoyant market for our shipyard solutions,” says Ole Falk Hansen, CEO of Nekkar.

Order intake in the second quarter was NOK 117 million (69), which is the highest level since 2020. The order intake includes sale of upgrades, newbuilds and spares. It reflects high tendering activity, partly driven by increased defence budgets. Nekkar’s order backlog stood at a healthy NOK 894 million (948) as of 30 September 2022.

“Our order backlog provides excellent visibility for the coming years for our Shipyard Solutions business area. Further, we continue to experience high tendering activity in this segment,” adds Ole Falk Hansen.

Nekkar reported revenue of NOK 79 million (128) in the third quarter 2022. The company’s operational EBITDA was NOK 21 million (39), equivalent to an operational EBITDA-margin of 27.1 percent (30.9%). Operational EBITDA excludes losses/gains on foreign exchange contracts not qualifying for hedge accounting. Reported EBITDA was NOK 5 million (37), equivalent to a margin of 6 percent (28.6%). EBIT ended at NOK 3 million (36). Both reported EBITDA and EBIT were significantly impacted by currency fluctuations between USD and NOK.

IMPACT TECHNOLOGIES

Nekkar is currently developing sustainable and digitalised impact technologies that aim to unlock customer value in ocean-based industries. These technologies include the InteliWell rig automation solution, SkyWalker wind turbine installation tool, and Starfish closed fish cage.

In the third quarter, global communication company Viasat Inc. announced that it has agreed to join the InteliWell joint venture (JV) together with Transocean Ltd. and Intellilift AS, a subsidiary of Nekkar ASA. The JV has been established with the object to accelerate the decrease of drilling time through rig automation, and to streamline well construction process through new AI-driven processes and tools.

The InteliWell JV has recently conducted successful testing of its automation software on board an ultra-deepwater drilling rig. This enables rig operators to drill faster and more consistently. Negotiations for the first commercial contract is still ongoing.

Subsequent to the quarter, Nekkar has announced that leading international wind turbine installation player BMS Group has entered into an innovation agreement for the development and testing of the SkyWalker wind turbine installation tool. Several of the large international wind turbine manufacturers utilise BMS Group as their favoured wind turbine installation partner.

During the third quarter, Nekkar has completed design improvements to further enhance the go-to-market product of the Starfish closed fish cage. Development of the full-scale Starfish continues as planned.

“The proposed resource rent tax on aquaculture activities has postponed decisions related to the location of the first full-scale Starfish installation. However, we will progress as planned to ensure that we do not lose valuable time and are prepared to install Starfish as soon as the fish farming companies are ready to proceed,” says Ole Falk Hansen.

Soft funding remains a key part of Nekkar’s development strategy for its impact technology projects. During the third quarter, Nekkar received a total of NOK 5.5 million in funding for its impact technologies. So far in the fourth quarter, Nekkar has received an additional NOK 6.5 million in soft funding.

You can find the presentation here.

Nekkar ASA will hold a live webcast presentation today at 08:00 CET. The webcast presentation can be followed from this URL: https://channel.royalcast.com/landingpage/hegnarmedia/20221124_1/