Akastor ASA (FRA:KY7) Q1 2025 Earnings Call Highlights: Strategic Moves and Financial Stability ...

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Thu, May 1, 2025, 12:10 AM 4 min read

HMH EBITDA: USD 33 million, flat year-over-year.
HMH Free Cash Flow: USD 15 million.
Order Intake: USD 198 million, book-to-bill ratio of 1.
Book Value of HMH: NOK 3.4 billion, or NOK 12.4 per Akastor share.
AKOFS Offshore Ownership: Increased to 66.7% after buyout and partial sale.
AKOFS Santos Contract: Nominated for a four-year MPSV contract with Petrobras starting July 2026.
AKOFS Seafarer Refinancing: USD 110 million facility maturing December 2028.
DDW Offshore Sale: Agreement to sell Skandi Peregrino for USD 25 million.
Total Book Equity Value: NOK 20.2 per share.
Revenue: USD 198 million, up 3% year-on-year.
Adjusted EBITDA: USD 33 million, down 2% year-on-year.
Adjusted EBITDA Margin: 16.5% for the quarter.
Unlevered Free Cash Flow: USD 15 million.
Cash and Cash Equivalents: USD 47 million at quarter-end.
Net Debt: USD 153 million.
Aftermarket Services Revenue: USD 84 million, down 10% year-on-year.
Spare Parts Revenue: USD 60 million, flat year-on-year.
Projects, Products & Other Revenue: USD 55 million, up 34% year-on-year.
Net Cash Position: NOK 19 million at the end of the period.
Consolidated Revenue: NOK 76 million.
Consolidated EBITDA: NOK 3 million.
Net Financial Items: Negative NOK 154 million.
Share of Net Profit from Equity Investments: Negative NOK 31 million.

Warning! GuruFocus has detected 4 Warning Signs with FRA:KY7.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

HMH reported an EBITDA of USD 33 million, consistent with the previous year, and a free cash flow of USD 15 million.
AKOFS Santos was nominated for a four-year MPSV contract with Petrobras, indicating potential future revenue.
The refinancing of the AKOFS Seafarer vessel was completed with a non-recourse USD 110 million facility, improving liquidity.
DDW Offshore entered into an agreement to sell Skandi Peregrino for USD 25 million, with plans to distribute a significant portion of the proceeds as dividends.
Akastor ASA maintains a positive net cash position with no corporate debt, providing financial stability and flexibility.

Negative Points

Currency effects led to a decrease in the book value of Akastor's shareholding in HMH.
The trade tariff environment could potentially impact EBITDA by 3% to 6%, although mitigation strategies are in place.
AKOFS Offshore's net losses are expected to continue, reducing its book value.
Skandi Peregrino recorded 0% utilization due to technical issues, delaying contract commencement.
The macroeconomic environment, including potential recessionary data and oil price volatility, poses risks to future performance.

Q & A Highlights

Q: How do you view potential shareholder distributions going forward, and has this changed in light of the recent market disturbance? A: Karl Kjelstad, CEO of Akastor ASA, stated that they remain in a strong position with no corporate-level debt and a net cash position. Following the expected closing of the Skandi Peregrino sale in Q2, they plan to distribute a significant portion of the net proceeds as a dividend. This will be Akastor's first-ever distribution to shareholders, aligning with their strategy to return value from realizations.

Q: Could you elaborate on the impact of the tariff environment on HMH, both in terms of direct cost effects and potential revenue implications? A: Tom McGee, CFO of HMH, explained that the tariff impact could have been a 3% to 6% hit to EBITDA if in place last year. However, they are mitigating this through supply chain optimization. The legacy ESS product lines are largely shielded, while PCS product lines are more affected. The main concern is secondary effects, such as customers delaying spending due to uncertainty.

Q: Given the current muted offshore drilling outlook, can you provide more color on the potential going forward, particularly regarding the fleet of rigs equipped with your system? A: Tom McGee, CFO of HMH, indicated that despite the challenging environment, the outlook for drilling contractors has improved. The resilience of the offshore base and ongoing contract negotiations suggest continued positive developments in the sector.

Q: Is the timeline for the HMH listing affected by current macroeconomic conditions? A: Oyvind Paaske, CFO of Akastor ASA, noted that it is difficult to comment on the timeline due to legal and market uncertainties. The timing of a potential public offering remains subject to various factors.

Q: Will there be a specific dividend from the Awilco Drilling dividend proceeds? A: Oyvind Paaske, CFO of Akastor ASA, mentioned that the proceeds from the Awilco Drilling dividend are relatively small, so there are no plans for a specific dividend. However, it adds to their cash buffer and potential for future distributions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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