Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ElectroMagnetic GeoServices ASA (FRA:E2M) reported a revenue increase to $10 million for the first quarter, indicating growth from the previous quarter.
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The company successfully completed the first proprietary contract in India and commenced mobilization for a second project, showcasing operational progress.
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The acquisition of the offshore subsea construction vessel, CMD, marks a strategic expansion into the subsea construction market, potentially diversifying revenue streams.
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The extension of the convertible bond loan until November 2030 provides financial stability and flexibility for future operations.
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The demand for subsea tree installations is expected to increase significantly, which could benefit the company's new subsea business segment.
Negative Points
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Free cash decreased by $3.1 million in the first quarter, reducing the cash position to $6 million.
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Operational costs increased to $8 million in the first quarter, up from $4.7 million in the previous quarter, impacting profitability.
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The vessel utilization rate was only 37% during the quarter, indicating underutilization of resources.
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The company faces uncertainty in securing projects in West Africa, with potential delays due to permit requirements.
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The acquisition of the CMD vessel involves significant financial commitments, including a $109 million purchase price and a $42,000 daily bareboat charter rate, which could strain financial resources.
Q & A Highlights
Q: Can you provide more details on the new business platform and the acquisition of the offshore subsea construction vessel, CMD? A: Bjrn Petter Lindhom, Analyst: We are establishing a new business platform alongside our existing EM business through the acquisition of the offshore subsea construction vessel, CMD, for $109 million. The CMD is a DP2 vessel with a 250-ton crane, financed through a five-year bareboat charter to minimize upfront costs. The vessel is currently on contract until the end of 2025, and we plan to offer it on a project-by-project basis in 2026 and 2027.
Q: What are the financial highlights for the first quarter of 2025? A: Anders Eimstad, Interim CFO: The total revenue for the first quarter was $10 million, with an EBITDA of $2.7 million and an adjusted EBITDA of $2 million. The net profit was $0.6 million, and free cash at the end of the quarter was $6 million. The operational cost base was $8 million, with a significant portion related to transit costs to India.