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Argeo AS
Quarterly Report • Nov 21, 2024
3540_rns_2024-11-21_9b5aed3b-84e9-4033-be45-21ac21d163d2.pdf
Quarterly Report
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Q3 Report
2024
Contents
| CEO Letter | 3 |
|---|---|
| Financial Highlights | 4 |
| Main events Q3 2024 | 5 |
| A complete subsea provider | 6 |
| Our verticals | 7 |
| Market Report | 8 |
| Q3 2024 Financials | 9 |
| Notes | 13 |
| Argeo Fleet & Assets | 17 |
| Argeo Technology | 18 |
| ESG | 20 |
| Contact | 23 |
I am pleased to present our third quarter results for 2024 proving continuous growth quarter over quarter and YoY increase:
We deliver a quarter showing improvement in all key financials from our second quarter report resulting from good utilization of all vessels and assets and efficient project execution.
Argeo Venture has delivered good performance in the quarter on the TotalEnergies Venus project and completed the first AUV part of the program ahead of time. The vessel has since undergone a planned reconfiguration rigging to deliver deep-water geotechnical work as the final project delivery.
The Hugin 6000 containerized system was mobilized onto the chartered vessel Ocean Guardian for RWE Canopy project offshore California and Argeo Searcher starting up for Woodside on the Calypso project in Trinidad & Tobago meaning we had three operational vessel spreads working across two continents and serving three major clients in both the O&G and the Renewables sector. Both Ocean Guardian and Argeo Searcher operations was completed on time and on budget.
Backlog
Total firm backlog 2024 currently stands at USD 71 million, not including Suriname Multiclient project, which will be reported separately in quarters to follow. Produced revenues from this backlog YTD was USD 48 million (Q3'24 USD 23 million), remaining reported backlog currently stand at USD 23 million.
Health, Safety, Environment & Quality
YTD-2024 we have completed significant operational and organisational growth both onshore and offshore. The entire team has shown dedication and focus, reaching, and in some areas, exceeding our corporate HSEQ KPI targets. Achieving a Total Recordable Incident Frequency (TRIF) under 0.6 with zero LTIs over 775,000 exposure hours underscores our solid commitment to safety. This performance highlights our dedication to maintaining a safe working environment.
Innovation & Technology
We have continued to strengthen our intellectual property protection, and we have in total been granted seven patents. Our digital platform "Argeo SCOPE" has been significantly upgraded with new features, and it plays a key role as a global commercial business to business (B2B) digital sales and product platform to the industry. Argeo SCOPE plays a key role in our quality control and data review processes offshore and onshore.
Both vessels now have geotechnical capabilities and Argeo Venture is already in full deep-water geotechnical operation. The Hugin fleet continues to perform well with good performance numbers and production rates.
CEO LETTER
CEO LETTER
Key Q3 2024 financial highlights include:
All amounts in USD million (Q3 2023 in brackets)
- Revenue: 23.0 (336% increase from 5.3 in Q3 2023)
- EBITDA: 5.4 (improvement of 7 from -1.6 in Q3 2023)
- EBIT: 2.7 (improvement of 5.5 from -2.8 in Q3 2023)
- Net profit: 0.5 (improvement of 4 from –3.5 in Q3 2023)
-
Remaining Backlog: USD 23 million
(Note: Figures are in accordance with IFRS accounting principles.)
Trond E. Figenschou Crantz CEO
Financial Highlights REVENUE
USD 23.0 million (5.3 million)
REVENUE PAST YEAR
Financial highlights (Q3 2023 in brackets)
EBIT USD 2.7 million (-2.8 million)
REMAINING BACKLOG USD 23 million (45 million)
EBITDA USD 5.4 million (-1.6 million)
NET PROFIT USD 0.5 million (-3.4 million)
Main Events Main events Q3 2024
- Completed RWE project
- Completed Woodside project
- Completed AUV-scope in Namibia
Subsequent events Q3 2024
- Argeo enters 8-year Multi Client agreement with National Energy Company Staatsolie in Suriname
- Argeo announces a \$13M deal in strategic equipment optimization
- Argeo Successfully Uplisted to Euronext Oslo Stock Exchange
A complete subsea service provider
from acquisition to actionable data
Argeo is a complete subsea service provider operating in three major verticals, oil & gas, marine minerals, and the renewables sector. We offer a unique package combining robust vessels, superior AUV's, advanced sensors and digital imaging technology and an intuitive digital platform that collects complex data and brings this to life. With our own vessels and superior AUV's we are fast, flexible and in a unique position to offer full lifecycle services. Our services include survey, inspection, maintenance, and repair, increasing efficiency and reducing carbon footprint for our customers.
Vessels ROBUST AND MODERN
Final product TURNKEY
Sensor systems UNIQUE PATENTED
Bringing complex data to life
in three key verticals
Argeo conducts ocean surveys & inspections using autonomous robotic solutions for three key markets, Oil & Gas, Marine Minerals and Renewables Oil & Gas
Argeo provides comprehensive services for the oil and gas industries, specializing in Inspection, Maintenance, Repair, and Survey (IRMS).
Our offerings include greenfield development, route survey connections with the installation of Floating Production Storage and Offloading units (FPSOs), and the inspection of existing pipelines, power cables, and subsea infrastructure. We conduct detailed subsea inspection programs and handle general maintenance activities. Additionally, we offer seismic support operations for Ocean Bottom Node (OBN) in collaboration with Shearwater Geo.
More cost-efficient survey and inspection giving our clients
• Faster inspections
- Faster project turnaround
- Lower CO2 footprint
- Safer operations with lower HSE risk
Easy access to actionable data
- Rapid decision ready data to clients during mission and project lifecycle
- Intuitive visualizations of complex data
Marine Minerals
Argeo work with marine minerals companies and geological institutions to conduct exploration surveys for new licenses and resource estimation. They also perform environmental assessments before and after exploration and extraction activities.
Renewables
Argeo provides advanced survey and inspection services to the offshore wind industry using cutting-edge technology.
Our offerings include pre-installation and route surveys (IRMS), cable burial inspection, and underwater data collection for new areas. Argeo supports wind farm construction, infrastructure inspections, and offers multi-client services for greenfield acreage. These solutions ensure efficient and safe installation of wind turbines, promoting sustainable ocean wind energy.
Market report
Market report
Strong strategic position across key verticals and geographic regions
Argeo continues to reinforce its strategic position within our primary verticals, capitalizing on a flexible asset deployment strategy that maximizes vessel spread utilization and asset productivity across industries. This approach has been instrumental in driving consistent engagement with tier 1 clients and capturing valuable market share in our core sectors.
In Q3, Oil & Gas has been the dominant sector, generating 64% of our revenue and underscoring the enduring demand for our services in this area. Marine Minerals has shown steady traction, contributing 19% to our revenue as we deepen our role in this rapidly emerging market. Additionally, Renewables accounted for 14% of revenues, reflecting our growing footprint in offshore wind. The remaining 3% came from rentals and other activities, demonstrating a diversified revenue stream across verticals.
Our operations this quarter comprised 80% survey work, with the remaining 20% focused on exploration within the Marine Minerals sector. This balanced portfolio of activities highlights our capacity to meet client needs across the project lifecycle, from discovery to detailed survey and analysis
Geographically, our revenue distribution showcases a solid footprint in key markets. EMEA led with 56% of revenues, underscoring our established position in this region. The NSA region contributed 24%, indicating expanding traction in the Americas, while APAC accounted for the remaining 19%, as we continue to grow our presence in this dynamic market.
Q3 2024 FINANCIALS
Revenue
Revenue for Q3 2024 was USD 23.0 million, compared to USD 5.3 million in Q3 2023. Revenue in Q3 2024 is mainly from the contracts with TotalEnergies in Namibia, RWE in California and Woodside in Trinidad and Tobago.
Cost
Cost of sales in Q3 2024 was USD 16.2 million, compared to USD 6.4 million in Q3 2023. Main reason for the increase is having three vessels in activity in Q3 2024 compared to one in the previous quarter, combined with higher operating cost in the area of operation.
Selling, general and administrative expenses increased from USD 0.5 million in Q3 2023 to USD 1.4 million in Q3 2024. The increase is reflecting a buildup of the organization to handle more activity with three vessels in operation in Q3 2024.
EBITDA
EBTIDA was USD 5.4 million in Q3 2024, compared to minus USD 1.6 million in Q3 2023.
Depreciation and amortisation
Depreciation and amortisation increased from USD 1.2 million in Q3 2023 to USD 2.7 million in Q3 2024. The increase in Q3 2024 is due to depreciation on the new assets Argeo Venture and two Hugin Superior AUV's. There is also an increase due to depreciation on the IFRS 16 Right-of-use assets bareboat charter of Argeo Searcher and office leases.
Financial items
Net financial loss in Q3 2024 was USD 2.2 million and includes currency exchange loss amounting to USD 0.5 million. Net financial loss in Q3 2023 was USD 0.6 million.
Net Profit/ Loss
Net profit for Q3 2024 was USD 0.5 million compared to a net loss of USD 3.5
million in Q3 2023.
Balance Sheet
Total non-current assets at the end of the period were USD 75.3 million. Of this, Right-of-use assets amounted to USD 27.2 million consisting of the bareboat charter Argeo Searcher, two Hugin Superior leases and office leases. Property, plant and equipment was USD 43.1 million in the end of the quarter, and is mainly one Hugin 6000 AUV, the Argus USV, the vessel Argeo Venture and lease additions to Argeo Searcher. The two SeaRaptor AUV's were sold in the quarter.
Cash and cash equivalents balance was USD 5.5 million at the end of the quarter, compared to USD 5.3 million at year end 2023.
Total liabilities at the end of the quarter were USD 54.9 million, compared to USD 36.6 million at the end of 2023. The increase is mainly due to new lease for a Hugin Superior, and a new loan for Argeo Venture.
Shares1
In April 2024, Argeo concluded its subsequent offering of 11,000,000 new shares at NOK 2.75 per share, raising gross proceeds of NOK 30,250,000.
In June 2024, Argeo did a consolidation (reverse split) of the Company's shares in the ratio 5:1. The new share capital of the Company after the reverse share split is NOK 22,208,174.50 divided into 44,416,349 shares, each with a nominal value of NOK 0.50.
As per 30 September 2024, a total of 1 526 054 options are outstanding in connection with the Company's share option program. 29 000 have vested and has a strike price of NOK 41. 1 487 000 options have a strike of NOK 16. The remaining 10 000 options are formalised as warrants ("Tranche 1 Warrants"). Exercise price for these is NOK 4.15, and all have vested.
In connection with the private placement in April 2021, the Company's general meeting approved the issuance of 750,000 new warrants to the existing shareholders of the Company before the private placement ("Tranche 2 Warrants"). 375 000 of these warrants expired in April 2023, and 258 103 was replaced with share options granted 23 January 2024. The remaining 116 897 Tranche 2 Warrants can be exercised at NOK 0.50 given a demonstrated share market price appreciation of three times the Subscription Price within a period of 4 years. The Subscription Price in the private placement in April 2021 was NOK 41 per share.
Financial statements
1 Historical numbers are adjusted for the reverse share split made in June 2024
Consolidated interim statement of comprehensive income Consolidated interim statement of financial position
Peter A. Hooper Board member
Lars Petter Utseth
Board member
Board member Nina Bjærum Inger Berg Ørstavik Board member
Trond F. Crantz CEO
Hugo Lima Santos Employee representative
Liam Flood Employee representative
Consolidated interim statement of compre-
hensive income
| Intangible assets 6 4,657 3,790 - - Revenues 22,993 5,269 48,124 9,085 17,724 9,467 15,664 25,131 2,438 1,379 3,816 4 Right-of-use assets 27,156 18,456 17,724 9,467 15,664 - - Total revenues 22,993 5,269 48,124 9,085 25,131 2,438 1,379 3,816 Property, plant and equipment 5 43,148 36,250 Cost of sales 16,229 6,402 31,745 11,476 9,827 -5,328 -10,188 - - -15,517 -2,691 -2,383 -5,074 Multi-client inventory 343 699 7,898 4,139 5,475 - - Gross profit 6,764 -1,134 16,379 -2,391 9,615 -253 -1,004 -1,257 Investment in joint venture - 152 - - Selling, general and administrative expenses 1,364 486 3,852 1,724 878 -1,230 -1,258 -2,488 -668 -570 -1,238 Total non-current assets 75,304 59,347 - - Depreciation and amortisation 2,664 1,200 7,045 3,135 1,464 -1,801 -2,579 -4,380 -801 -1,134 -1,935 5,6 Trade receivables 4,095 219 Other receivables 10,307 4,071 - - -6,868 -1,469 -1,704 -3,172 Total operating expenses 4,028 1,686 10,896 4,859 2,342 -3,031 -3,837 Cash and cash equivalents 5,457 5,340 - - Operating profit (loss)/EBIT 2,736 -2,820 5,482 -7,250 5,556 1,108 1,638 2,746 -1,722 -2,708 -4,430 Contract assets 605 552 - - Share of results from joint venture - -21 -66 -61 21 -18 -47 -66 -18 -21 -40 Other current assets 2,139 2,073 - - Finance income 7 10 25 22 -3 4 14 18 8 4 12 Total current assets 22,603 12,254 - - Finance expense 1,737 378 4,683 1,122 1,359 -1,144 -1,802 -2,946 -401 -343 -744 7 Total assets 97,907 71,601 - - Net exchange gains/(losses) -517 -256 805 940 -261 2,036 -714 1,322 785 411 1,196 All amounts in USD 1,000 - Note - Net financial items -2,247 -645 -3,919 -221 -1,602 878 -2,550 -1,672 374 50 424 Share capital 9 2,163 1,890 - - Profit/(loss) before tax 489 -3,465 1,563 -7,470 3,954 1,986 -911 1,074 -1,348 -2,658 -4,006 Share premium 68,992 62,204 - - Income tax expense - 0 -2 77 -0 2 0 2 -97 19 -77 Other capital reserves 2,280 1,734 - - Net profit/(loss) for the period 489 -3,465 1,565 -7,548 3,954 1,987 -911 1,076 -1,445 -2,638 -4,083 Other equity -30,432 -30,818 - - - Total equity 43,003 35,010 - - - Other comprehensive income Non-current interest-bearing liabilities 7 12,848 4,940 Items which may subsequently be reclassified to profit or loss: - - - Non-current lease liabilities 17,871 13,112 Non-current provisions 1 2 - - Exchange differences on translation of foreign operations 502 209 -1,179 -996 292 -2,368 687 -1,681 -872 -333 -1,205 Total non-current liabilities 30,720 18,053 - - 292 -2,368 687 Other comprehensive income for the period 502 209 -1,179 -996 -1,681 -872 -333 -1,205 Current interest-bearing liabilities 7 2,633 2,394 - - 4,246 -381 -224 Total comprehensive income for the period 991 -3,256 386 -8,544 -605 -2,317 -2,972 -5,289 Trade payables 10,680 6,456 Current lease liabilities 7,560 4,751 Earnings per share Current provisions 1,163 432 Basic EPS - profit or loss attributable to equity holders (USD) 0.01 -0.19 0.04 -0.37 Contract liabilities - 2,225 11 Other current liabilities 2,148 2,280 Diluted EPS - profit or loss attributable to equity holders (USD) 0.01 -0.19 0.04 -0.37 11 Total current liabilities 24,185 18,537 Total liabilities 54,905 36,590 Net profit/(loss) for the year attributable to: Total equity and liabilities 97,907 71,601 Equity holders of the parent company 489 -3,465 1,565 -7,548 Total comprehensive income attributable to: |
All amounts in USD 1,000 | Note | Q3 2024 | Q3 2023 | YTD Q3 2024 | YTD Q3 2023 Q3 24 vs Q3 23 | All amounts in USD 1,000 Q1-2024 Q2-2024 YTD Q2 |
Control Note |
30/09/24 Q1-2023 Q2-2023 YTD Q2 |
Control 31/12/23 |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity holders of the parent company | 991 | -3,256 | 386 | -8,544 | Oslo, 21 November 2024 |
Consolidated interim statement of financial position
Jan P. Grimnes Chair of the Board
Consolidated interim statement of changes in equity Consolidated interim statement of cash flows Consolidated interim statement of chang-
es in equity
| All amounts in USD 1,000 | Paid-in equity | Other equity | ||||
|---|---|---|---|---|---|---|
| Share capital |
Share premium |
Other capital reserves |
Cumulative translation differences |
Retained earnings |
Total equity | |
| Equity 01/01/2023 | 565 | 27,356 | 1,640 | -2,191 | -12,766 | 14,604 |
| Net profit or loss for the period | - | - | - | - | -7,548 | -7,548 |
| Other comprehensive income | - | - | - | -996 | - | -996 |
| Total comprehensive income for the period | - | - | - | -996 | -7,548 | -8,544 |
| Issue of share capital (Note 9) | 203 | 8,251 | - | - | - | 8,454 |
| Registration of shares from December 2022 | 213 | -213 | - | - | - | - |
| Share-based payment (Note 10) | - | - | 93 | - | - | 93 |
| Equity 30/09/2023 | 982 | 35,393 | 1,733 | -3,187 | -20,314 | 14,608 |
| Paid-in equity | Other equity | |||||
|---|---|---|---|---|---|---|
| Share capital |
Share premium |
Other capital reserves |
Cumulative translation differences |
Retained earnings |
Total equity | |
| Equity 01/01/2024 | 1,890 | 62,204 | 1,734 | -1,117 | -29,701 | 35,010 |
| Net profit or loss for the period | - | - | - | - | 1,565 | 1,565 |
| Other comprehensive income | - | - | - | -1,179 | - | -1,179 |
| Total comprehensive income for the period | - | - | - | -1,179 | 1,565 | 386 |
| Issue of share capital (Note 9) | 273 | 6,788 | - | - | - | 7,061 |
| Share-based payments (Note 10) | - | - | 546 | - | - | 546 |
| Equity 30/09/2024 | 2,163 | 68,992 | 2,280 | -2,296 | -28,136 | 43,003 |
Consolidated interim statement of cash flows
| All amounts in USD 1,000 | Note | Q3 2024 | Q3 2023 YTD Q3 2024 | |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Profit/loss before tax | 489 | -3,465 | 1,563 | |
| Adjustments to reconcile loss before tax to net cash flow | ||||
| Net financial items | 2,247 | 645 | 3,919 | |
| Depreciation, amortisation, and impairment | 2,664 | 1,200 | 7,045 | |
| Share-based payment expense | 246 | 8 | 546 | |
| Loss on sale of equipment | 82 | - | 82 | |
| Working capital adjustments | ||||
| Changes in trade and other receivables | 5,822 | 1,127 | -7,490 | |
| Changes in contract assets and other current assets | 1,209 | -484 | -120 | |
| Changes in trade payables | -3,267 | 747 | 4,224 | |
| Changes in provisions | 295 | 163 | 730 | |
| Changes in contract liabilities and other current liabilities | -1,776 | 315 | -2,356 | |
| Net cash flows from operating activities | 8,012 | 257 | 8,143 | |
| Cash flow from investing activities | ||||
| Purchase of property, plant and equipment | -1,745 0 |
-390 - |
-17,227 -122 |
|
| Investment in joint venture | 876 | - | 876 | |
| Proceeds from disposals of property, plant, and equipment | ||||
| Investment in Multi-client | - | - | 292 | |
| Development expenditures | -440 4 |
-328 3 |
-1,043 24 |
|
| Interest received Net cash flows from investing activities |
-1,305 | -714 | -17,201 | |
| Cash flow from financing activities | ||||
| Proceeds from issuance of equity | -0 | 624 | 7,061 | |
| Repayments of long term debt | -853 | -556 | -2,606 | |
| Proceeds from long term debt | - | 4 | 14,000 | |
| Payments for principal for the lease liability | -1,161 | -86 | -4,644 | |
| Payments for interest for the lease liability | -848 | -115 | -2,437 | |
| Interest paid | -808 | -65 | -1,843 | |
| Net cash flows from financing activities | -3,670 | -194 | 9,530 | |
| Net change in cash and cash equivalents | 3,036 | -650 | 473 | |
| Cash and cash equivalents at beginning of the period | 2,701 | 1,147 | 5,340 | |
| Net foreign exchange difference | -280 | -384 | -355 | |
| Cash and cash equivalents at the end of the period | 5,457 | 114 | 5,457 |
Note 1 General information
Argeo ASA ("the Company") is open for trading on Oslo Børs, with the ticker symbol ARGEO. The Company is incorporated and domiciled in Norway with principal offices located at Nye Vakås vei 14, 1395 Hvalstad, Norway.
Argeo ASA and its subsidiaries (collectively "the Group" or "Argeo") offers services and technical solutions to the surveying and inspection industry.
The interim consolidated financial statements of the Group for the nine months ended 30 September 2024 were authorised for issue in accordance with a resolution of the Board of Directors on 21 November 2024.
Note 2 Basis of preparation and significant accounting policies
The interim consolidated financial statements of the Group comprise consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and selected explanatory notes.
The interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by The European Union ("EU"). The interim consolidated financial statements are unaudited.
The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with Argeo's 2023 consolidated financial statements, which is available at www.argeo.no. The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those applied in the preparation of the Group's consolidated annual financial statements for the year ended 31 December 2023.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
The interim consolidated financial statements have been prepared on a historical cost basis. All figures are presented in United States dollar ("USD") thousands (USD 1,000), except when otherwise stated.
Further, the interim consolidated financial statements are prepared on a going concern assumption.
Presentation and functional currency
Argeo ASA has Norwegian krone (NOK) as its functional currency and its subsidiaries have NOK, USD, GBP or Brazilian real (BRL) as their functional currencies. The Group presents it's interim consolidated financial statements in USD to provide the primary users of the financial statements with more convenient information.
Note 3 Significant accounting judgements, estimates and assumptions
The preparation of the interim consolidated financial statements in accordance with IAS 34 and applying the chosen accounting policies requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis.
The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.
In preparing the interim consolidated financial statements, the significant judgments, estimates and assumptions made by management in applying the Group's accounting policies and the key source of estimation uncertainty were the same as those applied to the Group's annual financial statements for the year ended 31 December 2023.
Customer Areo Timing Q1-24 Q2-24 Total
Dec 23 - Jan
24 5,420 153 5,573
Feb 24 - June
24 2,743 5,350 8,093
| YTD | YTD | |||
|---|---|---|---|---|
| Specification of revenue from contracts with customers (USD 1,000): | Q3 2024 | Q3 2023 | Q3 2024 | Q3 2023 |
| Revenue from contracts with customers | 22,993 | 4,563 | 46,764 | 6,839 |
| Rental income | - | 706 | 1,360 | 2,246 |
| Total revenues | 22,993 | 5,269 | 48,124 | 9,085 |
| Geographical markets (USD 1,000) | Q3 2024 | Q3 2023 | YTD Q3 2024 |
YTD Q3 2023 |
| Africa | 9,997 | - | 25,674 | - |
| Asia | 1,262 | - | 9,355 | - |
| Americas | 11,657 | - | 11,657 | - |
| Europe | 77 | 4,563 | 78 | 6,839 |
| Total revenue from contracts with customers | 22,993 | 4,563 | 46,764 | 6,839 |
Trinidad Americas
Aug 24 - Sep
24 0
Note 4 Revenues Note 4 Revenues
Apr 24 - Dec
24 10,104 10,104
Norway, Rental
Sep 22 - May
24 1,199 1,199
RWE, Cali-
fornia Americas 0 0
Misc:
Office rental
Tromsø etc Norway 105 56 161
Total 9,467 15,663 25,130
10.239 10.698 10.482 10.847
Argeo has one operating segment focused on the delivery of subsea services. The operating segment is reported in a manner consistent with the internal reporting to the Board of Directors (the Group's chief operating decision-maker).
The Group's revenue from contracts with customers arise primarily from the performance of subsea services in accordance with customer specifications.
| USD 1,000 | Vessels | AUV, USV 1) | Misc. Equipment Office equipment | Total | USD 1,000 | Development | Software | Patents and licenses | |
|---|---|---|---|---|---|---|---|---|---|
| Acquisition cost 1 January 2023 | 844 | 20,301 | 558 | 361 | 22,063 | Acquisition cost 1 January 2023 | 1,675 | 871 | |
| Additions | 20,259 | 298 | 365 | 143 | 21,064 | ||||
| Sale equipment | - | - | -169 | - | -169 | ||||
| Currency translation effects | - | - | - | ||||||
| Acquisition cost 31 December 2023 | 21,102 | 20,598 | 754 | 504 | 42,959 | ||||
| Additions | 14,877 | 1,461 | 617 | 272 | 17,227 | ||||
| Currency translation effects | - | 66 | - | -1 | 65 | ||||
| Sale equipment | - | -11,470 | - | - | -11,470 | ||||
| Acquisition cost 30 September 2024 | 35,980 | 10,656 | 1,371 | 775 | 48,781 | ||||
| Amortisation charge for the year | - Vessels AUV,USV |
130 Misc. Equipment |
|||||||
| Acc.dep. & impairment 1 January 2023 | - | 858 | 210 | 130 | 1,198 | Currency translation effects Acquisition cost 31 |
- 21,102,390 |
28 20,597,088 |
753,943 504,706 42,958,127 |
| Depreciation for the year | 344 | 2,411 | 125 | 142 | 3,022 | Additions | 10,784,929 | 159,729 | 374,081 |
| Impairment for the year | - | 2,700 | - | - | 2,700 | Currency transla- | 0 | 56,326 | |
| Sale equipment | - | - | -133 | - | -133 | Acquisition cost 31 | 31,887,320 | 20,813,143 | 1,128,024 553,247 54,381,734 |
| Currency translation effects | - | -52 | - | -26 | -78 | Additions | 2,970,047 | 749,375 | 226,917 166,346 4,112,686 |
| Acc.dep. & impairment 31 December 2023 | 344 | 5,917 | 202 | 246 | 6,709 | Currency transla- | 0 | 0 | |
| Depreciation for the period | 1,559 | 2,099 | 117 | 150 | 3,927 | Acquisition cost 30 | 34,857,367 | 21,562,518 | 1,354,942 720,013 58,494,840 |
| Sale equipment | - | -5,012 | - | - | -5,012 | ||||
| Currency translation effects | - | 10 | - | -0 | 10 | ||||
| Acc.dep. & impairment 30 September 2024 | 1,903 | 3,014 | 320 | 396 | 5,633 | ||||
| Economic life | 5 years | 5 years | |||||||
| Depreciation method | Linear | Linear | |||||||
| Carrying amount 31 December 2023 | 20,759 | 14,681 | 552 | 259 | 36,250 | 0 Acc.dep. & impair- |
343,820 | 5,914,904 | 203,684 245,643 6,708,050 |
| Carrying amount 30 September 2024 | 34,076 | 7,641 | 1,051 | 379 | 43,148 | -0 Depreciation for |
225,651 | 511,967 | 14,830 |
| Currency transla- | 0 | 7,352 | |||||||
| Economic life | 5-10 years | 7 years | 3-5 years | 3 years | Acc.dep. & im- | 569,471 | 6,434,222 | 218,514 286,276 7,508,484 | |
| Depreciation method | Linear | Linear | Linear | Linear | Depreciation for | 634,815 | 1,054,898 | 40,506 |
Note 5 Property, plant and equipment Note 5 Property, plant and equipment Note 6 Intangible assets
Acc.dep. & impair- 1,204,286 7,484,391 259,020 338,589 9,286,287
| USD 1,000 | Development | Software | Patents and licenses | Total |
|---|---|---|---|---|
| Acquisition cost 1 January 2023 | 1,675 | 871 | 203 | 2,748 |
| Additions | 1,509 | - | 14 | 1,523 |
| Currency translation effects | 9 | -9 | - | - |
| Acquisition cost 31 December 2023 | 3,192 | 862 | 217 | 4,271 |
| Additions | 1,043 | - | - | 1,043 |
| Currency translation effects | 17 | -40 | - | -23 |
| Acquisition cost 30 September 2024 | 4,253 | 822 | 217 | 5,292 |
| Acc. amortisation 1 January 2023 | - | 247 | 36 | 282 |
| Amortisation charge for the year | - Vessels AUV,USV |
130 Misc. Equipment |
40 Office Total |
170 |
| Currency translation effects | - | 28 | - | 28 |
| Acc. amortisation 31 December 2023 | - | 405 | 76 | 481 |
| Amortisation charge for the period | - | 123 | 33 | 155 |
| Currency translation effects | - | -2 | - | -2 |
| Acc. amortisation 30 September 2024 | - | 526 | 109 | 635 |
| Carrying amount 31 December 2023 | 3,192 | 457 | 141 | 3,790 |
| Carrying amount 30 September 2024 | 4,253 | 296 | 109 | 4,657 |
| Economic life | 5 years | 5 years | 5 years |
Note 6 Intangible assets
Currency transla- 0 -4,729 0 137 -4,592 The capitalised development costs in Q3 2024 are mainly related to development of Argeo's digital twin solution "Argeo Scope", and various sensor solutions.
Additions in Q3 2024 are mainly related to reactivation and upgrade cost for the vessel Argeo Venture.
In August 2024 the Group signed an agreement for the sale of two SeaRaptor 6000 AUVs. The total consideration comprise a cash payment of USD 3.5 million and a write off of the seller's credits related to the AUVs of USD 3.5 million (refer to note 7). The cash consideration is paid in instalments whereas 25% was paid in Q3 2024, 50% was paid in Q4 2024 and the remaining 25% is due in February 2025. The net loss from the sale of USD 82 thousand is presented on the line item Selling, general and administrative expenses in the Consolidated interim statement of comprehensive income.
No indicators for impairment of property, plant and equipment were identified for the nine months ended 30 September 2024.
1) Autonomous Underwater Vehicles (AUV) and Unmanned Surface Vessels (USV).
No indicators for impairment of property, plant and equipment were identified for the six months ended 30 September 2024.
Note 7 Interest-bearing debt
Note 7 Interest-bearing debt
| Non-current interest-bearing liabilities (USD 1,000) | Interest rate | Maturity | 30/09/2024 | 31/12/2023 |
|---|---|---|---|---|
| Seller's credit - A | 12.80% | 2026 | - | 1,971 |
| Seller's credit - B | 14.10% | 2026 | - | 691 |
| Seller's credit - C | 14.10% | 2025 | - | 293 |
| Loan Innovation Norway - A | 8.20% | 2025 | - | 5 |
| Loan Innovation Norway - B | 8.20% | 2026 | 86 | 177 |
| Loan Innovation Norway - C | 8.20% | 2028 | 1,507 | 1,802 |
| Loan Argeo Venture | 2029 | 11,255 | - | |
| Non-current interest-bearing debt | 12,848 | 4,940 |
| Current interest-bearing liabilities (USD 1,000) | Interest rate | Maturity | 30/09/2024 | 31/12/2023 |
|---|---|---|---|---|
| Seller's credit - A | 12.80% | 2026 | - | - |
| Seller's credit - B | 14.10% | 2026 | - | - |
| Seller's credit - C | 14.10% | 2025 | 1,008 | 2,096 |
| Loan Innovation Norway - A | 8.20% | 2025 | 9 | 16 |
| Loan Innovation Norway - B | 8.20% | 2026 | 114 | 118 |
| Loan Innovation Norway - C | 8.20% | 2028 | 317 | 164 |
| Loan Argeo Venture | 2029 | 1,185 | - | |
| Current interest-bearing debt | 2,633 | 2,394 |
Loans from Innovation Norway
The Group had three loans from Innovation Norway at the end of September 2024, all bearing an interest at 8.20%*.
The Group has covenants related to the Innovation Norway funding (Loan Innovation Norway – C). The covenants are measured half-yearly based on the Group's ordinary financial reporting. The Group was compliant with all covenants as of 30 September 2024.
Assets pledged as security for secured liabilities
All three loans from Innovation Norway are secured with machinery and plant in Argeo Survey AS, Argeo ASA and Argeo Robotics. Further, the loans are secured with 50% of the shares in H1000 JV AS, a parent company guarantee from Argeo ASA, and trade receivables in Argeo Survey AS.
Seller's credits
The Group has seller's credits related to purchases of AUVs.
Loan Argeo Venture
In February 2024 the Group entered into a sale-and-leaseback transaction involving the Company's vessel Argeo Venture. The transaction has been accounted for as a financing arrangement.
*Innovation Norway may adjust the interest rate with a six week notice upon changes in underlying market rates.
In August 2024 the Group signed an agreement for the sale of two SeaRaptor 6000 AUVs. As a part of the total consideration, the seller's credits related to these assets were written off (seller's credit A and B). Refer to note 5 for further information regarding the sale.
Note 8 Fair value measurement
Fair value disclosures
Management has assessed that the fair values of cash and cash equivalents, trade and other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
Interest-bearing debt
Note 9 Share capital and shareholders information Note 9 Share capital and shareholders information
For the interest-bearing liabilities, the fair values are not materially different from their carrying amounts, since the interest payable on those borrowings is close to current market rates. The fair values of Interest-bearing liabilities are based on discounted cash flows using the current borrowing rate.
Issued capital and reserves:
| Share capital in Argeo AS | Number of shares issued and fully paid Par value per share (NOK) Financial position (USD 1,000) | ||
|---|---|---|---|
| At 1 January 2023 | 51,096,960 | 0.1 | 565 |
| Share capital increase January | 21,783,840 | 0.1 | 213 |
| Share capital increase February | 3,124,368 | 0.1 | 31 |
| Share capital increase February | 139,337 | 0.1 | 1 |
| Share capital increase June | 15,576,168 | 0.1 | 146 |
| Share capital increase July | 2,670,531 | 0.1 | 25 |
| Share capital increase October | 78,125,000 | 0.1 | 721 |
| Share capital increase November | 20,123,625 | 0.1 | 186 |
| Share capital increase December | 260,095 | 0.1 | 2 |
| At 31 December 2023 | 192,899,924 | 0.1 | 1,890 |
| Share capital increase March | 18,181,818 | 0.1 | 172 |
| Share capital increase April | 11,000,000 | 0.1 | 101 |
| Share capital increase June | 3 | 0.1 | 0 |
| Reverse share split (1:5) June | -177,665,396 | 0.5 | |
| At 30 September 2024 | 44,416,349 | 0.5 | 2,163 |
Shareholders in Argeo AS
| at 30 September 2024 | Total shares | Ownership/voting rights |
|---|---|---|
| KISTEFOS AS | 6,524,368 | 14.7% |
| SHEARWATER GEOSERVICES HOLDING AS | 4,024,725 | 9.1% |
| LANGEBRU AS | 2,500,000 | 5.6% |
| PRO AS | 1,889,560 | 4.3% |
| SPAREBANK 1 MARKETS AS | 1,558,186 | 3.5% |
| REDBACK AS | 1,358,903 | 3.1% |
| ØSTERBRIS OFFSHORE AS | 1,290,909 | 2.9% |
| NORDNET LIVSFORSIKRING AS | 1,231,738 | 2.8% |
| ASCENT AS | 1,089,316 | 2.5% |
| DNB Markets Aksjehandel/-analyse | 840,000 | 1.9% |
| DNB BANK ASA | 700,830 | 1.6% |
| RANUM | 515,000 | 1.2% |
| Nordnet Bank AB | 486,909 | 1.1% |
| TROPTIMA AS | 366,194 | 0.8% |
| HUNDERI HOLDING AS | 348,788 | 0.8% |
| HAUGEN | 347,360 | 0.8% |
| Carun Holding AS | 342,315 | 0.8% |
| LINDVARD INVEST AS | 333,933 | 0.8% |
| Performa Consulting AS | 326,194 | 0.7% |
| BERGSTÅ | 300,000 | 0.7% |
| Other | 18,041,121 | 40.6% |
| Total | 44,416,349 | 100% |
10 Share-based payment
Employees (including members of Executive management) and the Board of Directors receive remuneration in the form of share-based payment (options and warrants). As per 30 September 2024, the Group had 1,516,054 outstanding options and 10,000 outstanding warrants, with a weighted average strike price of NOK 16.48 and NOK 4.15, respectively.
On the 23rd of January 20241) the Group granted 1,501,000 share options which will vest 1/3 each year over a total vesting period of 3 years. The last possible exercise date is 5 years from the grant date. The grant replaces 111,000 outstanding share options from the grant in December 2021 and 7,200 of the "Tranche 1" warrants, and 516,213 of the "Tranche 2" warrants.
The new awards in 2024 have been assessed to represent a replacement of the original awards from 2021. The incremental value arising from the granting of the replacement awards in 2024 is recognised over the vesting period of the replacement award.
The Group recognised USD 546 thousand of share-based payment expense in the consolidated statement of comprehensive income for the nine months ended 30 September 2024.
As at 30 September 2024, the Group has recognised a social security provision for share-based payment of USD 1 thousand.
1) Historical numbers are adjusted for the reverse share split in June 2024.
11 Earnings per share
The following table reflects the income and share data used in the basic and diluted EPS calculations:
| USD | Q3 2024 | Q3 2023 | YTD Q3 2024 | YTD Q3 2023 |
|---|---|---|---|---|
| Profit/(Loss) attributable to ordinary equity holders | 488,863 | -3,464,713 | 1,565,166 | -7,547,849 |
| Weighted average number of ordinary shares - for basic EPS | 44,416,349 | 18,715,687 | 42,448,183 | 20,612,646 |
| Weighted average number of ordinary shares adjusted for the effect of dilution* | 46,059,237 | 19,303,240 | 44,005,130 | 21,569,548 |
| Basic EPS - profit or loss attributable to equity holders of the Company | 0.01 | -0.19 | 0.04 | -0.37 |
| Diluted EPS - profit or loss attributable to equity holders of the Company* | 0.01 | -0.19 | 0.04 | -0.37 |
*For Q3 2023 and YTD Q3 2023 the ordinary shares are not adjusted for the effect of dilution as the effect of including the additional shares is antidilutive.
12 Events after the reporting period
Adjusting events
There have been no adjusting events subsequent to the reporting period.
Non-adjusting events
On 24 October 2024, Argeo uplisted from Euronext Growth Oslo to Euronext Oslo Børs.
On 21 October 2024, Argeo announced a USD 13 million transaction to optimise its equipment pool and enhance operational efficiency. This includes divesting non-strategic equipment and executing a sale lease-back agreement for its upgraded Hugin 6000.
There have been no other significant non-adjusting events subsequent to the reporting period.
Alternative performance measures
Alternative performance measures
This section includes information about alternative performance measures (APMs) applied by the Group.
These alternative performance measures are presented to improve the ability of stakeholders to evaluate the Group's operating performance.
The Group applies the following APMs:
EBITDA
The Group's earnings before interest, tax, depreciation and amortisation (EBITDA) is used to provide consistent information on the Group's operating performance relative to other companies, and is frequently used by analysts, investors and other stakeholders when evaluating the financial performance of the Group. EBITDA, as defined by the Group, includes total revenue and other income and excludes depreciation, amortisation and impairment loss. A reconciliation of EBITDA is presented below.
Alternative performance measures
| EBITDA (USD 1,000) | Q3 2024 | Q3 2023 | YTD Q3 2024 | YTD Q3 2023 |
|---|---|---|---|---|
| Total revenues and other income | 22,993 | 5,269 | 48,124 | 9,085 |
| Cost of sales | 16,229 | 6,402 | 31,745 | 11,476 |
| Selling, general and administrative expenses | 1,364 | 486 | 3,852 | 1,724 |
| EBITDA | 5,400 | -1,619 | 12,527 | -4,115 |
| EBITDA margin | 23.5 % | -30.7 % | 26.0 % | -45.3 % |
Vessels ROBUST AND MODERN
With the most advanced fleet available Superior capacity
Argeo Searcher Argeo Venture
AUV's SUPERIOR
Hugin Superior
Hugin 6000/1000
Q1 2025 (option)
EFFICIENT
Argeo Electromagnetic sensor system Advanced Robotics
ARGEO LISTEN ARGEO WHISPER ARGEO DISCOVER
Inspection of subsea cathodic protection systems
- Marine Mineral exploration
- General site survey
- Tracking/burial depth of "dead" power cables
- Tracking buried pipelines
- Detection of Unexploded Ordnance (UXO)
- Marine Minerals exploration
Marine Minerals exploration
with Argeo SCOPE digital solution Turn key final product
Cloud-based solution for management, analysis, and interpretation of Ocean Space data
Enables efficient 3D visualization of Ocean Space Data in a user-friendly browser-based interface, supporting a collaborative data sharing and a smoother interpretation workflow.
Seamless data fusion from seabed measurements such as:
- Synthetic aperture sonar (SAS)
- Sub-bottom profiler (SBP)
- Backscatter
- Bathymetry
- Subsea camera and snapshots
- Environmental data
- Laser measurements
- Geo-taggable documents
- WMS Services
- Interpreted surfaces and horizons from legacy platforms
- Electromagnetic field data
Clean and safe oceans
through responsible operations
Our operations include inspection and maintenance of equipment for the Oil & Gas industry in addition to identification of outdated production equipment for removal, contributing to decommissioning (DECOM) efforts. Furthermore, Argeo's use of fuel-efficient vessels and battery-run robotic equipment underscores our commitment to sustainability, providing our company and services with a distinct green profile. Through these initiatives, Argeo continues to lead by example in promoting environmental stewardship and innovative solutions within the industry.
One of Argeo's most important value is to be responsible. This means that we must conduct business operations in a responsible and safe manner and to foster a healthy and prosperous workplace based on fairness and equality.
The UN Sustainable Development Goals were adopted by all the world's governments at the United Nations in 2015 and provide a common and necessary roadmap. At Argeo, we celebrate these goals and believe in making a difference in the ocean space. All 17 of the UN SDGs are relevant to our business, yet we have chosen to focus on four main areas; 7: affordable and clean energy, 9: industry, innovation and infrastructure, 13: climate action and 14: life below water. We find that we can contribute more within these areas and that they are enablers to further strengthen the full set of UN goals.
Status & ambition
As of Q3 2024 we have not yet started measuring a comprehensive carbon footprint, but it is our ambition to do so going forward. As our company grows it is also our ambition to set clear goals and to integrate an environmental awareness into all levels ofthe company, meaning we want sustainability to permeate the business. From how we write the contracts with our customers to the waste management in every office.
Through our core business, we help our clients become more efficient in keeping the oceans safe and clean. Our complete set-up of vessels, robotic subsea equipment and our own developed and patented sensor systems enables us to perform inspection surveys up to eight times more efficiently than traditional methods. This technological edge not only enhances operational efficiency but also reduces environmental impact. Therefore, HSEQ management is paramount for Argeo and being responsible is part of our core values.
Environmental
Status & ambition
Responsibility is a fundamental value at Argeo. We are dedicated to conducting our business with integrity, prioritizing safety and responsibility, and striving to minimize our environmental footprint. Argeo places significant emphasis on preventing negative environmental impacts from our operations.
Our company policy is to maintain safe and pollution-free practices that comply with both national and international regulations, as well as relevant standards and guidelines. Our objective is to continuously enhance our management skills in relation to environmental protection and we are committed to understand and collectively work towards reducing our environmental footprint.
Through our core business, we help our clients become more efficient
Social
The right balance of people
We believe maintaining a balanced and diverse workforce in terms of gender, age, and nationalities is a strategic advantage that fosters diverse perspectives and drives innovation.
This diversity enhances our ability to understand and serve a global customer base, strengthening our competitiveness and market presence. A varied team promotes an inclusive and collaborative work environment, encouraging creativity and improving overall performance.
By embracing diverse experiences and viewpoints, we attract top talent, enhance employee satisfaction, and reduce turnover. This balance results in better decision-making and a more robust, adaptable organization.
We are building and sustaining a fair, responsible, and attractive workplace
Co2 2072 Tons NOx 36935 Kg Sox 1071 Kg Argeo Searcher
Vessel emissions in Q3 2024
Age distribution per date
End of Q3 2024 Argeo employees were from 19 nationalities
Co2 1811 Tons NOx 24848 Kg Sox 508 Kg Argeo Venture
NOx 15162 Kg Sox 606 Kg
Co2 972 Tons Ocean Guardian
Governance
We believe active corporate governance is vital to the development of companies and that it provides longterm benefits for all Argeo's stakeholders.
Raising concerns & whistleblowing
All employees are encouraged to raise concerns wherever they identify activities which are not aligned with Argeo's values and behaviors. Argeo encourages employees to raise concerns in the first instance directly to line management. In circumstances where this is not possible or it may be more appropriate to do so due to the nature or seriousness of the concern, a confidential Whistleblowing portal is available.
Bribery and anti-corruption
Argeo has a zero tolerance for bribery and corrupt payments in whatever form, whether given or received, directly or indirectly, anywhere in the world. Most countries, including the USA, the UK and Norway, have strict anti-bribery and anti- corruption laws in place, which are intended to prevent companies and individuals from gaining an unfair advantage, and from undermining the rule of law. We must never offer or accept bribes or kickbacks and must not participate in or facilitate corrupt activities of any kind. We must also never engage a third party (in particular, a commercial agent or other business representative) who we believe may attempt to offer a bribe to conduct company business.
Per 2023 our suppliers are asked to fill out a "self-assessment form" and our future goal is to develop a formal Supply Chain Sustainability Code of Conduct.
Antitrust
Antitrust laws, sometimes also called competition laws, govern the way that companies behave in the marketplace. Antitrust laws encourage competition by prohibiting unreasonable restraints on trade and anti-competitive conduct. The laws deal in general terms with the way companies deal with their competitors, clients, and suppliers. Violating antitrust laws is a serious matter and could place both the company and the individual at risk of substantial criminal penalties.
Human rights policy
An important part of Argeo's commitment to responsible business is respecting human rights in accordance with internationally recognised standards. There is both a business and a moral case for ensuring that human rights principles are upheld during our operations and throughout our value chain.
Our approach is informed by the International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights, and the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work.
Code of conduct
Argeo aspires to be an honest and trustworthy company. Our reputation depends upon each of us understanding the Code of Conduct, and always demonstrating integrity and honesty. The Code of Conduct sets the standard for how we should work together to develop and deliver our services, how we protect the value of Argeo, and how we work with customers, contractors, suppliers, and others.
Responsible business practices
At Argeo we are all committed to
- Create a healthy and safe working place for both employees and contractors
-
Create measurable goals
-
Strive to achieve corporate environmental goals set forward
- Comply with relevant laws and regulations
- Promote a culture in which all employees share this commitment
- Promote responsible purchasing through our Supplier's Code of Conduct
- Develop and communicate a Company Code of Conduct
- Respecting and promote human rights of all individuals potentially affected by our operations. We respect the fundamental principles set forth in the Universal Declaration of Human Rights and related UN documents
Argeo's framework for corporate governance is intended to decrease business risk, maximize value and utilize our resources in an efficient, sustainable manner, for the benefit of shareholders, employees, and society at large.
JUST A DUMMY
BACKGROUND
Argeo
Nye Vakås v. 14 1395 Hvalstad Norway Telephone: +47 66 85 90 99 www.argeo.no
