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SAB Finance A.S.
Quarterly Report • Aug 29, 2024
1048_rns_2024-08-29_3a59f566-bcd1-44f9-a7e6-6e85e02d9eaa.pdf
Quarterly Report
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TWMA FINANCE AS.
FINANCE REPORT FOR QUARTER ENDED 30 JUNE 2024.
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TWMA. The world's drilling waste specialist.
TABLE OF CONTENTS.
| CEO Statement. | 1 |
|---|---|
| CFO Statement. | 2 |
| Financial Statements. | 3 |
| TWMA FINANCE AS Consolidated Income Statement. | 3 |
| TWMA FINANCE AS Consolidated Income Statement - Year To Date. | 4 |
| TWMA FINANCE AS Consolidated Balance Sheet. | 5 |
| TWMA FINANCE AS Consolidated Cash Flow. | 6 |
| TWMA FINANCE AS Consolidated Cash Flow -Year To Date. | 7 |
CEO STATEMENT.
I am pleased to present the CEO's Statement for the period ended 30 June 2024. During the 2ndquarter we continued to see a strong demand for TWMA's services. The utilisation of our Rotomill fleet was 67% for the period which was lower than the previous quarter due to UK drilling campaigns coming to an end and subsequent relocation of Rotomill to the Middle East. Year to date, the utilisation of the Rotomill assets was 70%. Despite the lower utilisation in the UK, the Group started operations on the second of four new islands on the Ghasha Mega Project in Abu Dhabi and also performed well onshore in the UK. As a result the Group delivered above budgeted figures for the period with revenue of \$19.4m and an EBITDA for continuing operations of \$4.8m. The first six months of 2024 have delivered \$37.8m revenue and an EBITDA of \$9.5m compared to revenue of \$35.2m and an EBITDA of \$7.0m in 2023.
Review of the business.
In Offshore UK, three Rotomills were demobilised mid Q2, two of which were deployed to the UAE to satisfy the requirements of the 3rd and 4th island on the Ghasha Mega project. The third Rotomill is due to mobilise to another UK operator by the end of Q3 2024. In Norway, after a quiet first half of the year, preparations for the restart of our operations in September 2024 are proceeding and are in line with plans. Lastly in the North Sea, our UK onshore facility had a strong quarter with a high level of drill cuttings and slops processed and treated.
In the UAE, drilling operations were carried out on all four islands on the 'Upper Zakum' contract. During the quarter, the Group received a 'Letter of Award' for a new 1+1 year contract. We expect to complete the contract signing within Q3 2024. The scope of the award covers our existing operations on 'Upper Zakum', additional Jack Up operations and an onshore facility.
With regards to the Ghasha Mega Project, operations continued on the 1st island. In respect of the 2nd island, the mobilisation of equipment and personnel were completed on time and on budget. Drilling commenced in May 2024 and products and services became fully chargeable during this period. We now have 22-24 personnel deployed on the second island. The 3rd island start up is provisionally planned for September 2024.
In Egypt, the operation continued to prepare for the start of a new contract with an international operator. The contract with TWMA is to remove, recycle and treat the drilling waste. It is expected that the Rotomill will begin processing in September 2024 in line with expectations. There is currently a high level of tender activity in Egypt where the Group is well placed to be successful.
The Solid Control's business in the US performed satisfactorily in the quarter. The land rig market in the US continues to be 'soft' which has resulted in lower than expected volume of Solid Control work. During the quarter, the division supported an average of 24 Solid Control jobs per month.
People.
Safety of all our people is our number one priority. I am pleased that in the quarter, we continued our good safety performance and recorded 0 Lost Time Incidents (2023: 0). The Group is very satisfied that it continues to operate at a high standard of safety and that our employees, for the last two years have been free from an injury which would have resulted in them being unable to work.
Halle Aslaksen Chief Executive Officer August 2024
CFO STATEMENT.
Trading Performance.
The Group Consolidated Income Statement is shown on page 3 to these financial statements. Revenue in the quarter was \$19.5m and the underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) of the Group was \$4.8m. The operating profit was \$4.9m in the quarter. A reconciliation between operating profit per these financial statements and EBITDA is set out below.
| Quarter ended Quarter ended | ||
|---|---|---|
| 30 June | 30 June | |
| 2024 | 2023 | |
| \$000 | \$000 | |
| Operating profit before exceptional items, depreciation and amortisation | 4,938 | 3,952 |
| Gain on disposal | (46) | (1) |
| Fx | (45) | (412) |
| EBITDA | 4,847 | 3,539 |
Year to date, the EBITDA of the group stands at \$9.5m. This compares to \$7.0m for the six months to 30 June 2023.
Capital Investment.
During the quarter a total of \$3.6m was invested in fixed assets, all of which related to plant and equipment including \$2.7m spent on the Ghasha Mega project.
Group Cashflow and Debt.
The Group's Consolidated statement of cash flows is shown on page 6 of these financial statements.
An analysis of the Net debt of the Group at the end of the quarter was as follows:
| 30 June 2024 \$000 |
|
|---|---|
| Nordic Bonds | (62,500) |
| Asset Finance Liabilities | (1,268) |
| Right of Use Liabilities | (4,289) |
| Cash | 9,736 |
| Net Debt at 30 June | (58,321) |
The leverage of the Group as at 30 June 2024 was 3.34x.
At 30 June 2024, the Group held unrestricted cash balances of \$9.7m plus unutilised available credit facilities of \$6m.
Mark Walker Chief Financial Officer August 2024
FINANCIAL STATEMENTS.
TWMA FINANCE AS CONSOLIDATED INCOME STATEMENT.
| Unaudited | ||
|---|---|---|
| Quarter ended | ||
| 30 June | ||
| 2024 | ||
| \$000 | ||
| Revenue | 19,480 | |
| Cost of Sales | (12,217) | |
| Gross profit | 7,263 | |
| Administrative expenses | (2,325) | |
| Operating profit before exceptional items, depreciation and amortisation | 4,938 | |
| Exceptional items | (481) | |
| Depreciation and amortisation | (2,900) | |
| Operating profit | 1,557 | |
| Finance Income | 41 | |
| Finance costs | (3,109) | |
| Loss before tax | (1,511) | |
| Tax charge | (216) | |
| Loss for the period | (1,727) |
TWMA FINANCE AS CONSOLIDATED INCOME STATEMENT - YEAR TO DATE.
| Unaudited | ||
|---|---|---|
| YTD | ||
| 30 June | ||
| 2024 \$000 |
||
| Revenue | 37,796 | |
| Cost of Sales | (23,733) | |
| Gross profit | 14,063 | |
| Administrative expenses | (4,109) | |
| Operating profit before exceptional items, depreciation and amortisation | 9,954 | |
| Exceptional items | (2,532) | |
| Depreciation and amortisation | (5,806) | |
| Operating profit | 1,616 | |
| Finance income | 41 | |
| Finance costs | (6,509) | |
| Loss before tax | (4,402) | |
| Tax charge | (464) | |
| Loss for the period | (4,866) |
TWMA FINANCE AS CONSOLIDATED BALANCE SHEET.
| Unaudited | |
|---|---|
| As at | |
| 30 June | |
| 2024 | |
| \$000 | |
| Non-current assets | |
| Goodwill and other intangible assets | 32,564 |
| Financing fees | 2,982 |
| Right of Use Assets | 3,847 |
| Property, plant & equipment | 43,255 |
| Total non-current assets | 82,648 |
| Current assets | |
| Inventories | 3,831 |
| Trade and other receivables | 19,570 |
| Cash and cash equivalents | 9,736 |
| Total current assets | 33,137 |
| Total assets | 115,784 |
| Current liabilities | |
| Trade and other payables | 17,728 |
| Tax liabilities | 440 |
| Lease liabilities | 1,189 |
| Total current liabilities | 19,357 |
| Non-current liabilities | |
| Borrowings | 62,500 |
| Owed to other Group Companies | 20,954 |
| Lease liabilities | 4,367 |
| Tax liabilities | 1,065 |
| Other liabilities | 3,578 |
| Total non-current liabilities | 92,465 |
| Total liabilities | 111,821 |
| NET ASSETS | 3,964 |
| Equity | |
| Ordinary shares | 68 |
| Share premium account | 0 |
| Other reserves | 71,245 |
| Accumulated losses | (67,349) |
| TOTAL EQUITY | 3,964 |
TWMA FINANCE AS CONSOLIDATED CASH FLOW.
| Quarter ended 30 June |
|---|
| 2024* |
| \$000 |
| 4,938 |
| (481) |
| 4,457 |
| (178) |
| (1,746) |
| 2,561 |
| (2,109) |
| 2,985 |
| (2,705) |
| (2,705) |
| (118) |
| (364) |
| 0 |
| 0 |
| (482) |
| (202) |
| 9,938 |
| 9,736 |
| Analysis of cash and cash equivalent at end of quarter | |
|---|---|
| Cash and bank balances | 6,603 |
| Deposits | 3,133 |
| Cash and cash equivalents at end of quarter | 9,736 |
TWMA FINANCE AS CONSOLIDATED CASH FLOW -YEAR TO DATE.
| Unaudited YTD |
|
|---|---|
| 30 June | |
| 2024* | |
| \$000 | |
| Operating profit before exceptional items | 9,954 |
| Adjustments for: | |
| Exceptional costs | (2,532) |
| Operating cash flows before movements in working capital | 7,422 |
| Increase in stocks | (272) |
| Increase in debtors | (1,859) |
| Increase in creditors | 4,540 |
| Fx / Non-cash items | (3,573) |
| Net cash inflow from operating activities | 6,257 |
| Purchase of fixed assets | (5,100) |
| Net cash outflow from investing activities | (5,100) |
| Bank interest | (2,512) |
| Funding repayments | (51,702) |
| Nordic Bond | 62,500 |
| Financing fees | (3,355) |
| Net cash inflow from financing activities | 4,931 |
| Net increase in cash and cash equivalents | 6,088 |
| Cash and cash equivalents at beginning of quarter | 3,648 |
| Cash and cash equivalents at end of quarter | 9,736 |
| Analysis of cash and cash equivalent at end of quarter | |
|---|---|
| Cash and bank balances | 6,603 |
| Deposits | 3,133 |
| Cash and cash equivalents at end of quarter | 9,736 |
FURTHER INFORMATION.
Halle Aslaksen. Chief Executive Officer (CEO)
Mark J Walker. Chief Financial Officer (CFO)
For administrative queries, please contact:
Investor Relations. E: [email protected]
TWMA's Global HQ Building 3 Aberdeen International Business Park Dyce AB21 0BR Aberdeen
*TWMA™ is a registered trademark and the brand name for the TWMA group of companies including Total Waste Management Alliance Limited.
*TCC™ Rotomill™ TCC is a registered trademark of Thermtech Holdings AS. Rotomill is a registered trademark of TWMA.
TWMA. The world's drilling waste specialist.