Akastor

Interim / Quarterly Report • Jul 11, 2024

AKASTOR

HALF YEAR RESULTS 2024

HIGHLIGHTS

• DRU arbitration concluded, with USD 176 million received in cash which resulted in accounting gain of NOK 1.3 billion in total in the first half year
• Net interest-bearing debt reduced by NOK 1.5 billion compared to year end 2023, with net interest-bearing items in a net cash position of NOK 831 million per end of June 2024
• Corporate bank facility amended and extended to June 2026. The facility, with a size of USD 30 million, was not drawn per end of period
• Approximately 3 million shares received in Odfjell Drilling in period pursuant to a warrant agreement
• HMH continues to deliver strong financials, with an LTM EBITDA (adj.) of USD 153 million per end of the second quarter, up 39% compared to last year
• HMH filed a confidential draft registration for a potential US IPO which may occur in the second half of 2024, pending market conditions
• Equity of NOK 5.5 billion per end of period, corresponding to NOK 20.2 per share, increased from NOK 14.5 per share per end of 2023 driven by final DRU settlement

KEY FIGURES

Akastor Group

	JUNE 30	DECEMBER 31
	2024	2023
Net capital employed (NOK million)	4 714	4 645
Net interest-bearing debt (NOK million)	(831)	675
Total shareholder return	+36%	+26%
Equity share	86%	66%

Net capital employed

NOK million, 30 June 2024

01. PORTFOLIO COMPANIES

HMH (50% ownership)

HMH reported revenues of USD 208 million in the second quarter, compared to USD 189 million in 2023. Revenues for the first half year were USD 401 million, compared with USD 374 million in the previous year. Adjusted EBITDA was USD 42 million in the quarter, corresponding to an adjusted EBITDA margin of approximately 20 percent. This compares to USD 34 million and a margin of 18 percent in the second quarter of 2023. For the first half year of 2024, adjusted EBITDA was USD 75 million, compared with USD 53 million in 2023.

Revenues from Aftermarket Services were USD 150 million in the quarter, up from USD 138 million in second quarter last year and USD 146 million in the first quarter this year, driven by increased service order trend and generally higher activity and volumes. Order intake within Aftermarket Services in the period was down 11 percent year-on-year driven by high rig reactivation service activities prior year and down 5 percent quarter-on-quarter.

Revenues from Projects, Products & Other were USD 58 million in the quarter, up from USD 51 million last year and USD 47 million in the first quarter this year primarily driven by higher activity within single equipment sale.

The equipment order backlog was USD 229 million per end of first half year, slightly down compared to last year driven by execution within Projects but partially mitigated by order intake within Products. Backlog was also somewhat down compared to first quarter this year driven by delivery on single equipment backlog in the period. HMH sees good prospects for growth in backlog in the second half of the year based on the current pipeline of opportunities within Products.

Net external debt per end of second quarter was USD 173 million.

In the second quarter, HMH announced that it had submitted a confidential first draft registration statement with the U.S. Securities and Exchange Commission ("SEC") relating to a proposed initial public offering in the US. The size and price range for the proposed offering have not yet been determined. The IPO may occur in the second half of 2024 after SEC review, pending market conditions.

HMH is a joint venture and accounted for using the equity method in Akastor's consolidated financial statements. The carrying amount of the joint venture is NOK 3 248 million as per end of the first half year based on preliminary financial information from the company.

AKOFS Offshore (50% ownership)

AKOFS Offshore reported revenues of USD 35 million in the second quarter compared to USD 28 million in 2023. The increase was primarily driven by Aker Wayfarer going off contract early in the second quarter last year, preparing for the new contract that commenced in third quarter 2023. Revenues for the first half year were USD 68 million, compared with USD 64 million in the previous year. EBITDA was USD 10 million in the quarter, compared with USD 3 million in 2023. For the first half year, EBITDA was USD 19 million, compared with USD 14 million in 2023.

Aker Wayfarer reported a revenue utilization of 99 percent in the second quarter while AKOFS Santos reported 72 percent in the same period, negatively affected by certain operational incidents and a planned maintenance stop in May. The utilization of AKOFS Santos improved through the quarter, with above 90 percent uptime in June, and the company expects improved utilization for the rest of the year. AKOFS Seafarer reported a revenue utilization of 94 percent in the second quarter, affected by a shorter yard stay in May where the vessel was prepared for coiled tubing operations. Through the remaining part of the quarter, AKOFS Seafarer delivered solid uptime and operational performance on its coiled tubing campaign for Equinor. AKOFS Seafarer will go to yard in August for approximately two weeks to demobilize the coiled tubing equipment.

Going forward, AKOFS Offshore will continue its focus on utilization and operational performance.

The order backlog ended at USD 285 million.

AKOFS Offshore is a joint venture and accounted for using the equity method in Akastor's consolidated financial statements. The carrying amount of the joint venture is NOK 285 million as per end of the first half year.

DDW Offshore (100% ownership)

DDW Offshore reported revenues of NOK 57 million in the second quarter, increased from NOK 52 million last year. Revenues for the first half year were NOK 96 million, compared with NOK 98 million in 2023. EBITDA was NOK 15 million in the quarter, compared with NOK 14 million in 2023. For the first half year, EBITDA was NOK 7 million, compared with NOK 27 million in 2023. The first half year of 2024 was affected by lowered utilization as a result of two vessels undergoing Special Periodic Survey (SPS) in the period, partly mitigated by higher market rates for vessels in operation.

DDW Offshore owns three offshore AHTS vessels. In the second quarter, average utilization of the fleet was 51 percent. Following a period between contracts in the first quarter, Skandi Emerald was on contract with Petrofac through the second quarter and delivered strong operations for the client and 100% utilization. The current contract ends in December 2024. Skandi Atlantic delivered a utilization of 33 percent in the quarter, affected by completion of her SPS in April before commencing a new contract with Chevron on June 1st. This contract lasts for 70 days, with an additional 110 days of options. Skandi Peregrino was reactivated after about four years in lay-up and completed her SPS in the second quarter, after which she has been operating in the spot market in Aberdeen since mid-May. With this, Skandi Peregrino delivered a utilization of 20 percent in the second quarter.

OTHER HOLDINGS

Other Holdings, as of June 30, 2024, mainly include 1.3 percent shareholding in Odfjell Drilling, 4.9 percent shareholdings in ABL Group, around 15 percent economic interest of NES Fircroft and 36 percent of the joint venture Føn Energy Services.

Akastor's economic interest in four drilling equipment contracts with Jurong Shipyard (DRU contracts) was concluded in the first half year through a final arbitration award and settlement whereby Akastor received a total amount of USD 176 million in cash as payment of termination fees, reimbursement of costs and interest compensation. As a result of the outcome of DRU arbitration, other income of NOK 630 million as well as interest income of NOK 717 million were recognized in the income statement in the first half year of 2024.

On May 31, 2024, Akastor received 3 023 886 shares in Odfjell Drilling Ltd., pursuant to a warrant agreement that was entered into in 2018. The settlement of the warrant agreement resulted in a financial gain of NOK 113 million recognized as part of net financial items in the first half year. Odfjell Drilling is listed on the Oslo Stock Exchange. The investment in Odfjell Drilling is accounted for as a financial asset measured at fair value.

NES Fircroft, where Akastor holds around 15 percent economic interest, continued to deliver growth and revenues were up 12 percent year-on-year in the second quarter driven by improved performance across several geographies. NES Fircroft is accounted for as a financial asset measured at fair value, with a carrying amount of NOK 794 million as per end of the first half year.

In addition, Other Holdings include the Real Estate portfolio (subletting of office leasing contracts) as well as corporate and project expenses. EBITDA exclusive other income related to DRU arbitration award, was negative NOK 18 million in the second quarter and negative NOK 36 million for the first half year. In the previous year, EBITDA was negative NOK 18 million and negative NOK 48 million for the same periods, respectively.

02. AKASTOR GROUP

Performance

Akastor group's revenues and other income and EBITDA for the first half year of 2024 were positively affected by other income of NOK 630 million related to DRU arbitration award. Revenues and other income for the first half year were NOK 733 million, compared to NOK 132 million in the previous year. EBITDA was positive NOK 601 million for the first half year, compared to negative NOK 21 million in the previous year. The consolidated revenue and operating profit in Akastor only include financial performance of portfolio companies that constitute a minor part of Akastor's total net capital employed. HMH and AKOFS Offshore are classified as joint ventures and accounted for using equity method in the consolidated financial statements.

Net financial items were positive NOK 902 million for the first half year, which included interest compensation of NOK 717 million related to DRU arbitration award. Net profit from the equity-accounted investees was NOK 8 million in the first half year, compared to loss of NOK 173 million in 2023, mainly related to Akastor's share of net profit in HMH of NOK 134 million, offset by share of net loss in AKOFS Offshore of NOK 127 million.

Net profit from continuing operations was NOK 1 493 million for the first half year, compared to loss of NOK 125 million last year. Net profit from discontinued operations was NOK 4 million in the first half year related to gain adjustment on divestments in prior years.

The group reported net profit of NOK 1 496 million for the first half year of 2024.

Financial Position

Total assets of Akastor amounted to NOK 6.4 billion as of June 30, 2024, compared to NOK 6.0 billion as per year-end 2023.

Net cash flow from operating activities was positive NOK 1 820 million for the first half year, including proceeds of NOK 1 912 million related to DRU arbitration award. The cash flow from investing activities was negative NOK 315 million in the first half year, compared to positive NOK 135 million in the previous year which included proceeds of NOK 216 million from the settlement of Odfjell Drilling seller credit in 2023.

Net cash (excluding lease liabilities) was NOK 196 million at the end of the period. Net interest-bearing items were positive NOK 831 million, reduced by NOK 1.5 billion compared to Net interest-bearing debt of NOK 675 million at year-end 2023, mainly driven by cash proceeds of NOK 1.9 billion from the settlement of DRU arbitration award.

The liquidity reserve at the end of the period was NOK 880 million, with cash and cash equivalents of NOK 560 million and undrawn committed credit facilities of NOK 320 million.

Total equity amounted to NOK 5.5 billion as of June 30, 2024, while the equity ratio was 86 percent, up from 66 percent as at year-end 2023.

Related Party Transactions

Please see Note 13 for information about significant related party transactions.

Principle Risks and Uncertainty

Akastor and each of its portfolio companies are exposed to various forms of market, operational and financial risks that may affect the companies' performance, their ability to meet strategic goals and future obligations.

Akastor's risk management model is designed on the basis that Akastor is an investment company with an overall objective of securing its shareholders' investments and developing the group's assets in order to provide the shareholders with a solid return. Akastor's current investment portfolio is focused on the oilfield services industry. This focus is mainly driven by the company's experience, expertise and track-record within this industry. Although Akastor has a flexible mandate, it has traditionally not sought to spread risk by investing in different industries. Instead, Akastor has focused on mitigating its vulnerability to the risk environment inherent to the oilfield services industry through risk management.

The oil services industry is a volatile business segment impacted by macro trends such as global uncertainty caused by wars and conflicts, oil supply & demand, legislative regulations driven by sustainability concerns as well as inflation and interest. These issues impact Akastor's ability to execute value enhancing transactions, as we see that the runway on some transactions needs to be extended or delayed and that financing costs increase. On the other hand, this has been balanced and to a large degree been offset by solid performance from Akastor's portfolio companies combined with increased focus on the oil service industry as an important business to ensure energy security. In sum, Akastor's financial position has been strengthened and we believe that Akastor is well positioned to continue its strategy to make value enhancing transactions in a continued unstable market situation.

Our focus on climate risk continues in close dialogue with all portfolio companies (HMH and AKOFS Offshore in particular) with focus on ensuring that appropriate ISO certification is maintained and that proper reporting requirements are set and monitored. All portfolio companies are expected to prepare and be ready when Corporate Sustainability Reporting Directive (CSRD) is implemented.

On the operational side, risks are primarily addressed by securing new orders and sound project execution by the portfolio companies. Results also depend on costs, both the portfolio companies' own costs and those charged by suppliers. Akastor and its portfolio companies are also exposed to financial risk under performance guarantees and financial guarantees issued, and financial market risks as further detailed below.

In addition, the portfolio companies, through their business activities within their respective sectors and countries, are also exposed to legal/compliance and regulatory/political risks, e.g. political decisions on international sanctions that impact supply and demand of the services offered by the portfolio companies, as well as environmental regulations. Moreover, we have over the recent years seen an increase in the threat faced from different forms of cyber risks such as e.g. risk of ransomware and phishing attempts. These are risk areas that are under continuous development and where it is important that Akastor and its portfolio companies continuously monitor this development and the risks associated.

Akastor is exposed to a variety of financial market risks such as currency risk, interest rate risk, tax risk, price risk, credit and counterparty risk, liquidity risk and capital risk as well as risks associated with access to and terms of financing. The objective of financial risk management is to manage and control financial risk exposures and thereby minimize potential adverse effects on Akastor's financial position. Following the outcome of the DRU arbitration and the corresponding impact on Akastor's financial position as described above, Akastor's financial risks have been reduced. Akastor's ability to position and perform value enhancing transactions going forward will still depend on its ability to obtain appropriate and affordable financing.

To manage and mitigate risks within Akastor, risk evaluation is an integral part of all business activities. As owner, Akastor actively supervises risk management in its portfolio companies through participation on the board of each portfolio company, and by defining a clear set of risk management and mitigation processes and procedures that all portfolio companies must adhere to. Akastor's Annual Report 2023 provides more information on risks and uncertainties.

The Akastor Share

The company had a market capitalization of NOK 4.4 billion on June 30, 2024. The company owned 1 813 974 own shares at the end of the first half year.

Fornebu, July 10, 2024 The Board of Directors and CEO of Akastor ASA

03. DECLARATION BY THE BOARD OF DIRECTORS AND CEO

The Board of Directors and the CEO have today considered and approved the consolidated condensed financial statements for the six months ended June 30, 2024, with comparatives for the corresponding period of 2023 for Akastor Group.

The Board has based this declaration on reports and statements from the group's CEO, the results of the group's activities, and other information that is essential to assess the group's position.

To the best of our knowledge:

• The consolidated condensed financial statements for the six months ended June 30, 2024 have been prepared in accordance with IAS 34 - Interim Financial Reporting and additional disclosure requirements under the Norwegian Securities Trading Act.
• The information provided in the financial statements gives a true and fair portrayal of Akastor Group's assets, liabilities, profit and overall financial position as of June 30, 2024.
• The information provided in the report for the first half 2024 provides a true and fair overview of the development, performance, financial position, important events and significant related party transactions in the accounting period as well as the most significant risks and uncertainties facing Akastor Group.

Fornebu, July 10, 2024 The Board of Directors and CEO of Akastor ASA

Frank O. Reite | Chairperson

Lone Fønss Schrøder | Deputy Chairperson

Svein Oskar Stoknes | Director

Kathryn M. Baker | Director

Asle Christian Halvorsen | Director Stian Sjølund | Director

Luis Antonio G. Araujo | Director

Henning Jensen | Director

Karl Erik Kjelstad I CEO

AKASTOR GROUP INTERIM FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENT

		First half		Full year
NOK million	Note	2024	2023	2023
Revenues	6	103	116	267
Other income	4, 6	630	16	14
Revenues and other income		733	132	282
Operating expenses		(132)	(153)	(284)
Operating profit before depreciation, amortization and impairment (EBITDA)		601	(21)	(2)
Depreciation, amortization and impairment		(15)	(14)	(28)
Operating profit (loss)		586	(35)	(31)
Net financial items	4,7	902	83	10
Profit (loss) from equity-accounted investees	9	8	(173)	(363)
Profit (loss) before tax		1 496	(125)	(384)
Tax income (expense)		(3)	-	-
Profit (loss) from continuing operations		1 493	(125)	(384)
Net profit (loss) from discontinued operations		4	113	122
Profit (loss) for the period		1 496	(12)	(262)
Attributable to:
Equity holders of Akastor ASA		1 496	(14)	(264)
Non-controlling interests		-	3	3
Basic/diluted earnings (loss) per share (NOK)		5.50	(0.05)	(0.97)
Basic/diluted earnings (loss) per share continuing operations (NOK)		5.48	(0.47)	(1.42)
Basic/diluted earnings (loss) per share discontinued operations (NOK)		0.01	0.42	0.45

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	First half		Full year
NOK million	2024	2023	2023
Net profit (loss) for the period	1 496	(12)	(262)
Other comprehensive income:
Currency translation differences	129	257	97
Currency translation differences, reclassification to income statement upon disposal	-	(2)	(2)
Share of OCI from equity-accounted investees	(70)	(9)	37
Net items that may be reclassified to profit or loss	59	246	131
Remeasurement gain (loss) net defined benefit liability	-	-	(8)
Share of OCI from equity-accounted investees	1	-	1
Net items that will not be reclassified to profit or loss	1	-	(7)
Total other comprehensive income (loss), net of tax	60	246	124
Total comprehensive income (loss) for the period, net of tax	1 556	235	(137)
Attributable to:
Equity holders of Akastor ASA	1 556	232	(140)
Non-controlling interests	-	3	3

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		June 30	December 31
NOK million	Note	2024	2023
Property, plant and equipment	8	358	231
Right-of-Use assets		4	7
Other non-current assets		1	1
Non-current interest bearing receivables		623	550
Equity accounted investees	9	3 550	3 439
Other non-current investments	10	1 248	1 051
Total non-current assets		5 785	5 279
Current operating assets		53	606
Current interest-bearing receivables		12	-
Current finance lease receivables		9	19
Cash and cash equivalents		560	144
Total current assets		634	769
Total assets		6 418	6 048
Equity attributable to equity holders of Akastor ASA		5 546	3 970
Total equity		5 546	3 970
Employee benefit obligations		77	82
Non-current liabilities and provisions		183	255
Non-current borrowings	11	262	236
Non-current lease liabilities		-	2
Total non-current liabilities		521	575
Current operating liabilities and provisions		233	339
Current borrowings	11	102	1 133
Current lease liabilities		16	32
Total current liabilities		352	1 504
Total equity and liabilities		6 418	6 048

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

The statement includes discontinued operations prior to their disposal unless otherwise stated.

	First half		Full year
NOK million	2024	2023	2023
Profit (loss) for the period	1 496	(12)	(262)
(Profit) loss for the period - discontinued operations	(4)	(113)	(122)
Depreciations, amortization and impairment continuing operations	15	14	28
Other adjustments for non-cash items and changes in operating assets and liabilities	312	51	60
Net cash from operating activities	1 820	(60)	(296)
Acquisition of property, plant and equipment	(112)	(0)	(9)
Payments related to sale of subsidiaries incl. adjustment for prior years' divestments	(176)	(65)	(54)
Funding to equity-accounted investees	(37)	(33)	(119)
Proceeds from other investment	-	216	216
Proceeds from finance lease receivables	10	18	211
Cash flow from other investing activities	(0)	(1)	(9)
Net cash from investing activities	(315)	135	236
Changes in external borrowings	(1 082)	69	125
Payments of lease liabilities	(18)	(22)	(41)
Net cash from financing activities	(1 100)	48	85
Effect of exchange rate changes on cash and cash equivalents	10	2	-
Net increase (decrease) in cash and cash equivalents	415	125	25
Cash and cash equivalents at the beginning of the period	144	119	119
Cash and cash equivalents at the end of the period	560	244	144

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOK million	Contributed equity and retained earnings	Other reserves	Total equity attributable to the parent	Non controlling interests	Total equity
Equity as of December 31, 2023	4 067	(97)	3 970	-	3 970
Total comprehensive income	1 496	60	1 556	-	1 556
Share-based payments in joint ventures	19	-	19	-	19
Equity as of June 30, 2024	5 583	(37)	5 546	-	5 546
Equity as of December 31, 2022	4 153	(97)	4 056	36	4 092
Total comprehensive income	(14)	246	232	3	235
Treasury shares transaction	2	-	2	-	2
Disposal of subsidiaries	-	-	-	(39)	(39)

NOTES

NOTE 1 - GENERAL

Akastor (the group) consists of Akastor ASA and its subsidiaries. Akastor ASA is a limited liability company incorporated and domiciled in Norway and whose shares are publicly traded.

The group is an oil-services investment company with a portfolio of industrial holdings and other investments. Akastor is listed on the Oslo Stock Exchange under the ticker AKAST. Please refer to Note 29 Group companies in Akastor's Annual Report 2023 for more information on the group's structure.

Akastor's Annual Report for 2023 is available at www.akastor.com.

NOTE 2 - BASIS FOR PREPARATION

The condensed consolidated financial statements of Akastor comprise the group and the group's interests in equityaccounted investees. As a result of rounding differences, numbers or percentages may not add up to the total.

Akastor's condensed interim financial statements for the six months ended June 30, 2024 are prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting. The condensed consolidated interim financial statements do not include all of the information and disclosures required for a complete set of annual consolidated financial statements, and should be read in conjunction with Akastor's Annual Report 2023. The accounting policies applied in these financial statements are the same as those applied in the group's consolidated financial statements as for the year ended December 31, 2023.

The condensed consolidated interim financial statements are unaudited.

NOTE 3 - JUDGMENTS, ESTIMATES AND ASSUMPTIONS

In applying the accounting policies, management makes judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revision to accounting estimates is recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these interim financial statements, the significant judgments made by management in applying the group's accounting policies and the key sources of uncertainty in the estimates are consistent with those applied to the consolidated financial statements as for the period ended December 31, 2023.

NOTE 4 - SIGNIFICANT EVENT

Akastor's economic interest in four drilling equipment contracts (DRU contracts) with Jurong Shipyard Pte Ltd (Jurong) was carved out from MHWirth in connection with the merger with Baker Hughes' SDS business. The contracts were terminated by Jurong and dispute over termination fees were resolved through arbitration process. In the second quarter of 2024, Akastor received final arbitration award and settlement whereby Akastor received a total amount of USD 176 million in cash as payment of termination fees, reimbursement of costs and interest compensation. The DRU contracts were thus fully and finally settled. As a result of the settlement, other income of NOK 630 million and interest income of NOK 717 million were recognized in the income statement in the first half year of 2024, see also Note 6 and Note 7.

NOTE 5 - OPERATING SEGMENTS

Akastor identifies its reportable segments and discloses segment information under IFRS 8 Operating Segments . See Note 7 Operating segments in Akastor's Annual Report 2023 for descriptions of Akastor's management model and operating segments as well as accounting principles used for segment reporting.

HMH and AKOFS Offshore are classified as joint ventures and accounted for using the equity method. The income statement in the segment information of these two joint ventures is presented at 100% basis, while balance sheet information refers to the carrying amounts in the consolidated financial statements.

As of June 30, 2024, "Other Holdings" mainly include 4.9 percent shareholdings in ABL Group, 1.3 percent shareholdings in Odfjell Drilling, 15 percent economic interest in NES Fircroft, 36 percent of the joint venture Føn Energy Services, equity instruments in Maha Energy and Awilco Drilling. In addition, this segment includes corporate functions and certain long-term office lease contracts that remained in Akastor after the demerger from Aker Solutions in 2014.

First half year 2024

	Equity-accounted investees		Consolidated entities
NOK million	HMH (JV)	AKOFS Offshore (JV)	DDW Offshore	Other Holdings	Adjustments of JVs	Total Akastor
External revenue and other income	2 805	577	96	637	(3 382)	733
Total revenue and other income	2 805	577	96	637	(3 382)	733
Operating profit before depreciation, amortization and impairment (EBITDA)	453	164	7	594	(618)	601
Operating profit (loss) (EBIT)	297	(14)	(5)	591	(283)	586
Net current operating assets (NCOA)	-	-	(19)	(160)	-	(180)
Net capital employed	3 248	285	338	843	-	4 714

First half year 2023

NOK million	Equity-accounted investees HMH (JV)	AKOFS Offshore (JV)	Consolidated entities DDW Offshore	Other Holdings	Adjustments of JVs	Total Akastor
External revenue and other income	3 918	665	98	35	(4 583)	132
Total revenue and other income	3 918	665	98	35	(4 583)	132
Operating profit before depreciation, amortization and impairment (EBITDA)	437	144	27	(48)	(581)	(21)
Operating profit (loss) (EBIT)	208	(56)	18	(53)	(152)	(35)
Net current operating assets (NCOA)	-	-	(188)	296	-	108
Net capital employed	3 135	545	248	892	-	4 820

NOTE 6 - REVENUE AND OTHER INCOME

		First half
NOK million	2024	2023	2023
Service revenue	45	15	121
Total revenue from contracts with customer (IFRS 15)	45	15	121
Lease revenue	58	101	147
Other income	630	16	14
Total external revenue and other income	733	132	282

Other income in 2024 relates to arbitration award for DRU contracts, see Note 4 for more information,

NOTE 7 - NET FINANCIAL ITEMS

	First half		Full year
NOK million	2024	2023	2023
Net interest expenses on borrowings	(47)	(46)	(101)
Net charges of financial lease receivables and lease liabilities	-	8	9
Interest income on debt instruments measured at Fair Value through Other Comprehensive Income (FVOCI)	52	48	97
Interest income related to DRU contracts 1)	717	-	-
Dividend income from equity instrument	2	2	4
Net change in fair value of financial assets measured at Fair Value through Profit or Loss (FVTPL) 2)	122	(10)	30
Loss allowance on debt instruments at FVOCI	(1)	(25)	(40)
Net foreign exchange gain (loss)	62	119	48
Other financial income (expenses)	(6)	(13)	(37)
Net financial items	902	83	10

1) relates to interest compensation related to arbitration award for DRU contracts, see Note 4 for more information.

2) includes a gain of NOK 113 million related to the settlement of a warrant agreement in 2024, see Note 10 for more information

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

NOK million	Vessels	Total
Balance as at December 31, 2023	231	231
Additions	128	128
Depreciation for the period	(12)	(12)
Currency translation differences	11	11
Balance as at June 30, 2024	358	358

NOTE 9 - EQUITY-ACCOUNTED INVESTEES

Reconciliation of carrying amounts in the period

			Total Equity
NOK million	HMH	AKOFS Offshore	Føn Energy Services	accounted investees
Balance as at December 31, 2023	3 015	407	17	3 439
Dilution gain from change in ownership	-	-	7	7
Share of net profit (loss)	134	(127)	(7)	0
Share of other comprehensive income	(37)	(13)	(19)	(69)
Share of changes directly in equity	19	-	-	19
Currency translation differences	116	18	19	154
Balance as at June 30, 2024	3 248	285	18	3 550

In May 2024, Akastor's shareholdings in Føn Energy Services was diluted to 36% as resulted of Føn Energy Services' acquisition of C-Ventus. The dilution resulted in a preliminary gain of NOK 7 million recognized in the income statement in the first half year of 2024, subject to final purchase price allocation of the acquisition. Føn Energy Services remains a joint venture to Akastor after the transaction.

NOTE 10 - OTHER INVESTMENTS

Other investments are measured at fair value.

NOK million	Note	June 30 2024	December 31 2023
NES Fircroft investment		794	711
ABL Group investment		74	79
Awilco Drilling investment		20	17
Odfjell Drilling warrants		-	56
Odfjell Drilling investment		176	-
Aker Pensjonskasse		158	158
Other equity securities		26	30
Other non-current investments	12	1 248	1 051

On May 31, 2024, Akastor received 3 023 886 shares in Odfjell Drilling Ltd. pursuant to a warrant investment agreement in 2018. The settlement resulted in a financial gain of NOK 113 million recognized in the income statement. Odfjell Drilling is listed on the Oslo Stock Exchange and the investment is measured at fair value.

NOTE 11 - BORROWINGS

Reconciliation of carrying amounts in the period

NOK million	Total
Balance as at December 31, 2023	1 369
Net repayment	(1 082)
Changes in accrued interests and fees	8
Foreign exchange movements	69
Balance as at June 30, 2024	364
Current borrowings	102
Non-current borrowings	262
Total borrowings	364

In June 2024, the subordinated Aker facility was fully repaid and cancelled. In addition, the agreement of bank revolving credit facilities was amended and extended upon receipt of proceeds from DRU arbitration award. After the amendment, the available bank revolving credit facilities are USD 30 million (SOFR + margin 4.0%) with maturity date in June 2026. There are no significant amendments in the terms and conditions and financial covenants.

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments measured at fair value are classified by the levels in the fair value hierarchy. See Note 27 Financial instruments in Akastor's Annual Report 2023 for more information about valuation methodologies and the group's financial instruments. The estimated fair values of material financial instruments are as below:

NOK million	Note	Fair value hierarchy	Fair value as of June 30, 2024	Fair value as of December 31, 2023
Financial assets measured at fair value
Fair value through P&L (mandatorily at FVTPL)
- Equity securities	10	Level 1	296	126
- Equity securities	10	Level 3	158	158
- Warrants	10	Level 3	-	56
Fair value through Other comprehensive income (FVOCI)
- Debt instruments	10	Level 3	794	711
Financial liabilities measured at fair value
- Deferred settlement obligations		Level 3	(259)	(422)

NOTE 13 - RELATED PARTIES

For detailed descriptions of related party transactions, please refer to Note 30 Related parties in Akastor's Annual Report 2023.

As of June 30, 2024, Akastor has interest-bearing receivables of NOK 312 million against AKOFS Offshore, including term loan of NOK 259 million (LIBOR + margin 2.5/5.5 percent) and drawn working capital facility of NOK 53 million (NIBOR + margin 5.5 percent). Akastor has made available a NOK 100 million working capital revolving facility to AKOFS Seafarer AS from contract commencement with Equinor.

As of June 30, 2024, Akastor has interest-bearing receivables of NOK 270 million against HMH (fixed interest rate 8.0 percent). Further, Akastor has a current interest-bearing liability of NOK 44 million towards HMH (fixed interest rate 8.0 percent).

As of June 30, 2024, Akastor has interest-bearing receivables of NOK 18 million against Føn Energy Services (NIBOR+ margin 2.0/7.2 percent).

ALTERNATIVE PERFORMANCE MEASURES

Akastor discloses alternative performance measures as a supplement to the consolidated financial statements prepared in accordance with IFRS. Such performance measures are used to provide an enhanced insight into the operating performance, financing abilities and future prospects of the company. These measures are calculated in a consistent and transparent manner and are intended to provide enhanced comparabilities of the performance from period to period. It is Akastor's experience that these measures are frequently used by securities analysts, investors and other interested parties.

Definitions

EBITDA - Earnings before interest, tax, depreciation and amortization, corresponding to "Operating profit before depreciation, amortization and impairment" in the consolidated income statement.

EBIT - Earnings before interest and tax, corresponding to "Operating profit (loss)" in the consolidated income statement.

Net current operating assets (NCOA) - a measure of working capital. It is calculated by current operating assets minus current operating liabilities, excluding financial assets or financial liabilities related to hedging activities

Net capital employed - a measure of all assets employed in the operation of a business. It is calculated by non-current assets (excluding non-current interest bearing receivables) and finance lease receivables added by net current operating asset, minus non-current operating liabilities (deferred tax liabilities, employee benefit obligations, other noncurrent liabilities and total lease liabilities)

Gross debt - Sum of current and non-current borrowings

Net debt - Gross debt minus cash and cash equivalents

Net interesting bearing debt - Net debt minus interest-bearing receivables

Equity ratio - a measure of investment leverage, calculated as total equity divided by total assets at the reporting date

Liquidity reserve - comprises cash and cash equivalents and undrawn committed credit facilities

Reconciliations

The tables below show reconciliations of alternative performance measures to the line items in the consolidated financial statements according to IFRS.

Net current operating assets (NCOA)

	June 30	December 31
NOK million	2024	2023
Current operating assets	53	606
Less:
Current operating liabilities	233	339
Net current operating assets	(180)	267

Net capital employed (NCE)

	June 30	December 31
NOK million	2024	2023
Total non-current assets	5 785	5 279
Net current operating assets (NCOA)	(180)	267
Current finance receivables	9	19
Less:
Non-current interest-bearing receivables	623	550
Employee benefit obligations	77	82
Other non-current liabilities	183	255
Total lease liabilities	16	34
Net capital employed	4 714	4 645

Gross/Net debt/NIBD

	June 30	December 31
NOK million	2024	2023
Non-current borrowings	262	236
Current borrowings	102	1 133
Gross debt	364	1 369
Less:
Cash and cash equivalents	560	144
Net cash/Net debt	(196)	1 225
Less:
Non-current interest-bearing receivables	623	550
Current interest-bearing receivables	12	0
Net interest-bearing debt (NIBD)	(831)	675

Equity ratio

	June 30	December 31
NOK million	2024	2023
Total equity	5 546	3 970
divided by Total assets	6 418	6 048
Equity ratio	86%	66%

Liquidity reserve

	June 30	December 31
NOK million	2024	2023
Cash and cash equivalents	560	144
Undrawn committed credit facilities	320	335
Liquidity reserve	880	479

Financial Calendar Third quarter results 2024, October 30, 2024.

Contact Information

Øyvind Paaske Chief Financial Officer

Tel: +47 917 59 705 E-mail: oyvind.paaske@akastor.com Visiting address: Oksenøyveien 10, NO-1366 Lysaker, Norway

For more information, please visit www.akastor.com/investors