Arendals Fossekompani

Earnings Release • Nov 10, 2023

Arendals Fossekompani: Third quarter financial results

Arendals Fossekompani: Third quarter financial results

(Arendal, 10 November 2023) Arendals Fossekompani ASA (OSE:AFK) reported

revenues of NOK 1,224 million (1,114 million) and an operating profit of NOK 60

million (127 million) in the third quarter of 2023. Ordinary profit after tax, but

before non-controlling interests, totaled NOK -54 million (31 million). Arendals

Fossekompani will pay a dividend of NOK 1.00 per share for the quarter.

“Operating revenues in the third quarter was driven by strong performance from key

portfolio companies Volue and ENRX, and yet another improved quarter from Tekna. A

significantly lower price of electricity has a negative effect on the operating result, as does

more normalized margins for NSSLGlobal,” says Benjamin Golding, Chief Executive Officer

at Arendals Fossekompani.

Compared to the extraordinary high power prices last year, the spot price for electricity in the

NO2 area was significantly lower in the third quarter this year. The lower price was only

partially compensated by higher production volumes. Total revenues from hydropower

production amounted to NOK 79 million (125 million) with an operating profit of NOK 35

million (90 million).

After three quarters, both total revenues and operating profit for Arendals Fossekompani are

higher than in the same period last year. Year-to-date revenues amount to NOK 4,034 million

(3,227 million) with an operating profit of NOK 409 million (346 million).

“Year-to-date figures show a strong performance in the portfolio as a whole,” says Golding.

SEGMENT DEVELOPMENTS

Volue generated solid growth rates during the third quarter, with total operating revenues

amounting to NOK 334 million (NOK 294 million). Recurring revenues constituted 76% of

total revenues and reached NOK 254 million in the quarter, an increase of 40% from the

third quarter of 2022. SaaS revenues of NOK 105 million in the quarter translates to an

increase of 50% compared to the third quarter of 2022. SaaS revenues are now 31% of Volue’s

total revenues. Adjusted EBITDA totaled NOK 63 million (50 million), equal to an adjusted

EBITDA margin of 19% (17%).

Tekna reports revenues of CAD 9.1 million (CAD 5.9 million), an increase of 53% from the

same quarter last year. Adjusted EBITDA was CAD -1.7 million, a significant improvement

from CAD -3.9 million in the corresponding quarter of 2022. Tekna continues to experience

strong demand for its advanced materials and systems. Total order backlog at the end of the

quarter was CAD 23.7 million, a 58% increase from same quarter last year. The backlog was

supported by CAD 10.4 million order intake in the reported period, up from CAD 6.5 million

in the previous quarter.

ENRX reports operating revenues of EUR 36.8 million, an 8% increase from the same

quarter in 2022. Revenue growth was driven by higher activity levels within the Heat

division, as well as a smaller contribution from the Charge division. The company achieved

solid growth in Europe, while some sliding project deliveries in Asia and North America will

push revenues to Q4. EBIT for the quarter ended at EUR 2.6 million (EUR 1.2 million). EBIT

in the quarter corresponded to a margin of 7%, up from 4% in the same quarter last year.

NSSLGlobal reports continued strong sales and operating profit as well as a solid order

intake. Revenues in the third quarter were GBP 21.4 million (GBP 22.1 million) and the

operating profit ended at GBP 3.5 million (GBP 6.5 million), corresponding to an operating

margin of 16% (29%). As anticipated following a long period of unusually high profit, the

margins are returning to a more normal level. NSSLGlobal’s sales and pipeline continue to be

strong across both governmental and maritime sectors.

“Our companies are well positioned within high-growth global industry verticals with a

positive long-term outlook. The portfolio is diversified, providing both stable cash flow

generation and attractive growth opportunities,” says Golding.

CORPORATE DEVELOPMENTS

Arendals Fossekompani’s financial position remains solid. The company’s available cash on

30 September amounted to NOK 1,110 million. In addition, the company has undrawn credit

facilities of NOK 1,338 million, securing available liquidity of NOK 2,448 million as per end

of the quarter.

DIVIDEND

AFK will pay a quarterly dividend of NOK 1.00 per share, based on the company’s quarterly

dividend policy.

ENDS

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For additional comments, please contact:

Benjamin Golding, Chief Executive Officer: +47 974 04 496

Hanne Watts, VP Communications & Sustainability: +47 974 04 496

Arendals Fossekompani | www.arendalsfossekompani.no

Arendals Fossekompani (AFK) is a long-term industrial investment company that owns

energy- and technology-related companies which enable the energy transition and next

generation industrial technologies. AFK operates globally in several future-oriented

industries, including 3D printing, wireless charging, algo trading, satellite services, battery

technology, software, and digitization. AFK was established in 1896 and has been a producer

of renewable hydro power for more than 100 years. The company is headquartered in

Arendal, Norway and listed at the Oslo Stock Exchange.

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This information is considered to be inside information pursuant to the EU Market Abuse

Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the

Norwegian Securities Trading Act.

This stock exchange announcement was published by Lars Peder Fensli, CFO, Arendals Fossekompani ASA, on 10 November 2023 at 08:00 CET