Seaway 7 ASA

Earnings Release • Apr 28, 2022

Seaway 7 ASA Announces First Quarter 2022 Results

Seaway 7 ASA Announces First Quarter 2022 Results

Oslo – 28 April 2022 – Seaway 7 ASA (Euronext Growth: SEAW7) announced today results for the first quarter which ended 31 March 2022.

First Quarter highlights

• First quarter 2022 revenue up 11% year-on-year to $267 million

• First quarter Adjusted EBITDA of $14 million equating to a margin of 5%

• Order intake in the first quarter of $93 million, equating to a first quarter book-to-bill ratio of 0.4, resulting in backlog of $1.0 billion at quarter end

For the period (in $ Three Months Ended

millions, except

Adjusted EBITDA margin 31 Mar 2022 31 Mar 2021

and per share data) Unaudited Unaudited

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Revenue 267 241

Adjusted EBITDA(a) 14 (7)

Adjusted EBITDA margin(a) 5% (3%)

Net operating loss (8) (20)

Net loss (2) (27)

Earnings per share – in $ per share

Basic (0.00) (0.09)

Diluted(b) (0.00) (0.09)

------------------------------------------------------------------------

31 Mar 2022 31 Mar 2021

At (in $ millions) Unaudited Unaudited

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Backlog(c) 1,046 1,238

Book-to-bill ratio – year-to-date(c) 0.4 0.3

Cash and cash equivalents 22 22

Borrowings (99) (101)

Net debt excluding lease liabilities(d) (77) (79)

Net debt including lease liabilities(d) (96) (106)

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(a) For explanations and reconciliations of Adjusted EBITDA and Adjusted EBITDA margin refer to Note 8 ‘Adjusted EBITDA and Adjusted EBITDA margin’ to the Condensed Consolidated Financial Statements.

(b) For the explanation and a reconciliation of diluted earnings per share refer to Note 7 ‘Earnings per share’ to the Condensed Consolidated Financial Statements.

(c) Backlog is a non-IFRS measure. Book-to-bill ratio represents total order intake divided by revenue recognised in the year. Book-to-bill ratio represents total order intake, (excluding amounts related to business combinations), divided by revenue recognised in the year-to-date. Comparative figure is for the full year ended 31 December 2021.

(d) Net debt is a non-IFRS measure and is defined as cash and cash equivalents less borrowings.

Stuart Fitzgerald, Chief Executive Officer, said:

In the first quarter of 2022, Seaway 7 delivered solid revenue and EBITDA growth compared with the prior year period. Although we experienced a relatively quiet quarter for announced new orders, the Group’s backlog remains robust at $1.0 billion. Tendering activity has been high with several contracts and preferred supplier positions expected to be awarded to the industry in the coming months.

First quarter operational review

The first quarter saw a continuation of good operational progress in the fabrication and installation phase on the Seagreen project. Of the 114 jackets, 60 jackets were delivered and on site in Nigg, Scotland with a further 20 jackets completed by fabricators and in transit from fabrication yards in China and the Middle East. By quarter end, 21 jackets and 11 cables were installed and the delivery of the remaining jackets and cables to the marshalling yard in Scotland remains on schedule.

As reported in the press on 14 April 2022, an incident took place with Saipem’s S7000 vessel whilst off-hire from Seaway 7 and on a planned maintenance stop. The timing of the return to work of the S7000 onto the Seagreen project is currently being evaluated.

Seaway Strashnov completed the monopile installation on the Kaskasi project in the German Bight in the first quarter. This was the first commercial use of a new method and equipment for installing monopiles in Dynamic Positioning mode from the Seaway Strashnov, a key milestone for Seaway 7 and an industry first. Seaway Yudin mobilised onto the Formosa 2 project in Taiwan and continued the installation of the pin-piles. Seaway Aimery commenced cable installation on the Hollandse Kust Zuid project, Netherlands and Seaway Moxie continued to be active on the Hornsea II project in the UK. Having finished 2021 work scopes on the Yunlin project Seaway Phoenix transited to the UK for maintenance in preparation for cable installation on the Seagreen project, UK. Maersk Connector sailed to Asia to support Taiwan project activity during 2022.

The heavy transportation vessels maintained their high levels of utilisation, despite planned dry-dockings, and we saw an improvement in the time charter equivalent day rates in the quarter.

During Q1 2022, the utilisation of the active fleet was 65%, down from 80% in the fourth quarter 2021.

The development of Seaway Alfa Lift foundation installation vessel continued through the first quarter in 2022 with sea trials successfully completed and commissioning of marine systems progressing.

The repairs of the Liebherr crane A-frame continued and are expected to be complete in the second half of 2022. The mission equipment for the upending and lowering of monopiles remains the critical path to vessel delivery and readiness for operations.

The development of Seaway Ventus, the Group’s first wind turbine installation vessel, continued during the first quarter with good progress on detailed design, yard activities and crane manufacture from GustoMSC. Vessel delivery is scheduled for mid-2023 with the vessel anticipated to start in the first half of 2024 on the Borkum Riffgrund 3 and Gode Wind 3 project in Germany.

We are monitoring risks associated with the ongoing Covid-19 restrictions and lockdowns in China, particularly as it relates to the movement of 3rd party equipment and personnel.

First quarter financial review

First quarter revenue of $267 million increased by 11% compared to the prior year period, reflecting higher activity on the Seagreen project, UK. Adjusted EBITDA margin increased to 5% from a negative Adjusted ETBIDA margin of 3%. After depreciation and amortisation of $22 million, the Group recorded a net operating loss of $8 million. Net loss for the quarter was $2 million, after a tax credit of $5 million.

During the quarter, net cash generated from operating activities was $20 million which was impacted by delayed client payments linked to commercial discussions in relation to Covid-19 challenges and delays in Taiwan. Capital expenditure was $13 million and mainly related to planned dry dockings of the heavy transportation vessels. Net cash used in financing activities of $8 million included receipt of a $35 million short-term loan from the Group’s ultimate parent undertaking, Subsea 7 S.A. Group, offset by repayment in full of the Seaway 7 ASA Revolving Credit Facility of $37 million and $5 million payment of lease liabilities. Cash and cash equivalents remained stable since 31 December 2021 and was $22 million by the end of the quarter.

In the first quarter, the Group recognised new awards of $33 million and escalations of approximately $60 million, resulting in a book-to-bill ratio of 0.4. The backlog at the end of March 2022 was $1.0 billion, of which $675 million is expected to be executed during the remainder of 2022.

Outlook

For the remainder of 2022 Seaway 7 benefits from a high level of visible activity afforded by its backlog. Ongoing tendering activity is significant for projects expected to be awarded to the industry in 2022, primarily for projects in UK, Europe and the US. This underpins our positive outlook for activity and earnings for Seaway 7 beyond the current backlog. To support this positive outlook we expect to have the core financing of the company in place by the end of the third quarter of 2022.

Seaway 7 remains well placed as a market leader in fixed offshore wind, with exposure across multiple segments in the value chain, and a unique geographic and client positioning. Market fundamentals for fixed offshore wind continue to strengthen and we expect demand for our services to be strong in the years to come. New assets under construction, a strengthening market and our ability to deliver large Integrated and EPCI projects for our customers will be key drivers for earnings growth going forward.

Special Note Regarding Forward-Looking Statements

Forward-Looking Statements: This announcement may contain ‘forward-looking statements’. These statements relate to our current expectations, beliefs, intentions, assumptions or strategies regarding the future and are subject to known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements may be identified by the use of words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘future’, ‘goal’, ‘intend’, ‘likely’ ‘may’, ‘plan’, ‘project’, ‘seek’, ‘should’, ‘strategy’ ‘will’, and similar expressions. The principal risks which could affect future operations of the Group are described in the ‘Risk’ section of the Group’s Annual Report. Factors that may cause actual and future results and trends to differ materially from our forward-looking statements include (but are not limited to): (i) our ability to deliver fixed price projects in accordance with client expectations and within the parameters of our bids, and to avoid cost overruns; (ii) our ability to collect receivables, negotiate variation orders and collect the related revenue; (iii) our ability to recover costs on significant projects;(iv) unanticipated delays or cancellation of projects included in our backlog; (v) competition and price fluctuations in the markets and businesses in which we operate; (vi) the loss of, or deterioration in our relationship with, any significant clients; (vii) the outcome of legal proceedings or governmental inquiries; (viii) uncertainties inherent in operating internationally, including economic, political and social instability, boycotts or embargoes, labour unrest, changes in foreign governmental regulations, corruption and currency fluctuations; (ix) the effects of a pandemic or epidemic or a natural disaster; (x) changes in, or our failure to comply with, applicable laws and regulations (including regulatory measures addressing climate change); (xi) operating hazards, including spills, environmental damage, personal or property damage and business interruptions caused by adverse weather; (xii) equipment or mechanical failures, which could increase costs, impair revenue and result in penalties for failure to meet project completion requirements; (xiii) the timely delivery of vessels on order and the timely completion of ship conversion programmes; (xiv) our ability to keep pace with technological changes and the impact of potential information technology, cyber security or data security breaches; and (xv) the effectiveness of our disclosure controls and procedures and internal control over financial reporting. Many of these factors are beyond our ability to control or predict. Given these uncertainties, you should not place undue reliance on the forward-looking statements. Each forward-looking statement speaks only as of the date of this announcement. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Webcast and conference call information:

Date: 28 April 2022

Time: 14:30 CET

Please join the webcast through

https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20220428_7

The webcast will also be available through Seaway 7 website

https://www.seaway7.com/investors/results-reports-publications/

Conference call details

Participants dial-in numbers:

Participant Passcode (for all countries): 447972

Norway: +47 21956342

Sweden: +46 406820620

UK: +44 2037696819

USA: +1 6467870157

International dial in: +44 2037696819

Please join the call 5-10 minutes prior to scheduled start time.

For further information, please contact:

Mark Hodgkinson

Tel +44 7788 316 501

ir@seaway7.com