Seaway 7 ASA

Earnings Release • Nov 17, 2021

Seaway 7 ASA Announces Third Quarter 2021 Results

Seaway 7 ASA Announces Third Quarter 2021 Results

Oslo – 17 November 2021 – Seaway 7 ASA (Euronext Growth: SEAW7) announced today results for the third quarter which ended 30 September 2021.

On 1 October 2021, OHT ASA completed a business combination with the renewables business unit of Subsea 7, and the combined company was renamed Seaway 7 ASA (the “Company”). The condensed consolidated financial statements of Seaway 7 ASA contained in this report reflect the results for the third quarter and year-to-date prior to the business combination and do not include the results related to Subsea 7’s renewables business unit. Consolidated financial statements of Seaway 7 ASA for the fourth quarter will include results related to both the Subsea 7 renewables business unit and legacy OHT businesses.

THIRD QUARTER 2021 SUMMARY

- Operating revenue was $17.4m in Q3 2021, down from $17.8m in Q2 2021

- EBITDA was $1.7m in Q3 2021, down from $3.9m in Q2 2021

- Loss before tax was $2.4m in Q3 2021, compared to a loss before tax of $0.1m in Q2 2021

- Utilization on the transportation fleet was 96% in Q3 2021. Utilization in Q2 2021 was 93%

SUBSEQUENT EVENTS

On 1 October 2021, OHT ASA completed a business combination with the renewables business unit of Subsea 7, and the combined company was renamed Seaway 7 ASA.

The combined entity retains the listing on Euronext Growth market in Oslo, with the ticker SEAW7.

As a result of the combination, these subsequent events came effective during October:

- 314,325,054 new ordinary shares were issued, each with a nominal value of NOK 0.10

- A new Board of Directors was elected

- A new CEO and executive management team was appointed

On 6 October 2021, the Company announced that it had been selected as preferred contractor by Ørsted for the transport and installation of wind turbine generators for part of the Gode Wind 3 and Borkum Riffgrund 3 offshore windfarms in Germany. The Contract for the aforementioned scope with Ørsted was subsequently signed on 8 November 2021. This is the first assignment to be secured for the Company’s jack-up WTG installation vessel VIND 1 and is seen as a positive validation of the combination to form Seaway 7 ASA and the confidence of our Customers in our ability to delivery on their project requirements.

On 18 October 2021, the Company was informed of an incident involving the folding A-frame on the main crane of Alfa Lift, currently under construction in China. No personnel were injured and the unplanned movement of the folding A-frame is currently being investigated, including impacts to vessel delivery schedule and on the initial committed works for the vessel.

On 12 November 2021, the Company announced that it had signed a Contract with SSE for the Doggerbank C project. Dogger Bank C will be developed with 87 wind turbine generators and is owned by SSE Renewables, Equinor and ENI. The company will utilise its specialist Heavy Lift Vessel Alfa Lift, and offshore installation will commence in 2024 following the installation of the Dogger Bank A and B projects. The contract award is subject to SSE Renewables final investment decision to proceed with the project.

FINANCIALS

Financial key figures

in $ thousands Q3 2021 Q2 2021

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

Operating revenue 17,400 17,752

EBITDA 1,697 3,859

Operating loss (2,367) (206)

Net Financial Income (expenses) (73) 59

Loss before tax (2,440) (147)

Loss per share, in $ per share (0.02) (0.00)

Vessels and construction contracts 275,619 260,123

Bank deposits and cash equivalents 12,058 16,978

Total Assets 315,310 300,108

Total Equity 226,878 229,318

Debt to credit institutions 36,527 21,474

Total current liabilities 49,489 47,118

Net cashflow from operating activities (1,394) 9,338

Net cashflow used in investment activities (18,324) (8,403)

Net cashflow from financing activities 14,798 (233)

Financial review

The Company’s operating revenue was $17.4m in Q3 2021, compared to $17.8m in Q2 2021. The Company’s EBITDA decreased from $3.9m in Q2 2021 to $1.7m in Q3 2021 driven by lower effective day rates achieved on contracts within the third quarter and certain one-off voyage related costs. Net financial expense was $0.1m in Q3 2021 compared to a net financial income of $0.1m in Q2 2021.

The Company’s total assets amounted to $315.3m at 30 September 2021, up from $300.1m at 30 June 2021. Total book equity was $226.9m at 30 September 2021.

Net cash flow from operating activities was negative $1.4m in Q3 2021. Net cash flow from financing activities was $14.8m following drawdown of $15.0m on the revolving credit facility. $18.3m were used in investment activities this quarter, mainly payments under contracts for vessel construction. Net change in cash and cash equivalents from 30 June 2021 to 30 September 2021 was negative $4.9m. Cash and cash equivalents at the end of Q3 2021 were $12.1m.

Total undrawn amount on the revolving credit facility was $13.0m on 30 September 2021.

OPERATIONS AND CONTRACTS

TRANSPORTATION

The Company has continued to avoid major operational disruptions from the Covid-19 pandemic, with reduced efficiency in execution of crew changes being the only negative effects. All the vessels in the fleet, Falcon, Eagle, Osprey, Hawk and Albatross have traded in the spot market in Q3 2021, transporting power barges, liftboats, jack-up drilling rigs and push barges.

Voyages performed in Q3 2021 fall into the following categories: Renewables; O&G Exploration and Production; Marine & Naval; and Other Industries. On a 12-month rolling basis, the Renewables voyages account for 38% of revenue. The Company has achieved a utilization of 96% in Q3 2021 and 93% YTD.

INSTALLATION

The Dogger Bank A and B projects continue to deliver detail design documentation according to plan. The scope of work includes transport and installation of 190 monopiles and transition pieces from Q3 2022 to early 2024. Impacts from the incident involving the main crane’s A-frame on 18 October 2021 on the startup of the Dogger Bank A offshore campaign are still being assessed, as are potential mitigations to maintain required progress on offshore installation activities in 2022.

NEWBUILDINGS

Construction of Alfa Lift at CMHI’s yard in Jiangsu, China, has been focused on electrical works as well as mechanical completion and commissioning activities. All generator sets have been started and test-run. The incident involving the main crane’s A-frame on 18 October 2021 continues to be investigated, and the consequences on the vessel delivery date are still to be confirmed.

The shipbuilding contract for VIND 1, the Company’s first wind turbine installation vessel (WTIV) was made effective on 30 November 2020, and continues in the detailed design phase following completion of basic design. Delivery is scheduled for mid-2023. Selection of all main equipment has been completed and first steel cutting expected end November 2021.

MARKET OUTLOOK

OFFSHORE WIND

Our primary market continues to develop favourably, supported by strong market fundamentals for offshore fixed wind from competitive power generation costs, and the broader electrification and Energy Transition imperative. Tendering activity is particularly focussed around European and US markets and the volume of active tendering activity has increased in the third quarter, primarily for offshore execution in 2024 and beyond. This rise in tendering activity is seen across each or our operating divisions with a mix of EPCI, and both integrated and standalone Transport and Installation tenders. We observe transportation and logistics becoming an increasingly important part of the tenders as markets and supply chains globalise.

Within Offshore Wind, we expect that the coming period will be characterized by active bidding, clarification rounds and negotiation with clients, followed by preferred bidder status or contract awards to the Company or its competitors. This will be primarily for projects with offshore execution from 2024 onwards.

TRANSPORTATION

Our fleet continues to operate in the spot market. We have seen a reasonable number of requests for transportation projects, with 261 received in Q3 2021 versus 230 in Q2 2021 which is sign of an increased activity level in the market. There is a growing share of offshore wind related projects currently being tendered for execution from late 2022 to 2027, dominated by transportation of monopiles and transition pieces from Asia to Europe and monopiles/transition pieces from Europe to the US.

Within Transportation, we expect continued increase in charter rates in the spot market due to an ongoing transition from short and medium term oversupply to undersupply of capacity. The near-term spot market will be dominated by Marine & Naval, Other industries and O&G Decommissioning & Exploration. In the medium and longer term we expect Renewables transportation projects to become a more significant proportion of total activity.

CORPORATE DEVELOPMENT

Seaway 7 ASA commences its operations as a combined company with a backlog of $1.3bn as of 1 October 2021, and with the support of reputable major shareholders with deep experience within offshore energy services, providing strong foundations for the operations and future strategic development of the Company. Since the combination date the Company has announced two new contract awards which further enhances the backlog position of Seaway 7 ASA.

As previously announced, Seaway 7 aims to move its share listing from the Euronext Growth market to the main Oslo Børs.

Seaway 7 will be seeking funding to support its capital commitments in respect of the new build vessels. Seaway 7 will aim to borrow directly from the credit market. Any new debt raising will be timed for the expected delivery of the Alfa Lift from the shipyard.

Seaway 7 is a pure-play Oslo-listed offshore wind services company with an extensive track record in delivering offshore wind farm projects. With a market-leading combination of capabilities and assets, and a unique client and geographic footprint, Seaway 7 is well positioned for the strong growth anticipated within offshore fixed wind through the coming decade.

RISK FACTORS

The main risk factors which could materially adversely impact the Company’s operations and/or financial performance and position are noted on page 12 of Seaway 7 ASA’s Annual Report 2020. During the fourth quarter, management will assess the risk factors which may impact the Company following the business combination with Subsea 7’s Renewables business on 1 October 2021.

During the year, management has been mitigating the impacts of the Covid-19 pandemic by monitoring health procedures and adhering to the guidance of the World Health Organization and local authorities. The Company has implemented revised working procedures to reduce the risks associated with Covid-19, including remote working, travel bans, strict crew change procedures, social distancing wherever possible and the use of additional personal protective equipment.

Webcast and conference call information

Date: 17 November 2021

Time: 14:30pm CET

Please join the webcast through:

https://channel.royalcast.com/landingpage/hegnarmedia/20211117_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:

Norway: +47 23500236

Sweden: +46 850558351

UK: +44 3333009272

USA: +1 6467224956

International dial in: +44 3333009272

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

About Seaway 7

Seaway 7 is a global leader in the delivery of bottom-fixed offshore wind farm solutions, committed to contributing to an efficient and sustainable energy supply for the future.

Seaway 7 is listed on the Oslo’s Euronext Growth (SEAW7)

Contact for investment community enquiries

Mark Hodgkinson

Tel +44 7788 316 501

ir@seaway7.com

Special Note Regarding Forward-Looking Statements

Forward-looking statements presented in this report are based on various assumptions. The assumptions were reasonable when made, but are subject to uncertainties and contingencies that are difficult or impossible to predict. Seaway 7 ASA cannot give assurances that expectations regarding the outlook will be achieved or accomplished.