Akastor — Earnings Release 2021

Feb 9, 2022

Akastor ASA: Fourth Quarter Results 2021

Akastor ASA: Fourth Quarter Results 2021

Fourth Quarter Highlights

· The combination of MHWirth and Baker Hughes' Subsea Drilling Systems (SDS)

into HMH closed on October 1, 2021, after which Akastor owns 50% of the shares

in the new company

· Completed refinancing of its existing corporate credit facilities in Akastor

· Net capital employed of NOK 5.1 billion and equity of NOK 4.1 billion per

year-end 2021, corresponding to NOK 15 per share

· HMH shows strong adjusted revenue of USD 168 million and adjusted EBITDA of

USD 31 million in its initial quarter

· AKOFS Offshore awarded three-year contract with Petrobras for Skandi Santos

· Net interest-bearing debt was NOK 984 million per end of the quarter, a

reduction of NOK 831 million in the quarter

· Subsequent event: HMH bridge loan facility refinanced with new Nordic bond

of USD 150 million

Akastor CEO Karl Erik Kjelstad comments:

"The most important event for Akastor in the quarter was the closing of the

combination of MHWirth and Baker Hughes SDS into HMH, which enabled refinancing

and a significant reduction of Akastor's corporate debt. Given the market

backdrop, we believe the timing is excellent for creating a premier global

drilling solutions provider, and we are happy to see HMH delivering strong

earnings. HMH also secured an order intake that demonstrates the revenue

synergies."

"The quarter also brought an important milestone for AKOFS Offshore, securing a

new three-year contract with Petrobras", Kjelstad added.

HMH

The combination of MHWirth and Baker Hughes' Subsea Drilling Systems (SDS)

business to create HMH was closed on October 1, 2021. The company reported

adjusted revenues of USD 168 million in the quarter, with adjusted EBITDA of USD

31 million, corresponding to an EBITDA margin of approximately 18.5 percent.

Revenues from After Market Services were USD 108 million in the quarter, in line

with the previous quarter. Short term contracts for rigs continue to affect

order intake, although HMH is well positioned to benefit from an expected pick

-up in rig reactivation activity in 2022.

Revenues from Projects, Products & Other were USD 58 million in the fourth

quarter, an increase of around 66 percent compared with the previous quarter,

driven by recent order intake of full package projects. Recent order intake will

further increase the activity level within Projects going forward, including the

USD 78 million contract for delivery of subsea equipment package to GMGS entered

in the fourth quarter. This contract is the first joint commercial win in HMH

and constitutes a concrete example of revenue synergy potential. The rig

newbuilding market continues to be muted with relatively few projects expected

to materialize in the short to medium term.

AKOFS Offshore

AKOFS reported revenues of USD 37 million and EBITDA of USD 7 million in the

quarter.

The company in the fourth quarter signed a firm three-year contract with

Petróleo Brasileiro S.A. (Petrobras) for Skandi Santos which will perform a

broad scope of subsea services in Brazil. The services will commence in Q4 2022

and the total contract value is about USD 107 million, of which USD 53 million

is booked as order intake in AKOFS Offshore in the quarter, while the remaining

value will go through separate contracts between end client and sub-suppliers of

AKOFS Offshore.

All vessels delivered high revenue utilization in the quarter, with Aker

Wayfarer recording 99% and Skandi Santos and AKOFS Seafarer both delivering 91%

revenue utilization. Skandi Santos went off contract with Petrobras late

December, while AKOFS Seafarer was affected by challenging weather conditions in

certain periods.

Other industrial holdings

AGR delivered yet another solid quarter with NOK 190 million in revenues, driven

by the Norwegian consultancy business. EBITDA of NOK 4 million was however

negatively affected by a non-recurring effect of NOK 11 million related to the

sale of its UK well management business. Cool Sorption delivered revenues of NOK

24 million, in line with last quarter, but with a higher EBITDA of NOK 5 million

driven by higher service contribution.

Financial holdings

Contributions from financial investments were negative NOK 187 million in the

quarter. NES Fircroft contributed positively with NOK 21 million. The preferred

equity in Odfjell Drilling contributed with NOK 19 million, negatively affected

by non-cash valuation changes of NOK 6 million related to the warrant structure

in the period. The joint venture AKOFS Offshore contributed negatively with NOK

229 million. This included non-cash impairment effects of NOK 156 million.

Consolidated financial figures

Group revenue and EBITDA of Akastor was NOK 247 million and negative NOK 15

million respectively. Consolidated financials do not include earnings of JV

holdings and thus represent a minor part of total Net Capital Employed. Net

income was NOK 1.2 billion in the fourth quarter, including financial effects of

the HMH transaction.

Financial calendar

Annual Report 2021: March 30, 2022

First Quarter Results 2022: April 28, 2022.

Media Contact

Øyvind Paaske

Chief Financial Officer

Tel: +47 917 59 705

E-mail: oyvind.paaske@akastor.com

Akastor is a Norway-based oil-services investment company with a portfolio of

industrial holdings and other investments. The company has a flexible mandate

for active ownership and long-term value creation.

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.