Eqva ASA — Interim / Quarterly Report 2019

May 31, 2019

HAVYARD GROUP ASA IR summary Q1 2019 – 31.05.19

Headlines/Milestones Q1 2019

• EBIT of MNOK 10,8 (1.4 %)
• EBITDA of MNOK 24,6 (3.1 %)
• Profit of MNOK 5,7 (0.9%)
• The Group's operating result (EBIT) in first quarter was according expectation. The main contributors are Ship Design & Solution and Fish Handling. Power & Control has weak results in the quarter due to high volume of traded components with lower margins. Havyard has delivered two ferries to Fjord1 in the first quarter.
• No considerable new contracts in first quarter, but signed new orders end April for delivery of 2+1 live fish carriers to Norsk Fisketransport with planned delivery in 2020 and 2021. The contracts includes Ship Design and major equipment supplies from Fish Handling and Power & Control.

With reference to info in the annual report regarding breach of financial covenants. A joint meeting has been conducted with banks and guarantors and there are ongoing activities to secure a long term solution that ensures a good foundation for future activity. The first step is to get waivers in place. The process around sale of company MMC FP is according schedule with the aim of agreement by the middle of June 2019.

Status and Outlook per Segments

Group Key Figures

MNOK	2019 Q1	2018 Q1	2018
EBIT-margin	1.37%	$-0.94%$	$-6.36%$
Earnings per share	0.13	$-0.17$	$-7.78$
Assets	2,534	1,610	2,293
Equity	300	491	293
Equity ratio	11.9%	30.5%	12.8%

Order backlog

• External order backlog of approx. MNOK 4.042 (Q4 2018: 4.642)
• 2019 MNOK 2.457
• 2020 MNOK 1.340
• 2021 MNOK 245

Figures per segment

segment
(NOK million)	Ship building Technology	Ship Design & Solutions	Power & Control	Fish Handling	Production & Services	Other	Havyard Group
Operating revenues, External	616.4	38,8	101.8	114,7		$-86,8$	784,9
Operating revenues, Internal	7.2	13,4	9,2	34,3		$-64,2$	0,0
Total operating revenue	623,7	52,2	111,0	$\star$ 149,0		$-151,0$	784,9
FBITDA	6,7	12,1	$-7,5$	9,7		3,6	24,6
Depreciation	3,3	4,4	2,2	2,3		1,6	13,8
Operating profit/(loss) (EBIT)	3,4	7,7	$-9,6$	7,3		2,0	10,8
Net financial items	$-1,3$	$-3,6$	2,3	0,3		$-1,3$	$-3,6$
Profit/(loss) from associate	0,0	0,0	0,0	0,0		$-1,0$	$-1,0$
Profit/(Loss) before tax	2,1	4,0	$-7,3$	7,7		0,7	7,2
Income tax expense	1,4	0,8	$-1,0$	0,2		0,2	1,5
Profit/(Loss)	0,8	3,2	$-6,4$	7,5		0,6	5,7
Total assets	1645,7	495,8	383,5	329,6		$-320,3$	2 5 3 4 , 3
Equity	83,0	110.9	55,8	126,0		$-75,3$	300,4
Liabilities	1562.7	384.9	327.7	203,6		$-245,0$	2 2 3 3 , 9

Balance sheet

	2019 Q1	2018 Q1	2018
	unaudited urevidert
Non-current assets
Goodwill	141003	141 003	141 003
Licenses, patents and R&D	95 036	110 519	98 323
Property, plant and equipment	273 807	231 273	203 236
Right of use assets	72 477
Investment in associates	28 640	20 058	27 605
Loan to associates	2 0 5 1	18 645	2024
Investment in financial assets	23 510	27 597	23 546
Other non-current receivable	4 3 3 3	22 507	4 3 4 6
Total non-current assets	568 381	571 602	500 083

Current Assets

TOTAL ASSETS	2 534 338	1610360	2 2 9 3 4 2 8
Total current assets	1965957	1038757	1793344
Cash and cash equivalents	278 199	157 614	361852
Contract assets customer contracts	952 077	408 066	840 956
Other receivables	426 878	114 200	245 115
Accounts receivables	165 912	169 258	193 567
Inventory	142 202	189 619	151 854

	2019 Q1	2018 Q1	2018
	unaudited urevidert
Equity
Share capital	1239	1239	1239
Share premium reserve	22 535	22 535	22 535
Treasury shares	$-3$	$-5$	$-3$
Retained earnings	191741	370 446	187 181
Non-controlling interest	84 893	97 226	82 436
Total equity	300 405	491442	293 389
Non-current liabilities
Deferred tax liability	7 311	15 0 21	6 6 3 9
Derivatives	$\Omega$	38	$\Omega$
Bond loan	$\Omega$	84738	$\Omega$
Loans and borrowings, non-current	$\Omega$	62 014	$\Omega$
Liabilities to parent company	$\Omega$	23715	$\Omega$
Lease liabilities	51 169
Derivatives	493
Other long-term liabilities	13267	1882	9 2 2 1
Total non-current liabilities	72 239	187 408	15 861
Current liabilities
Accounts payables	350 581	156 056	298 077
Taxes payable	3860	8 1 9 6	3 8 9 1
Public duties payables	72 547	30 885	68 597
Construction loans	752 010	210 600	668 642
Bond loan (installments next period)	87 500	10 000	90 000
Loans and borrowings, current	105 045	38 535	106 520
Contract liabilities	461064	150 502	403 919
Lease liabilities	21 3 0 9
Derivatives	1374
Other current liabilities	309 403	326 734	344 534
Total current liabilities	2 164 694	931 509	1984178
Total liabilities	2 233 933	1 118 917	2 000 039

Net cash flow used in investing activities	$-50470$	$-12751$	$-9389$
Changes in long term receivables	$-50470$	$-6029$	$-2266$
Interest income	O	211
Dividends received	$\circ$	$\circ$
Disposal of financial assets	$\circ$	$\circ$	$-5500$
Investment in financial assets	O	$\Omega$	$-22$
Investment in intangible assets	$\Omega$	$-5,201$	$-27.32$
Disposal of property, plant and equipment	o	$\circ$	24 00
Investments in property, plant and equipment	$\Omega$	$-1732$	$-1269$
CASH FLOW FROM INVESTMENTS

New long term debt		o	$\Omega$	55 000
Repayment non-current debt	10	$-3.975$	$-3835$	$-24868$
Repayment of lease liabilities	11	$-7.367$	o	o
Payment of loan in subsidiary		o	$\Omega$	20 000
Cost renegotiation bond loan		٥	$\circ$	o
Interest payment		$-4823$	$-3248$	$-26890$
Purchase/sale of treasury shares		$\Omega$	o	O
Net cash flow from/ (used in) financing activitie		$-16165$	$-7099$	23 241
Net change in cash and cash equivalents		$-74150$	$-38932$	105 203
Cash and cash equivalents at start of the year		221869	116 666	116 666
Cash and cash equivalents at end of the year		147 719	77734	221869

Cash Flow

(NOK 1,000)	Note	2019 Q1	2018 Q1	2018
		ungudited urevident
CASH FLOW FROM OPERATIONS
Profit/(loss) before tax		7 198	$-8,440$	$-203899$
Taxes paid		o	$\Omega$	C
Depreciation		13 813	5725	55 848
Net financial items		2.564	3 0 3 7	57 274
Change in value financial derivatives		$-7128$	$-1944$	8 415
Change in bond loan (amortization)		o	353	$-14$
Profit/loss disposals property, plant and equipmen		$\Omega$	$\Omega$	$-5000$
Impairment financial assets		o	$\Omega$	29 25 2
Share of (profit)/loss from associates		1005	2 3 4 8	$-6837$
Changes in inventory		9652	$-74435$	$-36669$
Net changes in construction loans	10 10	83 368	210 600	668 642
Changes in accounts receivables		27 655	$-33181$	$-57490$
Changes in accounts payable		52 504	12 590	$-636785$
Changes in customer contracts, asset		$-111$ 121	$-172$ 169	155 159
Changes in customer contracts, liability		57 145	$-25440$	134 145
Changes in restricted desposits		9 5 0 3	$-9522$	$-50.58$
Chanaes in other current receivables/liabilities		$-153674$	71 3 96	64 525
Net cash flow from/(to) operating activities		$-7515$	$-19082$	175 858

	Negative CF from operations in Q1.19:
▪	Accruals regarding projects

Negative CF from Investments in Q1.19:

▪ Changes in long term receivables (Leasing- long term)

Negative CF from financing Q1.19:

• Payment debt
• Repayment interest
• Repayment lease

HSE / QA

An extensive plan is implemented to reduce injuries and absence including subcontractors

Average sick leave

• Last 15 months sick leave at 3.24 %
• In 2019 sick leave at 4.0 % (Same level as first quartal in previous years.)

Injuries resulting in absence from work

• 2 injurie last 12 months

• Strong focus on Quality in the Group

• Quality deviations are measured, documented in action lists and handled effectively
• Internal audits in accordance with ISO 9001 and ISO 14001
• Supplier audits
• Audits from customers