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Reach Subsea
Quarterly Report • Nov 12, 2024
3725_rns_2024-11-12_3bd80a29-523a-4c22-9a99-9c74236ecb68.pdf
Quarterly Report
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Quarterly Consolidated Report
Everything within Reach
Sustainable access to ocean space
About Reach Subsea
Reach Subsea ASA is listed on the EURONEXT Oslo Stock Exchange under the ticker REACH. The Reach Subsea Group business concept is to offer high quality solutions and technology to clients in need of ocean data and services.
Our services are delivered through a fleet of vessels, supported by offices in Norway, Sweden, the UK, the US, Brazil, Cyprus, Trinidad, Australia, and Singapore. We currently employ over 400 people across both offshore and onshore locations.
The company operates a wide range of work and survey ROVs from its fleet of vessels, ranging from smaller survey, IMR, and light construction vessels to highcapacity subsea construction vessels. Operations are performed by highly qualified offshore personnel and supported by competent onshore engineering resources.
The Group's objective is to offer high quality solutions and technology to clients in need of ocean data and services.
Our vision, 'Sustainable access to ocean space,' underpins our commitment to developing sustainable solutions while carefully balancing the interests of all our stakeholder groups.
| Contents | 2 |
|---|---|
| Highlights | 3 |
| Key figures | 3 |
| CEO Letter | 4 |
| Our services | 9 |
| Featured projects | 11 |
| Technology development | 13 |
| Sustainability | 20 |
| Financial results for the quarter | 27 |
| Capital structure | 29 |
| The Share | 30 |
| Investor relations | 30 |
| News after quarter end | 30 |
| Outlook | 31 |
| Income statement | 33 |
| Notes | 37 |
| Definitions | 51 |
| Contact | 52 |
| Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 | |
|---|---|---|---|---|---|
| UNAUDITED | AUDITED | ||||
| Revenue (NOKm) | 835 | 651 | 2 033 | 1 522 | 1 996 |
| EBIT (NOKm) | 134 | 112 | 284 | 252 | 332 |
| Pre-tax profit (NOKm) | 115 | 92 | 217 | 208 | 290 |
| Cash and cash equivalents (NOKm) | 259 | 137 | 259 | 137 | 436 |
| Net working capital (NOKm) | 115 | 249 | 115 | 249 | (105) |
| Net interest bearing debt excl IFRS 16 leases (NOKm) | (111) | (97) | (111) | (97) | (369) |
| Net interest bearing debt incl IFRS 16 leases (NOKm) | 1 426 | 1 212 | 1 426 | 1 212 | 823 |
| Equity (NOKm) | 1 028 | 823 | 1 028 | 823 | 928 |
| Order backlog (NOKm) | 1 500 | 530 | 1 500 | 530 | 1 600 |
| Outstanding tender value (NOKbn) | 8.5 | 7.5 | 8.5 | 7.5 | 10.0 |
| Number of ROV days sold | 774 | 806 | 2 074 | 2 283 | 2 942 |
| Number of ROV days available | 1 012 | 1 174 | 2 905 | 3 494 | 4 506 |
| Technical uptime on ROVs | 99 % | 100 % | 99 % | 100 % | 99 % |
| Number of offshore personnel days sold | 14 013 | 6 282 | 35 113 | 21 140 | 29 849 |
| LTIs | 0 | 0 | 0 | 0 | 1 |
| Number of vessel days sold | 690 | 550 | 1 729 | 1 315 | 1 759 |
A strong 3Q in terms of activity level and operating results driven by growth, strong market conditions and successful project execution.
EBIT for 3Q2024 was NOK 134.1 million (NOK 112.4 million), while pre- tax result was NOK 115.0 million (NOK 92.3 million).
Reach Remote progressing with sea trials underway, clients lining up to be part of the solution, and the EU Innovation Fund granting EUR 14.3 million for Reach Remote scale-up.
Strong outlook as evidenced by a steady backlog of NOK 1.5 billion and tender volume of NOK 8.5 billion.
Revenue, EBIT and pre-tax profit for Q2 2023 and 6M 2023 include a gain on asset disposal of NOK 30 million.
Contents Directors Report Sustainability Finance Financial Statements
Highlights Key figures
I am pleased to share our third quarter report for 2024, showcasing our continued steady progress aligned with our strategic goals.
In a dynamic market, we are advancing Reach Subsea's growth with a strong focus on profitability and high-quality services. Our core services—IMR, Construction, Survey, and Monitoring—are key drivers of this progress, supported by high utilization across our fleet of eight subsea spreads and two USV spreads. Our services and global reach continue to expand steadily.
Our commitment to robotization in the subsea industry is rapidly materializing with Reach Remote 1 and 2 soon to join our operational USV fleet.
In addition to this, we are expanding our remote service offerings across both our traditional subsea assets and our growing fleet of unmanned platforms.
Reach Remote 1 and 2 introduce a ground breaking approach to subsea operations. Our belief in this vision is reflected in our substantial investments, and it's encouraging to see the market share our confidence.
This support is demonstrated by recognitions like the Ship of the Year 2024 award, the EU Innovation Fund grant for a Reach Remote scale up, and most importantly the support from major energy companies – our existing and future clients - for our pilot projects.
As we reach the starting point for the operationalization of the Reach Remote USVs, we are preparing to address many of the key questions raised during the design and construction phases. Reach Remote 1 is now preparing for her first exam.
We are facing exciting times ahead of us and with this momentum, we believe we are well-positioned to meet the growing demand in our industry.
Our order backlog remains strong at NOK 1.5 billion, with projects lined up for Q4 2024 and beyond, and our tender volume is now at NOK 8.5 billion.
In our mission for "Sustainable Access to Ocean Space" and as we achieve milestones that reinforce our vision, we remain focused on upholding the highest safety standards for our people. This commitment is exemplified by our continued record of zero work-related injuries. We believe that "Everything is within REACH."
Jostein Alendal CEO, Reach Subsea ASA
CEO Letter
Reach Subsea | Quarterly Consolidated Report 2024
3rd Quarter 2024
Our vision
'Sustainable access to ocean space' underpins our commitment to take part in the creation of a sustainable future.
Our values
LEARN
We are in constant search for new and relevant insight making us agile and difficult to keep up with.
- We question and challenge established ways of performance.
- We acquire and develop technology to constantly improve data acquisition, analysis and operations.
- We evaluate and improve methods to put our ever increasing knowledge into action.
TEACH
We share our knowledge to grow as a team and to improve industry standards.
-
• We continuously strive to find solutions beyond current paradigms to work out and implement best practice in our field.
• We share knowledge in-house, to grow as a team.
• We use our knowledge to succeed in alignment with our clients and enable industry improvements.
REACH
We have ambitions and we believe that everything is within reach.
- We constantly reach for improvements as our knowledge and capabilities now, are not the endpoint.
- We have great ambitions. By investing in R&D, driving technological leaps and methodological improvements, we reach for new heights.
- We continuously seek for better solutions, because no matter how good we get, there is always something better ahead of us – so we reach for it.
Jostein Alendal Chief Executive Officer
Jostein Alendal is the founder of Reach Subsea and has been the company's Business Development manager and CEO since 2008. Education: Automation Engineer. Experience: Technical Manager and co-founder of DeepOcean with group responsibility of all ROV operations. Stolt Comex Seaway AS, Seateam AS and DSND.
31 years in subsea
Bård Thuen Høgheim Chief Commercial Officer
Bård Høgheim has been CCO in Reach Subsea since 2014. Education: Master in Finance from Imperial College Business School. Experience: Project Broker in the subsea and renewables market in RS Platou and has experience in offshore industry analysis.
17 years in subsea
Birgitte W. Johansen Chief Financial Officer
Birgitte W. Johansen has been CFO in Reach Subsea since 2012. Education: The Blue MBA and Master of Business and Economics. Experience: Account Manager in BNP Paribas, Shipping department. Analyst and Project Manager in Oceanlink Management. Relationship Manager in SpareBank 1 SRBank, Energy and Maritime department. 25 years in finance
Inge Grutle Chief Operations Officer
Inge Grutle has been COO in Reach Subsea since 2012. Education: Master of Science degree in Marine and Subsea Technology. Experience: IMR Engineering Manager and Business Development in DeepOcean and has experience in planning and execution of offshore and subsea operations.
17 years in subsea
Audun Brandtzæg Chief Technology Officer
Audun Brandtzæg has been CTO in Reach Subsea since 2023. Education: Civil Engineer / Surveyor. Experience: Offshore / Senior Surveyor, Reporting Manager Stolt Comex Seaway, Head of Survey DeepOcean, Asset Manager / Project Manager / Survey responsible Gassco, Pool Director JV MMT / Reach, Global Operation Director Ocean Infinity.
34 years in subsea
Meet the management team
3rd Quarter 2024
Directors Report
The Reach Subsea Group's business concept is to offer high quality solutions and technology to clients in need of ocean data and services.
Our services
IMR & CONSTRUCTION
Reach Subsea offers diverse capabilities, from heavy construction and decommissioning to specialized inspection, maintenance, and repair (IMR) services.
Equipped with a reliable ROV fleet and backed by extensive industry expertise, we deliver solutions for projects of all sizes, providing dependable support across the lifecycle of ocean assets. Reach Subsea is committed to being a trusted partner for clients worldwide.
SURVEY
Reach Subsea offers cost-effective, high-end seabed mapping and pipeline inspection services on a global scale.
Our survey capabilities span reconnaissance and detailed seabed mapping for oil and gas, as well as offshore wind farm developments, in addition to inspecting critical subsea assets. These services are performed with our advanced fleet of vessels equipped with specialized survey ROVs and, increasingly, with our unmanned survey platforms as we expand our remote operations capabilities.
MONITORING
Reach Subsea offers innovative monitoring solutions for hydrocarbon production, carbon capture and storage (CCS) projects, and environmental assessments.
By employing passive monitoring methods, we provide data that supports efficient reservoir management, optimizes field development, and ensures a minimal environmental impact. Our services enable clients to track reserve depletion, enhance recovery rates, monitor CO2 injection, and confirm long-term containment while reducing uncertainties and detecting any potential leakage.
3rd Quarter 2024
Contents Directors Report Sustainability Finance Financial Statements
Services delivered during Q3
Figures for the same period last year are presented in brackets in the text.
REACH Subsea ASA Group ("Reach") operates and markets by quarter end eight subsea spreads + 2 USV spreads. In addition, Reach delivers survey, positioning, and monitoring services onboard a number of vessels and platforms.
Reach Subsea had a very active quarter with a varied service offering in all three main segments, IMR/Construction, Survey and Monitoring. Approximately one third of the revenue in Q3 has come from projects in the Renewable/Other sector, and two thirds from Oil and Gas related projects. These projects have a widespread geographical distribution with operations both in Europe, Americas, Asia and Oceania in Q3.
The number of vessel days that passed through our P&L in Q3 2024 was 690 (550) with a 98 % utilisation (99 %). For the first nine months of 2024 the number of vessel days that passed through our P&L amounted to 1,729 (1,315) with a 96 % utilisation (95 %). REACH had per quarter end 11 WROV-systems and two "Surveyor Interceptor" systems available for subsea operations, in addition to a pool of high quality survey and monitoring assets and equipment.
Reach Subsea was awarded a contract to deliver ROV and Survey services for Nexan's cable installation project Revolution Wind, using the Deep Cygnus, equipped with a 150Te AHC crane, work-class ROV and Nexans Capjet cable trencher.
Mobilisation of equipment and personnel commenced in Fredrikstad, Norway mid September 2024, before commencing the journey to US.
The Scope of work includes cable burial of the wind farm's export cables as well as pre-lay, as-laid, and depth of burial surveys along the various cable routes. Challenging areas in shallow watersand in varying soil conditions makes an impressive large project including multiple vessels simultaneously.
Alongside the Deep Cygnus, vessels such as the Nexans Aurora performs cable installation works, putting the onboard teams at great responsibility and coordinating roles to accomplish great results.
| Deep Cygnus | |
|---|---|
| Client | |
| Nexans | |
| Location | |
| Providence, USA | |
| Period | |
| September 2024 – February 2025 | |
| Water Depth | |
| 12m - 50m |
Much thanks to the well-suited vessel Deep Cygnus and its marine crew along with a highly professional project team from Reach Subsea, the project is forecasted to deliver efficiently together with Nexans, Orsted and multiple third parties involved.
Featured project #1 3rd Quarter 2024
Cable Trenching at Revolution Wind, USA
Vessel
Offshore Surveyor
Client
Australian Hydrographic Office (AHO)
Project
SI 1049 - Cape Fourcroy (North-West).
Location
Offshore Darwin, Northern Territory, Australia
Period
June 2024 - December 2024
Water Depth
21m - 100m
In excess of 7000 nodes were deployed and recovered, covering an area over 10,000 km2 on two different projects.
Hydrographic surveys are extremely accurate surveys of the seabed. Data is acquired by an experienced team, using a vessel equipped with a multibeam, tide gauges and current meters (deployed on the seafloor), and floating GNSS Positioning Buoys. These combined data sets give the depts of the sea floor at Lowest Astronomical Tide (LAT). The Australian Hydrographic Office (AHO) take the data Reach Subsea acquired, and produces nautical charts, for safe navigation.
Reach Subsea is part of the HydroScheme Industry Partnership Program (HIPP) which is run by the Australian Hydrographic Office (AHO) who is responsible for charting Australian waters.
As a proud member of the HIPP panel, Reach Subsea has conducted a number of Hydrographic surveys for the AHO.
The latest survey Reach Subsea conducted for the AHO was in mid 2024. This was SI 1049 - Cape Fourcroy (North-West). Reach Subsea acquired multibeam data over an area of 2,538 KM2.
Reach Subsea has invested in a dedicated vessel, operating in Australia. The Offshore Surveyor is a capable survey vessel, well suited for undertaking Hydrographic, Geophysical, and light Geotechnical surveys.
The Offshore Surveyor was used for SI 1049 - Cape Fourcroy (North-West) survey with great results, thanks to the dedicated moonpool for the multibeam deployment, and the crane and A-Frame for deployment of the seabed sensors.
Pictured top left: Reach Subsea's vessel, Offshore Surveyor. Top right: GNSS Positioning Buoys. Above: Data acquired by Reach Subsea for SI1049Source: Australian Hydrographic Office (AHO).
HydroScheme Industry Partnership Program (HIPP)
Featured projects
Technology development
GGCloudSync
Application for synchronizing files between local systems and cloud storage, using trusted technology for high-speed transfers.
It ensures data stays up-to-date, secure, and quickly transferred. Compatible with satellite systems like VSAT, Starlink, and OneWeb, handling interruptions, latency, and bandwidth limits. GGCloudSync reliably moves raw data to shore, enabling remote work and reducing the need for offshore staff, thus improving project performance, safety, health, and environmental outcomes. By 2025, fewer processing personnel will be offshore thanks to GGCloudSync.
ReachMap
Used to visualise project data such as proposed operations, real time vessel positions and automatically processed data from our new 24-hour data centre.
Raw data is sent from the field to DC24 via GGCloudSync, is automatically processed and forwarded to ReachMap for visualisation. The entire project team and clients can see data in near realtime, permitting first pass QC, project management and first-look perspectives on acquisition. By using a fully automated work flow we can get data in front of decision makers fast and consistently.
DepthWatch
Reach's DepthWatch service in combination with time-lapse OBN seismic provides accurate fieldwide subsidence monitoring.
A new method has been developed in collaboration with our customer, utilizing Reach's DepthWatch service to provide accurate node depth measurements during time-lapse deepwater OBN surveys. This allows us to measure subsidence in deepwater fields with 3 cm accuracy, which is important for geomechanical model calibration and monitoring of infrastructure stability. It also improves the quality of 4D seismic data. Read the abstract here.
Reach Subsea is a leader in technology development and application of innovative methods for our IMR, survey, and monitoring services in the offshore industry. The company has a highly skilled and interdisciplinary team of scientists and engineers with expertise and excellence in physics, geoscience, modelling, data analysis, sensors, instrument design, communication, and software development.
Viking Reach
Survey, IMR and Light Construction Vessel
| Charter period: | April 2023 - April 2029. 3-year option. |
|---|---|
| Vessel owner: Eidesvik Offshore ASA (50.1 %) Reach Subsea ASA (49.9 %) |
|
| Crane: | 70 ton |
| Assets: | 1 Surveyor WROV, 1 Surveyor Interceptor ROV, survey equipment |
| Q324 status: | Survey and light construction work in the North Sea until scheduled yard stay in end September for 40 days. |
Havila Subsea
Survey, IMR and Light Construction Vessel
Charter period: June 2024 - June 2027. 2-year option.
| Vessel owner: Havila Shipping ASA | |
|---|---|
| Crane: | 150 ton |
Assets: 2 x Schilling HD WROV, survey equipment
Q324 status: Ocean Bottom Node Operations for PX Geo in Gulf of Mexico continuously throughout the quarter.
Deep Cygnus
Construction Vessel
| Charter period: | April 2022 - April 2026. 1-year option. |
|---|---|
| Vessel owner: Volstad Maritime AS | |
| Crane: | 150 ton |
| Assets: | 1 Supporter WROV, survey equipment |
| Q324 status: | IMR operations in the North Sea until early September with start of Trenching Support Operations. |
Chartered vessels and assets
Go Electra
Survey, IMR and Light Construction Vessel
| Charter period: | March 2023 - March 2027. 2 year option. |
|---|---|
| Vessel owner: Go Offshore Pty Ltd. | |
| Crane: | 25 ton |
| Assets: | 1 x Supporter WROV, survey equipment |
| Q324 status: | Misc IMR scopes for Bluestream in July and August. Remobilisation of WROV and Survey spread onboard in September with IMR and Survey scopes in the North Sea. |
Olympic Triton
IMR and Light Construction Vessel
Charter period: February 2023 - February 2026. 2-year option.
| Vessel owner: Olympic Subsea ASA | |
|---|---|
| Crane: | 150 ton |
| Assets: | 2 x WROV Constructor and Supporter, survey equipment |
- Supporter, survey equipment
- Q324 status: Continuous IMR and construction support
- throughout the quarter in the North Sea.
Northern Maria
Survey and IMR vessel
| Charter period: | April 2024 - April 2027. 1-year option. |
|---|---|
| Vessel owner: Northern Survey Aps | |
| Crane: | 20 ton |
| Assets: | Survey equipment |
| Q324 status: | Chartered to Bluestream for subsea |
| inspection works throughout the quarter and | |
| with a two week yard stay in August. |
Chartered vessels and assets
Olympic Taurus
IMR and Light Construction Vessel
| Charter period: | April 2024 - April 2027. 2-year option. |
|---|---|
| Vessel owner: Olympic Subsea ASA | |
| Crane: | 150 ton |
| Assets: | 2 x WROV Constructors, survey equipment |
| Q324 status: | Offshore Wind projects until mid August. Full subsea and survey mobilisation successfully completed before starting IMR operations in the North Sea early September. |
Offshore Surveyor
Survey Vessel
Charter period: June 2024 - June 2027. 2-year option.
| Charter period: | June 2024 - June 2027. 2-year option. |
|---|---|
| Vessel owner: Guardian Offshore AU | |
| Crane: | None |
| Assets: | Survey equipment |
| Q324 status: | Hydrographic mapping for Australian |
| two week Yardstay in October. |
Q324 status: Hydrographic mapping for Australian authorities throughout the quarter. Scheduled
Newbuild
IMR and Light Construction Vessel
| Charter period: | 2026 --> |
|---|---|
| Vessel owner: Eidesvik Agalas AS | |
| Crane: | 150 ton |
| Assets: | Will be mobilized with state-of-the art WROVs and survey equipment. |
| Q324 status: | Under construction |
Chartered vessels and assets
Remote vessels
Reach Remote 1 & 2
Setting new standards, Reach Remote introduces Norway's pioneering fleet of uncrewed 24-meter surface vessels (USVs), featuring hull-mounted survey sensors and a Work Class Electric ROV.
Scheduled for deployment under the Norwegian Flag, these vessels are poised to revolutionize offshore subsea operations, aligning with sustainability initiatives. Reach Remote offers secure, eco-friendly, and cost-effective solutions for global subsea inspection, survey, and intervention services. This ground breaking project integrates Uncrewed Surface Vessels (USVs) with Remotely Operated Vehicles (ROVs), paving the way for advancements in remote maritime technologies and marking a significant milestone in global maritime operations.
Key features include
- Length: 23.9 meters
- Optimized for low energy consumption
- Electric Work Class ROV onboard
- Hull-mounted survey sensors
- Endurance of 30 days
- No personnel onboard
Pilot program Joint Industry Project
We are collaborating with Equinor and Total Energies and a few other major Client companies to carry out a technology qualification program for the Reach Remote, aiming to validate remote operations for various tasks offshore Norway. All the Clients are providing financial support for this initiative organized as a Joint Industry Project. Current operational areas are: Haugesund, Troll, Snorre, Gullfaks and Ăsgard.
Proving the capabilities of the vessel
- Seabed mapping
- Pipeline inspection
- Subsea structure inspection
- Reservoir modelling by gravimetry measurements
Reach Remote Q3 highlights
Successful completion of key project phases and start of sea trials
We have successfully completed several critical phases of our project. This includes completion of the vessel fabrication, the final steps in integrating advanced remote technology and operational processes to enable remote operations. We have started the official Sea Trials, with the aim of taking delivery of the vessel in Q4-24.
Recognition as 'Ship of the Year 2024'
One of the most notable accomplishments was Reach Remote 1 being recognized as 'Ship of the Year 2024'. This prestigious award reflects our innovative design and commitment to providing greener, more efficient operations within the industry.
Strengthening industry collaborations
We have strengthened our relationships with key partners and stakeholders, such as Massterly, Kongsberg, Kystdesign, NMA, DNV, academia and multiple maritime administrations. These collaborations are vital for advancing our capabilities and ensuring we remain at the forefront of technological development. Our alliances are fostering the exchange of knowledge and resources, helping us achieve shared goals in sustainability and operational excellence.
Securing EU Innovation Fund Grant
In a significant advancement, Reach Subsea has been granted up to €14.3 million from the EU Innovation Fund under the Net Zero Technologies initiative. This funding will support the scaleup of the Reach Remote project.
Contents Directors Report Sustainability Finance Financial Statements
Remote vessels
Reach Subsea DRIX (Orca 1 and Orca 2)
The DRIX is 8 meter long remotely controlled / autonomous survey vehicle designed for high quality hydrographic surveys in shallow waters. The vehicle is equipped with high performance subsea equipment and communication systems for over the horizon control and operations.
Key features include
- Length: 7.7 meters
- Draft: 2 meters
- Beam: 0.82 meters
- MBES: EM2040
Q3 highlights
- Our two Drix units (Orca1,2) are just completing the HSP18 project in the Gulf Arabia which aims to create hydrographic charts for the northern half of the Gulf Arabia for the Saudi Government. Pictured right is Orca2 heading to sea to map Saudi Aramco fields out to the northern border with Kuwait and Iran. Using unmanned technologies in complex areas reduced HSE exposure while at the same time improving efficiency and project delivery. The client, GEOSA (Saudi Arabia Government) are delighted to use Reach Subsea remote technologies to complete such a major project.
- The image (left) of a PSV and a super tanker in the background with the Reach Drix in the foreground shows a stark contrast of how remote technology can be deployed in the most complex areas to solve complex problems for major companies and government agencies.
20 3rd Quarter 2024
Sustainability within reach
Reach is committed to sustainability, addressing environmental, social, and governance (ESG) priorities with a strong focus. Progress is underway on the journey toward Corporate Sustainability Reporting Directive (CSRD) compliance, aligning with the European Sustainability Reporting Standards (ESRS).
Another quarter has passed at Reach, marked by a high level of activity in our sustainability efforts. The highlight of this period has undoubtedly been the successful launch of both Reach Remote vessels.
These remote-controlled vessels represent a ground breaking step in the maritime industry, embodying our commitment to the green transition. Reach Remote is specifically designed to reduce emissions and operational costs while enhancing safety and efficiency. These vessels contribute to the reduction of our carbon footprint, and sets a new standard reaching for more sustainable maritime operations.
ESG Knowledge & Compliance Development
Reach have been actively participating in the "Sustainability Academy" course, aligning with the Corporate Sustainability Reporting Directive (CSRD) for in-house knowledge. These sessions are tailored to ensure that our ESG team are well-informed with the latest knowledge and skills to drive sustainable practices across the company. We are also actively participating in the Sustainability forums hosted by the Norwegian Shipowners' Association and PwC's regional sustainability forum, fostering collaboration and sharing best practices with industry peers.
Smaller groups within our "Task Force group" have conducted focused workshops to delve into each Environmental, Social, and Governance (ESG) dimension. These sessions included discussions on our reporting structure, and gap analysis to benchmark our CSRD reporting compliance.
ESG Engagement & Community Action
To raise awareness and engagement across the organization, we've launched several initiatives. One stand out for this quarter was a "Bingo" competition aimed at promoting sustainability awareness, with participants from both onshore and offshore, generating new ideas and suggestions for sustainability improvements in the company – and in the private life.
In addition, our participation in the Coastal Clean-Up Campaign launched in September. This campaign mobilised several of the Reach Subsea offices, local schools, and kindergardens to participate in coastal clean-up activities, collecting waste from our coastline to reduce marine pollution. With over 150 participants, the campaign highlights our commitment to environmental stewardship and raising awareness about ocean conservation among future generations, contributing to the reduction of our carbon footprint and setting a new standard for more sustainable maritime operations.
ESG Q3 Highlights
Environmental
Given the nature of our operations and the market we operate in, it is a given for us to continue our long-standing focus on the impact we have on the ocean.
Our goal for several years has been to achieve zero major spills. To minimize environmental damage in the event of a spill, we invest in biodegradable oils. At Reach, we report all spills, regardless of size, to maintain a comprehensive overview of any discharges from our operations. This approach aligns with our environmental policy. When it comes to our positioning outside the non-O&G segment, we focus on early-phase offshore wind survey projects, and we aim to strengthen our role in later stages. Investments in assets and personnel enable us to deliver services effectively at these initial stages.
Social
Our turnover rate remains below 8 %, currently at 7.6 %, showing improvement over the Q3 2023 year-to-date figure of 8.0 %.
To reduce turnover, our HR department is focusing on initiatives to strengthen culture, standardize operations, and enhance employee satisfaction. Our trainee program has achieved the 2024 target of 10 apprentices across Norwegian offices and offshore. Additionally, an intern in Aberdeen contributed to business development and commercial projects, supporting our growth.
Governance
Our ongoing efforts to reach a 90 % completion rate in the ReachED courses are showing promising results, with strong participation across the team.
These courses provide employees with essential knowledge and, most importantly, a heightened awareness of key areas like Cyber Security, Sustainability, Anti-Bribery, and our Code of Conduct. By completing these modules, employees are not only enhancing their individual skill sets but are also strengthening the organization as a whole. Aligned with our commitment to transparency and accountability, our recent ISO audit further reinforces these standards, ensuring that our practices and policies uphold the highest levels of integrity and compliance.
Summary of key targets
Zero major spills of hazardous materials to the sea
CIRCLE-CHECK Achieved
Q3: 0 (Q3 2023: 0)
CO2 footprint below the NSA relevant emission targets
CIRCLE-CHECK Achieved
Q3: 32.81 YTD
In 2023, our total CO₂ emissions per "vessel day sold" was 35.08 tons of CO₂ equivalents (year-to-date: 35.29 tons). Based on fuel consumption on vessels hired in by Reach.
Increase activity within non-O&G segment
CIRCLE-CHECK Achieved
Q3: 30.48 % (Q3 2023: 29 %, YTD: 30 % )
Activity is measured through performed project days.
Successfully bring two USVs to market in 2024
Ongoing
Both Reach Remote units (USV1 & USV2) are now sea-launched.
Key Targets for 2024
Scheduled activities
Successfully bring two USVs to market in 2024. Q3 = Ongoing
Environmental
Maintain turnover below 8 %
CIRCLE-CHECK Achieved
Q3: 7.6 % YTD (Q3 2023: 8 % YTD)
10 apprentices and trainees participating yearly in trainee program
CIRCLE-CHECK Achieved
10 apprentices and trainees in 2024 to this date, located at Norwegian offices and offshore. Following plan to hire more trainees and posting job announcements continuously.
Zero Lost time incidents
CIRCLE-CHECK Achieved Q3: 0 LTI (Q3 2023: 0 LTI)
Zero work related injuries (LTI)
CIRCLE-CHECK Achieved
Q3: 0 YTD (Q3 2023: 0 YTD)
Key Targets for 2024
Contents Directors Report Sustainability Finance Financial Statements
Social
Scheduled activities
Implement and gain 90 % completion of Sustainability course
Ongoing
(The sustainability course was implemented 15.04.24)
90 % completion of Cyber security awareness training courses
Ongoing
90 % completion of Code of Conduct and Anti Bribery course Ongoing
Key Targets for 2024
Contents Directors Report Sustainability Finance Financial Statements
Governance
Reach Subsea | Quarterly Consolidated Report 2024
Finance
Financial results, capital structure and outlook
Figures for the same period last year are presented in brackets in the text.
Revenue for 3Q2024 was NOK 834.6 million (NOK 651.3 million), with the increase from last year primarily explained by high project activity as well as an increase in reimbursable cost.
Reach Subsea acquired Guardian Geomatics 15 November 2023. Financial results are fully consolidated as of that date. The financial effects of the transactions are further described in the Notes.
Operating expenses for 3Q2024 were NOK 700.4 million (NOK 538.9 million) where project-related expenses, including depreciation of IFRS 16 assets, represent the majority of the operating expenses for the Group. The increase compared to the same period last year is primarily explained by a higher project activity, increase in reimbursable cost and a general market cost increase. Details about depreciations and impairment sensitivity is presented in the Notes.
3Q2024 operating result (EBIT) was NOK 134.1 million (NOK 112.4 million).
The increased EBIT is primarily a result of higher project activity with strong margins. Net financial items for 3Q2024 were NOK –19.1 million (NOK –20.1 million).
The main year-over-year differences are (i) result from associated companies of NOK 10.2 million (NOK 8.1 million), (ii) increased interest expenses due to the higher level of IFRS 16 related debt, which amounted to NOK –33.6 million (NOK –25.6 million) and (iii) currency effects, which amounted to NOK 2.8 million (NOK –3.5 million). Our charter hires are in AUD, GBP, EUR, USD and NOK, while income in the first half was primarily in AUD, NOK, USD and EUR.
The total comprehensive income for 3Q2024 was NOK 91.4 million (NOK 77.8 million).
For 3Q2024, Oil & Gas revenues constituted 70 % while Renewable/ Other constituted 30 % of total revenues. By comparison, in 3Q2023 Oil & Gas revenues were 71 while Renewable/Other constituted 29 % of total revenues. Oil & Gas entails revenues from survey, IMR and light construction projects where the end client's asset is used in the oil & gas sector. Renewable/Other entails revenues from survey, IMR and light construction projects where the end client's asset is used outside the oil & gas sector.
Financial results for the quarter
Figures for the same period last year are presented in brackets in the text.
Revenue for the first nine months of 2024 was NOK 2,032.9 million (NOK 1,521.8 million), with the increase from last year explained by higher project activity as well as increased reimbursable cost year to date compared to the same period last year.
Reach Subsea acquired Guardian Geomatics 15 November 2023. Financial results are fully consolidated as of that date. The financial effects of the transactions are further described in the Notes.
Operating expenses for the first nine months of 2024 were NOK 1,749.0 million (NOK 1,269.5 million) where project-related expenses, including depreciation of IFRS 16 assets, represent the majority of the operating expenses for the Group. The increase compared to the same period last year is primarily explained by a higher activity in the first nine months of 2024 as well as increased reimbursable cost, compared to the same period last year and a general market cost increase. Details about depreciations and impairment sensitivity is presented in the Notes.
Operating result (EBIT) for the first nine months of 2024 was NOK 283.9 million (NOK 252.3 million).
The increased EBIT is primarily driven by high activity and strong project margins, partly offset by the sale of one ROV in 2Q2023 with a net gain of NOK 29.8 million. Net financial items for the first nine months of 2024 were NOK –66.9 million (NOK –43.9 million).
The main year-over-year differences are (i) result from associated companies of NOK 18.1million (NOK 8.9 million), (ii) increased interest expenses primarily due to the higher level of IFRS 16 related debt, which amounted to NOK –90.0 million (NOK –53.4 million) and (iii) currency effects, which amounted to NOK 0.2 million (NOK -1.8 million). Our charter hires are in AUD, GBP, EUR, USD and NOK, while income in the first nine months was primarily in AUD, NOK, USD and EUR.
The total comprehensive income for the first nine months of 2024 was NOK 183.3 million (NOK 168.1 million).
For the first nine months of 2024, Oil & Gas revenues constituted 63 % (70 %) while Renewable/ Other constituted 37 % (30 %) of total revenues.
Financial results year to date
The Group's equity as of 30 September 2024 was NOK 1,027.9 million (NOK 823.1 million), which represents 30.6 % (31.4 %) of the total balance sheet.
The increased equity is explained by generated comprehensive income over the last 12 months, and partly offset by dividends paid in 2Q2024. The increase in total assets resulted in a marginally reduced equity ratio compared to the same period last year.
Total current assets at the end of the quarter were NOK 1,021.3 million (NOK 836.8 million), of which cash and cash equivalents amounted to NOK 259.2 million (NOK 136.6 million). Including the unutilized revolving credit facility, available liquidity was NOK 289.2 million (NOK 166.6 million).
Receivables and inventories were NOK 762.1 million (NOK 700.2 million). Total non- interest-bearing current liabilities were NOK 646.8 million (NOK 451.0 million). This leaves a net working capital of NOK 115.2 million (NOK 249.3 million).
Total non-current assets at the end of the quarter were NOK 2,338.7 million (NOK 1,786.0 million). The increase is mainly a result of increased (i) Property, plant and equipment of net NOK 209.4 million, (ii) Right of use assets (leases capitalized under IFRS 16) of net NOK 184.2 million and (iii) Assets under construction of net NOK 89.5 million, which is mainly related to the Reach Remote project. For details related to vessel commitment, please see the Notes.
Net interest-bearing debt (total interest-bearing debt, including capitalized leases under IFRS 16, less cash) stood at NOK 1,426.0 million (NOK 1,212.2 million). The increase is explained by the increased charter commitment as described above. Net financial interest-bearing debt to credit institutions (i.e. excluding IFRS 16 leases) was NOK –111.1 million (NOK –97.1 million), i.e. cash positive.
Net cash flow from operating activities for 3Q2024 was NOK 307.0 million (NOK 266.6 million) with year-over-year increase primarily explained by higher profits in 3Q2024. Net cash flow from operating activities for the first nine months of 2024 was NOK 591.9 million (NOK 506.1 million).
Net cash flow from investing activities for 3Q2024 was NOK –77.4 million (NOK -68.7 million). Included in this figure is Purchase of fixed assets related to general equipment upgrades, mobilizations and general investments of NOK –71.4 million (NOK –68.7 million). Net cash flow from investing activities for the first nine months of 2024 was NOK –188.8 million (NOK –151.9 million).
Net cash flow from financing activities for 3Q2024 was NOK –198.7 million (NOK –193.2 million) and includes vessel charter hire classified as "Repayment of borrowings and leases" according to IFRS 16. Net cash flow from financing activities for the first nine months of 2024 was NOK –591.4 million (NOK –414.7 million).
Net change in cash and cash equivalents for 3Q2024 was
NOK 36.8 million (NOK 4.7 million). Net change in cash and cash equivalents for the first nine months of 2024 was NOK –188.2 million (NOK –60.5 million). Reach has per 30 September 2024 no major debt maturities to credit institutions falling due the next three years. Details about cashflow can be found in the Cash flow statement and the Notes.
The Reach Remote project is expected to amount to approximately NOK 449 million. As of September 30 2024 the company has capitalized NOK 278 million as Asset under construction. In addition, the company has financed two eROVs through leasing. As of September 30 the ROVs are under construction, and costs not recognised related to the ROVs amounts to NOK 60 million. The ROVs will be recognised in the balance sheet at commencement date.
Besides the Reach Remote project, Reach has taken multiple steps to secure vessel capacity at competitive terms. The additions to Right of use assets and liabilities in 2024 include the vessels Olympic Taurus, Northern Maria, Offshore Surveyor and Havila Subsea (extension).
Investments associated with these vessels and other capex projects is expected to amount to NOK 224 million, and encompass equipment, upgrades and mobilization activities for vessels. As of September 30 2024 remaining investments related to these investments is estimated to NOK 134 million. Reach has secured bank and lease financing of NOK 78 million to partly fund these investments.
Capital structure
Reach essentially follows the recommendation for reporting of IR-information issued by the Oslo Stock Exchange and publishes all its news releases on www.newsweb. no, a service provided by the Oslo Stock Exchange. Reach aims for a high level of quality on the content, and high frequency of information, provided to its investors.
Our quarterly financial reports include financial details to increase the transparency of our business. Financial reports, General Meeting Minutes, share price information, Corporate Governance, Operational figures and presentation of the Board and Management can be found on the company's web page, as well as the latest Reach Subsea ASA Annual and Sustainability Report covering initiatives and measures on Corporate Social Responsibility.
Reach Subsea ASA has a dividend policy stating that the company aims to distribute a dividend of around 50 % of adjusted net profit. Adjusted net profit is defined as reported net profit, adjusted for items the Board regards as transitory.
Reach has been awarded several contracts and call-offs under frame agreements, involving inspection, survey and construction support projects across Europe, the Americas and in Asia Pacific. Clients represent major operators and tier 1 contractors in both the oil & gas and renewable sectors.
Order backlog
Our schedule indicates good utilization for all our subsea spreads throughout 2024 and well into the first months of 2025. We now have an order book of approximately NOK 1.5 billion (NOK 530 million), with projects for execution in 4Q2024 and beyond. These contracts cover a wide spectrum of project types and are across both oil & gas and renewables projects. These figures do not include options and expected call- off extensions under frame agreements, which from experience can constitute significant additional work.
Current tender volume for the Group is NOK 8.5 billion (7.5 billion).
Reach Subsea ASA is listed on the Oslo Stock Exchange (Euronext). The Company has per 30 September 2024 issued 271,769,245 (255,449,563) shares, of which the majority is owned by Norwegian shareholders. The increased number of shares compared with 30 September 2023 is related to (i) a share increase of 850,000 new shares from the share incentive program for employees exercised in December 2023 and (ii) the purchase of Guardian Geomatics, partly settled by issuing 15,469,682 new shares.
The Share Investor relations News after quarter end
REACH currently markets and operates eight subsea spreads and two USV spreads (vessel, ROVs, and personnel, alone or together with partners), which have a competitive cost structure. These subsea spreads are tailored to our target markets and are well suited to the scope of services that are at the core of our business. We are continuously monitoring the market for opportunities to complement and strengthen our business, while at the same time progressing Reach Remote towards commercialization in 2024.
Looking ahead we see that the changes in global energy markets create a business environment with both challenges and opportunities.
The challenges are evident as subsea services provided to the oil & gas sector will have lower activity levels in the long run. However, in the short to medium term we are witnessing the resurgence of oil & gas activity, driving increased utilization across the industry.
The opportunities are that our core subsea service competence is being deployed in new and fast growing maritime sectors such as offshore wind, offshore aquaculture, carbon storage monitoring, environmental surveillance, and subsea mining.
The last year we have taken multiple steps to ensure that we continue to grow our business profitably into an improving market. These steps involved securing several vessels through new longer term charter agreements, investing in upgrades of our equipment pool across all our business lines, and strengthening our organisation through several key recruitments.
A major milestone in 2025 will be the introduction of Reach Remote to the market.
We notice substantial interest for a more sustainable way of providing subsea services and gathering subsea data. This is now materializing through the pilot projects signed with our key clients.
Furthermore, the substantial increase in charter rates for conventional subsea vessels further contributes to the competitive cost advantage of the Reach Remote solution.
Thus, from a commercial and value creation standpoint, Reach Remote is looking even more attractive.
The Board and management are pleased with the company's financial performance in the first nine months of 2024. There is still a large untapped potential within the group, and efforts to bundle our new capabilities into more valueadded integrated services, as well as utilizing the full capabilities on all our subsea spreads will accelerate going forward. Matching these efforts with the promising opportunity and pricing environment we see unfolding will be key to drive growth and margins further.
Haugesund, 11 November 2024 Rachid Bendriss (S) Chairman of the Board Martha Kold Monclair (S) Board member Kristine Skeie (S) Board member Espen Gjerde (S) Board member Arvid Pettersen (S) Board member Ingunn Ø. Iveland (S) Board member Anders Onarheim (S) Board member Jostein Alendal (S)
Managing Director
Contact: Jostein Alendal, CEO, Birgitte Wendelbo Johansen, CFO
Outlook
Reach Subsea | Quarterly Consolidated Report 2024
32 3rd Quarter 2024
Financial Statements
Reach Subsea ASA Group
| Statement of profit or loss (NOK 1000) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 | Notes | Comprehensive income (NOK 1000) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 | Notes |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating revenue | 833 874 | 651 847 | 2 032 215 1 492 446 1 966 584 | 9 | Translation differences | (602) | 78 | (272) | 37 | (1 116) | |||
| Other income/losses | 678 | (539) | 678 | 29 319 | 29 319 | 3 | Comprehensive income items | (602) | 78 | (272) | 37 | (1 116) | |
| Revenue | 834 552 | 651 308 2 032 892 | 1 521 765 1 995 903 | ||||||||||
| Total comprehensive income | 91 446 | 77 761 | 183 347 | 168 122 | 224 675 | ||||||||
| Procurement expenses | (246 465) | (148 836) | (570 015) | (359 751) | (503 760) | Earnings per share | 0.32 | 0.30 | 0.68 | 0.68 | 0.89 | ||
| Personnel expenses | (123 771) | (103 105) | (319 910) | (237 483) | (348 794) | 7 | |||||||
| Other operating expenses | (101 157) | (70 386) | (273 246) | (181 920) | (188 558) | Diluted earnings per share | 0.30 | 0.26 | 0.61 | 0.57 | 0.88 | ||
| EBITDA | 363 158 | 328 982 | 869 721 | 742 610 | 954 790 | ||||||||
| Depreciation and impairment | (229 021) | (216 567) | (585 830) | (490 347) | (623 005) | 3, 10 | |||||||
| Operating result (EBIT) | 134 137 | 112 415 | 283 891 | 252 263 | 331 786 | ||||||||
| Result from associated companies | 10 200 | 8 061 | 18 070 | 8 856 | 16 714 | 12 | |||||||
| Interest income | 1 463 | 938 | 4 813 | 2 468 | 4 991 | 11 | |||||||
| Interest expenses | (33 586) | (25 561) | (89 951) | (53 432) | (77 881) | 10, 11 | |||||||
| Other net financial items | 2 817 | (3 530) | 176 | (1 787) | 13 925 | 11 | |||||||
| Profit (loss) before taxes | 115 031 | 92 323 | 216 998 | 208 369 | 289 534 | ||||||||
| Income taxes | (22 983) | (14 640) | (33 379) | (40 284) | (63 743) | 8 | |||||||
| Profit (loss) | 92 048 | 77 683 | 183 619 | 168 085 | 225 791 |
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Contents Directors Report Sustainability Finance Financial Statements
Income statement
| Statement of financial position (NOK 1000) | 30.09.2024 | 30.09.2023 | 31.12.2023 | Notes | Statement of financial position (NOK 1000) | 30.09.2024 | 30.09.2023 | 31.12.2023 | Notes |
|---|---|---|---|---|---|---|---|---|---|
| Non-current assets | Equity | ||||||||
| Goodwill | 109 590 | 86 723 | 109 590 | 4 | Share capital | 271 769 | 255 450 | 271 769 | 6 |
| Deferred tax assets | 13 921 | 11 360 | - | 8 | Share premium | 388 273 | 358 418 | 388 273 | |
| Intangible assets | 26 599 | 9 503 | 30 769 | 4 | Proposed dividends | - | - | 97 837 | |
| Investment in associated companies | 131 580 | 104 487 | 113 452 | 12 | Other equity | 367 827 | 209 188 | 170 126 | 7 |
| Assets under construction | 301 825 | 212 295 | 266 658 | 3 | Total equity | 1 027 870 | 823 055 | 928 005 | |
| Property, plant and equipment | 298 770 | 89 391 | 183 279 | 3 | |||||
| Right-of-use assets | 1 456 398 | 1 272 193 | 1 163 222 | 3,10 | Non-current liabilities | ||||
| Total non-current assets | 2 338 683 | 1 785 952 | 1 866 970 | Interest-bearing debt to credit institutions | 121 886 | 31 744 | 57 418 | 5, 10 | |
| Interest-bearing debt leases | 802 895 | 909 620 | 805 931 | 5, 10 | |||||
| Current assets | Deferred tax liabilities | - | - | 10 567 | 8 | ||||
| Bunkers | 33 207 | 22 599 | 28 418 | Total non-current liabilities | 924 782 | 941 363 | 873 916 | ||
| Trade receivables | 658 372 | 550 635 | 314 166 | ||||||
| Other receivables | 70 490 | 127 007 | 41 904 | Current liabilities | |||||
| Cash and cash equivalents | 259 180 | 136 565 | 436 423 | Interest-bearing debt to credit institutions short term |
26 218 | 7 682 | 10 176 | 5, 10 | |
| Total current assets | 1 021 250 | 836 807 | 820 912 | Interest-bearing debt leases | 734 217 | 399 682 | 386 036 | 5, 10 | |
| Tax payable | 90 516 | 34 430 | 41 026 | 8 | |||||
| Total assets | 3 359 933 | 2 622 759 | 2 687 882 | Trade payables | 235 442 | 246 954 | 205 773 | ||
| Other current liabilities | 320 888 | 169 593 | 242 951 | ||||||
| Total current liabilities | 1 407 282 | 858 340 | 885 960 | ||||||
| Total liabilities | 2 332 063 | 1 799 704 | 1 759 877 | ||||||
| Total equity and liabilities | 3 359 933 | 2 622 759 | 2 687 882 |
Contents Directors Report Sustainability Finance Financial Statements
Balance Sheet
| Statement of cash flow (NOK 1000) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 | Notes | (NOK 1000) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 | Notes |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash flow from operating activities | Cash flow from financing activities | ||||||||||||
| Profit before tax | 115 031 | 92 323 | 216 998 | 208 369 | 289 534 | Net interest received/paid | (949) | (53) | (113) | 512 | 2 001 | ||
| Paid taxes | (1 834) | - | (6 682) | - | (8 808) | Proceeds from issuance of ordinary shares | - | - | - | 120 796 | 123 040 | ||
| Depreciation and amortisation | 229 021 | 216 567 | 585 830 | 490 347 | 623 005 | Proceeds from bank loan | 27 500 | 27 500 | 55 000 | 27 500 | 27 500 | ||
| Gain/loss on assets sold | - | - | - | (29 843) | (29 843) | Payment of dividends | - | - | (97 837) | (45 981) | (45 981) | ||
| Interest income | (1 463) | (938) | (4 813) | (2 468) | (4 991) | Repayment of borrowings | (2 474) | (2 160) | (6 435) | (21 062) | (23 300) | ||
| Interest expense | 33 586 | 25 561 | 89 951 | 53 432 | 77 881 | Repayment of leases (including interests) | (222 786) | (218 446) | (541 996) | (496 447) | (571 042) | ||
| Change in trade receivables | (114 012) | (63 800) | (344 206) | (334 307) | (12 535) | Net cash flow from financing activities | (198 710) | (193 159) | (591 382) | (414 682) | (487 781) | ||
| Change in trade payables | (25 952) | 8 447 | 9 211 | 144 524 | 27 038 | ||||||||
| Change in other provisions | 77 127 | (3 729) | 49 370 | (15 796) | 5 264 | Net change in cash and cash equivalents | 36 827 | 4 729 | (188 248) | (60 516) | 256 556 | ||
| Investments accounted for | Cash and cash equivalents in the start of the period |
221 508 | 128 836 | 436 423 | 191 591 | 191 591 | |||||||
| using the equity method | (10 200) | (8 061) | (18 070) | (8 856) | (16 714) | Translation differences | 845 | 3 001 | 11 005 | 5 490 | (11 723) | ||
| IFRS 2 share-based payments | 5 678 | 199 | 14 354 | 675 | 2 897 | Cash and cash equivalents in | 259 180 | 136 565 | 259 180 | 136 565 | 436 423 | ||
| Net cash flow from operating activities | 306 981 | 266 569 | 591 944 | 506 077 | 952 728 | the end of the period | |||||||
| Cash flow from investing activities | |||||||||||||
| Acquired cash balance from consolidation of Guardian Geomatics |
- | - | - | - | 27 652 | ||||||||
| Sale of fixed assets | - | - | - | 31 384 | 31 384 | ||||||||
| Purchase of fixed assets | (71 444) | (68 681) | (188 810) | (118 575) | (202 708) | ||||||||
| Purchase of shares in associated companies | - | - | - | (64 721) | (64 721) | ||||||||
| Net cash flow from investing activities | (71 444) | (68 681) | (188 810) | (151 911) | (208 392) |
Cash flow
| (NOK 1000) | Share capital | Share premium | Proposed dividends | Other reserves | Retained earnings | Total |
|---|---|---|---|---|---|---|
| Equity 1 January 2024 | 271 769 | 388 273 | 97 837 | 10 790 | 159 336 | 928 006 |
| Profit for the year | 183 619 | 183 619 | ||||
| Other comprehensive income for the year | (272) | (272) | ||||
| Total comprehensive income for the year | 183 347 | 183 347 | ||||
| Proceeds from shares issued | - | |||||
| Dividends paid | (97 837) | (97 837) | ||||
| Proposed dividends | - | |||||
| IFRS 2 share-based payments | 14 354 | 14 354 | ||||
| Equity 30 September 2024 | 271 769 | 388 273 | - | 25 144 | 342 684 | 1 027 870 |
36 3rd Quarter 2024
Equity
Note 1 - Basis for preparation
These consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. The interim financial statements are unaudited, and do not include all of the information required for the full financial statements, and should be read in conjunction with the consolidated yearly financial statement. The yearly financial statement are audited. Consolidated interims- and yearly financial statements are available on the news services from Oslo Stock Exchange (www.newsweb.no) or the company's webpage (www.reachsubsea.com). The accounting principles used in the preparation of these financial statements are consistent with those used in the annual financial statements. These consolidated condensed financial statements should be read in conjunction with the annual financial statements, which include a full description of the Group's accounting principles. The preparation of the interim accounts entails the use of judgements, estimates and assumptions
Note 2 - Significant accounting principles, estimates and judgements
that affect the application of accounting policies and the amounts recognised as assets and liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and other factors that are considered to be reasonable under the circumstances. The actual results may deviate from these estimates. The material assessments underlying the application of the company's accounting policies and the main sources of uncertainty are the same for the interim accounts as for the annual accounts for 2023.
Refer to note 10 for Right-of-use assets.
Note 3 - Fixed assets
| Property plant and | Property plant and | Property plant and | ||||
|---|---|---|---|---|---|---|
| Asset category | Assets under construction | equipment | equipment | equipment | Right-of-use assets | |
| ROV, leased from financial | Equipment and office | Right of use asset Vessel | ||||
| Fixed assets (NOK 1000) | Assets under construction | ROV and ROV equipment | institutions | machinery | and other equipment | Total |
| Purchase cost 01.01.24 | 266 658 | 186 981 | 125 134 | 155 858 | 1 607 273 | 2 341 904 |
| Additions | 87 168 | 17 559 | 42 967 | 52 039 | 825 379 | 1 025 114 |
| Reclassifications | (52 001) | - | 43 334 | 8 667 | - | (0) |
| Disposals/adjusted commitment | - | - | - | - | - | - |
| Purchase cost 30.09.24 | 301 825 | 204 540 | 211 436 | 216 565 | 2 432 652 | 3 367 018 |
| Accumulated depreciation 30.09.24 | - | (153 656) | (111 056) | (69 147) | (976 252) | (1 310 110) |
| Accumulated impairment 30.09.24 | - | - | - | - | - | |
| Net book value 30.09.24 | 301 825 | 50 885 | 100 380 | 147 506 | 1 456 398 | 2 056 993 |
| Depreciation in 2024 | - | (10 920) | (2 240) | (36 085) | (532 415) | (581 660) |
| Impairment in 2024 | - | - | - | - | - | - |
| Expected useful life (years) | 3-8 | 3-8 | 3-5 | 1-3 | ||
| Depreciation plan | Ongoing projects | Linear | Linear | Linear | Linear |
Note 3 - Fixed assets - continued
Assets under construction can be divided into the following categories:
Summary
Impairment testing has been performed in accordance with IAS 36.
Discount rate
The discount rate is based on the Weighted Cost of Capital (WACC) pre tax for the Group. The discount rate is 11.0 %.
Revenue assumptions
The revenue assumption in the cash flow forecast is based on a combination of utilisation for assets and selling price. Utilisation is based on firm contractual days on a short to medium term and estimated future selling on a medium to longer term. Forecasted utilisation on a longer term is based on historical data, as well as managements expectations of market development. Forecasted selling rates are based on historical data. No inflation adjustments have been made to revenue assumptions.
Right-of use-assets - vessels:
The right-of-use assets at 30 September 2024 represents the remaining committed vessel days on charter agreements with vessel owners and lease agreements for offices. The impairment testing demonstrated that the recoverable amount is larger than book value, and as such no impairment charge is required. The recoverable amount is sensitive to estimated utilisation and selling rate assumptions. See note 10 for further information on Right-of-use assets.
ROV and ROV equipment:
Impairment testing has been performed on each ROVs CGU, i.e. both owned and leased ROVs. The recoverable amount is based on estimated future cash flows, which is based on estimated selling price, budgeted maintenance cost and utilization. The impairment testing demonstrated that the assets recoverable amount is larger than book value, and as such no impairment charge is required. The recoverable amount is based on estimated future cash flow for the CGU, and is sensitive to estimated utilisation and selling rate assumptions.
A sensitivity analysis show the following sensitivity in the impairment testing, including both Right-of-use assets, ROV and ROV equipment:
An increase of the WACC of 2 percentage points will result in an impairment of NOK 8.0 million.
| Drop in estimated revenue | Impairment charge (NOK 1000) |
|---|---|
| 10 % | 34 439 |
| 20 % | 74 762 |
| 30 % | 134 317 |
| Reach Remote | 277 972 |
|---|---|
| Other capex-projects and mobilizations | 23 853 |
| Net book value 30.09.24 | 301 825 |
Note 4 - Intangible assets and goodwill
| Asset description (NOK 1000) | Research and development |
Customer relationships |
Goodwill | Total | Research and development are related to development of software/equipment related to the company's ASUMO project. As of September 30 2024 the group has net book values |
|---|---|---|---|---|---|
| Purchase cost 01.01.24 | 2 372 | 32 000 | 109 589 | 143 961 | for R&D totaling NOK 2.0 million. Hours spent have been capitalized for personnel as well |
| Additions | - | - | - | - | as other external consultants related to the development of equipment and software. |
| Disposals/adjustments | - | - | - | Customer relationships and goodwill are related to the acquisition of iSurvey | |
| Purchase cost 30.09.24 | 2 372 | 32 000 | 109 589 | 143 961 | Group in March 2022 and Guardian Geomatics in November 2023. Refer to the |
| Accumulated depreciation 30.09.24 | (398) | (7 375) | - | (7 773) | 2023 annual report for further information regarding the transactions. |
| Net book value 30.09.24 | 1 974 | 24 625 | 109 589 | 136 189 | The residual goodwill is tested for impairment on corporate level. The starting |
| Depreciation in 2024 | (170) | (4 000) | - | (4 170) | point for the impairment test is the difference between market value and book value of equity. As of September 30 2024 the market value exceeds the carrying |
| Depreciation plan | Linear | Linear | amount of equity, and no impairment indicators have been identified. | ||
| Estimated useful life | 5-10 years | 6 years | Indefinite |
Note 5 - Borrowings
Bank borrowings mature in the period 2024-2033 and bear average coupons of 8.5 % annually. The bank borrowings are subject to industry relevant covenants. Due to changes in equity and the financing of ongoing capex-projects the existing covenants were updated in 2023. The financial covenants are as follows:
- Minimum liquidity: Cash and cash equivalents, including any undrawn and available part of the overdraft facility with SR-Bank, shall at all times be minimum NOK 40 million.
- Debt service Coverage Ratio: The ratio of last 12 months' (LTM) EBITDA to the next 12 months' total estimated interest and instalments on Interest Bearing Debt (excl IFRS16 installments/incl. lease liabilities to credit institutions) shall at all times be minimum 2.00.
- Booked Equity shall be minimum NOK 500 million and Booked Equity Ratio shall be minimum 25 %.
As of 30 September 2024 the liquidity position (including overdraft facility) is 289.2 million, the Debt service Coverage Ratio is 6.0, and Booked equity NOK 1 028 million/31 %. All financial covenants are well within the thresholds mentioned above. Please note that some of the financial covenants in the groups debt facilities exclude the effects from IFRS 16, and therefore can not be directly derived from the groups financial statements.
Total borrowings to bank and financial institutions includes secured liabilities (bank and collateralised borrowings) of NOK 83.0 million (2023: NOK 30.4 million). Bank borrowings are secured by equipment and receivables of the group.
| (NOK 1000) | 30.09.2024 | 31.12.2023 |
|---|---|---|
| Non-current liabilities | ||
| Bank borrowings (including capitalized loan costs) | 65 835 | 24 623 |
| Lease liabilities to credit institutions | 56 051 | 32 795 |
| Other non-current lease liabilities (IFRS 16) | 802 895 | 805 931 |
| Total non-current borrowings | 924 782 | 863 350 |
| Current borrowings | ||
| Bank borrowings (including capitalized loan costs) | 17 218 | 5 817 |
| Lease liabilities to credit institutions | 9 001 | 4 358 |
| Other current lease liabilities (IFRS 16) | 734 217 | 386 036 |
| Total current interest-bearing debts | 760 435 | 396 211 |
| Carrying amount | ||
| Bank borrowings | 83 053 | 30 441 |
| Lease liabilities | 1 602 164 | 1 229 120 |
| Total carrying amount | 1 685 217 | 1 259 561 |
| Fair value | ||
| Bank borrowings | 83 053 | 30 441 |
| Lease liabilities | 1 602 164 | 1 229 120 |
| Total fair value | 1 685 217 | 1 259 561 |
| Shares | Stake |
|---|---|
| 52 136 636 | 19.2 % |
| 50 832 449 | 18.7 % |
| 29 116 897 | 10.7 % |
| 11 602 262 | 4.3 % |
| 6 272 000 | 2.3 % |
| 5 889 539 | 2.2 % |
| 5 000 000 | 1.8 % |
| 4 100 389 | 1.5 % |
| 3 769 928 | 1.4 % |
| 3 654 482 | 1.3 % |
| 3 654 482 | 1.3 % |
| 3 654 482 | 1.3 % |
| 3 050 000 | 1.1 % |
| 3 027 815 | 1.1 % |
| 2 973 658 | 1.1 % |
| 2 725 000 | 1.0 % |
| 2 193 426 | 0.8 % |
| 2 110 090 | 0.8 % |
| 2 029 703 | 0.7 % |
| 2 000 000 | 0.7 % |
| 201 793 238 | 74.3 % |
| 69 976 007 | 25.7 % |
| 271 769 245 | 100.0 % |
Note 6 - Shareholders
Reach Subsea's share capital amounts to NOK 271,769,245 divided into 271,769,245 shares, each with a nominal value of NOK 1.
On 17 February 2022, Wilhelmsen New Energy AS, a wholly owned subsidiary of Wilh. Wilhelmsen Holding ASA, agreed to subscribe for, and be allocated, 46,126,567 new shares in Reach Subsea ASA at a subscription price of NOK 3.25 per share. The agreement also included the issuance of warrants, whereby Wilhelmsen New Energy AS received the right to invest a further NOK 179 million through subscribing for an additional 44,766,864 new shares in Reach Subsea ASA at a subscription price of NOK 4.00 per share. In the event of any distribution to the company's shareholders by way of dividend payment, share capital reduction or share premium fund reduction, the subscription price is adjusted correspondingly. The effect of such adjustments is that the number of warrants is adjusted so that the aggregate number of warrants gives a total consideration as close as possible to the total consideration for which the investor could acquire shares pursuant to the warrants prior to the relevant adjustment. Following the last three year´s dividend payments, the subscription price has been adjusted to NOK 3.28 per share. Thus, the number of new shares that Wilhelmsen New Energy is entitled to subscribe for is now 54,593,737.
The warrants have a duration of three years and can be exercised at any time. The private placement and the issuance of the warrants was approved on an extraordinary general meeting in Reach Subsea ASA, held on 15 March 2022. Wilhelmsen New Energy AS have a combined holding of shares and warrants of 106,730,373.
Stock option program 1
In 2021 the Board of directors of Reach Subsea ASA approved a stock option scheme to further align the interests of the participating employees in Reach Subsea with those of the shareholders. The stock option scheme was finalised with a signed agreement between the company and Management and certain key employees 15.12.2021. Management and certain key employees of the Reach Subsea-group is granted the right to acquire up to a certain maximum number of shares in the Company at a fixed strike price ("the Option"). The strike price is set equal to the volume weighted average share price of the Company´s stock traded on the Oslo Stock Exchange 10 days prior to the finalization of the option scheme.
The options are vested with 1/3 each year, over a period of three years until 31.12.2024. The options are non-tradable and conditional upon the participant being employed by the Reach Subsea-group at the vesting date. The stock option plan constituted a maximum of 3.000.000 options equivalent to a similar number of Reach Subsea ASA shares.
The fair value at grant date was determined using a Black Scholes Model. The most significant inputs and assumptions in determining fair value at grant date was:
Excercise price: NOK 3.0 Share price at grant date: NOK 3.0 Expected volatility: 56.14 % Risk free interest rate: 1.092 %
Term of options: 3 years
Stock option program 2
In 2024 the Board of Directors of Reach Subsea ASA decided to establish a long-term incentive program for senior executives and key personnel in accordance with the Group's Remuneration Guidelines. The incentive program encompasses up to 15,000,000 new share options. Under the incentive program, participants will receive share options, which, if certain predefined performance criteria are met within a performance period, can be exercised by paying the predefined strike price. The strike price is set as the nominal value, NOK 1.00. One share option gives a contingent entitlement to one share after paying the strike price. Participants in the incentive program can elect to have up to 50 % of their options settled in cash to finance any potential tax expenses. 50 % of the options issued will vest after 3 years given a share price above NOK 9.00. 50 % of the options issued will vest after 5 years given a share price above NOK 12.00. The share price hurdles of NOK 9.00 and NOK 12.00 are subject to adjustments for dividends paid during the vesting period. The options have an exercise period of 6 months after vesting date.
The fair value at grant date was determined using the Monte Carlo valuation method. The most significant inputs and assumptions in determining fair value at grant date was:
Exercise price: NOK 1.0 Share price at grant date: NOK 5.96 Expected volatility: 40.14 % Risk free interest rate: 3.172 %
Note 7 - Share-based remuneration
As of September 30 2024 the company has two active stock option programmes. As of 3Q2024 the Company has recognized NOK 2.2 million in cost related to the options.
Note 8 - Tax
Deferred tax assets are recognized in the balance sheet based on expected utilization of tax losses carried forward and temporary differences. The carrying amount of deferred income tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
| (NOK 1000) | 01.07 - 30.09 2024 | 01.07 - 30.09 2023 | 01.01 - 30.09 2024 | 01.01 - 30.09 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Taxes payable | 25 144 | 20 571 | 57 867 | 26 729 | 42 261 |
| Changes in deferred taxes | (2 161) | (5 931) | (24 488) | 13 555 | 21 482 |
| Taxes, in total | 22 983 | 14 640 | 33 379 | 40 284 | 63 743 |
Deferred taxes / (Deferred tax assets)
| Temporary differences | 30.09 2024 | 30.09 2023 | 31.12 2023 |
|---|---|---|---|
| Other fixed assets | (12 351) | (14 926) | (3 135) |
| Financial leases | 32 111 | 3 761 | 17 415 |
| Fixed-price contracts | - | - | - |
| Inventories | (934) | (934) | (934) |
| Accruals | (30 103) | (25 260) | (18 376) |
| Right-of-use assets | (80 717) | (35 778) | (29 172) |
| Intangible assets | 62 675 | 21 500 | 74 775 |
| Tax loss carried forward Norway | - | - | 0 |
| Tax loss carried forward outside of Norway | (49 777) | (53 860) | (64 338) |
| Temporary differences, in total | (79 095) | (105 497) | (23 765) |
| Deferred tax assets | (13 921) | (23 209) | (799) |
| Not recognized deferred tax assets | - | (11 849) | (11 366) |
| Deferred tax assets in balance sheet* | 13 921 | 11 360 | (10 567) |
Note 8 - Tax continued
| (NOK 1000) | 01.07 - 30.09 2024 | 01.07 - 30.09 2023 | 01.01 - 30.09 2024 | 01.01 - 30.09 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Reconciliation from nominal to actual tax rate | |||||
| Profit & loss before taxes | 115 031 | 92 323 | 216 998 | 208 369 | 289 534 |
| Nominal tax rate | 22 % | 22 % | 22 % | 22 % | 22 % |
| Anticipated income tax due to nominal tax rate | 25 307 | 20 311 | 47 740 | 45 841 | 63 698 |
| Actual tax cost | 22 983 | 14 640 | 33 379 | 40 284 | 63 743 |
| Deviation | (2 324) | (5 671) | (14 361) | (5 557) | 46 |
| Tax effects of: | |||||
| Permanent differences | 1 578 | 3 050 | 2 490 | 2 550 | 104 |
| Effect of tax rates outside Norway different from 22 % |
746 | -1 088 | 505 | 887 | -270 |
| Changes in deferred tax assets, not recognized | - | 3 709 | - | 2 120 | 120 |
| Changes in deferred tax assets, previously not recognized |
- | - | 11 366 | - | - |
| Explanation | 2 324 | 5 671 | 14 361 | 5 557 | (46) |
| Effective tax rate | 20 % | 16 % | 15 % | 19 % | 22 % |
| Payable taxes in the balance sheet | 30.09 2024 | 30.09 2023 | 31.12 2023 | ||
| Payable taxes in the tax charge | (57 867) | (26 729) | (37 511) | ||
| Advances paid on tax charge | 501 | 1 590 | 1 056 | ||
| Tax payable previous years | (33 151) | (9 344) | - | ||
| Tax payable from business combinations | - | - | (4 570) | ||
| Payable taxes in the balance sheet | (90 516) | (34 431) | (41 026) |
45 3rd Quarter 2024
Note 9 - Segments
| (NOK 1000) | 01.07 - 30.09 2024 | 01.07 - 30.09 2023 | 01.01 - 30.09 2024 | 01.01 - 30.09 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Operating revenue | |||||
| Oil & Gas | 579 696 | 463 247 | 1 284 357 | 1 047 674 | 1 332 996 |
| Renewable / other | 254 180 | 188 600 | 747 858 | 444 772 | 633 588 |
| Total | 833 874 | 651 847 | 2 032 215 | 1 492 446 | 1 966 584 |
| Revenue by region | |||||
| Norway | 345 091 | 135 444 | 664 991 | 247 712 | 316 820 |
| Europe | 262 764 | 196 297 | 797 126 | 528 605 | 740 578 |
| Americas | 138 104 | 95 851 | 385 115 | 206 571 | 332 837 |
| Asia | 68 446 | - | 131 750 | - | 53 946 |
| Oceania | 19 470 | - | 53 141 | - | 29 002 |
| Other | 0 | 224 255 | 90 | 509 558 | 493 401 |
| Total | 833 874 | 651 847 | 2 032 215 | 1 492 446 | 1 966 584 |
| Revenue by type of service | |||||
| Data | 329 336 | 94 966 | 764 590 | 255 098 | 406 336 |
| Solutions | 504 540 | 556 881 | 1 267 625 | 1 237 348 | 1 560 248 |
| Total | 833 874 | 651 847 | 2 032 215 | 1 492 446 | 1 966 584 |
Revenues are categorised as either Data or Solutions based on the nature of the service delivered to a client. Data represents delivery of various types of maps, models and/or reports collected through subsea survey and/ or inspection projects. Solutions represents delivery of a specific client solution such as repair, modification, installation or removal of subsea equipment and infrastructure.
Note 10 - Leasing
Long and short term leases (committed lease term 12 months or less) of vessels and ROV's are capitalized as right- of use assets and depreciated under IFRS 16. The impact is that all cost in relation to leases of vessels/ROV's are presented as depreciation and interest expenses. No other short term leases, except for vessels and ROV's, are capitalized as right- of use assets and depreciated.
As of September 30 2024, Right of use assets in the balance sheet consist of contractual commitments for vessels and offices. Short term leases with no contractual commitment (pay as you go contracts), are not capitalized.
At inception of a contract the lease liability and the corresponding Right-of-use assets is measured at the present value of the estimated lease payments. Short term hired in vessels and ROV's are treated as short term leases under IFRS 16 and are also recognized as depreciations. The calculated lease liability is calculated with a discount rate of 7.5 %. See note 5 for further information on the Company's borrowings.
The total cash outflow for leases in 3Q2024 was NOK 222.8 million (3Q2023: 218.5 million).
The following have been recognized in 2024:
| Right-of-use assets | 30.09.2024 | 31.12.2023 |
|---|---|---|
| Property plant and equipment | 1 456 398 | 1 163 222 |
| Total | 1 456 398 | 1 163 222 |
| 802 895 | 805 931 |
|---|---|
| 734 217 | 386 036 |
| 30.09.2024 | 31.12.2023 |
| Total charges to the P&L | 239 684 | 228 326 | 617 440 | 513 549 | 656 537 |
|---|---|---|---|---|---|
| Interest expense | 31 174 | 24 570 | 85 025 | 51 475 | 74 892 |
| Impairment charge of right-of-use assets | - | - | - | - | - |
| Depreciation recognised as contract asset | - | 3 826 | (1 275) | - | |
| Depreciation charge of right-of use assets | 208 510 | 203 756 | 532 415 | 463 349 | 581 645 |
| Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 |
Note 10 - Leasing continued
The right-of-use assets are calculated based on a discounted estimated commitment on vessels (Havila Subsea, Olympic Triton, Viking Reach, Go Electra, Deep Cygnus, Olympic Taurus, Northern Maria, Offshore Surveyor) and offices. Other short term hired in vessels are treated as short term leases under IFRS 16 and are also recognised as depreciations.
| Reconciliation of leases on committed | Right-of use | Lease liability, | Lease liability, | Reconciliation of depreciation | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 |
|---|---|---|---|---|---|---|---|---|---|
| days recognised in 2024: | assets | non-current | current | Depreciation of long term right-of-use assets | 172 843 | 112 167 | 447 376 | 333 273 | 429 015 |
| Opening balance 01.01.2024 | 1 163 222 | 805 931 | 386 036 | ||||||
| Additions | 825 379 | - | 825 379 | Depreciation of short term right-of-use assets | 35 667 | 91 589 | 85 039 | 130 076 | 152 630 |
| Additions from business combination (note 14) | - | - | - | Depreciation recognised as contract asset | - | 3 826 | - | (1 275) | - |
| Depreciation of other assets | 20 511 | 8 986 | 53 416 | 28 274 | 41 360 | ||||
| Disposals | - | - | - | Total depreciation | 229 021 | 216 567 | 585 830 | 490 347 | 623 005 |
| Depreciation of right-of-use-assets | (532 415) | - | - | ||||||
| Impairment | - | - | - | ||||||
| Interests | - | - | 85 025 | ||||||
| Reclassification from long to short term | - | (3 259) | 3 259 | ||||||
| Adjusted commitment | 211 | 224 | - | ||||||
| Currency adjustment | - | - | 9 368 | ||||||
| Payments | - | - | (574 851) | ||||||
| Ending balance 30.09.2024 | 1 456 398 | 802 895 | 734 217 |
Note 11 - Financial items
| Net financial items | (29 306) | (28 153) | (84 963) | (52 750) | (58 963) |
|---|---|---|---|---|---|
| Total other net financial items | 2 817 | (3 530) | 176 | (1 787) | 13 925 |
| Other finance costs | (194) | (117) | (550) | (414) | (580) |
| Currency adjustment related to IFRS 16 | 3 282 | 9 063 | (9 368) | (6 020) | 12 616 |
| Net foreign exchange expense/income | (271) | (12 475) | 10 094 | 4 648 | 1 885 |
| Total interest expense | (33 586) | (25 561) | (89 951) | (53 432) | (77 881) |
| Other interest expense | (1 800) | 0 | (2 173) | 0 | (373) |
| IFRS 16 interest expense | (31 174) | (24 570) | (85 025) | (51 475) | (74 892) |
| Interest expense on bank borrowings | (611) | (991) | (2 753) | (1 957) | (2 617) |
| Total interest income | 1 463 | 938 | 4 813 | 2 468 | 4 991 |
| Interest income on short term bank deposits | 1 463 | 938 | 4 813 | 2 468 | 4 991 |
| Finance income and expenses | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12M 2023 |
Note 12 - Investment in associated companies
| Net result from investments in associates | 18 070 | 8 856 | 16 714 |
|---|---|---|---|
| Share of net result in investment, Guardian Geomatics Arabia Limited | - | - | - |
| Share of net result in investment, Eidesvik Reach AS | 18 070 | 8 856 | 16 714 |
| Specification of net result from investment in associates recognised in the income statement: |
|||
| Total carrying amount of investments in associates at balance date | 131 580 | 104 487 | 113 452 |
| Share of net result in investment, Eidesvik Reach AS | 18 070 | 8 856 | 16 714 |
| Translation differences | 58 | - | -23 |
| Acquisition cost shares acquired through business combination, Guardian Geomatics Arabia Limited |
- | - | 1 129 |
| Acquisition cost shares acquired, Eidesvik Reach AS | - | 95 632 | 95 632 |
| Opening balance carrying amount of investments in associates | 113 452 | - | - |
| Reconciliation and specification of carrying amount of investment in associates: |
30.09.2024 | 30.09.2023 | 31.12.2023 |
Investment in associated companies comprises shares in the entities Eidesvik Reach AS and Guardian Geomatics Arabia Limited. Reach Subsea holds a 49.9 % ownership in Eidesvik Reach AS, and a 40 % ownership in Guardian Geomatics Arabia Limited. Eidesvik Reach AS owns and operates the vessel Viking Reach. Guardian Geomatics Arabia Limited is a Saudi Arabia registered company, and was acquired through the purchase of 100 % of the shares in Guardian Geomatics in November 2023. Refer to annual report 2023 for further information regarding the Guardian transaction.
The investments are accounted for using the equity method:
The Reach Remote project is expected to amount to approximately NOK 449 million. As of September 30 2024 the company has capitalized NOK 278 million as Asset under construction. In addition, the company has financed two eROVs through leasing. As of June 30 the ROVs are under construction, and costs not recognised related to the ROVs amounts to NOK 60 million. The ROVs will be recognised in the balance sheet at commencement date.
Besides the Reach Remote project, Reach has taken multiple steps to secure vessel capacity at competitive terms. The additions to Right of use assets and liabilities in 2024 include the vessels Olympic Taurus, Northern Maria, Offshore Surveyor and Havila Subsea (extension).
Investments associated with these vessels and other capex projects is expected to amount to approximately NOK 224 million, and encompass equipment, upgrades and mobilization activities for vessels. As of September 30 2024 remaining investments related to these investments is estimated to NOK 134 million. Reach has secured bank and lease financing of NOK 78 million to partly fund these investments.
The Group has not had any major events after the balance sheet date that affects the accounts.
Note 13 - Commitments Note 14 - Events after quarter end
EBIT
Earnings before interest and taxes (operating result).
Liquidity
Cash and cash equivalents plus unutilized revolving credit facility
Net working capital
Receivables and inventories less non-interest bearing current liabilities.
Net interest-bearing debt
Interest bearing debt less cash and cash equivalents.
Number of ROV days sold Total number of ROV days sold in Reach Subsea AS during a defined period.
Number of ROV days available
Total number of ROVs owned by Reach Subsea multiplied with number of days in a defined period, plus total number of ROVs hired in by Reach Subsea AS multiplied with actual number of operational days in a defined period.
Project days Total number of days that a subsea spread is sold to projects, including ROV, personnel and/or vessel.
Technical uptime on ROVs
1-unpaid break down hours divided by total sold operation hours.
LTIs
Number of loss time incidents (number of incidents resulting in absence from work).
Number of vessel days sold
Vessel days sold by Reach Subsea AS (excl. JV/ Cooperation partners) that passes through our income statement.
51 3rd Quarter 2024
Contents Directors Report Sustainability Finance Financial Statements
Definitions
Contact
Reach Subsea ASA Møllervegen 6, 5525 Haugesund, Norway
+47 40 00 77 10
ReachSubsea.com
Jostein Alendal Chief Executive Officer
+47 928 80 412 [email protected]
Birgitte W. Johansen Chief Financial Officer
+47 994 51 279 [email protected]
• Offices: Americas, Australia, Brazil, Cyprus, Norway, Singapore, United Kingdom
