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Reach Subsea
Quarterly Report • Aug 27, 2024
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Quarterly Report
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Q2 2024
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 | 14 |
| Sustainability | 15 |
| Financial results for the quarter | 22 |
| Capital structure | 23 |
| The Share | 24 |
| Investor relations | 24 |
| News after quarter end | 24 |
| Outlook | 25 |
| Income statement | 26 |
| Notes | 31 |
| Definitions | 45 |
| Contact | 46 |
| Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | |
|---|---|---|---|---|---|
| UNAUDITED | AUDITED | ||||
| Revenue (NOKm) | 623 | 636 | 1 198 | 870 | 1 996 |
| EBIT (NOKm) | 121 | 148 | 150 | 140 | 332 |
| Pre-tax profit (NOKm) | 111 | 110 | 102 | 116 | 290 |
| Cash and cash equivalents (NOKm) | 222 | 129 | 222 | 129 | 436 |
| Net working capital (NOKm) | 94 | 230 | 94 | 230 | (105) |
| Net interest bearing debt, excl IFRS 16 leases (NOKm) | (128) | (120) | (128) | (120) | (369) |
| Net interest bearing debt, incl IFRS 16 leases (NOKm) | 1 566 | 1 216 | 1 566 | 1 216 | 823 |
| Equity (NOKm) | 931 | 745 | 931 | 745 | 928 |
| Order backlog (NOKm) | 1 600 | 590 | 1 600 | 590 | 1 600 |
| Outstanding tender value (NOKbn) | 11.0 | 5.0 | 11.0 | 5.0 | 10.0 |
| Number of ROV days sold | 610 | 910 | 1 300 | 1 477 | 2 942 |
| Number of ROV days available | 841 | 1 274 | 1 893 | 2 320 | 4 506 |
| Technical uptime on ROVs | 99 % | 99 % | 99 % | 99 % | 99 % |
| Number of offshore personnel days sold | 10 831 | 8 844 | 21 100 | 14 860 | 29 849 |
| LTIs | 0 | 0 | 0 | 0 | 1 |
| Number of vessel days sold | 558 | 517 | 1 039 | 765 | 1 759 |
A strong 2Q in terms of operations and results, market improvements, and progress towards strategic goals.
Underlying financial performance in line with last year for 2Q, and well ahead of last year for 6M. Dividend of NOK 0.36 per share distributed in the quarter.
Key milestones achieved for Reach Remote with successful sea launch and award of landmark technology qualification contract with Equinor.
Strong outlook as evidenced by order backlog and outstanding tender value more than doubling year-over-year.
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 present our second quarter and first half year report for 2024, confirming steady progress in accordance with our strategic objectives. We are showing steady positive increase compared to 2023, both in terms of revenues and EBIT.
Our journey of expanding Reach is making significant strides within a vibrant market, all while upholding our commitment to profitability and high-quality service. Our core services; IMR, Construction, Survey, and Monitoring, are at the heart of this growth, with each area seeing persistent advancement.
Our dedication to integrating robotization into the subsea industry is quickly taking shape and this past quarter has been a testament to our progress and achievements. We kicked off the period with the successful sea-launch of Reach Remote 1 USV at the end of the first quarter, followed by a series of successful tests throughout the second quarter. June brought a landmark moment with our first client agreement for Reach Remote 1, marking the beginning of a crucial technology qualification program with Equinor. This project symbolizes a pivotal transition for Reach Remote, evolving from a promising concept to a robust, fullscale operation, allowing us to validate its true potential. Meanwhile, Reach Remote 2, having also been sea-launched, is steadily catching up, demonstrating impressive progress.
| In addition, our platform has gained new strength this quarter with the extension of the Havila Subsea charter agreement |
|---|
| and the mobilization of our newest Survey vessel, Offshore Surveyor. Our second DRIX USV, Orca 2, has now joined Orca 1 in active operations, further enhancing our capabilities. |
| Our dedication to utilizing the latest technology and robotization for the subsea industry extends beyond Reach Remote, supported by |
| ongoing investments in technology that align |
| seamlessly with our operations. To showcase |
| these advancements, we're introducing a Technology Development chapter in this report, highlighting how these innovations |
| play a crucial role in our long-term strategy. |
| Our order backlog remains strong, standing at NOK 1.6 billion with projects for execution in 3Q2024 and beyond and our tender volume |
| persists at the level of 11 billion. Given the strong demand across various |
market segments, we are unwavering in our investment in conventional subsea services. It's inspiring to witness our offshore and onshore teams working together to develop efficient and thoughtful operational concepts for the upcoming Agalas vessel, set to enhance our IMR and light construction capabilities.
As we pursue "Sustainable Access to Ocean Space" and celebrate milestones that reinforce our vision, our primary measure of success remains the highest safety standards for and by our people, as evidenced by our continued record of zero work-related injuries. We are confident in our belief that "Everything is within Reach".
Jostein Alendal CEO, Reach Subsea ASA
CEO Letter
Reach Subsea | Quarterly Consolidated Report 2024
2nd 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
2nd 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.
Contents Directors Report Sustainability Finance Financial Statements
Our services
IMR & CONSTRUCTION
The Reach Subsea Vessel fleet offers a diverse array of capabilities, ranging from heavy construction and decommissioning services to specialized inspection, maintenance, and repair operations.
Our reliable and proficient ROV fleet, coupled with the extensive experience and expertise within our organization, consistently demonstrates that no task is too small or too large. We are here to be a reliable partner for our clients, supporting them throughout the entire lifecycle of all types of assets in the ocean space.
SURVEY
Reach Subsea provides cost-efficient high-end seabed mapping and pipeline
inspection survey services.
Reach Subsea has further developed our survey capability and we deliver high end survey services on a global basis. These services include reconnaissance and detailed seabed mapping for typical Oil and Gas and Offshore Windfarm development projects as well as detailed inspection of subsea assets. The survey services are mostly ROV based and performed from our advanced fleet of traditional vessels with dedicated survey ROVs as well as from our unmanned survey platforms. As we keep advancing our remote capabilities, we are performing an increasing part of our projects remotely.
MONITORING
Reach Subsea provide innovative services for hydrocarbon production, CCS projects and environmental monitoring.
By using passive methods, we can offer data to allow efficient reservoir management and field development strategy, in a cost-effective manner, and with a minimal environmental footprint. We help clients to understand reserve depletion, target untapped reserves, increase hydrocarbon recovery, optimize top-side infrastructure, monitor injection plume, reduce uncertainties in CO2 density and storage capacity, detect leakage, and confirm long-term containment.
2nd Quarter 2024
Services delivered during Q2
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 Q2 has come from projects in the Renewable 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 Q2.
The number of vessel days that passed through our P&L in Q2 2024 was 558 (517) with a 98 % utilisation (95 %). For the first six months of 2024 the number of vessel days that passed through our P&L amounted to 1,039 (765) with a 94 % utilisation (93 %). 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.
Guardian Geomatics along with its partner Nudhum LLC, was awarded Hydrographic Survey Project (HSP18) by GEOSA. HSP18 cover an area of 8,600 km² in the Arabian Gulf.
GEOSA requested Unmanned Surface Vessels (USVs) to undertake the work, and we began with an Exail DRIX named Orca1 in July 2023. Orca-1 operates on an 'Over-The-Horizon (OTH)' basis, with the Remote Operating Centre (ROC) based on the shoreside. Orca-1 comes into port every 3 days to receive fuel, transfer the acquired data on hard drives and general checks. The data is then transferred to Riyadh for processing and reporting and to be eventually published as updated navigation charts.
Multibeam data acquisition is the main focus of the survey, conducted according to IHO SP44 Order 1A specifications.
| Vessel | |
|---|---|
| Exail DRIX Orca 1 & 2 | |
| Client | |
| GEOSA | |
| Location | |
| Arabian Gulf | |
| Period | |
| July 2023 - October 2024 | |
| Water Depth | |
| 15m - 70m |
In addition, the project includes the acquisition and sampling of Sub-Bottom Profiler data, tide measurements, current meter reading, sediment sampling, bioluminescence, water clarity and updates to the aids to navigation for the respective charts.
Following acquisition by Reach Subsea, a 2nd DRIX (Orca-2) was ordered. Orca-2 commenced work on June 24 and the two USV's are working together to complete the data acquisition of the area. Together, they have acquired 5858 km² so far. Both Orca1 and Orca-2 operate with Kongsberg EM2040 multibeam systems. In addition, Orca-2 has an Echoes 3500 sub bottom profiler.
Orca-1 has operated continuously for over 1 year and Exail advise that this has been the longest-running operation record for a DRIX globally. Orca-1 and Orca-2 on the HSP 18 project have proven the viability for USV's in long term data acquisition. The learnings from the Orca's will be included in the operations of the Reach Remotes to begin work later this year.
Guardian Geomatics and Nudhum deploy USVs for hydrographic survey
| Viking Reach | |
|---|---|
| Client | |
| Equinor | |
| Location | |
| North Sea, Norwegian Sector | |
| Period | |
Services Frame Agreement with Equinor, Reach Subsea has been called off for performance of various work packs to be performed in the North Sea, NCS.
The work is performed with the vessel Viking Reach equipped with one Supporter Work Class ROV and one Surveyor Survey Class ROV.
Typical works to be performed during the campaign:
- Seabed mapping-reconnaissance
- Detailed Deepwater Seabed Mapping
- Pipeline Survey
- Gravimetric Survey
- Seabed Levelling and Debris/Boulder Clearance
Reach Subsea is responsible for provision of Engineering services, Project Management, Procurement and offshore execution during the campaign.
Equipment utilized during the campaign:
- Seabed Survey Acquisition Sensors, MBES, SSS, SBP Sensors
- HD Cameras
- Dragonet Gradiometer System
- Boulder GrabsDalagripen, Tag40, Orange Peeler Grab
- Subsea Dredgers
- Subsea Excavator from Scanmudring
Viking Reach - Light Construction Vessel Campaign 2024
Featured projects
| Vessel | |
|---|---|
| Havila Subsea | |
| Location | |
| Gulf of Mexico |
Period
April - December 2024
In Q2-Q4 Reach Subsea performed Nodes Positioning Survey.
The works were performed with Havila Subsea, equipped with 1x Schilling HD45 System and 1x Schilling HD46 System work class ROV's and manned with full ROV And Survey Crew.
Typical works done during the campaign:
- Node Positioning
- Node Acceptance
- Oceanographic sensors deployment and recovery
- Data files processed
In excess of 7000 nodes were deployed and recovered, covering an area over 10,000 km2 on two different projects.
Equipment utilized during the campaign:
- ROV MUX, RTS GEN6 or Innova MKII+
- Valeport mini IPS 300
- Impact Subsea, ISD4000
- Valeport mini SVS
- SprintNav 500 AAINS
- 4DNAV NavView including NodeDashboard
- CTD Valeport CTD-DR or SAIV 204
- Digital Barometer
- Altimeter for TMS 200m
- Gemini 702iS
- cNode MiniS 34-40 Narrow Beam
- cNode MiniS 34-180
- Subsea Cables
Featured project #3 2nd Quarter 2024
Havila Subsea - Nodes Positioning Survey
Featured projects
Technology development
Dragonet ROV UXO surveys
The Reach Dragonet gradiometer system was successfully launched in Q1/Q2 this year.
It has since delivered high-precision magnetic anomaly detection with low noise, enhanced by integrated HD cameras for real-time visual correlation. The modular, skid-based design ensures easy deployment and adaptability to various work scopes including geophysical sensors. There are several versions (width) of the system to provide versatile operations where the wide 9 meter frame is typically used for UXO surveys,
gWatch Remote
Reach's world-leading gWatch technology goes remote for unmanned operations.
Reach's gWatch is used for reservoir modelling by regular measuring of changes in gravity throughout the lifetime of the reservoir and was commercialized in 2013. It is currently used on all large gas / oil & gas / condensate fields in Norway and is rapidly reaching other parts of the world. The technology is undergoing a development project to reduce footprint and improve robustness and operational efficiency to prepare for remote operations with our fleet of Reach Remote vessels in Q4 2024.
Reach Horizon
Reach develops an internal platform for command & control of remote systems as well as supervising data acquisition.
Recent years hardware development enables possibility to operate a wide range of systems remotely. A key success factor is to manage all these systems under one umbrella which is why Reach is focusing on the Reach Horizon to broaden and improve our Remote Services.
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 |
| Q224 status: | Survey and light construction work in the North Sea continuously throughout the quarter. Project backlog until end of September. |
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 Q224 status: Ocean Bottom Node Operations for PX Geo in Gulf of Mexico continuously throughout the quarter. Project backlog until December 2025.
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 |
| Q224 status: | The Vessel spent most of the quarter at a yard for battery installation and mobilisation of subsea equipment. Started full IMR operations in the North Sea during June and has project backlog until second quarter 2025. |
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 | |
| Q224 status: | Working continuously for Bluestream in Q2 on miscellaneous IMR scopes. Project backlog until end December. |
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 |
| Project backlog until end October. |
- Supporter, survey equipment
- Q224 status: Continuous IMR and construction support
- throughout the quarter in the North Sea.
- Project backlog until end October.
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 | |
| Q224 status: | Chartered to Bluestream for subsea | |
| inspection works throughout the quarter. | ||
| Project backlog until mid October. |
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 |
| Q224 status: | W2W scopes in the Offshore Wind sector for different clients throughout the quarter. Project backlog until mid August before mobilizing 2 x WROV and Survey spread for complex subsea operations. The spread has been secured for its first subsea contract following mobilization. |
Offshore Surveyor
Survey Vessel
Charter period: June 2024 - June 2027. 2-year option.
| Vessel owner: Guardian Offshore AU | |
|---|---|
| Crane: | None |
| Assets: | Survey equipment |
Q224 status: Entered the fleet in June and commenced hydrographic mapping for the Australian authorities until the end of September.
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. |
| Q224 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 in 2024 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
Q2 highlights
- Successfully launched Reach Remote 1 USV and conducted a series of successful tests throughout the second quarter.
- Held a successful client day, generating high interest and engagement, including visit onboard the Vessel in Brevik and in the Massterly Remote Operation Centre in Horten.
- Entered into an agreement with Equinor to conduct technology qualification program for the Reach Remote USVs. To be executed directly after delivery, estimated autumn 2024.
- Reach Remote 2, following its sealaunch, is steadily progressing and catching up with Reach Remote 1.
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
Q2 highlights
- In Q2 Reach Subsea took delivery of our second DRIX unit named Orca 2 and immediately mobilised the vehicle for the hydrographic mapping project ongoing in Saudi Arabia.
- The operation of two DRIX units (Orca 1 and Orca 2) from the same operation team has led to even more efficient operations and the two units has now exceeded 60.000 line km of surveys.
- With the operation of the DRIX units Reach Subsea has further developed our remote survey capability and put Reach Subsea in the front of the ongoing technology shift towards uncrewed environmental friendly operations.
20 2nd Quarter 2024
Sustainability within reach
Reach firmly focuses on sustainability across environmental, social, and governance (ESG) aspects. The journey towards CSRD reporting is in progress, with workshops centred on the ESRS Standards and a developing a new reporting and communication structure in the company. This new structure aims to better align with the ESRS Standards under CSRD reporting. It will shift our focus from "Key targets" to directly connecting our ambitions with the ESRS standards and metrics. This will provide a clear framework for communicating and working with what our actual goals are, the actions we take, and what measurement parameters we use.
nvironmental ocial overnance
In line with our commitment to transparency and accountability, our Transparency Act has been updated this quarter, click here to view online.
We also conducted an internal competition among all departments on courses aligning with our Key Targets, to gain higher completion rate and engagement. This initiative led many of our employees to achieve a 100 % completion rate on all assigned courses.
By completing these courses, employees gain crucial knowledge in Cyber Security Awareness, Sustainability, Anti-Bribery, and Code of Conduct. This not only enhances their skills, but also strengthens the entire organization.
We aim to keep employee turnover below 8 %, and have achieved a 5.3 % turnover rate year-to-date in Q2 2024, slightly improved from 5.5 % in Q2 2023. This low turnover rate indicates high employee satisfaction in the company.
In addition, our trainee program continues to thrive, with 9 apprentices and trainees currently participating in 2024. These individuals are so far only based in our Norwegian offices and offshore locations, contributing to workforce development and skills enhancement.
One of our key focus areas and targets over several years has been to achieve zero major spills. We invest in biodegradable oil to minimize environmental damage in the event of a spill. We have a unified definition in Reach of what constitutes as a major spill (to ensure consistent language and calculations), but we report all spills to maintain a comprehensive overview of any discharges from our operations, regardless of its size.
We are also working on increasing our activity within the non-O&G segment. Although this target has not yet been fully achieved for this quarter (with Q2 2024 activity at 24 % compared to 30 % in Q2 2023), efforts are ongoing.
Sustainability
Reach Subsea | Quarterly Consolidated Report 2024
22 2nd Quarter 2024
Contents Directors Report Sustainability Finance Financial Statements
Double Materiality Principle
Impact Materiality
How we influence the world
Reach Subsea Earth & Community
Financial Materiality
How the world influences us
Double Materiality
Zero major spills of hazardous materials to the sea
CIRCLE-CHECK Achieved
Q2 = Zero major spills (Q2 2023 = zero major spills)
CO2 footprint below the NSA relevant emission targets
CIRCLE-CHECK Achieved
Q2 = 27.94 (YTD: 28.67)
Compared to our total CO2 emissions per sold vessel day was in 2023 (35,08 ton of CO2 equivalents) (YTD 2023: 33.76).
Based on fuel consumption on vessels hired in by Reach.
Increase activity within non-O&G segment
Ongoing
Q2 = 24 % (Q2 2023 = 30 %)
Successfully bring two USVs to market in 2024
Ongoing
| Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|
| Bring USV2 to market | |||
The first Reach Remote unit (USV1) on water, launched March 25th. USV2 is under construction, set to be sea-launched late summer 2024.
Key Targets for 2024
Scheduled activities
Environmental
Maintain turnover below 8 %
CIRCLE-CHECK Achieved
Q2 = 5.3 % YTD (Q2 2023 = 5.5 % YTD)
10 apprentices and trainees participating yearly in trainee program Ongoing
9 apprentices and trainees in 2024 to this date, located at Norwegian offices and offshore
9 apprentices and trainees participating yearly in trainee program
Lost time incidents (LTI) 0
CIRCLE-CHECK Achieved Q2 = 0 LTI (Q2 2023 = 0 LTI)
Zero work related injuries (LTI)
CIRCLE-CHECK Achieved
Q2 = Zero work related injuries (Q2 2023 = Zero work related injuries)
Key Targets for 2024
Scheduled activities
Social
90 % completion of Code of Conduct and Anti Bribery course. Q2 = Ongoing
90 % completion of Cyber security awareness training courses. Q2 = Ongoing
Implement and gain 90 % completion of Sustainability course. Q2 = Ongoing (The sustainability course was implemented 15.04.24)
Scheduled activities
Implement and gain 90 % completion of Sustainability course
Ongoing
Q2 = Ongoing
(The sustainability course was implemented 15.04.24)
90 % completion of Cyber security awareness training courses
Ongoing
Q2 = Ongoing
90 % completion of Code of Conduct and Anti Bribery course Ongoing Q2 = Ongoing
Key Targets for 2024
Governance
Finance
Financial results, capital structure and outlook
Figures for the same period last year are presented in brackets in the text.
Reach Subsea acquired Guardian Geomatics 15th November 2023. Financial results are fully consolidated as of that date. The financial effects of the transactions are further described in the Notes.
Revenue for 2Q2024 was NOK 623.1 million (NOK 636.4 million), with the decrease from last year primarily explained by 2Q2023 revenue including a gain of NOK 30 million from disposal of one ROV.
Operating expenses for 2Q2024 were NOK 502.0 million (NOK 488.2 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 general market cost increase. Details about depreciations and impairment sensitivity is presented in the Notes.
2Q2024 operating result (EBIT) was NOK 121.1 million (NOK 148.2 million).
The decreased EBIT is primarily a result of the sale of one ROV in 2Q2023, which had a net effect of NOK 29.8 million. Adjusting for the sales gain, EBIT increased slightly year over year. It is also worth noting that Deep Cygnus spent most of the quarter at a yard for battery installation and mobilisation for subsea mode. Furthermore, two other vessels worked in vessel only mode. During the second half of 2024 these three vessels will be mobilised in full subsea mode, along with the rest of our fleet, and be deployed towards higher value add work scopes.
Net financial items for 2Q2024 were NOK –10.2 million (NOK –37.8 million). The main year-over-year differences are (i) result from associated companies of NOK 7.3 million (NOK 0.8 million), (ii) increased interest expenses due to the higher level of IFRS 16 related debt, which amounted to NOK –32.3 million (NOK –24.5 million) and (iii) currency effects, which amounted to NOK 13.8 million (NOK –15.1 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 2Q2024 was NOK 86.0 million (NOK 86.3 million). For 2Q2024, Oil & Gas revenues constituted 69 % while Renewable/ Other constituted 31 % of total revenues. By comparison, in 2Q2023 Oil & Gas revenues were 70 % while Renewable/Other constituted 30 % 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.
Reach Subsea acquired Guardian Geomatics 15th November 2023. Financial results are fully consolidated as of that date. The financial effects of the transactions are further described in the Notes.
Revenue for the first half of 2024 was NOK 1,198.3 million (NOK 870.5 million), with the increase from last year explained by higher activity in the first quarter of 2024 compared to 1Q2023, partly offset by a gain of NOK 30 million from disposal of one ROV in 2Q2023.
Operating expenses for the first half of 2024 were NOK 1,048.6 million (NOK 730.6 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 quarter of 2024 compared to 1Q2023 and a general market cost increase. Details about depreciations and impairment sensitivity is presented in the Notes.
Operating result (EBIT) for the first half of 2024 was NOK 149.8 million (NOK 139.8 million).
The increased EBIT is primarily driven by a strong 1Q2024, partly offset by the sale of one ROV in 2Q2023 with a net gain of NOK 29.8 million. Adjusting for the sales gain, EBIT increased 36 % year over year. It is also worth noting that Deep Cygnus during the first half worked in vessel only mode until it spent most of the second quarter at a yard for battery installation and mobilisation for subsea mode. Furthermore, two other vessels worked in vessel only mode.
During the second half of 2024 these three vessels will be mobilised in full subsea mode, along with the rest of our fleet, and be deployed towards higher value add work scopes.
Net financial items for the first half of 2024 were NOK –47.8 million (NOK –23.8 million). The main year-over-year differences are (i) result from associated companies of NOK 7.9 million (NOK 0.8 million), (ii) increased interest expenses primarily due to the higher level of IFRS 16 related debt, which amounted to NOK –56.4 million (NOK –27.9 million) and (iii) currency effects, which amounted to NOK –2.6 million (NOK 1.7 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 the first half of 2024 was NOK 91.9 million (NOK 90.4 million).
For the first half of 2024, Oil & Gas revenues constituted 59 % (70 %) while Renewable/ Other constituted 41 % (30 %) of total revenues.
Financial results year to date
The Group's equity as of 30 June 2024 was NOK 930.7 million (NOK 745.1 million), which represents 28.5 % (34.5 %) 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 reduced equity ratio compared to the same period last year.
Total current assets at the end of the quarter were NOK 857.2 million (NOK 760.9 million), of which cash and cash equivalents amounted to NOK 221.5 million (NOK 128.8 million). Including the unutilized revolving credit facility, available liquidity was NOK 251.5 million (NOK 158.8 million).
Receivables and inventories were NOK 635.7 million (NOK 632.1 million). Total non- interest-bearing current liabilities were NOK 542.2 million (NOK 401.6 million). This leaves a net working capital of NOK 93.5 million (NOK 230.5 million).
Total non-current assets at the end of the quarter were NOK 2,402.9 million (NOK 1,731.0 million). The increase is mainly a result of (i) increased Right of use assets (leases capitalized under IFRS 16) of net NOK 327.5 million (ii) Assets under construction of net NOK 147.9 million, which is mainly related to the Reach Remote project and (iii) Property, plant and equipment of net NOK 124.4 million. 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 1,565.7 million (NOK 1,216.3 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 –127.6 million (NOK –119.7 million), i.e. cash positive.
Net cash flow from operating activities for 2Q2024 was NOK 328.9 million (NOK 244.7 million) with the main year on year differences related to increased Change in trade debtors and creditors and Depreciations. Net cash flow from operating activities for the first half of 2024 was NOK 285.0 million (NOK 239.5 million).
Net cash flow from investing activities for 2Q2024 was NOK –34.0 million (NOK 7.5 million). Included in this figure is Purchase of fixed assets related to general equipment upgrades, mobilizations and general investments of NOK –34.0 million (NOK –23.8 million). Net cash flow from investing activities for the first half of 2024 was NOK –117.4 million (NOK –83.2 million).
Net cash flow from financing activities for 2Q2024 was NOK –273.3 million (NOK –261.3 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 half of 2024 was NOK –392.7 million (NOK –221.5 million). Net change in cash and cash equivalents for 2Q2024 was NOK 21.6 million (NOK –9.1 million). Net change in cash and cash equivalents for the first half of 2024 was NOK –225.1 million (NOK –65.2 million). Reach has per 30 June 2024 no major debt maturities to credit institutions falling due the next three years. Details about cash flow can be found in the Cash flow statement and the Notes.
The Reach Remote project is expected to amount to approximately NOK 426 million. As of June 30 2024 the company has capitalized NOK 237.5 million as Asset under construction. Thus, remaining investments in the Reach Remote project amounts to approximately NOK 190 million, of which NOK 146 million is covered by bank and lease financing.
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, Offshore Surveyor and Northern Maria in addition to the lengthening of the charterparty for the vessel Havila Subsea.
Investments associated with these vessels and other capex projects is expected to amount to approximately NOK 281 million, and encompass equipment, upgrades and mobilization activities for vessels. As of June 30 2024 remaining investments related to these investments is estimated to NOK 164 million. Reach has secured bank and lease financing of NOK 126 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.
Our schedule indicates good utilization for all our subsea spreads throughout the main season 2024. We now have an order book of approximately NOK 1.6 billion (NOK 590 million), with projects for execution in 3Q2024 and beyond. These contracts cover a wide spectrum of project types and are across both oil & gas and renewables projects and are included in the "Operational update" in this report. 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 11 billion (5 billion).
Reach Subsea ASA is listed on the Oslo Stock Exchange (Euronext). The Company has per 30 June 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 June 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 + 2 USV spreads (vessel, ROVs, and personnel, alone or together with partners), which have a competitive cost structure. These subsea and USV 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 2024 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 half of 2024. There is still a large untapped potential within the group, and efforts to bundle our new capabilities into
more value-added integrated services, as well as utilizing the full capabilities on all our subsea spreads will accelerate going forward. During the first half, three of our spreads worked in vessel only mode. These spreads are now equipped, or in the process of being equipped, for full subsea mode. Thus, during the second half and going forward, our entire fleet will be equipped for more valueadded services, supporting further growth.
Statement pursuant to section 5-6 of the securities trading act.
Statement by the Board of Directors and Chief Executive Officer: We hereby confirm that the half-year financial statements for the period 1 January to 30 June 2024 have, to the best of our knowledge, been prepared pursuant to IAS 34 Interim Financial Reporting and that the information provided presents a true and fair picture of the company's and the group's assets, liabilities, financial positions and profit as a whole. We hereby also confirm that, to the best of our knowledge, the half year financial statements provide a true and fair overview of developments, the financial performance and important events during the accounting period and their effect on the half-year
financial statements, the most important risk and uncertainty factors that the group faces in the next accounting period and material transactions with close associates.
Haugesund, 26 August 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 2nd Quarter 2024
Financial Statements
Reach Subsea ASA Group
| Statement of profit or loss (NOK 1000) | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | Notes | Comprehensive income (NOK 1000) | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | Notes |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating revenue | 623 069 | 606 596 | 1 198 341 | 840 599 1 966 584 | 9 | Translation differences | (1 302) | (157) | 330 | (41) | (1 116) | ||
| Other income/losses | - | 29 843 | - | 29 858 | 29 319 | 3 | Comprehensive income items | (1 302) | (157) | 330 | (41) | (1 116) | |
| Revenue | 623 069 | 636 439 | 1 198 341 | 870 456 1 995 903 | Total comprehensive income | 86 034 | 86 340 | 91 901 | 90 361 | 224 675 | |||
| Procurement expenses | (129 042) | (134 801) | (323 550) | (210 915) | (503 760) | ||||||||
| Personnel expenses | (94 388) | (71 918) | (196 138) | (134 378) | (348 794) | 7 | Earnings per share | 0.32 | 0.34 | 0.34 | 0.37 | 0.89 | |
| Other operating expenses | (98 736) | (72 860) | (172 089) | (111 534) | (188 558) | Diluted earnings per share | 0.30 | 0.34 | 0.32 | 0.36 | 0.88 | ||
| EBITDA | 300 903 | 356 860 | 506 563 | 413 629 | 954 790 | ||||||||
| Depreciation and impairment | (179 828) | (208 640) | (356 809) | (273 780) | (623 005) | 3, 10 | |||||||
| Operating result (EBIT) | 121 075 | 148 220 | 149 754 | 139 848 | 331 786 | ||||||||
| Result from associated companies | 7 250 | 794 | 7 870 | 794 | 16 714 | 12 | |||||||
| Interest income | 1 045 | 1 035 | 3 350 | 1 530 | 4 991 | 11 | |||||||
| Interest expenses | (32 285) | (24 516) | (56 365) | (27 870) | (77 881) | 10, 11 | |||||||
| Other net financial items | 13 802 | (15 129) | (2 641) | 1 743 | 13 925 | 11 | |||||||
| Profit (loss) before taxes | 110 887 | 110 405 | 101 967 | 116 046 | 289 534 | ||||||||
| Income taxes | (23 550) | (23 909) | (10 396) | (25 644) | (63 743) | 8 | |||||||
| Profit (loss) | 87 337 | 86 496 | 91 571 | 90 402 | 225 791 |
33 2nd Quarter 2024
Contents Directors Report Sustainability Finance Financial Statements
Income statement
| Statement of financial position (NOK 1000) | 30.06.2024 | 30.06.2023 | 31.12.2023 | Notes | Statement of financial position (NOK 1000) | 30.06.2024 | 30.06.2023 | 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 | 11 756 | 5 429 | - | 8 | Share premium | 388 273 | 358 418 | 388 273 | |
| Intangible assets | 27 989 | 10 017 | 30 769 | 4 | Proposed dividends | - | - | 97 837 | |
| Investment in associated companies | 121 350 | 96 426 | 113 452 | 12 | Other equity | 270 703 | 131 228 | 170 126 | 7 |
| Assets under construction | 308 423 | 160 489 | 266 658 | 3 | Total equity | 930 746 | 745 095 | 928 005 | |
| Property, plant and equipment | 196 549 | 72 120 | 183 279 | 3 | |||||
| Right-of-use assets | 1 627 272 | 1 299 765 | 1 163 222 | 3, 10 | Non-current liabilities | ||||
| Total non-current assets | 2 402 929 | 1 730 969 | 1 866 970 | Interest-bearing debt to credit institutions | 74 991 | 1 266 | 57 418 | 5, 10 | |
| Interest-bearing debt leases | 1 000 071 | 965 517 | 805 931 | 5, 10 | |||||
| Current assets | Deferred tax liabilities | - | - | 10 567 | 8 | ||||
| Bunkers | 33 305 | 25 487 | 28 418 | Total non-current liabilities | 1 075 062 | 966 783 | 873 916 | ||
| Trade receivables | 544 360 | 486 835 | 314 166 | ||||||
| Other receivables | 58 074 | 119 738 | 41 904 | Current liabilities | |||||
| Cash and cash equivalents | 221 508 | 128 836 | 436 423 | Interest-bearing debt to credit institutions short term |
18 956 | 7 850 | 10 176 | 5, 10 | |
| Total current assets | 857 247 | 760 896 | 820 912 | Interest-bearing debt leases | 693 208 | 370 540 | 386 036 | 5, 10 | |
| Tax payable | 67 907 | 13 868 | 41 026 | 8 | |||||
| Total assets | 3 260 175 | 2 491 865 | 2 687 882 | Trade payables | 245 995 | 238 507 | 205 773 | ||
| Other current liabilities | 228 301 | 149 223 | 242 951 | ||||||
| Total current liabilities | 1 254 367 | 779 987 | 885 960 | ||||||
| Total liabilities | 2 329 429 | 1 746 770 | 1 759 877 | ||||||
| Total equity and liabilities | 3 260 175 | 2 491 865 | 2 687 882 |
Balance Sheet
| Statement of cash flow (NOK 1000) | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | Notes | (NOK 1000) | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | Notes |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash flow from operating activities | Cash flow from financing activities | ||||||||||||
| Profit before tax | 110 887 | 110 405 | 101 967 | 116 046 | 289 534 | Net interest received/paid | (353) | 18 | 836 | 565 | 2 001 | ||
| Paid taxes | (750) | - | (4 848) | - | (8 808) | Proceeds from issuance of ordinary shares | - | 1 237 | - | 120 796 | 123 040 | ||
| Depreciation and amortisation | 179 828 | 208 640 | 356 809 | 273 780 | 623 005 | Proceeds from bank loan | - | - | 27 500 | - | 27 500 | ||
| Gain/loss on assets sold | - | (29 843) | 0 | (29 843) | (29 843) | Payment of dividends | (97 837) | (45 981) | (97 837) | (45 981) | (45 981) | ||
| Interest income | (1 045) | (1 035) | (3 350) | (1 530) | (4 991) | Repayment of borrowings | (2 635) | (4 918) | (3 961) | (18 902) | (23 300) | ||
| Interest expense | 32 285 | 24 516 | 56 365 | 27 870 | 77 881 | Repayment of leases (including interests) | (172 473) | (211 670) | (319 210) | (278 001) | (571 042) | ||
| Change in trade debtors | 50 200 | (237 560) | (230 194) | (270 507) | (12 535) | Net cash flow from financing activities | (273 298) | (261 314) | (392 672) | (221 523) | (487 781) | ||
| Change in trade creditors | 14 652 | 119 560 | 35 163 | 136 077 | 27 038 | ||||||||
| Change in other provisions | (54 446) | 49 746 | (27 758) | (12 862) | 5 264 | Net change in cash and cash equivalents | 21 555 | (9 106) | (225 075) | (65 245) | 256 556 | ||
| Investments accounted for | Cash and cash equivalents in the start of the period |
201 090 | 137 274 | 436 423 | 191 591 | 191 591 | |||||||
| using the equity method | (7 250) | - | (7 870) | - | (16 714) | Translation differences | (1 137) | 668 | 10 160 | 2 490 | (11 723) | ||
| IFRS 2 share-based payments | 4 534 | 240 | 8 676 | 477 | 2 897 | Cash and cash equivalents in | 221 508 | 128 836 | 221 508 | 128 836 | 436 423 | ||
| Net cash flow from operating activities | 328 896 | 244 668 | 284 963 | 239 508 | 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 | 31 384 | ||||||||
| Purchase of fixed assets | (34 043) | (23 844) | (117 366) | (49 894) | (202 708) | ||||||||
| Purchase of shares in associated companies | - | - | - | (64 72) | (64 721) | ||||||||
| Net cash flow from investing activities | (34 043) | 7 540 | (117 366) | (83 231) | (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 | 91 571 | 91 571 | ||||
| Other comprehensive income for the year | 330 | 330 | ||||
| Total comprehensive income for the year | 91 901 | 91 901 | ||||
| Proceeds from shares issued | - | |||||
| Dividends paid | (97 837) | (97 837) | ||||
| Proposed dividends | - | |||||
| IFRS 2 share-based payments | 8 676 | 8 676 | ||||
| Equity 30 June 2024 | 271 769 | 388 273 | - | 19 466 | 251 238 | 930 746 |
36 2nd 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 web page (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 | 64 230 | 7 202 | 832 | 12 795 | 787 949 | 873 008 |
| Reclassifications | (22 465) | - | 15 586 | 6 879 | - | - |
| Disposals/adjusted commitment | - | - | - | - | - | - |
| Purchase cost 30.06.24 | 308 423 | 194 183 | 141 553 | 175 532 | 2 395 222 | 3 214 913 |
| Accumulated depreciation 30.06.24 | - | (149 632) | (109 448) | (55 728) | (767 948) | (1 082 755) |
| Accumulated impairment 30.06.24 | - | - | - | - | - | |
| Net book value 30.06.24 | 308 423 | 44 551 | 32 105 | 119 893 | 1 627 272 | 2 132 244 |
| Depreciation in 2024 | - | (6 896) | (632) | (22 597) | (323 905) | (354 030) |
| 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 June 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 not result in any impairment charge.
| Drop in estimated revenue | Impairment charge (NOK 1000) |
|---|---|
| 10 % | 25 206 |
| 20 % | 90 264 |
| 30 % | 190 656 |
| Reach Remote | 237 490 |
|---|---|
| Other capex-projects and mobilizations | 70 932 |
| Net book value 30.06.24 | 308 423 |
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 June 30 2024 the group has net book values for |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
| Purchase cost 01.01.24 Additions |
2 372 - |
32 000 - |
109 589 - |
143 961 - |
R&D totalling NOK 2.1 million. Hours spent have been capitalized for personnel as well 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 30.06.24 | 2 372 | 32 000 | 109 589 | 143 961 | Group in March 2022 and Guardian Geomatics in November 2023. Refer to the | |||||
| Accumulated depreciation 30.06.24 | (341) | (6 042) | - | (6 383) | 2023 annual report for further information regarding the transactions. | |||||
| Net book value 30.06.24 | 2 031 | 25 958 | 109 589 | 137 579 | The residual goodwill is tested for impairment on corporate level. The starting | |||||
| Depreciation in 2024 | (113) | (2 667) | - | (2 780) | point for the impairment test is the difference between market value and book value of equity. As of June 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 range of 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 was 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 to 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 instalments/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 June 2024 the liquidity position (including overdraft facility) is 251,5 million, the Debt service Coverage Ratio is 5.0, and Booked equity NOK 930.7 million/29 %. 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 56.4 million (2023: NOK 30.4 million). Bank borrowings are secured by equipment and receivables of the group.
| (NOK 1000) | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Non-current liabilities | ||
| Bank borrowings (including capitalized loan costs) | 42 628 | 24 623 |
| Lease liabilities to credit institutions | 32 363 | 32 795 |
| Other non-current lease liabilities (IFRS 16) | 1 000 071 | 805 931 |
| Total non-current borrowings | 1 075 062 | 863 350 |
| Current borrowings | ||
| Bank borrowings (including capitalized loan costs) | 13 734 | 5 817 |
| Lease liabilities to credit institutions | 5 222 | 4 358 |
| Other current lease liabilities (IFRS 16) | 693 208 | 386 036 |
| Total current interest-bearing debts | 712 163 | 396 211 |
| Carrying amount | ||
| Bank borrowings | 56 362 | 30 441 |
| Lease liabilities | 1 730 864 | 1 229 120 |
| Total carrying amount | 1 787 226 | 1 259 561 |
| Fair value | ||
| Bank borrowings | 56 362 | 30 441 |
| Lease liabilities | 1 730 864 | 1 229 120 |
| Total fair value | 1 787 226 | 1 259 561 |
| WILHELMSEN NEW ENERGY AS 52 136 636 NORTH INDUSTRIES 1 AS 50 832 449 SURVEY HOLDING AS 29 116 897 CITIBANK, N.A. 11 602 262 SOBER AS 10 963 446 HOLME HOLDING AS 6 400 000 JT INVEST AS 5 889 539 NORMAND DRIFT AS 5 000 000 PERSHING LLC 4 100 389 LION INVEST AS 3 769 928 DANSKE INVEST NORGE VEKST 3 127 815 ALTEA AS 2 973 658 CORUNA AS 2 725 000 AVANZA BANK AB 2 365 392 STAVA INVEST AS 2 193 426 BARRUS CAPITAL AS 2 110 090 RMS INVEST AS 2 000 000 JAKOB HATTELAND HOLDING AS 2 000 000 A-Å INVEST AS 1 938 725 NORDNET BANK AB 1 266 315 Total 20 largest 202 511 967 Others 69 257 278 Total 271 769 245 |
20 largest shareholders as per 30.06.24 | Shares | Stake |
|---|---|---|---|
| 19.2 % | |||
| 18.7 % | |||
| 10.7 % | |||
| 4.3 % | |||
| 4.0 % | |||
| 2.4 % | |||
| 2.2 % | |||
| 1.8 % | |||
| 1.5 % | |||
| 1.4 % | |||
| 1.2 % | |||
| 1.1 % | |||
| 1.0 % | |||
| 0.9 % | |||
| 0.8 % | |||
| 0.8 % | |||
| 0.7 % | |||
| 0.7 % | |||
| 0.7 % | |||
| 0.5 % | |||
| 74.5 % | |||
| 25.5 % | |||
| 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 subscribe for and be allocated an additional 44,766,864 new shares in Reach Subsea ASA at a subscription price of NOK 4.00 per share. 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 96,903,500.
Note 7 - Share-based remuneration
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:
- Exercise price: NOK 3.0
- Share price at grant date: NOK 3.0
- Expected volatility: NOK 56.14 %
- Risk free interest rate: NOK 1.092 %
- Term of options: 3 years
As of 2Q2024 the Company has recognized NOK 1.3 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) | 01.04 - 30.06 2024 | 01.04 - 30.06 2023 | 01.01 - 30.06 2024 | 01.01 - 30.06 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Taxes payable | 21 706 | 2 777 | 32 723 | 6 158 | 42 261 |
| Changes in deferred taxes | 1 844 | 21 132 | (22 327) | 19 486 | 21 482 |
| Taxes, in total | 23 550 | 23 909 | 10 396 | 25 644 | 63 743 |
Deferred taxes / (Deferred tax assets)
| Temporary differences | 30.06 2024 | 30.06 2023 | 31.12 2023 |
|---|---|---|---|
| Other fixed assets | (12 405) | (10 983) | (3 135) |
| Financial leases | 19 165 | 717 | 17 415 |
| Fixed-price contracts | - | - | - |
| Inventories | (934) | (934 | (934) |
| Accruals | (21 923) | (5 260) | (18 376) |
| Right-of-use assets | (66 017) | (31 136) | (29 172) |
| Intangible assets | 66 708 | 22 917 | 74 775 |
| Tax loss carried forward Norway | - | - | 0 |
| Tax loss carried forward outside of Norway | (56 354) | (61 834) | (64 338) |
| Temporary differences, in total | (71 759) | (86 512) | (23 765) |
| Deferred tax assets | (11 756) | (5 429) | (799) |
| Not recognized deferred tax assets | - | (10 811) | (11 366) |
| Deferred tax assets in balance sheet* | 11 756 | 5 429 | (10 567) |
Note 8 - Tax continued
| (NOK 1000) | 01.04 - 30.06 2024 | 01.04 - 30.06 2023 | 01.01 - 30.06 2024 | 01.01 - 30.06 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Reconciliation from nominal to actual tax rate | |||||
| Profit & loss before taxes | 110 887 | 110 405 | 101 967 | 116 046 | 289 534 |
| Nominal tax rate | 22 % | 22 % | 22 % | 22 % | 22 % |
| Anticipated income tax due to nominal tax rate | 24 395 | 24 289 | 22 433 | 25 530 | 63 698 |
| Actual tax cost | 23 550 | 23 909 | 10 396 | 25 644 | 63 743 |
| Deviation | (845) | (380) | (12 037) | 114 | 46 |
| Tax effects of: | |||||
| Permanent differences | 1 446 | 212 | 913 | 973 | 104 |
| Effect of tax rates outside Norway different from 22 % |
(601) | 169 | (241) | (1 087) | (270) |
| Changes in deferred tax assets, not recognized | - | - | - | - | 120 |
| Changes in deferred tax assets, previously not recognized |
- | - | 11 366 | - | - |
| Explanation | 845 | 380 | 12 037 | (114) | (46) |
| Effective tax rate | 21 % | 22 % | 10 % | 22 % | 22 % |
| Payable taxes in the balance sheet | 30.06 2024 | 30.06 2023 | 31.12 2023 | ||
| Payable taxes in the tax charge | (32 723) | (6 158) | (37 511) | ||
| Advances paid on tax charge | 535 | 1 590 | 1 056 | ||
| Tax payable previous years | (35 719) | (9 344) | - | ||
| Tax payable from business combinations | - | - | (4 570) | ||
| Payable taxes in the balance sheet | (67 907) | (13 868) | (41 026) |
45 2nd Quarter 2024
Note 9 - Segments
| (NOK 1000) | 01.04 - 30.06 2024 | 01.04 - 30.06 2023 | 01.01 - 30.06 2024 | 01.01 - 30.06 2023 | 01.01 - 31.12 2023 |
|---|---|---|---|---|---|
| Operating revenue | |||||
| Oil & Gas | 430 189 | 421 736 | 704 661 | 584 426 | 1 332 996 |
| Renewable / other | 192 881 | 184 860 | 493 679 | 256 172 | 633 588 |
| Total | 623 069 | 606 596 | 1 198 341 | 840 599 | 1 966 584 |
| Revenue by region | |||||
| Norway | 261 426 | 80 753 | 319 900 | 112 268 | 316 820 |
| Europe | 224 965 | 216 906 | 534 362 | 332 308 | 740 578 |
| Americas | 94 089 | 87 511 | 247 011 | 110 720 | 332 837 |
| Asia | 27 494 | - | 63 304 | - | 53 946 |
| Oceania | 15 156 | - | 33 673 | - | 29 002 |
| Other | (60) | 221 411 | 90 | 285 303 | 493 401 |
| Total | 623 069 | 606 596 | 1 198 341 | 840 599 | 1 966 584 |
| Revenue by type of service | |||||
| Data | 225 146 | 106 626 | 435 254 | 160 132 | 406 336 |
| Solutions | 397 924 | 499 970 | 763 087 | 680 467 | 1 560 248 |
| Total | 623 069 | 606 596 | 1 198 341 | 840 599 | 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 June 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 2Q2024 was NOK 172.5 million (2Q2023: 211.7 million).
The following have been recognized in 2024:
| Total | 1 627 272 | 1 163 222 |
|---|---|---|
| Property plant and equipment | 1 627 272 | 1 163 222 |
| Right-of-use assets | 30.06.2024 | 31.12.2023 |
| Lease liabilities | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Current | 693 208 | 386 036 |
| Non current | 1 000 071 | 805 931 |
| Total | 1 693 279 | 1 191 967 |
| Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 | |
|---|---|---|---|---|---|
| Depreciation charge of right-of use assets | 163 423 | 195 829 | 323 905 | 259 593 | 581 645 |
| Depreciation recognised as contract asset | - | 3 826 | (5 101) | - | |
| Impairment charge of right-of-use assets | - | - | - | - | - |
| Interest expense | 30 888 | 23 498 | 53 851 | 26 905 | 74 892 |
| Total charges to the P&L | 194 311 | 219 327 | 377 756 | 281 397 | 656 537 |
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.
| Total depreciation | 179 828 | 208 640 | 356 809 | 273 780 | 623 005 |
|---|---|---|---|---|---|
| Depreciation of other assets | 16 405 | 8 986 | 32 905 | 19 288 | 41 360 |
| Depreciation recognised as contract asset | - | 3 826 | - | (5 101) | - |
| Depreciation of short term right-of-use assets | 20 955 | 33 645 | 49 372 | 38 487 | 152 630 |
| Depreciation of long term right-of-use assets | 142 468 | 162 184 | 274 533 | 221 106 | 429 015 |
| Reconciliation of depreciation | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 |
| Reconciliation of leases on committed days recognised in 2023: |
Right-of use assets |
Lease liability, non-current |
Lease liability, current |
|---|---|---|---|
| Opening balance 01.01.2024 | 1 163 222 | 805 931 | 386 036 |
| Additions | 787 949 | - | 787 949 |
| Additions from business combination (note 14) | - | - | |
| Disposals | - | - | - |
| Depreciation of right-of-use-assets | (323 905) | - | - |
| Impairment | - | - | - |
| Interests | - | - | 53 851 |
| Reclassification from long to short term | - | 194 141 | (194 141) |
| Adjusted commitment | - | - | - |
| Currency adjustment | - | - | 12 650 |
| Payments | - | - | (353 148) |
| Ending balance 30.06.2024 | 1 627 272 | 1 000 071 | 693 208 |
Contents Directors Report Sustainability Finance Financial Statements
Note 11 - Financial items
| Finance income and expenses | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 | 12M 2023 |
|---|---|---|---|---|---|
| Interest income on short term bank deposits | 1 045 | 1 036 | 3 350 | 1 530 | 4 991 |
| Total interest income | 1 045 | 1 036 | 3 350 | 1 530 | 4 991 |
| Interest expense on bank borrowings | (1 398) | (1 018) | (2 141) | (966) | (2 617) |
| IFRS 16 interest expense | (30 888) | (23 498) | (53 851) | (26 905) | (74 892) |
| Other interest expense | - | - | (373) | - | (373) |
| Total interest expense | (32 285) | (24 516) | (56 366) | (27 871) | (77 883) |
| Net foreign exchange expense/income | (5 055) | 5 281 | 10 365 | 17 123 | 1 885 |
| Currency adjustment related to IFRS 16 | 19 061 | (20 296) | (12 650) | (15 083) | 12 616 |
| Other finance costs | (204) | (114) | (356) | (297) | (580) |
| Total other net financial items | 13 802 | (15 129 | (2 641) | 1 743 | 13 925 |
| Net financial items | (17 438) | (38 609) | (55 656) | (24 597 | (58 965) |
Note 12 - Investment in associated companies
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:
| Net result from investments in associates | 7 870 | 794 | 16 714 |
|---|---|---|---|
| Share of net result in investment, Eidesvik Reach AS | 7 870 | 794 | 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 | 121 350 | 96 426 | 113 452 |
| Share of net result in investment, Eidesvik Reach AS | 7 870 | 794 | 16 714 |
| Translation differences | 28 | - | (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: |
30.06.2024 | 30.06.2023 | 31.12.2023 |
The Reach Remote project is expected to amount to approximately NOK 426 million. As of June 30 2024 the company has capitalized NOK 238 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 52 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 264 million, and encompass equipment, upgrades and mobilization activities for vessels. As of June 30 2024 remaining investments related to these investments is estimated to NOK 164 million. Reach has secured bank and lease financing of NOK 126 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 2nd Quarter 2024
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