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SAB Finance A.S.
Quarterly Report • Nov 27, 2024
1048_rns_2024-11-27_92b43839-1ebd-4487-a855-d7078950977c.pdf
Quarterly Report
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TWMA FINANCE AS.
FINANCE REPORT FOR QUARTER ENDED 30 SEPTEMBER 2024.
Turning technology to your advantage.
TWMA. The world's drilling waste specialist.
TABLE OF CONTENTS.
| CEO Statement. | |
|---|---|
| CFO Statement. | 2 |
| Financial Statements. | 3 |
| TWMA FINANCE AS Consolidated Income Statement. | 3 |
| TWMA FINANCE AS Consolidated Income Statement - Year To Date. | 4 |
| TWMA FINANCE AS Consolidated Balance Sheet. | 5 |
| TWMA FINANCE AS Consolidated Cash Flow. | 6 |
| TWMA FINANCE AS Consolidated Cash Flow - Year To Date. | 7 |
CEO STATEMENT.
I am pleased to present the CEO's Statement for the Q3 period ended 30 September 2024 - the Group continued to deliver strong results for the period with revenue of \$18m and an EBITDA for continuing operations of \$4.9m. The first nine months of 2024 have delivered \$55.8m revenue and an EBITDA of \$14.4m compared to revenue of \$52.3m and an EBITDA of \$10.9m in 2023.
During the 3rd quarter we continued to see a good demand for TWMA's services. The utilisation of our RotoMill® fleet was 60% for the period, which was slightly lower than the previous quarter due to the relocation of RotoMills from the UK to the Middle East as drilling operations in the UK came to the end of their campaigns. Year to date, the utilisation of the RotoMill assets is 67%.
Review of the Business.
After a busy H1 24, Offshore UK was quieter with only one RotoMill operating through the period, along with 6-7 skip and ship operations. A second RotoMill should start up in Q4. We have been successfully awarded a framework agreement for the full suite of offshore and onshore drilling waste management services with one major operator on the UK Continental Shelf and additionally a 3-year extension to an existing contract with another client. In Norway, after a quiet first half of the year, operations restarted in September in line with expectations and are expected to continue through to 2025/26. Lastly in the North Sea, our UK onshore facility continued to deliver satisfactory results where a high level of drill cuttings and slops were processed and treated.
In the UAE, drilling operations were carried out on all four islands on the 'Upper Zakum' contract. Following the receipt of the 'Letter of Award' in Q2, the Group signed the full 1+1 year contract in mid Q3.The scope of the contract covers our existing operations on 'Upper Zakum', as well as additional personnel and equipment for skip & ship services for up to ten Jack Up operations and the construction and operation of a major onshore facility which will require two RotoMills.
With regards to the Ghasha Mega Project, following a successful start-up on the 2nd island, the Group enjoyed full operations on both the 1st and 2nd island throughout Q3. In respect of the 3rd island, the mobilisation of the equipment and RotoMill commenced towards the end of the quarter and we expect that it will become fully operational towards the end of 2024.
In Egypt, the onshore facility and RotoMill successfully restarted operations and is expected to run for the foreseeable future. During the quarter, TWMA was successful in winning further work with an international oil operator. There continues to be a high level of tender activity in Egypt where the Group is well placed to be successful.
The Solid Control business in the US performed satisfactorily in the quarter. The land rig market in the US continues to be 'soft' which has resulted in a lower than expected Solid Control work. During the quarter, the division supported an average of 20 Solid Control jobs per month.
People.
Safety of all our people is our number one priority. I am pleased that in the quarter, we continued our good safety performance and recorded 0 Lost Time Incidents (2023: 0). The Group is very satisfied that it continues to operate at a high standard of safety and that our employees have been free from an injury which would have resulted in them being unable to work for the last 2 years.
Halle Aslaksen Chief Executive Officer November 2024
CFO STATEMENT.
Trading Performance.
The Group Consolidated Income Statement is shown on page 3 to these financial statements. Revenue in the quarter was \$18.0m and the underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) of the Group was \$4.9m. The operating profit was \$4.5m in the quarter. A reconciliation between operating profit per these financial statements and EBITDA is set out below.
Quarter ended Quarter ended
| 30 September 2024 \$000 |
30 September 2023 \$000 |
|
|---|---|---|
| Operating profit before exceptional items, depreciation and amortisation | 4,456 | 2,604 |
| Gain on disposal Fx |
(39) 460 |
(2) 1,359 |
| EBITDA | 4,877 | 3,961 |
Year to date, the EBITDA of the group stands at \$14.4m. This compares to \$10.9m for the nine months to 30 September 2023.
Capital Investment.
During the quarter, a total of \$3.8m was invested in fixed assets, all of which related to plant and equipment including \$1.5m spent on the Ghasha Mega project.
Group Cashflow and Debt.
The Group's Consolidated statement of cash flows is shown on page 6 of these financial statements.
An analysis of the Net debt of the Group at the end of the quarter was as follows:
| 30 September 2024 \$000 |
|
|---|---|
| Nordic Bonds | (62,500) |
| Asset Finance Liabilities | (905) |
| Right of Use Liabilities | (4,681) |
| Cash | 3,430 |
| Net Debt at 30 September | (64,656) |
The leverage of the Group as at 30 September 2024 was 3.55x.
At 30 September 2024, the Group held unrestricted cash balances of \$3.4m plus unutilised available credit facilities of \$4.8m.
Mark Walker Chief Financial Officer November 2024
FINANCIAL STATEMENTS.
TWMA FINANCE AS CONSOLIDATED INCOME STATEMENT.
| Unaudited | Unaudited | |
|---|---|---|
| Quarter ended Quarter ended | ||
| 30 September | 30 September | |
| 2024 | 2023 | |
| \$000 | \$000 | |
| Revenue | 18,009 | 17,152 |
| Cost of Sales | (11,041) | (11,194) |
| Gross profit | 6,968 | 5,959 |
| Administrative expenses | (2,512) | (3,355) |
| Operating profit before exceptional items, depreciation and amortisation | 4,456 | 2,604 |
| Exceptional items | (822) | (158) |
| Depreciation and amortisation | (3,370) | (2,840) |
| Operating profit | 264 | (395) |
| Finance Income | 13 | 0 |
| Finance costs | (1,372) | (1,674) |
| Loss before tax | (1,095) | (2,068) |
| Tax charge | (316) | (12) |
| Loss for the period | (1,411) | (2,080) |
TWMA FINANCE AS CONSOLIDATED INCOME STATEMENT - YEAR TO DATE.
| Unaudited | Unaudited | |
|---|---|---|
| YTD | YTD | |
| 30 September | 30 September | |
| 2024 | 2023 | |
| \$000 | \$000 | |
| Revenue | 55,805 | 52,326 |
| Cost of Sales | (34,774) | (35,619) |
| Gross profit | 21,031 | 16,708 |
| Administrative expenses | (6,621) | (6,381) |
| Operating profit before exceptional items, depreciation and amortisation | 14,410 | 10,327 |
| Exceptional items | (3,354) | (650) |
| Depreciation and amortisation | (9,176) | (8,385) |
| Operating profit | 1,880 | 1,292 |
| Finance Income | 54 | 0 |
| Finance costs | (7,431) | (4,739) |
| Loss before tax | (5,497) | (3,447) |
| Tax charge | (780) | (36) |
| Loss for the period | (6,277) | (3,483) |
TWMA FINANCE AS CONSOLIDATED BALANCE SHEET.
| Unaudited | |
|---|---|
| As at | |
| 30 September | |
| 2024 | |
| \$000 | |
| Non-current assets | |
| Goodwill and other intangible assets | 33,911 |
| Financing fees | 2,714 |
| Right of Use Assets | 3,707 |
| Property, plant & equipment | 45,616 |
| Total non-current assets | 85,948 |
| Current assets | |
| Inventories | 4,153 |
| Trade and other receivables | 22,166 |
| Cash and cash equivalents | 3,430 |
| Total current assets | 29,749 |
| Total assets | 115,697 |
| Current liabilities | |
| Trade and other payables | 15,976 |
| Tax liabilities | 440 |
| Lease liabilities | 1,065 |
| Total current liabilities | 17,481 |
| Non-current liabilities | |
| Borrowings | 62,500 |
| Owed to other Group Companies | 20,736 |
| Lease liabilities | 4,521 |
| Tax liabilities | 1,413 |
| Other liabilities | 3,784 |
| Total non-current liabilities | 92,954 |
| Total liabilities | 110,434 |
| NET ASSETS | 5,263 |
| Equity | |
| Ordinary shares | 68 |
| Share premium account | 0 |
| Other reserves | 73,955 |
| Accumulated losses | (68,760) |
| TOTAL EQUITY | 5,263 |
TWMA FINANCE AS CONSOLIDATED CASH FLOW.
| Unaudited Quarter ended 30 September 2024 |
|
|---|---|
| \$000 | |
| Operating profit before exceptional items | 4,456 |
| Adjustments for: | |
| Exceptional costs | (822) |
| Operating cash flows before movements in working capital | 3,634 |
| Increase in stocks | (322) |
| Increase in debtors | (2,596) |
| Increase in creditors | (1,383) |
| Fx / Non-cash items | 2,655 |
| Net cash inflow from operating activities | 1,988 |
| Purchase of fixed assets | (4,151) |
| Net cash outflow from investing activities | (4,151) |
| Bank interest | (4,172) |
| Funding repayments | (378) |
| Nordic Bond | 408 |
| Financing fees | 0 |
| Net cash inflow from financing activities | (4,142) |
| Net increase in cash and cash equivalents | (6,305) |
| Cash and cash equivalents at beginning of quarter | 9,735 |
| Cash and cash equivalents at end of quarter | 3,430 |
| Analysis of cash and cash equivalent at end of quarter | |
|---|---|
| Cash and bank balances | 3,297 |
| Deposits | 133 |
| Cash and cash equivalents at end of quarter | 3,430 |
TWMA FINANCE AS CONSOLIDATED CASH FLOW - YEAR TO DATE.
| Unaudited YTD 30 September |
|
|---|---|
| 2024 | |
| \$000 | |
| Operating profit before exceptional items | 14,410 |
| Adjustments for: | |
| Exceptional costs | (3,354) |
| Operating cash flows before movements in working capital | 11,056 |
| Increase in stocks | (594) |
| Increase in debtors | (4,456) |
| Increase in creditors | 3,157 |
| Fx / Non-cash items | (919) |
| Net cash inflow from operating activities | 8,244 |
| Purchase of fixed assets | (9,251) |
| Net cash outflow from investing activities | (9,251) |
| Bank interest | (6,684) |
| Funding repayments | (52,080) |
| Nordic Bond | 62,908 |
| Financing fees | (3,355) |
| Net cash inflow from financing activities | 789 |
| Net increase in cash and cash equivalents | (218) |
| Cash and cash equivalents at beginning of quarter | 3,648 |
| Cash and cash equivalents at end of quarter | 3,430 |
| Analysis of cash and cash equivalent at end of quarter | |
|---|---|
| Cash and bank balances | 3,297 |
| Deposits | 133 |
| Cash and cash equivalents at end of quarter | 3,430 |
FURTHER INFORMATION.
Halle Aslaksen. Chief Executive Officer (CEO)
Mark J Walker. Chief Financial Officer (CFO)
For administrative queries, please contact:
Investor Relations. E: [email protected]
TWMA's Global HQ Building 3 Aberdeen International Business Park Dyce AB21 0BR Aberdeen
*TWMA™ is a registered trademark and the brand name for the TWMA group of companies including Total Waste Management Alliance Limited.
TWMA. The world's drilling waste specialist.