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Introduction & Market Context
Argeo AS (OB:ARGEO) presented its first quarter 2025 results on May 15, revealing a mixed financial performance as the company navigates leadership changes and market challenges. The company’s stock closed at NOK 3.83 on May 14, down 3.04% ahead of the presentation, and has experienced significant volatility with the price currently trading near its 52-week low of NOK 3.40, far below its 52-week high of NOK 18.25.
The presentation, delivered by CFO & Interim CEO Odd Erik Rudshaug and Executive Chair Jan G. Grimnes, highlighted the company’s continued focus on underwater survey services while acknowledging delays in marine minerals and wind energy markets, with oil and gas remaining Argeo’s primary revenue stream.
Quarterly Performance Highlights
Argeo reported Q1 2025 revenue of USD 11.5 million, representing a 21% increase compared to USD 9.5 million in Q1 2024. However, profitability metrics declined significantly year-over-year, with EBITDA turning negative at USD -0.2 million compared to a positive USD 2.9 million in the prior year period. The company posted a net loss of USD 4.2 million, a substantial decline from the USD 1.9 million profit recorded in Q1 2024.
As shown in the following financial highlights chart, while revenue growth remained positive, both EBITDA and net profit metrics deteriorated:
Despite current profitability challenges, Argeo reported a substantial backlog, with USD 14 million scheduled for production in Q2 2025 and an additional expected backlog of USD 150 million, bringing the total expected backlog to USD 164 million. The company also highlighted a tender volume of USD 197 million, suggesting potential for future revenue growth if these opportunities materialize.
The following visualization illustrates Argeo’s backlog and tender status:
Detailed Financial Analysis
Argeo’s balance sheet as of Q1 2025 showed total assets of USD 99 million, with equity of USD 20 million, representing an equity ratio of approximately 20%. The company’s asset structure includes USD 25 million in IFRS 16 right-of-use assets, USD 57 million in PPE and other non-current assets, and USD 18 million in current assets.
The following chart breaks down Argeo’s assets, equity, and liabilities:
Cash flow analysis for Q1 2025 revealed that Argeo used USD 0.8 million in operating activities, while investing activities consumed USD 5.1 million, including USD 4.2 million for multi-client projects. Financing activities provided a net positive cash flow, primarily due to USD 13.3 million raised through a new equity issuance, partially offset by lease payments, debt repayment, and interest payments totaling USD 3.6 million.
The cash flow visualization below shows how Argeo’s cash position improved from USD 1 million at the beginning of the quarter to USD 4 million by the end of Q1 2025:
Operational Performance
Argeo provided an update on its two primary vessels, with the Argeo Searcher completing AUV survey work in South America for an oil and gas client in early May 2025, achieving 66.2% performance and 79.0% utilization. The Argeo Venture was reported to be on schedule with its AUV survey work in East Africa, also for an oil and gas client, with completion targeted for early June 2025. The Venture achieved 62.8% performance with 100% utilization.
The company emphasized its strong safety record, reporting zero Total Recordable Incident Rate (TRIR), zero Lost Time Injuries (LTI), and no major non-conformances.
The following operational update provides details on both vessels’ performance:
Strategic Initiatives & Outlook
During the quarter, Argeo completed several significant projects, including the TotalEnergies (EPA:TTEF) Venus Namibia project and the Suriname MultiClient project. The company also secured new contracts for both the Argeo Searcher and Argeo Venture in South America and Africa, and was named the preferred supplier for a four-year ROV & AUV Support Vessel contract in South America.
A notable development was the leadership change, with Trond F. Crantz stepping down as CEO and the appointment of Jan P. Grimnes as Executive Chair and Odd Erik Rudshaug as interim CEO. This transition coincides with what the company describes as "advancing to the next phase" of growth and innovation.
The following slide outlines key events from Q1 2025 and subsequent developments:
Looking ahead, Argeo indicated it is positioned for a 4-year Inspection, Maintenance, and Repair (IMR) contract in South America and new multi-year contracts. The company plans to focus on identifying and commercializing solutions like AUVs, deployment systems, vessels, and geotechnical services, with the goal of becoming "the most efficient provider of seabed information."
Argeo also signaled a strategic shift toward more collaborative growth, noting plans to "collaborate with companies across all sectors of operations to strengthen its position as an industry leader."
Forward-Looking Statements
While Argeo’s presentation highlighted solid operational performance and a strong backlog, the financial results reveal significant challenges in maintaining profitability despite revenue growth. The leadership change and strategic pivot toward more collaborative approaches may indicate recognition of the need for operational adjustments.
The company’s heavy reliance on the oil and gas sector, combined with acknowledged delays in marine minerals and wind energy markets, presents both concentration risk and potential diversification challenges. Investors will likely focus on whether Argeo can convert its substantial backlog and tender pipeline into profitable operations in coming quarters, particularly as the company works through its leadership transition.
With a cash position of USD 4 million at quarter-end and negative operating cash flow, Argeo’s recent equity raise provides some financial flexibility, but sustainable profitability will be crucial for long-term success without further dilution.
Full presentation:
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