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Introduction & Market Context
Nekkar ASA (OSE:NKR) reported a challenging first quarter of 2025, with revenue declining 27% year-over-year to MNOK 111, down from MNOK 152 in Q1 2024. The company also posted a negative EBITDA of MNOK -12, a significant drop from the positive MNOK 30 recorded in the same period last year.
Despite these short-term challenges, Nekkar maintains a solid balance sheet with MNOK 182 in cash, approximately MNOK 62 in treasury shares, and no interest-bearing debt. The company also has an undrawn credit facility of MNOK 200, providing substantial financial flexibility.
As shown in the following overview of Nekkar’s positioning and key metrics:
Quarterly Performance Highlights
Nekkar’s Q1 2025 financial performance showed significant pressure on both revenue and profitability. The company’s EBITDA margin turned negative at -11%, compared to a positive 20% in Q1 2024. Net profit declined to MNOK -8 from MNOK 10 in the prior year, resulting in earnings per share of -0.08 compared to 0.10 previously.
The revenue decline was primarily attributed to lower project progress within Syncrolift, caused by external factors and lower than expected order intake last year. Meanwhile, the negative EBITDA was driven by a MNOK -13 cost increase in Techano Oceanlift related to market entry projects, reduced volume in Syncrolift, and negative currency effects from the depreciation of USD against NOK during the quarter.
The following chart illustrates Nekkar’s quarterly revenue and EBITDA trends:
Order intake for the quarter stood at MNOK 155, down from MNOK 188 in Q1 2024, while the order backlog decreased to MNOK 757 from MNOK 888 year-over-year. However, the company noted that the Q1 2025 figures do not include a subsequent award to Techano Oceanlift of approximately MNOK 60.
The order intake and backlog development per quarter can be seen in the following chart:
A comprehensive overview of Nekkar’s financial highlights for Q1 2025 is presented below:
Operational Updates
Nekkar operates through several key business units, each with distinct market dynamics and operational challenges.
As illustrated in the following overview of Nekkar’s operating companies:
Syncrolift, Nekkar’s largest business unit, experienced a significant revenue decline to MNOK 65 in Q1 2025 from MNOK 126 in Q1 2024. This was attributed to the phasing of activity on awarded projects and lower than expected order intake last year. Despite these challenges, Syncrolift continues to see high tendering activity, particularly in the defense sector, with a substantial tender pipeline of MNOK 7,800 extending beyond 2027.
Techano Oceanlift faced significant challenges with cost overruns on market entry projects, resulting in a negative EBITDA impact of MNOK 13. However, the company secured a repeat order for a 150-tonnes crane and a subsequent 70-tonnes award following quarter end, totaling MNOK 144. Management expects more efficient execution on these repeat orders as they leverage existing designs and production setups.
Intellilift showed strong performance with Q1 2025 revenue of MNOK 19, more than doubling from MNOK 8 in Q1 2024. The company successfully completed a milestone delivery for Hanwha Ocean, including a cutting-edge ABS-proven HMI system installed on the vessel Tidal Action (WA:ACT).
Globetech delivered solid results with revenue of MNOK 27, up 25% year-over-year, driven by new customers, new vessels, and deliveries to the existing customer base.
FiiZK, an associated company in which Nekkar holds a 39% stake, reported Q1 2025 revenue of MNOK 24, with Nekkar’s share of FiiZK’s quarterly profit at MNOK -3.5. The company is benefiting from the Norwegian government’s "Havbruksmeldingen" regulatory framework, which places increased focus on fish welfare and lice protection in aquaculture.
Strategic Positioning
Nekkar maintains a diversified portfolio across four end-markets: Defence (33%), Maritime (35%), Aquaculture (19%), and Offshore Energy (13%). This diversification provides resilience against sector-specific challenges.
The company’s revenue distribution across these four end-markets is illustrated below:
Nekkar has set ambitious targets for 2027, aiming to reach over MNOK 2,000 in revenue with 6-8 platform companies of comparable size. This represents a significant increase from the MNOK 837 reported for 2024 and underscores the company’s long-term growth strategy.
The company’s capital allocation strategy focuses on growing existing operating companies, building a balanced portfolio through strategic M&A, continuous improvement and R&D, and share buy-backs. As of Q1 2025, Nekkar had available capital of MNOK 382, including MNOK 182 in net cash and an undrawn credit facility of MNOK 200.
Forward-Looking Statements
Despite the challenging Q1 results, Nekkar’s management remains optimistic about the company’s future prospects. Syncrolift’s defense exposure provides a favorable outlook with high tendering activity. Intellilift is positioned to take on new contracts, while Techano Oceanlift is expected to finalize delivery for two market entry projects and start up new repeat contracts.
Globetech aims to continue growing the number of vessels served and expand its offering with adjacent services. FiiZK is seeing substantial interest in closed fish cage solutions, with the "Havbruksmelding" regulatory framework highlighting key focus areas of fish welfare, lice, and mortality.
The following summary provides an overview of Q1 2025 results and outlook:
In conclusion, while Nekkar faced significant challenges in Q1 2025 with declining revenue and negative EBITDA, the company maintains a strong balance sheet and strategic positioning across diverse end-markets. The high tendering activity in the defense sector and new contract wins in Techano Oceanlift provide a foundation for potential recovery in the coming quarters.
Full presentation:
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