Nekkar Q2 2025 slides: Revenue drops amid cost overruns, order backlog remains strong

Nekkar ASA (OB:NKR) presented its Q2 2025 financial results on August 28, revealing continued profitability challenges despite strong order intake and backlog figures. The company reported a 7.3% year-over-year revenue decline and negative EBITDA, while maintaining its ambitious 2027 revenue target of NOK 2+ billion.

Quarterly Performance Highlights

Nekkar reported Q2 2025 revenue of NOK 139 million, down from NOK 150 million in the same period last year. The company posted a negative EBITDA of NOK 12 million, compared to a positive NOK 20 million in Q2 2024, resulting in an EBITDA margin of -8.6% versus 13.4% a year earlier. Net profit declined to negative NOK 10 million from positive NOK 20 million in Q2 2024.

Despite these challenges, Nekkar maintained a strong order intake of NOK 147 million (up from just NOK 15 million in Q2 2024) and a solid order backlog of NOK 753 million at quarter-end, slightly higher than the NOK 725 million reported a year ago.

As shown in the following financial highlights chart:

The company’s cash flow from operations remained positive at NOK 52 million, up from NOK 36 million in Q2 2024, demonstrating Nekkar’s ability to generate cash despite profitability challenges. The company maintains a strong balance sheet with NOK 225 million in cash, approximately NOK 64 million in treasury shares, no interest-bearing debt, and an undrawn credit facility of NOK 200 million.

The quarterly financial trends show the recent challenges in profitability:

Meanwhile, order intake has significantly improved compared to previous quarters, with the backlog remaining stable:

Segment Performance Analysis

Nekkar operates across four end-markets: Defence (33%), Maritime (35%), Aquaculture (19%), and Offshore Energy (13%), providing diversification to its revenue streams:

The company’s portfolio includes several operating companies, each with varying performance in Q2:

Syncrolift, Nekkar’s largest business unit, reported revenue of NOK 72 million in Q2 2025, down significantly from NOK 124 million in Q2 2024. EBITDA declined to NOK 3 million (4% margin) from NOK 22 million (18% margin) a year earlier. The company attributed this decline to "lower activity as new project awards are taking longer than anticipated" and negative impacts from the depreciation of the US dollar against NOK.

Techano Oceanlift experienced the most significant challenges, reporting a negative EBITDA of NOK 14 million on revenue of NOK 35 million, resulting in a -41% EBITDA margin. The company cited "cost overruns in first delivery projects" as the primary reason for the weak performance.

In contrast, Intellilift and Globetech delivered solid results. Intellilift reported revenue of NOK 15 million with a 14% EBITDA margin, while Globetech achieved NOK 25 million in revenue with an impressive 28% EBITDA margin.

The detailed financial breakdown per operating company shows the varying performance:

Balance Sheet and Cash Flow

Despite the profitability challenges, Nekkar maintained a strong financial position with a solid balance sheet and positive cash flow:

The company reported negative working capital of NOK 22 million, a significant reduction since Q1 and year-end 2024, driven by a reduction in accounts receivables combined with an increase in prepayments from customers. The quarter-end cash position stood at NOK 225 million, up from NOK 205 million at the end of 2024.

Nekkar continues its share buy-back program, having purchased 8,558,543 shares at an average price of NOK 9.849 between Q3 2023 and Q2 2025, with a total transaction value of NOK 84.3 million. As of Q2 2025, the company holds 6,390,782 treasury shares.

Strategic Outlook and 2027 Ambitions

Despite current challenges, Nekkar maintains its ambitious target to reach NOK 2+ billion in revenue by 2027, up from NOK 837 million in 2024. This strategy includes expanding from the current 5 companies to 6-8 platform companies, creating a more balanced portfolio:

The company’s capital allocation strategy focuses on:

1. Growing existing operating companies

2. Building a balanced portfolio through strategic M&A

3. Continuous improvement and R&D

4. Share buy-backs

Syncrolift, Nekkar’s largest business unit, continues to see high tendering activity, particularly in the defense sector. The company reported a tender pipeline for newbuild/upgrades worth NOK 7.4 billion, though it noted that "timing of contract awards may be impacted by external factors outside of Nekkar’s control."

In the aquaculture sector, Nekkar’s associated company FiiZK is positioned to benefit from Norway’s "Miljøfleksordning" regulation, which goes into effect this fall and enables recovery of "withdrawn biomass" by converting to closed cage technology.

CEO Ole Falk Hansen summarized the quarter: "Revenue in Q2 2025 declined by 9% compared to the same period last year, due to lower activity in Syncrolift. EBITDA of MNOK -12 (-8.6%) in Q2 2025 was driven by cost increase in Techano Oceanlift. Quarterly order intake of MNOK 147 was driven by the Techano crane award to Hercules and the Diego Garcia upgrade contract in Syncrolift."

Nekkar’s stock closed at NOK 9.94 on August 27, 2025, down 0.6% ahead of the results announcement. The stock has traded between NOK 8.52 and NOK 12.10 over the past 52 weeks.

Full presentation:

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