Reach Subsea Q1 2025 slides reveal all-time high revenue and accelerating profitability

Introduction & Market Context

Norwegian subsea services provider Reach Subsea (REACH) presented its first quarter 2025 results on May 8, highlighting record Q1 performance amid favorable market conditions in both traditional oil and gas and renewable energy sectors. The company, which specializes in subsea inspection, maintenance, and repair (IMR) services, has been expanding its fleet capacity while advancing its remote vessel technology initiatives.

Reach Subsea shares closed at NOK 6.90 on May 7, 2025, down 1.43% ahead of the earnings presentation. The stock has traded between NOK 6.04 and NOK 10.65 over the past 52 weeks.

Quarterly Performance Highlights

Reach Subsea reported its strongest first quarter ever, with revenue reaching NOK 699 million, a 22% increase from NOK 575.3 million in Q1 2024. This growth was driven by an increased number of project days, higher pricing, and a shift toward integrated, full-service scope offerings.

Profitability saw even more dramatic improvement, with EBIT rising to NOK 68 million compared to NOK 28.7 million in the same period last year. Pre-tax profit showed a remarkable turnaround, reaching NOK 67 million versus a NOK 9 million loss in Q1 2024.

As shown in the following chart of quarterly financial performance:

The company’s order backlog remained strong at NOK 1,300 million, supported by a substantial tender volume of NOK 10 billion, indicating robust future demand for Reach Subsea’s services across multiple sectors.

Strategic Initiatives

A central element of Reach Subsea’s growth strategy is its Reach Remote program, which focuses on unmanned and remotely operated vessels. The company reported significant progress with Reach Remote 1 & 2, having completed a pilot program that demonstrated capabilities in seabed mapping, pipeline inspection, subsea structure inspection, ROV intervention, and reservoir modeling.

The following image shows the progress of the Reach Remote vessels:

The company emphasized that Reach Remote 1 and 2 are now transitioning from pilot phase to commercial projects, following successful technology and operational validation. Management described this as a showcase of "next-generation maritime and subsea robotization," positioning Reach Subsea as a technology leader in the subsea services industry.

The company’s command center for remote operations is illustrated here:

Detailed Financial Analysis

Reach Subsea’s financial position has strengthened considerably, with cash and cash equivalents increasing to NOK 327 million from NOK 201 million in the comparable period. The company maintains a negative net interest-bearing debt (excluding IFRS 16 leases) of NOK 117 million, indicating a cash-positive position.

The long-term financial trends show consistent improvement in both revenue and profitability, as illustrated in this chart:

Revenue mix analysis reveals significant shifts in the company’s business composition. Oil and gas sector revenue increased to NOK 438 million from NOK 274 million year-over-year, while renewables and other sectors grew to NOK 260 million from NOK 189 million. By segment, solutions revenue saw the most substantial growth, rising to NOK 592 million from NOK 365 million, reflecting the company’s strategic shift toward integrated service offerings.

The following chart details these revenue composition changes:

The company’s balance sheet has also improved, with increasing equity and cash positions alongside decreasing debt levels since 2019. Management noted that this strong financial position enables further investments in the Reach Remote program and technology updates.

Forward-Looking Statements

Reach Subsea management expressed confidence in the company’s growth trajectory, citing an "attractive market outlook" with growing demand across industries. The presentation highlighted the company’s expanded service offerings, secured long-term vessel capacity, and global footprint as key factors positioning it for continued growth.

The company’s strategy emphasizes five pillars: navigating dynamic markets, positioning for growth through expanded offerings and global presence, maintaining strong margins through execution excellence, leading in technology through marine robotization, and delivering attractive financials with strong cash flow and a shareholder-friendly approach.

This strategic roadmap is illustrated in the following slide:

In the sustainability domain, Reach Subsea reported zero lost time incidents and zero work-related injuries, meeting industry benchmarks. The company also outlined plans to increase the proportion of its fleet classified as unmanned/modern and to ensure operational maturity of remote services as part of its environmental initiatives.

With its strong Q1 2025 performance, robust order backlog, and advancing remote vessel technology, Reach Subsea appears well-positioned to capitalize on growing demand for subsea services across both traditional and renewable energy markets.

Full presentation:

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