Scana 1H 2025 slides: EBITDA collapses as revenue falls 30% year-over-year

Introduction & Market Context

Scana (NYSE:SCG) ASA (OB:SCANA) presented its half-year 2025 results on August 20, 2025, revealing a significant deterioration in financial performance across most key metrics. The Norwegian industrial company, which operates in the Offshore and Energy segments, reported a dramatic decline in profitability despite a modest improvement in order backlog.

The company’s stock closed at NOK 1.422 on August 19, 2025, up 1.57% for the day but hovering near its 52-week low of NOK 1.40, reflecting ongoing investor concerns about the company’s performance. With a 52-week high of NOK 3.50, Scana’s shares have lost significant value over the past year as operational challenges have mounted.

Quarterly Performance Highlights

Scana reported first-half 2025 revenue of NOK 764 million, representing a steep 29.7% decline from NOK 1,086 million in the same period of 2024. More concerning was the collapse in EBITDA, which plummeted to just NOK 1 million from NOK 177 million a year earlier – a 99.4% decrease that effectively erased the company’s operating profitability.

As shown in the following financial summary:

The company’s bottom line swung to a net loss of NOK 53.8 million for the first half of 2025, compared to a profit of NOK 83.8 million in the first half of 2024. This deterioration occurred despite a 9.3% increase in order backlog to NOK 1,174 million, up from NOK 1,074 million a year earlier.

Both of Scana’s operating segments experienced significant challenges, with the segment breakdown revealing the extent of the decline:

The Offshore segment, which accounts for approximately 69% of revenue, saw sales fall to NOK 527 million from NOK 667 million in 1H 2024, while EBITDA dropped to NOK 36 million from NOK 151 million. Meanwhile, the Energy segment performed even worse, with revenue declining to NOK 258 million from NOK 451 million and EBITDA turning negative at NOK -10 million compared to a positive NOK 50 million in the prior year period.

Detailed Financial Analysis

The company’s statement of profit or loss provides a more granular view of the financial deterioration:

While revenue declined by 29.7%, materials, goods and services costs decreased by 37.3%, suggesting some ability to reduce direct costs. However, payroll expenses increased by 16.4% to NOK 356.7 million despite the lower revenue base, creating significant margin pressure. This combination of factors resulted in an operating loss of NOK 58.3 million compared to an operating profit of NOK 121.3 million in the first half of 2024.

Scana’s balance sheet position has also weakened somewhat, with total equity declining to NOK 609.6 million as of June 30, 2025, from NOK 647.8 million a year earlier and NOK 663.0 million at the end of 2024:

The company’s liquidity position remains a concern, with available liquidity of NOK 123 million, including an undrawn working capital facility of NOK 116 million. Net interest-bearing debt stood at NOK 128 million, while cash flow from operations was positive at NOK 21.9 million, an improvement from NOK 1.2 million in the first half of 2024.

Strategic Initiatives

In response to the challenging operating environment, Scana has implemented several strategic changes. Most notably, Baste Tveito was appointed as acting CEO effective May 27, 2025, signaling a leadership transition during this difficult period.

The company has also shifted its strategic focus in the Offshore division toward securing prefabrication assignments, suggesting an attempt to stabilize this segment with more predictable work. Meanwhile, the Energy segment is described as "recovering," with leasing agreements generating recurring revenues and construction beginning on a "state-of-the-art" Battery Energy Storage System (BESS) installation at Ågotnes.

Management highlighted its focus on rebuilding order backlog, revenue, and profitability specifically for PSW Power and Automation, indicating this business unit has been particularly challenged.

Forward-Looking Statements

While Scana’s presentation did not provide specific numerical guidance for the remainder of 2025, the company’s focus on recovery in the Energy segment and the strategic shift in the Offshore division suggest management is taking active steps to address the profitability crisis.

The alternative performance measures presented by the company provide additional context on the company’s recent quarterly performance trends:

These metrics show the progressive deterioration in adjusted EBITDA over recent quarters, highlighting the urgency of the company’s recovery efforts. With the stock trading near 52-week lows and profitability essentially erased in the first half of 2025, investors will be closely watching for signs of operational improvement in the coming quarters.

Full presentation:

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