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Introduction & Market Context
Scana (NYSE:SCG) ASA (OB:SCANA) presented its first quarter 2025 results on May 15, 2025, revealing significant challenges across its business segments. The Norwegian industrial company, which operates through Offshore and Energy divisions, reported substantial revenue declines and margin pressure amid lower order intake and activity levels.
The company’s stock closed at 2.00 NOK on May 14, 2025, up 0.81% ahead of the results presentation, with the share price trading well below its 52-week high of 3.50 NOK.
Quarterly Performance Highlights
Scana’s financial performance deteriorated significantly in Q1 2025 compared to the same period last year, with revenue dropping 32% to 368 million NOK. More concerning was the company’s slide into negative EBITDA territory at -7 million NOK, representing a 107% decrease year-over-year.
As shown in the following quarterly highlights chart, adjusted EBITDA also declined sharply by 92% to just 4 million NOK:
The company’s order intake decreased by 5% to 524 million NOK, though order backlog showed modest growth of 2% to 1,166 million NOK. This backlog provides some stability amid current operational challenges.
Management attributed the poor performance primarily to low order intake, which has directly impacted both revenues and margins across the business.
Detailed Financial Analysis
The revenue reduction has put significant pressure on Scana’s margins, resulting in a loss before tax of 37 million NOK for the quarter:
Breaking down performance by division reveals challenges across both segments of the business:
The Offshore Division, which includes PSW Technology, PSW Solutions, and several other subsidiaries, reported revenue of 248 million NOK, down 26% from Q1 2024. EBITDA for this segment plummeted 90% to just 9 million NOK. Despite these challenges, the division secured an order intake of 518 million NOK and maintained a backlog of 966 million NOK.
The Energy Division performed even worse, with revenue falling 41% to 128 million NOK and EBITDA turning negative at -2 million NOK (a 111% decline). Order intake was particularly weak at just 14 million NOK, though the division maintains a backlog of 205 million NOK.
Scana’s balance sheet metrics show a net interest-bearing debt (NIBD) of 128 million NOK and net working capital of 175 million NOK:
The company’s cash generation showed a negative change in net working capital of 16 million NOK, with capital expenditures of 18 million NOK during the quarter. Scana secured proceeds from borrowings of 20 million NOK and maintained a liquidity reserve of 120 million NOK.
Strategic Initiatives
In response to the challenging operating environment, Scana has initiated several strategic measures:
1. Cost and efficiency initiatives across both divisions to adjust to lower activity levels
2. Ongoing strategic review for PSW Power & Automation AS, which has been prolonged
3. Secured extension of a frame agreement with Equinor, with the first of two three-year options exercised
4. Signed an exclusive frame agreement for steel parts supply
5. Secured a contract for delivery of mooring equipment to a FLNG (OL:FLNG) project
The Offshore Division reported high surface treatment activities at Mongstad and ongoing mooring projects with installation progress. The division is also allocating significant resources to a turnaround project and increasing focus on markets in China, Singapore, and Brazil.
Meanwhile, the Energy Division is experiencing strong growth in tenders despite current challenges. The division delivered energy storage deckhouses during the quarter and began construction on a 2MWh BESS (Battery Energy Storage System) facility. Management indicated that order intake is beginning to pick up in this segment.
Forward-Looking Statements
Following the end of the quarter, Scana reported several positive developments that could support recovery in future periods:
1. PSW Power & Automation secured a contract to design, manufacture, and assemble an E-House module for an offshore project in the Gulf of Mexico
2. The same division was awarded a contract from Aurland Havnevesen to design, manufacture, and install a Shore Power System for cruise vessels
3. PSW Power & Automation also secured a contract for delivery of BESS to the Nordic balancing market
The company’s order backlog of 1,166 million NOK provides some revenue visibility, with the majority allocated to the Offshore Division:
While Scana faces significant near-term challenges with revenue declines and margin pressure, management’s focus on cost adjustments, capacity scaling, and new contract wins suggests a strategic approach to navigating the current difficult operating environment. Investors will be watching closely to see if these measures can return the company to profitability in coming quarters.
Full presentation:
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