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Introduction & Market Context
Vow ASA (OB:VOW) presented its first quarter 2025 results on May 28, 2025, revealing a period of strong operational performance in its maritime segments, offset by challenges in industrial solutions and currency headwinds. The company, now under new leadership with CEO Gunnar Pedersen and CFO Cecilie Brænd Hekneby, reported revenue growth of 12.3% year-over-year to NOK 260.8 million, while facing significant currency-related losses that impacted bottom-line results.
The company’s stock has faced pressure recently, with shares trading at NOK 2.55 as of May 27, 2025, down 7.27% and significantly below its 52-week high of NOK 7.90. Despite these market challenges, Vow’s presentation highlighted substantial backlog growth and improving operational metrics in key segments.
Quarterly Performance Highlights
Vow reported revenue of NOK 260.8 million for Q1 2025, representing a 12.3% increase compared to the same period last year. Gross profit reached NOK 76.6 million with a margin of 29.4%, while adjusted EBITDA came in at NOK 13.2 million, translating to a 5% margin.
As shown in the following operational key figures:
The company’s order backlog has nearly doubled year-over-year, reaching NOK 1,532 million plus NOK 250 million in options, providing strong visibility for future revenues. However, despite operational improvements, the bottom line was significantly impacted by currency fluctuations, resulting in a net foreign exchange loss of NOK 12.1 million and contributing to a negative result before tax of NOK 30.4 million.
The following chart illustrates the company’s key financial metrics:
Segment Analysis
Maritime Solutions
The Maritime Solutions segment delivered strong performance with revenues of NOK 108.1 million and an adjusted EBITDA margin of 12.4%. The segment’s backlog stands at an impressive NOK 1,304 million, supported by 35 confirmed orders for cruise ships under construction. During the quarter, Scanship secured a EUR 3.5 million contract for wastewater treatment systems with deliveries starting in Q1 2026.
The segment’s performance and backlog are illustrated below:
The company’s strong position in the cruise industry is evidenced by its substantial vessel pipeline:
For 2025, Vow has scheduled equipment deliveries to 18 newbuilds and 1 retrofit, with 10 deliveries already completed year-to-date. Additionally, 12 vessels are scheduled for commissioning this year, with 4 already completed, adding to the fleet requiring spare parts from Scanship’s division.
Aftersales
The Aftersales segment showed particularly strong performance, with revenues increasing by 23% to NOK 58.4 million and an adjusted EBITDA margin of 15.3%. This segment continues to demonstrate consistent growth as the installed base of vessels with Vow equipment expands.
The following chart shows the segment’s revenue growth trend:
Industrial Solutions
The Industrial Solutions segment faced challenges during the quarter, with revenues of NOK 94.3 million representing a 22% increase, but adjusted EBITDA margin of only 1.4%. The company attributed this to costs related to delayed order intake that impacted profit margins.
The segment is currently progressing with several Front-End Engineering Design (FEED) studies, including projects related to end-of-life tires, sewage plants, and the Caribbean Carbon Refinery, which could potentially convert to full-scale projects in the future.
Financial Position and Outlook
Vow’s balance sheet showed total assets of NOK 1,380 million as of March 31, 2025, with equity of NOK 464.9 million. Interest-bearing debt stood at NOK 480 million, with loan facilities secured until Q3 2027. Available liquidity was reported at NOK 126 million.
The quarter saw significant currency effects, with market turmoil throughout the period resulting in a net foreign exchange loss of NOK 12.1 million. The company’s exposure is primarily in EUR and USD, as shown in the following chart:
Cash flow for the quarter ended with a balance of NOK 40.5 million, down from NOK 46.3 million at year-end 2024. Operating cash flow was NOK 71.1 million, while investments were NOK -4.3 million and financing activities contributed NOK 71.1 million.
Management outlined four financial priorities going forward:
1. Working capital management to optimize cash flow
2. Exchange risk mitigation
3. Capital structure optimization
4. Operational performance improvement
Strategic Initiatives
A significant strategic development is HitecVision’s agreement to acquire all shares in Vow Green Metals. In May 2025, the board recommended that shareholders accept the offer, and Vow has undertaken to irrevocably accept it. This move is expected to provide strategic benefits while allowing Vow to focus on its core operations.
The company continues to progress with its FEED studies in various areas, particularly in the heat treatment segment which is "proving its relevance" according to management. These studies represent potential future growth opportunities as they may convert to full-scale projects.
For the Maritime segment, the company expects margin levels to further improve as it executes on its substantial backlog. With equipment deliveries to 18 vessels and 12 vessels to be commissioned in 2025, the company anticipates high activity levels throughout the year, which should also benefit the Aftersales segment as the installed base continues to grow.
Overall, while Vow faces challenges in its Industrial Solutions segment and from currency fluctuations, its strong backlog, improving margins in key segments, and strategic initiatives position the company for potential improvement in the quarters ahead.
Full presentation:
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