Earnings call transcript: Akastor ASA Q1 2025 sees revenue miss, stock dips

Akastor ASA reported its Q1 2025 earnings, revealing a revenue miss that led to a 1.58% decline in its stock price. The company posted consolidated revenues of SEK 76,000,000, falling short of the SEK 78,000,000 forecast. The company maintains a strong liquidity position with a healthy current ratio of 3.01 and demonstrates impressive operational efficiency, achieving a gross profit margin of 78.74%. According to InvestingPro analysis, Akastor currently trades below its Fair Value, suggesting potential upside opportunity for investors.

Key Takeaways

• Akastor ASA’s Q1 revenue missed forecasts by SEK 2,000,000.
• Stock price fell by 1.58% following the earnings announcement.
• The company holds a robust liquidity position with SEK 617,000,000 available.
• High operational utilization of AKOFS Offshore vessels was maintained.
• Macroeconomic challenges and oil price volatility remain concerns.

Company Performance

Akastor ASA demonstrated resilience in its operational metrics despite a challenging macroeconomic environment. The company’s offshore drilling operations maintained high utilization rates, which contributed to its overall performance. However, the revenue miss highlights potential pressures from external economic factors.

Financial Highlights

• Revenue: SEK 76,000,000, missing the forecast of SEK 78,000,000.
• EBITDA: SEK 3,000,000.
• Net cash position: SEK 729,000,000.
• Available liquidity: SEK 617,000,000.

Market Reaction

Following the earnings report, Akastor ASA’s stock saw a 1.58% decline, closing at 11.4 SEK. This reaction reflects investor concerns over the revenue miss and broader economic uncertainties. The stock trades at an attractive P/E ratio of 1.88x and maintains relatively low price volatility with a beta of 0.26. InvestingPro analysis indicates the stock is currently undervalued, with comprehensive valuation metrics available in the Pro Research Report.

Outlook & Guidance

The company plans to distribute significant proceeds from the sale of Scandi Peregrino as dividends, marking its first-ever shareholder distribution. Akastor continues to explore exit strategies for NES Fareguld and potential public listing for HMH, contingent on market conditions. The company’s strong financial position is evidenced by its excellent Financial Health Score of 3.65/5 on InvestingPro, supported by robust cash flows and solid balance sheet metrics.

Executive Commentary

CEO Karl Erik Kjellsta emphasized the company’s strong cash position, stating, "We are currently in a net cash position with no draw on corporate facilities, enabling us to time transactions when values are attractive." CFO Thomas McGee noted, "Despite all of that, you’ve seen positive offshore drilling data points over the last few weeks."

Risks and Challenges

• Supply chain disruptions could impact operational efficiency.
• Macroeconomic pressures and potential tariffs may affect profitability.
• Oil price volatility poses risks to revenue stability.
• Customer spending restraints could limit growth opportunities.

Q&A

During the earnings call, analysts inquired about potential tariff impacts, which could lead to a 3-6% hit on EBITDA. The company also addressed strategies for optimizing supply chains amid ongoing challenges.

Full transcript - Akastor ASA (AKAST) Q1 2025:

Eivin Poskaya, CFO, Valkastur: Good afternoon, and welcome to the presentation of Akastor’s First Quarter Results. My name is Eivin Poskaya, CFO of Valkastur, and I’m joined by our CEO, Mr. Karl Erik Kjellsta. We’re also pleased to have HMH with us from Houston represented by Tom McGee, CFO and David Bratton, SVP Finance. Kalle will start by taking us through the key highlights followed by Tom and David with an update on HMH.

I’ll then cover Alkaster’s consolidated financials before handing it back to Kalle. We’ll wrap up with a Q and A session. Feel free to submit questions at any time during the presentation. With that, I’ll hand it over to Karl. Please?

Karl Erik Kjellsta, CEO, Akastor: Thank you, Eivind, and good afternoon and good morning to our U. S. Participants and thanks to everyone for joining us for this first quarter Akasto earnings call. Let’s start on Slide two with some key highlights for the first quarter. We are pleased to deliver another good quarter, marked by solid performance across our portfolio.

Reported an EBITDA of US33 dollars in line with the first quarter last year and with a cash free cash flow of $15,000,000 Order intake was 198,000,000 implying a book to bill of one. The continued financial performance with a robust performance of continues to be an important foundation for a potential future liquidity event. HMH is keeping its S-one filing with the SEC updated and timing of potential launch continue to be dependent on market conditions and sentiment. HMH remains our most valuable investment. The book value of our shareholding in HMH remains at around 70% of our total net capital employed, with a book value of NOK3.4 billion per the end of the first quarter or 12.4 per Akasto share.

This is somewhat down from previous quarter due to currency effects. All the Ark of Offshore vessels remain on its contract through the quarter and delivered solid operations for its clients. As mentioned in the last quarterly presentation, our cost of ownership in AKOFS Offshore increased to 66.7 percent in the first quarter following the completion of the buyout of Mitsui twenty five percent stake and then followed by the sale of 8.3% of this stake to Amoel. In the quarter, Aker Santos was nominated as the winner of the Petrobras Reverse Auction for a four year MPSV contract starting July 2026. That have been followed by ongoing negotiations with Petrobras.

No contract has yet been signed and remains subject to two dimension negotiations. But we are hopeful that Aker Santos will continue to deliver quality services for Petrobras for another four years immediately after current contract periods ends. Further, early April, the refinancing of Arcos Siffer vessel was completed through a nonrecourse US110 million dollars facility with a maturity in December 2028. Our book value of ARCOS was around NOK0.4 per Akasto share per the end of the quarter. DDV Offshore.

In the quarter, DDV Offshore entered into an agreement to sell Scandi Peregrino for US25 with the completion expected in second quarter twenty twenty five. Upon closing, Akasto plans to distribute a significant portion of the net proceeds as dividend to shareholders. The book value of our investment in DDV Offshore is NOK1.4 per Akasto share based on an average book value per vessel for about $11,000,000 Our total book equity value for the end of the period was NOK20.2 per share, which is somewhat down from last quarter, and this is again mainly due to currency effects. Acosto continues to be in a solid financial state with a positive net cash position and no draw on corporate LCF. With that, I am pleased to introduce HMS CFO and EVP, Thomas McGee that together with SVP Finance, David Bratton, take us through the HMH first quarter results.

So Tom, the word is yours.

Thomas McGee, CFO and EVP, HMH: Thank you, Perler. Thank you. Good morning. Good afternoon. I am going to time stamp this for you.

It’s 08:05 Central Standard Time in Houston, Texas, April Thirtieth. The reason for that is it’s something I say in the next fifteen minutes will be rendered completely obsolete and wrong by something that happens in the world in the next forty eight hours. That is the level of uncertainty we’re dealing with. So that’s that’s kinda how we’ll kick this off. Despite that, we’ve got some pretty good performance.

Let me start by talking about the markets. And and this will be, we can’t, you know, talk about forward guidance given, you know, what the the given the the regulations we’re under right now. I can’t talk about the market and give you a picture for what we’re what we see both good and bad. Let’s start with the bad. The trade situation, we’ll get this on the table.

We know we already got a a question on this. The the tariff impact, just the first order impact, had it been in place, the current regime, to the best of our knowledge, as it exists today, not tomorrow. We’ll if it were in place in 02/2024, it would have been about a three to 6% hit to EBITDA. We think we can mitigate most of that. So that that gives you an idea of what it would have looked like in ’24.

So the first order effects are negative, but they’re not significant. I think obviously we’re more concerned and we’ve taken some questions from some of you already since this has been in place. The second and third order impacts are what we concern ourselves a lot more with, And that’s the macro. You got recessionary data coming out of The US this morning. You know, oil price, we’ve got an OPEC meeting next week.

We feel like there’s a lot of bearishness already built into oil from that, but there’s a lot of stuff we can’t control there. This is stirred up. So we’re definitely worried about what kind of macro impact it has that, you know, they would they would have on us. There is also potential for further supply chain disruption. That’s unclear.

There’s a little bit of unknowns there. If you think about freight falling and seeing some of the weird things that are occurring, there’s potential impact there. Then finally, get into some customer behavior, and I’ll categorize that in two different areas. One would be you can’t make that in The US or you can’t make that in China, and having some of those discussions, which everyone is having right now. Then you have the secondary effect of some of the customers just restraining spending and saying, I’m gonna wait and see what happens.

So that’s sort of the negative market backdrop, but let’s go to the positive. Despite all of that, you’ve seen positive offshore drilling data points over the last few weeks. If you’re watching earnings reports, you saw a new backlog being issued at what I think are are pretty good day rates. And so you think about we’re 80% offshore, 75 aftermarket, that resilience in this in light of all of these macroeconomic challenges is pretty impressive. And so when we saw positive data points over the past few days on that offshore market, albeit probably more geared towards 26, and it’s talking about the drillers, you know, getting contracts and and and starting to erase that white space in in 02/1926, it just shows the the resilience of that market.

So we do think there are a lot of positive things happening at the same time as a backdrop. Obviously, it’s a challenging environment, but despite that, we got a book to bill of one and we had an EBITDA that was flat year over year. And we don’t release a budget, but that was our budget. It was absolutely on budget. The market behaved exactly as we expected to, despite all of the turbulence that we saw.

So we thought that was a very good result. Unlevered free cash flow came in strong. I think we have gone really after two things. One is inventory and trying to as we peaked inventory last year, trying to work to bring that back down. We’re doing a great job of that, and I think receivables have gone from underperforming to outperforming on collections.

So we’re very happy with free cash flow performance, and that’ll continue to be choppy as you’ve seen over the years, but I think coming out of the gate strong first quarter of year is big message to send that they were serious about bringing that EBITDA to the cash flow line. We signed a new multiyear service agreement

David Bratton, SVP Finance, HMH: for

Thomas McGee, CFO and EVP, HMH: Riser, getting continuing to grow that business, and we’ll talk at the end a little bit more. We are growing businesses now despite the the challenging market. I mean, we’re adapting these trends through productivity and cost. So we’ve got a lot of things that if you think about what you can do in this market, you you find ways to grow, you control costs, and we’re doing a lot of work around bringing manufacturing costs of products down to open new markets for us. So despite the challenging environment, good performance and a lot of opportunity on the price.

So on to you, David. Great.

David Bratton, SVP Finance, HMH: Okay, I’ll begin with the total company results and then we’ll move into the segment details. Revenue for the quarter was $198,000,000 up 3% year on year, driven by project activity, partly offset with lower services volume and down 14% quarter on quarter driven by lower services volume and non repeat of prior quarter contract service agreement performance. Adjusted EBITDA in the quarter was $33,000,000 down 2% year on year, driven by lower service volume and down 31% quarter on quarter, driven by lower service volume and a non repeat of contract service agreement performance. Adjusted EBITDA rate was 16.5 in the quarter, down versus 1Q24 driven by product mix. Orders for the quarter were $198,000,000 down 5% year on year driven by lower spares orders and down 6% quarter on quarter driven by lower equipment volume.

Finally, cash flow, unlevered free cash flow in the quarter was a positive $15,000,000 driven by improved collection efforts by the team and progress on working capital management. We ended the quarter with $47,000,000 cash and cash equivalents on hand. Next, I’ll walk you through the product line results in more detail. In aftermarket services, revenue was $84,000,000 in the quarter, down 10% year on year, driven by lower overhaul and repair volume and down 19% quarter on quarter, driven from contract service agreement performance in the prior quarter and lower digital technology volume. Aftermarket service order intake was $102,000,000 in the quarter, up 22% year on year and up 12% quarter on quarter, driven by overhaul and repair order intake.

Spares revenue was $60,000,000 in the quarter, flat year on year and up 8% quarter on quarter, driven by improved convertibility of existing backlog. Spare order intake was $61,000,000 in the quarter, down 17% year on year and down 2% quarter on quarter, following the threat of restraint spending by our customers. In project product and other, revenue in the quarter was 55,000,000 up 34% year on year, driven by project milestones and down 25% quarter on quarter driven by product volume. Lastly, moving to net interest bearing debt, we ended the quarter with $47,000,000 in cash and cash equivalents and a net debt of $153,000,000 Happy to note that the RCF was undrawn per 1Q twenty twenty five with net $15,000,000 repaid during the quarter. As Tom said, overall, we’re very proud of the team’s performance in this quarter.

And with that, I’ll turn this back over to Tom.

Thomas McGee, CFO and EVP, HMH: Yeah, and good place to start. Capital structure is solid, the extent there is downside risk in the market. We’re well prepared to weather it. We have a very resilient base business. When we’re out on the road, we talk about that all the time.

And I think that that’s really showing in this environment. That said, we are also getting ready to launch some growth initiatives, which is exciting and we look to take advantage of this weakness in the market and make sure we find ways to improve this business, not just on the cost side, but on the growth side. So again, challenging environment, we’re very well positioned, great performance so far, resilient base business and we’re going to keep finding ways to improve and grow the business. So with that, I’ll turn it over back to Oyben and Perlerca.

Eivin Poskaya, CFO, Valkastur: Thank you very much, Tom. I will then take you through the Akerstor’s financials starting at this slide with our net capital employed. HMH, as Karl mentioned, remains our largest investment with net capital employed equal to 50% of the book equity value in HMH. Our carrying value of this investment decreased by 168,000,000 compared to Q4, driven by currency, partly mitigated by a positive net profit in the period. The net capital employed of NES and DDV Offshore was also somewhat down in Q1 driven by FX.

The net capital employed of walk offs as Karl mentioned was million down from SEK138 million in Q4. The reduction reflects our share of net profit in the period partly offset by an increase from the investment made during the quarter, which raised our equity stake to 66.7%. Please however note that most of the investment costs related to the Akos transaction was allocated towards shareholder loans taken over from Mitsui included in the reported net debt of $729,000,000 of cash position at quarter end. Looking ahead, continued net losses in knock offs driven by the current contract portfolio will further reduce our book value of walk offs. We consider this book value however to be an historical and quite conservative measure which does not fully reflect underlying asset value of that company.

And we see meaningful upside potential and we’ll continue our efforts to ensure that this is increasingly reflected and understood over time. The value of our listed holdings, which include Odfjell Drilling, ABL, Maha Energy and Avelko Drilling increased by NOK 2,000,000 in the first quarter. The negative value of Odder, which includes smaller financial investments, pension accruals and various provisions was reduced by NOK79 million in Q1. The main driver here was the conclusion of the remaining guaranteed preferred return to Mitsui and MOL related to the Seaferry contract originating from the AKOS Offshore transaction back in 2018. This was paid out and netted as part of the AKOS transactions during the quarter.

The remaining balance of other per Q1 is mainly related to pension and with the largest component tied to HMH following the carve out of certain pension plans at HMH’s inception. In total net capital employed then decreased by million in Q1, primarily then driven by non cash FX effects. I’ll then turn to the next slide for an overview of the net debt movements in the quarter. In Q1, we had a total net cash position including about SEK $270,000,000 of cash held at the corporate level, which decreased to a net cash position of SEK 19,000,000 at the end of the period. This reduction was primarily driven by our investment in AKOS as well as payment of the mentioned guaranteed preferred return to Mitsui and MOL, partly mitigated by positive cash flow and FX effects in DDV Offshore.

Remember that the net cash position per Q1 includes a net debt position of NOK $253,000,000 in DDV Offshore. Following the announced sale of Scamdi Peregrino, this is expected to be reduced in Q2 as one third of the gross debt will then be repaid. Our total net interest bearing debt at the end of the first quarter with this came in at a net cash position of $729,000,000, including our interest bearing positions towards AKOFS and HMH. Compared to last quarter, our shareholder loans towards AKOFS increased by around US10 dollars following the transactions mentioned, partly offset by the U. S.

Dollar 7,500,000.0 seller credit towards Mitsui payable in Q2 and Q4 this year as well as negative FX effects on the U. S. Dollar loan holdings. Our external financing facilities remained as per end of twenty twenty four. The DDV term loan was reduced about U.

S. Dollar million dollars following one installment paid during the period. Our Corporate Bank RCF remained undrawn and fully available per end of Q1. Our available liquidity per end of the quarter was SEK $617,000,000, including then SEK 33,000,000 of cash held through DDV. Then our consolidated P and L.

As always, bear in mind that most of our holdings including HMH, NES and AKOFS are not consolidated into our group financials and thus that the consolidated revenue and EBITDA represent a very minor part of our total investments. DidiV Offshore delivered revenues of NOK 75,000,000 in the quarter with two out of three vessels on contract for most of the period. Skandi Peregrino delivered no revenues in the period as commencement of her new contract was delayed. EBITDA came in at 28,000,000 in Q1, up year on year as a result of lower utilization last year, but down quarter on quarter due to mobilization of Peregrino to Australia and costs in connection with the delay as well as specific positive one off effects last quarter. Other revenue in Q1 came in at SEK 1,000,000 with an EBITDA of negative SEK 25,000,000 and with that consolidated revenues and EBITDA for the quarter came in at SEK 76,000,000 and SEK 3,000,000 respectively.

Our net financial items came in at a negative of SEK 154,000,000 in the period. Financial investments contributed negatively about SEK 2,000,000 driven by a small adjustment to our valuation of NES as well as certain effects of our smaller listed holdings. Holger Drilling delivered a positive effect of SEK 11,000,000, including dividends received in the period. The FX accounting effect in Q1 was negative SEK 159,000,000 and is explained by the strengthening of versus the U. S.

Dollar, which has a P and L effect primarily on our U. S. Dollar denominated receivables. Share of net profit from equity accounted investments contributed negatively by 31,000,000, consisting then mainly of our relative share of net profit in HMH and AKOFS Offshore. AKOFS contributed negatively with SEK 50,000,000, while HMH contributed positively by SEK 24,000,000.

And with that, I’ll pass the word back to Karl. Please, Karl.

Karl Erik Kjellsta, CEO, Akastor: Thanks, Joven. Let me then roll off this presentation with some ownership agenda reflections. Let’s move to Slide 15. We continue to have a portfolio of nine investments, of which four are liquid listed holdings. Worth mentioning, our ownership position in Awilco Drilling has, in the second quarter, more or less been converted to cash through a distribution of dividends to the Avilco Drilling shareholders, where we and our customers see around $3,500,000 in April.

Avilco Drilling has announced its intention to delist and dissolve and will thus no longer be part of our portfolio going forward. Let’s move to Slide 16, HMH, where most have already been covered by Tom. Our ownership agenda for HMH remains firm. It is to expand the business through organic growth and value adding acquisitions. It is to maintain the leading market position via customer centric R and D, catalyzed by digital technologies.

And we continue to target to make HMH an investment that is liquid. HMH is, as mentioned already, keeping its S1 registration filing updated and as such continuing to prepare for potential listing. Timing of possible public offering is subject to a variety of factors, and it’s difficult to comment timing at this time. Let’s move to Slide 17 covering NES Faregroft. NES Faregroft continues to deliver growth in revenues year on year despite a more challenging environment for recruitment and especially permanent placements, given the turmoil that we experienced in the market.

The company is, as mentioned before, exit ready with different alternatives being explored, including a potential listing, also here subject to the market is offering an attractive valuation for a company like Nearest Aircraft. A key priority in addition to making the investment liquid is to continue to grow the company both organically and through M and A to enhance value for all shareholders. Slide 18, AKOS Offshore. We were happy to see that AKOS Offshore delivering solid operation in yet another quarter. AKOS Wayfair delivered a revenue utilization of 94%, however affected by four days out of operation in connection with the flu outbreak on board a vessel.

Arco Seafarer delivered a technical uptime of 95%, but with a revenue utilization of 85% due to weather conditions, as the charter rate is reduced with 50% during periods where we have waiting on weather. And we have not been through the winter season and hopefully waiting on weather will be a minor factor going forward. Ark of Santos delivered revenue utilization of 98% in period and continued its improved trend seen over the last quarters. With this, total revenues for Arkoff ended up US34 dollars with an EBITDA of $10,000,000 in line with previous quarters. AKOS Offshore have all its vessels on contract with solid clients and is well positioned for attractive renewal post existing contracts.

And this has already been demonstrated by the new Seafarer contract awarded in the fourth quarter last year as well as the current process with the renewal of the Santos contract, as already mentioned. We are very pleased also with the completion of the refinancing of the ACOSifera vessel in April to the €110,000,000 bank facility. The new facility has been used to refinance the previous bank loan as well as NOK 105,000,000 shareholder loan, where Acosto held 67%, and this facility will also be used to finance the upcoming five year periodic survey that the vessel will go through this fall. The refi improves liquidity of the company and also demonstrate the solid position of the company. Then DDV Offshore.

With the backlog secured last year, the three DDV Offshore vessels now all have contracts in Australia. These contracts will deliver good growth in both revenue and EBITDA going forward. In the first quarter, Scania Atlantic began its new one year contract, achieving an 88% utilization in the period. Scandi Peregrine, however, recorded 0% utilization as the start up of its new contract was delayed due to certain technical issues, with commencement not being expected in the second quarter. Our strategy for DDV remains to maximize the value of our investment by leveraging the attractive day rates that drive solid cash flow, while we actively continue to assess secondhand market opportunities for potential additional vessel sales.

And then finally, let’s look at Slide 20 with our key priorities going forward. Our customer strategy continues as before, with our key target being to develop the companies in our portfolio and when the time is right and values are attractive, execute value enhancing exits. We are currently in a net cash position with no draw on corporate facilities, enabling us to time transaction when values are attractive, with the goal of returning proceeds to our shareholders. We look forward to start delivering on our ultimate goal in 2025, returning proceeds from transaction to our shareholders. And with that, we are through the presentation, and we’ll move over to a Q and A session.

And I believe, Irwin, that we will pause for a minute or two to provide good opportunity to place questions. Thanks.

Eivin Poskaya, CFO, Valkastur: Yes, we’ll start with the Q and A session. We have received a question or a few questions on the same topic regarding the HMH listing and whether the timeline is affected by the current macroeconomic conditions. I think it’s as both Karl and Tom has touched upon, it’s very difficult to comment both based on a legal position and also based on not knowing how the markets will develop. So I think we’ll leave it at that, but move on to another questions where you can touch upon this topic maybe color. How do you view potential shareholder distributions going forward?

And has this changed in light of the recent market disturbance?

Karl Erik Kjellsta, CEO, Akastor: As mentioned already, our customer is now in a strong position with no debt at the corporate level and with a net cash position. And also as mentioned, following the expected second quarter closing of the announced sale of Perrigino, we plan to distribute a significant portion of the net proceeds as dividend, with payment anticipated shortly after the closing of the transaction. And this, I would like to mention, is a major milestone representing Alkaastro’s first ever distribution to shareholders and aligns with our stated strategy to return value through realizations. We remain committed to this approach and aim to distribute additional capital enabled by future realizations, and realization will depend on the market obviously.

Eivin Poskaya, CFO, Valkastur: Thank you. Then a question to HMH and I guess to Tom. And I know you touched upon this, Tom, but the question is, could you please elaborate around the impact you see from tariff environment, both in terms of direct cost effects and potentially also implications for revenue development? Also what measures are you taking with regards to optimizing supply chain in this regard? So I’ll hand that over to you to comment on Tom.

Thomas McGee, CFO and EVP, HMH: Sure, I think I gave you the directional you know, the impact of the tariffs. So we said 3% to 6% of EBITDA on last year. Although you can, you know, you mitigate that in a couple of ways and I think, know, we are looking at supply chains and we always are doing that. And so ultimately, way our supply chains are set up, our legacy ESS product lines, topside equipment is largely kind of shielded from from a lot of this, and so you have a little bit of protection there. PCS product line is a little bit more hit, but even that, you know, with the way we manage it and bring it back and forth around the world, we have pretty good coverage.

So our supply chain overall is not particularly exposed to this. We will continue to look at ways to optimize it if we need to, again, we have specific requests for customers saying we need to work around some things, but so far just think there’s so many manufacturers that are in far worse position, we have a pretty good scenario and we continue to follow it and so we’re not really concerned about the base impact. It’s a secondary effects that they could they can hurt and what would hurt on the, you know, what a tariff could do on the revenue side is, you know, talk about could customers just say, hey. I’m gonna stop spending till I get certainty. But if your rig’s working, you you kinda have to spend.

So I think that’s why you saw a good first quarter as you saw people continue to spend on their rigs. Right? And and I think that was good. And, again, I can’t give forward guidance, but I can point to the drillers and say that, you know, over the last few days, the the next couple years outlook for our customers, the drilling contractors has actually improved. And so I think we gotta look through all of this and say, there is you know, there are good things happening to the drilling contractors underneath this.

Now, you know, there could be some revenue hits in terms of being locked out of a market or something like that, which is bit back which is, you know, I guess possible. But again, when you look at the the the the base we have with that resilient offshore base, you you can look at the drilling contractors and see how that’s continuing to function quite well. So there are a lot of unknowns here. We’ve done the best we can in terms of mapping out the the impact, but we continue to think that, you know, it’s it’s pretty light and what are you worried what are we worried about? We’re not the price of oil.

I mean, it’s like that that that’s a bigger driver. And right now, even that volatility has not slowed down contract negotiations on for the offshore drillers with operators who still wanna go forward with those projects. So I think that’s probably the best way to say it.

Eivin Poskaya, CFO, Valkastur: Thank you very much Tom and I guess you partly answered this question through your last answer but I’ll pass it on anyway maybe you can say something about it. Given the current muted offshore drilling outlook, can you please provide some more color on how you assess the potential going forward and overall? And if there’s anything specific to comment on regarding the fleet of rigs equipped with the ore system particularly?

Thomas McGee, CFO and EVP, HMH: No, I think we’ve said everything in terms of what the contractors are saying.

Eivin Poskaya, CFO, Valkastur: Agreed. So thank you. With that, I think, yes, we have received the last question regarding potential to distribute proceeds from the Vilco Drilling dividend that Karl mentioned. I think I’ll just comment that it’s relatively small, so there’s no plans for a specific dividend from Akastor in that regard, but it, of course, adds to our cash buffer and potential for distributions going forward. So I’ll leave that by that.

And with that, I think we are through the Q and A session. And we’ll just thank you all for your attention and welcome you back to our presentation of the second quarter on July 10. Thank you very much.

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