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Akastor ASA reported its Q3 2025 earnings with a notable increase in total net cash, reaching $279 million, and a consolidated revenue of NOK 130 million. The company announced a dividend of NOK 0.40 per share. The stock price remained stable post-announcement, reflecting investor confidence in the company’s financial health and strategic direction.
Key Takeaways
- Total net cash increased by $134 million, reaching $279 million.
- Dividend declared at NOK 0.40 per share.
- HMH reported a 3% year-on-year revenue increase.
- Offshore drilling market shows signs of stabilization.
Company Performance
Akastor ASA demonstrated a solid performance in Q3 2025, with significant cash flow generation and a strong market position. The company’s focus on digital technology and contract services contributed to its steady growth, despite a challenging market environment. The offshore drilling market’s stabilization signals potential future growth for Akastor’s portfolio companies.
Financial Highlights
- Revenue: NOK 130 million
- Total net cash: $279 million, an increase of $134 million
- Consolidated EBITDA: NOK 27 million
- Dividend: NOK 0.40 per share
Outlook & Guidance
Akastor remains cautiously optimistic about the offshore rig upcycle anticipated in 2026-2027. The company is exploring exit strategies for investments and focusing on developing its portfolio companies. The strong net cash position supports Akastor’s strategic initiatives and potential future listings.
Executive Commentary
- Eirik Bergsvik, HMH CEO, noted, "We are seeing continued signs of stabilization and improvement in broader contracting and utilization trends."
- Akastor CEO Karl Erik Kjelstad emphasized, "Our strategy remains firmly in place... to develop companies in our portfolio."
Risks and Challenges
- Market volatility in the offshore drilling sector could impact future growth.
- Potential delays in offshore rig reactivations may affect revenue streams.
- Global economic uncertainties could pose risks to strategic initiatives.
Q&A
During the earnings call, analysts inquired about the dividend distribution strategy, which is tied to asset realizations. Questions also focused on potential rig reactivations in late 2026 and the readiness of NES Fircroft for an IPO or trade sale. The management’s responses indicated a strong strategic focus on maximizing shareholder value through carefully planned exits and investments.
Full transcript - Akastor ASA (AKAST) Q3 2025:
Eivind Polsmo, CFO, Akastor: Good afternoon and welcome to the presentation of Akastor’s third quarter results. My name is Eivind Polsmo, CFO, and I’m joined today by our CEO, Mr. Karl Erik Kjelstad. We are also pleased to have HMH with us from Houston, represented today by Eirik Bergsvik, CEO, and David Bratton, SVP Finance. As usual, Karl will begin with some key highlights followed by Eirik and Tim, who will present the HMH update. I will then take you through Akastor’s consolidated financials before handing it back to Karl. Toward the end, we’ll open for questions through the web-based Q&A solution where you can post questions at any time. With that, I’ll turn it over to Karl.
Karl Erik Kjelstad, CEO, Akastor: Thank you, Eivind, and good afternoon and good morning to our U.S. participants, and thank you so much for joining us for this earnings call. Let us start on slide 2 with the key highlights for the third quarter. Akastor ASA will continue to be in a solid financial state. We have a positive net cash position and no draw on our corporate revolving credit facilities. With this, we are very pleased to announce another cash distribution to our shareholders, this time NOK 0.4 per share, supported by the realization of our holding in Odfjell Drilling. This is aligned with our strategy to return excess capital to shareholders while maintaining a sound capital structure. Turning to HMH, the company continues to deliver robust financial performance and demonstrate resilience even in the challenging offshore drilling market.
Despite headwinds affecting service activity and spare parts sales, HMH achieved an adjusted EBITDA of $42 million, a solid quarter with a margin of 19%. Importantly, the company also delivered a strong cash flow, underscoring the quality of its operation and its ability to generate value also in a demanding environment. The value of our shareholding in HMH now represents 77% of our total net capital employed, with a book value of NOK 3.4 billion at the end of the third quarter, or NOK 12.5 per Akastor ASA share, somewhat higher than last quarter due to positive earnings in the period. Then Akofs Offshore, Akofs Santos vessel was formally awarded the four-year MPSV contract in the quarter, expected to commence in January 2027, safeguarding long-term earnings for Akofs.
Akofs earnings for the quarter were impacted by the planned 45-day yard stay required to complete the five-year classing of the Akofs Seafarer vessel. Except for this scheduled yard stay, all vessels, including Seafarer, delivered strong operational performance. It is again worth noting that our current book value of Akofs, where the value related to our equity holding in the third quarter was reduced to nil, reflects a conservative measure driven by historic cost and the company’s negative earnings to date. This does not in any way fully capture the underlying asset value of Akofs. We continue to see significant upside potential and remain focused on ensuring this value is increasingly recognized and understood. DDW Offshore, all vessels recorded 100% revenue utilization through the quarter, delivering an EBITDA of NOK 43 million.
The book value of our investment in DDW Offshore stood at NOK 1.2 per Akastor share, based on an average book value per vessel of $11 million. Finally, the third quarter we completed the sale of our remaining shares in Odfjell Drilling in line with the cash flow strategy of realizing assets to enable capital distribution to shareholders. This transaction generated proceeds of NOK 118 million in September, bringing the total proceeds from the sale of Odfjell shares during 2024 to NOK 222 million. Slide 2 I would like to have a few more comments on Odfjell investment. Back in 2018 we in Akastor made initial investment of $75 million in Odfjell Drilling through a preference shares and warrant agreement structure supporting the acquisition of Sterna Min Max that today is called Deepsea Nordkapp.
In November 2022 we sold the preference shares back to Odfjell Drilling for $95 million while we retained the warrants. In May 2024 we exercised these warrants and received just over 3 million ordinary shares and during the second and third quarter 2024 we realized these shares generating as mentioned, NOK 222 million. All in all, these investments have delivered a total return of about NOK 750 million corresponding to 2.2 times multiple or an IRR of about 19% in Norwegian krone terms. Needless to say, we are pleased with the outcome of this investment and also a bit sad to sell the shares as we have great belief in Odfjell Drilling going forward, but we are pleased to be enabled to yet another distribution to our shareholders following the realization. With that I’m pleased to introduce HMH CEO Eirik Bergsvik that will take us through HMH third quarter results.
Eirik, the word is yours.
Eirik Bergsvik, CEO, HMH: Thank you, Karl Erik. Good day everyone, and thank you for joining us on the call. I’ll begin by sharing a summary of our third quarter highlights and then provide some perspective on our current market conditions. After that, David will take us through the financials in greater detail. Starting with our results for the third quarter, we reported revenue of $217 million, which is up 3% year on year. Our EBITDA for the quarter came in at $42 million, representing an increase of 8% compared to the same period last year, but up 16% versus prior quarter. This resulted in an EBITDA margin of 19.3%. Our performance this quarter on cash was strong. We generated $35 million in unlevered free cash flow this quarter, primarily driven by improvements in working capital management and the collection of project milestone payments.
Order intake for the quarter totaled $171 million, down versus last year as expected. As offshore activity works through the current white space, I want to take a moment to thank the global HMH team. Our team continues to work hard to advance our strategic initiatives focused on strengthening margins and driving operational efficiency. This is positioning us well for the continued growth in the future. Now turning to current market conditions, we are seeing continued signs of stabilization and improvement in broader contracting and utilization trends with deepwater offshore markets benefiting both our customers and HMH. Speaking with our customers, despite their pipeline for early 2026 jobs still being limited, they are seeing significant opportunities for contract activity in mid-2026 and early 2027 provided oil prices remain reasonably stable.
Our customers are anticipating a gradual move toward a tighter market with improved backlog as we approach the inflection point sometime in 2026. With that, I’ll hand it over to David to walk through the financials in more detail.
David Bratton, SVP Finance, HMH: Thanks, Eric. I’ll begin with the total company results and then move into the segment details. Revenue for the quarter was $217 million, up 3% year on year and up 7% quarter on quarter, primarily due to aftermarket services, partly offset by a decrease in projects and products. Adjusted EBITDA in the quarter was $42 million, down 8% year on year, primarily due to spares and product volume, partly offset by an increase in contract services, an increase of 16% quarter on quarter driven by contract services and a rebound in spares from the prior quarter, partially offset by a decrease in projects. The adjusted EBITDA rate was 19.3% in the quarter. Orders for the quarter were $171 million, down 12% year on year and down 1% quarter on quarter, driven by a reduction in projects and spare parts due to the continued white space in the offshore market.
This was partially offset by an increase in service orders. Finally, on cash flow, unlevered free cash flow in the quarter was positive $35 million in the quarter, driven by project milestone collections and strong working capital management. We ended the quarter with $57 million in cash and cash equivalents on hand. Next, I’ll walk you through the product line results in more detail. In aftermarket services, revenue was $105 million in the quarter, up 26% year on year and up 14% quarter on quarter, driven by contract services. Aftermarket service order intake was $99 million in the quarter, up 42% year on year, mainly driven by contract services, partially offset by lower field service and repair activity. Quarter on quarter, order intake increased 25% supported by digital technology orders and contract services, with some offset from field service and repair activity.
Spares revenue was $58 million in the quarter, down 6% year on year, driven by softer global offshore activity, but up 12% quarter on quarter due to higher output of our topside spares volume compared with the prior quarter. Spares order intake was $56 million, down 18% year on year and down 13% quarter on quarter, driven again by the lower offshore spares order volume, partially offset by an increase in international land spares activity. In projects, product and other revenue in the quarter was $54 million, down 16% year on year, driven by lower product volume and down 8% quarter on quarter, driven by a decrease in projects, partially offset by increased product volume. Lastly, moving to net interest-bearing debt, we end the quarter with $57 million in cash and cash equivalents and a net debt of $144 million overall.
As Eric said, we’re proud of the team’s performance this quarter and continue to advance strategic initiatives to strengthen our margins and improve operational efficiency. With that, I’ll turn the call back over to the team in Oslo.
Eivind Polsmo, CFO, Akastor: Thank you, David. I will then take you through Akastor’s financials, starting on this slide 10 with our net capital employed, the carrying value of HMH, where Akastor’s net capital employed corresponds then to 50% of the book. Equity value in the company increased by $54 million compared to Q2, driven by positive net profit in the period. The net capital employed related to NES remains stable, while DDW NC declined somewhat in the period, driven by lower net working capital which was turned to cash in the period. The net capital employed of Akofs was reduced to $0 in Q3, as Karl noted, down from $79 million in Q2, reflecting our share of the net loss for the third quarter. As Karl noted, continued losses have gradually reduced our book value, which by the end of Q3 then stood at zero.
This means we carry no value of our equity holding in Akofs in our books. Again, we emphasize that this outcome is driven by accounting principles based on our historical cost and does not reflect the underlying asset values. We do carry the shareholder loans provided to Akofs Offshore totaling $418 million at the end of the period. These loans are included in our reported net interest bearing debt. The value of our listed holdings, which per end of Q3 included ABL and Maha Capital, decreased by a total of $134 million in the period, related then to the sale of Odfjell Drilling, partly mitigated by increased share price in Maha. The negative value of other, which includes smaller financial investments, pension accruals, and other provisions, was reduced by $20 million in the quarter, and the balance here mainly relates to pension obligations.
In total, our net capital employed decreased by $209 million in Q3, primarily driven by the sale of Odfjell as well as the net losses in Akofs Offshore. Over to our net cash position and an overview of development in the period, in Q3 our total net cash increased by $134 million, reaching $279 million at the end of the period. This improvement was primarily driven by the divestment of Odfjell Drilling shares and positive operational cash flow in DDW, partly offset by the dividend of NOK 0.35 per share, which we paid out in July. The Q3 net cash position includes a net debt position of $169 million in DDW Offshore, improved from $228 million last quarter due to positive cash flow during the period.
Total net interest bearing debt at quarter end stood at a net cash position of NOK 970 million, which includes interest bearing positions towards Akofs Offshore and HMH, as well as the remaining seller credit to Mitsui of $39 million, which are to be settled in Q4. Looking ahead, the cash balance in Q4 will be impacted by this seller credit payment as well as the approved dividend payment totaling about NOK 110 million scheduled for payment in November. Our external financing facilities remained largely unchanged from last quarter except for a cancellation of an undrawn NOK 70 million share financing facility following the divestment of Odfjell Drilling. The DDW term loan was reduced to approximately $24 million after one scheduled installment during the period. We are in discussion to refinance this term loan and expect completion of this in Q4.
Our corporate RCF remained fully available and undrawn at the end of Q3, and we have agreed with our banks to extend this facility to June 2027, with only final documentation remaining. At quarter end, the total available liquidity was NOK 816 million, including NOK 69 million cash held through DDW. That then includes the undrawn RCF with NOK 300 million. Then our consolidated P&L. As a reminder, most of our holdings are not consolidated in our group financials. Therefore, the consolidated revenue and EBITDA represent a small portion of our total investments. DDW Offshore delivered revenues of $128 million for the quarter with all vessels on contract throughout the period. EBITA was $43 million, up year on year and quarter on quarter, driven by higher fleet utilization. EBITDA was, however, impacted by some FX effects and certain non-recurring vessel costs.
Other revenues were NOK 2 million, while other EBITDA was negative NOK 16 million. As a result, consolidated revenue and EBITDA for the quarter ended at NOK 130 million and NOK 27 million, respectively. Our net financials contributed positively by NOK 54 million, driven by value increases across most holdings, including Odfjell Drilling and Maha Capital. FX accounting effects were negative NOK 23 million, reflecting a smaller weakening of the U.S. dollar versus the Norwegian kroner. Net interest and other financial income added NOK 4 million, bringing total net financial items to a positive NOK 38 million for the quarter. Share of net profit from equity accounted investments was neutral overall, with Akofs contributing negatively by NOK 81 million, while HMH contributed positively by the same amount. With that, I’ll pass the word back to Karl Erik Kjelstad for the last section.
Karl Erik Kjelstad, CEO, Akastor: Thanks, Erwin. Let me run off this presentation with some ownership agenda reflections. Firstly, on slide 16, our investment portfolio was in the quarter reduced from 9 investments to 8 following the Mansion exit from Odfjell Drilling. Let us then move to slide 17 covering HMH. Been already covered by Eirik to some extent, but let me anyhow add some few reflections as HMH owner. First of all, our ownership agenda for HMH remains firm. It is to expand the business through organic growth and also do value-adding acquisitions. It is to maintain a leading market position and also continue to target to make HMH investment liquid at some point in time. We remain somewhat cautious regarding the short-term outlook for the drilling market. That said, and also as Eirik stated, we do see encouraging signs when looking further ahead.
2026, 2027 show signs of becoming a start of a new offshore rig upcycle driven by the Deepwater Offshore development. Regarding the listing process, there is no concrete news at this point, but HMH is steadily keeping its S-1 registration filing updated and is as such continuing to be prepared for a listing. Timing of possible public offering is subject to a variety of factors and difficult to comment at this time. Let us move to slide 18 and covering NES Fircroft. NES Fircroft continues to deliver solid results with both revenue and EBITDA increasing by 5% compared to the third fiscal quarter of 2024, despite a continued somewhat challenging environment for recruitment. As mentioned earlier, the company is exit ready and together with the main owner AEA Investors, we have for some time been exploring several alternatives for an exit.
There is nothing specific to report at this stage and we will revert with an update when there is more clarity on this. In addition to our focus on making this investment liquid, a key priority is to continue growing the company both organically and also through M&A to enhance value for all shareholders. Slide 19 covering Akofs Offshore. As mentioned, all Akofs vessels remain on contract through the quarter. Akofs Aker Wayfarer achieved a revenue utilization of 97% while Akofs Santos delivered 94% revenue utilization in the quarter. As noted last quarter, Akofs Seafarer earnings was impacted by its scheduled five-year class renewal survey resulting in 45 days off hire. We are pleased to see that the survey was completely in line with budget and on planned time, but it led to a revenue utilization of 49% for the period.
Due to this, the total revenues for Akofs Offshore were $28 million with an EBITDA of $3 million. Looking ahead, Seafarer will transition to new contract terms late in the fourth quarter and this will increase the running rate earnings. We were also pleased to see that Akofs formally awarded the new four-year NPSV contract commencing in January 2027, and this contract value as previously disclosed will further strengthen Akofs’ earnings and cash flow once it commences during the third quarter. We also reached an agreement with our co-owner MOAL to restructure Santos financing, addressing historical what I would call misalignment from the shareholder loan structure and fully aligning ownership interest. As a part of this, Santos senior debt will be extended by one year to first quarter 2027 with commitments in place.
DDW Offshore, all three vessels remain on contract in Australia throughout the third quarter delivering 100% revenue utilization. EBITDA for the quarter was NOK 43 million, impacted by certain non-recurring vessel costs. Scandi Maris’ contract with Petrobras ended in late October and the vessel has since demobilized to Singapore where it’s currently on a short-term contract before entering the spot market ahead of its scheduled five-year classing early next year. Looking ahead, our focus remains on maximizing fleet utilization supported by solid contract backlog that provides operational and financial visibility. Our ultimate target is unchanged and we continue to actively assess secondhand market opportunities for potential sale of all three vessels. Finally, let’s look at slide 21 regarding some key priorities for Akastor going forward. Our strategy remains firmly in place.
Our core objective is to develop the companies in our portfolio and when timing and values are right, to execute value-enhancing exits. With a strong net cash position and no draw on corporate facilities, we are well positioned to maximize values when opportunities arise and at the right time. Today we are pleased to announce our second ever dividend of NOK 0.40 per share, marking another important milestone in our commitment to return value to our shareholders. I believe that concludes the formal part of this presentation and we will move over to a Q&A session and take a brief pause to allow you to submit questions. There are already some questions on the screen here, so Eivind, can you please facilitate that session?
Eivind Polsmo, CFO, Akastor: Yeah, thank you, Kalle. I guess we can go right to the questions. First, a question for you, Kalle. With the current liquidity position of Akastor, would you be able to pay a Q4 dividend from existing resources, or do you intend to maintain the policy of distributing proceeds from asset realizations only? I’ll hand that over to you.
Karl Erik Kjelstad, CEO, Akastor: Yeah, thank you. No, as I said, we are committed to distribute the values to shareholders, but the future distributions will be when we do transactions, because we also want to maintain a solid financial state with flexibility to act in the most optimal way when it comes to realize our assets.
Eivind Polsmo, CFO, Akastor: Thank you. We have a few questions on the same topic, so I’ll take one of them regarding HMH. I’ll pass that over to Eirik. Eirik, this is a question from the audience. Do you see potential for increased revenues related to reactivations of some of the rigs that are now experiencing white space? It’s commented that you might have the BOP for a few of the Noble and Valaris rigs currently idle, with contracts commencing in late 2026. I’ll pass that question to you, Eirik.
Eirik Bergsvik, CEO, HMH: Yeah, thanks. There is limited what I can say about that, but if you look at what we’ve been hearing from our clients, from the drillers, what we’ve been seeing them presenting at the various events this autumn, it looks very clear that we could expect some reactivations because of utilization becoming as high as it, I would say, has never been before, according to what the driller says. Yes, we look positive on those possibilities.
Karl Erik Kjelstad, CEO, Akastor: And.
Eirik Bergsvik, CEO, HMH: Yeah, that I think is what I can say about that right now.
Eivind Polsmo, CFO, Akastor: Okay, thank you. Thank you, Eirik. I guess lastly there’s also a few questions on the same topic, but I’ll pass that to you, Karl Erik, even though you commented on it briefly. Given the appetite for IPOs, do you see an opportunity to list NES Fircroft and is the company ready for an IPO?
Karl Erik Kjelstad, CEO, Akastor: The company is ready for an IPO. That’s of course an option to make the investment liquid. Any other alternative is to do a trade sale of the company. All options are on the table is what I can say.
Eivind Polsmo, CFO, Akastor: Thank you. With that, I think we are actually through the questions, and we’d just like to thank you all for your attention and welcome you back for our presentation of the fourth quarter results on February 12th next year. Thank you very much.
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