Earnings call transcript: Dof Group Q4 2024 sees revenue growth

Dof Group ASA (DOFG), a $1.53 billion market cap company with an "GREAT" Financial Health Score according to InvestingPro, reported a strong financial performance for Q4 2024, with revenue reaching the upper end of its guidance at $5.19 billion. The company also provided a positive outlook for 2025, forecasting full-year revenue between $1.8 billion and $1.9 billion. The stock price saw a modest increase of 1.37% following the announcement, reflecting investor confidence in the company’s strategic direction and market position.

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Key Takeaways

• Dof Group’s Q4 2024 revenue hit the upper end of guidance at $5.19 billion.
• Full-year 2025 revenue guidance is set between $1.8 billion and $1.9 billion.
• Stock price increased by 1.37% post-announcement.
• Strong cash flow with $176 million net cash from operations.
• Continued strategic fleet optimization and strong market presence in Brazil.

Company Performance

Dof Group demonstrated robust growth in Q4 2024, with a 24% increase in revenue compared to the previous year, building on its impressive 16.29% revenue growth over the last twelve months. Trading at a P/E ratio of 4.05, the company’s strategic investments in high-end anchor handling and construction vessels have bolstered its competitive position. The completion of the Dof Denmark transaction and ongoing fleet optimization are expected to enhance operational efficiency and market reach.

Financial Highlights

• Revenue: $5.19 billion, at the upper end of guidance.
• Full-year 2025 EBITDA Guidance: $720 million to $800 million.
• Net cash from operations: $176 million.
• Total (EPA:TTEF) interest-bearing debt: approximately $2 billion.

Market Reaction

Following the earnings announcement, Dof Group’s stock price rose by 1.37%, reflecting a positive market response to its strong performance and optimistic outlook. The stock has delivered an impressive 43.33% return over the past year and is currently trading within its 52-week range, with a high of $10.36 and a low of $5.52, suggesting stability and investor confidence.

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Outlook & Guidance

Dof Group has set an ambitious revenue target for 2025, with projections between $1.8 billion and $1.9 billion. The company expects a stronger second half of the year, driven by high tender activity, particularly in Brazil. The strategic focus on fleet optimization and potential vessel sales are anticipated to further enhance financial performance.

Executive Commentary

CEO Amos highlighted the company’s positive outlook, stating, "We expect a much stronger second half." He emphasized the potential for growth in the subsea market, particularly in 2026-2027, describing it as potentially the strongest period in the current cycle. Amos also expressed confidence in the integration of Dof Denmark, noting, "We are confident that this will be very good when we have done the get it into our platform."

Risks and Challenges

• Currency fluctuations affecting international operations.
• Potential delays in fleet optimization and vessel sales.
• Market volatility in the UK sector.
• Economic uncertainties in key markets like APAC and North America.
• Dependence on high tender activity in Brazil.

Q&A

During the earnings call, analysts focused on the company’s outlook for Brazil tenders, currency risk management, and the integration progress of Dof Denmark. Executives addressed these concerns, reiterating their commitment to strategic fleet optimization and highlighting ongoing refinancing efforts with bank commitments.

Full transcript - Dof Group ASA (DOFG) Q4 2024:

Amos, CEO/Primary Presenter, Dof Group: Good morning and good afternoon, and welcome to the q four presentation for the Dof Group. We will go through the presentation, and then we will have a q and a at the end. So, and then I guess the question will be sent through the through the, what’s it called, the link or what you call it. So so we invite things. We will answer all the questions we’ve done and and and please encourage you to ask questions.

Yeah. So then we go to the next page, page two here. And so this is a snapshot of Dov. So today, after the Dov Danmark transaction, we operate a fleet of 77 boats. So we’re off we own 65.

We have shot that in 400 management on Aitlan. And through the year, that might change a bit. We will have a new charter boat coming in April time. And, of course, we are reviewing then what our optimal fleet should look like going forward. So it might be that we truly sell a few votes to optimize it.

I’ll talk a bit more about that later. The backlog now is good. So 3,250,000,000.00, which is high. And my personal view is I think that will grow a lot the next three to six months. The tender activity is high and not only big tenders for long term, but also pretty high activity and what we call the project market and the pipeline also and that looks strong.

So there you see also on the graph here that revenue is up 24 compared to 23. And also on the underlying EBITDA is quite a lot. So so it’s been a good year all in all for us. Next (LON:NXT) page is showing what we are. So we, of course, we are a Barcelona, but we also are a service services provider.

So so perhaps what I’m most happy with on this page is that we see the graph in the middle here that the earnings in the subsea regions is up below. So a bit from that growing from 88,000,000 to $134,000,000 And I guess this was also part of the motivation why why we bought Doktan Mark. We cannot only increase the vessel ownership and running from the vessel, but also then we expect to be able to increase the running from the services side quite a bit, yes? And that’s the phase where we know we are transforming the Dov Tanmark fleet into the Dov commercial model and look forward to that. Talk a bit more about that later.

And of course, also for those who want to do the maths, there is a market value from independent brokers of $4,200,000,000 on the fleet. And then of course, you could also argue that there is quite a decent value on the regions that are able to deliver on 34,000,000 in a year in EBITDA. Then all the highlights for next page for quarter four. We had a guiding of the last window we had on the guiding was five tonne to 0.2. And we deliver on our excluding DovTEAN market, excluding asset sales, we deliver 5.19.

So in the upper end. So we are happy with that. Very strong contribution as we said on the last page, NOK34 million from the radiance. And C2 plus 95%, so it could have been higher, but quite okay. Backlog 3.25, we have a separate backlog slides to talk a bit more about that later on.

And as I said, we expect very strong order intake the next three to six months. The Danbok transaction completed. Of course, we got that fleet, that company first November and of course, we didn’t have any due to competition at all, we didn’t have any insight in what happened until January on the commercial side. So we have had, let’s say, shorter time than we normally have had to build a vector for that fleet done. But the team are working on it globally.

And I see I’m getting more optimistic on that be related to to end up with a very satisfying result on growing that fleet going forward. Regarding July, we will also go back to that later on. DAPDA will down quite a bit and, not in over CFO, we’ll be talking more about what happened on the cash flow and that the repayments in quarter four. It was a very strong cash flow in that quarter course. Perhaps most importantly is that the refinancing is on schedule.

All major banks already committed and expect to close it and sign a loan agreement within end of quarter one, meaning that we plan and are confident that we will pay our first quarterly dividend of $0.3 per share in second quarter. So we look forward to that. And the more have also want to propose to the general meeting in May to implement this year by October. So after we talk more about the numbers and so I leave the numbers for him. So then we move to this page.

So this is just highlights. So what do I take? 2,000,000,000 in ’24 which is 1.4, so book to bill of 1.4. So it’s a pretty strong year. 88% of all future translation every year, which is decent and then the very strong contribution from the regions.

Softarmark closed and then we want new contract or extended four out of the seven pipelines to operate, which of course gave very good foundation and strong momentum in the backlog. And then Buss was back on our end in August and then quarter four, of course, was the third quarter for Hurin in 2024. And perhaps the most important, of course, no major incidents during the year, which is, I guess, always the priority number one clause. So on page seven, please. No, page six, sorry.

So this is this slide is really what we do. So I encourage you to there is two videos here, one from the Wasson Oil decommissioning project and one from delay in FPSO and FPSO installation. So encourage you to have a look at that to actually see what we are doing. Yeah. And and, of course, this is the type of work we do to to make the the the money and make the the monitor regions contributed.

And in in ’24, as as I said, we have strong all regions performed very well. Yeah. And and, and, of course, it’s important to understand that, of course, we we make this project not only on the surface construction boats, but also on the anchor hand boats. Yeah. So so, for instance, on the Bele in our Peso project, we had we had we we had in total five, top operator in Canada’s on that project.

Yeah. So covering covering more than hundred days on each boat. And then, of course, also made a decent margin in the region, in the Atlantic region. And of course, that is important to understand when you see the fleet composition that we have increased our ionic fleet. And of course, the plan here is to, let’s say, have an ionic fleet and own that fleet with what I call a brain.

So we don’t want to have anchor handlers solely trading in spot molecule, we want to have a handful of anchor handlers that flex between spot and our project activity. And that means when we talked about fleet optimization that we might reduce, we might sell a few boats but it also means that we also will probably do a few long term contracts. So the ambition here is to reduce that fleet between spot and projects to four or five vessels. And today we have seven eggs. So that’s the job we have to do on the accounting side.

On the next page, it’s a picture of all the Skondi and Volvo (OTC:VLVLY) where we have recently finalized insulation of our own subject equipment, so two of these survey equipment and the vessel after that went on a long term contract in Brazil. And we will talk a bit about CapEx later on. And it’s important to understand for us, it is very important to get the Dovdan market into the Dovkom EOSI model. Only one decent project on a CSV here can repay the whole CapEx we now spend on that boat. So we as I said previously, we do this because we we get earnings on the vessel, but we also get very good margins on the projects.

And that’s the whole, and of course, that’s why we believe that the DovDalmar fleet can make more money in the DovDalmar than it could in the old DovDalmar model. So we are investing in that now and we’ll do that continuously until we have done what we’ve planned to do. So then we move to the next, please. And this is the backlog. And so DKK3.25 billion dollars in backlog execution.

And if you look at it, 1.366 for ’25 which is done 74% of the midpoint in our guidance on revenue. So it’s a very good foundation for ’25. And then as I said, we expect to grow that backlog a lot. And last year, I said I would not go on some holiday if we were not able to build a very strong backlog. And I’m willing to repeat that this year that I will not go on some holiday before the backlog is more fulfilled.

So I’m confident that we will continue to build build backlog and and in the interest of, we will build a lot. Then the next page is a bit more about building backlog and and this is done a slide showing a few comments on the anchor handling tender and the RSV tender forces in Brazil. On the anchor handling tender, there were eight lots. And if we focus now on the on six of the lots, which is the high end of it, two thirty ton, two fifty ton and two seventy ton bid over OTRE. We don’t have a eight versus bid.

We are off six from us. So we and you see the pictures here. You have picture here of the red nose conflict on top here. So and then you see the two gray which is two scaniaous classes. Because if we are a bit lucky and clever, of course, we can kind of update six, seven boats on that tandial.

And of course, that tandial is done four to four years from early twenty six and meaning you are backlogged into the twenty third year. So that could also solve part of the challenge we have with humanly, both Norway and the spot market. On the RSV tanda, we also bid the hand fellow boats and, of course, our ambitions that we should be able to place three, four, five boats on that as well. So let’s say in an optimistic moment, you could hope for a tonne plus bonds on these two ten plus with backflow down into the 22 at decent rates. But it’s still subject to the negotiation, it’s still subject to to find a reward and it’s still a lot of subjects.

But, of course, I’m and we are, you know, we are very optimistic that we will get something out of it. So then we move on. And as I said, the the the big focus now is is to integrate the of Denmark to get the equipment aboard to get our combined commercial team to do that job and integrate it. And we are, let’s say, halfway on doing that. And and we continue to focus on that.

And then we think it will be a very good addition to not only our long term charters but also a very good addition to our project in the year over year. So then we move on. Page 11 is done. Moften, I leave it to you.

Martin, CFO, Dof Group: Yes. Thank you, Mofsson. Hi, everyone. Before I to start off, this background photo on the on the first page is not a coincidence. It’s the first debt free vessel in the group for a while after very strong performance in Brazil following the after the restructuring, we we have actually repaid the whole loan on the cash whips from the performance in those services in Brazil.

So that is a highlight of the quarter. And on the next slide we see more on the numbers. And, yeah, you saw the very highlights on the first page. But it’s clearly a cost continuous positive development. We We have continued through the year to deliver very well in most segments and silos in the group.

You see, of course, the biggest contributor remains the DoFSeBC and the Sebbsie part with the Dofcon now also contributing at a high level after DuSios’ full quarter back on hire. Tof Redri is somewhat lower than previous quarter due to one vessel in between contracts and the class docking and also a vessel with a breakdown for part of the quarter affecting the utilization. But all in all more and more vessels are moving into better paid contracts so the development remains positive. There is, of course, that is on EBITDA level, very good also for the full year, remains very solid. A big negative number also this quarter on the on the P and L is the loss on currencies.

We’ll get back to that. It is related to, Norskamp and the big debt in US dollar in a BRL denominated company. I will do some more explanation on that but it is driven by call it, yeah, it’s a non cash effect affecting the P and L. And the new this quarter is of course Dof Denmark included from November 1, so this is a two months contribution. It is highly affected by this new one offs and transits and somewhat weak spot market with the fleet operating in the spot market.

We’ll have a bit more details on that on the next slide where we also cover the cash flow from the acquisition. The cash consideration on the closing was $557,000,000 but in the company that we purchased there was a cash balance of $172,000,000 so the net outflow of cash in the quarter related to the acquisition is $385,000,000 negative. Dof Denmark contributes in this mentioned two months with 46,000,000 worth of revenue and $7,000,000 in EBITDA. It is transit, it is a spot market and we had six anchor handlers and one CSV operating in the spot market. And there was also a one off cost related to the termination on the Skandi implementer where we, of course, we will work to recover the funds.

But it is a 5 and a half million dollar loss taken on this company implemented for the quarter related to the non payment of ChartRider. Yeah, and on the next slide of course you at the far right hand side you see that there is a very strong year end cash position. The cash development in the quarter is positive although the debt repayments are extraordinarily high. We’ll get back to that as well. So moving from left to right, we started at a cash balance of $450,000,000 and the operations have, probably after accounting for the full EBITDA, we have this quarter we have a release of working capital of $44,000,000 of a substantial stronger cash flow than quality earnings.

There is some small effects on amortization of contract cost, taxes and also the paid interest cost but resulting in a net cash flow from operating activities of $176,000,000 So still after interest cost that is higher than the EBITDA on the quarter. Then we have the investing activities of course very highly affected by Dof Denmark again for this quarter with just repeating the content from the last page but also including the group’s general capex of $36,000,000 On the financing side, we have a new this is the net payment from the US dollar 500,000,000 loan related to the closing on Dostenmark and we have paid, repaid or paid down $122,000,000 so quite a substantial part of the new debt is also repaid during the quarter. And yeah, then there is of course with the fluctuations in currency there is also a small currency effect on the cash position of the group. And on the next slide we have a bit more details on development in debt and net debt and of course interesting to see that with the repayments that we have done over the year, even though we have taken a new loan of $500,000,000, we are only back to the net debt where we were at the end of quarter one, roughly.

And when we exclude both the debt and the earnings from Dosto Denmark, we are at a 2.1 times multiple on that interest bearing debt to EBITDA. And of course it doesn’t make sense to include the debt when there is no corresponding EBITDA, so that is why we have excluded both Denmark on the multiple, but only on the multiple. We see there is a close to $2,000,000,000 total interest bearing debt on the group. And then back to what we also had at the high level on the slide before, the change in debt over the quarter is a normal amortization of 41. And then there is a big, of course there was this Scamdi Salvadore sweep payment that resulted in the vessel being fully repaid.

There is a large dividend from Dovkom to its owners of $50,000,000 per owner resulting in $48,000,000 repayment across the debt in Dovsebsie and also general cash sweeps across the silos giving us a call it an extraordinary repayment on debt of $81,000,000 for the quarter. The Dovsembark facility again $4.91 net paid out. And then there is one extraordinary effect on the changes in lease liabilities of $25,000,000 due to the SKAMBI installer previously being a lease liability and now it’s a known vessel. So that is a non cash effect under that. Yeah.

And then we go back to this, yeah, on the next one. If we go back to this, BRL USD development, there was, well, this is a similar effect to what we saw in the second quarter of twenty twenty four. One would think that having USD debt in a company with USD accounts would not make a big effect, but that is only on the balance. There is no balance effect from this debt but there is the P and L effect. The negative currency effect of the Nooshka accounts due to it being functional currency BRL is consolidated into the group numbers, but it is reversed over this, of the comprehensive income.

So the balance effect of this debt is zero. There is no cash impact either now or at a later point in time, but there is a P and L effect, just imported P and L effect from the Brazilian entity. And if we move on to the next one, this is an overview of the policy’s previously communicated amounts and what we, our call it ambitions on the refinancing is. It is to simplify the structure, it is to allow for more efficient cash management, reduce restrictions on dividends and restricted cash and so on. The progress on the refinancing has been very good.

It has been very good interest and it’s progressing well. We have, as we stated on the first page, received a commitment from the majority of the banks. And we are, as I said, very confident that we will conclude this within this quarter. Back to you, Amos.

Amos, CEO/Primary Presenter, Dof Group: Thank you, Martin. Sinan, we are on the financial guiding. I’ll do the numbers first and then the comments also. So we expect revenue between 1,800,000,000.0 and 1,900,000,000.0. And we expect between $7.20 and 800,000,000 in EBITDA.

And and talk a bit more about that part of it. And and, yeah. And as you see, we we have a it’s a higher range than we normally have when we go. And of course, the reason main reason for that is is that we are in the middle of transferring the Dovstadmark fleet into the DovComerson model. And, and then of course, the backlog when we took it over in first November was a bit lower than we normally have in Dof.

But we we see enough opportunities on the high class versus that there is reason to be a bit optimistic. And then, because the both in the spot market are has been weak so far, but we also have a plan for those. And as we said, maybe we want to put a few of them on long term complex. So it is a bit higher uncertainty than we normally have, but I do think that, that will gradually reduced and hopefully when we come to next round when we present quarter one week as we can narrow that range a bit. The normal turbo course, we are confident that this will be very good when we have done the get it into our platform and and and had a bit of time to to put the to do the backlog immediately.

So then going back to depreciation, $2.50 to $2.60. And then net interest cost, 101 tonne, and tax payable, 50 to 60. Then a few words on the CapEx. So it’s overall, we are talking $2.70 to two ninety. And what you can call maintenance CapEx, let’s say, the normal running CapEx is 130 to 140.

So comparing that, of course, to ’24, we it’s a natural increase due to the adding 22 vessels. Then we have what we call growth CapEx, which is subject with mainly ROVs. And of course, we do that. So we are installing ROVs on a few of the North Denmark boats. And of course, we do that because we think that is a very good investment.

And of course, we are bidding projects now on those boats that you should have payback only from the boarded margin on that CapEx in one project for Avastia. So that’s why we are doing it and we think that will pay off quite good. But, of course, that is not a repeating something being on repeat every year. So so this is especially high in in in ’25 due to that we did its acquisition. And then we have this new build, which is $90,000,000 this year.

And of course, that will not be repeated either. Yes. So but then, worth mentioning, when we guide here on CapEx, especially on the growth CapEx on the new build, of course, this is not cash yet. So that will be most of it will be financed. And I think we want the for instance, on the ERVs, we normally lease finance down with 70% to 80% leverage.

So the cash portion of it will be limited. All the comments is, as we said, sort of a bit back we have 74% of the revenue already secured. And of course, this is pretty high in this time of year. And we expect higher, what you recall, very high order intake in the next two, three, four, five, six months. Yeah.

And and then also, we are looking at the fleet. So so, you know, we we have so that will be. We we are looking at that. And and I think it’s more likely than unlikely that that we will sell a few boats through 2025 or subjects to to that the pricing is correct. But we do think it’s it makes sense to just divest a few non core vessels or older vessels or even higher vessels if the pricing are correct.

Yeah. So you could I could think that the fleet the own fleet will be a few hours towards the end of the year than we have today. So we are working with that as well. Then the final page is on the outlook. Just repeating $7.20 to 800,000,000 in EBITDA Hope to narrow that on the next crossroad when we present quarter one.

We expect, of course, gradually when we get this into our own model that EBITDA run rate will come up. We expect a much stronger second half not only because we got into the model but of course also because we have a few long term contracts starting in the Marcepa onwards, yes. So so already know, of course, we we know that that will increase. You mentioned the tenders in Brazil. So very high activity tendering noise in Brazil.

Very strong backlog from tier one players and also done a strong, let’s say, opportunity list on not only time charters but also on the subsidy projects globally. So to show what is happening on the commercial side is that we’re optimistic that we will continue to build backlog and we will have a build to build that is quite good also in ’24. Then, of course, these pictures are they are not, let’s say, randomly picked. The one on the left hand side is one of the big anchors owned in Brazil. And of course, because we’re showing that because he is one of the what candidates for being awarded a four year contract.

The next one, red one, is one of the ROEs support post we have that beginning on OSV10. And of course, he is done for a reason that we think he is in good position for that. And then we have the I class where we are installing our ROEs and we see more and more opportunities to to get good work for them through ’25. Yeah. And then you have the next one is to daily trading the North Sea Spot.

And that’s one of our main jobs now is to reduce that spot for sure either through long term contracts. And we have here for a reason that we think there is an opportunity, but also on that Nenka and in Canada with Petrobras. And then we micelle a few and get the exposure down where we want to be. And the last one, of course, is the ROVs. We have been installed on quite a few modes and expect that to that will lead to higher earnings and better utilization for not only for the subsea side of the coil but also for some of the end cameras.

So that, I think, was the last slide. So then we go to the q and a session, please.

Moderator/Q&A Facilitator, Dof Group: Right. And as Mansur said, please do feel free to send in your questions in the Q and A function on the webcast. We have quite a few already submitted, so let’s kick off. Hot topic today has been the SEBC7 and Saipan merger. Do you have any initial thoughts on this merger and its impact on the industry dynamics and impact on Dof specifically?

Amos, CEO/Primary Presenter, Dof Group: Well, it’s not a year. What is you know, first, I think it’s overall will be positive for Dofia. That will be the one last player in the industry, and and so it might be that open and bit of space for the on the sales side, on the construction side. So it might also be that such a large company will focus more on the really big projects and leaving a bit space for us on the smaller projects. So that’s my initial reaction that is delta positive for us.

It could be it opens on those returns around the globe and but then, of course, there’s nothing I can do with it. So we just have to see what happens.

Moderator/Q&A Facilitator, Dof Group: But you sound quite optimistic about the ongoing tenders in Brazil. Do you have any information about the timing and pricing dynamic here?

Amos, CEO/Primary Presenter, Dof Group: Yeah. I of course, I have yet. But I I don’t think I should share anything on pricing before we hopefully have a fine fine agreement. Yes. So so but I think, you know, the the the of course, the the off the the auction results have been made public from some analysts.

So you see the level being bid done. And and then there is always a better balance of a budget, which we don’t know. But but, we expect the first and the results here to be quite decent and hopefully, at least on the same level as you saw fixing levels last year.

Moderator/Q&A Facilitator, Dof Group: All right. Maastem, could you provide some color on why the BRL USD currency risk is not hedged regarding your USD long term debts?

Martin, CFO, Dof Group: Yeah, I can at least try. It’s a difficult one to hedge because it is a result on the balance or the balance sheet and the P and L in the local company in Brazil. So there is no cash effect and it would in that sense be a balance sheet hedge and a result hedge in Brazil in the local entity. And of course we are working on finding ways to avoid having these P and L effects and the only two reasons that we have is changing the functional currency and implementing what we would call hedge accounting on the local accounts. Then you would use the US dollar contract as a hedging instrument on the local US dollar debt to avoid taking the currency fluctuations over the P and L.

But we are pursuing the viable options to do so and I would say that changing the functional currency would be the preferred solution, but it is a bit of a process and a bit of a challenge with auditors and others in order to do so. So again, it’s not an effect. It’s not a real expense. It is a P and L effect that is non cash.

Amos, CEO/Primary Presenter, Dof Group: Yes. I’m not being an accountant. For me, it’s almost it’s only noise. We have a dollar loan in Oscon. We have dollar income on the financial part in the contracts and we have dollar accounts in Dovkorn.

So now that we have to take the NANDLEIT is for me quite understandable. And the only reason for doing that is because NUOSCon has functional currency in the areas. So it is almost what you can call stupid if you ask me, but I’m not an accountant.

Moderator/Q&A Facilitator, Dof Group: All right. Thank you. Then on the mentioned fleet optimization, could you elaborate a bit on your strategy here in the short to medium term? And when you potentially sell those vessels, do you expect those to compete in non Dov markets? Or will you meet those same vessels as competitors going forward?

Amos, CEO/Primary Presenter, Dof Group: Of course, the thinking behind it is, of course, that we we so we have do we wanna play? We wanna play in the Hyundai (OTC:HYMTF) and the construction space, and we wanna play in the, let’s say, high end and economic space. Let’s say, two, four, 50. And then, of course, it also also done, you know, looking at the the HCI or

Moderator/Q&A Facilitator, Dof Group: the

Amos, CEO/Primary Presenter, Dof Group: fleet. So it is a quite, let’s say, opportunistic post to it. We will we will reduce, reduce so we will probably see if we can sell a few other boats that don’t fit into those two categories, iron and canned or iron subsea. We will look at the fleetage. And of course, there are some, let’s say, part of our PSV fleet, because it’s not core for us anymore.

So we will look at those as well. But it also can be that, you know, when you have 65 boats and you get an offer, if you get a very nice offer for a high end boat, you sell that as well. So it’s a bit just to have to see how we can maximize behind those optimizing a fleet and maximizing the cash return on the sale. So but initially, of course, it is to streamline and tailor the fleet to what is our core core business. And, of course, in my if we sell them all to the market and not all to the market, of course, if we sell two anglers below 200 on board level, If they stay in the market, it doesn’t influence at all.

And if we sell a couple of PSVs, it doesn’t influence at all. So we sell the most to the guys who pay most. They don’t they can compete as much as they want.

Moderator/Q&A Facilitator, Dof Group: All right. And then there are quite a few questions on Dof Denmark and bridging the gap to the guidance in 2025 coming from now $7 U. S. Dollars for the two months, November and December, and then reaching the guidance of $150 to $200 in 2025. So how do you plan to sort of bridge that gap that’s needed to to reach the

Amos, CEO/Primary Presenter, Dof Group: guidance? Okay. That’s you know, it’s a very you need a very detailed forward to go through both for for both to answer that yet. So it is and I think, you know, it it was November, December, of course, it was quite a few one offs. We also had to take some losses on the implement.

So it is so I think it is not on so you can do in half a minute. Yeah. But, of course, there is a budget for both. There is a certain backup order to execute, and there is, let’s say, a pipeline that we are building on. Yeah.

So so so we we are so we we are are and, of course, we also have a direct backlog on on quite a few reports. Yes. So and there is new contract calling. So I think we are I think we are we are not particularly nervous that we will not be able to to end up in that guidance. But but I think it’s it’s it’s impossible to because it’s built up port by port and contract by contract.

And to them, we will have to go through each and one of the 22 ports to get the data also. So you just have to trust on it that we have done our homework on it and that let’s say if we are really good and clever and lucky, we can get to the higher end and if we are not that lucky somewhere in between.

Moderator/Q&A Facilitator, Dof Group: All right. And as a follow-up on that, how do you see the phasing of Dovdanmark in 2025? Should we expect a significant step up already in Q1? Or will that come more towards Q2 and

Amos, CEO/Primary Presenter, Dof Group: You know, I think q one will will so we’ll not be, to say, a very enormous step of I think it will be it would be stronger than that, but it’s 9,000,000, four and a half million, I guess. We have was it 9,000,000 we had in November and December. So it will it will be stronger monthly numbers than one we saw in November, December, but it will be gradually through the year. And and I think, you know, it’s it’s, I think when you when you get into April, May, you will see see it really start to kick off. So and of course, it’s well, as we said also, of course, it’s higher uncertainty on that fleet than we normally have.

And so it was also that of course also that’s why we are not narrowing in the guidance now because we have to see what we are able to do. But if it goes according to plan, of course, through the summer run into the fall, you will see how much higher run rate than you also in the run by December and you will see in first quarter. So, but we I guess we already have seen January. And I think January was according to our plan and stronger than what we saw the average for November and December.

Moderator/Q&A Facilitator, Dof Group: Alright. On the refinancing, do you expect that to be banks only or a combination of bank and bond debt?

Martin, CFO, Dof Group: That is still something that we consider. So, we have, yeah, as we have stated previously, we are concluding the bank part and then we’ll decide on the path going forward.

Moderator/Q&A Facilitator, Dof Group: All right. Then a question on the market. Excluding Brazil, it seems from oil service company comments that activity levels are leveling off or declining slightly in 2025. How do you see market trends outside of Brazil?

Amos, CEO/Primary Presenter, Dof Group: Of course, it’s when I look at our activity in APAC, it looks healthy. It looks it looks it looks like we will get continue to build backlog and and and that the rates are quite healthy. So I I think it will be be a good year in APAC. And North America is more the same that’s the same picture where we we see we are able to to win work, but of course, also have a very high backlog from before. Yeah.

So so the only, I think, we will see the trend from ’24 continuing into ’25. The only place of where you see likewise for Africa as well, there are quite a lot of opportunities, let’s say, APEC, Atlantic, North America. I know you mentioned Brazil. Of course, all looks I think it will be it will be a good year in all those markets in in 2020. The only place where you get a bit depressed is on The UK sector.

Yeah. Where you see, say, low activity, lower export market, and of course, that is why we have to reduce that water exposure and and and get the exposure to UK down. So so I think what we see and of course, we we are not macro analysts. Yeah. We we we have people on the ground globally with all the oil companies almost every day.

And we we collect our SI intelligence on on on that and the number of bids we have, the the the number of coming bids we have gives reason to to expect that that there will be good utilization and higher rates also in 2014.

Moderator/Q&A Facilitator, Dof Group: All right. And then on the guidance, do you account for any sale of vessels when providing that guidance or does the EBITDA guidance include all the vessels in the fleet?

Amos, CEO/Primary Presenter, Dof Group: Yeah. That includes all the vessels, but of course there are a few vessels with a lower burn yet. So if we sell those, of course, it will have a very limited impact on the the guidance. So of course, depend on what boats we we end up selling. Okay.

That was, of course, in the short term, of course, it will increase it, but of course, it depends on what vessel you end up selling. But if we end up selling low run boards, I it can give a small increase short term and have no impact longer term.

Moderator/Q&A Facilitator, Dof Group: Alright. And then on the I Class, do you expect to secure some long term work on some of those vessels to derisk the utilization and market fluctuations there?

Amos, CEO/Primary Presenter, Dof Group: Of course, we we are I I guess, the overall plan, of course, is that that we would like to have, let’s say, one or two or them on on, what you call, longer longer duration contracts. Yeah. And they’re perhaps one to multiyear contracts. Yeah. So that is, of course, the overall plan.

And and and but, of course, also then building, you have to remember that we we only start building backlog on those first November. Yeah. So so it’s and it was a lead time for the projects that typically do are a bit longer than than than a couple of months. Yeah. So so so they all the you know, if everything goes according to our plans, we will probably place one or two of them longer term and then run the rest in the project market.

And that also depends on what we we already put on projects for those posts in ’26 and also a few in ’27. So so the answer is long term or short term, the answer is that we we will derisk the exposure we have before all those folks running shorter term. Alright. And, perhaps adding, we do think, of course, that the timing is very good. Yeah.

It’s a good market and we, of course, expect that 2627 for high end really big subsea boats will be the strongest year we have seen in this cycle. So to have that let’s say that those vessels available for capturing work in ’twenty six and ’twenty seven might end up being very good for us.

Moderator/Q&A Facilitator, Dof Group: You mentioned speaking authority for a share buyback program. Do you have any more information to share about that on the potential size of such a program or other details?

Amos, CEO/Primary Presenter, Dof Group: No. No. No. So we will, so the voice the board will work on that and propose something for the general meeting, which we are gonna have visit in May and and, so there will be more details later on on that.

Moderator/Q&A Facilitator, Dof Group: Okay. Can you please explain the jump in corporate revenues and OpEx? And how do you believe that this will develop going forward?

Martin, CFO, Dof Group: Yeah, I can give a bit of flavor on that and of course the corporate cost is it is covered by the call it the regions and the operations of the group and it’s a it’s a question of how much cost is taken through corporate and not directly. So it is, you can you can sort of decide the the the share size of it. What is a bit special for 2024 is, there is a relatively large cost associated with the transaction of of the stock market that is taken by corporate and of course that is a one off and there is no reason that this should not go back to normal. But it has a bit of effect with the size of the group and the magnitude of operations, but the jump is primarily associated with the Denmark.

Amos, CEO/Primary Presenter, Dof Group: Yeah. Perhaps it was the other thing was that we are, you know, one we know two companies became on what we are looking at at the overall overhead level, SG and A level on not only in the corporate level but also on the, let’s say, the marine operations level. So, obviously, we are focusing a lot of that and try to, of course, to optimize the cost side on our operations as well.

Moderator/Q&A Facilitator, Dof Group: And on CapEx and CapEx guidance, could you say anything about the direction of maintenance CapEx and subsidy growth CapEx in 2026 and 2027?

Amos, CEO/Primary Presenter, Dof Group: It’s it’s it’s a good early days. Yeah. And and and, if you look at the growth CapEx this year, of course, it’s it’s it’s it’s mainly done related to subject equipment on on on the North Alma fleet, but it also, this portion of it is actually your CapEx in relation to the three year, triple three IRM contract we want to be back in on that. So it’s, let’s say, perhaps one third of it might be related to that IRAM contract. And it was, of course, always develop forward.

It was depends on what work you’re gonna execute, what contract you’re in, and and what you do with the fleet. But on, yeah, no. Not to the point, we we expect that portion to be below in ’26 and ’27. And on the on the on the maintenance CapEx, I guess it’s it depends on the docking cycles on the boats and and, so I guess, on average, Martin, perhaps, around that level is still gonna stay on average. Yeah.

But the bit rotation year on year.

Moderator/Q&A Facilitator, Dof Group: Alright. And then if we look at contract coverage, specifically in Brazil, you have quite a few contracts coming off now towards the end of twenty twenty five. And you mentioned that many of them you hope to place on the ongoing tenders. Should we expect some downtime between these contracts or will they be relatively back to back?

Amos, CEO/Primary Presenter, Dof Group: Of course, it depends, but, of course, if you are in Brazil, of course, you normally have probably have a month downtime. Yeah. You have to do the acceptance test and you have to do some smaller price on the boats. And so let’s say you have to assume perhaps a month downtime between an old Petrobras contract and a new Petrobras contract.

Moderator/Q&A Facilitator, Dof Group: All right. And then this will be the final question that we have time to address at this point. And that is how is the inflation pressure in the industry? And do you have good cost escalation in place in your long term contract?

Amos, CEO/Primary Presenter, Dof Group: Because in a typical long term contract, it is it is, you know, the the crude cost is normally, you know, saying that you you escalate the contract yearly on based on the, actually, the negotiated tariffs between the unions and Chipona Association, and that is in Norway, that is in Brazil. So the answer to that that that side of it is is okay. And and then then we, on the, let’s say, the backside of what you have normally consumer price index. Yeah. So it’s in general terms, it’s a decent protection.

Yeah. So so so, normally, we are able to, let’s say, keep the the level flat on a long term contract.

Moderator/Q&A Facilitator, Dof Group: Perfect. Thank you. And that was the last question for now. So thanks, everyone, for coming with the questions and for listening in.

Amos, CEO/Primary Presenter, Dof Group: Thank you very much to all of you and have a nice evening.

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