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Solstad Offshore reported a robust second quarter in 2025, with significant improvements across key financial metrics. The company achieved a 34.5% increase in revenue compared to the same quarter last year, reaching $78 million. The net result rose dramatically to $39 million, up from $4 million in Q2 2024. According to InvestingPro data, the stock has shown strong returns over the last three months and is currently trading near its 52-week high. Despite the positive financial performance, the stock price saw a modest increase of 2.12%, closing at $48.15, indicating a mixed market reaction.
Want deeper insights? InvestingPro offers 11 additional investment tips for Solstad Offshore, along with comprehensive financial analysis in their Pro Research Report.
Key Takeaways
- Revenue increased by 34.5% year-over-year to $78 million.
- Net income surged to $39 million from $4 million in the previous year.
- Solstad Offshore secured new contracts worth over $400 million.
- Vessel utilization reached 100% in Q2.
- The company plans to initiate quarterly dividends starting Q3 2025.
Company Performance
Solstad Offshore demonstrated a strong performance in Q2 2025, with revenue climbing to $78 million, a significant increase from $58 million in the same period last year. The company’s net income also saw a substantial rise, reaching $39 million, compared to $4 million in Q2 2024. InvestingPro analysis confirms the company’s profitability over the last twelve months, with analysts anticipating continued sales growth in the current year. This growth reflects the company’s successful strategy of securing long-term contracts and expanding its market presence, particularly in South America and West Africa.
Financial Highlights
- Revenue: $78 million, up 34.5% year-over-year
- Adjusted EBITDA: $32 million, a 28% increase from Q2 2024
- Net Result: $39 million, a substantial increase from $4 million in the previous year
- Book Equity: $49 million
- Cash Position: $60 million, excluding the Revolving Credit Facility
Outlook & Guidance
Solstad Offshore maintained its financial guidance for the year, projecting revenues in the range of $120-150 million. The company expressed optimism about future opportunities, particularly in the floating wind projects sector by the end of the decade. While InvestingPro data shows the company currently does not pay dividends to shareholders, the intention to commence quarterly dividends from Q3 2025 further underscores its confidence in sustained financial health.
Executive Commentary
CEO Lars Peders Ulster highlighted Brazil’s continued potential, stating, "Brazil continues to offer opportunities for both CSVs and micro analysts." He also noted the market’s robustness, saying, "The market is still robust and has leveled out on a healthy level." These comments reflect Solstad Offshore’s strategic focus on maintaining a strong market position in key regions.
Risks and Challenges
- Market competition remains intense, particularly in the subsea sector.
- Economic volatility in emerging markets could impact contract stability.
- Currency fluctuations pose a risk to international revenue streams.
- Potential regulatory changes in key markets like Brazil and West Africa.
- Dependence on a few large contracts could affect financial stability if they are not renewed.
Solstad Offshore’s Q2 2025 performance highlights its resilience and strategic acumen in navigating a competitive market environment. InvestingPro data indicates the stock generally trades with low price volatility, though recent performance shows strong returns over the past month. With a strong financial position and a promising outlook, the company appears well-positioned for continued growth.
For comprehensive analysis and 11 additional investment tips, explore Solstad Offshore’s detailed Pro Research Report on InvestingPro.
Full transcript - Solstad Offsho (SOFF) Q2 2025:
Lars Peders Ulster, CEO, Solstad Offshore: Good morning, and, welcome to Solstad Offshore’s second quarter and first half, presentation. And, this has been a quarter with a with a very high activity and a solid operational and financial results. Today’s presentation will be held by CFO, Chetur Ramstad, and myself, CEO, Lars Peders Ulster. And after the presentation, we will open up for q and a’s, so please ask your questions in the chat. If we take just a quick look at the disclaimer before we move on to the to the second quarter highlights and business update.
Obviously, the listing of SourceStar Maritime, where SourceStar Offshore owns 27.3%, in mid May was an important milestone for the company. And I’m happy to see that, that Solstomar team has been well received by investors and analysts. The outlook for for for for our industry and the market fundamentals are still positive, but the steep activity increase that we saw earlier has now leveled out for now, and it has leveled out on a relatively high level. And with day rates, we achieved, still being on healthy levels. We have had the quarter with with 100% utilization on our fleet, and and the and the EBITDA has improved to $32,000,000.
We continue to sign new contracts, and we signed four four times four year contracts, in the quarter, with Petrobras, where of one directly owned by Solarstar offshore and three, bareboat that in from Solarstar Maritime. And these contracts will contribute very positively to the company from first quarter twenty six and onwards. And in total, we signed new contracts for above $400,000,000 in the in the quarter, and that also confirms our very strong position in Brazil. Solstad Offshore will receive about $9,500,000 in dividend from Solstad Maritime for the quarter, and the plan is still that Solstad Offshore will start to distribute, dividends to shareholders on a quarterly basis based on third quarter, ’25, results. If we take a closer look at the at the market, the outlook, and the long term outlook for the for the for our industry remains positive and especially South America, which includes, of course, Brazil, but also Guyana, and other countries, and West Africa, offers, offers opportunities for the subsea fleet.
And the feedback we have from several of our clients is that 2026 has more activity than we have seen in 2025. In first half of, of this year, we have experienced a more competitive, subsea market, and the market continue to be very project, related with typical duration of of count, projects, of about one to six months. But still, rate levels for for CSV are on a stable high level. And during the last month, we have also seen that an increase again in the number of new requirements. Brazil is different and continues to offer, opportunities for both CSVs and for micro analysts.
That goes for long term contracts, and it goes for shorter projects. And we have a strong position in Brazil, and the contract we have signed this year will have effect from first quarter next year and build visibility into the next decade. And there are many more opportunities, in the country for Petrobras and for others. And the key to be able to win contracts is to have a strong local presence. From the Solstad side, we have invested, into our position in Brazil for nearly thirty years, and that definitively pays off now.
If we look at the backlog and also for the visibility, going forward, we we see that the we have a firm backlog on for Solstad offshore vessels of, of, $238,000,000. In addition, we include in in, also in in the Solstad offshore backlog several of the Solstad Maritime vessels, that are, are chartered in to to to to be, you know, to cover, contracts in in Brazil. And in the quarter of the of the Solstad Maritime, vessels was announced, on new contracts and thereby was bareboated in or will be bareboated in. And this increases the the Solstad offshore backlog substantially and brings the backlog for Solstad Maritime vessels via via soft in, up to more than $500,000,000 in second quarter. And the time that total combined backlog in South South Shore is then, $770,000,000.
The visibility for the remainder of of this year is strong as most of the vessel days are already firmed up. A new contract for the anchor handler, Norma Turcesa. Turcesa was announced last week, and there are also ongoing prospects for the three other vessels that has potentially or can potentially have some availability at the end of this year. Also for ’26 and beyond, the contract coverage for Solstad Offshore is strong. Chatel, I leave the word to you to say a few words about the the financial highlights.
We’re from mute.
Chetur Ramstad, CFO, Solstad Offshore: Thanks, Lars. If we start with the second quarter financial highlights. Vessel there was a good quarter for Solstad Offshore. Vessel utilization was 100% in the quarter. And all vessels has been working full.
Year to date utilization has been 96%. Revenue for the second quarter of $78,000,000 compared to $58,000,000 same quarter last year. Revenues of $147,000,000 year to date, increase of approximately 14% compared to last year. Adjusted EBITDA of $32,000,000 compared to $25,000,000 the same quarter last year, which is a 28% increase compared to second quarter last year. First half adjusted EBITDA of $62,000,000 The net result of $39,000,000 in second quarter compared to $4,000,000 same quarter last year.
First half net result of $62,000,000 compared to $41,000,000 last year. Solstad Offshore has firm backlog of $238,000,000 for the Solstad owned vessels, approximately $84,000,000 was added in the quarter. And if we also include the backlog for Solstad Martim chartered vessels, the total backlog is $771,000,000 Book equity of $49,000,000 compared to $193,000,000 same quarter last year. This gives an equity ratio of 40% at the end of second quarter. The adjusted net interest bearing debt in the financials are $83,000,000 down from $211,000,000 last year.
The reduction is mainly related to the settlement of Maximus residual claim that was resolved end of last year. Cash position in Sulst Offshore, dollars 60,000,000, excluding RCF. Then if we go to the next slide, and then we will look closer into the debt structure of the company to hopefully give a clear view on the debt side of the balance sheet. If we start with the right if we start with the waterfall on the right hand side, Sulstar Brasil or Bende’s interest bearing debt of $52,000,000 This is the financing of the four Brazilian built vessel owned by Solstad Offshore. Majority on this facility is between 2026 and 02/1931.
The Brazilian vessels are performing better than planned, and that is being paid down faster than we anticipate. The soft ISR interest bearing bank loan, currently $90,000,000 was established when we refinanced SOF in connection with the Maximus residual claim settlement in November 24. This debt has a five year amortization profile with a three year tenure. If we then accrue if I adjust for accrued interest and the cash on hand, the net interest bearing debt before leases is $82,000,000 This is what we call adjusted NIM. We have two large components of leasing debt.
Normal maximum lease of $164,000,000 This leasing debt consists of $62,000,000 in leasing obligation throughout the firm about charter period. In addition, has some purchase option of $125,000,000, and this option is included with the present value of $102,000,000. And SOF can choose if they want to exercise the option or extend the bareboat contract. The second lease primarily consists of the bareboat charters from Sulstad Maritime to South Brazil. And Sulstad Maritime utilized the soft setup in Brazil for some of its vessels.
This is Sulstar vessel maritime vessels that are being chartered to Brazilian end clients. All bareboat charters and contracts are back to back with very limited exposure for SOF. SOF are being compensated for rendering this service at market terms. The adjusted EBITDA is also after lease payments. This is the EBITDA that is available to service the adjusted net interest bearing debt.
As of second quarter, the adjusted net interest bearing debt of 83,000,000 over the long term adjusted EBITDA was NOK 800,000.0. It illustrates the low leverage in Sulstar Offshore. Then if we go to the to the financial investments and investments in associates and joint ventures in Sulstar, we will go to the three that we have. Solstad Offshore has an ownership of 27.3 in Solstad Malatim. And the ownership of this stake is recorded by using the equity method and the share of the result in the second quarter was $12,600,000 Book value of the shares as of second quarter was $212,000,000 And if you look at the Solstad Offshore share of the Solstad market cap, this was approximately $300,000,000 at the end of second quarter.
Then if we move to the middle one, that is the joint venture, Norman Installer SA. It’s a long lasting cooperation with our business partner, SBM. The joint venture is owned by Susta and SBM fifty fifty. And the joint venture is at in a net cash position at the end of second quarter. It has been a slow start for the joint venture, giving a result of $600,000 in the second quarter.
And normally, Stola will also the vessel will also have its main class renewal third quarter. But except for that, we the utilization going forward will be strong. Book value of Nisa shares in SOF was $21,000,000 per end of second quarter. Then the last investment that we have in sourced offshore is Omega Subsea, an owner of our lease rental equipment and services. Omega continues to deliver strong operational and commercial performance and continue its growth.
The second quarter, Omega owned 12 working class ROVs and 12 short of 12 is scheduled to be delivered in ’26 and beyond. Sulstow Shore currently owns 35.8% of the shares in Omega subsea. And the ownership is also being recorded by using the equity method, and the share of the result in second quarter was $1,500,000 The book value of the shares in Omega Subsea was $15,000,000 at the end of the second quarter. Then if we move to the next slide, financial guiding for sourced offshore. Sourced offshore maintains its previous guiding for second quarter at the same levels.
And we the range is 120 to 150. And lastly, we have, as mentioned by Lars as well, we have an intention to commence quarterly dividends based on the third quarter results this year. With that, I hand the word over to you, Lars, to to summarize.
Lars Peders Ulster, CEO, Solstad Offshore: Thank you, Chet. Thank you, Chetul. And to summarize this presentation, Solstad Offshore has had a a good first half year and a solid both operational and and financial performance. 100% utilization in the second quarter and and the net result that is significantly up compared to to last year. The market is still robust and but hasn’t leveled out on a on a on a healthy level, I will say.
So far, so very strong position in Brazil. And with this as a fundament, we continue to sign new long term profitable contracts with Brazilian clients that gives us visibility into the next decade. I would also like to highlight the investments we have into to associated companies and and joint ventures, and they continue to create shareholder value for Solstad Offshore. So all in all, a a strong quarter, strong first half year, and, the outlook for for the industry we operate in, particularly in Brazil, looks still very positive. So this concludes our presentation, and we move now over to q and a’s.
And, Chetel, have we received any questions?
Chetur Ramstad, CFO, Solstad Offshore: Yep. We have received quite a few. So let’s start with the first one. With Turquoise are secured until 2030, what are the plans for Norman to Molina and Norman to Parsio?
Lars Peders Ulster, CEO, Solstad Offshore: Those are the two I mean, we have, as as you well know, we have known we have three, Brazilian built tanker handlers, that operates on contact with Petrobras and all those in Brazil. And now one is is is secured for your contract. The others are also will will potentially come available end of the year, but we are participating in in Petrobras tenders. That is that is public knowledge. We have we are in in negotiations for for one of them there.
And and also there are some prospects for for for the for the for the for the the other one. So so we we foresee that we will be able to to to continue to have a high utilization on those vessels potentially also win longer term work for for the vessels.
Chetur Ramstad, CFO, Solstad Offshore: Thank you, Lars. And then there’s a question on Maximus. Will Maximus get an increased rate from second half and and and onwards?
Lars Peders Ulster, CEO, Solstad Offshore: We have a we have a a rate model that is that is firm, but there are some adjustments. But it’s not it’s will be more be linked to to the next project after the present one more than a firm date. So I suspect the the or will expect that the that an an adjustment there will be probably by by the end of the year. But still, the vessel is on on on very good terms on on on present contact.
Chetur Ramstad, CFO, Solstad Offshore: And then the next question on is on NESA. NESA delivered a low first half, being between jobs and with mobilization. What are the prospects for NESA for second half?
Lars Peders Ulster, CEO, Solstad Offshore: Well, it’s, first of all, influenced by the first quarter where we had the where we had the the vessel was idle in first quarter, has been working more or less third quarter, the second quarter in in Guyana. Now the vessel is on is on the Rosebank project, the West Of Shetland here in this part of the world. And we then go for for for for dry docking in in in August. And then the vessel is also nearly fully booked for for for for the remaining period of this year. And also have a have a very strong firm commitments also beyond ’25 on projects globally.
Chetur Ramstad, CFO, Solstad Offshore: Thanks, Lars. And then we have a question on on on dividend. How much dividend are you planning to to to pay out based on third quarter results?
Lars Peders Ulster, CEO, Solstad Offshore: Well, we have said that we we our intention is to start to to pay quarterly dividends, but we we will come back to to to the level in when we present the third quarter numbers. So so that is that is something we will share share with the with the with you later on.
Chetur Ramstad, CFO, Solstad Offshore: Thanks. And then as a general questions on on on the market, do you see a demand for floating wind offshore projects with our high end anchor handlers or CSVs?
Lars Peders Ulster, CEO, Solstad Offshore: Yeah. I think the the floating, the floating wind is, of course, is, of course, interesting, but but the timing wise, it’s still it’s moving to the right. So I suspect that that they let’s say, a substantial activity within floating wind is probably more by the very end of this decade or or or maybe even into into next decade before we see some some really substantial activity within floating wind.
Chetur Ramstad, CFO, Solstad Offshore: Thank you. But the vessel not a
Lars Peders Ulster, CEO, Solstad Offshore: are very relevant for for floating wind, both tanker handlers and CSVs.
Chetur Ramstad, CFO, Solstad Offshore: Thank you. And then a little bit general question on the market again. Can you elaborate on the softening of the market momentum as you commented on? Is this in terms of new opportunities, in terms of day rates, or in terms of contract durations?
Lars Peders Ulster, CEO, Solstad Offshore: I think it’s a combination. And and as I said, the exemption is Brazil, where where where it’s, where we’ve it’s a it’s a lot of opportunities, long term contracts. So so Brazil is still very solid. We see that the the number of requirements in the market, has slowed slowed down a bit, over the last, let’s say, three to six months, meaning also that competition on the on the various projects, that are out there is is higher. That having said, the the, the the vessel rates that we achieved is still on a on a on a good level.
But I think the and and we have seen that also that the number of requirements has actually increased the last month. But but but in general general, I I would say it’s a it has leveled out. There are a few less requirements in the market in general than than we saw a year ago. But but and that also has resulted in but the the typical contact duration is is is is some somehow short of. But but the market is is is not a it’s not as I would not say it as a strong negative signal.
It’s still high high activity rates are being kept up on on on a on a good level. And and and but but it’s it’s it’s has leveled out, I would say, and and not continue to grow as as as we saw a year ago.
Chetur Ramstad, CFO, Solstad Offshore: And we have a question on on on Brazil and and and the reasons recent awards in in the region. The new contracts that we have entered into, are they representing a step up in the rates and will increase the EBITDA from 26 and and and onwards?
Lars Peders Ulster, CEO, Solstad Offshore: Yes. The all the all the contracts we have announced recently will will improve the the earnings on those vessels compared to what they have today. So they they they are, yeah, they are, that will give improved margins.
Chetur Ramstad, CFO, Solstad Offshore: And we have an, question on Omega subsea. Do you do you have any plan to increase the ownership, in Omega subsea going forward?
Lars Peders Ulster, CEO, Solstad Offshore: No. It’s so we are we have a 36% ownership now, and and and we are happy with that. It gives us access to to to ROVs, to people, to to to survey, to to to tools and so on, and and it enables enables us to to offer, offer services on top of the of the of the vessel itself, and that is the most important. That is more important than than how much we own of, of Omega Subsea. But we’re happy with the ownership we have, and we are very happy with the partners we have in Omega Subsea.
Chetur Ramstad, CFO, Solstad Offshore: And then the last question of today, you mentioned the Norman Maximus option that is approaching. Is it a strategy for the company to to exercise this option?
Lars Peders Ulster, CEO, Solstad Offshore: Well, the option is well in the money. The we can purchase the vessel for a $125,000,000. It’s so so I would say the plan a is to to exercise that option. But it’s we we don’t have to exercise until, I think it’s third quarter next year, and then would effect from third quarter, ’27. So so as it looks now, it’s, it’s very likely that that option will be exercised.
Chetur Ramstad, CFO, Solstad Offshore: Okay. That was the questions for today.
Lars Peders Ulster, CEO, Solstad Offshore: Okay. So thank you very much, everyone, for for for listening in, and I wish you all a nice day ahead. Thank you very much.
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