Akastor (AKAST) Q2 2024 earnings summary

Executive summary

• DRU arbitration/settlement resulted in USD 176 million cash received, NOK 1.3 billion accounting gain in H1, and a positive effect of NOK 748 million in Q2, with no outstanding position at quarter-end.

• Net interest-bearing debt reduced by NOK 1.5 billion since year-end 2023, resulting in a net cash position of NOK 831 million and no draw on corporate bank facilities.

• HMH delivered strong results with 23% YoY EBITDA growth, LTM adjusted EBITDA up 39% YoY, and filed a confidential S-1 for a potential US IPO in H2 2024.

• Group net profit for Q2 was NOK 903 million, driven by DRU arbitration settlement and financial items.

• Equity increased to NOK 5.5 billion, or NOK 20.2 per share, up from NOK 14.5 per share at end-2023, mainly due to DRU settlement.

Financial highlights

• HMH reported USD 208 million in Q2 revenue (up 10% YoY), adjusted EBITDA USD 42 million (up 23% YoY, 20% margin), and H1 adjusted EBITDA USD 75 million.

• Group revenue and other income for Q2 was NOK 91 million, up from NOK 64 million in Q2 2023; H1 2024 revenues were NOK 733 million, up from NOK 132 million in H1 2023.

• Net financial items were NOK 854 million positive in Q2, including NOK 717 million interest from DRU arbitration; net profit from continuing operations was NOK 1,493 million for H1.

• Net cash from operating activities was NOK 1,820 million in H1, including NOK 1,912 million from DRU arbitration.

• DDW Offshore posted Q2 revenue of NOK 57 million and EBITDA of NOK 15 million, both up YoY.

Outlook and guidance

• HMH expects backlog growth in H2 2024, with inventory release and milestone collections improving cash flow.

• Positive market outlook for offshore and onshore segments, especially in the Middle East and North America.

• AKOFS Offshore and DDW Offshore anticipate improved vessel utilization and earnings as operational activity increases.

• Board to reassess dividend distribution regularly, aiming to distribute proceeds from future realizations.

• Akastor is well positioned to pursue value-enhancing transactions despite ongoing market volatility.