Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Solstad Offshore ASA (LTS:0G2Z, Financial) reported strong operational performance with high fleet utilization, indicating robust demand for its services.
- The company announced the initiation of quarterly dividends, marking a significant milestone for shareholders.
- Solstad Offshore ASA (LTS:0G2Z) has a firm backlog of 4.3 billion NOK, with recent additions expected to further strengthen its position.
- The company is experiencing high demand in the global offshore energy market, particularly in Brazil, which presents numerous opportunities for growth.
- Solstad Offshore ASA (LTS:0G2Z) has increased its EBITDA guidance, reflecting confidence in its financial performance and market conditions.
Negative Points
- The company reported limited significant contract signings during the quarter, although discussions for future contracts are ongoing.
- The North Sea anchor handling market is currently weak, posing challenges for the company's operations in that region.
- Solstad Offshore ASA (LTS:0G2Z) faces strict local content requirements in Brazil, necessitating a local setup to participate in the market.
- The company has significant leasing liabilities, which could impact financial flexibility.
- There is limited contract coverage for the anchor handling fleet in Australia for 2025, requiring efforts to secure long-term work.
Q & A Highlights
Q: Can you provide an update on the listing of Solstad Maritime?
A: The plan remains to list Solstad Maritime by the second quarter of 2025, with no further updates at this time. - Satish Mishra, Analyst
Q: What is the status of the Norman Frontier vessel?
A: Norman Frontier has been operating in the Mediterranean with full services, including ROVs. We haven't signed a long-term agreement but expect to continue operations in the same area for the coming quarters. - Kjetil Ramstad, CFO
Q: How do you view the anchor handling market in the North Sea?
A: The North Sea market has been weak, but we expect activity to increase. We are actively bidding on project work and exploring long-term opportunities in other regions. - Kjetil Ramstad, CFO
Q: What are the future ambitions for Solstad Services?
A: Solstad Services has been well-received, and we plan to expand by adding more ROVs and growing the segment. We aim to continue offering services on a day-rate basis, complementing our ship-owning operations. - Kjetil Ramstad, CFO
Q: Can you elaborate on the opportunities for the vessels Normand Maximus and Normand Installer in 2025?
A: Normand Installer is part of a long-term joint venture and will remain busy. Normand Maximus is engaged in projects in Brazil and will continue there through 2025, with strong demand expected thereafter. - Kjetil Ramstad, CFO
Q: Are you observing trends of clients paying booking fees to secure capacity?
A: Yes, clients are increasingly willing to secure vessel capacity long-term, especially for sophisticated vessels, sometimes by paying booking fees. - Kjetil Ramstad, CFO
Q: What are the prospects for long-term work in Australia for the anchor handling fleet?
A: We are optimistic about securing healthy contracts for our vessels in Australia, given ongoing discussions and existing drilling programs. - Kjetil Ramstad, CFO
Q: How do you see the supply and demand for services evolving?
A: Demand for our services is high and expected to grow, particularly in active regions like Brazil, Guyana, and Africa. We anticipate continued strong demand. - Kjetil Ramstad, CFO
Q: Can you comment on the leasing liabilities between the companies?
A: The main leasing liabilities involve long-term charters, such as Normand Maximus, and Brazilian leases, which will decrease over time. - Kjetil Ramstad, CFO
Q: Should we expect the current level of quarterly dividends to continue?
A: We plan to maintain the quarterly dividend of 0.5 NOK per share for the fourth quarter and aim to continue this practice going forward. - Kjetil Ramstad, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
