AMSC : Q1 2024 Quarterly Report

AMSC ASA

First Quarter 2024 Report

First Quarter 2024 report

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First quarter 2024 Report

Lysaker, 15 May 2024, AMSC ASA ("AMSC" or the "Company") announces results for the first quarter ending 31 March 2024.

HIGHLIGHTS

• On 16 January 2024 AMSC completed its NOK 1.0 bn contribution in kind of 100% of the shares in Offshore Leasing I AS ("OSL1") against a 21.1% shareholding in Solstad Maritime Holding AS ("Solstad Maritime"). The book gain on the sale of OSL1 during Q1 2024 was NOK 370.4 million.
• During Q1 2024, AMSC recognized its share of profit of NOK 25.1 million relating to its investment in Solstad Maritime.
• Declared Q1 2024 dividend of NOK 0.55 per share.
• AMSC has elected to change its presentation and functional currency from USD to NOK as it better represents the current business exposure.

AMSC CEO, Pål Lothe Magnussen comments, "We are pleased to bring the sale of Offshore Leasing 1 AS to a financial close and are excited about the prospects of our investment in Solstad Maritime Holding. The outlook for offshore energy activities continues to strengthen with increasing global E&P spending in combination with increased activity within offshore wind. We continue to evaluate investment opportunities and effective capital allocation alternatives, with the aim to continue to make attractive quarterly distributions".

MAIN EVENTS DURING AND SUBSEQUENT TO THE FIRST QUARTER

• Sale of 100% of the shares in OSL1: AMSC contributed 100% of the shares in OSL1, which owns the CSV Normand Maximus with corresponding bareboat contract and secured bank debt, against shares in Solstad Maritime. AMSC's contribution to Solstad Maritime was valued at NOK 1,000 million. and AMSC recognized a gain on the disposal in Q1 2024 of NOK 370.4 million. Following this transaction, AMSC holds approximately 21.1% of the shares and votes in Solstad Maritime and holds one seat on the Board of Directors. AMSC's ownership will be diluted following completion of the anticipated NOK 750 million additional share offering, expected to be completed during Q2 2024. Profit related to OSL1 is classified as discontinued operations in the Group's interim financial statements for Q1 2024.
• Operating profit from continuing operations: Operating loss from continuing operations was NOK 9.5 million in Q1 2024 compared to NOK 6.5 million loss in Q1 2023.
• Solstad Maritime Financial Highlights Q1 2024:

Revenues	MNOK 1,229
EBITDA adjusted	MNOK 668
Net Result	MNOK 128
Net assets / Equity	MNOK 5,295
Net cash from operations	MNOK 494
Adjusted NIBD	MNOK 8,523

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Assets in Solstad Maritime include (but not limited to):

• 33 high-end AHTS and CSVs
• Approximately 1,800 employees
• Ownership in joint ventures and associates

AMSC recognizes its share of Solstad Maritime as an investment in associated company, please see note 7 for further details.

• Dividends: As previously announced, the fourth quarter 2023 dividend payment of NOK 0.5362 per share was approved by the Extraordinary General Meeting on 20 November 2023 and payable to the shareholders on record as of 7 March 2024. The shares in AMSC were traded ex-dividend from and including 6 March 2024 and the dividend was paid on 15 March 2024. The dividend was classified as a return of paid in capital.
  On 15 May 2024, the board authorized a dividend payment of NOK 0.55 per share to the shareholders on record as of 22 May 2024. The shares in AMSC will be traded ex. dividend from and including 21 May 2024, and the dividend will be paid on or about 30 May 2024. The dividend will be classified as a return of paid in capital.
  The Company's policy with respect to dividends is driven by the Board's commitment to return value to its shareholders while also prudently managing its balance sheet and maintaining financial flexibility to pursue growth and diversification opportunities. Dividend payments depend on, among other things, performance of existing investments and will be considered in conjunction with the Company's financial position, debt covenants, capital requirements, and market conditions going forward.

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FIRST QUARTER FINANCIAL REVIEW

Condensed Income Statement

	unaudited
	Q1	Q1
Amounts in NOK million (except share and per share information)	2024	2023 *
Operating profit/(loss) before depreciation - EBITDA	(9.5)	(6.5)
Operating profit/(loss) - EBIT	(9.5)	(6.5)
Share of profit of equity accounted companies	25.1	-
Net financial income	7.2	0.8
Net foreign exchange gain/(loss)	29.6	(8.7)
Profit/(loss) before income tax	52.5	(14.4)
Income tax (expense) / benefit	(6.3)	-
Non-cash income tax (expense) / benefit	(0.3)	(5.2)
Profit/(loss) for the period from continuing operations	45.9	(19.6)
Profit for the period from discontinued operations	381.6	53.2
Net Profit/(loss) for the period	427.5	33.5
Average number of common shares	71 863 838	71 863 838
Basic and diluted earnings per share from continuing operations	0.64	(0.27)
Basic and diluted earnings per share from discontinued operations	5.31	0.74
Basic and diluted earnings per share from total operations	5.95	0.47

*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more information

First quarter results

As of 1 January 2024, the functional currency of the parent was changed prospectively from USD to NOK. The presentation currency for 2024 is NOK, with 2023 comparable figures re-presented to NOK as a presentation currency. See note 6 in the Q1 condensed financial statement for more information.

OSL1 is classified as discontinued operations and was disposed in January 2024. The comparative figures for the income statement are re-presented. The continuing operations consist solely of AMSC ASA. See note 8 for more information.

AMSC's leasing revenues from continuing operations for Q1 2024 were zero (zero in Q1 2023) due to leasing activities being classified as discontinued operations. EBITDA was negative NOK 9.5 million in Q1 2024 and negative NOK 6.5 million in Q1 2023. Operating loss was NOK 9.5 million in Q1 2024 and NOK 6.5 million in Q1 2023.

AMSC's share of the profit of Solstad Maritime was NOK 25.1 million during Q1 2024. Net financial income for Q1 2024 was NOK 7.2 million and NOK 0.8 million in Q1 2023. Net foreign exchange gain for Q1 2024 was NOK

29.6 million (loss of NOK 8.7 million in Q1 2023), relating to foreign currency gain and loss, and translation of foreign currency balances into functional currency.

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AMSC had a net profit before tax from continuing operations for Q1 2024 of NOK 52.5 million compared to a net loss before tax from continuing operations of NOK 14.4 million in Q1 2023. Income tax expense in Q1 2024 was NOK 6.3 million and zero in Q1 2023. Non-cash income tax expense was NOK 0.3 million in Q1 2024 compared to non-cash income tax expense of NOK 5.2 million in Q1 2023. Net profit from continuing operations for Q1 2024 was NOK 45.9 million compared to loss of NOK 19.6 million in Q1 2023. Profit from discontinued operations for Q1 2024 was NOK 381.6 million compared to NOK 53.2 million for Q1 2023.

The book gain on the sale of OSL1 during Q1 2024 was NOK 370.4 million. Net profit was NOK 427.5 million for Q1 2024 compared to NOK 33.5 million in Q1 2023.

Condensed Statement of Financial Position

		unaudited
	31-Mar	31-Mar	1-Jan	1-Jan
Amounts in NOK million	2024	2023 *		2024	2023 *
Vessels	-	7 797.6		-	7 400.7
Deferred tax assets	-	18.7		0.3	28.9
Interest-bearing long term receivables (DPO)	-	107.9		-	171.6
Investments accounted for using the equity method	1 025.1	33.5		-	3.1
Derivative financial assets	-	40.9		-	45.9
Trade and other receivables	4.3	129.8		6.8	26.7
Cash held for specified uses	-	48.0		-	184.5
Cash and cash equivalents	586.3	319.2		429.5	313.2
Assets classified as held for sale	-	-		1 515.0	-
Total assets	1 615.7	8 495.7		1 951.6	8 174.6
Total equity	1 601.1	1 777.7		1 164.8	1 725.2
Deferred tax liabilities	-	198.0		-	185.4
Interest-bearing long term debt	-	5 798.1		-	5 473.8
Interest-bearing short term debt	-	709.3		-	768.9
Dividend payable	-	-		36.6	-
Trade and other payables	7.4	12.6		9.6	22.2
Tax payable	7.3	-		-	-
Liabilities directly associated with assets classified as held for sale	-	-		740.6	-
Total equity and liabilities	1 615.7	8 495.7		1 951.6	8 174.6

*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more information

The change in vessels, other assets and liabilities from 31 December 2023 reflects the sale of the Jones Act business and OSL1 with related vessels, other assets and liabilities for the twelve months ending 31 March 2024.

Investments accounted for using the equity method reflect AMSC's investment in Solstad Maritime valued at NOK 1,000 million, which was an in kind contribution of 100% of the shares in OSL1. AMSC's share of profit in Q1 2024 related to its investment in Solstad Maritime is NOK 25.1 million.

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Outlook

AMSC has gone through a transformational 2023 with the exit from the Jones Act business and, subsequent to year end, the agreement to contribute 100% of the shares in OSL1 for a consideration of 21.1% of the shares in Solstad Maritime. AMSC aims to continue to grow through accretive transactions, conscious capital allocation and focus on paying attractive dividends to its shareholders.

The oil services and renewable energy momentum from 2023 continues into 2024 with further strengthening of market fundamentals in regions and for asset classes which Solstad Maritime is exposed to. Increased exploration and production (E&P) capex from oil companies, combined with government backed offshore wind developments, provides visibility of demand going forward, even though scheduling risk remains, and some projects may be delayed or postponed. The project backlog reported by the large offshore EPC contractors testify to the strong sector momentum.

Through its investment in Solstad Maritime, AMSC is exposed to a fleet of CSVs (Construction Service Vessels) and AHTS (Anchor Handling Tug Support Vessels) which cater to both the oil & gas industry as well as the renewable energy markets. Both markets experience a surge in activity which drives utilization and rates for the abovementioned assets. With limited availability of ships and modest orderbook for new assets, the market outlook remains good.

Risks

The risks currently facing AMSC principally relate to the operational and financial performance in Solstad Maritime.

AMSC's activities in general also expose the Company to a variety of other financial risks, including but not limited to currency and liquidity risk, refinancing risk and interest rate risk, and risk of not identifying new accretive investments.

For further details of AMSC's risks, refer to the 2023 Annual Report.

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	Lysaker, 15 May 2024
	The Board of Directors and President / CEO
	AMSC ASA
Annette Malm Justad	Peter D. Knudsen
Chairperson	Director
Frank O. Reite	Pål Magnussen
Director	President / CEO

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AMSC ASA GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE FIRST QUARTER 2024

CONDENSED INCOME STATEMENT

		unaudited
		Q1		Q1
Amounts in NOK million (except share and per share information)	Note	2024		2023 *
Operating expenses		(9.5)		(6.5)
Operating profit/(loss) before depreciation - EBITDA		(9.5)		(6.5)
Depreciation & amortization		-		-
Operating profit/(loss) - EBIT		(9.5)		(6.5)
Share of profit of equity accounted companies	7	25.1		-
Net financial income		7.2		0.8
Net foreign exchange gain/(loss)		29.6		(8.7)
Profit before income tax		52.5		(14.4)
Income tax (expense) / benefit	9	(6.3)		-
Non-cash income tax (expense) / benefit	9	(0.3)		(5.2)
Profit/(loss) for the period from continuing operations		45.9		(19.6)
Profit for the period from discontinued operations	8	381.6		53.2
Profit/(loss) for the period		427.5		33.5
Average number of common shares	10	71 863 838		71 863 838
Basic and diluted earnings per share from continuing operations		0.64		(0.27)
Basic and diluted earnings per share from discontinued operations		5.31		0.74
Basic and diluted earnings per share from total operations		5.95		0.47
*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more
information
CONDENSED STATEMENT OF CHANGES IN COMPREHENSIVE INCOME
		unaudited
		Q1		Q1
Amounts in NOK million		2024		2023 *
Net income/(loss) for the period		427.5		33.5
Other comprehensive income
Items that will not be reclassified to income statement		-		-
Currency translation differences - parent		-		126.2
Items that will be reclassified to income statement
Currency translation differences - subsidaries		5.3		(17.0)
Other comprehensive income		5.3		109.2
Total comprehensive income/(loss) for the period		432.9		142.7

*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more information

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CONDENSED STATEMENT OF FINANCIAL POSITION

			unaudited
		31-Mar	31-Mar		1-Jan	1-Jan
Amounts in NOK million	Note	2024	2023 *		2024	2023 *
Assets
Non-current assets
Vessels		-	7 797.6		-	7 400.7
Deferred tax assets		-	18.7		0.3	28.9
Interest-bearing long term receivables (DPO)	13	-	107.9		-	171.6
Other long term assets		-	33.5		-	3.1
Investment accounted for using the equity method	7	1 025.1	-		-	-
Derivative financial assets		-	40.9		-	45.9
Total non-current assets		1 025.1	7 998.7		0.3	7 650.2
Current assets
Trade and other receivables		4.3	129.8		6.8	26.7
Cash held for specified uses		-	48.0		-	184.5
Cash and cash equivalents		586.3	319.2		429.5	313.2
		590.6	497.0		436.3	524.4
Assets classified as held for sale	8	-	-		1 515.0	-
Total current assets		590.6	497.0		1 951.3	524.4
Total assets		1 615.7	8 495.7		1 951.6	8 174.6
Equity and liabilities
Total equity		1 601.1	1 777.7		1 164.8	1 725.2
Non-current liabilities
Bond payable	11	-	2 305.0		-	2 168.6
Other interest-bearing loans	11	-	3 549.7		-	3 365.4
Derivative financial liabilities		-	-
Capitalized fees	11	-	(56.6)		-	(60.2)
Deferred tax liability	9	-	198.0		-	185.4
Total non-current liabilities		-	5 996.1		-	5 659.2
Current liabilities
Interest-bearingshort-term debt	11	-	709.3		-	768.9
Dividend payable		-	-		36.6	-
Trade and other payables		7.4	12.6		9.6	22.2
Tax Payable	9	7.3
		14.6	721.9		46.2	791.0
Liabilities directly associated with assets classified as held for sale	8	-	-		740.6	-
Total current liabilities		14.6	721.9		786.8	791.0
Total liabilities		14.6	6 717.9		786.8	6 450.3
Total equity and liabilities		1 615.7	8 495.7		1 951.6	8 174.6

*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more information

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CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY

		unaudited
		31-Mar		31-Mar
Amounts in NOK million	Note	2024		2023 *
Equity as of beginning of period		1 164.8		1 725.2
Total comprehensive income for the period		432.9		142.7
Proceeds from sale of treasury shares		3.4		-
Dividends paid, classified as return of capital	10	-		(90.3)
Total equity as of end of period		1 601.1		1 777.7
CONDENSED CASH FLOW STATEMENT
		unaudited
Amounts in NOK million		Q1 2024	Q1 2023 *
Net cash flow from operating activities		(3.7)		(17.1)
Net cash flow used in investing activities		-		-
Net cash flow used in financing activities		(35.1)		(90.3)
Net cash flow from discontinued operations		163.0		(52.7)
Currency translation effects		-		29.6
Effect of exchange rate changes on cash and cash equivalents		31.4		-
Net change in cash and cash equivalents		155.5		(130.5)
Cash and cash equivalents at the beginning of period		430.7		497.7
Of which cash and cash equivalents in assets held for sale at the beginning of the period		1.2		-
Cash and cash equivalents at the end of period		586.3		367.2
Of which cash and cash equivalents in assets held for sale at the end of period		-		322.0
Cash and cash equivalents in continuing operations at end of period		586.3		45.2
CONDENSED CASH FLOW STATEMENT FROM DISCONTINUED OPERATIONS
		unaudited
Amounts in NOK million		Q1 2024		Q1 2023 *
Net cash flow from operating activities		14.2		94.4
Net cash flow used in investing activities		(27.6)		(64.6)
Net cash flow used in financing activities		184.9		(82.5)
Currency translation effects		(8.6)		-

*) Re-presented from USD presentation currency to NOK presentation currency for comparative purposes only. See note 6 for more information

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2024

1. Introduction - AMSC ASA

AMSC ASA ("AMSC") is a company domiciled in Norway. The condensed interim financial statements for the three months ended 31 March 2024 and 2023 comprise AMSC and its wholly owned subsidiary. These interim financial statements have not been audited or reviewed by the Company's auditors.

The consolidated 2023 annual financial statements of AMSC are available at www.amscasa.com.

2. Basis of Preparation

These consolidated interim financial statements reflect all adjustments, in the opinion of AMSC's management, that are necessary for a fair presentation of the results of operations for the periods presented.

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