Scana : Q2 2022 report

INTERIM REPORT | 2ND QUARTER AND FIRST HALF YEAR 2022

Interim report

2nd quarter and first half year 2022

Bergen, 24 August 2022	2

1 SCANA ASA | 2ND QUARTER AND FIRST HALF YEAR 2022

INTERIM REPORT | 2ND QUARTER AND FIRST HALF YEAR 2022

Scana wins pivotal contracts with new electrification offerings

The revenue for Q2 was NOK 206 million, which is an increase of 128 % from last year. For 1HY the revenue was NOK 413 million, which is an increase of 127 % from last year.

EBITDA for Q2 was NOK 20 million, which is an increase of 142 % from last year. For 1HY EBITDA was NOK 36 million, which is an increase of 141 % from last year.

The order backlog at the end of the quarter was NOK 444 million, a new record high. The record high order intake of NOK 270 million gives a book to bill of 1.3x.

Scana wins pivotal contracts and enters new markets with an expanded product portfolio, including fast charging systems for electric ferries and mobile battery systems for industrial use.

SUBSEQUENT EVENTS:

PSW Power & Automation has entered into the market of mobile battery systems for industrial use with contracts for the European rental companies Zeppelin Rental GmbH and Energyst Rental Solutions.

PSW Power & Automation has signed a contract for the design, assembly, and testing of a topside E-House module for an international subsea company

Subseatec has signed a contract with an international energy company for the delivery of riser joints.

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INTERIM REPORT | 2ND QUARTER AND FIRST HALF YEAR 2022

KEY FIGURES | GROUP

		QUARTER		YEAR TO DATE
NOK million	Q2 22		Q2 21	2022		2021
Revenue	206	90	413	182
EBITDA	20	8	36	15
Order intake	270	33	518	91
Order backlog	444	126	444	126
NIBD	227	-2	227	-2
Lease liabilities	405	9	405	9

PSW consolidated from 1 January 2022 and ATC from 1 February 2022.

REVENUE		EBITDA

NOK million

			208	206
90
	61	62
Q2 21	Q3 21	Q4 21	Q1 22	Q2 22

ORDER BACKLOG

NOK million

				444
			399
126	98
	78
Q2 21	Q3 21	Q4 21	Q1 22	Q2 22

NOK million

				20
			16
8
	3
		-2
Q2 21	Q3 21	Q4 21	Q1 22	Q2 22

ORDER INTAKE

NOK million				270
			248
33	33	43	43
Q2 21	Q3 21	Q4 21	Q1 22	Q2 22

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Powering the ocean industries

The first half of 2022 is marked by the launch of our strategy to Power the ocean industries. From a strong base in the Bergen area Scana will support electrification and decarbonisation of maritime and energy sectors through our business areas OFFSHORE, ENERGY and MARITIME.

During the quarter Scana entered into new markets and expanded its product offering within electrification with fast charging systems to electric ferries and mobile battery systems for industrial use. Sizeable contracts for the new and existing product offerings were won in Sweden, Iceland, Germany and Netherlands, and the European expansion for the ENERGY business area is gaining speed.

In the OFFSHORE business area, tendering activities remain at a high level with capacity constraints expected to be an issue for rig owners in the short to medium term. The expected uptick in OFFSHORE is, however, somewhat delayed, partly due to timing of large tenders and pending rig contracts.

Within MARITIME, the positive trend continued for mooring solutions and a substantial contract for mooring solutions to Brazil was added to the order backlog.

High energy prices and the green transition are increasingly driving demand for our service offerings. On the other hand, high energy prices drive cost which has a negative impact on profitability. Component shortage and freight constraints have been, and may continue to be, an issue and cause delays in project and product deliveries. To secure competitiveness in upcoming tenders, certain key components with long lead times have been ordered. Delayed project deliveries have a negative short-term impact on working capital as milestone payments are delayed.

The tendering activities are strong across our business areas with several contracts expected to be decided in second half year.

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INTERIM REPORT | 2ND QUARTER AND FIRST HALF YEAR 2022

ORDER INTAKE AND BACKLOG

The order intake for the quarter was NOK 270 million, compared to NOK 33 million last year (+725 %), of which NOK 153 million is derived from the acquisitions of PSW and ATC. The order intake represents a book to bill ratio of 1.3x. The order backlog was NOK 444 million at the end of the quarter compared to NOK 126 million last year (+251 %), of which NOK 273 million relates to PSW and ATC.

The business area ENERGY constituted NOK 180 million of the order backlog, emphasising Scana's transition towards the electrification megatrend.

REVENUE AND RESULTS

In the second quarter revenue for the group was NOK 206 million, compared to NOK 90 million second quarter 2021 (+128 %), of which NOK 149 million is related to acquisitions. The EBITDA of the quarter was NOK 20 million, compared to NOK 8 million (+142 %) one year earlier, of which the contributions from PSW and ATC were NOK 21 million.

The underlying decline in revenue excluding acquisitions is mainly related to fewer mooring projects in Q2 2022 compared to last year. A strong order intake will improve this going forward.

Increased energy prices and challenges in the supply chain has a negative impact on profitability compared to last year. Furthermore HQ cost has increased due to strengthening organisation with CCO from February 22 and one off cost related to strategy of MNOK 3.

Year to date group revenue was NOK 413 million, compared to NOK 182 million (127 %) in the prior-year period, of which PSW and ATC represented NOK 308 million. The group achieved NOK 36 million in EBITDA year to date compared to NOK 15 million in the same period last year, of which the contributions from PSW and ATC were NOK 39 million.

FINANCING AND LIQUIDITY

Scana had an available liquidity reserve at the end of the quarter of NOK 104 million, of which NOK 104 million were undrawn credit-facility. Bank financing consists of NOK 163 million with MNOK 5 in quarterly instalments. In addition, seller credits constitute NOK 60 million, of which NOK 13 million is short-term. The equity was NOK 456 million at the end of the quarter, compared with NOK 102 million at year-end 2021, corresponding to an equity ratio of 34 %. The increase was mainly a consequence of the issuance of 285 909 295 shares related to the PSW transaction completed 11 January 2022.

The cash flow from operation was negative NOK 26 million in the second quarter compared to NOK 19 million in the second quarter 2021 due to working capital build up and growth.

Project delays has caused increase in both trade receivables and contract assets. Net cash flow from investing activities was negative NOK 1 million in the second quarter versus NOK 1 million in the comparable quarter last year. Year to date net cash flow from investing activities was negative NOK 431 million driven by the acquisitions of PSW and ATC. The cash flow from financing activities was NOK 26 million in the current quarter and year to date NOK 412 million driven by the private placement and the new financing agreement related to the acquisition of PSW.

Due to the negative cashflow in the quarter Scana has a strong focus on improving cashflow and financial flexibility going forward.

As of June 30 2022 Scana is compliant with covenants.

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