Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: PGS vessel utilization continued to be an issue in Q2. Now that the vessels are your assets, are you taking any concrete measures to improve the vessel utilization going forward? A: Kristian Johansen, CEO: Yes, improving vessel utilization is part of the rationale for the transaction. We plan to utilize PGS vessels for our own projects and see synergies in selling OBN and streamers. We are coordinating sales teams and see a promising market for offshore wind, which will fill an important gap. We are optimistic about increasing utilization going forward.
Q: Anything you would like to highlight after completing the acquisition of PGS in early July? A: Kristian Johansen, CEO: We are excited about the acquisition. The cultural integration has gone well, and we see more positives than negatives. Vessel utilization concerns in Q2 seem temporary, and the tender stats for PGS look promising. We see substantial synergies and will provide more details at the Capital Markets Day.
Q: In Q2, you booked approximately $90 million in merger-related costs. Can you give an indication of how much is remaining for the coming quarters? A: Sven Larsen, CFO: We expect only a few more million dollars in charges, mostly in Q3, related to integration costs and some noncash costs. The dividend compensation part of the PGS proceeds, approximately $18 million, was paid in early July.
Q: Is it still your plan to switch from dividends to buybacks following the PGS acquisition? A: Sven Larsen, CFO: We will likely maintain a base level of dividends while potentially increasing the use of buybacks. We will provide more details at the Capital Markets Day.
Q: Following the PGS transaction, is there an intention to have a net cash balance sheet at the earliest possible time? A: Sven Larsen, CFO: We do not aim for an all net cash balance sheet but will prioritize reducing net debt from initial levels. We believe it is appropriate for a company with our structure to carry some debt, but less than we currently have.
Q: Can you provide an update on PGS backlog by the end of Q2? A: Kristian Johansen, CEO: We will provide the combined backlog figure at the Capital Markets Day. We have only been together for about 18 days, and the Capital Markets Day will offer more details on the PGS situation.
Q: Lots of good news on acquisition here in the presentation, but a little on multi-client projects. Can you give us an indication or some comments on this area, please? A: Kristian Johansen, CEO: We expect investments to be significantly higher in the second half of the year. The increase in order inflow and backlog was not driven by multi-client, but we are in the process of signing up some big multi-client projects that will start in the second half of the year.
Q: You had CapEx, excluding multi-client investments, of approximately $20 million per quarter in the first half. What is driving that? A: Sven Larsen, CFO: The main driver is investments in the OBN side, specifically a new streamer set costing around $25 million in total. This is for use in the North Sea as part of a long-term contract.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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