DOF GROUP ASA (DOFG) Q4 2025 Earnings Call Transcript

Hello, everyone, and a warm welcome to this QPOR 2025 results presentation by DOF. We released a report and presentation earlier this morning, and in this session, we will cover operational and financial highlights before rounding off with the Q&A session. You can already now post your questions in the webcast Q&A function, as I see some of you have already done, so that's good. Keep them coming, and we will cover as many as we can towards the end. And with that, I leave the word to you, Mons, on this nice front page of some freshly painted and upgraded vessels.

Thank you, Eric. And once again, welcome to the Quota 4 presentation for DOF. So as Eric said, you know, this is a picture of the Scandi lifter and Scandi logger that has been at the yard in Denmark. in november and december and i know a few days ago they arrived in in rio so now they will mobilize and start accepting test for their four-year contract with the better boss and also i've seen after we sent out numbers this morning you know some discussion among analysts on on CapEx for 26 and part of the reason why CapEx is a bit higher in 26 is because we have a rollover from these boats into 26 from 25 so you see that 25 is well below what we have guided and then 26 is a bit higher due to amongst other things these rollovers so we'll come back more to the CapEx and those but the good is of course that so that Esports soon will be making very good money on the charter for E-chartas.

So then, doffa de Klaas, I guess, on 74 boards.

We have backlogged on both of 4 boards 5.1. I guess we are on 5.2 now, and still a very high backlog. And KS25 has been a fantastic year when it comes to winning with a gap in the backlog. So KS25 is a backlog for 26, but also 27 and 28 are at record high levels, you could say. On the numbers, we finished the year with a bit of $2 billion revenue, and that's what makes me really proud is that we delivered a very strong quota for an ending at $796 in BDA, adjusting for some small sales gain. we had 7.81 in operation of Bedea in 2025. So I think that is, I'm very proud of that and you know the quota four was very strong. We did 220 including 4 million in gain on the sale in which is very good so leave that slide like that and this is what we do we are an offshore service provider we own vessels and we operate the vessels and we we of course have a large subsidy business global business you know all over the globe and then we of our unproductively integrated services within IRAM and mooring and construction and surf. Yeah, most of the services you can execute from a bus offshore. We have a fair market value on a fleet of 4.1 billion and we also see that we own 80 ROEs and of course interesting to know is that there was a buy a new ROV these days we are talking around five million dollar a piece and then you have to install and then you have to have a system yeah so it's it's pretty high value that ROV fleet as well if you look at the numbers split we have $6.35 on the assets, and then you see we have $1.46 on the projects or the services side of the business. So it is a record high yield also on the service side, and of course that is the people, there is no depreciation, there is no interest cost to be paid on that MPDA. So it's, and of course, you can only reflect on the value of that organization. Of course, we noticed that the listed companies with other assets, they are priced at higher multiples than they are priced on an average. So, and then you see combined operation MPDA, 780 watts. So I guess a big jump from 24, and if I can get back to that, but Vallebo, the latest guidance we had in November, but in the high range of what we guided at the start of the year in February. So all-in-all very satisfied with the performance in all the regions and on all projects.

So it's been a good year globally for us. So here it is.

So you could have bought $220 million. Sales gain of $4 million. Meaning $216 million from the operations. this is the last time we talked about it's now integrated and from now on it will be reported together with the rest of the fleet but they delivered 55 million which is pretty good Martin will talk a bit more how Doftan has delivered for the full year fleet utilization could still be higher 87% so that was a bit more to get out of it and as we mentioned the backlog is 5.2 billion and then we for 2026 we got 830 to 880 and of course then you have to keep in mind that we have I would say close to or around 80% of the midpoint of the revenue already in the backlog for 2026. So it's not very high risk on the numbers. Where we see, you know, the uptake, of course, is partly due to the time contracts on renewals on the boats. so that's the main reason but I guess what we haven't taken too much into consideration is that what has happened in in Quanta 4 and now we're into Quanta 1 and where we see fixing levels on projects through the season is that the market for anchor handles are really tightened and it looks extremely strong So, we do believe that there might be upside in these numbers due to a very strong uncannily market. And we really believe that that market will last quite long now. It's a very nice balance in the market. The demand side is picking up, not only in the North Sea, but we see requirements for big boats more than globally. We are seeing it in Angola, we see it in Guyana, we see it actually in India as well. We see it in the Black Sea and we see it a lot of other places. So I think now, because that is the part of the offshore overmarket that has been lagging. And now I see the pure signs, the signs that this is no cornring. And then, as you understand, I'm pretty bullish on that going forward. On the next interesting depth to BTA, we are at 1.7, so in the middle of the range, and then we propose 0.25 in dividend for the quota. yeah so uh and if you look at the graphs uh coming to last year uh what are four you see 77 in revenue compared to 445 and then 220 compared to 152 yeah so it's a it's a good growth uh and the problem of course a lot of it due to uh but the rest of the legacy They're also performing much better in this year than last year.

So, a little bit like that.

And then, I don't go through all of this, but as you see, quite a lot of new long-term contracts. Brazil, the obvious reason Brazil four-year contracts, the Nomad and Constructor extended in Guiana. The Pipelayers, three of them extended with a year before they start a new contract. to say with Enka Annas in Brazil, so meaning that Enka Annas has a backlog to into 2031. Yes, it's also, you know, the backlog is getting longer and longer. Well, I also mentioned, I think, you know, and of course, it's a bit special. We sent a press release on a country last than $50 million. But that was for you to be aware of how strong the market is. this is roughly a 30 day job and we expect plus minus 6 million dollar in the BDA in those 30 days it's just showing the strength in the market for the really high end and handlers we are seeing right now and there are more to come in that space so I leave it like that Yeah, perhaps also what made us very happy, of course, was the one with the green boat here, Havila Phoenix. We won a three-year IRM contract with BP in UK. And, of course, that is the second largest IRM contract in the North Sea after the Equinor IRM contract. So very, very happy with that. And, of course, that is a very strategic, important win for us. and we of course expect to that to grow in scope to do more scope for BB going forward so we leave that like that I think and perhaps one more which is which is the last one we also of course we mentioned that we renewed Scandi Patagonia in Argentina which the boat is built in 2000 years 25 years 25 years old and now renewed which i believe will be five years so so meaning also that these boats can can work for a very long time and i will not be surprised if she will continue after 2030 on that one track in argentina so then we move on And here is the backlog. So by the note, we have 5.2 billion in the book, which is a record high. And looking at, so in order to take in quota four, one billion, so a book to build close to two. And then you see we have roughly 1.7 billion before 2026, which is 77% of the midpoint of the revenue-guiding. And also then, if you see the small one up in the corner, you see the status a year ago. but you see that you know the year one year zero year one and year two is much higher now than it was three years ago yeah so if you compare 26 last year 27 this year of course you see we have we have more than 400 million dollar more in the book and if you compare 27 with 28 you see we have more than 500 million dollar. So of course it's a big growth in backlog. Of course the backlog now is more well paid than the whole backlog due to higher rates and margins in the contracts. And of course it gives it gives a fantastic foundation for the earnings not only in 26 but also in 27 and 21. Meaning that of course that the the earnings will stay strong for long and that the dividends will stay strong for long as well so very happy perhaps you know the order intake was remarkable in in 25 but of course we still still working on quite a few long-term opportunities and we expect to continue to build that backlog going forward we have mentioned a few opportunities we have later on so here is we are talking all about numbers and backlog and all that but of course this is what we are doing so we did the very the last project ever in our history we did in West Africa in Kota 4 and into into Port Avon. We have finalized it now. And, you know, very complex project, big surf project. We had, as you see, we had six vessels on the project. And I think we had more than 600 people involved in the project onshore and offshore. So it was a big, big job for us. And I'm very happy to say that client was extremely happy we finalized the project a couple of weeks in advance of schedule so they got the first production earlier and we of course finalizing it earlier meaning that we didn't use our contingency and so the margins of course also the project got better than what we had in the calculation when we bid it so So all in all, it's important for you also to understand that we are able to execute big projects on time and better than budget without the injuries at all. So I'm very happy with that. And I guess this is what we need to be best in class on. yeah and I don't know I don't know if this slide should have been here I read sometimes that the analysts talk about not as a value end of and because that's fair enough but because what they tend to forget is that is that doffa chipboard we are a service company with 85 to 90% of our revenue from services, from projects. And of course the value of that organization is extremely high and as you saw from the previous slide in 2005 we had $146 million NBDA outside what we made on the boats. And of course remember that quite a decent portion of those 146 million dollars come from projects where we use third party boats we have so of course we the organization could have done that with any boats in the DOF fleet yeah so so of course if you add the multiple on that you have to you have to include that in when you make the value on DOF yeah so I'm not saying what kind of multiple you should put on that but of course I see that similar companies are priced between six and times dbd and then of course you also have the value on the subsidies and i just mentioned that there is to buy a new roe and install it you are at least talking for a million only to buy an roe and then you have to install it yeah so there are two values on that as well but i leave it to you to do the mathematics yourself i'm just mentioning it that next time you talk about nav and off you don't have to forget the organization and the subsidy assets yeah so then it is mr martin who do the financial highlights and i guess martin today we have a bit of highlights it's the best year ever and i guess quarter quarter is perhaps the best quarter ever as well yeah thank you once You are right.

Second quarter was the best quarter ever before this one. So it is certainly highlights and highlights through 2025. You see from the illustration that it is on an equal to equal basis, lift of $20 million from Q4 of 24. for. And of course, it is a materially better contribution from the Dove Denmark fleet. It is the largest, call it positive, variations across the group is certainly from the SEBSI space, the project space, and Norska. The SEBSI projects are, let's say, lumpy in its nature. So the percentage of completion and the completion tend to affect numbers in the quarters. So that's why we are a bit, yeah, some quarters are extremely good like this one, and some are less so, although still very strong results. And of course, as Mons has alluded to a couple of times already, 146 on the from the same basis. It is really good. It's a really good contributor. On the next one, you see that the story continues in terms of leverage. This is of course core to to the strategy we have said that we have a target of staying between one and a half and two we are comfortably within that range. It is not materially new debt during the quarter, but we have extended a couple of charters affecting the debt. So the Havilla Phoenix has been extended, Steel Explorer has been extended. So the lease proceeds are affecting the numbers. but but no major events no new big loans or anything like that but on the next slide we see that we've had and this is something we've touched on before we have said that the profile on the the bank debt has been a bit steep steeper than we would have liked of course that is linked to the strategy of of having a stable leverage level between one and a half and two so we're very happy that we managed to reach an agreement with the creditors of the larger fleet facility to reduce the amortization with 40 percent from what it is today so it's giving us a little improved through the cash flow on a standalone basis of 58 million or close to $60 million per year. And of course, that avoids doing more expensive debt. So it's a good alternative in that sense. And it's also, of course, contributing positively to the outlook on dividends. On Denmark, of course, if you go a bit more than one year back, we had a separate session after we closed the transaction of most supply services to guide, especially on that fleet. We said that we were comfortable saying that the fleet would do between $150 and $200 million in 2024. In the first quarter, we had the termination of the Scandi implemented in Mexico, and we have also taken up a couple of vessels through the air from operations to mobilize them for new contracts. Despite that, the fleet is doing 181 for 25, including gain on sales through the second half of 15 million. But I think it's fair to say that the last couple of quarters here is a proof that this fleet is doing what we said it was going to do. And it is also very close to what we assumed in the transaction when it was done, proving it is the deal we planned it to be. and of course this is even without any additional subsea earnings on top of that fleet and of course they serve as a very good basis and platform to do subsea services uh let's say the the fleet is starting to be become red and the lines between the of denmark fleet and the legacy doff fleet is vanishing uh and fading so this is last time around we will provide any separate numbers on that fleet that was just to make sure we we did the call it transparent communication in the results of that the acquisition and i feel that we have we have done that now and and proven proven earnings capacity yeah this is a more detailed and comprehensive overview on on cash flow and there is this one particular subject that i will enlighten a bit more on that is the capex and the proceeds from borrowing there is a small principle change in the numbers So there is a one-off effect that is in Q4, but it is for the full year where the lease payments or the leased ROVs were previously shown net of proceeds from borrowing, but they are now grossed on capex and proceeds from borrowing. so 36 out of the 106 is uh call it a catch-up effect on uh grossing up payment on rvs and and leases so similar in the proceeds from borrowing that is 19 from the the new build and 36 from from rvs for the full year and this is now in the same manner as we do it on the guiding so this is aligned with what we guide on with regards to to capex so it's more it's more one-to-one uh show like this uh look what's highlight uh we talked about highlights it's a highlight for for the year but certainly so for for q4 is the operating cash flow very strong higher than the EBITDA with the positive changes in working capital. And other than that, it is business as usual with the normal amortization, lease payments and the dividend that we gave in the last quarter. Talking about dividend, the dividend announced today is the same as it was the previous quarter, 35 cents per share. So the total number of 86 million, bringing us to a total of $320 million in shareholder dividends for the last four quarters.

With that, I think it's back to you, Mons. Thank you, Martin.

So that is just a summary of the 25, the guiding, you know, compared to the final result. And of course, we see we guided the 185 midpoint revenue and we ended up 2 billion. And then on the BDA, we started here with 720 to 800. we narrowed it to 50 to 760 in november and then we had 8781 so if you compare to the early guiding we deliver in a high range on that and go to the mid regarding from november we I don't know what happened in november but we might be a bit pessimistic then we of course they were 21 dollar over the high end of that governing. So I'm very happy we'll be able to do that again. Depreciations målas in line with lovarna where we started and then interest cost in the middle and tax payable compared to what we guided at the start. We are roughly 10 million dollar below. On CapEx and here you have to be follow me. You know we started with $130 to $140 in maintenance capex and end of the year in $120 to $3. So we have kind of $15 million in the bag that will be... And of course, this is timing effects on when we do the maintenance. So we have... So some of this will happen in 2016, 2025. And then on growth capex, we in one where we go to 80 to 90 and then we have uh used 75 and as i mentioned there is roughly 15 million dollars on that growth that comes from the two uh lifter and logger that we have to do find out no pain knowing what i want instead of a quota for you so we have 15 uh roughly 10 15 million dollars for the amounts value so meaning that we we're totally roughly 30 dollar 15 on the growth and 15 on the maintenance that is in the in the 26 guidance that we come to you know comes from 25 yes we are lower than 25 and a bit higher than 26. so i think that is the final word we have on 2025 and once again we have to say we are very happy with both that moved on the backlog and numbers on the execution. And not at least I have before I forget it also the client feedback we have had has been excellent. So you know I think the clients want us back to do more work based on the feedback we get from them around the globe. So down here on the guiding for 26, we guide the revenue midpoint 2.2. And as mentioned on that, we have 77% of that guiding in the back row already. And then we guide the 8.30 to 8.80 on the BTA. I would say it carries a bit less risk than it was last year, because the backlog is a bit higher. Depreciation, 27 to 280, and then net interest, 90 million, so it's a bit lower than last year. And then tax payable, 80 to 85. We remember that we were a bit higher when we got the tax payable last year, so we have to take that off and not saying that will happen in 26 but but that's what we are where we are now and and of course we are looking on optimizing that on the capex side as i said we have maintenance capex 140 to 150 but then remember that 15 million of that comes from very well lower in 2025 so it's it's just sliding between the two years and the same on growth capex it is it is the dual classes that lift that with 15 million dollar that we didn't spend in in fourth quarter 25 and perhaps mentioning on the growth capex is it is of course some more orrovis we still have a few boats we want to have our own orrovis on and of course that will give a quick payback and higher earnings again. So the ROVs makes good money for us. And then we have ordered a crane, a big crane that we ought to install on one of the anchor handlers. And of course, we see that these big anchor handlers with big winches, big drums, and so on, they make a lot of money if you combine the bus learning And that's why we have invested in Ukraine, so roughly $14 million that will cost, but I think that will pay off very quickly. And then we ordered one new AUV. We, of course, won the four-year contract with Peter Bas in fourth quarter, you know, for a boat with an AUV, and we therefore want to order a new AUV. So that is the main explanation on the cat-back side. So then I guess there is one slide left. So full year guidance operational 830 to 880. Long-term backlog increased a lot through 2025. So T plus 2 backlog, up 137%, compared to the same time in 2005. And then, 85%, 4% of vessel-based on own and chartered in fleet, worldwide by firm backlog for 2026. So then, as normally, we have a few pictures. The picture on the left-hand side is a picture of a big anchor handler. I think it's in Wisconsin, and as I mentioned, that market has been very hot in Quota 4, so far in Quota 1, and the activity on the projects around the globe, and the pricing on those projects is quite good at the moment. And as I mentioned, a 30-day job for Wisconsin probably will give first month $6 million in NVIDIA. So I'm not saying you're going to analyze that, but I think it shows where that market is heading. So we believe that if that market now goes as we believe, we know that can give further upside-down on the DOF-ordning's ENI-östergång. Then I'll talk about building backlog. I know for those who follow it closely, you saw that Petrobas has not one at hand for pipelines. And as you probably know, we have three part players coming off contract in 26 and in 27. So we are soon bidding that and if we are clever and lucky on that, that will build backlog a lot for not only in 27, but in 28, 29, 30 and 31. So it's a very important tender for us, and we will keep you updated on that. Then we have a picture of a project, and as I mentioned, the execution project is key to success, and in 2025, all of our experts around the globe have executed more projects in an excellent way. Not only giving us good financial results, but also giving us very good clients' satisfaction, meaning that the business acquisition job going forward will be easier because the clients want us back. And then we have an oil class. Oil class is here because we, you know, we have used part of 2025 to, let's say, to get them into the DOF model. We have installed subsidy equipment on them, and we expect, you know, let's say, the spread earnings, including the subsidy side on those boats, to pick up in 26 compared to 25. So Dan, I think we leave it like that, and Dan, we welcome Annie Kvastians.

Yes, indeed. So please feel free to post your questions in the webcast Q&I function. I will kick right off with the ones that we have received. As you say, Mons, the anchor handling market has been very strong recently, and you have perhaps wisely previously been less exposed to the spot market. But how do you still see opportunities to capture the upside of this market for your part?

Of course, we have kept most of the free PC, also in two kvotar on projects, on long-term contracts. And of course, so we haven't had any, I think we haven't had a bond in the sport market for a long time. months yes so we haven't got any big part of that upside but what we're probably going to do now of course is that we have a couple of boats coming off contracts you know project contracts now and probably going to be a bit more you know let's say short term on those so more spots and more shorter projects yeah so not and and but of course the longer term of course if this market stays as it is of course the the the this will also then uh in heavily influenced the long-term rates you get for this high and that can last globally so so if we go according to what What I hope and believe is that you will see not only an uplift in earnings on spot and shorter jobs, but you also will gradually see an uplift in long-term rates globally for the really big account. And when you look at the prospect list and what we call more employees globally, it's very high. know in 2027 that there are several projects happening at the same time, so we see conflicts on the schedule if you are able to do all of them. It looks good, and so I think you will see perhaps a few months from now you will see a few more boats taking a bit more risk in the short market on the account.

Thank you. The next question is on Skundi Connector. The last update I saw on this was that she was firm until the end of 25. What's going on with this vessel? Is it being sold?

Is the option declared or is it available? i guess it's a mix yeah we are she's extended no uh into second quarter there after we also evaluating over options on her and and one of the options is to is to is to sell the book because we have mentioned before that you have one cable there is not strategically important for us if you want to be a hero in a market you need more than one boat and we have had people inspecting the boat so let's see what happens but nothing is done before it's done yet so you know we are working on selling your and we are also working on finding what we shot us for but I think if we are to choose we would prefer selling your Thank you.

Now on tax, you guide quite a bit of an uplift on tax in 2026. Is this mainly due to utilization of tax losses or does it imply a structurally higher tax rate going forwards?

Yeah, of course, we're good on payable tax, so it's not impacted by tax losses other than the fact that it is not payable in the areas where we have tax loss carry forward. But there are a number of factors impacting the number or the amount of payable tax. One is, of course, if you make more money, you generally pay a bit more tax, and tax is very often payable in arrears. So for a good 25 impact, the tax levels are payable in 26. Also, the operational area affects it. We consider withholding tax in areas like Guyana, Angola, and so on. Tax and payable tax, you pay that up front. So that affects the numbers. And there is also this global minimum tax known as Pillar 2. Also, we're also subject to that. And of course, we have a big normal taxated activity as well. So the impact is not among the worst, but it's also impacting the numbers. So a little bit of a mix.

Thank you. Then on the fleet loan amendment, when do you think the credit approvals will be finalized?

And are you able to say anything about the leverage threshold that you mentioned? yeah i can i think i can uh i think i can say that we are free to utilize this as long as we are within our own uh strategy on leverage and of course that is uh one and a half to two and then there is the two that is the the important uh number to to keep in mind and we've said that it's going to be effective from the first payment Q1 of this year so within a month's time we should have that signed and sealed I don't see any big risks on that right thank you then there

are a lot of questions around the topic of dividends dividend capacity expected dividends dividend increase payout level dividend policy etc To not cover all of them, I think I will leave the question fairly open and ask if you're able to say anything about dividend going forward, and to add on to that if you intend to introduce a fixed policy related to any indicators other than your leverage range target. dividend is what matter and how that is going to develop going forward it's it's up to them to

decide of course but no changes to policy leverage is still the guiding principle of that i think to to comment it a little bit i think that the drivers the key drivers is of course leverage. It is also backlog. It is earnings levels. So it is remains the target and ambition of the group to have that steadily increasing over time. Thank you.

Then a question on artificial intelligence.

Can you comment in general on how you are implementing AI in DOF and what possibilities you see related to both cost savings and better efficiency it's not much i will say about i think we we follow what is going on in in call it the core business of of doff it is it is not it's not a lot of ai impact on on the business per se but of course we do we do like everyone else utilize systems that incorporate uh ai functionality to to be more efficient in day-to-day tasks office tasks and so on um i think it's a it's a bit uh well it's early for us to to to say how much we can gain in efficiency in our core business from it and it's not my area have expertise side so i will uh i'll refrain from uh from saying too much about it all right now a few questions on brazil starting with whether you have heard anything new on the rsv new builds that were being discussed yeah i you know it's uh it is a dialogue yeah and

And we are waiting for Peter Boson. More than that, it's difficult to say. So it is not that, Danny, and it's alive on the sea where it ends. I can't say more than that.

And then following up on Brazil, what is your assessment of the offshore market in Brazil in 26? And do you see any risk of potential cover-backs cuts from Peter Boson?

You know, I think, you know, first of all, of course, if you see the DOF backlog in 2026, you know, we are, you know, the DOF service, all the RSVs was renewed. we renewed what's it's up on our release on summon and canada so it should pull back to go on all that fleet in 26 save you know we won this new pif thunder retreat under yeah so so was the the only we have to renew in 26 is to go to the three remaining five players we renew those three of them last year so in that context you know we we see the brazil market still to be very strong we we see no weakness and and and of course you know the activity level is very high and we we also see of course that we we when we have uh available spots you know we have had for the winter we have had actually one I-class in Brazil and we have had the Scandi Scansson in Brazil and picking up product work and we continue to do that so it's I have no worries about the Brazil market at all Thank you Can you a bit on what you consider to be the future growth potential for DOF.

Will it typically be contract renewals, growth in subsidy projects, or do you also consider M&A and the new builds as potential growth avenues?

I guess the first thing, of course, we want to do more of this time.

We see, of course, contract renewals at higher rates is a modern growth area. We see, you know, we are gradually doing more and larger projects and add more services to our, you know, on the spreads. You know, one of the reasons why we bought mass supply service and also goes to add the services on top. And we see, of course, that will continue to grow and on new assets so as we have said that we will have a great deal so we have so far sold few small boats but if we have to get a new boat so as we have to be in the middle of our core where we can add lots of extra earnings on top and of course on new bills we haven't touched that so far and of course we have one new bill which is 150 new contracts so you will not see Doff ordering Wassensson speculation so it's we will be disciplined if there is an opportunity like we had with mask supply service if there is you know vessel to that really fits the core of DOF and strengthen our market position because then we will look at it the discipline will be very strong as we have done so far and because then we still have the plans we discussed to exit the cable market, we have a plan to exit the PSV market, and so I guess it's at least even likely that we will sell our stand-by-box. But in the end, this company will be, you know, the subsidy side and absolutely higher on the organic side and services and services and services. So we will gradually, let's say, exit the commodity market or PSVs and all the lower ones. A long answer, sorry for that.

No, that's fine, thank you. Following up a bit on new builds, we have a question on whether we can elaborate a bit on the new build situation across our vessel segment and how we're seeing that impact in the market?

I think I'll start with the situation on new build.

Because on the anchor handling side there are no new builds.

And because the reason for that I guess number one is that the market has not been extremely good and also that Of course, the new build price for a high-end angle is probably closer to $250 million, yes. So we have, we have got some, you know, we haven't quoted for it, but we have had some indications. Again, we're talking $250 million. And of course, the market do not defend that the dollar. So that means that I don't see any new builds in the hanging side in the foreseeable future. And then I'm talking of small boats, I'm talking the 300 ton dollar boats, big boats, you know, 24 meter beam and 95 to 110 meter long. So there is no new boats. Then of course on the high and subsea side, you know, the 400 ton rain boats, the park players, you know, with the big laters, there are no new boats. And I think the picture is the same. If you want to go and buy 550 million dollars today, I think you are talking, I don't know, but at least I would guess at least between 400 and 500 million dollars. yet to do that and so i don't think that will happen and and then you have the let's say the the medium sized service market with where we showed the slide earlier on that where we have kind of also 20-25 percent of values in that space and and most of the way you see there is a quite high number of vessels for delivery in 27 and 28 and and how that pans out remains to be seen and it's also of course the segment of chartering boats, we have quite a few boats on charter on that so I don't know how that will pan out for vessel rates remains to be seen If there is a weakening in in vessel rates will that be negative for them? Not necessarily. We don't compete with the vessel owners ordering those boats. We have more clients on them. And they don't compete with us on a 3-year-old contract with Equinor or a project subsidy project for E&I or whatever, yeah, so I'm pretty relaxed on that if I should be 100% honest, which my mother tells me I have to be I would, of course love to have a year or two in the week vessel market putting us in a position to get very cheap boats, yeah, but I don't think that will happen, I think the market is strong enough to absorb these boats, yeah But if it's not, I can see myself as a charterer and not as an owner yet, because we use these boards for projects and don't do time-charters on those boards. A long answer.

That's good, thank you.

Recognizing the cyclical nature of the market, what type of indicators do you follow to anticipate a slowdown or negative inflection in your market?

Of course, the big indicator is always the oil price. It's the budget for the oil companies. It's all that. It's the sale of Christmas trees going forward. It's the order backlog for the T1 guys and so on and so on. uh but of course i think the most important let's say intel we is is what we get and of course remember we have probably a global sales force of 700 people here so what where we got the intel from that we make the decisions on is of course the day-to-day the week-to-week the month-to-month dialogue with all of our clients and it's our own prospect list and of course what we see from that now is that 27 and 28 you know the early indication for those years is that they look to be quite busy. We see, as I mentioned earlier on the morning, we see multiple tenders colliding on time in 27. So that's what we see. We see the opportunity we have in the dialogue with the clients and then we have a prospect list for all fleet for 27 and 21 and that looks very good. and of course then the next follower question is how to mitigate the cyclicality and of course that we do with the backlog and as we have said we will take all the backlog we can get long term now because it's not a tragedy if you have to book the backlog on today's record So that's how we do it. We cannot do anything with oil price. We cannot do anything with geopolitics. But what we can do something with is our own balance sheet and our own backlog. And that is what we are focusing on. But the summary is that we see no close on the haven right now. On the contrary, we see 26 getting more busy, and we see indication on 27 and 28. That looks very good.

Thank you.

In age two, we saw some lumpiness in the subsea region earnings, driven by project milestones. do you expect the same in 26 and if so can you provide some color on how you expect the milestones to develop it's it's always like that it depends on when the projects uh come to an end and when you do the final uh let's say uh numbers on those and when you have final discussion with the client yeah so because when you when you build a project you execute the project you you bid that with uh you know, with a certain margin and you bid that with a certain contingency. And as you go along, in your early days of projects, normally book income and go to the cost and then when you see it get closer to the end, you start to take profit and then when you finalize the project and you end up releasing the contingency. It is it is how you do it and it's impossible to give an answer on how that will pan out between Quota and Quota but of course as you have seen I guess Quota 4 normally you know maybe we have to release more of those projects, profits at the end of the year. So we might be a bit conservative through the project Well, I guess that's how we like to do it.

Thank you.

Then CapEx, what do you see as a fair long-term maintenance CapEx level?

I don't know. You know, I can see that this, I haven't done that in my head. It was that defense on one when you drive off the five gigas on the box. So, I don't know. We have to get back on that. So, that build-up was very based on year to year.

Okay.

Thank you. that was the questions that we were able to cover in this session thank you all for sending in good questions I know that we weren't able to cover everyone individually but I hope that we covered the main topics that you wanted us to speak about and if you have any follow-ups please do not hesitate to reach out so with that I'll say thanks to Monson Martin for a good session thank you very much for listening in and have a nice evening thank you very much thank you