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12/06MEET THE TEAM : Ryan Bridges
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AqualisBraemar LOC : Earnings Document

10/04/2021 | 08:08am EST

Q2 report 2021

AqualisBraemar LOC ASA

Q2 report 2021


  • Revenues of USD 38.3 million (Q2 20: USD 19.2 million)
  • Operating profit of USD 2.3 million (Q2 20: USD 1.6 million)
  • Adjusted EBIT of USD 2.8 million (Q2 20: USD 1.8 million)
  • Continued strong revenue growth in renewables segment
  • Cash balance of USD 24.5 million (Q1 21: USD 28.3 million)
  • Interest bearing bank debt of USD 13.3 million (Q1 21: USD 15.1 million)
  • Paid semi-annual dividend of NOK 0.25 per share in 1H 2021
  • Cost synergy target raised to USD 4.0 million from initial USD 3.5 million

David Wells, CEO of AqualisBraemar LOC ASA ("AqualisBraemar LOC" or the "Company") commented:

"During the first half of 2021 there have been some hectic months at AqualisBraemar LOC. It has been a unique challenge to integrate two equally sized companies, doubling the size of our group, in the middle of continued COVID related travel restrictions and ever-changing regulations across the 38 countries in which we operate. With that in mind, we are delighted by how quickly the integrated group has kicked into gear. We are pleased to report our highest quarterly revenues and operating profit in the company's history, in what is still a challenging market, and still expect significant cost synergies to be realized starting in the fourth quarter of this year.

In early 2020 we set a group wide target of 50% renewables and sustainability-oriented services in our business mix in 2025. This was and is an ambitious target, but we are making great progress. For the first time, Renewables has surpassed Maritime to become the second largest market for the group over the previous 12 months. Renewables constituted 29% of our revenues in the second quarter alone, and while this is positively impacted by seasonal high activity offshore Europe, it shows the speed with which the company is transitioning. We continue to see increasing demand for renewables consulting and anticipate continued high growth in 2021 and beyond.

Our traditional business within oil & gas and shipping experienced significant headwind during 2020 from Covid-19, low oil price and reduced international trade. While localised outbreaks have also caused challenges this year, these issues are expected to gradually subside over the second half of the year and a cyclical upswing could be on the cards as we approach 2022.

During the second quarter we paid out a NOK 0.25 dividend per share as part of our semi-annual dividend schedule, and our board expects to continue this practice in the second half of the year. Our shareholders have repeatedly supported us in connection with the major acquisitions over the last few years, and we remain focused on repaying that trust."


AqualisBraemar LOC ASA

Q2 report 2021


USD thousands (except shares, backlog, employees)


Total revenue




Adjusted EBITDA

Operating profit (loss) (EBIT)



Adjusted EBIT

Profit (loss) after taxes


Adjusted profit (loss) after taxes


Basic earnings per share (USD)

Adjusted basic earnings per share (USD)

Weighted average number of outstanding shares (thousands)

Cash and cash equivalents at the end of the period


Order backlog at the end of the period (USD million)


Average full-time equivalent employees during the period


Average billing ratio during the period


Q2 2021 Q2 2020 1H 2021 1H 2020

FY 2020

38 266

19 232

74 964

39 019

77 015

3 180

1 940

6 111

3 580

4 423

3 568

2 201

6 965

3 969

6 320

2 281

1 577

4 140

2 856

2 946

2 758

1 839

5 172

3 244

4 843

1 088

1 171

2 216

4 005

1 513

1 477

1 541

3 070

3 323

3 280











94 179

70 416

93 368

70 416

71 323

24 532

10 987

24 532

10 987

30 642
















  1. Refer Alternative Performance Measures
  2. Include subcontractors on 100% utilisation basis
  3. Billing ratio for technical employees including subcontractors on 100% utilisation basis. Excludes management, business development, administrative support employees and temporary redundancies. Figure calculated as billable hours over available hours. Available hours excludes paid absence and unpaid absence.
  4. Order backlog figure including LOC Group
  5. Figures excluding LOC Group


AqualisBraemar LOC ASA

Q2 report 2021


(Figures in brackets represent same period prior year or balance sheet date as of 31st March 2021. Certain comparative figures have been reclassified to conform to the presentation adopted for the current period).

Group results

The acquisition of LOC Group ("LOC") was consolidated in AqualisBraemar LOC's consolidated accounts as of 31st December 2020. For more information about the LOC acquisition, please see note

8. The acquisition of Braemar Technical Services

("BTS") was consolidated as of 30th June 2019.

Total operating revenues increased by 99% to USD

38.3 million in Q2 2021 (USD 19.2 million). This increase in revenues and the corresponding increases in costs below were primarily driven by the acquisition of LOC.

The total operating revenues were USD 75.0 million in H1 2021 (USD 39.0 million).

Staff costs increased by 110% to USD 20.9 million in Q2 2021 (USD 9.9 million). Other operating expenses increased by 93% to USD 14.2 million in Q2 2021 (USD 7.4 million).

Depreciation, amortisation and impairments increased by 148% to USD 0.9 million in Q2 2021 (USD 0.4 million). In addition to depreciations on right-of-use assets increasing to USD 0.6 million in Q2 2021 (USD

0.3 million) due to the consolidation of LOC's offices, the company now reports quarterly amortisation of intangible assets arising from the acquisition of LOC of USD 0.1 million in Q2 2021 (USD 0.0 million).

Total operating expenses were USD 70.8 million in H1 2021 (USD 36.2 million).

Operating profit (EBIT) amounted to USD 2.3 million in Q2 2021 (USD 1.6 million). Adjusted EBIT amounted to USD 2.8 million in Q2 2021 (USD 1.8 million). The adjustments primarily relate to integration costs, amortisation of intangible assets, share based compensation and other extraordinary or non-cash items.

EBIT amounted to USD 4.1 million in H1 2021 (USD 2.9 million). Adjusted EBIT amounted to USD 5.2 million in H1 2021 (USD 3.2 million).

The billing ratio for technical staff (including subcontractors) was 75% in Q2 2021, compared to 74% in Q2 2020.

Finance expenses of USD 0.2 million in Q2 2021 (USD

0.0 million) mainly represents interest on debt facilities entered into in connection with the LOC acquisition.

Net currency loss of USD 0.2 million in Q2 2021 (loss of USD 0.1 million in Q2 2020) and loss of USD 0.5 million

in H1 2021 (gain of USD 0.5 million in H1 2020) mainly represents unrealised loss on revaluation of bank accounts.

Profit after taxes amounted to USD 1.1 million in Q2 2021 (USD 1.2 million in Q2 2020). Profit after taxes amounted to USD 2.2 million in H1 2021 (USD 4.0 million in H1 2020).

Financial position and liquidity

At 30 June 2021, cash and cash equivalents amounted to USD 24.5 million, down from USD 28.3 million at 31 March 2021. The reduction in cash was primarily caused by dividends paid to shareholders (USD 2.8 million), repayment of bank debt (USD 1.7 million), negative operational cash flow due to increasing working capital (USD 1.2 million), and counterbalanced by USD 1.5 million proceeds from the subsequent offering of new shares carried out in the quarter. The net working capital will fluctuate during the year with the type of projects, milestone payments and the overall revenues.

Interest bearing bank debt at 30 June 2021 was USD

13.3 million, down from USD 15.1 million at 31 March 2021.

Lease liabilities were USD 3.5 million at 30 June 2021, down from USD 4.2 million at 31 March 2021. The lease liabilities are related to IFRS 16 recognition of long-term lease contracts for the company's offices worldwide.

The Board of Directors proposes a dividend to be paid during H1 2021 equal to 0.25 NOK per share, and for dividends to remain on a semi-annual schedule.

Order backlog

The order backlog at the end of Q2 2021 was USD 64.6 million, down from USD 71.3 million at the end of Q1 2021.

There is no backlog included for the legacy AqualisBraemar Marine or Adjusting business streams, as these businesses are primarily driven by incidents rather than long term contracts.

Services are primarily driven by "call-out contracts" which are driven by day-to-day operational requirements. An estimate for backlog on "call-out contracts" is only included in the order backlog when reliable estimates are available.

Organisational development

AqualisBraemar LOC had 922 employees (full time equivalents, "FTEs"), including subcontractors at 100% utilisation basis, on average during Q2 2021. The equivalent number was 896 for Q1 2021. The increase is driven by general growth in the Renewables sector


AqualisBraemar LOC ASA

Q2 report 2021

and seasonal higher activity offshore for the European offshore wind industry.

Health, safety, environment and quality AqualisBraemar LOC's HSEQ management system provides the framework to manage all aspects of our business. The management system is designed to ensure compliance with regulatory requirements, identify and manage risks and to drive continuous improvement in HSEQ performance.

During H1 2021, AqualisBraemar LOC had 1 lost time incident (LTI). This is the second LTI in more than 4 million cumulative man-hours clocked since Aqualis' incorporation.



H1 2021

All time












COVID-19 impacts

With offices across 38 countries in all major offshore and marine markets across the globe, COVID-19 has presented unique and varied challenges to the organisation, with big regional variations as time progressed. We have implemented strict measures in line with the respective national authorities' advice and recommendations to ensure the safety of clients, employees, and business partners, whilst making every effort to maintain an uninterrupted level of service to our clients.

Where possible and appropriate, we have restructured our activities to remote work and significantly expanded our digital collaborations.

While travel restrictions have increased complexity in project execution and limited ability to travel for physical attendances, the negative impact on overall activity level for the group has been relatively modest due to the extensive global reach of our organisation. Through our global footprint of staff and contractors covering almost 200 locations, we have been able to increasingly support new clients at locations where others have been unable to access.

AqualisBraemar LOC has been able to maintain and/or grow revenues in most markets and has not seen a significant reduction in staff levels or extensive use of temporary layoffs at any point of the pandemic.

Our renewables segment has remained especially strong during the period, as the majority of our work is "desktop work" and can be performed remotely. Aided by some significant contract wins, the segment has delivered strong growth through 2020 and the first half of 2021.

We expect continued travel restrictions and general delays in client decisions to limit growth in certain local

markets through the second half of 2021, but expect most restrictions to be lifted before the end of the year.

We continue to monitor the situation closely and remain agile in response to any business disruptions.


AqualisBraemar LOC's financial performance in the second half of 2021 will be driven by a combination of three key factors;

First, after acquiring BTS in 2019 and LOC in 2020, the size of the company has been quadrupled in 18 months from a revenue of USD 36m in 2018 to a proforma revenue of USD 140m in 2020. All three companies had offices in the major shipping and O&G hubs worldwide. We are now gradually taking out the synergies from these acquisitions. During 2021 ABL has consolidated offices in 18 locations worldwide and are implementing one ERP system and management system in the group. The estimated cost synergies derived from the LOC combination are now expected to amount to USD 4.0 million, up from an initial estimate of USD 3.5 million. We expect synergies to be gradually realised from 4Q 2021 onwards, which should contribute to margin improvement. Some integration costs must be expected.

Second, we plan to upgrade our back office and finance function both centrally and regionally. This is expected to continue to improve capital efficiency (working capital reduction and cash management) and improve performance of our business.

Third, the market situation is expected to contribute to topline growth in 2021. During 2020 most of the strong growth in our renewable business was offset by a relatively weak oil and gas market, plus travel restrictions and general slowdown in connection with the Covid-19 pandemic. So far in 2021 we have seen a gradual normalization in terms of Covid-19 related disruptions, even though local disruptions still exist. Both shipping and O&G markets are flattening out and gradually improving.

Finally, as our work in the Renewables sector grows its relative size of our revenue (22% of pro-forma combined revenue in the last 12 months) the strong growth in this segment will be more important for our overall development. Our stated ambition is for renewables and sustainability oriented services to represent 50% of our business mix by 2025.

During 2020 we saw record investment decisions in offshore wind, and with an increasing number of developers, new investors and new geographies, the consultancy market is expected to grow significantly in the short and long term.

Offshore E&P capex and rig activity, particularly in the jack-up segment, is expected to gradually recover from the second half of 2021. An oil price of USD 70/bbl is


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Aqualisbraemar ASA published this content on 04 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 October 2021 12:01:50 UTC.

© Publicnow 2021
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Financials (USD)
Sales 2021 154 M - -
Net income 2021 4,65 M - -
Net cash 2021 10,0 M - -
P/E ratio 2021 22,9x
Yield 2021 5,32%
Capitalization 107 M 107 M -
EV / Sales 2021 0,63x
EV / Sales 2022 0,49x
Nbr of Employees 922
Free-Float 48,1%
Duration : Period :
AqualisBraemar LOC ASA Technical Analysis Chart | AQUA | NO0010715394 | MarketScreener
Technical analysis trends AQUALISBRAEMAR LOC ASA
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 1
Last Close Price 1,10 $
Average target price 1,68 $
Spread / Average Target 52,8%
EPS Revisions
Managers and Directors
John David Peter Wells Chief Executive Officer
Dean Zuzic Chief Financial Officer
Glen Ole Rødland Chairman
Bader Diab Director-Engineering & North America
Reuben Segal Chief Operating Officer & Director-Middle East
Sector and Competitors