Akastor ASA Earnings Call Highlights Cash And Contracts

Akastor ASA ((NO:AKAST)) has held its Q4 earnings call. Read on for the main highlights of the call.

Akastor ASA’s latest earnings call struck a cautiously upbeat tone, with management emphasizing strong cash generation, successful refinancings and improving contract visibility across key holdings. While revenue softness and accounting write‑downs weighed on headline figures, investors were reminded that underlying cash flows and asset realizations are increasingly driving the equity story.

HMH delivers robust EBITDA and cash flow

HMH remained the financial workhorse of the portfolio, posting Q4 adjusted EBITDA of USD 58 million, up 23% year‑on‑year and 39% quarter‑on‑quarter, translating to a healthy 28% margin. Unlevered free cash flow reached USD 66 million in the quarter and full‑year adjusted EBITDA came in at USD 169 million, leaving HMH with USD 97 million in cash.

Operational efficiencies and refinancing strengthen HMH

Management credited inventory optimization, tight working capital management and the HMH 2.0 program for margin expansion and strong cash conversion. A successful refinancing of a USD 200 million bond on better terms improved capital structure flexibility and reduced future financing costs, while an up‑to‑date S‑1 keeps the business ready for a potential IPO.

Akastor balance sheet supports ongoing shareholder returns

At group level, Akastor ended the quarter with a positive net cash position of NOK 87 million, underscoring a conservative balance sheet stance. The company also announced a NOK 0.4 per share cash distribution, totaling NOK 109 million and marking a third consecutive quarterly payout, signaling a clear commitment to capital returns.

DDW Offshore crystallizes value and cuts financing costs

Post‑quarter, DDW Offshore sold the vessel Skandi Atlantic for USD 22.75 million versus a book value of just USD 9 million, locking in a sizeable gain above carrying value. DDW also completed a fleet refinancing via a new USD 24 million revolving credit and term loan facility, reducing future financing costs, with the average book value per vessel around USD 10 million.

AKOFS secures long‑term contracts and high utilization

AKOFS reported Q4 revenue of USD 38 million and EBITDA of USD 11 million, supported by strong vessel utilization, with Aker Wayfarer at 97%, AKOFS Santos at 85% and AKOFS Seafarer at 86%. Crucially for long‑term visibility, AKOFS Santos won a new four‑year Petrobras MPSV contract starting in 2027 and Aker Wayfarer was nominated for a four‑year Petrobras SESV contract.

NES Fircroft advances toward ‘exit ready’ status

NES Fircroft continued to perform solidly, with 2025 EBITDA up 5% to USD 148 million and operational cash flow improving by USD 23 million year‑on‑year. Net leverage declined as the EBITDA ratio improved from 1.4x to 1.1x, leading management to describe the staffing specialist as “exit ready” in valuation and balance sheet terms.

Active portfolio monetizations and restructuring

Akastor maintained its strategy of active portfolio management, with the post‑quarter sale of Maha Capital shares generating NOK 40 million in proceeds. The carve‑out of Føn Energy Services into IKM Løfteteknikk, where Akastor holds 33%, refocuses Føn on offshore wind maintenance and illustrates the group’s willingness to reshape holdings to unlock value.

HMH faces revenue and order intake pressure

Despite strong profitability, HMH’s top line showed weakness, with Q4 revenue of USD 206 million down 11% year‑on‑year and 5% quarter‑on‑quarter. Order intake fell to USD 175 million, a 17% decline from a year earlier, reflecting softer demand in projects, products and repairs and raising questions about near‑term growth momentum.

Projects, products and aftermarket orders soften

Projects, Product & Other revenue fell sharply to USD 46 million, down 37% versus last year and 15% sequentially, as a thinner backlog weighed on execution. Aftermarket services also saw an 18% year‑on‑year drop in order intake, with digital technology and repair activity particularly weak, including an approximate 24% quarter‑on‑quarter decline in selected digital lines.

Consolidated profitability remains modest at Akastor level

On a consolidated basis, Akastor reported Q4 revenue of NOK 106 million and EBITDA of only NOK 2 million, highlighting that group results are still thin despite strong contributions from certain holdings. Other EBITDA items were negative NOK 60 million, limiting near‑term earnings visibility for equity investors looking at the group accounts.

Net cash erosion and near‑term cash drags

Akastor’s net cash position decreased by NOK 192 million in the quarter to NOK 87 million, mainly due to the NOK 109 million shareholder distribution and a NOK 38 million settlement to Mitsui. DDW’s net debt of NOK 195 million at year‑end is consolidated, tempering the otherwise robust liquidity profile and reminding investors of leverage in parts of the portfolio.

AKOFS accounting write‑down masks operational progress

The company carries its AKOFS equity stake at zero book value due to historical losses, even as commercial performance and contract visibility improve. Shareholder loans of NOK 428 million remain on the balance sheet, and management noted that meaningful cash generation from the new contract portfolio is not expected until late 2027 due to capital expenditure and payment timing.

Market softness and seasonal factors cloud near term

Management cautioned that the offshore market is likely to be softer in 2025, with floater rig years expected to decline versus 2024. Seasonal effects also play a role, as Q4 contract structure awards bonuses that inflate margins versus Q1, making it uncertain whether the strong Q4 profitability can be sustained in the coming quarters.

Financial investments hit by valuation adjustments

Financial investments had a negative NOK 71 million impact in the quarter, mainly due to valuation adjustments related to NES. This was partially offset by a positive NOK 62 million share of net profit from equity‑accounted investments, largely driven by HMH, underlining the importance of this core asset for Akastor’s earnings profile.

Outlook and guidance framed by mid‑2026 inflection

Looking ahead, management outlined a cautious but constructive outlook, pointing to a likely market inflection around mid‑2026 as offshore drilling activity recovers into the second half of that year, with no numerical guidance provided. Akastor emphasized strong balance sheet flexibility, ongoing capital returns and cost‑reducing refinancings at HMH and DDW, while contract wins at AKOFS and solid metrics at NES are expected to support value creation despite near‑term market softness.

Akastor’s earnings call painted a picture of a portfolio in transition, where strong cash generation, disciplined capital returns and active asset management are gradually reshaping the investment case. While revenue headwinds, valuation hits and accounting write‑downs keep reported profits muted, the underlying trajectory in core holdings like HMH, AKOFS, NES and DDW suggests that patient investors could be rewarded as the offshore cycle turns toward 2026.