BNHUF (BNHUF) Q2 2026 Earnings Report, Transcript and Summary

Good day. Thank you for standing by. Welcome to the Bonheur ASA Q2 2026 results conference. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Anette Sofie Olsen, CEO. Please go ahead.

Good morning, everybody. Welcome to the second quarter presentation for Bonheur. It's a beautiful day here in Oslo today. Hopefully you will be pleased with the presentation as well. I will now give the word to Richard Olav Aa, CFO in Bonheur. Go ahead, Rik.

Yes. Thank you, Anette. Also a hearty good morning from me. The second quarter presentation is characterized by very solid underlying performance. We have 2 items that are impacting the results in a negative direction, is the outage of the Mid Hill Wind Farm outside our control, and it's the incident in Esbjerg Harbor. Those are taking their toll on the results. Despite those, we are presenting a very solid set of numbers based on good underlying performance in all the segments. With that, we can move on and starting with renewable energy. We see a positive development in the EBITDA. Almost a doubling from second quarter last year, an EBITDA of NOK 252 million. That comes mainly from 2 effects. It's higher prices, and I'm especially happy to see higher prices in Sweden. We have had a long period with very low power prices in Sweden. Hopefully this quarter can mark a turn of that trend. Also, prices in the U.K. are up, but they have been on a quite decent level for a long time, but they're also up this quarter. Also very good to see that generation is improving. 8% improved generation year-on-year, despite the Mid Hill Wind Farm being out the full quarter. This is really coming from improved generation in the other wind farms and the Crystal Rig IV, which has been successfully completed. Sofie will come back to the Crystal Rig IV more in detail, and also the other elements Sofie and Maren will cover in their presentation under renewable energy. All in all, an improved quarter based on generation and prices. When it comes to wind service, we see a strong underlying performance both for FOWIC and GWS this quarter. The results year-over-year are down from NOK 584 million to NOK 326 million. When you normalize for second quarter in '25, there is about NOK 100 million in termination fees included in the NOK 584 million. You're really comparing NOK 484 million with NOK 326 million. The delta between the NOK 484 million and the NOK 326 million we can contribute to 3 main factors. One is that Blue Tern have had a much lower utilization this quarter. Secondly, we have accrued everything we can think of related to the incident in the Esbjerg Harbor in this quarter. Haakon Magne will come back to the incident in itself. Thirdly, FOWIC and GWS have the results in EUR, and we translate that back to NOK, and the NOK is at the higher level compared to the EUR this quarter than the same quarter last year. I leave the backlog and the incident to Haakon Magne and moving on to Cruise Lines. Cruise Lines is delivering a result more or less at plan. The reason why the EBITDA is slightly lower than second quarter last year is due to currency. That the NOK is stronger compared to the GBP this quarter than the second quarter last year. Other than that, it's pointing definitely in the right direction for Cruise Lines with the improved occupancy and slightly higher prices. Particularly good to see that the booking numbers are really keeping up and Cruise Lines are now selling also [ 27 ] in a very good way, and Samantha will come back to that in her presentation. In the other investments, the EBITDA are more or less on the same level. I think important to note that we see EBITDA on NHST at a very strong level still, but down from last year. I think we see a somewhat weaker top-line development in NHST, and then with cost inflation, there is some pressure on the margin, although from a much stronger margin level than we have seen for many years. 1848, we see pickup now and Per will come back to that when it comes to the floating solar. We see a commercial pickup in activity there and hopefully we can land some commercial contracts in the years to come. He will come back to that more in his presentation. That's quite good because new technologies in renewables have had a lot of headwind the last few years, but we can maybe see a turn of that coming in now. Like I started with, the quarter falls in line with a series of strong quarters now, really starting in '21. The mix is different, but we still are at an EBITDA level on a 12-month rolling basis between NOK 3.5 billion and NOK 4 billion. What you see is the distribution between the 3 main segments is more even than it has been in the past. Also what you see, which is very good, is the uptick this quarter on renewables and the continued contributions from Cruise, while Wind Service continued to have a strong underlying performance. We have 3 strong segments all contributing to cash flow and profits for the group of companies. Yeah. EBITDA and revenue per segment. I think I covered most of this already. We see that the revenues are down NOK 216 million. It is really coming from the Wind Service segments. Again, the 3 effects, less activity on Blue Tern, the incident at the Esbjerg Harbor and FX. That goes straight also into the EBITDA. Main explanation of the drop in EBITDA, and we are reporting EBITDA of NOK 886 million. On the consolidated results, already gone through the EBITDA development. Depreciation and impairment. We have higher depreciation this quarter that is mainly related to a review that has taken place in Fred. Olsen Renewables, where 2 wind farms or wind farm projects have been written off because we do not see any more prospects of developing them profitably. Having said that, the portfolio of Fred. Olsen Seawind remains strong with good projects and particularly a lot of them have grid, which is a more and more scarce resource these days. On the net finance, it is a big swing. You see we reported NOK 189 million positive net finance second quarter '25, negative NOK 158 million this year. A negative swing of NOK 348 million. That is exactly [ on the million ], the gain we booked on the sale of the UWL shares in the second quarter last year. Net finance this quarter is exactly in line with the second quarter last year when you normalize for the sale of the UWL shares. Having said that, there is a lot of pluses and minuses in the net finance related to currency, bunkers, what have you, but you will find all those details in the quarterly report for those who are interested. Very low tax cost this quarter, we end up with a net result of NOK 372 million. Moving on to the balance sheet and my last slide. This is as clean as I can ever remember it. Howick now paid down the last on their debt, Fred. Olsen Windcarrier is now debt-free. We also see renewable energy, apart from 2 joint ventures in Scotland, is debt-free. Cruise Lines have no external debt. The only external debt we have in what we control 100% is the bond loans of Bonheur, and Bonheur sits now with a cash position of close to NOK 4.3 billion. The debt we have is on the renewable energy side related to the 2 joint ventures in Scotland, which is long-term project finance. On Wind Service is really the working capital facilities of renewable Wind Service. Other is really the working capital facility of NHST. We see both those segments are cash positive. All in all, a strong underlying quarter, and we are also ending the quarter with a very strong balance sheet.

Thank you, Richard. Next is now going through the different segments. Sofie Olsen Jebsen, CEO of Fred. Olsen Renewables.

Thank you. I'm starting off here with the first slide was a picture of Crystal Rig IV, on the left-hand side being constructed as part of our Crystal Rig cluster. Summarizing the quarter. We see that our production is up 8% versus Q2 last year. That also includes the production from Crystal Rig IV. We still have a grid outage at Mid Hill, and we are progressing the Windy Standard III construction projects. Moving on to the overview of our projects and our business model. The main change here from last time is that Crystal Rig IV has moved from construction over to operations. The market was defined by the Strait of Hormuz actions, which has affected a lot of the power markets. We do see that the power prices in the U.K. and the Nordics have increased compared to the same quarter last year, mainly because of increase in the gas prices. Combined with lower demand, that capped the power prices and reduced the gas to power link compared to the 2022 crisis we had in power prices. I think it's fair to say that the Middle East geopolitical risks still remain a key uncertainty, and that is both for the European power prices short term and for the longer term, looking at the storage levels ahead of next winter or the coming winter. Moving on. A bit more details on our production. It is generally in line with the similar quarter in '25, a bit higher also, and that includes the production from Crystal Rig IV. We have seen Mid Hill out for the whole quarter due to grid upgrades. We also got the news that the current outage is extended from July until the end August. That is due to project delays by the grid operator, who we are following up very closely, although this project remains outside our control. We have also been informed that the scheduled timing for a second outage after this has been canceled. Not that the outage itself has been canceled, but there is to be a revised schedule, and that has not been confirmed. We're working very hard to ensure that this is as favorable for us as possible, though. At our wind farm, Lista, we have seen 14 turbines partly curtailed in strong winds. That is because of fatigue-related foundation issues. This means that we are currently producing at 82% of full capacity, or that is the maximum output for the wind farm. We are starting now repair works, and this will continue into 2027. Then I can also inform that the grid constraints issues that we had at Rothes I and II have been resolved. Those wind farms are now back in full operation. Moving then on to our construction projects. Windy Standard III, we have seen 6 of 8 turbines erected of those 8 that have been delivered to sites. There are a remaining 12 turbines to be delivered at site, and that transportation should commence now during end of summer. We are estimating the project closeout to be in Q1 '27. On Crystal Rig IV, that project has become operational. Takeover certificate signed with the wind turbine manufacturer and delivered on budgets, subject to some final project closeouts. I think it's a big congratulations to the team, and we also see a recognition of that in the fact that we are nominated to the Onshore Construction Project of the Year at the National Wind Energy Awards. That was all I had to say this quarter. Thank you.

Thank you, Sofie. Good to see that we can deliver on plan, as usual, I would say, for Fred. Olsen Renewables. Magne Ore, CEO of Fred. Olsen Windcarrier.

Good morning, everyone. As I think Richard nicely summarized in the start, the 2 highlights for FOWIC was yet another company with a strong underlying performance. We had this incident on Brave Tern in Esbjerg, which I'll come back to later. If you go into the vessels, what they did the quarter, Bold Tern continued on the monopile drilling campaign of France with continued good performance. Same was for Brave Tern. It started very well. The performance continued well into the quarter. We were ahead of the project schedule. On the trip that should have marked a 50% completion of the project, then we occur an incident in the Esbjerg Harbor, and the vessel is out for 3 weeks. Blue Tern finished yard mid-May, then it went straight to a minor O&M campaign. If we then go a little bit more into the figure itself. For the quarter, we had contractual and commercial utilization of 78% and 90%, respectively. The main commercial downtime is linked to the Brave Tern incident. The other deviation is Blue Tern, which, as I said, was in yard until mid-May, went straight out to an O&M campaign before it had some ID days at the end of the quarter. With regards to Brave Tern, we have now concluded a thorough investigation of the incident to understand what happened and not at least learn so it will not happen again. I think it's 3 points, it's very important to highlight. First, apart from one seafarer that was sent to hospital for a checkup because he was exposed to dust from the collision, no other people was injured during the incident. Secondly, the investigation has not found any technical or capability issues with the vessel. Thirdly, the direct cause of the incident was the situation awareness at the bridge, including the pilot. Giving a little bit more color on that, when you are to exit Esbjerg harbor, you are passing a very narrow passage at the end. When the vessel went out, it turned, it set a direction to actually get through this narrow passage. But the clearance to another wind turbine installation became too limited, and that was not discovered in time, so the bridge was able to do then the navigational correction to avoid the blades hitting the other vessel. A little bit, at least on the positive side, it has been a very strong effort by the team, as Sofie also mentioned in her speech, and also great cooperation with the stakeholders. We have managed again to salvage the blades, repair the vessel, both forward and blade rack, mobilized the vessel back again in 3 weeks. The vessel has been ready for some time. It had been waiting on weather, and it went out at 7:00 this morning, so that is very good. Also, as Richard mentioned, we have made an estimate of the cost of the incident, which is accrued in the figure this quarter. Despite that, we still have an EBITDA of NOK 23 million. If we go over to the backlog and the market, the backlog went slightly up this quarter. And for me, also, a little bit symbolic, for the first time, it passes the NOK 1 billion mark in FOWIC history, which I think is very good. The main reason for the increased backlog this quarter is an extension of a 2027 contract. On the market, I think we have been quite consistent with our view over the time, and I think we continue to see the same picture as we communicated last quarter. We see a very tight vessel market both this year and next year. Before we see more volatility on the demand side towards the end of decade, and then we see activity picking up as we go into the next decade. I think that was what I planned to say.

Thank you. Arne, you're next. Maren Lundby, CEO of Fred. Olsen Seawind.

Thank you. Good morning, everyone. This quarter, not surprisingly, we have worked quite actively with completing or progressing the transaction with Vattenfall. We expect the transaction to complete by the end of this month. We have passed a consenting milestone for Codling by submitting the data for the further information request last month. We are continuing our diligent development strategies in both projects. A quick overview of the projects in our portfolio for the ones who are not fully up to speed. In Codling, we have secured an attractive CFD for 1,300 megawatts. We have site exclusivity. We have great connection into Dublin. We submitted our consent application late '24, with the subsequent submission of the further information request last month. The key focus going forward for Codling is to engage with authorities to progress the consent and mature supply chain and the business case towards FID. In Scotland, we have Muir Mhor, a 1,000 megawatt project outside Peterhead. The project is viewed as one of the top floating projects in the U.K., with radial grid connection already secured for mid-2030s. We have secured onshore consent. We have signed the important land option agreements. We are expecting the final offshore consent to come in this year. The key focus in Muir Mhor is to close the SPA, the transaction with Vattenfall later this month to progress the consent and execute the development strategy that we have set out towards an early allocation round. A bit more detail on Codling. As I mentioned, we submitted the data under the further information request last month, meaning the ball is now in the planning authority's court again, as we have done all the surveys and submitted the requested data from our side. We take confidence in the Irish government still being committed to offshore wind. Codling is engaging constructively with stakeholders and politicians to progress the consent determination and support the delivery of Ireland's offshore wind ambitions. In the project, we are preparing for procurement across all major scopes ahead of the consent determination. This is done by active engagement with government and stakeholders, and with the supply chain to mature our business case. Final slide, a bit more details on Muir Mhor. We are progressing according to plan on the transaction with Vattenfall, with completion expected end of this month, as I already mentioned. With strong project fundamentals and an advanced planning and approval stage, we remain focused on targeting an early allocation round. Through collaboration with both supply chain and stakeholders, Muir Mhor is optimizing the development spend while reducing CFD bid risk and enhancing the project deliverability. That's our key focus in the coming months and year. Fred. Olsen Seawind will leverage related companies' expertise to complete this development process, also advance towards construction and generation.

Good. Per Arvid Holth, CEO of Fred. Olsen 1848.

Thank you, Anette. A brief technical and commercial update from my side this quarter. This quarter we have, on the technical side, achieved what is called a statement of compliance for our floating solar technology BRIZO. That is a milestone to us. What is special about this statement, compared to many others, is that it covers the full system. It covers the anchors, the mooring through the floater grid, and down to the anchors on the other side. It is done for a 3-megawatt BRIZO building block, it also just as much covers the methods that we have developed to dimension and size BRIZO in respective environments. That is, as I said, a good milestone technically, also when it comes to insurability and then thereby also bankability of the technology. We have on the product development side a good cost out, so that we keep up our cost competitiveness. An important part of that is our 2 pilots that we have in Risor in Norway and Altamira Bay in Brazil, where we can take the operational data and use that to optimize our system. That is the technical side. On the commercial side then, reiterating a bit, there are 3 main application areas that we focus on. Where we solve the largest problems the soonest is in displacing hydrocarbons, that is typically in a bit remote places like islands, resorts, and ports. That is an important focus for us at the moment. There is also very good potential in the Commercial and Industrial, also called C&I or also called private wire, for industries either that are close by a large water surface or also commercial stakeholders that want to purchase green energy. Finally, covered last quarter, the hybridization with hydropower dams, and that is more utility-scale applications. It could also be on lakes, and it could also be nearshore, but that is really the larger the water surface, the larger the wave. That is really where BRIZO can make a difference. As Richard mentions, we do see activity in all applications, actually. This last quarter we have been part of active tender processes when it comes to developing floating solar on saltwater, so typically hydrocarbon displacement. We've also completed a quite significant field study on more utility-scale project.

Samantha Stimpson, CEO of Fred. Olsen Cruise Lines.

Good morning, everyone. Today I'm talking about improved performance for quarter 2 within Cruise Lines. We've seen improved revenue again this quarter, driven through increases in occupancy and overall utilization. We've seen a gross revenue improvement across our Available Lower Berth Days, and we continue to see improvement in our forward sales position for all seasons on sale. If we look a little bit closer at the quarter 2 performance, we can see that we've got an increase in overall passenger days. That's driven, as I've mentioned, through occupancy and utilization. We've managed to hold our price point flat as we've been able to increase the overall passenger numbers on board the ships. Therefore, we've been able to improve our Available Lower Berth Day in gross revenue by having more people on board the vessels, therefore ensuring we've got more passengers per berth. Overall, we've seen a slight decrease in our EBITDA in the quarter. That's predominantly been driven through increased crew flight costs, where the fuel has increased this half year. That's a slight impact. We continue to also invest in the modernization and the customer improvements across the operation as well. That's where there's been a slight decrease there within the quarter. Pleased to say that all of the investment that we're putting into customer improvement in experience, we're seeing our Net Promoter Scores continue to improve, and they've gone up by 6 points this quarter versus last year. As previously mentioned, our cumulative sales for all seasons on sale continues to improve year-on-year. A pleasing performance. If we look at the itineraries, you can see that we continue to show and demonstrate breadth of itinerary. We produced 29 sailings in total across quarter 2, demonstrating our focus and our mix of short sailings and longer sailings as well, ensuring that we get a good opportunity to maximize the occupancy across the 3 vessels. You can see there the individual Net Promoter Scores across the fleet, as already mentioned.

Thank you. With that, we will now move to questions and answers. Please.

[Operator Instructions] Our first question for today comes from the line of Helene Brondbo from DNB Carnegie.

I had one question related to the Brave Tern incident. I'm wondering if you could give us a bit more flavor on that one, sort of with respect to who was responsible for what part of the incident and maybe some additional details also on the costs there. I understand you have taken the crews, but how large are they? And I'm also wondering if any of the damages are covered by insurance.

We can start with the insurance and cost basis. Yes, we have insurance coverage. As I said, we have tried to make an estimate over the total cost, including the deductible under the various insurance. I think as a policy, we don't give any more detailed insight into the figures. With regards to the accident itself, I'm not sure if I fully understood your question, but I think we try to be open here and giving the root cause and explaining what happened. Maybe you can rephrase the question.

Yes. So what I was really wondering about is what part of the damages was for which responsibility, and was any of this the responsibility of the party that contacted you? How does that picture look here? For instance, vessel damages and turbine damages, et cetera?

I think the total cost we have accrued for in the figure. The root cause is, again, linked to the situation awareness on the bridge at the forepeak.

[Operator Instructions] There seems to be no further questions for today. I will now hand the call back to the speakers for closing remarks.

So I think for us, we all wish you a very nice summer, and see you for the third quarter presentation. Thank you.