Nekkar ASA - Norwegian disruptor

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Redeye’s comments after Q2
https://www.redeye.se/api/articles/download-file/63e3a5bf-7390-3ded-b8a7-0a6586897ebb/Nekkar%3A%20H1%20Review%20–%20Uncovers%20Hidden%20Values

H1 Review – Uncovers Hidden Values

Redeye makes mixed estimate revisions on the back of Nekkar’s H1’24 report that beat our EPS forecast. We argue that the outlook remains solid with high tendering activity despite a softer Q2’24 order intake for Syncrolift. Driven by two divestments in FiiZK, which likely will reveal some hidden values, and by a value accretive acquisition of Globetech, we slightly raise our base case valuation.

Attractively priced

Nekkar trades at attractive multiples around 7.3x 2023 EBITDA and 6.6x EBITDA on 2024e, which we find surprising given the company’s quality, financial track record over time, and outlook. We expect that a continued financial performance will close the valuation gap to our base case.

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A major owner sold their shares at 8 NOK :thinking:

RASMUSSENGRUPPEN AS (the “Seller”) has, with Pareto Securities AS as Sole Manager and Sole Bookrunner (the “Manager”), executed a block sale of existing shares (the “Offering”) in Nekkar ASA (the “Company”), through a club deal in the pre-sounding phase of the Offering.

The Seller has, as of this announcement, successfully sold 11,512,506 shares in the Company (the “Offer Shares”), which equals approximately 10.7% of the Company’s outstanding shares, at a price of NOK 8.00 per Offer Share, which again equals gross proceeds of approx. NOK 92.1 million.

And a couple of days ago, service and upgrade agreements were signed with Dubai

26 September 2024 - Nekkar’s wholly-owned subsidiary Syncrolift AS has signed a
comprehensive service agreement with Dubai Maritime City (DMC) for the
maintenance of DMC’s two shiplifts and 42 dry berth-sets of transfer systems.

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Have I understood correctly that Rasmussengruppen sold and the buyer was a person serving on the board? Shouldn’t this be mostly positive news even though the purchase price was low compared to the share price?

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Rasmussengruppen sold 11.5M shares, of which just over 600k went to Qvist and Buntel AB, which is under his control. So there are still nearly 11M shares whose destination is not yet known.

I don’t see this purchase as that positive yet, as they had to sell at such a large discount. It is more concerning that there has been no demand for the stock.

Regarding the block trade, the best-case scenario would have been if Nekkar could have bought most of it themselves at this price. According to share buyback trading rules, it is not possible to buy large quantities directly from the market in a single day; I cannot say for certain regarding block trades.

Picked up from another forum, Rasmussengruppen is apparently involved in the Shearwater IPO, for which they would need capital. Another factor is Nykode (NYKD), which they are involved in and whose share price has plummeted, which would have side effects.

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https://live.euronext.com/en/products/equities/company-news/2024-10-11-nekkar-asa-syncrolift-receives-notice-contract-award

Nekkar ASA: Syncrolift receives notice of contract award for Norwegian shiplift project

11 October 2024 - Nekkar ASA’s wholly-owned subsidiary Syncrolift AS has
received a notice of contract award from the Norwegian Defense Estate Agency
(Norwegian: Forsvarsbygg) for delivery of a shiplift to the Haakonsvern naval
base in Bergen, Norway.

The delivery includes a newbuild shiplift system and subsequent scheduled and
periodic service and maintenance services, customer support, and other service
and maintenance assignments. The combined contract value is NOK 205 million.

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FiiZK has received orders for two large closed fish farms. This is quite a significant breakthrough after all the changes, even if the quantity is certainly still limited.

Nekkar ASA: FiiZK awarded contract for closed fish farming cages

22 October 2024 - Aquaculture industry supplier FiiZK, which is an associated
company of Nekkar ASA (Nekkar), has been awarded a contract to deliver two
large, closed fish cages to an undisclosed Norway-based fish farmer.

Under the contract, FiiZK will supply two of its “Protectus” closed fish cages.
FiiZK has not disclosed the value of the contract.

"We have spent the past 12 months further developing and enhancing our products,
streamlined our business to focus solely on closed and semi-closed fish cages,
and prepared our team to provide the best possible support to fish farmers that
have closed cages as part of their production strategy. We consider this
contract as a confirmation that this is the right strategy for FiiZK, says Jan
Erik Kvingedal, CEO of FiiZK.

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Q3/2024 materials:

Q3 2024 Financial result and business update.pdf (6.6 MB)

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Plenty to digest this morning from Nekkar

First highlight is the target of NOK 2B revenue by 2027, which is more than double the current level :exploding_head:

  • mainly through organic growth, but targeted acquisitions are on the list
  • Currently 4 portfolio companies, with a target number of 6-8

Q3 revenue fell short of last year, but this fluctuates a lot depending on timing

  • EPS however NOK 0.40 vs NOK 0.20

Nekkar ASA (Nekkar) delivered a solid net profit of NOK 42 million in this year’s third quarter, up 91 percent from the same quarter last year (22). Revenue ended at NOK 140 million in the quarter (162) and EBITDA was NOK 14 million (29), giving a margin of 10.3 percent (17.8%).

Syncrolift received orders in Q3 and thereafter, which brings the backlog back to a good level

Order intake was NOK 83 million in this year’s third quarter (61), driven by new
Syncrolift contracts in Dubai and Germany. Nekkar’s order backlog stood at NOK
704 million at the end of the quarter (747), giving good visibility for 2024 and
2025. The order backlog does not include the recently won NOK 164 million
contract with the Norwegian Defence Estate Agency

Fiizk

Fiizk’s buy-and-sell process was already profitable. NOK 50M investment and non-core shares sold for NOK 213M. Nekkar’s share is 39%.

2 new closed Protectus systems sold. Significant growth expected from regulation in the coming years

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Intellilift

Revenue has grown steadily :+1:

Intellilift delivered revenue of NOK 12 million in this third quarter, a
doubling from the same period last year (6). The company also secured an
expansion of the purchase order for a new drilling control system in the
quarter.

Techano

Delays in projects and the first ones sold with lower margins. There is demand, but references are lacking, making bidding challenging :thinking:

Globetech

20 new contracts since the acquisition on Aug 15, 2024!
Now 170 recurring revenue contracts. Not yet fully reflected in the group’s revenue.
Commercial synergies with Techano and Intellilift :+1:

And more about those new targets

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A summary of Nekkar’s current situation and a bit about the future in the Pitch competition

And Redeye’s Q3 report was already found there, let’s also link it here for safekeeping
q3-review-softer-near-term-outlook - 2024-11-19.pdf (533,6 Kt)

https://www.redeye.se/api/articles/download-file/efca75be-8b57-3dc4-ae84-56e2767cd6ff/Nekkar%20Q3%20Review%20–%20Softer%20Near-Term%20Outlook

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CEO speaking at Redeye Technology & Science Day event

Nekkar: CEO Ole Falk Hansen presents at Redeye Technology & Life Science Day 2024 – December 3

  • Of the new targets, NOK 1.5 billion is intended to be achieved with current operations.

  • The remaining NOK 500 million through carefully considered and portfolio-fitting targeted acquisitions, provided such opportunities arise. This means technology combined with the sea in one way or another. Profitable or scalable technology companies mainly from Norway or possibly Europe.

  • For 2024, Syncrolift’s activities are subdued, with backlog revenue coming in slightly later as projects progress or start.

  • Three lost tenders during 2024, where a political aspect led to competitors winning the deals. I have raised this in comments before, but now it came directly from the CEO.

  • FiizK is on the right track, and a breakthrough period is coming for fish farms. Closed fish farms are available to the market at the right time.

  • Technano faces challenges in tenders due to a lack of references. A couple of projects are nearing completion, which hopefully will help with this.

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The operation of open-net farms will soon come to an end.

Norwegian translates quite smoothly into English with a browser translator, at least.

The short version

  • Eight cases of escaped farmed fish have already been reported in 2025.
  • Lerøy has reported an escape of 15,000 salmon in Møre og Romsdal.
  • MDG’s Rasmus Hansson calls for an end to traditional open salmon cages.
  • Escaped farmed fish are a threat to the wild salmon population, which was red-listed in 2021.
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Salunda has announced it has integrated its Red Zone monitoring solutions on four drilling rigs in Guyana with Intellilift’s digital technologies to deliver automated location and control of critical equipment and personnel.

The collaboration – on assets belonging to a major offshore drilling contractor – marks the world’s first deployment of a real-time digital interface between wearable sensors, drilling controls and moving machinery to provide instant alerts to workers in the line of fire. The digital interface streams machine location, velocity and status in real-time.

By integrating Intellilift’s platform with Salunda’s CrewHawk, the system provides a low latency digital interface through Salunda’s proprietary Motion Trigger and Equipment Status (MTES) module. CrewHawk monitors hazardous working environments to track individuals and equipment while Intellilft’s platform provides a digital interface to the drilling automation suite, including position and status of all operational machinery.

Alan Finlay, Salunda Chief Executive, said: “This is a significant step in the evolution of offshore safety equipment, and we are proud to be working with Intellilift to ensure that crews are as safe as they can be when working in Red Zones.

“The digital integration marks a step change in safety for the sector and by knowing where workers and equipment are, as well as having the data behind the movements accurately captured and logged, this trailblazing solution ensures that personel working in safety critical areas can feel well protected during daily operations.”

Salunda’s Hawk Analytics platform, which enables users to scrutinise data, generate trends and display heatmaps showing where violations are clustered and around which machines they are most common. Reports can then be used to coach crews and adapt working practices to bolster safety.

Stig Trydal, Intellilift Chief Executive, said: “The market is in urgent need of new technology, and we are witnessing a growing willingness among operators to disrupt markets. Our collaboration with Salunda exemplifies the potential of innovative companies to challenge the larger players in technology and transparency. The journey we’ve had together has been truly remarkable, and only time will reveal what lies ahead.” The project marks the second collaboration between the two organisations, having first joined forces in August 2024 to optimise safety and automation in well construction.

Salunda’s wearable technology and camera solutions wirelessly monitor hazardous working environments in real-time, tracking individuals and equipment to provide anonymised feedback that focuses on safe operations and minimising risk.

Users of Crew Hawk, which has MET, IECEx and ATEX certification, can set up perimeters in the working environment around areas that pose the greatest risk to personnel.

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Better performance all the time and growth drivers moving in the right direction. The comparison period Q4/2023 seemed quite tough, but overall :+1:

13 February 2025 - Nekkar ASA (Nekkar) delivered revenue of NOK 181 million in
last year’s fourth quarter, which is more or less unchanged from the same
quarter in 2023 (179). EBITDA was NOK 27 million (32), equivalent to a margin of
15.1 percent (18%). Cash flow excluding buy-backs was strong at NOK 68 million
(30) in the fourth quarter.

The fourth quarter and 2024 results position Nekkar well to deliver on its
strategic ambitions:

  • Strong operational cash flow of NOK 68 million in Q4 driven by progress in
    key projects in Syncrolift
  • Growth in Group revenue of NOK 575 million in 2023 to NOK 838 million
    (pro-forma incl. Globetech and FiiZK) in 2024
  • Continued expansion of the Nekkar portfolio according to communicated
    strategy - Globetech acquired and FiiZk restructuring completed
  • Key contract wins for several operating companies - FiiZk secured two major
    contracts and Syncrolift awarded Haakonsvern shiplift and transfer system
    project

Investor presentation:

Nekkar ASA_Q4 2024_presentation.pdf (6,0 Mt)

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And Redeye’s quick comments

  • Q4 revenues beat our expectations by 14%, posting 1% y/y growth on a group level. A bit more in detail, Syncrolift sales decreased y/y with about NOK20m, resulting in organic growth of a negative 15% y/y (when excluding Globetech). Syncrolift revenues continue to be relatively volatile which is a result of the business model with large project-based contracts, we encourage investors to evaluate Nekkar on a yearly basis. The last two quarters have seen a slowdown in near-term activity while order intake has been fair, but with delivery further out in time impacting near-term revenues.
  • Order intake amounted to 187m, including the previously communicated NOK136m contract to the Norwegian defense. As a result, the order backlog increased sequentially, now amounting to NOK744m.
  • Tender activity continues to be high, and the company expects to secure a significant amount of outstanding NOK5.7bn in tenders. For 2025, there are expected outcomes in the Middle East and Asia, ASMAR Chile.
  • On a group level, Nekkar beat our EBITDA estimate by about 24%, delivering an EBITDA margin of 15%, which is a healthy recovery relative to Q3 2024.
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Nekkar’s subsidiary Techano Oceanlift has been awarded a
contract by Sefine Shipyard to deliver an offshore crane to a newbuild
construction support vessel that the Turkish shipyard is building for a
strategic partnership between Agalas, Eidesvik and Reach Subsea.

Techano Oceanlift will supply a 150-tonnes capacity crane capable of performing
subsea construction work and topside lifting operations. The company’s scope of
work includes engineering, manufacturing and commissioning of the crane. The
contract value is approximately EUR 7.5 million.

This has been somewhat expected, that a new crane order for a sister vessel for the same client would be confirmed.
The price is EUR 1.0M more than the previous one just over a year ago. So the first one was apparently made with a smaller margin as a “loss leader”. Now there’s a bit more margin, of which some probably goes to exchange rates and inflation :thinking:

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A couple of crane orders for Techano in Canada. Apparently not very big, as there was no stock exchange release. The main thing is that Techano’s competitiveness and delivery capability are starting to show in the right direction :+1:

Techano Oceanlift has been awarded a contract by CRIST S.A. to deliver two offshore knuckle boom cranes that will be installed on board an offshore support vessel (OSV) that is being built at the yard.

Our cranes are designed for safe operation under harsh conditions and low temperatures and equipped with radio remote controls. They will be delivered with winches including constant tension (passive compensation), for safe operation offshore.

CRIST is building the OSV for DOF. The vessel will be delivered to service offshore Newfoundland and Labrador, Canada.

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It seems something quite significant is coming regarding fish farms :thinking:

Minister of Fisheries and the Oceans Marianne Sivertsen Næss will present the aquaculture report in Bergen on Thursday, April 10.

– The Norwegian aquaculture industry will produce good and sustainable food for the whole world. It creates important jobs and values ​​along the coast, and is a pillar of many local communities. With the new aquaculture report, the government wants to point out the direction for future aquaculture policy.

This is stated by Minister of Fisheries and Oceans Marianne Sivertsen Næss in a press release.

The aquaculture report will be presented in the Port Room, at Skoltegrunnskaien 1, at 5:00 p.m.

It is expected that the aquaculture announcement will contain stock market-sensitive information. The Oslo Stock Exchange closes trading at 1630.

20 organizations demand closed fish farms

On Thursday, the government will present its aquaculture report. At the same time, 16,000 signatories are backing a demand for closed and emission-free fish farming facilities.

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Does it smell like open-net farms will be banned?
It’s hard to quickly think of what negative could come from Fiizk’s perspective, because it says “will produce food”, meaning I think they intend to continue farming salmon :grinning:

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Sea trout will have tradable quotas, and possibly a tax on lost fish. I see tailwinds for the Closed Cage- product!

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Techano records more orders, heading in a better direction :green_circle:

Nekkar’s subsidiary Techano Oceanlift has been awarded a
contract by Hercules Supply AS to deliver an offshore crane for their newbuild
Multi-Purpose Supply Vessel (MPSV) currently under construction at Fujian Mawei
Shipyard.

Techano Oceanlift will supply a 70-tonnes capacity crane capable of performing
subsea construction work and topside lifting operations. The company’s scope of
work includes engineering, manufacturing and commissioning of the crane.

In addition, Intellilift’s software is integrated here :+1:

The 70-tonnes capacity knuckle boom crane is equipped with an active heave
compensated (AHC) winch with 3,000 metre wire for subsea construction
operations. The crane also features Nekkar subsidiary Intellilift’s control
system and motion compensating system.

In addition, the crane will be equipped with a unique detachable 3D compensated
lifting tool, Safelift. This tool greatly enhances topside lifts and increase
safety during lifting operations from vessel to topside installations during
adverse weather conditions.

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Q1 didn’t go quite as planned :grimacing:

Expectations weren’t very strong either, but still a rather sharp drop to the normal level.

A lot of good is promised or at least predicted for the future.
However, there might be buying opportunities today :grin:

Investor presentation:
https://api3.oslo.oslobors.no/v1/newsreader/attachment?messageId=645656&attachmentId=303970

8 May 2025 - Nekkar ASA (Nekkar) delivered revenue of NOK 111 million in the
first quarter, down 27% from the same quarter in 2024 (152) mainly driven by
slower progress in Syncrolift projects. EBITDA was NOK -12 million (30),
equivalent to a margin of -11% percent (20%) driven by the above-mentioned
progress in Syncrolift and cost increases in Techano Oceanlift projects. The
balance sheet remains strong with a net cash position of NOK 182 million.

While the first quarter results were impacted by unfavorable activity and cost
developments, Nekkar, with roughly one-third of activity related to a growing
defence segment, remains well positioned to deliver on its ambitions.

HIGHLIGHTS FROM THE QUARTER:

  • Group revenue of NOK 111 million (from NOK 152 million a year earlier),
    impacted by temporary lower progress on key projects in Syncrolift and lack
    of order intake last year
  • The first quarter negative EBITDA result of NOK 12 million represents a
    combination of the abovementioned temporary activity decline in Syncrolift,
    coupled with increased costs in Techano Oceanlift as well as adverse currency
    effects from the depreciation of USD against NOK
  • Operational cash flow of NOK -8 million in Q1 driven primarily by the
    abovementioned negative EBITDA result
  • Tendering activity continues at a high level across the Group, with specific
    award timing yet to be determined

“The negative EBITDA in the quarter is disappointing and does not align with our
performance goals at Nekkar. While the quarterly results isolated is negative we
continue to see a positive underlying development in our operating companies,
backed by a strong Group balance sheet and defined strategic ambitions going
forward” says Ole Falk Hansen, CEO of Nekkar.

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Syncrolift

Revenue roughly halved from a year ago. :red_circle:
Project delivery times vary, so some quarter just gets a worse timing. The order book for 2024 was also weaker, so there was less to deliver. :red_circle:
A lot of activity in the defense technology sector, from which improvement is expected in the future. However, order and processing times are long in these :yellow_circle:
Edit:
Picked from the Q&A video, the share of the defense sector is over 60% :thinking:

Technano

The first initial projects resulted in a loss, though this was at least assumed. :red_circle:
New ones coming with better margins going forward from Q2. Also new order book, as seen from previous updates. :green_circle:

Intellilift

Development work and deliveries are finally starting to show as revenue as well. :green_circle:

Globetech

Continues to deliver and grow, seems to have been a good acquisition :green_circle:

FiizK

A big drop from a year ago, but back then it included parts that have now been sold. :yellow_circle:
There is political pressure to improve the ethics of fish farming and fish health, to which FiizK’s farms offer an alternative. :green_circle:

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30M NOK value upgrade contract for Diego Garcia base :partying_face:

May 28, 2025 - Nekkar ASA’s wholly-owned subsidiary Syncrolift AS has been
awarded a contract from the United States government contractor MVL Group to
upgrade the shiplifting facilities on the Diego Garcia naval and airbase.

Under the contract, Syncrolift will deliver life extending services to the
existing shiplift and transfer system, including upgrades to the control system.
Work under the contract will commence immediately and is expected to be
finalized through the second half of 2026.

“The award, where we will deliver services to a naval-base in the Indian Ocean
from our Dubai and Mumbai locations, highlights our global competitiveness and
international presence” says Rolf-Atle Tomassen, managing director of Syncrolift
AS.

The total contract value is approximately NOK 30 million.

This is about a US-UK base, a lease extension for its administration has just been agreed upon. A slightly longer lease agreement :grin:

https://www.defensemirror.com/news/39567/UK_Signs_Agreement_with_Mauritius_to_Retain_Control_Over_Diego_Garcia_Naval_Base

Adding the AGM decisions here:

Minutes Annual General Meeting of Nekkar ASA 2025.pdf (3,6 Mt)

Nothing special. But new authorizations for share buybacks, max 10% of share capital. :+1: No talk of dividends, which is only positive with a Norwegian :norway: company :sweat_smile:

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