Second quarter financial results

“Revenue increased by 20% compared to the same quarter last year, driven by apartment handovers in AFK Property and strong performance from NSSLGlobal,” says Benjamin Golding, Chief Executive Officer at Arendals Fossekompani. 

The reduced operating profit for Arendals Fossekompani Group compared to the second quarter in 2023 was mainly driven by impairment of the entire book value of the shareholding and shareholder debt in Commeo and Ampwell, as well as lower electricity prices leading to lower profits from hydropower production. 

After the end of the quarter, Arendals Fossekompani sold its portfolio company Vergia to Swiss Life Asset Managers, which included shareholdings in Seagust, North Ammonia, and HydePoint.

“The discontinuation of Commeo and the divestment of Vergia contribute to focusing, de-risking and optimizing our portfolio, while reducing exposure to capital intensive businesses in line with strategy,” says Golding.

Electricity prices in the quarter were substantially lower from the same period last year, with the NO2 price area averaging EUR 44.8/MWh (EUR 82.4 MWh). Power generation was comparable to the same period last year of 135.2 GWh (133.7 GWh). Lower prices reduced quarterly revenues and operating profit for AFK Vannkraft to NOK 70 million (127 million) and NOK 44 million (107 million), respectively.

 

Operating in international markets, Arendals Fossekompani Group is naturally exposed to currency fluctuations. Revenue growth in NSSLGlobal was positively fueled by a stronger GBP compared to the second quarter of 2023, whereas the EUR and CAD remained at approximately the same levels.

SEGMENT DEVELOPMENTS 
Volue reports total operating revenues in Q2 of NOK 409 million (399 million). SaaS revenues reached NOK 135 million in the quarter, an increase of 38% compared to Q2 2023, representing 33% of total revenues. Adjusted EBITDA in the quarter totaled NOK 88 million (63 million), corresponding to an adjusted EBITDA margin of 22% (17%). 

On 8 July, the newly established entity, Edison Bidco AS, announced the intention to launch a voluntary cash offer for all outstanding shares in Volue. Edison Bidco AS is controlled by Arendals Fossekompani, Advent International L. P. and Generation Investment Management LLP. The proposed acquisition will privatize Volue and will support its next phase of growth under the new consortium. In the contemplated transaction, Arendals Fossekompani intends to reduce its shareholding in Volue from 60% to 40%.

NSSLGlobal reports revenues of GBP 29.3 million (22.9 million) for the second quarter. The growth was largely due to the catch-up and completion of several large government projects in the period. NSSLGlobal won new business estimated to GBP 6.1 million (GBP 16.3 million) during the quarter, of which 67% was due to government orders.

Tekna reports CAD 11.2 million in revenue, a 2% increase year-over-year, a 3% revenue decline for the first half of 2024 compared to the same period in 2023, and a 30% increase in revenue from Q1 to Q2. Tekna’s nano material is progressing through qualification for next-generation multilayer ceramic capacitors (MLCCs), with the first revenue-generating order now shipped for customer factory trials.

ENRX reports total operating revenues of EUR 36.9 million in the second quarter, in line with the same quarter in 2023. Slightly reduced activity within the Heat division was offset by a positive contribution from the Charge division. Total order intake for the quarter reached EUR 40,3 million (EUR 37.8 million). Total order backlog at end of Q2 2024 was EUR 75.6 million (EUR 94.2 million) up from EUR 74.3 million in Q1 2024.

FINANCIAL POSITION 
Arendals Fossekompani’s financial position remains solid. The company’s available cash on 30 June amounted to NOK 837 million. In addition, the company has undrawn credit facilities of NOK 1123 million, securing available liquidity of NOK 1,960 million as per end of the quarter.

 

“Our companies are well positioned within high-growth global industry verticals that have a positive long-term outlook. The portfolio is diversified, with both stable cash-flow generating assets and attractive growth opportunities,” says Golding. 

DIVIDEND 
On August 22nd, Arendals Fossekompani’s Board of Directors decided to pay an ordinary cash dividend of NOK 1.00 per share for the second quarter of 2024. The dividend is set to be paid on 9 September 2024.

Read the full report HERE