DOF Group ASA (DOFG) Earnings Call Transcript & Summary

Good afternoon, good morning, and welcome to the second quarter presentation for DOF Group. I'm here with, Hilde Dronen, our CFO, and I'm Mons Aase, CEO. So a few comments on the first page here, showing one red boat and one blue boat, of course, that's obviously because we have announced in the quarter transaction with the Maersk Supply Service for acquisition of Maersk Supply Service A/S. We have a few slides on that later on, and we'll come back to that. First slide here on DOF at a glance, just shows what we are, so we have operated now 57 boats around the globe. some of them are preowned, 5 on charter and the rest on management operate from all continents, main hubs, Australia, West Africa, U.S., Norway, U.K. and so on, and we have our own, I think we had 4,300 employees by end of the quarter. If we come back to the numbers, but we see, of course, revenue and the EBITDA have continued to grow also the last half year. And what we do, we own vessels, as said. And then we own on a large fleet of subsea equipment ROVs globally. And we have a very specialized workforce consist of engineers, ROV pilot, surveyors, project managers and so on and what we deliver to the clients are subsea projects and mooring projects mainly around the globe. So we have an organization that we see here produces margins on top of the vessel revenues. So we like to call ourselves an integrated -- integrator offshore services globally and so that's what we do. And of course, that's partly also why we like the Maersk acquisition so much because we don't only get a fleet of very good boats into the company, but we also then will be able to put additional service on it. So we claim that we -- a fleet like that are more worth in the DOF system than in a traditional ship owner system. On the quarter 4, we have had, and Hilde will, of course come back more to the numbers, but short is that we delivered $122 million EBITDA in the quarter with a revenue of $361 million. So we had good performance in APAC and the Atlantic region but lower than in Brazil, and we -- due to dockings we had some maintenance and then we had Skandi Amazonas mobilizing for a new contract. So she was owed a fair large portion of the quarter without income. Fleet utilization, 89% and perhaps what we are most happy with in the quarter is the order intake. We had a bit more than $1 billion in new orders coming in quarter 2 and after balance date, we have had $400 million so far. So it's been a record high in the quarter and after the quarter. We -- and partly, of course, due to the high backlog, we will come back to that total backlog distributes year-by-year going forward, but a very high backlog for second half this year. And looking at our own revised forecast, we lift our guidance to $500 million to $520 million from $490 million to $520 million. So we, of course, expect improved earnings done in second half. And of course, some exploration is Buzios, of course, been off-hire for the whole first half, back in full operation first August and of course, she will contribute in the second half. Amazonas then as I mentioned, off-hire for a large portion of second quarter, but then on contract on a new 2-year contract, so she will be fully on in second half. And then we have had -- we also have higher project activity in several regions, nowhere in the second half compared to the first half. And some small one-offs, for instance, a couple of million dollars done in cost on the Maersk acquisition booked in first half. And as we said, we signed an agreement to acquire Maersk in -- on second July, 22 boats, subsea and Anchor Handling vessels and then closing expected in quarter 4. And also seen a very important key number coming down. So we see net debt against EBITDA in over last 12 months at 2.7x. So that is moving in the right direction. I'll leave that like that and Hilde will come back to more details on the numbers here. And then on the backlog, we saw a bit more than $1 billion order intake in second quarter, $400 million after the balance date. And by end of the quarter, we had $2.6 billion in backlog, we're adding, of course, the $400 million [indiscernible] around 3, but of course, we burn a bit as well. So -- but it's its record high. And if you look at the backlog for second half '24, of course, the $600 million shown here is before, of course, the $400 million is distributed. So we think we are $650 million, $660 million backlog right now for second half. And of course, the revenue for first half was $692 million or something. So of course, it's very close to 95% of the revenue. In fact, the first half, we have a backlog for second half. So very low uncertainty on that. And looking at the entire fleet, it's perhaps some weeks on 3, 4 boats that could potentially be exposed in December. So it's very high backlog, and that's why we are going to lift the guidance. If you look at '25, of course, we see here slightly below $1 billion if you distribute $400 million and a portion in '25, we are above $1 billion. And of course, we give the revenue guidance here between $1.4 billion and $1.5 billion, at least we are 70% to 75% order backlog compared to revenue have been in '24. So it's starting to shape up for '25 as well. Also, of course, we see no -- that the backlog or some of the contract we just did. They have full period ending in '29. So of course, we also -- we have started to build backlog '27, '28 and into '29. So it's -- so as we say, I think it's a record high backlog. And of course, done on rates, margins that is either equal to the last peak we saw in the market or higher, yes. So it's very good levels in the backlog now. Then next page here is, of course, is showing what contracts we have done. And of course, I can't -- will not -- I cannot spend time on all of them. But might see a few. And of course, if we mentioned this call REM Inspector, which is a 3-year IRM contract with Equinor in North Sea, 3 plus 3x1 option on year. Of course, it's -- [indiscernible] is a very strategic, important contract for us in the North Sea. Number two, of course, it shows that we are able to grow on third-party boats. And of course, the good rates, good margins and, of course, that will help lifting not only revenue but also the EBITDA for '25 onwards compared to this year. And perhaps also mentioning, I'm happy with all of them, but perhaps also mentioning Vitoria, Niteroi where perhaps we see the highest uptick in rates. Example is Niteroi, today have a day rate of around all-in gross day rate around USD 150,000, USD 160,000. The new day rate is close to USD 250,000, so it's an enormous uptick in day rate and the same applies for Vitoria. So -- and of course, perhaps the last one to mention is, of course, the recently announced Skandi Acu where we actually see no backlog until June, July 2029, yes. And in general, you could say that all vessels or now contracts are on higher levels and somewhat at much higher levels than the present contracts I work on. So what this tells us is that we think we will continue to increase the EBITDA going into '25 and '26 compared to '24. And then some slides on Maersk employees. And first I hear is why do we think this makes sense? Suppose it is -- we are in what you may call very strong global markets for both subsea tonnage and Anchor Handling tonnage and of course, with that as the background, of course, we see immediate fleet expansion with modern and very high-end fleet, of course, it makes a lot of sense. You get immediate earnings and, of course, also then on costs compared to people looking at new builds, much, much, much lower cost then much, much, much earlier earnings, yes. We have a very good geographical fit. I have a slide on that later on. So of course, there is synergies to lock. And of course, you get the scale and you get a presence in all the regions you operate in, making you even more relevant than we are today. And as I said, very attractive priced assets and then very strong potential for earnings, not only on a vessel, but as mentioned also for DOF gradually to add projects earning on the Maersk fleet. A.P. Moller Holding, the owner of Maersk Supply Services will come in as a long-term owner. And often, we look very much forward to that. They have the same ambitions. Susan and we think there will be a good long-term owner for -- in the DOF Group. And Hilde will talk a bit more about the financing of Maersk and -- but of course, the short is that it's very robust. It's low leverage and -- and we also think it will increase the dividend capacity in DOF going forward. So I'll leave it like that slide. On the next one is just a summary of what Maersk Supply Service is when we buy 22 vessels. It's operating globally. It's a very long history. It's an average age of the fleet of 8.5 years and its 1,200 very skilled employees. And then on the left -- right-hand side here, you see the mix of cable layer vessel, construction support vessels and Anchor Handling vessels. So it's a very nice fleet. And of course, the -- so many beats -- these boats, the two on a picture, the Maersk Installer, which we're buying her and three sisters under Maersk Minder, here, which we are buying her and 4 sisters, they are the youngest they are 5, 6 years old so it's the youngest CSVs and the youngest handler in the global market, yes. So what we get we get -- the combined company will be the largest player in the market. And so it's the largest owner of construction vessels, subsea vessels and it's a large owner on what we call high-end Anchor Handling vessels. So it's a very interested in market position and of course, making us even more relevant for all of our clients around the globe. And of course, the feedback we have had a bit of feedback from clients around the globe after we announced it, and that is very positive, and I also look forward to see this combined entity working with them going forward. Then this is showing where we are -- how it will look globally. So we get -- let's say we get good scale in each region, we should be able to look at the cost, but also, of course, also then on being more relevant also on the sell side, it gives a lot of opportunities, yes. So the places where we grow most is in North America, and it's in the North Sea. So it's a good scale and very relevant globally with the new fleet and the new setup, yes. The next slide is showing the coverage on the Maersk fleet. And of course, as mentioned, of course, we, DOF almost sold-out in '24, have 70% to 75% coverage for '25 and so on. So of course, we were interested to have a fleet with not too high backlog for that reason, but also, of course, for the reason that we want to gradually add services on that fleet. And this shows that the backlog in '25 and into '26 is not very high in Maersk Supply. And then, of course, that is how we wanted to be on as I said, we see a lot of opportunities globally and the market is very strong. So we expect -- we think this is a good fit for us and a very good timing in the market, yes. So this is just on pricing, yes. So I don't go into detail, but we broker values on the fleet. We are buying is around $1.3 billion and an adjusting down for cash and so on and what we are paying. It's -- we are paying on close around 71%, if you look at the footnote here around 71% of that if you look at the whole balance sheet in Maersk Supply will look when we close the transaction. So we think it is a very attractive deal on what you call steel values. If you look on the -- next slide here, on the earning potential. This is -- I cannot guarantee you this, but it's some, let's say, claimed numbers where we have taken 11 on the Maersk boats. And we have said, if we are able to do the same on those boats as we did on some of our own boats, this will be the wrestle. So we are saying that if the 5 largest Anchor Handlers, newest Anchor Handlers in Maersk, the M-class are able to -- we are able to win contracts similar to what we did with Equinor and Iceman and Petrobras on Skandi Amazonas. Then they will make money according to the bar here. And then if we own the I-class under Forza are able to do the same as we have done on Skandi Seven, Skandi Acergy and what we are doing on Maersk Installer as well, we have one time charter in to us. Then, we think mark-to-market for those 11 boats are between $240 million and $260 (Sic) [$280] million here, which gives the for ForEx to 3.6x on those 11 boats alone. And of course, that is perhaps the slide that really shows why we think this is an attractive deal also on multiples for DOF here. So -- and of course, then, you can add 11 order books on top and so we think it's a very attractive deal when we come in to -- when we are -- when we do new contracts and get these boats into our platform. So -- so then I'll leave it to Hilde, please Hilde about the numbers to financial highlights please.

Main highlights for this quarter is a very high order intake result more or less the EBITDA more or less on consensus, a decent number, strong cash flow, but there are some special items, especially on the financial costs and on the EBIT line. So this quarter, we achieved an EBITDA of $122 million versus $121 million, same period last year. And year-to-date is $236 million versus $225 million. The operating profit EBIT is $111 million versus $128 million. And as you can see, there has been some reversal of impairment, previous impairment also this quarter. And that is actually four vessels where we have been awarded new contracts at significant higher rates than the existing contracts. So that has been -- is the basis for reversal of previous impairments. Two of the vessels are owned by the DOFCON JV and two of the vessels are owned by Norskan. If you look at the net interesting financial or interest costs, they are more or less in line on the previous period and also year-to-date. However, we have minus $62 million, which is net unrealized currency. And that is a noncash amount. It's related to Norskan, who is reporting their numbers in Brazilian real and the Brazilian real has weakened significantly towards the U.S. dollar. So that's the reason why this is put into the P&L. It has only impact on the P&L and not on the balance sheet. Taxes, $13 million versus $21 million. A large portion of this is actually payable and it's withholding tax. So that gives a net profit of $6 million versus $103 million. And of course, again, the financial unrealized impact on the financial has impacted the numbers highly this quarter. If you look to the right, there you see the EBITDA per segment. And as you can see, DOF Subsea is continuing performing well. DOF Rederi, a stable operation, but a disappointing performance in Norskan. That is mainly due to vessels being off-hire, mobilizing for contracts and also planned and preventative maintenance. We will come back to that. Looking at the balance sheet, no significant event on the non-current assets, tangible assets, which mainly include vessels stable development since year-end. Contract cost, that is actually mobilization costs to new contract, which is amortized during the contract period and is partly impacting the EBITDA quarter by quarter. So the cash generating EBITDA for this quarter was actually $127 million didn't amortize the contract costs. Deferred taxes, no big events this quarter, neither on the non-current assets. Looking at the receivables, a growth from year-end and also from previous year and a significant growth in the last 12 months, which reflects increased activity in the group. So that gives total assets of $2.9 billion versus $3 billion or approximately $3 billion for the full -- by end of this quarter. Equity is developing positive, which is, of course, good. Noncurrent assets mainly include secured debt, but also leases to -- because we are leasing three vessels from external owners, and they are booked as financial leases. That also reflects the current portion of debt of $168 million, which is the 12 months payment on the long-term debt. Other current liabilities, nothing much to comment on. And of course, looking at the columns on the right side, we see a positive development on net interest in bearing debt and on the equity and of course, see net interesting bearing debt to EBITDA has reduced from 3.3x to 2.7x the last 12 months. If you look at the cash flow, as I said, the cash flow is decent. It's $119 million versus $75 million last year and $228 million versus $142 million for the full year. and stable interest payments and also taxes paid. As I said, that's mainly withholding tax, but also some corporate tax. Sale of tangible assets is one PSV that was sold in April and delivered to new owners. CapEx is mainly maintenance CapEx, class stockings and planned maintenance. Other changes in investing activities, that's actually -- part of that is -- which is close to $7 million is that we have acquired the minority shareholders in DOF Installer, which is quite important for DOF Subsea in particular, because that gives us more flexibility on the cash and cash planning and also debt also related to debt payments. Net payment to borrowings is $63 million and on lease, it's $10 million. So that gives a total reduction on cash payment on that of $74 million. So the same is showing at an aggregated level on the right side. If you look at the interesting bearing debt where the gross debt is $1.729 billion by end of last quarter and $106 million of that was actually leases on -- it's mainly 3 financial leases, meaning hiring in vessels from external owners. The secured debt is $1.6 billion. And here, you see that as already mentioned, $74 million of that debt is repaid and $4 million is currency impact. And the debt by end of the first half is $1.6 billion. And as I said, this unrealized currency impact coming from the Brazilian entities is not impacting the balance sheet. Only $4 million of the unrealized currency is impacting the balance. The operational performance, DOF Subsea, again, showing good performance and close to 100% utilization in Asia Pacific and also very high activity in the Atlantic region and stable in the U.S. region. While we had lower utilization than the previous quarter is actually in Brazil. And of course, the Brazil activity on the subsea side is mainly impacted by the PIDF project, and that had lower activity, partly due to a 15-year class stocking of one of the vessels working on that, but also other planned maintenance. But as you see, all in all, DOF Subsea is developing positive and the last 12 months EBITDA on DOF Subsea is USD 265 million. Looking at DOFCON and for obvious reasons, the EBITDA development the last 12 months is lower than in 2023, and that is due to the Skandi Buzios being off-hire, the full quarter. But a good thing now is that the vessel is on hire, so -- and that is from first of August. And of course, contract awards on two vessels for this company, but that is applicable from '25 and onwards. In Norskan, as I mentioned earlier, the operation has been impacted by not only the utilization but also the costs due to maintenance on several vessels, but also the fact that Skandi Amazonas has been offered 45 days to mobilize for our new contract with Petrobras. That contract has now started and the vessel is fully operating on the new contract. And of course, you Skandi Amazonas is really affecting the numbers for Norskan. Very good performance in first quarter from that vessel and also last quarter, last year. And there you see that the last 12 months in Norskan has -- is more or less stable. DOF Rederi, stable operation, nothing much to report here, but this one less vessel's due to delivery of the Skandi Gamma. Looking at the debt, I will not go into all the details regarding the main terms on the debt and as informed before is that the existing debt in the DOF Group is split in 4 silos. And that is after the restructuring in March last year. And this is why we are reporting in these 4 silos. And as you can see on the key numbers, especially on DOF Subsea, they are developing positive and the net interesting bearing debt the last 12 months which is now 2x. So very positive development. Of course, DOFCON has been impacted by the Buzios incident. However, going forward, the operation here are expecting to be stable. and also at increased earnings due to the new contract awards on the 3PL as we recently published. On the Norskan, which is where we have the weakest balance and the net interesting bearing debt to EBITDA is 7.2x. So it's still above 7x and however, this is the company where we have the longest term on the debt in addition to DOFCON and 4 -- around $420 million outstanding debt is with BNDES where the first maturity is in 2030 at stable and good terms. So where we see where we need to refinancing in Norskan is around slightly below $80 million. In DOF Rederi, you see the net interesting bearing debt is now 1.3x and we don't see any refinancing issue on this company at all. But just a few words on the refinancing for the group. We are now working and preparing for the refinancing to establish a good and flexible capital structure for the company. And we are also starting looking to see what should be the right capital structure for paying dividend going forward. We are not at all concerned about the refinancing for the group because we see that all the silos are developing in a positive way. So we -- this is -- our main work this second half is to plan and work on a refinancing of the group. And now I think we are well positioning for that. Looking at Maersk, which is fully funded on the cash portion, which is expected to be in the range of $550 million to $560 million. It's depending on certain -- on when the closing will be. After the private placement that was completed in July and the facility with 4 lenders of $500 million, that is -- the financing is in place. And as you can see, it's not a high leverage we are planning for this company. If you take the full value, the broker estimate, the fair market value of the fleet, we are talking about a loan-to-value of 38%. But based on that, we are actually acquiring a company without debt and generating cash we expect to see around -- between 20% to 30% loan-to-value at closing. The closing is expected to happen in the fourth quarter, but it's depending on the competition filing. So that was it on the financing.

Yes. This slide, we have updated the guiding for '24. So on revenue, we have narrowed the window now, so it now shows $1.4 billion to $1.5 billion. EBITDA, we have narrowed the guidance, so taking it from $490 million to $520 million to $500 million to $520 million and of course, based on what we said, a very strong backlog for second half. Depreciation also narrow window and now it's $170 million to $180 million. Net operating income, as before, interest cost as before and tax payable, we have lowered it $40 million to $50 million instead of $50 million to $60 million, you see we paid less tax than we guided previously. On CapEx, it's up from $100 million to $110 million, which used to be $90 million to $100 million. And the only -- the reason for that is, of course, is the new contract with Equinor REM in the North Sea, so of course, it give nice earnings, but we have to invest in some new subsea equipment or at least for the -- to put on the boat were shuttering in. So that's the main change in the guidance. So post the hero course is that we see we are increasing the EBITDA guidance a bit. On outlook, so it's now $500 million to $520 million for '24 and so meaning that second half, it's between $265 million and $285 million and midpoint $275 million. And of course, it's -- if you analyze that, you have high $550 million, I'm not saying you can analyze that, but of course, it's an interesting number to note that midpoint here second half gives you $550 million run rate for a year. And we just had the first glance look at July numbers and yes, you could say that they didn't disappoint us on we see now as a good potential in the fleet based on the July numbers we have seen. So -- and then as I said, we have Skandi Buzios back on. They have been off for a long time and back on first of August, of course, that will help on the earnings going forward. Skandi Amazonas was out part of second quarter fully on and will also help. And then we have higher productivity in a few regions, which also we expect to deliver, [indiscernible]. So -- and then on the bottom here, it's a picture four boats. And of course, these are boats then on -- it's -- the first one on the left-hand side represents Skandi Vitoria, Skandi Niteroi. Of course, they will not start a new contract before in second half '25. the Skandi Africa will go on a new contract in March, April '25, and then you have the REM Equinor commencing in the spring of '25 and then you have Skandi Seven here that was recently renewed, that will start in November. So what we are trying to say without picture is that we think the growth in EBITDA, will continue also after second half '24, yes. So we look forward to starting the budget process for '25, and we look forward to commencing these new contracts. Then we have one slide here. We have just sent an invitation to Capital Market Day on 10 September in Pareto offices in Oslo. And of course, that's the day before the conference starts. So we think that's a good timing for it. And you are all welcome to attend that, starting 11:30 and then refreshment from 11:00. And of course, we want to -- we have invited some of the people we have around the globe. So they will give you a deeper insight into a couple of regions what they are doing and how they see the market. We will also spend more time on the Maersk Supply Transactions. We will give what we call a financial update. It means that we will, let's say, start to share some thoughts on the refinancing in timing for the refinancing, and of course, then also perhaps look a bit on if we do a refinancing. Hold the dividend potential looks like in the group. So that is -- will be a very important session. And I'll leave it like that. So you are all welcome 10 September, hope you show up and look forward to show more insight into DOF annual markets on that day. So thank you. That was the end of the presentation. And we -- hopefully, you have some questions, we will try to answer as best as we can. And I think we forgot to mention that, but I guess the questions should be sent on what you call it...

Through the webcast functionality. So we have a few questions already. And if you would like to ask a question, please feel free to use that functionality in the webcast to submit the question. The first one is, do you expect to be in a position to pay dividends in 2025? And if so, in which quarter of 2025?

No, as we just said, we will talk more about that on 10th September. And of course, we can't say yes or no to that today. but we are saying that there is a potential if we decide to do the refinancing in -- of course, the refinancing has to be done by January '26. So meaning you have to do it latest in second half '25 but of course, it also is an alternative to do that in -- during the fall on into first half '25 and of course, then we might be in a position to pay dividend in the spring of '25 because, of course, the main restriction of paying dividend is because the financing we have on part of the fleet now there is a covenant saying we cannot pay dividends.

And regarding the upcoming refinancing, what is your view on appetite from banks?

Hilde, you might answer that, please?

Yes. as I said, when I presented the debt status, we are not concerned about the refinancing at all. And one reason behind that is because that we see an increased appetite from banks. That includes the existing banks, but it also includes new banks. So due to -- and I expect that it's better earnings and it's better markets that will increase the possibility for new banks to coming in.

And perhaps also adding was the part of the group that [indiscernible] the long-term debt in Brazil will not be touched. So of course, what is to brief on is mainly DOF Subsea and DOF Rederi. And of course, one Hilde showed you the key numbers for that, of course, you see the gearing level, the debt level in those 2 silos are very low, so DOF Rederi was down at 1.3x or something on net debt to EBITDA and DOF subsea is around 2x and of course, will continue to fall -- so yes, so I just wanted to add that, yes.

So what's important on the refinancing is to ensure flexibility for the group, flexibility for the operation and also going forward to be able to pay dividend. But as your previous question, when that is going to happen, that's -- we can't say that today.

And we have a few questions on the unrealized currency effect for this quarter. So perhaps you could take a moment to explain where that comes from, again, and how that impacts the balance and the cash flow of the company.

Yes. Number one, it does not impact the cash flow nor does it impact the balance. It only impacts the P&L and USD 58 million of the USD 62 million is coming from our Brazilian activity. And it is because in Brazil, we are using functional currency in Brazilian reals. We are not allowed to use the U.S. dollar. Yet, we hope that we can do going forward, but today, it's not possible because there are such -- there are costs and also revenue in Brazilian reals. That's the main reason. The Brazilian real has weakened significantly towards the U.S. dollar and that is why this is coming as a P&L effect. But again, no cash impact, no balance impact. Only on the P&L. So what happened is under the net profit. We have a comprehensive, other comprehensive income. I think that is the name where this is actually reversed again. So the equity is not impacted the debt is not impacted.

Thank you. And will you consider any vessel sales in non-core segments, especially in light the MSS transaction once that is complete?

I think we have said that before, of course, we -- you have seen we have sold the PSV -- and of course, we will always continue to sell non-core assets, but of course, also more core assets if the price is good enough, yes. So that's part of the business. So we -- as I think right now, of course, if you look at the secondhand values, so I still -- they have -- they should move further. The underlying earnings are not -- as I see it fully reflected. But we -- yes, a long answer. So the answer is, of course, yes, to your question.

And if we look towards 2025 and 2026, how much of your available vessel days, excluding MSS, is currently open?

Now as we said, of course, it's -- you saw the -- you saw the backlog for '25. We are talking after the $400 million after balance date. We are talking between $1 billion and $1.1 billion in backlog for '25. And of course, that you could say that revenue in '24 around $1.4 billion perhaps, of course, it's 70% to 75% and of course, that is also reflected on the vessels that you might have 25% to 30% of the capacity available. And of course, then, you have some options. You have some variations towards the backlog report, of course, is the -- it's just, let's say, the basic scope. So there are a few -- there are some available spots. But of course, it's also a very high activity on the tendering side. And of course, it's normally from now until Christmas, we see, of course, the highest activity on, let's say, on the -- in the project market on securing backlog for '25. So it's -- and of course, and in '26, we said we had perhaps between $650 million and [ $70 million. ] So of course, getting close to 50% of the capacity sold yes.

Within DOF and other companies, 6 vessels on long-term contracts will start up 1 to 2 years into the future. Is this common -- for the industry or more a reflection of the current market?

It's a difficult question to answer. Of course, what you generally see, of course, is that clients, around the globe, when companies are Equinor or Shell or those guys move from fixing new contracts to 3, 4-year, 5-year contracts, then it's a sign that the market is turning yes. And of course, it's the same on the owner side of course you are very reluctant to go long on low rates. So I think what you see now is a reflection at both charter has and -- the charter has no start to think that this will last long and that's why they are trying to secure capacity, loan capacity. So I think that's the answer, yes. And whether you fix them forward, of course, it depends a bit on the vessel type of course, you see more fixing forward on subsea tonnage, than you typically see for P3, so of course -- and of course, a lot of the subsea [indiscernible] there is a lot of engineering and project planning before go offshore.

And on the PSVs. Yes, that you mentioned, can you update on the contract backlog in this segment and your near-term exposure in light of the softness in the North Sea now?

Yes, I'm happy to do that. Of course, for us, we have two boats that one in October is up for renewal and know who we expect because the auction is below market. So we expect that to be taken. And then we have one boat coming off in October and where we are, let's say, in a tight dialogue on a new contract for her. Suppose it's -- so today, of course, we might have that last boat if we are not able to land that contract, we might have her exposed. But likely, we will be hopefully soon, sold out this year and then also meaning that we are almost sold out for '25, so we don't see this weakness, especially in the U.K. spot market as influencing or -- the boat, we are talking about for renewal in October is actually in Asia Pacific. So yes.

Are you able to share anything on planned dividends in the DOFCON subsidiary joint venture with Technip?

You know we -- I can share my thoughts, yes. So my thought is that Buzios now back on IR, Vitoria and Niteroi are soon -- new contracts, 3 contracts on Vitoria, Niteroi starting in second half '25, meaning you are into -- close to '28 on those and then Acu until '29, so of course it's the study now so the cash flow in that [indiscernible] will be strong for the foreseeable future, yes. Then we are meeting our friends in Technip. 2 weeks from now and where we discuss it. So perhaps then -- so I will not comment any numbers before we have had that discussion. But of course, we -- our view, of course, is that there is room for good dividends from that year. So -- but we will -- it might be that on the Capital Market Day. After that, we have met Technip before that, we can put more so on flavor into it.

All right. That concludes the Q&A segment. So thank you, Mons and Hilde, and thank you, everyone, for your questions and for listening.

Thank you very much, and have a nice evening.

Thank you.