Vow ASA

Q1 2024 - On steady course

Oslo, 14 May 2024 – Vow ASA (OSE: VOW) had revenues of NOK 232.3 million in the first quarter. As previously guided with respect to profit, it has been a soft start to the year. The EBITDA margin was 2.4 per cent. Ongoing cost-saving initiatives and efforts to improve gross margin in projects are expected to have an increasingly positive impact throughout the year. The order backlog remains solid at NOK 1 066 million.

The group had revenues of NOK 232.3 million in the first quarter of 2024, compared to NOK 235.7 million in the first quarter last year. Revenues are in line with previous quarters, and the company has returned to a positive EBITDA result after two consecutive negative quarters. EBITDA was NOK 5.6 million in the first quarter of 2024.

“We note that both the Maritime Solutions and the Aftersales segments delivered double digit EBITDA margins in the quarter. In the Maritime Solutions segment, the EBITDA margin has turned positive after temporarily reduced margin levels in 2023. Industrial Solutions, meanwhile, continued to be impacted by costs related to capacity build-up and delayed order intake,” said Henrik Badin, CEO of Vow ASA.

Comprehensive cost reduction programmes are underway, coupled with initiatives to reduce administration costs. These measures are already showing effects and are expected to generate an increasingly positive impact throughout the year. Some initiatives will likely involve one-off costs in the second quarter, but Vow reiterates its EBITDA target of 15 per cent from 2025.

“It will be important to secure and execute new contracts to meet revenue and EBITDA targets, and across the group we are bidding and negotiating new contracts reflecting current price levels and with improved payment terms,” said Badin.

The order backlog currently stands at NOK 1 066 million including contracts announced in the second quarter this year, compared with NOK 1 226 million one year earlier and NOK 1 034 million at the start of the year.

Along with the firm backlog in cruise, tender activity is high. Cruise operators are currently renewing their fleets and preparing to place new orders at yard for ships with bigger and more advanced systems, replacing options with lower margins that have now expired. Vow is receiving encouraging feedback also from customers in Industrial Solutions with three large industry projects nearing final investment decision, and a significant pipeline of projects for which Vow technology remains highly relevant.