Bonheur ASA
OSE:BONHR
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Bonheur ASA
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Good morning. My name is Anette Olsen, and I'm the CEO of Bonheur. A hearty welcome to everybody for the first quarter presentation.
Today, we will start, as usual, with our CFO, Richard Olav Aa, who will take us through the main figures. And then we have the different responsible for the subsidiaries that will present their companies. So Richard?
Thank you, Anette. And also a warm welcome from me this morning. The first quarter results are characterized that we had some headwinds in the renewable energy segment, but still a good result, but that is more or less compensated by strong results in the Service segment and also a strong improvement in the Cruise segment. So I think you should have that in your mind we they go through the numbers.
So starting here on the first slide, going to the right as a start. We had operating revenues close to NOK 3 billion this quarter, which is an improvement of almost -- or more than NOK 500 million from first quarter last year. Like I said, EBITDA was on par with last year. The reduction in renewable energy is compensated by strong improvements in Wind Service and Cruise. The EBITDA ended at the same level of NOK 926 million.
Then I move away from the consolidated figures and into the various segments to the list. We see renewable energy had a very strong first quarter last year with an EBITDA of NOK 1.220 billion. That is now reduced to NOK 763 million, still a very good performance, but a steep reduction. That is really related to 3 items. We have less wind, the wind speed was actually 17% lower than in first quarter '22, mainly related to Norway and the U.K. Sweden was okay, and also lower than normal, 12% lower than normal.
The second most important thing is the high-price levies that's been introduced both in the U.K. and Norway that took down the EBITDA with NOK 134 million. We have booked that as an OpEx, I'll come back to that. And thirdly, the power prices, they are still at a good level, but lower than last year. So those 3 elements took down the EBITDA of more than NOK 400 million from first quarter last year.
Wind Service normally has a first quarter that is not so good due to seasons. Last year, it was actually a loss, EBITDA loss of NOK 9 million. This quarter, the Wind Service had an EBITDA of NOK 206 million. The main reason for that is, again, another quarter with strong operational performance in Fred. Olsen Windcarrier, Alexandra will come back to that. And the Tern vessel had 100% commercial utilization. Brave Tern was on transit back from Taiwan, but that was paid transit.
Backlog has strengthened further to NOK 522 million, and we have not included one agreement we have with our partner, Shimizu in the backlog, and Alexandra will come back to that because that is a little bit separate out of the normal backlog. But that's also an important milestone in the quarter. Global Wind Service had a more normal operational quarter and an okay start to the year.
Then a milestone, really a milestone. Cruise Lines had a positive EBITDA for the first time since the COVID outbreak 3 years ago and had an EBITDA of NOK 5 million. Three ships in operations, Bolette was 14 days in dry dock. Occupancy still low, 66%, and that shows a little bit the potential with the new ships that even if we only filled the 3 ships with 66% occupancy, we still made a positive EBITDA.
And you can see some of the reasons on the next bullet point that net ticket income is now at NOK 180 per passenger, which is up from NOK 133, 1 year ago. And that comes on the top of a good start on the booking season. January and February are the very important months of booking, and we have seen good demand and good bookings in the first quarter. So a little bit positive there on Cruise after 3 years with very [ red ] numbers.
Other investments, more or less on the same level as first quarter last year, NOK 48 million negative compared to NOK 39 million, slightly weaker for NHST, and we're also investing, and Sofie will come back to that on 1848. We are investing in technologies in floating wind and floating solar as we think technologies will be the key differentiator in floating solar and floating. Yes.
Then quickly on the parent company. Equity ratio of close to 74% by the end of first quarter, a strengthening from last year and cash in parent, about NOK 2.6 billion, which is more than NOK 500 million improvement from first quarter last year. So a good financial position.
Then on the consolidated summary already commented on the improvement on the revenues and the stable EBITDA. What you can see is that we have introduced here on the tax side, the high price levies as a part of our OpEx, but we splitted it out. So it's transparent how much it represents. These are the extra levies that the Norwegian and the U.K. government have introduced when prices are above a certain price level. In total, that was NOK 134 million in first quarter 2023.
Depreciation, more or less on the same level. Net finance this quarter was quite positive with NOK 95 million profit compared to a loss of NOK 14 million in first quarter '22. Net interest, on a normal level, but we had quite a lot of currency gains due to the weak Norwegian kroner. So an improvement of more than NOK 100 million. So EBIT was up NOK 111 million, mainly due to the net finance line.
On the tax cost, somewhat lower. And part of the reason there is a good result in FOWIC, which is a part of the public's tax regime. So there's an improvement on tax for '25 despite that they pay more the corporate tax in the U.K. and also the ground rent tax in Norway that spoke to the tax cost. So the net result, an improvement of NOK 135 million to a net result of NOK 565 million.
What is very positive this quarter for the shareholders of Bonheur is that more of the results comes from 100% controlled entities like FOWIC and less losses in Cruise, one where we have the joint ventures on the Renewable Energy side is where we have the reduction in the result. So shareholders of the parent company had NOK 326 million out of the NOK 565 million in result this quarter compared to only NOK 54 million in first quarter last year.
We're generating good cash flow in the quarter. The net interest-bearing debt was reduced to NOK 4.4 million, good improvement in working capital in the quarter and not too much CapEx in the quarter.
Going a little bit deeper on the revenues, the improvement of NOK 522 million on the revenues. As you can see, Cruise Lines is the big contributor with improvement in occupancy and prices close to NOK 500 million improved revenues in Cruise while the reduction in Renewable Energy due to lower Wind and prices is netted out by more utilization on the Tern vessels of NOK 308 million.
On EBITDA, Renewable Energy, a reduction again of NOK 457 million, which is then compensated by improved results in Wind Service and Cruise. And to repeat, since it's a quite big number on Renewable Energy, 3 items driving down the results: 17% lower wind speeds; more than NOK 130 million in levies, high price levies that is booked as OpEx; and thirdly, lower prices, and that's in descending order.
Yes. Wind Service, NOK 215 million, a good start of the year of all companies in that segment. And then Cruise Lines, and I can come a little bit more back to the details on Cruise Lines towards the end of the presentation.
Then on the balance sheet and the debt and the cash side, as said, we had a good development in cash this quarter with a reduction in working capital. And we see here from the table what we control 100%. We have a cash position now of NOK 4 billion and external debt of around NOK 3 billion.
Renewable Energy, it's with slightly more than NOK 0.5 billion in cash on the 100% controlled entities, on Windcarrier and Global Wind Service sits with close to NOK 600 million in cash compared to NOK 500 million in external debt.
Cruise Lines good start of the year and then have still some cash left. We have supported Cruise Lines extensively during COVID, and let's hope that, that now will soon come to an end.
And then Bonheur ASA, plus some minor companies, sits with close to NOK 2.7 billion in cash compared to the bond debt of around NOK 2.2 billion. In the joint ventures, renewable energy generated strong cash flow in first quarter and also in the fourth quarter and has a cash position in the JV of NOK 1.6 billion compared to an external debt of NOK 5.7 billion.
And then Wind Service, which is UWL and Global Wind Service and Blue Tern has a cash position of around NOK 500 million compared to next year debt of NOK 1.2 billion, which is in line with how we want to capitalize the group.
And then finally, my part of the agenda, before I revert to Cruise towards the end is that we want to talk a little bit about our sustainability reporting. We have made an effort this year in all the main subsidiaries with good engagement from a lot of employees and want to thank every employee that has contributed to this. It's been a good effort. That's resulted in the new sustainability report that we have issued now.
And I think it's very important to say this reporting is well [ thanked ]. We have lifted ourselves in the reporting side. But more important is this is very high on the agenda in all subsidiaries and not the reporting, but what we actually do, which is the most important thing.
And this is well rooted, especially in the renewable energy subsidiaries and some of the highlights of this year report is that we have record high renewable energy production substituting CO2. We have increased the wind development pipeline in a very good way. We are very careful in how we select sites and how we develop sites regarding both biodiversity, how we think about [ roads ] and so on.
And we had a significant installation activity of both onshore and offshore wind power in Global Wind Service and Fred. Olsen Windcarrier. I never thought to reduce emission from the vessels, especially in the cruise lines, working with machine learning tools, artificial intelligence, itinerary planning, what have you, to take down the emissions from the vessels.
Of course, this is important for us and that we work in this direction and that we strengthen our efforts both on the reporting and how we work, but it's also a big expectation from our partners, finance partners, operational partners and so on. So we have also updated or Green Finance Framework to include the EU taxonomy assessment, and that's what you see to the right bottom is where we have used a software program based on the EU taxonomy to see how aligned our turnover, CapEx and OpEx is with it.
And we see we are quite green on the turnover. We are -- we still have some red that we continue to work on. But on the CapEx and OpEx, it's lower. But all in all, I encourage you to read the report. They have a strong emphasis that we should walk the talk, and I can assure you that there's a lot of effort, great effort by a lot of employees in this area, in most importantly, what we do and not so much of what we report, but we have also now strength in our reporting in this area.
So I think that takes me to the end of my presentation.
Good. Thank you, Richard. And just to remind all of you that questions -- the session will happen at the end. So next is Anders Bade, Co-CEO of Fred. Olsen Renewables.
Thank you, Anette, and welcome to all of you on the call. I will start with the development portfolio as normal. So -- and I'll take it market by market. And this slide focused on onshore wind. So starting with the U.K., we have 5 sites consented that we're working to bring forward to FID.
Then we have on the development portfolio, an increase by 50 megawatts this quarter to 800 megawatts. It should be noted that when a site turns into what we here call development, that's when we have site control and secured land rights. Then we started to derisk. So typically, sites will follow fall apart -- fall away, when we derisk them closer to consent because we don't want to invest in sites that we don't think will be consented. So there is an increase in the number of megawatts, then the new sites are more than compensating also for the derisking activities where we remove some sites.
Norway, increasing with 100 megawatts this quarter. That's related to actually Finnmark where we have 2 sites in partnership with Finnmark Kraft. They could each be 450 megawatts, and they are progressing. We have only included one of them in these figures, but now 225 is included, which increases to -- Norway to 1,150 megawatts. And in Finnmark, as I've stated before, the municipalities are forward -- are positive, so we're moving forward.
Sweden, increasing with 75 megawatts for the quarter. And we also now have a solid portfolio in Southern Sweden in SE3 and SE4 and combined with our main footprint in Northern Sweden. So that's a key market for us.
We also have a Verkanliden consented, which we have now got the consent to increase the pipe from 210 to 250 meters. That was appealed, but then the burden is on the people who appeal that the 250 will be worse than 210. So we are quite confident that, that will be also finally approved, and that will increase Verkanliden to also160 megawatts and better wind speeds.
Italy, still increasing. Now a portfolio of 300 megawatts in a highly competitive market. We also -- we don't report the figures here on PV, land-based PV and on floating solar. Some of you who follow the national news in Norway, you will have seen that we are active, for instance, in Norway, in PV, and we have some sites under development, but they are early phase. We don't report the figures here. The same goes for planting solar, where we are particularly focused on Southeast Asia and Southern Europe.
Going to the next slide, we see the production, that they're increasing. Now with Fäbodliden at the end of the year, we'll have 14 operational -- Fäbodliden will 14 operational wind farms. Production for the year is -- prognosis for 2023 is somewhat lower than P50 due to the reasons of the wind speed that Richard mentioned and which I will come back to on the next slide.
We go to the next, this is always an important slide. In the upper left corner, you see the capacity factor and generation. As Richard mentioned, it's been lower wind speeds in U.K. and also actually particularly this time, Norway. We see capacity factors significantly higher in Q1 last year than they've been this year. And they are also lower than P50 for the quarter, the wind speeds.
Sweden is more healthy production and more on par with P50. Our prices in the down left corner, there you see them coming down still to a healthy level, strong level compared to historic figures, but lower than what they were over the last 18 months. And the key reason for that is the gas price, which you will see on the upper right corner. The blue line there shows the gas price coming down from the peak, almost EUR 300 per megawatt hour, now closer to EUR 50. So that's, I would say, a healthy reduction for the European economy and also for not supporting Putin, but obviously, it drives down the power prices.
So now you had with the peak gas price, you had some switching from gas to coal in terms of production. So coal was to a larger extent, priced better than what it normally is. But now with the current gas prices, it's really gas that sets the price because we now switch back more to gas production.
So it's a combination of the gas price and carbon price, which typically is a price setter, but you need to multiply the blue line with around 2 and divide the green line carbon prices by 3 to get to the marginal cost of running a gas-fired power plant. So gas is the dominant price setter.
Hydrologically, the balance in Scandinavia is now for Norway. It's about normal for the year. Hydrologic balance includes the snow, which has not yet melted. So Norway is now also balanced, North and South, which is very different to the situation we had one year ago, while in Sweden, there's somewhat less snow actually. It's not the water itself, it's the snow, which is somewhat less. So a little bit weaker hydrologic balance in Sweden, which maybe supports a bit stronger power prices than normal in Northern Sweden going forward.
Then I will also cover two other topics this quarter. First, one slide on floating solar and then two slides on sector-specific taxes. On floating solar, the aim with this slide is that combined with the slides from Sofie and 1848 later on the call, will give you an overview of what Bonheur is doing in the area of floating solar.
As mentioned, previously, floating solar is a key part of our Fred. Olsen Renewables' long-term strategy, and we focus on nearshore. We do that for 2 reasons. It's a large and tough market. We have large sea areas, we're a little close to coastal demand centers worldwide. Typically, in those areas, you have limited alternatives because you lack land close to demand centers, both for onshore solar and for onshore wind.
And it has a nearshore, floating solar has a good fit with the capabilities of Fred. Olsen companies in general and Fred. Olsen Renewables in particular. We are really there building on the 175 years of maritime and offshore experience across the different Fred. Olsen related companies.
We are an early mover. We started to work on this some years back. And we're building the competence on how to construct and operate these floating solar farms in the sea. We develop a very attractive value proposition with project partners. As mentioned previously in previous presentations, in new markets, we aim to partner with strong local power companies. And hence, with that partnership, we will have a strong go-to-market approach.
Derisking is absolutely key to unlock the potential. So we have taken a very systematic approach. We have performed rigorous mapping across all known floater concepts, and we have done that together with SERIS, our partner, which I mentioned on the right-hand side. And we have identified a high number of important failure modes.
Then we have very systematically grouped those failure modes and started to derisk. And you can see some of the key aspects that we derisk. It's about the environmental impact. It's certainly about extreme wind and wave loads. The systems have to sustain the extreme 50-yard wave and strong winds. It's all about lifetime, how to make sure that the solar farms will stay there and stay healthy for 25 to 30 years. Marine growth is a key aspect, system design, power production estimates, and obviously, also how to do efficiently operation and maintenance.
We are doing some of these stand-alone as it relates to renewables, but we really rely on high-quality partnerships and have been for SERIS established since 2020. With SERIS, we do particularly the -- address all the topside issues. SERIS is known to be the world leader in floating solar as a research institute for freshwater, and we now jointly have exclusive partnership in seawater.
Fred. Olsen 1848 is also a key partner, and Sofie will come back to that. And that's particularly on the anchoring, mooring and floater design for us. We also have other partnerships which are with the vendors and suppliers, which is supported by the Horizon 2020 program for the EU. You'll also see we have brand contribution on the other partnerships we have.
Then moving to the final section, the unfortunate topic of sector-specific taxes. This is such an important topic that we will also then recap one of the slides we presented at the previous presentation. We here see the tax rate of and its percent of net revenues, it's not of net profit.
Why we show it from net revenues is that some of the costs are not deductible before the tax. So of course, you do it if it was on net profit. This will be not as difficult to handle. But as you will see, especially on the right-hand side and for Norway, in general, the taxes are very, very high.
Starting with U.K., at power price of GBP 100 per megawatt hour, we have 17% taxes. That increases significantly when you go to a higher power price. And you see the estimated marginal tax in case of GBP 150 per megawatt hour, which is more than 2/3 of net revenues. And this surely has an impact on how quickly operators are able to make financial investment decisions as this will hamper the profits over the next years.
If U.K. is a challenge, then Norway is certainly much more problematic. In Norway, we have proposed -- taxes proposed in Q3, Q4 2022, still not concluded, I'll come back to that. We have a tax of almost 2/3 of net revenues for Lista, even at GBP 100 per megawatt hour.
If you look at the marginal tax rate, when you move up to GBP 150 per megawatt hour, we are taxed 85% of net revenues, not on net profit. Net profit is much higher. So this is a significantly higher tax than what you have even for oil and gas with the super profit they have had. So it's really key to get this right.
So we have worked intensively with this both to inform the government and also worked with the industry. And if you look at the next slide, the problem with onshore wind taxation is that it builds on the premise that there is super profit, but there is no long-term super profit in onshore wind.
On top of that, the proposal is to have a ground rent and resource tax, which is not cash neutral. So it will not be like what's proposed for oil and gas and hydro power, where the government co-invest. The regime here is proposed to be clearly less favorable. That will increase the breakeven electricity prices by between 20% to 25%.
Consequences of this, obviously, we can expect on the marginal new onshoring greenfield investments in Norway if this tax is implemented, which again will lead to long-term power deficit. It will clearly jeopardize establishment of new green industrial solutions, and have high power prices for the consumer.
This is then also happening simultaneously as EU is implementing a response to the U.S. Inflation Reduction Act. The IRA in the U.S., as you would know, have strong tax incentives for renewables and also other strong incentives. EU is discussing how the best deal with that and stay competitive. And Norway is then going in there with this if this is implemented in a completely different direction.
The good thing is that it's a very consistent position from the industry in the consultation process. Both onshore wind companies, big industrial users and industry associations are clear on the 2 key positions that we also have had from the start. If implemented, the resource tax for new onshore wind projects must be made fully cash neutral, like what you have for gas and for hydropower. And you cannot do this retroactively. So you should not implement this on existing wind farms. It really will deteriorate investor confidence.
So we expect the government to have a final proposal to parliament over the next months, and it will be really key to get this right.
With that, I'll hand back to you, Anette.
Thank you, Anders. We will now get a presentation from Lars Bender, CEO of Fred. Olsen Seawind. Lars?
Thank you. Yes, and I'll today take you through the activities in the quarter of Fred. Olsen Seawind. And I'll start by saying we've had a busy quarter with a lot of interesting activities. I'll start the presentation by giving you a short update of each of our core markets. Then I'll do a short deep dive on Norway, and then in the end, say a bit about the global outlook in offshore wind.
But if we start with the update in our core markets, then in Ireland, the Codling Wind Park project have submitted a bid into the CfD auction. We are expecting the results of that or provisional results on the 11th of May. So in this presentation, I'll not go into further detail, but just say that we are awaiting the results of that auction.
If we then turn to Scotland, we have the Muir Mhòr project together with Vattenfall in a 50-50 joint venture. That project is very much progressing according to plan. We have a focus in this year on data collection on site. We have already deployed a Flidar to site, measuring wind speeds. We have a Geotech campaign underway. These activities will support our consent application, but it's also the basis for future design of the wind farm. So overall, it's progressing according to expectations and plan in Scotland.
If we then turn to Norway, we have in this quarter, received an update around the framework for the first offshore wind round. And I would like to spend a bit more time on giving a view on what we see in Norway going forward.
So if we turn the slide, I think the first thing that's important around Norway is to remember the fundamentals of Norway when it comes to offshore wind. I think we, as a company and together with our partners in Hafslund and Ørsted and Blåvinge have a strong belief in Norway due to the fundamentals for offshore wind. First of all, there are good wind speeds across the West Coast, some of the best worldwide.
Norway will, if you look at the predictions for the power balance in Norway, have a power deficit around '27 and at least in a long-term perspective, offshore wind can be part of offsetting that. And third, offshore wind represents a significant potential for job creation. Norway have had and has still a strong industrial offshore heritage, both from oil and gas and other parts as well. And there is a really good skill set to develop into a new industry in offshore wind, and those fundamentals makes Norway an attractive place for offshore wind.
We have in this quarter seen that NVE has come with a projection of new areas for Norway up against the target of 2040 with 30 gigawatt that is positive that we now see that long-term development. But we have also, in this quarter, seen news around the specific rounds in Utsira Nord and Sørlige Nordsjø. And if we start with what we've seen in Utsira Nord, we see 3 areas developing for floating wind, Utsira Nord in the first round. It will be a 2-step process. First, the competition on qualitative conditions for seabed and then a second round for CfD 2 to 3 years later.
The submission date for the first competition on seabed is set to September 1, 1st of September this year, so a very fast track process. Overall, what we see without having full visibility is a good start for floating wind in Norway. There has been extensive dialogue between developers, industry and OED around criterias. There's a reasonable balance between coexistence and also the predictability and frame conditions for developers. So on the floating side, there's a positive view, I think, in general, both for us, but also in the industry around Utsira Nord.
If we then turn to Sørlige Nordsjø, the view is a bit different. The competition there will be, one, the site competition, so as one site of 1,500 megawatt. It will be a combined seabed and CfD auction. So basically, both the price and the exclusivity will be awarded in 1 round based on the price. And the auction date is currently expected for late this year in December.
And I would like to spend a bit more time on Sørlige Nordsjø II and the frame conditions in Sørlige Nordsjø II because there's no doubt we are -- when it comes to Sørlige Nordsjø II, we are concerned around the framework that has been published by OED and the government.
We will flip the slide. And what we are concerned about is the auction parameters. And I know this is a busy slide, but I'll try to take you through it in a good way. So we start on the left-hand side, there are at least 5 parameters, and there are more, but which we see are detrimental to getting a really good start for bottom fixed offshore wind in Sørlige Nordsjø.
First of all, the OED has set cap price of 66 øre and a total cap of NOK 15 billion. Those 2 caps in combination are way lower than what we see in other markets. But second and most importantly, the caps does not take into account the recent cost increases we've seen in offshore wind within the last year.
On the right-hand side, you will see a curve illustrating the development in turbine prices. And if you take that from the bottom to the top, we see an increase of around 50%. So we have seen significant increases in prices on CapEx. It goes for other elements and turbines as well. And the cap we then see at 66 øre, it's difficult to see that has been adjusted for those cost increases. But again, just on a par-to-par basis comparison with other markets, it is significantly lower. On top of that, there is an uncertainty on tax regime, which I referred to Anders' presentation earlier, that goes also for offshore wind. We don't have full clarity on what the tax regime will be going forward.
Second point, which is important is there's no indexation during operation of the wind power farm. So that basically means that the compensation you get will be decreasing in real terms during the CfD period. That increases the risk profile for developers, but it's again also an element which we see is not on par with other markets.
Further element, the CfD is compensated in Norwegian kroner instead of in euro, which basically means we will have the revenue side in Norwegian kroner and most of the cost side will be in euro, the CapEx side. That mismatch creates a risk on the currency exchange rate. And again, it's probably not the industry norm. We see in other regimes, it's either it's a euro-based contract or there's a choice between the local currency and euro.
Fourth element is the capture price risk. So currently, the CfD price will be measured against market price on a monthly basis, which, of course, increases the risk of cannibalization on price, and the significant risk here is left with the developer in relation to the capture price. Our best estimate is that, that will actually reduce the cap price with somewhere around 10%. And again, it's different from what we see in other markets.
The fifth element that I will mention is low prices. So the current auction regime sets a 4 øre or 5 øre per kilowatt hour. And below that, we will not, as developers be compensated. That's also different to what we see in other markets. Normally, this is set at 0.
When you look at this as a combined picture, we see conditions that are different from other markets and significantly worse. And second, we see that the conditions are not in line with the cost increases we've seen in offshore wind over the last year. So overall, it's something which we looked at very carefully in our partnership with Ørsted and Hafslund. We see Sørlige Nordsjø as with the current regime and the current CfD regime, we are expecting to be unattractive as an investment for developers. And that is especially also taking into account the recent cost increases in offshore wind.
If we then add on top of that and flip the slide, it is important to put Norway into context of the global offshore wind picture. And what you see here illustrated by the left-hand side is that against 2030, we see a significant increase in buildup of offshore wind with significant growth rate.
On the right-hand side, you see targets for wind market growth towards 2050. And those 2, in combination, illustrates an almost exponential growth in offshore wind, and we see regimes across the world being more and more favorable towards offshore wind.
And obviously, the point when we put this in context with Norway is that money and jobs will flow where the frame conditions are stable, predictable and most favorable. So our concern in our consortium and as a developer is, of course, that Norway is not on par with what we see in the rest of the world and we'll not be able to compete for developing offshore wind on bottom fixed.
I would like to go back to my first point because we do remain of the view that the fundamentals in Norway is -- are attractive, but it's also very important to stress that in order to capitalize for Norway on those fundamentals, we need a solid framework also in Sørlige Nordsjø II, which will get us a good start for offshore wind in Norway.
And with that, I will turn to the next slide and the more global outlook. So we see globally is a, as I said before, a development of offshore wind across all countries. We see increasing targets being set by governments. We see more and more framework in various countries. So there is a tendency to a large growth across the globe.
There's no doubt that political ambitions needs to be followed up by actual framework, it needs to be followed up by increase in supply chain capabilities and so forth, but there is a positive tendency when we look at the market in general globally. This is also supported by the Inflation Act in the U.S., supported by the EU Green Deal. So as a market outlook, as a global market outlook, this is positive.
And from the Fred. Olsen perspective, we are, of course, investigating these opportunities. We have a solid platform already of projects and corporations, but we actually want to use that platform and expand on it together in some markets with our sister companies, where we see that as a differentiating sector. So overall, on a global scale, we remain positive when it comes to the outlook for offshore wind.
And with that, I will give the word back to you, Anette.
Thank you, Lars. Before I welcome Sofie Olsen Jebsen to talk about 1848, I would like to inform the one of you that do not know that 1848 was our year of inception. This year, 2023 marks the 175-year anniversary. So we are very proud and hope that this is a good omen also for the further development of Fred. Olsen 1848 and the technology. So no pressure, Sofie.
Thank you. Just to follow up on that, I can say that the reason for the name 1848 -- Fred. Olsen 1848 is because we want to continue to stay in the forefront. And we try to develop solutions to solve the industry's challenges, and that can be tomorrow's solutions for renewable energy technologies.
We're having good speed with the development of the technologies that we are doing in floating offshore wind, BRUNEL, the floating foundation. Ramboll is currently progressing well with their design scope. We have also had a very good reception of the BRUNEL maintenance solution pictured on the bottom here, and that was launched not too long ago. We're also progressing well with the floating maintenance solution, where the ongoing FEED study is currently detailing all the technical, operational and commercial properties of the solution.
Today, I wanted to spend most time talking about floating solar. And as Anette mentioned, floating solar has a large potential. We have been working on trying to solve the challenges in floating solar for quite some time together with Fred. Olsen Renewables and their development expertise.
And we see that for floating solar nearshore and offshore technologies, there are some challenges that have to be overcome. This is the handling of wave loads and especially when these wave loads are combined with wind. And then there is the issue of actually building a cost-efficient solution that can operate and also solve these technical issues.
To response -- or as a response to this, we have developed Bolette, which you see on the picture below here. That is a floating PV power production system. And it consists of a pretensioned rope mesh, which allows the PV modules to move freely and independently within the mesh. This enables the environmental forces to be taken up by the rope mesh and the mooring system. This elegantly simple solution makes Bolette move with the motions of the ocean, quite differently from other solutions.
It is cost efficient as it utilizes existing technologies and components. We also have created an integrated maintenance solutions because maintenance of these islands is key, especially when the one you see on the picture consists of over 7,000 solar panels. So you have to have an efficient way of maintaining and cleaning.
We have decided to handle high wave loads and tropical storms. And our ability to utilize existing supply chain makes us able to source locally. Sustainability is, of course, very important. So all the components are tagged and they can also be recycled. The islands are scalable and can be adjusted in size to fit each project needs.
Talking a bit about the current developments. We have installed 6 panels in Herøya in Norway, you see on the bottom left picture there. We've also had a very successful tank test at SINTEF Ocean in January, also a picture here where we tested with very high wave loads. And now we are designing and procurement -- procuring for 150-kilowatt project that we will put in the water after the summer this year.
We will use the learnings from this -- and we are also currently optimizing, but we'll use the learnings from this to optimize the design. We are very enthusiastic about this solution and believe that it has the potential to unlock the great potential areas in nearshore and offshore floating solar. Thank you.
Thank you, Sofie. Alexandra Koefoed, CEO of Fred. Olsen Windcarrier. Welcome. You've had a challenging year, but strong performance.
Thank you. I will dwell a little bit on Q1 for Fred. Olsen Windcarrier. All in all, activity wise, it's been a quarter which has been as expected, but sometimes that's a good thing. So Bold Tern, she is still in Taiwan. She completed the Formosa 2 project early in the quarter and then went basically straight on to install the same kind of turbine on Greater Changhua for Ørsted. And we stayed on that project as long as we could until we had to leave for further commitments. There are still 14 turbines to be installed on that project, and that presents some opportunities for later in the year.
Brave Tern, as mentioned by Richard already, she transited back to Europe. So very early in Q2, she went on hire on the Saint-Brieuc project in France, so she will be in France for the remainder of the year. And that mobilization was paid transit back to Europe, but that income was actually registered in 2022 because it was linked to a project that completed at that time.
Blue Tern, she has done what she's been doing for the last couple of quarters. She has installed pin piles on the Neart na Gaoithe wind farm in Scotland, but by the end of this quarter, we expect her to transit over to the turbine scope. So that will begin to start installing some turbines in Neart na Gaoithe.
That leaves us to the results for the quarter. And it has been a good start to the year, not as strong as the fourth quarter linked to Brave's transit, but still a revenue of almost EUR 36 million and an EBITDA of EUR 17 million for the first quarter. And we're now expecting the vessels to be working fully for the next 2 quarters.
Contract backlog, it now sits at EUR 522 million compared to EUR 553 million in last quarter when you're looking at our vessels. So again, a quarter that went more or less as planned at least in relation to reservation agreements. Last quarter, we reported 2 reservation agreements, which have, as planned, materialized into two firm contracts.
One of them was Thor. This is a landmark project for Windcarrier. It will be installed in 2026. At that time, it will be the biggest wind farm in Denmark, and the client-desired [ WE ]. It's also an important project because this is the 1,450-megawatt size Siemens turbine that will start installing in '24, '25, which means our existing vessels have sort of proven their viability for back generation turbines. So we are very happy to have won that, and that was launched last week at WindEurope with all the other contractors for the Thor project. So something we're looking very much forward to. And the other contract is an undisclosed contract also in Europe with Blue Tern for '25.
And then I guess the most significant news in the quarter, we've also signed a reservation agreement in APAC, which is linked to a third-party vessel, which means we will be the contract entity for the end client, but the -- the vessel involved is a vessel that's not owned by Fred. Olsen Windcarrier.
So this is currently not reflected in the backlog because, of course, the EBITDA margin on that will be different than on our fully-owned or partly-owned vessels, but this sort of the Shimizu Corporation that we signed back in 2020. That's starting to materialize. And then once we have a firm contract, we will communicate a little bit more on that. But that means already in '24 that corporation will have a positive EBITDA contribution for Fred. Olsen Windcarrier. And then, of course, the backlog has changed in terms of we've completed works, and there's also been some extensions to existing contracts, but those changes are more minor.
Tender activity is still very significant, both in terms of T&I and O&M, and we also see the clients are getting worried about the bottleneck in the market and are willing to entertain a different type of contract discussion than previously, which has been very project-linked, but now we see at least the willingness to entertain different discussions. We see that as a very positive sign for Windcarrier going forward.
Well, I think that concludes my presentation.
Thank you. We will now open for questions.
I'll comment briefly -- just comment briefly on Cruise. Yes. Sorry.
Sorry. I forgot the Cruise part. Absolutely. Very important.
Move on [indiscernible]. Yes. Cruise, like I said, milestone, first quarter with positive EBITDA. And I think if you reflect back on '22, which was a year with great losses, we saw in '22, two things that we were struggling to get customers back cruising, especially with the Omicron outbreak in the first quarter and then the war in Ukraine.
We also saw the bunkers prices skyrocketing in 2022. So I think two focus areas on the Cruise Lines going into '23 has really been on two fronts, it's getting the sales and the customers back to cruising. And it's been enormous effort in the sales departments and other departments in Ipswich, who engaged the organization to take in more customers. So actually, the number of people selling in Ipswich has more than doubled, taking in calls. So it's been a strong effort to get the organization more sales-oriented, and we see a success of that in the first quarter this year that we have got a really good start of the year in the booking.
Then how much of this is pent-up demand from customer savings on COVID? We were really worried about the British economy lack of spending power and so on. But anyhow, at least cruise lines have done their part and see customers are coming back. And hopefully, this is a lasting trend.
The other one also the bunkers, we have had a lot of attention and efforts on the bunker area, looking at itineraries, where can we sail differently, slow down speeds, book a bunker smarter in the right ports and so on. But I think you should believe 2 years ago that really cruise lines was the forefront in the group in artificial intelligence.
So I think they have used the crisis to really install some very intelligent software on both Bolette and Borealis and it's going on in Balmoral on self-learning systems on how to optimize the fuel. So they're actually now in the forefront in the group of companies on the use of artificial intelligence to bring down the fuel consumption.
So yes, a good start of the year and hopefully, a turning point. Still, the customer sentiment in the U.K. is difficult to judge, how long it will be lost, but at least I think we are doing what we can, and we will continue to try to improve the Cruise business. With that, Anette.
Thank you. We will now open up for questions.
[Operator Instructions] And your first question comes from the line of John Olaisen from Norway.
After hearing your presentation and your view on the Norwegian offshore round, I just wonder, does this mean that you will not hand in an application if -- for Sørlige Nordsjø II if the terms are -- remain as they are right now?
Thank you, Richard.
Yes. That decision has not been taken yet. Currently, we are of the view that it's not only something we just say, it's also our obligation now to kind of speak up around what we see on the frame conditions. And we've considered this carefully together with our partners in Ørsted and Hafslund. And we hope, together with industry and organization that we can get a better framework than it is today. But the decision on how we treat this going forward has not been taken.
And within the partnership, is it 1/3 each? Could you just remind us, it's an equal partnership?
Yes, that's correct. We are equal partners with 1/3 each.
Yes. And within the partnership, does it have to -- do all 3 have to agree when to apply a loss? Or how does it work?
If you're talking about the specific view I put forward today, this is, of course, aligned within the partnership, and we are in agreement. And it's also obvious if you look at the size of these projects, if you are to -- it or invest or whatever it may be, agreement between the partners is an important preconditions for a good way forward when you look at these -- the size of these projects.
And I presume that you have discussed your concerns with the government. What do they -- what's the feedback? Do they see the argument? Do you think it's likely that there will be some changes?
I think that's always very difficult to answer. I think we're doing whatever we can. We have had discussions with government around this. We have put the views forward. And obviously, we hope that these will be taken into consideration, and we'll continue that dialogue. I think it's fair to say that the industry and the organizations, we have a combined view here. So of course, when we stand together, it's the hope that we can impact this.
[Operator Instructions] And your next question comes from the line of John Olaisen.
Yes. So if no other questions, I would happy to take a couple more. On the turbine installation vessel side, you have a good visibility now for a couple of quarters, and it seems that prices are up, and we've seen Cadeler reporting a very strong day rates on some new contracts with visibility many years down the line.
Can you update us on your plans for a potential new build? And do you share the view that the market has tightened significantly over the last few months as well, and the visibility is getting better and new build could be -- it could be a more current issue and coming quicker from you guys than what we thought?
Yes. I think -- good question. I think it's not a surprise question, so Alexandra?
And I -- to be perfectly honest, the answer will probably be the same until we actually announce a possible new build. So it's definitely something we are working on. It's in discussions with clients. We're in discussions with yards. And as I mentioned, we do see that market conditions are more favorable than possibly a couple of years ago.
Yes, it seems like it. And also, there are a lot of -- well, at least not a lot, but there are a few newcomers into that market as well. I would just wonder, do you think consolidation could be taking place? So probably an advantage to have a bigger entity, I would presume.
That is also a very, very difficult question to answer. We have seen consolidation in the industry in the past with -- where more speculative players have joined forces with sort of more of companies with more industry experience. I think that's at least something we've seen in the industry to speculate on what's going to happen forward. I think that's not really up to me.
My final question is regarding to Cruises. Is it possible to give some kind of case of what kind of occupancy rate we should expect for the summer, Q2 and Q3?
Well, I think you saw that the occupancy rate is presently for the quarter, 66%. And for this summer, I think we have not given any figures. So I don't think we should speculate. But I think you see from what Richard told you that we have very strong bookings.
Without guiding anything -- but John, I think we just -- without guiding anything, I think, what you could do is that -- cruise lines is, in a way, a seasonal business. So if you go back pre-COVID, you have the reporting, I think, on a quarterly basis, on occupancy back to 2012 or '13, I think, in the -- so you can take -- you can take a look at and see how much it swings. But I think what we say is that we have good bookings, so...
Booking them back to like more normal seasonality pre-COVID already?
I think that's -- what I'm saying too, is that we have spent a lot of time on getting people back to cruising again, and we have quite a lot of newcomers to Fred. Olsen Cruise Lines as well in booking now and also working more on the direct. So yes, I think we are seeing that things are more back to normal.
But a caution, it's early days. And the U.K. economy is fragile and consumer spending could be fragile. Right now, it's very strong demand, and you see it also here in the Scandinavian countries, a very strong demand for traveling this summer across the board. But how long this will last, how much is pent-up demand, it's very difficult to judge.
My very final question. How have winds speeds been so far in Q2, in your relevant areas for the renewable energy business?
That we don't comment on. That would be a kind of skewed information. Yes.
Your next question comes from line of Jonas Fremming of SB1 Market.
So the first question is to Fred. Olsen Seawind. So can you give some clarity on the expected CapEx or some kind of a CapEx range on the Codling Wind Farm?
Yes. Thank you for the question. As I said earlier, given that the bits and the competition are currently on evaluation, we've made a very deliberate decision that we do not comment in detail on Codling in this quarter. And I will remain with that statement. So sorry about that. But I think we will not go into those details for now.
Okay. That's okay. And I guess this question is to Alexandra. So in terms of the backlog for Fred. Olsen Windcarrier, could you give some clarity on available contract base for '24, '25, '26, '27, also '23, maybe?
I could give some clarity, although we do not -- intentionally don't provide sort of the vessel occupancy because, of course, that is also very useful for our competition to see. So we have a strong backlog for the coming 4 years, but there are some openings, partly in shoulder seasons and also on some very capable assets in prior seasons. So in terms of the backlog you see, that -- it's not a sold-out backlog. There's still available days to sell on the vessels.
Okay. Are any of the backlog years fully booked? Or are there some openings each year?
Some of the vessels are more or less fully booked for the period you see, and some of them are not. And I think that's as concrete as I'm going to be, again, because this is very valuable information for our competitors and bidding processes with clients.
Okay. And just a follow-up on the previous question. Alexandra, you said that you are discussing a new build with wind clients. So I'm just curious, how do you expect the payback level to be, if you were to order a new build? Would maybe 4, 5 years be possible?
I don't think I'm going to comment on that, Jonas. I understand that's something you are very keen to know, but again, I'm not going to be that specific.
That's fine. And the last question from me, it's related to Global Wind Service. So could you give some clarity on the margin development in this quarter and going forward as well?
I think the best one to answer that is Richard.
Yes. Thank you. Yes, Global Wind Service is a complete different economic setup than in Windcarrier. It's very little CapEx and it's more the capital is in working capital. And it has more the feature of a kind of a construction-like setup. So of course, the margin -- EBITDA margin level, you should expect in Global Wind Service is significantly lower than what you have in Wind Service due to the capital nature.
Having said that, the return on the capital in Global Wind Service historically has been quite good if you go back to the history. So I think Global Wind Service, we won't guide on the margin, but I've given you some clues on kind of what your comps should be on Global Wind Service, that the comps are really not asset-heavy industries like Fred. Olsen Windcarrier but more in the mine construction area.
Would a 5% EBITDA margin be a realistic assumption for '23 and '24 and so on?
I will not guide on that.
There are no further questions from the phones. I'd like to hand back.
All right. If no more questions, then thank you very much.