Bonheur ASA
OSE:BONHR
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Bonheur ASA
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Very nice to welcome you to the second quarter presentation of Bonheur. My name is Anette Olsen, and I am the Managing Director of Bonheur and also Fred. Olsen & Company. Today, we are going to start a little differently than usual. We have a video to show you. It's a video presentation that Fred. Olsen 1848 has produced to introduce you to the floating wind foundation that we are developing in the company. So please start the video.
[Presentation]
Well, hopefully, you enjoyed this introduction. We will now continue with the presentations, starting with our CFO in Fred. Olsen & Company, Richard Olav Aa. And then we have 3 of our CEOs present today. Alexandra Koefoed from Fred. Olsen Carriers; Anders Bade from Fred. Olsen Renewables; and Lars Bender from Fred. Olsen Seawind. We will do the presentations, and then at the end, open for questions.
So Richard, please?
Thank you. Yes. Also, hearty welcome to this second quarter presentation from me. And I think there are 2 things that I would like to mention at the start. We have strong improvements in our financial results due to the very good results in Fred. Olsen Renewables and, in particular, due to the high electricity prices. And secondly, it's the strategic importance of the establishment of Wind Fund 1 that we will come back to in more detail in the presentation. But those are those really the 2 highlights in this report, strongly improved results and establishment of Wind Fund 1.
But let's get started on the presentation moving from left to right, starting with renewables that has a result in EBITDA of NOK 502 million, which is an improvement of about NOK 300 million from the second quarter last year. This is mainly driven by high power prices, but also more generation as we now have Högaliden up and running. I'll make sure to come back to that.
Fäbodliden II, which is our next wind farm, which is an extension of Fäbodliden, is now continuing towards construction next summer. And in general, there are high development activities in all the business areas in [indiscernible].
And then, as I said, establishment of [ Whitson A/S ] which is the fund management company for Wind Fund 1, which has now a NOK 480 million committed financing from 3 long-term infrastructure investors in place, and I will cover in more detail.
Moving on to wind service, an EBITDA of NOK 106 million, that is down from NOK 271 million second quarter last year. The main reason for the reduction in the EBITDA is that utilization of the 3 turn vessels was around 50%, where it was almost 100% second quarter last year. And this is due to planned yard stays for 2 of the vessels and the large crane upgrade and the conversion of Bold Tern in particular.
But now coming out of the second quarter, we have all the 3 vessels back in the water, and they will now work towards a very strong backlog of NOK 530 million. So there is a good outlook now both in the short term for the rest of this year, but also for the longer term for '23 and '24 and '25, and we have a significant backlog of NOK 530 million.
Also in this quarter, [indiscernible] signed a major contract of EUR 150 million, and that is included now in the backlog of EUR 530 million. And also the conversion of Bold Tern, which Alexandra will cover in detail, was complete in this quarter, slightly delayed, but within the budget of EUR 61 million.
Moving on to Cruise. Strongly improved results from a loss of NOK 179 million second quarter last year to a loss of NOK 42 million this quarter. Last year, we had no ships in the water due to the COVID situation. We have had Bolette and Borealis cruising the third quarter, and Balmoral was mobilized in May and gradually came then into sailing towards the end of May and into June.
Occupancy has been 73%. It's lower than we had hoped for, but still a significant improvement compared to the fourth quarter and the first quarter. The bunker cost is the main concern for the cruise industry and also Fred. Olsen Cruise Lines. So we have very high bunker costs in the quarter. We're also taking cost on normalization of [indiscernible].
The demand for cruises now in the summer is very good, and we also have very strong bookings for the peak season and the summer season next year. But we will say that there is increased uncertainty now in general for the U.K. economy in view of the rising prices and inflation, and also that still the COVID outbreak is not under full control. So we see last-minute cancellations and also more issues about filling the ships in the winter seasons.
Obviously, also had some negative impact from canceling destinations in Russia, St. Petersburg, in particular, and also Ukrainian destinations, maybe Odessa in particular, due to the war.
Other investments, EBITDA loss of NOK 4 million versus plus NOK 25 million last year, the main reason for that is that we had a very positive one-off in the media business second quarter last year. I think I need to comment more on that, maybe other than as you saw on the video, there is a very high activity level in Fred. Olsen 1848 on several fronts for both engagement within floating offshore wind and floating solar.
So then moving to the right. We had revenues this quarter of close to NOK 2.4 billion, up almost NOK 0.75 billion year-on-year, driven by cruise and higher power prices. And EBITDA was NOK 562 million, almost doubling from second quarter last year. And we see also the same trends of improvement in the EBIT and the net results after tax.
The parent company equity, about NOK 6.9 billion, which is the same level as last year and an equity ratio slightly strengthened to 72%. The cash in parent stands at NOK 1.3 billion, which is down from NOK 2.1 billion. One reason for that is that we repaid a bond loan of NOK 500 million in the quarter, which we haven't refinanced and also that we have not taken out dividends from the strong results in Renewable Energy.
So on the consolidated level, we have already commented on the development in revenues and EBITDA on a consolidated level, noting a normal in depreciation. On the impairment, we have settled a legal dispute around the jack-up vessel Jill that led to a reversal of an earlier impairment of positive NOK 80 million.
Net finance more at the normal level this quarter of minus NOK 34 million, and we have then an earnings before taxes of close to NOK 300 million in the quarter. The net result is NOK 161 million. We are in a tax position for the U.K. wind farms and pay significantly taxes in the U.K. based on the strong results of the joint ventures in the U.K.
Results for the parent company is still negative due to the high losses within the cruise activities, which is then consolidated 100%, while on the Scottish joint ventures, 49% of the economic return is given to the partners.
Moving on to more granular on the revenues. Like I said, close to NOK 0.75 billion improvement on the revenues. The main contributor is in fact in the cruise, which is an improvement of revenue of NOK 580 million. Due to that, we now have 3 ships in the water. We also see the strong improvement in revenue in Renewable Energy due to the higher prices and also higher generation due to Högaliden coming in and somewhat stronger win in second quarter this year than last year.
Wind service, on the other hand, has a slight reduction in revenue, and that is due to the lower utilization of the turn vessels due to the [indiscernible].
Then on the EBITDA, we see that the improved revenue in Renewable Energy transforms directly into improved EBITDA of more than NOK 300 million and an EBITDA of NOK 502 million. Wind service, the reduction of NOK 165 million is related to that we had Bold Tern and Brave Tern at the yard for the main part of the quarter, and also some project delays in global wind service, especially in the U.S.
On the Cruise, still a loss of NOK 42 million, mainly due to that we have faced in Balmoral in the quarter, taking mobilization costs, but also the high bunker prices and occupancy of 73%. So that turns into an EBITDA of NOK 562 million for the group of companies, which is up close to NOK 250 million from second quarter last year.
So to one of the main events in this report, and this was released to the stock exchange Tuesday night this week. And this has been a project we've worked on for quite a long time. It's been a very interesting project, and it's a very important project for us. So the headline is that we have established equity -- long-term equity fund for onshore wind of close to NOK 5 billion.
As you see to the left in this slide, we would like to highlight 3 features with this structure. It's really a long-term platform, which fits well with our own long-term investment horizon. It's quite innovative and also very importantly for us, it's competitive financing. We're taking them 1 by 1, and starting with the long-term platform. I think then I would like to point your attention to the right-hand side on the name of investors, because when we started out this initiative, really, we're thinking about the 2 other M&A transactions we have done within onshore wind with [indiscernible] where they acquired 49% in the Scottish wind farms in 2 M&A transactions.
So we were taking the importance of having investors that were like-minded ourselves, that really had a really burning desire to invest long term in renewables, but also are very long-term in nature. And all these 3 investors, they are so-called buy-and-hold investors, so they don't have time horizons on their investments, so they can, in principle, invest in this platform forever, coming back to the time horizons in the platform.
Also, very importantly, we have followed the philosophy for many years of being merchant on the power price. We think that in the long run, that this is much better. And I've been in the Norwegian power market now for almost 30 years, and I've seen that the merchant strategy by far pans out the best if you have the financial capacity.
So all these investors are seasoned renewable investors that also share that view, that lower leverage and the merchant power strategy is the best over time, which was very important to us. So the 3 investors are then, from the top tier, we have MEAG which is the asset manager of Munich Re, which is the world's largest reinsurance company in the world and one of the largest asset managers in the world and are really into contributing to the green shift and investing significant capital into renewables.
We have KLP here in Norway, the largest asset manager in Norway, which also have the same time horizon buy-on-hold and really are taking a big step into renewable and made significant investments in variable renewable activities and funds.
And then finally, you have Keppel Infrastructure Trust, which is a part of the Keppel and Temasek system in Singapore, a leading Singaporean system for industry and global investments, and also have the buy-and-hold strategy as the 3 others.
So they complement each other very well geographically. They complement each other very well from a knowledge point of view, but they're also very similar in their desire to invest in renewables and the buy-and-hold strategy. So carefully selected and fit our strategy very well.
So on the long term, the fund is then initially, we will buy 49% of [indiscernible] Högaliden, and we invested there into the end of the economic life of those wind farms, then they will revert back to us. And then there is a mutual obligation to coinvest 49%, 51% in all onshore wind projects that [indiscernible] will bring to final investment decisions in Sweden and the U.K. until the fund is utilized for 5 years.
So if [indiscernible] is very good to bring projects forward quickly, we will utilize the fund well within the 5 years. And then the fund will be closed, and then we will have to look at new financings. Otherwise, it will run for 5 years and then close. But then we and the investors will sit together until the end of the economic lifetime of the wind farms. And then if you just make a simulation that, let's say, the last wind farm is invested, taking an investment decision 5 years from now, then it will take about 2 years to construct and then there will be a 30 years operation. So in principle, you could have this equity fund structure last for 37 years. So it's a very, very long-term [indiscernible] and that's very much supported by us and very much supported by the investors.
Then it comes to the innovation. We could, of course, continue to do M&A transactions that we did with [indiscernible], but we tried really to think through how can we be more long term and create a platform that maybe can be used for this, but also can be used for other financings, and not at least how can we create a platform that can handle future projects for us and not only the wind farms they already have built.
So we quickly identified that Norwegian regulations around funds is also very suitable for this and also investors are very comfortable with Norway as a place for having fund investments. So we worked intensively with the Norwegian financial authorities and received a license for the fund a few weeks ago. And that is then regulated and a platform that can do further this and also further infrastructure investments within renewable.
Then we spent a lot of time thinking through how could we then develop a model for how we could also price future projects. So that was not an open-end in this structure. So we have managed to develop evaluation method for the project that Anders and his team will bring to FID. And at FID, there will be a valuation model based on predefined input parameters, mainly sourced from third parties. And then a fixed cost of capital that we have agreed with the investors.
And then we will develop a value for the project at FID, then any development premium will be realized at that point when the investors will acquire 49% of the project -- 49% of the project preconstruction. And then any development profit will be realized to FORAS at that stage, and then FORAS and investors will share the CapEx, 51%, 49% going forward through the project.
And again, this platform and innovation, how we think about also future projects, but also that it's a licensed and regulating financing platform. It may assist in the development of further diversified financing opportunities for the [indiscernible] companies.
Then on the competitive side of this, we will receive for the existing 3 wind farms, which will be acquired 49% of now, which has been already signed, and those cash proceeds is now estimated to come into the third quarter of EUR 176 million from the 49% in those 3 wind farms. That equates to a 1.75x return on invested capital for the 3 wind farms, then we have taken the sales proceeds and the cash flow that has been received for the wind farms since they started and divided that on the investment capital to account to the 1.75x return.
And then very importantly, Anders will come back to this, how important is this for FORAS, that we then have a 5-year commitment for further approximately NOK 300 million for new projects. So that NOK 480 million is divided and on the NOK 176 million for the 3 initial wind farms, and then approximately then NOK 300 million for new projects.
And also mentioned this development premium that we believe then is set at a very good and best practice valuation method. And then it depends on FORAS, how good they are at developing the project, how large that a premium will turn out to be.
Yes. So it was a long presentation on this, but I thought it was good to give you a voice over on how our thinking has been around it, and we'll certainly also take questions on this to that.
Moving on to the group capitalization. And again, I would like to point you to the policies there because what we have now talked about is Wind Fund 1. It fits so well with our policies. Where we base our policies on 3 pillars, a strong parent financial position built on conservative leverage and solid liquidity position. Obviously, the establishment of the Wind Fund 1 will enable that FORAS will be much better equipped to aggressively build out onshore wind without support from the parent. So we can maintain our conservative leverage and solid liquidity position.
And also to the second bullet point, we aim to accelerate growth, subsidiaries within the company's high capital growth and capital incentive business segments, in particular, then the Wind Service segment and also Renewable Energy. They're all actively investigating and considering various means of sourcing external capital here in the broad set of equity options, including listing. And of course, this development of the Wind Fund 1 fits very well under the term broad set of equity options, because this is, in our opinion, something that's not been done before and really broadened the equity options for FORAS going forward and hopefully for the group of companies.
And then finally, subsidiaries to optimize its own nonrecourse financing, taking into account underlying fundamentals for the respective businesses and relative cost of capital. And [indiscernible] which we call the project internally, fits very well in, but this is tailor-made to the needs of FORAS and the development of onshore wind and the cost of capital [indiscernible].
Then moving on to the numbers. There are some changes to the numbers this quarter. We have strong cash generation within the renewables. As you see in the joint venture is more than NOK 1 billion in cash in the joint ventures at the end of second quarter. Wind service also had a good cash generation, close to NOK 400 million in the joint ventures, both with the [indiscernible] and the joint venture with [ Keppen ]. And also strong cash generation in the Scandinavian wind farms and renewable energy in general, with NOK 388 million in cash by the end of second quarter.
Wind carrier, wind service mainly done on global wind service, good cash position also there and limited external debt considering the value of the vessels.
Cruise lines, we have the debt towards whole America line from the acquisition of the new ships and the cash position is quite low, considering the size of that business.
Then on the parent, cash position has gone down because we have paid down the bond loan this quarter of NOK 500 million. We also paid dividends this quarter, and we have not taken up any dividends or loan repayments from renewable energy, neither the joint ventures or the Scandinavian wind farms. But anyhow, the cash position for the parent and what the parent controls 100% remains strong of close to NOK 2.1 billion, up against an external debt of close to NOK 3.4 billion. And then we also mindful then that we expect close to NOK 1.8 billion in cash to be received in the third quarter from the sale of the 3 Scandinavian wind farms.
Okay. Anders Bade, you will present Fred. Olsen Renewables, 1 of 2 co-CEOs. Please go ahead.
Thank you, Anette, and good morning to all of you on the call. Today, we will start with a slide on the revenue drivers, as I'm sure that some high interest this quarter. Then move on to the Wind Fund 1 from FORAS perspective. And then in the end, a couple of slides on the status of the -- and progress of the portfolio.
So starting with the revenue drivers. You see on the upper left corner, the generation and the wind. Generally, Q2 is not a particularly strong wind quarter. This year, wind production in Scandinavia, this time Northern Sweden has been about normal for Q2 and slightly lower than normal for U.K., but higher than the wind condition last year. And also with Högaliden, as Richard mentioned, we have added generation capacity. We expect with Högaliden that our annual generation will increase by 19%. And Högaliden has been at full production in Q2.
So the real important reason for the growth in EBITDA and revenues, you will see on the power prices in the down left corner, Sweden, Northern Sweden at above 50%, significantly lower than the other markets, but that's a solid pricing for Northern Sweden. Norway, where we have Lista and NO2 [indiscernible] NO2 continuing to increase to above EUR 160 per megawatt hour. U.K. somewhat coming down in the quarter, but still at a high price. And as we will see soon, when you go to the gas prices, we see an uplift again in June of power prices and forward prices in the U.K., in particular, going significantly up for the winter season.
And the drivers for the price you see on the right-hand side, normally both CO2 price and gas price are very important, but now it's almost all about the gas price, which you see on that blue line on that chart. So the gas prices came a bit down in Q2 before it increased -- the gas prices then increased a lot in June. And the forward prices also for gas are expected to significantly increase when we approach the winter season. So that provides a very strong market fundamentals for the power prices.
In Scandinavia, the hydrologic balance is also important. You can see that Sweden is around normal for the year. Normal in Norway, the hydrologic balance is a bit lower than normal. But Norway covers a lot of regional differences. So in Northern Norway, the hydrological balance is strong while in Southern Norway, it's weak. And in particular, in NO2, where we have Lista, that's the price zone there with the lowest hydrologic balance for this time of the year for more than 20 years.
So in combination with the very high gas prices that provides a strong outlook for the power prices also for Lista in addition to U.K., in particular.
If we then move on to the Wind Fund. As Richard said, this has been long-term work and really important for both the -- and for the renewables in particular. The fund covers 2 elements. It's taking investors 49% of the 3 existing wind farms. And with that, we capture a strong return on those 3 investments. Then we have NOK 300 million to finance 49% of new projects. Those projects will be in U.K. and Sweden, which is where we have the most mature portfolio. And it includes the consent to projects of around 150 megawatts in U.K. and a bit more than 150 megawatts in Sweden. This enables continued strong growth and expansion of our portfolio, which is obviously key for us and what we aim to achieve. And also then under FORAS, majority ownership and control. It's also been key for us not only to finance this in a strategically right manner, but also to bring in strong international reputable partners, which can provide a platform also for future collaboration and future investments.
It will be a full reversion of the wind farms, 100% to FORAS at the end of each wind farm investment period. And for Lista, Högaliden, and I think it's also following the 3 wind farms above and for future dropdowns. And with that, we will have the ability in FORAS to fully decide on further life expansion or to do the repowering.
As said, we will remain majority owner and we will continue as previously to be the operator of the wind farms. We will also, as Richard said, retain merchant market exposure. We might pragmatically take on some fixed-term contracts, but we believe in the strong term market outlook and also the investors' shares that view. And this has probably been one of the key changes in the industry. Previously, it was not possible to find investors that really provided equity for merchant pricing, especially if we didn't have strong rocks as we had in the U.K. This has been a key element for us to continue to have a merchant price exposure, particularly in the Nordics. So this is really a key achievement and a good collaboration with the Fred. Olsen company in particular.
We go to the next, in the context of [indiscernible], we will also update a little bit more on the status of the portfolio. You see this slide every quarter, and today, we will cover a little bit more on the update on the different markets. In U.K., we have a bit more than 20 sites under active developments, that covers the 800 megawatts you see here with long-term land agreements, plus some sites under exclusivity. Exclusivity is the step in the U.K. before we enter long-term land agreements.
So we expect once these projects become more mature, we have a good chance to have several sites consented annually and ready for construction. We're also waiting now for the determination of the appeal process for the extension of Rothes and Mid Hill, which we expect to be due soon.
In Norway, it's been good progress actually in Finnmark, that's all the north -- in the north of Norway. The Norwegian energy authorities are now opening up for the consenting process in municipalities, which are positive to onshore wind. And in Finnmark, we now have 2 such projects named [indiscernible] in my case, all in the north of Norway and there's a new 420 kV line, [indiscernible] nearby. So we are adding 2 projects up there. And we are happy to have 2 of the few projects in Norway, which we are now able to progress towards in the consenting process.
Sweden, continuing to add portfolio in this quarter. At least as important now as to grow the portfolio is to mature and develop the portfolio in a good way as possible towards consents. So we are working there as in other markets with doing the environmental impact assessments for the sites that they are -- that we haven't already done that. We are working with stakeholders, including the Sami villages, which we have a good dialogue in relation to in Northern Sweden. And we are doing the design of the wind farms for -- we're doing that at an early stage for optimal, both financial and production and for optimal chances of getting consents.
In Italy, we put them in the development here. It's not the land -- long-term land agreements that matters, because in Italy, you can actually explore wet land when you have a consent. So the 150 megawatts here, that's for the sites where we have handed in the consent application with the EIA, which is key in Italy to gain site control.
We also, obviously, in these 4 markets are working on an extensive list of additional prospects. That's not included in the figures you see here, and we are selectively pursuing onshore JV.
Then on the next slide, construction activities, Högaliden, all turbines installed, and we're doing the site -- we have done the site reinstatement this quarter. That's the work that we couldn't do, and there was still snow, but we have now concluded all of that work in Q2. And Fäbodliden II, as Richard mentioned, is now continuing towards construction in 2023.
In Scotland, we are progressing the sites we consented last year. Crystal Rig IV, Windy Standard III and Paul’s Hill II with the preconstruction phase in Q2, and we concluded on the scope definition for potential tenders in Q2. Then we will also, this quarter, provide a little bit more info on our floating solar initiative. We have been working systematically on floating solar now for more than 3 years. And we see a particular role for us in marine environment, nearshore environments. So our strategy has been to build solid progress on a competitive edge on how to build and operate and manage all the technical issues for building floating solar in seawater. We're doing it nearshore. And we will leverage that position, and we're gaining traction with strong local partners for new commercial projects.
The collaboration with SERIS is key for us. SERIS is the Solar Energy Research Institute of Singapore. They are recognized as a world leader in floating solar, and we are their exclusive industrial partner for marine environment, floating solar previously. This has been done on fresh water. They recognized our long-term maritime history and also all our experience and competence across the production companies within marine architecture and all the marine environment aspects. So we have mapped more than 40 floater concepts together with SERIS, we've benchmarked them and we've done a rigorous risk assessment, not only to understand the different floaters, but also to gain kind of real insight across the different floaters.
We are progressing to make this bankable. So we are engaging with insurance companies and also impendent third parties, including DNV [indiscernible] qualification work. We have an excellent collaboration with our sister company, Fred. Olsen 1848, including on windbreaker technology and [indiscernible] system. And we have done lab testing to check how the different systems are coping with, including wind and wave -- different wind and wave conditions. And we have several tools, including initial numeric models, which provides insight on unable to model how this system behave just using numerical model.
And we're leveraging this to gain traction. We have a partnership strategy in a market similar to what we had on offshore wind in the markets where we don't already have a strong local presence. We are targeting select countries in Southeast Asia, as well as Southern Europe, and in particular, in Southeast Asia, where we don't have strong local teams. We have a partnership approach where we aim to partner with the best strong local power producers and developers.
Key characteristics of the target markets include high power prices, good solar irradiation and lack of available land onshore. What we see is that several countries do not have enough space onshore to deal with the onshore PV and wind, and some of the countries also like wind resources. So in a way -- and people live close to the shore in most places. So we see floating solar in nearshore locations as key also for the transition to the energy transition. And we established Fred. Olsen Renewables in Singapore as our regional office.
As part of this, we're also in this quarter, and we are very pleased with that together with Fred. Olsen Seawind, we received a well ground of NOK 25 million to cover up to 50% of our DEVEX in selected countries in Southeast Asia. Well, that concludes my presentation. And now handing back to you, Anette.
Thank you, Anders. And next out is Lars Bender, CEO of Fred. Olsen Seawind.
Thank you. Yes. And also good morning from me. I will give you a presentation of the activities in Q2 in Fred. Olsen Seawind. I will take you through our core markets, Ireland, Scotland and Norway. And then on the end, I would say a bit about new markets as well. So if we start with the first slide.
It's been a busy quarter, and it's also been a quarter with a lot of major milestones achieved for our business. And one to highlight is definitely the milestone achieved for the Codling project. So the team has, in this quarter, submitted a Maritime Area Consent application, which, as you might remember from earlier presentations, it's one of the preconditions to participate in the [indiscernible] auction and CfD auction, and you need to have a Maritime Area Consent. So that has been submitted, and that's naturally a major milestone for the team, but also a major milestone for Ireland that these are now being submitted because it, of course, is a very important step towards realizing the 5-gigawatt targets towards 2030.
In addition to that, the project has also, in this quarter, updated the grid application. So they are currently in close dialogue with Eirgrid, the local TSO around the grid connection assessment, which is the other precondition to participate in the auction. So in order to participate in the CfD auction, you need 2 documents from the government, basically. One is the Marine Area Consent application and the other is the Grid Connection Assessment, and both have been submitted this quarter. So very positive progress in Ireland for our project.
The other thing which we've seen in Ireland this quarter is that Eirgrid has published a detailed time line towards the auction. So now we have both written but also very detailed time line setting out what needs to happen before the CfD auction and also what timing for the CfD auction. And that is now set to be late April 2023. Again, a very positive sign of the Irish market developing as we would like to see and also that the government is committed to delivering on the targets and the framework we need in order to progress the Codling project. So very positive.
In addition to that, naturally, the development this quarter with the Phase 1 project is very positive also for later projects and the Phase 2 projects. And Phase 2 describes the projects that come after the Phase 1 projects. So an auction is expected 2 years after the first CfD auction, and that is referred to as Phase II. But naturally, with the development this quarter, it puts even more emphasis -- and positive emphasis on the fact that Phase II will also deliver an auction in a timely manner. So positive developments for the Codling project this quarter.
Next slide. Then moving to Scotland. Our team, The Mara Mohr project and the team has been ramping up. And we now have an established stream across the 2 companies, Vatenfall and Fred. Olsen Seawind working very closely together. In addition to that, we have also now started establishing a local office in Sterling for Fred. Olsen Seawind, which also will serve as the project office for The Mara Mohr project.
In addition to that, we have kicked off environmental impact assessment work. We are looking at bird surveys and other works which are needed in order to prepare the consent. This all means that we will position the project for an early consent, and I'm working towards that, again, in order for us to participate in one of the earlier CfD rounds for the floating projects, where we expect that there will be a separate part for floating projects.
On top of that, we've kicked off the technical work streams as well. That entails floor assessment and it entails supply chain engagement. So overall, the project have, over the last half year, come off to a very good start, and we've now gone from, I would say, the establishment phase into the actual project phase.
So next slide. And then to Norway, and I think we had some positive news from the government in Norway in this quarter where they basically announced a target of 30 gigawatt towards 2040. And actually, we are very positive around that target, together [indiscernible], we have established a long-term partnership for the Norwegian market, which extends beyond the current lease rounds because we had a general belief in the Norwegian market. And hence, we are very happy to see that also the politicians see the same potential as we see in Norway. So that is very positive.
We are preparing a bit for both Utsira Nord and Sørlige Nordsjø II. We expect Utsira Nord to be a qualitative competition. It's a floating wind. We would expect to see a very similar competition to what we've seen in Scotland, so naturally, we are growing on our experiences from that competition. Also in Nordsjø II, it's still in the making, what the exact format will be. So there, we are more or less waiting for the government to say more about what the criteria will be and how the format will be. But overall, positive with the new announcement, and we have a positive look towards the Norwegian market.
And then looking a bit broader to new markets because it's, of course, natural for us. We've seen -- we established in 3 core markets in Ireland, Scotland and Norway, and it's natural for us to use that position and build on that position also in new markets. And what I thought I would say a bit about is how we screen those markets and what we focus on and how we select the countries we look at.
As you can see on the bottom of the slide, there are 5 different selection criterias. And the 3 on the top, our usual selection criterias for any offshore wind developer, favorable wind conditions, grid close to population. That's obviously something which most developers will look at. You also look at business environment, whether the economy is developed or not, and you look at, is there a political support regime and so forth. But what's important for me to highlight is that we also very much look at where do we have a distinct advantage, where do we have an existing position to build that on, or where do we have synergies with, for example, our existing partners or with our related companies.
So to give a few examples, we have, over the last year, worked with the Italian market. Reason for selecting Italy is obviously that it's a very good offshore wind market, which fulfills the first 3 criteria, but it's also a market where we have significant synergies with various renewables, who is already present there on onshore and solar. So it's been very natural for us to build on that knowledge around grid, around regulatory regime and so forth, and hence, also look into offshore wind there.
Another good example is The Celtic Sea leasing round coming up. Naturally, with the Scotland success, it's natural for us to look at other waters around the U.K., and build on those experiences and that knowledge we've gained both around supply chain, but naturally also around constraints and understanding of the regulatory regime. So Celtic Sea is another area we are also looking at.
The third area we're looking at is Southeast Asia. And as Anders already alluded to, we have there, again, utilized some of the synergies we have with [indiscernible] to investigate select countries in Southeast Asia. So overall, we are using our existing position in our core markets to build further on that naturally in a very selective manner, looking at in which countries do we have a distinct advantage, where do we have synergies we can build on so that we have an advantage when we set foot on the ground, so to speak.
So to sum up the quarter, first of all, major milestones achieved on Codling with the Marine Area Consent application submitted. We are ramping up the Scotland team and have kicked off the Environmental Impact Assessment work. And third, the Norwegian government has set an ambitious target, which is a really good fit with our long-term commitment to that market.
So with those remarks, I will give the word back to you.
Thank you, Lars. Alexandra Koefoed is next, CEO of Fred. Olsen Windcarrier. Thank you.
Good morning, everybody. So we start with the lovely picture of Bold Tern Norwegian outlooks. So it ties well in with Lars' presentation, Fred. Olson Windcarrier also have a global presence. We are in Europe, the U.S. and Asia, and we are actively working and tendering in all 3 areas.
Q1 for Windcarrier, it's a quarter which is a mix of yard and working. I'm happy to say Blue Tern has been working 100% on the full quarter. She has been working on foundation scope, both on the Kaskasi and NnG wind farm in Europe. So that means our V2G install count doesn't grow as quickly as in other quarters, but still an active quarter. Brave Tern started work in Asia as planned, and Bold Tern just at the end of the quarter arrived in Taiwan after her Yards Day, and is currently working.
Backlog relatively stable after we actually talked about a very big contract at the last quarter presentation, but I'll briefly mention that again. So the highlight of the quarter is the upgrade of Bold Tern, which is completed. And then we thought it was worth showing a sort of before and after shots because it is a very, very significant amount of changes we have done to the vessel.
Length of the hole is the same. Length overall is definitely not the same when you're looking at Crane and blade rack support. The width of the vessel, the beam has increased with 6 meters. It's not very easy to see on the picture, but if you are very observant, you see a shadow off of the main crane pedicle and that's where the sponsor ends. And we're happy to report that the vessel has the same transit capabilities, it has the same speed as before the upgrade, even though we haven't done anything to the machinery.
We've added some cabins. You can also see that in front of the life boat. And we have changed the docking system. So we've increased the preload capacity. That doesn't show on the picture, but it's very important. But what's very visible on the picture is the new crane. It's an increased capacity actually from what we had before the upgrade of the 1,000 tons. It's the largest crane we can put on this vessel, and I think it's quite visible in the picture that it is a significant larger crane, which also sort of drives some other structures, for instance, the boom rest support and also the helideck which is exchange.
I think I would just mention briefly what you see on and off, the vessel is the [ blade rack ] support, so that's where we'll carry the blades going forward. And that is actually an important change because previously, we used to have the blades just after for accommodation, which is the larger components, which meant we also had to ballast the vessel. So by reconfiguring the vessel, we can actually get rid of 1,000 tons of ballast which means we can carry 1,000 tons of cargo.
All in all, the project was completed at budget at EUR 61 million, and we have had some delays. It's not really linked to the Yards Day. It's linked to the fact that the crane was fabricated in China. We had challenges with getting the crane out of China due to very strict COVID regulations. So I think it was the third heavy lift that actually ended up -- picking it up, and that sort of had an add-on effect on one of the crane vessels. But still, we finished it in Q2 as we have reported for some time.
So now she is in Taiwan working, and that's been going relatively smoothly, given that we have been in yard for more than half a year. And I think it's also worth mentioning in terms of the backlog, we see a 40% increase of the rates on this vessel compared to our remaining fleet. So the clients do appreciate the added capacity.
Then to the results. They -- it's a positive EBITDA. That's a change from Q1. It is lower than last year, but that is linked to utilization, which was 51%. And that's mainly linked to Bold Tern, which has not worked in this quarter at all. But for the next 2 quarters, we do expect all 3 vessels to work more or less 100%. So that gives us a very strong outlook for the remainder of the year.
In terms of backlog, we did formally sign a new contract this quarter. We did talk about it in the last quarterly presentation. So it's the same contract, but it was signed this quarter. So that's why we mentioned it here. It's a very big contract, but it also has some subcontracting elements in it.
In the quarter, we have also added some work in Taiwan for '23, and we've completed some outgoing projects. So the backlog, all in all, has been quite steady. So we've sort of used some backlog, and we've added more or less the same amount. But as Richard pointed out, we do have a strong backlog for the coming 3.5 years.
That concludes my presentation.
Thank you. Back to you, Richard.
Yes. Thank you, Anette. And then moving on to Global Wind Service. Yes, Global Wind Service, look, we have done some product development, both the slides for Global Wind Service, we use the same slides for a long time. So here you see some other slides on that. I think at the heart of this slide, you see 2020 to 2023 strategy. We see a lot of interesting opportunities for Global Wind Service, and they really now develop a solid strategy towards '23 of which market positions they should go after. For competitive reasons, I cannot go into that much detail on that. But I would like to say that Global Wind Service have an excellent cooperation with all like and the same have been carried, excellent cooperation with its customers, in particular, the turbine manufacturers. And we see a lot of synergies and work in that interface, both with the turbine manufacturers but also in cooperation with [indiscernible].
The growth continues. As of now, Global Wind Service have around 1,600 dedicated increase working around the globe this summer, major projects in the onshore in the U.S., major projects in Taiwan, together with wind carrier and also very interestingly now offshore wind starting up in France, so also mobilizing then in France.
On the revenue side, we have seen U.S. becoming a very important market and been really driving revenue growth for the last couple of years, also this year, but we have the gap this year between finalizing some very large projects for Vestas and a gap before they move on to some even larger project schedules for Northland Power later in the year.
But anyhow, we expect further growth from the turnover in '21 of NOK 184 million, and position like very well fit into Lars' presentation and Alexandra's presentation fits right into the same markets and [indiscernible] as the rest of the group of the companies.
On the services today, and we're also looking at how we can expand the services. Of course, the installation is the big part where we do crane and installation and also do recovering when that is to happen. And last few years, also moved heavily into preassembly, which has been an area of outsourcing from the OEMs, which have been an important business area.
And it's really the offshore, which is the key part of the installation onshore. It's also a very important strong position there, but in offshore Global Wind Service is the undisputed #1 in the world as we speak.
On the service, more and more service work is also coming in the way for Global Wind Service as we see the OEMs really want to work with Global Wind Service in this area.
And finally in blades, we see especially on the offshore side, significant technical challenges and deterioration of blades and continuous need for blade exchange, blade inspections and so on, and it's a growing market where we are positioned.
I think that was what I planned to say about Global Wind, then on to Cruise. Already covered much of this, but to repeat Borealis and Bolette, they operated in full in the second quarter, and Balmoral came in to the market early May and gradually came in to more and more profitable cruising towards the end of the month. Still the occupancy of 73% in a high season like the second quarter, I would say, is on the low side. But on the other hand, the net ticket income of GBP 194 for the year is significantly higher than cruise lines have pre-COVID. There are good demands for Cruises this summer. We also see strong bookings going forward, but there are uncertainties. Now for the winter, we see more last-minute cancellations. We also see more last-minute bookings. And we are concerned about the U.K. economy with raising prices, inflation and so on, what that will do with the purchasing power and appetite for cruising.
So what we say here, we see strong bookings for the summer season, but we have more uncertainty around the winter season now between '22 and '23. And finally, it was not helpful at all that we had to cancel attractive destinations as St. Petersburg and Odessa.
And also the final remark on Cruise with the bunker prices, it is quite challenging these days, with bunker prices north of $100 per barrel, which is also transferring to the product markets for -- or marine gas oil and heavy fuel bunkers.
So to then end this presentation and just don't want to reiterate. Strong improvements in the results, almost a doubling of the EBITDA, mainly driven by Renewable Energy. A lot of strong operational achievements and also to end with [indiscernible] major strategic milestone for the group of companies, and in particular, for Fred. Olsen Renewables. So that ends my part. Anette, back to you.
Yes. We will now open up for questions.
[Operator Instructions] And we have a question from the line of [indiscernible] NHG Watch.
I was wondering if you could tell me if there is any sort of activity for Universal Foundation when the liability case regarding Deutsche Bank is finished?
Well, I think to answer your question, there is very limited activity in Universal Foundation.
Next question, please.
The next question comes from the line of [indiscernible] from SpareBank 1 Markets.
This is John [indiscernible] from SpareBank 1 Markets. I have a couple of questions. So I guess this one is to Alexandra. Can you give us an overview of the timing of the planned upgrades and renewals going forward? And could you also give us some kind of CapEx breakdown?
Can you repeat the first question, please?
An overview of the timing of the planned upgrades and renewals for the vessels [indiscernible].
Yes. So Bold Tern, we just completed. Brave Tern, we do have a firm order on a crane that was placed in December, that we are planning to install winter season '24. And for Blue Tern, we are looking at doing an upgrade after a project we have committed in '24. So that will go into '25. So that is the sort of time lines of the upgrades. In terms of rate churn, will be basically a copy of what we have done to Bold Tern. That upgrade is most likely going to happen in Europe. So that will probably have some effect on the CapEx. And Blue Turn, she is a bigger vessel than the others. So we have done quite a bit of work to optimize the upgrade. And we do know at this stage in time that she will get a significant larger crane than the 2 are the vessels because she has the technical capacity.
And also, I want to congratulate you on the recent announcement of the establishment of the investments firm and what seems to be a good transaction. So can you elaborate on the expected timing or FIDs for the various projects in the preconstruction phase or the consented phase?
Yes, that's a very good question. Maybe we could call on our colleague, Anders as he is one driving the FIDs.
Okay. Thank you. So you see we have now 3 consented sites in U.K., and we have 2 in Sweden. So for Sweden, Fäbodliden II is -- it's very close to FID. for Verkanliden we could potentially do a FID, but we are reconsenting that site for 250-meter critic instead of 210, which provides significantly better wind conditions and yield. So that's the reason why we wait for that. It will -- I'm not sure how precise I should be, but obviously, all the consented sites are sites we work hard to progress towards FID. For the remaining pipeline, we typically do FID between 6 months and 2 years after we get the consent, it would be my best guiding on that.
I think also as Anders said in your presentation, a little bit about where we were on the 3 Scottish consented projects that we have started the scoping and so on.
Yes. The Scottish project, we got the consent about a year ago. So we are working towards an FID on those 3 charts.
And there are no further questions. I'll hand it back to the speakers.
Okay. Thank you very much, everybody. And it only reminds me to wish you all a very good summer. So thank you.