Bonheur ASA
OSE:BONHR
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Bonheur ASA
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Very welcome to the third quarter presentation for Bonheur. Today, we will do as we usually do, Richard Olav Aa will -- our CFO in the company, will give us an overview of the main figures. And then the different responsible for the segments will talk to their segments, and then we will take questions at the end. So we'll start, Richard?
Yes. Thank you, Anette, and also a hearty welcome this morning from me. Before we dive into the numbers, I would like to set the scene for the figures this time.
I think it's fair to say that we have closed a landmark transaction this quarter with the new fund, the Hvitsten, and securing long-term financing, both short term -- short-term financing for Renewables but also long-term financing for developing the wind farms. Then we have strong results in the Renewable energy -- 2 renewable energy segments, but we also have some challenges in Cruise that we'll come back to.
Going forward, very important topic, taxes. We'll come back to that in detail on the tax situation, maybe in particular in Norway, which is the most concrete as we see it today, with potential quite harmful consequences for the situation in Norway. So with that introduction, with no further ado, I will go into the figures.
So starting with the Renewable energy business, we had an EBITDA this quarter of close to NOK 750 million, up from NOK 174 million in third quarter last year. We see continued high power prices in the quarter, especially in the U.K. and also in Norway, while Sweden still on a low level. Generation was 18% lower than P50, which is the normalized level. So we could still have generated more with normal wind speeds. Then we have the closing of the Borga transaction that closed early September, which gave a net liquidity effect into [ those ] Renewables of more than NOK 1.7 billion, and also a very important EUR 305 million in committed capital for building future wind farms in Scotland and Sweden.
And then on the tax side, I already made a comment about the significant uncertainty related to government taxation. And then maybe especially in Norway as we see it as of now, but also general uncertainty around the U.K. And Ivar Brandvold will cover that in detail later today.
Then on the Wind Service, a strong quarter with an EBITDA of NOK 418 million, up from NOK 264 million. All 3 operating units in that segment performed well in the third quarter. The Tern vessels had close to 100% utilization. Alexandra will cover in detail the projects and how that work has performed. And the backlog for the next 3 years, '23, '24, '25 stands at a solid EUR 473 million. GWS had a strong quarter with a lot of activity in the main markets, U.S., Taiwan and Europe. And UWL had 100% utilization of their 3 vessels and good results in the quarter.
Then we have our challenges at Cruise. We had still an EBITDA loss of Cruise, although lower. It's NOK 42 million negative this quarter, an improvement from NOK 138 million negative third quarter last year. We clearly had hoped that we would be back in black figures on EBITDA on Cruise this quarter, but we still have a small way to go. We have had 3 ships in operations. The occupancy was 73%, up from 62%, but still quite a bit lower than we have seen in the third quarter ahead of the COVID-19 pandemic.
So what are the reasons for this? Well, the EBITDA is influenced by -- on the occupancy, and that's mainly due to rebookings. We had a fairly good booking situation ahead of Q3. But we see what customer -- when they're uncertain, they rebook the cruise and our cancellation policy allow for that, that we can move their cruise to a later cruise. So we have maintained the cash from the cruisers, but they have rebooked to later cruises. High fuel cost, especially for the low sulfur grades, marine gas oil and the very low sulfur fuel grade has gone up quite considerably in price, and also the U.S. dollar-pound development where the pound has gone from around 1 30 down to 1 10 against the dollar, given the political uncertainty in the U.K. and the strong dollar development in general.
All these 3 items are hitting Cruise quite hard this quarter, and we end up with still an EBITDA figure in the red. Going forward, we see market uncertainty in the U.K. given the economic situation in the U.K., and with high inflation, high energy prices, and less consumer confidence and also continued high fuel costs. So there are more uncertainty related to Cruise than we saw 3 months ago. Given the challenging environment and also the fuel cost and also the increase in interest rates, we have to do an impairment based on the latest development in long-term interest rates. We have made an impairment of Cruise of NOK 456 million this quarter. We have taken that impairment towards the 2 older cruise ships. I'll also come back to the impairment and Cruise on a later slide.
On the Other investments, the EBITDA of minus NOK 42 million, a weakening of NOK 21 million. Part of that is in NHST, which have a higher cost this quarter, also due to inflation and distribution costs, but also due to higher investments in product development. The Fred. Olsen 1848, an active quarter. Sofie will come back to that later in the presentation. And Fred. Olsen Investments also starting to gain good speed ahead and have now, in total, 5 smaller investments within Renewable energy.
So on a consolidated basis, we have operating revenues of NOK 3.2 billion, up from NOK 1.9 billion, and EBITDA of close to NOK 1.1 billion, up from NOK 279 million. And then EBIT and net result after taxes are impacted by impairments and impact of long-term interest rates. I'll come back to that on the next slide because we have some special effects on the P&L from that. The parent company, the equity in the parent compared to third quarter last year is down from close to NOK 6.9 billion to close to NOK 6.2 billion. That's largely due to the investments we have made into the Cruise business.
Equity ratio stands at 56.8%, down from 68.2%, while the cash in the parent has increased from approximately NOK 2.2 billion to approximately NOK 3.3 billion, and the latter is due to the Borga transaction. That money that we had from the Borga or Hvitsten transaction, their child has many names, that converts into Renewables. That money is now borrowed up to Bonheur and that is converted to dividend in the fourth quarter. So these ratios on the equity and equity in parent will be quite significantly improved in the fourth quarter.
Then on the consolidated summary, already covered, revenues and EBITDA improvement. On the depreciation, we have written off the crane on Bold Tern, at the old crane, which has been replaced by a new crane. That's why we see an increased depreciation of NOK 72 million. Then we have the impairment of Cruise of NOK 455 million. That gives an EBIT of NOK 290 million, which is an improvement of NOK 277 million from third quarter last year, even we have had the impairment of Cruise. Then on net finance, we have a significantly positive net finance this quarter of NOK 387 million, which is an improvement of NOK 458 million from third quarter last year.
That is almost entirely due to the interest rate situation in the U.K., where long-term interest rates in the U.K. have risen sharply in the quarter, not at least due to the political turmoil. We have hedged our long-term financing in Renewables in Scotland with fixed interest rate swaps that have secured interest for more than 10 years. Those interest rate swaps have, of course, become much more valuable in the quarter when long-term interest rates have increased. So that's the reason behind the strong result in net finance.
So that gives us a strong EBIT improvement even though we have this impairment increase of up to NOK 675 million, which has an improvement with more than NOK 700 million. And then a net result of NOK 393 million, we are in tax position in the U.K., so we pay quite a bit of taxes on the U.K. wind farms, but still an improvement on net result of NOK 550 million. To the parent, though, it is a result of only NOK 40 million, and that's because the parent owns 100% of Cruise and takes the full impairment against the parent.
Then on the revenues, a little bit more deep dive into the revenues. An improvement of more than NOK 1.3 billion in the quarter, whereof NOK 616 million comes from the Renewable energy, both due to higher wind speeds, although lower than normal, but also improved pricing, especially in the Norway and U.K. Wind Service, an improvement of NOK 310 million. All 3 segments have improved revenues this quarter, in particular, the Olsen Windcarrier due to the 100% utilization.
And Cruise, an improvement of close to NOK 400 million. Even though it's weaker than expected, it's still a strong improvement from third quarter last year, where we had one cruise ship in full operation in the quarter -- in third quarter last year and one cruise ship for half the quarter while we had 3 cruise ships in the third quarter of '22. Other is more or less stable on the revenue side.
On the EBITDA, an improvement of NOK 803 million in total, where Renewable energy has an improvement of NOK 574 million. Again, largely due to prices and higher wind speeds. And Wind Service, an improvement of NOK 154 million. And again, high utilization of both UWL and Windcarrier but, also a record high quarter for Global Wind Service. While Cruise an improvement of NOK 96 million, what we see is that it's been a good decision to put all 3 ships out in the market. The results have been significantly worse if we hadn't reactivated Balmoral. So it's been profitable to make that decision. But still, it's not enough to cover the overhead cost in Cruise. So we are NOK42 million negative on EBITDA. On the other, it's smaller movements.
Then this slide on the balance sheet. It's a busy slide, and we have done a little bit of product development of this slide ahead of this quarter. Previously, we had a lot of focus on this slide on the guarantee side, that we tried to visualize that Bonheur moved away from having any guarantees from -- for their subsidiaries financially. That's now in place, so that's not really a big thing to address with the numbers. But what we see now is the long-term interest rates are increasing quite dramatically in all our markets. So the slide now takes more a focus on how the debt and cash is linked to the interest rates.
But I would like to just keep the financial objectives in focus as well, which are the first bullet points. That we have the policies, so strong parent financial positions with conservative leverage and solid liquidity position. That has further improved in this quarter, that the parent now has NOK 3.3 billion in cash and no guarantees. And then also with the aim to accelerate growth, subsidiaries within the company's high-growth and capital-intensive business segments are actively investigating and considers various means of sourcing external capital here in a broad set of equity options, including listing.
The Borga transaction or the Hvitsten transaction, what we define it to call it, is a clear example on that and secure long-term financing on a stand-alone basis for the Fred. Olsen Renewables, and that also links to the third bullet point and also the fourth bullet point of group financing.
But going to the numbers, and I think at least some of you will find interest in this table. What it really shows on a high level is that from -- on the financial side, actually, Bonheur will benefit from increased interest rates, and that comes from a very strong cash position and that a quite bit of our long-term debt is on fixed interest rates.
But if we start on the top with the joint ventures, the third lines, what we have in the joint venture on the Renewables side, the 2 joint ventures in Scotland and the new joint ventures in Norway and Sweden, and the in-service joint ventures with UWL and Keppel, we see, in total, we have approximately NOK 1.1 billion in cash and NOK 5.6 billion in external debt. Of that NOK 5.6 billion in external debt, approximately NOK 1 billion is shareholder loans and NOK 4.2 billion is covered by the fixed interest rates. So in total, the cash and what is not on fixed interest rates is very well balanced on the joint venture side.
So for the joint ventures, an increase or a decrease in the long-term interest rates will not drive up the net interest cost in the joint ventures in total. When it comes to what they control 100% from Bonheur on the 5 lines below, we see a total cash of NOK 3.9 billion. and external debt of -- close to NOK 3.4 billion, very close to NOK 300 million is on fixed interest rates.
So in total there, we have approximately NOK 800 million more in cash than we have on floating interest rates. So for what we control 100%, an increase in interest rates actually improves the net interest. So at this time, I mean, of course, this has not been beneficial when interest rates have gone down. But now when interest rates go up, we are very well protected.
And then to the end of this part of the presentation before handing over to Ivar. This slide you have seen many times before, but it's been developed further this quarter, and it's growing from every quarter. And we had a debate actually yesterday, if it's start to be too wide. But there is a good development in this slide also this quarter. We see on the Renewable side, Ivar will come back to that. Adding pipeline, Lars will come back to that, developing the projects in Siemens, and we see strong development across all the service sectors. And also, Sofie will come back to the Fred. Olsen 1848 development this quarter.
What we have added though in this quarter is a fourth box on this, which we call capital. And there we have the Hvitsten Asset Management company, which is now in operation. And we see there with the partners of Meag and KLP and Keppel. We have started really a new business on the asset management side. That builds on what we have done before, with equity partnerships with Trig and Aviva. And we did account and we see that over the years now, we have taken in close to EUR 1 billion in financial partnerships in the capital side, and now EUR 480 million of that is with the KLP and Meag and KIT structure.
And then also on the investment side, starting to gain speed with now 5 smaller investments in -- within Renewable energy. So we see an increased importance of this fourth box, and we think that the capital side now fills in with the renewables and services and technology and innovation in a very good way.
So with that, that's the end of my presentation.
Yes. Thank you, Richard. Next one out is Ivar Brandvold, Co-CEO of Fred. Olsen Renewables. So welcome, Ivar.
Good morning, everybody, and I'll cover our Renewable energy. And we're starting with the business model, we keep the scenario of our portfolio. And as we speak, we have a development portfolio of 3.7 gigawatts. We have a consented portfolio of 462 megawatts. And we have also a small park in Northern Sweden under construction of 17 in the Fabodliden II, and we have 400 -- 788 megawatts in production in total. The material change over the last quarter has been an increase of the consenting portfolio in the U.K., and we'll cover that in the next slide.
Then dealing what Richard just mentioned, we have the Wind Fund as a partner now for new projects, and daresay that they have developed a very strong consented portfolio of this last period, including Fabodliden, it will be around 480 megawatts that is consented. And the 2 last ones is Fetteresso in the U.K. and Rothes III most recently. I must say that Rothes III of 126 megawatts is quite an achievement, given the condensed development on land in the U.K. So that is something we are really proud of being able to bring to consent at this stage.
So we have then 6 consented parks. And in addition to Fabodliden II under construction now in Northern Sweden, which is an extension to the producing Fabodliden park, that's 4 turbines to be installed next year, and we started with the construction work in August this year, and things are progressing well, I must say.
If you then look at the market development. Now our core production first. 2021 was an odd year out, with a very low wind production, as you can see here, of 1.7 terawatt hours. When it comes to 2022, our expectation has been that we're going to deliver on what we call P50, or expected production, and we are now on target to meet that forecast of 2.2 terawatt hours being produced in 2022. So it's not really been any surprises of a negative character for the producing wind farms up until now.
If we look at the energy sector [ and so a sidel ] market on these 4 slides, if you look at the top left, you there see there the capacity factors and the generation on all wind farms. And of course, it also then shows, over the years in each quarter, the variations we have from winter to summer and back to winter again. And when it comes to the last 3 quarters, we are quite, as I mentioned, normal [ there ] production in our wind farms in total, with a drop during the summer season. And we now expect a rapid increase in production then in the fourth quarter.
In a way, the energy market is in a little bit more of a normal as we speak. If you look at the lower left graph, which covers the power prices, you will see that the power prices in Europe, in the U.K. and in Norway has come down quite sharply over this last month, and we have had a relatively stable development in Sweden. So it's still at higher levels, but at least there's some formal normalization in these markets. And I'd say that, that is on the back of the development of the gas pricing, which you see to the upper right, where there has been a rapid drop in the gas prices through the -- over the last months.
And that is a consequence of additional sources of gas via LNG to Russia into Europe, and also that the storage has been now replenished in Europe in ahead of the winter months. And the other topic, should we say, of parameter is the hydrological balance in Scandinavia, which has been lower than usual over quite some period. But you can see to the lower right there, that is starting to come back to normal. The 0 level here is what we call the normal level on the hydrologic balance. So in a way, those 2 factors are part of what's forming the basis for the current electricity prices.
So what do we expect during winter? We think that the most pronounced effect is going to be the uncertainty related to Ukraine and the sensitivity as to the other markets in Europe. So we expect volatility and larger variations also through this winter than we would normally see prior to this crisis.
If you go then to another topic which has taken quite some interest over these last months, and that is measures in the governments in U.K. and Norway and also EU related to the power situation. [ You'll note ] a little bit different approaches in Norway as to EU and the U.K. And I would like to draw your attention to the lower graph to the left there, that is the Statnett prognosis in terms of our power balance in Norway going forward. And with no new power being brought to the market, we expect that we will have a negative power balance in Norway by 2027.
And sometimes I wonder if this is a realization that is in a way understood in Norway, because this is taxed. And if we don't think about new energy sources via hydro or wind on land, we will not be able to meet our demands after 2027, which I think is quite a dramatic situation. And to meet the needs by 2030, additional 30 terawatt hours of new energy is required in Norway, which is a challenge in itself. And as I said, the 2 sources would be hydro, to a lesser extent; and onshore wind, to a larger extent. So it's a challenge in itself to develop this.
On the back of this, we have then now seen a tax proposal in Norway, which as I said, took us by surprise, which is quite dramatic. And the -- this was announced in late September in relation to preparation for the 2023 budget. And the consequences being legislated, so to speak, is that existing wind farms with this resource tax, basically, the government to capture about 3.3% of the value of the wind farms with no compensation, which is a dramatic change in itself. And on new wind farms, we would see a what we call a nonsymmetrical that is not a cash-neutral resource tax being proposed in contrast to what we have on hydro and oil and gas today, and that would materially effectively have a cost that there will have to be a dramatic increase in energy prices to have any minimum profitability of new projects.
So that is also something which I think is not wanted in Norway really. And on top of this, a fee of 23% is proposed above NOK 0.70 on the kilowatt hours for any production above -- 23% of any production above NOK 0.70, which is an effective cash also grown from the wind farms. So all in all, if implemented, it's impossible to say -- to see or to say that this will not hamper new energy investments dramatically. And what we could see is that it would see really that impact the power balance in Norway. We would have longer-term higher electricity prices more strongly linked to Europe. And we think that it also will hamper the transition into greener energy situation in Norway, then hence, also Europe going forward.
If you then look at what's being implemented and discussed in EU and in the U.K., the main focus there has been to reduce the consumer bill on electricity. That has been very hard due to the circumstances. And in EU, they have now proposed or implemented a cap of -- until June 2022, which a temporary measure, of EUR 180 per megawatt hour. Plus, there will also be a profit element above for the generators. We have 2 wind farms within that sphere which is in non-Sweden, but because of the prices in Northern Sweden, it will be limited impact on our Swedish wind farms with these cap.
What has been a prerequisite in the EU and which is also a prerequisite in the discussions in the U.K. is that measures should not be negative in terms of constructing and bringing new energy sources of renewable nature to the markets. In the U.K., there was just recently a Energy Prices Act of 2022 voted in both houses. So it's now an act to be implemented. And there is a secondary legislation that is now being prepared that will give us further details. But as we speak, we do not know what the end result of that secondary legislation will be.
So that covers my part of the presentation. Thank you.
Thank you, Ivar. Next one out is Lars Bender, CEO for Fred. Olsen Seawind.
Thank you very much, and welcome to the first 3Q for Fred. Olsen Seawind. I will today cover our core markets, so that's Ireland, Norway and Scotland. And then at the end, I will say a bit about our new markets as well, and our expectations in offshore wind.
So if we flip the slide, we'll start in Ireland with the Codling project. And just to recap, the Codling project is the largest offshore wind project in Ireland. It's a bottom-fixed project. We own it in a 50-50 joint venture with EDF. It is 1 out of 6 projects which are qualified for the ORESS-1 auction, which is expected to be in April '23. So overall, a significant offshore wind project, not only in an Irish context where it's the biggest, but also in a European and global context.
In this quarter, we've seen significant progress. We've received a marine area consent minded to award letter from the Irish government, which is positive. As you might recall, this is 1 out of 2 preconditions we need to fulfill in order to qualify for the auction. The other precondition is a grid connection assessment, which is expected that we will receive within the next month or so. So overall, the legislation is progressing well. We've received a marine area consent. And in general, the project is progressing according to plan.
This has also allowed us to now continue the development of the project. We received node assignment on the Poolbeg Peninsula, meaning that we now can do detailed design around our onshore substation and the connection into the grid. So overall, a quarter with significant progress on the framework around the auction, and also with a significant milestone in the form of the award of the marine area consent. So in Ireland, it's been positive development this quarter. And with that, I will go to Norway.
So just to recap our position in Norway, we've entered into a long-term partnership with Ørsted and Hafslund, an equal partnership where we aim to not only contend in the first upcoming lease round, but also to develop offshore wind long term in Norway. What we've seen in this quarter of news is that we've entered into a strategic supplier partnership with Nexscience. Nexscience is one of the world's leading cable producers for offshore wind. They have a significant Norwegian footprint. And one of the challenges we see in floating wind is dynamic cables. So the aim of this partnership is to discuss and develop tomorrow's solutions for dynamic cables for floating offshore wind.
This has been part of our strategy from day 1. We want to cooperate with the best Norwegian suppliers to deliver good solutions for floating offshore wind in Norway. Remembering back, Norway is a fantastic country for offshore wind. We have some of the best wind speeds in the world. We have a long coastline. So the conditions for being an offshore wind champion in floating wind is absolutely there, but we need to find some of the new solutions for both technology [ for ] also financing and production of offshore wind. And we intend to do exactly that through our partnerships with the supply chain.
All the news in this quarter in Norway, while on the framework around the legislation, it's expected still that we will receive news in Q4 around this. We haven't heard a lot yet, but obviously what we are waiting for is the details [ on competition receives ]. Is it going to be auctions? Is it going to be qualitative competition? We'll know more about that in Q4. Currently, our expectation is that [ generally will be a qualitative ] competition similar to what we saw in Scotland. Whereas, our expectation is that Sørlige Nordsjø II will be a more auction price-driven machine, and therefore, also with less focus on, for example, Norwegian supply chain and so forth.
But we will know more about that during the next quarter. In any case, we are preparing for both competitions together with our partners. Naturally, we also have the long-term focus, and we've been happy to see that the Norwegian government through NVE has now started with consultation on potential new acreage in Norway, supporting the 30 GW target before 2040. So overall, that is positive.
Then as Ivar already have mentioned, we've also followed the tax situation [ and know it ] very closely from the offshore wind side. I think it's relevant to make a few comments from the offshore wind perspective on tax as well. There's actually 2 very important points for offshore wind when seeing the proposed tax regime. Well, one is that given the process around the tax regime that it came, as Ivar said, as a bit of surprise, it's naturally something which we look at -- which will most likely or for sure, decrease the investor confidence into Norway.
And that's, of course, something we do not need from an offshore wind perspective. We would like Norway to be attractive. We would like to see Norway as an offshore wind champion long term. And in order to realize that, we need investments into Norway, and we need good, stable, predictable [ trading ] conditions.
The other part is, of course, that currently, [ when the ] suggestion is not cash-neutral, as Ivar also mentioned, it will drive electricity prices up. And if similar rules are implemented; for example, on offshore wind, which is a reasonable expectation, it will also drive the price of offshore wind up, again making it more difficult for Norway to succeed with the green shift, making it more difficult for Norway to claim the position as an offshore wind champion long term, which we see the potential for.
But again, we need stable frame conditions in order to realize that. So hopefully now, what will happen is that there will be a good consultation around these rules, and there will be a good compromise to find frame conditions that support the green shifts and which also supports development of offshore wind in Norway.
And with that, next slide, we will go to Scotland. In Scotland, we have the Muir Mhòr project. As mentioned before, it's around 800 MW, at least not less than that. It's a floating offshore wind project owned in a 50-50 joint venture with Vattenfall. Our expectation is still that we will see a CfD route with a separate pot for floating around '26, and that is what we are preparing the project for. So in this quarter, we have mobilized the full team [ funfedoceansea ] when we are leading the development with the project director and the full consenting of the site.
That means that we have undertaken significant data collection and investigation of the site, and we'll continue to do that into '23. That includes aerial studies, it includes metocean studies, it includes deployment of FLiDAR later this year. It also includes geophysical works. So overall, it is going to be a busy Q4 for the project, but it's also going to be a very busy '23 with a lot of data collection and analysis of the site. All in all, preparing the project for an early consent.
And then on a last note, besides the core markets we now have [ benefit ] in Scotland, in Norway and in Ireland, we naturally also are looking very much at new markets. We are working with a range of new markets, as I mentioned before. And even though we do see an energy crisis, we also see, maybe also to some extent supported by the current crisis on energy, that offshore wind targets are increasing in a lot of countries and in a lot of regions. So latest numbers we see is that there is an expectation of 300 gigawatt of offshore wind to be built before 2030.
To put that into context, we are today in a situation where we've built around 30 gigawatt. So it's a tenfold increase until 2030. So a very, very significant growth. If you look at the numbers towards 2050, the expectation is above 2,000 gigawatt. So the market potential is still extremely high. And I think the only thing that's happening now is that these targets are increasing as we almost speak. So we maintain a very positive outlook for offshore wind. We have a solid platform in our 3 core markets to develop from and to build into new markets.
And with that, the last note, I'll give the word back to you, Anette.
Thank you, Lars. Sofie Olsen Jebsen, CEO for Fred. Olsen 1848 will now present to us.
Thank you. I'll start off by showing a picture of the Brunel foundation in the Oslo Fjord, and it just illustrate the share size of a 15-megawatt foundation and turbine.
Fred. Olsen 1848, we are dedicated to develop tomorrow's sustainable energy solutions. And as you know, we are a technology and innovation company. And our technologies try to solve the challenges in the renewable industry. And on the right-hand side here, you can see the floating wind technologies that we've launched to the market so far. I will not go into the mobile port solution and the mobile fabrication site, which is on the bottom line there, but we're gaining solid traction on these as well.
So I'll start off by talking about our floating foundation Brunel, which is a semi-submersible structure, and it's based on a modular design on steel tubulars, so that it is very fit for serial mass production, which we believe is very important in floating wind. Highlights from Q3, we are in several ongoing commercial processes, both on a request for information level and on a deeper and more engaging contact with developers, which we are excited about.
On the technical side, we are completing a structural optimization to make the structure more lean and optimized, and also focusing on the fabrication properties. We do believe that having a refined assembly and fabrication setup is quite key for Brunel and the industry as a whole, and are focusing very much on this at the moment. Additionally, we are developing a cost-efficient operation and maintenance solution for Brunel. That is linked to the floating maintenance solution, which I will present on the next slide. Although it looks a bit different for Brunel and it is even more cost-efficient, but we will show you this on a later date.
We are very happy to have launched a new technology, the Floating Maintenance Solution. I'll start off by describing the challenges that this solution solved and the reasons for why we developed it. So today, most floating wind operation and maintenance solution is based on having to disconnect the foundation, towing it to shore, doing the repairs or change of blades, et cetera, and then towing it back again. This is quite a lengthy and large operation, which involves downtime, it involves weather windows to be quite large and it involves having available ports. You also have to have and add some additional weight on the floater to withstand the towing back and forth.
So now in order to overcome this and develop something better, we have worked on a solution that is based on the following criteria. Firstly, we wanted to be able to perform the major component exchanges offshore. We also wanted it to be based on proven technology and methodology. We believe that there are so many challenges happening in floating offshore wind, and the technology gap should be as small as possible. We also wanted a solution where the crane could operate with the same movements as the floater, where you would reduce the amount of dynamic lifts to a minimum, and where you had a self-supporting solution with no external requirements for power. And a solution that could be used on almost all semi-submersible foundations.
So in order to have a solution that looked and operate like a crane, we turn to Huisman, which is a leading crane manufacturer, and have worked together with them. And Huisman have pulled out all their tricks in the sleeve and developed a crane that has -- is both telescopic and it has a [ flighter ]. So in order for you to understand more about the solution, we will now show it in a video.
[Presentation]
Thank you. So as you saw from the film, the crane is quite efficiently mobilized by a service construction vessel. And since it is based on 2 different parts of 300 tonnes, there are many available such vessels in the market that can perform the operation today. You also have very minimal modifications to the floating foundation, this -- the only thing needed is this interface adapter ring of 40 tonnes, and that is not a lot required for such a large structure.
So we, as the solution fits on most semi-submersible foundations today, we have received an immense amount of positive feedback from the market, and it's clear that it solves a true gap out there. We are now in the process of forming up a FEED study for the solution, which will look more into the very details of the operation as well as the technical side. And I hope this made you as enthusiastic about the floating maintenance solution as we are, and I look forward to answer your questions about this.
Thank you, Sofie. Alexandra Koefoed, CEO of Fred. Olsen Windcarrier.
Good morning. I will present some highlights from Fred. Olsen Windcarrier in this portion. So in general, it's been a good quarter. We've had high activity, a very busy installation season in Taiwan. So I will stop there as we have 2 vessels working in Taiwan this season.
Looking at the slide, you can see that Brave Tern has actually been involved with 3 different projects over the summer and Bold Tern have been involved with 2 different projects, which is not our typical season. And then I would like to highlight a little bit what we see in Taiwan, which I think could be a prediction of what we will see in general in the offshore wind market going forward.
And we talked about growth in the offshore wind market, and that means that we have a supply chain that needs to follow that growth. That supply chain is very likely to be under pressure in the next decade to come. And what we see in Taiwan is small disruptions in any part of the supply chain, creates sort of a ripple or a domino effect through the projects. So I think if we had a third vessel in Taiwan this summer, it would easily have been occupied, because the clients have all been asking for additional vessel capacity.
So what this really requires is an open dialogue between us and the clients and, in some instances, also between the operators to really utilize the capacity in the supply chain which is there, in order to get wind built, which is definitely something we need to do. And it highlights another element that having a fleet of vessels and being able to offer the clients flexibility is important. So Blue Tern, a little bit less exciting. She has been on one project in Scotland, installing foundations for LNG, actually is scheduled to install foundations on the same project next year.
So that brings me to the numbers. And as mentioned already, all 3 vessels have seen 100% utilization during the quarter. That is very good. That's something we should have in the third quarter, but it's not necessarily something new. But the increased day rates we have managed to secure result in that we're seeing historical revenue and EBITDA for this quarter. And in terms of the year, we still have some catching up to do compared to, for instance, 2021. But as you see in the backlog, we have also a solid backlog for Q4 2022, which is probably something a little bit less ordinary, where we usually have our best quarters in the second and third quarter.
In terms of added backlog, we haven't signed any new contracts in this quarter. We have done some shuffling on the contracts we are in. But we have a very, very significant tender activity for the -- mainly the period '25 to '27, I think I should mention. But also a longer outlook, we do see clients are realizing that we are seeing a tighter market and they are approaching us to secure capacity early. And I think if you look -- going back to Lars mentioning, we need to build 300 gigawatt by 2030. And the vast majority of that will be the second sort of half of this decade, because projects to 2025 were already more or less lined up. So we have a very good market outlook for floating carrier and again [ for the fin ocean ]. That concludes my presentation.
Thank you. And I will now give the word back to you, Richard, to talk about Cruise.
Yes. Thank you, Anette. And also thank you to my colleagues. I think where we started this presentation with strong results and a very good development in the Renewable, on the Renewable side, I think it's been demonstrated by the 4 presentations. And then turning back to where we have some challenges.
And going a little bit more in detail on the Cruise side, we have a lot of work to do there. But going a little bit more in the details of what happened in the quarter. All 3 ships, they were operating, although Balmoral had a propeller issue, where we had to cancel one cruise of 11 days in the high season. So that, of course, impacted the quarter quite a bit on occupancy, on revenue. But we ended the quarter with occupancy of 73%, which is clearly on the low side where it should have been. Normally, like I said earlier, we should have been north of 85% in third quarter, but we see increased uncertainty in the U.K. economy and customers then being more cautious.
Net ticket income, though, we're at GBP 191 per diem. We also hope that to be higher, but that was more in line, I think, with expectation. But we all -- we have a clear plan to drive up the net ticket income, especially with the 2 new ships, which should cater for a higher per diem going forward. But then we came out with a negative EBITDA this quarter, and it's fair to say that it was more negative than we also expected ahead of the quarter. We of course, have this Balmoral propeller issue, that we had 11 days outage.
But then we were taken a little bit by surprise by a lot of customers transferring cruises to later dates, especially transferring from '22 cruises to '23 cruises, both due to COVID but I also think, in general, about the uncertainty in the U.K. economy. On the latter, if that was the main effect for cancellations to or transfers, you would expect people to request their money back, but they actually didn't do that. They moved the cruises to later dates, showing their confidence in Fred. Olsen Cruise lines.
On the fuel side, we have quite a bit -- a quite dramatic increase in the operating costs compared to the previous quarters. And it's really due to the increase in the fuel cost. But if you just look at Brent alone, that doesn't explain it. You have to look more in detail on the various fuel grades we're actually operating on. We can scrub the heavy sulfur fuel but the availability of the heavy sulfur fuel in Europe has been very limited over the summer, and we have run more on the expensive marine gas oil during the quarter. And for example, Balmoral have been operating out of Scotland, where the gas oil prices have been very high during the summer.
In addition, we acquired a lot of our goods in U.S. dollars: bunkers, food, a lot of the crew costs are in dollars, and it didn't help that the British pound really tanked from around GBP 1.30 against the dollar to around GBP 1.10, effectively driving up the cost in dollar with 20%. So a lot of winds in the wrong direction for cruise lines, both with these technical issues, transfers and especially then on the fuel cost side and the currency.
So we had -- as Cruise has been struggling for a while, we had then a hard look at the [ collars ] this quarter, and we developed 3 types of scenarios for the cruise business going forward as there's a lot of uncertainty, and looked at those scenarios. And based on those scenarios and taking somewhat of a cautious approach given the market situation, the fuel cost and also long-term interest rates going up, we decided to impair the cruise lines ships with GBP 39 million. And that's been allocated to the 2 older cruise ships. So the 2 new ships are unaffected by the impairment.
So again, that brings us to the end of the presentation. And again, quite good quarter on the -- both for renewable energy and in-service, but challenges on the cruise is kind of the main theme.
Thank you. We will then open up for questions.
[Operator Instructions] Your first question comes from the line of Anders Rosenlund.
On Fred. Olsen Windcarriers, when is the next yard stay, which vessel is it and how long will it last? I have a couple of other questions as well, if I may.
Do you want to answer?
We -- in terms of yard stays, the next big yard stay planned is for Brave Tern. We ordered a new crane for Brave Tern in December last year, and that is due to be installed after the '23 season. And it will last approximately the same period as for Bold Tern, because what we are doing to Brave Tern is more or less a copy paste -- or it is a copy paste of Bold Tern. So that took us approximately 6 months, plus minus.
And then on Page 28, it's also a Fred. Olsen Wind Carrier question. On the lower left-hand side, there is a chart which shows revenues and EBITDA in million euros. So is that full year 2021 and only third quarter 2022 that you're showing on the left-hand side there?
That's up until -- so it's up until Q3. So it's Q1, Q2 and Q3.
Yes, I think in the chart, it's year-to-date. And in the text, it's the quarter. Isn't that the explanation?
Your next question comes from the line of Jamie Franklin.
I just have a couple of questions on Wind Carrier. So firstly, just in terms of the vessel upgrades, could you give us a sense of how the day rates in the backlog for the upgraded vessels will compare to the existing fleets? And then the second question is on the MOU you have in place with Shimizu in Japan. Just wanted to know what exactly that covers? And if you could tell us a bit more about your current presence and activity in Japan to date, and what you're seeing in that region in terms of tendering activity.
Alexandra, you are the best one to answer these questions.
Just, Jamie, a quick question back from me, which company you're representing, just so we know?
This is Jamie Franklin from Jefferies.
Okay. Thank you.
In terms of day rates on the upgraded vessel versus the existing vessels, we have seen for contracts we secured in the period '22 through '24, it's an approximate in -- the average of the contracts for bolt-on for that period, which will be upgraded for the complete period, is 40% higher than the average for the 2 other vessels in the period '22-'24. So it gives you an indication that the clients are willing to pay more for the upgraded vessel. But as I mentioned, we also see a general market tightening. So we do see a general increase in rates overall.
In terms of the cooperation with Shimizu, that is an agreement where -- Shimizu is a large construction company. They have a wind turbine installation vessel under construction that will be ready next year. They have 2 projects that, that vessel will do in Japan next year. But the agreement is we will -- as they are not a vessel operator, they came to us because we are experienced in this market. We know how to operate these vessels and we also have the commercial insight outside Japan.
So we will likely do projects together with Shimizu in Japan. There are some cap attach rules in Japan that makes it very difficult to operate in Japan without a Japanese partner, so that was our motivation. And -- but outside Japan, we will actually market and are marketing the Shimizu vessel for projects, where we will be the contract counterpart for the client so they can work with a partner they know, but we have effectively added an additional vessel to our fleet.
Your next question comes from the line of John Olaisen from ABG.
I got 2 questions. First, starting with Fred. Olsen Seawind. I wonder if you could tell us a little bit more about the expected CfD auction round in April '23, how does it work? Is it bidding among current acreage holders? And how many gigawatt of capacity is expected to be auctioned? Maybe how many likely bidders are there, et cetera? If you could talk a little bit more about that CfD auction, please?
Lars is the expert of these. Lars?
Yes. Well, first of all, the auction is a CfD auction and it's expected in April, so that's the frame. There are some other terms and conditions still outstanding on a lot of them, so we still are waiting for them. But the frame around the conditions is that 6 projects are qualified to participate in that auction that are the so-called Phase 1 projects, which we are one of, and as I mentioned before, we are the biggest ones. So it's going to be a competition between those 6 projects on the CfD.
Then obviously, what we expect is a 15-year secured price as we see in other places in the market. Our expectation is, of course, also given the competition, given that it's an early phase development country, that the CfD will be attractive compared to what we see in other regions that are more developed. I don't know if that answers fully your question, but given that terms and conditions are still outstanding, it's difficult to kind of comment on the detail.
And sorry, how many -- is it possible to say how many -- can you give us some capacity that's expected to auction? Or is it the number -- how many -- of those 6 projects, do we know how many of those 6 projects are targeted to be awarded CfDs? Is it all 6? Or could it be only 1? Little bit of color on that, please?
Yes, that's a good question. That detail, we do not know. So the competition ratio, for example, is one of the things we, of course, are waiting to hear more about. But what Ireland have announced is that they have a 7 gigawatt target until 2030. And if you compare it to that, there is around 4.4 gigawatt going into that auction. So if they are to deliver on their 2030 target, then a significant part of the projects going into that competition needs to have an award. That's for sure. But the exact competition ratio, we don't know yet.
Okay. That was very useful, by the way. My second and last question is regarding Fred. Olsen Windcarrier. Is it possible to give a kind of indication of how much of the capacity for the 3 vessels are now sold out for '23 and '24, i.e., how much available capacity do you need to sell for '23 and '24, please?
So the question was on capacity in '23 and '24 for the vessels, yes. We have quite limited additional capacity. There is some additional capacity between '23 and '24 on the shoulder season. But other than that, when you sort of include that we have a yard stay coming up by -- once we finish our project in '23, there's very little capacity.
All right. So basically sold out for '23 and '24. How about '25, '26? When do you start getting more capacity available, sorry?
'25, we have one vessel fully sold out. The 2 other vessels, we are working several tenders at the moment, and we will, of course, if significant enough, we will inform the market.
All right. And as a follow-up to this question, what's the status of a potential fourth vessel being ordered from you guys? Are you building a newbuild?
Yes. We have been talking about a newbuild for a long time, and then we were also very, very public about it last -- or early this year. We are still working on those plans. And I think it's fair to say this spring was -- so that we had a turbulent market, both on the financial side and also in terms of CapEx investments, so we are still working on it. We know exactly what we want to build. I guess we will inform the market once we have news.
Your next question comes from [ Ruel Hartz Bigzen from Clarkson Securities. ]
So first, I want to talk a little bit about the cost [ plus ] revenue limit. So my understanding is that a possible legislative framework will first be adopted in England and Wales, and then likely extended to Scotland [ and ] implemented. And the government in London is said to be consulting with your counterparts in Edinburgh to see if the cost plus cap should be extended to Scotland. So do you have any color on like if it's implemented in Scotland, do you believe it's going to be like an exact copy of the one in England and Wales? Or could there be any differences there?
It was a little hard to hear the question. But Ivar, I think -- would you...
I think the question is, just checking with you, is that if there is legislation around the taxation of renewable energy in the U.K, that is applicable to England and Wales, will it also be automatically applicable to Scotland. Was that the question?
Yes. And if so, like could we see any potential differences, like the level on the cap or like when it's implemented?
I think it's very easy to answer that. And if I -- I mean, the situation is that there is no certainty at the moment of how this will be handled. And I think, certainly, Ivar has outlined what we know presently. And when it comes to Scotland and how they will deal with this, it's too early to say.
Okay. And then I have one question on the Cruise line. So some of your peers on Cruise have reported lately. You had Royal Caribbean, for instance, reporting last week, and they were pretty much back to pre-COVID levels, forecasting record yields and record EBITDA for 2023. You guys don't seem quite as optimistic on 2023. So maybe you can give a little bit color on sort of what's causing the difference here? I know you mentioned the U.K. or pound currency, which obviously you can't control. But are there other factors, like could demographics be a factor here or like the attractiveness of the assets be a factor? Can you please give some more color on that?
Yes. I think you have to remember that the U.K. is a different market than the total market that they are reporting on. And our ships cater for the U.K. market specifically, but Richard...
Well, I think we've also seen that, of course. I think when you come to the ships themselves, I think the 2 new ships, we're very happy with the ships. The customers -- or the customer feedback on the ships and the service and the product is really good. So I think the core product, we don't see any issues with the core product, but it's more how do we approach a market that is now a lot more cautious. Given the state of the U.K. economy, how do we approach that market without giving away the product and discounting, that's a very important point.
And then of course, the fuel side is very difficult for our ships because the availability of the high sulfur fuel, which we can scrub -- we have scrubbers on both Bolette and Borealis -- has been a very limited availability. So I think we are -- we have been a little bit handicapped on the fuel side and then also the U.K. economy.
That having said this, it's quite strong bookings looking forward for '23. So there's a lot of uncertainty, and that's why we said that we have developed 3 scenarios for the impairment, a low case, a base case and a high case. And which of these scenarios that will pan out for the Cruise is very hard to say. So what we are signaling here is that there is a lot more uncertainty going forward now given the state of the U.K. economy.
I can assure you we are focused on the operation and also on the cost side.
Our next question once again comes from Anders Rosenlund from SEB.
Excellent. I just discovered that I had a follow-up -- or not really a follow-up, but when it comes to accounting of this sale of 49% of the Nordic assets to this new investment company. Maybe I'm not the best when it comes to accounting, but I would expect that to generate a profit on the sale of the stake. Is that not the case because it continues to be accounted for according to historical costs? [ My estimation some ] flexibility there?
Yes. No, it's a very good question. If you go into the details of the report -- and obviously that was released this morning, so you haven't had time to that, you will see that the equity of the group has strengthened with some NOK 771 million. So that's the profit for the sale of the 49% and that's taken directly through equity. That's the same way as we did with the transactions with Trig and Aviva as well. Because we're not selling a majority, then we don't take it over the profit and loss, but take the book gain directly to P&L. But there is a significant book gain on the 49% sale of Lista, Fabodliden and Högaliden.
And on the cash, we see it on the cash of the parent company, but we not see it yet on the equity in the parent company because it's been taken out as a loan from Fred Olsen Renewable in the third quarter, but it's now already been converted to dividend in the fourth quarter. So you will see a significant strengthening of the equity in the parent and the equity ratio of the parent in the fourth quarter. But we have long debates about whether or not the profits from the sale of 49% in the wind farms, both with Trig and Aviva and also these ones, whether it should be taken on the P&L or direct to equity, but the right accounting treatment is to take it to equity. But you will find the numbers...
And you didn't comment on the number, but it's a very significant number. It's closing up on 4 digits, isn't it?
Yes. I think I mentioned it, it's slightly less than NOK 800 million on the profit.
Our last question comes from the line of Bard Rosef from Pareto.
On onshore wind, could you talk a little bit about potential timing of construction start for the consented projects? Aside from the 2 you have added this quarter, a few of them have been pre-consented for a while now. So if you can just consent -- talk a bit about your thinking around that?
The question was on the, should we say, the time line for bringing the consented projects forward to construction. The current -- what I can say is that the first project that we think is going to move into that process is the Crystal Rig IV. Fabodliden II has -- we have already made an investment decision, as I mentioned, and it's being constructed as we speak. So that the next project is going to be the Crystal Rig IV, we believe.
Then there are several conditions in the consents that we need to clarify, so that's something that's a little bit unclear. So the potential next project or projects to be brought into a construction phase is the Paul's Hill II and the Windy Standard III, also previously named Brockloch Rig III that could be brought into this phase in 2023. And then Fetteresso and Rothes will follow later. There are several conditions met -- that needs to be met before we can bring it into construction. So I think that's as clear as I can be as we speak.
That's very, very helpful and very clear. Just a follow-up, just to confirm, you're probably going to build those projects with full merchant exposure? Or are you planning [ an AD ] date?
Well, it's a very good question, Bard. That's clearly been our policy up to now, and that's been a policy over time that has been beneficial. But I think what is happening now on the government taxation side is so unclear. And what -- and the U.K. government it's fair to say, Ivar, they first tried to implement the CfD system also for onshore wind.
Yes. And yes, voluntary CfD system.
Which phase?
So far.
So we just have to see, but if the market construct as it -- will remain as it is today, it's fair to say that we will remain with our policies. But it's quite uncertain. So if legislation change and it's for some reason, which we cannot foresee today, makes more sense to do a CfD, of course, we will have to consider that.
There are no further questions at this time. I turn back the call to the speakers. Thank you.
Well, thank you very much. That ends our presentation.