Bonheur ASA
OSE:BONHR
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
181.6
286.5
|
| Price Target |
|
We'll email you a reminder when the closing price reaches NOK.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Bonheur ASA
You don't have any saved screeners yet
Good morning and welcome to the third quarter presentation for Bonheur. My name is Anette Olsen and I am the CEO. As usual, our CFO, Richard Olav Aa, from Fred. Olsen & Company will present. And in addition, we have the CEOs for the subsidiaries that each will have their presentation. At the end, we will open for a question-and-answer session. So go ahead, Richard.
Thank you, Anette, and also a hearty welcome from me to this third quarter presentation. Before we go into the numbers, the quarter has been an okay quarter with the improvements across all business lines and also all the major companies are making healthy EBITDA profit. That being said, we also have a quarter where the asset utilization is not at 100%. We had one big wind farm out due to fire by one of our suppliers. We have one vessels in yard in Windcarrier and utilization in Cruise Lines is still only at 78%. So there is still a lot of potential.
But with that, we can go into the numbers. We have operating revenues at NOK 3.6 billion, which is up NOK 400 million compared to last quarter -- same quarter last year. EBITDA improvements of NOK 138 million, up from NOK 800 million to NOK 938 million and EBIT improvement of a little more than NOK 100 million from approximately NOK 500 million to approximately NOK 600 million. A doubling on net result of the tax from NOK 172 million to NOK 350 million, and I'll come back to the tax effects this quarter.
Parent company remains, according to policy, very strong with an equity ratio or close to 76% and cash in current at NOK 2 billion at the end of third quarter. The highlights in the quarter and here the CEOs will come back to these bullet points, so I will only make a swift comment about them now. But starting from left to right, with Renewables, improvement on EBITDA with NOK 20 million to NOK 263 million, despite 25% lower power prices. This is a result of higher generation. Despite, like I said in the beginning, one of the largest wind farms, Mid Hill, have been out of the production for the full quarter. Sofie Jebsen Olsen will come back to the details on that.
Very proudly, we won 2 power contracts in the CfD Allocation Round 6, which will then enable the building of Crystal Rig IV, which already had an FID on and potentially also Windy Standard III which will be covered later in the presentation. Also very important milestone this quarter, the consent application for the Codling Wind project, a document of more than 11,000 pages, a massive piece of work, which is for the old -- the planning permit for the project to hopefully go ahead in not too distant future.
Windcarrier, an improvement of Windcarrier is really driving the improvement in this segment from NOK 399 million to NOK 435 million, but also good results in Global Wind Service and UWL this quarter. Haakon Magne Ore will come back to development in the backlog and a potential new contract. But also, like I said in the start of the presentation, a strong result, but one of the vessels at the full yard stays, so utilization of the Tern vessels is only 63% in the quarter. Cruise, also an improvement in EBITDA from NOK 213 million to NOK 255 million. It's improvements across the board. It's a slight improvement in occupancy, it's a slight improvement in ticket income, and it's a slight improvement in costs. So a marginal improvement across the board, but still, 77% occupancy in the peak season is a too low number for Cruise Lines.
And on that note, it's very good to see that the Cruise Lines organizations is able to increase booking so their booking numbers now at end of Q3 is 15% higher than compared to Q3 last year. In the other segment, an EBITDA of minus NOK 15 million compared to minus NOK 56 million. The main driver for this improvement is much better result in the media company, NHST, which had an EBITDA of NOK 57 million this quarter compared to NOK 4 million same quarter last year. A lot of cost cutting is the main driver behind this improvement in results, but also some improvement in the advertising market.
On the financial side, we redeemed a bond loan of NOK 800 million in third quarter and we issued a new bond loan in October of NOK 950 million. And we're very happy that we were able to do the new bond loan at the lowest margin we ever have achieved. So it's a strong demand for Bonheur bonds currently in the bond market. Then we have Fred. Olsen 1848, which will be covered by Per later in the presentation and also Fred. Olsen investments that are progressing with their investment activity.
This slide is a new slide in this quarter and you may have seen that we have modernized the slide and made them which we think better. And this is a completely new slide and I think it's a lot of good messages in this slide. And if we start to the left with the revenue development and here we go back to fourth quarter 2017 and up to third quarter this year. Why have we chosen this time period? Well, we want to see a time period pre-COVID and the time period post-COVID because that had a significant impact on our business, especially on the Cruise business, but also on the Renewable Energy.
If we look at pre-COVID, we had revenue on approximately level between NOK 6 billion and NOK 8 billion and quite evenly distributed across the business lines. Then COVID came and Cruise Lines went to 0 revenue, also energy prices fell and we also had low utilization in the Wind Service segment. So revenues dropped, actually, below NOK 6 billion during COVID. Then coming out of COVID, and of course, raising energy prices the renewable energy segment really drove up revenues. And we now also see that Cruise Lines is coming back. Wind Service is generating strong revenues across the board in full week in Global Wind Service and also UWL. So we see now a completely new revenue level compared to pre-COVID. So we're now up between NOK 10 billion and NOK 12 billion in revenues on a 12-month rolling basis.
All right. But revenues, we cannot -- you don't make profit only from revenues. You have to manage your cost and investments and so on there. So when you take a look at how this is transferred into operating results on the right hand side, we can also see the trends from the left are even more reinforced in the EBITDA. So pre-COVID, we see an EBITDA of around -- on average of around NOK 1.5 billion to NOK 1.6 billion where Renewable Energy is really carrying the big part of that EBITDA. Small contribution from cruise and a small contribution from the wind service sector.
Then during COVID, obviously, Cruise Lines large losses, falling energy prices and also not the best utilization in Windcarrier, so then down to an EBITDA level slightly more than NOK 500 million on a rolling basis. Then coming out of COVID with strong energy prices, we see renewable energy really shooting off, while the contribution from the Wind Service and is small and Cruise is still negative. Then we see Renewable Energy going down on the drop in energy prices, but then Cruise Lines is coming back with the modernized fleet and also Windcarrier coming into the market with much better rates, much better utilization and much better results.
So we are now at an EBITDA level on the roll -- fourth month rolling basis from the peak of the renewable energy prices and the last couple of years. We are now between NOK 3.5 billion and NOK 4 billion in EBITDA. And all 3 business segments are contributing significantly to this EBITDA. So it's a -- when we take on this more historical perspective, it's a quite interesting perspective. And we also felt it was important to convey this picture to you this morning.
Then going back to the quarter. Again, we see strong revenues in the quarter despite 2 significant assets in out of operation. Revenue increase is mainly in the Wind Service segment. Obviously the EBITDA increase is spread across all 3 segments. And again, all companies are making good profit in the third quarter. Net finance on depreciation slightly higher. Net finance needs a comment. 3Q '23, we had significant and realized losses on financial instruments, mainly related to the interest rate swaps in renewables while -- when interest rates are dropping, we have to take down the gain we have on those swaps. It's still a large gain in the balance sheet, but when interest rates coming down, it will be a loss. So that was really impacting the NOK 213 million last year.
We still have some of the same effects this year, but we also have positive currency effects. So the net finance is a loss of NOK 165 million. Normally, without these unrealized gains and losses, net finance should be at the level slightly below NOK 100 million per quarter, given the debt level in the -- across the group. So that takes us to an earnings before tax of NOK 438 million which is an improvement of NOK 154 million compared to last year.
Then tax cost is actually coming down despite a stronger earnings before tax. And the main reason for that is that we now have good profits from vessels in the tonnage tax systems. So all 3 cruise vessels, Brave Tern and Bold Tern, are in the tonnage tax systems, while more of the result in '23 came from the wind farms in Scotland where we pay tax. So that makes the net result to NOK 350 million which is an improvement of NOK 178 million and more than a doubling on the on the net results.
So to the financial position of the group. In addition to improvement in the results, we see a strong deleveraging across the board in the group over the last couple of years and also particularly strong this year. So I will not go through the financial policy now. We have refreshed it and made it more what should I say, easily accessible to the left, but we will not go into that now that we'll save for later. But it's nothing new there. But just looking at the numbers and the deleveraging, we have been true now. We look at the 100% own entities, we have a cash position of NOK 4.8 billion at the end of the quarter, an external debt of NOK 2.6 billion. So a net cash of NOK 2.2 billion.
If I go back to the earlier slide I showed you when we came out of COVID that was a completely different picture than the 100% entity had more debt than cash. And what has really changed you can find in the Wind Service segment, which now sits with NOK 1.7 billion in cash, an external debt of close to NOK 400 million, so a net cash position of NOK 1.3 billion, while that was in a net debt position all up to last year. Same with Cruise. Generating good cash now and has a cash position of NOK 738 million by the end of the quarter and the external debt is only the remaining payment on the seller credit to whole America line. So a net cash position of NOK 633 million.
Bonheur, the mother company, has always been fairly balanced between cash and debt and were still are. So we pay down the bond loan. So that took down the debt and it also took down the cash, but that will reverse itself now in the fourth quarter with a new bond loan line NOK 950 million so that will increase both cash and external debt for Bonheur ASA in the fourth quarter. On the less than -- on the 100% entity is not any big change on the renewable energy. Those are the long-term loans related to the U.K. wind farms. So they are just amortizing as planned and the wind farms are generating cash. While we see a big change on the wind service, also there with strong deleveraging, both in UWL, but also in particularly for Blue Wind, which have been generating good cash the last periods.
So all-in-all, very strong situation on the 100% own entities, and as planned on where we have the joint venture and that we have the significant debt in the group of companies. Finally and also what's very important for us and also particularly us that work with the financial reporting, we are from next year, or actually, for this reporting year to be reported next year, by law, need to be compliant with the new ESRS reporting standard. So I just give you a short update where we are on that. I think we are in good shape.
So what we are working on right now is this double materiality assessment, which is really the building block for everything in this reporting system. So that is how we impact the external world and how the external world may impact us. So we're doing this for all the subsidiaries and Bonheur ASA and it's building on the same we did last year. So that is work in progress now this autumn. Then as the one that have read our ESG report carefully, you see that we have a disclaimer on the Scope 3 reporting for CO2 because that has been very difficult and I don't think there are many companies that have this fully in place, but we need to get it in place. So we have acquired a software that can help us do this Scope 3 reporting much more efficient and get this in a much better place than it has been.
Then to comply with the ESRS, we also need some new policies into the into the ESG statement next year. We need to refresh our environmental policy, our social policy and our governance policy and tailor them to the reporting requirements. But I would also very much like to emphasize on this slide that what we do at the mother company level is one thing. That is a lot to do with reporting, but what really matters is what happened in real life in the subsidiaries.
So we have taken a position that the subsidiary reporting is actually the most important in real life and what the subsidiaries actually do. So to have a strategy process integrated with the strategy in the subsidiaries on sustainability is really important. And we also are transparent on this and publicize the sustainability report for all the major subsidiaries publicly. So that's where you really should focus when you look at what is really changing the needle on sustainability and makes us drive this forward because that's where we close to where the action is.
So by those words, I hand back to you, Anette.
Thank you. The first company that we will present this morning is Fred. Olsen Renewables and Sofie Olsen Jebsen, the CEO, will do so.
Thank you. Thank you very much. Moving on then. Our highlights this quarter is that we have had moderate power prices, but there are indications of an upward trend. We have increased power generation as there has been high winds and this is very good considering that Mid Hill has been out of production due to a transformer failure, which I will come more into. And as Richard mentioned, we've been successful in bidding for a CfD for 2 of our wind farms, which I will also cover more in the next slides.
As you know, we, in Fred. Olsen Renewables have a full cycle business model where we develop wind farms and energy farms from cradle to grave. And if you look at this graph to the right are our 12 operational wind farms, and then we move more into the future as we move left. We have 1 wind farm under construction, Crystal Rig IV. And then there's an overview of our consented projects that we are working on to move towards construction. We have a large development pipeline of 4 gigawatts and also a significant amount of site investigation, et cetera, going on.
Moving on to the market. We are delivering renewable electricity. So why do we spend a lot of time in this graph talking about the gas prices? Well, as you see and might know, the gas prices and the electricity prices are very much linked. And after the invasion of Ukraine, the EU put targets on the gas storage levels. Right now, we are at a situation where those targets are 90% fulfilled storage levels prior to their November 1 deadline, which is a sign that there is a tightening LNG market and we do also have increasing coal prices.
And with the winter temperatures coming, there might be an indication of an upward trend in the electricity prices. And you can see this from the lower left graph on this slide. The prices do, however, remain sensitive to political -- geopolitical tensions and escalations in the conflicts that we see around the world. If you look at the graph on the right-hand side, this shows the development of the power prices in our markets. And as you see, the prices have stabilized at a slightly higher level than they were at in 2020.
Moving on then. This quarter, we increased production with 11% around that due to high wind. Mid Hill was out of -- not generating during the quarter. There was a transformer failure at the external SSE transformer substation, which meant that the grid operator could not receive our power from the wind farm, so we have had to shut down production. We are currently very much in dialogue with the grid operator to support the process of getting a transformer replacement in the best way that we can. We do have an insurance claim in process, but we've not booked any claim revenue in Q3. There is a 30 days deductible for the insurance and then we are -- should be covered by this insurance that we have across all our wind farms.
Good news in the quarter. We had a successful bidding on a Contract for Difference in the UK Allocation Round 6. A Contract for Difference, that is a 15-year fixed price for the electricity that we deliver and that we get -- the price we get from the UK government. If the power price falls below this level because the level is set by a competitive auction where a strike price is defined. So if the price falls below the strike price, then we will still receive the fixed strike price. If the power price goes beyond or above, then we will have to pay that back. We were awarded a price of GBP 50.9 per megawatt hour in 2012 prices. That equals GBP 71 per megawatt hour in 2024 prices.
And we are very happy with this as the Baringa estimates for the same period was GBP 50 to GBP 60 or is GBP 50 to GBP 60 per megawatt hour in 2024 prices and forecasters like Volue are even below this. The 2 projects that were awarded were Crystal Rig IV and Windy Standard III. Crystal Rig IV is already in production -- sorry, construction. And as you see on the picture on the right-hand side, we are here installing the first anchor cage, which is in the middle here. It's a gravity-based foundation. So all of this area here will be filled up with concrete in order to support the wind tower and nacelle coming on top.
Both of the projects are in scope of Wind Fund I, acquiring 49% ownership. Going into a bit more detail about Crystal Rig IV, which is under construction. It is in our Crystal Rig I area, which we like to call it, where we already have 3 adjacent wind farms. And the construction of roads that we have is well matured across the sites. The roads are going out to all the 11 turbines to be constructed. We also have some requirements to fulfill for the -- from the Scottish Environmental Protection Agency. And I think one of them that is interesting to mention is whenever a road crosses a small river, we have to take care of the fish that live in the river.
So the river is electrically done so that the fish are quiet for 10 seconds and then we gather them and move them away for rescue. And for each river that we cross, 150 small fish are rescued in this way. So it's really environmental protection in action. Then we are progressing well on excavation for turbine foundations and the felling of forest for construction is nearly completed in the eastern array of the project and we are opening borrow pits.
Windy Standard III was the other projects that won the Contract for Difference auction. This is a proposed extension to also a cluster that we have with Brockloch Rig I and Brockloch Rig Wind Farm already operating. It's important to mention that there has not been a financial investment decision for this project yet, but we are continuing to mature the project and the business case now going forward through the preconstruction phase. So to sum up, again, main points this quarter and that's all for me.
Thank you. Next company to present will be Fred. Olsen Seawind with CEO, Lars Bender.
Thank you, Anette. I will give a walk-through of the highlights Fred. Olsen Seawind in this quarter. And I think it's been a good quarter, good progress on our project activities, but I think one specific event will dominate my presentation today and that is the submission of the consent application on Codling Wind Park. We have, over the last 3 years, taken Codling Wind Park through several significant delivery milestones, starting with the Maritime Area Consent, which gave us an exclusive right to the site. We achieved full grid access for the full capacity of the project.
And last year, we got a fixed price contract, the CfD for 20 years for the project. Now we have submitted the consent application. So we can be very satisfied with the progress of the project overall, but also very proud of the fantastic work done by the team, not only to submit the consent application, which is, as Richard alluded to, a significant piece of work, but also delivering a milestone on milestone in relation to that project. I will, later in my presentation, come a bit back to what the consent application means and the process going forward.
But before that, a short status and update. We are engaged in 3 core markets: Ireland, Scotland and Norway. In those markets, our core activities and core projects is Codling Wind Park and Muir Mho. I will come specifically back to both of these projects. But a short comment on Norway before that. We are still in Norway in a waiting position. We are still awaiting the framework around Utsira Nord and also the support regime. So no news there in this quarter besides that we are patiently waiting for an update.
Turning to Codling Wind Park. As I alluded to, a significant milestone. The Codling project has submitted a consent application and a consent application consists of 2 main parts. One part is a detailed overview of the project, what we intend to build and how we intend to build it. So that includes layout of the site. It includes details of design. So that's the one part. The other part is a very detailed environmental impact assessment, basically substantiating which environmental impact the project will have on the surrounding environment. That is a work that has been going on for several years. It has very much been informed by detailed surveys on site, detailed investigations and then all, of course, coming into one application, which we have now submitted.
We've done a very thorough work. It's a very robust application we've submitted. And therefore, we also have significant confidence in our application and also a consent at the end of that. In relation to the process going forward, given we've now submitted the consent application, this will now undergo a determination period by the consenting board. In that period, various stakeholders can submit observation. We will then have an opportunity to respond to these. And at the end of that process, the consenting board will issue a so-called consent determination, which is basically the final consent and building permit for the project.
On the back of that, the project will face a risk of judicial review. A judicial review is basically a legal process where a person or an entity against the government raises a legal case on the process around the consent. We are not as a project or as a company party to such a process, but it is a risk that we naturally have to cater for. Both when we talk about the consent determination period and the potential risk of a judicial review, the timing is currently uncertain. And that also means that we have to cater for a variety of potential timings for the project.
And as I've alluded to before, the way we've dealt with this is in a very prudent manner where we have a flexible development time line and schedule for the project. So we can deliver a project early if the project takes a shorter period of time. We can also deliver a project later if the timing of the consent takes longer. So that is very much the work that's ongoing now in the project, focus on design, focus on procuring with the aim of retaining a significant flexibility so we can cater for the consent period that we are now facing.
Turning to Scotland and Muir Mho. We have had good progress over the quarter and that means we can still look forward to submitting a consent application this year on Muir Mho. And that also means the project remains on track for being one of the first movers in relation to floating offshore wind in Scotland. In addition to that, we had a bit of positive news from AR6, the CfD round, where the floating wind projects that bid into that achieved a price of GBP 140 in 2012 prices, which is equivalent to GBP 193 in '24 prices. I think overall, that has been perceived and also by us as positive news. It underlines that there is a willingness to pay in U.K. for developing and industrializing floating offshore wind. So that naturally supports the market as such as a good market to develop and industrialize floating offshore wind in.
So overall, in summary, a quarter with a lot of work and -- but also good news and good progress. So with that, I'll leave it back to you, Anette.
Thank you. Next, Haakon Magne Ore, CEO of Fred. Olsen Windcarrier.
Thank you and good morning to everyone. If we start with the 3 highlights of Fred. Olsen Windcarrier this quarter, first point is yet another quarter with steady operational performance. You see it in the statistics. You also see it in the financials. But I think we set a new company record this quarter, which I think highlights the performance of our assets and not at least the team. On Baltic Eagle, we completed 4 turbines in 4 days. Normally, the rule of thumb is that you use 3 days on average per turbine. This comes despite this project having significant soil conditions with penetration of the legs into the seabed of more than 30 meters.
I think the market remains the same as we have pointed out in the last half year. It's a tight market, but it's also a dynamic market being driven by value chain issues, which again impact delays in the project. And the last point is more for you to take notice of that we have a higher than normal and planned yard stay in the next 9 to 12 months. If you go into what the vessel has done and what they will do, we can start with Bold Tern. She has been in Taiwan now for 4 years. She completed the Zhong Neng project in August. And then as we saw better opportunity in the next years for the vessel in Europe, we will take -- we start to take our home to Europe.
When she arrive here in November, she will go into yard to strengthen the vessel, so we can make a more generic sea fastening for the different 15-megawatt turbines. Brave Tern, she has stayed a little bit longer than we would like to see at the yard being upgraded, but we are coming to an end. Upon that, she will go directly to install the last turbines on LNG of Scotland. Blue Tern, it completed the Baltic Eagle project in August, went direct on to a medium-term O&M campaign, which is expected to last throughout January. At end of that contract, she will also go to yard. It's different things. We will have to renew and insert in the crane.
We will do some preparation for class, but also you have to take into account that this vessel has worked nonstop for 3 years, back-to-back on contract for 3 years, most of them in very challenging project. So she also needs some maintenance. Blue Wind completed the Yunlin project. We completed the foundations in July. The vessel was remobilized to do turbines. The last turbines was installed now in October, actually ahead of the firm contract expiring that led the client to terminate for convenience. But as we state, it has no financial impact on us. It has something impact on the booking.
So if you go over to the quarter and the financials, as I started with stable operations, stable uptime. We sold 96% of the days we had for sale. But with one vessel in yard for the whole quarter and the start of transit, the commercial uptime, the days we are invoicing was 63%. Our EBITDA was -- for the quarter was NOK 29 million and that takes us to over the NOK 100 million mark year-to-date. As I mentioned, we have seen some delays on the major upgrade program for Brave Tern in Spain and we expect to complete it within very short.
So if we then go over to backlog, the reported backlog is not so much change. For our own vessel, it stands at NOK 288 million, no new contract in the quarter, but we have signed a reservation agreement for work in '25 and '26 that is not included in this backlog. On the Blue Wind, also take -- just to take note, a little bit more accounting also that the next contract Blue Wind have, the Hai Long in '25, that will not go through our books because of a different contracting structure. So then it's not also reported in the backlog.
As I mentioned, the market is tight. There is limited vessel availability in the next years and we see that the value chain continue to struggle and that impacts project -- timing of projects, which again impacts the demand for our services. I think another trend which consists the clients are increasingly at least willing to discuss and look into longer-term contracts, either on a fixed period or bundling different projects to get the visibility on the vessel. That goes both for installation, but also the maintenance segment.
We also see that clients are wanting to discuss vessel availability on a longer-term basis than what has been normal. This is -- the normal has been 2 to 3 years ahead of the work. Now we see they are engaging to do work in '29 and '30 and even longer. As you may have seen, the first contract for work in 2030 has already been entered into by some of our competitors.
So I think that concludes my prepared remarks and give the word back to Anette.
Thank you. Next, Fred. Olsen 1848 and CEO, Per Arvid Holth.
Yes. Thank you, Anette, and good morning. Yes. So if we move on, we can go to the next one, brief status and update from 1848 in this quarter. We have on the floating wind side on BRUNEL, we have achieved a basic design certification on our floating foundation. So that is a major achievement for us. Going a bit more into detail to that, so that's an add-on on the concept level certification that we achieved in 2022, but it's a completely different ballgame. When we did the concept level certification, we achieved a statement of feasibility. So that means that BRUNEL was feasible according to the design standard, which is called DNV-SE-0422. At this point, after a lot of work, we have now achieved what is called the statement of compliance that you can see to the right there. That means that we comply to the extensive set of requirements set out in that standard.
So further to that, it also means that we need to take full design responsibility. We need to take in a turbine, a tower and a mooring system and there's no interfaces behind. So it's a comprehensive setup from our side. We early took responsibility -- design responsibility of the towers, providing one structure from the mooring and up to the nacelle. And that is -- makes a lot of sense in this setup here. Further to that, for any developer who is developing a floating project and are certifying that project, then a basic design certificate also released quite a lot of work because then a major part of the scope has achieved an advanced level of certification.
So by this, BRUNEL has a documented technical maturity to the satisfaction of an independent third-party and that's important to us. If you go to the next one, then some comments to the project. We are one of the first floating foundations who have achieved this level of certification to the new standard. It should be said that the new standard is quite new, but it also means that we have chosen -- deliberately chosen to be on top of that process and to be an early-mover. There's a couple of perspectives for why we did that.
One of them is that it's important for us, of course, to document the maturity of our technology, as mentioned. But the second part is that we see that this standard is an important standard for the highly required standardization of the offshore floating wind industry. So there's 2 comments on standardization. One is, of course, that when you have a basic design certificate, you have the ability to move on different sites, so it's not site-specific. The other side of standardization is that this standard provides a transparent set of criteria that you can use to benchmark different technologies. And with all the different technologies out there and the different maturity levels, that has been quite difficult also for us to benchmark ourselves.
So with this certificate, we feel that we follow and are in the front in the industry. We've had a strong team as part of the process. Ramboll has been the main engineering contractor. We've had 7Waves. We had that role in the concept phase supporting for continuity, Seasystems on anchor mooring and then a very specific supplier, but very important when you have a turret design is Moog Focal, who is responsible for the high voltage spiegel in the turret. Part of that, we are continuing our turbine controller project, underlining that we are working holistically, a project that is optimizing the controller of the BRUNEL turbine in cooperation with IFE and ZX Lidar and supported by the Norwegian Research Council. So that is the floating wind side for this time.
A brief update also then on the floating solar side. So that is our system BRIZO. So just to recap what BRIZO is, BRIZO is a floating solar technology suitable for installation in areas where you have wave loading. We're targeting 4-meter HS. And it opens up the possibility to then develop new areas, large lakes, large reservoirs and nearshore applications where you have an environmental loading, which is typically too high for the typical steep water technologies. In this quarter, it's been a busy quarter. We are in what we call the validation phase in our work process. There's a new set of components being designed, more optimized than from the previous design stage. We have our pilot in Risor where they are implemented for validation. And then our next step is to secure a commercial size pilot, typically 1 to 3 megawatts and that's our main focus going forward.
So by that, thank you.
Thank you. Richard will then talk about Fred. Olsen Cruise Lines this time.
Yes. Thank you, Anette. Cruise Lines, Yes, we have improved earnings, but I would also like to underline, we see a lot of operational improvement potential in Cruise Lines. We see occupancy still at below 80% in the peak season. We see pricing optimization opportunities and obviously working on the cost side. So yes, we're moving in the right direction, but a lot of potentials on the operating agenda for Fred. Olsen Cruise Lines.
Status on the quarter, occupancy, 77%. And again, being a third quarter peak season, it's lower than we want it to be. Net ticket income, a slight improvement from GBP 190 to GBP 194, but also lower than where we want to have it. Cruises in the quarter, a lot of the occupancy, some cruises are close to 90 plus. Other cruises are not there. So you can see some of the cruises we have taken for -- or produced. We will not go into detail on that for competitive reasons, but there is no doubt that some of the destinations here around Norway is very good for Fred. Olsen Cruise Lines.
We have an important dry dock planned for Balmoral in December to upgrade her while we see the dry docks for the 2 sister vessels are planned for next autumn. This is a new slide. We have not given this information before. But since we now have a strong focus on driving up occupancy and pricing, we think it's good for also the external to see how we perform on that.
So we're happy to report that if you look at forward bookings in pounds million end of third quarter this year compared to end of third quarter last year, we see an improvement of 15% from GBP 179 million up to GBP 206 million. And it's equally driven by volume and price and the volume increases are both with new guests and repeat guests. Our repeat guests are very loyal and coming back, but we also need new and younger guests. So also to grow the guest volume on new is a strategic target for the company.
So by that, Anette, we are at the end of the presentation. Back to you, yes.
We now open up for questions.
[Operator Instructions] And now, we're going to take our first question and it comes from the line of Daniel Haugland from ABG Sundal Collier.
So I have a couple of questions. My first this time goes on the Wind Service segment because I think we see quite high revenues and EBITDA a bit like in Q2. So I was wondering if you could give a bit more details on whether you have booked any reservation and cancellation fees in the quarter like we saw last quarter. And maybe a bit on how the accounting on that works because my understanding was that you will book some revenues on Brave Tern even if the vessel is not used on the canceled contracts. So how is that looking right now? So that is my first question.
Yes, I can start by saying that we had no bookings or reservation fees or booking from the termination fees in this quarter. What we had -- I mentioned that there was some technical issues from the termination for convenience for the last month of the Yunlin that we booked some more millions in this quarter that should normally have been booked for work in October and November. So I think that's the main accounting issue we have in this quarter.
Okay. So there is kind of no other than big nonrecurring effects.
Some millions that we had to book because of the termination, we had to book it ahead of the actual...
Okay. And then one more for you, Haakon Magne. So you talked a bit about the yard stays on the tern vessels. So can you say anything about how long kind of the planned yard times for Bold and Blue is? Is it weeks, months?
I think -- they are slightly less than 2 months.
Okay. In total or for each of the vessel?
For each of the stays.
Okay. And then I have 1 question on the Renewable Energy segment. So it seems like a quite high implied realized price this quarter. So if I just divide the revenues by the production in the quarter. And given that you have not booked any insurance claims, is there any other effects from, let's say, curtailments or anything like that, that affects this quarter kind of just to get a transparent view on what you have actually booked?
We do have effects on -- of curtailment and also of these EGLs, which is electricity generator levy this quarter.
Yes. We had a positive effect compared to last year on the EGL, which we have in the -- if you look at the report, it's the disclosed effects in the notes.
Yes. But from the notes, I see that there was no effect from EGLs in 2024. So obviously, on a year-over-year basis, you have that. But there is no EGL in the numbers for this quarter, is it?
No. Okay. Great. And then my last question is on the Codling project. You've submitted the consent application. And I appreciate that the timing of such a project is difficult to talk about and is really unknown. But is there a deadline for the government to review your application?
No, there is no specific deadline currently. And that's also, of course, why it's difficult for us to guide on it. It is a new -- offshore wind is new for the planning body in Ireland. And therefore, the timing is uncertain.
And the next question comes from the line of Helene Brondbo from DNB.
Yes. I have some questions, particularly related to the Wind Service segment. So Haakon Magne, I was also just wondering related to this yard stays. Do you have any estimate that you could share on the expected CapEx from that?
No, I think the main impact is the downtime we have. There is not so many millions. It's a couple of millions per yard stay.
Yes. Okay. And just also sort of to be clear on the Ocean Wind cancellation payments, is it sort of fair to assume that they started now -- sort of the EBITDA recognition started now in Q4 and will go into at least through Q1 next year. Is that roughly the correct timing? Or is that wrong?
Yes, I think it's a good estimate for the start. The Ocean Wind contract was supposed -- the firm pay was supposed to end in October next year.
Okay.
So it will be spread across the duration of the contract.
Yes. Okay. And just 1 more question from my side on the Renewables. I was just wondering with respect to the timing of the Windy Standard III, you said the timing was not known, but in the sort of the CfD term sheet from Crown Estate, that said that operations was expected in '26 and '27. So I was just wondering if it's that still your best guess on that one? And is there any time you would need to start production to get full recognition of the CfD?
It is correct that we have applied for the CfD for a certain time period and I think that is what you -- the fact that you referred to very correctly. We do, however, have an internal process to mature the project to reach a final investment decision that we have to adhere to and get all the facts together before we take a final investment decision. So I think that is my comments on that. A very good thing to note, however, with the CfD is actually that we were the most successful onshore developer in the round in terms of number of megawatt one disrupts.
But do you have some -- but do you have any flexibility with respect to when you start the CfD? Or do you need to start it by the time you have applied for to get the full amount?
Correct, the CfD starts at the time we have applied for to get the full amount. So if we start later, then we reduce the period -- number of years or the period that we get CfD for.
And the next question comes from the line of [indiscernible] from Clarksons Securities.
Congratulations on another sound quarter. I want to touch a bit upon the balance sheet and financial risk policy. You, of course, have a very pristine balance sheet currently. You have close to no net debt at the parent company level. And as Rich had mentioned you have very sound net cash positions, both in the Wind Service and Cruise segment, which have accumulated over the last couple of quarters. So just to touch up on that.
Is there any targeted cash amount you look for having on the fully owned entities? And as for the Wind Service and Cruise segments where cash has been accumulated, should we expect any upstream dividends to the parent company? Or do you want to sort of retain the cash there in case any investment opportunities comes along. So any thoughts on how you're thinking there would be helpful, I think, guys.
Yes. I think we don't guide when it comes to the future. Do you want to talk a little bit about this?
Yes. No, I mean, we don't comment specifically on future investment plans over and above what we have disclosed, but this also goes with our financial policy that model company shall be strong. So we typically upstream excess cash from the subsidiary when it's available. So of course, we have injected a lot of cash into Cruise Lines, mainly in the form of shareholder loans. So obviously, those loans can all started to be paid back. We also have loans between BRUNEL and Ocean and ultimately into Windcarrier on the shareholder loans. So we're also looking at how we can upstream that. So of course, it's a matter of upstreaming excess liquidity in the subsidiary [indiscernible]. That's a part of the policy. So you should not be surprised if you see further upstreaming from Cruise Lines and Windcarrier going forward.
And the next question comes from the line of Jonas Fremming from SpareBank 1 Markets.
So I will start off with Codling Wind Park. So in the planning application documentation, you have illustrated that financial close in 2027. And obviously, you have some flexibility and there are some uncertainties. But what are your own kind of expectations around FID on that project? Is it still possible with 2025 or is it more at 2026 as a best case now or maybe at '27 is the most realistic scenario now? Any comments on that will be appreciated.
Yes. Coming a bit back to what I said earlier, we -- the process we are now looking at is we submitted the consent application. The consent determination period is unknown, given that it is the first time this is going on in Ireland for offshore wind projects. So we don't have a clear view to how long that time that takes. And as I said, there is a risk, a potential risk of a [indiscernible] on the back of that. And that creates uncertainty around time line. So I cannot give you a specific target FID here for that reason. What I can say is that the way we have dealt with this risk and uncertainty is that we have developed a flexible development schedule. So if it comes early, we can develop the project further and take FID. If it comes later, we have also catered for that.
Okay. But if it's way earlier than your kind of expectations, could you still take an FID in 2025?
I think it will very much depend on the process. But in principle, we are setting the project up so that we can deliver according to the obligations we have on the [ ORS regime ]. And there are limitations where we have to deliver a certain time after we receive a final consent. And that's what we are now developing and planning for. Yes.
Okay. Understood. And in terms of Codling, so obviously, you own 50% of that project. It's a big project. It's a lot of required CapEx to continue to own the 50% under construction and also after that. So just thinking about the long-term here, it seems to me at least that the farm-down should be kind of expected. Just thinking about that, when would it be natural for you guys to actually do a farm-down if that's the plan?
I think we will not guide on farm-downs in relation to Codling. I think what we've said earlier, part of the plan for Codling is project finance overall. But when it comes to our equity and how we handle that, that will very much be assessed on a future basis. And I cannot guide on that here today.
And last question for me on headwinds from the Windcarrier. So it seems to me that the market is very tight also in 2025. And you obviously secured the reservation agreement for '25 and '26. But I mean, you don't have that much backlog in '25. You have some yard stays, but still, it seems to be that you have more open capacity. So basically, my question is, do you expect more backlog to come for 2025?
I think, again, I have to revert that we do not give forward guiding. What I can say, I think, is that we are very comfortable with the situation we are today.
All right. And maybe on the reservation agreement, is that on a project that did not secure a turbine installation before? Or is it a problematic project with supply chain problems and so on?
I think it's limited on what I'm commenting as it still is a reservation agreement. But if you look at it, that it started in '25 and take my previous comment that normally these vessels are booked 2 to 3, now they're increasing 4 to 5 years booked out in time. I think a fair assumption is that this is a problem -- a project that needs more capacity.
And the next question comes from the line of Daniel Haugland from ABG Sundal Collier.
So I just wanted to follow up on the EBITDA bookings in Wind Service. So if I simply compare FOWIC's EBITDA to Q3 last year, it's approximately flat at EUR 29 million, but utilization is down from 91% to 63%. So from this, should we conclude that it is higher contract day rates that is the reason why EBITDA is not falling when utilization is lower? Or is there any other effect we should kind of be aware of in these numbers?
I think I've said it before that there is no other accounting treatment this quarter than some million in pre-bookings from the Yunlin contract termination. And if the utilization is lower, then the other part of the equation is the day rate.
And the question comes from the line of Helene Brondbo from DNB.
I have another question on the FOWIC side. I see you talk a bit about this more long-term scope and bundling of contracts for both T&I and O&M. And I was wondering a bit on sort of how attractive you view the O&M market going forward versus T&I. Could you, for instance, see something about where you see sort of day rates relative to T&I and also to what extent you will be able to take O&M contracts in this currently tight market?
I mean I can start by saying we are pragmatic. We will try to optimize our schedule where we can get the best income -- risk-adjusted income. I think I cannot give you a specific answer to this, but just maybe give you a little bit more backdrop on the market. You need the same vessel -- if you're going to do a main component change on a turbine, you need the same vessel capacity as you need to install it. When we now go into the installed base being 15-megawatt generation, you basically need either an upgrade vessel or a new build to do the O&M part of those vessels. That is a major change to that market because prior, you had a lot of small vessel that has been redundant that has serviced the older vessels -- the older turbines. So it is a potential shift in the market now when the client needs to get bigger vessels to actually maintain the turbines they are installing at the moment. Did I hopefully give some flavor to it with not -- 2 lines below the answer?
And now we'll go and take our last question for today. And the question comes from the line of Anders Rosenlund from SEB.
I've been waiting, so I got to ask the final questions and it will be more than one. My first question is on the curtailment prices or curtailment revenues. I appreciate that you don't want to give us the figure and it's not in the report in notes or anywhere. But if we think about revenues in the Renewable segment, is it correct that, that consists of sale of electricity, green certificate revenues and primarily curtailments?
Sofie, do you want to answer?
Yes, I think you can conclude that we receive revenues from curtailments. And of course, this is the way that the U.K. system works. They -- in order to balance the market between a lot of wind production in the North or Scotland mostly, and then you have all the demand in the South. The grid is not strong enough to supply the amount of power. So in days where there's a lot of wind, the grid -- National Grid would typically curtail the producers and pay wind power producers to stop production so that the grid is still balancing. So that is the very way that the market functions in the U.K.
So in periods with curtailment, then you will have lower reported production because that's actually no production. You're getting paid for something that you don't do, right?
It is correct that curtailment is payment for not producing.
Okay. And then my second question is to the Cruise segment. And I appreciate the illustration, which shows forward booking. But when I read the report, I got the impression that this was revenue recognition year-to-date. But you're confirming that the figures that you show on the slide is revenues booked for the future period, right?
Yes.
Then my third question is on wind services. And the NOK 100 million reservation agreement. The way it's written in the report, it kind of looks like it could be a reservation agreement for Blue Wind vessels or the Blue Wind vessel. Is this a correct interpretation? Or is this for the owned part of the fleet?
It's for the owned part of it. But just a correction, I think we're looking at it now, but I think we actually wrote in the report that it's a fully controlled vessel.
Okay. Maybe it was my misunderstanding then. And then my fourth and final question is on the Codling and ScotWind project. I think in the second quarter, you made a comment saying that aim of FID in the '25 to '27 period on Codling bank and that's been talked about over and over again in this Q&A session. But I presume that is still the case. And CfD auction in '26 on ScotWind potentially with the FID in the '27 to '29 window. There are no changes to that, is it?
I think I'll go back to what I said earlier. We can start with Codling. We have a process ahead of us with consent now. That is uncertain. And hence, we cannot, with that uncertainty, give a clear guidance on FID. But we are preparing for an early scenario and we are preparing for a later scenario. When it comes to ScotWind, our strategy is, as I also alluded to today, to be one of the first movers and that also means preparing as quickly as we can after we received the consent for a CfD round. But again, also in the U.K. and in Scotland, the consent timing is uncertain. We'll submit the application later this year. And then the exact timing of that process will determine how early we can participate in the CfD round.
Yes. I understand what you're saying. But last quarter, your best assessment were the years that I indicated. So are there any changes to your best assessment last quarter now? Have you made any changes to what you said last quarter?
Sorry, repeat that again. What is related to ScotWind or in relation to Codling?
No, both. I appreciate your comments on Codling and maybe that's the granularity you're willing to give. But on ScotWind, you indicated 2026 and '27, '29 window. And nothing has changed that changes that view, has it?
No, I think we are -- what I've said today about Codling is highlighting the uncertainty around the assumptions in relation to FID. As alluded to before, there is public information out there around Codling also indicating potential timings of FID, but there is an uncertainty here. And therefore, we find that it's more prudent now to be very open about that uncertainty and not guide specifically on FID for Codling for now.
When it comes to ScotWind, then, of course, it's an early phase project. We will now submit a consent application. That timing will then determine when we can bid into a CfD allocation round. In principle, you're right. The assumptions around that have not changed. We're still protecting an early opportunity in Scotland. Whether we will then actually go for that is a question we'll take down the road.
The new layout looks nice.
And then to all of you, thank you very much for listening in and it only remains to wish you all a very nice weekend.