Norway’s Reach Subsea has reported 2021 as the best financial year in company history. This is said to be driven by high vessel utilization and project execution, as well as the purchase of OCTIO.
In its latest financial report, Reach Subsea stated it also had its best-ever fourth quarter which saw a revenue of NOK 191 million (about €19 million), a 46% increase compared to NOK 131 million from Q4 2020.
EBIT in 4Q 2021 increased 73% to NOK 26 million, also an increase from NOK 15 million from the same quarter in 2020.
Year-to-date revenue increased 9% to NOK 687 million, compared to the previous NOK 628 million, while EBIT increased for NOK 28 million, to NOK 79 million.
The Norwegian company saw continued high activity in the renewables segment with 31% and 45% of project days generated from non-oil and gas clients in 4Q 2021 and year-to-date, respectively.
According to Reach Subsea, this is all due to continued high utilization of assets and resources, a higher share of complex projects, and successful project execution.
“The fourth quarter of 2021 was another strong quarter for Reach Subsea with 46 percent revenue growth and strong growth in profitability compared to the same period in 2020. I am happy to say that 2021 as a whole was the best year ever for our company. Key drivers were high vessel utilization and successful project execution,” said Reach Subsea’s CEO Jostein Alendal .
Reach Subsea has continued to execute on its M&A strategy as well as the development of the autonomous Reach Remote system. Delivery of the first USV is on track for 2023.
The company received an offer from an undisclosed strategic partner to enter into a comprehensive agreement covering both an equity investment in Reach and strategic cooperation on the commercialization of Reach Remote.
The offer is for Reach to issue 46,126,567 new shares towards the strategic partner at NOK 3.25 per share, thereby raising NOK 150 million in new equity.
Furthermore, the offer entails that Reach will issue warrants at a subscription price of NOK 4 per share whereby each warrant will give the strategic partner the right to subscribe for one new Reach share.
The warrants have a duration of three years and can be exercised anytime. If all warrants are exercised, the strategic partner will potentially end up with a 33% ownership stake.
The proposed offer is subject to relevant corporate approvals by both parties and certain other conditions. The Board will work towards finalizing and concluding an agreement within the next couple of weeks, to be put forth to an extraordinary general meeting.
“We are seeing healthy demand across sectors. High commodity prices, led by record-high gas prices, are driving up activity levels in the petroleum sector,” Alendal added. “Our strong customer relations, long experience and cutting edge technology from offshore oil and gas, means that we are well positioned to take part in the structural growth of renewable energy projects.”