Record order backlog for Reach Subsea as it pursues ‘large untapped potential’ within group

Norway’s Reach Subsea has reported record financial results for the first three months of 2024 with the order backlog reaching NOK 1.3 billion (about €111.5 million), a 60% increase compared to the first quarter of 2023.

Revenue for Q1 2024 was NOK 575.3 million, a 146% increase compared to NOK 234 million in Q1 2023, explained by a higher number of project days sold, increased service scope on projects and higher pricing with increased project profit margins, whereas EBIT reached NOK 29 million (NOK -8,4 million).

Furthermore, the company said its order backlog continues to swell, reaching “an impressive NOK 1.3 billion”, and the volume of tenders has now surged to NOK 10 billion, a substantial increase from the NOK 2.7 billion reported in the first quarter of 2023, highlighting the escalating market demand.

The firm order backlog is for work in the second quarter of 2024 and beyond, with the vast majority related to work in 2024, while the order backlog figures do not include expected volumes from the frame agreements.

“The first quarter of 2024 proved to be another record-breaking period for Reach Subsea and underscoring our consistent growth in alignment with our strategic objectives. We are proud to report increased margins alongside our expansion, capitalizing on the infrastructure, vessels, assets, technology, and expertise cultivated over the past few years,” said CEO of Reach Subsea Jostein Alendal.

In this quarter, Reach Subsea performed the sea-launch of the Reach Remote USV and plans to launch two USVs this season, supporting a pipeline of national and international projects. The estimated delivery of Reach Remote is slightly delayed from the yard but is expected to be on track for the startup of commercial projects during 2024.

In addition to the Reach Remote debut, the initial Drix USV, a smaller-scale USV, completed over 25,000 kilometers of high-precision hydrographic survey lines. The company recently invested in a second Drix USV to support ongoing large-scale projects.

“Our aspirations for integrating robotization into the subsea industry are swiftly materializing. Alongside Reach Remote, we are already harnessing the capabilities of the USV type Drix. Our first USV, commissioned in April last year, has already demonstrated its value, successfully completing over 25,000 km of high-precision hydrographic survey lines,” Alendal said.

“This was achieved using a remote operations center, which allows for real-time control and data processing, a testament to our cutting-edge approach in a strategically important region. Building on this success, we have expanded our fleet with the addition of a second Drix USV. This new vessel has just passed its System Acceptance trials and will soon join our initial USV in a large-scale project to update and enhance nautical charts and seafloor mapping for a key governmental client.”

According to Reach Subsea, although the board and management are pleased with the company’s financial performance in Q1 2024, there is still a large untapped potential within the group, and efforts to bundle new capabilities into more value-added integrated services, as well as utilizing the full capabilities on all subsea spreads will accelerate going forward.

“A major milestone in 2024 will be the introduction of Reach Remote to the market. We are in active dialogue with clients around the globe and notice substantial interest for a more sustainable way of providing subsea services and gathering subsea data,” Alendal concluded.

“Furthermore, the substantial increase in charter rates for conventional subsea vessels further contributes to the competitive cost advantage of the Reach Remote solution. Thus, from a commercial and value creation standpoint, Reach Remote is looking even more attractive.”