Vow (VOW) H1 2025 earnings summary

Executive summary

• Q2 and H1 2025 results were negatively impacted by significant catch-up adjustments and a Q1 accounting error, leading to a covenant breach that was later waived after discussions with DNB.

• A profit improvement program has been launched to enhance cost control, profitability, and operational efficiency, alongside a strategic review.

• Aftersales segment delivered solid growth and margin improvement, while Maritime Solutions showed underlying progress despite negative adjustments.

• Industrial Solutions faced financial challenges, lower revenue, and a thinning backlog as large projects moved to commissioning.

• Sale of Vow Green Metals shares provided NOK 35 million, used to reduce debt and improve liquidity.

Financial highlights

• Q2 2025 revenue was NOK 228 million, down NOK 25 million year-over-year, mainly due to negative catch-up effects; H1 2025 revenue was NOK 472 million, down NOK 13 million year-over-year.

• Adjusted EBITDA for Q2 2025 was negative NOK 33 million, down NOK 53.5 million from Q2 2024, mainly due to catch-up adjustments.

• Aftersales revenue grew 8% year-over-year to NOK 59 million, with adjusted EBITDA margin rising to 16.9%.

• Industrial Solutions revenue declined 5% year-over-year, with profitability impacted by increased commissioning costs and late project changes.

• Net working capital reduced by NOK 2.5 million; available liquidity at quarter-end was NOK 90 million.

Outlook and guidance

• Solid backlog of NOK 1.4 billion and NOK 259 million in options, especially strong in Maritime Solutions.

• Management expects continued positive development in Maritime and Aftersales, but Industrial Solutions will remain challenging.

• Profit improvement initiatives are underway, with some cost savings expected to materialize in the current year and more over time.

• Strategy review ongoing, with further operational and strategic adjustments expected, especially for Industrial Solutions.

• Industrial Solutions is focused on circular solutions, with full-scale industrial references expected in the next 6-12 months.