Financial review(Numbers are unaudited)
Magnora and its subsidiaries (“the Group”) recognises its share of the financial results in its portfolio companies based on ownership share in accordance with IFRS. Portfolio companies are classified as associates when the Group has less than 50 percent and more than 20 percent ownership and/or considers it does not have control of the entity. See note 6 Investment in associates for more details. Portfolio companies are classified as subsidiaries when the Group has more than 50 percent ownership and/or considers it has control of the entity as the majority shareholder. For subsidiaries, the full net profit/loss is recognised as these companies are consolidated in the Group’s financial reports. Development costs in these companies are expensed and not capitalised, as they are in early development phase.
Operating revenue
Operating revenue amounted to NOK 49.7 million, up from NOK 0.3 million in the same quarter last year. This increase is due to revenue from services delivered to associated companies of NOK 1.3 million, and a milestone payment of USD 4.3 million (NOK 48.4 million) from Shell UK Ltd. related to Magnora’s legacy FPSO design. The revenue was recognised as earned during the quarter, while the payment was received after the quarter and recorded as a subsequent event. The funds were reserved for transfer to Hermana Holding ASA as part of the settlement of the demerger payable established in 2024.
As the legacy business is no longer part of Magnora’s core operations, no ongoing revenue is expected from this segment.
Other income
Other income for the quarter amounted to NOK 12.8 million compared to NOK 14.9 million in the same quarter last year. In both periods, the income relates to project divestments in South Africa. There were no earnout income from other previous exits during the quarter.
Operating expenses
Operating expenses for the quarter was NOK 9.9 million, compared to NOK 11.7 million in the same quarter last year. The decrease primarily reflects elevated costs in the previous year related to the restructuring activities undertaken in early 2024 to facilitate the carve-out of Magnora’s legacy licensing business.
Development and M&A expenses
Development and M&A costs totalled NOK 11.5 million, compared to NOK 14.5 million in the same quarter last year. The slight decrease from same quarter last year is due to lower use of third-party service providers.
Operating profit
Operating profit for the quarter was NOK 36.9 million, compared to a loss of NOK 2.0 million in the same quarter last year. The improvement was primarily driven by milestone revenue recognised from the legacy licence agreement and gains from project divestments. These were partly offset by depreciation and a negative contribution of NOK 4.0 million from the Group’s share of results from associated companies.
Net profit/loss
Net profit for the quarter amounted to NOK 38.6 million, compared to a net loss of NOK 4.9 million in the same quarter last year. The improvement was driven by the same reasons as mentioned in the above paragraph, as well as positive returns from interest income and favourable foreign exchange movements which together contributed NOK 1.7 million, compared to negative NOK 4.6 million in the same quarter the previous year.
Cash flow
As of 31 March 2025, cash and cash equivalents amounted to NOK 229.6 million, compared to NOK 254.1 million as of 31 December 2024.
Cash flow from operating activities was negative NOK 15.4 million, an improvement from the negative cash flow of NOK 22.6 million in the same quarter the previous year. This was primarily driven by reduced expenses related to development of the project portfolio, without the additional costs associated with the demerger of Hermana Holding ASA in 2024.
Cash flow from investing activities was NOK 6.5 million, in contrast to negative NOK 5.4 million in the same quarter the previous year. This inflow was mainly proceeds of NOK 6.7 million from the project divestments in South Africa. Additional significant cash inflows are expected upon achievement of future project awards and milestones. The inflow was partially offset by an investment of NOK 0.2 million in associated companies.
Cash flow from financing activities was a negative outflow of NOK 15.5 million, compared to a negative outflow of NOK 11.7 million in the same quarter last year. This included a capital distribution of NOK 12.0 million to shareholders and NOK 3.2 million spent on repurchase of own shares.
Financial position
Group equity by the end of the quarter was NOK 430.3 million (NOK 402.2 million at year end), representing an equity ratio of 73 percent (70 percent). The movement in the quarter compared is mainly due to the capital distribution to shareholders and the repurchase of own shares.
As of the report date, the Group has undrawn overdraft facilities of NOK 150 million.