Thank you. Good day, everyone, and welcome to this first quarter 2026 results presentation for Paratus Energy Services Limited.

My name is Baard Haijem and I'm the CFO and interim CEO of Paratus. Before we begin today's presentation, I would like to remind all participants on this call that some of the statements in this call may involve forward-looking statements.

Forward-looking information involves risks and uncertainties by nature that may cause actual results to differ materially from those projected in such statements. I therefore refer you to the latest public filings for the company.

The year 2026 has so far been very busy and also eventful for the company. In March, we announced a transformative transaction for Paratus, the $400 million sale of our jackup business, Fontis Energy.

This transaction marks an important milestone in the continued evolution of Paratus, simplifying the company and sharpening our strategic focus. Let me just recap from the last time we spoke.

Following completion of the transaction, Paratus becomes a focused PLSV holding company with exposure towards long-term contracts with strong cash flow visibility in a niche market, while at the same time we significantly improve our risk profile by exiting the Mexican jackup segment where we had exposure to payment irregularities and backlog risks. Second, this is a deleveraging story where our debt reduced from $625 million to around $250 million and net leverage coming down from 2.2 times EBITDA to around 1.4 pro forma basis Q1 '26.

Lastly, with current strong financial position and significantly improved cash flow visibility, we have strong confidence in a credible path to sustaining our current dividend per share over the long term. As previously announced, the closing of the Fontis transaction is expected in second half year '26 and is mainly subject to competition authority approval in Mexico.

Overall, the transaction arrangement is reflected by high degree of deal certainty. In early May, we successfully completed a private placement of $250 million of five-year senior secured bonds with a coupon of 8.125% and a borrowing framework of up to $500 million.

The primary use of proceeds is to refinance the existing '26 notes. Let me now move over to overall quarterly results, and please note that Fontis' financial results is accounted for as discontinued operations with associated assets and liabilities held for sale.

Therefore, we are not showcasing any Fontis figures in the operational update as we have done previously. We released Q1 trading update in connection with the bond issue in May, and there are no material changes to those figures.

We reported Q1 revenues of $75 million for SeaGems and combined segment EBITDA of $46 million compared to $74 million and $50 million in the fourth quarter, respectively. The small decline in EBITDA is mainly explained by the one-time positive effect which was booked in Q4 last year from reclassifying certain withholding taxes from OPEX to income tax.

We exited Q1 with a cash balance of $128 million and $254 million in net debt pro forma for the Fontis transaction. Finally, consistent with the previous quarters, the board has approved a 22 cents per share dividend for Q1, maintaining our stable distribution practice.

Now let's move over to the quarterly performance of our joint venture, SeaGems in Brazil. As usual, figures referred to here are on a 100% basis unless otherwise stated by me.

SeaGems delivered another strong quarter. I will go through the highlights.

Q1 revenues of $150 million and EBITDA of $96 million, supported by strong technical utilization of 98% and significant dayrates averaging close to $280,000 per day. The modest revenue increase from Q4 reflects higher dayrates driven by positive foreign exchange impact, and a Brazilian real-dominated component of the dayrates.

Compared to Q1 last year, the strong revenue increase is mainly due to the full fleet operating under the new Petrobras contracts. As mentioned, EBITDA was lower compared to Q4, mainly due to the one-off tax reclassification effect mentioned earlier.

During Q1, the JV distributed $83 million, around $41.5 million to Paratus, up from $76 million in Q4. At quarter-end, backlog stood at approximately $1.3 billion.

As discussed on our previous earnings call and in reports, Petrobras is in the market with a PLSV tender for start-up in '28, offering four-year contracts across different lots with varying technical specification. The tender deadline was originally due in February, but has now been pushed to mid-June '26.

SeaGems is well-positioned to submit a bid with at least one vessel, as the Jade PLSV is scheduled to finish its current contract in Q3 next year. Now let's go through the Q1 '26 financial results compared to both the previous quarter and the same quarter last year.

As mentioned earlier, please note that Fontis is accounted for as discontinued operation, with comparison figures in this table updated. Paratus reported net income from continuing operations after tax of $19 million, up from $6 million in Q4, and compared to a loss of $30 million in Q1 '25.

The key drivers were as follows. Revenue increased slightly quarter-on-quarter, while year-on-year growth was driven by higher dayrates from new Petrobras contracts.

EBITDA was slightly lower quarter-on-quarter due to one-off positive impact in Q4. The year-on-year EBITDA increased primarily driven by higher revenues.

Financial expenses were in line with the previous quarter and significantly lower compared to last year, mainly due to the upfront fee related to monetizing receivables in Mexico during Q1 '25. Income tax benefited from a lower-than-provided tax audit settlement in Mexico and the previously mentioned one-off withholding tax reclassification effect in Q4, broadly in line with last year.

Finally, the strong free cash flow in the quarter compared to both Q1 and Q4 last year was driven by higher distributions from SeaGems and lower interest payments compared to Q4, reflecting only the quarter payments on the '26 notes. Overall, the Q1 financial results reflected continued strong operational performance, solid earnings, and improved cash flow generation.

Now let's take a look into the main cash flow items during the quarter. At Paratus' consolidated level, we closed Q1 with a cash balance of $141 million, which represented a decrease from $178 million at year-end '25.

The $37 million decrease in cash was primarily driven by net cash used by discontinued operation, meaning Fontis, was $36 million spend, mainly due to lower collections from Fontis' client in Mexico and a payment for a tax audit claim settlement in the quarter. Cash flow from continuing operations of $4 million was primarily reflecting transaction-related costs and other temporary cash outflows.

Cash distribution from SeaGems, as mentioned, was $41 million, up from $38 million in Q4. Net interest payments of $4 million, down from $28 million in Q4, reflecting the interest payments on the '26 notes only.

Finally, we returned $36 million to our shareholders, consistent with the last quarter. After these movements, we ended the quarter with $141 million in cash at Paratus level.

In addition to this, our pro rata share of cash in SeaGems was $15 million $15 million, bringing the total group cash position to $156 million at end of Q1. In summary, Paratus continues to maintain a strong liquidity position, supported by stable distributions from SeaGems.

Moving over to our capital structure, and in particular to review it on a pro forma basis post the expected Fontis transaction. The sale of Fontis significantly improves net debt from $625 million in Q1, as you can see here, to a pro forma level of $254 million, while also removing exposure to payment irregularities in Mexico.

This corresponds to a reduction in leverage from 2.4 times EBITDA to around 1.4 times EBITDA on a pro forma basis. As announced in April, the twenty 2029 bondholders approved amendments to allow the seller's credit as part of the Fontis transaction to be treated as a permitted debt and deducted from the net debt calculation.

This provides additional flexibility as the seller's credit structure incentivized early repayment with a step-up in coupon, while also giving us opportunity to either address 2029 bonds or support future growth initiatives if we choose to do so. Subsequently to Q1, we successfully issued a new $250 million in bonds maturing 2031, primarily to refinance the '26 notes, as you can see here in our maturity profile.

To the next slides, following the sale of Fontis and the increased earnings visibility resulting from this transaction, we are now in a position to provide initial financial guidance for '26. For the full-year '26, we expect revenues in the range of $285 million to $300 million and EBITDA in the range of $175 million to $190 million, reflecting higher revenues as all vessels are now on new Petrobras contracts at higher dayrates.

CapEx is expected to fall in the range of $15 million to $25 million, mainly reflecting recurring CapEx spend and some preparatory spending for drydocking activities the next year. The guidance represents our current best assessment for '26, but as always, actual results will depend on operational performance, project execution, market conditions, and other factors.

Should our outlook change materially, we will update the market in accordance with our disclosure obligations. With that, we can open up for a Q&A session.

Thank you.

I will read the questions. For Fontis, please elaborate on the $36 million outflow related to lower collections.

As it is here, last quarter in Q4 we received over $100 million in collections, over $140 million in collections from our client, which compares to much less in Q1, so that's explains the cash burn in Fontis. In addition, we also settled the 2018 tax audit claims, which actually came better than what we have provided for in the accounting.

There's a question on the guidance. Why is guidance lower than what you show in the investor presentation as potential EBITDA?

How will you fund dividends for this shortfall? I can just explain first that the EBITDA figure that we presented before in early announcements was clearly identified as illustrative and not intended as guidance, just to make it clear, and to illustrate the cash flow potential under certain assumptions, as we have pointed out, whereas this guidance incorporates our latest work, activity, and plan and budgets.

It also reflects what we basically believe is the most realistic outcome based on information available today. Of course, there are upsides, and also we're also looking at the downsides that we need to incorporate.

That's the answer to it. There's a question about the process or status of the closing of the Fontis transaction.

As I just mentioned in the presentation and before, the transaction is subject to customary closing conditions. One of them that we ticked off in April, which was the consent for the seller's credit from our 2029 bondholders, that was given in mid-April.

The main that is outstanding is the competition clearance in Mexico, which is progressing as planned. The survey filings has been submitted and expect the timeline for the closing is unchanged.

We expect closing during second half of this year or Q3 as a likely case. There's some questions about the tenders, I can take some of them now.

Jade's contract expires in '27 and the tender now specifies '28 start-up. Is SeaGems pursuing any arrangement to avoid gap?

Petrobras has moved the expected start date for the potential contract or award from July '27 to 20 to January '28. One of the six vessels goes off contract in late July or early August '27 2027.

Of course, I cannot go into too much detail around the tender process, but we are very comfortable with the underlying demand picture and the need for a vessel. Petrobras continues to require these vessels, and based on what we know today, we believe there's good possibility that it is natural that the current pair between current contract and then the future contract start-up will be covered through extensions.

Yep. More on the Petrobras tender.

Can you give an update on the tender, why is Petrobras postponing the bid, anything we should think about around it? Yes, as I mentioned, it has been postponed, and we're working on a bid, and we will bid at least one vessel as the Jade is scheduled to finish its current contract in Q3 next year.

Of course, I don't want to go into bid details, but with regards to the postponement, nothing unusual, and postponements usually occur with either as a request from competitors or any outstanding clarification, meaning that Petrobras needs some time to get back to those. There's a question about OPEX per day and seasonality.

There shouldn't be any seasonality on that, but it's probably lower. It was lower last quarter, as I mentioned in the presentation, because there was some reclassification of items that we made in Q4 that affected the cost-per-day KPI.

That's why the picture is a little bit screwed in a way, so, yeah. There's a question about M&A or prospects, the usual suspect.

How should we think about acquiring the remaining 50% of SeaGems from your partner? All I can say is that we hold a right of first refusal for any potential sale of the remaining 50% of SeaGems.

The JV is, as we have said before, they perform very well, and we're pleased with the partnership that we have today with the other shareholder. Of course, should any opportunity present itself and the price be right, we would, of course, consider it, but it needs to be accretive to us.

Just to avoid any speculation, there's no concrete process that we're engaging as a buyer or as a seller, so. Please talk about the strategic objectives now that Fontis has been sold.

The review is in early stages. I would say focus is on the right structure for a pure-play PLSV business, and we also have focus on completing the transaction, even though it has been signed and agreed.

There is still a completion period that needs to be handled and concluded. Post close, as mentioned, Paratus is a fully contracted company, owning 50% SeaGems plus seller's credit that remains outstanding until it's paid, but at attractive interest.

As I said, with exposure to payment irregularities and backlog risks in Mexico which has now changed to strong cash flow visibility through long-term contracts with Petrobras, and actually a client that pays on time, flexible capital structure and strong balance sheet, I would say we are well-positioned to explore attractive options in the industry. There's a question about 20 will you repay the '29 with the cash proceeds received at Fontis closing?

At closing, we expect about $163 million of proceeds in cash for the Fontis sale from the buyer. We can also confirm that we have also met the thresholds for getting the $50 $15 million, which was categorized as deferred cash.

The answer to that is that in the bond indenture, the sale qualifies as a material asset sale where we either repay at the prevalent call price or need to reinvest within 12 months. Given that this payment is coming due in a short period of time before expected closing, and, of course, in the absence of any attractive reinvestment opportunities at that time, I would say repayment is the likely base case, but, of course, important to note that we have that reinvestment right.

There's a question about valuation. On Paratus, but also you said you need the acquisition of 50% to be accretive, would you be willing to pay the price of Paratus for the 50% stake?

That is, of course, not something that I should talk about in this call. It remains to be seen.

As I said, it needs to be accretive and meet our thresholds before we can say anything, so. Question about the bond raise that we just discussed.

How much better terms do you think you could have achieved if you had offered some amortization? That's a fair question, of course.

How does this compare with terms you see from lending banks and what would you be better to reduce leverage over time as vessels get older? We are very happy with the results of the bond issuance in May.

In terms of leverage, we haven't really stated or operated with a fixed target leverage ratio, but rather adjust it as necessary and through cycles, as you mentioned, also considering the aging of the vessels. Just to think about the recap, this company used to have over three times EBITDA, and in the last couple of years over two times EBITDA.

Now after Fontis, assuming the Fontis transaction completes as expected, now at 1.4 times pro forma times EBITDA, which is now well within norms for a dividend-paying company in our sector. Another one on debt.

Will you have 1.4 times leverage given you raised more debt than needed for the refinancing? Yes, we issued $250 million of debt, primarily to refinance '26, but at the same time also strengthening our liquidity with the remaining balance, but also for practical reasons, do all in one go.

We consider this a comfortable and reasonable size, and if you look at it, we haven't really increased today's leverage as at the same time we're also paying down debt at SeaGems level over the next two, two and a half years practically with almost the same amount, so. There's a question about dividend capacity.

Can the board confirm the currently quarterly dividend is sustainable and remains company policy? Does Fontis proceeds create any capacity for additional distribution to the shareholders?

Maybe take the last first. Fontis proceeds, they are, as I said, categorized as mandatory asset sale and they need to either be applied to repay the '29 bonds or reinvested over the next 12 months, we cannot use it for dividend distribution.

In terms of the dividend capacity and how long will we be able to maintain it, as we mentioned in calls before, we have not committed to any fixed dividend amount. Our focus has always been to provide stable and sustainable shareholder returns, and each quarter the board, based on also management recommendation, assesses dividends based on liquidity, cash flow visibility specifically, backlog, of course, it goes without saying, market outlook, and balance sheet strength, and, of course, within the limitation of the debt agreements.

Today we believe the company is well-positioned, supported by strong cash generation, and we also have a very strong balance sheet and low leverage. A question about our recent organizational changes.

CEO left and the chair person was not reelected. It's not much actually to say on this.

You can read all about it in our press releases, there's nothing more behind it, basically. The CEO resigned and the chairperson was not elected at the AGM, so.

There's no, yeah, disagreement as the question is here. I think we have answered all or most of our questions.

Before we close, there are some detailed questions also around the Petrobras tender, which are good, but given the commercial sensitivity of the process, we are not able to go into our bidding strategy here. I think with that, I think we'll wrap up for today's call.

Thank you all for joining. Thank you for the questions, and thank you for your continued interest in Paratus.

We look forward to speaking with you again in the next quarter in Q2. Thank you.