Solstad Maritime owns 31 high-end offshore vessels (21 construction-support CSVs, 10 AHTS) chartered to oil & gas and renewables operators, reporting in USD. The LTM window is a cyclical up-leg: operating income +20% yoy in 1H26, fleet utilization 83% (77%), EBIT margin 40.9% in 1H26, and adjusted ROIC of 11.7% against the 8% WACC — economic profit of +USD 55M, still positive (+31M) at the company's own 9.6% impairment-test WACC.
The quality of that spread is the question. This is a capital-heavy, day-rate-exposed fleet where asset marks swing with the cycle (FY2024 booked a +USD 47.9M impairment REVERSAL), and the forward indicator has softened: firm backlog of USD 1,049M is up 13% yoy, but book-to-bill was 0.9x in 1H26 (0.8x in 2Q26) versus 1.4x for FY2025 — order intake ran below revenue this half. We rate the name on the mid-cycle spread, not the LTM print.
Governance is a structural discount, not a disqualifier: Aker Capital (51.8%) and Solstad Offshore (27.3%) control the register with ~20% free float, and ~16% of FY25 revenue is bareboat/TC charter to associate Solstad Offshore, alongside ROV leasing from Omega Subsea and offices leased from a CEO-controlled company. Cash distributions are real — USD 107M paid in FY25, 0.10/share quarterly pace — but they are classified largely as extraordinary and depend on the cycle holding.
EP frame (reverse capitalization): at NOK 27.8 the market cap is NOK 12.95bn and EV ~USD 1.82bn at the implied 9.91 NOK/USD. Capitalized at the 8% WACC that EV implies a steady-state NOPAT of ~USD 145M — a ~17% fade from LTM adjusted NOPAT of 175.7. So the market is not paying for the peak: it already assumes meaningful mean reversion. Holding the current spread forever would warrant ~NOK 36 (EV = NOPAT/WACC = USD 2.20bn less net debt 511); the EP-zero floor (mid-cycle ROIC = WACC, EV = IC of USD 1.51bn) is ~NOK 21.
Base NOK 31 (+12%): mid-cycle ROIC fades to ~10.5% (NOPAT ~USD 158M capitalized at 8%, less net debt) — backlog and 2026-27 contract cover support a slow, not sharp, normalization. Bull NOK 39 (+40%): the offshore cycle extends through 2028, book-to-bill re-accelerates, and near-zero cash taxes (USD 1.73bn loss carryforwards) keep owner earnings above our 22%-taxed NOPAT, on top of the ~4% dividend pace. Bear NOK 19 (−32%): day rates roll over, the spread compresses to zero, and cyclical vessel marks plus the Jan-2029 maturity wall reintroduce impairment and refinancing risk. Probability-weighted ~NOK 30 — insufficient margin of safety at an up-leg utilization print.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~11.1%, limited by ROIC 12% ≈ WACC 8%) it cannot reach the current EV. No-growth value is $-6/share (-20% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | $39 | ≥11% | +40% | 25% | Cycle extends through 2028; near-zero cash tax + dividends compound; current spread persists (warranted ~NOK 36 + payout) |
| Base | $31 | ≥11% | +12% | 50% | Mid-cycle fade to ~10.5% ROIC; NOPAT ~USD 158M capitalized at 8% WACC less net debt |
| Bear | $19 | ≥11% | -32% | 25% | Day rates roll; spread to zero (EV = IC → ~NOK 21) plus impairment/2029-refi risk |
| Prob-weighted | $30 | — | +8% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | -4 | -3 | -3 | -2 | -2 | -0 |
| 7.25% | -5 | -4 | -4 | -4 | -3 | -2 |
| 8.00% (base) | -6 | -5 | -5 | -5 | -5 | -4 |
| 8.75% | -6 | -6 | -6 | -6 | -5 | -5 |
| 9.50% | -7 | -7 | -6 | -6 | -6 | -6 |
Green = fair value above the current price of $27.80. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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Utilization 83% (77%) and 1H26 EBIT margin 40.9% — the spread lives and dies with CSV/AHTS rates.
Firm backlog USD 1,049M (+13% yoy) with new contracts in Suriname and the Black Sea gives 2026-27 revenue cover.
USD 1.73bn loss carryforwards (no expiry) hold cash taxes near zero — cash-tax ROIC ~14-15% vs our 22%-taxed 11.7%.
13 Omega Subsea ROV systems deployed, more mobilizing through 2026-27 — service income raises revenue per vessel-day.
Quarterly USD 0.10/share pace (2Q26 proposal USD 47M); USD 107M paid FY25 — a direct cash-yield leg while the cycle holds.
Solstad Maritime is a well-run, cash-generative vessel owner earning genuinely above its cost of capital in the current up-leg — EP +USD 55M, ~13% FCF yield, real dividends. But it is a cyclical rated through-cycle: the market already prices a ~17% NOPAT fade, our mid-cycle base of NOK 31 offers only ~12% upside, and book-to-bill below 1x says the backlog build is decelerating. HOLD, medium conviction.
We would revisit on either leg: toward BUY if the price approaches the EP-zero floor (~NOK 21) with backlog intact, or if book-to-bill re-accelerates above 1x with the 2029 refinancing addressed early; toward SELL if day rates roll while the payout is maintained on a shortening backlog.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| LTM total operating income 648.8 | 649 | Condensed Statement of Comprehensive Income, p.16 📄 p.9 | LTM = FY25 590.358 + 1H26 355.890 - 1H25 297.472; includes charter, service, other income and disposal gains (Borsdata-consistent revenue definition). |
| LTM EBIT (Operating result) 233.1 | 233 | Condensed Statement of Comprehensive Income, p.16 📄 p.9 | LTM = 195.656 + 145.734 - 108.259. No impairments or reversals inside the LTM window. |
| Gain on sale of assets -8.0 (Normand Clipper) | -8 | Note 4 Tangible Fixed Assets, p.24 📄 p.13 | Subsea CSV Normand Clipper sold in 2Q26 for a net gain of MUSD 8 — classic offshore vessel-sale gain, stripped from adjusted NOPAT as non-recurring. |
| Restructuring add-back +0.2 | 0.2 | APM appendix, Adjusted EBITDA reconciliation, p.30-31 📄 p.16 | FY25 restructuring 2.264 less 1H25 2.067 leaves 0.197 in the LTM window; listing-era one-off, added back. |
| Rejected: IFRS 16 lease add-back 20.2 and AR-loss add-back 4.0 | 24.2 | APM appendix, Adjusted EBITDA reconciliation, p.30-31 📄 p.16 | Company's Operational adjusted EBITDA de-recognizes IFRS 16 and strips receivable losses; we keep both in opex — leased ROVs are operating assets and charterer bad debt is a recurring cost. Explains the full -7.2% APM divergence. |
| Total equity 952.4, NCI 0 | 952 | Condensed Statement of Financial Position, p.18 📄 p.10 | 30.06.2026 snapshot; NCI bought out during FY2025, so equity is 100% attributable to parent. |
| Accumulated OCI (translation reserve) -64.6 | -64.6 | Statement of Changes in Equity, p.20 📄 p.11 | Cumulative translation adjustment -64.618 stripped from equity: FX translation is not an operating investment decision, so equity_ex_oci = 1,017.0 in IC. |
| Interest-bearing debt 630.8 + lease liabilities 34.3 | 631 | Balance sheet p.18; NIBD reconciliation p.31 📄 p.10 | Debt to credit institutions 540.778 + current portion 90.009; leases (24.808 + 9.521) kept OUT of IC as ROU assets (~2% of operating assets: ROVs, offices) are peripheral to the owned 31-vessel fleet. |
| Cash 154.0, excess cash 141.0 | 154 | Balance sheet, p.18 📄 p.10 | Operational cash capped at 2% of LTM revenue (13.0); the rest is excess and removed from IC. Cash doubled in 1H26 on the MUSD 100 incremental loan tranche. |
| Tax: statutory 22% used; reported LTM tax is +31.2 INCOME | -31.2 | Note 17 Taxes, p.164-165 📄 p.164 | USD 1.73bn loss carryforwards (no expiry) drive DTA-recognition tax income; NOPAT taxed at statutory 22% for conservatism and cross-universe comparability — cash taxes are ~5% of PBT. |
| Net pension liability 1.1 | 1.1 | Note 18 Pension, p.166-167 📄 p.166 | Small closed DB plan (3 actives, 18 pensioners); net liability 1.056 included in IC; net interest ~0.03 — no NOPAT reclass. |
| Related-party revenue: BB/TC leases to Solstad Offshore 91.7 (FY25) | 91.7 | Note 15 Transactions with Related Parties, p.161-162 📄 p.161 | ~16% of FY25 revenue is bareboat/TC charter to associate Solstad Offshore, plus management fees 8.3 and ROV leasing from Omega Subsea (83.3 expense) — a dense related-party web to monitor for arm's-length pricing. |
| No impairment in LTM; FY2024 reversal +47.9 outside window | 0 | Consolidated Statement of Comprehensive Income, p.119 📄 p.119 | FY2025 impairment line is zero and 1H26 states no indicators; the FY2024 +47.852 reversal signals how cyclical these vessel marks are — a downturn would swing them the other way. |
| Thai tax/VAT claim fully provisioned 39.1 | 39.1 | Note 25 Contingent Liabilities, p.171; 1H26 Note 1, p.21 📄 p.171 | Legacy 2016-2020 Thai-waters claim, fully provisioned, no recourse beyond the subsidiary; no material development as of 30.06.2026 — monitored, no earnings adjustment. |