CEO Interview - NYAB Q1'26

Añadido: 2026-05-07

[00:00:00]Hello everyone and welcome to Ind TV.

[00:00:02]NAB published its Q1 earnings result earlier today and as always I have Yuan Lon with me here today, CEO of NAB.

[00:00:11]Yuan, welcome.

[00:00:13]>> Thank you.

[00:00:18]>> All right, let's start with the Q1 earnings report. Uh you were facing a quite tough comparison period, but given that backdrop, how would you summarize the first quarter? Yeah, but important steps. I mean the first quarter is not about earnings or revenue although we improved our margins but uh positive uh is that our order backlog grows uh and uh we we are very selective and we earn the trust of the clients that we focus on and prefer to work with. So all in all I I'm quite happy with the first quarter.

[00:01:00]>> And then if we look at the first quarter as a whole it's been quite turbulent given the geopol geopolitical uncertainty that uh we saw at the end of the quarter. Given that have you seen any uh impact on uh on tender activity or project phase facing around your customer base?

[00:01:23]>> Uh not really. Uh I would say that first of all like changes in oil price and such. Uh most of that is absorbed by our subcontractors and uh in quite many cases hedged to the end client.

[00:01:41]Uh but uh there are of course uncertainties and if this drags out and if it worsens uh it will uh of course have impact uh on us as on everybody >> and if we then assume that this uncertainty continues um although it seems like we are going in the right direction right now but if the uncertainty persists where do you see the largest risk for NAB uh is it uh delayed revenue from slower project starts or is it margin pre pressure from cost inflation and why so?

[00:02:18]>> Yeah. Well, I would say that during now the first quarter we have a margin improvement even. So my view is that it's so hard because it's so hypothetical. Uh right now the best guess is that that we are moving in the right direction. Uh but if it worsens um a lot of things will be affected uh that's for sure and uh it it will certainly be delays uh in projects and decisions but uh then again since we have a consultancy business quite focused on the Norwegian oil industry uh it could long term even be positive.

[00:03:11]>> And you mentioned the order backlog in the beginning which increase 27% year on year. Uh how much of it it's is long multi-year work versus shorter contracts? Uh and if I put it differently, how much of the 2027 is already secured and how much did depends on winds um this year? Uh yeah. You mean for year 2026?

[00:03:38]>> Yeah, we can start by that.

[00:03:40]>> Yeah. Yeah. Well, I would say that um more than half of the current backlog is for 2026 >> and uh given the vast amount I mean we have phase two projects to a value of 700 million euros when we leave the first quarter. uh and then we have one uh some projects uh with phase two after the end of the quarter and uh it's like we are looking at an immense growth if if you view view it as a whole I mean our backlog uh leaving Q1 is 100 million euros bigger than the comparison period >> and we have all of these phase two contracts and of Of course, a phase 2 contract is only potential.

[00:04:33]>> Mhm.

[00:04:34]>> Uh it's not in our backlog, of course, because it's not signed. But in New York's history, we have never not reached the execution phase.

[00:04:45]>> Okay.

[00:04:46]>> When we have the phase one, it has never happened as in 13 years.

[00:04:51]uh but uh and for natural reasons when the client chooses their partner for a phase one or when when we choose each other we already have a confidence for each other and then we start designing, >> planning, projecting uh the upcoming project and uh usually uh we we earn their trust and and move into a execution phase >> and and there you have the the revenue really.

[00:05:20]And now that you're already talking about the phase two awards, uh at Q4 you have like for potential signing timeline um towards the end of Q2 for the Upsola Tramway and Sansknet. Um can you provide an update where we stand on these processes?

[00:05:41]>> Yeah, for for I would say that that it's during the summer that's most likely at this moment.

[00:05:49]if it's at the end of Q2 or if it's in Q3, it's uh more or less a coin flip as I I can view it now. But um yeah, uh looks good so far and and and it's positive when it comes to SanskaNet.

[00:06:07]We have uh uh a appeal uh not against us but uh environmental. So most likely phase two uh best guess now is that that will uh materialize in Q3.

[00:06:24]>> Okay.

[00:06:24]>> Mhm. Mhm. And both are multi-year projects well beyond your historical scale. Uh how are you sort of organizing the project management and risk oversight for them? And are there any specific execution areas where you focus on when it comes to these projects? Uh well it it's just oops I would say that is like uh a new level for us uh when it comes to size. I mean we have had like and fal that's like a billion and out line that's exceeds 1 billion second in contract value >> and and bini that is the sensor craft project you're referring to is uh in that region in size. So >> Mhm.

[00:07:15]And then if we go back to margins in uh Q1. So back in uh Q4 2025 you said that the expanded work for force was more or less fully utilized again. Uh did you see that that hold into Q1 now? Uh and how do you see the operating margin developing in 2026 compared to the 6.2 adjusted EBIT margin that you delivered in 2025?

[00:07:43]>> Yeah. Well, uh we are hoping for and aiming for an improvement >> uh of the margin. uh but then again I mean it's uh it's timing effect and and and things like that >> and uh crucial and key to that is of course that we put put so much focus on these phase one uh projects >> so that there won't be like uh too many delays that they will materialize uh and such but uh the outlook for a margin improvement is good.

[00:08:19]And it's also clear that you're shifting the backlog towards uh bigger projects.

[00:08:27]Uh does that change the margin profile if you compare to the smaller projects that you have?

[00:08:35]>> Uh no uh it doesn't uh per se.

[00:08:41]>> So you can still achieve the same margins.

[00:08:43]>> Yes.

[00:08:43]>> Yeah.

[00:08:44]>> Yeah. Okay. Uh and then after the quarter I think the midappril early works agreement with SSIA stands out. Uh and the release mentioned parallel talks on later phases of the pump station. Can you say more about what could come next and also how you view the broader opportunity for NAB as uh as OB's 4.5 billion investment in Lulu unfolds.

[00:09:09]>> Yeah. Well, uh first of all, we have a long history with SSAB. Uh starting almost when NAB was founded and started.

[00:09:19]Uh so uh we know them very well. Uh we do work with them on the Finnish side. Uh we are happy to gaining their trust uh on this pump station. Uh now we are uh planning and designing the product together. And of course there are other projects uh aligned uh and in conjunction with with this big investment they do for for future green steel production.

[00:09:50]>> Mhm.

[00:09:51]>> Okay. Uh and also during Q1 you you signed a project management uh um contract with compute Nordic Finland uh which has a potential construction value of u around 100 million euro.

[00:10:08]>> Um could you say anything where that project is uh standing as of now and also what needs to happen for NAB to win the construction phase and this is a data center contract.

[00:10:20]>> Yeah. Yeah. Well, first of all, it it's uh great for us. It's our first real data center project.

[00:10:28]>> Uh we hope there will be more to come.

[00:10:30]It's a growing market.

[00:10:33]uh and we have the all the capabilities uh for uh both planning and uh designing and constructing those >> and uh the project itself uh in Mikili is moving forward. We are working together with the client and uh it it we are in the first phase and if we look at new's history uh we we will reach the execution phase but uh that's yet to be seen of course >> I think the press release said that uh you anticipated that the construction phase would begin in Q1. Is there a small delay in that uh project? uh I I don't really have the details on on that project.

[00:11:21]>> Okay. Okay. But if we uh take a step back, our data centers a segment where you want to pursue at scale or is this contract with compute Nordic more of a one-off kind of thing? Uh no but but uh we are aiming to um as the foundation of new or as we have uh stated since the very start that um where society needs to invest to develop we we want to offer offer our services and data centers are needed uh it's a new world AI requires a lot capacity.

[00:12:05]Uh so uh we we will surely continue uh aiming at data centers and there are that that market is uh really hot at the moment all over the Nordics.

[00:12:23]>> Mhm. And then uh looking at the rest of the year, which sectors uh do you see as the main growth driver for NAB? And uh are you al and are you noticing any shifts in the competitive landscape for large energy and rail projects in Sweden as you see it? Uh yeah uh the the drivers is of course infrastructure and energy as such. Uh and we already have uh the backlog >> uh and we have the contracts. We have a higher backlog than we ever had. It's at 472 million euros.

[00:13:05]So, uh the growth will be be uh mainly in our prioritized niche markets like water works, rail, uh high voltage, >> uh and uh industrial.

[00:13:26]>> And have you noticed any changes in the competitive?

[00:13:28]>> No. No, not really. But what what we see is of course that the markets we we address are hot.

[00:13:36]>> So we can be quite selective uh and uh grow it. It's like more it's more of a timing issue that uh says how how good or bad one quarter could be. New YUB's growth is quite clear. U so yeah.

[00:13:55]>> All right. Yuan, thank you so much for joining in and thank you for watching.

[00:14:03]>> Thank you.