MPC Capital’s Constantin Baack on the investment case for the offshore support vessel market

Yeah, first of all, thanks for having me, Kie. Good to be back and good to discuss a new topic with you. The offshore support vessel market and indeed the market has been growing and there has been good momentum. Obviously, taking a step back, I would say despite certain political headwinds from amongst others the US and I would say also a general sense of caution surrounding new offshore wind projects in Europe as well. The growth momentum for offshore support vessels indeed remains strong and the momentum is driven by a few factors in my view. It's largely driven by the fact that vessel investments have significantly been lagging behind offshore installation activity or capacity for that matter. And in many ways that has been a game of catch-up, bringing modern eco-efficient tonnage to market in order to service the green offshore energy ecosystem, I would call it, with equally green and efficient vessels. So I think that's one aspect. Moreover, we are also seeing increasing demand driven by geographic diversification, I would call it, particularly in Asia where offshore wind development is clearly accelerating. I'm sure we'll talk about geographic differences later on. Another important trend that will continue to gain relevance in my view is the servicing and also the decommissioning of first-generation wind parks. These are early installations that reach the end of their initial life cycle and there's a need for specialized vessels to service and also to decommission these wind farms. And that is expected to grow substantially and beyond the classical offshore wind market. We are also seeing that versatile vessels are in demand, such as offshore service and survey vessels, vessels that we have ordered together with investment partners with institutional capital, and those are being deployed in emerging areas of the business like carbon capture or storage projects, as well as environmental monitoring initiatives. There are also several and very recently this has been accelerating, several programs for the protection of navy infrastructure. Obviously there is concern about certain infrastructure elements and this is definitely something where we see it's partly a navy project but they also need support in identifying certain weaknesses etc. So there we also see quite some demand. And in summary, I would say while political and regulatory uncertainties continue to persist, and no doubt about it, the fundamentals of the OSV market remain robust, also supported by delayed vessel investments as I said lagging behind, as well as geographic expansion and life cycle considerations. We see there is significant growth ahead.