Annual Report 2018 V4.Indd
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ANNUAL REPORT 2018 OUR MISSION is to be a the reliable world leading shipping company. Acknowledged by our people, clients and other stakeholders by delivering high quality services to the global Oil & Gas, Renewable Energy and Aquaculture markets. ANNUAL REPORT 2018 - SOLSTAD OFFSHORE ASA 2 CONTENT Key figures 4 The Board of Directors 6 THE BOARD'S ANNUAL REPORT 1. Vision and values 7 2. The Company's activities 7 3. The Market 8 4. Corporate particulars 8 5. Corporate governance and management 8 6. Financial position and development - The Group 9 7. Restructuring process 9 8. Health, environment, safety and quality assurance 9 9. Market Outlook 10 10. Risk 10 11. Finance - Parent Company 11 12. Going Concern 11 13. Allocation of loss 11 Corporate governance 12 GROUP ACCOUNTS Statement of comprehensive income 15 Statement of financial position 16 Statement of changes in equity 18 Statement of cash flow 19 Notes 20 Alternative performance measures (definitions) 59 PARENT ACCOUNTS Profit and loss accounts 61 Balance sheet 62 Statement of cash flow 64 Notes 65 Auditor's Report 74 Fleet overview AHTS 79 Contract overview AHTS 80 Fleet overview PSV 81 Contract overview PSV 82 Fleet overview CSV 83 Contract overview CSV 84 FINANCIAL CALENDAR 2019 Preliminary dates for quarterly reports and ordinary General Meeting in SOFF are: Annual Report 2018: April 30, 2019 Result 1. quarter 2019 May 28, 2019 Ordinary General Meeting: June 6, 2019 Result 2. quarter 2019: August 28, 2019 Result 3. quarter 2019: November 11, 2019 Preliminary result 2019: Ultimo February, 2020 ANNUAL REPORT 2018 - SOLSTAD OFFSHORE ASA 3 KEY FIGURES Reference 2018 2017 2016 2015 PROFIT AND LOSS (NOK million) Freight income 4,673 3,626 2,468 3,546 Other operating income 238 151 114 110 Operating result before depreciation and impairment 422 654 876 1,429 Operating result -3,987 694 -736 -335 Net fi nancial items -1,855 -1,024 -79 -1,244 Ordinary result before tax -5,842 -330 -815 -1,579 Net result for the year -5,888 -345 -827 -1,604 Hereof majority's share -5,858 -314 -866 -1,581 BALANCE SHEET Deferred tax asset 2 - 42 38 Long term assets 28,599 32,295 19,318 14,212 Current assets 3,015 3 628 2,774 2,000 Total assets 31,615 36,111 22,286 16,236 Equity -851 4,962 3,456 3,668 Deferred tax - - - - Long-term liabilities and provisions 4,796 29,128 17,566 9,274 Current liabilities 27,669 2,021 1,006 3,141 Interest bearing liabilities 8 29,980 28,840 17,719 11,426 Bank overdra - - - 83 Free and restricted bank deposits 6 1,351 1,875 1,750 1,025 Net interest-bearing liabilities 9 28,629 26,965 15,968 10,483 PROFITABILITY Operating margin 1 9 % 17 % 34 % 39 % Earning on equity 2,5 -286 % -8 % -23 % -36 % LIQUITDITY Liquid assets 6 1,351 1,875 1,750 1,025 Working capital 7 -24,654 1,607 1,768 -1,140 EBITDA - adjusted 3 1,005 925 1,009 1,555 Current ratio 4 0.1 1.8 2.8 0.6 CAPITAL Total assets 31,615 36,111 22,286 16,236 Equity -851 4,962 3,456 3,668 Equity ratio 5 -3 % 14 % 16 % 23 % ANNUAL REPORT 2018 - SOLSTAD OFFSHORE ASA 4 References and defi nitions: 1. Operating result before depreciation and impairment in percentages of total operating income. 2. Result before tax, in percentage of average equity. including non-controlling interests 3. Operating result before depreciation and impairmen adjusted for Joint Ventures, excess values charter parties from mergers, operating leases and other non-cash related items 4. Current assets divided by current liabilities 5. Booked equity including non-controlling interests in percentage of total assets. 6. Cash and bank deposits (free and restricted) 7. Total current assets less total current liabilities (including current interest bearing liabilities) 8. Interest bearing liabilities is the total of the accounting lines "Interest bearing liabilities", "Current interest bearing liabilities" and "Leasing obligations" 9. Net interest bearing liabilities is interest bearing liabilities (10) less cash and bank deposits (8) Solstad Off shore ASA has included the above Alternative Performance Measures (APM), which are commonly used in the business, as they are used internally by management to understand the Group’s fi nancial performance. Hence, it is deemed that the APM’s also will provide useful information to the reader. For further defi nitions, refer to page 59. ANNUAL REPORT 2018 - SOLSTAD OFFSHORE ASA 5 THE BOARD OF DIRECTORS HARALD ESPEDAL (b. 1972) ELLEN SOLSTAD (b. 1974) MERETE HAUGLI (b.1964) Harald Espedal is a graduate from The Ellen Solstad has previously been working Merete Haugli has been a board member Norwegian School of Economic (NHH) in in RG Hagland AS and Solstad Offshore UK since the company's extraordinary general economics with additional studies in audit- Ltd. Since 2003 she has been in charge of meeting on March 3, 2017. She has experi- ing. Today he is the Chairman of Lyse the Solstad family office. Ellen Solstad ence as a board member of a number of ASA, Sandnes Sparebank, Espedal & CO AS, holds a bachelor degree from BI Norwegian companies, including Reach Subsea ASA, RS Deputy Chair in Stavanger Concert Hall, Business School and is board member in Platou ASA, Axactor AB and Norwegian and Board member in Aaspelin Ramm and several companies, among others, Wilson Property ASA. Merete Haugli has her edu- The Norwegian National Opera & Ballet. ASA and Solvang ASA. Ellen Solstad was cation from "Bankakademiet" and elected board member at the Company’s Norwegian School of Management (BI). Espedal has a long career within the extraordinary general meeting 13 July Finance and Investment industry including 2016 SHARES IN SOLSTAD OFFSHORE ASA: 0 as CEO and Investor Director for SKAGEN and Investment Director for Vesta. SHARES IN SOLSTAD OFFSHORE ASA: 0 SHARES IN SOLSTAD OFFSHORE ASA: 738 438 FRANK O. REITE (b. 1970) TORIL EIDESVIK (b. 1968) HARALD THORSTEIN (b. 1979) Frank O. Reite first joined Aker in 1995, and Toril Eidesvik is a trained solicitor from UiO Harald Thorstein is currently employed by became CFO in Aker ASA in August 2015. He (1993) and has worked as solicitor with Frontline Corporate Services in London, a came from the position of President & CEO Simonsen Musæus Advokatfirma (from company indirectly controlled by trusts of Akastor, and has previously held a 1994 – 1998) and Gjensidige NOR established by Mr John Fredriksen for the variety of executive positions in the Aker Sparebank (1998 – 2002). In the period benefit of his immediate family, and thus group, including overseeing and developing from 2003 to 2008 she worked as solicitor affiliated with Hemen. Thorstein's experi- Aker's investments in Converto Capital in Caiano AS. From 2009 until 2012 she was ence includes corporate finance advisory Fund AS, Havfisk, Norway Seafoods AS and Managing Director of Green Reefers ASA services in DnB Markets, where he focused Aker Yards ASA. Frank O. Reite has experi- and from 2013 to 2014 she was CEO in the on the offshore and shipping sectors. Prior ence from banking and has served as ship supply company EMS Seven Seas ASA. to that, Thorstein was partner in the stra- Director in Paine & Partners. He is board- She has long experience as a board mem- tegic advisory firm Arkwright. Harald member of several companies within the ber, and today Eidesvik work as CEO in TTS Thorstein has a Master of Science degree Aker Group. Frank O. Reite holds a B.A. in Group ASA. Toril Eidesvik has been a board within Industrial Economics and Technology business administration from member since 2005. Management from the Norwegian Handelshøyskolen BI in Oslo. He was elect- University of Technology and Science. He ed board member at the Company’s SHARES IN SOLSTAD OFFSHORE ASA: 3.488 was elected board member at the extraordinary general meeting 13 July Company’s extraordinary general meeting 2016. 25 April 2017. SHARES IN SOLSTAD OFFSHORE ASA: 0 SHARES IN SOLSTAD OFFSHORE ASA: 0 ANNUAL REPORT 2018 - SOLSTAD OFFSHORE ASA 6 THE BOARD'S ANNUAL REPORT Solstad Offshore ASA (“The Company”, “The Group” or areas; International PSV & AHTS, Strategic PSV & AHTS and “Solstad”) is a world leading owner and operator of offshore Construction and Renewable Energy worldwide. From 2019 the service vessels (OSVs), offering maritime services to the Company has reorganized its activities into two segments; 1) global offshore and renewable energy industry. The Company Subsea construction and renewable energy and 2) Global AHTS & owns and operates a fleet of PSV’s (platform supply vessels), PSV. In addition to the headquarter in Skudeneshavn, the AHTS (anchor handling tug support vessels) and CSVs (con- Company has three other locations in Norway (Fosnavåg, struction and subsea vessels). The supply vessels (AHTS and Grimstad and Ålesund), Aberdeen, Rio de Janeiro, Macae, Perth, PSVs) mainly support oil fields in production as well as devel- Singapore, Manila, Limassol and Odessa. opment and exploration activities. The Group's CSVs is partly working on long-term contracts and partly utilized for subsea The Company's operating income in 2018 was divided into 53% project activities. The CSVs on long-term contracts are serving (60%) from CSVs, 22% (22%) from AHTS and 25% (18%) from the IMR (Inspection, Maintenance & Repair) and the SURF PSVs. Furthermore, the regional split of the revenues was 42% (Subsea, Umbilicals, Risers & Flowlines) markets. Furthermore, (39%) from the North Sea, 16% (18%) from South America, 12% the Company participates in a joint venture which owns and (6%) from West Africa, 2% (4%) from Central and North America, operates vessels for use in the aquaculture industry.