Annual Report 2018 About Corporate Social Shareholder Annual Report and Strategy Fjord1 Asa Responsibility Information Financial Statements
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ANNUAL REPORT 2018 ABOUT CORPORATE SOCIAL SHAREHOLDER ANNUAL REPORT AND STRATEGY FJORD1 ASA RESPONSIBILITY INFORMATION FINANCIAL STATEMENTS TABLE OF CONTENTS About Fjord1 ASA Strategy Corporate social responsibility From the CEO Goals and KPIs Employee and organisational culture A value based company Vision Safety Organisation Values Environment Key figures Main ambitions Fjord1’s employees Highly skilled employees Important events Looking ahead to 2020 Targets and results Trends Operating segments Shareholder information Annual report and financial statements Information on executive team Board of directors' report 2018 Information on members of the board of directors Consolidated financial statements (IFRS) Corporate governance Parent company financial statements (NGAAP) Board of Directors’ report Auditor's report MOLDE - branch office FLORØ - head office BERGEN - branch office 2 ABOUT FJORD1 ASA THIS IS FJORD1 Fjord1 is Norway’s leading ferry company, with ferry transport as its core business. The company also operates activities within passenger boat services, catering and fjord-based tourism. By providing friendly and professional service, Fjord1's employees ensures the 21,6 million passengers who travel on the fjords each year have a safe, comfortable and seamless experience. Fjord1 is an innovative company with big ambitions. The company wants to play a leading role in the Green Shift currently dominating the ferry industry. By working continuously to develop world-class newbuilds, Fjord1’s goal is to be unsurpassed in environmentally friendly and reliable transport. By working continuously to develop world-class Fjord1 is already making good progress on its newbuilds, Fjord1’s goal biggest-ever ferry upgrade programme. Most tender is to be unsurpassed in competitions announced the last few years include environmentally friendly and enhanced environmental criteria, with many requiring zero- and low-emissions technology. By building new, reliable transport. climate-friendly vessels, the company has secured itself a leading position in the Green Shift and the electrification of Norway’s fjords. Fjord1 has taken delivery of as many as seven new hybrid and fully electric vessels in 2018, with even more scheduled for 2019. At the same time, several of Fjord1’s existing With its broad experience of ferry operations, solid vessels will undergo extensive upgrades in order to market know-how and a high level of flexibility in the meet the environmental criteria. In other words, the fleet, Fjord1 aims to show its owners that it is a good company finds itself in a period of high investments, investment. The company is headquartered in Florø, which will in turn help to safeguard its position as the with branch offices in Molde and Bergen. biggest operator in the Norwegian ferry industry. 3 ABOUT CORPORATE SOCIAL SHAREHOLDER ANNUAL REPORT AND STRATEGY FJORD1 ASA RESPONSIBILITY INFORMATION FINANCIAL STATEMENTS FROM THE CEO 4 Several ferry contracts have been tendered during 2018. Fjord1 has participated in several of these tenders, and I’m pleased to report that the company can look back on a number of positives in this area over the past year. Fjord1 was successful in the tender processes for Western Norway, and the company has made a serious commitment to the Green Shift by investing in environmentally friendly vessels where zero-emissions requirements have come to the fore in the maritime industry. The process of converting from traditional diesel to electric ferries entails extensive work but – with an organisation adapted to this very process – Fjord1 is definitely ready for the challenges ahead. We are investing heavily in newbuilds, and during the next few years, large parts of the fleet will be electrified. The company’s employees The environmental criteria from public authorities are its most valuable are fitting, and it was a special day for Fjord1 when it resource, and we want to opened the world’s first fully electric ferry route on 1 consistently have the best January 2018. and most highly motivated employees in the industry. The Anda–Lote ferry link on the E39 is the first route in the world with a zero-emissions requirement, and the project brings Fjord1 great prestige in being the first company to use the new technology – not only in terms of the vessels, but also the solution for the shore charging system. Today, Fjord1 emerges as both a want to consistently have the best and most highly leader and innovator within environmental efforts and motivated employees in the industry. new technology, something that brings with it a need for new expertise. We at Fjord1 are always seeking Fjord1 is steadily increasing its investments in tourism, new expertise within different specialist areas, and we which will be an exciting area in the year ahead, have a specific focus on personal development for both particularly in view of the Letter of Intent to establish employees and managers. a joint national tourism company signed with the NSB Group in the winter of 2018. In addition, we work Our passengers have been a particular area of focus closely with The Fjords, and were thrilled when their in 2018. The customer has always been important vessel MS "Future of The Fjords" was named “Ship of to Fjord1, and good service is more important now the Year 2018”, the same as awarded to the sister ship than ever. Self-service kiosks were introduced on in 2016. an increasing number of routes over the last year. It is pleasing to see that customers appreciate the Things are going very well for Fjord1. We have already 24-hour availability and that there is little wastage. In gained useful experience linked to the transformation, November, Fjord1 conducted its biggest-ever customer which we shall carry forward into our work in the year survey. We will use the feedback gained going forward, ahead. We are always looking to the future, because as Fjord1 wants to do everything it can to safeguard we want to be unsurpassed in terms of safe and its position as industry leader from a customer environmentally friendly transport on our ever greener perspective too. fjords. Reliable and safe operations are essential in establishing a good relationship with our passengers. Fjord1 achieved another year of good results, much of which can be attributed to continued good operations. Dagfinn Neteland Behind these results are a high level of expertise and CEO of Fjord1 precision, and highly skilled employees. The employees are the company's most valuable resource, and we 5 ABOUT CORPORATE SOCIAL SHAREHOLDER ANNUAL REPORT AND STRATEGY FJORD1 ASA RESPONSIBILITY INFORMATION FINANCIAL STATEMENTS A VALUE BASED COMPANY Fjord1’s values shall reflect who we are and how we The employees themselves have been involved in work. These values shall guide how Fjord1’s employees drawing up the company’s values, something that has behave every day, both internally and externally. been key to the work to build a strong and healthy In this way, the values also become an important organisational culture. Today, these values are fully management tool in our day-to-day work, laying the integrated in all parts of the organisation. foundations for the company’s identity. RELIABLE AND OPEN CHEERFUL KEEPING OUR AND HONEST PROMISES WORKING PROFITABLE TOGETHER AND PROUD TEAM SPIRIT 6 ORGANISATION CEO DIRECTOR DESIGNATED CFO COO TECHNICAL PROJECT DIRECTOR PERSON AND HSE VESSELS 7 ABOUT CORPORATE SOCIAL SHAREHOLDER ANNUAL REPORT AND STRATEGY FJORD1 ASA RESPONSIBILITY INFORMATION FINANCIAL STATEMENTS KEY FIGURES MAN-YEARS VESSELS PASSENGERS 1264 74 21.6 MILLION VEHICLES REVENUE 10.7 MILLION 3.1 BILLION BALANCE EQUITY BEFORE TAX 6.7 BILLION 2.3 BILLION 675 MILLION EBITDA INVESTMENTS 1.1 BILLION 1.9 BILLION 8 FJORD1’S EMPLOYEES – THE COMPANY’S MOST VALUABLE RESOURCE Fjord1 shall be the safest and most attractive provider The company’s positive development is closely linked of environmentally friendly ferry and passenger boat to individual efforts, commitment and know-how, and transport for its customers, clients and partners. By it is the employees who have made Fjord1 a strong providing friendly and professional service, Fjord1's brand. employees will make travel on the fjords a safe, comfortable and trouble-free experience. 9 ABOUT CORPORATE SOCIAL SHAREHOLDER ANNUAL REPORT AND STRATEGY FJORD1 ASA RESPONSIBILITY INFORMATION FINANCIAL STATEMENTS On 1 January 2018, Fjord1 launched the world’s first fully electric ferry connection! IMPORTANT EVENTS In a year characterised by major tender competitions, Fjord1 made its mark in 2018 as the industry leader. Q1 operations. In addition, Fjord1 was awarded a new tender On 1 January, Fjord1 began operating the world’s first contract by Møre og Romsdal county council. This contract fully electric connection on the Anda–Lote route in Sogn concerned the “Romsdal package”, covering operation of og Fjordane. This is the first route in the world with a four routes in Romsdal for a period of 14 years. The contract zero-emissions requirement, and the project brings Fjord1 entails a significant reduction in CO2 emissions and use of great prestige in being the first company to use the new fossil fuels, and lower energy consumption overall. In the technology – not only in terms of the vessels but also same period, Fjord1 signed a contract with Fiskarstrand the solution for the quay-based charging system. From Verft AS for conversion to electric operation of MF "Årdal". 1 January, Fjord1 also started up two new routes in As the company has entered into several contracts for new Hordaland: Krokeide–Hufthamar and Husavik–Sandvikvåg. environmentally friendly ferries, the Norwegian Export Credit In the same period, Fjord1 was awarded the “Nordmøre Guarantee Agency (GIEK) has contributed to the financing package”, which means that Fjord1 will continue to operate of Fjord1’s newbuilding programme by providing a NOK four county road connections in Nordmøre for 10 more 900 million guarantee. In September, Fjord1 opened its first years.