2022
ANNUAL
REPORT
2022 in brief
Net interest-bearing debt reduced by NOK 431 million
through the year, mainly driven by the sale of preference
shares held in Odfjell Drilling
Strong activity growth year-over-year across almost all
portfolio companies
HMH executed on synergy plan with wave one of ERP
implementation completed. Bridge loan facility refinanced
with new Nordic bond of USD 150 million.
New four-year contract for Aker Wayfarer with a total
value of around USD 282 million secured within AKOFS
Offshore
DRU arbitration proceeding was further progressed, with
hearing concluded last week of February 2023. Arbitration
outcome expected in second half of 2023.
Agreement to divest Cool Sorption entered into in the
year, with closing completed in February 2023
Net capital employeed per year end 2022
NOK million
NOK 4.6bn
Net Capital Employed
(2021: 5.1bn)
NOK 553 m
Net Interest-bearing Debt
(2021: 984m)
+73%Total Shareholder return
(2021: -25%)
60%Equity share
(2021: 57%)
Book value per share (NOK)
10.4
2.2
2.3
2.0
536
636
615
5000
4000
3000
2000
1000
0
2 863
0.8
231
-0.9
(237)
17.0
-2.0
14.9
(553)
(984)
4 645
4 092
DRU
contracts
Other
Net Capital
Employed
NIBD
Equity
3
TABLE OF CONTENTS
01. BOARD OF DIRECTORS' REPORT
02. DECLARATION BY THE BOARD
OF DIRECTORS AND CEO
03. CORPORATE GOVERNANCE STATEMENT
– AKASTOR ASA
04. FINANCIALS AND NOTES
a. Akastor Group
b. Akastor ASA
05. AUDITOR'S REPORT
06. ALTERNATIVE PERFORMANCE
MEASURES
07. BOARD OF DIRECTORS
08. MANAGEMENT
09. COMPANY INFORMATION
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Annual Report 2022
4
01. BOARD OF DIRECTORS' REPORT
Akastor is an investment company based in Norway with a
portfolio of companies in the oilfield services sector, with a
flexible mandate for active ownership and long-term value
creation. The shares of Akastor ASA are traded on the Oslo
Stock Exchange under the ticker AKAST. The Akastor portfolio
of companies had a total net capital employed of NOK 4.6 billion
at the end of 2022.
Highlights 2022
2022 will be remembered first and foremost by the geopolitical
tension seen in the world, escalated by Russia’s invasion of
Ukraine in February. The war in Ukraine had effect on energy
prices and led to increasing oil prices through the first half of
2022, primarily because of supply concerns and low oil
inventories going into 2022. Through the second half of 2022,
oil prices decreased driven by fear of recession and lower global
activity levels following high global inflation seen through the
year, partly driven by energy prices. Despite a volatile year in
terms of crude oil prices, with only a moderate price increase
year-over-year, the activity within oil and gas related businesses
increased and is expected to further increase in 2023 and
forward driven by high focus on energy security and higher
global activity following the normalization after the COVID-19
pandemic. For Akastor, the increase in offshore upstream capex
seen through 2022 and higher rig activity had positive bearing
on activity levels throughout the Akastor portfolio of companies.
Despite uncertainty related to inflation and increasing interest
rates threatening global growth as well as geopolitical instability,
the prospects for Akastor going into 2023 look promising based
on continued estimated growth for energy related businesses.
In January, Akastor announced that its 50% owned joint venture
HMH Holding B.V. (HMH) had successfully completed a USD 150
million senior secured bond issue with a tenor of 3 years with net
proceeds used for repayment of a bridge loan. The bond loan
was listed at the Oslo Stock Exchange in November.
In July, Akastor’s 50% owned joint venture AKOFS Offshore AS
(AKOFS Offshore) entered into a firm contract for its vessel
“Aker Wayfarer” in order for the vessel to continue to perform
services as a subsea equipment support vessel (SESV) for
Petrobras in Brazil. The duration of the contract is around 4
years, and the services are expected to commence in the first
half of 2023. Total contract value was about USD 282 million, of
which about USD 198 million will be revenue allocated to
AKOFS Offshore and included in the company’s backlog.
In September, Akastor announced that its wholly owned
subsidiary, DDW Offshore, had been awarded a firm one year
contract by Petrofac for the AHTS vessel Skandi Atlantic with
contract start in September 2022.
In November, Akastor sold the preference shares held in Odfjell
Drilling for a value of USD 95.2 million, of which USD 75.2
million was settled in cash at closing. The remaining USD 20
million is to be settled pursuant to a seller’s credit agreement
with maturity date July 31, 2024. The warrants held in Odfjell
Drilling were not part of the transaction and remain with Akastor.
The transaction reduced net debt and strengthened the financial
position of Akastor.
In December, Akastor announced a change in the management
team of HMH as Chairperson & Chief Executive Officer, Merrill
A. (“Pete”) Miller, Jr, was to step down as Chief Executive Officer
at the end of 2022. Mr. Miller remains Chairperson of the HMH
Board of Directors while Mr. Eirik Bergsvik, former President of
the Equipment and System Solutions Division in HMH, was
elected to succeed Pete Miller as Chief Executive Officer,
effective from January 1, 2023.
Also in December, Akastor entered into a share purchase
agreement with Diamond Key International Pty. Ltd. (“DKI”)
regarding the sale of all shares held in Cool Sorption A/S (“Cool
Sorption”) for DKK 20 million on a cash and debt free basis.
Closing of the transaction took place in February 2023.
Akastor’s total net capital employed decreased from NOK 5.1
billion in 2021 to NOK 4.6 billion in 2022, mainly driven by the
sale of Odfjell Drilling preference shares. Net interest-bearing
debt for Akastor was reduced from NOK 1.0 billion per year end
2021 to NOK 0.6 billion per 2022 driven by proceeds received in
connection with the divestment of Odfjell Drilling shares. Total
equity of Akastor was NOK 4.1 billion per year end 2022, at the
same level as per year end 2021.
Company Overview
Aker Holding AS, wholly owned by Aker ASA, is the largest
shareholder of Akastor with a shareholding of 36.7 percent.
Akastor is primarily operating within the oilfield services sector.
The portfolio per end of 2022 includes several industrial holdings
within this sector, including:
HMH, which provides drilling systems, equipment, and
aftermarket services. Ownership interest is 50 percent.
AKOFS Offshore, a subsea well installation and interven-
tion services provider. Ownership interest is 50 percent.
AGR, which delivers well-, reservoir- and software ser-
vices to the offshore drilling industry. Economic interest
is 64 percent (agreement to sell AGR entered into in
March 2023, see Subsequent Events).
Annual Report 2022 | Board of Directors' ReportBoard of Directors’ Report 5
Each above-mentioned Akastor portfolio company is organized
as an independent business which is self-sufficient and with its
own dedicated management team fully responsible for all
aspects of its operational activities. All portfolio companies have
separate boards of directors, consisting of appointed Akastor
investment managers, including, for some companies, external
board members and employee representatives. This governance
model provides for strong management of operational activities
and a good foundation for close cooperation between Akastor,
the portfolio companies and their employees.
In addition to its portfolio of industrial holdings, Akastor has
several financial investments, including:
DDW Offshore, which owns and operates five offshore
vessels. Ownership interest is 100 percent.
in depth, in order to evaluate current valuation versus future
potential.
The business models of the portfolio companies are decentralized
with each entity being self-sufficient, but as part of the Akastor
portfolio, all companies share a common foundation based on
Akastor’s values, governing documents, and compliance structure.
Akastor seeks to maximize value by combining strategic,
operational, and financial measures. Akastor’s strategy as an
investment company remains as before, targeting to generate
investments. New
an acceptable return on
investments may be made in the existing portfolio companies in
order to strengthen the companies and prepare for a future exit.
The ultimate goal is to return the capital to the shareholders of
Akastor upon divestments of assets, however ensuring that
Akastor has a solid capital structure.
its current
NES Fircroft, a technical and engineering staffing com-
pany. Economic interest is approximately 15 percent.
Market Outlook
DRU contracts, full economic interest in four drilling
equipment contracts with Jurong Shipyard. This posi-
tion was carved out from MHWirth in connection with
the merger with Baker Hughes’ SDS business.
Awilco Drilling, ownership interest is 6.8 percent.
In addition to the equity ownerships, Akastor also holds interest
bearing positions towards HMH and AKOFS Offshore, as well
as towards Odfjell Drilling as a result of the seller’s credit
agreement following the sale of the preference shares held in
Odfjell Drilling in November 2022.
The Akastor corporate organization is based at Fornebu, just
outside of Oslo in Norway, with a team of 13 employees, working
closely with the boards and management of its portfolio
companies.
Akastor has a total of 412 employees (including hired-ins) within
its consolidated subsidiaries as per year end 2022.
Strategy
The strategy of Akastor remains unchanged compared to last
year. Akastor is an investment company, employing an
independent approach for each portfolio company to optimize
its development potential. Akastor aims to create long-term
value for its shareholders through active development of its
portfolio companies as stand-alone businesses, while
maintaining the flexibility to be opportunistic. Akastor works
closely with each portfolio company’s management to make
decisions on operational activity, business development,
acquisitions and divestments to maximize the value of the
company. Each portfolio company develops and executes
independent value creation plans in close cooperation with the
Akastor investment team. As an owner, Akastor emphasizes
understanding the portfolio companies’ markets and challenges
Akastor’s portfolio companies operate mainly in the oilfield
services industry. In 2022, the energy markets were heavily
affected by the Russian invasion into Ukraine which led to
disruption of gas supplies into Europe and extreme increases in
energy prices through the first half of the year. Despite Akastor’s
portfolio companies having very limited exposure towards the
Russian or Ukrainian markets, a lot of efforts and focus in 2022
were used on monitoring the situation in these countries as well
securing compliance with the sanctioning regulations. The war
in Ukraine has led to an increasing focus on energy security
throughout the world which in turn should have positive bearings
for the industries, where the Akastor portfolio companies
operate, through increasing investment levels. However, the
geopolitical situation following the Russian invasion also
represents a risk going into 2023 in terms of instability and a
higher degree of geopolitical and economic uncertainty.
Over the last couple of years, the industry in which Akastor
operates has also been heavily affected by the outbreak of the
COVID-19 virus which caused significant disruption to the global
economy. The oil and gas markets were strongly affected by
negative demand development following lower global activity,
adding additional pressure on the global economy, with direct
effects on the investment level of oil companies and thereby
effects also for the oilfield services industry. In 2022, the effects
following the global pandemic continued to normalize, with
increasing activity levels seen across most industries. After a
period of decreasing investment levels seen within oil and gas
following the outbreak of COVID -19, the global offshore oil and
gas project capex commitments in 2022 increased compared to
2021 on the back of higher commodity prices. Further growth is
forecasted from 2023 and forward.
2022 was also a strong year for investments in renewable
energy sources. According to Rystad Energy, aggregate
investments in renewable energy capacity exceeded upstream
oil and gas investments for the first time in 2022 and several
Annual Report 2022 | Board of Directors' Report 6
large new renewable energy hubs came on stream during the
year. Akastor acknowledges and strongly believes that the
development and growth of renewable energy sources as part
of the total energy mix are crucial to reach the global emission
targets. We also believe the trend towards cleaner and greener
energy represents opportunities for the Akastor portfolio
companies as an addition to its current primary focus on more
traditional oil and gas related activities.
Through 2022, the oil and gas markets have seen further
increase in important macro fundamentals such as global
offshore upstream capex spending and rig utilization, which in
turn had positive bearing on Akastor through increased activity
for the various portfolio companies. A clear risk looking forward
into 2023 is a potential deeper recession following high inflation
and rapidly increasing global interest rates seen in the second
half of 2022 which in turn could affect global industrial activity
and energy prices, and thereby also oilfield service activity.
Also, the turmoil in global financial markets seen in March 2023
increases uncertainty and risk. If the turmoil leads to longer term
effects on financial markets, this could in turn also affect Akastor
and its portfolio companies, e.g. through ability to conclude
transactions and limit access to financing.
In 2023, Akastor will continue to closely monitor the development
of the war in Ukraine with focus on mitigating any direct effects
following these circumstances, including securing compliance
with all relevant economic sanctions. Despite limited direct
exposure to the region, Akastor could be affected through more
general market effects. Akastor is part of the Aker Security
Centre of Excellence, which is an Aker network focusing on
monitoring global risk factors related to the geopolitical situation,
cyber security as well as climate risk with the target of improving
the basis for decisions and ensuring business security for the
Aker Group of companies. Also, Akastor will continue to follow
the general economic outlook in light of a potential recession
with the ambition to adjust capacity throughout the portfolio if
required as a result of a potential lowered activity level. The
financial impact as a result of the changing global dynamics
remains uncertain as it is difficult to predict the duration and the
longer-term impact on financial markets and industrial activity
level. From an accounting perspective, these factors could
however impact future assessments of valuation of Akastor’s
assets if the current volatility results in a negative long-term
market outlook.
Based on the current footprint of the portfolio, the oilfield
services industry will remain the primary market for Akastor and
its portfolio companies going forward. However, Akastor clearly
believes that the ongoing energy transition represents exciting
opportunities and will through its role as an active owner
continue to develop offering and presence within non-oil markets
and the renewable energy space to further diversify the portfolio.
Technology development remains a strategic target for all
portfolio companies and Akastor is targeting to support the
industry’s transition to more energy-efficient operations for its
clients through development of new solutions. Akastor will
continue to support HMH in its efforts to optimize and reduce fuel
consumption and carbon footprint for its clients through enabling
more efficient drilling operations while also seeking opportunities
within industries outside of oil and gas. AGR is continuing the
development of its suite of software solutions, enabling more
efficient operations for oil companies and is also positioning itself
within low carbon solutions such as carbon capture, geothermal
drilling and wind solutions. Early in 2022, AGR established Føn
Energy Services, a joint venture together with IKM, to provide
wind power project management, operations and maintenance
services to offshore wind farms. Akastor views this as an
interesting opportunity for growth within the renewable space
and will continue to invest in this platform in 2023.
Through 2022, Akastor saw an increase in activity across almost
all portfolio companies. Despite continued risk and uncertainty
related to the global geopolitical situation as well as the global
financial turmoil seen lately, Akastor management remains
cautiously optimistic that activity levels within the oilfield services
industry will continue to increase going forward based on the
positive underlying market fundamentals and increasing focus
on energy security.
Group Financial Performance
Akastor presents its consolidated financial statements in
accordance with the International Financial Reporting Standards
(IFRS) as adopted by the European Union.
All amounts below refer to the consolidated financial statements
for the group, unless otherwise stated. Please note that
consolidated revenue and operating profit in Akastor only
include financial performance of portfolio companies that
constitute a minor part of Akastor’s total net capital employed.
Income Statement
Revenue and other income for 2022 increased by 11 percent to
NOK 1 059 million. Operating profit before interest, tax, depreciation
and amortization (EBITDA) was negative NOK 10 million,
compared to break even in 2021.
Depreciation, amortization and impairment was NOK 66 million in
2022, compared to NOK 82 million in the previous year.
Net financial income were NOK 80 million in 2022 compared to
NOK 194 million in the previous year. Akastor’s share of net loss
from the equity-accounted investees is NOK 263 million, compared
to NOK 346 million in 2021, mainly related to net loss in AKOFS
Offshore and HMH.
The pre-tax loss for the year was NOK 259 million, compared to a
loss of NOK 235 million the previous year.
The income tax expense for 2022 was NOK 2 million, compared to
a tax benefit of NOK 20 million in 2021. The effective tax rate is
impacted by several items, such as impairment of deferred tax
assets as well as non-tax deductible items.
Annual Report 2022 | Board of Directors' Report 7
Net loss from continuing operations was NOK 261 million,
compared to loss of NOK 215 million in 2021. The group had an
operating loss of NOK 257 million for the year.
Financial Position
Total assets of Akastor amounted to NOK 6.8 billion as of
December 31, 2022, compared with NOK 7.2 billion at year-end
2021. The decrease is mainly related to sale of preference
shares held in Odfjell Drilling.
Net debt (excluding lease liabilities) was NOK 1 220 million at the
end of the period, while net interest-bearing debt (NIBD) was NOK
553 million. Net interest-bearing debt decreased by NOK 431
million through the year, primarily explained by the sale of
preference shares held in Odfjell Drilling, partly mitigated by
corporate costs in the period.
Total equity amounted to NOK 4.1 billion at year-end 2022, of
which non-controlling interests were NOK 36 million. The equity
ratio was 60 percent as of December 31, 2022, compared to 57
percent in 2021.
Going Concern
The group was not in breach of any financial covenants as of
December 31, 2022. The current assessment is that the group
will continue to be able to meet the mandatory terms and
conditions of its banking facilities including the minimum liquidity
covenant, taking into account the extension of the maturity of
the corporate financing facilities to February/March 2024 and
the NOK 200 million increase of the subordinated Aker facility
secured in March 2023.
The current strategy of Akastor is based on realization of its
investments and the base plan for 2023 includes cash proceeds
from several holdings. Through this, Akastor is targeting to
increase liquidity and reduce refinancing risk in 2024.
Based on this, the board of directors confirms that the going
concern assumption, on which the consolidated financial
statements have been prepared, is appropriate.
The Akastor Portfolio
Cash Flow
As of December 31, 2022, Akastor had cash of NOK 119 million,
compared to NOK 89 million in 2021. The net cash flow from
operating activities was negative NOK 244 million, compared to
operating cash flow of negative NOK 96 million in the previous
year. The net cash flow from operating activities comprises of cash
flow generated from operating activities of negative NOK 176
million as well as net interest cost payments of NOK 102 million.
HMH
HMH was established in October 2021 following the merger
between MHWirth (previously 100% owned by Akastor) and
Baker Hughes’ Subsea Drilling Systems (SDS) business.
Akastor owns 50 percent of the shares in HMH, with the
remaining shares owned by Baker Hughes. HMH is classified
as a joint venture and accounted for using equity method in the
consolidated financial statements.
Net cash flow from investing activities was positive NOK 619
million, compared to NOK 431 million in 2021. The cash flow
from investing activities included proceeds of NOK 750 million
from sale of preference shares in Odfjell Drilling.
Net cash flow from financing activities amounted to negative
NOK 318 million, compared to negative NOK 516 million in 2021.
The cash flows included net repayment of borrowings of NOK
240 million and payment of lease liabilities of NOK 78 million.
Subsequent Events
In February 2023, the maturity of Akastor’s corporate credit
facilities was extended to February/March 2024. In March 2023,
the subordinated Aker facility was increased with NOK 200
million to NOK 450 million.
In March 2023, Akastor entered into a share purchase
agreement with ABL Group ASA (“ABL Group”) for the sale of all
shares in AGR against a combination of shares in ABL Group
and cash. Certain defined assets are excluded from the
transaction and will be retained by Akastor. This includes AGR’s
ownership in Føn Energy Services AS. The transaction is
expected to generate an accounting gain upon completion
in 2023.
HMH is a global provider of drilling solutions, engineering,
projects, equipment and services. HMH has a track record of
product and service delivery in more than 120 countries
worldwide. At year-end 2022, the company had approximately 2
000 employees. The company’s operations are divided in two
main business areas: Projects, Products and Other and
Aftermarket Services. HMH is Akastor’s largest portfolio
company both in terms of sales revenue and employees.
Key Figures 1)
Amounts in USD million
Revenue 2)
EBITDA (adj) 3)
EBITDA
Order intake
2022
Proforma 2021
675
100
562
85
79
64
692
820
NIBD (incl. shareholder loans)
260
226
1) The figures are unaudited, presented on 100% basis
2) Revenue/EBITDA excludes disposed entities in 2022
3) EBITDA (adj) excludes integration costs and other non-recurring items
The revenue for 2022 of USD 675 million was up 20 percent
compared to 2021 proforma figures for the combined entity,
driven primarily by increased activity within Projects, Products
and Other. EBITDA adjusted for integration cost and defined
non-recurring items increased from USD 85 million in 2021 to
Annual Report 2022 | Board of Directors' Report
8
USD 100 million in 2022. The adjusted EBITDA margin ended at
14.8 percent for 2022, slightly down from 15.2 percent in 2021
explained mainly by the increase in revenues from Projects and
Products where contribution margin is lower.
Akastor owns 50 percent of the shares in AKOFS Offshore, with
the remaining shares owned by Mitsui & Co and Mitsui O.S.K.
Lines, each with 25 percent. AKOFS Offshore is classified as a
joint venture and accounted for using equity method in the
consolidated financial statements.
Revenues from Projects, Products and Other increased with
around 81 percent to USD 232 million in 2022, driven by higher
revenues from large projects following the order backlog within
this segment secured in 2021 and executed in 2022. Full year
revenues from Aftermarket Services were USD 445 million in
2022, slightly up from USD 436 million in 2021 (proforma). The
average number of active rigs with equipment package from HMH
increased slightly compared to 2021, however with a higher active
base per end of period and good growth potential into 2023.
The offshore drilling market has over the last couple of years
been affected by an overcapacity of offshore drilling rigs.
Following the increased focus on energy security and higher
global capex spend among E&P companies, the rig demand
through 2022 increased and led to an improved drilling market
and higher activity for HMH as a result of more rigs with their
equipment in operation. Despite these effects, order intake
within Projects and Products decreased in 2022 compared to
last year, driven primarily by the award of three larger project
contracts in 2021. Order intake within single equipment
increased in 2022, with the non-oil segment continuing as the
main driver. Total order intake for HMH was USD 692 million in
2022, compared to USD 820 million in 2021. Going forward,
HMH remain positive and anticipate good growth in rig activity
based on the current outlook, fuelled by Brazil and Middle East
activity. The rig newbuilding market continues to be muted and
is expected to remain so also in the near future.
In 2022, HMH refinanced its bridge bank facility with a new
Nordic bond loan of USD 150 million which was an important
step to establish a longer-term capital structure. HMH also
executed on its synergy plan with wave one of the ERP
implementations completed, and the Baker Hughes transitional
service agreement exited. HMH will during the course of 2023
complete the integration, including the finalization of the
implementation of a joint ERP system for the combined
company. Through 2023, HMH will also increase its focus on
growth and will assess both organic initiatives as well as M&A to
potentially strengthen its presence within the offshore and
onshore drilling markets. HMH will also evaluate opportunities
to grow within the renewable sector and a further expansion of
its offering to non-oil markets. It is still important for HMH to
participate in the oil and gas industry’s transition towards more
energy-efficient solutions, and this will form a key area in the
strategy of HMH going forward.
AKOFS Offshore
AKOFS Offshore is a provider of vessel-based subsea well
installation and intervention services to the oil and gas industry.
The company operates three specialized offshore vessels,
AKOFS Santos, Aker Wayfarer and AKOFS Seafarer, and
employed 348 people as per the end of 2022.
Key Figures 1)
Amounts in USD million
Revenue and other income
EBITDA
EBIT
CAPEX and R&D capitalization
NCOA
Net capital employed
Order intake
Order backlog
Employees (FTE)
2022
149
48
8
29
19
349
198
470
348
2021
147
37
(15)
5
25
375
80
384
292
1) The figures are presented at 100 percent basis.
The company’s revenue was USD 149 million in 2022, around 1
percent higher than previous year, positively affected by full
year operations of the Aker Wayfarer vessel which in 2021
underwent its five-year periodic survey, partly mitigated by the
AKOFS Santos vessel that went to yard in July. The EBITDA
increased by USD 11 million to USD 48 million in 2022, primarily
explained by higher revenue utilization for Aker Wayfarer.
Through 2022, both AKOFS Santos and Aker Wayfarer operated
on contracts in Brazil for subsea equipment installation work.
Aker Wayfarer was on contract with Petrobras through the year
while AKOFS Santos was operating on a short-term contract
with a third party until July, after which she went to yard to
prepare for the new three-year contract with Petrobras originally
expected to commence late 2022. However, a period of delay
related to deliveries from a sub-supplier led to that the contract
first commenced in March 2023. Utilization for the two vessels
operating in Brazil was good throughout 2022, with revenue
utilization for Aker Wayfarer and AKOFS Santos of 97 percent
and 91 percent respectively, adjusted for the AKOFS Santos
yard stay.
In July, AKOFS Offshore secured a new four-year contract for
Aker Wayfarer to perform services as a subsea equipment
support vessel Petrobras in Brazil. The new contract is expected
to commence in the third quarter of 2023, following expiry of its
current contract in April 2023 and a shorter yard stay. Total
contract value of the new contract is about USD 282 million, of
which about USD 198 million will be revenue allocated to
AKOFS Offshore and included in the company’s backlog.
AKOFS Seafarer continued to operate on its five-year contract
with Equinor for Light Well Intervention services in the North
Sea and has through 2022 been delivering solid operational
performance. The vessel recorded a technical uptime above 97
percent in 2022, adjusted for periods on yard and waiting on
weather. Total revenue utilization ended at around 86 percent,
affected by a period of both mobilization and demobilization of
Annual Report 2022 | Board of Directors' Report 9
coiled tubing equipment to prepare the vessel for coiled tubing
operations during the summer season. 2022 was the first time
AKOFS Seafarer was used for coiled tubing, and the vessel
delivered a successful campaign for its client.
positive earnings in 2022. AGR today is mainly exposed towards
Norway and APAC, with APAC delivering solid growth and strong
results in 2022 driven by good activity within both consultancy
and well management.
The market situation for AKOFS Offshore over the last years
has been affected by relatively low investment levels among oil
companies. This has affected the prospects available for the
company and more concretely day rates on the contracts for the
various vessels. In 2022, AKOFS Offshore secured a new
contract for the Aker Wayfarer vessel, an important achievement
for the company, and with this all AKOFS Offshore’s vessels are
on relatively long-term contracts.
In 2023 and forward, AKOFS Offshore will continue to focus on
delivering high uptime on its existing contracts. Further, securing
successful commencement of the Aker Wayfarer vessel on the
new four-year contract is a key focus area in the year. In
addition, the company is continuously evaluating opportunities
to grow through further leveraging its competencies within
subsea well construction and intervention services.
AGR
AGR is a provider of well-, reservoir- and software services to
the offshore drilling industry. Akastor holds 100 percent of the
shares and 64 percent of the economic interest in the company.
Nordea and DNB hold the remaining 36 percent of economic
interest.
Key Figures
Amounts in NOK million
Revenue and other income
EBITDA
EBIT
CAPEX and R&D capitalization
NCOA
Net capital employed
Order intake
Order backlog
Employees (FTE)
2022
789
2021
723
81
66
10
19
246
804
554
368
33
9
16
(9)
192
769
518
388
AGR had total revenues of NOK 789 million in 2022, compared
to NOK 723 million in 2021. EBITDA in 2022 ended at NOK 81
million, up from 33 million in 2021, partly driven by a non-cash
accounting gain of NOK 21 million related to establishment of
the joint venture Føn Energy Services.
During 2022, the increased activity level in AGR was driven by
increased activity within its Norwegian consultancy business.
The Norwegian consultancy segment remains the largest
business segment in AGR, constituting more than 80 percent of
revenues in 2022.
Over the last years, AGR has had strong focus on its cost base,
targeting to improve profitability within its international segments.
After AGR closed down its UK well management business in
December 2021, all geographical segments of AGR delivered
As described under Subsequent Events above, Akastor entered
into a share purchase agreement with ABL Group ASA (“ABL
Group”) for the sale of all shares in AGR in March 2023.
Following signing of the agreement, AGR will be presented as
discontin ued operations for Akastor and held for sale until
completion of the trans action which is expected to occur in the
second quarter of 2023.
Other Holdings
Other Holdings per end of 2022 mainly included 100 percent
ownership of Cool Sorption (sold to Diamond Key International
Pty. Ltd. with closing in February 2023), 100 percent ownership
of DDW Offshore AS, around 15 percent economic interest of
NES Fircroft, a warrant structure towards Odfjell Drilling and 6.8
percent shareholding in Awilco Drilling. Also, the financial
interest in four drilling equipment contracts with Jurong Shipyard
(the DRU contracts) is included within Other Holdings. In
addition, this segment includes corporate functions and certain
long-term office lease contracts that remained in Akastor after
the demerger from Aker Solutions in 2014.
Key Figures
Amounts in NOK million
Revenue and other income
EBITDA
EBIT
CAPEX and R&D capitalization
NCOA
Net capital employed
Employees (FTE)
2022
270
(91)
(142)
(2)
224
921
44
2021
232
(32)
(92)
65
239
1 483
43
Total EBITDA for Other Holdings for the year was negative NOK
91 million. Cool Sorption delivered an EBITDA of NOK 4 million
in 2022, same as in 2021. DDW Offshore contributed positively
with NOK 7 million in 2022, compared to NOK 17 million in
2021. The positive EBITDA of DDW Offshore in 2021 included
an accounting gain related to bareboat charter agreements
entered into with OceanPact Servicos Maritimos S.A. which
was classified as
the underlying
performance in DDW Offshore in 2022 was better than last year,
driven by higher utilization on the remaining vessels. The
remaining negative EBITDA within Other Holdings mainly related
to corporate overhead costs, as well as certain legacy costs.
lease. Thus,
financial
Parent Company and Allocation of Net Loss
The parent company Akastor ASA is the ultimate parent
company in the Akastor group and its business is the ownership
and management of all subsidiaries. Akastor ASA has
outsourced all management functions to other companies within
the group, mainly Akastor AS. However, assets and liabilities
related to the Akastor Treasury function are held by Akastor
Annual Report 2022 | Board of Directors' Report 10
ASA. Akastor ASA has a net loss of NOK 457 million in 2022
(loss of NOK 664 million in 2021).
The parent company’s dividend policy states that Akastor's
shareholders shall receive a competitive return on their
investment either through cash dividends or increases in the
share price, or both. The company does not intend to distribute
regular or annual dividends, but will consider dividends on an
ongoing basis taking into consideration the company’s M&A
activities, expected cash flow, capital expenditure plans,
financing requirements and appropriate financial flexibility. The
board thereby proposes no dividend for 2022 and the net loss
for the year of NOK 457 million be allocated to retained earnings.
Risk Management
Akastor and its portfolio companies are exposed to various
forms of market, operational and financial risks that may affect
the companies’ performance, their ability to meet strategic goals
and the companies’ reputation.
Akastor’s risk management model is designed on the basis that
Akastor is an investment company with an overall objective of
securing its shareholders’ investments and developing the
group’s assets in order to provide the shareholders with a solid
return. Akastor’s current investment portfolio is focused on the
oilfield services industry. This focus is mainly driven by the
company’s experience, expertise and track-record within this
industry. Although Akastor has a flexible mandate, it has
traditionally not sought to spread risk by investing in different
industries. Instead, Akastor has focused on mitigating its
vulnerability to the risk environment inherent to the oilfield
services industry through sound risk management systems.
The risks associated with the global uncertainty that have
impacted markets during most of 2022, both arising from the
war in Ukraine as well as the recession warnings, also impact
Akastor’s ability to execute value enhancing transactions. More
specifically, we have seen that the runway on some transactions
has had to be extended or delayed and that the financing costs
have increased. On the other hand, this has been balanced and
to a large degree been offset by solid performance from
Akastor’s portfolio companies combined with increased focus
on the oil service industry as an important business to ensure
energy security. In sum, Akastor’s financial position has been
strengthened and we believe that Akastor is well positioned to
continue its strategy to make value enhancing transactions in a
continued unstable market situation.
Our focus on climate risk has continued throughout 2022, in
close dialogue with all portfolio companies. Following on the main
achievements in 2021, where i.a. all portfolio companies have set
defined sustainability targets, focus for 2022 has been to ensure
that proper reporting requirements are set and that a credible
strategy for achieving the targets is set and monitored. All portfolio
companies are expected to prepare and be ready when Corporate
Sustainability Reporting Directive (CSRD) is implemented.
On the operational side, risks are primarily mitigated by securing
new orders and sound project execution by the portfolio
companies. Results also depend on costs, both the portfolio
companies’ own costs and those charged by suppliers. Akastor
and its portfolio companies are also exposed to financial risk
under performance guarantees and financial guarantees issued,
and financial market risks as further detailed below.
In addition, the portfolio companies, through their business
activities within their respective sectors and countries, are also
exposed to legal/compliance and regulatory/political risks, e.g.
political decisions on international sanctions that impact supply
and demand of the services offered by the portfolio companies,
as well as environmental regulations. Moreover, we have over
the recent years seen an increase in the threat faced from
different forms of cyber risks such as e.g. risk of ransomware
and phishing attempts. These are risk areas that are under
continuous development and where it is important that Akastor
and
this
its portfolio companies continuously monitor
development and the risks associated.
As an investment company, Akastor and its portfolio companies
from time to time engage in mergers and acquisitions and other
transactions that could expose the companies to financial and
other non-operational risks, such as warranty and indemnity
claims and price adjustment mechanisms. Moreover, the entire
transaction process, including the process from signing to
closing as well as proper integration of new business operations,
entails a set of risks for Akastor that will need to be managed
and mitigated.
To manage and mitigate risks within Akastor, risk evaluation is
an integral part of all business activities, including when making
decisions regarding mergers and acquisitions and other
investment matters. As an owner, Akastor actively supervises
risk management in its portfolio companies through participation
on the board of directors of each portfolio company, and by
defining a clear set of risk management and mitigation processes
and procedures that all portfolio companies must adhere to. The
current and revised governing documents defined by Akastor
were rolled out during the first half of 2016 and are reviewed
annually. The overall responsibility for ensuring sound internal
control and an appropriate framework for risk management in
Akastor lies with its board of directors. A risk review is presented
to and reviewed by the audit committee and the board of
directors of Akastor on an annual basis.
The directors and officers of Akastor companies are covered
under an Aker group Director & Officer’s Liability Insurance
(D&O). The insurance covers personal legal liabilities including
defence- and legal costs. The officers and directors of the parent
company and all subsidiaries globally (owned 50% or more) are
covered by the insurance. The cover also includes employees
in managerial positions or employees who become named in a
claim or investigation.
Annual Report 2022 | Board of Directors' Report Financial Risks
Akastor is exposed to a variety of financial market risks such as
currency risk, interest rate risk, tax risk, price risk, credit and
counterparty risk, liquidity risk and capital risk as well as risks
associated with access to and terms of financing. The financial
risks, affecting the group’s income and the value of any financial
instruments held, are discussed in greater details in Note 29
Financial risk management and exposures to the group’s
consolidated financial statements. The objective of financial risk
management is to manage and control financial risk exposures
and thereby minimize potential adverse effects on Akastor’s
financial position.
Akastor per today is an investment company with limited
upstream cash flow from its portfolio companies and therefore
to a large degree depends on realization of assets to reduce
debt and improve liquidity. As described under Going Concern
above, liquidity risk has been mitigated in the short to medium
term through the increase of the Aker facility in March 2023.
However, in order to mitigate 2024 refinancing risk when the
corporate financing facilities mature and secure available
liquidity past 2023, Akastor is in accordance with its strategy
focusing on realization of holdings. In 2023, the outcome related
to the DRU arbitration process is a key milestone in this regard.
If realization processes planned for the year should be delayed
or if proceeds come in at a lower value than anticipated,
refinancing risk in 2024 would increase and other sources of
capital could be required.
Integrity Risks
All Akastor portfolio companies use education and awareness
training to manage and mitigate integrity risks. All employees
must complete an annual Code of Conduct training program. In
addition, all Akastor managers and office-based staff are
required to conduct integrity e-learning training and participate
in classroom courses. For employees in specific functions,
where chance of facing integrity risk is considered higher than
normal, additional training has been tailored for their role and
responsibilities. Hired-in personnel in high risk roles are also
required to undertake integrity training, just as third-party
representatives receive integrity training specially prepared for
them. The requirement for all portfolio companies is to complete
and report on the training within six months from employment or
publication of a new training session.
Akastor has established a whistleblowing system in line with the
company’s Governance Policy. The whistleblowing channel is
open for all external and internal stakeholders who wish to
report a breach of the Code of Conduct, other internal guidelines
or governing policies. Akastor employees are required to report
breaches of the Code of Conduct, and Akastor encourages
reporting of any concerns pertaining to compliance with law or
ethical standards.
Climate Risks
The main climate-related risks in Akastor are with our industrial
investments due to the fact that the industry is in a state of
11
accelerated transition to a lower-carbon intensive industry.
Governmental regulation of GHG emissions is expected to
increase and it will continue to be challenging to get necessary
financing with potential lenders electing not to invest in the oil
and gas market but rather move capital to new green markets.
Unless these risks are met with mitigating measures, we could
face a scenario where many of Akastor’s portfolio companies
lose its market positions and/or are left with product lines that
are obsolete and replaced by more energy efficient/green
alternatives. However, this transition to low carbon intensive
industry will also create several opportunities, which the portfolio
companies are addressing, for example HMH’s concept
developments towards the offshore wind industry and AGR’s
Carbon Capture and management services.
Each portfolio company addresses climate-related risks and
opportunities within its yearly risk assessment, and the
assessment is reviewed by its Board of Directors.
Environmental, Social and Governance
Akastor’s operating model reflects the fact that the portfolio
companies are independent companies which operate different
business models and therefore face different Environmental,
Social and Governance (ESG) risks and expectations from
stakeholders. As a holding company, Akastor is responsible for
setting the overall ESG priorities and providing the appropriate
risk management framework and policies applicable for the
portfolio. Akastor Sustainability Policy describes how Akastor
aims to integrate sustainability in its investment processes, own
operations, and in the governance of its organisation. The policy
includes the investment policy and how Akastor engages with
these
the portfolio companies.
expectations, each portfolio company is responsible for defining
their own ESG strategy with relevant activities and, where
necessary, supporting policies.
turn, and based on
In
Akastor also focuses on maintenance and development of
industrial relations and collaboration with unions. Historically,
good industrial relations have played an important role, and
maintaining these strong relations have proven to be one of the
success criteria in developing the company over the years.
Within the ESG efforts, Akastor is focused on areas that build
financial and non-financial value in the portfolio companies.
Akastor’s ESG strategy is based on four main priorities: working
against corruption, respecting human rights, addressing health
and safety and minimizing adverse impact on the environment.
Environment and Human Rights have had an increased focus in
2022 where Akastor intends to take part in the industry’s
transition towards more sustainable operations. All the portfolio
companies have completed human rights risk assessment, and
climate risk and opportunities assessments and are responsible
for working systematically and managing these possibilities and
consequences. In regards of Human Rights, Akastor and its
portfolio companies have not identified any actual adverse
impacts or significant risk for adverse impacts through its risk
Annual Report 2022 | Board of Directors' Report 12
assessments or due diligences of business partners. The
portfolio companies are defining their own ESG strategies
is continuously
these priorities. Akastor
encompassing
monitoring the implementation and integration of the priorities of
the ESG strategy, Code of Conduct, Sustainability Policy and
Integrity Policy across all the portfolio companies. For in-depth
reporting on each portfolio company’s approach to ESG,
including their Health, Safety and Environment work, refer to the
Akastor ESG Report for 2022. The Akastor ESG report also
includes Akastor's reporting adhering to the Transparency Act, a
Norwegian legislation, which requires companies to promote
respect for human rights and decent working conditions. The
Akastor ESG report is available on the website www.akastor.
com.
Research, Innovation and Technology Development
NOK 9 million was capitalized in 2022, compared to NOK 24
million in 2021, related to development activities. No research
and development costs were expensed during the year (NOK 1
million in 2021). All research, innovation and development
initiatives are performed by the Akastor portfolio companies.
Akastor ASA and Akastor AS performed no such activity in 2022.
People and Teams
Akastor is committed to equal opportunity and non-discrimination.
This commitment is described in Akastor’s Code of Conduct, as
well as Akastor’s policies and agreements, and builds on a
frame agreement signed with national and international trade
unions in 2008. This agreement was renewed in 2012 and sets
out fundamental labour rights and standards for general
employment terms and employee relations, with specific focus
on non-discrimination. Equal opportunities are fundamental for
Akastor and its portfolio companies. In 2022, as in previous
years, no events violating these agreements were reported.
As of year-end 2022, Akastor ASA’s board comprised eight
directors inclusive three employee elected directors, of which
two shareholders elected directors are female directors. Akastor
and its subsidiaries had a total of 412 employees (FTE) as of
December 31, 2022. AKOFS Offshore had a total of 348
employees (FTE) as of December 31, 2022. HMH had a total of
1 983 employees (FTE) as of December 31, 2022. In Akastor
AS, the male/female ratio was 77/23. The male/female ratio
(excluding hired ins) in the major portfolio companies and
Akastor Group were as follows:
HMH
18%
82%
AKOFS
Offshore
10%
90%
AGR
27%
73%
Akastor
Consolidated
26%
74%
Female
Male
All portfolio companies regularly assess whether they live up to
the principle of equal pay for equal work and no significant
differences have been identified. Each portfolio company
promotes equal opportunities by setting specific requirements
for diversity in recruitment and people development, and by
supporting programs dedicated to equal opportunity. Akastor
and its portfolio companies are not aware of any employees that
work involuntary part time. Akastor ASA fulfils the requirements
of the Norwegian Companies Act with regards to gender
representation on the board of directors, as two out of five
shareholder elected directors are women.
Aggregated sick leave in Akastor Group was 2.0 percent in
2022. There were no fatal injuries in any of the portfolio
companies. The total recordable incident frequency has
increased for all companies, and Akastor has thoroughly
analysed all incidents and taken actions to avoid similar
situations going forward. Caring for employee’s health and
safety is an integrated part of the group’s culture. See figures
below for details.
AKOFS
HMH
Offshore AGR
Akastor
Consolidated
Lost time Incident
Frequency (LTIF) 1)
Total Recordable Incident
Frequency (TRIF) 1)
Fatalities incl. subcontractors
Sick leave (percent)
1.6
3.2
-
3.6
-
1.7
-
3.8
-
-
-
3.3
-
8.9
-
2.0
1) Per million hours worked. Includes subcontractors
Annual Report 2022 | Board of Directors' Report 13
Corporate governance
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. It is the
responsibility of the board of directors of Akastor to ensure that
the company implements sound corporate governance. The
audit committee supports the board in safeguarding that the
company has internal procedures and systems in place to
ensure that corporate governance processes are effective.
Akastor’s corporate governance principles are based on the
Norwegian Code of Practice for Corporate Governance and are
designed to secure the shareholders’ investment through value
creation and to ensure good control with the portfolio
companies. The corporate governance principles are included
in this annual report and available on the company’s website
www.akastor.com.
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
Frank O. Reite | Chairperson
Lone Fønss Schrøder | Deputy Chairperson
Svein Oskar Stoknes | Director
Kathryn M. Baker | Director
Luis Antonio G. Araujo | Director
Henning Jensen | Director
Asle Christian Halvorsen | Director
Stian Sjølund | Director
Karl Erik Kjelstad | CEO
Annual Report 2022 | Board of Directors' ReportBoard of Directors’ Report 14
02. DECLARATION BY THE BOARD
OF DIRECTORS AND CEO
The board and CEO have today considered and approved the annual report and financial statements for the Akastor group and its
parent company Akastor ASA for the year ended on December 31, 2022. The board has based this declaration on reports and
statements from the group’s CEO and/or on the results of the group’s activities, as well as other information that is essential to
assess the group’s position which has been provided to the board of directors.
To the best of our knowledge:
The financial statements for 2022 for Akastor group and its parent company have been prepared in accordance with all
applicable accounting standards.
The information provided in the financial statements gives a true and fair portrayal of the group and its parent company’s
assets, liabilities, profit and overall financial position as of December 31, 2022.
The annual report provides a true and fair overview of the development, profit and financial position of Akastor group and its
parent company, as well as the most significant risks and uncertainties facing the group and the parent company.
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
Frank O. Reite | Chairperson
Lone Fønss Schrøder | Deputy Chairperson
Svein Oskar Stoknes | Director
Kathryn M. Baker | Director
Luis Antonio G. Araujo | Director
Henning Jensen | Director
Asle Christian Halvorsen | Director
Stian Sjølund | Director
Karl Erik Kjelstad | CEO
Annual Report 2022 | Declaration by the Board of Directors and CEODeclaration by the Board of Directors and CEO 15
03. CORPORATE GOVERNANCE STATEMENT
– AKASTOR ASA
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. Sound
corporate governance shall ensure that appropriate goals and
strategies are adopted, that the strategies are implemented in a
good manner and that the results achieved are subject to
measurement and follow-up.
1. The Corporate Governance Report
Basis for this Report
The corporate governance principles of the group are laid down
by the board of directors of Akastor ASA (“Akastor” or the
“company”). The principles are based on the Norwegian Code
of Practice for Corporate Governance dated 14 October 2021
(the «Code of Practice»), the regulations set out in the
Rulebook II of Oslo Børs (the stock exchange in Oslo) and the
relevant Norwegian background law such as the Norwegian
Accounting Act and the Norwegian Public Limited Liability
Companies Act. The Code of Practice may be found at
www.nues.no and the Oslo Børs Rulebook II may be found at
laws and regulations are
www.euronext.com. Norwegian
available at www.lovdata.no.
This report outlines how Akastor has implemented the Code of
Practice. Deviations from the Code of Practice are addressed
under the relevant sections. In general, the Akastor board only
approves deviations that the board believes contributes to value
creation for its stakeholders.
In addition to the Code of Practice, the Norwegian Accounting
Act section 3-3b stipulates that companies must provide a
report on their policies and practices for corporate governance
either in the annual report or in a document referred to in the
annual report. Such report is integrated in the below corporate
governance statement .
Governance Structure
Akastor is an oilfield services investment company with a
portfolio of industrial holdings and other investments. The
company has a flexible mandate for active ownership and long-
term value creation. Completed transactions in 2022 include the
sale of preference shares in Odfjell Drilling Ltd as well as the
sale of all shares in Cool Sorption A/S (sales agreement signed
in December 2022 and completed in February 2023).
On this background Akastor currently has an active investment
portfolio within the oilfield services industry consisting of AGR,
DDW Offshore, 50 percent of the shares in HMH, 50 percent of
the shares in AKOFS Offshore, a 15 percent economic
ownership in NES Fircroft, in addition to other holdings and
investments (see below), with a total net capital employed of
NOK 4.6 billion. HMH is a global provider of drilling solutions,
engineering, projects, equipment and services. AKOFS Offshore
is a provider of subsea well installation and intervention services.
AGR is a leading provider of well and reservoir consultancy
services as well as software and technical manpower for its
clients. DDW Offshore operates five offshore vessels. NES
Fircroft is a global technical and engineering staff provider.
Other investments mainly include warrant investments in Odfjell
Drilling and Awilco Drilling, a subletting portfolio through Akastor
Real Estate and an investment in Aker Pensjonskasse. In
addition, following the completion of the transaction in 2021
when HMH was formed, Akastor holds full ecomonic interest in
the four DRU contracts, which are still held by MHWirth as
contract holder, but where the financial exposure will be with
Akastor.
It is the responsibility of the board of directors of Akastor to
ensure that Akastor and its portfolio of companies implement
sound corporate governance. The board of directors evaluates
this corporate governance statement on an annual basis. The
the corporate
board’s audit committee also evaluates
governance statement as well as other key policies and
procedures pertaining
to compliance and governance.
Compliance with, and implementation of these corporate
governance guidelines are continuously evaluated by the board
and said committee; inter alia by way of the board being the
decisive body for the company’s defined management and
reporting structure, which include regular reporting.
Policies and Procedures
Akastor has a total of eleven corporate policies providing
business practice guidance within a number of key areas, all of
which are reviewed and updated on an annual basis. These
policy documents express the overall position of the group with
regard to for instance compliance, integrity and governance.
The policies provide instructions and guidelines that apply to the
portfolio companies and to individual employees in order to
ensure that the group’s operations are in compliance with
internal and external regulatory framework. In addition, the
portfolio companies are requested to implement their own
policies specific to their business within areas like project
execution, HSE and tendering.
Values and Code of Conduct
Akastor aims to develop and refine its portfolio of companies as
stand-alone enterprises, with the goal of maximizing the value
potential of each entity. The company works to develop the
business models of the portfolio companies, capitalize on their
market positions and promote aftersales services for the
equipment and systems delivered. The current investments are
Annual Report 2022 | Corporate Governance StatementCorporate Governance Statement
16
within the oilfield services sector, but the company has a flexible
mandate for active ownership and long-term value creation.
Akastor has an opportunistic approach and will continue to own
the portfolio companies as long as Akastor creates more value
than alternative owners.
Akastor wishes to contribute to sustainable social development
through responsible business practices. The company’s Code
of Conduct is a handbook that applies to all employees and
provides guiding on what Akastor considers to be responsible
ethical conduct. The Code of Conduct provides a framework of
core corporate values which reflects Akastor’s prudent business
practice and shall be reflected in every aspect of our operations.
The ethical guidelines and other governing documents of the
group have been drafted on the basis of these core corporate
values.
2. Business
The objectives of the company, as defined in its articles of
association, are «to own or carry out industrial and other
associated businesses, management of capital, and other
functions for the group, and to participate in or acquire other
businesses». The articles of association are available at www.
akastor.com.
The principal strategies of the group are presented in the annual
report. To ensure value creation for its shareholders, the board
of directors annually performs a designated strategy process
where it sets objectives and targets for the company, assesses
risk, evaluates the existing strategy and approves any significant
changes. Information concerning the financial position and
principal strategies of the company, and any changes thereto is
disclosed to the market in the context of the company’s quarterly
reporting and in designated market presentations as well as at
www.akastor.com.
Corporate Responsibility
Akastor takes an active approach to corporate responsibility.
Corporate responsibility in Akastor is about making prudent
business decisions, with minimum risk to reputation, brand and
the future sustainability of our business. The main focus of
corporate responsibility activities in Akastor, defined in our
group-wide integrity policy, is to work against corruption, to
respect human rights and to care for health, safety and the
environment. In the Akastor Sustainability Policy it is described
how Akastor aims to integrate sustainability in its investment
processes and engages with the portfolio companies. Akastor’s
primary stakeholders are the shareholders (existing and
potential), customers of its portfolio companies and employees
of the Akastor group. Akastor has an ongoing stakeholder
dialogue, media analysis and investor presentations, which
provide
to Akastor’s work on corporate
responsibility topics. All our portfolio companies are expected to
ensure integration of stakeholder engagement and a strong
corporate responsibility in their operations. Akastor recognizes
important
input
and respects the United Nations’ 17 Sustainable Development
Goals (SDGs), and has identified four SDGs that Akastor
positively impacts. A self-assessment is used to identify where
Akastor has the most opportunity to contribute to the SDGs.
Akastor identified 8, 12, and 13 as priority SDGs and encourages
the portfolio companies to identify and work towards relevant
SDGs in their work and strategy.
Akastor is committed to follow the Global Framework Agreement
(GFA) entered into by Aker with the trade unions Fellesforbundet,
IndustriALL Global Union, NITO and Tekna on December 17,
2012. The GFA builds on and continues the commitment from
the previous framework agreements signed in 2008 and 2010,
and outlines key responsibilities in relation to human and trade
union rights. The parties commit themselves to achieving
continuous improvements within the areas of working conditions,
industrial relations with the employees of the Aker group of
companies, health and safety standards at the workplace and
environmental performance. Akastor is a member of the UN
Global Compact, and also aligns with the principles of the
United Nations Convention against Corruption, the Universal
Declaration of Human Rights, the UN Guiding Principles for
Business and Human Rights and the ILO Declaration on
Fundamental Principles and Rights at Work. These international
principles guide our Code of Conduct and Integrity Policy and
provide the overall framework for the corporate responsibility
efforts in the Akastor group.
in
information
Further
the corporate social
respect of
responsibility work of Akastor and its portfolio of companies can
be found in the separate Environmental, Social and Governance
(ESG) report published simultaneously as the company’s
annual report for 2023.
3. Equity and Dividends
Equity
The management and the board regularly monitor that the
group’s equity and liquidity are appropriate for its objectives,
strategy and risk profile. The book equity of the group as per
December 31, 2022 is NOK 4 092 million, which represents an
equity ratio of 60 percent. The management of financial risk is
further described in the annual report.
Dividend Policy
The board proposes the level of dividend payment to the general
meeting who in turn is the decisive corporate body for dividend
decisions.
Over time, the aim is that Akastor’s shareholders shall receive a
competitive return on their investment either through cash
dividends or increase in the share price, or both. The company
does not intend to distribute regular or annual dividends, but will
consider dividends on an ongoing basis taking into consideration
the company’s M&A activities, expected cash flow, capital
expenditure plans, financing requirements and appropriate
financial flexibility.
Annual Report 2022 | Corporate Governance Statement 17
Authorizations for the Board of Directors
Proposals from the board of directors for future authorizations
for share capital increases, share buy-backs or similar shall be
for defined purposes, such as share purchase programs and
acquisitions of companies, and shall remain in effect until the
next annual general meeting.
The company’s annual general meeting on 20 April 2022
resolved to authorize the board to purchase treasury shares for
three purposes for utilization, all of which were subject to
separate voting under the general meeting: (i) purchase of
treasury shares to be used as transaction currency in connection
with acquisitions, mergers, demergers and other transactions,
(ii) purchase of treasury shares to be sold and/or transferred to
employees and directors under share purchase programs and
(iii) purchase of treasury shares for the purpose of investment or
for subsequent sale or deletion of such shares. The
authorizations were all limited to ten percent of the share capital.
The board’s authorizations to purchase treasury shares are
valid for the period until the date of the annual general meeting
of 2023. No shares were bought by the company in 2022
pursuant to the authorizations to the board of directors. As of
December 31, 2022, the company holds 1 985 164 own shares.
In addition, the annual general meeting in 2022 granted the
board of directors the mandate to approve the distribution of
dividends based on the company’s annual accounts for 2021 as
set out in the Public Limited Liability Companies Act section 8-2,
second paragraph. The mandate is valid for the period until the
date of the annual general meeting of 2023.
There are no current provisions in the articles of association of
the company or power of attorney from the general meeting
which grant the board of directors the mandate to issue or buy
back of shares in the company for the purposes of capital
increases.
Share Purchase Programs
There are currently no active share purchase programs in place
in Akastor.
4. Equal Treatment of Shareholders and Transac-
tions with Related Parties
The company has only one class of shares, and all shares carry
equal rights. Existing shareholders shall have pre-emptive
rights to subscribe for shares in the event of share capital
increases, unless otherwise indicated by special circumstances.
If the pre-emptive rights of existing shareholders are waived in
respect of a share capital increase, the reasons for such waiver
shall be explained by the board of directors. Transactions in
own shares are effected via Oslo Børs.
The largest shareholder of Akastor, Aker Holding AS, is wholly-
owned by Aker ASA, which in turn is controlled by Kjell Inge
Røkke through TRG Holding AS and The Resource Group TRG
AS. As of December 31, 2022, Aker Holding AS owns 36.7% of
the shares in Akastor ASA, which is an associated company of
Aker ASA.
The board of directors is of the view that it is positive for Akastor
that Aker ASA assumes the role of an active owner and is
actively involved in matters of importance to Akastor and to all
shareholders. The cooperation with Aker ASA offers Akastor
access to special know-how and resources within strategy,
transactions and funding. Moreover, Aker ASA offers network
and negotiation resources from which Akastor benefits in
various contexts. This complements and strengthens Akastor
without curtailing the autonomy of the group. It may be necessary
to offer Aker ASA special access to commercial information in
connection with such cooperation. Any information disclosed to
Aker ASA’s representatives in such a context is subject to
in
confidentiality undertakings and disclosure regulations
compliance with applicable laws.
Aker ASA and Aker Solutions ASA (or their subsidiaries) are not
deemed, within the meaning of the Public Limited Liability
Companies Act, to be a related party of Akastor. The board of
directors and the executive management team of Akastor are
nevertheless conscious that all relations with these companies
shall be premised on commercial terms and structured in line
with arm’s length principles.
In the event of any material transactions between the company
and shareholders, directors, senior executives, or related
parties thereof, which do not form part of the ordinary course of
the company’s business, the board of directors shall arrange for
an
independent assessment. The same shall, generally
speaking, apply to the relationship between Akastor and Aker
ASA related companies.
In respect of the above, the «Related parties» note to the
consolidated financial statements contains information on the
most significant transactions between Akastor and companies
within the Aker ASA group.
5. Freely Negotiable Shares
The shares are listed on the Oslo Børs and are freely
transferable. No transferability restrictions are laid down in the
articles of association. There are no restrictions on the party’s
ability to own, trade or vote for shares in the company.
6. General Meetings
Attendance, Agenda and Voting
The general meetings in Akastor will be conducted electronically.
The decision to hold virtual meetings without the possibility to
attend a physical meeting, is partly due to the requirements in
the Public Limited Liability Companies Act section 5-8, third
paragraph, letter b, and party for practical considerations. The
shareholders will be invited to participate online via PC, phone
or tablet, and a description of how to participate is included in
the notice of general meeting that will be announced. By
Annual Report 2022 | Corporate Governance Statement 18
participating online, shareholders will receive a live webcast
from the general meeting, the opportunity to ask written
questions, and vote on each of the items. The company
encourages shareholders to attend the general meetings.
It will also, like previous years, be possible to vote in advance or
give a proxy before the meetings. Notices convening general
meetings, including comprehensive documentation relating to
the items on the agenda, including the recommendation of the
nomination committee, shall be sought made available on the
company’s website no later than 21 days prior to the general
meeting. The articles of association of the company stipulate
that documents pertaining to matters to be deliberated by the
general meeting shall only be made available on the company’s
website, and not normally be sent physically by post to the
shareholders unless required by statute.
The following matters are typically decided at the annual general
meeting, in accordance with the articles of association of
Akastor ASA and Norwegian background law:
Election of the nomination committee and stipulation of
the nomination committee's fees;
election of shareholder representatives to the board of
directors as well as stipulation of fees to the board of
directors;
election of the external auditor and approval of the
auditor’s fee;
approval of any amendments to the board of directors’
regarding stipulation of salary and other
policy
remuneration to the executive management, if any;
advisory vote on the board of directors’ report on
remuneration to the executive management;
approval of the annual accounts and the board of
directors’ report, including distribution of dividend; and
other matters which, by law or under the articles of associ-
ation, are the business of the annual general meeting.
The deadline for registering intended attendance is as close to
the general meeting as possible. Information concerning both
the registration procedure, online participation and the filing of
proxies is included in the notice convening the general meeting
and on the registration form. The company also aims to structure,
to the extent practicable, the proxy form such as to enable the
shareholders to vote on each individual item on the agenda.
Chairperson
The articles of association stipulate that the general meetings
shall be chaired by the chairperson of the board of directors or
a person appointed by said chairperson. According to the Code
of Practice the board should however «make arrangements to
ensure an independent chairperson for the general meeting».
Thus, the articles of Akastor ASA deviate from the Code of
Practice in this respect. This has its background in a long-lasting
tradition in Akastor. Having the chairperson of the board chairing
the general meeting also simplifies the preparations for the
general meetings significantly.
Election of Directors
It is a priority for the nomination committee that the board of
directors shall work in the best possible manner as a team, and
that the background and competence of the directors shall
complement each other. As a consequence, the nomination
committee will propose that the shareholders are invited to vote
on the full board composition proposed by the nomination
committee as a group, and not on each director separately.
Hence, Akastor deviates from the Code of Practice stipulating
that one should make «appropriate arrangements for the
general meeting to vote separately on each candidate nominated
for election to the company’s corporate bodies».
Minutes
Minutes of general meetings will be published as soon as
practicable on the announcement system of Oslo Børs,
www.newsweb.no (ticker: AKAST), and at www.akastor.com.
7. Nomination Committee
The articles of association stipulate that the company shall have
a nomination committee. The nomination committee shall have
no less than three members, who shall normally serve for a term
of two years. The current members of the nomination committee
are Ingebret G. Hisdal (chairperson), Charlotte Håkonsen and
Kjetil E. Stensland, who were all elected at last year’s annual
general meeting and are therefore not up for re-election this
year. Charlotte Håkonsen is the General Counsel of Aker ASA
(and was employed by Akastor until 2018). No members of the
nomination committee are employed by, or directors of, Akastor.
The majority of the members of the nomination committee are
independent of both Akastor’s board of directors and the
executive management of the company.
The committee’s recommendations (relating to particularly the
board of directors and their remuneration) shall address how
the new board candidates will attend to the interests of the
shareholders in general and fill the requirements of the company,
including with
to competence, capacity and
independence.
respect
The composition of the nomination committee shall reflect the
interests of all shareholders and ensure independence from the
board of directors and the executive management. The
members and the chairperson of the nomination committee are
appointed by the general meeting, which also determines the
remuneration of the committee.
The annual general meeting in 2010 adopted guidelines
governing the duties of the nomination committee. According to
Annual Report 2022 | Corporate Governance Statement these guidelines, the committee shall emphasize that candidates
for the board have the necessary experience, competence, and
capacity to perform their duties in a satisfactory manner. A
reasonable
to gender and
background should also be emphasized.
representation with
regard
The chairperson of the nomination committee has the overall
responsibility for the work of the committee. In the exercise of its
duties, the nomination committee may contact, among others,
shareholders, the board, management, and external advisors.
The nomination committee shall also ensure
its
recommendations are endorsed by the largest shareholders.
that
Information concerning the nomination committee and deadlines
for making suggestions or proposing candidates for directorships
will be made available on the company’s website, www.akastor.
com when there are candidates up for election.
8. Composition and Independence of the Board of
Directors
Composition
It has been agreed with the employees that the company shall
have no corporate assembly. Hence, the board appoints its own
chairperson, cf. the Public Limited Liability Companies Act
section 6-1, second paragraph, unless the chairperson is
appointed by the general meeting. The proposal of the
include a proposed
nomination committee will normally
candidate for appointment as chairperson of the board of
directors. The board of directors appoints its own deputy
chairperson. According to the Public Limited Liability Companies
Act, the directors are appointed for a term of two years at a time
unless otherwise stated in the company’s articles of association.
The articles of association of Akastor stipulate that directors
may be elected for a period of one to three years.
The right of the employees to be represented and participate in
decision making is safeguarded through expanded employee
representation on the board of directors of both Akastor and in
a number of the group’s portfolio companies.
The articles of association stipulate that the board of directors
shall comprise six to twelve persons, one third of whom shall be
elected by and amongst the employees of the group. In addition,
up to three shareholder-appointed alternates may be appointed.
As per December 31, 2022, the board of directors comprised
eight directors, five of whom were elected by the shareholders
and three of whom were elected by and amongst the employees.
The company encourages the directors to hold shares in the
company. The shareholdings of the directors as of December
31, 2022 will be set out in the 2022 remuneration report. The
chairperson Frank O. Reite and the directors Lone Fønss
Schrøder, Kathryn M. Baker and Svein Oskar Stoknes are
currently shareholders in Akastor. The board composition,
including information about the directors’ background and
expertise will be detailed in the annual report for 2022.
19
The appointment of employee representatives to the board of
directors is conducted as prescribed by the Public Limited
Liability Companies Act, the Representation Regulations and
also as per practice agreed with the union representatives of the
employees of Akastor’s portfolio companies and industrial
holdings. The board of directors has appointed a designated
election committee charged with implementing the appointment
of such employee representatives.
Independence
A majority of the directors elected by the shareholders are
independent of the executive personnel and important business
associates of Akastor. None of the executive personnel of the
company are members of the board of directors.
The composition of the board of directors aims to ensure that
the interests of all shareholders are attended to, and that the
company has the know-how, resources, and diversity it needs at
its disposal. Among the five shareholder-elected directors, the
majority are deemed independent from the company’s largest
indirect shareholder, Aker ASA.
9. The Work of the Board of Directors
Procedures
For each calendar year, the board plans for its work and
meetings. Furthermore, there are rules of procedure for the
board of directors and Chief Executive Officer, which govern
areas of responsibility, duties and the distribution of roles
between the board of directors, the chairperson of the board of
directors and the Chief Executive Officer. The rules of procedure
for the board of directors also include provisions on convening
and chairing board meetings, decision making, the duty and
right of the Chief Executive Officer to disclose information to the
board of directors, the duty of confidentiality, etc. According to
the company’s articles of association, each of the directors
elected by the shareholders will serve for a period of one to
three years pursuant to further decision by the general meeting.
This to provide the nomination committee with the flexibility to
propose varying terms of service for the candidates.
Akastor has prepared guidelines as part of its rules of procedure
for the Chief Executive Officer and board of directors ensuring
that directors and the Chief Executive Officer notify the board of
directors if they have any material direct or indirect personal
interest in any agreement concluded by the group. The
guidelines stipulate that the directors and the Chief Executive
Officer shall not participate in the preparation, deliberation, or
resolution of any matters that are of such special importance to
themselves, or any of their related parties, so that the person in
question must be deemed to have a prominent personal or
financial interest in such matters. The relevant board member or
the Chief Executive Officer shall raise the issue of his or her
competence whenever there may be cause to question it, and
each director is the primary responsible for adopting the correct
decision as to whether he or she should step down from
participating in the discussion of the matter at hand.
Annual Report 2022 | Corporate Governance Statement 20
In general, as further stipulated in Akastor’s principles for related
party transactions, directors of Akastor should be cautious in
participating in the consideration of issues where a potential
conflict of interest or conflict of role may arise, undermining the
confidence in the decision process. Such person may not
participate in board discussions of more than one company that
is part of the same agreement, unless the companies have
common interests. These assessments will be carried out on a
case-by-case basis; in most events, and as a starting point, by
the relevant directors themselves, but often also in cooperation
with internal and/or external legal counsel.
The above principles will normally also be applied if Akastor
contracts with other companies in which said board members
hold direct or indirect ownership interests that exceed, in relative
terms, their ownership interests in Akastor.
If grounds for legal incapacity are established, the relevant
board member will, as a ground rule, not be granted access to
any documentation prepared to the board of directors for the
deliberation of the agenda item in question.
In general, Akastor applies a strict norm as far as competence
assessments are concerned. In cases where the chairperson of
the board of directors does not participate in the deliberations,
the deputy chairperson of the board of directors chairs the
meeting.
As far as the other officers and employees of Akastor are
concerned, transactions with related parties and conflicts of
interest are comprehensively addressed and regulated in the
group’s Code of Conduct.
Meetings
The board of directors will hold board meetings whenever
needed, but normally six to twelve times a year. The need for
extraordinary board meetings may typically arise because the
internal authorization structure of the company requires the
board of directors to deliberate and approve material tenders to
be submitted by the company or in relation to M&A transactions.
Whilst the deadlines for such submission often change, it is
difficult to fit this into the calendar of ordinary board meetings.
The board of directors held six ordinary board meetings in 2022.
In addition, two extraordinary board meetings were held
whereby decisions were taken by way of circulation. The
aggregate attendance rate at the board meetings was close to
100 percent.
The Matters Discussed by the Board of Directors
The Chief Executive Officer prepares cases for deliberation by
the board of directors in cooperation with the chairperson of the
board. Endeavours are made to prepare and present matters in
such a way that the board of directors is provided with an
adequate basis for its deliberations. The board of directors has
overall responsibility for the management of Akastor and shall,
through the Chief Executive Officer, ensure that its activities are
organized in a sound manner. The board of directors shall adopt
plans and budgets for the business, and keep itself informed of
the financial position of, and development within, the company.
This encompasses the annual planning process of Akastor, with
the adoption of overall goals and strategic choices for the group,
as well as financial plans, budgets, and forecasts for the group
and the portfolio companies. The board of directors performs
annual evaluations of its work and its know-how.
Audit Committee
Akastor will have an audit committee comprising two to four of
the directors. The audit committee currently comprises the
directors Lone Fønss Schrøder (chair), Kathryn M. Baker and
Henning Jensen. The audit committee is independent from the
management.
At least one of the members of the audit committee shall have
either formal qualifications within accounting or auditing, or
relevant experience and skills within the same. Both members
Fønss Schrøder and Baker have such relevant experience and
skills. The audit committee has a mandate and a working
method that complies with statutory requirements. The audit
committee mandate forms an integrated part of the rules of
procedures for the board of directors. The committee will
participate, on behalf of the board of directors, in the quality
assurance of guidelines, policies, and other governing
instruments in Akastor. The audit committee performs a
qualitative review of the quarterly and annual reports of Akastor,
including Akastor’s reporting on ESG and other non-financial
matters. Significant judgment calls (uncertain estimates) made
in the financial statements in the quarter are reviewed by the
audit committee. The audit committee further supports the
board of directors in safeguarding that the company has sound
risk management and internal controls. The audit committee
reviews the status on internal controls on an annual basis. In
order to safeguard appropriate processes and assessments,
the board’s audit committee shall also review major M&A
transactions as well as related party transactions which are not
part of the company’s ordinary course of business, unless such
related party transactions are immaterial.
Akastor currently has no remuneration committee as the
experiences from having such showed more merit in discussing
matters comprised by this committee’s mandate with all directors
present. As of December 31, 2022, there are no other board
committees than the audit committee. The board does not
envisage appointing any further board committees in 2023.
The board evaluates its performance and qualification annually.
A summary of the evaluation was made available to the
nomination committee.
10. Risk Management and Internal Control
Governing Principles
The board of directors shall ensure that Akastor has sound internal
control and systems for risk management that are appropriate in
Annual Report 2022 | Corporate Governance Statement 21
relation to the extent and nature of the company’s activities. The
audit committee supports the board of directors in safeguarding
that the company has internal procedures and systems that ensure
good corporate governance, stakeholder engagement, effective
internal controls and proper risk management, particularly in
relation to financial reporting. The Chief Financial Officer reports
directly to the audit committee on matters relating to financial
reporting, financial risks and internal controls.
Akastor has implemented an internal system for reporting
serious matters such as breaches of ethical guidelines and
violations of the law, which is also available to external parties
at www.akastor.com.
Risk Management
Akastor and its portfolio companies are exposed to a variety of
market, operational and financial risks. The board of directors
carries out an annual review of the company’s most important
areas of exposure to risk and its internal control arrangements.
Being an investment company, the main objective of Akastor is
to create value for its shareholders. Potential impacts on the net
asset value, share price or predictability of earnings are
therefore key parameters in the board’s risk evaluation. Sound
risk management throughout the organization, including by its
portfolio companies and industrial holdings, is recognized by
Akastor as an invaluable tool in the process of achieving
strategic, financial and operational goals while at the same time
ensuring compliance with
requirements and
adherence to high integrity standards.
regulatory
Risk evaluation is an integral part of all business activities and
Akastor employs a decentralized model for allocating managerial
responsibility under which the portfolio companies are required
to establish their own risk management and internal control
systems. Akastor’s representatives on boards of directors in the
portfolio companies seek to ensure that the portfolio companies
follow the principles of sound corporate governance.
Akastor manages risk through an internal framework both on a
corporate and portfolio company level comprising guidelines,
policies and procedures intended to ensure good business
operations and provide unified and reliable financial reporting.
The board of directors has adopted an authorization matrix that
forms part of its governing documents where authority is
delegated to the Akastor Chief Executive Officer. Furthermore,
authorization matrices are adopted for each of the portfolio
companies, pursuant to which the Akastor Chief Executive
Officer delegates authority to the boards and Chief Executive
Officers of the respective portfolio companies, which again
adopts authorization matrices for the portfolio organizations.
including
from Akastor’s
portfolio companies,
investment
directors and board representatives. Management of operational
risk and risk related to ESG primarily rests with the underlying
portfolio companies, although Akastor acts as an active driver
through its involvement on the boards and through support and
follow-up by the various Akastor corporate functions towards
relevant functions in the portfolio companies.
Akastor’s management holds review meetings with
the
management of the different portfolio companies. The purpose
of the meetings is to conduct an in-depth review of the
development of each portfolio company, focusing on operations,
risk management, market conditions, the competitive situation
and strategic issues. These meetings provide an important
foundation for Akastor’s assessment of its overall financial and
operational risk.
A key risk in one of the smaller portfolio companies may still be
negligible on the group level, whereas important risks in the
largest portfolio companies may have a serious impact on the
group as a whole. Akastor’s decentralized approach to
operational risk management, as described above, raises a
need for management to process and calibrate the insight
obtained through various interfaces with the portfolio companies
prior to the board’s annual risk review. The objective of such
exercise is to ensure that risks are reported in a format that
allows the board to acquire a true and fair view of the overall risk
environment of the Akastor group in an efficient manner and to
focus its attention on risks that are material on an aggregated
group level.
Prior to the board’s review of risk reporting, the audit committee
the reported risks and associated risk-reducing
reviews
measures. The audit committee also reviews the company’s in-
house reporting systems and
internal control and risk
management, and prepares the board’s review of financial
reporting.
Financial Reporting
The Akastor financial reporting division reports to the Chief
Financial Officer and is responsible for the external reporting
process and the internal management financial reporting
process. This also includes assessing financial reporting risks
and internal controls over financial reporting in the group.
The consolidated external financial statements are prepared in
accordance with IFRS and IAS standards as approved by the
EU. The existing policies and standards governing the annual
and quarterly financial reporting in the group, including the
Akastor accounting principles, are available
for Akastor
employees.
The board receives and reviews risk reports prepared by the
management, in respect of regular operational/business risk as
well as risk related to ESG. The management’s risk reporting is
based on the total level of insight obtained through regular
reporting and the close cooperation that Akastor has with the
Clearing meetings are held with the management teams of the
portfolio companies (with owernship more than 50 percent) in
connection with the annual closing of accounts and may also be
held in connection with quarterly financial reporting. For the
2022 financial year, clearing meetings with the portfolio
Annual Report 2022 | Corporate Governance Statement 22
companies were held in October 2022 and January 2023. The
main purpose is to ensure high-quality financial reporting. Such
meetings focus on important items involving estimation and
judgment, non-balance-sheet items, accounting for significant
transactions, new or modified accounting principles and other
topics relevant to the respective portfolio companies. The
external auditor is present in the clearing meetings.
Other Reporting
In addition to the abovementioned financial reporting, there are
regular business review and board meetings in the portfolio
companies which ensure timely and high-quality reporting from
the portfolio companies to the corporate management.
Regular reports for Akastor and the portfolio companies are
submitted to the board of directors. The quarterly business
update contains key financial numbers, M&A updates, financing,
status of value creation plans, compliance, risk management
and share price information for the Akastor group. Further, it
contains key financial numbers, key operational topics, status
on value drivers as well as key market information for the main
portfolio companies. The monthly business update contains
high level financial and operational information for the Akastor
group, as well as key highlights for the main portfolio companies.
11. Remuneration of the Board of Directors
individual directors
The remuneration of the board of directors will reflect its
responsibilities, know-how and time commitment, as well as the
complexity of the business. The remuneration will be proposed
by the nomination committee, and is not performance-related or
linked to options in Akastor. More detailed information about the
the
remuneration of
remuneration report for 2022, as further described in section 12
below. Neither the directors, nor companies with whom they are
affiliated, should accept specific paid duties for Akastor beyond
their directorships. If they nevertheless do so, the board of
directors shall be informed and the remuneration shall be
approved by the board of directors. No remuneration shall be
accepted from anyone other than the company or the relevant
group company in connection with such duties.
is provided
in
12. Remuneration of Executive Personnel
The board of directors has adopted designated guidelines for
the remuneration of executive management pursuant to the
provisions of section 6-16a of the Public Limited Liability
Companies Act. The current guidelines were adopted by the
general meeting on April 20, 2022. The board of directors has
not considered it necessary to suggest any amendments to the
guidelines and the existing policy will therefore apply also for
2023.
In accordance with section 6-16b of the Public Limited Liability
Companies Act, the board of directors has also prepared a
report on the remuneration to the executive management,
detailing the remuneration received by members of the
executive management in 2022. The report is available at www.
akastor.com, and will be subject for an advisory vote on the
annual general meeting 2023.
13. Information and Communication
Akastor has no option schemes or option programs for the
allotment of shares to employees. The Chief Executive Officer
determines the remuneration of executive management on the
basis of the guidelines laid down by the board of directors. All
performance-related remuneration within the group will be
the
made subject
remuneration of each executive manager is provided in the
mentioned remuneration report for 2022.
to a cap. Further
information about
The company has adopted a designated communications and
investor relations policy which covers, among other things,
guidelines for the company’s contact with shareholders other
than through general meetings.
The company’s reporting of financial and other information is
based on openness and the equal treatment of all securities
market players. The long-term purpose of the investor relations
function is to ensure access for the company to capital on
competitive terms, whilst at the same time ensuring that the
shareholders are provided with the most correct pricing of the
shares that can be achieved. This shall take place through
correct and timely distribution of price-sensitive information,
whilst ensuring, at the same time, that the company is in
compliance with applicable rules and market practices.
Reference is also made to the above discussion concerning the
flow of information between Akastor and Aker ASA in connection
with their cooperation within, inter alia, strategy, transactions,
and funding.
All stock exchange announcements and press releases are
made available on the company’s website, and stock exchange
announcements are also available at www.newsweb.no. The
company holds open presentations in connection with the
reporting of financial performance, either by a physical meeting
or by a conference call and webcast, and these presentations
are broadcasted on the internet. The financial calendar of the
company is available at www.akastor.com.
14. Take-overs
The overriding principle for Akastor is equal treatment of
shareholders. In a bid situation, the board of directors and
management have an independent responsibility to help ensure
that shareholders are treated equally, and that the company’s
business activities are not disrupted unnecessarily. In a take-
over situation, the board will have a particular responsibility to
ensure that shareholders are given sufficient information and
time to form a view of the offer.
The board of directors has not deemed it appropriate to adopt
specific guidelines for take-over situations as long as Aker
Annual Report 2022 | Corporate Governance Statement 23
Holdings AS continues to be the dominant shareholder of
Akastor. This represents a deviation from the Code of Practice.
15. Auditors
The external auditor presents a plan for the performance of the
audit work to the audit committee annually. In addition, the
auditor provides the audit committee with an annual written
confirmation to the effect that the independence requirement is
met. The auditor attends all audit committee meetings, and the
auditor has reviewed any material changes to the accounting
principles of the company, or to the internal controls of the
company, with the audit committee. The external auditor also
attends the board meeting where the annual financial statements
are reviewed and approved, normally in March. The board of
directors holds a minimum of one annual meeting with the
auditor without any executive personnel being in attendance.
The board’s audit committee stipulates guidelines on the scope
for using the auditor for services other than auditing,and makes
recommendations to the board of directors concerning the
appointment of the external auditor and the approval of the
auditor’s fees. Fees payable to the auditor, separated into those
relating to auditing and those relating to other services, are
specified in the «Other operating expenses» note to the
consolidated financial statements for the group and are also
reported to the general meeting. The auditor’s fees relating to
auditing are subject to approval by the general meeting.
Annual Report 2022 | Corporate Governance Statement 24
04.
a.
FINANCIALS AND NOTES
AKASTOR GROUP
Akastor Group | Consolidated income statement
Akastor Group | Consolidated statement of comprehensive income
Akastor Group | Consolidated statement of financial position
Akastor Group | Consolidated statement of changes in equity
Akastor Group | Consolidated statement of cash flow
General
Note 1 | Corporate information
Note 2 | Basis for preparation
Note 3 | Significant accounting policies
Note 4 | Significant accounting estimates and judgements
Performance of the year
Note 5 | Discontinued operations
Note 6 | Disposal group held for sale and disposal of subsidiaries
Note 7 | Operating segments
Note 8 | Revenue and other income
Note 9 | Salaries, wages and social security costs
Note 10 | Other operating expenses
Note 11 | Finance income and costs
Note 12 | Income tax
Note 13 | Earnings per share
Assets
Note 14 | Property, plant and equipment
Note 15 | Intangible assets and goodwill
Note 16 | Impairment testing of goodwill
Note 17 | Equity-accounted investees
Note 18 | Other investments
Note 19 | Non-current interest-bearing receivables
Note 20 | Trade and other receivables
Note 21 | Cash and cash equivalents
Equity and liabilities
Note 22 | Capital and reserves
Note 23 | Borrowings
Note 24 | Other liabilities
Note 25 | Employee benefits – pension
Note 26 | Provisions
Note 27 | Trade and other payables
Financial risk management
Note 28 | Capital management
Note 29 | Financial risk management and exposures
Note 30 | Financial instruments
Other
Note 31 | Leases
Note 32 | Group companies
Note 33 | Related parties
Note 34 | Events after reporting date
25
26
27
28
29
30
30
31
36
38
39
40
44
46
46
47
48
50
51
52
53
54
56
57
57
58
59
60
61
64
64
65
66
69
72
74
75
76
Annual Report 2022 | Financials and Notes | Akastor GroupFinancials and Notes | Akastor Group Akastor Group | Consolidated income statement
For the year ended December 31
Amounts in NOK million
Revenue and other income
Materials, goods and services
Salaries, wages and social security costs
Other operating expenses
Impairment loss on receivables
Operating expenses
Operating profit before depreciation, amortization and impairment
Depreciation, amortization and impairment
Operating profit (loss)
Finance income
Finance expenses
Impairment loss on debt instruments
Net finance income
Share of net profit (loss) from equity-accounted investees
Profit (loss) before tax
Income tax benefit (expense)
Profit (loss) from continuing operations
Profit (loss) from discontinued operations (net of income tax)
Profit (loss) for the period
Profit (loss) for the period attributable to:
Equity holders of the parent company
Non-controlling interests
Basic / diluted earnings (loss) per share (NOK)
Basic / diluted earnings (loss) per share continuing operations (NOK)
Basic / diluted earnings (loss) per share discontinued operations (NOK)
25
2021
953
(294)
(367)
(78)
(214)
(953)
-
(82)
(82)
369
(175)
-
194
(346)
(235)
20
(215)
1 140
925
919
6
3.38
(0.81)
4.20
2022
1 059
(420)
(366)
(109)
(174)
(1 069)
(10)
(66)
(76)
490
(244)
(166)
80
(263)
(259)
(2)
(261)
4
(257)
(276)
19
(1.01)
(1.03)
0.02
Note
7, 8
9
10
20
14,15, 31
11
17
12
5
13
13
13
Annual Report 2022 | Financials and Notes | Akastor Group
26
Akastor Group | Consolidated statement of comprehensive income
For the year ended December 31
Amounts in NOK million
Profit (loss) for the period
Other comprehensive income
Cash flow hedges, effective portion of changes in fair value
Cash flow hedges, reclassification to income statement
Total change in hedging reserve, net of tax
Total change in fair value reserve, net of tax
Currency translation differences - foreign operations
Currency translation differences, reclassification to income statement upon disposal
Share of OCI from equity-accounted investees
Total items that may be reclassified subsequently to profit or loss, net of tax
Remeasurement gain (loss) net defined benefit liability
Deferred tax of remeasurement gain (loss) net defined benefit liability
Share of OCI from equity-accounted investees
Total items that will not be reclassified to profit or loss, net of tax
Total other comprehensive income, net of tax
Total comprehensive income (loss) for the period, net of tax
Attributable to:
Equity holders of the parent company
Non-controlling interests
Note
2022
(257)
2021
925
17
25
17
-
-
-
-
325
-
(86)
239
(11)
-
10
(1)
(22)
1
(21)
(20)
33
(472)
(7)
(487)
9
(6)
-
3
238
(484)
(19)
(38)
19
441
435
6
Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated statement of financial position
As of December 31
Amounts in NOK million
Deferred tax assets
Property, plant and equipment
Intangible assets and goodwill
Right-of-use assets
Equity-accounted investees
Other investments
Non-current interest-bearing receivables
Non-current finance lease receivables
Other non-current assets
Total non-current assets
Inventories
Trade and other receivables
Derivative financial instruments
Current finance lease receivables
Current investments
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets
Issued capital incl. treasury shares
Other capital paid in
Reserves and retained earnings
Equity attributable to equity holders of the parent company
Non-controlling interests
Total equity
Non-current borrowings
Non-current lease liabilities
Employee benefit obligations
Deferred tax liabilities
Other non-current liabilities
Provisions, non-current
Total non-current liabilities
Current borrowings
Current lease liabilities
Current tax liabilities
Provisions, current
Trade and other payables
Other current liabilities
Liabilities classified as held for sale
Total current liabilities
Total liabilities
Total equity and liabilities
27
Note
2022
2021
12
14
15
31
17
18
19
31
20
31
18
21
6
22
23
31
25
12
24
26
23
31
26
27
24
6
37
237
146
27
3 502
869
668
10
2
5 497
5
769
-
208
162
119
43
1 307
6 804
161
1 540
2 355
4 056
36
4 092
198
37
96
4
459
3
796
1 142
48
2
31
498
162
32
1 916
2 712
6 804
42
251
145
41
3 408
1 625
315
176
21
6 025
5
872
10
64
147
89
-
1 187
7 212
161
1 538
2 393
4 091
18
4 109
1 372
72
108
4
628
26
2 211
16
82
1
20
625
148
-
892
3 103
7 212
Fornebu, March 22, 2023 | Board of Directors of Akastor ASA
Frank O. Reite | Chairperson
Lone Fønss Schrøder | Deputy Chairperson
Svein Oskar Stoknes | Director
Kathryn M. Baker | Director
Luis Antonio G. Araujo | Director
Henning Jensen | Director
Asle Christian Halvorsen | Director
Stian Sjølund | Director
Karl Erik Kjelstad | CEO
Annual Report 2022 | Financials and Notes | Akastor Group
28
Akastor Group | Consolidated statement of changes in equity
Share
capital
Treasury
shares
Other
capital
paid in
Hedging
reserve 1)
Fair
value
reserve1)
Currency
trans-
lation
reserve1)
Retained
earnings
Equity
attributable
to equity
holders of
the parent
company
Non-con-
trolling
interests
(NCI)
Total
equity
Amounts in NOK million
2021
Equity as of January 1, 2021
162
(2)
1 538
Profit (loss) for the period
Other comprehensive income
Total comprehensive income
Transaction with NCI
-
-
-
-
-
-
-
-
-
-
-
-
Equity as of December 31, 2021
162
(2)
1 538
2022
Profit (loss) for the period
Other comprehensive income
Total comprehensive income
Treasury share transactions
-
-
-
-
-
-
-
-
-
-
-
2
Equity as of December 31, 2022
162
(1)
1 540
21
-
(21)
(21)
-
-
-
(8)
(8)
-
(8)
1) See Note 22 Capital and reserves.
(52)
-
(20)
(20)
-
(72)
-
-
-
-
182
-
(446)
(446)
-
1 808
3 657
11
3 669
919
3
922
(1)
919
(484)
(435)
(1)
6
-
6
1
925
(484)
441
-
(264)
2 730
4 091
18
4 109
-
248
248
-
(276)
(1)
(277)
-
(276)
238
(38)
2
(72)
(16)
2 453
4 056
19
-
19
-
36
(257)
238
(19)
2
4 092
Annual Report 2022 | Financials and Notes | Akastor Group Akastor Group | Consolidated statement of cash flow
For the year ended December 31
Amounts in NOK million
Note
2022
2021
29
Cash flow from operating activities
Profit (loss) for the period - continuing operations
Profit (loss) for the period - discontinued operations
Profit (loss) for the period
Adjustments for:
Income tax expense (benefit)
Net interest cost and unrealized currency (income) loss
Depreciation, amortization and impairment
(Gain) loss on disposal of subsidiaries
(Gain) loss on disposal of assets
(Profit) loss from equity-accounted investees
Other non-cash effects
Changes in net working capital
Cash generated from operating activities
Dividend received
Interest paid
Interest paid for leases
Interest received
Interest received for leases
Income taxes paid
Net cash from operating activities
Cash flow from investing activities
Acquisition of property, plant and equipment
Payments for capitalized development
Acquisition of subsidiaries, net of cash acquired
Proceeds (payments) related to sale of subsidiaries
Proceeds from (acquisition of) other investments
Payments to equity-accounted investees
Proceeds from finance lease receivables
Net cash flow from other investing activities
Net cash from investing activities
Cash flow from financing activities
Proceeds from borrowings
Repayment of borrowings
Payment of lease liabilities
Proceeds from transaction with non-controlling interests
Net cash used in financing activities
Effect of exchange rate changes on cash and bank deposits
Net increase (decrease) in cash and bank deposits
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Of which is restricted cash
The statement included cash flows from discontinued operations prior to the disposal.
(261)
4
(257)
2
193
66
(25)
(2)
263
(229)
(187)
(176)
22
(168)
(6)
66
21
(3)
(244)
2
(11)
2
(96)
745
(76)
53
-
619
756
(996)
(78)
-
(318)
(26)
31
89
119
2
(215)
1 140
925
(20)
142
260
(1 225)
(51)
346
(272)
(151)
(46)
37
(120)
(26)
38
12
8
(96)
(112)
(24)
-
591
(9)
(47)
29
3
431
1 067
(1 472)
(112)
1
(516)
(5)
(186)
275
89
-
14, 15, 31
17
14
15
23
23
31
21
Annual Report 2022 | Financials and Notes | Akastor Group 30
Note 1 | Corporate information
Akastor ASA is a limited liability company incorporated and domiciled in
Functional and presentation currency
Norway and whose shares are publicly traded. The registered office is
The consolidated financial statements are presented in NOK, which is
located at Oksenøyveien 10, Bærum, Norway. The largest shareholder is
Akastor ASA’s functional currency. All financial information presented in
Aker Holding AS which is wholly owned by Aker ASA as of December 31,
NOK has been rounded to the nearest million (NOK million), except when
2022.
otherwise stated. The subtotals and totals in some of the tables in these
consolidated financial statements may not equal the sum of the amounts
The consolidated financial statements of Akastor ASA and its subsidiaries
shown due to rounding.
(collectively referred as Akastor or the group, and separately as group
companies) for the year ended December 31, 2022 were approved by the
When the functional currency in a reporting unit is changed, the effect of the
board of directors and CEO on March 22, 2023. The consolidated financial
change is accounted for prospectively.
statements will be authorized by the Annual General Meeting on April 19,
2023.
Use of estimates and judgements
The group is an oilfield services investment company with a portfolio of
management to make judgements, estimates and assumptions that affect
industrial holdings and other investments. Akastor is listed on the Oslo Stock
the application of policies and reported amounts of assets and liabilities,
Exchange under the ticker AKAST. Information on the group’s structure is
income and expenses. Although management believes these assumptions
provided in Note 32 Group companies. Information on other related party
to be reasonable, given historical experience, actual amounts and results
relationships of the group is provided in Note 33 Related parties.
could differ from these estimates. The items involving a higher degree of
The preparation of financial statements in conformity with IFRS requires
judgement or complexity, and items where assumptions and estimates are
material to the consolidated financial statements, are disclosed in Note 4
Note 2 | Basis for preparation
Significant accounting estimates and judgements.
Basis of accounting
The estimates and underlying assumptions are reviewed on an ongoing
The consolidated financial statements have been prepared in accordance
basis. Revisions to accounting estimates are recognized in the period in
with International Financial Reporting Standards as adopted by the
which the estimate is revised and in any future periods affected.
European Union (IFRS), their interpretations adopted by the International
Accounting Standards Board (IASB) and the additional requirements of the
Norwegian Accounting Act as of December 31, 2022.
Going concern basis of accounting
The consolidated financial statements have been prepared on a going
concern basis, which assumes that the group will be able to meet the
mandatory terms and conditions of the banking facilities as disclosed in
Note 28 Capital management. Please refer to Board of Directors’ report for
more information about going concern assessment.
Basis of measurement
The consolidated financial statements have been prepared on the historical
cost basis except for the following material items, which are measured on
an alternative basis on each reporting date:
Derivative financial instruments are measured at fair value.
Non-derivative financial instruments at Fair Value through Profit or
Loss (FVTPL) are measured at fair value.
Debt instrument at Fair Value through Other Comprehensive
Income (FVOCI) are measured at fair value.
Contingent considerations assumed in business disposals are
measured at fair value.
Net defined benefit (asset) liability is recognized at fair value of
plan assets less the present value of the defined benefit obligation.
Annual Report 2022 | Financials and Notes | Akastor Group 31
Note 3 | Significant accounting policies
Summary of significant accounting policies
A joint venture is an arrangement in which the group has joint control,
The principal accounting policies applied in the preparation of these
whereby the group has rights to the net assets of the arrangement, rather
consolidated financial statements are set out below. These policies have
to its assets and obligations for its liabilities. Joint control is established
been consistently applied to all the years presented, unless otherwise stated..
by contractual agreement requiring unanimous consent of the ventures for
Basis of consolidation
Subsidiaries
strategic, financial and operating decisions.
Interests in joint ventures are accounted for using the equity method.
Subsidiaries are entities controlled by the group. The group controls
They are initially recognized at cost, which includes transaction costs.
an entity when it is exposed to, or has rights to, variable returns from
Subsequent to initial recognition, the consolidated financial statements
its involvement with the entity and has the ability to affect those returns
include the group’s share of the profit and loss and other comprehensive
through its power over the entity. The financial statements of subsidiaries
income of the equity-accounted investees. When the group’s share of
are included in the consolidated financial statements from the date on which
losses exceeds its interest in an equity-accounted investee, the carrying
control commences until the date of which control ceases.
amount of that interest, including any long-term investments, is reduced
Business combinations
to zero, and further losses are not recognized except to the extent that the
group incurs legal or constructive obligations or has made payments on
Business combinations are accounted for using the acquisition method
behalf of the investee.
as of the acquisition date, which is the date when control is transferred
to the group. The consideration transferred in the acquisition is generally
Transactions eliminated on consolidation
measured at fair value, as are the identifiable net assets acquired. Any
Intra-group balances and transactions, and any unrealized gains and
goodwill that arises is tested annually for impairment.
losses or income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealized
Transaction costs, other than those associated with the issue of debt or
gains arising from transactions with joint ventures are eliminated to the
equity securities incurred in connection with a business combination are
extent of the group’s interest in the entity. Unrealized losses are eliminated
expensed as incurred.
in the same way as unrealized gains, but only to the extent that there is no
Any contingent consideration payable is measured at fair value at the
acquisition date. Changes in the fair value of the contingent consideration
Assets held for sale
evidence of impairment.
from acquisition of a subsidiary or non-controlling interest for transactions
Non-current assets, or disposal groups comprising assets and liabilities,
will be recognized in Other income as gain or loss, except for the obligation
that are expected to be recovered primarily through sale rather than through
that is classified as equity.
Non-controlling interests
continuing use, are classified as held for sale. This condition is regarded as
met only when the sale is highly probable and the asset or disposal group is
available for immediate sale in its present condition. Management must be
Non-controlling interests are measured initially at their fair value at the date
committed to the sale, which should be expected to qualify for recognition
of acquisition. Changes in the group’s ownership interest in a subsidiary that
as a completed sale within one year from the date of classification.
do not result in a loss of control are accounted for as equity transactions.
Loss of control
Non-current assets and disposal groups classified as held for sale are
measured at the lower of their carrying amount and fair value less costs to
On the loss of control, the group derecognizes the assets and liabilities of
sell. Property, plant and equipment and intangible assets once classified
the subsidiary, any non-controlling interests and the other components of
as held for sale are not depreciated or amortized, but are considered in the
equity. Any resulting gain or loss is recognized in the income statement.
overall impairment testing of the disposal group.
Any interest retained in the former subsidiary is measured at fair value when
control is lost. Subsequently it is accounted for as an equity-accounted
No reclassifications are made for years prior to the year when non-current
investee or as an available-for-sale financial asset depending on the level
assets or disposal groups are classified as a held for sale.
of influence retained.
Any contingent consideration receivable is measured at fair value at the
A discontinued operation is a component of the group’s business that
disposal date. Changes in the fair value of the contingent consideration
represents a separate major line of business or geographical area of
from divestment of a subsidiary for transactions will be recognized in Other
operations that has been disposed of or is held for sale, or is a subsidiary
income as gain or loss.
acquired exclusively with a view to resale. Classification as a discontinued
operation occurs upon disposal or when the operation meets the criteria to
Investments in joint ventures
be classified as held for sale, if earlier.
Discontinued operations
The group’s interests in equity-accounted investees comprise interests in
joint ventures.
In the consolidated income statement, income and expenses from
discontinued operations are reported separately from income and expenses
Annual Report 2022 | Financials and Notes | Akastor Group 32
from continuing operations, down to the level of profit after taxes. When an
group’s normal operating cycle, is held primarily for the purpose of being
operation is classified as a discontinued operation, the comparative income
traded, the liability is due to be settled within twelve months after the
statement is restated as if the operation had been discontinued from the
reporting period, or if the group does not have an unconditional right to
start of the comparative year.
defer settlement of the liability for at least twelve months after the reporting
The statement of cash flow includes the cash flow from discontinued
operations prior to the disposal. Cash flows attributable to the operating,
Financial assets, financial liabilities and equity
investing and financing activities of discontinued operations are presented
On initial recognition, a financial asset is classified as measured at amortized
in the notes to the extent these represent cash flows with third parties.
costs, FVOCI or FVTPL. The classification depends on the group’s business
period. All other liabilities are classified as non-current.
Foreign currency
Foreign currency transactions and balances
model for managing the financial assets and the contractual terms of the
cash flows.
Transactions in foreign currencies are translated at the exchange rate at
A financial asset is measured at amortized costs if the business
the date of the transaction. Monetary assets and liabilities denominated
model is to hold the asset to collect contractual cash flows, and
in foreign currencies at the reporting date are translated to the functional
the contractual cash flows are solely payments of principal and
currency at the exchange rate on that date. Foreign exchange differences
interests (SPPI criterion).
arising on translation are recognized in the income statement. Non-
monetary assets and liabilities measured in terms of historical cost in a
A debt instrument is classified at FVOCI if the business model
foreign currency are translated using the exchange rate on the date of the
is both collecting contractual cash flows and selling the financial
transaction. Non-monetary assets and liabilities denominated in foreign
asset, and it meets the SPPI criterion.
currencies that are measured at fair value are translated to the functional
currency at the exchange rates on the date the fair value is determined.
All financial assets not classified as measured at amortized cost or
FVOCI are measured at FVTPL.
Investments in foreign operations
Items included in the financial statements of each of the group’s entities
Financial assets are not reclassified subsequent to their initial recognition
are measured using the currency of the primary economic environment in
unless the group changes its business model for managing financial assets.
which the entity operates. The results and financial positions of all the group
entities that have a functional currency different from the group’s presentation
Other investments
currency are translated into the presentation currency as follows:
Other investments include equity and debt investments in companies where
Assets and liabilities, including goodwill and fair value adjustments,
by less than 20 percent of the voting power. The investments are categorized
are translated at the closing exchange rate at the reporting date.
as financial assets measured at FVTPL or FVOCI and recognized at fair
the group has neither control nor significant influence, usually represented
value at the reporting date. Subsequent to initial recognition, changes in
Income statements are translated at average exchange rate for
financial assets measured at FVTPL are recognized in profit and loss.
the year, calculated on the basis of 12 monthly end rates.
Exchange differences arising from the translation of the net investment
interest income calculated using the effective interest method, foreign
in foreign operations, and of related hedges, are included in other
exchange gains and losses and impairment losses are recognized in profit
comprehensive income as currency translation reserve. These translation
and loss. Other changes in fair value are recognized in other comprehensive
differences are reclassified to the income statement upon disposal of the
income and presented as part of fair value reserve. When financial asset
related operations or when settlement is likely to occur in the near future.
measured at FVOCI is derecognized, the gain or loss accumulated in other
When a debt instrument is classified as financial asset measured at FVOCI,
comprehensive income is reclassified to profit and loss.
Monetary items that are receivable from or payable to a foreign operation
are considered as part of the net investment in that foreign operation, when
Trade and other receivables
the settlement is neither planned nor likely to occur in the foreseeable future.
Trade and other receivables are generally classified as financial assets
Exchange differences arising from these monetary items are recognized in
measured at amortized costs. They are recognized at the original invoiced
other comprehensive income.
amount, less loss allowance made for credit losses. The interest rate
element is disregarded if insignificant, which is the case for the majority of
Current/non-current classification
the group’s trade receivables.
An asset is classified as current when it is expected to be realized or is
intended for sale or consumption in the group’s normal operating cycle, it
Interest-bearing receivables
is held primarily for the purpose of being traded, or it is expected/due to
Interest-bearing receivables include loans to related parties and are
be realized or settled within twelve months after the reporting date. Other
generally classified as financial assets measured at amortized costs.
assets are classified as non-current.
Such financial assets are recognized initially at fair value and subsequent
measurement at amortized cost using the effective interest method, less
A liability is classified as current when it is expected to be settled in the
any impairment losses.
Annual Report 2022 | Financials and Notes | Akastor Group 33
Cash and cash equivalents
Income tax
Cash and cash equivalents include cash on hand, demand deposits held at
Income tax recognized in the income statement comprises current and
banks and other short-term highly liquid investments with original maturity
deferred tax. Income tax is recognized in the income statement except
of three months or less.
to the extent that it relates to items recognized directly in equity or other
Trade and other payables
comprehensive income.
Trade payables are recognized at the original invoiced amount. Other
Current tax is the expected tax payable or receivable on the taxable income
payables are recognized initially at fair value. Trade and other payables
or loss for the year, using tax rates enacted or substantially enacted at the
are valued at amortized cost using the effective interest rate method. The
reporting date, and any adjustment to tax payable in respect of previous
interest rate element is disregarded if it is insignificant, which is the case for
years. Current tax payable also includes any tax liability arising from the
the majority of the group’s trade payables.
declaration of dividends, recognized at the same time as the liability to pay
Interest-bearing borrowings
the related dividend.
Interest-bearing borrowings are recognized initially at fair value less
Deferred tax is recognized in respect of temporary differences between
attributable transaction costs. Subsequent to initial recognition, interest-
the carrying amounts of assets and liabilities for financial reporting and the
bearing borrowings are measured at amortized cost with any difference
amounts used for taxation purposes. Deferred tax is not recognized for:
between cost and redemption value being recognized in the income
statement over the period of the borrowings on an effective interest basis.
Goodwill not deductible for tax purposes
Share capital
The initial recognition of assets or liabilities that affects neither
Ordinary shares are classified as equity. Repurchase of share capital is
accounting nor taxable profit
recognized as a reduction in equity and is classified as treasury shares.
Temporary differences relating to investments in subsidiaries to
Finance income and expense
the extent that they will not reverse in the foreseeable future
Finance income and expense include interest income and expense, foreign
exchange gains and losses, dividend income, gains and losses on derivatives,
Deferred tax is measured at the tax rates that are expected to be applied to
as well as change in fair value of financial assets measured at FVTPL.
temporary differences when they reverse, based on the tax rates that have
Interest income and expenses include calculated interest using the effective
been enacted or substantively enacted at the reporting date.
interest method, in addition to discounting effects from assets and liabilities
measured at fair value. Gains and losses on derivatives include effects
Deferred tax assets and liabilities are offset if there is a legally enforceable
from derivatives that do not qualify for hedge accounting and embedded
right to offset current tax liabilities and assets, and they relate to income
derivatives, in addition to the ineffective portion of qualifying hedges.
taxes levied by the same tax authority on the same taxable entity, or on
Revenue from contract with customers
and assets on a net basis, or to realize the tax assets and settle the liabilities
different taxable entities which intend either to settle current tax liabilities
IFRS 15 Revenue from Contracts with customers establishes a five-step method
simultaneously.
that applies to all customer contracts. Under the standard, only approved
customer contracts with a firm commitment are basis for revenue recognition.
Deferred tax assets are recognized for unused tax losses, tax credits
The deliveries in the contracts are reviewed to identify distinct performance
and deductible temporary differences, to the extent that it is probable that
obligations, and revenue is recognized in line with how the entity satisfies these
future taxable profits will be available against which they can be utilized.
performance obligations – either over time or at a point in time. This assessment
Measurement of deferred tax assets are reviewed at each reporting date.
may involve significant judgement. For contracts with customers for which the
performance obligations are satisfied over time, revenue is recognized over
Impairment
time using a cost progress method or as time and material are delivered to the
Trade receivables and contract assets
customer. For contracts with customers for which the performance obligations
Loss allowance is recognized in profit or loss and measured at lifetime
are satisfied at a point in time, revenue is recognized at the point in time
ECLs. ECLs are a probability-weighted estimate of credit losses. Lifetime
when the customer obtains control of the product or the service.
ECLs are the ECLs that result from all possible default events over the
expected life of a financial asset. The group considers a financial asset to be
Majority of the group’s revenue is service revenue generated from rendering of
in default when the group is unlikely to receive its outstanding contractual
services to customers. The customers simultaneously receive and consume
amount in full, or the contractual payments are more than 90 days past due.
the benefits provided by these services. The invoicing is usually based on
When estimating ECLs, the group considers reasonable and supportable
the service provided at regular basis. Under some service contracts, the
information that is relevant and available without undue cost or effort, based
invoices are based on hours or days performed at agreed rates. The group
on the group’s historical experience including forward-looking information.
has assessed that these performance obligations are satisfied over time. The
The loss allowance is recognized in financial items to the extent that
revenue is recognized according to progress, or using the invoiced amounts
impairment is caused by the insolvency of the customer.
when the invoiced amounts directly correspond with the value of the services
that are transferred to the customers.
The gross carrying amount of trade receivable is written off when the group
Annual Report 2022 | Financials and Notes | Akastor Group 34
has no reasonable expectations of recovering a trade receivable in its
Onerous contracts
entirety or a portion thereof. The group individually makes an assessment
Provision for onerous contracts is recognized when the expected benefits to
with respect to the timing and amount of write-off based on whether there
be derived by the group from a contract are lower than the unavoidable costs
is a reasonable expectation of recovery. Trade receivables that are written
of meeting the obligations under the contract. The provision is measured at
off could still be subject to enforcement activities in order to comply with the
the lower of the expected cost of terminating the contract and the expected net
group’s procedures for recovery of amounts due.
cost of continuing with the contract. Before a provision is recognized, the group
recognizes any impairment loss on the assets associated with the contract.
Debt instruments measured at amortized cost or at FVOCI
Debt instruments measured at amortized cost or at FVOCI are considered
Leases
to be “credit-impaired” when there is significant financial difficulty of the
As a lessee
borrower or it is probable that the borrower will enter bankruptcy or other
Right-of-use assets
financial reorganization. The loss allowance is charged to profit and loss.
The group recognizes right-of-use asset at the lease commencement date.
Non-financial assets
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any prepaid lease payments
The carrying amounts of the group’s non-financial assets (other than
made at or before the commencement date, plus any initial direct costs.
employee benefit assets, inventories and deferred tax assets) are reviewed
Subsequently, the right-of-use asset is depreciated on a straight-line basis
at the end of each reporting period to determine whether there is any
over the shorter of its estimated useful life and the lease term. In addition,
indication of impairment. If an indication of impairment exists, the asset’s
the right-of-asset is subject to impairment assessment of non-financial
recoverable amount is estimated. Cash-generating units (CGU) containing
assets and adjusted for certain remeasurement of the lease liability.
goodwill, intangible assets with an indefinite useful life and intangible assets
that are not yet available for use are tested for impairment annually.
Lease liabilities
The recoverable amount is the greater of fair value less costs to sell and
measured at the present value of the lease payments over the lease term,
value in use. In assessing value in use, the estimated future cash flows
discounted using the group's incremental interest rate. Generally, the lease
are discounted to their present value using a pre-tax discount rate that
payments include fixed payments and variable lease payments that depend
At the lease commencement date, the group recognizes lease liability
reflects current market assessments of the time value of money and the
on an index or rate.
risks specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the
The lease liability is subsequently increased by the interest cost on the
CGU to which the asset belongs.
lease liability and decreased by lease payment made. It is remeasured
when there is a change in future lease payments arising from a change in
An impairment loss is recognized whenever the carrying amount of an
an index or rate, or as appropriate, changes in the assessment of whether
asset or a CGU exceeds its recoverable amount. Impairment losses are
an extension option is reasonably certain to be exercised or a termination
recognized in the income statement.
option is reasonably certain not to be exercised.
An impairment loss recognized in respect of a CGU (or a group of CGUs)
Short term leases and leases of low-value assets
containing goodwill is allocated first to goodwill and then to the other assets
The group applies the recognition exemption to its leases that have a lease
in the CGU(s) on a pro rata basis.
term of 12 months or less from the commencement date and do not contain
An impairment loss on goodwill is not reversed. An impairment loss on
exemption to leases that are considered of low-value assets, mainly IT
other assets is reversed if there has been a change in the estimates used
equipment and office equipment. Lease payments associated with the short
to determine the recoverable amount, and the change can be objectively
-term leases and leases of low -value assets are recognized as expenses
related to an event occurring after the impairment is recognized. An
on a straight -line basis over the lease term.
a purchase option (short-term leases). The group also applies recognition
impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been
Lease term
determined, net of depreciation or amortization, if no impairment loss had
The group determines the lease term as the non-cancellable term of the
been recognized.
Provisions
lease, together with any periods covered by an option to extend the lease
if it is reasonably certain to be exercised, or any period covered by an
option to terminate the lease if it is reasonably certain not to be exercised.
A provision is recognized when the group has a present obligation as a
The group applies judgment in evaluating whether it is reasonably certain
result of a past event that can be estimated reliably and it is probable that
to exercise extension option, considering all relevant factors that create
the group will be required to settle the obligation. If the effect is material,
economic incentive to exercise the extension option.
provisions are determined by discounting the expected future cash flows at
a market based pre-tax rate that reflects current market assessments of the
As a lessor
time value of money and, where appropriate, the liability-specific risks. The
When the group acts as a lessor, it determines at lease inception whether
unwinding of the discount is recognized as finance expense.
each lease is a finance lease or an operating lease.
Annual Report 2022 | Financials and Notes | Akastor Group 35
To classify each lease, the group makes an overall assessment of whether
disposed of. The same principle is used for allocation of goodwill when the
the lease transfers substantially all of the risks and rewards incidental to
group reorganizes its businesses.
ownership of the underlying asset. If this is the case, then the lease is a
finance lease; if not, then it is an operating lease. As part of this assessment,
Research and development
the group considers certain indicators such as whether the lease is for the
Expenditures on research activities undertaken with the prospect of
major part of the economic life of the asset.
obtaining new scientific or technical knowledge and understanding is
recognized in the income statement as incurred.
When the group is an intermediate lessor, it accounts for its interests in the
head lease and the sub-lease separately. It assesses the lease classification
Development activities involve a plan or design for the production of new or
of a sub-lease with reference to the right-of-use asset arising from the head
substantially improved products or processes. Development expenditure is
lease, not with reference to the underlying asset.
capitalized only if development costs can be measured reliably, the product
or process is technically and commercially feasible, future economic
The group recognizes lease payments received under operating leases
benefits are probable and the group intends to and has sufficient resources
as income on a straight line basis over the lease term as part of “Lease
to complete development and to use or sell the asset. The capitalized
revenue”.
Property, plant and equipment
expenditure includes cost of materials, direct labour overhead costs that
are directly attributable to preparing the asset for it intended use and
capitalized interest on qualifying assets. Other development expenditures
Property, plant and equipment are measured at cost less accumulated
are recognized in the income statement as an expense as incurred.
depreciation and impairment losses. The cost of self-constructed assets
includes the cost of materials, direct labour, borrowing costs on qualifying
Capitalized development expenditure is measured at cost less accumulated
assets, production overheads and the estimated costs of dismantling and
amortization and accumulated impairment losses.
removing the assets and restoring the site on which they are located.
Other intangible assets
If the components of property, plant and equipment have different useful
Acquired intangible assets are measured at cost less accumulated
lives, they are accounted for as separate components.
amortization and impairment losses.
Subsequent costs
Subsequent expenditures
The group capitalizes the cost of a replacement part or a component of
Subsequent expenditures on intangible assets are capitalized only when
property, plant and equipment when that cost is incurred if it is probable
they increase the future economic benefits embodied in the specific asset to
that the future economic benefits embodied with the item will flow to the
which they relate. All other expenditures are expensed as incurred.
group and the cost of the item can be measured reliably. All other costs are
expensed as incurred.
Amortization
Depreciation
Amortization is recognized in the income statement on a straight-line basis
over the estimated useful lives of intangible assets unless such useful
Depreciation is normally recognized on a straight-line basis over the
lives are indefinite. Intangible assets are amortized from the date they are
estimated useful lives of property, plant and equipment.
available for use.
Intangible assets
Goodwill
Employee benefits
Defined contribution plans
Goodwill that arises from the acquisition of subsidiaries is presented as
Obligations for contributions to defined contribution pension plans are
intangible asset. For the measurement of goodwill at initial recognition, see
recognized as an expense in the income statement as incurred.
Business combinations.
Defined benefit plans
Goodwill is measured at cost less accumulated impairment losses. In
The group’s net obligation in respect of defined benefit pension plans is
respect of equity-accounted investees, the carrying amount of goodwill is
calculated separately for each plan by estimating the amount of future
included in the carrying amount of the investment, and any impairment loss
benefit that employees have earned in the current and prior periods;
is allocated to the carrying amount of the equity-accounted investee as a
discounting that amount and deducting the fair value of any plan assets.
whole.
When the group disposes of an operation within a CGU or group of CGUs
qualified actuary using the projected unit credit method. The discount
to which goodwill has been allocated, a portion of the goodwill is included
rate is the yield at the reporting date on government bonds or high-quality
in the carrying amount of the operation when determining the gain or loss
corporate bonds with maturities consistent with the terms of the obligations.
The calculation of defined benefit obligations is performed annually by a
on disposal. The portion of the goodwill allocated is measured based on
the relative values of the operation disposed of and the portion of the CGU
Remeasurement of the net defined benefit liability, which comprises
retained at the date of partial disposal, unless it can be demonstrated that
actuarial gains and losses, the return on plan assets (excluding interest)
another method better reflects the goodwill associated with the operation
and the effect of the asset ceiling (if any, excluding interest), are recognized
Annual Report 2022 | Financials and Notes | Akastor Group 36
immediately in other comprehensive income. The group determines the net
3 inputs is included in Note 30 Financial Instruments.
interest expense (income) on the net defined benefit liability (asset) for the
period by applying the discount rate used to measure the defined benefit
Impairment of financial assets
obligation at the beginning of the annual period to the then-net defined
The group has invested in significant debt instruments measured at fair
benefit liability (asset), taking into account any changes in the net defined
value through other comprehensive income (FVOCI). The impairment of
benefit liability (asset) during the period as a result of contributions and
these financial assets are subject to expected credit loss. The loss allowance
benefit payments. Net interest expense and other expenses related to
is recognized in profit and loss and reduces the fair value loss otherwise
defined benefit plans are recognized in the income statement.
recognized in OCI. The loss allowance is based on assumptions of expected
cash flows from the debt instruments. When making these assumptions, the
When the benefits of a plan are changed or when a plan is curtailed, the
group uses judgements selecting the similar inputs as used in the fair value
resulting change in benefit that relates to past service or the gain or loss on
measurement since the valuation model also considers the present value of
curtailment is recognized immediately in the income statement. The group
expected cash flows from such investments. Key assumptions include the
recognizes gains and losses on the settlement of a defined benefit plan
expected disposal value of the investments and discount factor.
when the settlement occurs.
Deferred and contingent considerations
Fair value measurement
Deferred and contingent considerations
resulting
from business
When available, the group measures the fair value of a financial instrument
combinations and disposals are measured at fair value at transaction date.
using the quoted price in an active market for that instrument. If there is no
When a deferred and contingent consideration meets the definition of a
quoted price in an active market, then the group uses valuation techniques
financial asset or liability, it is subsequently remeasured at fair value at the
that maximize the use of relevant observable inputs and minimize the use
reporting date. The determination of fair value is based on discounted cash
of unobservable inputs. The chosen valuation technique incorporates all
flows. Key assumptions made by the management include the probability of
of the factors that market participants would take into account in pricing a
meeting each performance target and the discount factor.
transaction.
Income taxes
The best evidence of the fair value of a financial instrument on initial
The group is subject to income taxes in numerous jurisdictions. Significant
recognition is normally the transaction price. If the group determines that
judgement is required to determine the worldwide provision for income
the fair value on initial recognition differs from the transaction price and
taxes. There are many transactions and calculations for which the ultimate
the fair value is evidenced neither by a quoted price in an active market
tax determination is uncertain during the ordinary course of business.
for an identical asset or liability nor based on a valuation technique that
Provisions for anticipated tax audit issues are based on estimates of
uses only data from observable markets, the financial instrument is initially
eventual additional taxes.
measured at fair value, and the difference between the fair value on initial
recognition and the transaction price is recognized as a deferred gain or
Valuation of deferred tax assets is dependent on management’s assessment
loss. Subsequently, the deferred gain or loss is recognized in profit or loss
of future recoverability of the deferred tax benefit. Expected recoverability
on an appropriate basis over the life of the instrument.
may result from expected taxable income in the near future, planned
Note 4 | Significant accounting estimates and judgements
change may affect the results for each future reporting period.
transactions or planned tax optimizing measures. Economic conditions may
change and lead to a different conclusion regarding recoverability, and such
Estimates and judgements are continually reviewed and are based on
Tax authorities in different jurisdictions may challenge calculation of income
historical experiences and expectations of future events. The resulting
taxes from prior periods. Such processes may lead to changes to prior
accounting estimates will, by definition, seldom accurately match actual
periods’ taxable income, resulting in changes to income tax expense. When
results, but are based on the best estimate at the time. Estimates and
tax authorities challenge income tax calculations, management is required
assumptions that have a significant risk of causing material adjustments to
to make estimates of the probability and amount of possible tax adjustments.
the carrying amounts of assets and liabilities within the next financial year
Such estimates may change as additional information becomes known.
are discussed below.
Further details about income taxes are included in Note 12 Income tax.
Fair value measurement
Pension benefits
The group has invested in significant financial assets that require the
The present value of the pension obligations depends on a number of factors
measurement of fair value. If there is no quoted price in an active market,
determined on the basis of actuarial assumptions. These assumptions
then the group uses valuation techniques that maximize the use of
include financial factors such as the discount rate, expected salary growth,
relevant observable inputs and minimize the use of unobservable inputs.
inflation and return on assets as well as demographical factors concerning
The chosen valuation technique incorporates all of the factors that market
mortality, employee turnover, disability and early retirement. Assumptions
participants would take into account in pricing a transaction. The fair value
about all these factors are based on the situation at the time the assessment
measurement requires a high degree of judgment. Judgements include
is made. However, it is reasonably certain that such factors will change over
considerations of inputs such as cash flow projection, discount rate and
the very long periods for which pension calculations are made. Any changes
volatility. Further information about the fair value measurement using level
in these assumptions will affect the calculated pension obligations with
Annual Report 2022 | Financials and Notes | Akastor Group 37
immediate recognition in other comprehensive income. Further information
Legal disputes and contingent liabilities
about the pension obligations and the assumptions used are included in
Given the scope of the group’s worldwide operations, group companies
Note 25 Employee benefits - pension.
are inevitably involved in legal disputes in the course of their business
Lease terms
activities. In addition, as an investment company, Akastor and its portfolio
companies from time to time engage in mergers, acquisitions and other
Some of the property leases, in which the group is a lessee, contain
transactions that could expose the companies to financial and other
extension or termination options exercisable before the end of the non-
non-operational risks, such as indemnity claims and price adjustment
cancellable period. These options are used to provide operational flexibility
mechanisms resulting in recognition of deferred settlement obligations.
for the group. In determining the lease term, the group considers all facts
and circumstances that create an economic incentive to exercise an
Provisions have been made to cover the expected outcome of the legal
extension option, or not exercise a termination option. Extension options (or
claims and disputes to the extent negative outcomes are likely and reliable
periods after termination options) are only included in the lease term if the
estimates can be made. However, the final outcomes of these cases are
lease is reasonably certain to be extended (or not terminated). The most
subject to uncertainties, and resulting liabilities may exceed provisions
relevant factors to be considered as “creating economic incentive” include
recognized. The group follows the development of these disputes on case-
significant leasehold improvement, alternatives for the leased property and
by-case basis and makes assessment based on all available evidence as
the costs and business disruption required to replace the leased assets.
at the reporting date.
Most extension options in offices leases have not been included in the lease
term, because the group expects to be able to replace the assets without
significant cost or business disruption. Most of the early termination options
are not considered in the lease term either as the group assesses it as
reasonably certain that the leases will not be terminated early.
The lease term assessment requires management’s judgment and is made
at the commencement of the leases. The lease term is reassessed if an
option is actually exercised or the group becomes obliged to exercise it. The
assessment of reasonable certainty is only revised if a significant event or a
significant change in circumstances occurs, which affects this assessment,
and that is within the group’s control. Please see Note 31 Leases for more
information about the leases where the group is a lessee.
Annual Report 2022 | Financials and Notes | Akastor Group 38
Note 5 | Discontinued operations
Discontinued operations MHWirth
SDS business to HMH in return for the other 50% of the shares and USD
On October 1, 2021, Akastor completed the transaction to bring together
200 million in consideration, of which USD 120 million was paid in cash at
Akastor’s wholly owned subsidiary, MHWirth AS (MHWirth) and Baker
closing. HMH has issued shareholder notes to Akastor and Baker Hughes
Hughes’ Subsea Drilling Systems (SDS) business to create a joint venture
representing the balance of the consideration owed to them. The notes are
company HMH Holding B.V. (HMH). HMH delivers a global full-service
subordinated to HMH’s external debt financing. HMH financed the cash
offshore drilling equipment offering that provides customers with a broad
consideration payable to Baker Hughes and Akastor by way of a USD 220
portfolio of products and services.
million bank facility.
HMH is owned 50/50 by Akastor and Baker Hughes. Akastor contributed
Following the transaction, MHWirth was deconsolidated and classified as
its shares in MHWirth to HMH in return for 50% of the shares of HMH and
discontinued operations. HMH is classified as a joint venture to the group
USD 120 million in consideration, of which USD 100 million (before certain
and accounted for using the equity method. See Note 17 Equity-accounted
adjustments) was paid in cash at closing. Baker Hughes contributed the
investees for more information.
Results of discontinued operations
Amounts in NOK million
Revenue
Expenses
Net financial items
Profit (loss) before tax
Income tax
Profit (loss) from operating activities, net of tax
Gain (loss) on sale of discontinued operations
Net profit (loss) from discontinued operations
Basic/diluted earnings (loss) per share from discontinued operations (NOK)
2022
2021
2 024
(2 096)
(27)
(99)
3
(96)
1 236
1 140
4.20
4
4
0.02
Gain on sale of discontinued operations in 2022 was related to re-assessment of contingent considerations related to divestments from prior years. Gain
on sale from the disposal in 2021 included gain of NOK 1 240 million for MHWirth divestment, offset by loss of NOK 4 million on divestments from previous
years. The gain in 2021 included currency translation differences of NOK 362 million that were reclassified from Other Comprehensive Income to the income
statement as part of gain from the disposal of MHWirth.
Cash flows from (used in) discontinued operations
Amounts in NOK million
Net cash from operating activities
Net cash from investing activities (incl. net cash proceeds from sale of the operations)
Net cash from financing activities
Net cash flow from discontinued operations
2021
50
592
(49)
593
Annual Report 2022 | Financials and Notes | Akastor Group 39
Note 6 | Disposal group held for sale and disposal of subsidiaries
Disposal group held for sale
In December 2022, Akastor entered into a share purchase agreement with Diamond Key International Pty. Ltd. (“DKI”) for the sale of all shares in Cool
Sorption A/S (“Cool Sorption”) for DKK 20.4 million on a cash and debt free basis. Cool Sorption is a specialist supplier of Vapour Recovery Units (VRU) and
systems and is included in “Other holdings” in segment reporting. Accordingly, Cool Sorption is presented as a disposal group held for sale as of December
31, 2022. The sale transaction was completed in February 2023.
Assets and liabilities of disposal group held for sale
Amounts in NOK million
Deferred tax assets
Intangible assets
Trade and other receivables
Assets held for sale
Provision, current
Trade and other payables
Liabilities held for sale
2022
6
1
35
43
1
31
32
Disposal of entities
Disposal of AGR Well Management Limited (UK) in 2021
Disposal of AGR Wind Services in 2022
On December 22, 2021, Akastor completed the transfer of the shares in
In February 2022, Akastor completed the transaction to establish a joint
AGR Well Management Limited (“AGR Well Management”), a wholly-
venture company, Føn Engergy Services, together with IKM Group. Akastor
owned subsidiary, to SpotOn Energy Holding AS (“SpotOn Energy”). As
transferred the shares in AGR Wind Services AS (“AGR Wind”) to Føn
compensation for the transfer, Akastor, through its subsidiary AGR AS,
Energy Services. As compensation for the transfer, Akastor, through its
received 20% ownership in SpotOn Energy, which is expected to strengthen
subsidiary AGR AS, received 45% ownership in Føn Energy Services. The
the cooperation between AGR and SpotOn Energy going forward. SpotOn
company offers integrated Operations and Maintenance (O&M) solutions
Energy is accounted as an associated company to the group. The
to developers, operators, suppliers and owners of offshore renewables
transaction resulted in an accounting loss of NOK 11 million, included as
infrastructure, and in particular offshore wind farms. Føn Energy Services is
Other revenue and income in the income statement for 2021.
classified as a joint venture to the group and accounted for using the equity
method.
The disposal of AGR Wind Services resulted in an accounting gain of NOK
21 million, included as Other revenue and income in the income statement
for 2022.
Annual Report 2022 | Financials and Notes | Akastor Group
40
Note 7 | Operating segments
Basis for segmentation
HMH and AKOFS Offshore are classified as joint ventures and accounted
As of December 31, 2022, Akastor has three reportable segments which
for using the equity method, see Note 17 Equity-accounted investees. The
are the strategic business units of the group. The strategic business units
segment information of the two joint ventures are presented at 100% basis.
are managed separately and offer different products and services due
to different market segments and different strategies for their projects,
Further, Akastor holds 100 percent ownership in Cool Sorption (divested in
products and services:
February 2023), 100 percent in DDW Offshore AS, 15 percent economic
interest in NES Fircroft and 93 percent of Aker Pensjonskasse, equity
HMH is a premier drilling solutions provider, which was formed as
instruments in Awilco Drilling, as well as economic interests in four drilling
an independent company in October 2021 through the merger of
equipment contracts with Jurong Shipyard (DRU contracts). These are
Baker Hughes' Subsea Drilling Systems business and Akastor's
included in “Other holdings”.
wholly owned subsidiary, MHWirth AS. HMH combines integrated
delivery capabilities, capital, renowned industry expertise and
Measurement of segment performance
delivers the full range of offshore drilling equipment products and
Segment performance is measured by operating profit before depreciation,
packages at scale.
amortization and impairment (EBITDA) which is reviewed by the group’s
Executive Management Group (the chief operating decision maker).
AKOFS Offshore is a global provider of vessel-based subsea well
Segment profit, together with key financial information as described below,
construction and intervention services to the oil and gas industry,
gives the Executive Management Group relevant information in evaluating
covering all phases from conceptual development to project
the results of the operating segments and is relevant in evaluating the results
execution and offshore operations.
of the segments relative to other entities operating within these industries.
AGR is a well design and drilling project management, HSEQ,
reservoir and field management service company delivering
solutions for the entire field life cycle. The company also provides
rig procurement,
tailored
training, software and
technical
manpower for clients globally.
Annual Report 2022 | Financials and Notes | Akastor Group 41
Information about reportable segments
Equity-accounted
investees
Consolidated
entities
Amounts in NOK million
Note
HMH (JV)
AKOFS Off-
shore (JV)
AGR
Other
holdings
Total
operating
segments
Adjustment
of JVs and
elimination
Total
Akastor
2022
Income statement
External revenue and other
income
8
Total revenue and other income
Operating profit before
depreciation, amortization and
impairment (EBITDA)
Depreciation and amortization
14, 15, 31
Impairment
Operating profit (loss) (EBIT)
Assets
Current operating assets
Non-current operating assets
Finance lease receivables
Assets held for sale
Segment assets
Liabilities
Current operating liabilities
Non-current operating liabilities
Lease liabilities
Liabilities held for sale
Segment liabilities
Net current operating assets
Net capital employed
31
6
31
6
6 477
6 477
1 425
1 425
762
(457)
-
306
4 725
7 158
-
-
458
(376)
-
81
578
4 517
-
-
11 883
5 095
3 235
452
344
-
4 032
1 490
7 852
393
6
1 245
-
1 644
185
3 451
789
789
81
(14)
-
66
167
253
-
-
419
148
13
13
-
173
19
246
269
269
(91)
(31)
(20)
(142)
779
1 088
218
43
2 130
555
549
72
32
8 961
8 961
(7 902)
(7 902)
1 059
1 059
1 209
(1 220)
(878)
(20)
311
833
-
(387)
6 249
13 016
218
43
(5 312)
(8 197)
-
-
19 527
(13 510)
4 331
1 020
1 675
32
(3 637)
(458)
(1 590)
-
(10)
(45)
(20)
(76)
937
4 819
218
43
6 017
693
562
85
32
1 208
7 058
(5 685)
1 372
224
921
1 918
12 469
(1 675)
(7 824)
243
4 645
Annual Report 2022 | Financials and Notes | Akastor Group
42
Amounts in NOK million
Note
HMH (JV) 1)
AKOFS Off-
shore (JV)
AGR
Other
holdings
Total
operating
segments
Adjustment
of JVs and
elimination
Total
Akastor
Equity-accounted
investees
Consolidated
entities
2021
Income statement
External revenue and other
income
Inter-segment revenue
Total revenue and other income
Operating profit before
depreciation, amortization and
impairment (EBITDA)
8
Depreciation and amortization
14, 15, 31
Impairment
Operating profit (loss) (EBIT)
Assets
Current operating assets
Non-current operating assets
Finance lease receivables
31
Segment assets
Liabilities
Current operating liabilities
Non-current operating liabilities
Lease liabilities
Segment liabilities
31
Net current operating assets
Net capital employed
1 419
-
1 419
215
(116)
-
99
3 701
6 736
-
10 436
2 655
582
381
3 619
1 045
6 817
1 269
-
1 269
320
(365)
(88)
(134)
610
4 249
-
4 859
387
7
1 163
1 556
224
3 303
723
-
723
33
(16)
(7)
9
149
228
-
376
158
13
13
184
(9)
192
230
2
232
(32)
(59)
-
(92)
736
2 045
241
3 021
496
901
142
1 539
239
1 483
3 641
2
3 643
534
(556)
(95)
(117)
(2 688)
(2)
(2 690)
(534 )
481
88
35
5 195
13 257
241
(4 318)
(7 576)
-
18 693
(11 894)
953
-
953
-
(76)
(7)
(82)
877
5 681
241
6 799
647
914
155
3 696
1 503
1 699
6 898
1 499
11 796
(3 049)
(589)
(1 544)
(5 182)
1 716
(1 269)
(6 712)
231
5 084
1) HMH was established as a joint venture to Akastor as of October 1, 2021.The income statement information is presented at 100% basis for the period October 1- December
31, 2021. Segment assets and liabilities refer to financial positions in HMH at 100% basis as of December 31, 2021.
Annual Report 2022 | Financials and Notes | Akastor Group
Reconciliations of information on reportable segments to IFRS measures
Amounts in NOK million
Assets
Total segment assets
Derivative financial instruments
Cash and cash equivalents
Non-current interest-bearing receivables
Consolidated assets
Liabilities
Total segment liabilities
Current borrowings
Non-current borrowings
Consolidated liabilities
Geographical information
43
Note
2022
2021
21
19
23
23
6 017
-
119
668
6 804
1 372
1 142
198
2 712
6 799
10
89
315
7 212
1 716
16
1 372
3 103
Geographical revenue is presented on the basis of geographical location of the group companies selling to the customers. Non-current segment assets and
capital expenditures are based on the geographical location of the assets.
Amounts in NOK million
Norway
Netherlands
United Kingdom
Denmark
Australia
Other countries
Total
Major customer
Revenue and other income
2022
2021
779
-
91
82
104
2
1 059
663
-
128
79
75
8
953
Non-current assets exclud-
ing deferred tax assets and
financial instruments
2022
1 036
2 886
3
-
12
-
2021
1 180
2 650
3
1
9
3
3 913
3 847
Revenues from one customer of AGR represent approximately NOK 154 million (NOK 150 million in 2021) of the group’s total revenue.
Annual Report 2022 | Financials and Notes | Akastor Group
44
Note 8 | Revenue and other income
Revenue types
The group generates revenue primarily from provision of consultancy and engineering services to its customers in AGR, a supplier of well-, reservoir- and
software services to the offshore drilling industry. Other sources of revenue are mainly lease revenue from charter lease of vessels in DDW Offshore.
Amounts in NOK million
Revenue from contracts with customers
Other revenue and income
Lease revenue
Other revenue
Gain (loss) on disposal of subsidiaries
Gain on disposals of assets
Total revenue and other income
Note
2022
31
880
155
1
21
2
1 059
2021
834
76
3
(11)
51
953
Disaggregation of revenue from contracts with customers
Revenue from contracts with customer is disaggregated in the following table by major contract and revenue types and timing of revenue recognition.
The table also includes a reconciliation of the disaggregated revenue with revenue information as shown in Note 7 Operating segments.
Amounts in NOK million
2022
Major contract/revenue types
Construction revenue
Sale of standard products
Service revenue
Total Revenue from contracts with customers
Timing of revenue recognition
Transferred over time
Transferred at point in time
Total Revenue from contracts with customers
Other revenue and income
Total external revenue and other income in segment reporting
AGR
Other
holdings
Total
Akastor
-
17
751
768
751
17
768
21
789
48
-
63
111
111
-
111
158
269
48
17
814
880
862
17
880
179
1 059
Annual Report 2022 | Financials and Notes | Akastor Group
Amounts in NOK million
2021
Major contract/revenue types
Construction revenue
Sale of standard products
Service revenue
Total Revenue from contracts with customers
Timing of revenue recognition
Transferred over time
Transferred at point in time
Total Revenue from contracts with customers
Other revenue and income
Total external revenue and other income in segment reporting
Contract balances
Amounts in NOK million
Receivables, which are included in “trade and other receivables”
Contract assets
Contract liabilities
45
AGR
Other
holdings
Total
Akastor
-
16
718
734
718
16
734
(11)
723
47
-
53
100
100
-
100
130
230
47
16
771
834
818
16
834
120
953
Note
2022
2021
20
27
115
61
25
117
47
21
Contract assets relate to the group’s rights to consideration for work completed, but not yet invoiced at the reporting date. The contract assets are transferred
to receivables when the rights to payment become unconditional, which usually occurs when invoices are issued to the customers. No impairment on
contract assets was recognized in 2022 or 2021.
Contract liabilities relate to advance consideration received from customer for work not yet performed. Revenue recognized in 2022 that was included in
contract liabilities in the beginning of the year was NOK 14 million (NOK 11 million in 2021).
Transaction price allocated to the remaining performance obligations
The following table includes revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied)
as of December 31, 2022.
Amounts in NOK million
Transaction price allocated
2023
599
Later
53
Total
652
The amounts disclosed above do not include variable consideration which is constrained. The group applies the practical expedient and does not adjust
the transaction price allocated to performance obligations for the effects of a significant financing component if the group expects, at contract inception, that
the period between when the group transfers a promised good or service to a customer and when the customer pays for that good or service will be one
year or less.
Annual Report 2022 | Financials and Notes | Akastor Group 46
Note 9 | Salaries, wages and social security costs
Amounts in NOK million
Note
2022
2021
Salaries and wages including holiday allowance
Social security tax/ national insurance contribution
Pension cost
Other employee costs
Salaries, wages and social security costs
Note 10 | Other operating expenses
Amounts in NOK million
External consultants and hired-ins inclusive audit fees
Rental and other costs for premises and equipment
Office supplies and travel expenses
Other
Total other operating expenses
Fees to the auditors
25
298
43
12
15
366
299
43
11
13
367
2022
2021
79
8
17
6
109
55
7
8
9
78
The table below summarizes audit fees (exclusive VAT), as well as fees for audit related services, tax services and other services incurred by the group
during 2022 and 2021.
Amounts in NOK million
2022
2021
2022
2021
2022
2021
Akastor ASA
Subsidiaries
Total
Audit
Other assurance services
Total
1
-
1
2
-
2
1
-
2
2
1
3
3
-
3
4
1
5
Annual Report 2022 | Financials and Notes | Akastor Group 47
Note 11 | Finance income and costs
Amounts in NOK million
Note
2022
2021
Interest income on bank deposits measured at amortized cost
Interest income on debt instruments at FVOCI
Interest income on finance lease receivables
Net foreign exchange gain
Dividend income from equity instrument
Net changes in fair value of financial assets at FVTPL
Liquidation of foreign entity 1)
Other finance income
Finance income
Interest expense on financial liabilities measured at amortized cost
Unwind of discounting effect
Interest expense on lease liabilities
Impairment loss on receivables 2)
Loss on foreign currency forward contracts
Other financial expenses
Financial expenses
Net finance income
31
31
35
103
21
166
79
58
-
27
490
(140)
(24)
(6)
(166)
(58)
(16)
(410)
80
17
89
12
55
74
11
110
2
369
(112)
(24)
(9)
-
(17)
(12)
(175)
194
1) Relates to currency translation differences that were reclassified from Other Comprehensive Income to the income statement as result of liquidation.
2) Impairment related to loss allowance on debt instruments measured at FVOCI.
See Note 30 Financial instruments for information of the finance income and expense generating items.
Annual Report 2022 | Financials and Notes | Akastor Group 48
Note 12 | Income tax
Income tax expense
Amounts in NOK million
Current tax expense
Current year
Total current tax expense
Deferred tax expense
Origination and reversal of temporary differences
Write down of tax loss and deferred tax assets
Recognition of previously unrecognized deferred tax assets
Total deferred tax income (expense)
Total tax income (expense)
2022
2021
(3)
(3)
(13)
(22)
37
2
(2)
(1)
(1)
25
(30)
26
21
20
Effective tax rate
The table below reconciles the reported income tax expense to the expected income tax expense according to the corporate income tax rate in Norway.
Amounts in NOK million
2022
2021
Profit (loss) before tax, continuing operations
Tax income (expense) using the company's domestic tax rate
Tax effects of:
Difference between local tax rate and Norwegian tax rate
Permanent differences 1)
Prior year adjustments (deferred tax)
Recognition of previously unrecognized deferred tax assets 2)
Write down of tax loss or deferred tax assets 3)
Total tax income (expenses)
(259)
57
(1)
(74)
1
37
(22)
(2)
22.0%
(0.4%)
(28.6%)
0.5%
14.5%
(8.6%)
(0.7%)
(235)
52
-
(32)
4
26
(30)
20
22.0%
-
(13.5%)
1.8%
11.1%
(12.7%)
8.5%
1) Relates mainly to net profit and loss after tax from equity-accounted investees and profit and loss recognized on various tax-exempted investments.
2) Relates mainly to previously not recognized tax loss carry-forward in Norway.
3) The impairment relates mainly to deferred tax assets in Akastor Corporate entities in Norway.
Annual Report 2022 | Financials and Notes | Akastor Group
49
Recognized deferred tax assets and liabilities
Amounts in NOK million
2022
2021
2022
2021
2022
2021
Assets
Liabilities
Net
PPE and Intangible assets
Pensions
Provisions
Other items
Tax loss carry-forwards
Total before set offs
Set-off of tax
Total deferred tax assets(liabilities)
5
2
2
9
36
53
(16)
37
2
2
1
6
37
48
(5)
42
(1)
-
-
(19)
-
(20)
16
(4)
(1)
-
-
(9)
-
(10)
5
(4)
4
2
2
(10)
36
33
-
33
1
2
1
(3)
37
38
-
38
The group has made an evaluation of taxable profit for the next five years based on management’s projection. Deferred tax assets are recognized to the
extent that it is probable that future taxable profit will be available, against which the deductible temporary difference can be utilized.
Change in net recognized deferred tax assets (liabilities)
Amounts in NOK million
Balance as of December 31, 2020
Disposal of subsidiaries as of January 1, 2021
Recognized in profit and loss
Recognized in other comprehensive income
Currency translation differences
Balance as of December 31, 2021
Recognized in profit and loss
Classified as held for sale
Balance as of December 31, 2022
PPE and
intangible
assets
Projects
under
construc-
tion Pensions
Provi-
sions
Other
items
Tax loss
carry-for-
wards
30
(29)
-
-
-
-
3
-
4
(50)
51
-
-
(2)
-
-
-
-
65
(57)
-
(6)
(1)
2
-
-
2
28
(26)
(1)
-
-
1
1
-
2
204
(207)
-
-
-
(3)
(10)
3
(10)
43
(27)
22
-
(1)
37
7
(9)
36
Total
320
(294)
21
(6)
(3)
38
2
(6)
33
Tax loss carry-forwards and deductible temporary differences for which no deferred tax assets are recognized
Deferred tax assets have not been recognized in respect of tax loss carry-forwards or deductible temporary differences when the group evaluates that it
is not probable that future taxable profit will be available against which the group can utilize these benefits based on forecasts and realistic expectations.
Expiry date of unrecognized tax loss carry-forwards
Amounts in NOK million
Expiry within one year
Expiry in more than one year or later
Indefinite
Total
2022
14
375
1 350
1 739
2021
-
350
1 772
2 121
Unrecognized other deductible temporary differences are NOK 1 169 million in 2022 (NOK 1 022 million in 2021).
Annual Report 2022 | Financials and Notes | Akastor Group
50
Note 13 | Earnings per share
Akastor ASA holds 1 985 164 treasury shares at year end 2022 (2 390 215 in 2021). Treasury shares are not included in the weighted average number of
ordinary shares.
Amounts in NOK million
Profit (loss) from continuing operations
Non-controlling interests
Profit (loss) attributable to ordinary shares from continuing operations
Profit (loss) from discontinued operations
Profit (loss) attributable to ordinary shares
Basic/ diluted earnings per share
2022
(261)
(19)
(280)
4
(276)
2021
(215)
(6)
(221)
1 140
919
The calculation of basic/diluted earnings per share is based on the profit (loss) attributable to ordinary shareholders and a weighted average number of
ordinary shares outstanding.
Issued ordinary shares as of January 1
Weighted average number of issued ordinary shares for the year adjusted for treasury shares
Basic/ diluted earnings (loss) per share (NOK)
Basic/ diluted earnings (loss) per share for continuing operations (NOK)
Basic/ diluted earnings (loss) per share for discontinued operations (NOK)
2022
2021
274 000 000
274 000 000
271 002 629
271 609 785
(1.01)
(1.03)
0.02
3.38
(0.81)
4.20
Annual Report 2022 | Financials and Notes | Akastor Group Note 14 | Property, plant and equipment
The table below includes discontinued operations until these met the criteria to be classified as held for sale.
Amounts in NOK million
Historical cost
Balance as of January 1, 2021
Additions
Reclassifications
Transfer from assets under construction
Disposals and scrapping
Disposal of subsidiaries
Currency translation differences
Balance as of December 31, 2021
Additions
Disposals and scrapping
Reclassification to held for sale
Currency translation differences
Balance as of December 31, 2022
Accumulated depreciation
Balance as of January 1, 2021
Depreciation for the year 1)
Disposals and scrapping
Disposal of subsidiaries
Currency translation differences
Balance as of December 31, 2021
Depreciation for the year
Impairment
Reclassifications to held for sale
Currency translation differences
Balance as of December 31, 2022
Book value as of December 31, 2021
Book value as of December 31, 2022
Note
Buildings
and land
Vessels
Machinery,
equipment,
software
Under
construction
671
-
-
-
-
(654)
(17)
-
-
-
-
-
-
(310)
(2)
-
305
7
-
-
-
-
-
-
-
-
366
65
-
-
(156)
-
8
282
(2)
-
-
35
315
(7)
(30)
-
-
(1)
(38)
(18)
(21)
-
(6)
(83)
244
232
1 343
11
10
1
(8)
(1 248)
(7)
101
1
-
(9)
-
93
(1 051)
(13)
7
957
6
(94)
(3)
-
9
-
(88)
7
5
4
3
-
(1)
-
(6)
(1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
6
51
Total
2 384
79
10
-
(164)
(1 908)
(17)
384
(1)
-
(9)
35
408
(1 368)
(46)
7
1 262
12
(133)
(21)
(21)
9
(6)
(171)
251
237
1) Includes depreciation of NOK 12 million from discontinued operations in 2021
Depreciation
Estimates for useful life, depreciation method and residual values are reviewed annually. The group has not identified material assets expected to have
a significant shorter useful life due to climate-related risks. Assets are mainly depreciated on a straight-line basis over their expected economic lives as
follows:
Machinery, equipment and software
Vessels
3–15 years
20–25 years
Annual Report 2022 | Financials and Notes | Akastor Group
52
Note 15 | Intangible assets and goodwill
Amounts in NOK million
Historical cost
Balance as of 1 January 2021
Reclassification
Capitalized development
Adjustment from business combina-tions prior years
Disposals of subsidiaries
Currency translation differences
Balance as of December 31, 2021
Reclassification
Capitalized development
Reclassification to held for sale
Currency translation differences
Balance as of December 31, 2022
Accumulated amortization and impairment
Balance as of 1 January 2021
Amortization for the year 1)
Impairment 2)
Disposal of subsidiaries
Currency translation differences
Balance as of December 31, 2021
Amortization for the year
Reclassification to held for sale
Balance as of December 31, 2022
Net book value as of 31 December 2021
Net book value as of 31 December 2022
Note
Development
costs
Goodwill
Other
Total
6
583
(10)
24
-
(544)
(4)
50
1
9
(14)
-
47
(411)
(10)
-
390
3
(28)
(6)
13
(22)
22
25
1 392
270
2 246
-
-
(1)
(1 263)
(10)
118
-
-
-
1
119
(86)
-
(69)
146
(1)
(10)
-
-
(10)
109
109
-
1
-
(244)
(3)
24
-
-
-
-
24
(154)
(6)
(86)
233
3
(9)
(3)
-
(13)
15
11
(10)
24
(1)
(2 051)
(16)
192
1
9
(14)
1
190
(651)
(16)
(155)
770
5
(47)
(10)
13
(44)
145
146
1) Includes amortization of NOK 6 million from discontinued operations in 2021
2) Includes impairment of NOK 149 million from discontinued operations in 2021
Research and development costs
NOK 9 million has been capitalized in 2022 (NOK 24 million in 2021) related to development activities. No research and development costs were expensed
during the year (NOK 1 million in 2021).
Amortization
Intangible assets all have finite useful lives and are amortized over the expected economic life, ranging between 5-10 years.
Annual Report 2022 | Financials and Notes | Akastor Group 53
Note 16 | Impairment testing of goodwill
Goodwill originates from acquisitions. For the purpose of impairment testing, goodwill has been allocated to the group’s cash-generating units (portfolio
companies) as shown in the table below, which represents the lowest level at which goodwill is monitored in management reporting.
Amounts in NOK million
AGR
Total goodwill
2022
2021
109
109
109
109
Impairment testing for cash-generating units containing significant
margins and other cost components based on historical experience as
goodwill
well as assessment of future market development and conditions. These
The recoverable amounts of cash-generating units (portfolio companies)
assumptions require a high degree of judgement, given the significant
are determined based on value-in-use calculations. Discounted cash flow
degree of uncertainty regarding oilfield service activities in the forecast
models are applied to determine the value in use for the portfolio companies
period.
with goodwill. The management has made cash flow projections based
on budget and strategic forecast for the periods 2023-2027. Beyond the
Terminal value growth rate The group uses a constant growth rate not
explicit forecast period of five years, the cash flows are extrapolated using
exceeding 2% (including inflation) for periods beyond the management’s
a constant growth rate.
forecast period of five years. The growth rates used do not exceed the
growth rates for the industry in which the portfolio company operates.
Key assumptions used in the calculation of value in use are discussed
below. The values assigned
to
the key assumptions
represent
Discount rates are estimated based on Weighted Average Cost of Capital
management's assessment of future trends in the relevant industries as well
(WACC) for the industry in which the portfolio company operates. The
as management’s expectations regarding margin, and have been based on
risk-free interest rates used in the discount rates are based on the 10 year
historical data from both external and internal sources.
state treasury bond rate at the time of the impairment testing. Optimal debt
EBITDA used in the value-in-use calculations represents the operating
further adjusted to reflect any additional short to medium term market risk
earnings before depreciation and amortization and is estimated based
considering current industry conditions.
leverage is estimated for each portfolio company. The discount rates are
on the expected future performance of the existing businesses in their
main markets. Assumptions are made regarding revenue growth, gross
Discount rate assumptions used in impairment testing
Discount rate after tax
2022
2021
Discount rate pre tax
2022
2021
AGR
15.0%
13.0%
18.4%
16.3%
Sensitivity to changes in assumptions
The group has performed sensitivity calculations to identify any reasonably
For the portfolio companies containing goodwill, the recoverable amounts
possible change in key assumptions that could cause the carrying amount
are higher than the carrying amounts based on the value in use analysis
to exceed the recoverable amount. In AGR, if the average revenue growth
and consequently no impairment loss of goodwill was recognized in 2022
in the forecast period were reduced by more than 10%, or if the average
or 2021.
EBITDA margin in the forecast period were reduced by more than 2%, the
estimated recoverable amount would be lower than the carrying amount
and it would result in impairment in AGR.
Annual Report 2022 | Financials and Notes | Akastor Group 54
Note 17 | Equity-accounted investees
Equity-accounted investees include joint ventures that are accounted for using the equity method. Such investments are defined as related parties to
Akastor. See Note 33 Related parties for significant agreements and transactions with joint ventures and any guarantees provided on behalf of or from such
entities.
Amounts in NOK million
Country
Ownership and voting rights
Balance as of January 1, 2022
Acquisitions
Share of net profit (loss)
Share of other comprehensive income
Currency translation differences
Balance as of December 31, 2022
HMH
AKOFS Offshore
Netherlands
50%
2 650
-
(82)
(25)
321
2 863
Norway
50%
759
-
(179)
(51)
86
615
Total
equity-
accounted
investees
Føn Energy
Services
Norway
45%
-
26
(2)
-
-
24
3 408
26
(263)
(76)
407
3 502
HMH
Føn Energy Services
On October 1, 2021, Akastor completed the transaction to bring together
In February 2022, Akastor, through its subsidiary AGR AS, completed the
Akastor’s wholly owned subsidiary, MHWirth AS (MHWirth) and Baker
transaction to establish a joint venture company, Føn Engergy Services,
Hughes’ Subsea Drilling Systems (SDS) business to create a joint venture
together with IKM Group. Following the transaction, Akastor and IKM each
company HMH Holding B.V. (HMH). Following the transaction, Akastor and
holds 45% of the shares in Føn Energy Services, and have joint control
Baker Hughes each holds 50% of the shares in HMH, and have joint control
over the company. See Note 6 for more information about the transaction.
over the company. See Note 5 Discontinued operations for more information
The company offers integrated Operations and Maintenance (O&M)
about the transaction. HMH is a provider of drilling systems, equipment and
solutions to developers, operators, suppliers and owners of offshore
aftermarket services.
AKOFS Offshore
AKOFS Offshore is a joint venture where Akastor, MITSUI & CO., Ltd.
("Mitsui") and Mitsui O.S.K. Lines, Ltd. ("MOL") hold 50%, 25% and 25%
of the shares respectively, and have joint control over the company. The
company is a subsea well installation and intervention services provider.
renewables infrastructure, and in particular offshore wind farms.
Annual Report 2022 | Financials and Notes | Akastor Group 55
Summary of financial information for significant equity-accounted investee (100 percent basis)
Amounts in NOK million
Current assets
– Cash and cash equivalents
Non-current assets
Current liabilities
– Current financial liabilities (excluding trade and other payables and provisions)
Non-current liabilities
– Non-current financial liabilities (excluding trade and other payables and provisions)
Net assets (100%)
Akastor's share of net assets (50%)
Akastor's carrying amount of the investment
Revenue
Depreciation, amortization and impairment
Interest income
Interest expense
Income tax expense
Profit (loss) for the year
Other comprehensive income (loss)
Total comprehensive income (loss) (100%)
Total comprehensive income (loss) (50%)
Impairment of goodwill 2)
Elimination of unrealized gain on downstream sales
Akastor's share of total comprehensive income (loss)
HMH 1)
AKOFS
2022
2021
2022
2021
5 645
468
7 193
(3 770)
(476)
(3 341)
(2 889)
5 726
2 863
2 863
6 477
(457)
-
(364)
(78)
(164)
(50)
(215)
(107)
-
-
(107)
6 265
817
6 906
(4 092)
(1 384)
(3 781)
(3 199)
5 299
2 650
2 650
1 419
(116)
-
(57)
(23)
12
-
12
6
-
-
6
888
310
4 517
(1 844)
(1 451)
(2 331)
(2 325)
1 230
615
615
1 425
(376)
5
(302)
(6)
(358)
(102)
(459)
(230)
-
-
(230)
951
337
4 249
(1 536)
(1 149)
(2 146)
(2 140)
1 517
759
759
1 269
(453)
-
(269)
(65)
(516)
(15)
(531)
(266)
(124)
30
(360)
1) Income statement information for HMH in 2021 was related to the period between October 1 – December 31, 2021 after the formation of the company.
2) Goodwill in AKOFS Offshore was impaired in 2021 as a result of reassessment of valuation of the vessels in AKOFS Offshore.
Annual Report 2022 | Financials and Notes | Akastor Group 56
Note 18 | Other investments
Amounts in NOK million
NES Fircroft investment
Aker Pensjonskasse
Awilco Drilling investment
Odfjell Drilling warrants
Other equity securities
Total other investments
Shares in Step Oiltools B.V.
Total current investments
Note
2022
2021
33
30
30
636
158
10
34
31
621
158
10
807
29
869
1 625
162
162
147
147
NES Fircroft
Odfjell Drilling warrants
Akastor holds around 15% economic ownership interest in NES Fircroft,
In November 2022, Akastor sold the preference shares in Odfjell Drilling
a global technical and engineering staffing provider. The investment,
for a total consideration of USD 95.2 million, of which USD 75.2 million
consisting mainly of debt instruments, is measured at fair value. See
was settled in cash while the remaining USD 20 million was settled through
Note 30 Financial instruments for more information about the fair value
a seller’s credit agreement towards Odfjell Drilling, see Note 19 for more
measurement of debt instruments in NES Fircroft.
information. Akastor retains warrants for 6 837 492 common shares in
Odfjell Drilling, divided by six exercisable tranches until May 31, 2024.
Aker Pensjonskasse
Odfjell Drilling is listed on the Oslo Stock Exchange.
Aker Pensjonskasse was established by Aker ASA to manage the
retirement plan for employees and retirees in Akastor as well as related
Shares in Step Oiltools B.V.
Aker companies. Akastor holds 93.4 percent of the paid-in capital in Aker
Step Oiltools was included in the transaction scope when HMH was
Pensjonskasse. The ownership does not constitute control since Akastor
established and thus forms part of the MHWirth business contributed from
does not have the power to govern the financial and operating policies so
Akastor to the joint venture HMH in 2021. However, the legal ownership in
as to obtain benefits from the activities in this entity.
shares in Step Oiltools B.V. remains with Akastor as of December 31, 2022.
Awilco Drilling
The ownership does not constitute control since Akastor is not exposed to
variable returns from the legal ownership. See also Note 24 Other liabilities
Akastor holds 6.8% of the common shares in Awilco Drilling, which is listed
for more information about the liabilities related to Step Oiltools.
on the Oslo Euronext Growth.
Note 19 | Non-current interest-bearing receivables
Amounts in NOK million
Receivables from AKOFS Offshore
Receivables from HMH
Seller’s credit to Odfjell Drilling
Receivables from Aker Pensjonskasse
Receivable from Føn Energy Services
Total non- current interest-bearing receivables
Note
2022
2021
226
218
200
22
2
668
113
180
-
22
-
315
In November 2022, Akastor sold the preference shares in Odfjell Drilling for a total consideration of USD 95.2 million, of which USD 75.2 million was settled
in cash while the remaining USD 20 million was settled through a seller’s credit agreement towards Odfjell Drilling. The seller’s credit agreement has
maturity date on July 31, 2024, with 10% p.a. cash interest (step-up of interest to 13% p.a. from January 1, 2024).
Annual Report 2022 | Financials and Notes | Akastor Group Note 20 | Trade and other receivables
Amounts in NOK million
Trade receivables
Less provision for impairment
Trade receivables, net of provision
Other receivables
Trade and other receivables
Advances to suppliers
Contract assets
Prepaid expenses
Public duty and tax refund
Total
57
Note
2022
2021
30
8
204
(64)
140
556
696
2
61
11
-
769
191
(57)
135
673
808
-
47
16
2
872
Other receivables relate mainly to Akastor’s economic interest in four drilling equipment contracts with Jurong Shipyard (DRU contracts). This position was
carved out from MHWirth in connection with the merger with Baker Hughes’ SDS business. The contracts were terminated by Jurong and dispute over
termination fees is being resolved through arbitration process with outcome expected in 2023. In 2022, the group reassessed both receivables and accrued
expenses following the formal termination of the last two contracts. An impairment of NOK 174 million, with a corresponding reversal of accrued expenses,
was recognized in 2022 (NOK 214 million in 2021). Net financial position related to the contracts was not impacted by the reassessment.
Book value of trade and other receivables is approximately equal to fair value.
Aging of trade receivables
Amounts in NOK million
Not overdue
Past due 0-30 days
Past due 31-90 days
Past due more than 90 days
Total trade receivables
2022
2021
145
126
3
1
8
-
56
57
204
191
The past due receivables are monitored regularly and impairment analysis is performed on an individual basis for major customers. As of December 31,
2022, trade receivables of a face value of NOK 64 million were impaired. See below for the movements in the provision for impairment of receivables.
Amounts in NOK million
Balance as of January 1
Unused amounts reversed
Disposal of subsidiaries
Currency translation differences
Balance as of December 31
Note 21 | Cash and cash equivalents
Amounts in NOK million
Restricted cash
Interest-bearing deposits
Total cash and cash equivalents
2022
2021
57
-
-
7
64
131
(8)
(68)
2
57
2022
2021
2
117
119
-
89
89
Additional undrawn committed bank revolving credit facilities amount to NOK 304 million, that together with cash and cash equivalents gives a total liquidity
reserve of NOK 423 million as of December 31, 2022. See also Note 23 Borrowings.
Annual Report 2022 | Financials and Notes | Akastor Group
58
Note 22 | Capital and reserves
Share capital
reserve is related to share of other comprehensive income in equity
Akastor ASA has one class of shares, ordinary shares, with equal rights for
accounted investees.
all shares. The holders of ordinary shares are entitled to receive dividends
and are entitled to one vote per share at General Meetings. Total outstanding
Fair value reserve
shares are 274 000 000 at par value NOK 0.592 per share (NOK 0.592 in
The fair value reserve comprises the cumulative net changes in the fair
2021). All issued shares are fully paid.
value of financial assets classified as Fair Value through OCI (FVOCI) until
these assets are impaired or derecognized.
Treasury shares
Sale of 405 051 treasury shares to employees was carried out in 2022 in
Currency translation reserve
connection with the company’s variable pay program. As of December 31,
The currency translation reserve includes exchange differences arising
2022, Akastor ASA holds 1 985 164 treasury shares (2 390 215 treasury
from the translation of the net investments in foreign operations, foreign
shares in 2021), representing 0.72 percent of total outstanding shares.
exchange gain or loss on loans defined as part of net investments in foreign
operations, as well as the group’s share of currency translation differences
The Board of Directors has not proposed dividend for 2022 or 2021.
in equity accounted investees. Upon the disposal of investments in foreign
operations during 2021, the accumulated currency translation differences
related to the disposed entities were reclassified from the currency
Hedging reserve
translation reserve to the income statement.
As of December 31, 2022, the group had no cash flow hedges. The hedging
Annual Report 2022 | Financials and Notes | Akastor Group 59
Note 23 | Borrowings
Below are contractual terms of the group’s interest-bearing loans and borrowings which are measured at amortized cost. For more information about the
group’s exposure to interest rates, foreign currency and liquidity risk, see Note 29 Financial risk management and exposures.
Amounts in million
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million) 3)
Term loan AGR
Term loan DDW Offshore
Total borrowings
Current borrowings
Non-current borrowings
Total borrowings
2021
Revolving credit facility (USD 89 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Term loan AGR
Term loan DDW Offshore
Overdraft
Total borrowings
Current borrowings
Non-current borrowings
Total borrowings
Nominal
currency
value
Carrying
amount
(NOK)
Currency
Maturity 1)
Interest terms 2)
USD
NOK
NOK
NOK
USD
USD
NOK
NOK
NOK
USD
NOK
66
200
16
180
27
83
-
3
180
53
Feb 2024
USD LIBOR + margin 5.5%
Feb 2024
Mar 2024
Apr 2027
NIBOR + margin 5.5%
NIBOR + margin 10%
Fixed rate 4%
Feb 2024
USD LIBOR + margin 4.25%
656
198
16
198
272
1 340
1 142
198
1 340
721
Feb 2023
USD LIBOR + margin 5.5%
Feb 2023
Mar 2023
Apr 2027
NIBOR + margin 5.5%
NIBOR + margin 10%
Fixed rate 4%
Oct 2023
USD LIBOR + margin 4.25%
-
3
185
467
11
1 387
16
1 372
1 387
1) In February and March 2023, the maturity date of Revolving credit facilities, Aker facility and DDW Offshore term loan was extended to February/March 2024. The borrowings
are classified as current reflecting the maturity date as at the reporting date.
2) Commitment fee is 40 percent of the margin for revolving credit facilities and Aker facility.
3) In March 2023, Aker facility was increased to NOK 450 million (NIBOR + margin 12%).
For information about contractual maturities of borrowings including interest payments and the period in which they mature, see Note 29 Financial risk
management and exposures.
Bank debt
The term loan of USD 27 million to DDW Offshore is provided by GIEK, DNB
The revolving credit facilities are provided by a bank syndicate consisting
and BNP Paribas and matures in February 2024. The Facility is guaranteed
of high-quality Nordic and international banks, with DNB acting as agent.
by Akastor ASA and the lenders benefit from first priority mortgages in the
The terms and conditions include restrictions which are customary for
vessels. This facility includes restrictions which are customary for these
these kinds of facilities, including inter alia negative pledge provisions and
kinds of secured financing.
restrictions on acquisitions, disposals and mergers, dividend distribution
and change of control provisions. For information about financial covenants,
see Note 28 Capital management.
The term loan facility of NOK 180 million to AGR is provided by Nordea and
DNB. The lenders have no recourse to Akastor ASA. This facility includes
restrictions which are customary for these kinds of facilities.
Annual Report 2022 | Financials and Notes | Akastor Group
60
Reconciliation of liabilities arising from financing activities
Amounts in NOK million
Balance as of December 31, 2020
Proceeds from borrowings
Repayment of borrowings
Changes from financing cash flows
Changes in capitalized borrowing costs
Accrued interest (incl. commitment fees)
Foreign exchange movements
Balance as of December 31, 2021
Proceeds from borrowings
Repayment of borrowings
Changes from financing cash flows
Changes in capitalized borrowing costs
Accrued interest (incl. commitment fees)
Foreign exchange movements
Balance as of December 31, 2022
Revolving
credit
facilities
Subordi-
nated Aker
facility
Term loan
AGR
Term loan
– DDW
Offshore
Overdraft
Total
borrowings
1 119
1 056
(1 472)
(416)
7
5
6
721
736
(711)
25
13
(1)
96
854
-
-
-
-
-
3
-
3
20
(20)
-
-
13
-
16
173
455
-
-
-
-
13
-
185
-
-
-
-
13
-
198
-
-
-
-
-
13
467
-
(254)
(254)
-
9
50
272
-
11
-
11
-
-
-
11
-
(11)
(11)
-
-
-
-
1 746
1 067
(1 472)
(405)
7
20
18
1 387
756
(996)
(240)
13
33
146
1 340
See Note 31 Leases for reconciliation of liabilities arising from leasing activities.
Note 24 | Other liabilities
Amounts in NOK million
Deferred gain
Deferred settlement obligations
Liability for profit split
Other liabilities
Total other non-current liabilities
Liability related to Step Oitools
Total other current liabilities
Note
2022
2021
30
30
30
30
30
326
102
1
459
162
162
51
377
200
1
628
148
148
Deferred gain
Liability for profit split
In May 2018, Akastor invested in preferred equity and warrants in Odfjell
DDW Offshore AS has obligation to share 50 percent of the sale proceeds
Drilling. On initial recognition, the investment in warrants was recognized at
from disposal of two of its vessels with its lenders prior to April 2024.
fair value and the difference between the fair value and the transaction price,
NOK 117 million, was recognized as “Deferred gain”. The deferred gain is
Liability related to Step Oiltools
subsequently amortized and recognized to profit and loss at straight-line
Step Oiltools was included in the transaction scope when HMH was
basis over six years. See Note 18 Other investments for more information
established and thus forms part of the MHWirth business contributed from
about the warrant investment.
Akastor to the joint venture HMH in 2021. However, the legal ownership in
shares in Step Oiltools B.V. remains with Akastor as of December 31, 2022.
Deferred settlement obligations
Since Akastor is not exposed to variable returns from the legal ownership,
Deferred settlement obligations represent contingent considerations
the liability reflects the obligation to transfer Step Oiltools or its assets to
resulting from disposal of subsidiaries. The obligations are mainly related
HMH when the ownership structure is resolved. See also Note 18 Other
to provision for indemnity liabilities for pension plans in connection with
investments for more information about the Step Oiltools shares.
MHWirth divestment as well as guaranteed preferred return to Mitsui and
MOL in connection with AKOFS Offshore divestment.
Annual Report 2022 | Financials and Notes | Akastor Group 61
Note 25 | Employee benefits – pension
Akastor’s pension costs represent the future pension entitlement earned by
Compensation plan
employees in the financial year. In a defined contribution plan the company
To ensure that the employees were treated fairly on the change over to the
is responsible for paying an agreed contribution to the employee’s pension
contribution plan in 2008, the company introduced a compensation plan.
assets. In such a plan, this annual contribution is also the cost. In a defined
The basis for deciding the compensation amount is the difference between
benefit plan, it is the company’s responsibility to provide a certain pension.
calculated pension capital in the defined benefit plan and the value of the
The measurement of the cost and the pension liability for such arrangements
defined benefit plan at the age of 67 years. The compensation amount will
is subject to actuarial valuations. Akastor has over a long time period
be adjusted annually in accordance with the adjustment of the employees’
gradually moved from defined benefit arrangements to defined contribution
pensionable income, and accrued interest according to market interest. If
plans. Consequently, the impact of the remaining defined benefit plans is
the employee leaves the company voluntarily before the age of 67 years,
gradually reduced.
the compensation amount will be reduced.
Pension plans in Norway
AFP – early retirement arrangement
The main pension arrangement in Norway is a general pension plan organized
AFP is an early retirement arrangement organized by Norwegian employers,
by the Norwegian Government. This arrangement provides the main
the main Labor Union organization in Norway (LO) and the Norwegian
general pension entitlement of all Norwegians. All pension arrangements by
Government. The AFP plan is providing additional lifelong pensions to
employers consequently represent limited additional pension entitlements.
employees that retire before the general retirement age, to compensate
for the reduction of the ordinary pension entitlements. The employees are
Norwegian employers are obliged to provide an employment pension plan,
given a choice of retirement age, with lower pension at earlier retirement.
which can be organized as a defined benefit plan or as a defined contribution
plan. The Norwegian companies in Akastor have closed the earlier defined
The Norwegian Accounting Standards Board has issued a comment
benefit plans in 2008 and are now providing defined contribution plans for all
concluding that the AFP plan is a multi-employer defined benefit plan. The
employees.
Defined benefit plan
AFP plan exposes the participating entities to actuarial risk associated
with employees of other entities with the result that there is no consistent
and reliable basis for allocating the obligation, plan assets and costs to
Employees who were 58 years or older in 2008, when the change took place,
individual participating entities. Sufficient information is not available to use
are still in the defined benefit plan, which is a funded plan. There are no longer
defined benefit accounting and the AFP plan is accounted for as a defined
any active employees in this plan. The estimated contributions expected to be
contribution plan.
paid to the Norwegian plan during 2023 amount to NOK 6 million.
Pension plans outside Norway
Pension plans outside Norway are predominately defined contribution plans.
Pension cost
Amounts in NOK million
Defined benefit plans
Defined contribution plans including AFP
Total pension cost
Net employee defined benefit obligations
Amounts in NOK million
Defined benefit plans Norway
Defined benefit plans USA
Total employee benefit obligations
Note
2022
2021
1
11
12
1
10
11
9
2022
2021
94
2
96
94
15
108
Annual Report 2022 | Financials and Notes | Akastor Group 62
Movement in net defined benefit (asset) liability
Amounts in NOK million
Balance as of January 1
Disposal of subsidiaries as of January 1, 2021
Included in profit or loss
Service cost
Interest cost (income)
Total
Included in OCI
Remeasurements (loss) gain:
Actuarial loss (gain) arising from:
– demographic assumptions
– financial assumptions
– experience adjustments
Return on plan assets excluding interest income
Effect of movements in exchange rates
Total
Other
Benefits paid by the plan
Contributions paid into the plan
Total
Balance as of December 31
Plan assets
Amounts in NOK million
Plan assets at fair value Norwegian plan
Government
Finance
Private and Government enterprise
Municipalities
Bonds
Fund/private equity
Total plan assets Norway at fair value
Equity securities
Debt securities
Total plan assets US at fair value
Total plan assets at fair value
Pension obligation
2022
2021
Pension asset
Net pension obligation
2022
2021
2022
2021
332
-
639
(279)
1
4
4
2
(18)
4
-
7
(5)
(30)
-
(30)
301
1
2
3
6
(10)
(5)
-
3
(6)
(25)
-
(25)
332
(224)
-
-
(2)
(2)
-
(3)
-
25
(6)
16
24
(20)
5
(205)
(251)
28
108
-
388
(251)
-
(1)
(1)
-
(2)
-
-
(3)
(5)
20
(15)
5
(224)
1
2
2
2
(21)
4
25
-
11
(6)
(20)
(26)
96
1
2
2
5
(12)
(5)
-
-
(11)
(5)
(15)
(20)
108
2022
2021
2
14
23
10
48
56
104
25
76
101
205
5
15
26
15
60
60
120
29
75
104
224
The equity portfolio is invested globally. The fair value of the equities is
The investment in fund/private equity is mainly funds that invests in listed
based on their quoted prices at the reporting date without any deduction for
securities and where the fund value is based on quoted prices.
estimated future selling cost.
The investments in bonds are done in the Norwegian market and most of
the bonds are not listed on any exchange. The market value as at year end
is based on official prices provided by the Norwegian Securities Dealers
Association. The Bond investments have on average a high credit rating.
Most of the investments are in Norwegian municipalities with a credit rating
of AA.
Annual Report 2022 | Financials and Notes | Akastor Group
Defined benefit obligation – actuarial assumptions
The group’s significant defined benefit plans are in Norway. The followings are the principal actuarial assumptions at the reporting date for the plans in
63
Norway.
Discount rate
Asset return
Salary progression
Pension indexation
Mortality table
Norway
2022
3.20%
2.00%
3.75%
1.7 -3.5%
K2013
2021
1.90%
1.90%
2.75%
0 -2.5%
K2013
The information below relates only to Norwegian plans as these represent
in the pension indexations. The total effect of fluctuations in economic
the majority of the plans.
assumptions is consequently unlikely to be very significant.
The discount rates and other assumptions in 2022 and 2021 are based
Assumptions regarding future mortality have been based on published
on the Norwegian high quality corporate bond rate and recommendations
statistics and mortality tables. The current life expectancy underlying the
from the Norwegian Accounting Standards Board. It should be expected
values of the defined benefit obligation at the reporting date is shown below.
that fluctuations in the discount rates would also lead to fluctuations
Years
Life expectancy of male pensioners
Life expectancy of female pensioners
2022
22.7
26.0
2021
22.6
25.9
As of December 31, 2022, the weighted-average duration of the defined benefit obligation was 4.1 years.
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected
the defined benefit obligation as of December 31, 2022 by the amounts shown below.
Amounts in NOK million
Discount rate (1% movement)
Future salary growth (1% movement)
Future pension growth (1% movement)
Increase
Decrease
(8)
-
9
9
-
(7)
The change in discount rate assumptions would affect plan assets in the income statement in next period as it would change the estimated asset return but
have no effect on pension assets as of year-end.
Annual Report 2022 | Financials and Notes | Akastor Group 64
Note 26 | Provisions
Amounts in NOK million
Provision, current
Provision, non-current
Total provisions
Development of significant provisions
Amounts in NOK million
Balance as of December 31, 2021
Provisions utilized
Provisions reversed
Unwind of discount
Reclassification to held for sale
Balance as of December 31, 2022
Expected timing of payment
Within the next twelve months
After the next twelve months
Total
Onerous contracts
2022
2021
31
3
34
20
26
47
Warranties
Onerous
contracts
Other
Total
10
-
(9)
-
(1)
-
-
-
-
31
(3)
-
1
-
29
27
3
29
6
(2)
-
-
-
5
4
1
5
47
(4)
(9)
1
(1)
34
31
3
34
Provision for onerous contracts relates mainly to unavoidable operational costs for vacant properties where the group is committed under lease contracts.
Note 27 | Trade and other payables
Amounts in NOK million
Trade creditors 1)
Accrued expenses
Liability for profit split 2)
Trade and other payables
Public duty and tax payables
Contract liabilities
Deferred settlement obligations
Total trade and other payables
Note
2022
2021
67
179
89
335
46
25
91
498
99
377
-
476
46
21
82
625
30
8
30
1) Trade creditors are due within one year.
2) Relates to obligation in DDW Offshore AS to share 50 percent of the sale proceeds from disposal of two of its vessels in 2023.
Book value of trade creditors and other current liabilities is approximately equal to fair value.
Annual Report 2022 | Financials and Notes | Akastor Group 65
Note 28 | Capital management
Akastor’s capital management is designed to ensure that the group has
Funding cost
sufficient financial flexibility to carry out its strategic targets, both short-
Akastor aims to have diversified funding sources in order to reach the
term and long-term. Akastor is targeting to maintain a financial structure
lowest possible cost of capital. These funding sources might include:
that, through solidity and cash flow, secures the group’s strong long-term
creditworthiness, as well as maximize value creation for its shareholders
through:
Investing in projects and business areas which will increase the
company’s Return On Capital Employed (ROCE) over time.
Optimizing the company’s capital structure to ensure both sufficient
and timely funding over time to finance its activities at the lowest
cost.
Investment policy
The use of banks based on syndicated credit facilities.
The issue of debt instruments in the Norwegian capital market.
The issue of debt instruments in foreign capital markets.
Ratios used in monitoring of capital/covenants
Akastor monitors capital on the basis of a gearing ratio (net debt/equity) and
equity ratio (equity/total assets). These ratios are similar to covenants as
defined in the loan agreement entered into in 2021 for the revolving credit
facilities which are shown below. See Note 23 Borrowings for details about
Akastor’s capital management is based on a rigorous investment selection
these loans.
process which considers not only Akastor’s weighted average cost of
capital and strategic orientation but also external factors such as market
expectations.
Funding policy
Liquidity planning
The company’s gearing ratio shall not exceed 0.5 times and
is calculated from the consolidated total borrowings to the
consolidated Equity.
Equity ratio shall not be lower than 32.5%, calculated from the
Akastor has a strong focus on its liquidity situation to meet its capital needs
consolidated total equity to consolidated total assets.
and ensure solvency for its financial obligations. Akastor had a liquidity
reserve per year end 2022 of NOK 423 million, composed of an undrawn
Minimum liquidity amount shall exceed NOK 150 million on
committed credit facility of NOK 304 million and cash and cash equivalents
consolidated level.
of NOK 119 million.
Funding of operations
The ratios are calculated based on net debt including cash and borrowings,
consolidated equity and consolidated total assets, however adjusted for
Akastor’s group funding policy is that subsidiaries should finance their
certain items as defined in the loan agreement. Covenants ratios are based
operations with the treasury department (Akastor Treasury). This ensures
on accounting principles as of December 31, 2022.
optimal availability and transfer of cash within the group and better control
of the company’s overall debt as well as cheaper funding for its operations.
The covenants are monitored on a regular basis by the Akastor Treasury
However, AGR is financed directly through a NOK 180 million Term Loan
department to ensure compliance with the loan agreements which are
maturing in 2027, and DDW Offshore is financed directly through a USD 27
tested and reported on a quarterly basis. Akastor was in compliance with its
million Term loan maturing in 2024.
covenants as of December 31, 2022. In February 2023, the group extended
Funding duration
the maturity of the corporate revolving credit facilities to February/March
2024. In March 2023, the subordinated Aker facility was increased with
Akastor emphasizes financial flexibility and steers its capital structure
NOK 200 million to NOK 450 million (NIBOR + 12% margin).
accordingly to limit its liquidity and refinancing risks. In this perspective,
loans and other external borrowings are to be renegotiated well in advance
AGR’s external financing has one financial covenant the Liquidity shall be
of their due date and generally for periods of 3 to 5 years. However, as a
not less than NOK 20 million.
result of MHWirth divestment in 2021 and the required refinancing carried
out in connection with this, corporate facilities currently have a shorter
duration as realization of assets are expected to be carried out in the short
to medium term.
Annual Report 2022 | Financials and Notes | Akastor Group 66
Note 29 | Financial risk management and exposures
The group is exposed to a variety of financial risks: currency risk, interest
Currency risk
rate risk, price risk, credit risk, liquidity risk and capital risk. The capital
The group operates internationally and is exposed to currency risk
market risk affects the value of financial instruments held. The objective of
on commercial transactions, recognized assets and liabilities and net
financial risk management is to manage and control financial risk exposures
investments in foreign operations. Commercial transactions and recognized
and thereby increase the predictability of earnings and minimize potential
assets and liabilities are subject to currency risk when payments are
adverse effects on the group’s financial performance.
denominated in a currency other than the respective functional currency
of the group company. The group’s exposure to currency risk is primarily
Risk management is present in every project. It is the responsibility of the
against USD.
project managers, with the support of Akastor Treasury, to identify, evaluate
and hedge financial risks under policies approved by the Board of Directors.
Exposure to currency risk
The group has well-established principles for overall risk management, as
Changes in currency rates change the values of borrowings, receivables
well as policies for the use of derivatives and financial investments. There
and cash balances.
have not been any changes in these policies during the year.
Amounts in million
Cash and cash equivalents
Intercompany loans
Loans and receivables
Deferred settlement assets and obligations
Balance sheet exposure
Forward exchange contracts
Net exposure
Net exposure (NOK million)
2022
USD
-
48
109
(42)
115
-
115
2021
USD
(5)
43
43
(50)
31
(75)
(43)
1 141
(383)
Sensitivity analysis
of the reporting period. The analysis assumes that all other variables, in
A strengthening of USD against NOK as of December 31 would have
particular interest rates, remain constant and ignores any impact of forecast
affected the measurement of financial instruments denominated in a foreign
sales and purchases. Figures in the table below only include the effect in
currency and increased (decreased) income statement by the amounts
income statement for change in currency regarding financial instruments
shown below. This analysis is based on foreign currency exchange rate
and do not include effect from operating cost and revenue.
variances that the group considered to be reasonably possible at the end
Effect of weakening of NOK against USD:
Amounts in NOK million
Profit (loss) after tax
2022
USD (10%)
114
USD (10%)
2021
Profit (loss) after tax
(38)
A strengthening of the NOK against USD as of December 31 would have
interest rate risk. Borrowings and receivables issued at fixed rates expose
had the equal but opposite effect on the above amounts, on the basis that
the group to fair value interest rate risk. However, as these borrowings are
all other variables remain constant. The sensitivity analysis does not include
measured at amortized cost, interest rate variations do not affect profit and
effects on the consolidated result and equity from changed exchange rates
loss when held to maturity.
used for consolidation of foreign subsidiaries.
The primary currency-related risk is the risk of reduced competitiveness
increased (decreased) profit and loss by the amounts shown on the table
abroad in the case of a strengthened NOK. This risk relates to future
below. This analysis assumes that all other variables, in particular foreign
commercial contracts and is not included in the sensitivity analysis above.
currency rates, remain constant. The analysis is performed on the same
An increase of 100 basis points in interest rates during 2022 would have
basis as for 2021.
Interest rate risk
The group’s interest rate risk arises from cash balances, interest-bearing
borrowings and interest-bearing receivables. Borrowings and receivables
issued at variable rates as well as cash expose the group to cash flow
Annual Report 2022 | Financials and Notes | Akastor Group Effect of increase of 100 basis points in interest rates on profit (loss) before tax
Amounts in NOK million
Cash and cash equivalents
Interest-bearing receivables
Borrowings
Net
67
2022
2021
1
4
(17)
(12)
2
2
(19)
(16)
A decrease of 100 basis points in interest rates during 2022 would have
The group evaluates that significant credit risk concentrations are related
had the equal but opposite effect on the above amounts, on the basis that
to receivables and contract assets from major corporate customers. The
all other variables remain constant. There are no effects on equity as there
maximum exposure to credit risk at the reporting date equals the carrying
are no interest swaps.
Guarantee obligations
amounts of financial assets (see Note 30 Financial instruments) and
contract assets (see Note 8 Revenue and other income). The group does
not hold collateral as security.
The group has provided the following guarantees on behalf of subsidiaries
and related parties as of December 31, 2022 (estimated remaining exposure
Based on estimates of incurred losses in respect of trade receivables and
as of December 31, 2022):
contract assets, the group establishes a provision for impairment losses.
Provisions for loss on debtors are based on individual assessments.
Performance guarantees on behalf of group companies of
Provisions for loss on trade receivables and contract assets were NOK 278
NOK 17 million (NOK 361 million in 2021)
million in 2022 (NOK 271 million in 2021).
Performance guarantees on behalf of related parties of
Liquidity risk
NOK 2.2 billion (NOK 2.6 million in 2021)
Liquidity risk is the risk that the group will encounter difficulty in meeting the
Parent company indemnity guarantees for fulfillment of lease
liquidity to ensure that it will always have sufficient liquidity reserves to meet
obligations associated with its financial liabilities. The group manages its
obligations and finance obligations of NOK 2.6 billion
its liabilities when due.
(NOK 3.0 billion in 2021)
Financial guarantees including counter guarantees for bank/
availability of funding from an adequate amount of committed credit facilities
surety bonds and guarantees for pension obligations to
and the ability to close out market positions. Due to the dynamic nature of
employees of NOK 0.2 billion (NOK 0.3 billion in 2021)
the underlying businesses, Akastor Treasury maintains flexibility in funding
Prudent liquidity risk management includes maintaining sufficient cash, the
by maintaining availability under committed credit lines.
Although guarantees are financial instruments, they are considered
contingent obligations and the notional amounts are not included in the
Akastor is an investment company with limited upstream cash flow from
financial statements. See more information about guarantees for related
its portfolio companies and therefore to a large degree depends on
parties in Note 33 Related parties.
realization of assets to reduce debt and improve liquidity. In order to mitigate
Price risk
refinancing risk when the corporate financing facilities mature and secure
available liquidity, the group is in accordance with its strategy focusing on
The group is exposed to fluctuations in market prices in the operational
realization of holdings. The outcome related to the DRU arbitration process
areas related to contracts, including changes in market prices for raw
is a key milestone in this regard. If realization processes planned should be
materials, equipment and development in wages. These risks are to the
delayed or if proceeds come in at a lower value than anticipated, refinancing
extent possible managed in bid processes by locking in committed prices
risk would increase and other sources of capital could be required.
from vendors as a basis for offers to customer or through escalation clauses
with customers.
Credit risk
The group policy for the purpose of optimizing availability and flexibility
of cash within the group is to operate a centrally managed cash pooling
arrangement. An important condition for the participants (business units)
Credit risk is the risk of financial losses to the group if customer or
in such cash pooling arrangements is that the group as an owner of such
counterparty to financial investments/instruments fails to meet contractual
pools is financially viable and is able to prove its capability to service its
obligations and arise principally from investment securities and receivables.
obligations concerning repayment of any net deposits made by business
units. Management monitors rolling monthly forecasts of the group’s liquidity
Assessment of credit risk related to customers and subcontractors is an
reserve on the basis of expected cash flow.
important requirement in the bid phase and throughout the contract period.
Such assessments are based on credit ratings, income statement and
balance sheet reviews and using credit assessment tools available (e.g.
Dun & Bradstreet and Credit Watch). Sales to customers are settled in cash.
Annual Report 2022 | Financials and Notes | Akastor Group 68
Financial liabilities and the period in which they mature
The following is the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and include
contractual interest payments and exclude the impact of netting agreements.
Amounts in NOK million
Note
Book
value
Total cash
flow 1)
6 months
and less
6–12
months
1–2 years
2–5 years
More than
5 years
2022
Borrowings 2)
Lease liabilities
Other non-current liabilities
Other current liabilities
Deferred settlement obligations
Trade and other payables
Total financial liabilities
Financial guarantees 3)
2021
Borrowings 2)
Lease liabilities
Other non-current liabilities
Deferred settlement obligations
Trade and other payables
Total financial liabilities
Financial guarantees 3)
23
31
24
24
24, 27
27
23
31
24
24, 27
27
1 340
1 403
85
103
162
417
335
2 442
89
110
162
429
335
2 528
5 058
1 387
1 522
155
201
459
476
2 678
168
221
481
476
2 868
6 247
59
27
-
-
103
272
461
198
48
42
-
8
240
338
581
334
22
-
162
8
63
589
1
32
41
-
60
236
369
4
852
34
110
-
91
-
1 087
555
1 237
46
221
82
-
1 586
497
157
6
-
-
102
-
265
3 640
111
39
-
163
-
313
3 315
-
1
-
-
126
-
127
665
94
1
-
168
-
263
1 851
1) Nominal currency value including interest.
2) The interest costs are calculated using the last fixing rate known by year end (plus applicable margin).
3) Financial guarantees are not recognized on the consolidated balance sheet. The undiscounted cash flows potentially payable under financial guarantees are classified on the
basis of expiry date.
Annual Report 2022 | Financials and Notes | Akastor Group
69
Note 30 | Financial instruments
Accounting classifications and fair values
Level 2 - fair values are based on inputs other than quoted prices included
The following table shows the carrying amounts and fair values of financial
in Level 1 that are observable for the asset or liability, either directly or
assets and financial liabilities, including their levels in the fair value
indirectly.
hierarchy. It does not include fair value information for financial assets and
financial liabilities not measured at fair value if the carrying amount is a
Level 3 - fair values are based on unobservable inputs, mainly based on
reasonable approximation of fair value. For financial instruments measured
internal assumptions used in the absence of quoted prices from an active
at fair value, the levels in the fair value hierarchy are as shown below.
market or other observable price inputs.
Level 1 - fair values are based on prices quoted in an active market for
identical assets or liabilities.
Amounts in NOK million
2022
Financial assets measured at fair value
Fair value through P&L (mandatorily at FVTPL)
Equity securities
Equity securities 1)
Warrants
Fair value through Other comprehensive income
Debt instruments 1)
Financial assets not measured at fair value
Financial assets at amortized cost
Cash and cash equivalents
Non-current interest-bearing receivables
Trade and other receivables
Financial assets
Financial liabilities not measured at fair value
Financial liabilities at amortized cost
Borrowings 2)
Other financial liabilities
Other non-current liabilities
Trade and other payables
Financial liabilities measured at fair value
Fair value through profit & loss
Other current liabilities
Deferred settlement obligations
Financial liabilities
Note
Carrying
amount
Financial
instruments
measured at
fair value
Level in
fair value
hierarchy
18
18
18
18
21
19
20
23
24
27
24
24, 27
40
321
34
40
321
34
Level 1
Level 3
Level 3
636
636
Level 3
119
668
696
2 514
(1 340)
(1 342)
Level 2
(103)
(335)
(162)
(417)
(2 357)
(162)
(417)
Level 3
Level 3
1) Investments in level 3 in the hierarchy relate to equity securities and debt securities with no active market. These investments are measured at the best estimate of fair value.
2) For credit facilities and other loans with floating interest, notional amounts are used as approximation of fair values.
Annual Report 2022 | Financials and Notes | Akastor Group 70
Amounts in NOK million
2021
Financial assets measured at fair value
Fair value – hedging instruments
Derivative financial instruments
Fair value through P&L (mandatorily at FVTPL)
Equity securities
Equity securities 1)
Warrants
Contingent considerations
Fair value through Other comprehensive income
Debt instruments 1)
Financial assets not measured at fair value
Financial assets at amortized cost
Cash and cash equivalents
Non-current interest-bearing receivables
Trade and other receivables
Financial assets
Financial liabilities not measured at fair value
Financial liabilities at amortized cost
Borrowings 2)
Other financial liabilities
Other non-current liabilities
Other current liabilities
Trade and other payables
Financial liabilities measured at fair value
Fair value through profit & loss
Deferred settlement obligations
Financial liabilities
Note
Carrying
amount
Financial
instruments
measured at
fair value
Level in
fair value
hierarchy
18
18
18
17
18
21
19
20
23
24
24
27
24, 27
10
10
Level 2
10
1 125
18
20
10
1 125
18
20
Level 1
Level 3
Level 3
Level 3
619
619
Level 3
89
315
808
3 013
(1 387)
(1 402)
Level 2
(201)
(148)
(476)
(459)
(2 671)
(459)
Level 3
1) Investments in level 3 in the hierarchy relate to equity securities and debt securities with no active market. These investments are measured at the best estimate of fair value.
2) For credit facilities and other loans with floating interest, notional amounts are used as approximation of fair values.
Annual Report 2022 | Financials and Notes | Akastor Group Reconciliation of Level 3 financial assets and financial liabilities
Amounts in NOK million
Balance as of December 31, 2020
Addition
Settlements
Net gain (loss) in the income statement
Fair value through OCI
Disposal of subsidiaries
Balance as of December 31, 2021
Settlements
Net gain (loss) in the income statement
Reclassifications
Balance as of December 31, 2022
71
Assets
Liabilities
1 480
189
(37)
196
(20)
(26)
1 782
(982)
220
(29)
991
(274)
(220)
27
4
-
3
(459)
59
(16)
(162)
(579)
Measurement of fair values at level 3
Debt instruments at FVOCI
Deferred settlement obligations
These liabilities relate to contingent considerations and obligations from
Financial assets measured at FVOCI are related to debt instruments
business disposals. Final amounts to be paid depend on future earnings
in NES Fircroft. The valuation model considers the present value of the
in the disposed companies or outcome of indemnity claims and price
expected cash flows from the ultimate disposal of the investments weighted
adjustment mechanisms.
with different probabilities. The expected disposal value is determined by
forecast EBITDA at the time of disposal and market multiples, adjusted by
Liabilities depending on future earnings: The recognized amounts
forecast net debt of the investee. The estimated fair value would increase
are determined based on recent forecasts and strategy figures for
The forecast EBITDA were higher (lower);
(decrease) if:
The market multiples applied were higher (lower); or
adjustment mechanisms: Provisions are made based on all
available evidence as at the reporting date.
The net debt of the investees at the date of disposal were lower
(higher).
The credit exposure on the Level 3 asset is limited to the amount recognized
and the credit risk is not considered to be significant due to the nature of
the entity, thus the final realized values are sensitive to the above
inputs as driven by market conditions.
Liabilities depending on outcome of indemnity claims and price
Warrants measured at FVTPL
the arrangement.
The financial asset relates to warrant investment in Odfjell Drilling. The
valuation is obtained from external valuation experts, using a Monte Carlo
simulation model where the simulated stock prices are based on a lognormal
stock price model assumed to follow a Geometric Brownian Motion. The key
inputs to the valuation model consist of the stock price of Odfjell Drilling
(listed on the Oslo Stock Exchange under ticker ODL) at the valuation date,
as well as assumption of future volatility based on the share’s historical
prices. The estimated fair value is mostly sensitive to the ODL share price
and would increase (decrease) if the ODL share price were higher (lower).
Annual Report 2022 | Financials and Notes | Akastor Group 72
Note 31 | Leases
Group as lessee
IT equipment and office equipment are considered as leases of low-value
The group leases office buildings on a number of locations. The leases
assets. The right-of-use assets and lease liabilities are not recognized for
typically run for a period of 3-10 years and some of the leases have
short-term leases or leases of low-value assets.
extension options.
The group applies the short-term lease recognition exemptions for leases
of property or machinery with lease term of 12 months or less. Leases of
The lease agreements do not impose any covenants or restrictions.
Right-of-use assets
Amounts in NOK million
Balance as of January 1
Additions
Depreciation 1)
Reversal of impairment
Disposal of subsidiaries
Remeasurement
Currency translation differences
Balance as of December 31
1) Includes depreciation related to discontinued operations of NOK 11 million in 2021
The right-of-use assets are related to leases of office buildings.
Lease liabilities
Amounts in NOK million
Balance as of January 1
Cash payments
Additions
Remeasurement
Disposal of subsidiaries
Currency translation differences
Balance as of December 31
Current lease liabilities
Non-current lease liabilities
Amounts recognized in the income statement and cash flow statement
Amounts in NOK million
Expenses related to leases of low-value items
Interest on lease liabilities
Total amounts recognized in the income statement
Payments for leases expensed
Interest paid for lease liabilities
Principal payments of lease liabilities
Total cash outflow for leases
2022
2021
41
4
(15)
1
-
(4)
-
27
468
9
(43)
-
(416)
25
(2)
41
2022
155
2021
592
(78)
(112)
4
9
5
64
-
-
85
48
37
(397)
(1)
155
82
72
2022
2021
(3)
(6)
(9)
(3)
(6)
(78)
(87)
(2)
(9)
(11)
(2)
(26)
(112)
(139)
Annual Report 2022 | Financials and Notes | Akastor Group
73
Some property leases contain extension or termination options exercisable
Group as lessor
before the end of the non-cancellable period. They are used to maximize
The group subleases out some of the property leases which are presented
operational flexibility in terms of managing the assets used in the group’s
as part of the right-of-use assets. DDW Offshore leases out some of its
operations. The extension and termination options held are exercisable
vessels.
only by the group and not by the respective lessor. The group assesses at
lease commencement date whether it is reasonably certain to exercise the
Finance leases
extension or termination options.
Some of the subleases of right-of-use assets are classified as finance lease,
with reference to the right-of-use assets arising from the head leases. In
Most extension options in offices leases have not been included in the lease
2021, DDW Offshore entered into bareboat charter agreements and forward
liability, because the group expects to be able to replace the assets without
sale of two vessels, which are classified as finance lease. The group
significant cost or business disruption. Most of the early termination options
recognized a gain of NOK 51 million from the transaction as “gain from
are not considered in the lease term either as the group assesses it as
disposal of assets”, see Note 8 Revenue and other income.
reasonably certain that the leases will not be terminated early. If the group
had exercised the extension options in significant property leases as of
The following table sets out a maturity analysis of finance lease receivables,
December 31, 2022, the group estimates potential future lease payments
showing the undiscounted lease payments to be received after the reporting
(undiscounted) of approximately NOK 37 million, which are not included in
date.
the lease liabilities.
Amounts in NOK million
Due within one year
Due in one to two years
Due in two to three years
Total undiscounted lease receivable
Unearned interest income
Total finance lease receivables
Current finance lease receivables
Non-current finance lease receivables
Operating leases
2022
2021
213
18
-
232
13
218
208
10
64
189
18
271
31
241
64
176
Most of the leases are classified as operating leases except for the finance leases identified above. The lease income from subleasing right-of-use assets
in 2022 was NOK 10 million (NOK 28 million in 2021).
The following table sets out future undiscounted sublease income under the non-cancellable lease periods.
Amounts in NOK million
Due within one year
Due in one to two years
Total
2022
2021
104
2
106
23
-
23
Annual Report 2022 | Financials and Notes | Akastor Group 74
Note 32 | Group companies
This note gives an overview of subsidiaries of Akastor ASA. For information about other investments in the group, refer to Note 17 Equity-accounted
investees and Note 18 Other investments. If not stated otherwise, ownership equals share of voting rights.
Group companies as of December 31
Company
Akastor ASA
AGR1)
AGR (Australia) Pty Ltd
AGR AS
AGR Energy Services AS
AGR Software AS
AGR Consultancy Services AS
AGR Mexico Well Management S. de R. L. de C. V
AGR Consultancy Solutions Ltd
SpotOn Well Management Ltd
AGR Group Americas, Inc
AGR Energy Services Inc
AGR Wind Services AS 2)
Other companies
Cool Sorption A/S
Well Systems Servicing Ltd
AKA SPH AS
DDW Offshore AS
Akastor AS
Mercury HoldCo AS
Akastor Real Estate AS
KOP Surface Products Singapore Pte Ltd
Aker Cool Sorption Siam Ltd
Frontica Business Solutions Ltd 3)
AK Willfab Inc
Mercury HoldCo Inc
1) Akastor holds 100 percent of the shares and 64 percent of the economic interests
2) Disposed in 2022
3) Liquidated in 2022
Country
Norway
Australia
Norway
Norway
Norway
Norway
Mexico
UK
UK
USA
USA
Norway
Denmark
Nigeria
Norway
Norway
Norway
Norway
Norway
Singapore
Thailand
UK
USA
USA
Ownership (%)
2022
2021
64
64
64
58
64
64
64
64
64
64
-
100
100
100
100
100
100
100
100
100
-
100
100
64
64
64
58
64
64
64
-
64
64
52
100
100
100
100
100
100
100
100
100
100
100
100
Annual Report 2022 | Financials and Notes | Akastor Group 75
Note 33 | Related parties
Related party relationships are those involving control (either direct or
settled firstly by ordinary dividend from AKOFS Offshore, with any shortfall
indirect), joint control or significant influence. Related parties are in a
being guaranteed by Akastor. Akastor ASA has issued a bank guarantee for
position to enter into transactions with the company that would not be
payment of preferred return for a total amount of NOK 131 million relating
undertaken between unrelated parties.
to the remaining period.
Akastor ASA is a parent company with control of around 20 companies
Akastor has issued a financial guarantee of NOK 152 million in favour of
around the world. These subsidiaries are listed in Note 32 Group
finance institutions for fulfilment of lease obligations related to Avium Subsea
companies. Any transactions between the parent company and the
AS. Akastor has issued a financial parent company indemnity guarantee of
subsidiaries are shown line by line in the separate financial statements
NOK 1.4 billion in favour of OCY Wayfarer Limited for fulfilment of lease
of the parent company, and are eliminated in the consolidated financial
obligations related to AKOFS 3 AS. In addition, Akastor is guaranteeing
statements.
the performance of AKOFS Norway Operations AS (operating AKOFS
Seafarer) under the 5 years charter agreement with Equinor. The remaining
Joint ventures are accounted for using the equity method, see Note 17
contract value of this charter agreement is NOK 2.1 billion. Avium Subsea
Equity-accounted investees.
AS, AKOFS 3 AS and AKOFS Seafarer AS are wholly owned subsidiaries
The largest shareholder of Akastor, Aker Holding AS, is wholly-owned by
Aker ASA, which in turn is controlled by Kjell Inge Røkke through TRG
HMH
of AKOFS Offshore.
Holding AS and The Resource Group TRG AS. Akastor is an associated
In October 2021, Akastor completed the transaction to bring together
company to Aker ASA as per year end 2022 and 2021.
Akastor’s wholly owned subsidiary, MHWirth AS (MHWirth) and Baker
Below are descriptions of significant related party agreements.
company HMH. Following the transaction, Akastor and Baker Hughes each
Significant agreements with related parties to Aker ASA
See Note 5 Discontinued operations and Note 17 Equity-accounted
holds 50% of the shares in HMH, and have joint control over the company.
Hughes’ Subsea Drilling Systems (SDS) business to create a joint venture
Aker Holding AS
investees for more information.
In connection with the refinancing of its corporate credit facilities, Akastor
entered into a subordinated loan agreement with Aker Holding AS, a
As of December 31, 2022, Akastor has interest-bearing receivables of
wholly owned subsidiary to Aker ASA. The agreement provides credit
NOK 218 million against HMH (fixed interest rate 8.0 percent), see also
facility of NOK 250 million (NIBOR + margin 10.0 percent) available to
Note 19 Non-current interest-bearing receivables. Further, Akastor has a
Akastor. In February/March 2023, the facility was extended to March 2024
liability of NOK 162 million towards HMH related to Step Oiltools, see also
and increased to NOK 450 million (NIBOR + margin 12.0 percent). The
Note 24 Other liabilities for more information. Akastor has issued financial
carrying amount of the loan from Aker Holding AS was NOK 16 million as of
guarantees of NOK 539 million for MHWirth AS, a wholly owned subsidiary
December 31, 2022, see Note 23 Borrowings for more information.
of HMH, for fulfilment of lease obligations and performance under certain
operational support frame agreements.
The Resource Group TRG AS
AK Wilfab Inc, a wholly owned subsidiary of Akastor, is together with Aker
Other related parties
Solutions Inc and The Resource Group TRG AS sponsoring the US pension
Aker Pensjonskasse
plan named the Kvaerner Consolidated Retirement Plan. Akastor holds one
Aker Pensjonskasse was established by Aker ASA to manage the retirement
third of the liability of the sponsors for the underfunded element of the plan
plan for employees and retirees in Akastor as well as related Aker companies.
and The Resource Group TRG AS holds two thirds of the ultimate liability.
Akastor holds 93.4 percent of the paid-in capital in Aker Pensjonskasse and
Aker ASA guarantees for The Resource Group TRG AS’ liability and covers
Akastor’s share of paid-in equity was NOK 158 million at the end of 2022
for all its expenses related to the pension plan.
(NOK 158 million in 2021). Akastor’s premium paid to Aker Pensjonskasse
amounts to NOK 6 million in 2022 (NOK 8 million in 2021). Akastor also
Related party transactions with joint ventures
has an interest-bearing receivable against Aker Pensjonskasse of NOK 22
AKOFS Offshore
million and an additional financing commitment NOK 10 million (3% interest
As of December 31, 2022, Akastor has interest-bearing receivables of NOK
of drawn amount and 1% interest of committed amount).
226 million against AKOFS Offshore, including term loan of NOK 173 million
(LIBOR + margin 2.5/5.5 percent) and drawn working capital facility of NOK
Even though Akastor owns 93.4 percent in Aker Pensjonskasse, the
53 million (NIBOR + margin 5.5 percent). Akastor has made available a
ownership does not constitute control since Akastor does not have the
NOK 100 million working capital revolving facility to AKOFS Seafarer AS
power to govern the financial and operating policies so as to obtain benefits
from contract commencement with Equinor.
from the activities in this entity.
As part of the joint venture shareholders agreement, the other two investors,
Grants to employee representative’s collective fund
Mitsui and MOL, are entitled to a guaranteed preferred equity return, in
Aker ASA has signed an agreement with employee representatives that
respect of the operations of AKOFS Seafarer, amounting to a total of USD
regulate use of grants from Akastor ASA for activities related to professional
46 million for the period 2020-2025. The payment of preferred return will be
development. The grant in 2022 was NOK 510 000 (NOK 510 000 in 2021).
Annual Report 2022 | Financials and Notes | Akastor Group 76
Compensation to key management
The key management personnel of Akastor includes the Board of Directors and the executive management team. The figures below represent remuneration
expenses recognized in the year. Detailed remuneration disclosures are provided in Remuneration Report 2022.
Amounts in NOK million
Base salary
Variable pay and other benefits
Post-employment benefits (pension expenses to company)
Remuneration to Board of Directors
Total
2022
2021
7
8
1
3
19
7
15
-
3
26
The balance of accrued expenses related to key management remuneration amounted to NOK 16 million as of December 31, 2022, of which NOK 5 million
is contingent on continuous employment after a three-year period.
Note 34 | Events after reporting date
In February 2023, the maturity of Akastor’s corporate credit facilities was extended to February/March 2024. In March 2023, the subordinated Aker facility
was increased with NOK 200 million to NOK 450 million.
In March 2023, Akastor entered into a share purchase agreement with ABL Group ASA (“ABL Group”) for the sale of all shares in AGR against a combination
of shares in ABL Group and cash. Certain defined assets are excluded from the transaction and will be retained by Akastor. This includes AGR’s ownership
in Føn Energy Services AS. The transaction is expected to generate an accounting gain upon completion in 2023.
Annual Report 2022 | Financials and Notes | Akastor Group
04.b. FINANCIALS AND NOTES
AKASTOR ASA
Akastor ASA | Income statement
Akastor ASA | Statement of financial position
Akastor ASA | Statement of cash flow
Note 1 | Accounting principles
Note 2 | Operating revenue and expenses
Note 3 | Net financial items
Note 4 | Tax
Note 5 | Investments in group companies
Note 6 | Shareholders’ equity
Note 7 | Receivables and borrowings from group companies and related parties
Note 8 | Borrowings
Note 9 | Guarantees
Note 10 | Financial risk management
Note 11 | Related parties
Note 12 | Shareholders
Note 13 | Subsequent events
77
78
79
80
81
82
82
83
83
84
84
85
86
87
87
88
88
Annual Report 2022 | Financials and Notes | Akastor ASAFinancials and Notes | Akastor ASA 78
Akastor ASA | Income statement
For the year ended December 31
Amounts in NOK million
Operating revenue
Operating expenses
Operating profit (loss)
Net financial items
Profit (loss) before tax
Income tax benefit (expense)
Profit (loss) for the period
Profit (loss) for the period distributed as follows
Other equity
Profit (loss) for the period
Note
2022
2021
2
2
3
4
1
2
(40)
(40)
(429)
(468)
12
(457)
(457)
(457)
(53)
(51)
(613)
(664)
-
(664)
(664)
(664)
Annual Report 2022 | Financials and Notes | Akastor ASA
Akastor ASA | Statement of financial position
As of December 31
Amounts in NOK million
Assets
Deferred tax assets
Investments in group companies
Non-current interest-bearing receivables on group companies
Other non-current interest-bearing receivables
Total non-current assets
Current interest-bearing receivables on group companies
Other receivables on group companies
Other receivables
Cash in cash pool system
Total current assets
Total assets
Equity and liabilities
Issued capital
Treasury shares
Share premium
Other paid in capital
Other equity
Total equity
Non-current borrowings, external
Total non-current liabilities
Current borrowings, external
Other liabilities to group companies
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
79
Note
2022
2021
4
5
7
7
7
7
6
8
8
7
12
4 194
500
2
4 708
126
-
4
11
141
4 849
162
(1)
2 000
2 005
(227)
3 939
-
-
870
40
1
910
910
4 849
-
4 515
500
2
5 018
173
1
3
-
177
5 195
162
(1)
2 000
2 003
229
4 393
719
719
16
52
15
83
802
5 195
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
Frank O. Reite | Chairperson
Lone Fønss Schrøder | Deputy Chairperson
Svein Oskar Stoknes | Director
Kathryn M. Baker | Director
Luis Antonio G. Araujo | Director
Henning Jensen | Director
Asle Christian Halvorsen | Director
Stian Sjølund | Director
Karl Erik Kjelstad | CEO
Annual Report 2022 | Financials and Notes | Akastor ASA
80
Akastor ASA | Statement of cash flow
For the year ended December 31
Amounts in NOK million
Profit (loss) before tax
Adjustments:
Group contribution and dividend
Non-cash impairment
Net interest cost and unrealized currency (income) loss
Profit (loss), net of adjustments
Changes in net operating assets
Net external interest paid
Net cash from operating activities
Capital contribution in group companies
Net cash from investing activities
Proceeds from borrowings
Repayment of borrowings
Changes in borrowings from group companies
Changes in borrowings to group companies
Change in overdraft cash pool
Net cash from financing activities
Effect of exchange rate changes on cash and cash deposits
Net increase (decrease) in cash and bank deposits
Cash in cash pool system at the beginning of the period
Cash in cash pool system at the end of the period1)
1) Unused committed credit facilities amounted to NOK 304 million as of December 31, 2022 (NOK 553 million in 2021).
Note
3
3
7
2022
(468)
-
355
111
(3)
(28)
(41)
(71)
(34)
(34)
756
(731)
-
-
40
65
50
11
-
11
2021
(664)
(7 000)
7 593
46
(25)
18
(38)
(45)
-
-
1 067
(1 483)
844
(171)
(225)
32
14
-
-
-
Annual Report 2022 | Financials and Notes | Akastor ASA
81
Note 1 | Accounting principles
Akastor ASA (the parent company) is a company domiciled in Norway. The
Share capital
financial statements are presented in conformity with Norwegian Accounting
Costs for purchase of own shares including transaction costs are accounted
Act and Norwegian generally accepted accounting principles (NGAAP).
for directly against equity. Sales of own shares are performed according
to stock-exchange quotations at the time of award and accounted for as
Revenue recognition
increase in equity.
Operating revenue mainly comprise parent company guarantees (PCG)
recharged to entities within the group. The revenue is recognized over the
Cash flow statement
guarantee period.
The statement of cash flow is prepared according to the indirect method.
Cash and cash equivalents include cash, bank deposits and other short-
Investments in subsidiaries
term liquid investments.
Investments in subsidiaries are measured at cost in the parent company
accounts, less any impairment losses. The investments are impaired to
Functional currency and presentation currency
fair value if the impairment is not considered temporary. Impairment losses
The parent company’s financial statements are presented in NOK, which
are reversed if the basis for the impairment loss is no longer present.
is Akastor ASA’s functional currency. All financial information presented in
Investments in subsidiaries and associates are reviewed for impairment
NOK has been rounded to the nearest million (NOK million), except when
whenever events or changes in circumstances indicate that the carrying
otherwise stated. The subtotals and totals in some of the tables in these
amount may exceed the fair value of the investment.
financial statements may not equal the sum of the amounts shown due to
Dividends, group contributions and other distributions from subsidiaries are
recognized as income the same year as they are recognized in the financial
Foreign currency
rounding.
statement of the provider. If the dividends or group contributions exceed
Transactions in foreign currencies are translated at the exchange rate
withheld profits after the acquisition date, the excess amount represents
applicable at the date of the transaction. Monetary items in a foreign
repayment of invested capital, and is recognized as a reduction of carrying
currency are translated to NOK using the exchange rate applicable on the
value of the investment.
balance sheet date. Foreign exchange differences arising on translation are
recognized in the income statement as they occur.
Classification
Current assets and current liabilities include items due within one year or
Tax
items that are part of the operating cycle. Other balance sheet items are
Tax income (expense) in the income statement comprises changes
classified as non-current assets/debts.
in deferred tax. Deferred tax is calculated as 22 percent of temporary
differences between accounting and tax values as well as any tax losses
Non-current borrowings are presented as current if a loan covenant breach
carry-forward at the year end. Net deferred tax assets are recognized only
exists at balance date. If a covenant waiver is approved subsequent to
to the extent it is probable that they will be utilized against future taxable
year-end and before the approval of the financial statements, the liability
profits.
is presented as non-current debt to the extent maturity date is beyond one
year.
Measurement of borrowings and receivables
Financial assets and liabilities consist of investments in other companies,
trade and other receivables, interest-bearing receivables, cash and cash
equivalents, trade and other payables and interest-bearing borrowing.
Trade receivables and other receivables are recognized in the balance
sheet at nominal value less provision for expected losses.
Interest-bearing borrowings are initially recorded at transaction value less
transaction costs. Subsequent to initial recognition, these borrowings
are measured at amortized cost with any difference between cost and
redemption value being recognized in the income statement over the period
of the borrowings on an effective interest basis.
Cash in cash pool system
Akastor ASA has a cash pool that includes the parent company’s cash as
well as net deposits from subsidiaries in the group cash pooling system
owned by the parent company. Correspondingly, Akastor ASA’s current
debt to group companies will include their net deposit in the group’s cash
pool system.
Annual Report 2022 | Financials and Notes | Akastor ASA 82
Note 2 | Operating revenue and expenses
Operating revenue comprises NOK 1 million in income from parent company
NOK 3.2 million has been allocated to payable fees to the Board of Directors
guarantees (NOK 2 million in 2021).
for 2022 (2021: NOK 3.0 million). Remuneration to and shareholding of the
Board of directors and CEO is described in Remuneration Report 2022.
There are no employees in Akastor ASA and hence no salary or pension
related costs and also no loan or guarantees related to the executive
Fees to the auditors
management team. Group management and corporate staff are employed
Fees to the auditors for statutory audit amounted to NOK 1.1 million
by other Akastor companies and costs for their services as well as other
exclusive VAT (2021: NOK 2.0 million).
parent company costs are recharged to Akastor ASA.
Note 3 | Net financial items
Amounts in NOK million
Interest income from group companies
Interest income, external
Interest expense, external
Other financial income
Dividends from group companies
Impairment on receivables to group companies
Impairment of shares
Other financial expenses
Net foreign exchange gain (loss)
Net financial items
Note
2022
2021
7
41
52
(108)
-
-
-
(355)
(9)
(50)
(429)
29
31
(82)
1
7 000
(56)
(7 537)
(3)
4
(613)
Annual Report 2022 | Financials and Notes | Akastor ASA Note 4 | Tax
Amounts in NOK million
Calculation of taxable income
Profit (loss) before tax
Dividend income from group companies
Impairment of shares and receivables to group companies
Changes in timing differences
Generated (utilized) tax loss
Taxable income
Taxable (deductible) temporary differences
Provisions
Interest deduction carry-forward
Tax loss carry-forward 1)
Net temporary differences
Tax rate
Tax effects of temporary differences
Not recognized deferred tax assets 2)
Deferred tax assets (liability)
Tax expense
Taxes payable
Change in deferred tax
Income tax benefit (expense)
83
2022
2021
(468)
-
355
9
104
-
2
(21)
(180)
(199)
22%
44
(32)
12
-
12
12
(664)
(7 000)
7 593
(7)
79
-
(2)
(5)
(79)
(86)
22%
19
(19)
-
-
-
-
1) In addition, Akastor ASA has unrecognized tax loss carry forwards of NOK 440 million as of 2022 which is currently being subject to inquiries from Norwegian Tax Authorities
2) Deferred tax assets are not recognized when the management assesses that it is not probable that future taxable profit will be available, against which the deductible
temporary difference can be utilized.
Note 5 | Investments in group companies
Amounts in NOK million
Akastor AS
Mercury Holdco AS
Total
Registered
office
Share
capital
Number of
shares held
Percentage
owner- / vot-
ing share
Fornebu, Norway
Fornebu, Norway
1 004
-
1
1 000
100%
100%
Financial information in group companies 2022 (unaudited)
Amounts in NOK million
Profit (loss) for the period
Equity as of December 31
2022
2 882
1 312
4 194
2021
3 237
1 279
4 515
Akastor AS
Mercury
Holdco AS
(343)
2 859
75
1 400
Annual Report 2022 | Financials and Notes | Akastor ASA
84
Note 6 | Shareholders’ equity
Amounts in NOK million
Share capital
Treasury
shares
Share
premium
Other paid in
capital
Retained
earnings
Equity as of January 1, 2021
Profit (loss) for the period
162
(1)
2 000
2 003
-
-
-
-
Equity as of December 31, 2021
162
(1)
2 000
2 003
Treasury shares transaction
Profit (loss) for the period
-
-
-
-
-
-
2
-
Equity as of December 31, 2022
162
(1)
2 000
2 005
894
(664)
229
-
(457)
(227)
Total
5 057
(664)
4 393
2
(457)
3 939
The share capital of Akastor ASA is divided into 274 000 000 shares with a
treasury shares held by the end of 2022 was 1 985 164 and the shares
nominal value of NOK 0.592. The shares can be freely traded. See Note 12
are held for the purpose of being used for future awards under any share
Shareholders for an overview of the company's largest shareholders.
purchase program for employees, as settlement in future corporate
acquisitions or for other purpose as decided by the board of directors.
Sale of 405 051 treasury shares to employees was carried out in 2022
in connection with the company’s variable pay program. The number of
Note 7 | Receivables and borrowings from group companies and related parties
Amounts in NOK million
2022
2021
Group companies (borrowings) deposits in the cash pool system
Akastor ASA's net deposit (borrowings) in the cash pool system
Cash in cash pool system
Non-current interest-bearing receivables on group companies
Current interest-bearing receivables on group companies 1)
Net interest-bearing receivables on group companies
Other receivables on group companies
Other liabilities to group companies
Total other receivables on group companies
1) Includes group companies’ borrowings in the cash pool system.
(121)
131
11
500
126
626
-
(40)
(40)
(171)
171
-
500
173
673
1
(52)
(52)
Interest-bearing receivables on and borrowings from group
assure good control and access to the group’s cash. Participation in the
companies
cash pool is vested in the group’s policy and decided by each company’s
Akastor ASA is the group’s central treasury function (Akastor Treasury)
board of directors and confirmed by a statement of participation. The
and enters into borrowings and deposit agreements with group companies.
participants in the cash pool system are jointly and severally liable and it
Deposits and borrowings are done at market terms and are dependent of
is therefore important that Akastor as a group is financially viable and can
the group companies’ credit rating and the duration of the borrowings.
repay deposits and carry out transactions. Any debit balance on a sub
account can be set-off against any credit balance. Hence, a debit balance
In 2021, an impairment of NOK 56 million was recognized related to interest-
represents a claim on Akastor ASA and a credit balance a borrowing from
bearing receivables on Step Oiltools BV prior to recapitalization of the entity.
Akastor ASA.
Cash pool arrangement
The cash pool system has a net cash of NOK 11 million as of December 31,
Akastor ASA is the owner of the cash pool system arrangements with DNB.
2022 (net overdraft of NOK 11 million in 2021).
The cash pool systems cover a majority of the group geographically and
Annual Report 2022 | Financials and Notes | Akastor ASA
85
Note 8 | Borrowings
Amounts in million
Currency
Nominal
currency
value
Carrying
amount (NOK)
Maturity 1)
Interest terms 2)
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million) 3)
Total borrowings
USD
NOK
NOK
66
200
16
Current borrowings
Total
2021
Revolving credit facility (USD 89 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Overdraft facility
Total borrowings
Current borrowings
Non-current borrowings
Total
USD
NOK
NOK
NOK
83
-
3
-
Feb 2024
USD LIBOR + margin 5.5%
Feb 2024
Mar 2024
NIBOR + margin 5.5%
NIBOR + margin 10%
656
198
16
870
870
870
721
Feb 2023
USD LIBOR + margin 5.5%
Feb 2023
Mar 2023
NIBOR + margin 5.5%
NIBOR + margin 10%
-
3
11
735
16
719
735
1) In February 2023, the maturity date was extended to February/March 2024. The borrowings are classified as current reflecting the maturity date as at the balance sheet date.
2) Commitment fee is 40 percent of the margin.
3) In March 2023, Aker facility was increased to NOK 450 million (NIBOR + margin 12%).
All facilities are provided by a bank syndicate consisting of high-quality
The company’s gearing ratio shall not exceed 0.5 times, calculated
Nordic and international banks and DNB is acting as the agent. The terms
from the consolidated total borrowings to the consolidated Equity.
and conditions include restrictions which are customary for these kinds of
facilities, including inter alia negative pledge provisions and restrictions on
Equity ratio shall not be lower than 32.5%, calculated from the
acquisitions, disposals and mergers, dividend distribution and change of
consolidated total equity to consolidated total assets.
control provisions.
Minimum liquidity amount shall exceed NOK 150 million on
In 2021, Akastor ASA carried out refinancing of its credit facilities as a
consolidated level.
result of MHWirth divestment. In February 2023, the maturity date of the
revolving credit facilities was extended to February/March 2024. Under the
The covenants are monitored on a regular basis by the Akastor Treasury
loan agreements, the financial covenants are a gearing ratio based on net
department to ensure compliance with the loan agreements which are
debt/equity, an equity ratio based on equity/total assets and a minimum
tested and reported on a quarterly basis. Akastor was in compliance with
liquidity amount.
its covenants as of December 31, 2022. On the basis of the covenant levels
and its financial forecasts, management believes that the risk of covenant
being breached is low and that the group will continue as a going concern for
the foreseeable future. See more information in Board of Directors’ report.
Annual Report 2022 | Financials and Notes | Akastor ASA
86
Financial liabilities and the period in which they mature
Amounts in NOK million
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Total borrowings
2021
Revolving credit facility (USD 89 million)
Subordinated Aker facility (NOK 250 million)
Overdraft facility
Total borrowings
Carrying
amount
Total
undiscounted
cash flow 1)
6 months
and less
6–12 months
1–2 years 2)
656
198
16
870
721
3
11
735
668
217
16
901
787
3
11
800
35
9
-
43
27
-
11
37
32
9
-
40
602
200
16
818
22
738
-
-
22
3
-
740
1) The interest costs are calculated using the last fixing rate known by year end (plus applicable margin).
2) Repayment of the loan in the table is according to maturity date of the facility in the loan agreement.
Note 9 | Guarantees
Akastor has provided the following guarantees on behalf of wholly owned subsidiaries and related parties as of December 31 (all obligations are per date
of issue):
Amounts in NOK million
Parent Company Guarantees to group companies 1)
Parent Company Guarantees to related parties 2)
Counter guarantees for bank/surety bonds, group companies 3)
Counter guarantees for bank/surety bonds, related parties 3)
Total guarantee liabilities
Maturity of guarantee liabilities:
6 months and less
6-12 months
1-2 years
2-5 years
5 years and more
2022
639
4 017
232
1
4 889
45
1
555
3 623
665
2021
1 025
4 416
305
8
5 754
104
4
497
3 315
1 835
1) Parent Company Guarantees to support subsidiaries in contractual obligations towards clients.
2) Parent Company Guarantees to support related parties in contractual obligations towards clients, mainly AKOFS 1 AS, AKOFS 3 AS, AKOFS Norway Operations AS and
MHWirth AS.
3) Bank guarantees and surety bonds are issued on behalf of Akastor subsidiaries and related parties, and counter indemnified by Akastor ASA.
Although guarantees are financial instruments, they are considered contingent obligations and the notional amounts are not included in the financial
statements.
US pension plan
AK Wilfab Inc, a wholly owned subsidiary of Akastor, is together The Resource Group TRG AS and Akastor ASA sponsoring the US pension plan named
the Kvaerner Consolidated Retirement Plan. Akastor Group holds one third of the liability of the sponsors for the underfunded element of the plan and The
Resource Group TRG AS holds two thirds of the ultimate liability. Aker ASA guarantees for The Resource Group TRG AS’ liability and covers for all its
expenses related to the pension plan.
Annual Report 2022 | Financials and Notes | Akastor ASA 87
Note 10 | Financial risk management
Currency risk
loans to subsidiaries and related parties, guarantees to subsidiaries and
The company’s exposure to currency risk is primarily against USD as the
related parties and deposits with external banks. External deposits are done
company has external borrowings denominated in USD. As of 31 December
according to a list of approved banks and primarily with banks where the
2022 or 2021, Akastor ASA had not entered into any forward exchange
company also have a borrowing relationship.
contracts.
Interest rate risk
Loss provisions for interest-bearing receivables are made in situations of
negative equity if the company is not expected to be able to fulfill its loan
The company is exposed to changes in interest rates because of floating
obligations from future earnings. No impairment related to receivables
interest rate on loan receivables and loan payables. The company does
from group companies was recognized in 2022 (NOK 56 million in 2021).
not hedge transactions exposure in financial markets and does not have
See Note 7 Receivables and borrowings from group companies for more
any fixed interest rate loan receivables nor loan payables. The company is
information about receivables.
therefore not exposed to fair value risk on its outstanding loan receivables
or loan payables. Interest bearing loan receivables and loan payables
Liquidity risk
expose the company to income statement and cash flow interest risk.
Liquidity risk relates to the risk that the company will not be able to meet
its debt and guarantee obligations and is managed through maintaining
Interest-bearing borrowings to group companies reflect the cost of external
sufficient cash and available credit facilities. Due to the dynamic nature of
borrowing, reducing the interest risk exposure for Akastor ASA.
the underlying businesses, Akastor Treasury maintains flexibility in funding
Credit risk
by maintaining availability under committed credit lines. Development in
the group’s and thereby Akastor ASA’s available liquidity is continuously
Credit risk is the risk of financial losses to the company if a customer or
monitored through monthly cash flow forecasts, annual budgets and long
counterparty fails to meet contractual obligations. Credit risk relates to
term planning.
Note 11 | Related parties
Transactions and balances with subsidiaries and related parties are described in the following notes:
Transactions
Other services
Financial items
Investments
Cash pool, receivables and borrowings
Guarantees
Note
Note 2
Note 3
Note 5
Note 7
Note 9
All transactions with related parties are carried out at market terms and in accordance with the arm’s lengths principle.
Annual Report 2022 | Financials and Notes | Akastor ASA 88
Note 12 | Shareholders
Shareholders with more than 1 percent shareholding as per December 31
Company
2022
Aker Holding AS
Goldman Sachs & Co
Ministry of Trade, Industry and Fisheries, Norway
Morgan Stanley & Co. LLC
Apollo Asset Limited
Mh Capital AS
F2 Funds AS
Tigerstaden AS
Company
2021
Aker Holding AS
Goldman Sachs & Co
Morgan Stanley & Co. LLC
Ministry of Trade, Industry and Fisheries, Norway
Verdipapirfond Odin Norge
F2 Funds AS
Note 13 | Subsequent events
Nominee
Nominee
Number of
shares held
Ownership
100 565 292
38 731 705
33 100 085
30 438 269
6 049 000
4 000 000
3 270 000
3 000 000
36.70%
14.14%
12.08%
11.11%
2.21%
1.46%
1.19%
1.09%
Number of
shares held
Ownership
Nominee
Nominee
100 565 292
39 245 843
33 139 698
33 100 085
10 575 925
3 239 187
36.70%
14.32%
12.09%
12.08%
3.86%
1.18%
In February 2023, the maturity of Akastor’s corporate credit facilities was extended to February/March 2024. In March 2023, the subordinated Aker facility
was increased with NOK 200 million to NOK 450 million.
Annual Report 2022 | Financials and Notes | Akastor ASA
05. AUDITOR'S REPORT
89
To the General Meeting of Akastor ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Akastor ASA, which comprise:
•
•
the financial statements of the parent company Akastor ASA (the Company), which comprise
the statement of financial position as at 31 December 2022, the income statement and
statement of cash flow for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and
the consolidated financial statements of Akastor ASA and its subsidiaries (the Group), which
comprise the statement of financial position as at 31 December 2022, the income statement,
statement of comprehensive income, statement of changes in equity and statement of cash
flow for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion
•
•
•
the financial statements comply with applicable statutory requirements,
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
Annual Report 2022 | Auditor's ReportAuditor's Report
90
We have been the auditor of the Company for one year from the election by the general meeting of the
shareholders on 20 April 2022 for the accounting year 2022.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matters
How our audit addressed the Key Audit Matter
Accuracy of Equity-accounted investees
Investments in the Joint Ventures (JV) HMH
Holding B.V (HMH) and AKOFS Offshore
AS (AKOFS) amounts to approximately
51% of the Group’s total assets, and any
year-on-year fluctuations in Akastor’s share
of the JV’s booked results may amount to a
significant part of the Group’s total results.
As such, accuracy in reporting Group
management receives from JVs is of
significance to the Group’s financial
statements.
See note 3 “Significant accounting policies”,
section “Basis of consolidation” for
significant accounting policies applied for
investments in joint ventures. Information on
the recognition and measurement of the JVs
are disclosed in note 17 “Equity-accounted
investees”.
We completed the Group audit plan based on our
understanding of HMH and AKOFS, discussions with
Akastor’s management and collaboration with the
component audit teams. We were involved in the
component audit team's risk assessment, including
the susceptibility of material misstatement due to
fraud or error, and we reviewed their audit plan with
regards to identified significant risks. We agreed with
the component auditors on the materiality levels for
their audit. Our involvement and communication, both
written and otherwise, was extensive.
We obtained a sufficient understanding of the
component audit firm and the engagement teams
through meetings with them, prior experience with the
component team, and frequent communication. They
confirmed to us that they were independent.
To evaluate the sufficiency and appropriateness of
audit evidence obtained by the component audit
teams, we reviewed the received audit reporting, held
meetings with the component audit teams and
reviewed their audit documentation. Our procedures
were focused on the audit of significant risks and the
audit of the consolidation process and -journals.
Through our involvement with the component
auditors, we were able to obtain sufficient appropriate
audit evidence regarding the financial information of
the components and the consolidation process to
express an opinion on the Group’s financial
statements.
Finally, we considered the adequacy of disclosures in
notes related to equity-accounted investees and
found them to be appropriate.
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Annual Report 2022 | Auditor's Report
91
Valuation of Other Investments and Trade
and Other Receivables
Other Investments and Trade and Other
Receivables amount to approximately 24%
of the Group’s total assets. Management
uses valuation techniques to estimate the
fair value of Other Investments and the
recoverability of Trade and Other
Receivables.
These two line items are significant to the
financial statements, and the carrying value
is sensitive to management’s use of
judgment.
The substantial part of Other Investments is
measured at fair value through other
comprehensive income and is classified as
level 3 in the fair value hierarchy. Trade and
Other Receivables are measured at
amortized cost less any impairment, if
present.
See note 4 “Significant accounting
estimates and judgements” for disclosures
on Management’s fair value measurement
and Impairment of financial assets. The
carrying value of Other Investments is
specified in note 18 “Other Investments”.
See note 20 “Trade and Other Receivables”
for disclosure on trade and other
receivables.
For Other Investments, we obtained the valuation
model from management, evaluated the valuation
method applied and tested the mathematical
accuracy of the model. We agreed with management
that the valuation model used was appropriate.
We challenged the key assumptions applied by
management in the valuation model. Specifically, we
discussed with management to challenge their view
on EBITDA, peer groups, EV/EBITDA valuation
multiples, assumed exit date and discount rate. We
compared applied assumptions to budgets approved
by management and to obtainable market information
such as relevant benchmarks for enterprise value
multiples and discount rates. We also tested data
used in the model against relevant agreements. We
found management's key assumptions to be
reasonable.
For the substantial part of Trade and Other
Receivables, composed of Other Receivables, we
obtained management’s valuation and held
discussions with management to challenge their
assessment of the impact on Other receivables of the
dispute related to four terminated construction
contracts with Jurong Shipyard.
To corroborate the valuation assessment, we
obtained supporting documentation on key
assumptions. We found that supporting
documentation corroborated with the information
presented.
Finally, we considered the adequacy of disclosures in
notes for Other Investments and Trade and Other
Receivables and found them to be appropriate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
3 / 6
Annual Report 2022 | Auditor's Report
92
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
•
•
is consistent with the financial statements and
contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
4 / 6
Annual Report 2022 | Auditor's Report
93
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Akastor ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name AKASTORASA_ESEF_2022-12-31, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
5 / 6
Annual Report 2022 | Auditor's Report
94
2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to
Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 22 March 2023
PricewaterhouseCoopers AS
Anders Ellefsen
State Authorised Public Accountant (Norway)
6 / 6
Annual Report 2022 | Auditor's Report 95
06. ALTERNATIVE PERFORMANCE
MEASURES
Akastor discloses alternative performance measures as a supplement to the consolidated financial statements prepared in accordance with IFRS. Such
performance measures are used to provide an enhanced insight into the operating performance, financing abilities and future prospects of the group. These
measures are calculated in a consistent and transparent manner and are intended to provide enhanced comparability of the performance from period to
period. It is Akastor's experience that these measures are frequently used by securities analysts, investors and other interested parties.
The definitions of these measures are as follows:
EBITDA - earnings before interest, tax, depreciation and amortization, corresponding to "Operating profit before depreciation, amortization and impairment"
in the consolidated income statement.
EBIT - earnings before interest and tax, corresponding to "Operating profit (loss)" in the consolidated income statement.
Capex and R&D capitalization - a measure of expenditure on PPE or intangible assets that qualify for capitalization.
Net current operating assets (NCOA) - a measure of working capital. It is calculated by current operating assets minus current operating liabilities,
excluding financial assets or financial liabilities related to hedging activities.
Net capital employed - a measure of all assets employed in the operation of a business. It is calculated by non-current assets and finance lease receivables
(excluding non-current interest-bearing receivables) added by net current operating assets minus non-current operating liabilities (deferred tax liabilities,
employee benefit obligations, other non-current liabilities and lease liabilities).
Gross debt - sum of current and non-current borrowings, excluding lease liabilities.
Net debt - gross debt minus cash and cash equivalents.
Net interest-bearing debt (NIBD) - net debt minus non-current and current interest-bearing receivables.
Equity ratio - a measure of investment leverage, calculated as total equity divided by total assets at the reporting date.
Liquidity reserve - comprises cash and cash equivalents and undrawn committed credit facilities.
Order intake - represents the estimated contract value from the contracts or orders that are entered into or committed in the reporting period.
Order backlog - represents the remaining unearned contract value from the contracts or orders that are entered into or committed at the reporting date. The
backlog does not include options on existing contracts, or contract value from short-cycled service orders.
The tables below show reconciliation of alternative performance measures to the line items in the financial statements according to IFRS.
Net current operating assets (NCOA)
Amounts in NOK million
Inventories
Trade and other receivables
Current operating assets
Current tax liabilities
Provisions, current
Trade and other payables
Current operating liabilities
Net current operating assets (NCOA)
2022
2021
5
5
769
872
774
877
(2)
(1)
(31)
(20)
(498)
(625)
(531)
(647)
243
231
Annual Report 2022 | Alternative Performance MeasuresAlternative Performance Measures
96
Net capital employed (NCE)
Amounts in NOK million
Total non-current assets
Net current operating assets (NCOA)
Current investment
Current finance lease receivables
Non-current interest-bearing receivables
Deferred tax liabilities
Employee benefit obligations
Other non-current liabilities
Other current liabilities
Non-current provisions
Total lease liabilities
Net assets held for sale
Net capital employed (NCE)
Gross debt/Net debt/NIBD
Amounts in NOK million
Non-current borrowings
Current borrowings
Gross debt
Cash and cash equivalents
Net debt
Non-current interest-bearing receivables
Net interest-bearing debt (NIBD)
Equity ratio
Amounts in NOK million
Total equity
Divided by Total assets
Equity ratio
Liquidity reserve
Amounts in NOK million
Cash and cash equivalents
Undrawn committed credit facilities
Liquidity reserve
2022
2021
5 497
6 025
243
231
162
148
208
64
(668)
(315)
(4)
(4)
(96)
(108)
(459)
(628)
(162)
(148)
(3)
(26)
(85)
(155)
11
-
4 645
5 084
2022
198
1 142
1 340
2021
1 372
16
1 387
(119)
(89)
1 220
1 299
(668)
(315)
553
984
2022
4 092
6 804
60%
2022
119
304
2021
4 109
7 212
57%
2021
89
553
423
642
Annual Report 2022 | Alternative Performance Measures 07. BOARD OF DIRECTORS
97
Frank O. Reite | Chairperson of the Board
Frank O. Reite is a Norwegian citizen, born in 1970. He first joined Aker in 1995 and held the
position as CFO in Aker ASA from August 2015 until August 2019. Mr. Reite has previously held
the position as President & CEO of Akastor (up until 2015) and also held a variety of executive
positions in the Aker group, including overseeing and developing Aker’s investments in Converto
Capital Fund AS, Havfisk ASA, Norway Seafoods AS and Aker Yards ASA. Mr. Reite also has
experience from banking and served as Operating Director at Paine & Partners, a New York-based
private equity firm. Reite’s current board positions include being chair of Converto AS, deputy chair
of the board and chair of the audit committee in Aker ASA, chair of Norron AB, and director of
Solstad Offshore ASA. He holds a B.A. in business administration from Norwegian Business
School BI in Oslo.
As of March 22, 2023, Mr. Reite holds, through a privately owned company, 200,000 shares in
Akastor ASA and has no stock options. He is a Norwegian citizen and has been elected for the
period 2022-2024.
Lone Fønss Schrøder | Deputy Chair
Lone Fønss Schrøder is CEO of Concordium AG, a global provider of blockchain technologies.
She is vice-chair of Volvo Cars AB and chair of the audit committee, and director of Geely Sweden
Holdings AB and Ingka Holding B.V. (Ikea Group). She has held several senior management and
CEO positions in the A.P. Møller-Maersk group and became CEO and president of Wallenius Lines
AB in 2005. Fønss Schrøder has board experience from Kværner ASA, Eukor Inc, Vattenfall AB,
Yara ASA, Valmet OY and others. Fønss Schrøder holds an MSc in law from the University of
Copenhagen and in economics from Copenhagen Business School in Denmark.
Ms. Fønns Schrøder serves as an independent director. As of March 22, 2023, she holds 4,400
shares in the company and has no stock options. She is a Danish citizen and has been elected for
the period 2022-2024.
Svein Oskar Stoknes | Director
Svein Oskar Stoknes has been CFO at Aker ASA since August 2019. Prior to this, he served as
CFO at Aker Solutions, where he joined in 2007 and was named CFO in 2014. Previously, Mr.
Stoknes held a range of senior positions within finance and advisory for organizations like
Tandberg, Citigroup and ABB. He graduated from the Norwegian School of Management and has
an MBA from Columbia Business School in New York.
As of March 22, 2023, Mr. Stoknes owns 1,297 shares and no stock options in the company. He is
a Norwegian citizen and has been elected for the period 2022-2024.
Annual Report 2022 | Board of DirectorsBoard of Directors 98
Kathryn M. Baker | Director
Kathryn M. Baker has over 35 years of business experience in a broad range of industries and
roles. She currently serves as Chairwoman of Terra Mater Renewable Investments, and board
member of MPC Energy Solutions and Gaming Innovation Group ASA and member of the
Investment Committee of Norfund. Ms. Baker previously served on the Executive Board of the
Central Bank of Norway (Norges Bank), the European Advisory Board of the Tuck School of
Business and the Ethics Committee of the Norwegian Private Equity and Venture Capital
Association (NVCA), where she also previously served as Chairwoman. Ms. Baker was a partner
at the Norwegian private equity firm Reiten & Co for 15 years. Prior to that, she was a management
consultant at McKinsey & Company in Oslo and a financial analyst at Morgan Stanley in New York.
Ms. Baker holds a bachelor’s degree in economics from Wellesley College and an MBA from the
Amos Tuck School of Business at Dartmouth College.
As of March 22, 2023, she holds 45,683 shares in the company. Ms. Baker is an American citizen
and has been elected for the period 2021-2023.
Luis Antonio G. Araujo | Director
Luis Antonio G. Araujo has over 38 years of experience in the energy and oil & gas industries. He
was CEO of Aker Solutions from July 2014 to August 2020. Prior to his appointment as CEO, Mr.
Araujo held the position as Regional President and Executive Vice-President for Aker Solutions in
Brazil since November 2011 where he led a major turn-around of the local operations. Prior to his
period with Aker Solutions, he was CEO of Wellstream in Brazil (currently part of Baker Hughes
GE), and held several senior positions within ABB, FMC Technologies, Vetco Gray and Technip
Coflexip. Mr. Araujo is currently an independent director and member of the board of Magseis
Fairfield ASA listed on the Oslo Stock Exchange, and Chairperson of the board of OceanPact, a
Brazilian company. Mr. Araujo holds a bachelor degree in Mechanical Engineering from Gama
Filho University and an MBA from Edinburgh University.
Mr. Araujo serves as an independent director. As of March 22, 2023, Mr. Araujo holds no shares
and no stock options in the company. He has triple citizenship; Brazilian, British and Portuguese
and has been elected for the period 2021-2023.
Henning Jensen | Director, Elected by the employees
Henning Jensen currently works as a Service Account Manager in DLS department at HMH. Mr.
Jensen joined MHWirth in 2005. He has since then held various positions in the company. Mr.
Jensen holds a bachelor degree in Marine Technology and a Master in Industrial Economy and
Technology from Agder University College in Grimstad.
As of March 22, 2023, Mr. Jensen holds no shares or stock options in the company. Mr. Jensen is
a Norwegian citizen and has been elected for the period 2021-2023.
Annual Report 2022 | Board of Directors 99
Asle Christian Halvorsen | Director, Elected by the employees
Asle Christian Halvorsen currently works as Sales Manager in the Global Sales dept at HMH. He
began his career with the Aker group in 2011 when he joined STEP Offshore. Mr. Halvorsen holds
an Executive Master of Management from BI Norwegian Business School.
As of March 22, 2023, he holds 10,000 shares in the company. Mr. Halvorsen is a Norwegian
citizen. He has been elected for the period 2021-2023.
Stian Sjølund | Director, Elected by the employees
Stian Sjølund currently works as Performance Optimization Engineer at HMH. Mr. Sjølund joined
the Company in 1998 as an Engineer in Drilling Lifecycle Services department. He has since then
held various positions in the company in Norway and abroad. Mr. Sjølund holds a technical college
degree in electrical engineering from Grimstad Technical College.
As of March 22, 2023, he holds 10,000 shares in the company. Mr. Sjølund is a Norwegian citizen
and has been elected for the period 2021-2023.
Annual Report 2022 | Board of Directors 100
08. MANAGEMENT
Karl Erik Kjelstad | CEO
Karl Erik joined Akastor in 2014, he has been part of the Aker group since 1998 and has numerous
key positions including various CEO positions. Karl Erik has held several board positions in
different industries, including oil service, offshore drilling, offshore and merchant shipping,
shipbuilding, IT services, real estate and construction industry. Karl Erik holds an MSc in Marine
Engineering from the Norwegian University of Science and Technology (NTNU) and an AMP from
Harvard Business School.
As of March 22, 2023, Kjelstad holds 700,000 shares in Akastor ASA through his company
Byesvollen AS.
Øyvind Paaske | CFO
Øyvind joined the investment team in Akastor as Investment Manager in 2014 and has held the
position as CFO of Akastor from March 2020. Prior to this he was Investment Manager at Converto
(Aker ASA). Øyvind holds an MSc in Financial Economics from the Norwegian School of Economics
and Business Administration (NHH) and UNC Kenan-Flagler Business School.
As of March 22, 2023, Paaske holds 135,083 shares in Akastor ASA.
Annual Report 2022 | ManagementManagement 101
09. COMPANY INFORMATION
Reports on the Internet
Copyright and Legal Notice
The quarterly and annual reports of Akastor are available on the
internet. Akastor encourages its shareholders to subscribe to
the company’s annual reports via the electronic delivery system
of the Norwegian Central securities Depository (VPS). Please
note that VPS services (VPS Investortjenester) are designed
primarily for Norwegian shareholders. Subscribers to this
service receive annual reports in PDF format by email. VPS
distribution takes place at the same time as distribution of the
printed version of Akastor’s annual report to shareholders who
have requested it. Quarterly reports, which are generally only
distributed electronically, are available on the company’s
website and other sources. Shareholders who are unable to
receive the electronic version of interim reports may subscribe
to the printed version by contacting Akastor’s investor relations
staff.
Copyright in all published material including photographs,
drawings and images in this publication remains vested in
Akastor and third party contributors to this publication as
appropriate. Accordingly, neither the whole nor any part of this
publication can be reproduced in any form without express prior
permission. Articles and opinions appearing in this publication
do not necessarily represent the views of Akastor. While all
steps have been taken to ensure the accuracy of the published
contents, Akastor does not accept any responsibility for any
errors or resulting loss or damage whatsoever caused and
readers have the responsibility to thoroughly check these
aspects for themselves. Enquiries about reproduction of content
from this publication should be directed to Akastor ASA.
Contact details
Akastor ASA
Oksenøyveien 10, 1366 Lysaker, Norway
PO Box 124, 1325 Lysaker, Norway
+47 21 52 58 00
akastor.com
HMH
Norway
Butangen 20, 4639 Kristiansand, Norway
PO Box 413 Lundsiden, 4604 Kristiansand, Norway
+47 38 05 70 00
Houston
3300 North Sam Houston Parkway East
77032 Houston, Texas, United States
+1 281 449 2000
hmhw.com
AKOFS Offshore
Karenslyst Allé 57, 0277 Oslo, Norway
PO Box 244, 0213 Oslo, Norway
+47 23 08 44 00
akofsoffshore.com
AGR
Karenslyst allé 4, 0278 Oslo, Norway
+47 24 06 10 00
agr.com
Annual Report 2022 | Company InformationCompany Information l
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