2023
ANNUAL
REPORT
2023 in brief
Continued underlying growth and improved markets for
Akastor portfolio companies
HMH delivered record high adj. EBITDA of USD 132 million,
up 30% versus 2022. HMH refinanced with USD 200
million bond that extended the company’s maturity structure
and improved terms which helps enable further growth
AKOFS Offshore commenced new long-term contracts
with Petrobras for both AKOFS Santos and Aker Wayfarer
DDW Offshore sold two vessels and refinanced the
remaining fleet with a new USD 31 million loan facility to
settle legacy debt and profit split arrangement
AGR sold to ABL Group, whereby Akastor became a
shareholder in the listed ABL Group
Full settlement received on the USD 20 million seller’s
credit towards Odfjell Drilling
Akastor completed the DRU arbitration process, and
awaits the award
Net capital employeed per year end 2023
NOK million
NOK 4.6bn
Net Capital Employed
(2022: 4.6 bn)
NOK 675 m
Net Interest-bearing Debt
(2022: 553m)
+26%Total Shareholder return
(2022: 73%)
66%Equity share
(2022: 60%)
Book value per share (NOK)
11.0
2.6
1.8
1.5
407
497
711
1.0
263
-0.9
17.0
-2.5
14.5
(248)
(675)
(984)
3 015
4 645
3 970
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 2023
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 2023.
Highlights 2023
2023 showed continued underlying growth and improved
markets for all Akastor portfolio companies. During the year,
Akastor completed several strategic transactions and realized
holdings, in line with the current strategy. Below is an overview
of the main news released during the year.
In February, Akastor completed the sale of all shares in Cool
Sorption A/S to Diamond Key International Pty. Ltd. for DKK 20
million on a cash and debt free basis.
In March, Akastor announced that it had entered into a share
purchase agreement with ABL Group ASA (ABL Group) for the
sale of all shares in AGR AS against a combination of shares in
ABL Group and cash. The transaction was completed in April,
after which Akastor became a shareholder in ABL Group, which
offers independent energy and marine consultancy to the global
renewables, maritime and oil and gas sectors. Ownership
holdings in Føn Energy Services and Maha Energy were carved
out of the transaction and remain with Akastor.
In June, the USD 20 million seller’s credit towards Odfjell Drilling
that emerged as a result of the sale of preference shares to
Odfjell Drilling in November 2022, was fully and finally settled.
In July, Akastor announced that the two AHTS vessels Skandi
Saigon and Skandi Pacific, previously owned by Akastor’s
subsidiary DDW Offshore, had been sold for a total cash
payment of USD 18 million for both vessels to OceanPact
Servicos Maritimos S.A.
In July, AKOFS Offshore successfully delivered the Aker
Wayfarer vessel under a four-year contract with Petrobras,
which was a key accomplishment as it means that all three
vessels operated by AKOFS Offshore now are employed on
long-term contracts securing cashflow.
In September, DDW Offshore completed a USD 31 million
refinancing provided by EnTrust Global’s Blue Ocean Funds as
lenders. The new loan agreement matures in September 2026
and is guaranteed by Akastor. The refinancing enabled
settlement of the loan facility maturing in February 2024,
settlement of all remaining profit split arrangements and
reactivation of Skandi Peregrino. Following the refinancing,
DDW Offshore holds full economic interest in its fleet of three
vessels.
In November, HMH successfully completed a USD 200 million
senior secured bond issue with a tenor of 3 years and a fixed
coupon of 9.875 % per annum. The net proceeds from the
bonds were used to refinance HMH’s capital structure, settling
the previous USD 150 million senior secured bond issue and
fully repaying existing bank borrowings.
Akastor’s total net capital employed per end of 2023 was NOK
4.6 billion, at same level as per end of 2022. Net interest-bearing
debt for Akastor increased from NOK 0.6 billion per year end
2022 to NOK 0.7 billion per 2023 driven by corporate cashflow
in the period. Total equity of Akastor was NOK 4.0 billion per
year end 2023, slightly down from NOK 4.1 billion per year end
2022.
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 2023 includes two industrial investments
within this sector which are joint ventures accounted for using
the equity method:
HMH, which provides drilling systems, equipment, and
aftermarket services. Ownership interest is 50 percent.
AKOFS Offshore, a subsea well
installation and
intervention services provider. Ownership interest is 50
percent.
Both above-mentioned Akastor portfolio companies are
organized as independent businesses which are self-sufficient
and have their own dedicated management teams fully
responsible for all aspects of their operational activities. The
companies have separate boards of directors, consisting of
appointed Akastor representatives as well as representatives
from the respective co-owners. This governance model provides
for strong management of operational activities and a good
foundation for close cooperation between Akastor, the co-
owners and the portfolio company itself.
In addition to the industrial investments, Akastor has several
holdings classified as financial investments, including:
DDW Offshore, which owns and operates three offshore
vessels. Ownership interest is 100 percent.
Annual Report 2023 | Board of Directors' ReportBoard of Directors’ Report NES Fircroft, a technical and engineering staffing
is approximately 15
interest
company. Economic
percent.
DRU contracts, full economic interest in four drilling
equipment contracts with Jurong Shipyard. This position
was carved out from MHWirth in connection with the
merger with Baker Hughes’ SDS business.
ABL Group, which offers independent energy and
marine consultancy to the global renewables, maritime
and oil and gas sectors. Ownership interest is 4.9
percent.
Maha Energy, an international upstream oil and gas
company within exploration, development and
production of oil and gas. Ownership interest is 1.7
percent.
Føn Energy Services, an independent service provider
to the offshore and onshore wind industry and traditional
energy sectors. Ownership interest is 44 percent.
Awilco Drilling, ownership interest is 6.8 percent.
Odfjell Drilling, where Akastor holds a warrant structure
with a maximum potential of 6.8 million shares.
In addition to the equity ownerships, Akastor also holds interest
bearing positions towards HMH and AKOFS Offshore.
The Akastor corporate organization is based at Fornebu, just
outside of Oslo in Norway, with a team of 11 employees, working
closely with the boards and management of its portfolio
companies.
Strategy
The strategy of Akastor remains consistent with the previous
year. Akastor is an investment company, employing an
independent approach for each investment to optimize its
development potential. Akastor aims to create long-term value
for its shareholders through active ownership, while maintaining
the flexibility to be opportunistic. The business models of the
portfolio companies are decentralized with each entity being
self-sufficient. Akastor typically 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 Board of Directors, where the Akastor
investment team is represented. For the industrial investments
which are joint ventures, Akastor works closely also with the
relevant co-owners, primarily through the Board of Director
meetings, but also continuously in line with cooperation
principles set out in the relevant governing documents such as
a shareholder’s agreement. With regards to the financial
5
investments where Akastor holds minority positions, the
involvement is more limited. However, Akastor also actively
engages through the Board of Directors or directly with
management to influence development. As an owner, Akastor
emphasizes understanding the portfolio companies’ markets
and challenges in depth, in order to evaluate current valuation
versus future potential.
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 to
strengthen the companies and prepare for a future exit. The
ultimate goal is to return capital to shareholders of Akastor upon
divestments of assets, however ensuring that Akastor has a
sound capital structure.
its current
Market Outlook
Akastor’s portfolio companies operate mainly in the oilfield
services industry, which to a large degree coincides with
development in the oil and gas market. Throughout 2023, the
global demand for oil products continued its upward trajectory,
partly driven by the continuous return to regularity following the
Covid-19 pandemic. Oil prices through the year were volatile,
with fear of a global economic downturn affecting prices
negatively while concerns over geopolitical tensions disrupting
supply acted as a catalyst for price surges. The price of crude oil
ended the year down by about 10%, despite OPEC+’s efforts to
support prices by cutting production. In the latter part of 2023,
the oil market sentiment turned bearish as non-OPEC+ supply
strength coincided with slowing global oil demand growth. Oil
demand growth in 2024 is expected to continue to decelerate as
remaining COVID-catch-up effects are fading.
Despite uncertainty and a weakening of oil prices seen through
the latter part of the year, 2023 showed further increase in
important macro fundamentals for the oilfield services industry
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. Global
E&P spending, ultimately the most important driver for oil
service activity, is expected to continue to grow into 2024,
following solid double-digit growth rates seen in 2022 and 2023.
The growth in 2024 will however most likely slow down, with
SEB indicating an annual increase in global upstream E&P
spending of around 5% based on their yearly E&P survey
analysing budgets of 31 oil companies around the globe (vs.
approximately 20% estimated growth in 2023). For the oilfield
services industry, a reduced and consolidated supply side
compared to the situation a few years back, as well as increased
utilisation and improved backlog visibility across most sectors
forms a solid backdrop for the industry in general.
Despite growing confidence through 2023 that policymakers will
achieve an economic soft landing, a potential recession
Annual Report 2023 | Board of Directors' Report 6
following continued high inflation and increasing global interest
rates seen since the second half of 2022 still poses a risk
through potential effects on global industrial activity and energy
prices, and thereby also oilfield service activity. The current
geopolitical tension seen in the world, with ongoing wars both in
Ukraine and the Middle East, makes 2024 an unpredictable
year when it comes to macro-economic factors. Uncertainty
affects the global financial markets and could in turn also affect
Akastor and its portfolio companies through ability to conclude
transactions and limit access to financing.
Akastor will continue to follow the general macroeconomic
situation with the goal of adjusting capacity throughout the
portfolio if required as a result of a potential lowered activity
level. The financial impact of these effects remains uncertain
and difficult to predict, both in terms of duration and longer-term
impact on financial markets and industrial activity level. These
factors may have a future adverse impact on the fair value of
Akastor's assets.
Based on the current footprint of our portfolio, the oilfield
services industry will remain the primary market for Akastor and
its portfolio companies going forward. However, 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 and will through its role as an active owner
continue to develop offerings 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
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. Føn Energy Services, a
joint venture together with IKM, is set up to provide wind power
project management, operations and maintenance services to
offshore wind farms.
To sum up, Akastor saw an increase in activity across almost all
portfolio companies through 2023. Despite continued risk and
uncertainty related to the global geopolitical situation as well as
the fragile global macroeconomic situation, Akastor remains
cautiously optimistic that activity levels within the oilfield services
industry will continue to increase going forward based on the
positive underlying market fundamentals.
Group Financial Performance
All amounts below refer to the consolidated financial statements
for the group, unless otherwise stated. Following the divestment
in 2023, AGR has been classified as discontinued operations
and the comparable income statement for 2022 has been re-
presented. 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 2023 was NOK 282 million,
compared to NOK 269 million in 2022. Operating profit before
interest, tax, depreciation and amortization (EBITDA) was
negative NOK 2 million, compared to negative NOK 91 million in
2022.
Depreciation, amortization and impairment was NOK 28 million
in 2023, compared to NOK 51 million in the previous year.
Net financial income was NOK 10 million in 2023 compared to
NOK 93 million in the previous year. Finance income and costs
relate mainly to interest income and expenses from receivables
and borrowings, fair value changes in financial assets measured
at fair value and net foreign exchange gain. Akastor’s share of
net loss from the equity-accounted investees is NOK 363
million, compared to NOK 263 million in 2022, mainly related to
net loss in AKOFS Offshore and HMH.
Net loss from continuing operations was NOK 384 million,
compared to net loss of NOK 312 million in 2022. Net profit from
discontinued operations was NOK 122 million compared to
NOK 55 million in 2022, mainly related to operating profit in the
discontinued operations in AGR, as well as gain from the
divestment of AGR in 2023. The group had net loss of NOK 262
million for the year, compared to loss of NOK 257 million in
2022.
Financial Position
Total assets of Akastor amounted to NOK 6.0 billion as of
December 31, 2023, compared with NOK 6.8 billion at year-end
2022. The decrease is mainly related to sale of AGR as well as
settlement of seller’s credit towards Odfjell Drilling in 2023.
Net debt (excluding lease liabilities) was NOK 1 225 million at
the end of the period, while net interest-bearing debt (NIBD)
was NOK 675 million. Net interest-bearing debt increased by
NOK 122 million through the year driven by corporate cash
flows in the period.
Total equity amounted to NOK 4.0 billion at year-end 2023. The
equity ratio was 66 percent as of December 31, 2023, compared
to 60 percent in 2022.
Akastor presents its consolidated financial statements in
accordance with the International Financial Reporting Standards
(IFRS) as adopted by the European Union.
Cash Flow
As of December 31, 2023, Akastor had cash of NOK 144 million,
compared to NOK 119 million in 2022. The net cash flow from
operating activities was negative NOK 296 million, compared to
Annual Report 2023 | Board of Directors' Report 7
operating cash flow of negative NOK 244 million in the previous
year. The net cash flow from operating activities comprised of
cash flow generated from operating activities of negative NOK
188 million as well as net interest cost payments of NOK 119
million.
Net cash flow from investing activities was positive NOK 236
million, compared to NOK 619 million in 2022. The cash flow
from investing activities included settlement proceeds of NOK
216 million from seller’s credit towards Odfjell Drilling and
proceeds of NOK 211 million from finance lease.
Net cash flow from financing activities amounted to NOK 85
million, compared to negative NOK 318 million in 2022. The
cash flows included net proceeds from borrowings of NOK 125
million and payment of lease liabilities of NOK 41 million.
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 the equity method in
the consolidated financial statements.
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 2023, the company had approximately
2 200 employees inclusive contractors. The company’s oper-
ations 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.
Subsequent Events
In February 2024, the maturity of corporate bank facilities and
subordinated Aker facility was extended to June and July 2024,
respectively.
Going Concern
The group was in compliance with all financial covenants as of
December 31, 2023. In February 2024, the maturity of current
corporate credit facilities was extended to June and July 2024,
see “Subsequent Events”. Furthermore, Akastor has in place
firm agreements to extend these facilities with a period of two
years subject to the amount of proceeds received from the DRU
arbitration, which is expected to occur in the second quarter of
2024. In the event proceeds from the DRU arbitration are lower
than required for the extension to become effective, Akastor
assesses that alternative financing sources are accessible and
would in such case target a refinancing of current corporate
facilities through a structure including, but not limited to, a
Nordic bond loan.
including
Reflecting the above, the current assessment is that the group
has in place sufficient financing facilities to continue operations
and comply with mandatory terms and conditions of such
facilities,
liquidity covenant. This
assessment takes into account the agreements regarding
extension of the current facilities subject to DRU arbitration
proceeds, backed up by a potential refinancing including other
types of capital such as a bond loan in case this should be
required.
the minimum
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
Key Figures 1)
Amounts in USD million
2023
2022
Revenue
EBITDA (adj) 2)
EBITDA
Order intake
Equipment backlog 3)
786
675
132
100
120
79
826
692
237
243
NIBD (incl. shareholder loans)
271
260
1) The figures are unaudited, presented on 100% basis
2) EBITDA (adj) excludes non-recurring expenses or costs defined as outside of
normal company operations
3) Equipment backlog defined as order backlog within Projects, Products and Other
The revenue for 2023 of USD 786 million was up 16 percent
compared to 2022 revenues of USD 675 million, driven by
increased activity within Aftermarket Services. EBITDA adjusted
for integration cost and defined non-recurring items increased
from USD 101 million in 2022 to USD 132 million in 2023. The
adjusted EBITDA margin ended at 16.8 percent for 2023, up
from 14.8 percent in 2022 explained mainly by the increase in
revenues from Aftermarket Services where contribution margins
are higher.
Revenues from Projects, Products and Other decreased with
around 4 percent to USD 221 million in 2023, driven by lower
revenues from large projects following phasing of order backlog
within this segment, partly mitigated by increased revenues
from single equipment which came in at USD 110 million in
2023, up from USD 75 million in 2022. Full year revenues from
Aftermarket Services were USD 565 million in 2023, up from
USD 445 million in 2022. The increase in revenues through
2023 was driven by the increased number of active rigs with
HMH equipment package compared to average levels in 2022
and high SPS activity, leading to increased spares output and
higher Contractual Services Agreement activity.
HMH
HMH was established in October 2021 following the merger
Following the increased focus on energy security and higher
global capex spend among E&P companies over the last couple
Annual Report 2023 | Board of Directors' Report
8
of years, utilization rates across the offshore drilling markets
have increased and led to improved dayrates and higher activity.
This has also affected HMH positively, especially through
Aftermarket Services, as more rigs with HMH equipment have
come into in-operations. Total order intake for HMH was USD
826 million in 2023, up from USD 692 million in 2022, primarily
driven by Aftermarket Services where order intake grew by USD
103 million. Order intake within Projects, Products and Other
also increased in 2023 compared to last year, driven by single
equipment orders within the non-oil segment as this market
continued to gain momentum. Going forward, HMH remains
positive and anticipates continued growth in rig activity based
on the current outlook. The rig newbuilding market continues to
be muted and is expected to remain so in the near future.
In November 2023, HMH refinanced its Nordic bond loan of
USD 150 million with a new USD 200 million Nordic bond loan
which was an important step to establish a more flexible long-
term capital structure. HMH also completed
its ERP
implementation project in Q4 2023, providing a common ERP
system for the whole group. In 2024, HMH will continue to focus
on growth through organic initiatives as well as M&A to
strengthen its presence within the offshore and onshore drilling
markets. HMH will also continue to evaluate opportunities to
grow within non-oil markets, including renewables. It is still a
key focus for HMH to participate in the oil and gas industry’s
transition
towards more energy-efficient solutions, and
development and commercialization of innovative technology is
an important part of the strategy of HMH.
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 352 people as per the end of 2023.
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 the equity method in the
consolidated financial statements.
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
1) The figures are presented at 100 percent basis.
2023
2022
130
149
33
(7)
12
16
334
-
363
48
8
29
19
349
198
470
The company’s revenue was USD 130 million in 2023, around
17 percent lower than the previous year, primarily driven by
lower utilization for Aker Wayfarer which was out of operation for
a period between contracts. The EBITDA decreased from USD
48 million in 2022 to USD 33 million in 2023, explained by the
said effects.
Through 2023, both AKOFS Santos and Aker Wayfarer
commenced new contracts with Petrobras in Brazil for subsea
equipment installation work. Aker Wayfarer commenced its new
four-year contract to perform services as a subsea equipment
support vessel for Petrobras in Brazil in July, after ending its
previous contract in April. AKOFS Santos commenced its new
three-year contract in March after some delay related to
deliveries from a sub-supplier. With this, total revenue utilization
for Aker Wayfarer and AKOFS Santos ended the year at 72
percent and 68 percent, respectively. Adjusted for periods out of
operations, uptime was approximately 95 percent and 86
percent respectively.
AKOFS Seafarer continued to operate on its five-year contract
with Equinor for Light Well Intervention services in the North
Sea. Through 2023, she continued to deliver solid operational
performance and recorded a technical uptime of around 94
percent in the year. Adjusted for periods on yard and waiting on
weather, total revenue utilization ended at around 88 percent,
affected specifically by a period of mobilization of coiled tubing
equipment to prepare the vessel for coiled tubing operations
during the summer season as well as a period of demobilization
of the same equipment to return to normal intervention
operations. Also, the vessel was in 2023 prepared for deepwater
operations, and successfully delivered operations on water
depths exceeding 1,000 meters during the year.
AKOFS Offshore was for a period affected by relatively low
investment levels among oil companies which resulted in limited
prospects available for the company which again has had a
concrete effect on current contract terms for the various vessels.
All of AKOFS Offshore’s vessels are currently on relatively long-
term contracts, however with earnings affected by the historic
day rates on the various contracts. Based on current market
conditions, both AKOFS Offshore and Akastor believe that there
is a solid potential to increase revenues and earnings through
improved contract terms after expiry of the current backlog.
In 2024 and forward, AKOFS Offshore will continue to focus on
delivering high uptime on its existing contracts. The company
will assess future opportunities for AKOFS Seafarer which is
under contract with its client to December 2025, after which
Equinor holds an option to extend the contract by three years.
AKOFS Offshore management expects more clarity around this
option during 2024. AKOFS Offshore is also continuously
evaluating opportunities to grow through further leveraging its
competencies within subsea well construction and intervention
services.
Annual Report 2023 | Board of Directors' Report 9
DDW Offshore
Per end of 2023, DDW Offshore owns and holds the full
economic ownership in three mid-sized Anchor Handling Tug
Supply (AHTS) vessels, Skandi Peregrino, Skandi Atlantic and
Skandi Emerald. Akastor holds 100 percent of the shares in the
company.
Key Figures
Amounts in NOK million
Revenue and other income
EBITDA
EBIT
NCOA
Net capital employed
2023
231
84
67
32
263
2022
147
7
(32)
(79)
231
DDW Offshore delivered total revenues of NOK 231 million in
2023, compared to NOK 147 million in 2022. EBITDA in 2023
ended at NOK 84 million, up from 7 million in 2022, driven by
increased charter rates and utilization of the fleet.
Through 2023, Skandi Atlantic and Skandi Emerald, delivered a
revenue utilization of 99 and 94 percent respectively. Skandi
Atlantic ended the year on contract with Petrofac in Australia on
a contract originally expiring in the first quarter of 2024, while
Skandi Emerald operated in New Zealand for Beach Energy on
a contract that ended in early January 2024. In the first quarter
of 2024, Skandi Atlantic’s contract with Petrofac was extended
to December 2024. Skandi Emerald will replace Skandi Atlantic
on this contract in March 2024 as Skandi Atlantic is to undergo
its class renewal in Singapore. The classing is expected to be
completed by end of April 2024, after which the vessel will be
ready for market.
Skandi Peregrino remained in lay-up in Norway through most of
2023. Based on a market assessment, it was decided to
reactivate the vessel and she arrived at yard in Denmark in
December to undergo her Special Periodic Survey. The vessel
is expected to be ready for market by the end of April 2024.
During 2023, DDW Offshore sold the two vessels Skandi Saigon
and Skandi Pacific to OceanPact for a total cash payment of
USD 18 million. 50% of the proceeds was shared with the DDW
Offshore lenders in accordance with the profit split that was part
of the restructuring agreements from October 2020. Until
realization, Skandi Saigon and Skandi Pacific were on bareboat
contracts with OceanPact which were classified as financial
lease. The operations of these vessels thus did not have effect
on revenue or EBITDA in 2023.
In September 2023, DDW Offshore refinanced its original loan
facility and with this settled the profit split arrangement for the
two vessels Skandi Atlantic and Skandi Emerald. The refinancing
also provided funding to reactivate Skandi Peregrino.
In 2024, DDW Offshore will focus on optimizing utilization of the
three vessels. Despite the fact that only Skandi Emerald has
secured work through 2024, the market momentum looks
promising and the company expects to keep utilization and sees
good opportunities for both Skandi Peregrino and Skandi
Atlantic when the vessels are available for new contracts.
Akastor remains opportunistic with regards to its investment in
DDW Offshore, and will through 2024 assess the asset
realization potential versus operational cash flow from holding
the investment.
Other Holdings
Other Holdings per end of 2023 mainly include around 15
percent economic interest of NES Fircroft, a warrant structure
towards Odfjell Drilling, a 4.9 percent shareholding in ABL
Group, a 1.7 percent shareholding in Maha Energy and a 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 commitments that remained in Akastor
after the demerger from Aker Solutions in 2014.
Key Figures
Amounts in NOK million
Revenue and other income
EBITDA
EBIT
NCOA
Net capital employed
2023
51
(87)
(98)
236
960
2022
122
(98)
(111)
303
690
Total EBITDA for Other Holdings for the year was negative NOK
87 million, driven by corporate overhead costs, including legal
costs related to the DRU arbitration process as well as certain
other legacy costs.
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
ASA. Akastor ASA has a net loss of NOK 285 million in 2023
(loss of NOK 457 million in 2022).
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 2023 and the net loss
for the year of NOK 285 million be allocated to retained earnings.
Annual Report 2023 | Board of Directors' Report 10
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 continuing to
impact markets during 2023, have impacted 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.
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.
In sum, Akastor’s
Our focus on climate risk has continued throughout 2023, in
close dialogue with HMH and AKOFS Offshore which both
provide regular reporting to Akastor on ESG performance. A
separate ESG network has been established involving relevant
functions in Akastor, HMH and AKOFS Offshore, which is an
important platform to share experience, expectations and
identify risks related to ESG. Compliance with all non-financial
reporting requirements has been a focus area in the ESG
network, which includes work necessary to prepare and be
ready when the 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.
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 risk of ransomware and
phishing attempts. These are risk areas that are under
continuous development and where it is important that Akastor
this
its portfolio companies continuously monitor
and
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 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.
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 26
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.
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.
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
Annual Report 2023 | Board of Directors' Report debt and improve liquidity. As described under Going Concern
above, liquidity risk has been mitigated in the short term through
the extension of the current facilities through to June and July
2024, to be replaced by new corporate credit lines, which have
been committed, but are subject to the amount received
following the DRU arbitration award. If the amount received by
Akastor following conclusion of the DRU award is lower than
expected, Akastor will need to source other means of funding
such as through a Nordic bond loan, in which case Akastor will
be exposed to general risks associated with such bond
financing. In a scenario where the DRU award is low and
financing through the bond market is not available for Akastor,
equity financing 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 the 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 since the oil service industry is exposed to the risks
associated with an 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 their market positions and/or are left
with product lines that are obsolete and replaced by more
energy efficient/green alternatives. These risks have been
partially offset by recent years’ increased focus on energy
security from conventional energy sources. Moreover, the
transition to low carbon intensive industry might also create
some opportunities, which
the portfolio companies are
positioning to pursue.
11
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
the portfolio companies.
these
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.
The portfolio companies are defining their own ESG strategies
encompassing
is continuously
these priorities. Akastor
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. Akastor ASA
is subject to annual corporate social responsibility reporting
requirements pursuant to section 3-3c of the Norwegian
Accounting Act. The reporting is covered by the Akastor ESG
report 2023, which is issued separately and published on
Akastor's website www.akastor.com. 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.
Research, Innovation and Technology Development
NOK 4 million was capitalized in 2023, compared to NOK 9
million in 2022, related to development activities in AGR prior to
divestment. No research and development costs were expensed
in 2023 or 2022. All research, innovation and development
initiatives are performed by the Akastor portfolio companies.
Akastor ASA and Akastor AS performed no such activity in
2023.
Annual Report 2023 | Board of Directors' Report 12
People and Teams
is committed
to equal opportunity and non-
Akastor
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 2023, as
in previous years, no events violating these agreements were
reported.
As of year-end 2023, Akastor ASA’s board comprised eight
directors inclusive three employee elected directors, of which
two shareholders elected directors are female directors. On a
consolidated basis Akastor had 11 employees (FTE) as of
December 31, 2023. AKOFS Offshore had a total of 352
employees (FTE) as of December 31, 2023. HMH had a total of
2 201 employees (FTE) as of December 31, 2023. In Akastor
AS, the male/female ratio was 73/27. The male/female ratio in
the major portfolio companies and Akastor Group were as
follows:
Female
Male
Akastor
27%
73%
HMH
18%
82%
AKOFS
Offshore
10%
90%
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.
Sick leave in Akastor is less than 1%. In both HMH and AKOFS
Offshore, sick leave was reduced in 2023 compared with 2022.
There were no fatal injuries in any of the portfolio companies,
but total recordable incident frequency slightly increased for
both HMH and AKOFS Offshore. Each incident is thoroughly
analysed and actions are taken 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.
Lost time Incident Frequency (LTIF) 1)
Total Recordable Incident Frequency
(TRIF) 1)
Fatalities incl. subcontractors
Akastor
HMH
AKOFS
Offshore
-
-
-
1.5
3.8
-
1.4
2.7
-
Sick leave (percent)
≤ 1% 2.5%
2.3%
1) Per million hours worked. Includes subcontractors
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 19, 2024 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 2023 | Board of Directors' Report 13
Annual Report 2023 | 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, 2023. 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 2023 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, 2023.
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 19, 2024 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 2023 | 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 www.euronext.com.
Norwegian laws and regulations are 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 2023 include the
sale of all shares in AGR AS and Cool Sorption A/S, transfer of
two vessels from DDW Offshore (Skandi Saigon and Skandi
Pacific) as well as a USD 31m refinancing agreement in DDW
Offshore.
On this background Akastor currently has an active investment
portfolio within the oilfield services industry consisting of 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, 44 percent of shares in Føn Energy Services, 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. DDW Offshore operates
three offshore vessels. NES Fircroft is a global technical and
engineering staff provider. Other investments mainly include
shareholdings in ABL Group, Maha Energy and Awilco Drilling,
warrant investments in Odfjell 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, ESG 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 2023 | 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 7, 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 2023 is NOK 3 970 million, which represents an
equity ratio of 66 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 2023 | 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 19 April 2023
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
in 2024. No shares were bought by the company in 2023
pursuant to the authorizations to the board of directors. As of
December 31, 2023, the company holds 1 813 974 own shares.
In addition, the annual general meeting in 2023 granted the
board of directors the mandate to approve the distribution of
dividends based on the company’s annual accounts for 2022 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 in 2024.
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.
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 (or its 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 Aker ASA 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.
Share Purchase Programs
There are currently no active share purchase programs in place
in Akastor.
5. Freely Negotiable Shares
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, 2023, Aker Holding AS owns 36.7% of
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
participating online, shareholders will receive a live webcast
Annual Report 2023 | Corporate Governance Statement 18
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, will be 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’
policy
regarding stipulation of salary and other
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
association, 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 the annual general
meeting in 2022 and are therefore up for re-election this year.
Charlotte Håkonsen is the General Counsel of Aker ASA. 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 2023 | 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.
Akastor’s 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, 2023, 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, 2023 will be set out in the 2023
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,
the directors’
background and expertise will be detailed in the annual report
for 2023.
information about
including
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.
At the annual general meeting in 2024, there is a proposal to
make certain adjustments to the articles of association which
includes removing the requirement that stipulates that one third
of the directors shall be appointed by the employees. If
approved, inclusion of employee elected directors on the board
of Akastor ASA shall follow the statutory requirements set out in
the Public Limited Liability Companies Act. Based on current
structure of Akastor ASA, with only 11 employees on a
consolidated basis per year-end 2023, there is no requirement
to include employee elected directors on the board.
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
Annual Report 2023 | Corporate Governance Statement 20
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.
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 2023.
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 qualification 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, 2023, there are no other board
committees than the audit committee. The board does not
envisage appointing any further board committees in 2024.
Annual Report 2023 | Corporate Governance Statement 21
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 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.
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
portfolio companies,
investment
directors and board representatives. Management of operational
risk and risk related to ESG 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.
from Akastor’s
including
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
reviews
the reported risks and associated risk-reducing
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® Accounting 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.
Annual Report 2023 | Corporate Governance Statement 22
Financial reports are received from the portfolio companies at a
regular basis. The Akastor financial reporting division has review
of financial results together with the external auditor at a
quarterly basis, with focus on important items involving estimate
and judgement, accounting for significant transactions and
other topics relevant to the financial reporting.
Other Reporting
In addition to the abovementioned financial reporting, there are
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 2023, 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
2024.
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 2023. The report is available at www.akastor.
com and will be subject for an advisory vote on the annual
general meeting 2024.
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 2023.
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 2023 | 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 2023 | 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 of subsidiaries
Note 7 | Operating segments
Note 8 | Revenue and other income
Note 9 | Other operating expenses
Note 10 | Finance income and costs
Note 11 | Income tax
Note 12 | Earnings per share
Assets
Note 13 | Property, plant and equipment
Note 14 | Intangible assets and goodwill
Note 15 | Equity-accounted investees
Note 16 | Other investments
Note 17 | Non-current interest-bearing receivables
Note 18 | Trade and other receivables
Note 19 | Cash and cash equivalents
Equity and liabilities
Note 20 | Capital and reserves
Note 21 | Borrowings
Note 22 | Other liabilities
Note 23 | Employee benefits – pension
Note 24 | Trade and other payables
Financial risk management
Note 25 | Capital management
Note 26 | Financial risk management and exposures
Note 27 | Financial instruments
Other
Note 28 | Leases
Note 29 | Group companies
Note 30 | Related parties
Note 31 | Events after reporting date
25
26
27
28
29
30
30
31
35
36
37
38
42
43
44
45
46
47
48
49
51
52
52
53
53
54
55
56
58
58
59
62
64
66
67
68
Annual Report 2023 | 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
Cost of goods and services
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
2022
Re-presented
269
(35)
(152)
(174)
(361)
(91)
(51)
(142)
483
(224)
(166)
93
(263)
(312)
1
(312)
55
(257)
(276)
19
(1.01)
(1.22)
0.20
2023
282
(163)
(121)
-
(284)
(2)
(28)
(31)
259
(209)
(40)
10
(363)
(384)
-
(384)
122
(262)
(264)
3
(0.97)
(1.42)
0.45
Note
7, 8
9
18
13,14, 28
10
15
11
5
12
12
12
Annual Report 2023 | 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
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
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
15
23
15
2023
(262)
97
(2)
37
131
(8)
1
(7)
124
(137)
(140)
3
2022
(257)
325
-
(86)
239
(11)
10
(1)
238
(19)
(38)
19
Annual Report 2023 | 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
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
Other non-current liabilities
Deferred tax liabilities
Provisions, non-current
Total non-current liabilities
Current borrowings
Current lease liabilities
Trade and other payables
Current tax liabilities
Provisions, current
Other current liabilities
Liabilities classified as held for sale
Total current liabilities
Total liabilities
Total equity and liabilities
27
Note
2023
2022
11
13
14
28
15
16
17
28
18
28
16
19
20
21
28
23
22
11
21
28
24
22
-
231
-
7
3 439
1 051
550
-
1
37
237
146
27
3 502
869
668
10
2
5 279
5 497
5
601
19
-
144
-
769
6 048
161
1 541
2 267
3 970
-
3 970
236
2
82
255
-
-
575
5
769
208
162
119
43
1 307
6 804
161
1 540
2 355
4 056
36
4 092
198
37
96
459
4
3
796
1 133
1 142
32
305
-
34
-
-
1 504
2 078
6 048
48
498
2
31
162
32
1 916
2 712
6 804
Fornebu, March 19, 2024 | 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 2023 | Financials and Notes | Akastor Group
28
Akastor Group | Consolidated statement of changes in equity
Share
capital
Treas-
ury
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
2022
Equity as of January 1, 2022
162
(2)
1 538
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
2023
Profit (loss) for the period
Other comprehensive income
Total comprehensive income
Treasury share transactions
Share-based payments in joint
ventures
Disposal of subsidiaries
-
-
-
-
-
-
Equity as of December 31, 2023
162
1) See Note 20 Capital and reserves.
-
-
-
-
-
-
(1)
-
-
-
2
-
-
1 541
-
-
(8)
(8)
-
(8)
-
15
15
-
-
-
7
(72)
(264)
2 730
-
-
-
-
-
248
248
-
(276)
(1)
(277)
-
4 091
(276)
238
(38)
2
18
19
-
19
-
4 109
(257)
238
(19)
2
(72)
(16)
2 453
4 056
36
4 092
-
-
-
-
-
-
-
116
116
-
-
-
(264)
(7)
(271)
-
52
-
(264)
124
(140)
2
52
-
3
-
3
-
-
(39 )
(262)
124
(137)
2
52
(39)
(72)
100
2 234
3 970
-
3 970
Annual Report 2023 | Financials and Notes | Akastor Group Akastor Group | Consolidated statement of cash flow
For the year ended December 31
Amounts in NOK million
Note
2023
2022
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, net of cash disposed
Funding to equity-accounted investees
Proceeds from other investments
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
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.
(384)
122
(262)
-
99
33
(126)
2
13,14, 28
15
363
(106)
(312)
55
(257)
2
193
66
(25)
(2)
263
(229)
(191)
(187)
(188)
(176)
4
(237)
(3)
118
12
(2)
(296)
(9)
(4)
-
(54)
(119)
216
211
(5)
236
507
(382)
(41)
85
-
25
119
144
-
22
(168)
(6)
66
21
(3)
(244)
2
(11)
2
(96)
(76)
745
53
-
619
756
(996)
(78)
(318)
(26)
31
89
119
2
13
14
21
21
28
19
Annual Report 2023 | Financials and Notes | Akastor Group
30
Note 1 | Corporate information
Functional and presentation currency
Akastor ASA is a limited liability company incorporated and domiciled in
Akastor ASA’s functional currency. All financial information presented in
Norway and whose shares are publicly traded. The registered office is
NOK has been rounded to the nearest million (NOK million), except when
located at Oksenøyveien 10, Bærum, Norway. The largest shareholder is
otherwise stated. The subtotals and totals in some of the tables in these
Aker Holding AS which is wholly owned by Aker ASA as of December 31,
consolidated financial statements may not equal the sum of the amounts
2023.
shown due to rounding.
The consolidated financial statements are presented in NOK, which is
The consolidated financial statements of Akastor ASA and its subsidiaries
When the functional currency in a reporting unit is changed, the effect of the
(collectively referred as Akastor or the group, and separately as group
change is accounted for prospectively.
companies) for the year ended December 31, 2023 were approved by the
board of directors and CEO on March 19, 2024. The consolidated financial
Use of estimates and judgements
statements will be authorized by the Annual General Meeting on April 16,
The preparation of financial statements in conformity with IFRS requires
2024.
management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
The group is an oilfield services investment company with a portfolio of
income and expenses. Although management believes these assumptions
industrial holdings and other investments. Akastor is listed on the Oslo Stock
to be reasonable, given historical experience, actual amounts and results
Exchange under the ticker AKAST. Information on the group’s structure is
could differ from these estimates. The items involving a higher degree of
provided in Note 29 Group companies. Information on other related party
judgement or complexity, and items where assumptions and estimates are
relationships of the group is provided in Note 30 Related parties.
material to the consolidated financial statements, are disclosed in Note 4
Significant accounting estimates and judgements.
Note 2 | Basis for preparation
Basis of accounting
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised and in any future periods affected.
The consolidated financial statements have been prepared in accordance
with IFRS® Accounting Standards as adopted by the EU, their interpretations
adopted by the International Accounting Standards Board (IASB) and the
additional requirements of the Norwegian Accounting Act as of December
31, 2023.
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 25 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:
Non-derivative financial instruments at Fair Value through Profit or
Loss (FVTPL) are measured at fair value.
Debt instruments 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 2023 | Financials and Notes | Akastor Group 31
Note 3 | Significant accounting policies
Summary of significant accounting policies
in the same way as unrealized gains, but only to the extent that there is no
The principal accounting policies applied in the preparation of these
evidence of impairment.
consolidated financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise
Assets held for sale
stated.
Basis of consolidation
Subsidiaries
Non-current assets, or disposal groups comprising assets and liabilities,
that are expected to be recovered primarily through sale rather than through
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
Subsidiaries are entities controlled by the group. The group controls
available for immediate sale in its present condition. Management must be
an entity when it is exposed to, or has rights to, variable returns from
committed to the sale, which should be expected to qualify for recognition
its involvement with the entity and has the ability to affect those returns
as a completed sale within one year from the date of classification.
through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date on which
Non-current assets and disposal groups classified as held for sale are
control commences until the date of which control ceases.
measured at the lower of their carrying amount and fair value less costs to
Loss of control
sell. Property, plant and equipment and intangible assets once classified
as held for sale are not depreciated or amortized, but are considered in the
On the loss of control, the group derecognizes the assets and liabilities of
overall impairment testing of the disposal group.
the subsidiary, any non-controlling interests and the other components of
equity. Any resulting gain or loss is recognized in the income statement.
No reclassifications are made for years prior to the year when non-current
Any interest retained in the former subsidiary is measured at fair value when
assets or disposal groups are classified as a held for sale.
control is lost. Subsequently it is accounted for as an equity-accounted
investee or as a financial asset depending on the level of influence retained.
Discontinued operations
Any contingent consideration receivable is measured at fair value at the
represents a separate major line of business or geographical area of
disposal date. Changes in the fair value of the contingent consideration
operations that has been disposed of or is held for sale, or is a subsidiary
from divestment of a subsidiary for transactions will be recognized in Other
acquired exclusively with a view to resale. Classification as a discontinued
income as gain or loss.
operation occurs upon disposal or when the operation meets the criteria to
A discontinued operation is a component of the group’s business that
be classified as held for sale, if earlier.
Investments in joint ventures
The group’s interests in equity-accounted investees comprise interests in
In the consolidated income statement, income and expenses from
joint ventures.
discontinued operations are reported separately from income and expenses
from continuing operations, down to the level of profit after taxes. When an
A joint venture is an arrangement in which the group has joint control,
operation is classified as a discontinued operation, the comparative income
whereby the group has rights to the net assets of the arrangement, rather
statement is restated as if the operation had been discontinued from the
to its assets and obligations for its liabilities. Joint control is established
start of the comparative year.
by contractual agreement requiring unanimous consent of the ventures for
strategic, financial and operating decisions.
The statement of cash flow includes the cash flow from discontinued
Interests in joint ventures are accounted for using the equity method.
investing and financing activities of discontinued operations are presented
They are initially recognized at cost, which includes transaction costs.
in the notes to the extent these represent cash flows with third parties.
operations prior to the disposal. Cash flows attributable to the operating,
Subsequent to initial recognition, the consolidated financial statements
include the group’s share of the profit and loss and other comprehensive
Foreign currency
income of the equity-accounted investees. When the group’s share of
Foreign currency transactions and balances
losses exceeds its interest in an equity-accounted investee, the carrying
Transactions in foreign currencies are translated at the exchange rate at
amount of that interest, including any long-term investments, is reduced
the date of the transaction. Monetary assets and liabilities denominated
to zero, and further losses are not recognized except to the extent that the
in foreign currencies at the reporting date are translated to the functional
group incurs legal or constructive obligations or has made payments on
currency at the exchange rate on that date. Foreign exchange differences
behalf of the investee.
arising on translation are recognized in the income statement. Non-
monetary assets and liabilities measured in terms of historical cost in a
Transactions eliminated on consolidation
foreign currency are translated using the exchange rate on the date of the
Intra-group balances and transactions, and any unrealized gains and
transaction. Non-monetary assets and liabilities denominated in foreign
losses or income and expenses arising from intra-group transactions, are
currencies that are measured at fair value are translated to the functional
eliminated in preparing the consolidated financial statements. Unrealized
currency at the exchange rates on the date the fair value is determined.
gains arising from transactions with joint ventures are eliminated to the
extent of the group’s interest in the entity. Unrealized losses are eliminated
Annual Report 2023 | Financials and Notes | Akastor Group 32
Investments in foreign operations
Financial assets are not reclassified subsequent to their initial recognition
Items included in the financial statements of each of the group’s entities
unless the group changes its business model for managing financial. assets.
are measured using the currency of the primary economic environment
in which the entity operates. The results and financial positions of all the
Other investments
group entities that have a functional currency different from the group’s
Other investments include equity and debt investments in companies where
presentation currency are translated into the presentation currency as
the group has neither control nor significant influence, usually represented
follows:
by less than 20 percent of the voting power. The investments are categorized
as financial assets measured at FVTPL or FVOCI and recognized at fair
Assets and liabilities, including goodwill and fair value adjustments,
value at the reporting date. Subsequent to initial recognition, changes in
are translated at the closing exchange rate at the reporting date.
financial assets measured at FVTPL are recognized in profit and loss.
Income statements are translated at average exchange rate for
When a debt instrument is classified as financial asset measured at FVOCI,
the year, calculated on the basis of 12 monthly end rates.
interest income calculated using the effective interest method, foreign
exchange gains and losses and impairment losses are recognized in profit
Exchange differences arising from the translation of the net investment
and loss. Other changes in fair value are recognized in other comprehensive
in foreign operations, and of related hedges, are included in other
income and presented as part of fair value reserve. When financial asset
comprehensive income as currency translation reserve. These translation
measured at FVOCI is derecognized, the gain or loss accumulated in other
differences are reclassified to the income statement upon disposal of the
comprehensive income is reclassified to profit and loss.
related operations or when settlement is likely to occur in the near future.
Monetary items that are receivable from or payable to a foreign operation
Trade and other receivables are generally classified as financial assets
are considered as part of the net investment in that foreign operation, when
measured at amortized costs. They are recognized at the original invoiced
the settlement is neither planned nor likely to occur in the foreseeable future.
amount, less loss allowance made for credit losses. The interest rate
Exchange differences arising from these monetary items are recognized in
element is disregarded if insignificant, which is the case for the majority of
other comprehensive income.
the group’s trade receivables.
Trade and other receivables
Current/non-current classification
Interest-bearing receivables
An asset is classified as current when it is expected to be realized or is
Interest-bearing receivables include loans to related parties and are
intended for sale or consumption in the group’s normal operating cycle, it
generally classified as financial assets measured at amortized costs.
is held primarily for the purpose of being traded, or it is expected/due to
Such financial assets are recognized initially at fair value and subsequent
be realized or settled within twelve months after the reporting date. Other
measurement at amortized cost using the effective interest method, less
assets are classified as non-current.
any impairment losses.
A liability is classified as current when it is expected to be settled in the
Cash and cash equivalents
group’s normal operating cycle, is held primarily for the purpose of being
Cash and cash equivalents include cash on hand, demand deposits held at
traded, the liability is due to be settled within twelve months after the
banks and other short-term highly liquid investments with original maturity
reporting period, or if the group does not have an unconditional right to
of three months or less.
defer settlement of the liability for at least twelve months after the reporting
period. All other liabilities are classified as non-current.
Trade and other payables
Financial assets, financial liabilities and equity
payables are recognized initially at fair value. Trade and other payables
On initial recognition, a financial asset is classified as measured at amortized
are valued at amortized cost using the effective interest rate method. The
costs, FVOCI or FVTPL. The classification depends on the group’s business
interest rate element is disregarded if it is insignificant, which is the case for
model for managing the financial assets and the contractual terms of the
the majority of the group’s trade payables.
Trade payables are recognized at the original invoiced amount. Other
cash flows.
A financial asset is measured at amortized costs if the business
Interest-bearing borrowings are recognized initially at fair value less
model is to hold the asset to collect contractual cash flows, and
attributable transaction costs. Subsequent to initial recognition, interest-
the contractual cash flows are solely payments of principal and
bearing borrowings are measured at amortized cost with any difference
interests (SPPI criterion).
between cost and redemption value being recognized in the income
statement over the period of the borrowings on an effective interest basis.
Interest-bearing borrowings
A debt instrument is classified at FVOCI if the business model
is both collecting contractual cash flows and selling the financial
Share capital
asset, and it meets the SPPI criterion.
Ordinary shares are classified as equity. Repurchase of share capital is
recognized as a reduction in equity and is classified as treasury shares.
All financial assets not classified as measured at amortized cost or
FVOCI are measured at FVTPL.
Annual Report 2023 | Financials and Notes | Akastor Group 33
Finance income and expense
lease liability and decreased by lease payment made. It is remeasured
Finance income and expense include interest income and expense, foreign
when there is a change in future lease payments arising from a change in
exchange gains and losses, dividend income, as well as change in fair
an index or rate, or as appropriate, changes in the assessment of whether
value of financial assets measured at FVTPL. Interest expenses include
an extension option is reasonably certain to be exercised or a termination
discounting effects from liabilities measured at fair value.
option is reasonably certain not to be exercised.
Revenue from contract with customers
Lease term
Majority of the group’s revenue from contract with customers is service
The group determines the lease term as the non-cancellable term of the
revenue generated from rendering of services to customers. The customers
lease, together with any periods covered by an option to extend the lease
simultaneously receive and consume the benefits provided by these
if it is reasonably certain to be exercised, or any period covered by an
services. The group has assessed that these performance obligations are
option to terminate the lease if it is reasonably certain not to be exercised.
satisfied over time. Under some service contracts, the invoices are based
The group applies judgment in evaluating whether it is reasonably certain
on hours or days performed at agreed rates. The revenue is recognized
to exercise extension option, considering all relevant factors that create
according to progress, or using the invoiced amounts when the invoiced
economic incentive to exercise the extension option.
amounts directly correspond with the value of the services that are
transferred to the customers.
As a lessor
Under day rate chartering contract, the group is remunerated by the customer
each lease is a finance lease or an operating lease.
by an agreed daily rate for each day of use of the vessel, equipment, crew
and other resources. The charterer determines, within the contractual limits,
To classify each lease, the group makes an overall assessment of whether
how a vessel is utilized. The right to use the vessel falls un under the scope
the lease transfers substantially all of the risks and rewards incidental to
of IFRS 16 “Leases”. The portion of lease revenue of the contract value is
ownership of the underlying asset. If this is the case, then the lease is a
When the group acts as a lessor, it determines at lease inception whether
estimated at an overall level.
finance lease; if not, then it is an operating lease. As part of this assessment,
the group considers certain indicators such as whether the lease is for the
Income tax
major part of the economic life of the asset.
Deferred tax assets are recognized for unused tax losses and deductible
temporary differences, to the extent that it is probable that future taxable
The group recognizes lease payments received under operating leases
profits will be available against which they can be utilized. Measurement of
as income on a straight line basis over the lease term as part of “Lease
deferred tax assets are reviewed at each reporting date.
revenue”.
Impairment of financial assets
Trade receivables and contract assets
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated
Loss allowance is recognized in profit or loss and measured at lifetime ECLs.
depreciation and impairment losses. If the components of property, plant
ECLs are a probability-weighted estimate of credit losses. When estimating
and equipment have different useful lives, they are accounted for as
ECLs, the group considers reasonable and supportable information that is
separate components. Depreciation is normally recognized on a straight-
relevant and available without undue cost or effort, based on the group’s
line basis over the estimated useful lives of property, plant and equipment.
historical experience including forward-looking information. The gross
carrying amount of trade receivable is written off when the group has no
Employee benefits
reasonable expectations of recovering a trade receivable in its entirety or
Defined contribution plans
a portion thereof.
Obligations for contributions to defined contribution pension plans are
recognized as an expense in the income statement as incurred.
Debt instruments measured at amortized cost or at FVOCI
The group assesses on a forward-looking basis the expected credit losses
Defined benefit plans
associated with its debt instruments carried at amortized cost and FVOCI.
The group’s net obligation in respect of defined benefit pension plans is
The impairment methodology applied depends on whether there has been
calculated separately for each plan by estimating the amount of future
a significant increase in credit risk. The loss allowance is charged to profit
benefit that employees have earned in the current and prior periods;
and loss.
Leases
Lease liabilities
discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a
qualified actuary using the projected unit credit method. The discount
At the lease commencement date, the group recognizes lease liability
rate is the yield at the reporting date on government bonds or high-quality
measured at the present value of the lease payments over the lease term,
corporate bonds with maturities consistent with the terms of the obligations.
discounted using the group's incremental interest rate. Generally, the lease
payments include fixed payments and variable lease payments that depend
Remeasurement of the net defined benefit liability, which comprises
on an index or rate.
actuarial gains and losses, the return on plan assets (excluding interest)
and the effect of the asset ceiling (if any, excluding interest), are recognized
The lease liability is subsequently increased by the interest cost on the
immediately in other comprehensive income. The group determines the net
Annual Report 2023 | Financials and Notes | Akastor Group 34
interest expense (income) on the net defined benefit liability (asset) for the
of the factors that market participants would take into account in pricing a
period by applying the discount rate used to measure the defined benefit
transaction.
obligation at the beginning of the annual period to the then-net defined
benefit liability (asset), taking into account any changes in the net defined
The best evidence of the fair value of a financial instrument on initial
benefit liability (asset) during the period as a result of contributions and
recognition is normally the transaction price. If the group determines that
benefit payments. Net interest expense and other expenses related to
the fair value on initial recognition differs from the transaction price and
defined benefit plans are recognized in the income statement.
the fair value is evidenced neither by a quoted price in an active market
Fair value measurement
for an identical asset or liability nor based on a valuation technique that
uses only data from observable markets, the financial instrument is initially
When available, the group measures the fair value of a financial instrument
measured at fair value, and the difference between the fair value on initial
using the quoted price in an active market for that instrument. If there is no
recognition and the transaction price is recognized as a deferred gain or
quoted price in an active market, then the group uses valuation techniques
loss. Subsequently, the deferred gain or loss is recognized in profit or loss
that maximize the use of relevant observable inputs and minimize the use
on an appropriate basis over the life of the instrument.
of unobservable inputs. The chosen valuation technique incorporates all
Annual Report 2023 | Financials and Notes | Akastor Group 35
Note 4 | Significant accounting estimates and judgements
Estimates and judgements are continually reviewed and are based on
Income taxes
historical experiences and expectations of future events. The resulting
Valuation of deferred tax assets is dependent on management’s assessment
accounting estimates will, by definition, seldom accurately match actual
of future recoverability of the deferred tax benefit. Expected recoverability
results, but are based on the best estimate at the time. Estimates and
may result from expected taxable income in the near future, planned
assumptions that have a significant risk of causing material adjustments to
transactions or planned tax optimizing measures. Economic conditions may
the carrying amounts of assets and liabilities within the next financial year
change and lead to a different conclusion regarding recoverability, and such
are discussed below.
change may affect the results for each future reporting period.
Fair value measurement
Tax authorities may challenge calculation of income taxes from prior periods.
The group has invested in significant financial assets that require the
Such processes may lead to changes to prior periods’ taxable income,
measurement of fair value. If there is no quoted price in an active market,
resulting in changes to income tax expense. When tax authorities challenge
then the group uses valuation techniques that maximize the use of
income tax calculations, management is required to make estimates of the
relevant observable inputs and minimize the use of unobservable inputs.
probability and amount of possible tax adjustments. Such estimates may
The chosen valuation technique incorporates all of the factors that market
change as additional information becomes known. Further details about
participants would take into account in pricing a transaction. The fair value
income taxes are included in Note 11 Income tax.
measurement requires a high degree of judgment. Judgements include
considerations of inputs such as cash flow projection, discount rate and
Pension benefits
volatility. Further information about the fair value measurement using level
The present value of the pension obligations depends on a number of factors
3 inputs is included in Note 27 Financial Instruments.
determined on the basis of actuarial assumptions. These assumptions
Impairment of financial assets
include financial factors such as the discount rate, expected salary growth,
inflation and return on assets as well as demographical factors concerning
The group has invested in significant debt instruments measured at fair
mortality, employee turnover, disability and early retirement. Assumptions
value through other comprehensive income (FVOCI). The impairment of
about all these factors are based on the situation at the time the assessment
these financial assets is subject to expected credit loss. The loss allowance
is made. However, it is reasonably certain that such factors will change over
is recognized in profit and loss and reduces the fair value loss otherwise
the very long periods for which pension calculations are made. Any changes
recognized in OCI. The loss allowance is based on assumptions of expected
in these assumptions will affect the calculated pension obligations with
cash flows from the debt instruments. When making these assumptions, the
immediate recognition in other comprehensive income. Further information
group uses judgements selecting the similar inputs as used in the fair value
about the pension obligations and the assumptions used are included in
measurement since the valuation model also considers the present value of
Note 23 Employee benefits - pension.
expected cash flows from such investments. Key assumptions include the
expected disposal value of the investments and discount factor.
Legal disputes and contingent liabilities
Deferred and contingent considerations
to time engage in mergers, acquisitions and other transactions that could
Deferred and contingent considerations resulting from disposals are
expose the companies to financial and other non-operational risks, such as
measured at fair value at transaction date. When a deferred and
indemnity claims and price adjustment mechanisms resulting in recognition
As an investment company, Akastor and its portfolio companies from time
contingent consideration meets the definition of a financial asset or
of deferred settlement obligations.
liability, it is subsequently remeasured at fair value at the reporting date.
The determination of fair value is based on discounted cash flows. Key
Provisions have been made to cover the expected outcome of the legal
assumptions made by the management include the probability of meeting
claims and disputes to the extent negative outcomes are likely and reliable
each performance target and the discount factor.
estimates can be made. However, the final outcomes of these cases are
subject to uncertainties, and resulting liabilities may exceed provisions
recognized. The group follows the development of these disputes on case-
by-case basis and makes assessment based on all available evidence as
at the reporting date.
Annual Report 2023 | Financials and Notes | Akastor Group 36
Note 5 | Discontinued operations
Discontinued operations AGR
Energy Holdings AS in addition to Closing Cash Amount of NOK 5 million.
On April 18, 2023, Akastor completed the transaction with ABL Group
2/3 of ABL shares were transferred to Nordea and DNB as settlement of
ASA (ABL Group) for the sale of all shares in AGR AS (“AGR”) against a
the loans they previously had against AGR. Akastor retains 1/3 of the ABL
combination of shares in ABL Group and cash. Through this sale, Akastor
shares (6 055 556), which equals an ownership share in ABL Group of
becomes a shareholder in ABL Group, which offers independent energy
4.9%. All Consideration Shares are subject to a 12 month lock-up period.
and marine consultancy to the global renewables, maritime and oil and gas
sectors. Further, shareholdings in Føn Energy Services and Maha Energy
Following the transaction, AGR was deconsolidated and classified as
were carved out of the transaction and remain with Akastor.
discontinued operations. The comparative consolidated income statement
has been re-presented to show the discontinued operations separately from
Upon completion of the transaction, a total of 18 166 667 Consideration
continuing operations.
Shares in ABL Group was issued to Akastor’s wholly owned subsidiary RGA
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 on sale of discontinued operations
Net profit from discontinued operations
Basic/diluted earnings per share from discontinued operations (NOK)
2023
257
(243)
(2)
13
-
12
110
122
0.45
2022
789
(723)
(14)
53
(3)
50
4
55
0.20
Gain on sale from the disposal in 2023 included gain of NOK 104 million for AGR divestment which included currency translation differences of NOK 2 million
that were reclassified from Other Comprehensive Income to the income statement as part of gain from the disposal. The remaining gain of NOK 6 million in
2023 as well as the gain in 2022 were related to re-assessment of contingent considerations related to divestments from prior years.
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
2023
2022
57
(67)
(1)
(11)
31
(14)
(4)
13
Annual Report 2023 | Financials and Notes | Akastor Group 37
Note 6 | Disposal of subsidiaries
Disposal of entities in 2023
Disposal of Cool Sorption
Disposal of AGR
In April 2023, Akastor completed the transaction with ABL Group ASA for
In December 2022, Akastor entered into a share purchase agreement
the sale of all shares in AGR AS (“AGR”) against a combination of shares
with Diamond Key International Pty. Ltd. for the sale of all shares in Cool
in ABL Group and cash, see more information about the transaction in Note
Sorption A/S (“Cool Sorption”) for DKK 20.4 million on a cash and debt free
5 Discontinued operations. The disposal of AGR resulted in an accounting
basis. Accordingly, Cool Sorption was presented as a disposal group held
gain of NOK 104 million, included as "Net profit (loss) from discontinued
for sale as of December 31, 2022.
operations" in the income statement for 2023.
The sale transaction was completed in February 2023. Cool Sorption is a
specialist supplier of Vapour Recovery Units (VRU) and systems and was
included in “Other holdings” in segment reporting prior to the sale. The
disposal of Cool Sorption resulted in an accounting gain of NOK 16 million,
included as "Other income" in the income statement for 2023.
Effect of disposal on the financial position of the group
Amounts in NOK million
Deferred tax assets
Intangible assets and goodwill
Property, plant and equipment
Right-of-Use assets
Trade and other receivables
Cash and cash equivalents
Total assets
Pension liabilities
Deferred tax liabilities
Lease liabilities
Trade and other payables
Total liabilities
Non controlling interest
Currency translation reserve
Net assets and liabilities disposed
Total consideration at fair value
Gain on sale, net of tax
Portion of consideration received in cash, net of transaction costs
Cash and cash equivalents disposed of
Net cash flow from disposal
1) Cool Sorption was presented as disposal group held for sale as of December 31, 2022.
Disposal of entities in 2022
Disposal of AGR Wind Services
COOL SORPTION 1)
(7)
(2)
-
-
(40)
(5)
(53)
-
-
-
37
37
-
-
(15)
31
16
21
(5)
16
AGR
(37)
(148)
(3)
(12)
(151)
(49)
(400)
7
4
12
158
181
39
2
(177)
281
104
(14)
(49)
(63)
In February 2022, Akastor, through AGR, completed the transaction to
Føn Energy Services is classified as a joint venture to the group and
establish a joint venture company, Føn Engergy Services, together with IKM
accounted for using the equity method. The company offers integrated
Group. Akastor transferred the shares in AGR Wind Services AS to Føn
Operations and Maintenance (O&M) solutions to developers, operators,
Energy Services. As compensation for the transfer, Akastor received 44%
suppliers and owners of offshore renewables infrastructure, and in particular
ownership in Føn Energy Services. The disposal of AGR Wind Services
offshore wind farms.
resulted in an accounting gain of NOK 21 million in 2022.
Annual Report 2023 | Financials and Notes | Akastor Group
38
Note 7 | Operating segments
Basis for segmentation
As of December 31, 2023, Akastor has identified the following operating
Other holdings mainly include 4.9 percent shareholdings in ABL
Group, 15 percent economic interest in NES Fircroft, 44 percent of
segments as described below. After the divestment of AGR in April 2023,
the joint venture Føn Energy Services, equity instruments in Maha
DDW Offshore is identified as a reportable segment from 2023. Since
Energy and Awilco Drilling, as well as economic interests in four
DDW Offshore was previously included in "Other holdings", the comparable
drilling equipment contracts with Jurong Shipyard (DRU contracts).
segment information has been re-presented.
In addition, this segment includes corporate functions and certain
long-term office lease contracts that remained in Akastor after the
HMH is a premier drilling solutions provider, which was formed as
demerger from Aker Solutions in 2014.
an independent company in October 2021 through the merger of
Baker Hughes' Subsea Drilling Systems business and Akastor's
HMH and AKOFS Offshore are classified as joint ventures and accounted
wholly owned subsidiary, MHWirth AS. HMH combines integrated
for using the equity method, see Note 15 Equity-accounted investees. The
delivery capabilities, capital, renowned industry expertise and
segment information of the two joint ventures is presented at 100% basis.
delivers the full range of offshore drilling equipment products and
packages at scale.
Measurement of segment performance
AKOFS Offshore is a global provider of vessel-based subsea well
amortization and impairment (EBITDA) which is reviewed by the group’s
construction and intervention services to the oil and gas industry,
Executive Management Group (the chief operating decision maker).
covering all phases from conceptual development to project
Segment profit, together with key financial information as described below,
execution and offshore operations.
gives the Executive Management Group relevant information in evaluating
Segment performance is measured by operating profit before depreciation,
the results of the operating segments and is relevant in evaluating the results
DDW Offshore owns three modern Anchor Handling Tug Supply
of the segments relative to other entities operating within these industries.
(AHTS) vessels with capability to operate and support clients on
a world-wide basis. The vessels are specially designed to perform
anchor-handling, towing, and supply services at offshore oil and
gas fields.
Annual Report 2023 | Financials and Notes | Akastor Group 39
Information about reportable segments
Equity-accounted
investees 1)
Consolidated
entities
Amounts in NOK million
Note
HMH (JV)
AKOFS Off-
shore (JV)
DDW
Offshore
Other
holdings
Total
operating
segments
Adjustment
of JVs
Total
Akastor
2023
Income statement
External revenue and other
income
8
Total revenue and other income
Operating profit before
depreciation, amortization and
impairment (EBITDA)
Depreciation, amortization and
impairment
Operating profit (loss) (EBIT)
Assets
Current operating assets
Non-current operating assets
Finance lease receivables
Segment assets
Liabilities
Current operating liabilities
Non-current operating liabilities
Lease liabilities
Segment liabilities
Net current operating assets 2)
Net capital employed 2)
8 264
8 264
1 369
1 369
1 262
345
13, 14, 28
(659)
603
(415)
(70)
5 787
7 249
-
586
4 239
-
13 036
4 825
3 586
446
387
4 419
-
3 015
421
6
994
1 421
-
407
1) Segment information presented at 100% basis
2) Refers to figures included in Akastor’s consolidated statement of financial position.
231
231
84
(17)
67
77
231
-
308
45
-
-
45
32
263
51
51
9 914
9 914
(9 632)
(9 632)
(87)
1 605
(1 607)
(11)
(98)
(1 102)
503
1 074
(533)
530
1 076
19
6 979
12 795
19
(6 373)
(8 066)
-
1 625
19 793
(14 439)
(4 008)
(451)
(1 381)
(5 840)
294
337
34
665
236
960
4 347
788
1 415
6 550
267
4 645
-
-
267
4 645
282
282
(2)
(28)
(31)
606
4 729
19
5 354
339
337
34
709
Annual Report 2023 | Financials and Notes | Akastor Group
40
Equity-accounted
investees 1)
Consolidated
entities
Amounts in NOK million
Note
HMH (JV)
AKOFS
Offshore
(JV)
DDW
Offshore
Other
holdings
Adjustment
of JVs and
dis-
continued
operations
Total
operating
segments
Total
Akastor
2022 (re-presented)
Income statement
External revenue and other
income
Total revenue and other
income
Operating profit before
depreciation, amortization and
impairment (EBITDA)
Depreciation, amortization and
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 2)
Net capital employed 2)
8
6 477
1 425
6 477
1 425
147
147
122
8 172
(7 902)
122
8 172
(7 902)
269
269
762
458
7
(98)
1 129
(1 220)
(91)
13, 14, 28
(457)
306
(376)
81
4 725
7 158
-
-
578
4 517
-
-
11 883
5 095
3 235
452
344
-
393
6
1 245
-
4 032
1 644
-
2 863
-
615
(39)
(32)
45
232
180
-
457
124
102
-
-
226
(79)
231
(12)
(111)
(884)
245
833
(387)
(51)
(142)
734
857
38
43
6 082
12 764
218
43
(5 146)
(7 945)
-
-
937
4 819
218
43
1 673
19 108
(13 091)
6 017
431
447
72
32
982
303
690
4 183
1 008
1 662
32
6 884
224
4 399
(3 490)
(446)
(1 577)
-
693
562
85
32
(5 512)
1 372
19
246
243
4 645
1) Segment information presented at 100% basis.
2) Refers to figures included in Akastor’s consolidated statement of financial position.
Annual Report 2023 | Financials and Notes | Akastor Group
Reconciliations of information on reportable segments to IFRS measures
Amounts in NOK million
Assets
Total segment assets
Cash and cash equivalents
Non-current interest-bearing receivables
Consolidated assets
Liabilities
Total segment liabilities
Current borrowings
Non-current borrowings
Consolidated liabilities
Geographical information
41
Note
2023
2022
19
17
21
21
5 354
144
550
6 048
709
1 133
236
2 078
6 017
119
668
6 804
1 372
1 142
198
2 712
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
Denmark
Other countries
Total
Major customer
Revenue and other income
2023
2022
Re-presented
282
-
-
-
282
187
-
82
-
269
Non-current assets exclud-
ing deferred tax assets and
financial instruments
2023
664
3 094
-
-
3 758
2022
1 036
2 883
-
14
3 913
Revenues from one customer of DDW Offshore represent approximately NOK 120 million (NOK 25 million in 2022) of the group’s total revenue.
Annual Report 2023 | Financials and Notes | Akastor Group 42
Note 8 | Revenue and other income
The group generates revenue primarily from day rate contracts in DDW Offshore, which owns three modern Anchor Handling Tug Supply (AHTS) vessels.
A day rate contract is a contract where DDW Offshore is remunerated by the customer at an agreed daily rate for each day of use of the vessel, equipment,
crew and other resources. It is estimated that 40% of the contract value is service revenue while the remaining is lease portion of the revenue.
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
28
2023
121
147
-
16
(2)
282
2022
Re-presented
169
97
1
-
2
269
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
2023
Major contract/revenue types
Service revenue
Total Revenue from contracts with customers
Timing of revenue recognition
Transferred over time
Total Revenue from contracts with customers
Lease revenue
Other revenue and income
Total external revenue and other income in segment reporting
Amounts in NOK million
2022 (re-presented)
Major contract/revenue types
Construction revenue
Service revenue
Total Revenue from contracts with customers
Timing of revenue recognition
Transferred over time
Total Revenue from contracts with customers
Lease revenue
Other revenue and income
Total external revenue and other income in seg-ment reporting
DDW
Offshore
Other
holdings
Total
Akastor
93
93
93
93
140
(2)
231
28
28
28
28
7
16
51
121
121
121
121
147
14
282
DDW
Offshore
Other
holdings
Total
Akastor
-
58
58
58
58
87
2
147
48
63
111
111
111
10
1
122
48
121
169
169
169
97
3
269
Annual Report 2023 | Financials and Notes | Akastor Group Contract balances
Amounts in NOK million
Receivables, which are included in “trade and other receivables”
Contract assets
Contract liabilities
43
Note
2023
2022
18
24
22
11
7
115
61
25
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 2023 or 2022.
Contract liabilities relate to advance consideration received from customer for work not yet performed. Revenue recognized in 2023 that was included in
contract liabilities in the beginning of the year was NOK 16 million (NOK 14 million in 2022).
Transaction price allocated to the remaining performance obligations
Revenue of NOK 4 million is expected to be recognized in 2024 related to performance obligations that are unsatisfied (or partially satisfied) as of December
31, 2023.
Note 9 | Other operating expenses
Amounts in NOK million
Salaries and other employee benefit costs
External consultants inclusive legal costs
Other
Total operating expenses
Fees to the auditors
2023
58
52
11
121
2022
Re-presented
74
59
19
152
Audit fees (exclusive VAT) incurred by the group during 2023 were NOK 1.6 million (NOK 2.5 million in 2022). Fees incurred for other assurance services
were NOK 0.5 million in 2023 (NOK 0.1 million in 2022).
Annual Report 2023 | Financials and Notes | Akastor Group 44
Note 10 | Finance income and costs
Amounts in NOK million
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
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 debt instruments 1)
Loss on foreign currency forward contracts
Other financial expenses
Financial expenses
Net finance income
1) Impairment related to loss allowance on debt instruments measured at FVOCI
See Note 27 Financial instruments for information of the finance income and expense generating items.
.
Note
2023
2022
Re-presented
28
28
59
97
12
48
4
30
9
259
(160)
(16)
(3)
(40)
-
(30)
(249)
10
31
103
21
168
79
58
24
483
(124)
(24)
(5)
(166)
(58)
(13)
(390)
93
Annual Report 2023 | Financials and Notes | Akastor Group
45
Note 11 | Income tax
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
2023
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)
(384)
84
(1)
(72)
-
14
(26)
-
22.0%
(0.2%)
(18.7%)
-
3.6%
(6.8%)
-
2022
Re-presented
(312)
69
-
(79)
1
36
(26)
1
22.0%
(0.1%)
(25.3%)
0.3%
11.6%
(8.2%)
0.2%
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 unrecognized tax loss and deductible temporary differences in Akastor Corporate entities.
Change in net recognized deferred tax assets (liabilities)
Amounts in NOK million
Balance as of December 31, 2021
Recognized in profit and loss
Classified as held for sale
Balance as of December 31, 2022
Disposal of subsidiaries
Balance as of December 31, 2023
Note
Net deferred
tax assets
38
2
(6)
33
(33)
-
6
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.
Amounts in NOK million
Expiry within one year
Expiry in more than one year or later
Indefinite 1)
Total
2023
-
411
3 140
3 551
2022
14
375
1 350
1 739
1) In February 2024, the Norwegian Tax Appeals Board overturned a 2020 decision from the tax authorities. Following the decision from the Tax Appeals Board, the tax
authorities dropped a similar case. The total disputed amount was NOK 1 455 million. The unrecognized tax losses carried forward has been correspondingly increased.
Unrecognized other deductible temporary differences are NOK 1 112 million in 2023 (NOK 1 169 million in 2022).
Annual Report 2023 | Financials and Notes | Akastor Group
46
Note 12 | Earnings per share
Akastor ASA holds 1 813 974 treasury shares at year end 2023 (1 985 164 in 2022). 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
2023
(384)
(3)
(386)
122
(264)
2022
Re-presented
(312)
(19)
(331)
55
(276)
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)
2023
2022
274 000 000
274 000 000
272 180 398
272 002 629
(0.97)
(1.42)
0.45
(1.01)
(1.22)
0.20
Annual Report 2023 | Financials and Notes | Akastor Group Note 13 | Property, plant and equipment
The table below includes discontinued operations until these met the criteria to be classified as held for sale.
47
Amounts in NOK million
Historical cost
Balance as of January 1, 2022
Additions
Reclassification to held for sale
Currency translation differences
Balance as of December 31, 2022
Additions
Disposals and scrapping
Disposal of subsidiaries
Currency translation differences
Balance as of December 31, 2023
Accumulated depreciation
Balance as of January 1, 2022
Depreciation for the year 1)
Impairment
Reclassifications to held for sale
Currency translation differences
Balance as of December 31, 2022
Depreciation for the year 1)
Disposals and scrapping
Disposal of subsidiaries
Currency translation differences
Balance as of December 31, 2023
Book value as of December 31, 2022
Book value as of December 31, 2023
Note
Vessels
Machinery,
equipment,
software
Total
282
(2)
-
35
315
9
-
-
10
334
(38)
(18)
(21)
-
(6)
(83)
(17)
-
-
(2)
(103)
232
231
101
1
(9)
-
93
-
(85)
(8)
-
-
(94)
(3)
-
9
-
(88)
(2)
85
6
-
-
5
-
384
(1)
(9)
35
408
9
(85)
(8)
10
334
(133)
(21)
(21)
9
(6)
(171)
(20)
85
6
(2)
(103)
237
231
6
6
1) Includes depreciation of NOK 2 million from discontinued operations in 2023 (NOK 5 million in 2022).
Depreciation
Estimates for useful life, depreciation method and residual values are reviewed annually. The vessels are depreciated on a straight-line basis over their
expected economic lives of 20-25 years. The group has not identified assets expected to have a significant shorter useful life due to climate-related risks.
Annual Report 2023 | Financials and Notes | Akastor Group
48
Note 14 | Intangible assets and goodwill
Amounts in NOK million
Historical cost
Balance as of 1 January 2022
Reclassification
Capitalized development
Reclassification to held for sale
Currency translation differences
Balance as of December 31, 2022
Capitalized development
Disposal of subsidiaries
Balance as of December 31, 2023
Accumulated amortization and impairment
Balance as of 1 January 2022
Amortization for the year 1)
Reclassification to held for sale
Balance as of December 31, 2022
Amortization for the year 1)
Disposal of subsidiaries
Balance as of December 31, 2023
Net book value as of 31 December 2022
Net book value as of 31 December 2023
Note
Development
costs
Goodwill
Other
Total
50
1
9
(14)
-
47
4
(51)
-
(28)
(6)
13
(22)
(2)
24
-
25
-
118
-
-
-
1
119
-
(119)
-
(10)
-
-
(10)
-
10
-
109
-
24
-
-
-
-
24
-
(24)
-
(9)
(3)
-
(13)
(1)
14
-
11
-
192
1
9
(14)
1
190
4
(194)
-
(47)
(10)
13
(44)
(3)
48
-
146
-
6
6
1) Includes amortization of NOK 3 million from discontinued operations in 2023 (NOK 10 million in 2022)
Research and development costs
NOK 4 million has been capitalized in 2023 (NOK 9 million in 2022) related to development activities in discontinued operations. No research and
development costs were expensed in 2023 or 2022.
Annual Report 2023 | Financials and Notes | Akastor Group 49
Note 15 | 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 30 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, 2023
Additions
Share of net profit (loss)
Share of other comprehensive income
Share of changes directly in equity
Currency translation differences
Balance as of December 31, 2023
HMH
HMH
AKOFS Offshore
Netherlands
50%
Norway
50%
2 863
-
(41)
53
52
87
3 015
615
96
(315)
(16)
-
26
407
Total
equity-
accounted
investees
Føn Energy
Services
Norway
44%
24
1
(7)
-
-
-
17
3 502
97
(363)
37
52
113
3 439
On October 1, 2021, Akastor completed the transaction to bring together Akastor’s wholly owned subsidiary, MHWirth AS (MHWirth) and Baker Hughes’
Subsea Drilling Systems (SDS) business to create a joint venture company HMH Holding B.V. (HMH). Following the transaction, Akastor and Baker Hughes
each holds 50% of the shares in HMH, and have joint control over the company. HMH is a premier provider of drilling systems, equipment and 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.
Føn Energy Services
In February 2022, Akastor, through its subsidiary AGR AS, completed the transaction to establish a joint venture company, Føn Engergy Services, together
with IKM Group. Following the transaction, Akastor and IKM each holds 44% of the shares in Føn Energy Services, and have joint control over the company.
See Note 6 for more information about the transaction. The company offers integrated Operations and Maintenance (O&M) solutions to developers,
operators, suppliers and owners of offshore renewables infrastructure, and in particular offshore wind farms.
Annual Report 2023 | Financials and Notes | Akastor Group 50
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%)
Akastor's share of total comprehensive income (loss) (50%)
HMH
AKOFS
2023
2022
2023
2022
6 468
638
7 539
(3 923)
(323)
(4 054)
(3 609)
6 029
3 015
3 015
8 264
(659)
27
(377)
(167)
(82)
106
24
12
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)
832
247
4 239
(985)
(564)
(3 272)
(3 266)
814
407
407
1 369
(415)
14
(380)
(62)
(629)
(31)
(661)
(330)
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)
Annual Report 2023 | Financials and Notes | Akastor Group Note 16 | Other investments
Amounts in NOK million
NES Fircroft investment
Aker Pensjonskasse
ABL Group investment
Awilco Drilling investment
Odfjell Drilling warrants
Other equity securities
Total other investments
Shares in Step Oiltools B.V.
Total current investments
NES Fircroft
51
Note
2023
2022
30
27
27
711
158
79
17
56
30
1 051
-
-
636
158
-
10
34
31
869
162
162
Akastor holds around 15% economic ownership interest in NES Fircroft, a global technical and engineering staffing provider. The investment, consisting
mainly of debt instruments, is measured at fair value. See Note 27 Financial instruments for more information about the fair value measurement of debt
instruments in NES Fircroft.
Aker Pensjonskasse
Aker Pensjonskasse was established by Aker ASA to manage the retirement plan for employees and retirees in Akastor as well as related Aker companies.
Akastor holds 93.4 percent of the paid-in capital in Aker Pensjonskasse. The ownership does not constitute control since Akastor does not have the power
to govern the financial and operating policies so as to obtain benefits from the activities in this entity.
ABL Group
Akastor holds 4.9% of the common shares in ABL Group, which is listed on the Oslo Stock Exchange.
Awilco Drilling
Akastor holds 6.8% of the common shares in Awilco Drilling, which is listed on the Oslo Euronext Growth.
Odfjell Drilling warrants
Akastor holds a warrant structure with a maximum potential of 6.8 million common shares in Odfjell Drilling, divided by six exercisable tranches until May
31, 2024. Odfjell Drilling is listed on the Oslo Stock Exchange.
Shares in Step Oiltools B.V.
Step Oiltools was part of the MHWirth business contributed from Akastor to the joint venture HMH in 2021. However, the legal ownership in shares in Step
Oiltools B.V. remains with Akastor whilst the ownership does not constitute control since Akastor is not exposed to variable returns from the legal ownership.
In 2023, management of HMH started the liquidation process of Step Oiltools and the value of both shares and liability is impaired as result of reassessment
of expected net proceeds from the liquidation. Net financial position related to Step Oiltools was not impacted by the reassessment. See also Note 22 Other
liabilities for more information about the liabilities related to Step Oiltools.
Annual Report 2023 | Financials and Notes | Akastor Group 52
Note 17 | 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
Seller’s credit to Diamond Key International
Receivable from Føn Energy Services
Total non- current interest-bearing receivables
2023
2022
262
244
-
23
12
9
550
226
218
200
22
-
2
668
In 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 was settled in 2023.
Note 18 | Trade and other receivables
Amounts in NOK million
Trade receivables
Less provision for impairment
Trade receivables, net of provision
Other receivables 1)
Trade and other receivables
Advances to suppliers
Contract assets
Prepaid expenses
Total
Note
2023
2022
76
(1)
75
512
586
-
11
4
601
204
(64)
140
556
696
2
61
11
769
27
8
1) 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 2024. 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. 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
2023
2022
48
15
12
-
76
145
3
1
56
204
The past due receivables are monitored regularly and impairment analysis is performed on an individual basis for major customers. As of December 31,
2023, trade receivables of a face value of NOK 1 million were impaired. See below for the movements in the provision for impairment of receivables.
Amounts in NOK million
Balance as of January 1
Write down/utilized
Currency translation differences
Balance as of December 31
2023
2022
64
57
(65)
-
2
7
1
64
Annual Report 2023 | Financials and Notes | Akastor Group
Note 19 | Cash and cash equivalents
Amounts in NOK million
Restricted cash
Interest-bearing deposits
Total cash and cash equivalents
53
2023
2022
-
144
144
2
117
119
Additional undrawn committed bank revolving credit facilities amount to NOK 335 million, that together with cash and cash equivalents gives a total liquidity
reserve of NOK 479 million as of December 31, 2023. See also Note 21 Borrowings.
Note 20 | Capital and reserves
Share capital
Fair value reserve
Akastor ASA has one class of shares, ordinary shares, with equal rights for
The fair value reserve comprises the cumulative net changes in the fair
all shares. The holders of ordinary shares are entitled to receive dividends
value of financial assets classified as Fair Value through OCI (FVOCI) until
and are entitled to one vote per share at General Meetings. Total outstanding
these assets are impaired or derecognized.
shares are 274 000 000 at par value NOK 0.592 per share (NOK 0.592 in
2022). All issued shares are fully paid.
Currency translation reserve
Treasury shares
The currency translation reserve includes exchange differences arising
from the translation of the net investments in foreign operations, foreign
Sale of 171 190 treasury shares to employees was carried out in 2023 in
exchange gain or loss on loans defined as part of net investments in foreign
connection with the company’s variable pay program. As of December 31,
operations, as well as the group’s share of currency translation differences
2023, Akastor ASA holds 1 813 974 treasury shares (1 985 164 treasury
in equity accounted investees. Upon the disposal of investments in foreign
shares in 2022), representing 0.66 percent of total outstanding shares.
operations during 2023, the accumulated currency translation differences
of NOK 2 million related to the disposed entities were reclassified from the
The Board of Directors has not proposed dividend for 2023 or 2022.
currency translation reserve to the income statement.
Hedging reserve
As of December 31, 2023, the group had no cash flow hedges. The hedging
reserve is related to share of other comprehensive income in equity
accounted investees.
Annual Report 2023 | Financials and Notes | Akastor Group 54
Note 21 | 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 26 Financial risk management and exposures.
Amounts in million
2023
Revolving credit facility (USD 60 million)
Revolving credit facility (NOK 241 million)
Subordinated Aker facility (NOK 375 million)
ABL/Maha share financing
Term loan DDW Offshore
HMH Loan Note
Overdraft
Total borrowings
Current borrowings
Non-current borrowings
Total borrowings
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Term loan AGR
Term loan DDW Offshore
Total borrowings
Current borrowings
Non-current borrowings
Total borrowings
Nominal
currency
value
Carrying
amount
(NOK)
Currency
Maturity 1)
Interest terms 2)
Jun 2024
USD LIBOR + margin 5.5%
Jun 2024
Jul 2024
NIBOR + margin 5.5%
NIBOR + margin 12%
Uncommitted
NIBOR + margin 1.5%
Sep 2026
Oct 2024
Fixed rate 10.85%
Fixed rate 8.0%
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%
USD
NOK
NOK
NOK
USD
USD
NOK
USD
NOK
NOK
NOK
USD
60
241
82
57
31
4
66
200
16
180
27
616
241
82
57
309
41
24
1 369
1 133
236
1 369
656
198
16
198
272
1 340
1 142
198
1 340
1) In February 2024, the maturity date of Revolving credit facilities and Aker facility was extended to June and July 2024, respectively.
2) Commitment fee is 40 percent of the margin for revolving credit facilities and Aker facility.
For information about contractual maturities of borrowings including interest
In September 2023, DDW Offshore completed a refinancing provided by
payments and the period in which they mature, see Note 26 Financial risk
EnTrust Global’s Blue Ocean Funds as lenders. The new term loan of USD
management and exposures.
Bank debt
31 million matures in September 2026. The facility is guaranteed by Akastor
ASA and the lenders benefit from first priority mortgages in the vessels. This
facility includes restrictions which are customary for these kinds of secured
The revolving credit facilities are provided by a bank syndicate consisting
financing.
of high-quality Nordic and international banks, with DNB acting as agent.
The terms and conditions include restrictions which are customary for
these kinds of facilities, including inter alia negative pledge provisions and
restrictions on acquisitions, disposals and mergers, dividend distribution
and change of control provisions. For information about financial covenants,
see Note 25 Capital management.
Annual Report 2023 | Financials and Notes | Akastor Group
55
Reconciliation of liabilities arising from financing activities
Amounts in NOK million
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
Proceeds from borrowings
Repayment of borrowings
Changes from financing cash flows
Settlement with ABL shares
Reclassification
Changes in capitalized borrowing costs
Accrued interest (incl.commitment fees)
Foreign exchange movements
Balance as of December 31, 2023
Revolving
credit
facilities
Subordi-
nated Aker
facility
Term loan
AGR
Term loan
– DDW
Offshore
Other,
including
overdraft
Total
borrowings
721
736
(711)
25
13
(1)
96
854
50
(74)
(24)
-
-
2
(1)
23
856
3
20
(20)
-
-
13
-
16
60
(20)
40
-
-
-
26
-
82
185
-
-
-
-
13
-
198
-
(9)
(9)
(188)
-
-
(1)
-
-
467
-
(254)
(254)
-
-9
50
272
316
(279)
36
-
-
-
(8)
8
11
-
(11)
(11)
-
-
-
-
81
-
81
-
37
-
3
1
1 387
756
(996)
(240)
13
33
146
1 340
507
(382)
125
(188)
37
2
20
32
309
121
1 369
See Note 28 Leases for reconciliation of liabilities arising from leasing activities.
Note 22 | 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
2023
2022
27
27
27
27
9
246
-
-
255
-
-
30
326
102
1
459
162
162
Deferred gain
Liability for profit split
In May 2018, Akastor invested in preferred equity and warrants in Odfjell
DDW Offshore AS had 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. The
fair value and the difference between the fair value and the transaction price,
liability for profit split was fully settled in 2023.
NOK 117 million, was recognized as “Deferred gain”. The deferred gain is
subsequently amortized and recognized to profit and loss at straight-line
Liability related to Step Oiltools
basis over six years. See Note 16 Other investments for more information
Step Oiltools was part of the MHWirth business contributed from Akastor to
about the warrant investment.
the joint venture HMH in 2021. However, the legal ownership in shares in
Step Oiltools B.V. remains with Akastor. The liability reflects the obligation
Deferred settlement obligations
to transfer disposal proceeds to HMH when the ownership structure is
Deferred settlement obligations represent contingent considerations
resolved. In 2023, management of HMH started the liquidation process of
resulting from disposal of subsidiaries. The obligations are mainly related
Step Oiltools and the value of both shares and liability is impaired as result
to provision for indemnity liabilities for pension plans in connection with
of reassessment of expected net proceeds from the liquidation. Net financial
MHWirth divestment as well as guaranteed preferred return to Mitsui and
position related to Step Oiltools was not impacted by the reassessment.
MOL in connection with AKOFS Offshore divestment.
See also Note 16 Other investments for more information about the Step
Oiltools shares.
Annual Report 2023 | Financials and Notes | Akastor Group 56
Note 23 | Employee benefits – pension
Akastor’s pension costs represent the future pension entitlement earned
Norwegian employers are obliged to provide an employment pension plan,
by employees in the financial year. In a defined contribution plan the
which can be organized as a defined benefit plan or as a defined contribution
company is responsible for paying an agreed contribution to the employee’s
plan. The Norwegian companies in Akastor have closed the earlier defined
pension assets. In such a plan, this annual contribution is also the cost. In
benefit plans in 2008 and are now providing defined contribution plans for
a defined benefit plan, it is the company’s responsibility to provide a certain
all employees.
pension. The measurement of the cost and the pension liability for such
arrangements is subject to actuarial valuations. Akastor has over a long
Defined benefit plan
time period gradually moved from defined benefit arrangements to defined
Employees who were 58 years or older in 2008, when the change took
contribution plans. Consequently, the impact of the remaining defined
place, are still in the defined benefit plan, which is a funded plan. There are
benefit plans is gradually reduced.
no longer any active employees in this plan. The group has also unfunded
Pension plans in Norway
The main pension arrangement in Norway is a general pension plan
organized by the Norwegian Government. This arrangement provides
the main general pension entitlement of all Norwegians. All pension
arrangements by employers consequently represent limited additional
pension entitlements.
executive pension plans that are closed for new members. The estimated
contributions expected to be paid during 2024 amount to NOK 13 million.
Pension cost
Amounts in NOK million
Defined benefit plans
Defined contribution plans including AFP
Total pension cost
Movement in net defined benefit (asset) liability
Amounts in NOK million
Balance as of January 1
Disposal of subsidiaries as of January 1, 2023
Included in profit or loss
Service cost
Interest cost (income)
Total
Included in OCI
Remeasurements (loss) gain:
Actuarial loss (gain)
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
2023
-
2
2
2022
Re-presented
1
2
3
Pension obligation
2023
2022
Pension asset
Net pension obligation
2023
2022
2023
2022
301
(12)
332
-
(205)
4
(224)
-
-
(2)
(2)
(3)
25
(6)
16
-
(3)
(3)
(5)
1
(2)
(6)
24
(11)
(13)
24
(20)
5
(197)
(205)
96
(8)
108
-
-
3
3
6
1
1
8
(6)
(11)
(17)
82
1
2
2
(15)
25
-
11
(6)
(20)
(26)
96
-
6
6
11
-
3
14
(30)
-
(30)
279
1
4
4
(12)
-
7
(5)
(30)
-
(30)
301
Annual Report 2023 | Financials and Notes | Akastor Group
Plan assets
Amounts in NOK million
Bonds
Fund/private equity
Total plan assets in Norway at fair value
Equity securities
Debt securities
Total plan assets in US at fair value
Total plan assets at fair value
57
2023
2022
40
57
97
-
100
100
197
48
56
104
25
76
101
205
The equity portfolio is invested globally. The fair value of the equities is
Association. The Bond investments have on average a high credit rating.
based on their quoted prices at the reporting date without any deduction for
Most of the investments are in Norwegian municipalities with a credit rating
estimated future selling cost.
of AA.
The investments in bonds are done in the Norwegian market and most of
The investment in fund/private equity is mainly funds that invests in listed
the bonds are not listed on any exchange. The market value as at year end
securities and where the fund value is based on quoted prices.
is based on official prices provided by the Norwegian Securities Dealers
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
Norway.
Discount rate
Asset return
Salary progression
Pension indexation
Mortality table
Life expectancy of male pensioners (in years)
Life expectancy of female pensioners (in years)
Norway
2023
3.10%
2.25%
3.50%
1.8 -3.3%
K2013
22.8
26.1
2022
3.20%
2.00%
3.75%
1.7 -3.5%
K2013
22.7
26.0
The discount rates and other assumptions in 2023 and 2022 are based on the Norwegian high quality corporate bond rate and recommendations from
the Norwegian Accounting Standards Board. It should be expected that fluctuations in the discount rates would also lead to fluctuations in the pension
indexations. The total effect of fluctuations in economic assumptions is consequently unlikely to be very significant.
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, 2023 by the amounts shown below.
Amounts in NOK million
Discount rate (1% movement)
Future pension growth (1% movement)
Increase
Decrease
(15)
15
16
(13)
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 2023 | Financials and Notes | Akastor Group 58
Note 24 | Trade and other payables
Amounts in NOK million
Trade creditors
Accrued expenses
Liability for profit split 1)
Trade and other payables
Public duty and tax payables
Contract liabilities
Deferred settlement obligations 2)
Total trade and other payables
Note
2023
2022
17
96
-
113
8
7
176
305
67
179
89
335
46
25
91
498
27
8
27
1) Relates to obligation in DDW Offshore AS to share 50 percent of the sale proceeds from disposal of its vessels, which was fully settled in 2023.
2) Relates to current portion of deferred settlement obligations, see Note 22 for more information
Book value of trade creditors and other current liabilities is approximately equal to fair value.
Note 25 | Capital management
Akastor’s capital management is designed to ensure that the group has
Funding duration
sufficient financial flexibility to carry out its strategic targets, both short-
Akastor emphasizes financial flexibility and steers its capital structure
term and long-term. Akastor is targeting to maintain a financial structure
accordingly to limit its liquidity and refinancing risks. In this perspective,
that, through solidity and cash flow, secures the group’s strong long-term
loans and other external borrowings are to be renegotiated well in advance
creditworthiness, as well as maximize value creation for its shareholders
of their due date and generally for periods of 3 to 5 years. However, as a
through:
result of MHWirth divestment in 2021 and the required refinancing carried
out in connection with this, corporate facilities currently have a shorter
Investing in projects and business areas which will increase the
duration as realization of assets are expected to be carried out in the short
company’s Return On Capital Employed (ROCE) over time.
to medium term.
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
Akastor’s capital management is based on a rigorous investment selection
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
Funding cost
Akastor aims to have diversified funding sources in order to reach the
lowest possible cost of capital. These funding sources might include:
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
Akastor has a strong focus on its liquidity situation to meet its capital needs
equity ratio (equity/total assets). These ratios are similar to covenants as
and ensure solvency for its financial obligations. Akastor had a liquidity
defined in the loan agreement entered into in 2022 for the revolving credit
reserve per year end 2023 of NOK 479 million, composed of an undrawn
facilities which are shown below. See Note 21 Borrowings for details about
committed credit facility of NOK 335 million and cash and cash equivalents
these loans.
of NOK 144 million.
Funding of operations
The company’s gearing ratio shall not exceed 0.5 times and
is calculated from the consolidated total borrowings to the
Akastor’s group funding policy is that subsidiaries should finance their
consolidated Equity.
operations with the treasury department (Akastor Treasury). This ensures
optimal availability and transfer of cash within the group and better control
Equity ratio shall not be lower than 32.5%, calculated from the
of the company’s overall debt as well as cheaper funding for its operations.
consolidated total equity to consolidated total assets.
However, DDW Offshore is financed directly through a USD 31 million Term
loan maturing in 2026.
Minimum liquidity amount shall exceed NOK 150 million on
consolidated level.
Annual Report 2023 | Financials and Notes | Akastor Group 59
The ratios are calculated based on net debt including cash and borrowings,
covenants as of December 31, 2023. In February 2024, the group extended
consolidated equity and consolidated total assets, however adjusted for
the maturity of the corporate revolving credit facilities to June/July 2024.
certain items as defined in the loan agreement. Covenants ratios are based
on accounting principles as of December 31, 2023.
DDW Offshore's external financing has two financial covenants; i) a
minimum liquidity of USD 1.425 million and ii) a minimum asset cover ratio
The covenants are monitored on a regular basis by the Akastor Treasury
of 120% (Market Value of the vessels / Secured Loan Amount) .
department to ensure compliance with the loan agreements which are
tested and reported on a quarterly basis. Akastor was in compliance with its
Note 26 | Financial risk management and exposures
The group is exposed to a variety of financial risks: currency risk, interest
Risk management is present in every project. It is the responsibility of the
rate risk, price risk, credit risk, liquidity risk and capital risk. The capital
project managers, with the support of Akastor Treasury, to identify, evaluate
market risk affects the value of financial instruments held. The objective of
and hedge financial risks under policies approved by the Board of Directors.
financial risk management is to manage and control financial risk exposures
The group has well-established principles for overall risk management,
and thereby increase the predictability of earnings and minimize potential
as well as policies for the use of derivatives and financial investments.
adverse effects on the group’s financial performance.
There have not been any changes in these policies during the year.
Currency risk
The group’s exposure to currency risk is primarily against USD. In addition, The group has significant investments in portfolio companies that operate
internationally and are exposed to currency risk on commercial transactions, recognized assets and liabilities and net investments in foreign operations.
Exposure to currency risk
Changes in currency rates change the values of borrowings, receivables and cash balances.
Amounts in million
Cash and cash equivalents
Intercompany loans
Loans and receivables
Deferred settlement obligations
Balance sheet exposure
Net exposure (NOK million)
Sensitivity analysis
2023
USD
(3)
60
89
(41)
104
2022
USD
-
48
109
(42)
115
1 063
1 141
A strengthening of USD against NOK as of December 31 would have affected the measurement of financial instruments denominated in a foreign currency
and increased (decreased) income statement by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the
group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates,
remain constant and ignores any impact of forecast sales and purchases. Figures in the table below only include the effect in income statement for change
in currency regarding financial instruments and do not include effect from operating cost and revenue.
Effect of weakening of NOK against USD:
Amounts in NOK million
USD (10%)
Profit (loss) after tax
2023
106
2022
114
Annual Report 2023 | Financials and Notes | Akastor Group
60
A strengthening of the NOK against USD as of December 31 would have
issued at variable rates as well as cash expose the group to cash flow
had the equal but opposite effect on the above amounts, on the basis that
interest rate risk. Borrowings and receivables issued at fixed rates expose
all other variables remain constant. The sensitivity analysis does not include
the group to fair value interest rate risk. However, as these borrowings are
effects on the consolidated result and equity from changed exchange rates
measured at amortized cost, interest rate variations do not affect profit and
used for consolidation of foreign subsidiaries.
loss when held to maturity.
The primary currency-related risk is the risk of reduced competitiveness
An increase of 100 basis points in interest rates during 2023 would have
abroad in the case of a strengthened NOK. This risk relates to future
increased (decreased) profit and loss by the amounts shown on the table
commercial contracts and is not included in the sensitivity analysis above.
below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant. The analysis is performed on the same
Interest rate risk
basis as for 2022.
The group’s interest rate risk arises from cash balances, interest-bearing
borrowings and interest-bearing receivables. Borrowings and receivables
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
2023
2022
1
6
(13)
(6)
1
4
(17)
(12)
A decrease of 100 basis points in interest rates during 2023 would have
materials, equipment and development in wages. These risks are to the
had the equal but opposite effect on the above amounts, on the basis that
extent possible managed in bid processes by locking in committed prices
all other variables remain constant. There are no effects on equity as there
from vendors as a basis for offers to customer or through escalation clauses
are no interest swaps.
Guarantee obligations
with customers.
Credit risk
The group has provided the following guarantees on behalf of subsidiaries
Credit risk is the risk of financial losses to the group if customer or
and related parties as of December 31, 2023 (estimated remaining exposure
counterparty to financial investments/instruments fails to meet contractual
as of December 31, 2023):
obligations and arise principally from investment securities and receivables.
Performance guarantees on behalf of group companies of nil
The group evaluates that significant credit risk concentrations are related to
(NOK 17 million in 2022)
external receivables. The maximum exposure to credit risk at the reporting
date equals the carrying amounts of financial assets (see Note 27 Financial
Performance guarantees on behalf of related parties of NOK 1.5
instruments) and contract assets (see Note 8 Revenue and other income).
billion (NOK 2.2 million in 2022)
The group does not hold collateral as security. The group reviews the
creditworthiness of counterparty when entering into significant or long-term
Parent company indemnity guarantees for fulfillment of lease
contract and actively monitors its credit exposure to each counterparty.
obligations and finance obligations of NOK 2.1 billion (NOK 2.6
billion in 2022)
Liquidity risk
Financial guarantees including counter guarantees for bank/surety
obligations associated with its financial liabilities. The group manages its
bonds and guarantees for pension obligations to employees of
liquidity to ensure that it will always have sufficient liquidity reserves to meet
NOK 0.2 billion (NOK 0.2 billion in 2022)
its liabilities when due.
Liquidity risk is the risk that the group will encounter difficulty in meeting the
Although guarantees are financial instruments, they are considered
Prudent liquidity risk management includes maintaining sufficient cash, the
contingent obligations and the notional amounts are not included in the
availability of funding from an adequate amount of committed credit facilities
financial statements. See more information about guarantees for related
and the ability to close out market positions. Due to the dynamic nature of
parties in Note 30 Related parties.
the underlying businesses, Akastor Treasury maintains flexibility in funding
by maintaining availability under committed credit lines.
Price risk
The group is exposed to fluctuations in market prices in the operational
Akastor is an investment company with limited upstream cash flow from its
areas related to contracts, including changes in market prices for raw
portfolio companies and therefore to a large degree depends on realization
Annual Report 2023 | Financials and Notes | Akastor Group 61
of assets to reduce debt and improve liquidity. In order to mitigate refinancing
The group’s most significant group of assets, equity-accounted investees,
risk when the corporate financing facilities mature and secure available
consists primarily of investments in HMH and AKOFS Offshore. The
liquidity, the group is in accordance with its strategy focusing on realization
largest climate-related risks are related to the transition to a low-emission
of holdings. Liquidity risk has been mitigated in the short term through the
economy, and an expected decrease in the oil and gas sector, which will be
extension of the current corporate financing facilities through to June and
challenging in terms of access to and cost of capital. In addition, large oil
July 2024, to be replaced by new corporate credit lines, which have been
companies are shifting towards low-carbon production, leading to changes
committed, but subject to the amount received following the DRU arbitration
in customer requirements that may require new investments in technology.
award. If the proceeds from DRU arbitration come in at a lower value than
Overall, this may lead to negative impact on the equity of these investees
anticipated, Akastor will need to source other means of funding such as
and thus reduction of the value of Akastor’s investments.
through a bond financing.
The group policy for the purpose of optimizing availability and flexibility
vessels held by DDW Offshore, the group is mainly exposed to physical
of cash within the group is to operate a centrally managed cash pooling
risks such as extreme weather changes. The group has not identified
arrangement. An important condition for the participants (business units)
significant changes when assessing useful life or impairment testing of the
With regards to the physical assets in the group, mainly attributed to the
in such cash pooling arrangements is that the group as an owner of such
vessels due to climate related risks.
pools is financially viable and is able to prove its capability to service its
obligations concerning repayment of any net deposits made by business
For the 2023 financial statements, the group has not identified any material
units. Management monitors rolling quarterly forecasts of the group’s
impacts on judgement and estimates due to climate-related risks. Akastor
liquidity reserve on the basis of expected cash flow.
and its portfolio companies preform climate related risk and opportunity
Climate risk
assessment based on the methodology described in the Task Force
on Climate-Related Financial Disclosures (TCFD) on a regular basis.
Akastor, as an investment company, is exposed to climate related risks,
Assessment of risks is carried out in preparation of the group’s financial
mainly transition risks and physical risks which are closely linked to the
statements.
risks identified by the portfolio companies it has ownership interests in.
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
2023
Borrowings 2)
Lease liabilities
Deferred settlement obligations
Trade and other payables
Total financial liabilities
Financial guarantees 3)
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)
Note
21
28
22, 24
24
21
28
22
22
22, 24
24
Book
value
Total cash
flow 1)
6 months
and less
6–12
months
1–2 years
2–5 years
More than
5 years
1 369
1 511
1 042
34
589
121
2 114
34
424
121
2 090
3 850
1 340
1 403
85
103
162
417
335
2 442
89
110
162
429
335
2 528
5 058
18
171
121
1 352
31
59
27
-
-
103
272
461
198
183
14
8
-
204
265
334
22
-
162
8
63
589
1
95
2
74
-
171
1 499
852
34
110
-
91
-
1 087
555
190
-
45
-
235
1 665
157
6
-
-
102
-
265
3 640
-
-
127
-
127
390
-
1
-
-
126
-
127
665
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 2023 | Financials and Notes | Akastor Group
62
Note 27 | 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.
2023
2022
Note
Carrying
amount
Financial
instruments
measured at
fair value
Financial
instruments
measured at
fair value
Carrying
amount
Fair value
hierarchy
Amounts in NOK million
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
Trade and other payables
Other non-current liabilities
16
16
16
16
19
17
18
21
24
22
Financial liabilities measured at fair value
Fair value through profit & loss
Deferred settlement obligations
Other current liabilities
Financial liabilities
22, 24
22
125
158
56
125
158
56
40
321
34
40
321
34
Level 1
Level 3
Level 3
711
711
636
636
Level 3
144
550
586
2 332
119
668
696
2 514
(1 369)
(1 371)
(1 340)
(1 342)
Level 2
(113)
-
(422)
-
(1 904)
(422)
-
(335)
(103)
(417)
(162)
(2 357)
(417)
(162)
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 2023 | Financials and Notes | Akastor Group
Reconciliation of Level 3 financial assets and financial liabilities
Amounts in NOK million
Balance as of December 31, 2021
Settlements
Net gain (loss) in the income statement
Reclassifications
Balance as of December 31, 2022
Additions
Settlements
Net gain (loss) in the income statement
Balance as of December 31, 2023
63
Assets
Liabilities
1 782
(982)
220
(29)
991
-
(18)
(48)
926
(459)
59
(16)
(162)
(579)
(3)
24
136
422
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 2023 | Financials and Notes | Akastor Group 64
Note 28 | 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)
Disposal of subsidiaries
Remeasurement
Balance as of December 31
1) Includes depreciation related to discontinued operations of NOK 1 million in 2023 (NOK 5 million in 2022)
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
Balance as of December 31
Current lease liabilities
Non-current lease liabilities
Note
2023
2022
6
27
-
(10)
(12)
2
7
41
4
(15)
-
(4)
27
Note
2023
2022
6
85
(41)
-
2
(12)
34
32
2
155
(78)
4
5
-
85
48
37
Amounts recognized in the income statement and cash flow statement
Amounts in NOK million
2023
2022
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
(3)
(3)
(6)
(3)
(3)
(41)
(46)
(3)
(5)
(8)
(3)
(6)
(78)
(87)
Annual Report 2023 | Financials and Notes | Akastor Group 65
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 leases out the vessels in DDW Offshore and subleases out some
operational flexibility in terms of managing the assets used in the group’s
of the property leases.
operations. The extension and termination options held are exercisable
only by the group and not by the respective lessor. The group assesses at
Finance leases
lease commencement date whether it is reasonably certain to exercise the
Some of the subleases of right-of-use assets are classified as finance
extension or termination options.
lease, with reference to the right-of-use assets arising from the head leases.
The finance lease of two vessels in DDW Offshore was completed in 2023.
Extension options in offices leases have not been included in the lease
liability, because the group expects to be able to replace the assets without
The following table sets out a maturity analysis of finance lease receivables,
significant cost or business disruption. If the group had exercised the
showing the undiscounted lease payments to be received after the reporting
extension options in significant property leases as of December 31, 2023,
date.
the group estimates potential future lease payments (undiscounted) of
approximately NOK 37 million, which are not included in the lease liabilities.
Amounts in NOK million
Due within one year
Due in one to two years
Total undiscounted lease receivable
Unearned interest income
Total finance lease receivables
Current finance lease receivables
Non-current finance lease receivables
Operating leases
The lease income from subleasing right-of-use assets in 2023 was NOK 7 million (NOK 10 million in 2022).
The following table sets out future undiscounted operating lease income under the non-cancellable lease periods.
Amounts in NOK million
Due within one year
Due in one to two years
Total
2023
2022
20
-
20
1
19
19
-
213
18
232
13
218
208
10
2023
2022
10
-
10
104
2
106
Annual Report 2023 | Financials and Notes | Akastor Group 66
Note 29 | Group companies
This note gives an overview of subsidiaries of Akastor ASA. For information about other investments in the group, refer to Note 15 Equity-accounted
investees and Note 16 Other investments. If not stated otherwise, ownership equals share of voting rights.
Group companies as of December 31
Company
Akastor ASA
Akastor AS
DDW Offshore AS
Mercury HoldCo AS
Akastor Real Estate AS
RGA Energy Holdings AS 1)
AKA SPH AS
AK Willfab Inc 2)
Mercury HoldCo Inc
KOP Surface Products Singapore Pte Ltd 2)
Well Systems Servicing Ltd 2)
Disposed entities 3)
Cool Sorption A/S
Aker Cool Sorption Siam Ltd
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
1) Established in 2023
2) Dormant company
3) Disposed in 2023
Country
Norway
Norway
Norway
Norway
Norway
Norway
Norway
USA
USA
Singapore
Nigeria
Denmark
Thailand
Australia
Norway
Norway
Norway
Norway
Mexico
UK
UK
USA
USA
Ownership (%)
2023
2022
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
-
-
-
100
100
100
100
-
100
100
100
100
100
100
100
64
64
64
58
64
64
64
64
64
64
Annual Report 2023 | Financials and Notes | Akastor Group 67
Note 30 | 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 135 million relating
undertaken between unrelated parties.
to the remaining period.
The subsidiaries of Akastor ASA are listed in Note 29 Group companies. Any
Akastor has issued a financial guarantee of NOK 157 million in favour of
transactions between the parent company and the subsidiaries are shown
finance institutions for fulfilment of lease obligations related to Avium Subsea
line by line in the separate financial statements of the parent company, and
AS. Akastor has issued a financial parent company indemnity guarantee of
are eliminated in the consolidated financial statements.
NOK 1.1 billion in favour of OCY Wayfarer Limited for fulfilment of lease
Joint ventures are accounted for using the equity method, see Note 15
the performance of AKOFS Norway Operations AS (operating AKOFS
obligations related to AKOFS 3 AS. In addition, Akastor is guaranteeing
Equity-accounted investees.
Seafarer) under the 5 years charter agreement with Equinor. The remaining
contract value of this charter agreement is NOK 1.4 billion. Avium Subsea
The largest shareholder of Akastor, Aker Holding AS, is wholly-owned by
AS, AKOFS 3 AS and AKOFS Seafarer AS are wholly owned subsidiaries
Aker ASA, which in turn is controlled by Kjell Inge Røkke through TRG
of AKOFS Offshore.
Holding AS and The Resource Group TRG AS. Akastor is an associated
company to Aker ASA as per year end 2023 and 2022.
HMH
As of December 31, 2023, Akastor has interest-bearing receivables of NOK
Below are descriptions of significant related party agreements.
244 million against HMH (fixed interest rate 8.0 percent), see also Note
Significant agreements with related parties to Aker ASA
interest-bearing liability of NOK 41 million towards HMH (fixed interest rate
Aker Holding AS
8.0 percent), see also Note 21 Borrowings for more information. Akastor
In connection with the refinancing of its corporate credit facilities, Akastor
has issued financial guarantees of NOK 430 million for MHWirth AS, a
entered into a subordinated loan agreement with Aker Holding AS, a wholly
wholly owned subsidiary of HMH, for fulfilment of lease obligations and
owned subsidiary to Aker ASA. The agreement provides credit facility of
performance under certain operational support frame agreements.
17 Non-current interest-bearing receivables. Further, Akastor has a current
NOK 375 million (NIBOR + margin 12.0 percent) available to Akastor. As
of December 31, 2023, the carrying amount of the Aker facility is NOK 82
Føn Energy Services
million. In February 2024, the facility was extended to July 2024, see Note
As of December 31, 2023, Akastor has interest-bearing receivables of NOK
21 Borrowings for more information.
9 million against Føn Energy Services (NIBOR+ margin 2.0/7.2 percent),
see also Note 17 Non-current interest-bearing receivables.
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 2023
for all its expenses related to the pension plan.
(NOK 158 million in 2022). Akastor’s premium paid to Aker Pensjonskasse
amounts to NOK 6 million in 2023 (NOK 6 million in 2022). Akastor also
Related party transactions with joint ventures
has an interest-bearing receivable against Aker Pensjonskasse of NOK 23
AKOFS Offshore
million and an additional financing commitment NOK 10 million (3% interest
As of December 31, 2023, Akastor has interest-bearing receivables of NOK
of drawn amount and 1% interest of committed amount).
262 million against AKOFS Offshore, including term loan of NOK 209 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 2023 was NOK 547 500 (NOK 510 000 in 2022).
Annual Report 2023 | Financials and Notes | Akastor Group 68
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 2023.
Amounts in NOK million
Base salary
Variable pay and other benefits
Post-employment benefits (pension expenses to company)
Remuneration to Board of Directors
Total
2023
2022
7
7
1
4
18
7
8
1
3
19
The balance of accrued expenses related to key management remuneration amounted to NOK 18 million as of December 31, 2023, of which NOK 5 million
is contingent on continuous employment after a three-year period.
Executive management’s and directors’ shareholding
The following number of shares is owned by the members of the executive management and the directors (and their related parties) as of December 31:
Karl Erik Kjelstad
Øyvind Paaske
Frank Ove Reite
Lone Fønss Schrøder
Svein Oskar Stoknes
Kathryn Baker
Luis Antonio G. Araujo
Asle Christian Halvorsen
Stian Sjølund
Henning Jensen
Title
CEO
CFO
Chairperson
Deputy chair
Director
Director
Director
Director, elected by employees
Director, elected by employees
Director, elected by employees
2023
700 000
135 083
200 000
4 400
1 297
45 683
-
10 000
10 000
-
2022
600 000
105 083
200 000
4 400
1 297
45 683
-
10 000
10 000
-
Note 31 | Events after reporting date
In February 2024, the maturity of corporate bank facilities and subordinated Aker facilities was extended to June and July 2024, respectively.
Annual Report 2023 | 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
Note 8 | Borrowings
Note 9 | Guarantees
Note 10 | Financial risk management
Note 11 | Related parties
Note 12 | Shareholders
Note 13 | Subsequent events
69
70
71
72
73
74
74
75
75
76
76
77
78
79
79
80
80
Annual Report 2023 | Financials and Notes | Akastor ASAFinancials and Notes | Akastor ASA 70
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
2023
2022
2
2
3
4
9
(41)
(32)
(256)
(288)
4
(285)
(285)
(285)
1
(40)
(40)
(429)
(468)
12
(457)
(457)
(457)
Annual Report 2023 | 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
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
Current borrowings, external
Other liabilities to group companies
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
71
Note
2023
2022
4
5
7
7
7
6
8
7
16
3 990
500
1
4 506
143
9
-
152
4 658
162
(1)
2 000
2 007
(512)
3 656
962
39
2
1003
1003
4 658
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
Fornebu, March 19, 2024 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 2023 | Financials and Notes | Akastor ASA
72
Akastor ASA | Statement of cash flow
For the year ended December 31
Amounts in NOK million
Profit (loss) before tax
Adjustments:
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
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 335 million as of December 31, 2023 (NOK 304 million in 2022).
Note
3
7
2023
(288)
204
106
21
(3)
(65)
(46)
-
-
110
(94)
8
25
11
(11)
11
-
2022
(468)
355
111
(3)
(28)
(41)
(71)
(34)
(34)
756
(731)
40
65
50
11
-
11
Annual Report 2023 | Financials and Notes | Akastor ASA
73
Note 1 | Accounting principles
Akastor ASA (the parent company) is a company domiciled in Norway. The
Cash in cash pool system
financial statements are presented in conformity with Norwegian Accounting
Akastor ASA has a cash pool that includes the parent company’s cash as
Act and Norwegian generally accepted accounting principles (NGAAP).
well as net deposits from subsidiaries in the group cash pooling system
Revenue recognition
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
Operating revenue mainly comprise parent company guarantees (PCG)
system.
recharged to entities within the group. The revenue is recognized over the
guarantee period.
Share capital
Investments in subsidiaries
Costs for purchase of own shares including transaction costs are accounted
for directly against equity. Sales of own shares are performed according
Investments in subsidiaries are measured at cost in the parent company
to stock-exchange quotations at the time of award and accounted for as
accounts, less any impairment losses. The investments are impaired to
increase in equity.
fair value if the impairment is not considered temporary. Impairment losses
are reversed if the basis for the impairment loss is no longer present.
Cash flow statement
Investments in subsidiaries and associates are reviewed for impairment
The statement of cash flow is prepared according to the indirect method.
whenever events or changes in circumstances indicate that the carrying
Cash and cash equivalents include cash, bank deposits and other short-
amount may exceed the fair value of the investment.
term liquid investments.
Dividends, group contributions and other distributions from subsidiaries are
Functional currency and presentation currency
recognized as income the same year as they are recognized in the financial
The parent company’s financial statements are presented in NOK, which
statement of the provider. If the dividends or group contributions exceed
is Akastor ASA’s functional currency. All financial information presented in
withheld profits after the acquisition date, the excess amount represents
NOK has been rounded to the nearest million (NOK million), except when
repayment of invested capital, and is recognized as a reduction of carrying
otherwise stated. The subtotals and totals in some of the tables in these
value of the investment.
financial statements may not equal the sum of the amounts shown due to
Classification
Current assets and current liabilities include items due within one year or
Foreign currency
rounding.
items that are part of the operating cycle. Other balance sheet items are
Transactions in foreign currencies are translated at the exchange rate
classified as non-current assets/debts.
applicable at the date of the transaction. Monetary items in a foreign
currency are translated to NOK using the exchange rate applicable on the
Non-current borrowings are presented as current if a loan covenant breach
balance sheet date. Foreign exchange differences arising on translation are
exists at balance date. If a covenant waiver is approved subsequent to
recognized in the income statement as they occur.
year-end and before the approval of the financial statements, the liability
is presented as non-current debt to the extent maturity date is beyond one
Tax
year.
Tax income (expense) in the income statement comprises changes
in deferred tax. Deferred tax is calculated as 22 percent of temporary
Measurement of borrowings and receivables
differences between accounting and tax values as well as any tax losses
Financial assets and liabilities consist of investments in other companies,
carry-forward at the year end. Net deferred tax assets are recognized only
trade and other receivables, interest-bearing receivables, cash and cash
to the extent it is probable that they will be utilized against future taxable
equivalents, trade and other payables and interest-bearing borrowing.
profits.
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.
Annual Report 2023 | Financials and Notes | Akastor ASA 74
Note 2 | Operating revenue and expenses
Operating revenue comprises NOK 9 million in income from parent company
NOK 3.3 million has been allocated to payable fees to the Board of Directors
guarantees (NOK 1 million in 2022).
for 2023 (2022: NOK 3.2 million). Remuneration to and shareholding of the
Board of directors and CEO is described in Remuneration Report 2023.
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 1.2 million
by other Akastor companies and costs for their services as well as other
exclusive VAT (2022: NOK 1.1 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
Interest expense, related parties
Impairment of shares in group companies
Other financial expenses
Net foreign exchange gain (loss)
Net financial items
2023
2022
56
76
(143)
(26)
(204)
(1)
(14)
(256)
41
52
(101)
(7)
(355)
(9)
(50)
(429)
Annual Report 2023 | Financials and Notes | Akastor ASA Note 4 | Tax
Amounts in NOK million
Calculation of taxable income
Profit (loss) before tax
Impairment of shares in 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)
75
2023
2022
(288)
204
5
80
-
(3)
(21)
(1 554)
(1 578)
22%
347
(332)
16
-
4
4
(468)
355
9
104
-
2
(21)
(180)
(199)
22%
44
(32)
12
-
12
12
1) In February 2024, the Norwegian Tax Appeals Board overturned a 2020 decision from the tax authorities. Following the decision from the Tax Appeals Board, the tax
authorities dropped a similar case. The total disputed amount was NOK 1 455 million. The tax loss carry-forward has been correspondingly increased.
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- /
voting share
Fornebu, Norway
Fornebu, Norway
1 004
-
1
1 000
100%
100%
Financial information in group companies 2023 (unaudited)
Amounts in NOK million
Profit (loss) for the period
Equity as of December 31
2023
2 678
1 312
3 990
2022
2 882
1 312
4 194
Akastor AS
Mercury
Holdco AS
(206)
2 632
63
1 477
Annual Report 2023 | Financials and Notes | Akastor ASA
76
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, 2022
Treasury shares transaction
Profit (loss) for the period
Equity as of December 31, 2022
Treasury shares transaction
Profit (loss) for the period
Equity as of December 31, 2023
162
-
-
162
-
-
162
(1)
-
-
(1)
-
-
2 000
2 003
-
-
2
-
2 000
2 005
-
-
2
-
(1)
2 000
2 007
229
-
(457)
(227)
-
(285)
(512)
Total
4 393
2
(457)
3 939
2
(285)
3 656
The share capital of Akastor ASA is divided into 274 000 000 shares with a
treasury shares held by the end of 2023 was 1 813 974 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 171 190 treasury shares to employees was carried out in 2023
in connection with the company’s variable pay program. The number of
Note 7 | Receivables and borrowings from group companies
Amounts in NOK million
2023
2022
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 liabilities to group companies
Total other receivables on group companies
1) Includes group companies’ borrowings in the cash pool system.
(136)
136
-
500
143
643
(39)
(39)
(121)
131
11
500
126
626
(40)
(40)
Interest-bearing receivables on and borrowings from group
cash pool is vested in the group’s policy and decided by each company’s
companies
board of directors and confirmed by a statement of participation. The
Akastor ASA is the group’s central treasury function (Akastor Treasury)
participants in the cash pool system are jointly and severally liable and
and enters into borrowings and deposit agreements with group companies.
it is therefore important that Akastor as a group is financially viable and
Deposits and borrowings are done at market terms and are dependent of
can repay deposits and carry out transactions. Any debit balance on a sub
the group companies’ credit rating and the duration of the borrowings.
account can be set-off against any credit balance. Hence, a debit balance
represents a claim on Akastor ASA and a credit balance a borrowing from
Cash pool arrangement
Akastor ASA.
Akastor ASA is the owner of the cash pool system arrangements with DNB.
The cash pool systems cover a majority of the group geographically and
The cash pool system has a net overdraft of NOK 24 million as of December
assure good control and access to the group’s cash. Participation in the
31, 2023 (net cash of NOK 11 million in 2022).
Annual Report 2023 | Financials and Notes | Akastor ASA
77
Note 8 | Borrowings
Amounts in million
Currency
Nominal
currency
value
Carrying
amount (NOK)
Maturity 1)
Interest terms 2)
2023
Revolving credit facility (USD 60 million)
Revolving credit facility (NOK 241 million)
Subordinated Aker facility (NOK 375 million)
Overdraft facility
Total borrowings
Current borrowings
Total
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Total borrowings
Current borrowings
Total
USD
NOK
NOK
NOK
USD
NOK
NOK
60
241
82
-
66
200
16
616
241
82
24
962
962
962
656
198
16
870
870
870
June 2024
USD LIBOR + margin 5.5 %
June 2024
July 2024
NIBOR + margin 5.5 %
NIBOR + margin 12%
February 2024
USD LIBOR + margin 5.5 %
February 2024
NIBOR + margin 5.5 %
March 2024
NIBOR + margin 10%
1) In February 2024, the maturity date of Revolving credit facilities and Aker facility was extended to June and July 2024, respectively.
2) Commitment fee is 40 percent of the margin.
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 February 2024, the maturity date of the revolving credit facilities was
consolidated level.
extended to June/July 2024. Under the loan agreements, the financial
covenants are a gearing ratio based on net debt/equity, an equity ratio
The covenants are monitored on a regular basis by the Akastor Treasury
based on equity/total assets and a minimum liquidity amount.
department to ensure compliance with the loan agreements which are
tested and reported on a quarterly basis. Akastor was in compliance with
its covenants as of December 31, 2023. 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 2023 | Financials and Notes | Akastor ASA
78
Financial liabilities and the period in which they mature
Amounts in NOK million
2023
Revolving credit facility (USD 60 million)
Revolving credit facility (NOK 241 million)
Subordinated Aker facility (NOK 375 million)
Overdraft facility
Total borrowings
2022
Revolving credit facility (USD 66 million)
Revolving credit facility (NOK 250 million)
Subordinated Aker facility (NOK 250 million)
Total borrowings
Carrying
amount
Total
undiscounted
cash flow 1)
6 months
and less
6–12 months
1–2 years 2)
616
241
82
24
962
656
198
16
870
654
253
89
24
1 020
668
217
16
901
654
253
-
24
931
35
9
-
43
-
-
89
-
89
32
9
-
40
-
-
-
-
-
602
200
16
818
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
2023
468
3 008
217
-
3 693
31
265
1 499
1 508
390
2022
639
4 017
232
1
4 889
45
1
555
3 623
665
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 with 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. Akastor Group’s share of net pension liability related to the plan amounted to NOK 1
million as of December 31, 2023. Aker ASA guarantees for The Resource Group TRG AS’ liability and covers for all its expenses related to the pension plan.
Annual Report 2023 | Financials and Notes | Akastor ASA 79
Note 10 | Financial risk management
Currency risk
The company’s exposure to currency risk is primarily against USD as the company has external borrowings denominated in USD. As of December 31, 2023
or 2022, Akastor ASA had not entered into any forward exchange contracts.
Interest rate risk
The company is exposed to changes in interest rates because of floating interest rate on loan receivables and loan payables. The company does not hedge
transactions exposure in financial markets and does not have any fixed interest rate loan receivables nor loan payables. The company is therefore not
exposed to fair value risk on its outstanding loan receivables or loan payables. Interest bearing loan receivables and loan payables expose the company to
income statement and cash flow interest risk.
Interest-bearing borrowings to group companies reflect the cost of external borrowing, reducing the interest risk exposure for Akastor ASA.
Credit risk
Credit risk is the risk of financial losses to the company if a customer or counterparty fails to meet contractual obligations. Credit risk relates to loans to
subsidiaries and related parties, guarantees to subsidiaries and related parties and deposits with external banks. External deposits are done according to a
list of approved banks and primarily with banks where the company also have a borrowing relationship.
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
obligations from future earnings. No impairment related to receivables from group companies was recognized in 2023 or 2022. See Note 7 Receivables and
borrowings from group companies for more information about receivables.
Liquidity 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 sufficient
cash and available credit facilities. Due to the dynamic nature of the underlying businesses, Akastor Treasury maintains flexibility in funding by maintaining
availability under committed credit lines. Development in the group’s and thereby Akastor ASA’s available liquidity is continuously monitored through monthly
cash flow forecasts, annual budgets and long 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 2023 | Financials and Notes | Akastor ASA 80
Note 12 | Shareholders
Shareholders with more than 1 percent shareholding as per December 31
Company
2023
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
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
Note 13 | Subsequent events
Nominee
Nominee
Nominee
Nominee
Number of
shares held
Ownership
100 565 292
42 339 755
33 100 085
18 025 544
17 441 290
4 000 000
3 300 000
36.70%
15.45%
12.08%
6.58%
6.37%
1.46%
1.20%
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%
In February 2024, the maturity of Akastor’s corporate credit facilities and the subordinated Aker facility was extended to June and July 2024, respectively.
Annual Report 2023 | Financials and Notes | Akastor ASA
05. AUDITOR'S REPORT
81
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 2023, 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 2023, 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 material accounting policy information.
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 2023, and its financial performance and its cash flows for the year then ended in
accordance with the 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 2023, and its financial performance and its cash flows for the year then ended
in accordance with IFRS Accounting 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.
We have been the auditor of the Company for two years 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.
The Group’s business activities are largely unchanged compared to last year. We have not identified
regulatory changes, transactions or other events that qualified as new key audit matters this year. Accuracy
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 2023 | Auditor's ReportAuditor's Report
82
of Equity-accounted Investees and Valuation of Other Investments and Trade and Other Receivables have
the same characteristics during 2023, and consequently have been areas of focus also for this year’s audit.
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 57% of the
Group’s total assets. Any year-on-year fluctuations
in Akastor’s share of the JVs 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 15 “Equity-accounted
investees”.
We tested the shares of equity-accounted
investees recognised by management in the
statement of financial position and the
corresponding financial statement line items in the
income statement and statement of comprehensive
income, against financial reports of the JVs. The
JVs’ financial reports were communicated to us by
component audit teams who, as instructed by us,
performed audit work related to the JVs for
purposes of the Group audit.
To evaluate the reliability of the JVs financial
reports, we obtained an understanding of the JVs,
held discussions with Akastor’s management and
collaborated with the component audit teams. We
were involved in the component audit teams’ risk
assessment, including the susceptibility of material
misstatement due to fraud or error. We also
reviewed their audit plan with regards to identified
significant risks, and challenged their audit
response to areas subject application of judgment.
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 of the JVs to express an
opinion on the Group’s financial statements.
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Annual Report 2023 | Auditor's Report
83
Finally, we considered the adequacy of disclosures
in notes related to equity-accounted investees and
found them to be appropriate.
Valuation of Other Investments and Trade
and Other Receivables
Other Investments and Trade and Other
Receivables amount to approximately 27% 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.
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.
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 16 “Other Investments”. See note
18 “Trade and Other Receivables” for disclosure on
trade and other receivables.
We challenged the key assumptions applied by
management in the valuation model. Specifically,
we discussed with management to challenge their
view on ebitda, growth, net working capital and net
interest-bearing debt, peer groups, ev/ebitda
valuation multiples 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. Other receivables relate mainly to the
Group’s economic interest in four terminated
construction contracts with Jurong Shipyard. We
discussed with management the impact of the
terminated contracts on the valuation of Other
receivables.
To evaluate the valuation assessment, we tested
key assumptions applied. 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
3 / 6
Annual Report 2023 | Auditor's Report
84
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 obtained in the audit, or whether the
Board of Directors’ report and the other information accompanying the financial statements otherwise
appears 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 of the Company 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 of the consolidated financial statements of the Group
that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU.
Management is responsible 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 opinion on the
4 / 6
Annual Report 2023 | Auditor's Report
85
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, actions taken to
eliminate threats or safeguards applied.
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_2023-12-31, have been prepared, in all material respects,
in compliance with the requirements of the Commission Delegated Regulation (EU) 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.
5 / 6
Annual Report 2023 | Auditor's Report
86
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, 20 March 2024
PricewaterhouseCoopers AS
Anders Ellefsen
State Authorised Public Accountant (Norway)
6 / 6
Annual Report 2023 | Auditor's Report
87
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.
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.
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)
2023
5
601
606
-
(34)
(305)
(339)
267
2022
5
769
774
(2)
(31)
(498)
(531)
243
Annual Report 2023 | Alternative Performance MeasuresAlternative Performance Measures 88
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
2023
2022
5 279
267
-
19
(550)
-
(82)
(255)
-
-
(34)
-
5 497
243
162
208
(668)
(4)
(96)
(459)
(162)
(3)
(85)
11
4 645
4 645
2023
236
1 133
1 369
(144)
1 225
(550)
675
2023
3 970
6 048
66%
2023
144
335
479
2022
198
1 142
1 340
(119)
1 220
(668)
553
2022
4 092
6 804
60%
2022
119
304
423
Annual Report 2023 | Alternative Performance Measures 07. BOARD OF DIRECTORS
89
Frank O. Reite | Chairperson of the Board
Frank O. Reite joined Aker in 1995 and served as CFO in Aker ASA from 2015 until 2019. He is
currently working as an advisor. He holds a B.A. in business administration from BI Norwegian
Business School in Oslo. Prior to his role as Aker’s CFO, Mr. Reite held the position as President
& CEO of Akastor, and has previously 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. Mr. Reite
has been the Aker ASA’s deputy chair and head of the Audit Committee since April 2021. Mr. Reite
is also currently chair of Solstad Maritime Holding AS, Converto AS, Norron AB, and, among
others, director of AMSC ASA, Solstad Offshore ASA and Aker BioMarine ASA.
As of March 19, 2024, 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. Fønss Schrøder serves as an independent director. As of March 19, 2024, 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 the Chief Financial Officer (CFO) of Aker ASA since 2019. Prior to
this, he served as CFO of Aker Solutions ASA, where he joined in 2007 and was named CFO in
2014. Stoknes has also held a range of senior positions within finance and advisory for organizations
like Tandberg, Citigroup, Norwegian Trade Council and ABB. He graduated from the Norwegian
School of Management with a master’s degree in business and economics, and has an MBA from
Columbia Business School in New York. Stoknes is a director of Aker Capital AS and several other
companies where Aker is the largest shareholder.
As of March 19, 2024, 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 2023 | Board of DirectorsBoard of Directors 90
Kathryn M. Baker | Director
Kathryn M. Baker has over 30 years of experience in a broad range of industries and roles. She
is currently Chairwoman of Terra Mater Investment Management and is a Board member of MPC
Energy Solutions and InoBat. In addition, Ms. Baker serves on the investment committee of the
DFI Norfund. Ms. Baker was previously a member of the Executive Board of the Central Bank of
Norway (Norges Bank), the European Advisory Board of the Tuck School of Business and she led
the Ethics Committee of the Norwegian Private Equity and Venture Capital Association (NVCA)
where she was also 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 with McKinsey & Co 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 Tuck School of Business at Dartmouth
College.
Ms. Baker serves as an independent director. As of March 19, 2024, Ms. Baker holds 45,683
shares in the company. She is an American and Norwegian citizen and has been elected for the
period 2023-2025.
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 Chairman 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 19, 2024, Mr. Araujo holds no shares and
no stock options in the company. Mr. Araujo has triple citizenship; Brazilian, British and Portuguese and
has been elected for the period 2023-2025.
Henning Jensen | Director, Elected by the employees
Henning Jensen currently works as a specialist engineer in project control 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 19, 2024, Mr. Jensen holds no shares or stock options in the company. Mr. Jensen is
a Norwegian citizen and has been elected for the period 2023-2025.
Annual Report 2023 | Board of Directors 91
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 19, 2024, he holds 10,000 shares in the company. Mr. Halvorsen is a Norwegian
citizen. He has been elected for the period 2023-2025.
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 19, 2024, he holds 10,000 shares in the company. Mr. Sjølund is a Norwegian citizen
and has been elected for the period 2023-2025.
Annual Report 2023 | Board of Directors 92
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 19, 2024, 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 19, 2024, Paaske holds 135,083 shares in Akastor ASA.
Annual Report 2023 | ManagementManagement 93
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
akastor.com
DDW OFFSHORE
Oksenøyveien 10, 1366 Lysaker, Norway
PO Box 124, 1325 Lysaker, Norway
ddwoffshore.com
AKOFS Offshore
Karenslyst Allé 57, 0277 Oslo, Norway
PO Box 244, 0213 Oslo, Norway
+47 23 08 44 00
akofsoffshore.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
Annual Report 2023 | Company InformationCompany Information X
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