A N N U A L R E P O R T
2 0 2 2
CONTENTS
HIGHLIGHTS
2
3
4
5
6
8
Highlights
Key figures
About Prosafe
Main events in 2022
CEO letter
Corporate Governance
18
Directors’ report
31
Declaration by the Board of Directors and the CEO
33
Consolidated accounts
70
Parent company accounts
87
Independent auditor’s report
Revenues
198.9
million USD
2021: 141.1
EBITDA
61.4
million USD
2021: 24.9
Employees
182
2021: 103
Fleet utilisation
70.6%
2021: 54.5%
Biodiversity
0spills
2021: 0
Safety
0Lost Time Injury Incidents
2021: 0
Health
1.31%
sickness absence
2021: 0.27%
Operations
1,738
operating days
2021: 1,407
KEY FIGURES
Profit
Operating revenues
EBITDA
Operating profit (loss)
Net profit (loss)
Earnings per share (fully diluted)
Balance sheet
Total assets
Interest-bearing debt
Net interest-bearing debt
Book equity
Book equity ratio
Liquidity reserve
Net cash flow
Net working capital
Valuation
Market capitalisation at year-end
Share price
Operations
Fleet utilisation rate
Employees
MUSD
MUSD
MUSD
MUSD
USD
MUSD
MUSD
MUSD
MUSD
%
MUSD
MUSD
MUSD
MUSD
NOK
%
Note
2022
2021
2020
2019
2018
1
2
3
4
5
6
7
198.9
61.4
31.9
1.5
0.17
500.0
422.2
330.6
37.3
7.5
91.6
17.7
79.7
1,128.0
128.2
141.1
24.9
(49.8)
927.9
263.3
492.8
423.3
349.4
36.3
7.4
73.9
(86.4)
61.7
158.0
158.4
56.7
(9.5)
(864.3)
(950.1)
225.4
97.1
(342.6)
(399.9)
(10,798.2)
(4,540.0)
587.7
1,509.4
1,349.1
(948.5)
(161.4)
160.3
(37.8)
1,480.2
1,397.9
1,199.8
2.4
0.2
198.1
57.8
(1,279.3)
(1,158.2)
330.8
166.6
53.0
(114.5)
(1,300.0)
1,736.8
1,243.0
1,102.7
400.2
23.0
277.3
(91.6)
58.7
10.4
1,080.0
19.7
2,110.0
126.7
13,400.0
70.6
54.5
20.4
50.9
47.3
Number of employees at year-end
Employees in direct employment
182
103
99
150
417
HSSE
Lost time injuries
Total recordable injury frequency
Sick leave
Per million worked hours
Per million worked hours
% of total working hours
0
0
1.31
0
0
0.27
0
1.81
0.46
0
0.82
2.26
1
2.54
2.07
Notes: 1. Operating profit before depreciation and impairment
2. Net profit / Average number of outstanding and potential shares.
3. Interest-bearing debt - Cash and deposits
4. (Book equity / Total assets) * 100
5. Cash and deposits
6. Currents Assets - Current Liabilities
7. On 27 January 2022, Prosafe completed a 1,000:1 reverse split of the company's shares. As a result, the calculation
of the earnings per share and share price for prior year presented/restated was based on the new number of shares
3
ABOUT PROSAFE
Prosafe is a leading owner and operator of semi-submersible
accommodation, safety and support vessels.
At year-end, Prosafe owned and/or operated six
semi-submersible accommodation, safety and
support vessels and one Tender Support Vessel
(TSV). In addition, the company has options to take
delivery of two new build vessels at the yard.
via a telescopic gangway to the client’s installation
so that personnel can safely walk to work. The
vessels are normally provided on a time charter
basis where Prosafe mans and operates the vessels
directly.
The company’s versatile fleet of five dynamically
positioned, two anchor moored and one passive
position moored vessels are capable of operating in
the most demanding offshore environments.
Prosafe’s vessels have accommodation capacity
for up to 500 people and offer high quality welfare
and catering facilities, storage, workshops, offices,
a cinema, medical services, deck cranes and
lifesaving and firefighting equipment.
Prosafe’s vessels are serving energy
companies on various offshore
projects, primarily in global
offshore oil and gas areas,
but can also serve offshore
wind installations. Prosafe’s
operations are related to the
support of the lifecycle of offshore
installations such as maintenance
and modification of installations on
fields already in production, hook-up
and commissioning of new fields, tie-backs to
existing infrastructure and decommissioning.
Prosafe has
experience from
operations offshore Norway,
United Kingdom, US and
Mexican Gulf of Mexico, Brazil,
Australia, South East Asia
and West Africa.
Prosafe has a long track record from
demanding operations world-
wide, with leading operational
performance and good safety
results. The company has extensive
experience from operating gangway
connected to fixed installations,
FPSOs, TLPs, Semis and Spars.
Prosafe has experience from operations
offshore Norway, United Kingdom, US and
Mexican Gulf of Mexico, Brazil, Australia,
South East Asia and West Africa.
The vessels are operated in dynamic positioning
(DP) mode by use of own engines and thrusters or
in a moored mode, while being gangway connected
Prosafe is listed on the Oslo Stock Exchange
with ticker code PRS.
Vision
To be a leading and innovative provider of
technology and services in selected niches of
the global offshore energy industry.
Mission
To provide customers with innovative and
cost-efficient solutions in order to maximize
shareholder value and to create a challenging
and motivating workplace.
Strategy
To be the preferred provider of high-end
accommodation vessels globally.
Values
Profitability, Respect, Innovation, Safety,
Ambition, Focus, the Environment
4
MAIN EVENTS
IN 2022
• Good health, safety and environmental results
with zero Lost Time Injuries and zero accidental
discharges to the natural environment.
• The fleet utilisation for the year was 70.6 per cent
(2021: 54.5 per cent), the highest utilisation rate
since 2014.
• Secured new contracts for Safe Concordia in
Trinidad and in the US Gulf of Mexico, and two
four-year contracts for Safe Notos, Safe Eurus and
a 650-day contract for Safe Zephyrus in Brazil.
• Certified to the ISO 50001 Energy Management
standard in January 2022.
• Further increased focus on energy management
and emissions reduction and established an Energy
Management team to drive the effort.
55
CEO LETTER
2022 – TAILWINDS FOR OFFSHORE ENERGY
2022 was a very busy year for Prosafe with the highest fleet
utilisation since 2014.
Global events turned the focus to security of energy supply
which may provide tailwinds for the offshore service
industry for the coming years.
The global energy agenda pivoted around February
2022 and changed direction with 180 degrees in 180
days - from focusing on leaving hydrocarbons in the
ground at COP26 in Glasgow in November 2021, to
ensuring security of energy supply from dependable
sources in the spring of 2022.
a stable and dependable supply of energy to ensure
an orderly transition. This will likely create tailwinds
for the oil services industry in the years to come
and generally take time. It also demonstrates the
industry’s valuable contribution to the security and
economic well-being of our societies.
Although the energy transition is both inevitable and
desirable, 2022 was a stark reminder of the need for
The society’s requirement to businesses to reduce
their environmental impact has further intensified
in 2022. We have done the same in Prosafe and will
play our part. The first important reduction steps
were taken in 2022 when a new engine configuration
reduced CO2 emissions by 15-20 % for a dynamically
positioned rig. To further improve, we have set
a target of 50% emission reduction by 2030 and
established an Energy Management team to drive the
effort. Meeting the target will require harnessing our
decades of competence with tomorrow’s technology
6
and ways of working, as well as support from our
customers. Our vessels are the main driver behind the
emission reduction targets.
The strategy in Prosafe stands on a number of
strategic pillars which aim at maximizing the value
of our existing assets and growing our fleet and
our business to remain the leading player within
our niche. We have included the organisation in
setting the strategic priorities and have improved
our performance management tools. Prosafe is
managed with the aim to create competitive
shareholder value, opportunities for our
employees and a positive impact on
our surroundings.
In 2022, we saw revenue grow
by 41% and EBITDA increase by
147%. We added almost 10 years
of contract backlog for our vessels
working for Petrobras in Brazil.
We had 6 of our 7 vessels working
for all or part of the year in Norway,
UK, Trinidad & Tobago and Brazil. We had
high operational and commercial activity, and
our co-workers have been very busy in 2022. Their
contribution has been vital to our ability to operate
safe and cost-efficiently. Thank you!
The focus on security of energy supply bodes well
for the activity in our core markets in the North Sea
and Brazil. In Brazil, the production infrastructure will
grow in the years to come with a number of new
FPSOs coming on stream. Our activities in Brazil
are mainly linked to the regular maintenance and
modification of the production infrastructure. In the
North Sea, 2022 has seen a record high number of
Plans for Development and Operation submitted in
Norway and many projects sanctioned in the UK.
High activity in the early parts of the value chain
traditionally translate into demand for our services /
vessels during implementation, although it is too
early to say when and where. We expect day rates to
continue to further improve and deem it likely that
situations of scarce supply of our services may
occur in the coming years as activity looks
to be increasing with supply remaining
stable or declining.
Health and safety lies at the heart
of what we do and we promote a
zero-mindset philosophy which
means that no accidents or incidents
are acceptable. Our health and safety
statistics in 2022 are very good and
include zero Lost Time Incidents (LTI)
and sick leave of just 1.31%. The key is the
continued daily focus on the activities which form
the basis for achieving and maintaining excellence in
health and safety.
We continued our increasingly more important
ESG work in 2022. Main projects were the ongoing
emission reduction project, a climate risk review in
accordance with the Task Force on Climate-related
Financial Disclosures, a reassessment of our material
impact, the implementation of required actions to
In 2022, we saw
revenue grow by 41%
and EBIDTA increase by 147%.
We added almost 10 years of
contract backlog for our
vessels working for
Petrobras in Brazil.
comply with the Norwegian Transparency Act and
an adaptation of our Environmental, Social and
Governance (ESG) reporting to comply with the
Sustainability Accounting Standards Board reporting
standard. Overall, both the quality and transparency
of our ESG efforts have increased.
The year 2022 has also been characterized by
inflationary cost pressure, longer lead times on
equipment and increasing interest rates. Prosafe
is not immune to these effects. Our lean operating
model and flexible cost structure provide some
cushion against the inflationary cost pressures.
We remain unhedged on our interest expenses.
The outlook for 2023 is somewhat mixed. We will
have three vessels on contract with Petrobras in Brazil
for most of the year and one vessel commencing
working in the USA. The outlook for the North Sea
following a year with very high activity is more
uncertain and may only pick up from 2024 when we
have 2-3 vessel available for hire.
Finally, I would like to thank our shareholders and
lenders for their confidence in and continued support
of Prosafe. We are confident in our ability to benefit
from the tailwind in the industry and thereby protect
and create value for our stakeholders in the years
ahead.
Stay safe,
Jesper Kragh Andresen, CEO
7
CORPORATE
GOVERNANCE
Prosafe SE is committed to ensuring that high standards of corporate governance are maintained to ensure
the greatest possible value creation over time in the best interests of shareholders, employees and other
stakeholders.
Prosafe SE is a European public company (Societas Europaea) listed on the Oslo
Stock Exchange. The corporate governance framework forms the basis for a
transparent business model with a clear segregation of roles, responsibilities
and accountabilities between shareholders, the Board of Directors and executive
management. Corporate governance in the company follows the principles
contained in the Norwegian Code of Practice for Corporate Governance in its latest
version of 14 October 2021 (the “Code of Practice”).
GOVERNANCE STRUCTURE
Prosafe’s governance structure is set out below.
SHAREHOLDERS
Nomination Committee
External Auditor
1. IMPLEMENTATION AND REPORTING
ON CORPORATE GOVERNANCE
This report on Corporate Governance accounts for the company’s corporate
governance principles and practices as required by the Accounting Act Section
3-3b and how Prosafe complies with the Code of Practice. Application of the Code
of Practice is based on the “comply or explain” principle, which stipulates that any
deviations from the Code should be explained. In the company’s own assessment,
Prosafe did not deviate from any sections of the Code of Practice at year-end 2022.
BOARD OF DIRECTORS
Audit Committee
Compensation Committee
MANAGEMENT
Ethics Committee
2. THE BUSINESS
The Code of Practice covers 15 topics which are designed to ensure that the
division of roles between shareholders, the Board of Directors (“the Board”) and the
company’s executive management is regulated in a way that strengthens confidence
among shareholders, employees, the capital market and other interested parties
to ensure control and compliance, equal treatment of shareholders and maximum
value creation over time.
Prosafe’s business is defined in Article 3 of the company’s Articles of Association:
Prosafe SE shall own and operate vessels and other offshore tonnage, related to oil
and gas activities, as well as conduct any activity related to ownership and operation
related to this. Prosafe SE may invest in companies within the same or other sectors.
The company’s Corporate Governance Report covers every section of the Code of
Practice and is included in the annual report and published on Prosafe’s website at
https://www.prosafe.com/investor-information/corporate-governance/
The Board of Directors has established objectives, strategies, and a risk profile
for the business within the scope of the definition of its business to create
value for its shareholders in a sustainable manner, considering economic, social
and environmental considerations. The company’s objectives, strategies and
9
4. EQUAL TREATMENT OF SHAREHOLDERS
Pre-emption rights to subscribe
Should the Board wish to propose that the AGM departs from the pre-emptive
right of existing shareholders relating to any capital increase, such a proposal will
be justified by the common interest of the company and the shareholders, and
the reasons for the proposal will be presented in the notice of the AGM as well
as publicly disclosed in a separate stock exchange announcement.
Trading in own shares
In the event of a share buy-back programme, the Board of Directors will aim to
ensure that all transactions are carried out either through the trading system or
at prevailing prices at the Oslo Stock Exchange. In the event of such programme,
the Board of Directors will take the company's and shareholders' interests into
consideration and aim to maintain transparency and equal treatment of all
shareholders. If there is limited liquidity in the company’s shares, the company
shall consider other ways to ensure equal treatment of all shareholders.
risk profile are subject to at least an annual review by the Board. The reviews
are supplemented by ongoing dialogue between the Board and executive
management, monthly reporting and ad hoc weekly reporting and updates of all
significant matters.
3. EQUITY AND DIVIDENDS
Equity and capital structure
Prosafe’s consolidated shareholders’ equity as at 31 December 2022 amounted to
USD 37.3 million (2021: USD 36.3 million), equivalent to 7.5 per cent (2021: 7.4 per
cent) of the Group’s total assets.
Dividend policy
Prosafe’s longer term ambition is that its shareholders receive a competitive
return on their investment in the company through a combination of share price
appreciation and a direct return in the form of dividends.
The company has not paid dividends since 2015. Under the latest amended and
restated loan agreements, following the restructuring in December 2021, dividends
may only be paid after obtaining prior written consent of two-thirds of the lenders.
Board authorisations
Mandates and authorities for different purposes such as increase
of share capital or share buy-backs are considered separately
at each annual general meeting (“AGM”) and are generally
limited in time and valid to the date of the next AGM. As at
31 December 2022, the Board held no mandates for share
capital increases or share buy-backs.
In January 2022, the company executed a reverse
share split whereby 1,000 shares became
1 share. No equity buy-backs or share
issues were executed during the year.
5. SHARES AND NEGOTIABILITY
Prosafe has one class of shares in issue and all shares are equal in all respects. The
shares are freely transferrable on the Oslo Stock Exchange. The company’s Articles
of Association place no limitations on voting or restrictions or on any party’s ability
to own, trade of vote for shares in the company.
6. GENERAL MEETINGS
The Board of Directors will make its best effort to facilitate that as many
shareholders as possible may attend and exercise their right to speak and vote at
general meetings, thereby making the general meeting an effective forum for the
views of shareholders and the Board. Shareholders holding at least 5 per cent of the
issued and voting shares are entitled to submit matters for inclusion on the agenda
of a general meeting. An extraordinary general meeting (EGM) can be called by the
Board of Directors if deemed necessary or be requested by the company’s auditor or
shareholders representing at least 5% of the company’s share capital.
Written notice of an AGM and a meeting calling for adoption of a special resolution
is sent out not later than twenty-one days before the scheduled meeting unless
special notice is required by law. The resolutions and supporting information
are sufficiently detailed, comprehensive and specific to allow shareholders to
form a view on all matters to be considered at the meeting. Both these and any
recommendations of the Nomination Committee enabling shareholders to take
an informed position on all matters to be discussed are made available within the
relevant timeframe on the company’s website.
Shareholders wishing to attend the general meeting, either in person or online,
must notify the company of this intention before the deadline stipulated in the
notice. The Board aims to facilitate the attendance of as many shareholders as
possible. As stipulated in Prosafe’s Articles of Association, shareholders intending
to participate in the general meeting shall notify the company of this no later than
two days prior to the general meeting.
The Chairman (or in exceptional circumstances, another member of the Board), the
auditor and the Chairman of the Nomination Committee attend the AGM. Prosafe
wishes to facilitate a dialogue with shareholders at the general meeting, and
therefore encourages all Board members to attend. The Chairman normally chairs
the general meetings and the Board ensures that the general meeting is able to
appoint an independent chairman.
Prosafe prepares proxy forms and conducts the voting arrangements at the
meeting in a form and manner which allows shareholders to vote separately
on each matter to be considered by the meeting and for each of the candidates
nominated for election.
The 2022 AGM was held on 11 May 2022 with 59.22 per cent of the share capital
represented.
7. NOMINATION COMMITTEE
The Nomination Committee is governed by the Articles of Association’s section 8.
The AGM on 11 May 2022, re-elected the following two members for the
Nomination Committee for a period of one year: Thomas Raaschou (Chair) and
Annette Malm Justad. The committee members are independent of the Board of
Directors and executive management.
The general meeting stipulates the guidelines for the duties of the committee and
determines the committees’ remuneration. The current instructions were revised in
2019 and approved by the AGM.
The Nomination Committee submits its recommendations to the general meeting
for election of and compensation to members of the Board of Directors, in addition
to members of the Nomination Committee. Each proposal is justified on an
individual basis. All shareholders may nominate candidates to the Board. Relevant
deadlines for submitting proposals for candidates to be appointed to the Board or
the Nomination Committee are published on the company’s website in due time
before the AGM takes place.
11
The Nomination Committee held twelve meetings in 2022. Average meeting
attendance was 100 per cent.
Name
Thomas Raaschou
Role
Chair
Annette Malm Justad
Member
May 2016
May 2023
Date
first time
appointed
Date
due for
re-election
Meeting
attendance
(%)
May 2011
May 2023
100
100
8. BOARD OF DIRECTORS:
COMPOSITION AND INDEPENDENCE
Pursuant to the articles of association section 5, the company's Board of Directors
shall consist of three to seven members. On 31 December 2022, the Board
consisted of five members as described in the table below. The directors are
appointed for one year and all directors may be re-elected in 2023. The general
meeting appoints the Chairman of the Board. At the AGM on 11 May 2022, Halvard
Idland was elected as a new member of the Board. The remaining four members
were re-elected.
The Board held 15 Board meetings in 2022. Average meeting attendance was 98.5
per cent.
Name
Role
Date
first time
appointed
Date
due for
re-election
Meeting
attendance
(%)
Glen Ole Rødland
Chairman March 2016
May 2023
Alf C. Thorkildsen
Deputy
Chairman*
May 2020
May 2023
Birgit Aagaard-Svendsen
Director
March 2017
May 2023
Nina Udnes Tronstad
Halvard Idland
Director
Director
May 2019
May 2023
May 2022
May 2023
100
100
93.3
100
100
*Alf C. Thorkildsen was appointed Deputy Chairman in February 2022
The Board members are independent of the company’s executive personnel and
material business contacts and save for Alf C. Thorkildsen also independent of the
company's main shareholders.
The directors have been appointed to ensure that a broad base of appropriate
expertise, capacity and diversity is reflected on the Board. Working constructively
together with its committees’ and the company’s administration, the Board
oversees the strategic direction, targets, reporting, management and control of the
company.
Directors are encouraged to own shares in the company. Information about each
director, their experience and shareholding is available on Prosafe’s website.
9. THE WORK OF THE BOARD
OF DIRECTORS (“THE BOARD”)
The duties of the Board
The Board of Directors is responsible for the overall management of the company
and supervision of day-to-day management and the company’s business activities,
including organisation, strategy, planning, reporting, and establishing of control
systems. This includes regulation of the duties of the Board of Directors and
the Chief Executive Officer (CEO), the division of work between the Board of
Directors and the CEO, the annual plan for the Board of Directors, notices of Board
proceedings, administrative procedures, minutes, Board committees, transactions
between the company and the shareholders and confidentiality. The Board of
Directors has an annual plan for its work which is revised at regular intervals.
Agreements with related parties
Any transactions, agreements or arrangements between the company's
shareholders, members of the Board, members of the executive management
team or close associates of any such parties may only be entered into as part
of the ordinary course of business and on arm's length market terms. All such
transactions shall, where relevant, comply with the procedures set out in the
Norwegian Public Limited Liability Companies Act and the Norwegian Code of
Practice for Corporate Governance.
12
The Board shall arrange for a valuation to be obtained from an independent
third party for transactions with related parties, including agreements that
are considered immaterial. The Board's annual directors' report shall provide
information about any transactions with related parties. The Board will when
required or otherwise deemed appropriate arrange for a valuation to be obtained
from an independent third party.
Board members shall immediately notify the Board and members of the executive
management team shall immediately notify the CEO (who, where relevant,
will notify the Board) if they have any material direct or indirect interest in any
transaction entered into by the company. For information regarding related party
transactions, see note 21 of the consolidated accounts.
Instructions for the Board
Prosafe’s Board Instructions give an overview of function, duties and responsibility
of the Board, including procedures for Board meetings. The Board shall determine
the vision, values and long-term objectives of the company. The Board shall also
contribute with external expertise and experience to the company's management.
The Board has adopted instructions for management specifying their respective
duties, authority and responsibilities in relation to the business. The CEO has a
particular responsibility for ensuring that the Board receives precise, relevant and
timely information enabling it to discharge its duties.
Scheduled Board meetings are normally held six to eight times a year, but the
work schedule is flexible and otherwise adaptable to take into account relevant
commercial, operational and strategic circumstances. Internal segregation of
responsibilities and duties between the Board and management is established in
several corporate documents including corporate policies and procedures, approval
matrices and delegated authorities, Board approvals for budgets and forecasts
and specific investments, and the grant of specific powers of attorney in respect of
particular transactions.
The Chairman has a particular responsibility for ensuring that the Board’s work is
well organised and efficiently conducted. The Chairman of the Board encourages an
open and constructive debate within the Board and with management.
The Board’s evaluation of its own work
The Board undertakes an annual assessment of its own performance and expertise,
working methods, composition and the manner in which the directors function,
both individually and collectively, in relation to the goals set for their work. In
this context, the Board also assesses itself in relation to corporate governance.
The assessment is made available to the Nomination Committee as a tool for
continuous improvement.
Conflicts of interest and disqualification
The Board has implemented various policies and procedures to avoid conflicts of
interest between directors, executive management, their close associates and
external third parties with whom the company collaborates.
Members of the Board and executive management cannot consider items in which
they have a special and prominent interest, cf. the rules on disqualification in the
Public Companies Act.
Directors and executive personnel must notify the Board if they have any material
direct or indirect personal interest in any agreement concluded by the group.
Neither the Board members nor the CEO shall participate in the preparation,
deliberation, or resolution by the Board of any matters that are of such special
importance to themselves or any of their related parties that the person in question
is deemed to have a prominent personal or financial interest in these matters. The
relevant Board member or the CEO shall raise the issue of his or her independence
whenever there may be cause to question it and 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.
Throughout the year, no potential conflicts of interest have been declared by any
members of the Board or of Executive Management. In the event of any potential
conflict of interest, appropriate action will be taken to protect against such
potential conflicts which includes for example the individual not participating
in the relevant part of the Board meeting and/or abstaining from voting on the
relevant matter.
13
Audit Committee
The Audit Committee is a sub-committee of the Board of Directors, and acts as a
preparatory body in connection with the Board's supervisory roles with respect to
financial reporting and the effectiveness of the company's internal control system.
It also attends to other tasks assigned to it in accordance with the instructions for
the Audit Committee adopted by the Board of Directors. At 31 December 2022, the
Audit Committee comprised Board members Birgit Aagaard-Svendsen (Chair) and
Halvard Idland. Both are considered independent of the company and have relevant
skills and experience within accounting or auditing.
The Committee operates based on a generic annual plan and undertakes
an examination and evaluation of the adequacy and effectiveness of the
organisation’s governance, risk management and internal controls, monitors the
financial reporting process and prepares the Board’s follow up on such issues.
The Audit Committee is tasked from time to time with the carrying out of special
investigations designed to assess the overall risk management system within the
Group.
The Audit Committee meets six to eight times a year and holds closed sessions
with the appointed auditor on at least an annual basis without the company’s
management being present. The appointed auditor participates at all Audit
Committee meetings.
The Audit Committee reports and makes recommendations to the Board of
Directors, but the Board of Directors retains responsibility for implementing such
recommendations.
The Audit Committee held six meetings in 2022. Average meeting attendance was
100 per cent.
Name
Role
Date
first time
appointed
Date
due for
re-election
Meeting
attendance
(%)
Birgit Aagaard-Svendsen
Chair
May 2017
May 2023
Glen O. Rødland
Halvard Idland
Member
Member
May 2020
Resigned
May 2022
May 2022
May 2023
100
100
100
Compensation Committee
The Compensation Committee is a sub-committee of the Board and its objective
is to act as a preparatory body for the Board’s work relating to employment
terms and performance review for the CEO as well as strategy and principles for
remuneration of executive management. The Compensation Committee operates
based on a generic annual plan. At 31 December 2022, the committee comprised of
Board members Nina Udnes Tronstad (chair) and Alf C. Thorkildsen, who are both
independent of the company’s executive management.
The Compensation Committee held six meetings in 2022. Average meeting
attendance was 100 per cent.
Name
Nina Udnes Tronstad
Role
Chair
Date
first time
appointed
Date
due for
re-election
Meeting
attendance
(%)
May 2019
May 2023
Alf C. Thorkildsen
Member
May 2020
May 2023
100
100
14
10. RISK MANAGEMENT
AND INTERNAL CONTROL
The Board is responsible for ensuring that sound internal control and risk
management systems, that are appropriate for the extent and nature of the
company’s activities, are in place. The Board conducts an annual review of all risk
areas and the internal control procedures.
Prosafe categorises its primary risks under the following headings: strategic,
commercial, operational, compliance and legal, financial, climate and IT/Cyber-
security related. The Board and senior officers manage these risks through
continuous assessments, reporting and periodic reviews in management and
Board meetings, and as part of the rolling strategy and planning processes. These
risks and associated sensitivities as well as internal control measures are described
in more detail at https://www.prosafe.com/investor-information/corporate-
governance/risk-management/ and in a separate Risk Management Policy.
The risk management methodology applied by management and the Board is in
accordance with industry and market practices generally and as implemented in
Prosafe over several years.
The Audit Committee assesses the integrity of Prosafe’s accounts and follows up
on behalf of the Board on issues related to financial review and external audit of
Prosafe’s accounts. Furthermore, the Board and the Audit Committee supervise and
verify that effective internal control systems are in place, including systems for risk
management and financial reporting, and satisfactory routines for following up
adherence to the company’s ethical guidelines.
Management maintains a risk and opportunity register that includes all risks
of material significance for the company. This register is reviewed regularly in
Board meetings and is followed up by management and the Board in the form of
strategies and mitigating actions. The Board conducts also an annual review of all
risk areas and the internal control system.
All significant tenders and projects are reviewed by the company’s Bid Committee.
The scope of the reviews includes all aspects which may impact the financial results
and good reputation of Prosafe. The Bid Committee acts to safeguard and support
tender processes to ensure client tenders have an acceptable balance between risk
and reward, and that awarded projects are driving risk mitigating measures in order
to meet quality, delivery and financial targets. The committee has an advisory role
towards the tender and subsequent project teams within authorities provided by
the Board.
11. REMUNERATION OF THE BOARD
The AGM resolves directors’ fees based on the recommendation from the
Nomination Committee. The remuneration of the Board reflects its responsibilities,
expertise, time commitment and the complexity of the business.
The remuneration of the Board is not linked to the company’s performance
and none of the current Board directors have a pension scheme or agreement
concerning pay after termination of their office nor have they received any share
options.
Board
USD 110,000
USD 84,000
USD 68,000
Chair
Deputy Chair
Directors
In addition, a fee of USD 1,500 is payable to directors, Board Committee members
and Board representatives to the Nomination Committee attending Board or
Committee meetings held away from their home country.
Information relating to the total remuneration to the Board for 2022 is set out in
note 6 of the consolidated accounts.
15
The fees payable to the members of the Board Committees are as follows:
Committee
Chair
Members
and Board
representatives
Nomination Committee
USD 7,500
Compensation Committee USD 15,000
Audit Committee
USD 20,000
USD 5,000
USD 10,000
USD 10,000
Other
Additional USD
850 per meeting
N/A
N/A
Based on the need for directors to be independent of the company’s executive
personnel, none of the directors has any specific assignments for Prosafe beyond
their role as director.
12. REMUNERATION OF
EXECUTIVE PERSONNEL
The Board determines the terms of employment of the CEO and executive
management and has prepared guidelines for salary and other remuneration which
are clear and easily understandable and contributes to the company’s commercial
strategy, long-term interest and financial viability.
Remuneration for executive management comprises three principal elements, base
pay, variable pay and other benefits such as pension to ensure convergence of the
interests of executive management and shareholders. Prosafe aims to provide a
competitive total remuneration to attract and retain senior executives with the
desired skills and experience.
The variable pay of executive management is performance related and cannot
exceed the executive’s gross annual salary for the same calendar year. The amount
paid to an executive under the short-term incentive program and long-term
incentive program combined cannot exceed five times his/her annual fixed cash
remuneration in the relevant year. The variable pay is linked to the operations
and development of the company and aligned with the Prosafe’s strategy, ethical
guidelines and values to support sustainable value creation for shareholders.
The Executive Remuneration Policy and the Board’s Report on Executive
Remuneration were presented to and adopted by the AGM in 2022. The report
was presented for a consultative vote, except for the part regarding guidelines for
share-based remuneration or remuneration linked to the company’s share price
development which were subject to a separate vote. For further details relating
to remuneration paid to executive management, see note 6 of the consolidated
accounts and the Executive Remuneration Policy and the Board’s Report on
Executive Remuneration attached to the 2022 AGM notice.
13. INFORMATION AND COMMUNICATION
Prosafe has adopted an investor relations policy which covers guidelines for the
company’s contact with shareholders and the financial community. In order
to ensure equal treatment of shareholders for the purpose of creating a good basis
for a fair and correct pricing of the company’s financial instruments, Prosafe aims
to provide clear, up-to-date and timely financial and other information about
the company’s operations to the financial market. This shall take place through
the timely distribution of price-sensitive information to the market, at all times
handled in compliance with applicable market rules and practices.
Prosafe publishes interim reports and presentations on a quarterly basis. Investor
presentations in the form of audiocast or webcast are held in connection with
the reporting of annual and interim results to give an overview of operational
and financial developments. An ongoing dialogue is otherwise maintained with
analysts and investors. All information distributed to the company’s shareholders is
published in English on the company’s website at the same time as it is sent to the
Oslo Stock Exchange and www.newsweb.no.
14. TAKE-OVERS
There are no defence mechanisms against take-over bids in Prosafe’s Articles
of Association, nor have any other measures been implemented to specifically
hinder acquisitions of shares in the company. The Board has not established
written guiding principles for how it will act in the event of a take-over bid, as such
situations normally are specific and one-off by nature, which make a guideline
challenging to prepare.
16
If an offer is made for the company’s shares, the Board will ensure that all
shareholders are treated equally and seek to ensure that the company’s activities
are not unnecessarily interrupted. The Board will act in the best interest of
shareholders and ensure that they have sufficient information and time to assess
the offer. The Board will prior to the expiry of the offer period, issue a statement
evaluating the offer and make a recommendation as to whether shareholders
should or should not accept the offer. In such a situation, Prosafe will act in
accordance with the applicable principles for good corporate governance.
15. AUDITOR
The company’s external auditor is KPMG AS. The auditor is appointed by the general
meeting and is independent of Prosafe SE.
Each year, the auditor presents the audit plan for the company to the Audit
Committee. The auditor also meets with the full Board at least once a year in
connection with the preparation of the annual financial statements and a review
of the financial reporting and internal control procedures, including weaknesses
identified by the auditor and proposals for improvement. At least once a year, the
independent auditor meets with the Board without the presence of any member of
executive management.
The Audit Committee supports the Board in the administration and exercise of
its responsibility for supervision of the auditor’s work, who shall keep the Board
informed of all aspects of its work for Prosafe.
The auditor attends all Audit Committee meetings.
Company policies govern the use of the auditor’s services. Use of the auditor for
services other than the audit of Prosafe requires approval by the Audit Committee.
The renumeration of the auditor is approved by the AGM. Fees for audit work and
other services are reported by the Board to the General Meeting. For more details,
see note 7 of the consolidated accounts.
28 March 2023
The Board of Directors of Prosafe SE
(original signed)
Glen Ole Rødland
Non-executive Chairman
Alf C. Thorkildsen
Non-executive Deputy Chairman
Birgit Aagaard-Svendsen
Non-executive Director
Nina Udnes Tronstad
Non-executive Director
Halvard Idland
Non-executive Director
Jesper K. Andresen
Chief Executive Officer
17
17
DIRECTORS’ REPORT
The directors present their annual report of Prosafe SE (the “Company” or the “Parent Company”) and its
subsidiaries (the company and its subsidiaries referred to as the “Group” or “Prosafe”) together with the
Group’s and the Parent Company’s audited financial statements for the year ended 31 December 2022.
INTRODUCTION
The Parent Company, Prosafe SE, is legally domiciled
in Norway and is the ultimate owner of all Group
companies.
In December 2021, the company concluded a financial
restructuring and established a more sustainable
capital structure. The restructuring followed the
general downturn in oil and gas activity as well as
structural changes to the industry. Prosafe used the
downturn to adapt its operating model, rightsize its
organisation and enhance its fleet while continuing
safe and efficient operations.
Specifications for each of the vessels and details of
the current contracts can be found on the company’s
website https://www.prosafe.com/fleet/vessels/
During 2022, Prosafe experienced high fleet activity,
increased order backlog and improved financial results
from its operations. This was driven by a strong oil
price as well as increased maintenance activity by
operators.
STRATEGY
Prosafe’s strategy is to be the preferred supplier
of high-end offshore accommodation vessels
globally. Prosafe expects continued demand for
accommodation vessels and services in the coming
years amid a gradual energy transition. Prosafe
believes sector returns will improve on the back of
increased oil and gas activity and a reduced supply of
accommodation rigs globally.
Safe Zephyrus operated for bp at ETAP in the UK
North Sea from 22 January until 21 December 2022.
On 8 December 2022, Petrobras chartered the Safe
Zephyrus to provide gangway connected operations
in Brazil from 1 May 2023. The contract has a firm
period commitment of 650 days with a contract value
of approximately USD 73 million (equivalent to USD
112,500 per day). Certain contract and regulatory
compliance scopes must be performed to ensure
contract commencement in May 2023.
Safe Boreas completed a contract on the Norwegian
Continental Shelf between 1 May 2022 and 29 July
2022. A UK client chartered the Safe Boreas to provide
gangway connected operations to support a platform
in the UK North Sea from 22 September 2022 to 1
November 2022. The vessel is now in lay-up in Norway
pending future work.
OPERATIONS AND PROJECTS
As at year-end, the fleet comprised seven fully owned
vessels, plus options for two new builds, the Safe Nova
and the Safe Vega, at yard in China. During 2022, a
typhoon damaged the new builds and the yard has
initiated repairs.
The Safe Caledonia remained in-field and on a
stand-by day rate until early March 2022. On 7
March 2022, Safe Caledonia re-started operations
for TotalEnergies at the Elgin platform in the UK. The
contract was successfully completed on 2 December
2022 and the vessel is currently laid up in the UK
pending future work.
19
Safe Eurus has been providing safety and maintenance
support to Petrobras in Brazil since November 2019
on a contract with a firm duration until February
2023. On 25 May 2022, Safe Eurus was awarded a
four-year contract with Petrobras which commenced
on 17 February 2023, following from the expiry of
the last contract. The total value of the contract
is approximately USD 126 million. Safe Eurus was
originally expected to be off-hire for approximately
35 days in April/May 2023 for Petrobras contract
compliance works and hull cleaning. The off-hire
period has now been moved to Q1 2024. Prosafe will
in parallel execute the vessel’s next Special Periodic
Survey (SPS) which is due in Q2 2024.
Safe Notos has been operating for Petrobras in Brazil
since December 2016. Safe Notos commenced a new
four-year contract with Petrobras on 18 July 2022, in
direct continuation of the previous contract. The total
value of the new contract is approximately USD 110
million. Safe Notos is expected to be off-hire in May
2023 during which Petrobras contract modification
and hull cleaning will be conducted.
Safe Concordia commenced a contract in Trinidad
and Tobago in July 2021. The contract was initially
scheduled to complete in mid-March 2022. BP
chartered the vessel in direct continuation of the
previous contract and Safe Concordia continued
operations in Trinidad until 30 September 2022. In
October, Prosafe announced a contract with a major
operator to provide accommodation support in the
US Gulf of Mexico. The firm duration of the contract,
commencing within a window of July through
September 2023, is 330 days with up to 6 months of
options. The value of the firm period is approximately
USD 33 million. A standby rate of USD 28,000 per day
has been agreed for the period from 1 August 2023
until commencement. Safe Concordia is laid up in
Curaçao where ramp-up and mobilization works have
started for the upcoming project in the US Gulf of
Mexico.
Safe Scandinavia is laid up in Norway and is being
marketed broadly.
Prosafe is focused on the efficient execution of
mobilization and preparations for the contracts in
Brazil and the US Gulf of Mexico with commencement
in 2023. These will require investments and working
capital during the first half of 2023. In addition, the
company is preparing for potential contracts in 2024.
Prosafe is increasing its efforts within Environmental,
Social and Governance (ESG) related factors including
energy management to reduce energy consumption
and emissions and to comply with laws and
regulations. Prosafe does not undertake specific
Research & Development activities. However,
the company has established an Energy
Management team to focus on energy
management to adapt to the global
ambition to achieve energy efficiency,
reduce emissions and assure
compliance with ISO 50001.
Prosafe received formal
ISO 50001 certification
in January 2022.
20
ORDER BACKLOG
The total order backlog1) on 31 December 2022
amounted to USD 357 million (USD 152 million)
of which USD 332 million relates to firm contracts
and USD 25 million relates to options. Secured
utilisation for 2023 is currently 41.6 per cent, while
secured utilisation for 2024 is 49.8 per cent.
CORPORATE SOCIAL
RESPONSIBILITY
AND ESG REPORTING
Prosafe views Corporate Social Responsibility
(CSR) as an integral part of being an efficient and
value-generative business. Prosafe is committed to
maintaining high ethical, social, environmental and
governance standards, identifying, addressing and
reporting its ESG impact, and creating sustainable
values for the benefit of its stakeholders and the
society at large wherever the company operates.
The company uses internationally recognised
standards for identifying (GRI) and reporting
(Sustainability Accounting Standards Board) material
ESG topics. In 2022, Prosafe completed several
significant ESG projects: a materiality review of
material ESG topics using GRI 3 Materiality Standard,
a climate risk review that covered the risk categories
described in the TCFD framework, an independent
GHG emissions accounting (including scope 3
emissions where data available), and an ESG reporting
upgrade including SASB Marine Transportation and Oil
and Gas Services Standards.
In 2022, Prosafe reviewed its responsible supply chain
process and initiated a number of actions as part of
the implementation of the Norwegian Transparency
Act.
A full Norwegian Transparency Act Statement will
be published on Prosafe’s website together with this
annual report.
MARKETS
North Sea: Norway and UK
The North Sea (UK and Norway) remains a key market
for semi-submersible accommodation vessels. In 2023,
the company has two vessels idle and available for
charter in the North Sea. Beyond 2023, the company
expects higher activity levels due to increased demand
for accommodation to meet project requirements
in both Norway and the UK. Future accommodation
vessel demand will likely be driven by the continued
need for oil and gas throughout the energy transition
1) Order backlog = amount of contracted revenue not yet recognised in the income statement
21
Accommodation supply
The supply side has developed positively since 2016
with a reduction in the number of available units,
largely supported by Prosafe which has sold eight
vessels for recycling while renewing its fleet. Over the
same time period, two competitors have sold one unit
each for recycling.
and high energy prices which drive investments
in field development and maintenance as well as
investments in offshore renewable energy generation.
Brazil
The main demand driver in Brazil is maintenance and
modification work on the large and growing fleet
of FPSOs. Semi-submersibles remain the preferred
design for long term charter contracts with Petrobras
as units for maintenance and safety (UMS). Prosafe
classifies the region as a core market. Demand for
large accommodation vessels fell from its peak of
nine vessels in 2015 to five vessels in mid-2018. It is
forecasted that there will be a long-term requirement
for seven to ten vessels in Brazil.
The most recent awards by Petrobras in 2022 reflect
day rates increasing from approximately USD 75,000
to USD 112,500. In addition, other international
operators have required accommodation vessels to
support both newer installations and aging assets
owned and/or leased by Equinor, Shell, Modec and
SBM. UMS demand is expected to increase with the
planned installation of a large number of new FPSOs
in Brazil the coming the years, and Prosafe expects
further tenders in 2023 and beyond.
Rest of the world
Demand for semi-submersible offshore accom-
modation units in geographical markets outside the
North Sea and Brazil is characterized by low visibility.
Opportunities are monitored and pursued on an
opportunistic basis. In the US Gulf of Mexico, semi-
submersible accommodation vessels have operated on
occasions. In 2022, the company secured a contract for
2023 in the US Gulf of Mexico.
Globally, there are approximately 20 to 25 offshore
accommodation vessels available for operation. The
company expects a bifurcation of the market where
the high-end modern DP3 vessels will show better
performance/cashflow over time. The fleet of high-end
vessels is currently estimated at 12 to 15 vessels.
Prosafe remains the market leader with seven vessels
including a Tender Support Vessel (TSV) currently in
cold lay-up. The company has options for two high-end
semi-submersible vessels currently stacked with Cosco
in China. Prosafe’s main competitor has five vessels
while the remaining fleet is generally distributed
amongst various owners. Prosafe maintains that the
industry would benefit from further consolidation and
vessel recycling and anticipates that this will occur in
the years ahead.
Energy transition
Prosafe supports the transition to renewable energy
to prevent further global warming and due to the
finite nature of fossil fuels. The transition process will
be complex and require substantial resources over
time. This includes development of new solutions
for carbon capture, energy management, alternative
fuels, electrification and new ways of working. Prosafe
expects continued high activity in the oil and gas
industry in the foreseeable future, with a parallel focus
on investments in energy management and efforts to
reduce carbon intensity and emissions. These efforts
are over time expected to provide the company with
new business opportunities.
HEALTH, SAFETY, SECURITY
AND THE ENVIRONMENT
(HSSE)
Robust HSSE performance is fundamental to all
of Prosafe’s operations and is therefore reflected
in its core values. Prosafe works proactively and
systematically to reduce incidents, injuries and
absence.
22
Prosafe operates a zero-accident mindset philosophy
which means that no accidents or serious incidents
are acceptable. A number of initiatives have been
implemented over the years in order to further
strengthen the safety culture. These and new
initiatives will be continuously developed in order to
improve safety performance further.
In 2022, Prosafe recorded zero incidents classified
as a Lost Time Injury (LTI) (2021: 0), i.e. those injuries
resulting in an employee being absent from the next
work shift due to the injury. Sick leave was 1.31 per
cent in 2022, an increase from 0.27 per cent in 2021.
Prosafe had no accidental discharges to the natural
environment in 2022 and continues to actively reduce
emissions by modernizing and adapting its fleet and
operating procedures and practices. In 2022, Prosafe
continued its focus on the energy management
side of environmental management. The company
was accredited according to ISO 50001 Energy
Management in January 2022.
The impact to the external environment from
Prosafe’s operations is reported in detail in the ESG
report which is published together with this annual
report and available on the company’s website.
HUMAN RESOURCES
AND DIVERSITY
Due to the nature of the company’s business which is
characterised by both long- and short-term contracts
with international mobilisations, the offshore
headcount will increase and decrease depending on
the nature of the contract. The offshore crews in
certain geographical locations consist partly of agency
personnel engaged short-term for specific contracts.
Prosafe had 182 employees at the end of 2022
(average 192), compared with 103 in the previous year
(average 97). This increase is largely a result of the
nationalization of crew in Brazil where the company
has long-term contracts.
The voluntary employee turnover in the Group
was 20.6 per cent in 2022, compared with 11.2 per
cent in 2021. This increase is mainly due to short
term contracts during the period. Upon concluding
the contracts, the employed crew sourced other
employment resulting in an increase in voluntary
turnover.
Prosafe operates an equal opportunity policy
including gender equality. Men have, however,
traditionally made up a greater proportion of the
recruitment base for offshore operations, and this
is reflected in Prosafe’s gender breakdown. Prosafe
aims to offer the same opportunities to all and there
is no discrimination with respect to recruitment,
remuneration or promotion, age, disability, gender,
marriage and civil partnership, pregnancy and
23
maternity, nationality, religion or belief, and sexual
orientation. More detailed information can be found
in the ESG report published together with this annual
report.
CORPORATE GOVERNANCE
Corporate governance in the Group is based on
the principles contained in the Norwegian Code of
Practice for Corporate Governance of 14 October
2021. There are no deviations from Code of Practice in
2022. The Group’s full corporate governance report is
available in a separate section in this annual report.
Sound corporate governance is a priority for
maintaining and strengthening confidence in Prosafe
among shareholders, capital market and other
stakeholders. Corporate governance helps to ensure
maximum value creation over time in the best interest
of shareholders, employees and other stakeholders.
At the Annual General Meeting held on 11 May
2022, all members of the Board were re-elected,
with Halvard Idland elected as a new member to the
Board. Hereafter, the Board of Directors consists of
five non-executive Directors. Glen Ole Rødland was
re-elected as chairman. The remuneration of the
members of the Board is disclosed in note 6 to the
consolidated accounts.
The company has a Directors & Officers liability
insurance that covers Directors and executive
management. The total limit of the coverage is
USD 40 million.
As at 31 December 2022, Birgit Aagaard-Svendsen
owned 3 shares in Prosafe and Nina Udnes Tronstad
owned 6,000 shares. Glen Ole Rødland controls
100,000 shares through the investment company
Gross Management AS, and has an indirect ownership
interest in Prosafe through his ownership interest in
North Sea Strategic Investments. Alf C. Thorkildsen
FINANCIAL RESULTS,
FINANCING AND FINANCIAL
POSITION OF THE GROUP
(The figures in brackets correspond to the 2021
comparatives)
INCOME STATEMENT
Operating revenues totalled USD 198.9 million in
2022 (2021: USD 141.1 million), with fleet utilisation2)
increasing to 70.6 per cent (54.5 per cent). The
increase in utilisation reflects a combination of
execution of contracts deferred from previous years,
as well as new contracts and extensions.
Operating expenses increased to USD 137.5 million
(USD 116.2 million), mainly due to higher activity.
Depreciation, amortization and impairment
amounted to USD 29.5 million (USD 74.7 million).
The prior year included a non-recurring impairment
of USD 40.6 million following the judgement in the
Westcon dispute legal appeal case.
The operating profit was USD 31.9 million (loss of
USD 49.8 million).
has an indirect ownership interest in Prosafe through
his ownership interest in North Sea Strategic
Investments and HitecVision VI Invest Sierra.
Interest expenses totalled USD 18.7 million (USD 37.9
million). Lower interest expenses were mainly the
result of reduced debt following the completion of
financial restructuring in December 2021. For further
2) Utilisation = actual vessel days in operation in the period / possible vessel days in the period x 100
24
information, refer to note 10 and note 14 of the 2022
consolidated accounts.
upgrades and maintenance to comply with contract
requirements.
Financial items other than interest expenses
amounted to negative USD 3.4 million (positive USD
1,018.7million). The prior year was impacted by a
one-off financial gain of USD 1,030.5 million, arising
from the completion of the financial restructuring
in December 2021. Refer to note 9, 10 and 14 of the
consolidated accounts for more details.
Taxes for 2022 in the amount of USD 8.3 million (USD
3.1 million) were mainly related to operations in
Trinidad and Tobago (USD 6.6 million), Brazil and UK.
Net profit amounted to USD 1.5 million (net profit
of USD 927.9 million), resulting in earnings per share
of USD 0.17 (USD 263.27). Fully diluted earnings
per share were USD 0.17 (USD 263.27). In January
2022, Prosafe completed a 1,000:1 reverse split
of the company's shares to satisfy the minimum
requirement to market value of the issuer’s shares
for listed companies. In May 2022, the company
reduced the nominal value of its shares from EUR
50 to EUR 1.25 per share. As a result, there was a
reduction in share capital of USD 485.1 million and a
corresponding increase in retained earnings.
FINANCIAL POSITION
Total assets amounted to 500.0 million (USD 492.8
million) at the end of 2022. Investments in tangible
assets totalled USD 10.2 million (USD 17.3 million).
The investments in 2022 mainly relate to vessel
At year-end 2022, the Group had a total liquidity
reserve in the form of liquid assets (cash and deposits)
of USD 91.6 million (USD 73.9 million). Total restricted
cash at year-end 2022 was USD 2.2 million (USD 2.4
million).
Total shareholders’ equity amounted to USD 37.3
million positive (USD 36.3 million), resulting in an
equity ratio of 7.5 per cent (7.4 per cent).
Interest-bearing debt was to USD 422.2 million (USD
423.3 million) at year-end.
The interest-bearing debt agreements are subject to
termination, repayment or buy back clauses in the
event of a change of control of the Group (as control
is defined in the relevant agreements). The Group was
in compliance with the only financial covenant of USD
18 million minimum cash at year-end 2022.3) Please
refer to note 14 of the 2022 consolidated accounts for
further information.
Net cash flow in 2022 was positive USD 17.7 million
(USD 86.4 million negative). Improved net cash
flow in 2022 was mainly due to improved cashflow
from operating activities in 2022, as well as lower
repayments to lenders, as a result of the financial
restructuring in December 2021. Net cash flow from
operating activities amounted to USD 49.2 million
(USD 23.4 million). The improvement in operational
cashflow was mainly driven by increased vessel
utilisation. Total cash investment in tangible assets
was mostly related to compliance works and contract
requirements and amounted to USD 10.2 million
(USD 17.3 million).
FINANCIAL RESULTS AND FINANCIAL
POSITION OF THE PARENT COMPANY
The net loss for the year amounted to USD 13.0 million
(profit of USD 803.9 million, mainly arising from
the completion of the financial restructuring). Net
financial gain amounted to USD 21.0 million
(USD 944.0 million gain).
Total net assets for the year amounted to USD 0.1
million (USD 12.3 million).
DIVIDENDS
Prosafe's long-term objective is to provide
shareholders with a competitive, risk-adjusted yield
on their shares through a combination of share price
appreciation and direct return in the form of dividend.
Under the latest amended and restated facility
agreements following the restructuring in December
2021, dividends may only be paid after obtaining prior
written consent of two thirds of the lenders.
As the company has resolved to reduce the share
capital for coverage of loss that cannot be covered
otherwise without notice to the creditors, a resolution
3) The Minimum Liquidity is calculated on each quarter date and excludes cash balance held under the New Group (Safe Eurus Singapore Pte. Ltd., Axis Nova Singapore Pte. Ltd. and Axis Vega Singapore Pte. Ltd).
As of end December 2022, the New Group’s cash position was USD 10.7 million.
25
to distribute dividends may not be adopted until
three years have elapsed from the registration in
the Norwegian Register of Business Enterprises in
May 2022 unless the share capital subsequently has
been increased by an amount at least equal to the
reduction.
GOING CONCERN
The Board of Directors confirms that the accounts
have been prepared under the assumption that
the company is a going concern. A slow North Sea
market in 2023 combined with working capital and
investments required for new contracts is expected to
have a significant negative impact on liquidity in 2023.
Based on the Group's 12 month cashflow forecast, the
company foresees a possible breach of the minimum
liquidity covenant of USD 23 million from the second
half of 2023. As a result, the USD 250 million and
USD 93 million credit facilities may become due and
payable. Refer to Note 14 for information on the
minimum liquidity covenant. This results in material
uncertainty related to Group’s ability to continue as
a going concern and therefore whether the Group
will realise its assets and settle its liabilities in the
ordinary course of business in the next twelve months.
In response to the situation, management and the
board are pursuing various options, including further
working capital management, cost savings, potential
minor asset disposals and fund raising to ensure
sufficient liquidity. The company may also request a
waiver of any potential breach of covenants which will
require the consent of 2/3 of the lenders. Although it is
too early to conclude what the outcome will be, the
board has determined that the actions taken and
options available are sufficient to mitigate the
uncertainty and has therefore prepared the financial
reporting on a going concern basis. For more infor-
mation refer to note 2 of the consolidated accounts.
SHAREHOLDERS
AND SHARE CAPITAL
According to the shareholder register as at 31
December 2022, the 20 largest shareholders held a
total of 77.8 per cent of the issued shares. The number
of shareholders was 4,834.
Significant shareholdings as at 31 December 2022 are
presented in note 13 to the consolidated accounts and
are updated bi-weekly on the company’s website
26
at https://www.prosafe.com/investor-information/
shareholder-information/largest-stakeholders/
As at 31 December 2022, Prosafe had an issued share
capital of 8,798,699 ordinary shares, all at a nominal
value of EUR 1.25 each.
Selected employees have been offered share options
to the company’s shares as an element of employee
renumeration. If the company has own shares, the
company may allot own shares instead of issuing new
shares when share options are exercised. All share
options are offered at strike prices that reflect the
market price of the shares at the time of allotment of
the rights.
The company’s loan agreements include change of
control clauses as well as restrictions on mergers,
acquisitions, investments, additional financial
indebtedness and dividends. The loan agreements
also include a cash sweep provision and a quarterly
minimum liquidity covenant. Lender consent under
the loan agreements requires two-thirds lender
approval. More information is provided in note 14 to
the consolidated accounts.
Further information on the share capital and changes
are described in note 13 to the consolidated accounts.
executives
manage these
risk factors through
continuous risk assessments,
reporting and periodic reviews in
management and Board meetings, and as part
of the rolling strategy and planning processes.
The Group aims to create shareholder value by
allocating capital and resources to the business
opportunities that yield the best return relative to the
risk involved within its specified strategic direction.
Commercial risk comprises macro factors such as
oil price and industry specific factors such as the
supply/demand balance, competitive position, new
development solutions, climatic conditions, and new
ways of executing offshore projects.
RISK
Prosafe categorises its primary risks under the
following headings: strategic, commercial, operational,
compliance and legal, financial, climate and cyber-
security related. The Group’s Board of Directors and
Prosafe seeks to reduce its exposure to operational,
financial and compliance related risk through proper
operating routines, the use of financial instruments
and insurance policies. Following the restructuring
completed in December 2021, the company has not
utilised any financial instruments or entered into any
hedging agreements. The company has no hedging
facilities available post the restructuring.
Demand for accommodation units is among others
sensitive to oil price fluctuations and changes in
exploration and production spending. Demand is also
sensitive to impacts from the energy transition which
may pose both opportunities and threats. In addition,
the demand for accommodation units is sensitive to
other incidents that may impact the general state of
the world economy, general activity and spend levels,
27
and demand for natural resources. Global incidents
like pandemics and conflicts with a material impact
on capital markets and the oil price may negatively
impact activity in the oil and gas industry, and thereby
also demand for accommodation services.
The Group is exposed to financial risks such as
currency risk, interest rate risk, financing and liquidity
risk, credit risk and counterparty risk.
Prosafe maintains an active overview of and relations
with lenders, capital market participants and investors
to secure the best possible access to capital markets if
and when needed.
Prosafe is exposed to liquidity risk, which is the risk
that Prosafe will not be able to meet its financial
obligations when they become due. Liquidity risk
sources include, but are not limited to, contract
cancellations, customers not paying charter rates
under contracts and low demand for accommodation
vessels in the future. Prosafe manages liquidity at
the Group level as per the Board approved Finance
Policy. The Group monitors the liquidity development
and the risk of insufficient capital by rolling cash flow
forecasts. Liquidity is managed on a low risk and highly
liquid basis, primarily in deposits with its main lending
banks.
Prosafe reports in USD and generates income primarily
in USD, whereas a large part of its operating costs are
in other currencies such as GBP, Euro, Brazilian Real and
Norwegian Krone. The currency mix will, however, vary
with areas of operation. This exposure as identified
based in rolling forecasts may be hedged according
to the Group’s Finance Policy. The interest rate risk
and currency risk is unhedged following the financial
restructuring that was completed in December 2021.
The Group carries out credit checks on clients as part
of its tendering processes and has a history of minimal
loss from debtors. There are no material overdue
receivables as at year-end.
Prosafe is committed to ensuring the highest
standards of data security and privacy for its
employees, stakeholders and clients. To achieve this,
the company complies with GDPR regulations and best
practices, and has in place a number of procedural
and organizational controls and protective measures.
This includes continuous evaluation of new options to
improve cyber-security measures, including control of
remote access to IT and OT systems, and mail security.
Prosafe also runs security awareness campaigns to
educate its employees on best practices for working
from home and maintaining data security vigilance.
Climate risks and opportunities are likely to impact the
business, its strategy and financial planning. Prosafe
has in 2022 undertaken a climate risk review with
support from an independent expert. The company
is exposed to the following risk categories described
in the TCFD framework: physical, regulatory, market,
technology and reputation risks (and opportunities).
Prosafe has a structured approach to monitoring
the development of the accommodation support
market and opportunities created by the transition to
renewable energy sources globally. Using information
from these sources and its ongoing monitoring of
GHG emission performance across the fleet, Prosafe
believes it is well positioned to absorb, mitigate or
adapt to climate-related risks; and, in some cases may
exploit available opportunities.
The Group has no direct exposure to the war in
Ukraine. The recent macroeconomic and geopolitical
developments have supported higher energy prices
amid concerns for regional energy shortages. At
the same time, the same factors have contributed
to global supply chain and logistics challenges,
inflationary pressures and higher interest rates.
Further information on financial risk management is
provided in note 18 to the consolidated accounts.
The main features of Prosafe’s risk management
process are available on the website at https://www.
prosafe.com
28
INTERNAL CONTROLS
Internal control is ensured in accordance with Prosafe’s
policies and procedures which aim to ensure the
effectiveness and efficiency of its operations, reliability
of its financial reporting and compliance with
applicable laws and regulations. These policies and
procedures are designed, inter alia, to safeguard assets
and protect from accidental loss or fraud.
In addition, the policies and procedures are
reinforced by the organisation and the competence
of its personnel, segregation of duties, regular risk
assessments and internal reporting, management
meetings, Board meetings and the Audit Committee,
together with external audit and public reporting and
communication.
In respect of internal controls relating to the
preparation of financial statements, the Board
demonstrates independence from management
and exercises oversight of the development and
performance of internal controls. Management
establishes, with Board oversight, structures, reporting
lines, and appropriate authorities and responsibilities.
In addition to the ongoing reviews by executive
management, annual reviews and assessments are
carried out which are approved by the Board in respect
of risk management and internal controls.
The Group carries out regular reviews to ascertain
whether the internal controls are present and
functioning, and evaluates and communicates any
internal control deficiencies in a timely manner to
those parties responsible for taking corrective action,
including senior management and the Board, as
appropriate. Audits carried out by external parties
like the financial auditor, clients and regulatory
authorities and the reporting and follow-up of these
are important elements to ensure continuous focus on
and improvement of internal controls.
29
OUTLOOK
The market for offshore accommodation vessels
is driven by maintenance, modification and life
extension of existing oil and gas infrastructure as
well as the hook-up and installation of platforms and
FPSOs. Investments in oil and gas activity are expected
to increase significantly in the coming years, which
is expected to lead to higher offshore activity and
demand for accommodation vessels. The transition
to new energy sources, particularly offshore wind and
carbon capture, may in the future also lead to future
opportunities for the accommodation rig market.
Scrapping of legacy vessels has reduced the fleet by
21 per cent since the peak in 2016, improving the
market balance. The segment for high specification
accommodation vessels consist of only 12-15 vessels.
Prosafe has a strong position on the supply side,
owning four high-specification vessels and having
options for two stacked newbuilds at yard in China.
During 2022, accommodation market activity
increased and the utilisation of high specification
vessels reached 80 per cent for the first time since
2015. This reflects what Prosafe considers to be
the early phase of a new long-term oil and gas
investment cycle. For 2023, the company maintains
a focus on capturing relevant market opportunities
and on the efficient execution of mobilization and
preparations for the new contracts in Brazil and the
US Gulf of Mexico. Given the significant investments
needed to prepare for the new contracts in 2023
combined with an expected slow North Sea market,
there is uncertainty as to whether Prosafe will be in
compliance with the minimum liquidity covenant
from the second half of 2023. In response, Prosafe is
pursuing various options, including further working
capital management, cost savings, potential asset
disposals and fund raising to ensure sufficient
liquidity. The company may also request a waiver of
any potential breach of covenants which will require
the consent of 2/3 of the lenders. Although it is too
early to conclude what the outcome will be, the board
has determined that the actions taken and options
available are sufficient to mitigate the uncertainty
and has therefore prepared the financial reporting on
a going concern basis. For more information refer to
note 2 of the consolidated accounts.
Prosafe expects continued demand growth in Brazil
for accommodation, maintenance and safety vessels
driven by an increasing number of FPSOs and new oil
and gas operators. This has already resulted in high
contracting activity in Brazil.
In the North Sea, the company expects higher
maintenance and tie-back activity in the UK and
hook-up operations in Norway from 2024-2025
onwards on the back of increased oil and gas activity
and a record number of new projects planned in
Norway. The activity in the North Sea for 2023 is
expected to be at a record low due to a lack of mature
projects both for maintenance and installation. With a
reduced fleet of accommodation rigs available globally
and increasing demand, Prosafe expects increasing day
rates and activity from 2024 onwards.
The company continues to follow its strategy in a
disciplined manner, which is to increase utilization at
satisfactory day rates in an improving market. As such,
the company has some vessels on long-term contracts,
predominately in Brazil, and others available for short-
term opportunities, mainly in the North Sea.
The company will seek to play an active role in any
future consolidation of the offshore accommodation
market. The company may also consider adjacent
business development opportunities within energy
sector niches as well as other ocean industries where
Prosafe can on a sustainable basis create shareholder
value.
28 March 2023
The Board of Directors of Prosafe SE
(original signed)
Glen Ole Rødland
Non-executive Chairman
Alf C. Thorkildsen
Non-executive Deputy Chairman
Birgit Aagaard-Svendsen
Non-executive Director
Nina Udnes Tronstad
Non-executive Director
Halvard Idland
Non-executive Director
Jesper K. Andresen
Chief Executive Officer
30
DECLARATION BY THE
BOARD OF DIRECTORS AND
CHIEF EXECUTIVE OFFICER
The Board of Directors and the Chief Executive Officer have today considered and approved the annual report
and financial statements for the Prosafe Group and its parent company Prosafe SE for the 2022 calendar year
ended on 31 December 2022.
This declaration is based on reports and statements from the Chief Executive Officer, Chief Financial Officer
and on the results of the Group’s business as well as other essential information provided to the Board of
Directors to assess the position of the parent company and the Group.
TO THE BEST OF OUR KNOWLEDGE:
The 2022 financial statements for the parent company and the Group 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 parent company’s
and the Group’s assets, liabilities, financial position and results taken as a whole as at 31 December 2022.
The Board of directors’ report for the parent company and the Group provides a true and fair overview of the
development, performance, outlook and financial position of the parent company and the Group taken as a
whole, and the most significant risks and uncertainties facing the parent company and the Group.
28 March 2023
The Board of Directors of Prosafe SE
(original signed)
Glen Ole Rødland
Non-executive Chairman
Alf C. Thorkildsen
Non-executive Deputy Chairman
Birgit Aagaard-Svendsen
Non-executive Director
Nina Udnes Tronstad
Non-executive Director
Halvard Idland
Non-executive Director
Jesper K. Andresen
Chief Executive Officer
32
CONSOLIDATED ACCOUNTS
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(USD million)
Charter revenues
Other operating revenues
Operating revenues
Employee benefits
Other operating expenses
Operating profit before depreciation
and impairment
Depreciation
Impairment
Operating profit/(loss)
Interest income
Interest expenses
Other financial income
Other financial expenses
Net financial items
Profit before taxes
Taxes
Net profit
Attributable to equity holders of the parent
Earnings per share (USD)
Diluted earnings per share (USD)
Note
4
4, 5
6
7
8
8
10
9
9
10
11
12
12
2022
169.3
29.6
198.9
(59.2)
(78.3)
61.4
(29.5)
0.0
31.9
0.7
(18.7)
0.6
(4.7)
(22.1)
9.8
(8.3)
1.5
2021
121.8
19.3
141.1
(50.6)
(65.6)
24.9
(33.0)
(41.7)
(49.8)
1.0
(37.9)
(USD million)
Net profit for the year
Other comprehensive income
Items to be reclassified to profit or loss
in subsequent periods:
2022
1.5
2021
927.9
Foreign currency translation
(1.3)
(2.3)
Items that will not be reclassified to profit or loss
in subsequent periods:
Pension remeasurement
(0.1)
(0.1)
1,051.8
Other comprehensive loss for the year, net of tax
(1.4)
(2.4)
(34.1)
980.8
931.0
(3.1)
927.9
Total comprehensive income for the year
attributable to equity holders of the parent
0.1
925.5
1.5
927.9
0.17
0.17
263.3
263.3
34
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(USD million)
Note
Share
capital
Convertible
bonds
Other
equity
Foreign currency
translation
Equity at 31 December 2020
Net profit
Other comprehensive loss
Total comprehensive income
Conversion of convertible bonds
Share issuance through debt conversion
Share capital reduction
Equity at 31 December 2021
Net profit
Other comprehensive loss
Total comprehensive income
Share based payment
Share capital reduction
Equity at 31 December 2022
9.1
0.0
0.0
0.0
0.6
492.6
(4.8)
497.5
0.0
0.0
0.0
0.0
(485.1)
12.4
18.8
0.0
0.0
0.0
(18.8)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(1,007.8)
927.9
(0.1)
927.8
18.2
(433.3)
4.8
(490.3)
1.5
(0.1)
1.4
0.9
485.1
(2.9)
31.4
0.0
(2.3)
(2.3)
0.0
0.0
0.0
29.1
0.0
(1.3)
(1.3)
0.0
0.0
27.8
13
13
13
6
13
Total
equity
(948.5)
927.9
(2.4)
925.5
0.0
59.3
0.0
36.3
1.5
(1.4)
0.1
0.9
0.0
37.3
The legal form of the share capital and the share premium accounts are reflected in the statement of changes in equity of the accompanying parent financial statements.
Other equity includes share premium reserve, capital reduction reserve, share-based payment reserve and retained earnings.
35
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(USD million)
ASSETS
Vessels
Other tangible assets
Total non-current assets
Cash and deposits
Debtors
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Other equity
Total equity
Interest-bearing non-current liabilities
Other non-current liabilities
Total non-current liabilities
Interest-bearing current debt
Accounts payable
Taxes payable
Other current liabilities
Total current liabilities
Total equity and liabilities
Note
31.12.22
31.12.21
8, 16
8
17, 19
17, 18
20
13
14, 17, 18
17
14, 17, 18
17
11
15, 17
376.8
1.2
378.0
91.6
20.6
9.8
122.0
500.0
12.4
24.9
37.3
418.5
1.9
420.4
3.7
3.1
18.0
17.5
42.3
397.0
2.2
399.2
73.9
14.1
5.6
93.6
492.8
497.5
(461.2)
36.3
422.4
2.2
424.6
0.9
1.8
10.7
18.5
31.9
500.0
492.8
On 28 March 2023, the Board of Directors of Prosafe SE approved
and authorised these financial statements for issue.
Glen Ole Rødland
Non-executive Chairman
Alf C. Thorkildsen
Non-executive Deputy Chairman
Birgit Aagaard-Svendsen
Non-executive Director
Nina Udnes Tronstad
Non-executive Director
Halvard Idland
Non-executive Director
Jesper K. Andresen
Chief Executive Officer
36
CONSOLIDATED CASH FLOW STATEMENT
(USD million)
Note
2022
2021
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxes
Net gain from extinguishment of debt
Loss/(Gain) on sale of non-current assets
Depreciation and impairment
Interest income
Interest expenses
Taxes paid
Share-based payment
Change in working capital
Other items from/(used in) operating activities
Net cash provided by operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Net proceeds from disposal of tangible assets
Acquisition of tangible assets
Interest received
Net cash used in investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Repayments of interest-bearing debt
Interests paid
Refinancing costs
Net cash used in financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
14
8
14
8
14
19
9.8
0.0
0.5
29.5
(0.7)
18.7
(1.0)
0.9
(10.4)
1.9
49.2
0.0
(10.2)
0.7
(9.5)
(4.4)
(14.1)
(3.5)
(22.0)
17.7
73.9
91.6
931.0
(1,030.5)
(1.0)
74.7
(1.0)
37.9
(1.3)
0.0
14.6
(1.0)
23.4
1.6
(17.3)
1.0
(14.7)
(77.6)
0.0
(17.5)
(95.1)
(86.4)
160.3
73.9
37
NOTES TO THE CONSOLIDATED ACCOUNTS
NOTE 1: CORPORATE INFORMATION AND PRINCIPAL ACTIVITY
Prosafe SE (the 'Company') is a public limited company domiciled in Norway.
The registered office of the Company is Forusparken 2, 4031 Stavanger, Norway.
The Company is a leading owner and operator of offshore accommodation vessels.
The Company is listed on the Oslo Stock Exchange with ticker code 'PRS'.
The consolidated accounts comprise the financial statements of the Company and
its subsidiaries (together referred to as the 'Group').
The consolidated accounts for the year ended 31 December 2022 were approved
and authorised for issue in accordance with a resolution of the Board of Directors
on 28 March 2023.
NOTE 2: STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
The consolidated accounts have been prepared in accordance with International
Financial Reporting Standards ('IFRS') endorsed by the European Union. The
consolidated accounts have been prepared on a historical cost basis except as
otherwise described in the notes below.
The consolidated accounts are presented in US dollars (USD), and all amounts
have been rounded to the nearest millions, unless otherwise indicated. Adding up
rounded figures and calculating percentage rate of changes may result in slight
differences compared with totals arrived at by adding up component figures which
have not been rounded.
The accounting policies adopted are consistent with those in the previous financial
years.
CRITICAL JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated accounts requires Management to
make critical judgments, estimates and assumptions that affect the reported
amounts of revenue, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the end of the reporting period. However, uncertainty about
these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in future
periods.
The estimates and assumptions are assessed on a continuous and regular basis. The
estimates and assumptions which have the most significant effect on the amounts
recognised in the financial statements are as follows:
GOING CONCERN. During the year, the Group has won three long-term contracts
for Safe Zephyrus, Safe Notos and Safe Eurus with Petrobras in Brazil, in addition to
a contract for Safe Concordia in the US Gulf of Mexico. With these new contracts,
the Group has increased its order books significantly from last year. Refer to note
4 for the Group’s order book as at 31 December 2022. The new contracts require
working capital and investments to prepare and mobilize the vessels during the
first half of 2023. Approximately 75 percent of the cash from these contracts
will only be received in the second half of 2023. Management also expects weak
demand in the North Sea market in 2023, and there is an increased likelihood that
currently off-hire vessels will not contribute positively to cashflow in 2023. Based
on the Group's 12 months cashflow forecast, management foresees a possible
breach of the minimum liquidity covenant of USD 23 million from the second
half of 2023. As a result, the USD 250 million and USD 93 million credit facilities
may become due and payable. Refer to Note 14 for information on the minimum
liquidity covenant.
This results in material uncertainty related to the Group’s ability to continue
as a going concern and whether the Group will realise its assets and settle its
liabilities in the ordinary course of business in the next twelve months. In response,
management and the Board of Directors are pursuing various options to remain in
compliance with the minimum liquidity covenant:
• Further working capital management, cost savings, potential minor asset
disposals and fund raising to ensure sufficient liquidity
• The Company may request a waiver of any potential breach of covenants which
will require the consent of 2/3 of the lenders.
38
Although it is too early to conclude what the outcome will be, the Board of
Directors has determined that the actions taken and options available are sufficient
to mitigate the uncertainty and has therefore prepared the financial reporting on a
going concern basis.
MODIFICATION OF DEBT. The Group fully implemented and completed a financial
restructuring in 2021 whereby the majority of external debt was refinanced. The
renegotiation of the terms of certain financial liabilities included issuing equity
instruments to creditors to extinguish all or part of the liability.
Management had identified loans that qualify for extinguishment and the
recognition of the reinstated debt as a new liability. Management had assessed
that the financial restructuring resulted in a substantial modification of debt
due to substantially different terms. The terms were substantially different if the
discounted present value of the cash flows under the new terms, including any fees
paid net of any fees received and discounted using the original effective interest
rate, was at least 10% different from the discounted present value of the remaining
cash flows of the original financial liability. In addition, other qualitative factors
such as changes in the type of interest rate and change in covenants were also
considered.
Substantial modifications were treated as an extinguishment, and derecognition
of the existing liability and recognition of a new liability at fair value based on the
new contractual terms. Determining the fair value of the shares issued to creditors
and the recognition of the reinstated debt required the use of judgement and
estimates. The methods applied for fair value calculations included estimations
that were based on publicly available data and managements own assumptions.
The fair value of long-term debt was calculated by determining the net present
value of estimated cash flows applying an estimated market rate for the Group at
initial recognition. The market rate estimate was determined by observing publicly
available terms and conditions of relevant peers’ for similar loans and adjusted
for known differences from the Group’s agreed credit facility terms, as well as the
Group’s new capitalization and value of the vessels. The basis for this estimated
market rate, to which the fair value was sensitive, was not based on observable
input and therefore the fair value of the debts were level 3 estimates.
Upon derecognition of debt, the difference between the carrying amount of the
original liability and the consideration paid was recognised in profit or loss. The
consideration paid included equity instruments, cash transfers and the reinstated
debt. Costs or fees incurred were also recognised within profit and loss as part of
the gain or loss on extinguishment.
DEPRECIATION. Estimated useful life of the Group's accommodation/service
vessels is set at 35 years or less dependent on the age at the time of acquisition
and subsequent refurbishments and as the economic life varies for the various
components on a vessel. Individual components may, however, be depreciated over
shorter periods of time. Refer to note 8 for details.
IMPAIRMENT / REVERSAL OF IMPAIRMENT OF NON-FINANCIAL ASSETS.
Management monitors the performance indicators on an ongoing basis. Every
vessel is seen as an individual cash generating unit (CGU) as they generate cash
inflows that are largely independent of those from other assets or groups of
assets. At each reporting date, management reviews and determines whether
there is any indication of impairment or impairment reversal of the CGU. If any
such indication exists, or when annual impairment testing for an asset is required,
the asset’s recoverable amount is estimated. Changes in the circumstances or
expectations of future performance of an individual asset may be an indicator
that the asset is impaired, requiring the carrying amount to be written down to
its recoverable amount. Impairments are reversed if conditions for impairment are
no longer present. Evaluating whether impairment indicators are present, if an
asset is impaired or if an impairment should be reversed requires a high degree of
judgement and estimates of recoverable amounts may to a large extent depend
upon the selection of key assumptions about the future.
Where recoverable amounts are based on estimated future cash flows, reflecting
the Group’s or market participants’ assumptions about the future and discounted
to their present value, the estimates involve complexity. Impairment testing
requires long-term assumptions to be made concerning several economic factors
such as future vessel day rates, operating costs, utilisation rate and discount rates,
in order to establish relevant future cash flows and their discounted amounts.
Long-term assumptions for major economic factors are made at a group level.
39
There is a high degree of reasoned judgement involved in establishing these
assumptions, in determining other relevant factors such as vessel day rates and
long-term growth rates, and in determining the residual value for computation of
the ultimate terminal value of an asset.
IMPAIRMENT OF SHARES IN SUBSIDIARIES. The recoverable amount of non-financial
assets mentioned above impacts the estimated value of shares in vessel-owning
subsidiaries. Hence, impairment of shares in subsidiaries is a significant estimate
required for the preparation of the parent company accounts.
CHANGES IN SIGNIFICANT ACCOUNTING POLICIES
Changes to the Standards and interpretations of Standards that are required to be
adopted in annual periods beginning on 1 January 2022 did not have any impact
on the amounts recognised in prior periods and are not expected to have any
significant impact to the current or future periods.
Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
The Group has adopted these amendments from 1 January 2022. The amendments
specify which costs an entity includes in determining the cost of fulfilling a contract
for the purpose of assessing whether the contract is onerous. This resulted in a
change in accounting policy for performing an onerous contracts assessment.
Previously, the Group included only incremental costs to fulfil a contract when
determining whether that contract was onerous. The revised policy is to include
both incremental costs and an allocation of other direct costs.
The amendments apply to contracts existing at 1 January 2022. At the date of initial
application, the cumulative effect of applying the amendments is recognised as an
opening balance adjustment to retained earnings or other components of equity,
as appropriate. The comparatives are not restated. The Group has analysed all
contracts existing at 1 January 2022 and determined that none of them would be
identified as onerous applying the revised accounting policy – i.e. there is no impact
on the opening equity balances as at 1 January 2022 as a result of the change.
Standards issued but not yet effective, which the Group has not yet adopted
A number of amendments and improvements to standards have been issued
and are effective for annual periods beginning after 1 January 2023 and earlier
application is permitted; however, the Group has not adopted the new or amended
standards in preparing these consolidated accounts earlier. The Group’s assessment
is that the following new or amended standards and interpretations are not
expected to have a material impact to the Group in the current or future reporting
periods or on foreseeable future transactions upon adoption:
- Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)
- Definition of Accounting Estimate (Amendments to IAS 8)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION. The consolidated accounts comprise the financial
statements of the parent company and its subsidiaries. Subsidiaries are fully
consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control
ceases. The financial statements of the subsidiaries are prepared for the same
reporting period as the parent company, using consistent accounting policies.
Associates are those entities in which the Group has significant influence, but
not control or joint control, over the financial and operating policies. Interests in
associates are accounted for using the equity method and are initially recognised
at cost. Subsequent to initial recognition, the consolidated accounts include the
Group’s share of the profit or loss and other comprehensive income of equity-
accounted investees, until the date on which significant influence ceases.
All intra-group balances, income and expenses, unrealised gains and losses and
dividends resulting from intra-group transactions are eliminated in full. The
Group’s interest in equity-accounted investees comprises interests in an associate.
40
Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent that there is no evidence of impairment.
BUSINESS COMBINATIONS AND GOODWILL. Business combinations are accounted
for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value.
Acquisition related costs incurred are expensed and included in administrative
expenses.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the
acquisition date.
Goodwill is initially measured at cost being the excess of the aggregate of
the consideration transferred and the amount recognised for non-controlling
interest over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in profit and loss.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition date, allocated to each of the
Group’s cash generating units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to
those units.
Where goodwill forms part of a cash generating unit and part of the operation
within that unit is disposed of, the goodwill associated with the operation disposed
of is included in the carrying amount of the operation when determining the gain
or loss on disposal of the operation. Goodwill disposed of in this circumstance is
measured based on the relative values of the operation disposed of and the portion
of the cash generating unit retained.
FOREIGN CURRENCY TRANSLATION. The presentation currency is USD. This is also
the functional currency for the parent company. Transactions in other currencies
than the functional currency are translated at the exchange rate prevailing at the
transaction date. Monetary items in other currencies than the functional currency
are translated to the functional currency at the exchange rate on the reporting
date, and the currency difference is recognised in the profit and loss account.
Non-monetary items in currencies other than the functional currency are translated
at the exchange rate at the transaction date.
When consolidating companies with a functional currency other than USD, profit
and loss items are translated at the monthly average exchange rate, while balance
sheet items are translated at the exchange rate on the reporting date. Translation
differences are recognised in other comprehensive income. On disposal of a foreign
operation, the deferred cumulative amount recognised in other comprehensive
income relating to that particular operation, is recognised in the income statement.
SEGMENT REPORTING. For management and monitoring purposes, the Group is
organised into one segment; chartering and operation of accommodation/service
vessels. For geographical information, reference is made to note 4.
41
REVENUE RECOGNITION
Type of Product/Service
Charter Income/
Mobilisation Income/
Demobilisation Income/
Lump Sum Fee
Nature and timing of satisfaction of performance,
including significant payment terms
Revenue recognition
The Group charters the accommodation vessels to customers
for an agreed period. The Group does not convey the right to
control the use of the asset to the customers and none of the
contracts are accounted for as a lease. The invoices are issued
on a monthly basis or based on the contractual terms and are
normally payable within 30 days.
The activities giving rise to mobilisation, demobilisation and
re-phasing are not a distinct performance obligation in itself
and are highly interdependent on the charter activities. These
activities are necessary for the Group to perform its service in
providing the accommodation vessels to the customer.
These incomes, together with charter income and bareboat
income, are considered as a single performance obligation and
the revenue are collectively recognised over the charter period.
In addition, any additional fees arising from suspension or
deferment of contracts will be deferred and amortised over the
charter period when the performance obligations are met.
The deferred revenue is included in the contract liabilities.
Management,
crew services,
catering and
other related income
The Group provides optional services upon request from the
customer. The invoices are issued on a monthly basis or based on
the contractual terms and are payable normally within 30 days.
These incomes are recognised over time when performance
obligations are met. The related costs are recognised in profit or
loss when they are incurred.
The Group has reviewed its contracts with customers and concluded that these
contracts do not contain a lease. If another conclusion determined that these
contracts contain a lease, there will not be any significant difference in the
accounting of revenue.
Interest income
Interest income is recognised on a time-proportion basis using the effective interest
method. Interest income is included in financial items in the income statement.
Dividend income
Dividend income is recognised when the right to receive payment is established.
42
PROVISIONS are recognised when, and only when, the Group has a present
obligation as a result of events that have taken place, and it can be proven probable
that a financial settlement will take place as a result of this liability, and that the
size of the amount can be measured reliably. Provisions are reviewed on each
balance sheet date and their level reflects the best estimate of the liability. When
the Group expects some or all of a provision to be reimbursed, the reimbursement
is recognised as a separate asset, but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the income statement
net of any reimbursement.
For onerous contracts, provisions are made when unavoidable cost of meeting the
obligations under the contract exceed the economic benefit to be received under
the contract. The unavoidable costs under the contract are the lower of the cost
of fulfilling the contract and any compensation or penalties arising from failure to
fulfil the contract. Unavoidable cost are costs that would not incur for the entity if it
did not have the contract.
TANGIBLE ASSETS are recognised at cost less cumulative depreciation and
accumulated impairment losses, if any. Assets are depreciated on a straight-line
basis over their estimated useful lives, with account taken of their estimated
residual value. Management makes annual assessments of residual value, methods
of depreciation and the remaining useful life of the assets. Components of an asset
which have an estimated shorter life than the main component of the asset are
accordingly depreciated over this shorter period. Acquisition cost includes costs
directly attributable to the acquisition of the assets. Subsequent expenditures are
added to the book value of the asset or accounted for on a separate basis, when it
is likely that future benefits would derive from the expenditures. The vessels are
subject to a periodic survey every five years, and associated costs are amortised
over the five-year period to the next survey. Other repair and maintenance costs are
expensed in the period they are incurred.
Expenditures for new builds are capitalised, including instalments paid to the
yard, project management costs, and costs relating to the initial preparation,
mobilisation and commissioning until the vessel is placed into service. In
accordance with IAS 23, borrowing costs are capitalised on qualifying asset.
Tangible fixed assets are depreciated on a straight-line basis over their useful
lifetime as follows:
• Semi-submersible vessels:
– Superstructure: 35 years or less
– Living quarters and other equipment: 5 to 35 years
– Periodic maintenance: 5 years
• Buildings: 20 to 30 years
• Right-of-use assets (office leases): 3 to 5 years
• Equipment: 3 to 5 years
IMPAIRMENT OF NON-FINANCIAL ASSETS. The Group assesses at each reporting
date whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Group
estimates the asset's recoverable amount. An asset’s recoverable amount is the
higher of an asset’s or cash generating unit’s fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of
assets. Every vessel is seen as an individual CGU. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a post-tax discount
rate that reflects current market assessments of the time value of money and
risks specific to the asset. In determining fair value less costs to sell, recent market
transactions are taken into account, if available.
The Group bases its impairment calculation on a detailed forecast calculation
which is prepared for the Group’s cash generating units. The forecast calculation
is generally covering a period of five years and a terminal value. In 2021 and 2022,
there was no valuation-in-use calculation as there were no impairment indicators.
The value-in-use calculation was last performed and disclosed in 2020.
For non-financial assets except goodwill, an assessment is made at each reporting
date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased.
43
If such indication exists, the Group estimates the asset’s recoverable amount.
A previously recognised impairment loss is reversed only if there has been a
significant change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The impairment loss is
reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Management has not
identified any indicators for reversal of impairment as at the end of the reporting
period.
FINANCIAL ASSETS
Initial recognition
Trade receivables are initially recognised when they are originated. All other
financial assets are initially recognised when the Group becomes a party to the
contractual provision of the instrument.
A financial asset (unless it is a trade receivable without a significant financing
component) is initially measured at fair value plus, for an item not at fair value
through profit or loss ("FVTPL"), transaction costs that are directly attributable to its
acquisition or issue. A trade receivable without a significant financing component is
initially measured at the transaction price.
Classification and measurement
On initial recognition, a financial asset is classified as measured on following basis:
1) financial assets at amortised cost; and 2) financial assets at fair value through
profit or loss "FVTPL".
Financial assets are not reclassified subsequent to their initial recognition unless
the Group changes its business model for managing financial assets, in which case
all affected financial assets are reclassified on the first day of the first reporting
period following the changes in the business model.
1) Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:
-
It is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
Its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
-
2) Financial assets at FVTPL
All financial assets not classified as measured at amortised cost or FVOCI as
described above are measured at FVTPL. This includes all derivative financial assets.
On initial recognition, the Group may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost of a FVOCI
as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
that would otherwise arise.
Derivative financial instruments
The Group uses derivative financial instruments such as forward currency contracts,
interest rate cap, and interest rate swaps to hedge its foreign currency risk and
interest rate risk. Such instruments are initially recognised at fair value on the date
on which a derivative contract is entered into and are subsequently remeasured at
fair value. Derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.
The derivative financial instruments are mainly used in economic hedges where
the changes in fair value are taken directly through profit or loss. The fair value
of forward currency contracts is the discounted difference between the forward
exchange rate and the contract price. The fair value of interest rate caps and swaps
contracts are calculated using inputs that are from observable market prices.
Gains or losses arising from changes in fair value of derivative financial instruments
that do not qualify for hedge accounting are taken to the profit and loss account.
For cash flow hedges, the effective portion of the gains or losses on the hedging
instrument is recognised directly in other comprehensive income and accumulated
44
in the hedging reserve, while the ineffective portion is recognised in the profit and
loss account. Amounts taken to other comprehensive income are reclassified to
the profit and loss account when the hedged transaction affects the profit and loss
account. For fair value hedges, changes in the fair value of the designated hedging
instruments are recognised in the profit and loss account. The hedged item is
adjusted to reflect change in its fair value in respect of the risk hedged, with any
gain or loss recognised in the profit and loss account.
The Group documents at the inception of the transaction the relationship between
the hedging instruments and hedged items, as well as its risk management
objective and strategies for undertaking various transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives designated as hedging instruments are highly effective
in offsetting changes in fair value or cash flows of the hedged items. There are
currently no hedged items in the periods covered within this financial statement.
Current versus non-current classification
Derivative instruments that are not designated and effective hedging instruments
are classified as current or non-current or separated into a current and non-current
portion based on an assessment of the facts and circumstances.
When the Group holds a derivative as an economic hedge for a period beyond 12
months after the balance sheet date or a derivative instrument is designated as an
effective hedging instrument, the fair value of the derivative instrument is classified
as current or non-current consistent with the classification of the underlying item.
Economic hedges are not treated as hedging for accounting purposes.
Subsequent measurement and gains and losses
1) Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognised in profit
or loss. Any gain or loss on derecognition is recognised in profit or loss.
2) Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in profit or loss.
Derecognition
A financial asset is derecognised when the contractual rights to the cash flows from
the financial asset expire or it transfers the rights to receive the contractual cash
flows in a transaction which substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the Group neither transfers nor
retains substantially all of the risks and rewards of ownership and it does not retain
control of the financial asset.
Impairment of financial assets
The Group recognises loss allowances for expected credit losses on:
- Financial assets measured at amortised cost
Loss allowances for trade receivables and assets are always measured at an amount
equal to lifetime expected credit losses.
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating expected credit losses,
the Group considers reasonable and supportable information that is relevant
and available without undue cost of effort. This includes both quantitative and
qualitative information and analysis, based on the Group's historical experience
and informed credit assessment and including forward-looking information.
The Group considers a financial asset to be in default when:
- The borrower is unlikely to pay its credit obligations to the Group in full, without
recourse by the Group to actions such as realising security (if any is held); or
- The financial asset is more than 90 days past due.
45
Measurement of expected credit losses:
- For trade receivables, the Group applies the simplified method of credit reserves,
i.e. the reserve will correspond to the expected loss over the whole life of the
trade receivable. In order to measure the credit losses, trade receivables are
grouped based on credit risk characteristics of its customer. The Group applies
forward-looking variables for expected credit losses.
- Expected credit losses are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the
contract and the cash flows that the Group expects to receive).
- Expected credit losses are discounted at the effective interest rate of the
Derecognition of financial assets
The gross carrying amount of a financial asset is written off when the Group has no
reasonable expectations of recovering a financial asset in its entirety or a portion
thereof. For customers, the Group individually makes an assessment with respect
to the timing and amount of write-off based on whether there is reasonable
expectation of recovery. The Group expects no significant recovery from the amount
written off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group's procedures for recovery
of amount due.
financial asset.
FINANCIAL LIABILITIES
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit-impaired, which is when one or more events that have a
detrimental impact on the estimated future cash flow of the financial asset have
occurred.
Evidence that a financial asset is credit-impaired includes the following observable
data:
- Significant financial difficulty of the borrower or issuer;
- A breach of contract such as default or being more than 90 days past due;
- The restructuring of a loan or advance by the Group on terms that the Group
-
would not consider otherwise;
It is probable that the borrower will enter bankruptcy or other financial
reorganisation; or
- The disappearance of an active market for a security because of financial
difficulties.
Loss allowances of expected credit losses for financial assets measured at
amortised cost are deducted from the gross carrying amount of the assets as in the
statement of financial position.
Initial recognition
Financial liabilities within the scope of IFRS 9 are classified as financial liabilities
at fair value through profit or loss and financial liabilities measured at amortised
cost. The Group determines the classification of its financial liabilities at initial
recognition. Financial liabilities are recognised initially at fair value and, in case
of loans and borrowings, net of directly attributable costs. The Group’s financial
liabilities include non-derivative financial instruments (trade and other payables,
loans and borrowings, financial guarantee contracts) and derivative financial
instruments.
Subsequent measurement and gains and losses
Financial liabilities at fair value through profit and loss are measured at fair value
and net gains and losses, including any interest expense, are recognised in profit
or loss. Other financial liabilities are subsequently measured at amortised cost
using the effective interest method. If there is a change in the timing or amount
of estimated cash flows, the amortised cost of the financial liability is adjusted in
the period of change to reflect the revised actual and estimated cash flows, with
a corresponding income or expense being recognised in profit or loss. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any
gain or loss on derecognition is also recognised in profit or loss.
46
Derecognition
A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification
is treated as a derecognition of the original liability and the recognition of a
new liability, and the difference between the carrying amount extinguished and
the consideration paid (including any non-cash assets transferred or liabilities
assumed) is recognised in profit or loss.
FAIR VALUE OF FINANCIAL INSTRUMENTS. The fair value of financial instruments
that are actively traded in organised financial markets is determined by reference
to quoted market bid prices at the close of business on the balance sheet date.
For financial instruments where there is no active market, fair value is determined
using valuation techniques. Such techniques may include using recent arm’s length
market transactions, reference to the current fair value of another instrument that
is substantially the same, discounted cash flow analysis or other valuation models.
EMPLOYEE BENEFITS
Defined contribution plans
Companies within the Group make contributions to pension schemes that are
defined contribution plans. The companies’ payments are recognised in the income
statement for the year to which the contribution applies.
Share-based payment arrangements
The Group operates an equity-settled, share-based compensation plan. The grant-
date fair value of equity-settled share-based payment arrangements granted to
employees is recognised as an expense, with a corresponding increase in equity,
over the vesting period of the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which the related service are expected
to be met, such that the amount ultimately recognised is based on the number of
awards that meet the related service at the vesting date.
At each balance sheet date, the Group revises its estimates of the number of
shares under options that are expected to become exercisable on the vesting date
and recognises the impact of the revision of the estimates in profit or loss, with a
corresponding adjustment to the equity over the remaining vesting period. When
the options are exercised, the proceeds received (net of transaction costs) and the
related balance previously recognised in the equity are credited to the share capital
account, when new ordinary shares are issued, or to the “treasury shares” account,
when treasury shares are re-issued to the employees.
BORROWING COSTS. Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as part of the cost of
the respective assets. Capitalised borrowing costs are calculated using the effective
interest method.
LEASES. A lease is defined as a contract that conveys the right to control the use
of an identified asset for a period in exchange for consideration. For each contract
that meets this definition, the lessees will recognise a right-of-use asset and a lease
liability in the balance sheet with certain exemptions for short term and low value
leases. Lease payments are to be reflected as interest expense and a reduction
of lease liabilities, while the right-of-use assets are to be depreciated over the
shorter of the lease term and the assets useful life. The portion of lease payments
representing payments of lease liabilities and interest expense shall be classified
in line with the policy elected for other interest payments in the statement of cash
flows.
Lease liabilities are measured at the present value of remaining lease payments,
discounted using the incremental borrowing rate. At initial recognition, right-of-use
assets are measured at an amount equal to the lease liability.
Major lease liabilities for the Group comprise of leases of chartered-in vessels, office
buildings, warehouses, transportation, logistics assets and other IT infrastructure
and office equipment. The Group separately expenses variable expense services and
other non-lease components embedded in lease contracts for office buildings and
warehouses. For leases of other assets, the Group capitalises non-lease components
subject to fixed payments as part of the lease.
47
The Group applies the general short-term exemption for leases of chartered-in
vessels, office buildings, warehouses, transportation, logistics assets and other IT
infrastructure and office equipment. Leases with a lease term of 12 months or less
that do not contain a purchase option are expensed as short-term leases.
The Group also applies the general low value exemption for leases of office
equipment. This applies for all leases where the value of the underlying asset is
below USD 5,000. These low value leases of such assets will not be capitalised and
that lease payments are expensed in profit or loss.
INCOME TAXES in the income statement include taxes payable and changes in
deferred tax. Deferred tax is calculated based on temporary differences between
book and tax values that exist at the end of the period. Deferred tax asset is
recognised in the statement of financial position when it is probable that the
tax benefit can be utilised. Deferred tax and deferred tax asset are measured at
nominal value.
Income tax assets and liabilities for the current and prior periods are measured at
the amount expected to be recovered or paid to the tax authorities. Deferred tax
liabilities are measured at the tax rates that are expected to apply in the year when
the liability is settled, based on tax rates that have been enacted or substantively
enacted at the reporting date. Deferred tax is provided using the liability method.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same tax authority.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
CASH AND DEPOSITS comprise cash at banks and short-term deposits with an
original maturity of three months or less, which are subject to an insignificant risk
of changes in value.
DIVIDEND distribution to the shareholders is recognised in the financial statements
on the date on which the shareholders' right to receive payment is established.
SHAREHOLDER'S EQUITY. Any difference between the issue price of share capital
and the nominal value is recognised as share premium. The costs incurred
attributable to the issue of share capital are deducted from equity. Zero coupon
convertible bonds and share options that will be settled by the Company by
delivering a fixed number of its own equity instruments in exchange for a fixed
amount of cash are equity instruments and recognised in equity. The translation
reserve comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations.
NOTE 4: SEGMENT REPORTING AND CONTRACT BALANCES
The Group has one segment, which is chartering and operation of accommodation/
service vessels.
.
Operating revenues by geographical location
2022
2021
Brazil
Norway
Trinidad & Tobago
United Kingdom
Total operating revenues
52.7
17.2
53.1
75.9
43.6
0.0
19.6
77.9
198.9
141.1
The revenue allocation is based on place of operation of the vessel.
48
Operating revenues by major customers:
2022
2021
Europe 1
Europe 2
Europe 3
Europe 4
South America 1
South America 2
South America 3
1) Operating revenues in USD million
2) Percentage of total revenues
Total assets by geographical location
Europe
South America
Asia
Total assets
1)
0.0
2)
0.0%
29.5
14.8%
0.0
46.9
52.7
43.3
9.8
0.0%
23.6%
26.5%
21.8%
4.9%
1)
31.5
25.9
19.6
0.0
2)
22.3%
18.4%
13.9%
0.0%
43.6
30.9%
0.0
0.0%
19.6
13.9%
2022
164.1
213.8
0.1
378.0
2021
173.9
225.0
0.3
399.2
Contract balances
31.12.22
31.12.21
01.01.21
Trade receivables from charters
Contract assets
Contract liabilities
20.6
2.0
0.0
14.1
0.3
1.1
6.9
4.2
3.6
The contract assets relate to rights to consideration for work completed but not
billed and deferred charter incentive as a result of contract modification. The
contract assets are recognised as a deduction of revenue over the performance
obligation of the contract. The contract liabilities relate to deferral fees or upfront
consideration received from customers. The contract liabilities are recognised as
revenue over the performance obligation of the contract.
Significant changes in the contract assets and the contract liabilities during the
year are as follows:
Revenue from recognition of the
opening balance
Revenue deduction from recognition of
the opening balance
Consideration received during the year
not recognised as revenue
Contract incentive as a result of
contract modifications
Rights to consideration for work
completed but not billed
2022
2021
2022
2021
Contract assets
Contract liabilities
0.0
0.0
(1.1)
(3.6)
(0.3)
(4.2)
0.0
0.0
0.0
0.0
2.0
0.0
0.0
1.1
0.3
0.0
0.0
0.0
0.0
0.0
The below table includes the Group's firm order book, consisting of performance
obligations that are unsatisfied or partially satisfied as at the end of the reporting
period.
Chartering and operation
of accommodation vessels
31 December 2022
31 December 2021
< 12
months
1-2
years
More
than
2 years
96.8
116.4
118.7
119.9
6.1
0.0
Total
331.9
126.0
Variable considerations that are constrained and not considered in the transaction
price are excluded from the table above.
49
NOTE 5: OTHER OPERATING REVENUES
(Loss)/Gain on sale of non-current assets
Management, crew services, catering and
other related income
Total other operating revenues
2022
2021
(0.5)
1.0
30.1
29.6
18.3
19.3
NOTE 6: EMPLOYEE BENEFITS AND MANAGEMENT REMUNERATION
Wages and salaries
Contract personnel
Other personnel-related expenses
Social security taxes
Pension expenses
Share-based payment expense
Other remuneration
Total employee benefits
2022
2021
19.1
27.1
7.0
3.4
1.2
0.9
0.5
13.4
29.8
3.9
2.9
0.4
0.0
0.2
59.2
50.6
Number of employees
The average number of employees in the Group for 2022 was 192 (2021: 97).
The average number of employees by legal entity was as follows:
Prosafe Offshore Limited
Prosafe Services Maritimos Ltda
Prosafe AS
Prosafe Offshore Holdings Pte. Ltd.
Prosafe SE
Safe Eurus Singapore Pte. Ltd.
Total average number of employees
2022
2021
79
88
6
8
2
9
37
35
7
8
2
8
192
97
Bonus scheme
The CEO, CFO and COO hold incentive agreements which may lead to a bonus
payment. The bonus depends on achieving defined targets relating to earnings, cost
efficiency targets, long-term strategic targets, operational performance and HSE
performance.
Severance pay
For the CEO and the CFO, the Group guarantees a remuneration corresponding to
the base salary received at the time of departure for a period of 5 months beyond a
4 month notice period and with a set off for the 5 months against any other income
received. For the COO, the Group guarantees a remuneration corresponding to the
base salary received at the time of departure for a period of 12 months beyond a 6
month notice period.
In accordance with the code of practice for corporate governance recommended by
the Oslo Stock Exchange, remuneration for the Board of Directors and Executive
Management is specified below and in a separate report from the Board of Directors.
Share options
A. Description and fair value of share option programmes (equity-settled)
On 10 February 2022, 11 May 2022 and 19 August 2022, the Group initiated a long-
term incentive program where executive management and selected employees
were granted options to subscribe for ordinary shares of Prosafe SE.
The key terms and conditions are as follows:
Number of share options issued
250 000
100 000
100 000
Commencement date
Grant date
10.02.22
19.08.22
11.05.22
11.05.22
19.08.22
11.05.22
Executive Managment Employees
The options are vested equally over 24, 36 and 48 months from commencement
date, respectively. Any options not exercised 60 months after the commencement
date will be cancelled.
As at 31 December 2022, a total of 450,000 options are issued, each option
allowing the holder to subscribe to one ordinary share in the Company.
50
B. Measurement of fair values
The fair value of an option granted was estimated using the Black Scholes option-
pricing model and the transactions are accounted for as equity-settled share-based
payment.
The inputs used in the measurement of the fair values at grant date of the equity-
settled share-based payment plans were as follows.
Fair value at grant date (in NOK)
Share price at grant date (in NOK)
Exercise price (in NOK)
Expected volatility
Expected life
Risk-free interest rate (based on
government bonds at grant date)
Executive Managment Employees
98.85
178
83
20 %
58.77
237.5
237.5
20 %
42.4
178
178
20 %
4.75 years
5 years
5 years
2.76 %
3.18 %
2.76 %
Expected volatility has been based on implied oil price volatility. The expected term
of the instruments has been based on the maturity of options.
C. Reconciliation of outstanding share options
2022
Outstanding at 1 January
Granted during the year
Outstanding at 31 December
Exercisable at 31 December
Number
of options
-
450 000
450 000
-
Weighted-
average
exercise price
-
138
138
-
The options outstanding at 31 December 2022 had an exercise price in the range
of NOK 83.0 to NOK 237.5 and remaining contractual life in the range of 4.1 years
to 4.6 years.
There were no options exercised in 2022.
D. Expense recognised in profit or loss
A share-based payment expense of USD 0.9 million was recognised for 2022.
Senior officers
(USD 1 000)
Year
Salary
Bonus Pension
benefits
Total
Other
Jesper Kragh Andresen
CEO
Reese McNeel
CFO (from August 2022)
Stig Harry Christiansen
DCEO/ CFO (to May 2022)
Ryan Duncan Stewart
COO
Jesper Kragh Andresen
CEO
Stig Harry Christiansen
DCEO/ CFO
Ryan Duncan Stewart
COO
2022
357
2022
131
95
60
43
19
514
17
0
208
2022
141
0
17
8
166
2022
342
95
34
2
473
2021
396
290
33
21
740
2021
376
284
31
21
712
2021
378
179
37
3
597
51
Board of directors
(USD 1 000)
Glen Ole Rødland (Chairman)
Alf C. Thorkildsen (Deputy Chairman)
Birgit Aagaard-Svendsen
Nina Udnes Tronstad
Halvard Idland (from May 2022)
Total fees 1)
Glen Ole Rødland (Chairman)
Birgit Aagaard-Svendsen
Nina Udnes Tronstad
Alf C. Thorkildsen
Total fees 1)
Year
Board fees
NOTE 7: OTHER OPERATING EXPENSES
2022
2022
2022
2022
2022
2021
2021
2021
2021
115
94
95
85
52
441
122
91
84
78
375
Repair and maintenance
Other vessel operating expenses
General and administrative expenses 1)
Total other operating expenses
Auditors' fees
(USD 1 000)
Audit
Fees for non-audit services
Total auditors' fees
2022
2021
20.8
52.0
5.5
78.3
22.7
38.4
4.5
65.6
2022
2021
375
9
384
374
154
528
1) If applicable, figures include compensation from the audit committee and
compensation committee.
1) Auditors' fees are included in general and administrative expenses. Fees
for non-audit services in 2022: USD 9,000 were related to compliance and
pre-liquidation stage services offered to the group companies by the statutory
auditor (2021: USD 154,000 were mainly related to other assurance and audit-
related services provided in relation to the financial restructuring offered to the
group companies by the statutory auditor.)
52
NOTE 8: TANGIBLE ASSETS
Cost as at 31 December 2020
Additions1
Disposals
Cost as at 31 December 2021
Additions2
Disposals
Currency translation differences
Cost as at 31 December 2022
Accumulated depreciation and impairment 31 December 2020
Depreciation for the year
Disposals
Impairment for the year
Accumulated depreciation and impairment 31 December 2021
Depreciation for the year
Disposals
Accumulated depreciation and impairment 31 December 2022
Net carrying amount 31 December 2022
Net carrying amount 31 December 2021
Depreciation rate (%)
Economically useful life (years)
Vessels
New builds
Equipment
Buildings
assets
Total
Right-of-use
2,913.2
57.4
(367.8)
2,602.8
9.0
(14.4)
0.0
2,597.4
2,500.9
32.1
(367.8)
40.6
2,205.8
28.7
(13.9)
2,220.6
376.8
397.0
3-20
5-35
60.7
0.0
0.0
60.7
0.0
0.0
0.0
60.7
59.6
0.0
0.0
1.1
60.7
0.0
0.0
60.7
0.0
0.0
3.8
0.2
(0.3)
3.7
0.0
0.0
0.0
3.7
2.6
0.5
(0.2)
0.0
2.9
0.4
0.0
3.3
0.4
0.8
7.1
0.0
(7.1)
0.0
0.0
0.0
0.0
0.0
6.6
0.0
(6.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.4
1.4
0.0
1.8
0.0
0.0
(0.2)
1.6
0.0
0.4
0.0
0.0
0.4
0.4
0.0
0.8
0.8
1.4
2,985.2
59.0
(375.2)
2,669.0
9.0
(14.4)
(0.2)
2,663.4
2,569.7
33.0
(374.6)
41.7
2,269.8
29.5
(13.9)
2,285.4
378.0
399.2
20-33
3-5
3-5
20-30
20-33
3-5
1) Additions in 2021 included non-cash transactions of USD 40.6 million relating to the Westcon judgement (see below under Vessels for further information) and
USD 1.1 million of right-of-use assets addition.
2) Additions in 2022 included non-cash transaction of -USD 1.2 million relating to the fair value change in sellers credit arising from revising estimates of repayment
schedule (See note 18).
53
New builds
New builds include prepayment to the yard, owner-furnished equipment and other
project costs incurred. See note 22 for details relating to new builds.
Buildings
In 2021, the building held in Aberdeen was disposed off.
Vessels
Estimated useful life for the semi-submersible accommodation vessels is set at 35
years or less dependent on the age at the time of the acquisition and subsequent
refurbishments as the economic life varies for the various components on a vessel.
Individual components may, however, be depreciated over shorter periods of time
than the life of the vessel itself. The management has assessed the Group's vessels
residual value to remain the same as prior year at USD 4.2 million based on the
latest assumptions and factors from past recycling transactions. This estimate is
primarily based on average steel prices and costs associated with scrapping and is
reviewed on an annual basis.
Management has performed an impairment assessment of its vessels in
accordance with IAS 36. Each individual vessel is considered to be a cash generating
unit.
The key indicator assessment as at year-end 2022 is the development in the market
environment for offshore accommodation vessels.
There is a significant improvement in demand and utilization in 2022, in part driven
by activity previously deferred due to Covid-19.
For 2023, the Group sees a slower North Sea market in 2023, and for some
vessels work in other regions will lead to increased capex and mobilization spend
in preparation for new contracts. Management has expectations of a positive
development in long-term demand drivers in Brazil and North Sea supported also
by increased tender activity expected based on ongoing client discussions for 2024
and beyond.
Overall, the market has improved compared to the bottom in 2020, however, the
visibility is still low and there is insufficient data available to conclude that there is
clear shift in day-rates and utilisation above the longer-term assumptions applied
in prior years value-in-use calculations. Other external sources also include broker
valuations of the accommodation vessels which also do not indicate a significant
change from prior periods. On this basis, the Group has not identified indicators
of impairment nor impairment reversal and hence no value-in-use calculation was
performed.
In April 2021, the Gulating Court of Appeal decided that Prosafe shall pay full
payment to Westcon of the amount claimed. As a result, the Group has recognised
USD 40.6 million as a fixed asset acquisition cost and consequently recognised an
impairment loss of USD 40.6 million.
NOTE 9: OTHER FINANCIAL ITEMS
Currency gain
Gain from extinguishment of debt 1)
Other financial income
Total other financial income
Fair value adjustment interest rate swaps
Other financial expenses 2)
Total other financial expenses
2022
2021
0.6
0.0
0.0
0.6
0.0
(4.7)
(4.7)
1.8
1,048.0
2.0
1,051.8
(0.2)
(33.9)
(34.1)
1) In 2021, there was a gain from extinguishment of debt as a result of the
completion of the financial restructuring process. See further details in note 14.
2) In 2022, refinancing costs of USD 3.5 million incurred is related to the Cosco
global deed settlement (2021: refinancing cost of USD 17.5 million incurred as
a result of the financial restructuring process) and included in other financial
expenses. See further details in note 14 relating to financial restructuring.
54
NOTE 10: FINANCIAL ITEMS
Year ended 31 December 2022
Interest income (a)
Currency gain 1)
Total other financial income (b)
Amortisation of amortised costs
Debts interest expenses
Total interest expenses (c)
Other financial expenses
Total other financial expenses (d)
Financial assets
measured at
amortised cost
Financial liabilities
measured at
amortised cost
0.7
0.0
0.0
0.0
0.0
0.0
(3.9)
(14.8)
(18.7)
(4.7)
(4.7)
(23.4)
Net financial items (a)+(b)+(c)+(d)
0.7
1) Excluded from the category breakdown but added to the total for net effect.
Total
0.7
0.6
0.6
(3.9)
(14.8)
(18.7)
(4.7)
(4.7)
(22.1)
55
Year ended 31 December 2021
Interest income (a)
Currency gain 1)
Gain from extinguishment of debt
Other financial income 1)
Total other financial income (b)
Amortisation of borrowing costs
Amortisation of amortised costs
Debts interest expenses
Total interest expenses (c)
Fair value adjustment interest rate swaps
Other financial expenses 2),3)
Total other financial expenses (d)
Financial assets
measured at
amortised cost
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost
1.0
0.0
0.0
0.0
0.0
0.0
0.0
1,048.0
0.0
1,048.0
(5.4)
(0.9)
(31.6)
(37.9)
0.0
(16.4)
(16.4)
1.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(0.2)
0.0
(0.2)
(0.2)
Total
1.0
1.8
1,048.0
2.0
1,051.8
(5.4)
(0.9)
(31.6)
(37.9)
(0.2)
(33.9)
(34.1)
Net financial items (a)+(b)+(c)+(d)
1.0
993.7
980.8
1) Excluded from the category breakdown but added to the total for net effect.
2) In April 2021, the Gulating Court of Appeal decided that Prosafe shall pay full payment to Westcon of the amount claimed.
As a result, the Group recognised USD 13.8 million as other financial expenses.
3) USD 17.5 million of refinancing costs were excluded from the category breakdown but added to the total for net effect.
56
NOTE 11: TAXES
Income tax expenses
Taxes in income statement:
Taxes payable
Total taxes in income statement
The corporate tax rate in Norway for 2022 is 22% (2021: 22%).
2022
2021
8.3
8.3
3.1
3.1
Deferred income tax assets and liabilities are offset as all the temporary differences
are within the Norway tax resident entities that comprise a tax group. Within the tax
group there is a legally enforceable right to set off current tax assets against current
tax liabilities. There is no expiry date on the temporary differences and tax loss carried
forward.
Reconciliation of effective tax rate (IAS 12.81)
Tax rate in Norway (parent company tax jurisdiction)
22.0%
Profit before taxes
Tax based on applicable tax rate
Tax on income not taxable in determining
taxable profit
Tax effect of non-deductible expenses
Tax effect due to changes in unrecognized
deferred tax assets
Effect of tax in other jurisdictions
Total taxes in income statement
9.8
2.2
(13.8)
1.1
10.5
8.3
8.3
22.0%
931.0
204.8
(226.7)
1.3
20.6
3.1
3.1
Deferred tax - Specification and movements
2022
2021
Temporary differences:
Exit from Norwegian tonnage tax system
Vessel tax base exceeds net book value
Tax loss carried forward
Loss account for deferral
Basis for deferred tax
Recognised deferred tax asset
Deferred tax liability 1 January and 31 December
7.1
(535.7)
(1,030.3)
(185.5)
8.9
(725.3)
(949.7)
(259.2)
(1,744.4)
(1,925.3)
0.0
0.0
0.0
0.0
Tax payable as at 31 December
18.0
10.7
The value of the deferred tax assets is not recognised in the accounts as the probability
of having sufficient future taxable profit to utilise the deferred tax assets as tax
deductions cannot be established.
The total tax payable in the income statement and as at 31 December resulted from
the Group's operations in other parts of the world which were subjected to tax in
jurisdictions other than Norway.
NOTE 12: EARNINGS PER SHARE
Earnings per share are calculated by dividing net profit by the weighted average
number of ordinary shares outstanding during the year. Diluted earnings per share
are calculated by dividing net profit by the weighted average number of ordinary
shares plus the number of potential shares relating to share options.
Net profit
2022
2021
1.5
927.9
Weighted average number of outstanding shares
8,798,699
3,524,542
Basic earnings per share
0.17
263.27
Weighted average number of outstanding and
potential shares 1)
Diluted earnings per share
8,826,320
3,524,542
0.17
263.27
1) In 2022, the weighted average number of outstanding and potential shares
includes the average share capital of 8,798,699 and share options of 27,621
(2021: average share capital of 3,524,542).
57
NOTE 13: SHARE CAPITAL, SHAREHOLDER INFORMATION,
Largest shareholders as at 31 December 2022
No of shares
Percentage
CONVERTIBLE BONDS, WARRANTS AND SHARE-BASED PAYMENT
2022
2021
HV VI INVEST SIERRA AS
NORTH SEA STRATEGIC INVESTMENTS AS
1,355,363
1,116,565
15.4 %
12.7 %
8,798,699 8,798,699,789
MIDELFART CAPITAL AS
MH CAPITAL AS
ALDEN AS
Issued and paid up number of ordinary shares
at 31 December 1)
Total authorised number of shares
at 31 December
Nominal value at 31 December 2) 3) 4)
Number of shareholders at 31 December
8,798,699 8,798,699,789
EUR 1.25
EUR 0.05
4,834
4,850
1) In 2021, the financial restructuring process was fully implemented and
completed. As a result of conversion of convertible bonds in 2021 and
equitisation of debts, the outstanding number of shares increased by 5,522,786
and 8,710,712,791 respectively. See note 14 for details on the financial
restructuring.
2) In 2021, the Company reduced the nominal value of its shares from EUR 0.10 to
EUR 0.05 per share. As a result, there was a reduction in share capital by USD 4.8
million and a corresponding increase in other equity.
3) On 27 January 2022, the Company completed a 1,000:1 reverse split of the
Company's shares to satisfy the minimum requirement to market value of the
issuer's shares for listed companies. After the reverse share split, 1,000 shares
with a nominal value of EUR 0.05 give 1 new share with a nominal value of EUR
50.00. The number of outstanding shares in the Company after the reverse split is
8,798,699.
4) At the AGM on 11 May 2022, the shareholders approved to reduce the share
capital by reducing the nominal value of the shares from EUR 50.00 to EUR 1.25.
As a result, the Company recorded a reduction in share capital by USD 485.1
million and a corresponding increase in other equity.
The Bank of New York Mellon
WESTCON YARDS AS
VICAMA CAPITAL AS
VICAMA AS
SONGA CAPITAL AS
UBS Switzerland AG
VERDIPAPIRFONDET DNB SMB
J.P. MORGAN SECURITIES PLC
ENG INVEST AS
DIMA AS
GROSS MANAGEMENT AS
RONGEVÆR, OTTO
VARDE NORGE AS
CAM AS
TRAPESA AS
Total 20 largest shareholders/
groups of shareholders
804,581
803,250
498,674
306,247
263,500
236,533
225,000
172,017
135,567
132,531
127,601
125,000
115,000
100,000
90,977
85,000
80,000
74,171
9.1 %
9.1 %
5.7 %
3.5 %
3.0 %
2.7 %
2.6 %
2.0 %
1.5 %
1.5 %
1.5 %
1.4 %
1.3 %
1.1 %
1.0 %
1.0 %
0.9 %
0.8 %
6,847,577
77.8 %
All ordinary shares rank equally. Holders of these shares are entitled to one vote per
share at general meetings of the Company.
Convertible bonds
The convertible bonds allow the bond holders to convert into shares at a conversion
price of NOK 25 or NOK 30 per share. There is no contractual obligation to deliver
cash or another financial asset as the conversion feature can only be settled
through the issuance of a fixed amount of shares. Hence, the convertible bonds
have been classified entirely as equity. All outstanding convertible bonds were
converted in 2021 as part of the financial restructuring process and there was no
convertible bond as of 31 December 2021 and 31 December 2022.
58
Warrants
As part of the USD 1,300 million credit facility refinancing concluded in 2018, the
Group issued warrants to those lenders having elected to receive such instead of
increased margins. The warrants give right to subscribe for one new share in the
Group at a subscription price of NOK 21.37. In 2021, these warrants were cancelled
as part of the financial restructuring and there are no warrants outstanding as of
31 December 2021 and 31 December 2022. See further details in note 14 relating
to financial restructuring.
Share-based payments
Share-based payments in other equity comprises the cumulative value of services
received from employees recorded on grant of equity-settled share options, The
expense for service received is recognised over the vesting period. The amount in
other equity is retained when the options are exercised or expire. See note 6 for
details on share-based payments.
NOTE 14: INTEREST-BEARING DEBT
Credit facilities - face value
Sellers' credits - face value
Difference between face value and carrying
amount - sellers credit
Lease liabilities
Total interest-bearing debt
Non-current interest-bearing debt
Current interest-bearing debt
Total interest-bearing debt
2022
2021
344.2
90.5
(13.3)
0.8
422.2
418.5
3.7
422.2
343.4
94.4
(15.9)
1.4
423.3
422.4
0.9
423.3
Reconciliation of movements of interest-bearing debt
to cash flows arising from financing activities
2022
2021
Interest-bearing debt at 1 January
423.3
1,509.4
Changes from financing cash flows
- Repayments of interest-bearing debt
- Interests paid
- Refinancing costs paid
Total changes from financing cash flows
Other liability-changes
- Non-cash movement in interest bearing debt
- Extinguishment of debt
- Refinancing costs
- Westcon claim
- Debt equitized for shares
- Interests expense
- Swaps termination 1)
- New finance leases
(4.4)
(14.1)
(3.5)
(22.0)
(1.3)
0.0
3.5
0.0
0.0
18.7
0.0
0.0
(77.6)
0.0
(17.5)
(95.1)
0.1
(1,030.5)
0.0
55.0
(59.3)
37.9
4.7
1.1
Total liability-related changes
20.9
(991.0)
Interest-bearing debt at 31 December
422.2
423.3
1) In 2021, interest rate swaps which were terminated by the swap banks were
included as part of interest-bearing debt.
Modification of debt
When a debt instrument is restructured and the terms have been modified,
it is necessary to assess whether the new terms are considered to have been
substantially modified, and thereby conclude on the accounting treatment relating
to the extinguishment of the existing liabilities and recognition of the modified
liabilities (IFRS 9).
59
2022
No debt instrument has been restructured nor any terms have been modified.
2021
On 20 December 2021, the financial restructuring process was fully implemented
and completed. Management has assessed that the financial restructuring
resulted in a substantial modification of debt due to substantially different terms.
The terms are substantially different if the discounted present value of the cash
flows under the new terms, including any fees paid net of any fees received and
discounted using the original effective interest rate, is at least 10% different from
the discounted present value of the remaining cash flows of the original financial
liability. In addition, other qualitative factors such as changes in the type of interest
rate and change in covenants are also considered.
Substantial modifications are treated as an extinguishment, and derecognition of
the existing liability and recognition of a new liability at fair value based on the
new contractual terms. Management has determined that the difference in the fair
value and carrying value of the new loan is not material. The fair value of long-term
debt is calculated by determining the net present value of estimated cash flows
applying an estimated market rate for the Group at initial recognition. The market
rate estimate was determined by observing publicly available terms and conditions
of relevant peers for similar loans and adjusted for known differences from the
Group’s agreed credit facility terms, as well as the Group’s new capitalization and
value of the vessels. The basis for this estimated market rate, to which the fair
value is sensitive, is not based on observable input and therefore the fair value
of the debts are level 3 estimates. Upon derecognition of debt, any difference is
recognised as a gain or loss within profit or loss. Costs or fees incurred are also
recognised within profit or loss as part of the gain or loss on extinguishment. A
financial net gain of USD 1,030.5 million has been reflected in the Consolidated
Income Statement as shown below.
Balance
before
financial
restructuring
Cash
payments
Equitized
to shares 1)
Balance
after
financial
restructuring
USD 1,300 million
credit facility
USD 144 million
credit facility
Westcon claim
Interest rate swap claim
Safe Notos Cosco
sellers credit
1,269.6
(38.0)
(981.6)
250.0
139.6
55.0
42.0
(9.0)
(28.5)
0.0
(37.6)
(26.5)
(42.0)
19.6
0.0
(19.6)
93.0
0.0
0.0
0.0
1,525.8
(75.5)
(1,107.3)
343.0
1) The Company has issued 8,710,712,791 shares (representing 99% of equity) as
part of the financial restructuring. Based on valuation done by an independent
financial advisor, management has assessed that the fair value of the equity
instrument issued on 20 December 2021 is USD 59.3 million. The outstanding
number of shares after the financial restructuring is 8,798,699,789.
The net gain arising from the substantial modification of debt is as follows:
Equitization of shares
Fair value of shares
Gain from extinguishment of debt (Note 9)
Refinancing costs (Note 9)
Net gain from extinguishment of debt
(1,107.3)
59.3
(1,048.0)
17.5
(1,030.5)
60
USD 250 million credit facility
The credit facility of USD 1,300 million was restructured in December 2021. USD
250 million was reinstated and an amount of USD 38 million was paid to lenders
and the remaining outstanding amount was converted to equity in December
2021. The USD 250 million facility matures in 2025.
USD 93 million credit facility
This credit facility, which previously consisted of one tranche of USD 144 million
(Safe Notos) was restructured in December 2021. The facility has USD 93 million
outstanding. USD 9 million was paid to lenders in December 2021 and the
remaining outstanding amount was converted to equity. The USD 93 million facility
matures in 2025.
Covenants as per amendment in December 2021:
Minimum liquidity
The Borrower shall procure that the Minimum Liquidity of the Group (for the
avoidance of doubt, excluding the New Group (Prosafe Offshore Holdings Pte. Ltd.,
Safe Eurus Singapore Pte. Ltd., Axis Nova Singapore Pte. Ltd. and Axis Vega
Singapore Pte. Ltd.) calculated on each quarter date does not fall below (i) USD 18
million to and including 31 December 2022; (ii) USD 23 million from and including
1 January 2023 to and including 31 December 2023 and (iii) USD 28 million from
and including 1 January 2024 and thereafter. As at 31 December 2022, the Group
Liquidity for the bank covenants is USD 80.0 million (2021: USD 67.9 million) and
New Group is USD 11.6 million (2021: USD 6 million).
Interest on credit facilities
Interest is USD 3-month LIBOR plus margin of 2.50% on both credit facilities, the
USD 250 million and the USD 93 million facilities. The transition from USD LIBOR to
SOFR will take place on 31 March 2023 with credit adjustment spread of 0.26161%
published by Bloomberg Index Services Limited on 5 March 2021.
Excess cash sweep
There is an excess cash sweep with testing on 31 December each year. The cash
sweep was tested on 31 December 2022 and there was no excess cash sweep on
that testing date. The excess cash sweep amount means the amount that is equal
to the lowest of the excess cash amount on the relevant testing date and any of the
coming four quarter dates (based on the Group’s firm liquidity forecast), subject
always to a minimum of zero on each of those dates. Excess cash means, the sum
of unrestricted cash, less the cash sweep threshold (USD 66 million), less cash
interest payable on the next interest payment date and less any new shareholder
contributions in the previous 12 months.
Dividend distribution
Dividend distribution is restricted until 3 years elapsed from December 2021 unless
share capital has been subsequently increased by an amount at least equal to the
distribution and may only be paid with Majority of Lender's Approval. Majority
Lender's Approval refers to 66 2/3 consent from the lenders of each of the USD 250
million and USD 93 million facilities.
Financial indebtedness
The Group is restricted from incurring new debts unless the outstanding amount
does not exceed USD 20 million in aggregate or after obtaining Majority Lender's
Approval.
Investment restrictions
The Group is restricted from making any investments unless Majority Lender's
Approval is obtained for the transaction or if the investment transaction in target
is funded fully through share issuance or cash proceeds from equity offering, the
target has positive cash flows after debt service on 24 months forward looking
pro-forma basis and does not have any financial indebtedness.
The Majority Lender's Approval is required for the delivery of Safe Nova or Safe Vega
Vessel.
Sellers' credits
COSCO (Qidong) Offshore Co. Ltd. (Cosco) granted a sellers’ credit of USD 99.4
million on the final delivery instalment of the Safe Eurus in 2019. The Group
is paying Cosco the minimum instalments under the Safe Eurus sellers' credit.
As at 31 December 2022, USD 90.5 million (2021: USD 94.4 million) gross was
outstanding.
61
The Safe Notos seller credit (2nd priority) granted from Cosco was part of the
restructuring that was completed in December 2021. There is nothing outstanding
on the Safe Notos seller credit as of 31 December 2021, as Cosco has been granted
shares as part of the equitisation of debt in December 2021.
Difference between face value and carrying amount - Sellers Credits
In 2019, Prosafe took delivery of Safe Eurus and issued a promissory note with a
principal amount of USD 99.4 million to COSCO Shipping (Qidong) Offshore Co. Ltd.
As the partial payment for the vessel was deferred beyond normal credit terms,
the cost of the vessel was the cash price equivalent at the recognition date. The
Safe Eurus promissory note was initially recognised at fair value and subsequently
measured at amortised cost. The fair value of the below-market loan was measured
as the present value of the expected future cash flows, discounted using an
appropriate market related rate. The initial applicable discounting rate was similar
to the rate charged by the credit facilities lenders of 3-months USD Libor plus 3.35%
per annum in 2019. The difference between the cash price equivalent and the
principal amount of the promissory note was determined to be USD 25.4 million.
This amount will be recognised as interest over the period of credit. The repayment
schedule and interest expense on the promissory note depends on the financial
performance of the vessel.
In 2022, management revised the repayment schedule and interest expense on
the promissory note based on the updated financial performance of the vessel. The
revised expected maturity date is August 2028 (2021: December 2027). Subsequent
to the revision in estimates of payment, a fair value decrease of USD 1.2 million was
recognised in the carrying amount of Safe Eurus (See note 8).
NOTE 15: OTHER CURRENT LIABILITIES
Various accrued costs
Contract liabilities
Total interest-free current liabilities
2022
2021
17.5
0.0
17.5
17.4
1.1
18.5
NOTE 16: MORTGAGES AND GUARANTEES
2022
As at 31 December 2022, the Group’s interest-bearing debt secured by mortgages
totalled USD 344.2 million. The debt was secured by mortgages on the
accommodation/service vessels Safe Caledonia, Safe Concordia, Safe Scandinavia,
Safe Boreas, Safe Zephyrus and Safe Notos (net carrying value USD 283.5 million).
Negative pledge clauses apply on shares in the vessel owning subsidiaries. Earnings
accounts are pledged as security for the credit facilities, but cash will only be
restricted if a continuing event of default occurs and the bank sends notice on that.
As at 31 December 2022, the Group had issued parent company guarantees to
clients on behalf of its subsidiaries in connection with the award and performance
of contracts and Cosco (Qidong) Co., Ltd approximately USD 35 million and USD
60 million respectively. The amounts specified with regard to parent company
guarantees reflect the sum of the estimated capped liability under the relevant
agreements.
2021
As at 31 December 2021, the Group’s interest-bearing debt secured by mortgages
totalled USD 343.4 million. The debt was secured by mortgages on the
accommodation/service vessels Safe Caledonia, Safe Concordia, Safe Scandinavia,
Safe Boreas, Safe Zephyrus and Safe Notos (net carrying value USD 298.2 million).
Negative pledge clauses apply on shares in the vessel owning subsidiaries. Earnings
accounts are pledged as security for the credit facilities, but cash will only be
restricted if a continuing event of default occurs and the bank sends notice on that.
As at 31 December 2021, the Group had issued parent company guarantees to
clients on behalf of its subsidiaries in connection with the award and performance
of contracts and Cosco (Qidong) Co., Ltd approximately USD 94.3 million and
79.7 million respectively. The amounts specified with regard to parent company
guarantees reflect the sum of the estimated capped liability under the relevant
agreements.
62
NOTE 17: FINANCIAL ASSETS AND LIABILITIES
As at 31 December 2022, the Group had financial assets and liabilities in the following categories:
Year ended 31 December 2022
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Interest-bearing debt 1)
Accounts payable
Other current liabilities
Other non-current liabilities
Total financial liabilities
Financial assets
measured at
amortised cost
Financial liabilities
measured at
amortised cost
Carrying value
Fair value
91.6
20.6
3.5
115.7
0.0
0.0
0.0
0.0
422.2
3.1
17.5
1.9
444.7
91.6
20.6
3.5
115.7
422.2
3.1
17.5
1.9
444.7
91.6
20.6
3.5
115.7
422.2
3.1
17.5
1.9
444.7
1) Refer to note 14 for details on interest-bearing debt.
Management assessed the cash and deposits, accounts receivables, other current assets, accounts payable and other current liabilities
to approximate their carrying amounts largely due to the short-term maturities of these instruments.
63
As at 31 December 2021, the Group had financial assets and liabilities in the following categories:
Year ended 31 December 2021
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Interest-bearing debt 1)
Accounts payable
Other current liabilities
Other non-current liabilities
Total financial liabilities
Financial assets
measured at
amortised cost
Financial liabilities
measured at
amortised cost
Carrying value
Fair value
73.9
14.1
3.5
91.5
0.0
0.0
0.0
0.0
423.3
1.8
18.5
2.2
445.8
73.9
14.1
3.5
91.5
423.3
1.8
18.5
2.2
445.8
73.9
14.1
3.5
91.5
423.3
1.8
18.5
2.2
445.8
1) Refer to note 14 for details on interest-bearing debt.
Management assessed the cash and deposits, accounts receivables, other current assets, accounts payable and other current liabilities
to approximate their carrying amounts largely due to the short-term maturities of these instruments.
As at 31 December 2021, the fair value of the interest rate caps amounted to less than USD 0.1 million of the financial assets and was not
material for further disclosure.
64
NOTE 18: FINANCIAL RISKS
The Group operates on a global basis with cash flows and financing in various
currencies. This means that the Group is exposed to market risks related to
fluctuations in exchange rates and interest rates. The Group's presentation currency
is USD, and financial risk exposure is managed with financial instruments in
accordance with internal policies and standards approved by the Board of Directors.
After restructuring in 2021, there are no credit lines available for hedging of
financial risks and consequently such risks remained unhedged in 2022.
Currency risk
The Group is exposed to currencies other than USD associated with operating
expenditure, capital expenditure, tax, cash and deposits. Operating expenditure,
capital expenditure and tax are mainly denominated in GBP, BRL and NOK. Cash and
deposits are mainly denominated in USD, GBP, BRL and NOK.
Currency risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant
exchange rates and reflects the main effects on profit or loss and equity assuming
that the change had occurred at the balance sheet date. A 10% strengthening/
weakening of the USD against GBP, BRL and NOK will have the following effects.
Exposures to foreign currency changes for all other currencies are not material.
Pre-tax effects on income statement
2022
2021
USD +10%
Re-valuation cash and deposits
USD -10%
The Group's interest rate risks arise primarily from its variable rate credit facilities.
As at 31 December 2022, the Group has not entered into arrangements to hedge
the floating interest rate (As at 31 December 2021, interest on debt is in principle
floating but had been hedged to reduce the variability of cash flows in the interest
payments through the use of interest rate cap and interest rate swap agreements).
The interest rate swaps were terminated in 2021 and the interest rate cap has
matured in February 2022.
The Group evaluates the hedge profile in relation to the repayment schedule of
its loans. Due to current unfavourable pricing of the interest rate swap and short
maturity of the interest bearing debt, the Group has decided not to hedge the
floating interest rate. After restructuring in 2021, there are no credit lines available for
hedging of financial risks and consequently such risks remained unhedged in 2022.
Interest rate caps
As at 31 December 2021, the Group had interest rate caps with notional amount
of USD 120 million, capped rate of 3.0000% and mature in February 2022. The fair
value of these interest rate caps amounted to less than USD 1,000 and was not
material for further disclosure in 2021.
Interest rate swaps
The interest rate swaps were terminated in 2021. The terminated amount was not
paid to the counterparties as part of the financial restructuring agreement. The
terminated amount was reclassified to the interest-bearing debt.
Notional amount
Fixed rate
Maturity
Swap type
Terminated
value
(2.5)
(1.8)
2021
USD 120 million
1.5330 %
2022
Bullet
(4.7)
Re-valuation cash and deposits
2.5
1.8
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Fair value
interest rate risk is that the fair value of a financial instrument will fluctuate due to
changes in market interest rates.
Interest rate risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant
interest rate and reflects the main effects on profit or loss and equity assuming
that the change had occurred at the balance sheet date. In 2021, a forward curve
shift of ±50bps was applied in the sensitivity analysis and there is no material
impact to the outstanding interest rate cap. A ±50bps change in interest rate will
have the following effects in 2022.
65
Pre-tax effects on income statement
US LIBOR +50bps
Interest expense on credit facilities
US LIBOR -50bps
Interest expense on credit facilities
2022
1.7
(1.7)
Managing interest rate benchmark reform and associated risks
A fundamental reform of major interest rate benchmarks is being undertaken
globally, including the replacement of some interbank offered rates (IBORs) with
alternative nearly risk-free rates (referred to as ‘IBOR reform’). As at 31 December
2022, the Group’s IBOR exposure is indexed to US dollar LIBOR. The alternative
reference rate for US dollar LIBOR is the Secured Overnight Financing Rate (SOFR).
The Group has entered into fallback clauses for the Group's US dollar LIBOR indexed
exposures. These clauses switch the instrument from USD LIBOR to SOFR on 31
March 2023 with credit adjustment spread of 0.26161% published by Bloomberg
Index Services Limited on 5 March 2021.
Management monitors and manages the transition to alternative risk-free rates.
Management evaluates whether the contracts which are referenced to IBORs
will need to be amended as a result of IBOR reform and how to manage such
communication with the counterparties.
Non-derivative financial liabilities
The Group’s IBOR exposures to non-derivative financial liabilities as at 31 December
2022 included USD 343 million credit facility indexed to USD LIBOR. The transition
from USD LIBOR to SOFR will take place on 31 March 2023 with credit adjustment
spread of 0.26161% published by Bloomberg Index Services Limited on 5 March
2021.
Total amounts of unreformed contracts, including those with an appropriate fallback
clause
The Group monitors the progress of transition from IBORs to new benchmark
rates by reviewing the total amounts of contracts that have yet to transition to
an alternative benchmark rate and the amounts of such contracts that include
an appropriate fallback clause. The Group considers that a contract is not yet
transitioned to an alternative benchmark rate when interest under the contract is
indexed to a benchmark rate that is still subject to IBOR reform, even if it includes a
fallback clause that deals with the cessation of the existing IBOR (referred to as an
‘unreformed contract’).
The following table shows the total carrying amounts of unreformed contracts
and those with appropriate fallback clauses at 31 December 2022 and at 1 January
2022.
USD LIBOR
31 December 2022
Financial liabilities
Total amount
of unreformed
contracts
Amount with
appropriate
fallback clause
Credit facilities - face value
344.2
344.2
1 January 2022
Financial liabilities
Credit facilities - face value
343.4
343.4
Credit risk
In line with industry practice, other contracts normally contain clauses which give
the customer an opportunity for early cancellation under specified conditions.
Providing the Group has not acted negligently, however, the effect on results in
such cases will normally be wholly or partly offset by a financial settlement in the
Group’s favour.
Credit assessment of financial institutions issuing guarantees in favour of the
Group, yards, sub-contractors and equipment suppliers is part of the Group’s
project evaluations and risk analyses. The counterparty risk is in general limited
when it comes to the Group’s clients, since these are typically major oil companies
and national oil companies.
66
The Group held cash and deposits of USD 91.6 million as at 31 December
2022 (2021: USD 73.9 million) with banks with high credit-ratings assigned by
international credit-rating agencies. The cash balances are measured on 12-month
expected credit losses and subject to immaterial credit loss.
For trade receivables, the Group applies the simplified method of credit reserves,
i.e. the reserve will correspond to the expected loss over the whole life of the trade
receivable. In order to measure the credit losses, trade receivables are grouped
based on credit risk characteristics of its customers. The Group applies forward-
looking variables for expected credit losses. As at 31 December 2022, no credit
reserve has been recorded as the Group's clients are typically major oil companies
and national oil companies and the receivables are usually received within 3
months. The receivables over 60 days have been fully received as of the date of
financial statements. Based on the Group's assessment, the expected credit loss is
not material.
Accounts receivables
31 December 2022
31 December 2021
Total
20.6
14.1
Not
due
11.8
13.7
< 30
days
6.9
0.4
30-60
days
61-90
days
0.0
0.0
1.2
0.0
> 90
days
0.7
0.0
Liquidity risk
The Group is exposed to liquidity risk in a scenario when the Group's cash flow
from operations is insufficient to cover payments of financial liabilities. In order
to mitigate the liquidity risk, the Group monitors the liquidity development and
the risk of insufficient capital by rolling cash flow forecasts to determine whether
the Group's liquidity position is above the minimum cash covenant as per the
loan agreements. Given the significant investments needed to prepare for the
new contracts in 2023, there is uncertainty as to whether the Group will be in
compliance with the minimum liquidity covenant from late 2023. The management
is pursuing different initiatives to mitigate a potential shortfall and with the
objective to remain in compliance taken as described in Note 2 of the consolidated
accounts- Going Concern. The Board of Directors has a reasonable expectation that
the Group has adequate resources to mitigate the uncertainty.
As at 31 December 2022, the Group's main financial liabilities had the following
remaining contractual maturities:
Per year
Interest-bearing debt (repayments) 1)
Interests 2)
Taxes
Accounts payable and other
current liabilities
Total
2023
2024
2025
2026
2027→
6.3
26.0
18.0
20.6
70.9
6.3
349.7
22.7
0.0
20.3
0.0
0.0
0.0
29.0
370.0
7.0
1.4
0.0
0.0
8.4
65.0
1.9
0.0
0.0
66.9
1) Interest-bearing debt includes lease liabilities, credit facilities and seller credit from Cosco. The
credit facilities mature in 2025. Assuming only the firm contracts, there will be no cash sweep
under the credit facilities prior to maturity. The Group is paying the minimum instalments
agreed with Cosco under the Safe Eurus seller credit which matures approximately in 2028.
2) Interest on lease liabilities, credit facilities and seller credits. Based on current agreed credit
margin plus USD 3M LIBOR and SOFR forward curve as at 31 December 2022, and the expected
cash flows under the seller credit terms.
As at 31 December 2021, the Group's main financial liabilities had the following
remaining contractual maturities:
Per year
Interest-bearing debt (repayments) 1)
Interests 2)
Taxes
Accounts payable and other
current liabilities
Total
2022
2023
2024
2025
2026→
4.0
10.0
10.7
20.3
45.0
6.0
13.0
0.0
0.0
19.0
6.0
349.5
71.9
15.8
0.0
17.5
0.0
4.0
0.0
0.0
0.0
21.8
367.0
0.0
75.9
1) Interest-bearing debt includes credit facilities and seller credit from Cosco. The credit facilities
mature in 2025. Assuming only the firm contracts, there will be no cash sweep under the credit
facilities prior to maturity. The Group is paying the minimum instalments agreed with Cosco
under the Safe Eurus seller credit which matures approximately in 2028.
2) Interest on credit facilities and seller credits. Based on current agreed credit margin plus
USD 3M LIBOR forward curve as at 31 December 2021 and the expected cash flows under the
seller credit terms.
67
Capital management
The primary objective of the Group's capital management is to ensure that it
maintains a healthy capital structure in line with economic conditions. The Group
manages the total of shareholders' equity and long-term debt as their capital.
Normally the Group's main tool to assess its capital structure is the leverage
ratio, which is calculated by dividing net interest-bearing debt including bank
guarantees, by Group gross profit before depreciation and impairment over the last
12 months.
As a result of the completion of the financial restructuring process in 2021,
the capital structure of the Group has improved. There was a significant de-
leveraging of the balance sheet with approximately 75 per cent of debt reduction,
a corresponding reduction in annual debt service, and in sum a significantly
improved balance sheet and improved financial flexibility.
NOTE 19: CASH AND DEPOSITS
Restricted cash deposits
Cash held in New Group
Free cash and short-term deposits
Total cash and deposits
2022
2021
2.2
11.6
77.8
91.6
2.4
6.0
65.5
73.9
Under the existing credit facility agreements, the Group is required to maintain a
minimum liquidity of USD 18 million to and including 31 December 2022. See note
14 for details on financial covenants.
NOTE 20: OTHER CURRENT ASSETS
Other receivables
Prepayments
Stock
Other current assets
Contract assets
Total other current assets
2022
2021
0.9
1.5
4.8
0.6
2.0
9.8
1.6
1.4
0.7
1.6
0.3
5.6
NOTE 21: RELATED PARTY DISCLOSURES
The financial statements comprise the parent company, Prosafe SE, and the
subsidiaries listed below.
Company name
of incorporation Ownership
Country
Prosafe Services Maritimos Ltda
Prosafe Offshore BV
Prosafe AS
Axis Nova Singapore Pte. Ltd.
Axis Vega Singapore Pte. Ltd.
Prosafe Offshore Holdings Pte. Ltd.
Prosafe Offshore Pte. Ltd.
Prosafe Rigs Pte. Ltd.
Safe Eurus Singapore Pte. Ltd.
Prosafe (UK) Holdings Ltd.
Prosafe Offshore Ltd.
Prosafe Rigs Ltd.
Brazil
Netherlands
Norway
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
United Kingdom
United Kingdom
United Kingdom
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Voting
share
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Transactions and outstanding balances within the Group have been eliminated in
full.
68
Shares owned by senior officers and directors at 31 December 2022:
(includes shares owned by close family/relatives and wholly-owned companies)
Directors:
Glen Ole Rødland - Chairman 1)
Alf C. Thorkildsen - Deputy Chairman 2)
Birgit Aagaard-Svendsen - Director
Nina Udnes Tronstad - Director
Halvard Idland - Director (from May 2022)
Shares
100,000
0
3
6,000
0
1) Mr Rødland has an indirect ownership interest in Prosafe due to his ownership
interest in North Sea Strategic Investments.
2) Mr Thorkildsen has an indirect ownership interest in Prosafe due to his ownership
interest in North Sea Strategic Investments and HitecVision VI Invest Sierra.
Related party transactions
The Group has an agreement with OMP Management AS for the purpose of
providing advice and support in regards to industry analysis and potential M&A
transactions. OMP Management AS is a Norwegian company that is controlled by
HitecVision VI Invest Sierra, which together with another HitecVision fund (North
Sea Strategic Investments) are major shareholders in the Group. The fee payable
by the Group is USD 17,500 per month up to September 2022 and USD 10,000
per month from October to December 2022 and a success fee if a transaction,
as defined in the engagement letter, should occur with the involvement of OMP
Management AS. The success fee shall be calculated on the basis of the enterprise
value of the company or asset(s) acquired and be between 0.75%-1.25% of the
total enterprise value, depending on the size of the transaction. The success fee
shall furthermore in all circumstances be capped at USD 3.5 million in any single
transaction. In 2022, the transacted amount was USD 0.2 million (2021: USD 0.2
million). The outstanding balance as of 31 December 2021 and 31 December 2022
is below USD 50,000. The agreement was terminated in January 2023.
The Group has a framework agreement with Global Maritime. Under the
framework agreement, the Group has engaged Global Maritime to undertake
projects for the Group's vessels. Global Maritime is majority-owned by HitecVision,
which through one or more entities is a major shareholder of the Company. The
Global Maritime projects value is about USD 1.7 million, of which USD 0.5 million
was transacted during the year (2021: USD 0.7 million) and there is no outstanding
balance as of 31 December 2022 (outstanding balance of USD 0.4 million as of 31
December 2021 were due and payable under normal payment terms).
NOTE 22: CAPITAL COMMITMENTS
New builds
As at 31 December 2022, the Group had two (2021: two) undelivered completed
new builds residing at Cosco's Qidong shipyard in China; Safe Nova and Safe Vega.
Safe Nova and Safe Vega
The Group is committed to pay USD 25 million upon delivery of each of the vessels
and the remainder of the costs will be financed by Cosco. The repayment of
Cosco financing and interest rates are linked to respective vessel future earnings
and day rate. The Group received Force Majeure delay notice from Cosco on 20
September 2022 notifying the damage made on Safe Nova and Safe Vega caused
by Typhoon Muifa in China and requires a lengthy time to repair both vessels. The
yard has started to undertake repairs. The Group is in discussion with Cosco on
the revised delivery date of the vessels. The Group will also be required to fund any
mobilization costs required post delivery of the rigs which is currently estimated to
be approximately USD 20 million.
69
PARENT COMPANY
ACCOUNTS
INCOME STATEMENT - PROSAFE SE
(USD 1 000)
Note
2022
Income from investments in subsidiaries
Impairment of shares in subsidiaries
Results of investing activities
Operating expenses
Operating loss
Interest income
Interest expenses
Other financial income
Other financial expenses
Net financial items
(Loss)/Profit before taxes
Taxes
Net (loss)/profit
6
2
4
4
3
3
4
5
20,000
(48,264)
(28,264)
(5,732)
(33,996)
7,643
(14,798)
51,766
(23,608)
21,003
(12,993)
(18)
(13,011)
2021
0
(135,888)
(135,888)
(4,210)
(140,098)
8,152
(34,134)
1,047,899
(77,899)
944,018
803,920
0
803,920
Attributable to equity holders of the company
(13,011)
803,920
STATEMENT OF COMPREHENSIVE INCOME - PROSAFE SE
(USD 1 000)
Net (loss)/profit
Other comprehensive loss that will not be reclassified
to profit or loss in subsequent periods
Pension remeasurement
2022
2021
(13,011)
803,920
(109)
(145)
Total comprehensive (loss)/income for the year, net of tax
(13,120)
803,775
Attributable to equity holders of the company
(13,120)
803,775
71
STATEMENT OF FINANCIAL POSITION - PROSAFE SE
(USD 1 000)
ASSETS
Shares in subsidiaries
Intra-group receivables
Total non-current assets
Cash and deposits
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Share premium reserve
Share capital reduction reserve
Total paid-in equity
Retained earnings
Share-based payments reserve
Total equity
Interest-bearing long-term debt
Interest-free long-term liabilities
Total long-term liabilities
Interest-bearing current debt
Accounts payable
Intra-group current liabilities
Other interest-free current liabilities
Total current liabilities
Total equity and liabilities
Note
6
11, 13
13
7, 11,13
2022
2021
308,997
18,294
327,291
19,909
426
20,335
347,626
276,348
21,646
297,994
19,382
42,485
61,867
359,861
12,438
624,154
71,846
497,505
624,154
71,846
8
708,438
1,193,505
(709,258)
(1,181,205)
886
66
0
12,300
9, 13,14
343,000
343,000
13
1,877
2,182
344,877
345,182
9,13
13,14
11,13,14
10, 13,14
1,177
65
516
925
2,683
438
637
67
1,237
2,379
347,626
359,861
On 28 March 2023, the Board of Directors of Prosafe SE approved
and authorised these financial statements for issue.
Glen Ole Rødland
Non-executive Chairman
Alf C. Thorkildsen
Non-executive Deputy Chairman
Birgit Aagaard-Svendsen
Non-executive Director
Nina Udnes Tronstad
Non-executive Director
Halvard Idland
Non-executive Director
Jesper K. Andresen
Chief Executive Officer
72
CASH FLOW STATEMENT - PROSAFE SE
(USD 1 000)
Note
2022
2021
Cash flow from operating activities
(Loss)/Profit before taxes
Gain from extinguishment of debt
Unrealised currency loss on long-term debt
Expected credit loss, net
Impairment shares in subsidiaries
Interest income
Interest expenses
Share-based payment expense
Change in working capital
Taxes paid
Other items from operating activities
Net cash flow provided by/(used in) operating activities
Cash flow from investing activities
Increase of shares in subsidiaries
Reduction of shares in subsidiary
Change in intra-group balances
Interest received
Net cash flow provided by investing activities
Cash flow from financing activities
Repayment of interest-bearing debt
Refinancing costs
Interest paid
Net cash flow used in financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
(12,993)
803,920
9
0
(1,030,532)
9,851
(42,631)
48,264
(7,643)
14,798
517
(99)
(18)
3,097
13,143
(400)
1,969
3,275
110
4,954
0
(3,511)
(14,059)
(17,570)
527
19,382
19,909
3,216
56,869
135,888
(8,152)
34,134
0
(8,864)
0
311
(13,210)
0
0
43,628
8,152
51,780
(75,517)
(17,367)
0
(92,884)
(54,314)
73,696
19,382
9
13
73
STATEMENT OF CHANGES IN EQUITY - PROSAFE SE
(USD 1 000)
Equity at 31 December 2020
Net profit
Other comprehensive loss
Total comprehensive income 1)
Conversion of convertible bonds
Share issuance through debt conversion 2)
Share capital reduction
Equity at 31 December 2021
Net loss
Other comprehensive loss
Total comprehensive loss 1)
Share based payment
Share capital reduction
Equity at 31 December 2022
Note
Share
capital
Share
premium
Capital
reduction
reserve
Retained
earnings
Share-based
payments
reserve
Convertible
bonds
Total
equity
9,097
1,039,317
71,846
(1,989,827)
0
0
0
597
492,658
(4,847)
497,505
0
0
0
0
(485,067)
12,438
0
0
0
18,172
(433,335)
0
0
0
0
0
0
0
803,920
(145)
803,775
0
0
4,847
624,154
71,846
(1,181,205)
0
0
0
0
0
0
0
0
0
0
624,154
71,846
(13,011)
(109)
(13,120)
0
485,067
(709,258)
8
8
0
0
0
0
0
0
0
0
0
0
0
886
0
886
18,769
0
0
0
(18,769)
0
0
0
0
0
0
0
0
0
(850,798)
803,920
(145)
803,775
0
59,323
0
12,300
(13,011)
(109)
(13,120)
886
0
66
1) Total comprehensive income/(loss) is attributable to the owners of the company
2) See note 14 of the consolidated accounts for details.
Nature and purpose of reserves
Share premium: The difference between the issue price of the shares and their nominal value.
74
Board of directors
Glen Ole Rødland (Chairman)
Alf C. Thorkildsen (Deputy Chairman)
Birgit Aagaard-Svendsen
Nina Udnes Tronstad
Halvard Idland (from May 2022)
Total fees 1)
Glen Ole Rødland (Chairman)
Birgit Aagaard-Svendsen
Nina Udnes Tronstad
Alf C. Thorkildsen
Total fees 1)
Year
2022
2022
2022
2022
2022
2021
2021
2021
2021
Board fees
115
94
95
85
52
441
122
91
84
78
375
1) If applicable, figures include compensation from the audit committee and
compensation committee.
Number of employees
The average number of employees in the Company for 2022 was 2 (2021: 2).
NOTES - PROSAFE SE
All figures in USD 1 000 unless otherwise stated.
NOTE 1: ACCOUNTING POLICIES
The financial statements have been prepared in accordance with the International
Financial Reporting Standards (IFRS) endorsed by the European Union (EU) and the
requirements of the Norwegian Accounting Act. The accounting policies applied to
the consolidated accounts have also been applied to the parent company, Prosafe
SE. The accounting policies adopted are consistent with those in the previous
financial years. The parent company financial statements should be read in
conjunction with the consolidated accounts. The notes of the consolidated accounts
provide additional information to the parent company's accounts which is not
presented here separately. The Company's functional currency is US dollars (USD),
and the financial statements are presented in USD. Investments in subsidiaries are
measured at historic cost, unless there is any indication of impairment. In case of
impairment, an investment is written down to recoverable amount.
NOTE 2: OPERATING EXPENSES
Services from subsidiaries
Directors’ fees
Salaries and management bonus
Other remuneration
Share-based payment expense a)
Payroll taxes
Pension expenses
Auditors' audit fees
Auditors' other fees
Legal and consultancy fees
Office insurance
Other operating expenses
Total operating expenses
2022
2021
1,526
441
1,221
88
517
167
100
153
5
584
368
562
871
375
1,451
41
0
192
95
212
90
316
259
308
5,732
4,210
a) See note 6 of the consolidated financial accounts for details
75
NOTE 3: OTHER FINANCIAL ITEMS
Gain from extinguishment of debt 1)
Reversal of expected credit loss 2)
Total other financial income
Fair value adjustment interest rate swaps
Currency loss
Expected credit loss 2)
Other financial expenses 3)
Total other financial expenses
2022
0
51,766
51,766
0
(9,910)
(9,135)
(4,563)
(23,608)
2021
1,047,899
0
1,047,899
(169)
(3,217)
(56,869)
(17,644)
(77,899)
1) In 2021, there was a gain from extinguishment of debt as a result of the completion of the financial restructuring
process. For further information, see note 14 of the consolidated accounts.
2) For further information, see note 11 relating to allowance of expected credit loss of receivables from subsidiaries.
3) In 2022, the financial expenses largely relates to Cosco global deed settlement as part of the refinancing restructuring
process. (2021: largely arose from costs relating to the financial restructuring process. For further information, see note
14 of the consolidated accounts.)
NOTE 4: FINANCIAL ITEMS
Year ended 31 December 2022
Interest income (a)
Reversal of expected credit loss
Total other financial income (b)
Interest expenses
Total interest expenses (c)
Expected credit loss
Other financial expenses 1)
Currency loss 1)
Total other financial expenses (d)
Financial assets
measured at
amortised cost
Financial liabilities
measured at
amortised cost
7,643
51,766
51,766
0
0
(9,135)
0
0
(9,135)
0
0
0
(14,798)
(14,798)
0
0
0
0
Total
7,643
51,766
51,766
(14,798)
(14,798)
(9,135)
(4,563)
(9,910)
(23,608)
Net financial items (a)+(b)+(c)+(d)
50,274
(14,798)
21,003
1) Excluded from the category breakdown but added to the total for net effect.
76
Year ended 31 December 2021
Interest income (a)
Gain from extinguishment of debt
Total other financial income (b)
Interest expenses
Amortisation of borrowing costs
Amortisation of amortised cost
Total interest expenses (c)
Fair value adjustment interest rate swaps
Expected credit loss
Other financial expenses 1)
Currency loss 2)
Total other financial expenses (d)
Financial assets
measured at
amortised cost
8,152
0
0
0
0
0
0
0
(56,869)
0
0
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost
0
0
0
0
0
0
0
(169)
0
0
0
Total
8,152
0
1,047,899
1,047,899
1,047,899
1,047,899
(31,611)
(5,426)
2,903
(34,134)
0
0
(276)
0
(276)
(31,611)
(5,426)
2,903
(34,134)
(169)
(56,869)
(17,644)
(3,217)
(77,899)
(56,869)
(169)
Net financial items (a)+(b)+(c)+(d)
(48,717)
(169)
1,013,489
944,018
1) USD 17.4 million of refinancing costs were excluded from the category breakdown but added to the total for net effect.
2) Excluded from the category breakdown but added to the total for net effect.
77
NOTE 5: TAXES
Taxes
Total taxes in income statement
Temporary differences:
Loss carried forward
Basis for deferred tax liability (+)/benefit (-)
Deferred tax liability (+)/benefit (-)
Taxes payable at 31 December
2022
2021
18
18
0
0
(405,989)
(405,989)
(310,502)
(310,502)
0
0
0
0
The corporate tax rate in Norway for 2022 was 22% (2021: 22%).
The value of the deferred tax assets is not recognised in the accounts as the probability of
having sufficient future taxable profit to utilise the deferred tax assets as tax deductions cannot
be established.
Reconciliation of effective tax rate (IAS 12.81)
Tax rate
(Loss)/Profit before taxes
Tax based on applicable tax rate
Tax effect of non-deductible expenses
2022
2021
22.0 %
(12,993)
(2,858)
13,901
22.0 %
803,920
176,862
43,670
Tax on income not taxable in determining taxable profit
(13,779)
(226,673)
Tax effect due to unrecognized deferred tax assets
Tax charge
2,754
(18)
6,141
0
78
NOTE 6: SHARES IN SUBSIDIARIES
(Carrying value and total equity in 1 000)
2022 Ownership
Number
at 31 December
31 December
at 31 December
Investment
Total
Investment
carrying value
Equity at
carrying value
Companies
& Voting Share
of Shares
Prosafe AS 1)
Prosafe (UK) Holdings Ltd. 2)
Prosafe Offshore Pte. Ltd. 3)
Prosafe Rigs Pte. Ltd. 3)
Prosafe Offshore Holdings Pte. Ltd. 3)
Prosafe Offshore Ltd. 2)
Prosafe Rigs Ltd. 2)
Total
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100
2,000,000
646,050,000
2,821,040,000
25,599,000
2
2
2022
1,000
34
7,441
300,122
400
0
0
308,997
2022
4,738
34
16,381
298,496
940
12,779
(14)
2021
0
9,826
1,400
265,122
0
0
0
276,348
The registered addresses of the subsidiaries and associated company are as follows:
1) Forusparken 2, N-4031 Stavanger, Norway
2) 1st Floor, 10 Temple Back Bristol BS1 6FL, United Kingdom
3) 1 International Business Park, #09-03 The Synergy, Singapore 609917
2022
1) The Company has increased the investment in Prosafe AS by offsetting the
amount due from Prosafe AS of USD 42.5 million
2) Prosafe (UK) Holdings Limited has returned USD 2.0 million to the Company as a
reduction in capital.
3) The Company has increased the investment in Prosafe Rigs Pte. Ltd. by offsetting
the amount due from Prosafe Rigs Pte. Ltd. of USD 40 million.
4) The Company has increased the investment in Prosafe Offshore Holdings Pte.
Ltd by USD 0.4 million.
5) Prosafe (UK) Holdings Limited transferred 100% of shares in Prosafe Offshore
Limited and Prosafe Rigs Limited to the Company as part of the group
restructuring process.
79
Based on management's assessment of impairment indicators, there were
triggers which indicated that the expected recoverable amount was less than
the investment carrying value of the following subsidiaries. The expected
recoverable amount was estimated based on the fair value of the subsidiaries.
The determination of vessels valuation (as disclosed in note 8 of the consolidated
accounts) has a direct impact on the fair value of the Company's shares in
particular for subsidiaries holding offshore contracts and vessels. As a result, the
following impairment charges/(reversal) were made:
Prosafe Rigs Pte. Ltd.
Prosafe Offshore Pte. Limited
Prosafe (UK) Holdings Limited
Prosafe AS
Total
2022
2021
5,000
(6,041)
7,823
41,482
48,264
76,700
0
0
59,188
135,888
There are mortgages on the shares in Prosafe Rigs Pte. Ltd. and Prosafe Offshore
Pte. Limited.
NOTE 7: OTHER CURRENT ASSETS
Current receivables due from subsidiaries
Other current assets
Total other current assets
2022
2021
78
348
426
41,352
1,133
42,485
NOTE 8: SHARE CAPITAL, CONVERTIBLE BONDS, WARRANTS
AND SHARE BASED-PAYMENTS RESERVES
Issued and paid up number of ordinary shares
at 31 December 1)
Total authorised number of shares
at 31 December
Nominal value at 31 December 2) 3) 4)
Number of shareholders at 31 December
2022
2021
8,798,699 8,798,699,789
8,798,699 8,798,699,789
EUR 1.25
EUR 0.05
4,834
4,850
1) In 2021, the financial restructuring process was fully implemented and
completed. As a result of conversion of convertible bonds in 2021 and
equitisation of debts, the outstanding number of shares increased by 5,522,786
and 8,710,712,791 respectively. See note 14 of the consolidated account for
details on the financial restructuring.
2) In 2021, the Company reduced the nominal value of its shares from EUR 0.10 to
EUR 0.05 per share. As a result, there was a reduction in share capital by USD 4.8
million and a corresponding increase in other equity.
3) On 27 January 2022, the Company completed a 1,000:1 reverse split of the
Company's shares to satisfy the minimum requirement to market value of the
issuer's shares for listed companies. After the reverse share split, 1,000 shares
with a nominal value of EUR 0.05 give 1 new share with a nominal value of
EUR 50.00. The number of outstanding shares in the Company after the reverse
split is 8,798,699.
4) At the AGM on 11 May 2022, the shareholders approved to reduce the share
capital by reducing the nominal value of the shares from EUR 50.00 to EUR 1.25.
As a result, the Company recorded a reduction in share capital by USD 485.1
million and a corresponding increase in other equity.
80
Ordinary shares
2022
2021
In issue at 1 January
8,798,699,789
82,464,212
Issued in connection with conversion of
convertible bonds
Issued in connection with the debt conversion
0
0
5,522,786
8,710,712,791
Reconciliation of movements of
interest-bearing debt to cash flows
arising from financing activities
2022
2021
At 1 January
343,438
1,413,130
Reverse share split
(8,789,901,090)
0
Changes from financing cash flows
In issue at 31 December fully paid up
8,798,699
8,798,699,789
- Repayments of interest-bearing debt
0
(75,517)
Convertible bonds & warrants
There are no outstanding bonds and warrants as at 31 December 2022 and 2021.
In 2021, the bonds and warrants were converted/cancelled as part of the financial
restructuring. For further information, see note 14 of the consolidated accounts
relating to financial restructuring in 2021.
Share-based payments reserve
Share-based payments reserve comprises the cumulative value of services received
from employees recorded on grant of equity-settled share options, The expense for
service received is recognised over the vesting period. The amount in the share-
based payments reserve is retained when the options are exercised or expire. See
note 6 of the consolidated financial accounts for details.
NOTE 9: INTEREST-BEARING DEBT
Credit facilities - face value
Total interest-bearing debt
Current interest-bearing debt
Non current interest-bearing debt
Total interest-bearing debt
2022
2021
344,177
344,177
343,438
343,438
1,177
343,000
344,177
438
343,000
343,438
For further information, see note 14 of the consolidated accounts relating to
financial restructuring in 2021.
- Interest paid
- Refinancing costs
Total changes from financing cash flows
(14,059)
(3,511)
(17,570)
0
(17,367)
(92,884)
Other liability-changes
- Non-cash movement in interest bearing debt
- Debts transferred from a subsidiary
- Refinancing costs
- Extinguishment of debt
- Debts equitized for shares
- Interests unpaid
- Interest expenses
- Swaps termination 1)
0
0
3,511
0
0
0
14,798
0
286
75,206
0
(1,030,532)
(59,323)
32,855
0
4,700
Total liability-related changes
18,309
(976,808)
At 31 December
344,177
343,438
1) Interest rate swaps which were terminated by the swap banks during 2021 were
included as part of interest-bearing debt.
81
NOTE 10: OTHER INTEREST-FREE CURRENT LIABILITIES
Year-end current balances
2022
2021
Current payables due to subsidiaries
Other current liabilities
Total other interest-free current liabilities
NOTE 11: INTRA-GROUP BALANCES
2022
2021
516
925
1,441
67
1,237
1,304
Year-end long-term balances
2022
2021
NOK loan to Prosafe AS
USD loan to Prosafe Offshore Holdings Pte. Ltd.
USD loan to Safe Eurus Singapore Pte. Ltd.
Less: Allowance for credit loss
Intra-group long-term receivables
0
0
130,319
(112,025)
18,294
52,300
70,328
124,343
(225,325)
21,646
Loan agreements with subsidiaries are based on market prices using 3M NIBOR
(NOK loan) and 3M LIBOR (USD loan) interest rates plus a margin of 2.15% (2021:
2.15%) and 2.43-3.70% (2021: 2.43-3.70%) per annum respectively. Outstanding
balances at year-end are unsecured, and settlement normally occurs in cash or via
share capital injection.
The Company has assessed the recoverability of its receivables from subsidiaries
and has an allowance for credit loss of USD 112,025,000 (2021: USD 225,325,000)
based on assessments of their projected future cashflows.
In 2022, the Company entered into conversion of debt agreement with Prosafe AS
by converting the NOK loan to Prosafe AS amount of USD 42.5 million into equity
capital, which resulted in a reversal of credit loss of USD 42,631,000.
In 2022, the Company entered into waiver of receivable agreement with Prosafe
Offshore Holdings Pte. Ltd. by waiving the USD loan to Prosafe Offshore Holdings
Pte. Ltd. amount of USD 70.7 million. As the amount was fully provided in prior year,
there is no impact to profit or loss account.
Current receivables due from subsidiaries
Current payables due to subsidiaries
78
(516)
41,352
(67)
In 2022 and 2021, the current receivables and payables were not subject to any
interest calculation.
In 2022, the Company entered into conversion of debt agreement with Prosafe Rigs
Pte. Ltd. by converting the current receivables due from Prosafe Rigs Pte. Ltd. for the
amount of USD 40.0 million into equity capital.
Transactions with related parties
2022
2021
Transactions
Transfer of third party debts from Prosafe Rigs
Pte. Ltd. as part of debt conversion
Administrative expenses due to Prosafe AS
Interest income
Interest expenses
Share-based payment expense
Dividends from subsidiaries
0
(75,206)
(1,526)
7,533
0
517
20,000
(871)
8,150
(464)
0
0
Prosafe AS are performing services on behalf of Prosafe SE relating to management,
corporate activities, investor relations, financing and insurance. The services are
invoiced on a quarterly basis and paid on market terms. Please refer to note 6 to the
consolidated accounts for disclosure of remuneration to directors.
In 2021, the Company has entered into an agreement with OMP Management AS
for the purpose of providing advice and support in regards to industry analysis and
potential M&A transactions. OMP Management AS is a Norwegian company that is
controlled by HitecVision VI Invest Sierra, which together with another HitecVision
fund (North Sea Strategic Investments) are major shareholders in the Company.
The fee payable by the Company is USD 17,500 per month up to September
2022 and USD 10,000 per month from October to December 2022 and a success
82
fee if a transaction, as defined in the engagement letter, should occur with the
involvement of OMP Management AS. The success fee shall be calculated on the
basis of the enterprise value of the company or asset(s) acquired and be between
0.75%-1.25% of the total enterprise value, depending on the size of the transaction.
The success fee shall furthermore in all circumstances be capped at USD 3.5 million
in any single transaction. In 2022, the transacted amount was USD 187,500 (2021:
USD 218,500) and the outstanding balance of USD 3,125 (2021: USD 21,875) were
due and payable under normal payment terms. The agreement was terminated in
January 2023.
accounts are pledged as security for the credit facilities, but cash will only be
restricted if a continuing event of default occurs and the bank sends notice on that.
As at 31 December 2021, the Company had issued parent company guarantees to
clients on behalf of its subsidiaries in connection with the award and performance
of Cosco (Qidong) Co., Ltd approximately USD 94.3 million and USD 79.7 million
respectively. The amounts specified with regard to parent company guarantees
reflect the sum of the estimated capped liability under the relevant agreements.
NOTE 12: MORTGAGES AND GUARANTEES
NOTE 13: FINANCIAL ASSETS AND LIABILITIES
2022
As at 31 December 2022, the Company’s interest-bearing debt secured by
mortgages totalled USD 344.2 million. The debt was secured by mortgages on the
accommodation/service vessels Safe Caledonia, Safe Concordia, Safe Scandinavia,
Safe Boreas, Safe Zephyrus and Safe Notos (net carrying value USD 283.5 million).
Negative pledge clauses apply on shares in the vessel owning subsidiaries. Earnings
accounts are pledged as security for the credit facilities, but cash will only be
restricted if a continuing event of default occurs and the bank sends notice on that.
As at 31 December 2022, the Company had issued parent company guarantees to
clients on behalf of its subsidiaries in connection with the award and performance
of contracts and Cosco (Qidong) Co., Ltd approximately USD 35 million and USD
60 million respectively. The amounts specified with regard to parent company
guarantees reflect the sum of the estimated capped liability under the relevant
agreements.
2021
As at 31 December 2021, the Company’s interest-bearing debt secured by
mortgages totalled USD 343.4 million. The debt was secured by mortgages on the
accommodation/service vessels Safe Caledonia, Safe Concordia, Safe Scandinavia,
Safe Boreas, Safe Zephyrus and Safe Notos (net carrying value USD 298.2 million).
Negative pledge clauses apply on shares in the vessel owning subsidiaries. Earnings
Year ended 31 Dec 2022
Financial
assets
measured at
amortised
cost
Financial
liabilities
measured at
amortised
cost
Intra-group long-term receivables
Cash and deposits 1)
Other current assets
Total financial assets
18,294
19,909
426
38,629
0
0
0
0
Carrying
value
18,294
19,909
426
38,629
Interest-bearing debt 2)
Accounts payable
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current liabilities
Total financial liabilities
344,177
344,177
65
1,877
516
925
65
1,877
516
925
347,560
347,560
1) Included in cash and deposits were USD 1.9 million of restricted cash deposits.
2) Refer to note 14 of the consolidated accounts for details on fair value of the
interest-bearing debt.
83
Year ended 31 Dec 2021
Financial
assets
measured at
amortised
cost
Financial
liabilities
measured at
amortised
cost
Intra-group long-term receivables
Cash and deposits 1)
Other current assets
Total financial assets
21,646
19,382
42,485
83,513
0
0
0
0
Carrying
value
21,646
19,382
42,485
83,513
Interest-bearing debt 2)
Accounts payable
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current liabilities
Total financial liabilities
343,438
343,438
637
2,182
67
1,237
637
2,182
67
1,237
347,561
347,561
1) Included in cash and deposits were USD 2.1 million of restricted cash deposits.
2) Refer to note 14 of the consolidated accounts for details on fair value of the
interest-bearing debt.
NOTE 14: MATURITY PROFILE LIABILITIES
Year ended 31 December 2022
2023
2024
Interest-bearing debt (repayments) 1)
0
0
Interests on interest bearing debts
25,999
21,839
Intra-group current liabilities
Accounts payable
Other interest-free current liabilities
516
65
925
0
0
0
2025
onwards
343,000
18,865
0
0
0
Total
27,505
21,839
361,865
1) The interest-bearing debt matures in 2025.
Year ended 31 December 2021
2022
2023-
2024
2025
onwards
Interest-bearing debt (repayments) 1)
0
0
Interests on interest bearing debts
10,000
28,000
343,000
16,000
0
0
0
0
0
0
28,000
359,000
Intra-group current liabilities
Accounts payable
Other interest-free current liabilities
Total
67
637
1,237
11,941
1) The interest-bearing debt matures in 2025.
NOTE 15: FINANCIAL RISKS
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Fair value
interest rate risk is that the fair value of a financial instrument will fluctuate due to
changes in market interest rates.
The Company's interest rate risks arise primarily from its variable rate credit facilities.
As at 31 December 2022, the Company has not entered into arrangements to hedge
the floating interest rate (As at 31 December 2021, interest on debt is in principle
floating but had been partially hedged to reduce the variability of cash flows in
the interest payments through the use of interest rate cap and interest rate swap
agreements). The interest rate swaps were terminated in 2021 and the interest rate
cap has matured in February 2022.
The Company evaluates the hedge profile in relation to the repayment schedule of
its loans. Due to current unfavourable pricing of the interest rate swap and short
maturity of the interest bearing debt, the Company has decided not to hedge the
floating interest rate. After restructuring in 2021, there are no credit lines available
for hedging of financial risks and consequently such risks remained unhedged in 2022.
Interest rate caps
As at 31 December 2021, the Company had interest rate caps with notional amount
of USD 120 million, capped rate of 3.0000% and mature in February 2022. The fair
value of these interest rate caps amounted to less than USD 1,000 and was not
material for further disclosure in 2021.
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Interest rate swaps
The interest rate swaps were terminated in 2021. The terminated amount was not
paid to the counterparties as part of the financial restructuring agreement. The
terminated amount was reclassified to the interest-bearing debt.
Notional amount
Fixed rate
Maturity
Swap type
Terminated
value
2021
USD 120 million
1.5330 %
2022
Bullet
(4,700)
Interest rate risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant
interest rate and reflects the main effects on profit or loss and equity assuming
that the change had occurred at the balance sheet date. In 2021, a forward curve
shift of ±50bps was applied in the sensitivity analysis and there is no material
impact to the outstanding interest rate cap. A ±50bps change in interest rate will
have the following effects in 2022.
Pre-tax effects on income statement
US LIBOR +50bps
Interest expense on credit facilities
US LIBOR -50bps
Interest expense on credit facilities
2022
1.715
(1.715)
Managing interest rate benchmark reform and associated risks
A fundamental reform of major interest rate benchmarks is being undertaken
globally, including the replacement of some interbank offered rates (IBORs) with
alternative nearly risk-free rates (referred to as ‘IBOR reform’). As at 31 December
2022, the Group’s IBOR exposure is indexed to US dollar LIBOR. The alternative
reference rate for US dollar LIBOR is the Secured Overnight Financing Rate (SOFR).
The Company has entered into fallback clauses for the Company's US dollar LIBOR
indexed exposures. These clauses switch the instrument from USD LIBOR to
SOFR on 31 March 2023 with credit adjustment spread of 0.26161% published by
Bloomberg Index Services Limited on 5 March 2021.
Management evaluates whether the contracts which are referenced to IBORs
will need to be amended as a result of IBOR reform and how to manage such
communication with the counterparties.
Non-derivative financial liabilities
The Company’s IBOR exposures to non-derivative financial liabilities as at 31
December 2022 included USD 343 million credit facility indexed to USD LIBOR. The
transition from USD LIBOR to SOFR will take place on 31 March 2023 with credit
adjustment spread of 0.26161% published by Bloomberg Index Services Limited on 5
March 2021.
Total amounts of unreformed contracts, including those with an appropriate fallback
clause
The Company monitors the progress of transition from IBORs to new benchmark
rates by reviewing the total amounts of contracts that have yet to transition to
an alternative benchmark rate and the amounts of such contracts that include
an appropriate fallback clause. The Company considers that a contract is not yet
transitioned to an alternative benchmark rate when interest under the contract is
indexed to a benchmark rate that is still subject to IBOR reform, even if it includes a
fallback clause that deals with the cessation of the existing IBOR (referred to as an
‘unreformed contract’).
The below table shows the total carrying amounts of unreformed contracts and those
with appropriate fallback clauses at 31 December 2022 and at 1 January 2022.
USD LIBOR
Total amount
of unreformed
contracts
Amount with
appropriate
fallback clause
Pre-tax effects on income statement
31 December 2022
Financial liabilities
Credit facilities - face value
344,177
344,177
1 January 2022
Financial liabilities
Management monitors and manages the transition to alternative risk-free rates.
Credit facilities - face value
343,438
343,438
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Currency risk
The Company's operating expenses are primarily denominated in NOK and GBP, and
the operating result is therefore exposed to currency risk relating to fluctuations
in the NOK and GBP exchange rates versus the USD. The Company is exposed to
currencies other than USD associated with interest-bearing debt (denominated in
NOK) , cash and deposits (denominated in USD, GBP and NOK).
Currency risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant
exchange rates and reflects the main effects on profit or loss and equity assuming
that the change had occurred at the balance sheet date. A 10% strengthening/
weakening of the USD against NOK, EUR and GBP will have the following effects.
Exposures to foreign currency changes for all other currencies are not material.
Pre-tax effects on income statement
2022
2021
the liquidity risk, the Group monitors the liquidity development and the risk of
insufficient capital by rolling cash flow forecasts to determine whether the Group's
liquidity position is above the minimum cash covenant as per the loan agreements.
Given the significant investments needed to prepare for the new contracts in
2023 for the Group, there is uncertainty as to whether the Company will be in
compliance with the minimum liquidity covenant from late 2023. Management is
pursuing different initiatives to mitigate a potential shortfall and with the objective
to remain in compliance as described in note 2 of the consolidated accounts
and the Board of Directors has a reasonable expectation that the Company has
adequate resources to mitigate the uncertainty.
Capital management
The primary objective of the Company's capital management is to ensure that
it maintains a healthy capital structure in line with economic conditions. This is
managed on a group level as disclosed in note 18 of the consolidated accounts.
USD +10%
Re-valuation cash and deposits
Re-valuation NOK Loan to Prosafe AS
Total
USD -10%
Re-valuation cash and deposits
Re-valuation NOK Loan to Prosafe AS
Total
373
0
373
(373)
0
(373)
368
5,230
5,598
(368)
(5,230)
(5,598)
Credit risk
The Company is exposed to credit risk in relation to the inter-company loan to
a subsidiary, Safe Eurus Singapore Pte. Ltd (2021: three subsidiaries, Prosafe AS,
Prosafe Offshore Holdings Pte. Ltd. and Safe Eurus Singapore Pte. Ltd.). See note 11
for details about the intra-group loan.
Liquidity risk
The Company is exposed to liquidity risk in a scenario when the Company’s cash
flow from operations is insufficient to cover payments of financial liabilities. The
Company manages liquidity and funding on a group level. In order to mitigate
86
INDEPENDENT
AUDITOR'S REPORT
To the General Meeting of Prosafe SE
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Prosafe SE, which comprise:
• the financial statements of the parent company Prosafe SE (the Company),
which comprise the statement of financial position as at 31 December 2022, the
income statement, statement of comprehensive income, statement of changes
in equity and cash flow statement for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and
• the consolidated financial statements of Prosafe SE and its subsidiaries (the
Group), which comprise the consolidated statement of financial position as at
31 December 2022, the consolidated income statement, consolidated statement
of comprehensive income, consolidated statement of changes in equity and
consolidated cash flow statement for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of
the Company as at 31 December 2022, and its financial performance and its
cash flows for the year then ended in accordance with International Financial
Reporting Standards as adopted by the EU, and
• the consolidated financial statements give a true and fair view of the financial
position of the Group as at 31 December 2022, and its financial performance and
its cash flows for the year then ended in accordance with International Financial
Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(ISAs). Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company and the Group as required by relevant
laws and regulations in Norway and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred
to in the Audit Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 4 years from the election by the
general meeting of the shareholders on 8 May 2019 for the accounting year 2019.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 and Note 14 in the financial statements, which
indicate that the Group may breach the minimum liquidity covenant of USD 23
million from the second half of 2023. The Group’s ability to continue as a going
concern may be dependent on raising additional funds. As stated in Note 2, these
events or conditions, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s and the Parent Company’s ability to continue as
a going concern. Our opinion is not modified in respect of this matter.
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. In addition to the matter described in the
Material Uncertainty Related to Going Concern section, we have determined the
matters described below to be the key audit matters to be communicated in our
report.
Valuation of accommodation vessel fleet and possible reversal of impairment
Reference is made to Note 2 Statement of Compliance and basis of preparation
paragraph “Impairment / Reversal of impairment of non-financial assets” and
Note 8 Tangible assets.
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The key audit matter
How the matter was addressed in our audit
The Group's fleet of accommodation vessels have a book value of USD 376,8
million and represents a significant portion of total assets. The Group recorded
significant impairment charges in previous years, including both in 2019 and
2020. All the vessels owned by the Group are previously impaired in accordance
with IAS 36
The Group regularly reviews whether there are any indicators of impairment and
impairment reversal and tests the individual assets for impairment (reversal) if an
indicator is identified.
The market for offshore accommodation vessels improved in 2022 with
utilization levels for the Group and the industry as a whole significantly higher
than the preceding years.
Assessing whether an indicator for impairment reversal exists, involves significant
judgment from management, as to whether significant changes have occurred
in the market for accommodation vessels, which could significantly impact the
expected future cash flow from the asset. This judgement includes assessing
observable changes in day rates and the likelihood of redeployment of the vessel
to new contracts either from lay-up or when the current contract period expires.
This uncertainty is mainly applicable to those vessels that are nearing the end of
the fixed contract period and those that are currently not on contract.
The judgments described above have a direct impact on the valuation of the
Company’s significant investment in subsidiaries and the expected credit loss on
receivables from subsidiaries.
For all vessels in the Group’s fleet per 31 December 2022, a qualitative
assessment of impairment (reversal) indicators did not require further
quantitative impairment testing.
We obtained an understanding of the process for identifying impairment reversal
indicators and tested the design and implementation of selected controls over
management’s assessment.
We evaluated whether all vessels in the fleet were identified by management
and assessed for impairment reversal indicators. For each vessel we assessed
the key considerations applied by management in the impairment reversal
trigger assessment. For those vessels where an error could result in a material
misstatement and where management did not identify an impairment reversal
trigger, we assessed the appropriateness and reliability of qualitative factors and
challenged management considering:
• utilisation levels for the fleet in 2022
• status of tender activity
• supply-side constraints and market expectations in the short and medium term
We inspected external information sources, comparing to management updates
and communication with the Board of Directors of the Group to assess the
consistency of the current year increase in activity for the sector.
We assessed the impact on impairment reversal for shares in subsidiaries and
reversal of expected credit loss for receivables from subsidiaries, considering the
vessel indicators assessments as well as the net assets of the subsidiaries.
We assessed the adequacy of disclosure related to impairment indicators
89
Other information
The Board of Directors and the Managing Director (management) are responsible
for the information in the Board of Directors’ report and the other information
accompanying the financial statements. The other information comprises
information in the annual report, but does not include the financial statements
and our auditor’s report thereon. Our opinion on the financial statements does not
cover the information in the Board of Directors’ report nor the other information
accompanying the financial statements.
In connection with our audit of the financial statements, our responsibility is to
read the Board of Directors’ report and the other information accompanying the
financial statements. The purpose is to consider if there is material inconsistency
between the Board of Directors’ report and the other information accompanying
the financial statements and the financial statements or our knowledge obtained
in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially
misstated. We are required to report if there is a material misstatement in the
Board of Directors’ report or the other information accompanying the financial
statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of
Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the
statements on Corporate Governance and Environmental, Social and Governance
report.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a
true and fair view in accordance with International Financial Reporting Standards
as adopted by the EU, and for such internal control as management determines
is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing
the Company’s and the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using 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 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.
90
• 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.
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 Prosafe SE we have performed
an assurance engagement to obtain reasonable assurance about whether
the financial statements included in the annual report, with the file name
“2138001LK2Z2HSER4U15-2022-12-31-en”, 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.
We also provide the Audit Committee with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those
matters that were of most significance in the audit of the financial statements
In our opinion, the financial statements, included in the annual report, have been
prepared, in all material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance
with the ESEF regulation. This responsibility comprises an adequate process and
such internal control as management determines is necessary.
91
Auditor’s Responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on
whether, in all material respects, the financial statements included in the annual
report have been prepared in compliance with ESEF. We conduct our work in
compliance with the International Standard for Assurance Engagements (ISAE)
3000 – “Assurance engagements other than audits or reviews of historical financial
information”. The standard requires us to plan and perform procedures to obtain
reasonable assurance about whether the financial statements included in the
annual report have been prepared in compliance with the ESEF Regulation.
As part of our work, we have performed procedures to obtain an understanding
of the Company’s processes for preparing the financial statements in compliance
with the ESEF Regulation. We examine whether the financial statements are
presented in XHTML-format. We evaluate the completeness and accuracy of the
iXBRL tagging of the consolidated financial statements and assess management’s
use of judgement. Our procedures include reconciliation of the iXBRL tagged data
with the audited financial statements in human-readable format. We believe that
the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Stavanger, 28 March 2023
KPMG AS
Anfinn Fardal
State Authorised Public Accountant
(This document is signed electronically)
92
Accommodating
the Offshore
Industry
www.prosafe.com
Photo: © Jan Inge Haga, Jerzy Rowiński, dstylesimages, Tom Haga & iStock