ANNUAL REPORT 2022
We pursue conscious change in the container shipping industry
KEY FIGURES
2022 2021 2020
Number of container vessels
1
62 68 57
Transport capacity of container ship fleet TEU 134,270 147,286 109,240
Operating revenues USD m 616.8 384.7 171.9
EBITDA USD m 522.2 290.4 16.2
Adjusted EBITDA
2
USD m 451.5 218.3 16.2
Profit (loss) for the period USD m 435.0 189.9 (64.5)
Adjusted profit (loss) for the period
2
USD m 364.3 115.4 (64.5)
Cash flow from operating activities USD m 436.5 212.2 16.5
Cash and cash equivalents USD m 125.5 180.3 39.3
Interest-bearing debt USD m 153.6 231.8 276.9
Total equity USD m 721.4 727.6 383.0
EPS USD 0.98 0.46 (0.27)
Adjusted EPS
2
USD 0.82 0.26 (0.27)
Total ownership days days 21,671 21,942 21,616
Total trading days days 20,590 20,904 19,377
Utilization 97.9% 97.9% 91.6%
Average TCE USD 28,625 16,887 8,102
Average OPEX USD 6,363 5,379 4,918
Leverage ratio 16.1% 22.4% 40.8%
1
Includes vessels from investment in joint venture
2
For further details, see Alternative Performance Measures on page 96
0,0
616,8
616.8
2021 20222020
171.9
384.7
Operating revenues
in USD m
0.0
522.2
2021 20222020
EBITDA and Adj. EBITDA
in USD m
16.2 16.2
218.3
290.4
451.5
522.2
0,0
522,2
0.00
0.98
EPS and Adj. EPS
in USD
2021 2022
0.26
0.46
0.82
0.98
(0.27)(0.27)
2020
Adjusted
Annual Report 2022 MPC Container Ships 1
+
Successful business year with substantial increase in revenuesand
earnings driven by strong time charter rates withlong contract durations
+
Several accretive vessel sales realized, many at close to peak market
rates, which facilitated continued deleveraging and significant
shareholder distributions
+
Operating revenues were USD 616.8 million, an increase
of 60.3% from USD 384.7 million in 2021
+
Strong balance sheet with total interest-bearing debt of USD 153.6m
as at December 31, 2022 (2021: USD 231.8 million) corresponding to an
industry-low leverage ratio of 16.1% (2021: 22.4%)
+
Utilization rate stable at a high 97.9% (2021: 97.9%)
+
Average Time Charter Equivalent (TCE) per day
increased to USD 28,625 from USD 16,887 in 2021
+
The Board declared dividends amounting to a total USD 458 million
for the 2022 financial year, of which USD 262 million recurring and
USD 196 million event-driven dividends
HIGHLIGHTS
Annual Report 2022 MPC Container Ships 1
CONTENTS
4 CEO Letter
6 About MPC Container Ships
8 Board of Directors’ Report
22 Board of Directors
24 Corporate Governance Report
32 Remuneration Report
36 Responsibility Statement
38 Consolidated Financial Statements
44 Notes to the Consolidated Financial Statements
76 Parent financial statements
80 Notes to the Parent Financial Statements
86 Auditor’s Report
96 Alternative Performance Measures
Annual Report 2022 MPC Container Ships 3
2 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 3
2 MPC Container Ships Annual Report 2022
CEO LETTER
Dear shareholders, customers, and partners,
We are pleased to report another strong quarterly result, rounding
off the best financial year in MPC Container Ships’ history. This past
year has brought a variety of challenges and opportunities. Inthe
first half of the year, we experienced the highest charter rates in
the history of container shipping. But, as the global economy was
faced with a variety of issues, such as Russia’s invasion of Ukraine,
rapidly rising inflation and China’s Covid-19 policy, freight rates and
charter rates declined significantly over the second half of the year.
At MPC Container Ships, we focus on being agile and well-equipped
to adjust our operations and strategy to fit with the prevailing
market conditions.
Strengthening the company and delivering significant
shareholder returns
During the first half of 2022, we were able to capitalize on the
strong markets by locking in long-term time charter contracts at
very attractive rates. As a result, at the end of the year, we had
contract coverage for 86% of operating days in 2023 and a charter
backlog of USD 1.5 billion with an average remaining contract dura-
tion of 2.2 years. Wealso continued to deleverage the company and
currently operate with a low leverage of 16.1% with more than 50%
of the fleet unencumbered.
At the end of 2021, we announced a new distribution policy, includ-
ing a commitment for quarterly recurring shareholder distributions,
and we distributed our first dividend in February 2022. In addition
to strong operational earnings, we also divested a number of our
vessels, some at close to peak market prices, generating additional
shareholder returns. In total, the Board declared USD 458 million
in recurring and event-driven dividends for 2022. With the recently
announced event-driven dividend, which was paid on February 28,
2023, and the recurring dividend for the fourth quarter, the total
dividends paid in just over 12 months will reach USD 537 million,
corresponding to USD 1.21 per share (NOK ~11.67), constituting an
exceptional yield of approximately 47%. We are very proud to be
able to reward our committed, long-term shareholders for their
dedication and trust in MPCC.
Constantin Baack
CEO
CEO Letter
4 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 5
Positioning for the future
Over the last few months, as part of our ongoing strategy for selec-
tive portfolio optimization, we have announced several new and
accretive portfolio measures, which include continued divest-
ments from our Bluewater joint venture with U.S. investor, TRF,
and investments in younger, larger, scrubber-fitted vessels with
existing charters contracts. These measures are not only earn-
ings-accretive but represent an important effort to maintain the
long-term competitive position of MPCC in prevailing market con-
ditions and amid increasing environmental regulation.
Strategic approach to ESG
We are continuously increasing our strategic focus on ESG and
believe that investing in crew well-being as well as emission reduc-
tion and decarbonization is a necessity, as is reflected in our pur-
pose to pursue conscious change in the container shipping indus-
try. Weshare a common responsibility to safeguard a sustainable
future and to meet forthcoming regulations. We will work closely
with our customers and partners to continuously evaluate new
technologies and opportunities within decarbonization and invest
in vessels and fuel-related infrastructure that will propel sustain-
able change in the maritime industry.
Over the course of 2022, we ordered four newbuildings, of which
two are 5,500 TEU eco-design vessels with the latest engine tech-
nology and advanced hull design that allow for fuel consumption
savings of up to 40% in comparison to conventional designs, and
compliance with IMO emission regulations.
The other two vessels are 1,300 TEU, dual-fuel vessels, which can
be powered by methanol and operated as carbon neutral. Both
vessles have 15-year time charters from North Sea Container Lines,
backed by a contract of affreightment from the Norwegian indus-
trial company ElkemASA. We firmly believe that regional container
trades, with predictable trading profiles and manageable fuel infra-
structure investments, will become the first truly green shipping
trades. By joining forces with likeminded partners, we are even bet-
ter positioned to meet ourambitious environmental goals and we
look forward to establishing one of the first green transportation
corridors in Northern Europe.
In January 2023, we were proud to extend our relationship with
the German e-fuel company INERATEC and sign the industry’s first
offtake agreement for synthetic marine diesel oil (MDO), which will
be a key component to reducing CO
2
emissions and making climate
neutrality possible.
In March, we look forward to publishing our most recent sustain-
ability report, further outlining our efforts and commitment to
decarbonization and ESG.
Strong competitive position and committed to
shareholderreturns
Due to the long-term nature of charter contracts entered into in
2021 and 2022, vessel availability in the market is significantly
reduced compared to historical averages. In addition, general
improvements in the outlook for the global economy over recent
months give reason for optimism in the medium-term outlook for
container markets, particularly for intra-regional trades, for which
the supply-demand balance appears considerably more encourag-
ing than for the long-haul market.
With industry-low leverage and a robust charter backlog providing
strong earnings visibility for the coming year and beyond, MPCC
remains in a very strong competitive position. In 2023, we will
utilize our agile business model and financial flexibility to seize
opportunities as they arise and will continue to focus on continuous
fleet optimization while remaining highly committed to our policy
ofreturning capital to our shareholders.
Sincerely,
Constantin Baack (CEO)
CEO Letter
4 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 5
ABOUT
MPC CONTAINER SHIPS
Founded in 2017, MPC Container Ships has become a market-leading container
tonnage provider, that owns and operates small- to mid-size container ships
serving intra-regional trade lanes on fixed-rate charters. Intra-regional services
support main trade lanes by connecting ports on intercontinental shipping lanes
with one or more smaller ports.
DETERMINED
Our determination arises from
our passion and commitment
for what we do.
+
We develop new and innovative ideas
and are always ready to break new
ground to achieve our goals.
+
We take ownership of our tasks
and we do not give up.
+
We grow with new challenges, assume
responsibility, and have the courage
to make decisions.
+
We accept failures and use the knowledge
gained for continuous improvement.
Our values
About MPC Container Ships
6 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 7
ENTHUSIASTIC
Enthusiasm for us
means inspiration
and motivation.
+
We inspire each other and our
partners to take on challenging topics
and projects.
+
Approaching every task with drive and
optimism creates a unique spirit that
leads us to success.
+
We firmly believe enjoying what we
do is the key to job satisfaction.
MINDFUL
Mindful stands for
respectful and
conscious actions.
+
We act with respect for the world we are
living in, carefully selecting projects and
partners.
+
We place sustainability at the core of our
business decisions, while consciously
dealing with and actively managing risk.
+
We are considerate, we make time for
and treat each other and our partners
with mutual respect and appreciation.
+
For us, trust and transparency are
vital factors for a successful internal
and external cooperation.
Guided by our values and our purpose to pursue conscious change in the
container shipping industry, our mission is to seize opportunities to create
long-term value and propel change in the maritime industry with our own capital,
new ideas, analytical skills, and a broad network. Together, we envision sustain-
able container shipping connecting the worlds’ ports to serve peoples’ need.
About MPC Container Ships
6 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 7
BOARD OF
DIRECTORS’
REPORT
Annual Report 2022 MPC Container Ships 9
8 MPC Container Ships Annual Report 2022
Business
Overview and
Corporate
Development
MPC Container Ships ASA (the “Company” or “MPCC” together with
its subsidiaries the “Group”) was incorporated on January 9, 2017,
as a private limited liability company under the laws of Norway
and converted to a Norwegian public limited liability company on
January 16, 2018. The Group’s principal business activity is to invest
in and operate maritime assets in the container shipping segment.
As a dedicated owner and operator of container ships, the Group
has a focus on small- to mid-size vessels that are chartered out on
time-charter contracts to global and regional liner shipping com-
panies serving intra-regional trade lanes.
With the economic recovery from the COVID-19 pandemic that
began in the second half of 2020, especially US imports increased
significantly in absolute and relative terms and triggered a his-
toric and unprecedented container market boom. The year 2022
started strongly but February 2022 marked a turning point for the
global economy. Subsequently the world was faced with a variety
of issues, beginning with Russia’s invasion of Ukraine and the eco-
nomic and financial sanctions placed on Russia by Western nations.
With overall increased geopolitical uncertainty, rapidly rising
inflation, and China’s Covid-19 policy, central banks began tight-
ening their monetary policies to combat inflation, and GDP growth
forecasts were repeatedly revised downward. Fears of recession
loomed, especially for the U.S. and European economies.
At the same time, a strong container market persisted through the
first half of 2022, and during this period, MPC Container Ships ASA
was able to capitalize on the strong markets by locking in long-term
time charter contracts at very attractive rates, building up a strong
contract backlog for its fleet both for 2022 and for coming years.
However, throughout the second half of 2022 the macro-economic
headwinds and negative sentiment resulted in lower consumer
demand, putting pressure on the container shipping industry. The
market began to normalize, and freight- and time-charter rates
declined significantly during the second half of the year. Despite
this, MPCContainer Ships has maintained its high backlog with
strong counterparties, which provides significant earnings visi-
bility for 2023 and beyond.
Financing and Capital Allocation
MPCC follows a long-term strategy for prudent and rational cap-
ital allocation, with an ambition to deliver attractive shareholder
returns over time through value accretive operations and capital
allocation. The Board and the management place emphasis on
maintaining sensible capital allocation between cycles, balanc-
ing investments between the primary capital uses, which includes
fleet optimization and renewals, balance sheet improvements, and
providing attractive shareholder returns.
On the back of very strong container markets in 2021 and well
into 2022, MPC Container Ships has consistently deleveraged its
balance sheet and had total interest-bearing debt of USD 153.6m as
at December 31, 2022, which corresponds to an industry-low lever-
age ratio of 16.1%, compared with USD 231.8 million and a leverage
of 22.4% at the end of 2021.
Furthermore, in January 2022, the Group introduced a new share-
holder distribution policy, by which the intention is pay quar-
terly dividends of 75% of the profit for the period after consider-
ing CAPEX and working capital requirements, including liquidity
reserves, and non-recurring items. In addition, the Company may
make additional event-driven distributions based on non-recurring
proceeds, such as vessel sales, at the Board’s discretion.
Subsequently, the Board declared dividends amounting to approx-
imately USD 458 million for the 2022 financial year, of which
USD 262 million in quarterly recurring dividends and USD 196 million
in event-driven dividends. In January 2023, the Board declared an
additional event-driven dividend of USD 31.1 million.
ESG topics and issues make up a core aspect of MPCC’s strat-
egy and operations. We recognize that the shipping industry is
responsible for a significant portion of global emissions, and we
are determined to do our part to address this issue. The Group has
actively prepared for implementation of the International Maritime
Organization’s Carbon Intensity Indicator (CII) and the inclusion of
maritime shipping in the EU’s Emission Trading System. In 2022,
the Group undertook a significant amount of work to understand
its greenhouse gas (GHG) emissions profile, identify opportunities
for reductions, and implement a plan to reduce our aggregate and
intensity-based emissions. Together with our customers and part-
ners we are investing in research and development and have already
executed seven projects to reduce emissions. These include new
dual-fuel vessels, the use of alternative fuels and the installation
of energy-efficient technologies. We estimate that these invest-
ments will eliminate significant amounts of CO
2
emissions over the
life of the vessels. For more information, please refer to our 2022
ESGReport, which is available on the Company’s website.
Fleet Update
As part of a strategy for continuous fleet optimization and in light
ofhigh second-hand prices during the first half of the year, the
Group sold six vessels during 2022, of which three were wholly
owned and three were owned 50% through the Bluewater joint
venture. Theaccretive portfolio measures contributed to signifi-
cant non- recurring shareholder distributions in the form of event-
driven dividends and further simplified and strengthened the
corporate structure through a reduction of the total joint venture
investment.
Over the course of 2022, MPCC also ordered four newbuildings,
including two 5,500 TEU eco-design vessels with the latest engine
technology and advanced hull design that allow for fuel consump-
tion savings of up to 40% in comparison to conventional designs,
and compliance with IMO emission regulations. The other two
vessels are 1,300 TEU, dual-fuel vessels powered by methanol that
Board of Directors’ Report
Annual Report 2022 MPC Container Ships 9
8 MPC Container Ships Annual Report 2022
can be operated as carbon neutral, with 15-year time charters from
North Sea Container Lines, backed by a contract of affreightment
from the Norwegian industrial company Elkem ASA.
As at December 31, 2022, the Group’s fleet consisted of 62 vessels,
of which four joint venture vessels, with an aggregate capacity of
approximately 134,270 TEU.
In December 2021, the Group entered into a Memorandum of Agree-
ment (MOA) for the sale of AS Palatia for USD 35.8 million. The vessel
was handed over to its new owner on January 10, 2022, resulting in
a gain of USD 18.8 million.
In January 2022, the Group’s joint venture, 2. Bluewater Holding
Schifffahrtsgesellschaft GmbH & Co. KG, delivered the 2008-built
AS Petulia to an unrelated party for a consideration of USD 35.8mil-
lion, resulting in a gain of USD 20.1 million in the joint venture.
In March 2022, the Group’s joint venture, 2. Bluewater Holding
Schifffahrtsgesellschaft GmbH & Co. KG, delivered the 2006-built
ASPatricia to an unrelated party for a consideration of USD 34.3 mil-
lion, resulting in a gain of USD 22.2 million in the joint venture.
In July 2022, the Group sold the vessel AS Serafina for a total con-
sideration of USD 34.0 million, resulting in a gain of USD 19.9 million.
In September 2022, the Group sold the vessel AS Laetitia for
a total consideration of USD 16.2 million, resulting in a gain of
USD 10.3 million.
In December 2022, the Group entered into a commercial agree-
ment for the option for early redelivery of the joint venture vessel,
Carpathia, and the wholly owned vessel, AS Carlotta from their
charter contracts as well as the subsequent sale of the Carpathia.
The early redelivery and subsequent sale of the Carpathia were
both completed in December 2022, resulting in a total USD 12.6 mil
-
lion recognized in the share of profit or loss from joint venture.
The option for early redelivery of AS Carlotta was exercised in
January 2023.
In December 2022, the Group entered into an MOA to sell its 2006-
built joint venture vessel AS Cleopatra for USD 20.9 million. The
vessel was delivered to its new owner in January 2023.
Going forward, the Group will continue to pursue selective growth
opportunities, such as second-hand vessel acquisitions, M&A, and
newbuildings. Investment decisions shall be value accretive on a
per share basis and follow strict investment criteria including the
long-term mitigation of residual value risk.
Corporate Changes
On February 25, 2022, Peter Frederiksen was elected as a new
board member by an extraordinary general meeting of the Com-
pany to replace previous board member, Darren Maupin.
On January 28, 2022, an extraordinary general meeting of the
Company was held. The general meeting passed the resolution
to reduce the Company’s share capital from NOK 444,051,377 to
NOK 443,700,279 by cancelling the Company’s treasury shares of
in total 351,098 shares. The share capital reduction amounting
to NOK351,098 was transferred to other equity. This resolution
entailed no payments made by the Company. The share capital
reduction was carried out on May 18, 2022.
On November 30, 2022, Board Member, Laura Carballo, and Board
Observer, Paul Gough, resigned their respective positions. On
December 21, 2022, Pia Meling was elected as a new board member
by an extraordinary general meeting of the Company for a period
starting from the extraordinary general meeting until the Compa-
ny’s Annual General Meeting in 2024.
Subsequent Events
In December 2022, as part of the Group’s measures for continuous
portfolio optimization, the Group entered into a commercial agree-
ment for the option for early redelivery of the vessel AS Carlotta
against a cash compensation of USD 25.2 million. The option was
subsequently exercised in January 2023 and the vessel was rede-
livered in January 2023.
In December 2022, the Group entered into a Memorandum of
Agreement (MOA) to sell its 2006-built vessel AS Cleopatra for an
agreed sale price of USD 20.9 million to an unrelated party. The
vessel was delivered to its new owner in January 2023.
In December 2022, the Group obtained an approval from Credit
Agricole together with an Export Credit Agency for a senior secured
Pre-Delivery loan facility in the amount of up to USD 15.8 million
anda senior secured Post-Delivery loan facility in an amount of
up to USD 102.4 million. The loan facilities will be used to finance
the two 5,500 TEU eco-design newbuildings and are subject to
the execution of final transaction documents to both parties’
satisfaction.
In January 2023, the Group entered into an MOA to sell its 2003-
built vessel Carinthia for an agreed sale price of USD 7.6 million to
an unrelated party.
In January 2023, the Group entered into agreements to acquire
the 2010-built vessel Rio Centaurus and the 2007-built vessel TRF
Kaya for a total consideration of USD 33.9 million. Both vessels are
scrubber-fitted, benefitting from the current high fuel price spread.
Moreover, both vessels come with existing charters attached with
renewals in the third quarter of 2023 and the first quarter of 2024,
respectively.
In January 2023, the Board declared an event-driven dividend of
USD 0.07 per share based on the commercial agreements for the
redelivery of vessels Carpathia and AS Carlotta and the sale of joint
venture vessels Carpathia and AS Cleopatra. The dividend was paid
on February 28, 2022.
In February 2023, in conjunction with the publication of the Group’s
fourth quarter results for 2022, the Board declared a recurring div-
idend of USD 0.15 per share, to be paid on March 30, 2023.
Board of Directors’ Report
10 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 11
In February 2023, the Group signed a senior secured term loan
facility in an amount up to USD 8.3 million with OVB. The loan
facility matures four years after delivery of 2007-built TRF Kaya
and carries an interest equivalent to the SOFR plus a margin of
350 basis points. The facility will be used to partially finance the
acquisition of the vessel.
In February 2023, the Group postponed the USD 15.0 million repay-
ment of its USD 70.0 million three-year revolving credit facility
agreement with CIT Group by six months to July 2023.
In March 2023, the recently acquired vessel, AS Claudia (formerly
known as TRF Kaya) was delivered to MPCC from the seller and
aloan facility of USD 8.3 million with OVB was drawn down.
Consolidated
Financial Statements
Income Statement
For the full year 2022, the Group reported operating revenues
of USD 616.8 million (2021: 384.7 million) and gross profit of
USD 488.6 million (2021: USD 254.8million). The increase in oper-
ating revenues and gross profit compared to the previous year
is driven by higher charter rates for the Group’s fleet. The Group
reported a net profit of USD 435.0 million (2021: 189.9 million).
Earnings per Share
Both basic and diluted earnings per share for the year were
USD 0.98 (2021: USD 0.46).
Financial Position
The Group’s total assets amounted to USD 956.3 million as at
December 31, 2022, compared to USD 1,034.6 million as at Decem-
ber 31, 2021. Total non-current assets of USD 799.8 million
(USD 803.0 million as at December 31, 2021) reflected the carry-
ing amounts of the vessels operated by the Group, including the
equity investment in joint venture. The decrease in the carrying
amounts of the vessels in 2022 is primarily due to the sale of three
wholly-owned vessels (AS Palatia, AS Serafina and AS Laetitia) and
three joint venture vessels (AS Petulia, AS Patricia and Carpathia)
in2022 and regular depreciation of the remaining fleet. This is
offset by CAPEX and other vessel upgrades.
As at December 31, 2022, an aggregate amount of USD 32.8 million
installments was paid for the Group’s four newbuilding contracts.
The investment in joint venture as at December 31, 2022, decreased
to USD 20.9 million from USD 28.7 million as at December 31, 2022,
as a result of USD 51.8 million in the share of profit from the joint
venture offset by dividends received of USD 60.4 million.
Total equity as at December 31, 2022, was USD 721.4 million, down
from USD 727.6 million as at December 31, 2021, and included a
non-controlling interest of USD 2.6 million. The decrease in total
equity was mainly due to dividend payments of USD 441.0 million
during the year and the settlement of warrants of USD 2.2 million.
As at December 31, 2022, the Group had total interest-bearing debt
of USD 153.6 million (USD 231.9 million as at December 31, 2021).
Cash Flow
The Group generated cash flow from operating activities of
USD 436.5 million, up from USD 212.2 million in 2021 due to the
strong development in the charter market compared to the pre-
vious year.
Cash flow from investing activities was positive at USD 44.4 million
(2021: USD 43.2 million), mainly due to net proceeds of USD 83.9 mil-
lion from the sale of three wholly-owned vessels and USD 60.4 mil-
lion in dividends received from the Group’s joint venture invest-
ment. This is partly offset by dry-dockings and other vessel
upgrades amounting to USD 66.3 million and USD 32.8 million in
installments paid for the four newbuildings.
Cash flow from financing activities in 2022 was negative
USD 535.6 million (2021: negative USD 114.3 million), primarily due
to USD 441.0 million in dividend payments and the repayment of
existing loan facilities of USD 80.0 million.
Cash and cash equivalents as at December 31, 2022, amounted to
USD 125.5 million compared with USD 180.3 million as at Decem-
ber 31, 2021. Total restricted cash as at December 31, 2022, was
USD 30.9 million, compared with USD 23.6 million as at Decem-
ber 31, 2021.
Allocation of Earnings
In support of the objective to maximize shareholder returns,
MPCContainer Ships’ intention is to pay regular dividends by way
of distributing 75% of the profit for the period after consider-
ing CAPEX and working capital requirements, including liquidity
reserves, and non-recurring items. Dividends will be declared
or proposed at the sole discretion of the Board and will depend
upon the financial position, earnings, debt covenants, distribu-
tion restrictions, capital requirements and other factors related
to MPCContainer Ships and its subsidiaries. The Company cannot
guarantee that its Board will declare or propose dividends in the
future. Furthermore, MPC Container Ships may make event-driven
distributions based on non-recurring proceeds, such as vessel
sales, by way of extraordinary dividends or share buybacks, at the
Board’s discretion.
Board of Directors’ Report
10 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 11
In accordance with the Company’s distribution policy, the Board
has in 2022 declared quarterly recurring dividends approximately
USD 262 million, equal to USD 0.59 per share, as well as event-
driven dividends amounting to approximately USD 196 million, equal
to USD 0.44 per share, for a total amount of USD 458 million or
USD 1.03 per share.
Parent Financial
Statements
Statement of Profit or Loss
Revenues for 2022 were USD 14.8 million (2021: USD 14.8 mil-
lion). Payroll and other operating expenses were USD 20.3 million
(2021: USD 24.2 million), resulting in a negative operating result
of USD 5.6million (2021: negative by USD 9.4 million). Net finan-
cial income/expense was positive USD 117.1 million (2021: positive
USD 22.0 million).
Profit before tax was USD 111.5 million (2021: USD 12.6 million),
resulting in a profit for the period of USD 111.5 million (2021:
USD 12.7 million). The Board of Directors has proposed that the
profit for the period is allocated to retained earnings.
Financial Position
The Company’s total assets amounted to USD 318.6 million as at
December 31, 2022 (699.5 million as at December 31, 2021). Non-cur-
rent assets in the amount of USD 275.5 million (2021: 516.9 million)
comprise mainly equity investments in subsidiaries.
Total equity was USD 250.3 million as at December 31, 2022 (2021:
USD 447.8 million). Total liabilities were USD 68.3 million as at
December 31, 2022 (2021: USD 251.8 million). The decrease in equity
is mainly explained by dividend distributions in 2022 which is offset
by profit for the twelve-month period of USD 11.5 million.
Cash Flow
During 2022, the Company generated a positive cash flow from
operating activities of USD 13.1 million (2021: negative USD 0.7 mil-
lion). This is mainly driven by the higher charter rates employed
by the Company which is offset by net of finance income of
USD 117.1 million. The cash flow from investing activities into vessels
and joint venture investments was positive USD 358.8 million
(2021:USD 127.8 million), reflected by dividends received from
both subsidiaries and joint venture investments. The negative cash
flow from financing activities of USD 441.1 million (2021: negative
USD 28.4 million) is due the dividend distribution made in the year.
The total net change in cash and cash equivalents in 2021 was
USD 69.3 million (2021: negative USD 98.8 million).
Cash and cash equivalents as at December 31,2022 were
USD 32.5 million (December 31, 2021: USD 101.8 million).
Going Concern
In accordance with the Norwegian Accounting Act § 3-3a, the Board
of Directors confirms that the going concern assumption on which
the financial statements have been prepared, is appropriate. This
assumption is based on the current market perception, contracted
charter backlog as well as respective budgeted future cash flows
for 2023 and 2024.
Work Environment
and Equal
Opportunities
As at December 31, 2022, the Group had 29 employees, of which
22men and 7 women. The Group strives for diversity on a broad
basis, including gender, age, ethnicity, personal beliefs, back-
ground, education, sexual orientation, and nationality. The ESG
report includes key metrics related to diversity and information
regarding the Group’s efforts to promote diversity. Offshore per-
sonnel operating the Group’s vessels are not employed by the
Group, but we have high focus on health and safety on board on
our vessels.
The working environment onshore is considered to be good, and
efforts for improvements are made on an ongoing basis through,
among others, employee development review and feedback ses-
sions with the individual persons. No leave of absence, incidences
or reporting of work-related accidents resulting in significant
material damage or personal injury occurred during the year.
The Norwegian Discrimination Act’s objective is to promote gender
equality, ensure equal opportunities and rights and prevent dis-
crimination due to ethnicity, national origin, descent, language,
religion and faith. The Group is working in an active, determined
and systematic way to encourage the act’s purpose within our busi
-
ness and aims to be a workplace with equal opportunities. This
is reflected in the Company’s Code of Conduct, applicable to all
entities controlled by the Company and all employees, directors,
officers and agents.
As at December 31, 2022, the Board of Directors consisted of two
women and three men. The executive management consisted of
two men.
Board of Directors’ Report
12 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 13
Internal Controls and
Risk Management
In accordance with the principles underlying value-based man-
agement, the Board of Directors places great importance on
systematic risk management. This is done not only to satisfy the
requirements set out by law, but also to ensure the Company’s
governance in a highly dynamic market environment by identify-
ing existing and potential risk exposures.
Through (i) quarterly reviews of the Company’s most prominent
areas of risk exposure and its internal control arrangements,
(ii)management guidelines and (iii) the appointment of a dedi-
cated risk management unit to perform risk monitoring and provide
regular risk management updates to the Risk & Audit Committee,
the Board of Directors aims to ensure that the Company has
sound internal control and systems for risk management that are
appropriate in relation to the extent and nature of the Company’s
activities.
In July 2021, the Company contracted an experienced German
lawyer as External Compliance Officer to support the Chief
Compliance Officer in defining and setting up a comprehen-
sive Compliance Management System (CMS) and heading the
daily operative routines. Since August 2021, Mrs. Sunniva Nising
Sandvoldofthe Norwegian law firm CMS Kluge Advokatfirma AS
has been contracted to serve as the Company’s External Data
Protection Officer.
Corporate
Governance and
Corporate Social
Responsibility
Good corporate governance is a prerequisite for cooperation
based on trust between the owners, the Board of Directors, and
the executive management of the Group. Of equal importance is the
Company’s corporate social responsibility, which shall be reflected
in our core values, the quality of our work and services, and in our
entire range of activities.
The Board of Directors actively adheres to good corporate govern-
ance standards and will ensure that the Company either complies
with or explains possible deviations from the Norwegian Code
of Practice for Corporate Governance (the “Code”). As at Decem-
ber 31, 2022, there were no significant deviations between the
Code and how the Company complies with the Code. The corporate
governance principles of the Company are adopted and overseen
by the Board of Directors.
For more details on corporate governance please see the Corporate
Governance Report on page 24 of this report. For more information
on corporate social responsibility, health and safety, and environ-
mental impacts, please see the 2022 ESG Report published on the
Company’s website.
Transparency Act
According to the Norwegian Transparency Act, which entered into
force July 1, 2022, the Group has a duty to carry out a due diligence
assessments related to fundamental human rights and decent
working conditions in its own businesses and supply chains. The
Group will publish a Transparency statement on it’s website before
June 30, 2023 and has a process in place to be able to publish a
Transparency statement together with its Annual Report for 2023.
Container
Market Update
Restrained growth forecast
amidstpeaking inflation
andalessgloomy outlook
February 2022 marked a turning point for the global economy with
Russia’s invasion of Ukraine. Additionally, the last year has seen
the global economy having to contend with decades-high inflation
rates and China’s Covid-19 policy. Central banks started tightening
their monetary policies to combat inflation and GDPgrowth fore-
casts were revised downward continuously. Fears of recession
loomed, especially for the U.S. and European economies. However,
despite those headwinds, economies showed signs of resilience
with higher-than-expected levels of consumption and savings,
tight labor markets with low unemployment rates and rapidly
adjusting energy markets in Europe. Looking forward to 2023, the
International Monetary Fund’s January 2023 World Economic Out-
look projects that the global economy will be less gloomy than fore-
cast in its October 2022 Update. The global GDP growth forecast for
the full year 2023 was adjusted upward by 0.2 percentage points to
2.9%. Global international trade is expected to fall to 2.4% in 2023
before rebounding to 3.4% in 2024.
1
The upward trend is based
on the reopening of China’s economy, but the recovery depends
on progress made in the roll-out of vaccinations as severe health
issues could dampen the economic rebound. Inflation currently
appears to have peaked in several economies and is expected to
fall throughout 2023 and 2024. This means that central bank rate
hikes are forecast to peak in 2023, too. Despite these positive
signs, downside risks to the outlook remain, including develop-
ments concerning the war in Ukraine, China’s recovery as well as
persistently elevated (“sticky”) inflation rates.
1
IMF, World Economic Outlook, January 2023.
Board of Directors’ Report
12 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 13
The significant decline in
freightrates, time-charter
ratesand assetprices in 2022
hastapered off recently
Declining spot freight rates, contract rates and time-charter rates
as well as second-hand prices for container vessels created a lag
effect in the course of last year. Spot freight rates were the first to
fall from record highs in January 2022 due to shrinking consumer
demand and associated container trade volumes. As shown in
Figure 1, the SCFI fell from a record high of 5,110 points at the
beginning of January 2022 to 995 points (-81%) currently. However,
this figure continues to be higher than the long-term pre-Covid
average. The index fell to as low as 400 index points during the price
war in 2016. Contract rates fell subsequently, as did charter rates.
The time-charter market experienced significant declines in
time-charter rates only as of the second half of 2022. The HARPEX
Time-Charter Rate Index peaked in March when it reached 4,586
points. The index currently stands at 1,091 points (-76%). But com-
pared to historical averages of around 500 index points (2010-2019),
the HARPEX is also still relatively high. Since the start of 2023,
time-charter rates have not been falling as sharply and a sideways
trend can already be seen in a number of indices such as Howe
Robinson’s HRCI or Braemar’s BOXi The HARPEX even recorded its
first slight increase for the first time this year at the beginning of
February. The current 6- to 12-month time-charter rates (as
at10 February) stand at USD 12.5k/day for a 1.1k TEU vessel, USD 14k/
day for a 1.7k TEU vessel, USD 17.5k/day for a 2.7kTEU vessel and
USD 20k/day for a 4.3k TEU container vessel.
2
2
Clarksons Research, Shipping Intelligence Network, February 2023;
Harper Petersen, February 2023.
Falling time-charter rates in the second half of 2022 were accom-
panied by sharp declines in asset prices. The second-hand price
index from Clarksons Research fell from a high of 128.5 index points
in April 2022 to currently 59.5 index points (-54%). However, as with
the time-charter rates, second-hand prices have also started to
stabilize and trend sideways since December 2022. S&P activity
slowed significantly in 2022 with a total of 222 deals, compared
to a total of 498 deals in 2021. As at February 2023, second-hand
prices are at USD 7.5m for a 1k TEU vessel, USD 9.5m for a 1.7kTEU
vessel, USD 14m for a 2.8k TEU vessel and USD 23m for a 4.5kTEU
vessel. Despite the drop in second-hand prices, these values also
continue to be higher than historic averages, whereas Clarksons’
second-hand price index has moved only within a 45 index-point
range (2010-2019). Although newbuild prices did not undergo the
same percentage drop, they remained elevated during all of 2022 as
a result of the pressure from the currently large orderbook on con-
tainer yard forward capacity. At present, newbuild prices remain
around USD 29m for a 1.8k TEU vessel, USD 42m for a 2.8kTEU
vessel and USD 73m for a 5.3k TEU vessel.
3
Time-charter market fundamentals
return to pre-Covid levels, however,
a number of strong characteristics
persist
The fundamentals of the time-charter market also returned to
pre-Covid charter market levels during the second half of 2022.
With time-charter rates starting to decrease in Q3 2022, charter
periods have become shorter, and the forward-fixing market
has reverted to a spot market. Average charter periods for ves-
sels of 1kto 5.1kTEU were 26 to 27 months in the period between
the market peak in 2021 and the beginning of 2022. Pre-Covid
charter periods averaged around 6 to 9 months and the market
is now seeing these levels once again. In addition, forward fixing
levels began to decrease in Q3 2022. Pre-Covid, only 5% to 10%
of charter fixtures were concluded more than 30 days in advance.
As the market peaked, this figure reached levels of around 60% in
Q1 2022. Forward fixing became less relevant at the end of 2022,
reverting back to 9% of charter fixtures that were concluded more
than 30 days in advance.
4
However, given that they are medium to long-term in nature, some
characteristics of the market boom continue to persist. One of
these is vessel availability which dropped significantly because ves-
sels were charted out for extensive periods of two or more years,
reducing the number of vessels available for charter for quite some
time in the future. Figure 2 shows that, compared to prior years,
vessel availability has reduced substantially. At the start of 2023,
availability was 60% lower than at the beginning of 2021.
5
Another
fundamental which has remained relatively steady since the mar-
ket boom are idle statistics. Figure 2 also displays the number of
vessels between 1k to 5.1k TEU that have become commercially
idle. Current figures (January 30, 2023) show that when the entire
3
Clarksons Research, Shipping Intelligence Network, February 2023.
4
Ibid.
5
Harper Petersen, February 2023.
5,000
6,000
4,000
3,000
2,000
1,000
0
Fig. 1: SCFI Comprehensive and HARPEX –
Time-Charter Rate Development, 6–12 Months
Index
SCFI HARPEX
995
5,110
1,091
4,586
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
Jan
2022
Jan
2023
Jan
2024
Board of Directors’ Report
14 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 15
containership fleet is considered, a total of 149 vessels (736kTEU)
are commercially idle which corresponds to 2.8% of the total fleet.
This is a slight increase of 0.2 percentage points since the start of
the year when a total of 97 vessels (663k TEU) were commercially
idle. Nevertheless, of the total 77 idle vessels in the 1k to 5.1kTEU
size segment, the larger share of idle vessels accounts for carriers
(total units of 53), whereas non-operating owners account for only
24 vessels being commercially idle in this size segment. Further-
more, the idle fleet remains historically low compared to pre-Covid
levels as Figure 2 illustrates.
6
6
Alphaliner, February 2023.
Supply-demand balance:
encouraging intra-regional
tradesdespite ordering
spree during market boom
The surge in the container market triggered an ordering spree with
newbuild contracting reaching levels totaling 4.4 mTEU in 2021,
which was significantly higher than levels recorded in prior years.
In 2022, newbuild contracting slowed to a total of 2.7 mTEU. This
meant that the orderbook also increased from 8.5% of the fleet
in October 2020 to 28.8% of the fleet as of February 2023. New-
build deliveries are expected to enter the market mainly over the
next three years, comprising around 2.1 mTEU in 2023, 2.8 mTEU in
2024, followed by 2.5 mTEU in 2025. Supply is expected to outstrip
demand during this three-year period. Figure 3 (left) illustrates the
development of the orderbook and the surge in the orderbook-to-
fleet ratio. Nevertheless, when looking at the orderbook-to-fleet
ratios on a more granular basis, Figure 3 (right) shows that orders
were significantly biased towards vessel sizes in excess of 12kTEU.
Consequently, supply is expected to grow more strongly for larger
vessels. The orderbook-to-fleet ratio is currently around 68% for
vessels of between 12k and 17k TEU and only 15% for feeder vessels
ranging between 1k and 3k TEU. On top of the relatively low order-
book compared to total fleet for smaller vessels, the average age
of these smaller feeder and panamax vessels is significantly higher
than for larger vessel sizes as Figure 3 (right) also shows. Demoli-
tion is expected to increase significantly as of this year and a total
of 11vessels has already been scrapped since the beginning of the
year (for comparison: a total of only 11 vessels were scrapped dur-
ing all of 2022). Demolition is expected to be relatively high in the
smaller size segments due to the relatively large number of vessels
that are older than 20+ years. The demolition of vessels smaller
than 5.2k TEU is expected to reach around one million TEU overall
in 2023, 2024 and 2025 combined. All of this results in weaker net
fleet growth for smaller vessels. Supply is expected to grow by 7%
in 2023 and 2024 for the total fleet, whereas vessels smaller than
5.2k TEU are expected to grow by only 3.5% in 2023 and only 0.3%
in 2024.
7
7
Clarksons Research, Shipping Intelligence Network, February 2023;
Maritime Strategies International Horizon, February 2023.
1,600
1,400
1,200
1,000
600
800
400
200
0
2020 2021 2022 2023 2023 ROY*
1,410
1,392
604
552
484
Fig. 2a: Start-of-the-year Charter Vessel Availability
No. Of Vessels
* Availability for the remainder of 2023 as of February 14, 2023,
including newbuild-deliveries
–60%
28
21
28
106
64
131
Jan
2019
Jan
2020
Jan
2021
Jan
2022
Jan
2023
301
350
300
250
200
100
50
150
0
Fig. 2b: Total idle fleet as of statistic
No. of vessels
1-2k 2-3k 3-5.1k
Board of Directors’ Report
14 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 15
On the demand side, intra-regional trades (main deployment trades
for vessels smaller than 5.2k TEU) are expected to rebound in 2023
and to outstrip supply until at least 2026. The demand for intra-
regional trades is driven by high volumes in Intra-Asia. The ASEAN
region is also more economically integrated since the Regional
Comprehensive Economic Partnership (RCEP), the world’s largest
free trade agreement, entered into force in 2022. Intra-regional
demand is expected to recover strongly from -1.1% annual growth in
2022 to 3.2% annual growth in 2023 and 7% annual growth in 2024.
Regarding the total market, demand is projected to fall behind total
supply until at least 2025, with annual growth recovering from -1.1%
annual growth in 2022 to a more moderate 2.2% annual growth in
2023 and 6.6% annual growth in 2024.
8
8
Maritime Strategies International, Horizon, February 2023.
Summing up the supply-demand picture, the market balance
appears more encouraging for intra-regional trades than for the
total market. As shown in Figure 4, an excess supply situation is
expected until at least 2025 for the total market, with strong annual
container fleet growth figures of 7% in 2023 and 2024. The excess
supply situation in the total market is expected to ease in 2024
since demand is expected to rebound to annual growth of 6.6%. For
intra-regional trades, supply growth (3.5%) is expected to be only
slightly above demand growth (3.2%) this year. As of 2024 onwards,
significant excess demand can be expected with annual demand
growth figures of 7% in 2024 and 5.5% in 2025.
9
9
Ibid.
7,423
28.8
25,802
40
30
35
25
20
10
5
15
0
Fig. 3a: Orderbook Development
TEUm %
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total Fleet Orderbook
Orderbook-to-Fleet ratio (rhs)
40
30
25
20
10
5
15
0
35
70
90
80
40
50
60
30
20
10
-10
0
12-17k TEU
Fig. 3b: Orderbook across size segments
compared to fleet age
% (Orderbook / Fleet)
% of fleet 20+ years
0 5 10 15 20 25 30
1-3k TEU
3-6k TEU
>17k TEU
High OB / Fleet
Relative Young Fleet
Low OB / Fleet
Relative Old Fleet
8-12k TEU
6-8k TEU
10
8
6
2
0
4
–2
Fig. 4a: Supply-Demand Balance – Total Market
%
2019 2021 20222020 2024 (f) 2025 (f)2023 (f)
Supply growth (TEU capacity) Demand growth (TEU throughput)
1.4
0.4
4.0
3.5
4.5
4.4
7.0
7.0
2.2
-1.9
5.9
-1.1
2.2
6.6
0.8
5.9
5.1
5.4
5.5
4.8
10
8
6
2
0
4
–2
Fig. 4b: Supply-Demand Balance – Intra-Regional Trades
%
2019 2021 20222020 2024 (f) 2025 (f)2023 (f)
Supply growth (TEU capacity <5.2k TEU)
Demand growth (intra-regional TEU throughput)
1.4
0.2
1.6
2.3
3.1
3.2
0.3
4.1
-1.8
3.7
-1.1
3.5
7.0
3.4
4.2
6.7
-1.4
5.5
6.9
Board of Directors’ Report
16 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 17
The dual-fuel orderbook continues
to pick up, especially for methanol
The spike in orders during the market boom has resulted in a sig-
nificant increase in dual-fuel ordering in the container shipping
segment. Decarbonization efforts by the industry coupled with
environmental regulations introduced by the IMO (CII, EEXI) and
the EU (EU ETS) are the main factors driving this development.
Asshown in Figure 5 (left), around 27% of the current orderbook in
terms of number of vessels (41% in terms of TEU capacity) consists
of dual-fuel vessels compared to conventional fuel orders. LNG still
dominates the current dual-fuel orderbook with 77% in terms of
number of vessels (73% in terms of TEU capacity), but as Figure
5 (right) shows, methanol dual-fuel ordering, which was basically
non-existent before 2021, has gained significant traction over the
past year. Liner carriers such as Maersk, and more recently CMA
CGM, have decided to use methanol as a dual-fuel option. The cur-
rent orderbook illustrates that already 23% of dual-fuel ordering
accounts for methanol in terms of number of vessels (27% in terms
of TEU capacity).
10
10
Clarksons Research, Shipping Intelligence Network, February 2023.
Summarizing the current container market update, the improve-
ment in the outlook for the global economy compared to only a few
months ago provides reason for optimism that container markets
will rebound in the second half of 2023 and into 2024. This is
backed up by an encouraging outlook with regard to demand for
intra- regional trades in particular. Nevertheless, the substantial
number of newbuild deliveries entering the market in the years
ahead is not inconsiderable and potential cascading effects need
to be monitored closely. Finally, environmental regulations are
expected to have impact on effective capacity as indicated by
increasing demolition levels and slower trading speeds, particu-
larly for smaller vessels in niche trades.
Fig. 5a: Current dual-fuel orderbook
No. of vessels
Conventional
254 / 27%
637 / 73%
Dual-Fuel
Total Orderbook
927
Fig. 5b: Current dual-fuel types orderbook
No. of vessels
LNG
59 / 23%
195 / 77%
Methanol
Dual-Fuel
Orderbook
254
50
40
30
20
10
0
47
29
21
9
2021 20232022
Fig. 5c: Methanol Dual-Fuel Orderbook Development
Board of Directors’ Report
16 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 17
Outlook and Strategy
At the end of 2022, the Group had fixed 86% of operating days in
2023, reflecting an approximate USD 576 million in contracted
charter revenue. The charter contract for the fleet, including new-
buildings, had an average remaining contract duration of 2.2 years
and constituted USD 1.5 billion in contracted revenue. Throughout
2021 and 2022, the Group has continued to deleverage and as at
December 31, 2022, leverage ratio was 16.1%, down from 22.4% at
December 31, 2021.
Following a period of market normalization in the second half of
2022, at the end of the year and in the beginning of 2023, rates
seem to have stabilized somewhat at a level above historical aver-
ages. Vessel availability in the market remains limited and, despite
a high order book for new vessels within larger tonnage, the sup-
ply-demand balance appears more favorable within MPCC’s mar-
ket segment of small- to mid-size vessels serving intra-regional
trade lanes. Together with recent improvements in the general
outlook for the global economy, the outlook for container shipping
is increasingly encouraging.
There are also opportunities to gain from increasing our focus on
and investments in green technology, and MPCC will work closely
with customers and partners to continuously evaluate new tech-
nologies and opportunities within decarbonization and invest in
vessels and fuel-related infrastructure that will propel sustainable
change in the maritime industry.
Going forward, regardless of market developments, MPCC remains
in a very strong financial position with significant earnings visibility
and thus in a strong competitive position. For the coming year, the
Group will continue its strategy for fleet optimization and continue
to pursue selective growth opportunities. The Board also remains
committed to the Company’s dividend policy to ensure reliable
quarterly shareholder distributions also for the coming years.
Risk Factors
The Board of Directors aims to ensure that the Company has sound
internal controls and systems for risk management that are appro-
priate in relation to the extent and nature of the Company’s objec-
tives and activities. Together with the executive management, the
Board has identified approximately 57 risk factors divided into eight
categories.
The Risk Inventory is quantified and monitored taking a probability-
impact approach. Each risk is assigned a Risk Owner within the
Company’s organization and a defined set of countermeasures and
control frequencies.
A summary of the Company’s risk categories is outlined below.
Descriptions are not exhaustive, and the sequence of risk catego-
ries is not set out according to importance or priority.
Market and Industry Risks
As a supplier of ocean-going container vessels to the international
sea trade, the Company is exposed to changes in trade patterns
and the supply-demand for containerized goods caused by macro-
economic and geo political events. Such events include the trade
tensions between the U.S. and China in2018-2019, the outbreak
of the COVID-19 pandemic in 2020, and the Russian invasion of
Ukraine. This in turnnecessitates risk surveillance and mitigation
procedures related to the charter market, fluctuation in vessel
values and competitors, among others. The Company strives to
maintain a dynamic chartering strategy, a reliable fleet, and a
close dialogue with the shipping market intelligence community
to proactively adjust operations according to prevailing and future
market environments.
The conflict between Russia and Ukraine as well as the economic
and financial sanctions placed on Russia to end the conflict
receives special attention by the Company. The conflict and the
ensuing international response have generated significant disrup-
tion to the geopolitical landscape. The Company has assessed all
relevant areas, including operations, contracts, and charter par-
ties, in order to identify risks and define specific countermeas-
ures. Regarding the commercial risks from vessels trading in the
critical area, four vessels have stopped calling ports in Ukraine and
Russia, and no dockings are scheduled in the region. Operational
risks might arise on the crewing side, as MPCC`s crew manager
is hiring Ukrainian and Russian seafarers. The Company is tak-
ing direct countermeasures with its crewing manager to mitigate
potential crewing scarcities. Besides these existing risk factors,
our risk assessment concludes that there is no immediate holistic
impact on MPCC expected. We remain confident that if there is no
complete disruption of the global supply chain,MPCC’sbusiness
and operations should be able to continue.
Board of Directors’ Report
18 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 19
Regarding the World Economy, inflation increased to 9% in the U.S.
and 10% in the Euro Area at the end of 2022. Central banks reacted
promptly by increasing interest rates, which put negative pressure
on investments. The global economy is currently struggling with
a slowdown of economic activity. However, economists already
expect a relaxation in the second half of 2023, with inflation and
interest rates leveling out and increasing consumer demand. First
signs of a positive change in momentum are already visible.
Environmental, Social,
and Governance Risks
Risks related to ESG include climate change impacts, mitigation
and adaptation, environmental management practices and duty
of care, working and safety conditions, respect for human rights,
gender diversity, anti-bribery and corruption practices, and com-
pliance with relevant laws, regulations, and best practices. Respon-
sible business operations should also consider the impacts of
megatrends, such as climate change, emerging regulations, volun-
tary guidelines as well as the transparency requirements of wider
stakeholders.
Sustainability-related topics are gaining foothold among stake-
holders not due to specific laws or regulations mandating a new
level of disclosure but as the result of a broader understanding
of the reputational and financial impact of poorly handling such
issues. While developments in the ESG (“Environmental, Social and
Governance”) reporting and regulatory environment are outside the
control of the Company, our attentiveness and adherence to ESG
initiatives and reporting standards is of strategic relevance within
the Company’s scope of business.
Performance Risks
The Company’s performance depends heavily on technical, opera-
tional, environmental, and reputational factors that carry both risks
and opportunities. The Company addresses these risk and oppor-
tunities by assigning responsibilities, and monitoring and reporting
routines to dedicated teams within its organization, such as asset
management, treasury ,and controlling, utilizing. The Company
continuously develops portfolio management tools and engages
subject matter consultants to conduct routine compliance and
quality management assessments.
The Company’s vessels have insurance covering, among other
things, P&I, hull and machinery, loss of hire, war risks, and crew
negligence. However, risks remain as to whether the vessels are cov-
ered under all conditions. Vessels carry loss prevention, safety, and
quality manuals to ensure sound HSE routines. Third-party contract-
ing related to the Company’s performance shall comply with appli-
cable laws and regulations, for instance, and where applicable, with
the International Maritime Organization’s ISM Code and the SOLAS,
STCW and Maritime Labor conventions.
Legal Risks
The Company is exposed to changes in legal, tax, and regulatory
regimes within relevant jurisdictions as well as potential private litiga-
tion and public prosecution. The Company seeks to mitigate legal risks
by maintaining a well-functioning risk management system, manage-
ment guidelines and dedicated compliance and legal functions.
Especially in the current geopolitical situation with newly introduced
and further strengthened sanction regimes for example, legal risk
exposure is elevated. The Company mitigates this situation by a) even
closer monitoring current business activities and all involved parties,
b) the introduction of a comprehensive Sanctions Compliance Policy
and c) seeking advice from seasoned sanction experts.
Personnel Risks
The continued progress of the Company depends heavily on the
knowledge and network of key personnel as well as on access to
new talent. Personnel risk mitigation procedures include pre- and
post-hire preparations, regular employee development reviews,
jour fixes and a methodical expansion of internal resources on
business-critical processes.
IT Risks
IT and cyber risks make up an increasing share of the Company’s
risk universe. The Company purchases IT services from third par-
ties that offer comprehensive security strategies which closely
match the Company’s business objectives. All data and applica-
tions are hosted multi-redundantly in European cloud storage and
secured multiply against data loss and third-party access. Security
checks and staff training are carried out on a regular basis.
Financial Risks
The Company seeks to actively manage its financial risk exposures
through the use of dedicated finance, treasury and owner con-
trolling teams within its organization. Liquidity and covenant risks
are monitored on an ongoing basis, also considering latest macro-
economic events such as the COVID-19 pandemic and its implica-
tions for container shipping. Currency and interest rate risks are
mitigated via financial instruments when deemed appropriate. The
compliance with certain debt covenants, including covenants in
relation to the market value of the Group’s fleet, may be beyond
the control of the Group. As at December 31, 2022, outstanding
interest-bearing debt was USD 153.6 million, net of debt issuance
costs, which will be repaid through the cash flow generated from
the vessels or through refinancing. As at December 31, 2022, the
Group has an outstanding of capital commitments of USD 189.4 mil-
lion relating to the four newbuildings contracted in 2022.
Board of Directors’ Report
18 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 19
Climate Risks
The Company has divided climate-related risks into two major cat-
egories: (1) risks related to the transition to a lower-carbon econ-
omy and (2) risks related to the physical impacts of climate change.
Transitioning to a lower-carbon economy implies extensive
changes in the political, legal, technological and market environ-
ment. It is the goal of the MPCC Risk Management to identify the
specific risks for our business model and to address mitigation and
adaptation requirements related to climate change. Depending on
the speed and focus of these changes, transition risks may pose
varying levels of financial and reputational risk to our organization.
Physical risks resulting from climate change can be event-driven
(acute) or longer-term shifts (chronic) in climate patterns. Phys-
ical risks may have financial implications for the company, such
as direct damage to assets and indirect impacts from disrupted
operations.
Other Risks
From time to time, the Company will be required to consider major
business initiatives, which, if implemented, entail a considerable
amount of costs and resources. Moreover, if executed with-
out due care and planning, such strategic initiatives may have a
material adverse impact on the Company. The need to consider
major initiatives may arise from strategic considerations, from
shifts in market dynamics or from regulatory changes outside the
Company’s control. The Company will seek to mitigate risks arising
from such initiatives, as well as all other risks not assorted into
the above-mentioned six risk categories, on a case-by-case basis
by implementing project steering committees comprising relevant
stakeholders and expertise, be it internal or external.
Members of the Board and the executive management team are
covered by insurance policies (D&O) against potential liability
towards the Company and third parties.
Forward-Looking
Statements
Forward-looking statements presented in this report are based on
various assumptions. The assumptions are subject to uncertainties
and contingencies that are difficult or impossible to predict. MPC
Container Ships ASA cannot give assurances that expectations
regarding the outlook will be achieved or accomplished.
Oslo, March 23, 2023
The Board of Directors of
MPC Container Ships ASA
Ulf Holländer (Chairman)
Peter Frederiksen
Dr. Axel Schroeder
Ellen Hanetho
Constantin Baack (CEO)
Pia Meling
Board of Directors’ Report
20 MPC Container Ships Annual Report 2022
20 MPC Container Ships Annual Report 2022
BOARD OF
DIRECTORS
Ulf Holländer (1958)
Chairman
Term of office: Re-elected on April 27,
2022, for a period of two years. First
elected on April 2, 2017.
Independent: No
Committee Membership: Chairman of the
Risk and Audit Committee and the Remu-
neration Committee.
Experience: Ulf Holländer commenced his
career as an audit assistant and auditor at
Dr. W Schlage & Co Wirtschaftsprüfungs
und Steuerberatungsgesellschaft in Ham-
burg, after which he worked at the ship-
ping group Hamburg Süd and affiliated
companies in Australia and the U.S. Posi-
tions included financial controller, com-
mercial director, and head of Hamburg
Süd’s finance and accounting department.
Mr. Holländer was CFO of MPC Münch-
meyer Petersen Capital AG before being
appointed as CEO in 2015.
Education: Commerce degree from the
University of Hamburg.
Shareholding: 165,637 shares
Board meetings attended in 2022: 26
Dr. Axel Schroeder (1965)
Board Member
Term of office: Re-elected on April 27,
2022, for a period of two years. First
elected on May 18, 2017.
Independent: No
Committee Membership: None
Experience: Dr. Axel Schroeder has held
various positions within the MPC Group
since 1990, including engagements in MPC
Münchmeyer Petersen Capital AG (“MPC
Capital”) from its infancy in 1994 and as CEO
from 1999 to 2015, during which period MPC
Capital was listed at the Frankfurt Stock
Exchange (2000). Since 2015, Dr.Schroeder
has chaired MPC Capital’s Supervisory
Board. Moreover, he is managing partner
of MPC Münchmeyer Petersen & Co. GmbH.
Education: Economics and Social
Science at the University of Hamburg
followed by a doctorate.
Shareholding: 2,536,511 shares
Board meetings attended in 2022: 26
Board of Directors
22 MPC Container Ships Annual Report 2022
Pia Meling (1975)
Board Member
Term of office: Elected on December 21,
2022, for a period until the 2024 Annual
General Meeting
Independent: Yes
Committee Membership: Risk and Audit
Committee and ESG Committee
Experience: Pia Meling has significant
financial, ESG, and managerial experience
within the shipping and maritime sectors.
Her experience includes senior positions
with Klaveness Group, Clean Marine AS,
Wilhelmsen Ships Service, and Massterly
AS. Mrs. Meling is currently the Managing
Director of Grieg Green AS. She is also a
member of the Ocean Portfolio Board at
the Research Council of Norway and serves
on the Board of Directors of port operator
Westport AS, as well as the listed Norwe-
gian cleantech company TECO 2030 ASA.
Education: MBA from the Norwegian
School of Economics.Shareholding: 0
shares
Board meetings attended in 2022: 1
Peter Frederiksen (1963)
Board Member
Term of office: Re-elected on April 27,
2022, for a period of two years. First
elected on February 25, 2022.
Independent: Yes
Committee Membership: Remuneration
Committee
Experience: Peter Frederiksen held man-
agement and board positions at Hamburg
Süd for 9 years and at Maersk Line for 25
years. He has extensive experience in the
shipping industry and currently serves on
the board of several shipping and maritime
companies, including Uni-Tankers A/S and
Bunker Holding A/S.
Education: A.P. Møller Maersk Shipping
Education. Executive Development Pro-
grams at INSEAD and Cornell Johnson
Graduate School of Management.
Shareholding: 200,000 shares
Board meetings attended in 2022: 19
Ellen Hanetho (1964)
Board Member
Term of office: Re-elected on April 27,
2022, for a period of two years. First
elected on January 16, 2018.
Independent: Yes
Committee Membership: Risk and Audit
Committee, Remuneration Committee, and
ESG Committee
Experience: Ellen Hanetho started her
career in the Investment Banking Divi-
sion of Goldman Sachs International Ltd in
London and New York (1997-2002). Subse-
quently, she was investment managerand
partner at Credo Partners AS (2003-2012)
and then CEO of Frigaard Invest AS (2013-
2019). At present, she is an independent
investor and business developer, and holds
several board positions including chair of
the board of HydrogenPro ASA and direc-
torships in Stokke Industri AS, Kristian
Gerhard Jebsen Group Limited, Kongsberg
Automotive ASA and EQVA ASA.
Education: BSBA in Business Administra-
tion from Boston University and an MBA
from Solvay Business School.
Shareholding: 60,000 shares
Board meetings attended in 2022: 26
Board of Directors
Annual Report 2022 MPC Container Ships 23
CORPORATE
GOVERNANCE
REPORT
Annual Report 2022 MPC Container Ships 25
24 MPC Container Ships Annual Report 2022
Good corporate governance is a prerequisite for cooperation based
on trust between the owners, the Board of Directors (“the Board”)
and the management of MPC Container Ships ASA (“the Company”,
together with its subsidiaries “the Group”), with a view to achieving
long-term growth.
The Board actively adheres to good corporate governance stand-
ards and will ensure that the Company either complies with or
explains possible deviations from the Norwegian Code of Practice
for Corporate Governance (“the Code”). The Code can be found at
www.nues.no.
As at December 31, 2022, there are no significant deviations
between the Code and how the Company complies with the Code.
Two minor deviations under Section 5 on general meetings and one
deviation under Section 6 on the nomination committee have been
justified and disclosed.
Business
The business activity of the Company is set out in article 3 of its
articles of association: “The Company’s business activity is to
(i) invest in maritime assets (vessels, shares in ship-owning compa-
nies, loans secured by vessels, and/or shares in ship-owning com-
panies) with a main focus on small- to mid-size container ships, (ii)
chartering out the vessels via time-charter agreements, operate
and sell them as well as (iii) working out the acquired maritime loans
in order to take over the securing assets.”
As a globally active shipping company, MPC Container Ships consid-
ers the creation of shareholder and stakeholder value as the core
purpose of our business activities. Yet, we believe that the ability
to create long-term sustainable value lies in linking economic and
financial advancements with environmental, social and governance
propositions and thus following the principles of Corporate Social
Responsibility.
Adapting to the future and changing environment of our business
and the general market as well as preparing for the challenges that
those developments imply, is the key element of our long-term
business strategy. Our mission is to future-proof our business and
create stakeholder value through:
+
Being a professional and positive workplace with an inclusive
working environment. Health and safety of our employees are
always the main priority.
+
Supporting collective climate ambitions and leverage industry
networks to accelerate change.
+
Valuing professional, transparent, and fair business
relationships by acting as a transparent and trustworthy
business partner.
+
Adopting a long-term perspective in our business strategy
and decision making, that is taking economic and ecological
aspects equally into account
The Company is listed on the Oslo Stock Exchange under the ticker
symbol “MPCC”.
As set out in the risk factors section in the Board of Director’s
report in the Annual Report for 2022, the Board has defined clear
objectives, strategies, and risk profiles for the Company’s busi-
ness activities to ensure shareholder value creation. The Board will
evaluate these objectives, strategies, and risk profiles on a regular
basis, and routinely monitors risk exposure vis-à-vis its business
objectives.
Deviations from the Code: none
Equity and
Dividends
Share Capital
All shares issued in the Company are equal in all respects. The
Company has one class of shares, each carrying one vote and an
equal right to dividend. All shares are validly issued and fully paid.
The shares are issued in accordance with the laws of Norway and
registered in the Norwegian Central Securities Depository (VPS)
with ISIN NO0010791353. As at December 31, 2022, the Company’s
share capital is NOK 443,700,279 divided into 443,700,279 shares,
each with a nominal value of NOK 1.00.
Any increase of the Company’s share capital must be mandated
by the general meeting. If a mandate is to be granted to the Board
to increase the Company’s share capital, such mandate will be
restricted to a defined purpose. If the general meeting is to con-
sider mandates to the Board for the issuance of shares for differ-
ent purposes, each mandate will be considered separately by the
general meeting.
At the Company’s annual general meeting held April 27, 2022, the
Board was authorized to increase the Company’s share capital by
up to NOK 110,925,070. Subject to this aggregate amount limitation,
the Board’s authority may be used on more than one occasion and
for such purposes as the Board finds to be in the interest of the
Company. No new shares were issued in 2022.
The Board’s authority shall remain in force until the annual general
meeting in 2023, but not later than June 30, 2023. Pre-emptive
rights of existing shareholders may be set aside. The authority
covers (i) capital increases against contributions in cash and non-
cash, (ii) the right to incur special obligations for the Company,
(iii)resolutions on mergers and (iv) takeover situations.
Corporate Governance Report
Annual Report 2022 MPC Container Ships 25
24 MPC Container Ships Annual Report 2022
Capital Structure
The Board regards its capital structure and equity ratio as appro-
priate considering the Group’s objectives, strategy, and risk profile.
Dividend Policy
In support of its objective of maximizing returns to shareholders,
MPC Container Ships’ intention is to pay regular dividends by way
of distributing 75% of the profit for the period after consider-
ing CAPEX and working capital requirements, including liquidity
reserves and one-off effects. Dividends will be declared or pro-
posed by the Board at the sole discretion of the Board and will
depend on the financial position, earnings, debt covenants, distri-
bution restrictions, capital requirements and other factors related
to MPC Container Ships and its subsidiaries. The Company cannot
guarantee that its Board will declare or propose dividends in the
future. Furthermore, the Company may make event-driven distri-
butions based on non-recurring proceeds, such as vessel sales, by
way of extraordinary dividends or share buybacks, to be applied
according to the Board’s discretion.
Purchase of Own Shares
On January 28, 2022, an extraordinary general meeting of the
Company was held. The general meeting passed the resolution
to reduce the Company’s share capital from NOK 444,051,377 to
NOK 443,700,279 by cancelling the Company’s treasury shares of in
total 351,098 shares. The share capital reduction amounting to NOK
351,098 was transferred to other equity. This resolution entailed
no payments made by the Company. The share capital reduction
was carried out on May 18, 2022, after which the Company had no
remaining treasury shares.
At the extraordinary general meeting held on January 28, 2022, the
Board was granted an authorization to acquire shares in the Com-
pany on behalf of the Company with an aggregate nominal value of
up to NOK 44,370,027 and with a consideration per share of no less
than NOK 1.00 and no more than NOK 200.00. The Board’s authority
is valid until the annual general meeting in 2023, but not later than
June 30, 2023.
Deviations from the Code: none
Equal Treatment
ofShareholders
Equal Treatment
Equal treatment of all shareholders is a core governance principle
of the Company. The Company has one class of shares, and each
share confers one vote at the general meeting. The articles of
association contain no restrictions on voting rights and all shares
have equal rights.
Transactions in Own Shares
The Company’s transactions in own shares are carried out over the
stock exchange or by other means at market price. Should there
be an increase in capital which involves a waiver of the existing
shareholders’ pre-emptive rights, and the Board resolves to carry
out such an increase on the basis of a mandate granted by the
general meeting, the Board will explain the justification for waiv-
ing thepre-emptive rights in the stock exchange announcement.
Deviations from the Code: none
Shares and
Negotiability
The Company’s shares are listed on the Oslo Stock Exchange and
are freely negotiable. The Company has one class of shares, each
carrying one vote at the general meeting. The shares have no trad-
ing restrictions in the form of Board consent or ownership limita-
tion, and the Company does not limit any party’s ability to own, trade
or vote for shares in the Company.
Deviations from the Code: none
Corporate Governance Report
26 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 27
General Meetings
The general meeting of shareholders is the Company’s supreme
corporate body. It serves as a democratic and effective forum
for interaction between the Company’s shareholders, Board, and
management.
According to the Company’s articles of association, the annual
general meeting shall be held once a year before the end of June.
Furthermore, extraordinary general meetings may be convened
either by the Board, the auditor or shareholders representing at
least 5% of the Company’s share capital.
Notice of Meeting
Notice of the general meeting is sent at the latest 21 days before
the meeting. All shareholders registered in the Norwegian Central
Securities Depository (VPS) will receive a notice of meeting and are
entitled to submit proposals and vote directly or via proxy. Agenda
papers will also be published on the Company’s website.
Pursuant to the Company’s articles of association, when documents
concerning matters to be discussed at general meetings have been
made available to the shareholders on the Company’s website, the
Board may decide that the documents shall not be sent to the
shareholders. If so, a shareholder may request that documents
concerning matters to be discussed at the general meeting be sent
to him or her. The Company will not charge any form of compensa-
tion for sending the documents to the shareholders.
The agenda papers must contain all necessary information so that
the shareholders can decide on the issues to be addressed. The
notice of general meeting may state that shareholders wanting to
attend the general meeting must notify the company thereof within
a certain period. This period cannot expire sooner than five days
before the meeting, as proposed amended.
Registration and Proxy
Registration should be made in writing, either via mail or e-mail.
The Board will ensure so that as many shareholders as possible
are able to participate. Shareholders who are unable to attend in
person, are encouraged to appoint a proxy. A special proxy form
is available which facilitates separate voting instructions for each
issue to be considered by the general meeting and for each of the
candidates nominated for election. The Company will nominate one
or more persons to vote as proxy for shareholders. Representatives
from the Board, management and/or the auditor will participate in
the general meeting.
If shares are registered by a nominee in the Norwegian Central
Securities Depository (VPS) and the beneficial shareholder wants
to vote for their shares, the beneficial shareholder must re- register
the shares in a separate VPS account in their own name prior to
the general meeting. If the holder can prove that such steps have
been taken and that the holder has a de facto shareholder inter-
est in the Company, the shareholder will be allowed to vote for
the shares. Decisions regarding voting rights for shareholders
and proxy holders are made by the person opening the meeting,
whose decisions may be reversed by the general meeting by simple
majority vote.
Minutes
The minutes of the general meetings are made available on the
Company’s website immediately after the meeting.
Deviations from the Code: The Board might not make arrange-
ments for an independent chairperson for general meetings as
the Company believes that the Chairman of the Board can act
independently and in the interests of shareholders. Similarly, the
Board may not deem it appropriate for all Board members and the
auditor to participate in all general meetings.
Nomination
Committee
Considering the scope of the Company’s operations, the Board
considers it reasonable and appropriate that the Company should
have three Board sub-committees: the Risk & Audit Committee,
the Remuneration Committee, and the ESG Committee. The Risk &
Audit Committee is made up of Ulf Holländer (Chairman), Pia Meling
and Ellen Hanetho. The Remuneration Committee is made up of
UlfHolländer (Chairman), Ellen Hanetho, Peter Frederiksen. The
ESG Committee is made up of Pia Meling and Ellen Hanetho.
Deviations from the Code: Contrary to the recommendations
of the Code, the Company presently does not have a dedicated
Nomination Committee due to the above considerations. Regard-
less, the Company shall account for the interests of the share-
holders when considering the composition of the Board. This is
done by (i) seeking a diverse and highly qualified pool of Board
candidates with relevant competence and industry expertise and
(ii) ensuring that shareholder input on Board member nomination,
election and evaluation are properly addressed. The Board must
take appropriate measures to avoid self-perpetuation.
Corporate Governance Report
26 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 27
Board of Directors:
Composition and
Independence
Pursuant to the Company’s articles of association, the Board shall
consist of between three to seven members who are elected by the
general meeting for up to four years at a time. MPC Capital has the
right to elect 40% of the members of the Board (rounded down).
If the aggregate share ownership of MPC Capital and affiliates
falls below 20% of the total number of shares in the Company,
MPC Capital shall only have the right to elect one board member.
Ifneither MPC Capital nor any affiliates own any shares in the Com-
pany, MPC Capital shall not have the right to elect a board member.
Board appointments are communicated through the notice of
general meetings and the members are elected by majority vote.
The Board considers its composition to be diverse and competent
with respect to the expertise, capacity, and diversity appropriate
to attend to the Company’s objectives, main risks and challenges,
and the common interest of all shareholders. The Board composi-
tion adheres to the requirement regarding gender equality and rep-
resentation of both sexes on the board of directors of Norwegian
public entities, as set forth in the Norwegian Public Limited
Liability Companies Act Section 6-11a. Further, the Board deems
its composition to be made up of individuals who are willing and
able to work as a team, resulting in the Board working effectively as
a collegiate body. The Board does not include executive personnel
of the Company.
The Work of the
Board of Directors
Duties of the Board
The Board has overall responsibility for the management of the
Company and for supervising the day-to-day management and
theCompany’s operations. This involves defining the Company’s
objectives, strategies, and risk profiles to ensure value creation
for its shareholders. The Board is also responsible for following-up
on the implementation of objectives and strategies, as well as for
control functions to ensure that the Company has proper opera-
tions as well as asset and risk management.
Instructions for the Board
Pursuant to the provisions of the Norwegian Public Limited Liability
Companies Act, the Board has established rules of procedure that
provide detailed regulations and guidelines for the Board’s work
and administrative procedures and define the functions and
dutiesof the CEO towards the Board.
Agreements with Related Parties
The Board and the management are committed to promoting equal
treatment of all shareholders.
In relation to its ordinary business, the Group may enter into trans-
actions with certain entities in which the Group has ownership
interests or with entities otherwise deemed related parties of the
Group, its shareholders, Board, or executive personnel. Such trans-
actions are carried out on an arm’s length basis and disclosed in
Note 25 of the Company’s Annual Report for 2022.
Guidelines regulating loyalty, ethics, impartiality, and conflict of
interests are stipulated in the Company’s Code of Conduct, appli-
cable to all entities controlled by the Company and all employees,
directors, officers, and agents.
The Code of Conduct is made available on the Company’s website.
Deviations from the Code: none
Conflicts of Interest
and Disqualification
Members of the Board and executive management cannot consider
matters in which they may hold a special interest. In order to ensure
that items brought to the Board’s attention can be considered in
an unbiased and satisfactory way, Board members and executive
management have a duty to inform the Board of any potential
special interest in Board matters, and the Board must account for
the individual’s interest in its consideration of the item.
Instructions for the CEO
A clear division of responsibilities and tasks has been estab-
lished between the Board and executive management. The CEO,
appointed by the Board, has a particular responsibility to ensure
that the Board receives accurate, relevant, and timely information
that is sufficient to allow the Board to carry out its duties.
Corporate Governance Report
28 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 29
Financial Reporting
The Board receives periodic reports with comments on the Com-
pany’s financial status. In terms of the annual accounts which the
Board is asked to adopt, the Board may ask the executive man-
agement to confirm that accounts have been prepared in accord-
ance with EU IFRS (Group level) and Norwegian GAAP (parent level),
that all the information included is in accordance with the actual
situation of the Company and that nothing of material importance
has been omitted.
Chairman of the Board
The principal duty of the Chairman is to ensure that the Board
operates well and carries out its duties. In addition, the Chairman
has certain specific duties in respect of the general meetings.
Matters to be considered by the Board are prepared by the CEO in
collaboration with the Chairman, who chairs the board meetings.
In order to ensure an independent approach by the Board, another
member should take the chair when the Board considers matters of
a material nature in which the Chairman has, or has had, an active
involvement.
Meeting Structure
The Board intends to meet at least five times each year and rou-
tinely receives reports on the Company’s operational and financial
performance, market updates, etc. Furthermore, the Board is con-
sulted on or informed about matters of special importance.
Risk & Audit Committee
The Risk & Audit Committee shall act as a preparatory and advi-
sory body for the Board and support the Board in the exercise of
its responsibility for financial reporting, internal control and risk
management. Furthermore, the Risk & Audit Committee shall
review and discuss with the Company’s management and statutory
auditor the Company’s annual and quarterly financial statements
and assess and monitor the independence of the statutory auditor.
The Risk & Audit Committee shall meet at least four times a year
and at such other times as the Chairman of the committee deems
appropriate.
A Risk & Audit Committee consisting of three members, one of
them independent of the Company’s business activities and main
shareholders, was established in January 2018.
Remuneration Committee
The Remuneration Committee shall act as a preparatory and
advisory body for the Board and shall assist the Board in its work
in relation to the Company’s remuneration policies and terms of
employment for the CEO.
A Remuneration Committee consisting of three members, one of
them independent of the Company’s business activities and main
shareholders, was established in March 2018.
The Board’s Self-Evaluation
The Board conducts an annual evaluation of its performance, way
of working and expertise.
Deviations from the Code: none
Risk Management
and Internal Control
In accordance with the principles underlying value-based man-
agement, the Board places great importance on systematic risk
management. This is done not only to satisfy the requirements set
out by law, but also to ensure the Company’s governance in a highly
dynamic market environment by identifying existing and potential
risk exposures.
Through (i) quarterly reviews of the Company’s most prominent
areas of risk exposure and its internal control arrangements,
(ii)management guidelines and (iii) the appointment of a dedi-
cated risk management unit to perform risk monitoring and provide
regular risk management updates to the Risk & Audit Committee,
the Board aims to ensure that the Company has sound internal
controls and systems for risk management that are appropriate in
relation to the extent and nature of the Company’s activities.
In view of the extent and nature of the Company’s activities, the
Board considers the Company’s internal control and risk manage-
ment to be sound and appropriate. It is composed of the majority
shareholder’s governing elements, such as the code of conduct,
business standards, whistleblowing system and other relevant
policies and procedures.
The Board reviews the Company’s risk matrix regularly, as well as
the internal control arrangements at least annually.
MPC Container Ships ASA reports to the financial market on a
quarterly basis. The Board performs an internal financial audit
review prior to the release of quarterly results, and when other-
wise required.
Deviations from the Code: none
Corporate Governance Report
28 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 29
Remuneration of the
Board of Directors
For the financial year 2022, each Board member received NOK
400,000 in remuneration, covering work related to both Board
representation and committee participation, and the Chairman
received NOK 600,000 as approved by the annual general meeting
on April 27, 2022. The Company considers the remuneration for the
Board to reflect the Board’s responsibility, expertise, time commit-
ment and the complexity of the Company’s activities.
The remuneration of the Board is not linked to Company per-
formance. Board members have no options to buy shares in the
Company, nor do they receive compensation other than the Board
remuneration. Board remuneration is considered to be on market
terms.
Deviations from the Code: none
Remuneration of
Executive Personnel
Pursuant to the Norwegian Public Limited Liability Companies
Act,the Board prepares guidelines for the remuneration of the
Company’s CEO and other executive personnel. The guidelines set
out the main principles applied in determining the salary and other
remuneration of the executive personnel considered to reflect
market conditions and help to ensure convergence of the financial
interests of the executive personnel and shareholders.
The Board’s statement on executive personnel remuneration is
communicated to the annual general meeting in a separate appen-
dix, highlighting which guidelines are advisory and which, if any,
are binding.
Any performance-related remuneration such as incentive pro-
grams, share option schemes or similar shall be linked to value
creation for shareholders and results delivered in the Group over
time. Such arrangements aim to drive performance and be based
on financial, operational, and other quantifiable measures over
which the employee in question can impact. Performance-related
remuneration is subject to limits.
For information about remuneration of the Company’s CEO and
other executive personnel, see the Remuneration Report and Note
25 of the Company’s Annual Report for 2022.
Deviations from the Code: None
Information and
Communications
The Company seeks to treat all participants in the securities mar-
ket equally through publishing interim reports, annual reports,
press releases and all relevant information for the market in a
timely, efficient, and non-discriminating manner. All reports will
be available on the Company’s website www.mpc-container.com
and through regulatory and non-regulatory disseminations at the
Oslo Stock Exchange.
The Board has adapted an Investor Relations Policy to ensure that
the Company’s investor relations are carried out in compliance with
applicable rules, regulations, and recommended practices. The
policy shall also ensure awareness of investor relations amongst
the management and the Board.
The Company’s current financial calendar with dates of important
events including the annual general meeting, publishing of quar-
terly reports and its presentations, etc. is publicly accessible on
the Company’s website www.mpc-container.com and through
regulatory and non-regulatory disseminations at the Oslo Stock
Exchange.
Deviations from the Code: none
Takeovers
The Company has implemented guidelines on how to act in the
event of a takeover bid.
In the event of a takeover bid being made for the Company, the
Board will follow the overriding principle of equal treatment for all
shareholders and will seek to ensure that the Company’s business
activities are not disrupted unnecessarily. The Board will strive
to ensure that shareholders are given sufficient information and
time to evaluate an offer the Board considers attractive for the
shareholders.
The Board will not seek to prevent any takeover bid unless it
believes that the interests of the Company and the shareholders
justify such actions.
If a takeover bid is made, the Board will issue a statement with a
recommendation on whether such bid should be accepted or not
bythe shareholders. Such statement shall, inter alia, include infor-
mation on whether the assessment of the bid is unanimous and, if
not, on which basis individual Board members have made reserva-
tions regarding the Board’s statement.
Corporate Governance Report
30 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 31
In the event of a takeover bid, the Board will consider obtaining a
valuation from independent experts. If a major shareholder, any
member of the Board or executive management, related parties
or close associates of such individuals or anyone who has recently
held such a position is either the bidder or has a particular personal
interest in a takeover bid, the Board will arrange for an independ-
ent valuation.
Deviations from the Code: none
Auditor
Under Norwegian law the auditor of the Company is elected by
the general meeting. Ernst & Young AS (org. no. 976 389 387) was
elected as the Company’s auditor on May 18, 2017.
The auditor participates in meetings of the Risk & Audit Commit-
tee that cover interim, quarterly, and annual financial reporting,
board meetings that deal with the annual accounts as well as the
annual general meeting. At these meetings, the auditor reviews any
deviations in the accounting principles applied and comments on
key aspects of the audit, material accounting estimates and issues
of special interest to the auditor, including possible disagreements
between the auditor and the management.
At least once a year the auditor and the Board meet without the
members of the executive management present.
The auditor presents and discusses annually with the Risk & Audit
Committee the main features of their plan for the audit of the
Company as well as a review of the Company’s internal control
procedures.
The auditor shall annually submit a written confirmation that the
auditor continues to satisfy the requirements for independence
and a summary of all services in addition to audit work that has
been undertaken for the Company.
Deviations from the Code: none
Corporate Governance Report
30 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 31
REMUNERATION REPORT
Report on salaries and other
remuneration to leading personnel
in MPC Container Ships ASA
for 2022
This report on salaries and other remuneration to leading per-
sonnel (“the Report”) of MPC Container Ships ASA (“the Company”)
is based on the guidelines for the determination of salaries and
other remuneration of leading personnel in the Company which
were approved by the Company’s general meeting on April 27, 2022
(“Guidelines”). The statement regarding remuneration for executive
management was passed by 81.4% of the shares represented at the
shareholders’ meeting.
The report is based on the requirements set out in the Norwegian
Public Limited Companies Act of 13 June 1997 no. 45 (the “Compa-
nies Act”) section 6-16 a and 6-16 b, as well as Regulation on guide-
lines and report on remuneration for leading personnel of Decem-
ber 11, 2021 No. 2730 (the “Regulation”). The report is formulated in
line with the European Commission’s template for remuneration
reports.
Information required by the Norwegian Act relating to Annual
Accounts of July 17, 1998 no. 56 (“Accounting Act”) section 7-31b
is included in the Company’s Annual Report for 2022 in Note 25.
Remuneration to board members is not covered by this Report.
Any remuneration to board members is determined by the general
meeting in accordance with the Companies Act section § 6-10 and
is available in Note 25 in the Annual Report for 2022.
The guidelines for remuneration
that the Company has adopted
in2022
The overall objective of the management remuneration policy of
the Company is to attract, retain and motivate employees with the
skills, qualifications and experience needed to maximize value
creation for the Company and its shareholders. The Company shall
offer competitive terms to executive management. Subject to this,
the remuneration of the Company’s executive management shall as
far as possible be in line with the market level for remuneration of
executive management in comparable companies.
The remuneration of executive management shall not be of a size
or nature which is liable to harm the Company’s reputation.
The remuneration of the Company’s executive management may in
addition to a fixed salary include customary benefits in kind such
as car allowance or Company car, coverage of telephony and broad-
band costs, newspaper subscriptions etc. The remuneration may
also include pension and insurance schemes as well as severance
pay entitlements. The Board may establish bonus schemes for
executive management. The purpose of any such variable bonus
scheme shall be to give management an incentive to contribute to
value creation in the Company and its subsidiaries.
There is currently no remuneration related to the share or develop-
ments in the share price.
The remuneration policy for executive management during 2022
has been in accordance with the principles described above. Infor-
mation on remuneration to executive management during 2022
isincluded in Note 25 to the annual accounts.
Remuneration Report
32 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 33
Remuneration to leading personnel
Leading personnel currently hold contract within the MPC Con-
tainer Ships ASA as well as in the German entity, MPC Container
Ships GmbH & Co. KG. The tables below show total remuneration
in USD to the Company’s leading persons which have been earned
or paid by the Company for the last 5 years.
1
1
The salaries are paid in EUR from MPC Container Ships ASA
and MPCContainer Ships GmbH & Co. KG
Remuneration from MPC Container Ships ASA
Name of
Director
(start/end)
Financial
year
Fixed remuneration Variable remuneration Extra-
ordinary
items
Pension
expense
Total
remuneration
Proportion of
fixed and variable
remuneration
Base salary Other
benefits
One-year
variable
Multi-year
variable
Constantin
Baack
(CEO)
2022 233,347 316,066 549,413 Fixed/variable:
42%/58%
2021 170,585 768,562 4,711,598
2
5,650,745 Fixed/variable:
3%/97%
2020 179,773 158,244 338,018 Fixed/variable:
43%/57%
2019 173,307 148,501 321,808 Fixed/variable:
56%/44%
2018 297,554 148,777 446,332 Fixed/variable:
0%/100%
Moritz
Fuhrmann
(CFO from
December 1,
2022)
2022 8,779 8,779 Fixed/variable:
100%/-
Dr. Benjamin
Pfeifer
(CFO until
December 1,
2022)
2022 108,151 42,142 150,293 Fixed/variable:
72%/28%
2021 106,100 90,598 196,698 Fixed/variable:
54%/46%
2
Multi-year variable for the CEO based on a multi-year LTIP (Long-Term Incentive Plan) contract agreed with the Compensation Committee and signed in
2018 between the Company and the CEO. The basic driver (KPI) for the variable compensation is (among others) the equity per share development within
a respective timeframe. The original intention of the LTIP was for the CEO to receive performance rights shares or equivalent in the Company. Beginning
of FY 2022 the Compensation Committee and CEO negotiated a cash settlement of the contract as the LTIP plan terms have never been fully finalized.
Thecash payment was contractually fixed In February 2022.
Remuneration Report
32 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 33
Remuneration from MPC Container Ships GmbH & Co. KG
Name of
Director
(start/end)
Financial
year
Fixed remuneration Variable remuneration Extra-
ordinary
items
Pension
expense
Total
remuneration
Proportion of
fixed and variable
remuneration
Base salary Other
benefits
One-year
variable
Multi-year
variable
Constantin
Baack
(CEO)
2022 210,711 15,803
226,514 Fixed/variable:
100%/0%
2021 144,754 17,126 161,879 Fixed/variable:
100%/0%
2020 150,186 17,126 167,312 Fixed/variable:
100%/0%
2019 152,931 17,126 170,056 Fixed/variable:
100%/0%
Moritz
Fuhrmann
(CFO from
December 1,
2022)
2022 13,169 6,016 19,185 Fixed/variable:
100%/0%
Dr. Benjamin
Pfeifer
(CFO until
December 1,
2022)
2022 158,033 6,287 63,213 227,533 Fixed/variable:
72%/28%
2021 171,255 12,666 22,834 206,755 Fixed/variable:
83%/17%
Remuneration paid in relation to the Guidelines. See our guidelines
in the section above.
Total remuneration paid
comparedto the Guidelines
A prerequisite for a successful implementation of the Company’s
business strategy and securing the Company’s long-term interests,
including sustainability, is that the Company is able to recruit and
retain qualified personnel. To achieve this, it is necessary for the
Company to offer competitive remuneration.
The Company’s remuneration guidelines enable the Company to
offer leading personnel a competitive total remuneration. Total
remuneration to leading personnel during 2022 has complied with
the Company’s guidelines for remuneration.
Remuneration Report
34 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 35
Remuneration Report
34 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 35
Annual Report 2022 MPC Container Ships 37
36 MPC Container Ships Annual Report 2022
RESPONSIBILITY
STATEMENT
We confirm that, to the best of our knowledge, the consolidated
financial statements presented in this report have been prepared
in accordance with International Financial Reporting Standards as
adopted by the European Union and give a true and fair view of the
Group’s assets, liabilities, financial position and profit or loss as
a whole.
We also confirm that, to the best of our knowledge, the Board of
Directors’ report includes a fair review of the development and
performance of the business and the position of the Group and a
description of risks and uncertainties.
Oslo, March 23, 2023
The Board of Directors and CEO of
MPC Container Ships ASA
Ulf Holländer (Chairman)
Peter Frederiksen
Dr. Axel Schroeder
Ellen Hanetho
Constantin Baack (CEO)
Pia Meling
Responsibility Statement
Annual Report 2022 MPC Container Ships 37
36 MPC Container Ships Annual Report 2022
CONSOLIDATED FINANCIAL
STATEMENTS
Annual Report 2022 MPC Container Ships 39
38 MPC Container Ships Annual Report 2022
Consolidated Statement
of Profit or Loss
in USD thousands Notes 2022 2021
Operating revenues 5, 6 616,768 384,710
Commissions (17,127 ) (11,741 )
Vessel voyage expenditures 7 (13,765 ) (11,982 )
Vessel operation expenditures 8 (139,988 ) (121,772 )
Ship management fees (9,023 ) (9,262 )
Share of profit from joint venture 9 51,761 24,794
Gross profit 488,626 254,747
Administrative expenses 10 (13,862 ) (19,513 )
Other expenses (3,347 ) (3,773 )
Other income 1,788 2,535
Gain (loss) from sale of vessels 11 49,042 56,439
EBITDA
1
Depreciation 11 (75,392 ) (62,049 )
Bargain gain business combination 12 - 2,312
Operating profit (EBIT) 446,855 230,700
Finance income 13 3,742 156
Finance costs 13, 17 (14,480 ) (40,325 )
Profit (loss) before income tax (EBT) 436,118 190,530
Income tax expenses 15 (1,071 ) (676 )
Profit (loss) for the period 435,047 189,854
Attributable to:
Equity holders of the Company 434,832 189,725
Non-controlling interest 215 129
Basic earnings per share – in USD 16 0.98 0.46
Diluted earnings per share – in USD 16 0.98 0.46
1
See separate section on Alternative Performance Measures (APM) for a description of the APM’s applied in this Annual Report
Consolidated Financial Statements
Annual Report 2022 MPC Container Ships 39
38 MPC Container Ships Annual Report 2022
Consolidated Statement
of Financial Position
in USD thousands Notes December 31, 2022 December 31, 2021
ASSETS
Non-current Assets
Vessels 11 745,873 774,362
Newbuildings 11, 23 32,770 -
Right-of-use asset 266 -
Investment in associates and joint venture 9 20,893 28,656
Total non-current assets 799,802 803,018
Current assets
Vessel held-for-sale 11 - 16,304
Inventories 6,340 4,820
Trade and other receivables 18 22,922 30,141
Financial instruments at fair value 17 1,740 -
Cash and cash equivalents 19 125,517 180,329
Unrestricted cash 94,603 156,767
Restricted cash 30,914 23,562
Total current assets 156,519 231,594
TOTAL ASSETS 956,321 1,034,613
Consolidated Statement
of Comprehensive Income
in USD thousands Notes 2022 2021
Profit (loss) for the period 435,047 189,854
Items that may be subsequently transferred to profit (loss) 634 8,769
Foreign currency effects, net of taxes - (297 )
Change in hedging reserves, net of taxes 20 634 9,066
Total comprehensive profit (loss) 435,681 198,623
Attributable to:
Equity holders of the Company 435,466 198,494
Non-controlling interest 215 129
Consolidated Financial Statements
40 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 41
in USD thousands Notes December 31, 2022 December 31, 2021
EQUITY AND LIABILITIES
Equity
Share capital 20, 22 48,589 48,630
Share premium 20, 22 152,737 597,080
Treasury shares 20, 22 - (1,143 )
Retained earnings 517,044 82,212
Other reserves 525 (109 )
Non-controlling interest 20 2,551 919
Total equity 721,447 727,589
Non-current Liabilities
Non-current Interest-bearing debt 14 74,462 148,083
Lease liabilities - long-term 114 -
Acquired TC contracts, non-current 12 1,480 3,728
Deferred tax liabilities 15 803 -
Total non-current liabilities 76,859 151,811
Current Liabilities
Interest bearing loans and borrowings 14 79,112 83,743
Acquired TC contracts, current 12 2,248 18,083
Trade and other payables 17,282 17,628
Income tax payable 15 378 -
Deferred revenue 40,133 15,146
Other liabilities 24 18,863 20,613
Total current liabilities 158,015 155,213
TOTAL EQUITY AND LIABILITIES 956,321 1,034,613
Oslo, March 23, 2023
The Board of Directors and CEO of
MPC Container Ships ASA
Ulf Holländer (Chairman) Dr. Axel Schroeder
Peter Frederiksen Ellen Hanetho
Pia Meling
Constantin Baack (CEO)
Consolidated Financial Statements
40 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 41
Consolidated statement
of changes in equity
in USD thousands
Share
capital
Share
premium
Treasury
shares
Retained
earnings
Other
reserves
Total equity
attributable
to the equity
holders of
the Company
Non-con-
trolling
interest Total equity
Equity as at January 1, 2022 48,630 597,080 (1,143 ) 82,212 (109 ) 726,670 919 727,589
Result of the period - - - 434,832 - 434,832 215 435,047
Other comprehensive income - - - - 634 634 - 634
Total comprehensive income - - - 434,832 634 435,466 215 435,681
Change in non-controlling
interest - - - - - - -
Contributions of equity,
net of transaction costs - - - - - - -
Dividends provided for or paid - (441,022 ) - - - (441,022 ) - (441,022 )
Cancelation of treasury shares (41 ) (1,102 ) 1,143 - - - - -
Settlement of warrants - (2,219 ) - - - (2,219 ) (2,219 )
Addition from non-controlling
interest - - - - - - 1,417 1,417
Equity as at December 31, 2022 48,589 152,737 - 517,044 525 718,895 2,551 721,447
Equity as at January 1, 2021 43,047 456,764 (1,143 ) (108,413 ) (8,877 ) 381,378 1,655 383,033
Result of the period - - - 189,725 - 189,725 129 189,854
Other comprehensive income - - - - 8,769 8,769 - 8,769
Total comprehensive income - - - 189,725 8,769 198,494 129 198,623
Change in non-controlling
interest - - - 900 - 900 (865 ) 35
Contributions of equity,
net of transaction costs 5,583 143,870 - - - 149,453 - 149,453
Dividends provided for or paid - - - - - - - -
Cancelation of treasury shares - - - - - - - -
Settlement of warrants - (3,554 ) - - - (3,554 ) - (3,554 )
Addition from non-controlling
interest - - - - - - - -
Equity as at December 31, 2021 48,630 597,080 (1,143 ) 82,212 (109 ) 726,670 919 727,589
Consolidated Financial Statements
42 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 43
Consolidated statement
of cash flow
in USD thousands Notes 2022 2021
Profit/ (loss) before income tax 436,118 190,530
Income tax expenses paid - -
Net change Inventory and Trade and Other receivables 6,655 (3,588 )
Net change other current and Trade and other payables 1,398 26,569
Net change in deferred revenue 24,987 -
Depreciation 11 75,392 62,049
Finance costs (net) 13 10,791 40,169
Share of profit from joint venture 9 (51,761 ) (24,794 )
Gain from sale of vessels 11 (49,042 ) (54,774 )
Amortization of TC contracts 12 (18,083 ) (21,662 )
Bargain gain business combination - (2,312 )
Cash flow from operating activities 436,455 212,187
Proceeds from disposal of vessels 11 83,916 141,444
Scrubbers, dry dockings and other vessel upgrades 11 (66,301 ) (41,084 )
Purchase of new vessel 11 (32,770 ) (9,000 )
Interest received - 65
Dividend received from joint venture investment 9 60,350 24,500
Acquisition of shares in associate (826 ) -
Cash acquired entities acquired - 11,918
Cash consideration acquisition - (84,611 )
Cash flow from investing activities 44,369 43,232
Share issuance costs 20 - (190 )
Dividend paid (441,022 ) -
Addition of non-controlling interest 20 1,417 -
Proceeds from debt financing 14, 17 - 368,548
Repayment of debt 14, 17 (80,000 ) (421,823 )
Repayment of acquired debt 14, 17 - (34,071 )
Payment of principal of leases (118 ) -
Repayment of warrants 24 (3,554 ) -
Repurchase of warrants 24 (2,219 ) -
Interest paid 13, 17 (8,716 ) (14,082 )
Debt issuance costs 17 - (7,939 )
Other finance paid (2,030 ) (1,437 )
Cash from financial derivatives 17 607 -
Repayment of hedging instrument 18 - (3,351 )
Cash flow from financing activities (535,635 ) (114,345 )
Net change in cash and cash equivalents (54,812 ) 141,074
Cash and cash equivalents at the beginning of the period 180,329 39,255
Cash and cash equivalents at the end of the period 125,517 180,329
Consolidated Financial Statements
42 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 43
Consolidated Financial Statements
44 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 45
Consolidated Financial Statements
44 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 45
Consolidated Financial Statements
46 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 47
Consolidated Financial Statements
46 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 47
Consolidated Financial Statements
48 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 49
Consolidated Financial Statements
48 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 49
Consolidated Financial Statements
50 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 51
Consolidated Financial Statements
50 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 51
Consolidated Financial Statements
52 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 53
Consolidated Financial Statements
52 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 53
Consolidated Financial Statements
54 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 55
Consolidated Financial Statements
54 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 55
Consolidated Financial Statements
56 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 57
Consolidated Financial Statements
56 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 57
Consolidated Financial Statements
58 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 59
Consolidated Financial Statements
58 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 59
Consolidated Financial Statements
60 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 61
Consolidated Financial Statements
60 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 61
Consolidated Financial Statements
62 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 63
Consolidated Financial Statements
62 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 63
Consolidated Financial Statements
64 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 65
Consolidated Financial Statements
64 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 65
Consolidated Financial Statements
66 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 67
Consolidated Financial Statements
66 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 67
1
Consolidated Financial Statements
68 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 69
Consolidated Financial Statements
68 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 69
Consolidated Financial Statements
70 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 71
Consolidated Financial Statements
70 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 71
Consolidated Financial Statements
72 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 73
Consolidated Financial Statements
72 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 73
Consolidated Financial Statements
74 MPC Container Ships Annual Report 2022
74 MPC Container Ships Annual Report 2022
PARENT FINANCIAL
STATEMENTS
Annual Report 2022 MPC Container Ships 77
76 MPC Container Ships Annual Report 2022
Statement of Profit or Loss
in USD thousands Notes 2022 2021
Revenues 2,3 14,775 14,780
Revenues 14,775 14,780
Payroll 4 (3,079) (7,181)
Other operating expenses 5 (17,320) (17,025)
Operating profit (loss) (EBIT) (5,625) (9,426)
Finance income 5 121,373 24,673
Finance expense 5 (4,292) (2,628)
Profit (loss) before income tax (EBT) 111,456 12,620
Income tax 6 - 46
Profit (loss) for the period 111,456 12,666
Transfer of profit to retained earnings 7 111,456 12,666
Dividend proposed 66,555 -
Earnings per share 7 0.25 0.03
Basic earnings per share – in USD 7 0.25 0.03
Diluted earnings per share – in USD 7 0.25 0.03
Parent Financial Statements
Annual Report 2022 MPC Container Ships 77
76 MPC Container Ships Annual Report 2022
Statement of Financial Position
in USD thousands Notes 2022 2021
Non-current assets
Investments in subsidiaries 8 247,560 489,855
Investments in affiliated companies 8 27,894 27,068
Other non-current assets 3 3
Total non-current assets 275,457 516,926
Current assets
Short-term receivables group 3 9,768 80,192
Other short-term receivables 810 561
Cash and cash equivalents 9 32,546 101,833
Total current assets 43,124 182,587
Total assets 318,580 699,513
EQUITY AND LIABILITIES
Equity
Share capital 7,10 48,589 48,629
Share premium 7 86,229 396,316
Treasury shares 7 - (1,143)
Retained earnings 7 115,460 4,004
Total equity 250,278 447,807
Current liabilities
Dividend accrual 7 66,555 200,764
Accounts payable 573 846
Accounts payable Group 11 40,278
Social security, VAT, etc. 186 151
Other short-term liabilities 976 9,667
Total current liabilities 68,302 251,707
Total equity and liabilities 318,580 699,513
Parent Financial Statements
78 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 79
Statement of Cash Flow
in USD thousands Notes 2022 2021
Profit (loss) before income tax 111,456 12,620
Tax refund from previous year's paid corporate tax - 46
Net change in current assets 70,178 2,530
Net change in current liabilities (51,415) 5,662
Depreciation and impairment - 508
Finance income (net) (117,081) (22,045)
Cash flow from operating activities 13,138 (678)
Loan proceeds from subsidiaries - 60,000
Interest income 459 -
Investment in subsidiaries (42,005) (4,168)
Investment in affiliates (826) -
Purchase of other non-current assets - -
Dividends received from subsidiaries 340,745 47,470
Dividends received from joint ventures 60,350 24,500
Cash flow from investing activities 358,723 127,802
Repayment of debt - (25,700)
Other paid financial items (145) (610)
Repayment of hedging instruments - (1,918)
Paid dividends 7 (441,002) -
Share issuance costs - (190)
Cash flow from financing activities (441,147) (28,418)
Net change in cash and cash equivalents (69,286) 98,706
Cash and cash equivalents at beginning of period 101,832 3,126
Cash and cash equivalents at the end of period 32,546 101,832
Oslo, March 23, 2023
The Board of Directors and CEO of
MPC Container Ships ASA
Ulf Holländer (Chairman) Dr. Axel Schroeder
Peter Frederiksen Ellen Hanetho
Pia Meling
Constantin Baack (CEO)
Parent Financial Statements
78 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 79
Notes
Note 1 – Significant accounting policies
MPC Container Ships ASA (“the Company”) was incorporated on January 9, 2017 as a private limited liability company under the laws of
Norway, and converted to a Norwegian public limited liability company (Norwegian: allmennaksjeselskap) on January 16, 2018.
The financial statements are prepared in accordance with Norwegian Standards (NGAAP) for public limited liability companies.
Current assets are assets that are expected to be realized in the Company’s normal circle, held primarily for the purpose of trading and
that are expected to be realized within twelve months after the reporting period. Current liabilities are liabilities that are expected to be
settled within the Company’s normal operating cycle. Other assets are classified as non-current assets and other liabilities are classified
as non-current liabilities.
Accounts receivables are recognized at fair value after provisions for bad debts.
Long-term investments in shares in subsidiaries including affiliated companies are recognized at original cost, but are reduced to fair
value if the decrease in value is not temporary.
Revenues and expenses from operations are booked in the same period as they occur.
The financial statements are presented in US Dollar (USD), which is the functional currency of the Company. Foreign currency transactions
are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transaction.
All financial information presented in USD has been rounded to the nearest thousand USD, except otherwise indicated. Differences
from currency translations are classified as financial income.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
Deferred tax liabilities are classified as non-current assets and are recognized for all taxable temporary differences. Deferred tax assets
are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which
the deductible temporary difference can be utilised.
Dividends are reflected as Dividends payable within current liabilities. Group contributions for the year to other entities within
MPCC’s Norwegian tax group are reflected in the balance sheet as current liabilities within Liabilities to group companies. Under NGAAP
the presentation of dividends payable and payable group contributions differs from the presentation under IFRS, as it also includes
dividends and group contributions payable which at the date of the balance sheet is subject to a future annual general meeting
approval before distribution. A corresponding amount is recognised directly in equity.
Note 2 – Operating revenues
in USD thousands 2022 2021
Ship management fees 9,065 9,003
Corporate management fees 3,569 3,049
Reimbursement 2,141 2,728
Total operating revenues 14,775 14,780
Parent Financial Statements
80 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 81
Note 3 – Group transactions
in USD thousands
Receivables at
December 31, 2022
Payables at
December 31, 2022
Revenues
in 2022
Expenses
in 2022
Intercompany balances/transactions 9,768 - 14,775 (4,622)
In USD thousands
Receivables at
December 31, 2021
Payables at
December 31, 2021
Revenues
in 2021
Expenses
in 2021
Intercompany balances/transactions 80,192 - 14,780 (3,173)
Revenue is related to invoiced ship management fees and corporate management fees including other reimbursements.
Note 4 – Payroll expenses, Board of Directors remuneration, compensations
in USD thousands 2022 2021
Payroll 1,621 6,826
Social security 98 131
Other personnel expenses 1,133 67
Accrued Board of Directors remuneration 227 156
Total payroll expenses 3,079 7,181
In accordance with Norwegian law, the Company is required to have an occupational pension scheme.
The Company’s pension scheme was in compliance with Norwegian law as at December 31, 2022.
Please refer to Note 25 of the consolidated financial statements for the remuneration of the Board of Directors and key management.
in USD thousands 2022 2021
Fees related to audit services 167 145
Fees related to other services 12 5
Fees recorded towards equity - -
Total auditor compensation 179 150
Parent Financial Statements
80 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 81
Note 5 – Specification of P/L records
in USD thousands 2022 2021
Other operating expenses
Fees from auditors (134) (208)
Ship management fees (8,481) (8,527)
Legal fees (3,170) (4,117)
Other fees (4,622) (3,173)
Other operating expenses (751) (1,001)
Total operating expenses (17,157) (17,025)
Finance income
Interest income 458 1
Income from exchange 4,069 90
Dividend from subsidiaries 56,445 -
Dividend from joint venture investments 60,350 24,500
Interest income from subsidiaries - 82
Profit from shares sold 50 -
Total finance income 121,373 24,673
Finance expense
Interest expense (1,150) (725)
Expense from exchange (3,142) (199)
Other financial expenses - (1,704)
Total finance expense (4,292) (2,628)
Note 6 – Income tax
The Company is subject to ordinary corporation tax in Norway:
in USD thousands 2022 2021
Basis for ordinary corporation tax expense
Profit(loss) before taxes 111,456 12,620
Non-taxable income (dividend) 116,795 23,765
Non-taxable cost (3,770) -
Net taxable income (1,569) (11,145)
Expected income tax at statutory rate (22%) 345 2,452
Change in temporary differences and
tax losses carried forward not recognized (345) (2,452)
In Norway, the Company has an estimated tax loss carried forward amounting to USD 16.3 million. The tax loss relates mainly to trans-
action cost on capital increase and can be carried forward indefinitely. Currently, no convincing evidence of using the tax loss exists.
Accordingly, the criteria for recognition of deferred tax assets are not met.
Parent Financial Statements
82 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 83
Note 7 – Equity
in USD thousands Share capital Treasury shares Share premium
Retained earnings/
losses Total
Total equity as at January 1, 2022 48,630 (1,143) 396,316 4,004 447,807
Cancellation of treasury shares (41) 1,143 (1,102) - -
Settlement of warrants - - (2,219) - (2,219)
Dividends - - (240,211) - (240,211)
Dividend proposed - - (66,555) - (66,555)
Profit (loss) - - - 111,456 111,456
Total equity at December 31, 2022 48,589 (0) 86,229 115,460 250,278
As at December 31, 2022, the total number of outstanding shares was 443,700,279 (2021: 444,051,377). See Note 10.
The proposed dividend consisted of the resolved dividends by the Board of Director’s on February 27, 2023 where the Company will
distribute USD 0.15 per share, amounting to USD 66.6 million, based on the financial results of the fourth quarter of 2022.
in USD thousands Share capital Treasury shares Share premium
Retained earnings/
losses Total
Total equity as at January 1, 2021 43,046 (1,143) 456,764 (8,662) 490,005
Capital increase August 9, 2021 5,583 - 143,870 - 149,453
Settlement of warrants - - (3,554) - (3,554)
Dividend proposed - - (200,764) - (200,764)
Profit (loss) - - - 12,666 12,666
Total equity at December 31, 2021 48,629 (1,143) 396,316 4,004 447,807
in USD thousands 2022 2021
Profit (loss) for year attributable to ordinary
equity holders – in USD thousands 111,456 12,666
Weighted average number of shares outstanding,
basic 443,826,290 414,653,050
Weighted average number of shares outstanding,
diluted 443,868,078 419,017,088
Basic earnings per share – in USD 0.25 0.03
Basic earnings per share – in USD 0.25 0.03
Parent Financial Statements
82 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 83
Note 8 – Investments in subsidiaries and affiliated companies
Investments in subsidiaries
in USD thousands Country Equity Profit (loss) Book value Ownership
MPC Container Ships Invest B.V. Netherlands 32,415 (533) 47,432 100.00%
MPCC Second Financing GmbH & Co KG Germany 49,306 21,938 0 100.00%
MPCC First Financing OpCo KG Germany 105 23 29 100.00%
MPCC First Financing Verwaltungs GmbH Germany 31 (0) 29 100.00%
MPC Container Ships GmbH & Co. KG Germany 268 104 733 100.00%
MPC Container Ships Verwaltungs GmbH Germany 30 2 29 100.00%
MPC Container Ships Sourcing GmbH Germany 313 (170) 122 100.00%
MPCC Greenbox AS Norway 14,205 (120) 12,922 90.10%
MPCC ECOBOX GmbH Germany 25 (2) 31 100.00%
MPC ECOBOX 6 GmbH Germany 27 0 31 100.00%
MPC ECOBOX 7 GmbH Germany 27 0 31 100.00%
MPC ECOBOX OPCO 6 GMBH CO. KG Germany 14,486 (14) 14,500 100.00%
MPC ECOBOX OPCO 5 GMBH CO. KG Germany 14,485 (15) 14,500 100.00%
AS Shipping OpCo 1 GmbH Germany 80 14 59 100.00%
AS Shipping OpCo 2 GmbH Germany 33 7 - 100.00%
Sao Paulo Project Holding Verwaltungs GmbH Germany 63 - - 100.00%
MPCC Third Financing AS Norway 199,716 (8,501) 149,832 100.00%
AS Carolina Schiff. Mbh & Co. KG Germany 9,262 8,027 966 100.00%
AS Franziska Schiff. Mbh & Co. KG Germany 6,202 3,106 1,760 100.00%
AS Roberta Schiff. Mbh & CO. KG Germany 8,685 4,611 4,557 100.00%
Total 349,765 247,560
The major investment in subsidiaries of the Company are direct or indirect investments in container vessels where the fair values of the
vessels exceed the book values. Accordingly, there is no identified need for impairment on the Company’s investments in subsidiaries
in 2022 (2021: USD 0.5 million).
Investments in affiliated companies
in USD thousands Country Equity Profit/loss (+/-) Book value Ownership
2. Bluewater Holding Schiff. GmbH & Co. KG Germany 31,562 118,512 24,063 50%
2. Bluewater Holding SFG Germany 33 2 3,004 50%
Siemssen GmbH & Co. KG Germany - - 827 25%
Total 31,595 27,067
Parent Financial Statements
84 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 85
Note 9 – Cash and cash equivalents
in USD thousands 2022 2021
Bank deposits denominated in USD 31,127 101,521
Bank deposits denominated in EUR 126 161
Bank deposits denominated in NOK 1,292 151
Total cash and cash equivalents 32,546 101,833
Bank deposits in NOK consisted of in total USD 67 thousand in funds held for employee taxes withheld, payable to the Norwegian government.
Note 10 – Shareholders
As at December 31, 2022, the share capital of the Company consisted of 443,700,279 (2021: 444,051,377) shares with nominal value per
share of NOK 1.00. All issued shares are of equal rights and are fully paid up.
Please refer to Note 20 of the consolidated financial statements for an overview of the 20 largest shareholders of the Company as at
December 31, 2022. Please also refer to Note 22 of the consolidated financial statements for information about the Group’s issued warrants.
Note 11 - Guarantees
The Company has guaranteed for the recourse term loan of MPCC Second Financing GmbH & Co. KG., together with the subsidiaries of
MPCC Second Financing GmbH & Co. KG. Additionally, the Company has guaranteed for the senior secured term loan and revolving credit
facility of MPCC Third Financing AS, together with the subsidiaries of MPCC Third Financing AS.
Note 12 – Financial risk management
Foreign Exchange
The risk that future cash flows will fluctuate because of changes in foreign exchange rates. The Company has exposure in EUR and
NOK as part of administrative and operating expenses and a portion of cash and cash equivalents and trade payables are denominated
in EUR and NOK. The Company do not have financial instruments in place to mitigate this risk.
Credit Risk
Credit risk relates to loans to subsidiaries and affiliated companies, guarantees to subsidiaries, deposits with external banks and
receivables against related parties. Loss provisions are provided in situations of negative equity and where the companies are not expected
to be able to fulfil their loan obligations from future earnings.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meets its financial obligations when they fall due and is managed through
maintaining sufficient cash. Development in the Group’s and thereby the Company’s available liquidity, is continuously monitored through
a liquidity planning tool which includes weekly cash reporting and monthly cash flow forecasts.
Parent Financial Statements
84 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 85
AUDITOR’S REPORT
Statsautoriserte revisorer
Ernst & Young AS
Dronning Eufemias gate 6a, 0191 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of MPC Container Ships ASA
Report on the audit of the financial statements
Opinion
We have audited the financial statements of MPC Container Ships ASA (the Company) which comprise
the financial statements of the Company and the consolidated financial statements of the Company and
its subsidiaries (the Group). The financial statements of the Company comprise the statement of financial
position as of 31 December 2022, the statement of profit or loss and statement of cash flows for the year
then ended and notes to the financial statements, including a summary of significant accounting policies.
The consolidated financial statements of the Group comprise the statement of financial position as of 31
December 2022, the statement of profit or loss, the statement of comprehensive income, the statement of
cash flow, and the statement of changes in equity 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 legal requirements,
• the financial statements give a true and fair view of the financial position of the Company as of 31
December 2022 and its financial performance and cash flows for the year then ended in
accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway,
• the consolidated financial statements give a true and fair view of the financial position of the
Group as of 31 December 2022 and its financial performance and 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 risk and 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 in
accordance with the requirements of the 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 6 years from the election by the general meeting of the
shareholders on 23 May 2017 for the accounting year 2017.
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 for 2022. 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
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opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the financial statements.
Impairment evaluation of vessels
Basis for the key audit matter
The value of vessels as at 31 December 2022
amounted to USD $745,873,000, which
represented 78% of total assets for the group.
Due to significant decline in charter fee broker
values as well as decline in charter contracts,
underpinned by increase in OPEX, management
identified impairment indicators. Management
proceeded with the estimation of the recoverable
amount of each vessel through value in use
models, and compared this against the carrying
amount of each vessel to assess (any) need for
impairment charges. The value in use impairment
testing is dependent on several assumptions such
as future charter rates, utilization, operating
expenses and discount rates (weighted average
cost of capital), all impacted by future market
developments and economic conditions. The
estimation of future uncontracted cash flows
requires significant judgement related to if or
when a new contract will be signed, at what
charter rates and what the associated operating
expenses will be. We consider the impairment
evaluation a key audit matter due to the
uncertainty of estimates and judgement involved
in establishing the assumptions.
Our audit response
Our audit procedures included evaluating
management’s assessment of impairment
indicators for vessels and the assumptions
applied in the value in use calculations. We
assessed the accuracy of prior years’ forecasts,
compared expected revenue and operating
expenses to approved budgets, current contracts,
historical data and long-term market expectations.
We involved an internal valuation specialist in the
assessment of the discount rates applied.
Furthermore, we tested the mathematical
accuracy of the value in use calculations and
assessed management’s sensitivity analyses.
Refer to Note 3 - Significant accounting policies
‘impairment of vessels’, Note 4 – Significant
judgements, estimates, and assumptions and
Note 11: Vessels and prepayments.
Other information
Other information consists of the information included in the annual report other than the financial
statements and our auditor’s report thereon. Management (the board of directors and Chief Executive
Officer) is responsible for the other information. Our opinion on the financial statements does not cover
the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information,
and, in doing so, consider whether the board of directors’ report, the statement on corporate governance
and the statement on corporate social responsibility contain the information required by applicable legal
requirements and whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information or
that the information required by applicable legal requirements is not included, we are required to report
that fact.
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We have nothing to report in this regard, and in our opinion, the board of directors’ report, the statement
on corporate governance and the statement on corporate social responsibility are consistent with the
financial statements and contain the information required by applicable legal requirements.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements of the
Company in accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway and of the consolidated financial statements of the Group in accordance
with International Financial Reporting Standards as adopted by the EU, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or 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 the
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
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, 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.
• 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 fair presentation.
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• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the risk and audit committee with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirement
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of MPC Container Ships ASA we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements included
in the annual report, with the file name MPCContainerShipsASA-2022-12-31-EN.zip, have been
prepared, in all material respects, in compliance with the requirements of the Commission Delegated
Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation
pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to
the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material
respects, in compliance with the ESEF Regulation.
Management’s responsibilities
Management is responsible for the preparation of an annual report and iXBRL tagging of the consolidated
financial statements that complies with the ESEF Regulation. This responsibility comprises an adequate
process and such internal control as management determines is necessary to enable the preparation of
an annual report and iXBRL tagging of the consolidated financial statements that is compliant with the
ESEF Regulation.
Auditor’s responsibilities
Our responsibility is to express an opinion on whether, in all material respects, the financial statements
included in the annual report have been prepared in accordance with the ESEF Regulation based on the
evidence we have obtained. We conducted our engagement in accordance 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 that the financial statements included in the annual report have been
prepared in accordance with the ESEF Regulation.
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As part of our work, we performed procedures to obtain an understanding of the company’s processes for
preparing its annual report in XHTML format. We evaluated the completeness and accuracy of the iXBRL
tagging and assessed management’s use of judgement. Our work comprised 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.
Oslo, 23 March 2023
ERNST & YOUNG AS
The auditor's report is signed electronically
Jon-Michael Grefsrød
State Authorised Public Accountant (Norway)
Penneo document key: TBSBE-PPHY6-KA2Y2-OE4OO-NBEOM-MFJ4O
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Serial number: 9578-5992-4-3016511
IP: 145.62.xxx.xxx
2023-03-23 13:15:15 UTC
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Statsautoriserte revisorer
Ernst & Young AS
Dronning Eufemias gate 6a, 0191 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR’S ASSURANCE REPORT ON REMUNERATION REPORT
To the General Meeting of MPC Container Ships ASA
Opinion
We have performed an assurance engagement to obtain reasonable assurance that MPC Container
Ships ASA’s report on salary and other remuneration to directors (the remuneration report) for the
financial year ended 31 December 2022 has been prepared in accordance with section 6-16 b of the
Norwegian Public Limited Liability Companies Act and the accompanying regulation.
In our opinion, the remuneration report has been prepared, in all material respects, in accordance with
section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation.
Board of directors’ responsibilities
The board of directors is responsible for the preparation of the remuneration report and that it contains
the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and
the accompanying regulation and for such internal control as the board of directors determines is
necessary for the preparation of a remuneration report that is free from material misstatements, whether
due to fraud or error.
Our independence and quality control
We are independent of the company in accordance with the requirements of the 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. Our firm
applies International Standard on Quality Control 1 (ISQC 1) and accordingly maintains a comprehensive
system of quality control including documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Auditor’s responsibilities
Our responsibility is to express an opinion on whether the remuneration report contains the information
required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying
regulation and that the information in the remuneration report is free from material misstatements. We
conducted our work in accordance with the International Standard for Assurance Engagements (ISAE)
3000 – “Assurance engagements other than audits or reviews of historical financial information”.
We obtained an understanding of the remuneration policy approved by the general meeting. Our
procedures included obtaining an understanding of the internal control relevant to the preparation of the
remuneration report in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the company’s internal control. Further we
performed procedures to ensure completeness and accuracy of the information provided in the
remuneration report, including whether it contains the information required by the law and accompanying
regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Oslo, 23 March 2023
ERNST & YOUNG AS
The auditor's assurance report is signed electronically
Jon-Michael Grefsrød
State Authorised Public Accountant (Norway)
Penneo document key: NW40D-146NF-QQWXI-GPKJP-DWNVT-3Y7VA
This document is digitally signed using Penneo.com. The digital signature data
within the document is secured and validated by the computed hash value of the
original document. The document is locked and timestamped with a certificate
from a trusted third party. All cryptographic evidence is embedded within this PDF,
for future validation if necessary.
How to verify the originality of this document
This document is protected by an Adobe CDS certificate. When you open the
document in Adobe Reader, you should see, that the document is certified by
Penneo e-signature service <penneo@penneo.com>. This guarantees that the
contents of the document have not been changed.
You can verify the cryptographic evidence within this document using the
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Serial number: 9578-5992-4-3016511
IP: 145.62.xxx.xxx
2023-03-23 13:15:15 UTC
Penneo document key: NW40D-146NF-QQWXI-GPKJP-DWNVT-3Y7VA
ALTERNATIVE
PERFORMANCE MEASURES
Annual Report 2022 MPC Container Ships 97
96 MPC Container Ships Annual Report 2022
The Group’s financial information is prepared in accordance with the International Financial Reporting Standards (IFRS). In addition, it
is themanagement’s intention to provide alternative performance measures that are regularly reviewed by management to enhance the
understanding of the Group’s performance but are not intended as a replacement of the financial statements prepared in accordance
with the IFRS. The alternative performance measures presented may be determined or calculated differently by other companies.
The alternative performance measures are intended to enhance comparability of the results and to give supplemental information to the
users of the Group’s external reporting.
Gross Profit
Gross profit is a key financial parameter for the Group and is derived directly from the income statement by deducting cost of sales
( vesselvoyage expenditures, ship management fees, vessel operating expenditures and commissions) from operating revenues.
EBITDA
Earnings before interest, tax, depreciations and amortization (EBITDA) is a key financial parameter for the Group and is derived directly from
the condensed consolidated statement of profit or loss adding back depreciation and impairment of vessels to the operating profit (EBIT).
in USD thousands 2022 2021
Operating profit (EBIT) 446,858 230,699
Depreciation (75,392) (62,049)
EBITDA 522,250 292,749
Adjusted EBITDA
Adjusted EBITDA is a financial metric that includes the deduction of various of one-time, irregular and non-recurring items from EBITDA.
in USD thousands 2022 2021
EBITDA 522,250 292,749
Gain (loss) from sale of vessels 49,042 56,439
Share of profit or loss from joint venture 51,761 15,684
Bargain gain business combination - 2,312
Adjusted EBITDA 421,447 218,314
Alternative Performance Measures
Annual Report 2022 MPC Container Ships 97
96 MPC Container Ships Annual Report 2022
Adjusted Profit (Loss)
Adjusted profit (loss) is the profit (loss) for the period excluding one-time, irregular, and non-recurring items, such as gain (loss) from
saleof vessels.
in USD thousands 2022 2021
Profit (loss) for the period 435,049 189,854
Gain (loss) from sale of vessels 49,042 56,439
Share of profit or loss from joint venture 51,761 15,684
Bargain gain business combination - 2,312
Adjusted profit (loss) for the period 334,247 115,419
Adjusted Earnings per Share (EPS)
Adjusted EPS is derived from the adjusted profit (loss) divided by the number of shares outstanding at the end of the period.
Average Time Charter Equivalent (TCE)
Average TCE is a commonly used key performance indicator (KPI) in the shipping industry. It represents time charter revenue and pool
revenue divided by the number of trading days for the consolidated vessels during the reporting period. Trading days are ownership days
minus days without revenue, including commercial, uninsured technical and dry-docking-related off-hire days.
Alternative Performance Measures
98 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 99
Average Operating Expenses (OPEX) per Day
Average OPEX per day is a commonly used KPI in the shipping industry. OPEX per day is calculated as operating expenses excluding
tonnage taxes and operating expenses reimbursed by the charterers divided by the number of ownership days for consolidated vessels
during the reporting period.
Utilization
Utilization in percentage is a commonly used KPI in the shipping industry. It represents total trading days including off-hire days related
to dry dockings divided by the total number of ownership days during the period.
Leverage Ratio
Interest-bearing long-term debt and interest-bearing short-term debt divided by total assets.
Equity Ratio
Total book equity divided by total assets.
Alternative Performance Measures
98 MPC Container Ships Annual Report 2022
Annual Report 2022 MPC Container Ships 99
MPC Container Ships ASA
Ruseløkkveien 34, 0251 Oslo
PO Box 1251 Vika
NO-0111 Oslo, Norway
Registered enterprise no. 918 494 316
www.mpc-container.com