Note 1\tAccounting Principles
1.1\tAccounting Principles for the Consolidated Financial Statements
General information
MPC Container Ships ASA (\u201cthe Company\u201d) is a public limited liability company (Norwegian: allmennaksjeselskap) incorporated and domiciled in Norwaywith registered address at Rusel\u00f8kkveien 34, 0251 Oslo, Norway, and Norwegian registered enterprise number 918494316. The Company was incorporated on January 9, 2017 and commenced operations in April 2017, when the first vessels were acquired. The consolidated financial statements comprise the Company and its subsidiaries (together referred to as \u201cthe Group\u201d). The principal activity of the Group is to invest in and to operate maritime assets in the container shipping segment.
The shares of the Company are listed at the Oslo Stock Exchange under the\u00a0ticker symbol MPCC. MPC Container Ships ASA is the parent company in\u00a0the Group.
The consolidated financial statements were approved by the Company\u2019s Board of Directors on March 21, 2024.
Basis of preparation and measurement
The consolidated financial statements of MPC Container Ships ASA (the \u201cParent Company\u201d), and all its subsidiaries (the \u201cGroup\u201d), are prepared in accordance with International Financial Reporting Standards\u00ae (IFRS) as adopted by the European Union. The consolidated financial statements were prepared on the basis of historical cost, with some exceptions where fair value measurement is applied. These exceptions are specifically disclosed in the accounting policies sections in relevant notes:
+Note 7.2\u2013 Financial Instruments
All assets and liabilities for which fair values are measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
+ Level 1: Quoted market prices in active markets for identical assets or liabilities.
+ Level 2: Inputs other than quoted market prices included in Level 1 are directly or indirectly observable.
+ Level 3: Inputs are unobservable.
The Group has prepared the financial statements on the basis that it will continue to operate as going concern.
Certain amounts in the comparable years have been restated or reclassified to conform to current year presentation. All amounts in the consolidated financial statements are denominated in US dollars (USD), which is the functional currency of the parent company of the Group. All financial information presented in USD has been rounded to the nearest thousand USD, except otherwise indicated.
The Group\u2019s financial year corresponds to the calendar year.
Basis of consolidation
The consolidated financial statements include MPC Container ASA and its subsidiaries in which the Company exercises control. The financial statements of the subsidiaries are prepared for the same reporting period as the Group, using consistent accounting policies. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries
Subsidiaries are all companies where the Group has a controlling interest. A\u00a0controlling interest is where the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50% of the shares in the company, or through agreements, are able to exercise control over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
Companies that constitute the Group are listed in Note 6.2\u2013 Group Companies.
Accounting principles related to joint ventures, associated companies are presented in Note 6.1\u2013 Investments in Joint Venture and Associate.
Foreign currency translation
In accordance with IAS 21, 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.
Financial reporting principles
The material financial reporting principles are described in the relevant notes in the consolidated financial statements and in the notes in the financial statements of the parent company.
The Group presents assets and liabilities in the statement of financial position based on the current or non-current classification.
The cash flow statement of the Group is prepared using the indirect method. Liquid assets include cash, bank deposits (restricted and unrestricted) and other short-term investments which can be converted within 3 months.
New and amended standards and interpretations
The Group\u2019s intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approval before the consolidated financial statements are issued.
Starting from January 1, 2023, the Group has applied the following new statndards and amendments:
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies. The amendment clarifies in which situations a change in an accounting policy is material and should be disclosed.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates. The amendment clarifies the definition and application of an accounting estimate.
Amendments to IAS 12 \u2013 Income Taxes
In May 2023, the IASB issued amendments to IAS 12 Income Taxes, which provides temporary exemptions from the requirement to recognise and disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar Two Model Rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes. The amendments have been adopted by the EU and the company has applied the mandatory temporary exception according to IAS 12. This implies that no deferred tax is recognised or disclosed with respect to this tax regime for the financial year 2023.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Amendment to IFRS 16 \u2013 Leases on sale and leaseback
In September 2022, the IASB issued an amendment to IFRS 16 which adds requirements for how an entity accounts for a sale and leaseback after the date of the transaction. After the commencement date, the seller-lessee applies the subsequent measurement requirements in IFRS 16 to the right-of-use asset and the lease liability that arise from the leaseback, including the lease modification requirements. In applying these requirements, the seller-lessee determines \u2018lease payments\u2019 or \u2018revised lease payments\u2019 in a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The Group is currently assessing the impact of the amendments will have on current sale and leaseback arrangement.
Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
+ What is meant by right to defer settlement
+ That a right to defer must exist at the end of the reporting period
+ That classification is unaffected by the likelihood that an entity will exercise its deferral right
+ That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.
Amendment to IAS 7 and IFRS 7 \u2013 Supplier finance
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
Amendments to IAS 21 \u2013 Lack of Exchangeability
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
1.2\tSignificant Judgement, Estimates and Assumptions
The preparation of consolidated financial statements conforming to IFRS requires management to make judgments, estimates and assumptions that may affect assets, liabilities, revenues, expenses and information in notes to these financial statements. Estimates are management\u2019s best assessment based on information available at the date the financial statements are authorized for issue. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods. Estimates and underlying assumptions are reviewed on an on-going basis. The main areas where judgements and estimates have been made are prescribed in each of the following notes:
+Note 5.2\u2013 Depreciation, Amortization and Impairment Charges
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__6-1": { "value": "General information
MPC Container Ships ASA (\u201cthe Company\u201d) is a public limited liability company (Norwegian: allmennaksjeselskap) incorporated and domiciled in Norwaywith registered address at Rusel\u00f8kkveien 34, 0251 Oslo, Norway, and Norwegian registered enterprise number 918494316. The Company was incorporated on January 9, 2017 and commenced operations in April 2017, when the first vessels were acquired. The consolidated financial statements comprise the Company and its subsidiaries (together referred to as \u201cthe Group\u201d). The principal activity of the Group is to invest in and to operate maritime assets in the container shipping segment.
The shares of the Company are listed at the Oslo Stock Exchange under the\u00a0ticker symbol MPCC. MPC Container Ships ASA is the parent company in\u00a0the Group.
The consolidated financial statements were approved by the Company\u2019s Board of Directors on March 21, 2024.
Financial reporting principles
The material financial reporting principles are described in the relevant notes in the consolidated financial statements and in the notes in the financial statements of the parent company.
The Group presents assets and liabilities in the statement of financial position based on the current or non-current classification.
The cash flow statement of the Group is prepared using the indirect method. Liquid assets include cash, bank deposits (restricted and unrestricted) and other short-term investments which can be converted within 3 months.
Note 2\tFinancial Performance
2.1\tSegment Information
Accounting policy
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers in the Group. The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors of the Company.
All of the Group\u2019s vessels earn revenue from seaborne container transportation globally. The vessels exhibit similar economic, trading and financial characteristics. The Group is organised in one operating segment, i.e. the container shipping segment. The Group provides geographical data for revenue only, as the Group\u2019s revenue predominantly stems from vessels that may be empoyed globally. Gross revenue specific foreign countries which contribute significantly to total revenues are disclosed below.
in USDthousands | 2023 | 2022 |
Intra-Asia | 156,789 | 158,968 |
South America | 216,364 | 159,398 |
Europe | 37,762 | 54,249 |
Middle East | 190,633 | 129,437 |
Africa | 30,904 | 32,084 |
Other geographical locations (worldwide trades) | 68,258 | 55,245 |
Total time charter and pool revenue | 700,710 | 589,380 |
For the year ended December 31.2023, the Group had three customers (2022: two) who each accounted for 10% or more for our consolidated revenues in the amount of USD 75.6 million, USD 91.9 million and USD 127.9 million respectively. These three customers accounted for 42% of the total revenues for 2023.
2.2\tRevenues and Other Revenues
Accounting policy
Revenue recognition
The Group derives its revenue from time charters of its vessels, each of which contains a lease. These charters involve placing the specified vessel at charterers\u2018 use of specified rental period of time in return for payment of specified daily hire rates. Most of the charters include options for the charterers to extend the terms. Revenue from the Group\u2019s time charters is accounted for as operating leases, on a straight-line basis, for a shorter period of the vessels\u2019 useful life, over the average fixed rentals over the minimum fixed rental period of the time charter agreements, as service is performed. Charter hire received in advance is recorded under \u201cDeferred revenue\u201d in the Consolidated Statement of Financial Position until charter services are rendered. Invoiced revenue related to an estimated proportion of remaining voyage time and activities at the destination port is deferred. Under a time charter, the daily hire rate includes lease component related to the right of use of the vessel and non-lease components primarily related to the operating expenses of the vessel incurred by the Group such as commissions, vessel operating expenses: crew expenses, lubricants, certain insurance expenses, repair and maintenance, spares, stores etc. and vessel management fees. The lease component of the vessel represents the use of the vessel without any associated performance obligations and is accounted for in accordance with IFRS 16 Leases while revenues from time charter services (non-lease) and other revenues (e.g. bunkers and other services) are accounted for in accordance IFRS 15. The non-lease component from the Group\u2019s time charter contracts are recognized over time, as the performance obligation is satisfied over time. Revenue from bunkers and other goods and services from customers are recognized in the period the goods or services are transferred to the customer, following the \u201cpoint in time principle
in USD thousands | 2023 | 2022 |
Time charter revenues | 700,710 | 587,868 |
Pool charter revenues | - | 1,512 |
Total Charter revenues | 700,710 | 589,380 |
Amortization of time charter contracts | 2,716 | 18,083 |
Other revenues | 7,855 | 9,304 |
Total operating revenues | 711,282 | 616,768 |
When a time charter contract is linked to an index, we recognize revenue for the applicable period based on the actual index for that period. In 2023, one vessel was index-linked (2022: nil) and four vessels were on variable rate time charter (2022: nil).
The lease and non-lease components of our revenues in the year ended December 31, 2023 and December 31, 2022 were as follows:
in USD thousands | 2023 | 2022 |
Service element | 152,897 | 134,936 |
Other revenue | 7,855 | 9,304 |
Total revenue from customer contracts | 160,752 | 144,240 |
Lease elements | 547,813 | 454,444 |
Amortization of time charter contracts | 2,716 | 18,083 |
Total operating revenues | 711,282 | 616,768 |
Contracted revenues based on fixed time charter contracts as at December 31, 2023 are set out below, based on minimum contract periods of vessels held in subsidiaries:
in USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
TCE | 436,899 | 346,844 | 56,837 | 155,274 | 995,853 |
2.3\tVessel Voyage Expenditures
Accounting policy
Voyage expenses are expensed as incurred and primarily consist of port charges, bunker costs (bunker costs are normally covered by the Group\u2019s charterer, except in certain cases such as vessel re-positioning, or under repair and maintenance, or when the vessels have been idle) ,address commissions and brokerage commissions.
in USD thousands | 2023 | 2022 |
Bunker consumption | (7,715) | (11,396) |
Other voyage expenses | (2,183) | (2,368) |
Total vessel voyage expenditures | (9,898) | (13,765) |
Commissions | (20,000) | (17,127) |
2.4\tVessel Operating Expenditures
Accounting policy
Vessel operating expenses are expensed as incurred and include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance. General operating expenses are related to the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Vessel operating expenditures which are partially compensated by income from reimbursements from the charterer and are being recognized as other revenue.
in USD thousands | 2023 | 2022 |
Crew | (74,769) | (71,331) |
Lube oil | (9,189) | (8,646) |
Maintenance and repair | (48,670) | (39,227) |
Insurances | (15,983) | (17,178) |
Operating expenditures | (4,780) | (3,605) |
Total vessel operating expenditures | (153,390) | (139,988) |
2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
2.7\tEarnings Per Share
Accounting policy
The Group presents basic and diluted earnings per share data for its ordinary shares.
Basic earnings per share are calculated by dividing the profit for the reporting period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the reporting period.
Diluted earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table sets forth the computation of basic and diluted earnings per share for the year ended December 31:
in USD thousands | 2023 | 2022 |
Profit (loss) for year attributable to ordinary equity holders \u2013 in USD thousands | 324,961 | 434,832 |
Weighted average number of shares outstanding, basic | 443,700,279 | 443,700,279 |
Weighted average number of shares outstanding, diluted | 443,700,279 | 443,700,279 |
Basic earnings per share \u2013 in USD | 0.73 | 0.98 |
Diluted earnings per share \u2013 in USD | 0.73 | 0.98 |
Basis of preparation and measurement
The consolidated financial statements of MPC Container Ships ASA (the \u201cParent Company\u201d), and all its subsidiaries (the \u201cGroup\u201d), are prepared in accordance with International Financial Reporting Standards\u00ae (IFRS) as adopted by the European Union. The consolidated financial statements were prepared on the basis of historical cost, with some exceptions where fair value measurement is applied. These exceptions are specifically disclosed in the accounting policies sections in relevant notes:
+Note 7.2\u2013 Financial Instruments
All assets and liabilities for which fair values are measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
+ Level 1: Quoted market prices in active markets for identical assets or liabilities.
+ Level 2: Inputs other than quoted market prices included in Level 1 are directly or indirectly observable.
+ Level 3: Inputs are unobservable.
The Group has prepared the financial statements on the basis that it will continue to operate as going concern.
Certain amounts in the comparable years have been restated or reclassified to conform to current year presentation. All amounts in the consolidated financial statements are denominated in US dollars (USD), which is the functional currency of the parent company of the Group. All financial information presented in USD has been rounded to the nearest thousand USD, except otherwise indicated.
The Group\u2019s financial year corresponds to the calendar year.
Basis of consolidation
The consolidated financial statements include MPC Container ASA and its subsidiaries in which the Company exercises control. The financial statements of the subsidiaries are prepared for the same reporting period as the Group, using consistent accounting policies. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries
Subsidiaries are all companies where the Group has a controlling interest. A\u00a0controlling interest is where the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50% of the shares in the company, or through agreements, are able to exercise control over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
Companies that constitute the Group are listed in Note 6.2\u2013 Group Companies.
Accounting principles related to joint ventures, associated companies are presented in Note 6.1\u2013 Investments in Joint Venture and Associate.
Foreign currency translation
In accordance with IAS 21, 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.
Financial reporting principles
The material financial reporting principles are described in the relevant notes in the consolidated financial statements and in the notes in the financial statements of the parent company.
The Group presents assets and liabilities in the statement of financial position based on the current or non-current classification.
The cash flow statement of the Group is prepared using the indirect method. Liquid assets include cash, bank deposits (restricted and unrestricted) and other short-term investments which can be converted within 3 months.
New and amended standards and interpretations
The Group\u2019s intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approval before the consolidated financial statements are issued.
Starting from January 1, 2023, the Group has applied the following new statndards and amendments:
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies. The amendment clarifies in which situations a change in an accounting policy is material and should be disclosed.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates. The amendment clarifies the definition and application of an accounting estimate.
Amendments to IAS 12 \u2013 Income Taxes
In May 2023, the IASB issued amendments to IAS 12 Income Taxes, which provides temporary exemptions from the requirement to recognise and disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar Two Model Rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes. The amendments have been adopted by the EU and the company has applied the mandatory temporary exception according to IAS 12. This implies that no deferred tax is recognised or disclosed with respect to this tax regime for the financial year 2023.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Amendment to IFRS 16 \u2013 Leases on sale and leaseback
In September 2022, the IASB issued an amendment to IFRS 16 which adds requirements for how an entity accounts for a sale and leaseback after the date of the transaction. After the commencement date, the seller-lessee applies the subsequent measurement requirements in IFRS 16 to the right-of-use asset and the lease liability that arise from the leaseback, including the lease modification requirements. In applying these requirements, the seller-lessee determines \u2018lease payments\u2019 or \u2018revised lease payments\u2019 in a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The Group is currently assessing the impact of the amendments will have on current sale and leaseback arrangement.
Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
+ What is meant by right to defer settlement
+ That a right to defer must exist at the end of the reporting period
+ That classification is unaffected by the likelihood that an entity will exercise its deferral right
+ That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.
Amendment to IAS 7 and IFRS 7 \u2013 Supplier finance
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
Amendments to IAS 21 \u2013 Lack of Exchangeability
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26189": { "value": "The consolidated financial statements of MPC Container Ships ASA (the \u201cParent Company\u201d), and all its subsidiaries (the \u201cGroup\u201d), are prepared in accordance with International Financial Reporting Standards\u00ae (IFRS) as adopted by the European Union. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26367": { "value": "The Group has prepared the financial statements on the basis that it will continue to operate as going concern.", "dimensions": { "concept": "ifrs-full:DescriptionOfUncertaintiesOfEntitysAbilityToContinueAsGoingConcern", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26407": { "value": "All amounts in the consolidated financial statements are denominated in US dollars (USD), which is the functional currency of the parent company of the Group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26464": { "value": "Basis of consolidation
The consolidated financial statements include MPC Container ASA and its subsidiaries in which the Company exercises control. The financial statements of the subsidiaries are prepared for the same reporting period as the Group, using consistent accounting policies. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__22-1": { "value": "Subsidiaries
Subsidiaries are all companies where the Group has a controlling interest. A\u00a0controlling interest is where the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50% of the shares in the company, or through agreements, are able to exercise control over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
Companies that constitute the Group are listed in Note 6.2\u2013 Group Companies.
Accounting principles related to joint ventures, associated companies are presented in Note 6.1\u2013 Investments in Joint Venture and Associate6.2\tGroup Companies
The Group\u2019s consolidated financial statements include the financial statements of the Company and its subsidiaries listed in the table below. The table excludes all general partner companies and non-operating companies.
Company | Country | Principal activity | Ownership |
MPC Container Ships Invest B.V. | Netherlands | Holding company | 100.00% |
\u201cAS Angelina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS California\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Carelia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clarita\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clementina CV\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Columbia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Cypria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabiana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabrizia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fatima\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Felicia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Filippa\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fiorella\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Floretta\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
Company | Country | Principal activity | Ownership |
\u201cAS Floriana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Patria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Paulina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Petronia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Ragna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Savanna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Selina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sevillia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sicilia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sophia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
MPCC Second Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Camellia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carlotta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Christiana\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Pauline\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabrina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Samanta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Susanna\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Svenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Fourth Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Anne\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Stine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Silje\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Simone\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Third Financing AS | Norway | Holding company | 100.00% |
\u201cAS Fenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Freya\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Company | Country | Principal activity | Ownership |
\u201cAS Nadia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Penelope\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Paola\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Palina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Petra\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Constantina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Serena\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Mipo AS | Norway | Ship-owning entity | 100.00% |
MPCC Alva AS | Norway | Ship-owning entity | 100.00% |
MPCC City AS | Norway | Ship-owning entity | 100.00% |
MPCC Caspria AS | Norway | Ship-owning entity | 100.00% |
MPCC Nora AS | Norway | Ship-owning entity | 100.00% |
MPCC GREENBOX AS | Norway | Holding company | 90.10% |
MPCC NORDLAND AS | Norway | Ship-owning entity | 90.10% |
MPCC VESTLAND AS | Norway | Ship-owning entity | 90.10% |
MPC ECOBOX OPCO 5 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPC ECOBOX OPCO 6 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carolina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Franziska\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Nina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Claudia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
AS Shipping OpCo 2 GmbH | Germany | Holding company | 90.00% |
Subsidiaries
Subsidiaries are all companies where the Group has a controlling interest. A\u00a0controlling interest is where the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50% of the shares in the company, or through agreements, are able to exercise control over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
Companies that constitute the Group are listed in Note 6.2\u2013 Group Companies.
Accounting principles related to joint ventures, associated companies are presented in Note 6.1\u2013 Investments in Joint Venture and Associate", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__26-1": { "value": "Subsidiaries
Subsidiaries are all companies where the Group has a controlling interest. A\u00a0controlling interest is where the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50% of the shares in the company, or through agreements, are able to exercise control over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
Companies that constitute the Group are listed in Note 6.2\u2013 Group Companies.
Accounting principles related to joint ventures, associated companies are presented in Note 6.1\u2013 Investments in Joint Venture and Associate.
6.2\tGroup Companies
The Group\u2019s consolidated financial statements include the financial statements of the Company and its subsidiaries listed in the table below. The table excludes all general partner companies and non-operating companies.
Company | Country | Principal activity | Ownership |
MPC Container Ships Invest B.V. | Netherlands | Holding company | 100.00% |
\u201cAS Angelina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS California\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Carelia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clarita\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clementina CV\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Columbia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Cypria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabiana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabrizia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fatima\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Felicia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Filippa\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fiorella\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Floretta\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
Company | Country | Principal activity | Ownership |
\u201cAS Floriana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Patria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Paulina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Petronia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Ragna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Savanna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Selina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sevillia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sicilia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sophia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
MPCC Second Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Camellia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carlotta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Christiana\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Pauline\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabrina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Samanta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Susanna\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Svenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Fourth Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Anne\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Stine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Silje\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Simone\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Third Financing AS | Norway | Holding company | 100.00% |
\u201cAS Fenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Freya\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Company | Country | Principal activity | Ownership |
\u201cAS Nadia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Penelope\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Paola\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Palina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Petra\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Constantina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Serena\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Mipo AS | Norway | Ship-owning entity | 100.00% |
MPCC Alva AS | Norway | Ship-owning entity | 100.00% |
MPCC City AS | Norway | Ship-owning entity | 100.00% |
MPCC Caspria AS | Norway | Ship-owning entity | 100.00% |
MPCC Nora AS | Norway | Ship-owning entity | 100.00% |
MPCC GREENBOX AS | Norway | Holding company | 90.10% |
MPCC NORDLAND AS | Norway | Ship-owning entity | 90.10% |
MPCC VESTLAND AS | Norway | Ship-owning entity | 90.10% |
MPC ECOBOX OPCO 5 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPC ECOBOX OPCO 6 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carolina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Franziska\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Nina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Claudia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
AS Shipping OpCo 2 GmbH | Germany | Holding company | 90.00% |
Foreign currency translation
In accordance with IAS 21, 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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26918": { "value": "New and amended standards and interpretations
The Group\u2019s intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approval before the consolidated financial statements are issued.
Starting from January 1, 2023, the Group has applied the following new statndards and amendments:
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies. The amendment clarifies in which situations a change in an accounting policy is material and should be disclosed.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates. The amendment clarifies the definition and application of an accounting estimate.
Amendments to IAS 12 \u2013 Income Taxes
In May 2023, the IASB issued amendments to IAS 12 Income Taxes, which provides temporary exemptions from the requirement to recognise and disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar Two Model Rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes. The amendments have been adopted by the EU and the company has applied the mandatory temporary exception according to IAS 12. This implies that no deferred tax is recognised or disclosed with respect to this tax regime for the financial year 2023.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Amendment to IFRS 16 \u2013 Leases on sale and leaseback
In September 2022, the IASB issued an amendment to IFRS 16 which adds requirements for how an entity accounts for a sale and leaseback after the date of the transaction. After the commencement date, the seller-lessee applies the subsequent measurement requirements in IFRS 16 to the right-of-use asset and the lease liability that arise from the leaseback, including the lease modification requirements. In applying these requirements, the seller-lessee determines \u2018lease payments\u2019 or \u2018revised lease payments\u2019 in a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The Group is currently assessing the impact of the amendments will have on current sale and leaseback arrangement.
Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:
+ What is meant by right to defer settlement
+ That a right to defer must exist at the end of the reporting period
+ That classification is unaffected by the likelihood that an entity will exercise its deferral right
+ That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.
Amendment to IAS 7 and IFRS 7 \u2013 Supplier finance
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
Amendments to IAS 21 \u2013 Lack of Exchangeability
The amendments are not expected to have a material impact on the Group\u2019s financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26919": { "value": "New and amended standards and interpretations
The Group\u2019s intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approval before the consolidated financial statements are issued.
Starting from January 1, 2023, the Group has applied the following new statndards and amendments:
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies. The amendment clarifies in which situations a change in an accounting policy is material and should be disclosed.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates. The amendment clarifies the definition and application of an accounting estimate.
Amendments to IAS 12 \u2013 Income Taxes
In May 2023, the IASB issued amendments to IAS 12 Income Taxes, which provides temporary exemptions from the requirement to recognise and disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar Two Model Rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes. The amendments have been adopted by the EU and the company has applied the mandatory temporary exception according to IAS 12. This implies that no deferred tax is recognised or disclosed with respect to this tax regime for the financial year 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__30-1": { "value": "1.2\tSignificant Judgement, Estimates and Assumptions
The preparation of consolidated financial statements conforming to IFRS requires management to make judgments, estimates and assumptions that may affect assets, liabilities, revenues, expenses and information in notes to these financial statements. Estimates are management\u2019s best assessment based on information available at the date the financial statements are authorized for issue. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods. Estimates and underlying assumptions are reviewed on an on-going basis. The main areas where judgements and estimates have been made are prescribed in each of the following notes:
+Note 5.2\u2013 Depreciation, Amortization and Impairment Charges
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Judgement and estimates
+ Impairment of vessels: In assessing the need for impairments, each vessel is considered to be a separate cash generating unit. The impairment testing demand a considerable degree of estimation. Changes in circumstances and assumptions may significantly affect the estimated recoverable amounts. In assessing impairment, both external and internal sources of information are considered. External sources include a significant decline in market value that is not the result of the passage of time, normal use of the assets or increase in interest rate. Internal sources of information include evidence of obsolescence of, or physical damage to, an asset. If the carrying amount of an asset exceeds the amount that is recoverable from its use or sale, an impairment loss is recognised immediately so that the carrying amount corresponds to the recoverable amount.
+ As we obtain information from various industry and other sources (see further in the basis for impairment testing), our estimates of charter-free market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them.
+ Value in use calculations involve a high degree of estimation and a number of critical assumptions such as time charter rates, utilization rate, drydocking expenditures and requirements, operational expenses, residual values and discount rates. These assumptions are based on a combination of historical trends and current market conditions as well as future expectations. Estimated outflows for operating expenses and drydocking expenditures as well as requirement are based on a combination of historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of scrap rates used in management\u2019s evaluation of salvage value. The more significant factors that could impact management\u2019s assumption regarding time charter rates include (i) regional and global economic environment, (ii) trade patterns, (iii) by industry-specific trends in respect of capacity supply and demand, and (iv) changes in rules and regulation applicable to the container market, which includes legislation adopted by the international organization such as IMO and the EU or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially in the future.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27710": { "value": "2.1\tSegment Information
Accounting policy
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers in the Group. The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors of the Company.
All of the Group\u2019s vessels earn revenue from seaborne container transportation globally. The vessels exhibit similar economic, trading and financial characteristics. The Group is organised in one operating segment, i.e. the container shipping segment. The Group provides geographical data for revenue only, as the Group\u2019s revenue predominantly stems from vessels that may be empoyed globally. Gross revenue specific foreign countries which contribute significantly to total revenues are disclosed below.
in USDthousands | 2023 | 2022 |
Intra-Asia | 156,789 | 158,968 |
South America | 216,364 | 159,398 |
Europe | 37,762 | 54,249 |
Middle East | 190,633 | 129,437 |
Africa | 30,904 | 32,084 |
Other geographical locations (worldwide trades) | 68,258 | 55,245 |
Total time charter and pool revenue | 700,710 | 589,380 |
For the year ended December 31.2023, the Group had three customers (2022: two) who each accounted for 10% or more for our consolidated revenues in the amount of USD 75.6 million, USD 91.9 million and USD 127.9 million respectively. These three customers accounted for 42% of the total revenues for 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27711": { "value": "2.1\tSegment Information
Accounting policy
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers in the Group. The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors of the Company.
All of the Group\u2019s vessels earn revenue from seaborne container transportation globally. The vessels exhibit similar economic, trading and financial characteristics. The Group is organised in one operating segment, i.e. the container shipping segment. The Group provides geographical data for revenue only, as the Group\u2019s revenue predominantly stems from vessels that may be empoyed globally. Gross revenue specific foreign countries which contribute significantly to total revenues are disclosed below.
in USDthousands | 2023 | 2022 |
Intra-Asia | 156,789 | 158,968 |
South America | 216,364 | 159,398 |
Europe | 37,762 | 54,249 |
Middle East | 190,633 | 129,437 |
Africa | 30,904 | 32,084 |
Other geographical locations (worldwide trades) | 68,258 | 55,245 |
Total time charter and pool revenue | 700,710 | 589,380 |
For the year ended December 31.2023, the Group had three customers (2022: two) who each accounted for 10% or more for our consolidated revenues in the amount of USD 75.6 million, USD 91.9 million and USD 127.9 million respectively. These three customers accounted for 42% of the total revenues for 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27719": { "value": "Accounting policy
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers in the Group. The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors of the Company.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28065": { "value": "2.2\tRevenues and Other Revenues
Accounting policy
Revenue recognition
The Group derives its revenue from time charters of its vessels, each of which contains a lease. These charters involve placing the specified vessel at charterers\u2018 use of specified rental period of time in return for payment of specified daily hire rates. Most of the charters include options for the charterers to extend the terms. Revenue from the Group\u2019s time charters is accounted for as operating leases, on a straight-line basis, for a shorter period of the vessels\u2019 useful life, over the average fixed rentals over the minimum fixed rental period of the time charter agreements, as service is performed. Charter hire received in advance is recorded under \u201cDeferred revenue\u201d in the Consolidated Statement of Financial Position until charter services are rendered. Invoiced revenue related to an estimated proportion of remaining voyage time and activities at the destination port is deferred. Under a time charter, the daily hire rate includes lease component related to the right of use of the vessel and non-lease components primarily related to the operating expenses of the vessel incurred by the Group such as commissions, vessel operating expenses: crew expenses, lubricants, certain insurance expenses, repair and maintenance, spares, stores etc. and vessel management fees. The lease component of the vessel represents the use of the vessel without any associated performance obligations and is accounted for in accordance with IFRS 16 Leases while revenues from time charter services (non-lease) and other revenues (e.g. bunkers and other services) are accounted for in accordance IFRS 15. The non-lease component from the Group\u2019s time charter contracts are recognized over time, as the performance obligation is satisfied over time. Revenue from bunkers and other goods and services from customers are recognized in the period the goods or services are transferred to the customer, following the \u201cpoint in time principle
in USD thousands | 2023 | 2022 |
Time charter revenues | 700,710 | 587,868 |
Pool charter revenues | - | 1,512 |
Total Charter revenues | 700,710 | 589,380 |
Amortization of time charter contracts | 2,716 | 18,083 |
Other revenues | 7,855 | 9,304 |
Total operating revenues | 711,282 | 616,768 |
When a time charter contract is linked to an index, we recognize revenue for the applicable period based on the actual index for that period. In 2023, one vessel was index-linked (2022: nil) and four vessels were on variable rate time charter (2022: nil).
The lease and non-lease components of our revenues in the year ended December 31, 2023 and December 31, 2022 were as follows:
in USD thousands | 2023 | 2022 |
Service element | 152,897 | 134,936 |
Other revenue | 7,855 | 9,304 |
Total revenue from customer contracts | 160,752 | 144,240 |
Lease elements | 547,813 | 454,444 |
Amortization of time charter contracts | 2,716 | 18,083 |
Total operating revenues | 711,282 | 616,768 |
Contracted revenues based on fixed time charter contracts as at December 31, 2023 are set out below, based on minimum contract periods of vessels held in subsidiaries:
in USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
TCE | 436,899 | 346,844 | 56,837 | 155,274 | 995,853 |
Accounting policy
Revenue recognition
The Group derives its revenue from time charters of its vessels, each of which contains a lease. These charters involve placing the specified vessel at charterers\u2018 use of specified rental period of time in return for payment of specified daily hire rates. Most of the charters include options for the charterers to extend the terms. Revenue from the Group\u2019s time charters is accounted for as operating leases, on a straight-line basis, for a shorter period of the vessels\u2019 useful life, over the average fixed rentals over the minimum fixed rental period of the time charter agreements, as service is performed. Charter hire received in advance is recorded under \u201cDeferred revenue\u201d in the Consolidated Statement of Financial Position until charter services are rendered. Invoiced revenue related to an estimated proportion of remaining voyage time and activities at the destination port is deferred. Under a time charter, the daily hire rate includes lease component related to the right of use of the vessel and non-lease components primarily related to the operating expenses of the vessel incurred by the Group such as commissions, vessel operating expenses: crew expenses, lubricants, certain insurance expenses, repair and maintenance, spares, stores etc. and vessel management fees. The lease component of the vessel represents the use of the vessel without any associated performance obligations and is accounted for in accordance with IFRS 16 Leases while revenues from time charter services (non-lease) and other revenues (e.g. bunkers and other services) are accounted for in accordance IFRS 15. The non-lease component from the Group\u2019s time charter contracts are recognized over time, as the performance obligation is satisfied over time. Revenue from bunkers and other goods and services from customers are recognized in the period the goods or services are transferred to the customer, following the \u201cpoint in time principle
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28075": { "value": "Accounting policy
Revenue recognition
The Group derives its revenue from time charters of its vessels, each of which contains a lease. These charters involve placing the specified vessel at charterers\u2018 use of specified rental period of time in return for payment of specified daily hire rates. Most of the charters include options for the charterers to extend the terms. Revenue from the Group\u2019s time charters is accounted for as operating leases, on a straight-line basis, for a shorter period of the vessels\u2019 useful life, over the average fixed rentals over the minimum fixed rental period of the time charter agreements, as service is performed. Charter hire received in advance is recorded under \u201cDeferred revenue\u201d in the Consolidated Statement of Financial Position until charter services are rendered. Invoiced revenue related to an estimated proportion of remaining voyage time and activities at the destination port is deferred. Under a time charter, the daily hire rate includes lease component related to the right of use of the vessel and non-lease components primarily related to the operating expenses of the vessel incurred by the Group such as commissions, vessel operating expenses: crew expenses, lubricants, certain insurance expenses, repair and maintenance, spares, stores etc. and vessel management fees. The lease component of the vessel represents the use of the vessel without any associated performance obligations and is accounted for in accordance with IFRS 16 Leases while revenues from time charter services (non-lease) and other revenues (e.g. bunkers and other services) are accounted for in accordance IFRS 15. The non-lease component from the Group\u2019s time charter contracts are recognized over time, as the performance obligation is satisfied over time. Revenue from bunkers and other goods and services from customers are recognized in the period the goods or services are transferred to the customer, following the \u201cpoint in time principle
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__39-1": { "value": "2.3\tVessel Voyage Expenditures
Accounting policy
Voyage expenses are expensed as incurred and primarily consist of port charges, bunker costs (bunker costs are normally covered by the Group\u2019s charterer, except in certain cases such as vessel re-positioning, or under repair and maintenance, or when the vessels have been idle) ,address commissions and brokerage commissions.
in USD thousands | 2023 | 2022 |
Bunker consumption | (7,715) | (11,396) |
Other voyage expenses | (2,183) | (2,368) |
Total vessel voyage expenditures | (9,898) | (13,765) |
Commissions | (20,000) | (17,127) |
2.4\tVessel Operating Expenditures
Accounting policy
Vessel operating expenses are expensed as incurred and include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance. General operating expenses are related to the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Vessel operating expenditures which are partially compensated by income from reimbursements from the charterer and are being recognized as other revenue.
in USD thousands | 2023 | 2022 |
Crew | (74,769) | (71,331) |
Lube oil | (9,189) | (8,646) |
Maintenance and repair | (48,670) | (39,227) |
Insurances | (15,983) | (17,178) |
Operating expenditures | (4,780) | (3,605) |
Total vessel operating expenditures | (153,390) | (139,988) |
2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
5.2\tDepreciation, Amortization and Impairment Charges
Accounting policy
Impairment of vessels
Indicators of impairment of vessels and other fixed assets are assessed at each reporting date. The same applies when events or changes in circumstances that may entail that the vessels\u2019 carrying amount may not be recoverable. Such indicators may include depressed charter rates and lower second hand vessel values. If impairment indicators are identified, the recoverable amount is estimated; and If the carrying amount exceeds its recoverable amount, an impairment loss is recognized; i.e. the asset is written down to the higher of the fair value less cost of sale and its value -in-use. The net realizable value is the amount obtainable from the sale of an asset in an arms length transaction less the costs of sale and the value in use is the present value of estimated future cash flows expected from the continued use of an asset.
Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
The following assumptions have been made when calculating the value in use for container vessels:
+ Each vessel is considered to be a separate cash-generating unit.
+ Future cash flows are based on an assessment of expected development in charter rates and estimated level of administrative and operating expenses (including maintenance and repair) and dry-docking over the remaining useful life of the vessel plus any residual value.
+ The net present value of future estimated cash flows of each cash-generating unit is based on a discount rate according to a pre-tax weighted average cost of capital. The weighted average cost of capital (WACC) is calculated based on the expected long-term borrowing rate and risk-free USD SOFR rate plus an equity risk premium. In 2023, the WACC used in the impairment testing was 9.0%.
An impairment loss recognized in prior periods for an asset is reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
Judgement and estimates
+ Impairment of vessels: In assessing the need for impairments, each vessel is considered to be a separate cash generating unit. The impairment testing demand a considerable degree of estimation. Changes in circumstances and assumptions may significantly affect the estimated recoverable amounts. In assessing impairment, both external and internal sources of information are considered. External sources include a significant decline in market value that is not the result of the passage of time, normal use of the assets or increase in interest rate. Internal sources of information include evidence of obsolescence of, or physical damage to, an asset. If the carrying amount of an asset exceeds the amount that is recoverable from its use or sale, an impairment loss is recognised immediately so that the carrying amount corresponds to the recoverable amount.
+ As we obtain information from various industry and other sources (see further in the basis for impairment testing), our estimates of charter-free market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them.
+ Value in use calculations involve a high degree of estimation and a number of critical assumptions such as time charter rates, utilization rate, drydocking expenditures and requirements, operational expenses, residual values and discount rates. These assumptions are based on a combination of historical trends and current market conditions as well as future expectations. Estimated outflows for operating expenses and drydocking expenditures as well as requirement are based on a combination of historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of scrap rates used in management\u2019s evaluation of salvage value. The more significant factors that could impact management\u2019s assumption regarding time charter rates include (i) regional and global economic environment, (ii) trade patterns, (iii) by industry-specific trends in respect of capacity supply and demand, and (iv) changes in rules and regulation applicable to the container market, which includes legislation adopted by the international organization such as IMO and the EU or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially in the future.
Climate risk
+ Management continuously monitors climate related risks when measuring the recoverable amount. While the Group\u2019s operations are not currently exposed to significant physical risk, the value-in-use may be impacted by transition risk, such as legislation, regulations, and changes in demand for the Group\u2019s assets. Although no single climate related assumption is a key assumption for this year\u2019s impairment test, expectations for the following years have been incorporated into projected cash flows: retrofit investments to improve fuel efficiency.
Basis for impairment testing and calculation of recoverable amount
In the impairment test for cash-generating units, the recoverable amount of the unit is compared with its carrying amount. The recoverable amount for the relevant cash-generating units is determined based on higher of the estimated fair value less cost of sale and its estimated value-in-use calculations. If the recoverable amount is less than the carrying amount, the latter is written down to the recoverable amount. The estimated fair value for our vessels is determined by a combination of various industry sources, including charter-free market values received from third-party independent broker; similar vessel sales offered from potential or historical buyers, recent sales of our owned vessels in a non-distressed situation. While the value-in-use is calculated as the discounted value of the estimated future net cash flows per cash-generating unit.
In developing estimates of future cash flows in order to assess value in use, the Group must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, dry docking and other capital requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. As at December 31, 2023, our revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessels as well as estimated time charter equivalents rates for the remaining life of the vessel after the completeion of its current contract. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) internally developed forecasts, and (ii) the trailing 15 year historical average rates, based on monthly averages rates published by an independent third party martimie research service. The estimated daily time charter equivalent rate used for non-contracted revenue days of each vessel is considered a significant assumption. Recognzing that the container transportation industry is cyclical and subject to significant volatility, we consider the assumptions used represent a reasonable benchmark for the estimated time charter equivalents rates for the non-contracted revenue days, based on the past and ongoing shipping cycles.
Estimated outflows for operating expenses and dry docking requirements are based on historical and approved budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of recycle rates used in management\u2019s evaluation of salvage value.
Other capital requirements for vessels are primarily retrofit investments based on the Group\u2019s decarbonization strategy.
At each reporting date, the Group evaluates whether there is an indication that an asset may be impaired. If such indicator exists, an impairment test is performed. Such indicators may include depressed spot rates and declined secondhand containerships values. At December 31, 2023, the impairment indicator was triggered as the market values of our vessels have declined from levels seen in 2021 and 2022. Hence, an impairment test has been performed for the Group\u2019s vessels.
In 2023, the Group recognized a total impairment loss of USD 79.4 million (2022: zero). Below sets fourth the material impairment loss to each cash generating units:
in USD thousands | Built | Status | Sale price | 2023 |
Operating vessels | ||||
AS Alva | 2008 | 11,453 | ||
AS Nora | 2014 | 8,794 | ||
AS Pamela | 2009 | 8,611 | ||
AS Anita | 2010 | 4,365 | ||
AS Alexandria | 2010 | 4,236 | ||
Other vessels | 10,332 | |||
Impairment for operating vessels | 47,791 | |||
Held-for -sale | ||||
AS Rosalia | 2009 | Sold | 7,000 | 1,766 |
AS Romina | 2009 | Sold | 7,000 | 2,213 |
AS Flora | 2005 | Sold | 6,000 | 1,085 |
AS Roberta | 2006 | Sold | 7,500 | 736 |
AS Rafaela | 2007 | Sold | 8,000 | 1,590 |
AS Emma | 2010 | Sold | 22,500 | 18,391 |
AS Paulina | 2004 | Held -for sale | 8,000 | 2,921 |
AS Pauline | 2006 | Held -for sale | 9,500 | 866 |
AS Petra | 2004 | Held -for sale | 8,000 | 2,018 |
Impairment for held-for-sale vessels | 31,587 | |||
Total Impairment | 79,378 | 79,378 |
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 34,936 | 24,761 | 69,919 | - | 129,616 |
Interest payments | 9,277 | 13,421 | 6,985 | - | 29,683 |
Trade and other payables | 20,397 | - | - | - | 20,397 |
Realted part payables | 1,062 | - | - | - | 1,062 |
Other liabilities | 16,011 | - | - | - | 16,011 |
Total | 81,683 | 38,182 | 76,904 | - | 196,769 |
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2022:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 80,000 | 48,333 | 26,667 | - | 155,000 |
Interest payments | 9,825 | 6,862 | 1,938 | - | 18,625 |
Trade and other payables | 17,282 | - | - | - | 17,282 |
Other liabilities | 18,863 | - | - | - | 18,863 |
Total | 125,970 | 55,195 | 28,605 | - | 209,770 |
2.3\tVessel Voyage Expenditures
Accounting policy
Voyage expenses are expensed as incurred and primarily consist of port charges, bunker costs (bunker costs are normally covered by the Group\u2019s charterer, except in certain cases such as vessel re-positioning, or under repair and maintenance, or when the vessels have been idle) ,address commissions and brokerage commissions.
in USD thousands | 2023 | 2022 |
Bunker consumption | (7,715) | (11,396) |
Other voyage expenses | (2,183) | (2,368) |
Total vessel voyage expenditures | (9,898) | (13,765) |
Commissions | (20,000) | (17,127) |
2.4\tVessel Operating Expenditures
Accounting policy
Vessel operating expenses are expensed as incurred and include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance. General operating expenses are related to the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Vessel operating expenditures which are partially compensated by income from reimbursements from the charterer and are being recognized as other revenue.
in USD thousands | 2023 | 2022 |
Crew | (74,769) | (71,331) |
Lube oil | (9,189) | (8,646) |
Maintenance and repair | (48,670) | (39,227) |
Insurances | (15,983) | (17,178) |
Operating expenditures | (4,780) | (3,605) |
Total vessel operating expenditures | (153,390) | (139,988) |
2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
4.2\tDeferred Revenues and Other Liabilities
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
5.2\tDepreciation, Amortization and Impairment Charges
Accounting policy
Impairment of vessels
Indicators of impairment of vessels and other fixed assets are assessed at each reporting date. The same applies when events or changes in circumstances that may entail that the vessels\u2019 carrying amount may not be recoverable. Such indicators may include depressed charter rates and lower second hand vessel values. If impairment indicators are identified, the recoverable amount is estimated; and If the carrying amount exceeds its recoverable amount, an impairment loss is recognized; i.e. the asset is written down to the higher of the fair value less cost of sale and its value -in-use. The net realizable value is the amount obtainable from the sale of an asset in an arms length transaction less the costs of sale and the value in use is the present value of estimated future cash flows expected from the continued use of an asset.
Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
The following assumptions have been made when calculating the value in use for container vessels:
+ Each vessel is considered to be a separate cash-generating unit.
+ Future cash flows are based on an assessment of expected development in charter rates and estimated level of administrative and operating expenses (including maintenance and repair) and dry-docking over the remaining useful life of the vessel plus any residual value.
+ The net present value of future estimated cash flows of each cash-generating unit is based on a discount rate according to a pre-tax weighted average cost of capital. The weighted average cost of capital (WACC) is calculated based on the expected long-term borrowing rate and risk-free USD SOFR rate plus an equity risk premium. In 2023, the WACC used in the impairment testing was 9.0%.
An impairment loss recognized in prior periods for an asset is reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
Judgement and estimates
+ Impairment of vessels: In assessing the need for impairments, each vessel is considered to be a separate cash generating unit. The impairment testing demand a considerable degree of estimation. Changes in circumstances and assumptions may significantly affect the estimated recoverable amounts. In assessing impairment, both external and internal sources of information are considered. External sources include a significant decline in market value that is not the result of the passage of time, normal use of the assets or increase in interest rate. Internal sources of information include evidence of obsolescence of, or physical damage to, an asset. If the carrying amount of an asset exceeds the amount that is recoverable from its use or sale, an impairment loss is recognised immediately so that the carrying amount corresponds to the recoverable amount.
+ As we obtain information from various industry and other sources (see further in the basis for impairment testing), our estimates of charter-free market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them.
+ Value in use calculations involve a high degree of estimation and a number of critical assumptions such as time charter rates, utilization rate, drydocking expenditures and requirements, operational expenses, residual values and discount rates. These assumptions are based on a combination of historical trends and current market conditions as well as future expectations. Estimated outflows for operating expenses and drydocking expenditures as well as requirement are based on a combination of historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of scrap rates used in management\u2019s evaluation of salvage value. The more significant factors that could impact management\u2019s assumption regarding time charter rates include (i) regional and global economic environment, (ii) trade patterns, (iii) by industry-specific trends in respect of capacity supply and demand, and (iv) changes in rules and regulation applicable to the container market, which includes legislation adopted by the international organization such as IMO and the EU or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially in the future.
Climate risk
+ Management continuously monitors climate related risks when measuring the recoverable amount. While the Group\u2019s operations are not currently exposed to significant physical risk, the value-in-use may be impacted by transition risk, such as legislation, regulations, and changes in demand for the Group\u2019s assets. Although no single climate related assumption is a key assumption for this year\u2019s impairment test, expectations for the following years have been incorporated into projected cash flows: retrofit investments to improve fuel efficiency.
Basis for impairment testing and calculation of recoverable amount
In the impairment test for cash-generating units, the recoverable amount of the unit is compared with its carrying amount. The recoverable amount for the relevant cash-generating units is determined based on higher of the estimated fair value less cost of sale and its estimated value-in-use calculations. If the recoverable amount is less than the carrying amount, the latter is written down to the recoverable amount. The estimated fair value for our vessels is determined by a combination of various industry sources, including charter-free market values received from third-party independent broker; similar vessel sales offered from potential or historical buyers, recent sales of our owned vessels in a non-distressed situation. While the value-in-use is calculated as the discounted value of the estimated future net cash flows per cash-generating unit.
In developing estimates of future cash flows in order to assess value in use, the Group must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, dry docking and other capital requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. As at December 31, 2023, our revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessels as well as estimated time charter equivalents rates for the remaining life of the vessel after the completeion of its current contract. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) internally developed forecasts, and (ii) the trailing 15 year historical average rates, based on monthly averages rates published by an independent third party martimie research service. The estimated daily time charter equivalent rate used for non-contracted revenue days of each vessel is considered a significant assumption. Recognzing that the container transportation industry is cyclical and subject to significant volatility, we consider the assumptions used represent a reasonable benchmark for the estimated time charter equivalents rates for the non-contracted revenue days, based on the past and ongoing shipping cycles.
Estimated outflows for operating expenses and dry docking requirements are based on historical and approved budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of recycle rates used in management\u2019s evaluation of salvage value.
Other capital requirements for vessels are primarily retrofit investments based on the Group\u2019s decarbonization strategy.
At each reporting date, the Group evaluates whether there is an indication that an asset may be impaired. If such indicator exists, an impairment test is performed. Such indicators may include depressed spot rates and declined secondhand containerships values. At December 31, 2023, the impairment indicator was triggered as the market values of our vessels have declined from levels seen in 2021 and 2022. Hence, an impairment test has been performed for the Group\u2019s vessels.
In 2023, the Group recognized a total impairment loss of USD 79.4 million (2022: zero). Below sets fourth the material impairment loss to each cash generating units:
in USD thousands | Built | Status | Sale price | 2023 |
Operating vessels | ||||
AS Alva | 2008 | 11,453 | ||
AS Nora | 2014 | 8,794 | ||
AS Pamela | 2009 | 8,611 | ||
AS Anita | 2010 | 4,365 | ||
AS Alexandria | 2010 | 4,236 | ||
Other vessels | 10,332 | |||
Impairment for operating vessels | 47,791 | |||
Held-for -sale | ||||
AS Rosalia | 2009 | Sold | 7,000 | 1,766 |
AS Romina | 2009 | Sold | 7,000 | 2,213 |
AS Flora | 2005 | Sold | 6,000 | 1,085 |
AS Roberta | 2006 | Sold | 7,500 | 736 |
AS Rafaela | 2007 | Sold | 8,000 | 1,590 |
AS Emma | 2010 | Sold | 22,500 | 18,391 |
AS Paulina | 2004 | Held -for sale | 8,000 | 2,921 |
AS Pauline | 2006 | Held -for sale | 9,500 | 866 |
AS Petra | 2004 | Held -for sale | 8,000 | 2,018 |
Impairment for held-for-sale vessels | 31,587 | |||
Total Impairment | 79,378 | 79,378 |
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 34,936 | 24,761 | 69,919 | - | 129,616 |
Interest payments | 9,277 | 13,421 | 6,985 | - | 29,683 |
Trade and other payables | 20,397 | - | - | - | 20,397 |
Realted part payables | 1,062 | - | - | - | 1,062 |
Other liabilities | 16,011 | - | - | - | 16,011 |
Total | 81,683 | 38,182 | 76,904 | - | 196,769 |
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2022:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 80,000 | 48,333 | 26,667 | - | 155,000 |
Interest payments | 9,825 | 6,862 | 1,938 | - | 18,625 |
Trade and other payables | 17,282 | - | - | - | 17,282 |
Other liabilities | 18,863 | - | - | - | 18,863 |
Total | 125,970 | 55,195 | 28,605 | - | 209,770 |
Accounting policy
Voyage expenses are expensed as incurred and primarily consist of port charges, bunker costs (bunker costs are normally covered by the Group\u2019s charterer, except in certain cases such as vessel re-positioning, or under repair and maintenance, or when the vessels have been idle) ,address commissions and brokerage commissions.
Accounting policy
Vessel operating expenses are expensed as incurred and include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance. General operating expenses are related to the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Vessel operating expenditures which are partially compensated by income from reimbursements from the charterer and are being recognized as other revenue.
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Accounting policy
Impairment of vessels
Indicators of impairment of vessels and other fixed assets are assessed at each reporting date. The same applies when events or changes in circumstances that may entail that the vessels\u2019 carrying amount may not be recoverable. Such indicators may include depressed charter rates and lower second hand vessel values. If impairment indicators are identified, the recoverable amount is estimated; and If the carrying amount exceeds its recoverable amount, an impairment loss is recognized; i.e. the asset is written down to the higher of the fair value less cost of sale and its value -in-use. The net realizable value is the amount obtainable from the sale of an asset in an arms length transaction less the costs of sale and the value in use is the present value of estimated future cash flows expected from the continued use of an asset.
Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
The following assumptions have been made when calculating the value in use for container vessels:
+ Each vessel is considered to be a separate cash-generating unit.
+ Future cash flows are based on an assessment of expected development in charter rates and estimated level of administrative and operating expenses (including maintenance and repair) and dry-docking over the remaining useful life of the vessel plus any residual value.
+ The net present value of future estimated cash flows of each cash-generating unit is based on a discount rate according to a pre-tax weighted average cost of capital. The weighted average cost of capital (WACC) is calculated based on the expected long-term borrowing rate and risk-free USD SOFR rate plus an equity risk premium. In 2023, the WACC used in the impairment testing was 9.0%.
An impairment loss recognized in prior periods for an asset is reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29028": { "value": "2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
8.2\tRelated Party Transactions
The Group has entered into a corporate service agreement to purchase administrative and corporate services from MPC M\u00fcnchmeyer Petersen Capital AG and its subsidiaries.
The Company is responsible for the technical ship management of the vessels owned by the Group. Performance of technical ship management services is sub-contracted to Wilhelmsen Ahrenkiel Ship Management GmbH & Co. KG and Wilhelmsen Ahrenkiel Ship Management B.V., joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG, for 52 of the 59 vessels owned by the Group at December 31, 2023.
Commercial ship management of the vessels owned by the Group and associated joint ventures is contracted to Contchart GmbH & Co. KG and Harper Petersen B.V., which are joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG.
The following table provides the total amount of service transactions that have been entered into with related parties for the relevant period:
in USD thousands / 2023 | 2023 | 2022 |
Wilhelmsen Ahrenkiel Ship Man. GmbH & Co. KG / B.V. | 8,167 | 8,653 |
Harper Petersen & Co. GmbH | 6,624 | 5,670 |
MPC M\u00fcnchmeyer Petersen Capital AG | 924 | 1,180 |
Total | 15,715 | 15,503 |
Directors\u2019 and executive management\u2019s compensation and shareholding\u200c1
Shares at December 31, 2023 | Warrants | 2023 remuneration | |
Ulf Holl\u00e4nder (Chairman)\u200c2 | 165,637 | - | USD 90,000 |
Dr. Axel Schroeder\u200c3 | 2,471,110 | - | USD 50,000 |
Pia Meling | - | - | USD 50,000 |
Peter Fredriksen | 200,000 | - | USD 50,000 |
Ellen Hanetho | 60,000 | - | USD 50,000 |
Constantin Baack (CEO) | 66,000 | - | USD 1,239,446 |
Moritz Fuhrmann (CFO) | - | - | USD 494,587 |
Dr. Benjamin Pfeifer (former CFO) | - | - | USD 81,235 |
Shares at December 31, 2022 | Warrants | 2022 remuneration | |
Ulf Holl\u00e4nder (Chairman) | 165,637 | - | NOK 600,000 |
Dr. Axel Schroeder\u200c4 | 2,536,511 | - | NOK 400,000 |
Pia Meling | - | - | NOK 400,000 |
Peter Fredriksen | 200,000 | - | NOK 400,000 |
Ellen Hanetho | 60,000 | - | NOK 400,000 |
Constantin Baack (CEO) | 66,000 | - | NOK 7,848,515 |
Moritz Fuhrmann (CFO) | - | NOK 285,807 | |
Dr. Benjamin Pfeifer (former CFO) | 7,300 | - | NOK 3,820,956 |
1Several of the board members hold further share through indirect shareholdings in the Company. Please refer to Note 7.5\u2013 Equityfor further details
2On March 15, 2024, an agreement was reached that all shares held by Ulf Holl\u00e4nder were sold to MPC CSI GmbH.
3On March 15, 2024, an agreement was reached that all shares held by Dr. Axel Schroeder were sold to MPC CSI GmbH.
4In November 2022, 4.9 million shares were transferred from a company controlled by Dr. Axel Schroeder to MPC CSI GmbH as contribution in kind.
In USD thousands 2023 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 474 | 765 | 1,2393 |
Moritz Fuhrmann (CFO) | 275 | 220 | 495 |
Dr. Benjamin Pfeifer (former CFO) | 81 | - | 81 |
In USD thousands 2022 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 460 | 316 | 776 |
Moritz Fuhrmann (CFO) | 28 | - | 28 |
Dr. Benjamin Pfeifer (former CFO) | 272 | 105 | 377 |
In April, 2023, the Company\u2019s general meeting unanimously resolved that each member of the Board of Directors shall receive USD 50,000 (USD 90,000 for the Chairman of the Board) in remuneration for the financial year 2023. The\u00a0Board fees resolved for the year are paid out in the subsequent year. The total remuneration to the Board of Directors and executive management in 2023 was USD 2.1 million (2022: USD 1.2 million).
Guidelines for compensation to the CEO and CFO
The main purpose of the compensation to the executive management is to attract, retain and motivate employees with the skills, qualifications and experience needed to maximise value creation for the Company and its shareholders.
The total compensation to the CEO and CFO consists of base salary, bonus and other benefits. The Company practices standard employment contracts, with standard terms and conditions regarding notice period and severance pay for the executive management. The executive management participates in a variable bonus scheme where the purpose is to provide incentive to contribute to the value creation of the Company and its shareholders.
2.5\tOther Operating Expenses
Accounting policy
Other operating expenses including administrative expenses are expensed as incurred and include, audit fees, bookkeeping fees, legal fees, board remuneration, service cost, executive officers compensation, directors & officers insurance and stock exchange fees.
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
Other administrative expenses include remuneration to the Board of Directors and executive management, and fees paid for corporate management services from MPC Maritime Investments GmbH and MPC M\u00fcnchmeyer Petersen Capital AG which are part of the Group\u2019s related parties. Further information on transactions between related parties can be found in Note 8.2\u2013 Related pary transactions. The Group employs 33 people as at December 31, 2023. The Group has defined contributions plan for all employees in line with established market practices and regulations in Norway, Germany and Netherlands.
in USD thousands | 2023 | 2022 |
Legal and advisory services | (2,869) | (2,725) |
Audit and accounting services | (1,045) | (1,104) |
Salary and employee expenses | (5,989) | (5,266) |
Other administrative expenses | (4,901) | (4,766) |
Total administrative expenses | (14,805) | (13,862) |
The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29248": { "value": "The following table details the administrative expenses incurred in relation to 2023 audit and related services.
in USD thousands | 2023 | 2022 |
Audit fee | (670) | (781) |
Attestation services | (6) | (9) |
Total auditor services | (676) | (790) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
In USD thousands | Currency | Facility amount | Interest | Maturity | December 31, 2023 | December 31, 2022 |
Loan and credit facility | USD | 180,000 | SOFR + 3.35% | November 2023/2026 | - | 100,000 |
Senior secured credit facility | USD | 70,000 | SOFR+ 3.25% | June 2024 | 55,000 | 55,000 |
Term loan facility | USD | 50,000 | SOFR+2.8% - 3.35% | August 2028 | 49,130 | - |
Sale and leaseback facility | USD | 75,000 | SOFR+2.6% | October 2027 | 66,963 | - |
Senior secured term loan facility | USD | 8,300 | SOFR+3.5% | February 2027 | 4,810 | - |
Term loan and credit facility | USD | 15,933 | SOFR+1.5% -2.5% | February 2036 | 8,713 | - |
Secured revolving loan facility | USD | 100.0 | SOFR+2.95% | March 2028 | - | - |
Other long-term debt incl. accrued interest | 256 | 403 | ||||
Total outstanding | 129,872 | 155,403 | ||||
Debt issuance costs | (3,357) | (1,829) | ||||
Total interest-bearing debt outstanding | 126,515 | 153,574 | ||||
Classified as: | ||||||
Non-current | 92,951 | 74,462 | ||||
Current | 33,564 | 79,112 | ||||
Total | 126,515 | 153,574 |
In July 2021, the Group entered into a USD 70.0 million three-year revolving credit facility agreement with CIT Group, where MPCC Second Financing GmbH & Co. KG, a subsidiary of the Company, is the borrower. The initial drawdown of USD 55.0 million was made to refinance the existing debt. In 2023, the Group repaid fully the USD 55.0 million and the facility is cancelled.
In October 2021, the Group entered into an agreement for a USD 180 million five-year senior secured loan and revolving credit facility with Hamburg Commercial Bank (\u201cHCOB\u201d). It consists of a USD 130 million term loan and a revolving credit facility of USD 50 million. In 2023, the Group repaid fully the USD 100.0 million and the facility is cancelled.
In February 2023, the Group signed a senior secured term loan facility in an amount up to USD 8.3 million with OVB and it was fully drawn down as at March 31, 2023. The loan facility was used to partially finance the acquisition of the 2007-built AS Claudia. The loan facility carries an interest equivalent to the SOFR plus a margin of 350 basis points and matures in February 2027. The loan is to be repaid quarterly. The facility is secured by one vessel with a carrying amount of USD 14.1 million. As at December 31, 2023, the Group repaid USD 3.5 million, and USD 4.8 million remained outstanding.
In May 2023, the Group entered into a pre-delivery term loan facility in an amount of USD 15.9 million and post-delivery term loan facility in an amount of up to USD 101.5 million with Cr\u00e9dit Agricole together with K-SURE Agent. The loan facilities will be used to finance the two 5,500 TEU eco-design newbuildings. In 2023, USD 8.7 million was drawn to pay a progress payment of USD 7.2 as well as a mandatory insurance premium paid to the lender. As at December 31, 2023 the outstanding balance of USD 8.7 million was classified as current portion of interest-bearing debt and USD 101.5 million would be available once the delivery of both newbuildings is completed.
The two 5,500 TEU eco-design newbuildings are expected to be deliverd in the second and third quarter of 2024 and pre-delivery portion of the facility shall be matured upon delivery of each vessels.
In July 2023, the Group entered into a 5-year loan facility in an amount of up to USD 50.0 million with HCOB to finance part of the acquisition cost of the five modern eco-design vessels, AS Anne, AS Simone, AS Stine, AS Silje, and AS Sabine. The facility has a tenor of five years, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus a margin of a range from 280 basis points to 335 basis points depending on the Loan to Value (LTV) percentage. In 2023, USD 50 million was drawn on the facility to pay for the vessels and the Group subsequently repaid USD 0.9 million. As at December 31, 2023, USD 49.1 million remained outstanding andthe carrying amount of the five vessels was USD 112.5 million.
In September 2023, the Group entered into a sale and leaseback transactions with BoComm Leasing in an amount of USD 75.0 million for 12 of its vessels. The lease financing has a tenor of 48 months starting from September/October 2023 and carries an interest rate of SOFR plus a margin of 260 basis point, and includes purchase obligations for the 12 vessels at the end of the term. The Group is precluded from accounting for the sale of the vessels due to the purchase obligations at the end of the term which prevents the lessor from obtaining control of the vessels as such the lease has been accounted for as a secured borrowing, with the vessels recorded under \u201cVessels\u201d. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. As at December 31, 2023, all of the 12 vessels, with carrying amount of USD 116.1 million, were delivered to BoComm Leasing and USD 67.0 million remained outstanding. Since the transaction does not qualify as a sale as according to IFRS 15, the transferred vessels are not derecognized and shall be depreciated by the Group as it we were the legal owner. The proceeds of USD 75.0 million shall was recognized as financial liabilities.
In December 2023, the Group entered into a senior secured reducing revolving loan facility of up to USD 100.0 million with HCOB, subject to finalization of the loan. The facility has a tenor of five years, and carries an interest rate of SOFR plus a margin of 295 basis points. As at December 31, 2023, no draw-down was made on this facility.
The following main financial covenants are defined in the terms of the credit facility agreement with Cr\u00e9dit Agricole and\u00a0HCOB:
+ The Parent company (MPC Container Ships ASA) shall maintain a minimum equity ratio of 40%
+ The consolidated liquidity in the Group shall maintain a minimum liquidity of USD 250.000 per consolidated vessel
The Group is in compliance with all loan and credit facility covenants as at December 31, 2023.
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
2.6\tFinance Income and Expenses
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
in USD thousands | 2023 | 2022 |
Interest income | 2,819 | 631 |
Other financial income | 5,022 | 3,110 |
Total financial income | 7,841 | 3,741 |
Interest expenses | (14,648) | (10,918) |
Bank fees on early repayment of debt | (904) | - |
Result on derivative contracts reclassified from equity | - | (300) |
Other | (2,821) | (3,262) |
Total financial expenses | (18,373) | (14,480) |
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__54-1": { "value": "Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
In USD thousands | Currency | Facility amount | Interest | Maturity | December 31, 2023 | December 31, 2022 |
Loan and credit facility | USD | 180,000 | SOFR + 3.35% | November 2023/2026 | - | 100,000 |
Senior secured credit facility | USD | 70,000 | SOFR+ 3.25% | June 2024 | 55,000 | 55,000 |
Term loan facility | USD | 50,000 | SOFR+2.8% - 3.35% | August 2028 | 49,130 | - |
Sale and leaseback facility | USD | 75,000 | SOFR+2.6% | October 2027 | 66,963 | - |
Senior secured term loan facility | USD | 8,300 | SOFR+3.5% | February 2027 | 4,810 | - |
Term loan and credit facility | USD | 15,933 | SOFR+1.5% -2.5% | February 2036 | 8,713 | - |
Secured revolving loan facility | USD | 100.0 | SOFR+2.95% | March 2028 | - | - |
Other long-term debt incl. accrued interest | 256 | 403 | ||||
Total outstanding | 129,872 | 155,403 | ||||
Debt issuance costs | (3,357) | (1,829) | ||||
Total interest-bearing debt outstanding | 126,515 | 153,574 | ||||
Classified as: | ||||||
Non-current | 92,951 | 74,462 | ||||
Current | 33,564 | 79,112 | ||||
Total | 126,515 | 153,574 |
In July 2021, the Group entered into a USD 70.0 million three-year revolving credit facility agreement with CIT Group, where MPCC Second Financing GmbH & Co. KG, a subsidiary of the Company, is the borrower. The initial drawdown of USD 55.0 million was made to refinance the existing debt. In 2023, the Group repaid fully the USD 55.0 million and the facility is cancelled.
In October 2021, the Group entered into an agreement for a USD 180 million five-year senior secured loan and revolving credit facility with Hamburg Commercial Bank (\u201cHCOB\u201d). It consists of a USD 130 million term loan and a revolving credit facility of USD 50 million. In 2023, the Group repaid fully the USD 100.0 million and the facility is cancelled.
In February 2023, the Group signed a senior secured term loan facility in an amount up to USD 8.3 million with OVB and it was fully drawn down as at March 31, 2023. The loan facility was used to partially finance the acquisition of the 2007-built AS Claudia. The loan facility carries an interest equivalent to the SOFR plus a margin of 350 basis points and matures in February 2027. The loan is to be repaid quarterly. The facility is secured by one vessel with a carrying amount of USD 14.1 million. As at December 31, 2023, the Group repaid USD 3.5 million, and USD 4.8 million remained outstanding.
In May 2023, the Group entered into a pre-delivery term loan facility in an amount of USD 15.9 million and post-delivery term loan facility in an amount of up to USD 101.5 million with Cr\u00e9dit Agricole together with K-SURE Agent. The loan facilities will be used to finance the two 5,500 TEU eco-design newbuildings. In 2023, USD 8.7 million was drawn to pay a progress payment of USD 7.2 as well as a mandatory insurance premium paid to the lender. As at December 31, 2023 the outstanding balance of USD 8.7 million was classified as current portion of interest-bearing debt and USD 101.5 million would be available once the delivery of both newbuildings is completed.
The two 5,500 TEU eco-design newbuildings are expected to be deliverd in the second and third quarter of 2024 and pre-delivery portion of the facility shall be matured upon delivery of each vessels.
In July 2023, the Group entered into a 5-year loan facility in an amount of up to USD 50.0 million with HCOB to finance part of the acquisition cost of the five modern eco-design vessels, AS Anne, AS Simone, AS Stine, AS Silje, and AS Sabine. The facility has a tenor of five years, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus a margin of a range from 280 basis points to 335 basis points depending on the Loan to Value (LTV) percentage. In 2023, USD 50 million was drawn on the facility to pay for the vessels and the Group subsequently repaid USD 0.9 million. As at December 31, 2023, USD 49.1 million remained outstanding andthe carrying amount of the five vessels was USD 112.5 million.
In September 2023, the Group entered into a sale and leaseback transactions with BoComm Leasing in an amount of USD 75.0 million for 12 of its vessels. The lease financing has a tenor of 48 months starting from September/October 2023 and carries an interest rate of SOFR plus a margin of 260 basis point, and includes purchase obligations for the 12 vessels at the end of the term. The Group is precluded from accounting for the sale of the vessels due to the purchase obligations at the end of the term which prevents the lessor from obtaining control of the vessels as such the lease has been accounted for as a secured borrowing, with the vessels recorded under \u201cVessels\u201d. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. As at December 31, 2023, all of the 12 vessels, with carrying amount of USD 116.1 million, were delivered to BoComm Leasing and USD 67.0 million remained outstanding. Since the transaction does not qualify as a sale as according to IFRS 15, the transferred vessels are not derecognized and shall be depreciated by the Group as it we were the legal owner. The proceeds of USD 75.0 million shall was recognized as financial liabilities.
In December 2023, the Group entered into a senior secured reducing revolving loan facility of up to USD 100.0 million with HCOB, subject to finalization of the loan. The facility has a tenor of five years, and carries an interest rate of SOFR plus a margin of 295 basis points. As at December 31, 2023, no draw-down was made on this facility.
The following main financial covenants are defined in the terms of the credit facility agreement with Cr\u00e9dit Agricole and\u00a0HCOB:
+ The Parent company (MPC Container Ships ASA) shall maintain a minimum equity ratio of 40%
+ The consolidated liquidity in the Group shall maintain a minimum liquidity of USD 250.000 per consolidated vessel
The Group is in compliance with all loan and credit facility covenants as at December 31, 2023.
Accounting policy
Financial income consists of interest income, currency gain. Interest income are recognised as it accrues using effective rate, while dividends are recognised at the date of approval of the Annual General Meeting.
Financial expenses consist of interest expenses, currency losses, and other financial expenses. Interest expenses are recognised as they accrue using effective rate. In addition, there are interest expenses on leasing liabilities.
Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29578": { "value": "2.7\tEarnings Per Share
Accounting policy
The Group presents basic and diluted earnings per share data for its ordinary shares.
Basic earnings per share are calculated by dividing the profit for the reporting period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the reporting period.
Diluted earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table sets forth the computation of basic and diluted earnings per share for the year ended December 31:
in USD thousands | 2023 | 2022 |
Profit (loss) for year attributable to ordinary equity holders \u2013 in USD thousands | 324,961 | 434,832 |
Weighted average number of shares outstanding, basic | 443,700,279 | 443,700,279 |
Weighted average number of shares outstanding, diluted | 443,700,279 | 443,700,279 |
Basic earnings per share \u2013 in USD | 0.73 | 0.98 |
Diluted earnings per share \u2013 in USD | 0.73 | 0.98 |
Accounting policy
The Group presents basic and diluted earnings per share data for its ordinary shares.
Basic earnings per share are calculated by dividing the profit for the reporting period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the reporting period.
Diluted earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29870": { "value": "Note 3\tIncome Taxes
3.1\tIncome Tax Reconciliation
Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
in USD thousands | 2023 | 2022 |
Income taxes paid/payable | (692) | (260) |
Change in deferred tax asset | 55 | (803) |
Other taxes | - | (8) |
Income tax expense | (637) | (1,071) |
Specification of corporate income tax expense | ||
Basis for ordinary corporation tax expense | ||
Profit(loss) before taxes | 325,754 | 436,118 |
Nominal tax rate | 22% | 22% |
Expected tax at nominal tax rate | (71,666) | (95,946) |
Tax effect of reconciling items | ||
Income tax exempted from corporate tax under the tonnage regime | 70,046 | 86,922 |
Share of result in joint venture | 4,980 | 11,387 |
Change in temporary differences not recognized | (4,747) | (2,363) |
Other permanent differences/exchange translation differences | 750 | (1,071) |
Income tax expense | (637) | (1,071) |
Recognized on the statement of financial position: | ||
Deferred tax assets | - | - |
Deferred tax liabilities | (748) | (803) |
Income taxes payable | (289) | (260) |
Temporary differences | ||
Foreign exchange differences on translation to local currency for tax reporting | (3,398 | (3,649) |
Net basis for deferred tax liabilities: | (3,398) | (3,649) |
The Company\u2019s subsidiaries in which the vessels are held are subject to German, Dutch, or Norwegian tonnage tax, as applicable. Companies subject to tonnage tax are exempt from ordinary tax on income derived from operations in international waters. The subsidiaries within the tonnage tax system pay a tonnage tax based on the size of the vessels. The fee is recognized as an operating expense.
The parent company (MPC Container Ships ASA) is under ordinary taxation rules in Norway. The ordinary rate of corporation tax in Norway is 22% for 2023 (2022: 22%). Refer to note 6in the Parent Financial Statement. The parent company and other holding companies within the group may have individual tax losses each year, which generate carry forward losses for the individual companies. Deferred tax assets are only recognized to the extent that the future utilization within the Group can be justified as at December 31, 2023. As a consequence, a tax position of USD 66.9 million relating to carry forward losses has not been recognized in the balance sheet.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29871": { "value": "Note 3\tIncome Taxes
3.1\tIncome Tax Reconciliation
Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
in USD thousands | 2023 | 2022 |
Income taxes paid/payable | (692) | (260) |
Change in deferred tax asset | 55 | (803) |
Other taxes | - | (8) |
Income tax expense | (637) | (1,071) |
Specification of corporate income tax expense | ||
Basis for ordinary corporation tax expense | ||
Profit(loss) before taxes | 325,754 | 436,118 |
Nominal tax rate | 22% | 22% |
Expected tax at nominal tax rate | (71,666) | (95,946) |
Tax effect of reconciling items | ||
Income tax exempted from corporate tax under the tonnage regime | 70,046 | 86,922 |
Share of result in joint venture | 4,980 | 11,387 |
Change in temporary differences not recognized | (4,747) | (2,363) |
Other permanent differences/exchange translation differences | 750 | (1,071) |
Income tax expense | (637) | (1,071) |
Recognized on the statement of financial position: | ||
Deferred tax assets | - | - |
Deferred tax liabilities | (748) | (803) |
Income taxes payable | (289) | (260) |
Temporary differences | ||
Foreign exchange differences on translation to local currency for tax reporting | (3,398 | (3,649) |
Net basis for deferred tax liabilities: | (3,398) | (3,649) |
The Company\u2019s subsidiaries in which the vessels are held are subject to German, Dutch, or Norwegian tonnage tax, as applicable. Companies subject to tonnage tax are exempt from ordinary tax on income derived from operations in international waters. The subsidiaries within the tonnage tax system pay a tonnage tax based on the size of the vessels. The fee is recognized as an operating expense.
The parent company (MPC Container Ships ASA) is under ordinary taxation rules in Norway. The ordinary rate of corporation tax in Norway is 22% for 2023 (2022: 22%). Refer to note 6in the Parent Financial Statement. The parent company and other holding companies within the group may have individual tax losses each year, which generate carry forward losses for the individual companies. Deferred tax assets are only recognized to the extent that the future utilization within the Group can be justified as at December 31, 2023. As a consequence, a tax position of USD 66.9 million relating to carry forward losses has not been recognized in the balance sheet.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29872": { "value": "Note 3\tIncome Taxes
3.1\tIncome Tax Reconciliation
Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
in USD thousands | 2023 | 2022 |
Income taxes paid/payable | (692) | (260) |
Change in deferred tax asset | 55 | (803) |
Other taxes | - | (8) |
Income tax expense | (637) | (1,071) |
Specification of corporate income tax expense | ||
Basis for ordinary corporation tax expense | ||
Profit(loss) before taxes | 325,754 | 436,118 |
Nominal tax rate | 22% | 22% |
Expected tax at nominal tax rate | (71,666) | (95,946) |
Tax effect of reconciling items | ||
Income tax exempted from corporate tax under the tonnage regime | 70,046 | 86,922 |
Share of result in joint venture | 4,980 | 11,387 |
Change in temporary differences not recognized | (4,747) | (2,363) |
Other permanent differences/exchange translation differences | 750 | (1,071) |
Income tax expense | (637) | (1,071) |
Recognized on the statement of financial position: | ||
Deferred tax assets | - | - |
Deferred tax liabilities | (748) | (803) |
Income taxes payable | (289) | (260) |
Temporary differences | ||
Foreign exchange differences on translation to local currency for tax reporting | (3,398 | (3,649) |
Net basis for deferred tax liabilities: | (3,398) | (3,649) |
The Company\u2019s subsidiaries in which the vessels are held are subject to German, Dutch, or Norwegian tonnage tax, as applicable. Companies subject to tonnage tax are exempt from ordinary tax on income derived from operations in international waters. The subsidiaries within the tonnage tax system pay a tonnage tax based on the size of the vessels. The fee is recognized as an operating expense.
The parent company (MPC Container Ships ASA) is under ordinary taxation rules in Norway. The ordinary rate of corporation tax in Norway is 22% for 2023 (2022: 22%). Refer to note 6in the Parent Financial Statement. The parent company and other holding companies within the group may have individual tax losses each year, which generate carry forward losses for the individual companies. Deferred tax assets are only recognized to the extent that the future utilization within the Group can be justified as at December 31, 2023. As a consequence, a tax position of USD 66.9 million relating to carry forward losses has not been recognized in the balance sheet.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__71-1": { "value": "Note 3\tIncome Taxes
3.1\tIncome Tax Reconciliation
Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
in USD thousands | 2023 | 2022 |
Income taxes paid/payable | (692) | (260) |
Change in deferred tax asset | 55 | (803) |
Other taxes | - | (8) |
Income tax expense | (637) | (1,071) |
Specification of corporate income tax expense | ||
Basis for ordinary corporation tax expense | ||
Profit(loss) before taxes | 325,754 | 436,118 |
Nominal tax rate | 22% | 22% |
Expected tax at nominal tax rate | (71,666) | (95,946) |
Tax effect of reconciling items | ||
Income tax exempted from corporate tax under the tonnage regime | 70,046 | 86,922 |
Share of result in joint venture | 4,980 | 11,387 |
Change in temporary differences not recognized | (4,747) | (2,363) |
Other permanent differences/exchange translation differences | 750 | (1,071) |
Income tax expense | (637) | (1,071) |
Recognized on the statement of financial position: | ||
Deferred tax assets | - | - |
Deferred tax liabilities | (748) | (803) |
Income taxes payable | (289) | (260) |
Temporary differences | ||
Foreign exchange differences on translation to local currency for tax reporting | (3,398 | (3,649) |
Net basis for deferred tax liabilities: | (3,398) | (3,649) |
The Company\u2019s subsidiaries in which the vessels are held are subject to German, Dutch, or Norwegian tonnage tax, as applicable. Companies subject to tonnage tax are exempt from ordinary tax on income derived from operations in international waters. The subsidiaries within the tonnage tax system pay a tonnage tax based on the size of the vessels. The fee is recognized as an operating expense.
The parent company (MPC Container Ships ASA) is under ordinary taxation rules in Norway. The ordinary rate of corporation tax in Norway is 22% for 2023 (2022: 22%). Refer to note 6in the Parent Financial Statement. The parent company and other holding companies within the group may have individual tax losses each year, which generate carry forward losses for the individual companies. Deferred tax assets are only recognized to the extent that the future utilization within the Group can be justified as at December 31, 2023. As a consequence, a tax position of USD 66.9 million relating to carry forward losses has not been recognized in the balance sheet.
Note 4\tNet Working Capital
4.1\tTrade and Other Receivables
Accounting policy
Trade and other receivables
Trade receivables and other short-term receivables are measured at transaction price upon initial recognition and subsequently measured at amortised cost less expected credit losses. The Group applies the simplified approach to provide for lifetime expected credit losses in accordance with IFRS 9. Credit loss allowance is recognised based on both historical and forward-looking credit loss assessment. Trade receivables relate to receivables against the charterers for the Group\u2019s time charter contracts. Insurance claims are the Group\u2019s claims covered by insurance agreements where the virtually certain threshold are met.
in USD thousands | December 31, 2023 | December 31, 2022 |
Trade receivables | 6,310 | 7,937 |
Claims related to insurance cases | 12,065 | 9,829 |
Other receivables and prepayments | 5,292 | 5,156 |
Total Trade and other receivables | 23,667 | 22,922 |
The Group had outstanding receivables per December 31, 2023 amounting to USD 6.3 million. Historically, the Group have not had any credit losses of significance. A significant part of the outstanding receivables is against larger liner companies, of which the Group have had a long business relationship with, which reduces the risk further. The invoiced amount is considered to be approximately equal to the value which would be derived under the amortized cost method. In 2023, the Group recognized USD 0.4 million as impairment losses, compared to USD 0.6 million in 2022.
4.2\tDeferred Revenues and Other Liabilities
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
Set out below is a comparison by category for carrying amounts and fair values of all of the Group\u2019s financial instruments that are carried in the financial statements. The estimated fair value amounts of the financial instruments have been determined using appropriate market information and valuation techniques.
Fair value of trade receivables, cash and cash equivalents and trade payables approximate their carrying amounts measured at amortized cost due to the short-term maturities of these instruments.
The fair value of interest-bearing debt is estimated by discounting future cash flows using rates for debt on similar terms, credit risk and remaining maturities. Fair value of interest-bearing debt approximates the carrying amounts as there have been no significant changes in the market rates for similar debt financing between the date of securing the debt financing and the reporting date.
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial assets | ||||
Trade and other receivables | 23,667 | 23,667 | 22,922 | 22,922 |
Financial instruments at fair value | 1,951 | 1,951 | 1,740 | 1,740 |
Cash and cash equivalents1 | 122,584 | 122,584 | 125,517 | 125,517 |
Total financial assets | 148,202 | 148,202 | 150,179 | 150,179 |
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial liabilities at amortized cost | ||||
Non-current Interest-bearing debt | 92,951 | 92,951 | 74,462 | 74,462 |
Current interest-bearing debt | 33,564 | 33,564 | 79,112 | 79,112 |
Trade and other payables | 20,397 | 20,397 | 17,282 | 17,282 |
Related party payables | 1,062 | 1,062 | - | - |
Other liabilities | 16,011 | 16,011 | 18,863 | 18,863 |
Total financial liabilities | 163,985 | 163,985 | 189,719 | 189,719 |
Fair value hierarchy
The Group uses a hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2023.
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 126,515 | - | 126,515 |
Assets | ||||
Financial instruments | - | 1,951 | - | 1,951 |
The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2022
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 153,574 | - | 153,574 |
Assets | ||||
Financial instruments | - | 1,740 | - | 1,740 |
1Includes restricted cash |
Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29886": { "value": "Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29887": { "value": "Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29888": { "value": "Accounting policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant taxation authorities.
The Company is subject to tax on its income in accordance with the general tax rules pertaining to companies that are tax resident in Norway.
The Company\u2019s vessel-owning subsidiaries are subject to the Norwegian, German or Dutch tonnage tax regime, i.e. taxable income is calculated as a lump sum depending on the net tonnage of the respective vessels, independent of the realized earnings. Income not derived from the operation of the vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. Tonnage taxes are classified as \u201cVessel operating expenditures\u201d.
Deferred tax liabilities are classified as non-current liabilities 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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30619": { "value": "4.1\tTrade and Other Receivables
Accounting policy
Trade and other receivables
Trade receivables and other short-term receivables are measured at transaction price upon initial recognition and subsequently measured at amortised cost less expected credit losses. The Group applies the simplified approach to provide for lifetime expected credit losses in accordance with IFRS 9. Credit loss allowance is recognised based on both historical and forward-looking credit loss assessment. Trade receivables relate to receivables against the charterers for the Group\u2019s time charter contracts. Insurance claims are the Group\u2019s claims covered by insurance agreements where the virtually certain threshold are met.
in USD thousands | December 31, 2023 | December 31, 2022 |
Trade receivables | 6,310 | 7,937 |
Claims related to insurance cases | 12,065 | 9,829 |
Other receivables and prepayments | 5,292 | 5,156 |
Total Trade and other receivables | 23,667 | 22,922 |
The Group had outstanding receivables per December 31, 2023 amounting to USD 6.3 million. Historically, the Group have not had any credit losses of significance. A significant part of the outstanding receivables is against larger liner companies, of which the Group have had a long business relationship with, which reduces the risk further. The invoiced amount is considered to be approximately equal to the value which would be derived under the amortized cost method. In 2023, the Group recognized USD 0.4 million as impairment losses, compared to USD 0.6 million in 2022.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__74-1": { "value": "Accounting policy
Trade and other receivables
Trade receivables and other short-term receivables are measured at transaction price upon initial recognition and subsequently measured at amortised cost less expected credit losses. The Group applies the simplified approach to provide for lifetime expected credit losses in accordance with IFRS 9. Credit loss allowance is recognised based on both historical and forward-looking credit loss assessment. Trade receivables relate to receivables against the charterers for the Group\u2019s time charter contracts. Insurance claims are the Group\u2019s claims covered by insurance agreements where the virtually certain threshold are met.
in USD thousands | December 31, 2023 | December 31, 2022 |
Trade receivables | 6,310 | 7,937 |
Claims related to insurance cases | 12,065 | 9,829 |
Other receivables and prepayments | 5,292 | 5,156 |
Total Trade and other receivables | 23,667 | 22,922 |
The Group had outstanding receivables per December 31, 2023 amounting to USD 6.3 million. Historically, the Group have not had any credit losses of significance. A significant part of the outstanding receivables is against larger liner companies, of which the Group have had a long business relationship with, which reduces the risk further. The invoiced amount is considered to be approximately equal to the value which would be derived under the amortized cost method. In 2023, the Group recognized USD 0.4 million as impairment losses, compared to USD 0.6 million in 2022.
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30956": { "value": "4.2\tDeferred Revenues and Other Liabilities
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
4.2\tDeferred Revenues and Other Liabilities
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
4.2\tDeferred Revenues and Other Liabilities
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
Accounting policy
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is recognized through profit and loss net of any reimbursement. Under the payment terms generally applicable to the Group\u2019s revenue, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services. Part of the deferred revenue constitutes contract liabilities which represent advance payments and billings in excess of revenue recognized.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__81-1": { "value": "The following table shows the components of other liabilities as at period end.
in USD thousands | December 31, 2023 | December 31, 2022 |
Accrued expenses | 13,337 | 15,989 |
Accrued salaries | 1,989 | 1,034 |
VAT, social security, etc | 212 | 217 |
Acquired TC contracts | 1,011 | 2,248 |
Other short-term liabilities | 473 | 1,623 |
Total Other liabilities | 17,022 | 21,111 |
Deferred reveues | 35,230 | 40,133 |
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 34,936 | 24,761 | 69,919 | - | 129,616 |
Interest payments | 9,277 | 13,421 | 6,985 | - | 29,683 |
Trade and other payables | 20,397 | - | - | - | 20,397 |
Realted part payables | 1,062 | - | - | - | 1,062 |
Other liabilities | 16,011 | - | - | - | 16,011 |
Total | 81,683 | 38,182 | 76,904 | - | 196,769 |
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2022:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 80,000 | 48,333 | 26,667 | - | 155,000 |
Interest payments | 9,825 | 6,862 | 1,938 | - | 18,625 |
Trade and other payables | 17,282 | - | - | - | 17,282 |
Other liabilities | 18,863 | - | - | - | 18,863 |
Total | 125,970 | 55,195 | 28,605 | - | 209,770 |
Note 5\tTangible Assets
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
5.2\tDepreciation, Amortization and Impairment Charges
Accounting policy
Impairment of vessels
Indicators of impairment of vessels and other fixed assets are assessed at each reporting date. The same applies when events or changes in circumstances that may entail that the vessels\u2019 carrying amount may not be recoverable. Such indicators may include depressed charter rates and lower second hand vessel values. If impairment indicators are identified, the recoverable amount is estimated; and If the carrying amount exceeds its recoverable amount, an impairment loss is recognized; i.e. the asset is written down to the higher of the fair value less cost of sale and its value -in-use. The net realizable value is the amount obtainable from the sale of an asset in an arms length transaction less the costs of sale and the value in use is the present value of estimated future cash flows expected from the continued use of an asset.
Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
The following assumptions have been made when calculating the value in use for container vessels:
+ Each vessel is considered to be a separate cash-generating unit.
+ Future cash flows are based on an assessment of expected development in charter rates and estimated level of administrative and operating expenses (including maintenance and repair) and dry-docking over the remaining useful life of the vessel plus any residual value.
+ The net present value of future estimated cash flows of each cash-generating unit is based on a discount rate according to a pre-tax weighted average cost of capital. The weighted average cost of capital (WACC) is calculated based on the expected long-term borrowing rate and risk-free USD SOFR rate plus an equity risk premium. In 2023, the WACC used in the impairment testing was 9.0%.
An impairment loss recognized in prior periods for an asset is reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
Judgement and estimates
+ Impairment of vessels: In assessing the need for impairments, each vessel is considered to be a separate cash generating unit. The impairment testing demand a considerable degree of estimation. Changes in circumstances and assumptions may significantly affect the estimated recoverable amounts. In assessing impairment, both external and internal sources of information are considered. External sources include a significant decline in market value that is not the result of the passage of time, normal use of the assets or increase in interest rate. Internal sources of information include evidence of obsolescence of, or physical damage to, an asset. If the carrying amount of an asset exceeds the amount that is recoverable from its use or sale, an impairment loss is recognised immediately so that the carrying amount corresponds to the recoverable amount.
+ As we obtain information from various industry and other sources (see further in the basis for impairment testing), our estimates of charter-free market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them.
+ Value in use calculations involve a high degree of estimation and a number of critical assumptions such as time charter rates, utilization rate, drydocking expenditures and requirements, operational expenses, residual values and discount rates. These assumptions are based on a combination of historical trends and current market conditions as well as future expectations. Estimated outflows for operating expenses and drydocking expenditures as well as requirement are based on a combination of historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of scrap rates used in management\u2019s evaluation of salvage value. The more significant factors that could impact management\u2019s assumption regarding time charter rates include (i) regional and global economic environment, (ii) trade patterns, (iii) by industry-specific trends in respect of capacity supply and demand, and (iv) changes in rules and regulation applicable to the container market, which includes legislation adopted by the international organization such as IMO and the EU or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially in the future.
Climate risk
+ Management continuously monitors climate related risks when measuring the recoverable amount. While the Group\u2019s operations are not currently exposed to significant physical risk, the value-in-use may be impacted by transition risk, such as legislation, regulations, and changes in demand for the Group\u2019s assets. Although no single climate related assumption is a key assumption for this year\u2019s impairment test, expectations for the following years have been incorporated into projected cash flows: retrofit investments to improve fuel efficiency.
Basis for impairment testing and calculation of recoverable amount
In the impairment test for cash-generating units, the recoverable amount of the unit is compared with its carrying amount. The recoverable amount for the relevant cash-generating units is determined based on higher of the estimated fair value less cost of sale and its estimated value-in-use calculations. If the recoverable amount is less than the carrying amount, the latter is written down to the recoverable amount. The estimated fair value for our vessels is determined by a combination of various industry sources, including charter-free market values received from third-party independent broker; similar vessel sales offered from potential or historical buyers, recent sales of our owned vessels in a non-distressed situation. While the value-in-use is calculated as the discounted value of the estimated future net cash flows per cash-generating unit.
In developing estimates of future cash flows in order to assess value in use, the Group must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, dry docking and other capital requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. As at December 31, 2023, our revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessels as well as estimated time charter equivalents rates for the remaining life of the vessel after the completeion of its current contract. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) internally developed forecasts, and (ii) the trailing 15 year historical average rates, based on monthly averages rates published by an independent third party martimie research service. The estimated daily time charter equivalent rate used for non-contracted revenue days of each vessel is considered a significant assumption. Recognzing that the container transportation industry is cyclical and subject to significant volatility, we consider the assumptions used represent a reasonable benchmark for the estimated time charter equivalents rates for the non-contracted revenue days, based on the past and ongoing shipping cycles.
Estimated outflows for operating expenses and dry docking requirements are based on historical and approved budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of recycle rates used in management\u2019s evaluation of salvage value.
Other capital requirements for vessels are primarily retrofit investments based on the Group\u2019s decarbonization strategy.
At each reporting date, the Group evaluates whether there is an indication that an asset may be impaired. If such indicator exists, an impairment test is performed. Such indicators may include depressed spot rates and declined secondhand containerships values. At December 31, 2023, the impairment indicator was triggered as the market values of our vessels have declined from levels seen in 2021 and 2022. Hence, an impairment test has been performed for the Group\u2019s vessels.
In 2023, the Group recognized a total impairment loss of USD 79.4 million (2022: zero). Below sets fourth the material impairment loss to each cash generating units:
in USD thousands | Built | Status | Sale price | 2023 |
Operating vessels | ||||
AS Alva | 2008 | 11,453 | ||
AS Nora | 2014 | 8,794 | ||
AS Pamela | 2009 | 8,611 | ||
AS Anita | 2010 | 4,365 | ||
AS Alexandria | 2010 | 4,236 | ||
Other vessels | 10,332 | |||
Impairment for operating vessels | 47,791 | |||
Held-for -sale | ||||
AS Rosalia | 2009 | Sold | 7,000 | 1,766 |
AS Romina | 2009 | Sold | 7,000 | 2,213 |
AS Flora | 2005 | Sold | 6,000 | 1,085 |
AS Roberta | 2006 | Sold | 7,500 | 736 |
AS Rafaela | 2007 | Sold | 8,000 | 1,590 |
AS Emma | 2010 | Sold | 22,500 | 18,391 |
AS Paulina | 2004 | Held -for sale | 8,000 | 2,921 |
AS Pauline | 2006 | Held -for sale | 9,500 | 866 |
AS Petra | 2004 | Held -for sale | 8,000 | 2,018 |
Impairment for held-for-sale vessels | 31,587 | |||
Total Impairment | 79,378 | 79,378 |
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
5.1\tVessels and Newbuildings
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
Judgement and estimates
+ Depreciation of vessels (including scrubbers): Depreciation is based on estimates of the vessels\u2019 useful lives, residual values less recycling costs and the depreciation method, which are reviewed by management at each balance sheet date. Any changes in estimated useful lives and/or residual values impact the depreciation of the vessels prospectively.
Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Cost | |||||
At January 1, 2022 | 937,842 | - | 937,842 | 20,914 | 958,756 |
Acquisitions | - | - | - | - | - |
Capitalized dry-docking, progress billings and other expenses | |||||
66,301 | 32,770 | 99,071 | - | 99,071 | |
Transfers | (1,041) | - | (1,041) | - | (1,041) |
Disposals of vessels | (26,932) | - | (26,932) | (20,914) | (47,846) |
Vessels held for sale | - | - | - | - | - |
At December 31, 2022 | 976,170 | 32,770 | 1,008,940 | - | 1,008,940 |
Acquisitions | 169,376 | - | 169,376 | - | 169,376 |
Capitalized dry-docking, progress billings and other expenses | |||||
48,254 | 46,210 | 94,464 | - | 94,464 | |
Disposals of other fixed assets | (8,332) | - | (8,332) | - | (8,332) |
Disposals of vessels | (108,208) | - | (108,208) | - | (108,280) |
Vessel held for sale | (48,618) | - | (48,618) | 48,618 | - |
At December 31, 2023 | 1,028,642 | 78,980 | 1,107,622 | 48,618 | 1,156,240 |
in USD thousands | Vessels | Newbuilds, payment on account | Total property,\u00a0plant & equipment | Vessels held-for-sale | Total |
Accumulated depreciation | |||||
At January 1, 2022 | (163,479) | - | (163,479) | (4,661) | (168,090) |
Depreciation for the year | (75,270) | - | (75,270) | - | (75,270) |
Disposal of vessels | 8,452 | - | 8,452 | 4,611 | 13,063 |
Transfers | - | - | - | - | - |
At December 31, 2022 | (230,297) | - | (230,297) | - | (230,297) |
Depreciation for the year | (102,504) | - | (102,504) | - | (102,504) |
Impairment | (79,378) | - | (79,378) | - | (79,378) |
Disposal of vessels | 51,375 | - | 51,375 | - | 51,375 |
Transfers | 23,453 | - | 23,453 | (23,453) | - |
At December 31, 2023 | (337,351) | - | (337,351) | (23,453) | (360,804) |
Net book value | |||||
At December 31, 2023 | 691,291 | 78,980 | 770,271 | 25,165 | 795,436 |
At December 31, 2022 | 745,873 | 32,770 | 778,643 | - | 778,643 |
Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
At each reporting date, the Group evaluates whether there is an indication that an asset may be impaired. If such indicator exists, an impairment test is performed. Such indicators may include depressed spot rates and declined secondhand containerships values. At December 31, 2023, the impairment indicator was triggered as the market values of our vessels have declined from levels seen in 2021 and 2022. Hence, an impairment test has been performed for the Group\u2019s vessels.
In 2023, the Group recognized a total impairment loss of USD 79.4 million (2022: zero). Below sets fourth the material impairment loss to each cash generating units:
in USD thousands | Built | Status | Sale price | 2023 |
Operating vessels | ||||
AS Alva | 2008 | 11,453 | ||
AS Nora | 2014 | 8,794 | ||
AS Pamela | 2009 | 8,611 | ||
AS Anita | 2010 | 4,365 | ||
AS Alexandria | 2010 | 4,236 | ||
Other vessels | 10,332 | |||
Impairment for operating vessels | 47,791 | |||
Held-for -sale | ||||
AS Rosalia | 2009 | Sold | 7,000 | 1,766 |
AS Romina | 2009 | Sold | 7,000 | 2,213 |
AS Flora | 2005 | Sold | 6,000 | 1,085 |
AS Roberta | 2006 | Sold | 7,500 | 736 |
AS Rafaela | 2007 | Sold | 8,000 | 1,590 |
AS Emma | 2010 | Sold | 22,500 | 18,391 |
AS Paulina | 2004 | Held -for sale | 8,000 | 2,921 |
AS Pauline | 2006 | Held -for sale | 9,500 | 866 |
AS Petra | 2004 | Held -for sale | 8,000 | 2,018 |
Impairment for held-for-sale vessels | 31,587 | |||
Total Impairment | 79,378 | 79,378 |
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31238": { "value": "Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepairsAndMaintenanceExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31239": { "value": "Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31240": { "value": "Accounting policy
Vessels and other property, plant and equipments
Vessels and other property, plant and equipments are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include capitalizable expenditures that are directly attributable to the acquisition of the vessels. Upon acquisition, each component of the vessels, with a cost significant to the total acquisition costs, such as dry-docking component, exisitng charter contract, is separately identified and depreciated over that component\u2019s useful life on a straight-line basis.
The scrubber installations are recognized in the carrying amount of the vessels, and depreciated over the remaining useful life of the vessels.
Depreciation is calculated on a straight-line basis over the useful life of the assets, taking residual values into consideration, and adjusted for impairment charges, if any. Residual values of the vessels are estimated as the lightweight tonnage of each vessel multiplied by recycling value per ton. Expected useful lives of our vessels, i.e. 25 years, and residual values are reviewed at each balance sheet date and, where they differ significantly from previous estimates, depreciation calculations are altered accordingly.
Impairment losses are described in detail in the accounting principle Impairment disclosed in Note 5.2\u2013 Depreciation, Amortisation and Impairment charges.
Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next class renewal, i.e.\u00a05\u00a0years. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.
Vessels and other property, plant and equipments are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognized.
Vessels held for sale
Vessels are classified as \u201cVessels held for sale\u201d when all of the following criteria are met: management has committed to a plan to sell the vessel; the vessel is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of vessels; an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; the sale of the vessel is probable and transfer of the vessel is expected to qualify for recognition as a completed sale within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These vessels are not depreciated once they meet the criteria to be held for sale.
Newbuildings
Instalments on newbuilding contracts are capitalized as \u201cNewbuildings\u201d when they are incurred. Upon delivery, newbuildings are reclassified to vessels and are subject to depreciation. The acquisition cost includes direct investments, cost incurred during the construction period and borrowing cost. Borrowing costs are capitalized during the construction period. When the newbuilding contracts are financed, the amount of interest capitalized during the construction period will be based on the effective interest of the designated loan facilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__95-1": { "value": "Climate risk
+ Future climate change measures may affect the shipping industry regarding fuel regulation, port fees and the recycling values of the vessels. Potential future fuel taxes or carbon emission regulation such as EU\u2019s emission trading system (EU ETS) or development of new more climate friendly fuel may increase the future operating expenses or capex of the Group that may be only partly offset by higher time charter rates. Technological developments enabling more climate friendly container vessels may affect the ability to obtain new charters in the future, the potential useful life of the vessels and the recycle values of the vessels. These effects may result in impairment of vessels due to lower recycling value from mandatory EU approved yards, or generating less cash-flow from not reaching regulatory targets. Management has considered the impact of decarbonization and climate-related risks on useful lives of existing vessels. Such risk including new climate-related legislation restricting the recycling of EU flagged vessels outside of EU approved yard.
Climate risk
+ Management continuously monitors climate related risks when measuring the recoverable amount. While the Group\u2019s operations are not currently exposed to significant physical risk, the value-in-use may be impacted by transition risk, such as legislation, regulations, and changes in demand for the Group\u2019s assets. Although no single climate related assumption is a key assumption for this year\u2019s impairment test, expectations for the following years have been incorporated into projected cash flows: retrofit investments to improve fuel efficiency.
Credit risk
Credit risk refers to the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The maximum credit risk exposure is related to the Group\u2019s trade receivables of USD 6.3 million as at December 31, 2023.
It is the aim of the Group to enter into contracts with creditworthy counterparties only. Prior to concluding a charter party, the Group evaluates the credit quality of the customer, assessing its financial position, past experience and other factors. Charter hire is paid in advance, effectively reducing the potential exposure to credit risk. Bank deposits are only deposited with internationally recognized financial institutions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__94-1": { "value": "Acqusitions of vessels:
In January 2023, the Group entered into agreements to acquire the 2010-built scrubber-fitted vessel AS Nina and the 2007-built scrubber-fitted vessel AS Claudia for a total consideration of USD 33.7 million. Both vessels come with existing charters attached with renewals in the third quarter of 2023 and the first quarter of 2024, respectively. Both vessels were subsequently delivered to the Group in March 2023.
In June 2023, the Group entered into agreement to acquire a fleet of five modern ecodesign vessels from an unrelated party, for a total consideration of USD 135.6 million. The 2016-built vessel, AS Anne (2,190 TEU), includes an existing 36-month time charter agreement which was recorded as a separate component of the vessel. The vessel was delivered on June 30, 2023. The total consideration for the vessel including the time charter agreement was USD 41.6 million. The time charter agreement was subsequently terminated in July 2023 and the Group received a cash compensation of USD 22.0 million. Simultaneously, the Group depreciated seperately of USD 22.0 million to reflect the cost of contract.
Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f33110": { "value": "Disposal of vessels and other assets:
In 2023, the Group sold and delivered six wholly-owned vessels. Total impairment loss relating to these vessels were USD 31.6 million. An additional USD 1.2 million loss was recorded due to revision of the final sale price upon delivery of the vessels. Refer to Note 5.2\u2013 Depreciation, Amortization and Impairment Chargesfor further detail.
In December 2023, the Group entered into MoA to sell its 2004-build vessels, AS Petra and AS Paulina, and its 2006-built AS Pauline to an unrelated party for a total of USD 25.5 million. As at December 31, 2023, the vessels were classified as \u201cVessels held for sale \u201c, and a total impairment loss of USD 5.8 million was recognized as the the carrying amount of the vessels were not recoverable from their expected fair value less cost of sale.
In December 2023,USD 6.5 million of CAPEX was written off.
Newbuildings:
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels with a contract price of USD 72.2 million per vessel. The vessels have a 7-year time charter contracts in place with ZIM Integrated Shipping Services\u00a0(NYSE: ZIM) and are expected to be delivered in the second and third quarter of 2024. The other two vessels are carbon-neutral, dual-fuel, 1,300 TEU container vessels that are able to operate on green methanol. The contract price is USD 39.0 million per vessel and they are expected to be delivered in late 2024. For these two vessels, a 15-year time charter contracts to North Sea Container Line AS have been secured. As at December 31, 2023, total additions to Group\u2019s newbuilding program was of USD 79.0 million of which USD 77.2 million was related to yard progress billing. Remaining commitments amounted to USD 156.1 million are due in 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__99-1": { "value": "Accounting policy
Impairment of vessels
Indicators of impairment of vessels and other fixed assets are assessed at each reporting date. The same applies when events or changes in circumstances that may entail that the vessels\u2019 carrying amount may not be recoverable. Such indicators may include depressed charter rates and lower second hand vessel values. If impairment indicators are identified, the recoverable amount is estimated; and If the carrying amount exceeds its recoverable amount, an impairment loss is recognized; i.e. the asset is written down to the higher of the fair value less cost of sale and its value -in-use. The net realizable value is the amount obtainable from the sale of an asset in an arms length transaction less the costs of sale and the value in use is the present value of estimated future cash flows expected from the continued use of an asset.
Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
The following assumptions have been made when calculating the value in use for container vessels:
+ Each vessel is considered to be a separate cash-generating unit.
+ Future cash flows are based on an assessment of expected development in charter rates and estimated level of administrative and operating expenses (including maintenance and repair) and dry-docking over the remaining useful life of the vessel plus any residual value.
+ The net present value of future estimated cash flows of each cash-generating unit is based on a discount rate according to a pre-tax weighted average cost of capital. The weighted average cost of capital (WACC) is calculated based on the expected long-term borrowing rate and risk-free USD SOFR rate plus an equity risk premium. In 2023, the WACC used in the impairment testing was 9.0%.
An impairment loss recognized in prior periods for an asset is reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
Basis for impairment testing and calculation of recoverable amount
In the impairment test for cash-generating units, the recoverable amount of the unit is compared with its carrying amount. The recoverable amount for the relevant cash-generating units is determined based on higher of the estimated fair value less cost of sale and its estimated value-in-use calculations. If the recoverable amount is less than the carrying amount, the latter is written down to the recoverable amount. The estimated fair value for our vessels is determined by a combination of various industry sources, including charter-free market values received from third-party independent broker; similar vessel sales offered from potential or historical buyers, recent sales of our owned vessels in a non-distressed situation. While the value-in-use is calculated as the discounted value of the estimated future net cash flows per cash-generating unit.
In developing estimates of future cash flows in order to assess value in use, the Group must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, dry docking and other capital requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. As at December 31, 2023, our revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessels as well as estimated time charter equivalents rates for the remaining life of the vessel after the completeion of its current contract. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) internally developed forecasts, and (ii) the trailing 15 year historical average rates, based on monthly averages rates published by an independent third party martimie research service. The estimated daily time charter equivalent rate used for non-contracted revenue days of each vessel is considered a significant assumption. Recognzing that the container transportation industry is cyclical and subject to significant volatility, we consider the assumptions used represent a reasonable benchmark for the estimated time charter equivalents rates for the non-contracted revenue days, based on the past and ongoing shipping cycles.
Estimated outflows for operating expenses and dry docking requirements are based on historical and approved budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of recycle rates used in management\u2019s evaluation of salvage value.
Other capital requirements for vessels are primarily retrofit investments based on the Group\u2019s decarbonization strategy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f35215": { "value": "held-for-sale vessels31,587
Total Impairment
79,378
79,378
Impairment Sensitivity Analysis
As discussed above, we believe the appropriate historical period to use as a benchmark for impairment testng of our vessels is the trailing 15 years, to the extent available, as such average take into consideration the volatility and cyclicality of the market. Charter rates are, however, subject to change based on a variety of factors that we cannot control and we note that for all vessel categories, charter rates for 2021 and 2022 have been greater than their fifteen year historical averages.
In connection with the impairment testing of our vessels as of December 31, 2023, we performed a sensitivity analysis on the most sensitive and/or subjective assumption \u2013 the long term estimated daily time charter equivalent rates used for non-contracted revenue days;WACC and residual value that has the potential to affect the outcome of the test. The following table summarizes the he sensitivity of the impairment to the key assumption:
in usd thousands | Change in impairment | Increase 2023 | Decrease 2022 |
Base rate | Increase/decrease by 5% | (3,613) | 4,744 |
Recycling price | Increase/decrease by USD 50 | (705) | 1,118 |
WACC | Increase/decrease by 25 basis point | 968 | (572) |
Note 6\tGroup Structure
6.1\tInvestments in Joint Venture and Associate
Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
in USD thousands | December 31, 2023 | December 31, 2022 |
Investment in joint venture | 1,703 | 20,067 |
investment in associate | 1,231 | 826 |
Total | 2,934 | 20,893 |
Investment in Joint venture
The Group holds a 50% ownership interest in 2. Bluewater Holding Schifffahrtsgesellschaft GmbH & Co. KG (Bluewater), Hamburg(Germany). As at December 31, 2023, Bluewater has zero (2022: four) container vessels.
In December 2022, Bluewater, entered into an MOA to sell its 2006-built 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, resulting in a gain of USD 10.9 million in the joint venture.
In January 2023, Bluewater, 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. The vessel was delivered to its new owner in March 2023, resulting in a gain of USD 2.1 million in the joint venture.
In July 2023, the Group agreed to sell its 2002-built and 2003-built joint-venture vessels Cimbra and Cardonia for USD 22.0 million and USD 20.5 million to unrelated parties. The joint venture vessel, Cardonia was subsequently delivered to its new owner in July 2023, and Cimbria was delivered in August 2023, which resulted in gains of USD 13.3 million (Cardonia) and USD 13.2 million (Cimbria) in the joint venture.
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
6.2\tGroup Companies
The Group\u2019s consolidated financial statements include the financial statements of the Company and its subsidiaries listed in the table below. The table excludes all general partner companies and non-operating companies.
Company | Country | Principal activity | Ownership |
MPC Container Ships Invest B.V. | Netherlands | Holding company | 100.00% |
\u201cAS Angelina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS California\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Carelia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clarita\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Clementina CV\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Columbia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Cypria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabiana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fabrizia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fatima\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Felicia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Filippa\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Fiorella\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Floretta\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
Company | Country | Principal activity | Ownership |
\u201cAS Floriana\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Patria\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Paulina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Petronia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Ragna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sara\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Savanna\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Selina\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sevillia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sicilia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
\u201cAS Sophia\u201d ShipCo C.V. | Netherlands | Ship-owning entity | 99.90% |
MPCC Second Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Camellia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carlotta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Christiana\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Pauline\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabrina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Samanta\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Susanna\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Svenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Fourth Financing GmbH & Co. KG | Germany | Holding company | 100.00% |
\u201cAS Anne\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Stine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Silje\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Simone\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Sabine\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Third Financing AS | Norway | Holding company | 100.00% |
\u201cAS Fenja\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Freya\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Company | Country | Principal activity | Ownership |
\u201cAS Nadia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Penelope\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Paola\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Palina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
Zweite \u201cAS Petra\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Constantina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Serena\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPCC Mipo AS | Norway | Ship-owning entity | 100.00% |
MPCC Alva AS | Norway | Ship-owning entity | 100.00% |
MPCC City AS | Norway | Ship-owning entity | 100.00% |
MPCC Caspria AS | Norway | Ship-owning entity | 100.00% |
MPCC Nora AS | Norway | Ship-owning entity | 100.00% |
MPCC GREENBOX AS | Norway | Holding company | 90.10% |
MPCC NORDLAND AS | Norway | Ship-owning entity | 90.10% |
MPCC VESTLAND AS | Norway | Ship-owning entity | 90.10% |
MPC ECOBOX OPCO 5 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
MPC ECOBOX OPCO 6 GmbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Carolina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Franziska\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Nina\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
\u201cAS Claudia\u201d Schifffahrtsgesellschaft mbH & Co. KG | Germany | Ship-owning entity | 100.00% |
AS Shipping OpCo 2 GmbH | Germany | Holding company | 90.00% |
6.1\tInvestments in Joint Venture and Associate
Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
in USD thousands | December 31, 2023 | December 31, 2022 |
Investment in joint venture | 1,703 | 20,067 |
investment in associate | 1,231 | 826 |
Total | 2,934 | 20,893 |
Investment in Joint venture
The Group holds a 50% ownership interest in 2. Bluewater Holding Schifffahrtsgesellschaft GmbH & Co. KG (Bluewater), Hamburg(Germany). As at December 31, 2023, Bluewater has zero (2022: four) container vessels.
In December 2022, Bluewater, entered into an MOA to sell its 2006-built 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, resulting in a gain of USD 10.9 million in the joint venture.
In January 2023, Bluewater, 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. The vessel was delivered to its new owner in March 2023, resulting in a gain of USD 2.1 million in the joint venture.
In July 2023, the Group agreed to sell its 2002-built and 2003-built joint-venture vessels Cimbra and Cardonia for USD 22.0 million and USD 20.5 million to unrelated parties. The joint venture vessel, Cardonia was subsequently delivered to its new owner in July 2023, and Cimbria was delivered in August 2023, which resulted in gains of USD 13.3 million (Cardonia) and USD 13.2 million (Cimbria) in the joint venture.
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f35556": { "value": "6.1\tInvestments in Joint Venture and Associate
Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
in USD thousands | December 31, 2023 | December 31, 2022 |
Investment in joint venture | 1,703 | 20,067 |
investment in associate | 1,231 | 826 |
Total | 2,934 | 20,893 |
Investment in Joint venture
The Group holds a 50% ownership interest in 2. Bluewater Holding Schifffahrtsgesellschaft GmbH & Co. KG (Bluewater), Hamburg(Germany). As at December 31, 2023, Bluewater has zero (2022: four) container vessels.
In December 2022, Bluewater, entered into an MOA to sell its 2006-built 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, resulting in a gain of USD 10.9 million in the joint venture.
In January 2023, Bluewater, 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. The vessel was delivered to its new owner in March 2023, resulting in a gain of USD 2.1 million in the joint venture.
In July 2023, the Group agreed to sell its 2002-built and 2003-built joint-venture vessels Cimbra and Cardonia for USD 22.0 million and USD 20.5 million to unrelated parties. The joint venture vessel, Cardonia was subsequently delivered to its new owner in July 2023, and Cimbria was delivered in August 2023, which resulted in gains of USD 13.3 million (Cardonia) and USD 13.2 million (Cimbria) in the joint venture.
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__116-1": { "value": "6.1\tInvestments in Joint Venture and Associate
Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
in USD thousands | December 31, 2023 | December 31, 2022 |
Investment in joint venture | 1,703 | 20,067 |
investment in associate | 1,231 | 826 |
Total | 2,934 | 20,893 |
Investment in Joint venture
The Group holds a 50% ownership interest in 2. Bluewater Holding Schifffahrtsgesellschaft GmbH & Co. KG (Bluewater), Hamburg(Germany). As at December 31, 2023, Bluewater has zero (2022: four) container vessels.
In December 2022, Bluewater, entered into an MOA to sell its 2006-built 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, resulting in a gain of USD 10.9 million in the joint venture.
In January 2023, Bluewater, 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. The vessel was delivered to its new owner in March 2023, resulting in a gain of USD 2.1 million in the joint venture.
In July 2023, the Group agreed to sell its 2002-built and 2003-built joint-venture vessels Cimbra and Cardonia for USD 22.0 million and USD 20.5 million to unrelated parties. The joint venture vessel, Cardonia was subsequently delivered to its new owner in July 2023, and Cimbria was delivered in August 2023, which resulted in gains of USD 13.3 million (Cardonia) and USD 13.2 million (Cimbria) in the joint venture.
The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f35567": { "value": "Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f35568": { "value": "Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f35569": { "value": "Accounting policy
Joint ventures are those entities whereby the Group have has joint control and rights to the net assets. Associates are those entities where the Group has significant influence but not control or joint control (usually between twenty and fifty percent of the voting power). The Group\u2019s investments in associate and joint venture are accounted for using equity method. The investments in an associate or a joint venture are initially recognized at cost and thereafter adjusted for Group\u2019s share of post-acquisition profits or losses, movements in other comprehensive income or dividends received.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__117-1": { "value": "The following tables shows the summarized financial information of the Group\u2019s investment in Bluewater:
in USD thousands | 2023 | 2022 |
Non-current assets | - | 28,323 |
Cash and cash equivalents | 2,148 | 13,211 |
Other current assets | 1,450 | 1,328 |
Non-current liabilities | - | - |
Current liabilities | 192 | 2,728 |
Equity | 3,405 | 40,133 |
Group\u2019s carrying amount of the investment | 1,703 | 20,067 |
in USD thousands | 2023 | 2022 |
Operating revenues | 14,752 | 82,328 |
Operating costs | (8,416) | (18,812) |
Other income (expense) | 278 | 43,522 |
Gain (loss) from sale of vessels | 39,535 | - |
Depreciation | (959) | (3,187) |
Net financial income (expense) | 112 | (307) |
Income tax | (28) | (22) |
Profit after tax for the period | 45,275 | 103,522 |
Total comprehensive income for the period | 45,275 | 103,522 |
Group\u2019s share of profit for the period | 22,637 | 51,761 |
Dividends received | 41,000 | 60,350 |
Bluewater can not distribute dividends without the approval of both joint venture partners.
The joint venture had no contingent liabilities or capital commitments at December 31, 2023 and 2022.
Investment in associate
In 2022, the Group entered into an agreement with INERATEC for the supply of synthetic Marine Diesel Oil (MDO) made from biogenic CO2and renewable hydrogen, with delivery set to start in 2024. The Group recorded its initial investment at a cost of USD 0.8 million to acquire 24.5% ownership interest in Siemssen KG which holds an investment in INERATEC. In January 2023, the Group further increased its investment of USD 0.4 million to maintain its ownership position. As at December 31, 2023, the Group\u2019s investment in Siemssen KG was USD 1.2 million. The investment is accounted under the equity method.
Classified as:
Non-current
92,951
74,462
Current
33,564
79,112
Total
126,515
153,574
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37849": { "value": "Note 7\tCapital Structure and Financial Instruments
7.1\tFinancial Risk Management
This section provides additional information about the Group\u2019s policies that are considered most relevant in understanding the operations and management of the Group, in particular objectives and policies of how the Group manages its financial risks, liquidity positions and capital structure.
The Group owns and operates vessels for worldwide transportation of containerised cargo. Through its operation, the Group is exposed to market risk, credit risk, liquidity risk and other risks that may negatively influence the value of assets, liability and future cash flows.
Market riskfrom financial instruments is the risk that future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise four types of risk: interest rate risk, foreign currency risk, credit risk and price risk.
Interest rate riskis the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group\u2019s exposure to the risk of changes in market interest rates relates primarily to the Group\u2019s long-term debt obligations with floating interest rates, i.e. interest payable on the bond issued and the non-recourse senior secured term loan depends on the short-term SOFR. An increase of the short-term SOFR rate by 100 basis points would cause the Group\u2019s annualized interest expenses to increase by USD 73 thousands on a net debt basis (total interest bearing net minus cash and cash equivalents including restricted cash).
Foreign currency riskis the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The functional currency of most of the entities in the Group is USD, and the Group has only minor currency risk from its operations since all income and all major vessel costs are in USD. However, the Group has exposure to EUR and NOK as parts of administration and vessel operating expenses and a portion of cash and cash equivalents, other short-term assets, trade payables and provisions and accruals are denominated in EUR and NOK. Currently, no financial instruments have been entered into to mitigate this risk.
The Group is subject to price risk related to the charter market for feeder container vessel which is uncertain and volatile and will depend upon, among other things, the global and regional macroeconomic developments. In addition, the future financial position of the Group depends on valuations of the vessels owned by the Group. Currently, no financial instruments have been entered into to reduce this shipping market risk. The Group will normally have limited exposure to risks associated with bunker price fluctuations as the bunkers are for the charterers account when the vessels are on time charter contracts. See Board of Directors\u2019 report for further description.
From January 1, 2024, shipping is part of EU\u2019s emission trading system (EU ETS). The Group must submit allowances for 100% of emissions for voyages within EU, and 50% of voyages in and out of EU (including ballast leg). The share of emissions that must be covered by allowances gradually increases each year from 40% of emissions reported for 2024, 70% of emissions reported for 2025 and from 2026, 100% of reported emissions. The cost will in most cases be covered by the customer. As at December 31, 2023, the Group held allowances amounting USD 15.8 thousands.
Credit risk
Credit risk refers to the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The maximum credit risk exposure is related to the Group\u2019s trade receivables of USD 6.3 million as at December 31, 2023.
It is the aim of the Group to enter into contracts with creditworthy counterparties only. Prior to concluding a charter party, the Group evaluates the credit quality of the customer, assessing its financial position, past experience and other factors. Charter hire is paid in advance, effectively reducing the potential exposure to credit risk. Bank deposits are only deposited with internationally recognized financial institutions.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations when they fall due. The Group\u2019s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity and/or undrawn committed credit facilities at all times to meet its obligations. See Board of Directors\u2019 report for further description with respect to liquidity risk. To ensure this, the Group continuously monitors projected cash flows using a liquidity planning tool. This includes furnishing management with weekly cash reporting, monthly liquidity forecasts and furnishing management and the Board of Directors with rolling 12\u201324 months liquidity forecasts.
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2023:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 34,936 | 24,761 | 69,919 | - | 129,616 |
Interest payments | 9,277 | 13,421 | 6,985 | - | 29,683 |
Trade and other payables | 20,397 | - | - | - | 20,397 |
Realted part payables | 1,062 | - | - | - | 1,062 |
Other liabilities | 16,011 | - | - | - | 16,011 |
Total | 81,683 | 38,182 | 76,904 | - | 196,769 |
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2022:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 80,000 | 48,333 | 26,667 | - | 155,000 |
Interest payments | 9,825 | 6,862 | 1,938 | - | 18,625 |
Trade and other payables | 17,282 | - | - | - | 17,282 |
Other liabilities | 18,863 | - | - | - | 18,863 |
Total | 125,970 | 55,195 | 28,605 | - | 209,770 |
7.2\tFinancial Instruments
Accounting policy
The Group may use certain hedging instruments, such as forward contracts or options, to manage foreign exchange or interest rate risk, for instance. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
At the inception of a hedge relationship, the Group formally documents the relationship between the hedge instrument and the hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship.
The Group makes an assessment at inception and on an ongoing basis according to IFRS 9, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that ultimately could affect profit or loss.
For the purpose of hedge accounting, hedges are classified as:
+ fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment (except for foreign currency risk); or
+ cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable transactions.
Hedges which meet the criteria for hedge accounting are accounted for as follows:
The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive income (OCI) in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the statement of profit or loss. Amounts recognized as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognized as OCI are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in equity are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs.
Set out below is a comparison by category for carrying amounts and fair values of all of the Group\u2019s financial instruments that are carried in the financial statements. The estimated fair value amounts of the financial instruments have been determined using appropriate market information and valuation techniques.
Fair value of trade receivables, cash and cash equivalents and trade payables approximate their carrying amounts measured at amortized cost due to the short-term maturities of these instruments.
The fair value of interest-bearing debt is estimated by discounting future cash flows using rates for debt on similar terms, credit risk and remaining maturities. Fair value of interest-bearing debt approximates the carrying amounts as there have been no significant changes in the market rates for similar debt financing between the date of securing the debt financing and the reporting date.
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial assets | ||||
Trade and other receivables | 23,667 | 23,667 | 22,922 | 22,922 |
Financial instruments at fair value | 1,951 | 1,951 | 1,740 | 1,740 |
Cash and cash equivalents1 | 122,584 | 122,584 | 125,517 | 125,517 |
Total financial assets | 148,202 | 148,202 | 150,179 | 150,179 |
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial liabilities at amortized cost | ||||
Non-current Interest-bearing debt | 92,951 | 92,951 | 74,462 | 74,462 |
Current interest-bearing debt | 33,564 | 33,564 | 79,112 | 79,112 |
Trade and other payables | 20,397 | 20,397 | 17,282 | 17,282 |
Related party payables | 1,062 | 1,062 | - | - |
Other liabilities | 16,011 | 16,011 | 18,863 | 18,863 |
Total financial liabilities | 163,985 | 163,985 | 189,719 | 189,719 |
Fair value hierarchy
The Group uses a hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2023.
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 126,515 | - | 126,515 |
Assets | ||||
Financial instruments | - | 1,951 | - | 1,951 |
The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2022
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 153,574 | - | 153,574 |
Assets | ||||
Financial instruments | - | 1,740 | - | 1,740 |
1Includes restricted cash |
Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
7.3\tCash and Cash Equivalents
Accounting policy
Cash and short-term deposits in the statement of financial position comprise cash at banks, on hand and short-term deposits with a maturity of three months or less. Cash equivalents represent short-term, liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less.
Cash not available for general use by the Group due to minimum liquidity requirements in the loan agreements and required class are classified as restricted cash.
in USD thousands | December 31, 2023 | December 31, 2022 |
Bank deposits denominated in USD | 106,149 | 121,245 |
Bank deposits denominated in EUR | 2,194 | 2,521 |
Bank deposits denominated in NOK | 563 | 1,751 |
Money market | 13,678 | - |
Total cash and cash equivalents and restricted cash | 122,584 | 125,517 |
The fair value of cash and cash equivalents at December 31, 2023 is USD 122.6million (USD 125.5 million at December 31, 2022). Restricted cash as at December 31, 2022 was USD 5.0 million compared to USD 30.2 million as at December 31, 2022. USD 3.8 million under the senior secured credit facility is restricted cash for the solely use for required class-related maintenance on the vessels, compared to USD 10.8 million at December 31, 2022. Further, the group have USD 0.6 million in a retention account, related to repayment on the term loan facility, and USD 0.6 million is kept as minimum liquidity as required by the loan agreements described in Note 7.4.
Bank deposits earn interest at floating rates based on applicable bank deposit rates. Short-term deposits are made for varying periods, depending on the cash requirements of the Group.
7.4\tInterest-Bearing Debt
Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
In USD thousands | Currency | Facility amount | Interest | Maturity | December 31, 2023 | December 31, 2022 |
Loan and credit facility | USD | 180,000 | SOFR + 3.35% | November 2023/2026 | - | 100,000 |
Senior secured credit facility | USD | 70,000 | SOFR+ 3.25% | June 2024 | 55,000 | 55,000 |
Term loan facility | USD | 50,000 | SOFR+2.8% - 3.35% | August 2028 | 49,130 | - |
Sale and leaseback facility | USD | 75,000 | SOFR+2.6% | October 2027 | 66,963 | - |
Senior secured term loan facility | USD | 8,300 | SOFR+3.5% | February 2027 | 4,810 | - |
Term loan and credit facility | USD | 15,933 | SOFR+1.5% -2.5% | February 2036 | 8,713 | - |
Secured revolving loan facility | USD | 100.0 | SOFR+2.95% | March 2028 | - | - |
Other long-term debt incl. accrued interest | 256 | 403 | ||||
Total outstanding | 129,872 | 155,403 | ||||
Debt issuance costs | (3,357) | (1,829) | ||||
Total interest-bearing debt outstanding | 126,515 | 153,574 | ||||
Classified as: | ||||||
Non-current | 92,951 | 74,462 | ||||
Current | 33,564 | 79,112 | ||||
Total | 126,515 | 153,574 |
In July 2021, the Group entered into a USD 70.0 million three-year revolving credit facility agreement with CIT Group, where MPCC Second Financing GmbH & Co. KG, a subsidiary of the Company, is the borrower. The initial drawdown of USD 55.0 million was made to refinance the existing debt. In 2023, the Group repaid fully the USD 55.0 million and the facility is cancelled.
In October 2021, the Group entered into an agreement for a USD 180 million five-year senior secured loan and revolving credit facility with Hamburg Commercial Bank (\u201cHCOB\u201d). It consists of a USD 130 million term loan and a revolving credit facility of USD 50 million. In 2023, the Group repaid fully the USD 100.0 million and the facility is cancelled.
In February 2023, the Group signed a senior secured term loan facility in an amount up to USD 8.3 million with OVB and it was fully drawn down as at March 31, 2023. The loan facility was used to partially finance the acquisition of the 2007-built AS Claudia. The loan facility carries an interest equivalent to the SOFR plus a margin of 350 basis points and matures in February 2027. The loan is to be repaid quarterly. The facility is secured by one vessel with a carrying amount of USD 14.1 million. As at December 31, 2023, the Group repaid USD 3.5 million, and USD 4.8 million remained outstanding.
In May 2023, the Group entered into a pre-delivery term loan facility in an amount of USD 15.9 million and post-delivery term loan facility in an amount of up to USD 101.5 million with Cr\u00e9dit Agricole together with K-SURE Agent. The loan facilities will be used to finance the two 5,500 TEU eco-design newbuildings. In 2023, USD 8.7 million was drawn to pay a progress payment of USD 7.2 as well as a mandatory insurance premium paid to the lender. As at December 31, 2023 the outstanding balance of USD 8.7 million was classified as current portion of interest-bearing debt and USD 101.5 million would be available once the delivery of both newbuildings is completed.
The two 5,500 TEU eco-design newbuildings are expected to be deliverd in the second and third quarter of 2024 and pre-delivery portion of the facility shall be matured upon delivery of each vessels.
In July 2023, the Group entered into a 5-year loan facility in an amount of up to USD 50.0 million with HCOB to finance part of the acquisition cost of the five modern eco-design vessels, AS Anne, AS Simone, AS Stine, AS Silje, and AS Sabine. The facility has a tenor of five years, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus a margin of a range from 280 basis points to 335 basis points depending on the Loan to Value (LTV) percentage. In 2023, USD 50 million was drawn on the facility to pay for the vessels and the Group subsequently repaid USD 0.9 million. As at December 31, 2023, USD 49.1 million remained outstanding andthe carrying amount of the five vessels was USD 112.5 million.
In September 2023, the Group entered into a sale and leaseback transactions with BoComm Leasing in an amount of USD 75.0 million for 12 of its vessels. The lease financing has a tenor of 48 months starting from September/October 2023 and carries an interest rate of SOFR plus a margin of 260 basis point, and includes purchase obligations for the 12 vessels at the end of the term. The Group is precluded from accounting for the sale of the vessels due to the purchase obligations at the end of the term which prevents the lessor from obtaining control of the vessels as such the lease has been accounted for as a secured borrowing, with the vessels recorded under \u201cVessels\u201d. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. As at December 31, 2023, all of the 12 vessels, with carrying amount of USD 116.1 million, were delivered to BoComm Leasing and USD 67.0 million remained outstanding. Since the transaction does not qualify as a sale as according to IFRS 15, the transferred vessels are not derecognized and shall be depreciated by the Group as it we were the legal owner. The proceeds of USD 75.0 million shall was recognized as financial liabilities.
In December 2023, the Group entered into a senior secured reducing revolving loan facility of up to USD 100.0 million with HCOB, subject to finalization of the loan. The facility has a tenor of five years, and carries an interest rate of SOFR plus a margin of 295 basis points. As at December 31, 2023, no draw-down was made on this facility.
The following main financial covenants are defined in the terms of the credit facility agreement with Cr\u00e9dit Agricole and\u00a0HCOB:
+ The Parent company (MPC Container Ships ASA) shall maintain a minimum equity ratio of 40%
+ The consolidated liquidity in the Group shall maintain a minimum liquidity of USD 250.000 per consolidated vessel
The Group is in compliance with all loan and credit facility covenants as at December 31, 2023.
7.5\tEquity
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
7.6\tCapital Management
A key objective of the Group\u2019s capital management is to ensure that the Group maintains a capital structure in order to\u00a0support its business activities and maximise the shareholder value. The Group evaluates its capital structure in light of current and projected cash flows, the state of the shipping markets, new business opportunities and the Group\u2019s financial commitments. Capital is primarily managed on Group level.
The Group monitors its capital structure using the book-equity ratio, which stands at 78.9% as at December 31, 2023 (2022: 75.4%). The Group\u2019 s debt facilities contain certain financial covenants which require the Company or the subsidiaries to maintain the following financial covenants, minimum value of vessels, and a certain level of free cash and equity ratio. The Group aims at maintaining an equity ratio with adequate headroom to the respective covenant requirements (refer to Note 7.4\u2013 Interest-Bearing Debt).
in USD thousands | December 31, 2023 | December 31, 2022 |
Book equity | 753,481 | 721,447 |
Total assets | 954,744 | 956,321 |
Book-equity ratio | 78.9% | 75.4% |
In support of the Group\u2019s objective of maximizing returns to shareholders, the Group\u2019s intention is to pay regular dividends by way of distributing 75% of profits (loss) for the period after considering CAPEX and working capital requirements, including liquidity reserves and one-off effects. Dividends will be declared or proposed by the Board at the sole discretion of the Board and will depend upon the financial position, earnings, debt covenants, distribution restrictions, capital requirements and other factors related to the Group. The Company cannot guarantee that its Board will declare or propose dividends in the future. Furthermore, the Board may make event driven distributions based on non-recurring proceeds, such as vessel sales, by way of extraordinary dividends or share buybacks, to be applied according to the Board\u2019s discretion.
During 2023, the Group distributed dividends for a total of USD 293.1 million, which also includes distributions to non-controlling interests. These include both recurring and event driven dividends. The dividend was distributed with USD 150.9 from share premium, USD 142.0 million from retained earnings and USD 0.3 million to non-controlling interests.
Announcement date | Type | Cash distribution per share | Ex-dividend | Record | Payment |
31.01.2023 | Event-driven | USD 0.07 / NOK 0.7238 | 20.02.2023 | 21.02.2023 | 28.02.2023 |
28.02.2023 | Recurring | USD 0.15 /\u00a0NOK 1.5765 | 23.03.2023 | 24.03.2023 | 30.03.2023 |
23.05.2023 | Recurring | USD 0.15 /\u00a0NOK 1.5956 | 21.06.2023 | 22.06.2023 | 29.06.2023 |
21.08.2023 | Recurring | USD 0.15 /\u00a0NOK 1.6118 | 20.09.2023 | 21.09.2023 | 28.09.2023 |
21.11.2023 | Recurring | USD 0.14 / NOK 1.5224 | 13.12.2023 | 14.12.2023 | 21.12.2023 |
7.1\tFinancial Risk Management
This section provides additional information about the Group\u2019s policies that are considered most relevant in understanding the operations and management of the Group, in particular objectives and policies of how the Group manages its financial risks, liquidity positions and capital structure.
The Group owns and operates vessels for worldwide transportation of containerised cargo. Through its operation, the Group is exposed to market risk, credit risk, liquidity risk and other risks that may negatively influence the value of assets, liability and future cash flows.
Market riskfrom financial instruments is the risk that future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise four types of risk: interest rate risk, foreign currency risk, credit risk and price risk.
Interest rate riskis the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group\u2019s exposure to the risk of changes in market interest rates relates primarily to the Group\u2019s long-term debt obligations with floating interest rates, i.e. interest payable on the bond issued and the non-recourse senior secured term loan depends on the short-term SOFR. An increase of the short-term SOFR rate by 100 basis points would cause the Group\u2019s annualized interest expenses to increase by USD 73 thousands on a net debt basis (total interest bearing net minus cash and cash equivalents including restricted cash).
Foreign currency riskis the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The functional currency of most of the entities in the Group is USD, and the Group has only minor currency risk from its operations since all income and all major vessel costs are in USD. However, the Group has exposure to EUR and NOK as parts of administration and vessel operating expenses and a portion of cash and cash equivalents, other short-term assets, trade payables and provisions and accruals are denominated in EUR and NOK. Currently, no financial instruments have been entered into to mitigate this risk.
The Group is subject to price risk related to the charter market for feeder container vessel which is uncertain and volatile and will depend upon, among other things, the global and regional macroeconomic developments. In addition, the future financial position of the Group depends on valuations of the vessels owned by the Group. Currently, no financial instruments have been entered into to reduce this shipping market risk. The Group will normally have limited exposure to risks associated with bunker price fluctuations as the bunkers are for the charterers account when the vessels are on time charter contracts. See Board of Directors\u2019 report for further description.
From January 1, 2024, shipping is part of EU\u2019s emission trading system (EU ETS). The Group must submit allowances for 100% of emissions for voyages within EU, and 50% of voyages in and out of EU (including ballast leg). The share of emissions that must be covered by allowances gradually increases each year from 40% of emissions reported for 2024, 70% of emissions reported for 2025 and from 2026, 100% of reported emissions. The cost will in most cases be covered by the customer. As at December 31, 2023, the Group held allowances amounting USD 15.8 thousands.
Credit risk
Credit risk refers to the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The maximum credit risk exposure is related to the Group\u2019s trade receivables of USD 6.3 million as at December 31, 2023.
It is the aim of the Group to enter into contracts with creditworthy counterparties only. Prior to concluding a charter party, the Group evaluates the credit quality of the customer, assessing its financial position, past experience and other factors. Charter hire is paid in advance, effectively reducing the potential exposure to credit risk. Bank deposits are only deposited with internationally recognized financial institutions.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations when they fall due. The Group\u2019s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity and/or undrawn committed credit facilities at all times to meet its obligations. See Board of Directors\u2019 report for further description with respect to liquidity risk. To ensure this, the Group continuously monitors projected cash flows using a liquidity planning tool. This includes furnishing management with weekly cash reporting, monthly liquidity forecasts and furnishing management and the Board of Directors with rolling 12\u201324 months liquidity forecasts.
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2023:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 34,936 | 24,761 | 69,919 | - | 129,616 |
Interest payments | 9,277 | 13,421 | 6,985 | - | 29,683 |
Trade and other payables | 20,397 | - | - | - | 20,397 |
Realted part payables | 1,062 | - | - | - | 1,062 |
Other liabilities | 16,011 | - | - | - | 16,011 |
Total | 81,683 | 38,182 | 76,904 | - | 196,769 |
The following table summarises the contractual maturities of financial liabilities on an undiscounted basis as at December 31, 2022:
In USD thousands | < 1 year | 1\u20133 years | 4\u20135 years | > 5 years | Total |
Interest-bearing debt | 80,000 | 48,333 | 26,667 | - | 155,000 |
Interest payments | 9,825 | 6,862 | 1,938 | - | 18,625 |
Trade and other payables | 17,282 | - | - | - | 17,282 |
Other liabilities | 18,863 | - | - | - | 18,863 |
Total | 125,970 | 55,195 | 28,605 | - | 209,770 |
Credit risk
Credit risk refers to the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The maximum credit risk exposure is related to the Group\u2019s trade receivables of USD 6.3 million as at December 31, 2023.
It is the aim of the Group to enter into contracts with creditworthy counterparties only. Prior to concluding a charter party, the Group evaluates the credit quality of the customer, assessing its financial position, past experience and other factors. Charter hire is paid in advance, effectively reducing the potential exposure to credit risk. Bank deposits are only deposited with internationally recognized financial institutions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38578": { "value": "Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations when they fall due. The Group\u2019s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity and/or undrawn committed credit facilities at all times to meet its obligations. See Board of Directors\u2019 report for further description with respect to liquidity risk. To ensure this, the Group continuously monitors projected cash flows using a liquidity planning tool. This includes furnishing management with weekly cash reporting, monthly liquidity forecasts and furnishing management and the Board of Directors with rolling 12\u201324 months liquidity forecasts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f39076": { "value": "Accounting policy
The Group may use certain hedging instruments, such as forward contracts or options, to manage foreign exchange or interest rate risk, for instance. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
At the inception of a hedge relationship, the Group formally documents the relationship between the hedge instrument and the hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship.
The Group makes an assessment at inception and on an ongoing basis according to IFRS 9, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that ultimately could affect profit or loss.
For the purpose of hedge accounting, hedges are classified as:
+ fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment (except for foreign currency risk); or
+ cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable transactions.
Hedges which meet the criteria for hedge accounting are accounted for as follows:
The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive income (OCI) in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the statement of profit or loss. Amounts recognized as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognized as OCI are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in equity are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f39077": { "value": "Accounting policy
The Group may use certain hedging instruments, such as forward contracts or options, to manage foreign exchange or interest rate risk, for instance. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
At the inception of a hedge relationship, the Group formally documents the relationship between the hedge instrument and the hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship.
The Group makes an assessment at inception and on an ongoing basis according to IFRS 9, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that ultimately could affect profit or loss.
For the purpose of hedge accounting, hedges are classified as:
+ fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment (except for foreign currency risk); or
+ cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable transactions.
Hedges which meet the criteria for hedge accounting are accounted for as follows:
The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive income (OCI) in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the statement of profit or loss. Amounts recognized as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognized as OCI are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in equity are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f39604": { "value": "Set out below is a comparison by category for carrying amounts and fair values of all of the Group\u2019s financial instruments that are carried in the financial statements. The estimated fair value amounts of the financial instruments have been determined using appropriate market information and valuation techniques.
Fair value of trade receivables, cash and cash equivalents and trade payables approximate their carrying amounts measured at amortized cost due to the short-term maturities of these instruments.
The fair value of interest-bearing debt is estimated by discounting future cash flows using rates for debt on similar terms, credit risk and remaining maturities. Fair value of interest-bearing debt approximates the carrying amounts as there have been no significant changes in the market rates for similar debt financing between the date of securing the debt financing and the reporting date.
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial assets | ||||
Trade and other receivables | 23,667 | 23,667 | 22,922 | 22,922 |
Financial instruments at fair value | 1,951 | 1,951 | 1,740 | 1,740 |
Cash and cash equivalents1 | 122,584 | 122,584 | 125,517 | 125,517 |
Total financial assets | 148,202 | 148,202 | 150,179 | 150,179 |
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial liabilities at amortized cost | ||||
Non-current Interest-bearing debt | 92,951 | 92,951 | 74,462 | 74,462 |
Current interest-bearing debt | 33,564 | 33,564 | 79,112 | 79,112 |
Trade and other payables | 20,397 | 20,397 | 17,282 | 17,282 |
Related party payables | 1,062 | 1,062 | - | - |
Other liabilities | 16,011 | 16,011 | 18,863 | 18,863 |
Total financial liabilities | 163,985 | 163,985 | 189,719 | 189,719 |
Fair value hierarchy
The Group uses a hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2023.
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 126,515 | - | 126,515 |
Assets | ||||
Financial instruments | - | 1,951 | - | 1,951 |
The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2022
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 153,574 | - | 153,574 |
Assets | ||||
Financial instruments | - | 1,740 | - | 1,740 |
1Includes restricted cash |
Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f39605": { "value": "Set out below is a comparison by category for carrying amounts and fair values of all of the Group\u2019s financial instruments that are carried in the financial statements. The estimated fair value amounts of the financial instruments have been determined using appropriate market information and valuation techniques.
Fair value of trade receivables, cash and cash equivalents and trade payables approximate their carrying amounts measured at amortized cost due to the short-term maturities of these instruments.
The fair value of interest-bearing debt is estimated by discounting future cash flows using rates for debt on similar terms, credit risk and remaining maturities. Fair value of interest-bearing debt approximates the carrying amounts as there have been no significant changes in the market rates for similar debt financing between the date of securing the debt financing and the reporting date.
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial assets | ||||
Trade and other receivables | 23,667 | 23,667 | 22,922 | 22,922 |
Financial instruments at fair value | 1,951 | 1,951 | 1,740 | 1,740 |
Cash and cash equivalents1 | 122,584 | 122,584 | 125,517 | 125,517 |
Total financial assets | 148,202 | 148,202 | 150,179 | 150,179 |
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial liabilities at amortized cost | ||||
Non-current Interest-bearing debt | 92,951 | 92,951 | 74,462 | 74,462 |
Current interest-bearing debt | 33,564 | 33,564 | 79,112 | 79,112 |
Trade and other payables | 20,397 | 20,397 | 17,282 | 17,282 |
Related party payables | 1,062 | 1,062 | - | - |
Other liabilities | 16,011 | 16,011 | 18,863 | 18,863 |
Total financial liabilities | 163,985 | 163,985 | 189,719 | 189,719 |
Fair value hierarchy
The Group uses a hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2023.
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 126,515 | - | 126,515 |
Assets | ||||
Financial instruments | - | 1,951 | - | 1,951 |
The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2022
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 153,574 | - | 153,574 |
Assets | ||||
Financial instruments | - | 1,740 | - | 1,740 |
1Includes restricted cash |
Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s7_notes__6__137-1": { "value": "Set out below is a comparison by category for carrying amounts and fair values of all of the Group\u2019s financial instruments that are carried in the financial statements. The estimated fair value amounts of the financial instruments have been determined using appropriate market information and valuation techniques.
Fair value of trade receivables, cash and cash equivalents and trade payables approximate their carrying amounts measured at amortized cost due to the short-term maturities of these instruments.
The fair value of interest-bearing debt is estimated by discounting future cash flows using rates for debt on similar terms, credit risk and remaining maturities. Fair value of interest-bearing debt approximates the carrying amounts as there have been no significant changes in the market rates for similar debt financing between the date of securing the debt financing and the reporting date.
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial assets | ||||
Trade and other receivables | 23,667 | 23,667 | 22,922 | 22,922 |
Financial instruments at fair value | 1,951 | 1,951 | 1,740 | 1,740 |
Cash and cash equivalents1 | 122,584 | 122,584 | 125,517 | 125,517 |
Total financial assets | 148,202 | 148,202 | 150,179 | 150,179 |
December 31, 2023 | December 31, 2022 | |||
in USD thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value |
Financial liabilities at amortized cost | ||||
Non-current Interest-bearing debt | 92,951 | 92,951 | 74,462 | 74,462 |
Current interest-bearing debt | 33,564 | 33,564 | 79,112 | 79,112 |
Trade and other payables | 20,397 | 20,397 | 17,282 | 17,282 |
Related party payables | 1,062 | 1,062 | - | - |
Other liabilities | 16,011 | 16,011 | 18,863 | 18,863 |
Total financial liabilities | 163,985 | 163,985 | 189,719 | 189,719 |
Fair value hierarchy
The Group uses a hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2023.
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 126,515 | - | 126,515 |
Assets | ||||
Financial instruments | - | 1,951 | - | 1,951 |
The table below shows the fair value measurements for both the Group\u2019s assets and liabilities as at December 31, 2022
in USD thousands | Level 1 | Level 2 | Level 3 | Total fair value |
Liabilities | ||||
Floating rate debt | - | 153,574 | - | 153,574 |
Assets | ||||
Financial instruments | - | 1,740 | - | 1,740 |
1Includes restricted cash |
Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
The fair value of cash and cash equivalents at December 31, 2023 is USD 122.6million (USD 125.5 million at December 31, 2022). Restricted cash as at December 31, 2022 was USD 5.0 million compared to USD 30.2 million as at December 31, 2022. USD 3.8 million under the senior secured credit facility is restricted cash for the solely use for required class-related maintenance on the vessels, compared to USD 10.8 million at December 31, 2022. Further, the group have USD 0.6 million in a retention account, related to repayment on the term loan facility, and USD 0.6 million is kept as minimum liquidity as required by the loan agreements described in Note 7.4.
Bank deposits earn interest at floating rates based on applicable bank deposit rates. Short-term deposits are made for varying periods, depending on the cash requirements of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40314": { "value": "Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40315": { "value": "Cash Flow Hedges
The Group uses interest rate swaps, caps and collars as hedges of its exposure to interest rate fluctuations in connection with its debt and bond financing.
As at December 31, 2023 the Group has three interest rate caps and two options to enter into interest-rate swaps.
The table below shows the notional amounts of current and future anticipated interest-bearing debt under existing debt facilities hedged by interest-rate caps:
instrument | Notiona amount | Effective period | Interest cap | Maturity |
Interest-rate cap | USD 45.27 million | 2024\u20132026 | 4.0% | December 2026 |
Interest-rate caps | USD 15.9\u20132.2 million | 2024\u20132031 | 4.0% | May/ June 2031 |
Swaptions | USd 43.7\u201310.2 million | 2024\u20132036 | 3.5% | July 2024 |
The Group has entered into 2 options (swaptions) to enter into interest-rate swaps whereby the Group receives SOFR floating interest and pays a fixed interest of 3.5% on a declining notional amount starting at USD 43.7 million. If exercised, the interest-rate swaps have declining notional amounts over the period and contractual maturities in 2036. Additionally, the Group has entered into interest caps to hedge against the risk of increased interest payments as\u00a0shown in the table above.
The fair value (level 2) of the Group\u2019s swaptions is the estimated amount that the Group would receive or pay for a similar option on the balance sheet date. The swaptions are designated as cash flow hedges of future interest payments. The fair value of the option is determined by an option pricing model that includes assumptions about volatility, forward interest curves, etc.
The fair value (level 2) of the Group\u2019s interest rate caps is the estimated amount that the Group would receive or pay to terminate the agreements as at the reporting date, considering, as applicable, the forward interest rate curves.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40652": { "value": "7.3\tCash and Cash Equivalents
Accounting policy
Cash and short-term deposits in the statement of financial position comprise cash at banks, on hand and short-term deposits with a maturity of three months or less. Cash equivalents represent short-term, liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less.
Cash not available for general use by the Group due to minimum liquidity requirements in the loan agreements and required class are classified as restricted cash.
in USD thousands | December 31, 2023 | December 31, 2022 |
Bank deposits denominated in USD | 106,149 | 121,245 |
Bank deposits denominated in EUR | 2,194 | 2,521 |
Bank deposits denominated in NOK | 563 | 1,751 |
Money market | 13,678 | - |
Total cash and cash equivalents and restricted cash | 122,584 | 125,517 |
The fair value of cash and cash equivalents at December 31, 2023 is USD 122.6million (USD 125.5 million at December 31, 2022). Restricted cash as at December 31, 2022 was USD 5.0 million compared to USD 30.2 million as at December 31, 2022. USD 3.8 million under the senior secured credit facility is restricted cash for the solely use for required class-related maintenance on the vessels, compared to USD 10.8 million at December 31, 2022. Further, the group have USD 0.6 million in a retention account, related to repayment on the term loan facility, and USD 0.6 million is kept as minimum liquidity as required by the loan agreements described in Note 7.4.
Bank deposits earn interest at floating rates based on applicable bank deposit rates. Short-term deposits are made for varying periods, depending on the cash requirements of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40653": { "value": "7.3\tCash and Cash Equivalents
Accounting policy
Cash and short-term deposits in the statement of financial position comprise cash at banks, on hand and short-term deposits with a maturity of three months or less. Cash equivalents represent short-term, liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less.
Cash not available for general use by the Group due to minimum liquidity requirements in the loan agreements and required class are classified as restricted cash.
in USD thousands | December 31, 2023 | December 31, 2022 |
Bank deposits denominated in USD | 106,149 | 121,245 |
Bank deposits denominated in EUR | 2,194 | 2,521 |
Bank deposits denominated in NOK | 563 | 1,751 |
Money market | 13,678 | - |
Total cash and cash equivalents and restricted cash | 122,584 | 125,517 |
The fair value of cash and cash equivalents at December 31, 2023 is USD 122.6million (USD 125.5 million at December 31, 2022). Restricted cash as at December 31, 2022 was USD 5.0 million compared to USD 30.2 million as at December 31, 2022. USD 3.8 million under the senior secured credit facility is restricted cash for the solely use for required class-related maintenance on the vessels, compared to USD 10.8 million at December 31, 2022. Further, the group have USD 0.6 million in a retention account, related to repayment on the term loan facility, and USD 0.6 million is kept as minimum liquidity as required by the loan agreements described in Note 7.4.
Bank deposits earn interest at floating rates based on applicable bank deposit rates. Short-term deposits are made for varying periods, depending on the cash requirements of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40660": { "value": "Accounting policy
Cash and short-term deposits in the statement of financial position comprise cash at banks, on hand and short-term deposits with a maturity of three months or less. Cash equivalents represent short-term, liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less.
Cash not available for general use by the Group due to minimum liquidity requirements in the loan agreements and required class are classified as restricted cash.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f40661": { "value": "Accounting policy
Cash and short-term deposits in the statement of financial position comprise cash at banks, on hand and short-term deposits with a maturity of three months or less. Cash equivalents represent short-term, liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less.
Cash not available for general use by the Group due to minimum liquidity requirements in the loan agreements and required class are classified as restricted cash.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f41037": { "value": "7.4\tInterest-Bearing Debt
Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
In USD thousands | Currency | Facility amount | Interest | Maturity | December 31, 2023 | December 31, 2022 |
Loan and credit facility | USD | 180,000 | SOFR + 3.35% | November 2023/2026 | - | 100,000 |
Senior secured credit facility | USD | 70,000 | SOFR+ 3.25% | June 2024 | 55,000 | 55,000 |
Term loan facility | USD | 50,000 | SOFR+2.8% - 3.35% | August 2028 | 49,130 | - |
Sale and leaseback facility | USD | 75,000 | SOFR+2.6% | October 2027 | 66,963 | - |
Senior secured term loan facility | USD | 8,300 | SOFR+3.5% | February 2027 | 4,810 | - |
Term loan and credit facility | USD | 15,933 | SOFR+1.5% -2.5% | February 2036 | 8,713 | - |
Secured revolving loan facility | USD | 100.0 | SOFR+2.95% | March 2028 | - | - |
Other long-term debt incl. accrued interest | 256 | 403 | ||||
Total outstanding | 129,872 | 155,403 | ||||
Debt issuance costs | (3,357) | (1,829) | ||||
Total interest-bearing debt outstanding | 126,515 | 153,574 | ||||
Classified as: | ||||||
Non-current | 92,951 | 74,462 | ||||
Current | 33,564 | 79,112 | ||||
Total | 126,515 | 153,574 |
In July 2021, the Group entered into a USD 70.0 million three-year revolving credit facility agreement with CIT Group, where MPCC Second Financing GmbH & Co. KG, a subsidiary of the Company, is the borrower. The initial drawdown of USD 55.0 million was made to refinance the existing debt. In 2023, the Group repaid fully the USD 55.0 million and the facility is cancelled.
In October 2021, the Group entered into an agreement for a USD 180 million five-year senior secured loan and revolving credit facility with Hamburg Commercial Bank (\u201cHCOB\u201d). It consists of a USD 130 million term loan and a revolving credit facility of USD 50 million. In 2023, the Group repaid fully the USD 100.0 million and the facility is cancelled.
In February 2023, the Group signed a senior secured term loan facility in an amount up to USD 8.3 million with OVB and it was fully drawn down as at March 31, 2023. The loan facility was used to partially finance the acquisition of the 2007-built AS Claudia. The loan facility carries an interest equivalent to the SOFR plus a margin of 350 basis points and matures in February 2027. The loan is to be repaid quarterly. The facility is secured by one vessel with a carrying amount of USD 14.1 million. As at December 31, 2023, the Group repaid USD 3.5 million, and USD 4.8 million remained outstanding.
In May 2023, the Group entered into a pre-delivery term loan facility in an amount of USD 15.9 million and post-delivery term loan facility in an amount of up to USD 101.5 million with Cr\u00e9dit Agricole together with K-SURE Agent. The loan facilities will be used to finance the two 5,500 TEU eco-design newbuildings. In 2023, USD 8.7 million was drawn to pay a progress payment of USD 7.2 as well as a mandatory insurance premium paid to the lender. As at December 31, 2023 the outstanding balance of USD 8.7 million was classified as current portion of interest-bearing debt and USD 101.5 million would be available once the delivery of both newbuildings is completed.
The two 5,500 TEU eco-design newbuildings are expected to be deliverd in the second and third quarter of 2024 and pre-delivery portion of the facility shall be matured upon delivery of each vessels.
In July 2023, the Group entered into a 5-year loan facility in an amount of up to USD 50.0 million with HCOB to finance part of the acquisition cost of the five modern eco-design vessels, AS Anne, AS Simone, AS Stine, AS Silje, and AS Sabine. The facility has a tenor of five years, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus a margin of a range from 280 basis points to 335 basis points depending on the Loan to Value (LTV) percentage. In 2023, USD 50 million was drawn on the facility to pay for the vessels and the Group subsequently repaid USD 0.9 million. As at December 31, 2023, USD 49.1 million remained outstanding andthe carrying amount of the five vessels was USD 112.5 million.
In September 2023, the Group entered into a sale and leaseback transactions with BoComm Leasing in an amount of USD 75.0 million for 12 of its vessels. The lease financing has a tenor of 48 months starting from September/October 2023 and carries an interest rate of SOFR plus a margin of 260 basis point, and includes purchase obligations for the 12 vessels at the end of the term. The Group is precluded from accounting for the sale of the vessels due to the purchase obligations at the end of the term which prevents the lessor from obtaining control of the vessels as such the lease has been accounted for as a secured borrowing, with the vessels recorded under \u201cVessels\u201d. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. As at December 31, 2023, all of the 12 vessels, with carrying amount of USD 116.1 million, were delivered to BoComm Leasing and USD 67.0 million remained outstanding. Since the transaction does not qualify as a sale as according to IFRS 15, the transferred vessels are not derecognized and shall be depreciated by the Group as it we were the legal owner. The proceeds of USD 75.0 million shall was recognized as financial liabilities.
In December 2023, the Group entered into a senior secured reducing revolving loan facility of up to USD 100.0 million with HCOB, subject to finalization of the loan. The facility has a tenor of five years, and carries an interest rate of SOFR plus a margin of 295 basis points. As at December 31, 2023, no draw-down was made on this facility.
The following main financial covenants are defined in the terms of the credit facility agreement with Cr\u00e9dit Agricole and\u00a0HCOB:
+ The Parent company (MPC Container Ships ASA) shall maintain a minimum equity ratio of 40%
+ The consolidated liquidity in the Group shall maintain a minimum liquidity of USD 250.000 per consolidated vessel
The Group is in compliance with all loan and credit facility covenants as at December 31, 2023.
7.4\tInterest-Bearing Debt
Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
In USD thousands | Currency | Facility amount | Interest | Maturity | December 31, 2023 | December 31, 2022 |
Loan and credit facility | USD | 180,000 | SOFR + 3.35% | November 2023/2026 | - | 100,000 |
Senior secured credit facility | USD | 70,000 | SOFR+ 3.25% | June 2024 | 55,000 | 55,000 |
Term loan facility | USD | 50,000 | SOFR+2.8% - 3.35% | August 2028 | 49,130 | - |
Sale and leaseback facility | USD | 75,000 | SOFR+2.6% | October 2027 | 66,963 | - |
Senior secured term loan facility | USD | 8,300 | SOFR+3.5% | February 2027 | 4,810 | - |
Term loan and credit facility | USD | 15,933 | SOFR+1.5% -2.5% | February 2036 | 8,713 | - |
Secured revolving loan facility | USD | 100.0 | SOFR+2.95% | March 2028 | - | - |
Other long-term debt incl. accrued interest | 256 | 403 | ||||
Total outstanding | 129,872 | 155,403 | ||||
Debt issuance costs | (3,357) | (1,829) | ||||
Total interest-bearing debt outstanding | 126,515 | 153,574 | ||||
Classified as: | ||||||
Non-current | 92,951 | 74,462 | ||||
Current | 33,564 | 79,112 | ||||
Total | 126,515 | 153,574 |
In July 2021, the Group entered into a USD 70.0 million three-year revolving credit facility agreement with CIT Group, where MPCC Second Financing GmbH & Co. KG, a subsidiary of the Company, is the borrower. The initial drawdown of USD 55.0 million was made to refinance the existing debt. In 2023, the Group repaid fully the USD 55.0 million and the facility is cancelled.
In October 2021, the Group entered into an agreement for a USD 180 million five-year senior secured loan and revolving credit facility with Hamburg Commercial Bank (\u201cHCOB\u201d). It consists of a USD 130 million term loan and a revolving credit facility of USD 50 million. In 2023, the Group repaid fully the USD 100.0 million and the facility is cancelled.
In February 2023, the Group signed a senior secured term loan facility in an amount up to USD 8.3 million with OVB and it was fully drawn down as at March 31, 2023. The loan facility was used to partially finance the acquisition of the 2007-built AS Claudia. The loan facility carries an interest equivalent to the SOFR plus a margin of 350 basis points and matures in February 2027. The loan is to be repaid quarterly. The facility is secured by one vessel with a carrying amount of USD 14.1 million. As at December 31, 2023, the Group repaid USD 3.5 million, and USD 4.8 million remained outstanding.
In May 2023, the Group entered into a pre-delivery term loan facility in an amount of USD 15.9 million and post-delivery term loan facility in an amount of up to USD 101.5 million with Cr\u00e9dit Agricole together with K-SURE Agent. The loan facilities will be used to finance the two 5,500 TEU eco-design newbuildings. In 2023, USD 8.7 million was drawn to pay a progress payment of USD 7.2 as well as a mandatory insurance premium paid to the lender. As at December 31, 2023 the outstanding balance of USD 8.7 million was classified as current portion of interest-bearing debt and USD 101.5 million would be available once the delivery of both newbuildings is completed.
The two 5,500 TEU eco-design newbuildings are expected to be deliverd in the second and third quarter of 2024 and pre-delivery portion of the facility shall be matured upon delivery of each vessels.
In July 2023, the Group entered into a 5-year loan facility in an amount of up to USD 50.0 million with HCOB to finance part of the acquisition cost of the five modern eco-design vessels, AS Anne, AS Simone, AS Stine, AS Silje, and AS Sabine. The facility has a tenor of five years, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus a margin of a range from 280 basis points to 335 basis points depending on the Loan to Value (LTV) percentage. In 2023, USD 50 million was drawn on the facility to pay for the vessels and the Group subsequently repaid USD 0.9 million. As at December 31, 2023, USD 49.1 million remained outstanding andthe carrying amount of the five vessels was USD 112.5 million.
In September 2023, the Group entered into a sale and leaseback transactions with BoComm Leasing in an amount of USD 75.0 million for 12 of its vessels. The lease financing has a tenor of 48 months starting from September/October 2023 and carries an interest rate of SOFR plus a margin of 260 basis point, and includes purchase obligations for the 12 vessels at the end of the term. The Group is precluded from accounting for the sale of the vessels due to the purchase obligations at the end of the term which prevents the lessor from obtaining control of the vessels as such the lease has been accounted for as a secured borrowing, with the vessels recorded under \u201cVessels\u201d. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. As at December 31, 2023, all of the 12 vessels, with carrying amount of USD 116.1 million, were delivered to BoComm Leasing and USD 67.0 million remained outstanding. Since the transaction does not qualify as a sale as according to IFRS 15, the transferred vessels are not derecognized and shall be depreciated by the Group as it we were the legal owner. The proceeds of USD 75.0 million shall was recognized as financial liabilities.
In December 2023, the Group entered into a senior secured reducing revolving loan facility of up to USD 100.0 million with HCOB, subject to finalization of the loan. The facility has a tenor of five years, and carries an interest rate of SOFR plus a margin of 295 basis points. As at December 31, 2023, no draw-down was made on this facility.
The following main financial covenants are defined in the terms of the credit facility agreement with Cr\u00e9dit Agricole and\u00a0HCOB:
+ The Parent company (MPC Container Ships ASA) shall maintain a minimum equity ratio of 40%
+ The consolidated liquidity in the Group shall maintain a minimum liquidity of USD 250.000 per consolidated vessel
The Group is in compliance with all loan and credit facility covenants as at December 31, 2023.
Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f41047": { "value": "Accounting policy
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs and have not been designated as at fair value through profit or loss. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the effective interest rate.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
Debt issuance costs, including debt arrangement fees, are capitalized and amortized using the effective interest method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. If a loan is repaid early, any unamortized portion of the related debt issuance costs is expensed in the period in which the loan is repaid. The Group has recorded debt issuance costs as a direct deduction from the carrying amount of the related debt using the effective interest rate method.
Under a sale and leaseback transaction, when the transfer of vessels does not qualify as a sale under IFRS 15, the seller-lessee does not de-recognise the transferred asset, and it accounts for the cash received as a financial liability.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f42602": { "value": "7.5\tEquity
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
7.5\tEquity
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
7.5\tEquity
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
7.5\tEquity
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f42612": { "value": "Accounting policy
Profit distribution includes dividends approved by the Board of Directors\u2019 Meeting. The distribution of profits proposed by the Board of Directors is recognized as a liability and a deduction of equity once the distribution is approved by the Group\u2019 shareholders at the Board of Directors\u2019 Meeting. Costs related to share issuances are recognized directly in equity.
Total equity consists of share capital, share premium, fair value reserves, reserve for invested unrestricted equity, retained earnings and non-controlling interest. Share premium includes the amount exceeding the accounting par value of shares received by the Company in connection with share subscriptions. Fair value reserve includes hedge accounted component of fair value changes of derivatives under hedge accounting. Retained earnings include profit for the period and previous periods. Paid dividends approved in the General Meeting are first deducted from share premium before charging against retained earnings.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForWarrantsExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f42760": { "value": "Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2023 | 443,700,279 | 48,589 | 152,737 |
Cancellation of treasury shares | - | - | - |
Dividend paid from share premium | - | - | (150,858) |
Settlement of warrants | - | - | - |
December 31, 2023 | 443,700,279 | 48,589 | 1,879 |
Number of shares | Share capital (USD\u00a0thousands) | Share premium (USD\u00a0thousands) | |
January 1, 2022 | 444,051,377 | 48,630 | 597,080 |
Cancellation of treasury shares | (351,098) | (41) | (1,102) |
Dividend paid from share premium | - | - | (441,022) |
Settlement of warrants | - | - | (2,219) |
December 31, 2022 | 443,700,279 | 48,589 | 152,737 |
Share Capital
The share capital of the Company consists of 443,700,279 shares as at December 31, 2023, with nominal value per share of NOK 1. All issued shares are of equal rights and are fully paid up.
In July 2022, the Group entered a contract to purchase two new carbon-neutral 1300 TEU newbuildings, together with Topeka MPC Maritime AS, a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG. Topeka MPC Maritime AS purchased their 9.9% non-controlling interest for USD 1.4 million.
Furthermore, non-controlling interests as of December 31, 2023 consists of the 0.1% shares the ship managers hold in the ship-owning entities under the MPC Container Ships Invest B.V. Group. As at December 31, 2023, the non-controlling interest also includes the minority interest\u2019s share of result within these ship-owning entities, see Note 6.2\u2013 Group Companies.
The table below summarizes the changes in components in other reserves.
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2023 | - | (109) | (109) |
Change during year | (1,368) | - | (1,368) |
As at December 31, 2023 | (1,368) | (109) | (1,477) |
Cash flow hedging | Currency translation adjustment | Change in Other comprehensive income | |
As at January 1, 2022 | - | (109) | (109) |
Change during year | 634 | - | 634 |
As at December 31, 2022 | 634 | (109) | 525 |
Overview of the 20 largest shareholders as at December 31, 2023
Shareholder | Number of shares | in % | Type |
MPC CSI GmbH | 70,302,796 | 15.8% | Ordinary |
CLEARSTREAM BANKING S.A. | 20,687,298 | 4.7% | Nominee |
State Street Bank and Trust Comp | 18,643,356 | 4.2% | Nominee |
J.P. Morgan SE | 17,260,108 | 3.9% | Nominee |
The Bank of New York Mellon | 10,161,183 | 2.3% | Nominee |
FOLKETRYGDFONDET | 8,879,877 | 2.0% | Ordinary |
Avanza Bank AB | 7,989,707 | 1.8% | Nominee |
JPMorgan Chase Bank | 7,859,325 | 1.8% | Nominee |
NORDNET LIVSFORSIKRING AS | 7,191,085 | 1.6% | Ordinary |
Brown Brothers Harriman & Co. | 6,529,365 | 1.5% | Nominee |
State Street Bank and Trust Comp | 5,727,608 | 1.3% | Nominee |
SONGA CAPITAL AS | 5,000,000 | 1.1% | Ordinary |
Nordnet Bank AB | 4,342,055 | 1.0% | Nominee |
The Bank of New York Mellon | 4,080,214 | 0.9% | Nominee |
The Bank of New York Mellon SA/NV | 3,913,686 | 0.9% | Nominee |
State Street Bank and Trust Comp | 3,840,669 | 0.9% | Nominee |
Deutsche Bank Aktiengesellschaft | 3,569,639 | 0.8% | Nominee |
SIX SIS AG | 2,800,242 | 0.6% | Nominee |
VERDIPAPIRFONDET STOREBRAND INDEKS | 2,799,673 | 0.6% | Ordinary |
Goldman Sachs International | 2,620,689 | 0.6% | Nominee |
Total | 214,198,575 | 48.3% |
Dr. Axel Schroeder and Ulf Holl\u00e4nder hold indirect ownership interest in the Company through an indirect minority interest in MPC CSI GmbH. Peter Frederiksen holds direct ownership in the Company. The Group CEO, Constantin Back, holds 66,000 shares directly in the Company. The CEO does not have any indirect ownership. Refer to Note 8.2\u2013 Related Party Transactionsfor further information on Directors\u2019 and executive management\u2019s compensation and shareholding as at December 31.2023.
In 2017, the company issued 2,121,046 warrants to MPC Capital Beteiligungsgesellschaft mbH & Co. KG, and additional 3,489,860 warrants were issued in 2020. Each warrant gave the right, but no obligation, to subscribe for one share in the Company. The warrants were valid for a period of five years from April 20, 2017.
The Company entered into an agreement on September 3, 2021 with the warrant holder to settle 3,740,604 warrants for a cash consideration of USD 3.5 million which was recognized in 2021 in other paid capital. Since the cash consideration was due by June 30, 2022, the provision was included under current liabilities as at December 31, 2021. As at December 31, 2021 the warrant holder holds 1,870,302 which have an exercise price of USD 1.89 conditional on that the vesting criteria are met. The remaining 1,870,302 warrants held at year-end 2021 were settled for a cash consideration of USD 2.2 million on January 22, 2022. Following the settlement agreement, there were no longer any warrants outstanding relating to the Company from this date onwards.
The warrants issued to the founding shareholder were recognized as equity instruments in accordance with IAS 2 Financial Instruments.
7.6\tCapital Management
A key objective of the Group\u2019s capital management is to ensure that the Group maintains a capital structure in order to\u00a0support its business activities and maximise the shareholder value. The Group evaluates its capital structure in light of current and projected cash flows, the state of the shipping markets, new business opportunities and the Group\u2019s financial commitments. Capital is primarily managed on Group level.
The Group monitors its capital structure using the book-equity ratio, which stands at 78.9% as at December 31, 2023 (2022: 75.4%). The Group\u2019 s debt facilities contain certain financial covenants which require the Company or the subsidiaries to maintain the following financial covenants, minimum value of vessels, and a certain level of free cash and equity ratio. The Group aims at maintaining an equity ratio with adequate headroom to the respective covenant requirements (refer to Note 7.4\u2013 Interest-Bearing Debt).
in USD thousands | December 31, 2023 | December 31, 2022 |
Book equity | 753,481 | 721,447 |
Total assets | 954,744 | 956,321 |
Book-equity ratio | 78.9% | 75.4% |
In support of the Group\u2019s objective of maximizing returns to shareholders, the Group\u2019s intention is to pay regular dividends by way of distributing 75% of profits (loss) for the period after considering CAPEX and working capital requirements, including liquidity reserves and one-off effects. Dividends will be declared or proposed by the Board at the sole discretion of the Board and will depend upon the financial position, earnings, debt covenants, distribution restrictions, capital requirements and other factors related to the Group. The Company cannot guarantee that its Board will declare or propose dividends in the future. Furthermore, the Board may make event driven distributions based on non-recurring proceeds, such as vessel sales, by way of extraordinary dividends or share buybacks, to be applied according to the Board\u2019s discretion.
During 2023, the Group distributed dividends for a total of USD 293.1 million, which also includes distributions to non-controlling interests. These include both recurring and event driven dividends. The dividend was distributed with USD 150.9 from share premium, USD 142.0 million from retained earnings and USD 0.3 million to non-controlling interests.
Announcement date | Type | Cash distribution per share | Ex-dividend | Record | Payment |
31.01.2023 | Event-driven | USD 0.07 / NOK 0.7238 | 20.02.2023 | 21.02.2023 | 28.02.2023 |
28.02.2023 | Recurring | USD 0.15 /\u00a0NOK 1.5765 | 23.03.2023 | 24.03.2023 | 30.03.2023 |
23.05.2023 | Recurring | USD 0.15 /\u00a0NOK 1.5956 | 21.06.2023 | 22.06.2023 | 29.06.2023 |
21.08.2023 | Recurring | USD 0.15 /\u00a0NOK 1.6118 | 20.09.2023 | 21.09.2023 | 28.09.2023 |
21.11.2023 | Recurring | USD 0.14 / NOK 1.5224 | 13.12.2023 | 14.12.2023 | 21.12.2023 |
8.1\tCommitment
As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels are expected to be delivered in the second and third quarter of 2024. The other two vessels are 1,300 TEU container vessels equipped with dual-fuel engines that are able to operate on green methanol. They are expected to be delivered in late 2024. As at December 31, 2023, remaining commitments to the newbuilding program amounted to USD 156.1 million which are due in 2024.
In 2023, the Group has committed to undertake joint retrofit with some of our customers on 13 vessels with a total cost of USD 17.5 million, of which USD 4.4 million shall be reimbursed from the charterer. As at December 31, 2023, the remaining commitments amounts to USD 15.6 million.
In December 2022, the Company had entered into a put/call option with INERATEC GmbH through its investment in associates for the delivery of 1,500 MT green physical marine diesel oil between 2024 and 2026. The option would oblige the Company to purchase and take delivery of the at a maximum price of 2,500 USD/MT.
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As at December 31, 2023, the Group\u2019s newbuilding program consisted of four vessels, of which two 5,500 TEU eco-design vessels are expected to be delivered in the second and third quarter of 2024. The other two vessels are 1,300 TEU container vessels equipped with dual-fuel engines that are able to operate on green methanol. They are expected to be delivered in late 2024. As at December 31, 2023, remaining commitments to the newbuilding program amounted to USD 156.1 million which are due in 2024.
In 2023, the Group has committed to undertake joint retrofit with some of our customers on 13 vessels with a total cost of USD 17.5 million, of which USD 4.4 million shall be reimbursed from the charterer. As at December 31, 2023, the remaining commitments amounts to USD 15.6 million.
In December 2022, the Company had entered into a put/call option with INERATEC GmbH through its investment in associates for the delivery of 1,500 MT green physical marine diesel oil between 2024 and 2026. The option would oblige the Company to purchase and take delivery of the at a maximum price of 2,500 USD/MT.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800MXS7CXYJ2Q1805", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f44828": { "value": "8.2\tRelated Party Transactions
The Group has entered into a corporate service agreement to purchase administrative and corporate services from MPC M\u00fcnchmeyer Petersen Capital AG and its subsidiaries.
The Company is responsible for the technical ship management of the vessels owned by the Group. Performance of technical ship management services is sub-contracted to Wilhelmsen Ahrenkiel Ship Management GmbH & Co. KG and Wilhelmsen Ahrenkiel Ship Management B.V., joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG, for 52 of the 59 vessels owned by the Group at December 31, 2023.
Commercial ship management of the vessels owned by the Group and associated joint ventures is contracted to Contchart GmbH & Co. KG and Harper Petersen B.V., which are joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG.
The following table provides the total amount of service transactions that have been entered into with related parties for the relevant period:
in USD thousands / 2023 | 2023 | 2022 |
Wilhelmsen Ahrenkiel Ship Man. GmbH & Co. KG / B.V. | 8,167 | 8,653 |
Harper Petersen & Co. GmbH | 6,624 | 5,670 |
MPC M\u00fcnchmeyer Petersen Capital AG | 924 | 1,180 |
Total | 15,715 | 15,503 |
Directors\u2019 and executive management\u2019s compensation and shareholding\u200c1
Shares at December 31, 2023 | Warrants | 2023 remuneration | |
Ulf Holl\u00e4nder (Chairman)\u200c2 | 165,637 | - | USD 90,000 |
Dr. Axel Schroeder\u200c3 | 2,471,110 | - | USD 50,000 |
Pia Meling | - | - | USD 50,000 |
Peter Fredriksen | 200,000 | - | USD 50,000 |
Ellen Hanetho | 60,000 | - | USD 50,000 |
Constantin Baack (CEO) | 66,000 | - | USD 1,239,446 |
Moritz Fuhrmann (CFO) | - | - | USD 494,587 |
Dr. Benjamin Pfeifer (former CFO) | - | - | USD 81,235 |
Shares at December 31, 2022 | Warrants | 2022 remuneration | |
Ulf Holl\u00e4nder (Chairman) | 165,637 | - | NOK 600,000 |
Dr. Axel Schroeder\u200c4 | 2,536,511 | - | NOK 400,000 |
Pia Meling | - | - | NOK 400,000 |
Peter Fredriksen | 200,000 | - | NOK 400,000 |
Ellen Hanetho | 60,000 | - | NOK 400,000 |
Constantin Baack (CEO) | 66,000 | - | NOK 7,848,515 |
Moritz Fuhrmann (CFO) | - | NOK 285,807 | |
Dr. Benjamin Pfeifer (former CFO) | 7,300 | - | NOK 3,820,956 |
1Several of the board members hold further share through indirect shareholdings in the Company. Please refer to Note 7.5\u2013 Equityfor further details
2On March 15, 2024, an agreement was reached that all shares held by Ulf Holl\u00e4nder were sold to MPC CSI GmbH.
3On March 15, 2024, an agreement was reached that all shares held by Dr. Axel Schroeder were sold to MPC CSI GmbH.
4In November 2022, 4.9 million shares were transferred from a company controlled by Dr. Axel Schroeder to MPC CSI GmbH as contribution in kind.
In USD thousands 2023 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 474 | 765 | 1,2393 |
Moritz Fuhrmann (CFO) | 275 | 220 | 495 |
Dr. Benjamin Pfeifer (former CFO) | 81 | - | 81 |
In USD thousands 2022 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 460 | 316 | 776 |
Moritz Fuhrmann (CFO) | 28 | - | 28 |
Dr. Benjamin Pfeifer (former CFO) | 272 | 105 | 377 |
In April, 2023, the Company\u2019s general meeting unanimously resolved that each member of the Board of Directors shall receive USD 50,000 (USD 90,000 for the Chairman of the Board) in remuneration for the financial year 2023. The\u00a0Board fees resolved for the year are paid out in the subsequent year. The total remuneration to the Board of Directors and executive management in 2023 was USD 2.1 million (2022: USD 1.2 million).
Guidelines for compensation to the CEO and CFO
The main purpose of the compensation to the executive management is to attract, retain and motivate employees with the skills, qualifications and experience needed to maximise value creation for the Company and its shareholders.
The total compensation to the CEO and CFO consists of base salary, bonus and other benefits. The Company practices standard employment contracts, with standard terms and conditions regarding notice period and severance pay for the executive management. The executive management participates in a variable bonus scheme where the purpose is to provide incentive to contribute to the value creation of the Company and its shareholders.
8.2\tRelated Party Transactions
The Group has entered into a corporate service agreement to purchase administrative and corporate services from MPC M\u00fcnchmeyer Petersen Capital AG and its subsidiaries.
The Company is responsible for the technical ship management of the vessels owned by the Group. Performance of technical ship management services is sub-contracted to Wilhelmsen Ahrenkiel Ship Management GmbH & Co. KG and Wilhelmsen Ahrenkiel Ship Management B.V., joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG, for 52 of the 59 vessels owned by the Group at December 31, 2023.
Commercial ship management of the vessels owned by the Group and associated joint ventures is contracted to Contchart GmbH & Co. KG and Harper Petersen B.V., which are joint ventures of MPC M\u00fcnchmeyer Petersen Capital AG.
The following table provides the total amount of service transactions that have been entered into with related parties for the relevant period:
in USD thousands / 2023 | 2023 | 2022 |
Wilhelmsen Ahrenkiel Ship Man. GmbH & Co. KG / B.V. | 8,167 | 8,653 |
Harper Petersen & Co. GmbH | 6,624 | 5,670 |
MPC M\u00fcnchmeyer Petersen Capital AG | 924 | 1,180 |
Total | 15,715 | 15,503 |
Directors\u2019 and executive management\u2019s compensation and shareholding\u200c1
Shares at December 31, 2023 | Warrants | 2023 remuneration | |
Ulf Holl\u00e4nder (Chairman)\u200c2 | 165,637 | - | USD 90,000 |
Dr. Axel Schroeder\u200c3 | 2,471,110 | - | USD 50,000 |
Pia Meling | - | - | USD 50,000 |
Peter Fredriksen | 200,000 | - | USD 50,000 |
Ellen Hanetho | 60,000 | - | USD 50,000 |
Constantin Baack (CEO) | 66,000 | - | USD 1,239,446 |
Moritz Fuhrmann (CFO) | - | - | USD 494,587 |
Dr. Benjamin Pfeifer (former CFO) | - | - | USD 81,235 |
Shares at December 31, 2022 | Warrants | 2022 remuneration | |
Ulf Holl\u00e4nder (Chairman) | 165,637 | - | NOK 600,000 |
Dr. Axel Schroeder\u200c4 | 2,536,511 | - | NOK 400,000 |
Pia Meling | - | - | NOK 400,000 |
Peter Fredriksen | 200,000 | - | NOK 400,000 |
Ellen Hanetho | 60,000 | - | NOK 400,000 |
Constantin Baack (CEO) | 66,000 | - | NOK 7,848,515 |
Moritz Fuhrmann (CFO) | - | NOK 285,807 | |
Dr. Benjamin Pfeifer (former CFO) | 7,300 | - | NOK 3,820,956 |
1Several of the board members hold further share through indirect shareholdings in the Company. Please refer to Note 7.5\u2013 Equityfor further details
2On March 15, 2024, an agreement was reached that all shares held by Ulf Holl\u00e4nder were sold to MPC CSI GmbH.
3On March 15, 2024, an agreement was reached that all shares held by Dr. Axel Schroeder were sold to MPC CSI GmbH.
4In November 2022, 4.9 million shares were transferred from a company controlled by Dr. Axel Schroeder to MPC CSI GmbH as contribution in kind.
In USD thousands 2023 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 474 | 765 | 1,2393 |
Moritz Fuhrmann (CFO) | 275 | 220 | 495 |
Dr. Benjamin Pfeifer (former CFO) | 81 | - | 81 |
In USD thousands 2022 | Base salary | Variable pay | Total |
Constantin Baack (CEO) | 460 | 316 | 776 |
Moritz Fuhrmann (CFO) | 28 | - | 28 |
Dr. Benjamin Pfeifer (former CFO) | 272 | 105 | 377 |
In April, 2023, the Company\u2019s general meeting unanimously resolved that each member of the Board of Directors shall receive USD 50,000 (USD 90,000 for the Chairman of the Board) in remuneration for the financial year 2023. The\u00a0Board fees resolved for the year are paid out in the subsequent year. The total remuneration to the Board of Directors and executive management in 2023 was USD 2.1 million (2022: USD 1.2 million).
Guidelines for compensation to the CEO and CFO
The main purpose of the compensation to the executive management is to attract, retain and motivate employees with the skills, qualifications and experience needed to maximise value creation for the Company and its shareholders.
The total compensation to the CEO and CFO consists of base salary, bonus and other benefits. The Company practices standard employment contracts, with standard terms and conditions regarding notice period and severance pay for the executive management. The executive management participates in a variable bonus scheme where the purpose is to provide incentive to contribute to the value creation of the Company and its shareholders.
8.3\tSubsequent Events
In January 2024, the Group completed the sale and delivered the 2004-built vessel, AS Paulina to an unrelated party.
In January 2024, the Group partnered with Unifeeder in a joint investment for the construction of a 1,250 TEU container vessel at Chinese-based shipyard Wenchong shipbuilding. The vessel is equipped with dual-fuel engines and able to operate on green methanol. The contract price is USD 39.0 million and the equity will be contributed 50% by the Group and the remaining half by Unifeeder. The newbuilding shall be scheduled for delivery in late 2026, and will be under a 7-year time-charter agreement with Unifeeder post-delivery.
In February 2024, the Group entered into an agreement to sell its 2006-built vessel, AS Clarita, to an unrelated party for a total of USD 10.3 million.
In February 2024, pursuant to the Company\u2019s stated distribution policy, the Board of Directors declared a recurring dividend of USD 0.13 per share for the fourth quarter of 2023, corresponding to a total dividend payment of approximately USD 57.7 million, depending on prevailing FX rates. The dividend will be paid on or about March 26.2024.
In March 2024, the Group completed the sale and delivered the 2004-built vessel, AS Petra to an unrelated party.