ANNUAL REPORT 2023
2 Auditor’s report
HÖEGH LNG
Annual
Report
2023
Cover photo
Neptune
Auditor’s report 3
HÖEGH LNG
About Höegh LNG
Höegh LNG is a pioneer within maritime energy infrastructure, providing
fast-track floating LNG terminals to facilitate for national and regional
energy security around the world. The flexibility provided by floating
terminal solutions also supports the transition to clean, carbon-free energy.
We are a leading innovator, owner and operator of Floating Storage
and Regasification Units (FSRUs) and LNG carriers (LNGCs). Both are
critical to energy security, and a foundation for future technologies and
infrastructure for decarbonisation of global energy systems.
For over 50 years, we have connected energy producers and end-users via
safe and reliable access to critical and cost competitive LNG infrastructure.
FSRUs are strategic assets that provide countries and energy companies
with rapid, flexible and cost-efficient access to the global LNG market.
Today, half of our capacity is deployed in Europe.
Technical and commercial innovation in addition to operational excellence
and a competent and purpose-built organisation have made us a leader
within the expanding LNG import terminal market. These factors will remain
the foundation for long-term value creation and future growth. Moreover,
we are at the forefront of developing clean energy terminal infrastructure,
pioneering advancements in ammonia, hydrogen (H2), and carbon capture
and storage (CCS). By championing these sustainable solutions, we ensure
our relevance and resilience across diverse energy transition scenarios.
Höegh LNG is a Bermudian entity with approximately 900 employees
at sea and onshore, with presence in Norway, Singapore, Germany,
Lithuania, United Kingdom, USA, Indonesia, Egypt, Colombia, Brazil,
France and the Philippines.
Höegh LNG Holdings Ltd. is owned by Larus Holding Ltd., a 50-50 joint
venture between Leif Höegh & Co. Ltd. and Floating Infrastructure LP.
Leif Höegh & Co. Ltd. is indirectly controlled by the third generation of the
Høegh family, while Floating Infrastructure LP is owned by funds managed
by Morgan Stanley Infrastructure Partners.
Please see: www.hoeghlng.com
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HÖEGH LNG
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KEY FINANCIAL FIGURES
OPERATIONAL KPIs
(in USD’000 unless otherwise indicated) 2023 2022
INCOME STATEMENT
Total income 520 872 380 788
Operating profit before depreciation and impairment(EBITDA) 338 187 153 231
Operating profit after depreciation and impairment 220 408 37 955
Profit (loss) for the year 96 955 (55 409)
BALANCE SHEET AS OF 31 DECEMBER
Equity adjusted for hedging transactions 780 609 699 216
Adjusted equity ratio (%) 30 29
Net interest-bearing debt 1 380 186 1 336 667
CASH FLOWS
Net cash flows from operating activities 307 322 163 040
Net cash flows from investing activities (206 305) (180 938)
Net cash flows from financing activities (29 280) 30 608
Net increase in cash and cash equivalents 71 737 12 710
2023 2022
Technical availability (%) 99.8 99.7
Lost time injury frequency (per million work hours) 0.3 0.0
FLEET LIST
Vessel Type Ownership (%) Built Flag
Storage capacity
(m
3
)
Regas capacity
(MMscf/d)
Arctic Princess LNGC 34 2006 NIS 147 980
Arctic Lady LNGC 50 2006 NIS 147 797
Hoegh Gandria LNGC 100 2013 MHL 160 000
Neptune FSRU 50 2009 NIS 145 037 750
Cape Ann FSRU 50 2010 FRA 145 145 750
Independence FSRU 100 2014 SGP 170 132 750
PGN FSRU Lampung
1
FSRU 49 2014 IDN 170 011 375
Höegh Gallant FSRU 100 2014 NIS 170 051 500
Höegh Grace FSRU 100 2016 MHL 170 313 532
Hoegh Giant FSRU 100 2017 SGP 170 032 750
Höegh Esperanza FSRU 100 2018 NIS 170 116 750
Hoegh Gannet FSRU 100 2018 SGP 170 070 1 000
Hoegh Galleon FSRU 100 2019 SGP 170 348 750
1
Consolidated with 100%
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HÖEGH LNG
Contents
08 DELIVERING ENERGY SECURITY AND TRANSITION
12 DIRECTORS’ REPORT
14 Strategic direction
15 Sustainability
17 Review of 2023
19 LNG and FSRU market development
20 Financial results
21 Risk and risk management
23 Shareholder information
23 Corporate governance
23 Prospects
26 CORPORATE GOVERNANCE REPORT
28 Implementation and reporting on corporate governance
29 Business
30 Equity and dividends
31 Equal treatment of shareholders
31 Shares and negotiability
31 General meetings
31 Nomination committee
31 Board of directors: Composition and independence
34 The work of the board of directors
35 Risk management and internal control
36 Remuneration of the board of directors
36 Remuneration of executive personnel
37 Information and communications
37 Takeovers
37 Auditor
38 FINANCIAL STATEMENTS
40 Consolidated financial statements Höegh LNG Group
42 Consolidated statement of income
42 Consolidated statement of comprehensive income
43 Consolidated statement of financial position
45 Consolidated statement of changes in equity
46 Consolidated statement of cash flows
48 Index to notes
96 Financial statements Höegh LNG Holdings Ltd.
98 Statement of income
98 Statement of comprehensive income
99 Statement of financial position
101 Statement of changes in equity
102 Statement of cash flows
103 Notes
114 Directors’ responsibility statement
118 Independent auditor’s report
124 Alternative performance measures
1
2
3
4
4.1
4.2
4.3
4.4
4.5
Delivering energy
security and
transition
01
HÖEGH LNG
8 Delivering energy security and transition
Delivering energy security
and transition
2023 was an extraordinary year for Höegh LNG, with record profitability, delivery of
critical LNG infrastructure in Europe, and launching of new innovative clean energy
concepts.
HÖEGH LNG
Delivering energy security and transition 9
Global LNG demand reached in 2023 a new high at 406 million tonnes. Rapid
deployment of regasification infrastructure, especially in Europe, was crucial in
mitigating supply disruptions and stabilising the market after unprecedented
turbulence since late 2021. Simultaneously, the expanding LNG carrier fleet led to
lower freight rates.
In this market, Höegh LNG successfully commissioned three new terminals
in Europe. These achievements were no small feat - they placed tremendous
demands on our entire organization. My sincere gratitude goes out to our people
and our customers and partners who together have delivered fast-track LNG
terminal solutions securing gas supply to Germany and France.
The year also saw the energy transition gaining momentum, creating significant
opportunities for sustainable growth. At Höegh LNG, we are firmly committed to
drive the energy transition responsibly, serving as both a trusted LNG infrastructure
provider and a leading pioneer of clean energy solutions.
Sustainability and clean energy strategy
Our focus on ESG, sustainability and energy
transition gained significant traction in 2023.
Our overall climate ambition is to reduce carbon
emissions by 50% and operate our first net zero-
carbon FSRU by 2030, and we remain resolute
on our commitment to achieve this goal.
Our commitment to safety stands as our highest
priority and in 2023, we proudly initiated a
“Safer Together” program, fostering a safety
culture throughout the group. Our goal is clear:
zero harm to people and the environment.
Second year running, Höegh LNG achieved a
5-star rating and this year with an outstanding
score of 100 out of 100 in the GRESB infra-
structure assets benchmark report, reflecting
our dedication to sustainability and operational
excellence.
In 2023, we started delivering on our clean
energy strategy, putting our plan into action with
groundbreaking concepts.
The ammonia-to-hydrogen cracker project was
progressed together with partners Wärtsila,
BASF, Sustainable Energy and Norwegian
research institutes, with support of the
Norwegian government. FID was taken to build
a pilot plant during 2024 and we expect to have
a large-scale technology ready by 2028 for
floating solutions.
A new hybrid FSRU concept was launched to
the market. This groundbreaking innovation
will allow our existing FSRUs to serve as
dual-purpose import terminals in the future.
By installing the large-scale ammonia cracker
onboard, the FSRUs will be able to distribute
both natural gas and hydrogen to the grid.
Höegh LNG and Aker BP entered into a
partnership to deliver complete CCS solutions
HÖEGH LNG
10 Delivering energy security and transition
The rapid need for energy transition
creates significant opportunities for
sustained growth.
to European industrial emitters. The joint
efforts involve CO2 transportation and storage
solutions, including innovative Floating CO2
Storage Units (FCSO). By 2028-2029, the aim
is to offer market-leading decarbonization
solutions, contributing significantly to Europe’s
energy transition.
Record high results – prospects for growth
In 2023, we delivered the highest net result
in the company’s history – driven by all the
new contracts for our fleet of FSRUs. Höegh
LNG also achieved a significant milestone
by refinancing and securing new loan and
corporate debt facilities of more than USD 1
billion, reducing our cost of debt and providing
funds for further growth.
As part of our growth strategy, we completed
the acquisition of the LNG carrier Golar Seal
(later renamed Hoegh Gandria) in March 2023,
securing a valuable asset with potential for
conversion into a FSRU. In December 2023,
Höegh LNG also joined forces with VTTI B.V. to
create the Zeeland Energy Terminal in or near
the port of Vlissingen in the Netherlands. This
marks our first origination endeavor in years,
underscoring our commitment to delivering
energy security and transition in Europe.
The FSRU market is poised for growth,
driven by the build-out of more liquefaction
capacity, particularly in the US and Quatar, and
increased LNG carrier capacity. We see market
opportunities across Asia and South America in
addition to opportunities for further expansion
in Europe. Höegh LNG, with its modern and
sophisticated fleet and robust operational track
record, remain well positioned to succeed in the
market.
The rapid need for energy transition creates
significant opportunities for sustained growth.
With our clean energy strategy, we expect to
play a pivotal role, leveraging our expertise
in floating terminals, liquid gas handling and
marine gas transportation.
I am enthusiastic about navigating Höegh
LNG, alongside our team, customers, partners,
and shareholders, towards our purpose of
accelerating countries to energy security and
transition.
Erik Nyheim
President and CEO
HÖEGH LNG
Delivering energy security and transition 11
02
Directors’ report
14 Strategic direction
15 Sustainability
17 Review of 2023
19 LNG and FSRU market development
20 Financial results
21 Risk and risk management
23 Shareholder information
23 Corporate governance
23 Prospects
HÖEGH LNG
14 Directors' report
Directors’ report for 2023
In 2023, global demand for LNG grew steadily to a record high of 406 million tonnes.
The expansion of the global LNG carrier fleet played a key role in reducing freight rates
from their previous peak levels which stabilised the market. The upward trajectory
of the LNG market is expected to continue, fuelled by robust growth in liquefaction
capacity. Amid this bustling market, Höegh LNG successfully commissioned three
new LNG import terminals in Europe and are actively exploring further opportunities
in the floating import terminal market. While last year emphasized energy security
globally, the current narrative has pivoted towards the need for energy transition. In
response, Höegh LNG are strategically positioned through introducing the Hybrid FSRU
concept, whereby our existing FSRUs can be upgraded to distribute both hydrogen and
natural gas. Additionally, our ammonia floating terminal concept further aligns with
sustainable energy goals and our partnership agreement with Aker BP on CCS aims to
drive industry decarbonization in Europe.
Höegh LNG Holdings Ltd. (“Höegh LNG
Holdings” or the “company”) and its
subsidiaries and joint ventures (together
“Höegh LNG” or “the group”) is a privately
owned group which operate worldwide and is
the global market leader for floating storage
and regasification units (FSRUs).
With the company’s registered office located
in Hamilton, Bermuda, the group operates
worldwide and are present in Oslo (Norway),
Manila (Philippines), Singapore, London
(UK), Miami (USA), Jakarta (Indonesia),
Klaipeda (Lithuania), Cairo (Egypt), Cartagena
(Colombia), Hamburg (Germany), Le Havre
(France) and Santos (Brazil).
Strategic direction
Höegh LNG provides cost competitive and
flexible LNG infrastructure that forms the
basis for energy security and independence,
enabling the transition to a low carbon future.
Our critical LNG infrastructure allows all
countries with a coastline to access global
LNG markets. LNG can be sourced globally
and shipped through specialised LNG carriers,
providing natural gas consumers with an
abundant sourcing flexibility compared to gas
transported in fixed pipelines.
We drive technological and commercial
innovation in our markets and continuously
seek excellence in our operations to maximise
value for our stakeholders while ensuring
safety and well-being of our employees and
minimising the impact on the environment.
We create growth and value by offering
a solution addressing three megatrends
affecting global energy systems:
• Energy security is a top geopolitical priority,
where all nations require a robust plan for
capacity of supply to meet current and
future energy demand and redundancy
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HÖEGH LNG
• Cost of energy, including universal access to
affordable and abundant energy
• Energy transition and changes to the
energy mix to decarbonise energy systems
and minimise potential environmental and
climate change impacts
Our strategic beliefs, direction and ambitions
consider the impact of these megatrends on
Höegh LNG as a company and our industry.
They guide how we develop to reach our full
potential and generate long-term value. We
plan to grow our LNG infrastructure business
and innovate clean energy terminal solutions for
emerging markets such as carbon capture and
storage (CCS), ammonia, hydrogen and other
segments – all supported by our world-class
operations.
Sustainability
Höegh LNG is deeply committed to guiding the
energy transition responsibly, serving as both
a trusted LNG provider and a leading advocate
for clean energy solutions. The commitment
extends beyond rhetoric to concrete action,
prioritizing sustainability issues crucial to
operations and stakeholders.
Last year, Höegh LNG achieved an impressive
score of 97 out of a possible 100 in the GRESB
assessment. Building upon this success,
this year, thanks to the company’s targeted
efforts in addressing identified gaps and
implementing improvements, Höegh LNG
achieved an impressive score of a perfect 100!
Focus areas include environmental impact,
workforce health and safety, and climate
resilience complemented by internal emphasis
on diversity, inclusion, and fostering a positive
corporate culture. Stakeholder dialogues and
surveys validate the significance of these
areas, underpinning the commitment to robust
sustainability practices.
Impact on the external environment
In 2023, Höegh LNG observed a rise in scope
1 emissions compared to 2022, in particularly
as last year four of our vessels underwent
technical preparation in dock for operation,
aligning this year emissions more closely with
standard operational levels. Nevertheless,
Höegh LNG remains steadfast in its pledge to
slash carbon emissions (scope 1) by 50 percent
and introduce its maiden net zero-carbon FSRU
by 2030, with 2020 as the baseline.
To realise these ambitions, Höegh LNG is
actively exploring power and shore-based
water heating solutions for its FSRUs. In 2023,
a significant step was taken with a pioneering
initiative in Germany where hot water from
nearby industries now supplies the onboard
regas process plant, cutting emissions from
potential regas boilers and showcasing fleet
efficiency. This milestone underscores Höegh
LNG’s commitment to sustainable operations.
Concurrently, Höegh LNG has made significant
strides in waste management, including grey
water volume reduction systems, LED lighting,
and a pilot study on food digestion to reduce
waste. Efforts to limit plastic bottle usage
have also been successful, with vessels now
equipped with reusable bottles and dispensers.
Looking to 2024, Höegh LNG aims to expand
food digestion systems, implement microplastic
filters, and reduce plastic waste, demonstrating
its commitment to responsible waste
management and environmental stewardship.
Driving Clean Energy Solutions in 2023
In 2023, Höegh LNG demonstrated its
commitment to advancing the global energy
transition while ensuring commercial
sustainability. The focus centered on pioneering
clean energy solutions, such as floating
ammonia terminals, ammonia to hydrogen
conversion, blue hydrogen production, and
carbon capture & storage (CCS) initiatives.
HÖEGH LNG
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The introduction of hybrid FSRUs marked a
significant milestone in energy infrastructure
development. These vessels offer the dual
capability of delivering both LNG and clean
energy, providing a cost-effective solution for
importing clean energy while ensuring energy
security and transitioning away from fossil
fuels. Advantages include utilising existing
infrastructure, cost-effectiveness, flexibility,
and readiness by 2028.
Additionally, Höegh LNG actively engaged
in developing floating ammonia terminals to
import, store, and distribute liquid ammonia
to shore. Collaborations with partners like
Wartsila, BASF, and Norwegian research
institutes aim to implement an industrial-scale
ammonia cracker on a floating terminal by 2028,
facilitating hydrogen supply to end-consumers.
In partnership with Aker BP, Höegh LNG is
committed to providing CCS services to combat
climate change. Achieving a significant milestone
in 2023 with Aker BP’s receipt of a CO2 storage
license, the collaboration aims by 2028-2029
to establish a robust CCS value chain on the
Norwegian Continental Shelf, covering CO2
gathering, transportation, and secure injection
for permanent storage in subsea reservoirs.
The dedication to driving positive change in
the energy sector underscores Höegh LNG’s
commitment to sustainability and environmental
stewardship. Through innovative solutions and
strategic partnerships, Höegh LNG remains
at the forefront of accelerating the energy
transition towards a cleaner future.
More detailed information is available in the
company’s sustainability report for 2023 on:
www.hoeghlng.com
Personnel
Höegh LNG had 202 permanent onshore
employees and 693 maritime personnel as of
31 December 2023. The retention rate for 2023
was 97 percent for maritime personnel and 91
percent for onshore personnel. Average sickness
absence among office employees in Oslo was
stable around 2.0 percent.
Höegh LNG prioritizes employee development,
aligning corporate goals with individual
aspirations through our performance process.
As we navigate industry challenges, we remain
dedicated to empowering our team, driving
excellence, and embracing diversity for
continued success.
Diversity
In 2023, Höegh LNG made significant strides
in empowering its workforce and fostering
diversity and gender equality. Signing the
WISTA “40 by 30” pledge underscored our
commitment to achieving a 40 percent female
leadership ratio by 2030 up from 23 percent at
the end of 2023.
We are committed to fostering diverse
and multinational crews onboard our fleet,
ensuring respect for all, irrespective of gender,
nationality, religion, or culture. Our ambition
is to increase female representation from 2.7
percent in 2023 to 10 percent by 2030.
Safety
At Höegh LNG, safety stands as the highest
priority. The company’s HSEQ data reflects an
unwavering dedication to safeguarding lives
and the environment. Despite experiencing
a slight uptick in incidents, our Lost Time
Incident Frequency (LTIF) remained well below
target, affirming our commitment to zero harm.
Open communication channels encourage
reporting and facilitate continuous improvement
initiatives.
Comprehensive training programs empower our
crew to uphold the highest safety standards,
both at sea and onshore. Rigorous safety
Directors’ report 17
HÖEGH LNG
protocols ensure employee welfare onshore,
while our proactive approach to security and
emergency preparedness, including cyber
threats, ensures readiness across all fronts.
Höegh LNG remains resolute in its commitment
to safety, guided by data-driven insights and
propelled by a pursuit of excellence.
Responsible supply chain
In 2023, Höegh LNG intensified its commitment
to sustainability by enhancing the supplier
evaluation process. Through a thorough
tender process, a digital tool was selected to
align with standards, particularly focusing on
Environmental, Social, and Governance (ESG)
factors and human rights within the supply chain.
This initiative reflects the company’s dedication
to systematically prioritise, enhance, and
monitor suppliers. The aim is to strengthen the
tools to identify potential risks early and enact
appropriate action plans, fostering continuous
improvement and collaboration throughout the
supply chain.
Cyber security
In 2023, Höegh LNG made substantial progress
in elevating its cyber security maturity
level. After conducting an in-depth cyber
risk assessment, Höegh LNG significantly
strengthened its cybersecurity measures group-
wide. This was achieved through the initiation of
IT systems upgrades onboard vessels, migration
and enhancement of IT technical infrastructure,
and the implementation of comprehensive
employee training programs. These measures
collectively reinforce our resilience against
potential cyber threats. Integration of the
NIST cyber security framework and partner
audits ensures transparency and alignment
with industry standards. Höegh LNG remains
committed to sustaining and enhancing strong
cyber security measures.
CSRD - Upcoming reporting requirements
In 2023, Höegh LNG began laying the
groundwork for compliance with the Corporate
Sustainability Reporting Directive (CSRD),
undertaking materiality assessments and
incorporating climate-related risks into its
analyses. As we have progressed into 2024,
Höegh LNG is actively engaged in conducting
gap analyses and implementing robust
governance structures for sustainable CSRD
practices. We are preparing to be ready for
implementation of CSRD for the annual report
for 2024 which will further enhance our
sustainability reporting.
Review of 2023
Business development
Höegh LNG had a successful year on the
business development front in 2023.
The acquisition of the LNG carrier Hoegh
Gandria was completed in mid-March 2023.
The vessel was subsequently at a yard in April
for its 10th anniversary class renewal, and from
late April it commenced employment on a one-
year time charter contract.
Hoegh Giant finalised its interim LNG carrier
time charter party by the end of the first quarter
and commenced its long-term FSRU contract
with TSRP/Compass in Brazil from beginning of
the third quarter.
In September 2023, Höegh LNG and Aker BP
entered into a strategic partnership to develop
a fully comprehensive carbon transport and
storage offering for industrial CO2 emitters in
Northern Europe.
Hoegh Galleon ended its short-term time
charter contract in the LNG carrier market at the
end of September. From the beginning of the
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HÖEGH LNG
fourth quarter, the vessel commenced its long-
term contract with AIE.
In December 2023, the charterer of Höegh
Grace waived its charter termination option
in 2026, which means that Höegh Grace will
continue its employment in Colombia at least
until 2031.
Höegh LNG entered in December 2023 into a
joint development agreement with VTTI B.V. to
develop the new Zeeland energy terminal in or
near the port of Vlissingen in the Netherlands.
The terminal will be based on a FSRU, which
in time, plans to transition from import of LNG
to hydrogen. The facility will be connected
to one of the largest industrial clusters in the
Netherlands and to the Dutch and European gas
pipeline network and, sequentially, the hydrogen
backbone. It is expected to be in operation in
the second half of 2027.
Overall, the business development activity
remains high, with ongoing dialogues for FSRU
projects worldwide.
Operational performance
Throughout 2023, our fleet maintained stable
operations with close to 100 percent technical
availability.
The operational focus has been on preparing
four vessels for FSRU operations in Europe and
Brazil.
Neptune, under a long-term charter with
TotalEnergies, commenced commercial regas
operations for Deutsche ReGas in Lubmin,
Germany, during January/February 2023.
Hoegh Gannet arrived in Brunsbüttel, Germany,
in January 2023, earning regular charter hire
during commissioning. Commissioning was
successfully completed in November, initiating
commercial regas operations.
Cape Ann, also under a long-term charter
with TotalEnergies, was relocated to Le Havre,
France, in September. By the end of October,
Cape Ann completed commissioning and began
delivering natural gas to the grid as France’s
inaugural FSRU.
Hoegh Giant, while idle for most of the second
quarter of 2023, was repositioned to commence
operations under its long-term contract in Brazil
during the third quarter.
The board of directors acknowledges that 2023
posed significant challenges for the organization
both onshore and at sea. We extend our heartfelt
appreciation to all employees, both onshore
and onboard the vessels, for their unwavering
dedication and hard work.
Fleet development
On 31 December 2023, Höegh LNG had a fleet
of 10 FSRUs and three LNG carriers (LNGCs),
following the acquisition of Hoegh Gandria in
March 2023. The average age of the assets in
operation was 10.2 years, while the average
remaining contract length per vessel was 7.8
years at the end of 2023.
For 2024, the fleet has close to 100 per cent
contract coverage, with the exception of Hoegh
Gandria, which is employed until end of August
2024.
Corporate activities
Refinancing
Throughout 2023 and into 2024, the group
successfully refinanced and raised new loan
and corporate debt facilities for the amount of
USD 1.075 billion. Of this amount, $940 million
has already been drawn, while the remaining
amount is available credit lines. Of the USD 940
million drawn, USD 785 million was deployed to
repay existing debt, including the HLNG03 bond
loan. This significant milestone underscores
Höegh LNG’s financial prowess and operational
Directors’ report 19
HÖEGH LNG
excellence, positioning it for sustained growth.
This accomplishment has reinforced the
confidence of existing relationship banks, but
it has also attracted support from new lenders,
further solidifying the company’s reputation
in the financial markets. For a comprehensive
overview of the debt facilities, please refer
to Note 6.3 in the consolidated financial
statements.
Arbitration with charterer of PGN FSRU
Lampung settled
With reference to the previously disclosed
disputes and pending arbitrations with the
charterer of PGN FSRU Lampung, the company
reached in February 2024 an amicable
settlement with the charterer. Both parties
have agreed to settle all disputes, claims,
and counterclaims that were subject to the
arbitration proceedings. The arbitrations have
been terminated with immediate effect, finally
and irrevocably. The charter contract for PGN
FSRU Lampung remains in full force and effect
and each party will cover its own costs in
relation to the terminated arbitrations.
LNG and FSRU market
development
Coming from unprecedented turbulent and
tight conditions in 2022, global LNG and gas
markets gradually stabilised in 2023, with prices
and price volatility moderating through the
year, although events in the Middle East added
some volatility and price pressure to expected
seasonal effects in the fourth quarter. Global
gas prices were nonetheless at elevated levels
as compared to historical averages.
Global demand for LNG rose by 2.4 percent
from 396 million tonnes in 2022 to a record
high 406 million tonnes in 2023. Europe and
Asia combined drove 93 percent of demand,
with Asian imports picking up significantly in
the fourth quarter. European imports were flat
as compared to the year before and hence still
more than 60 percent higher than in 2021.
In 2023, LNG carrier rates softened compared
to the record highs of 2022. While spot rates
surged towards the end of the third quarter,
they retreated by year-end. Improved European
import infrastructure, bolstered by new
FSRU-based terminals since 2022, reduced
bottlenecks and enhanced fleet capacity
utilization. Major charterers, anticipating
market conditions, secured sufficient tonnage,
supporting a steep growth in the global carrier
fleet. Term rates decreased throughout the
year, reflecting both calmer gas markets
and rapid fleet expansion. Despite an LNGC
orderbook of over 300 units by year-end,
newbuilding prices remained at record highs
with extended lead times.
While global LNG supply growth is limited
in the short-term, medium and long-term
market growth is supported by advancing
upstream liquefaction projects, not least in
the US and Qatar. Only counting projects
that are operational or have taken FID, global
liquefaction capacity is expected to grow by
more than 40 percent from 488 million tonnes
per annum in 2023, to 689 million tonnes per
annum in 2028.
The FSRU market remains active, with numerous
projects in progress globally. In Europe, five
FSRUs became operational in 2023, with four
more expected by 2024. Additionally, two
units are set for commissioning elsewhere by
2024. As of December 31, 2023, there were
47 FSRUs globally, excluding four barges with
limited capacity. Almost all FSRUs are either in
long-term contracts or committed to near-term
contracts, leaving only one available for prompt
delivery. Another FSRU newbuild is expected for
delivery in 2026.
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HÖEGH LNG
Financial results
Group figures
The financial statements of Höegh LNG
consolidate its subsidiaries and include
joint venture and associated companies in
accordance with the equity method. Unless
otherwise stated, figures for 2023 are
compared with those of 2022.
Income statement
Höegh LNG demonstrated significant growth
compared to the prior year and reported a
total income of USD 520.9 million, up from
USD 380.8 million in 2022. Similarly, operating
profit before depreciation and amortisation
(EBITDA) reached USD 338.2 million, marking
a substantial increase from USD 153.2 million
in the preceding year. The improved revenues
and EBITDA are mainly explained by the new
contracts for the fleet which commenced in
late 2022 and in 2023, the addition of Hoegh
Gandria to the fleet in 2023, and reduced
administrative expenses compared to the
previous year. Operating profit was USD 220.4
million in 2023 (USD 38.0 million). Net financial
expenses amounted to USD 111.7 million in 2023
(USD 90.8 million).
The group reported a net profit of USD 97.0
million for 2023, a substantial improvement
compared to the loss of USD 55.4 million
reported in 2022. This increase in profitability
was primarily driven by the higher EBITDA,
although it was partly offset by increased
depreciation and interest costs largely caused
by the addition of the new vessel to the fleet.
Financial position
On 31 December 2023, the consolidated book
value of assets totalled USD 2 610 million (USD
2 431 million). The change during 2023 mainly
reflects the increase in current assets, including
cash and cash equivalents and increase
in vessels and spare parts following the
acquisition of the LNG carrier Hoegh Gandria
in March 2023 offset by depreciation of assets
and amortisation of right-of-use assets.
The carrying amount of equity on 31 December
2023 was USD 780 million (USD 726 million).
Net of mark-to-market of hedging reserves,
the equity adjusted for hedging transactions
was USD 781 million (USD 699 million), bringing
the adjusted equity ratio to 30 percent (29
percent). The capital structure of Höegh LNG
is considered to be adequate given the risks
facing the group.
Financing
The group is financing its assets and business
activities through a combination of equity and
interest-bearing debt. The interest-bearing debt
consist of asset-backed bank financing as well
as unsecured credit facilities and a bond loan.
As of 31 December 2023, outstanding interest-
bearing debt carried on the balance sheet
totalled USD 1 656 million, net of debt issuance
costs, compared to a total of USD 1 515 million
as of 31 December 2022. The increase is mainly
explained by new debt related to the acquisition
of Hoegh Gandria of USD 111 million, as well as
drawing down the USD 685 million debt facility
to refinance Höegh Esperanza and Hoegh
Gannet, which was also used to repay the
outstanding debt for the HLNG03 bond and a
corporate credit facility.
Cash flows and liquidity
Cash flows from operating activities in 2023
was USD 307.3 million, up from USD 163.0
million in 2022, owing mainly to increased
EBITDA and variations in working capital.
Net cash flows used in investing activities
amounted to USD 206.3 million (USD 180.9
million). The investments in 2023 are mainly
related to the acquisition of Hoegh Gandria,
while the investments in 2022 were mainly
related to the acquisition of the public common
units in Höegh LNG Partners LP.
Directors’ report 21
HÖEGH LNG
Cash flows from financing activities were
negative at USD 29.3 million (positive at USD
30.6 million), driven primarily by repayment of
outstanding debt related to HLNG03 bond and
build-up of restricted cash and cash collateral.
Total cash flows in 2023 was USD 71.7 million
(USD 12.7 million). On 31 December 2023,
unrestricted cash and cash equivalents amounted
to USD 218.5 million (USD 146.8 million).
On 31 December 2023, the group’s current
interest-bearing debt was USD 426.5 million
(USD 369.8 million), including debt related
to Independence and Höegh Galleon. These
repayments will be covered by cash flows
generated from operations and other available
liquidity, the refinancing of the Hoegh Galleon
facility which was completed and upsized in
January 2024 and the consideration which will
be received from the sale of Independence in
December 2024 (the charterer of Independence
has declared its purchase option).
Going concern
The annual financial statements have been
prepared under a going concern assumption,
and the board of directors confirms that this
assumption is fulfilled.
Parent company financials
The total comprehensive loss for the parent
company on a stand-alone basis in 2023 was
USD 4.9 million (income of USD 24.1 million).
The decrease from 2022 is mainly related to
impairment on shares in associate and losses on
cash flow hedges.
On 31 December 2023, total assets were USD
704 million (USD 947 million), while the equity
ratio was 76 percent (57 percent). Cash flows in
2023 was negative at USD 5.4 million (negative
at USD 3.6 million). On 31 December 2023, the
company held USD 17.2 million in cash and cash
equivalents (USD 22.6 million).
Risk and risk management
Risk management
Höegh LNG manages strategic and operational
risk in line with ISO 31000 in relation to both
new and existing business. The following
certifications are held for management
of quality, the environment, safety and
occupational health:
• International Safety Management.
• ISO 9001 Quality Management System.
• ISO 14001 Environmental Management
System.
The company also complies with the
requirements of ISO 45001:2018 Occupational
Health and Safety Management Systems
as well as meeting the International Safety
Management (ISM) standard.
Operating in a high-risk environment requires
a strong focus on health, safety, quality and
environment. Höegh LNG devotes continuous
attention to developing and improving
procedures and routines. Risk management
processes are integrated in governance,
management and operations on all levels of the
organisation. Enterprise risk is assessed on a
regular basis by the management and reported
to the board on quarterly intervals.
Market risk
The group’s fleet comprises ten modern FSRUs
and three LNG carriers. The entire fleet is either
operating under or committed to long-term
contracts with strong counterparties, except the
LNG carrier Hoegh Gandria which is currently
employed on a one-year LNGC contract
ending in March 2024. A new LNGC contract
has recently been concluded for another five
months. The average remaining contract
length per vessel was 7.8 years at the end of
December 2023.
22 Directors' report
HÖEGH LNG
Operational risk
Höegh LNG assumes operational risks
associated with loading, transporting,
offloading, storing, reloading and regasifying
LNG cargoes, which can cause delays to
operations. In addition, difficulties presented
by port constraints, weather conditions,
vessel compatibility, technical availability
and performance may affect the results of
operations and expose Höegh LNG to adverse
financial consequences.
Financial risk
Höegh LNG is exposed in the ordinary course
of its business to different types of financial
risk, including market risk (interest and foreign
exchange rates impacted by rising inflation),
credit and liquidity risk. Risk management
routines are in place to mitigate such risks.
When such risks are identified, these are
evaluated and if deemed appropriate, mitigating
actions are taken. Höegh LNG’s primary
strategy in mitigating financial market risks is to
apply derivatives, where appropriate, in hedging
its various net financial-market risk positions.
When the use of derivatives is deemed
appropriate, only well-understood, conventional
instruments issued by highly rated financial
institutions are used.
Interest rate risk
Höegh LNG is exposed to increase in interest
rates on its interest-bearing debt as all interest-
bearing debt in Höegh LNG is subject to floating
interest rates. However, the group has entered
into fixed interest-rate swaps for close to 90
percent of the debt facilities until end of their
maturity and is therefore not exposed in any
material way to fluctuations in interest-rate levels
on existing debt facilities. Generally, for new
debt facilities to be drawn in the future, including
refinancing of balloon amounts at maturity of
existing debt, the group is exposed to interest
rate risk, and has not entered into any derivatives
to hedge such risk.
Currency risk
Höegh LNG’s business transactions, capitalised
assets and liabilities are mainly denominated
in USD which is the reporting currency. The
majority of its foreign exchange exposure
relates to administrative expenses denominated
in NOK, totalling around NOK 373 million in
2023. The group has per 31 December 2023
outstanding forward rate agreements (FRA’s)
totalling NOK 350 million (USD 33 million),
to hedge budgeted administration expenses
in NOK by buying NOK and selling USD. In
addition, Höegh LNG has certain revenues in
euros. Höegh LNG’s NOK-denominated bond
loan HLNG04 has been swapped to USD for the
principal amount and the coupons using cross
currency interest rate swaps (CCIRS).
Inflation risk
Höegh LNG is exposed to inflation risk
on its vessel operating expenses and its
administrative costs. However, for most of
Höegh LNG’s contracts, the inflation related to
vessel operating expenses are recoverable from
the customers through inflation adjustment
mechanisms agreed in the contracts for the
portion of contracted revenues earmarked
for covering daily operating costs. Changes
in inflation have the potential to significantly
influence both current and projected interest
rate levels, thereby directly affecting the
valuation of financial derivatives like interest
rate swaps.
Liquidity risk
Liquidity risk is the risk that Höegh LNG will
be unable to fulfil its financial obligations
when they fall due, including servicing its
interest-bearing debt and refinancing debt at
maturity. As of December 31, 2023, the group
had $318 million in total available liquidity,
including undrawn corporate revolving credit
facilities. Outstanding interest-bearing debt on
the balance sheet amounts to $1.656 million.
The debt will be repaid using cash flows from
existing assets and through refinancing upon
Directors’ report 23
HÖEGH LNG
maturity. Despite substantial debt maturities
in 2024 and 2025, Höegh LNG’s solid contract
backlog enhances its liquidity position,
providing the group with a strong position to
meet obligations and refinance debt ahead of
maturity if necessary.
Credit risk
Customer credit risk is the risk that a
counterparty does not meet its obligations to
the group under a contract, leading to a financial
loss. Existing FSRUs/LNGCs are chartered to
creditworthy counterparties and/or projects with
a strong strategic rationale for the country they
operate in. Cash funds are only deposited with
internationally recognised financial institutions
which have a high credit rating, or invested in
marketable securities issued by companies
holding a high credit rating.
The maximum exposure to credit risk amounts
to USD 382 million represented by the carrying
amount of all financial asset in the balance sheet.
Tax risk
Operating in developing markets with complex
tax environments poses challenges, including
navigating tax regulations and continuously
monitoring for compliance and risk mitigation.
In some charter contracts, direct and indirect
taxes such as withholding, payroll, and income
tax based on the vessel’s operating jurisdiction
are effectively passed through to the charterer.
Shareholder information
As of 31 December 2023, the company’s
share capital was USD 12.000, consisting of
1.200.000 fully paid common shares, each with
a par value of USD 0.01. All the shares in the
company are owned by Larus Holding Limited,
a 50/50 joint venture between Leif Höegh & Co
Ltd. and funds managed by Morgan Stanley
Infrastructure Partners.
Corporate governance
The board’s statement of policy on corporate
governance is set out in the corporate
governance report included as a separate
chapter in this annual report. Höegh LNG
has adopted and implemented a corporate
governance system which complies with section
6.3.6 of the Oslo Børs rulebook II – issuer rules
and, other than as stated in the said report, with
the Norwegian code of practice for corporate
governance.
Prospects
The demand for FSRUs is expected to remain
strong. While Höegh LNG has secured long-
term contracts for its entire fleet of FSRUs, our
business development team is in active dialogue
with several potential new projects looking
for FSRU capacity. The acquisition of Hoegh
Gandria provides flexibility to pursue FSRU
conversion opportunities.
24 Directors' report
HÖEGH LNG
Hamilton, Bermuda, 18 April 2024
The Board of Directors and the President and CEO of Höegh LNG Holdings Ltd.
Morten W. Høegh
Chairman
Johan Pfeiffer
Deputy Chairman
Eric den Besten
Director
Tammy L. Richardson-Augustus
Director
Alberto Donzelli
Director
Erik Nyheim
President and CEO
Carlo Ravizza
Director
John Kwaak
Director
HÖEGH LNG
03
28 Implementation and reporting on
corporate governance
29 Business
30 Equity and dividends
31 Equal treatment of shareholders
31 Shares and negotiability
31 General meetings
31 Nomination committee
31 Board of directors:
Composition and independence
34 The work of the board of directors
35 Risk management and internal control
36 Remuneration of the board of directors
36 Remuneration of executive personnel
37 Information and communications
37 Takeovers
37 Auditor
Corporate
governance report
HÖEGH LNG
28 Corporate governance report
Höegh LNG Holdings Ltd. (“Höegh LNG
Holdings” or “company”) is an exempted
company limited by shares, domiciled and
incorporated under the laws of Bermuda.
Höegh LNG Holdings Ltd. is a private company
owned by Larus Holding Ltd., which is a 50-
50 joint venture between Leif Höegh & Co.
Ltd. and Floating Infrastructure LP. Leif Höegh
& Co. Ltd. is indirectly controlled by Leif O.
Høegh and family trusts under which Morten
W. Høegh and his immediate family are the
primary beneficiaries. Floating Infrastructure LP
is owned by funds managed by Morgan Stanley
Infrastructure Partners.
The company is subject to Bermudian law
regarding corporate governance. As the
company has one bond issued and listed on
Oslo Børs (ticker: HLNG04), the company is
required to provide a report on its corporate
governance as further set out in section 6.3.6
of the Oslo Børs rulebook II – issuer rules (the
“issuer rules”).
The company and its subsidiaries have
adopted and implemented a corporate
governance system which mainly complies
with the Norwegian code of practice for
corporate governance (the “Norwegian
corporate governance code”). This system is
designed to enhance business performance by
mitigating risk and enhancing accountability,
thereby maintaining stakeholder trust and the
company’s strong reputation in the financial
market. The deviations from the Norwegian
corporate governance code are primarily due to
the company’s status as a privately held entity
incorporated in Bermuda. These deviations are
further detailed in this report.
The Norwegian corporate governance code is
published at www.nues.no and the issuer rules
are published on the Oslo Børs website at
www.euronext.com.
Implementation and
reporting on corporate
governance
The foundation of corporate governance in
Höegh LNG is set out in the company’s bye-
laws, in addition to a governing principles policy
and Höegh LNG’s code of conduct.
The governing principles policy is based on
the Norwegian corporate governance code
and is approved by the board. It identifies the
key governing bodies in Höegh LNG, describes
the roles and responsibilities of the governing
bodies and functions of the group, and specifies
requirements for the business with regard to
important governing processes, documents and
systems. The board has also adopted governing
procedures to implement the principles set
out in the governing principles policy. These
procedures include separate charters for the
board of directors, the coordination committee
and the capital structure committee, as well as
instructions for both the President and CEO and
the group’s chief compliance officer.
Höegh LNG and the group’s employees are
required to adhere to and comply with laws and
regulations, including on international trade and
economic sanctions, and Höegh LNG’s standards
for ethics, health, safety, the environment
and quality as further set out in Höegh LNG’s
code of conduct, the insider trading policy and
the procedure for governmental investigation
adopted by the board. In addition, the board has
Corporate governance report
Corporate governance report 29
HÖEGH LNG
adopted a supplier code of conduct which all
suppliers are required to adhere to.
Through compliance with the above, the board
and management contributes to achieving the
following objectives:
Trust: Good corporate governance establishes a
basis for trust in the board and the management
by the shareholders and other stakeholders.
Transparency: Communication with the
company’s stakeholders will be based on
transparency concerning both Höegh LNG’s
business, which is important for assessing
the company’s development, and its financial
position.
Independence: The relationship between the
board, the management and the shareholders
will be on an independent basis to ensure that
decisions are made on a qualified and neutral
basis.
Equality: Höegh LNG aims to give all its
shareholders equal treatment and rights.
Control and management: Good control and
governance mechanisms will contribute to
predictability and risk reduction.
Deviations from the code: None.
Business
The company’s purpose is accelerating
countries to energy security and transition by
providing innovative and flexible marine energy
infrastructure. Höegh LNG’s values are: (i) we
innovate with customers and partners, (ii) we
deliver excellence as one team, and (iii) we care
for people and the planet.
Höegh LNG provides cost competitive and
flexible LNG infrastructure that form the basis for
energy security and independence, also enabling
the transition to a low-carbon future. Our critical
LNG infrastructure allows all countries with a
coastline to access global LNG markets. As
LNG can be sourced globally and is shipped
onboard specialised LNG carriers, Höegh LNG’s
marine energy infrastructure provide consumers
of natural gas an abundant sourcing flexibility
compared to gas transported in fixed pipelines.
In addition, we will pioneer Clean Energy
solutions for ammonia, H2 and CCS enabling
growth and providing robustness and relevancy
in several energy transition scenarios.
We drive technological and commercial
innovation in our markets and continuously seek
excellence in our operations to maximise value
for our stakeholders while ensuring the welfare
of our employees and minimising the impact on
the environment.
We create growth and value by offering
solutions that address three megatrends
affecting global energy systems;
• Energy security is a top geopolitical priority,
where all nations require a robust plan for
capacity of supply to meet current and
future energy demand and redundancy
• Cost of energy, including universal access
to affordable and abundant energy
• Energy transition and changes to the
energy mix to decarbonise energy systems
and minimise potential environmental and
climate change impacts
Our strategic beliefs, direction and ambitions
consider the impact of these megatrends on
Höegh LNG as a company and our industry. They
guide how we develop to reach our full potential
and generate long-term value. We plan to grow
our LNG infrastructure business and innovate
HÖEGH LNG
30 Corporate governance report
clean energy terminal solutions for emerging
markets such as carbon capture and storage
(CCS), ammonia, hydrogen and other segments –
all supported by our world-class operations.
The board evaluates the objectives, strategies
and risk profiles continuously and at least
annually.
The company has guidelines for how it
integrates considerations related to its
stakeholders into its value creation. Since 2014,
Höegh LNG has issued a separate sustainability
report in accordance with Oslo Børs’ Guidance
on the Reporting of Corporate Responsibility
and the “core” level of the Global Reporting
Initiative (GRI) standard and from 2021, the
UN Sustainable Development Goals (SDGs).
Reference is made to the sustainability report
for further details.
The Memorandum of Association and the
company’s bye-laws are available on the
company’s website (www.hoeghlng.com –
corporate governance – governance documents
– other governance documents).
Deviations from the code:
• In line with common practice for Bermudian-
registered companies, the company’s
objectives and powers, as set out in its
Memorandum of Association, are broad and
therefore wider and more extensive than
recommended in the Norwegian corporate
governance code.
Equity and dividends
Capital structure
The issued share capital in the company as of
31 December 2023 was USD 12 000, consisting
of 1 200 000 fully paid common shares, each
with a par value of USD 0.01.
Book equity as of 31 December 2023 totalled
USD 780 million. Net of mark-to-market of
hedging reserves, the adjusted book equity on
31 December 2023 was USD 781 million.
The board regards the current level of equity
and financing as adequate in view of Höegh
LNG’s objectives, strategy and risk profile. The
capital structure will probably be subject in the
future to the issuance of further debt relating to
scheduled refinancing and new debt, net profits
and dividend payments, potential issuance of
new equity capital and other factors.
Dividend policy
As a private company, the board of directors
has not established a dividend policy. Subject
to certain restrictions putting a cap on dividend
distributions, the board of directors will from
time to time decide any dividends payable to the
company’s shareholder.
Deviations from the code:
• Pursuant to Bermudian law and common
practice for Bermudian-registered
companies, it is not necessary to obtain the
general meeting’s approval for payment of
dividends (bye-law 15).
Equity issuance
The authorised share capital of the company is
USD 12 000.
Deviations from the code:
The following applies pursuant to Bermudian law
and common practice for Bermudian-registered
companies.
• The board has wide powers to issue any
authorised but unissued shares in the
company on such terms and conditions
as it may decide, and may, subject to any
resolution of the shareholders in a general
meeting and to the rights of any issued
Corporate governance report 31
HÖEGH LNG
shares, attach such rights and restrictions as
the board may determine.
• The board may, without approval from the
shareholders in a general meeting, acquire
the company’s own shares to be cancelled
or held as treasury shares. These bye-law
provisions (bye-law 3) are neither limited
to specific purposes nor to a specified
period as recommended in the Norwegian
corporate governance code.
Equal treatment of
shareholders
Equal treatment of all shareholders is a core
governance principle in Höegh LNG.
The company has only one class of shares and,
on a poll, each share confers one vote at the
general meeting.
Deviations from the code: None.
Shares and negotiability
The common shares of the company are freely
transferable, and the company’s constitutional
documents impose no transfer restrictions on
the company’s common shares.
Deviations from the code: None
General meetings
Being a Bermudian entity, the general meeting of
the company is held annually in Bermuda.
The shareholders of the company are
responsible for making certain key decisions
concerning the company’s business. At the
annual general meeting (AGM), these include the
appointment of the auditor, the election of the
board of directors and the determination of the
remuneration of directors. Alternate directors
are appointed by the individual directors and
are not elected by the general meeting. The
financial statements are presented to the AGM
for information, but under Bermudian law, the
shareholders’ approval of these are not required.
Bye-laws 19 to 35 set out extensive rules
regarding the conduct of general meetings,
including in relation to the notice of general
meetings, proceedings, voting, proxies and
corporate representatives.
Deviations from the code:
• The general meeting procedures are aligned
to the fact that the company is privately held
with one shareholder.
• The company does not have a nomination
committee.
• Pursuant to bye-law 27, the chairman or the
President and CEO shall act as chairman of a
general meeting. In their absence, a chairman
shall be appointed or elected by those
present at the meeting and entitled to vote.
Nomination committee
As a private company, the company does not
have a nomination committee.
Deviations from the code: As a private company,
the company does not have a nomination
committee.
Board of directors:
composition and
independence
The board and its chairman are elected or
appointed in the first place at the statutory
32 Corporate governance report
HÖEGH LNG
meeting of the company and thereafter, except
in the case of a casual vacancy, at the annual
general meeting or at any special general
meeting called for that purpose
1
. The bye-laws
provide for the board to consist of not less than
one director.
The composition of the board of directors
represent diversity in background, expertise and
gender (one female of seven directors).
There are no sub committees of the board. The
full board act as audit committee.
Currently, the board consist of the following
seven directors:
• Morten W. Høegh has served as chairman
of Höegh LNG since 2006. Since 2003 he
has been a director of Höegh Autoliners
ASA (and its predecessors Leif Höegh &
Co. ASA, Leif Höegh & Co. Ltd. and Höegh
Autoliners Ltd.). Morten W. Høegh is a
director of Höegh Eiendom Holdings AS.
He is a Partner of Höegh Capital Partners.
Morten W. Høegh serves as a director and
Chairman of Gard P&I (Bermuda) Ltd. and
as chairman of its risk and election and
governance committees as well as chairman
of certain of its subsidiaries. He also
serves as the Chairman of the West Europe
committee of DNV. From 1998 to 2000,
Morten W. Høegh worked as an investment
banker with Morgan Stanley. He holds an
MBA from Harvard Business School with
High Distinction (Baker Scholar) and an MSc
in Ocean Systems Management and a BSc in
Ocean Engineering from the Massachusetts
Institute of Technology.
• Johan Pfeiffer has served as deputy
chairman of Höegh LNG since May 2021.
Johan Pfeiffer is a Managing Director and
Operating Partner with Morgan Stanley
Infrastructure Partners (MSIP). He serves
on the board of several companies in the
MSIP portfolio. Prior to Morgan Stanley,
Johan Pfeiffer was the President for Europe,
Latin America and Africa for Johnson
Controls and previously Tyco. Prior to
Johnson Controls, Johan Pfeiffer was a Vice
President for FMC Technologies in Houston
and General Manager and Managing Director
in Kongsberg, Norway. Johan Pfeiffer
was previously the Vice Chairman of the
US Petroleum Equipment and Services
Association. He holds an MBA from the
Wharton School, an MA in International
Studies from the University of Pennsylvania,
and an MSC in Material Sciences
Engineering from the Swiss Federal Institute
of Technologies (EPFL).
• Carlo Ravizza has served as a director of
Höegh LNG since June 2023 and board
observer since 2011. He is an Investment
Director at HCP and Board Member on
various HCP’s portfolio companies with
over 15 years’ experience in the principal
investments and real assets space. Prior to
HCP, Carlo Ravizza advised large corporates
on strategy, corporate finance, M&A and
restructuring projects while at McKinsey,
Bain, JPMorgan, AlixPartners and Alvarez &
Marsal. He holds a summa cum laude degree
in finance and accounting from University
of Torino and an MBA from London Business
School.
• Alberto Donzelli has served as a director
of Höegh LNG since May 2021. Alberto
Donzelli is a Managing Director and co-head
of Europe for Morgan Stanley Infrastructure
Partners (MSIP). Alberto Donzelli worked
in the investment banking businesses of
UBS and Credit Suisse, where he was part
of the European Utilities Group advising
on numerous M&A transactions in Europe.
Alberto Donzelli holds a degree in Business
Administration from Bocconi University.
1
The company does not have a corporate assembly.
Corporate governance report 33
HÖEGH LNG
• Eric den Besten has served as a director
of Höegh LNG since June 2023. Eric den
Besten is the CEO of Hoegh Capital Partners
(“HCP”). He was previously Chief Investment
Officer of SHL Capital, a single-family office
with controlling interests in Aston Martin
Lagonda and the Aston Martin F1 team. Prior
to SHL, Eric den Besten was a Managing
Director of Cambridge Associates and an
Associate Portfolio Manager at Merrill Lynch
Investment Managers. Eric den Besten has
a BA from Yale University and an MBA from
Dartmouth College (Tuck).
• John Kwaak has served as a director of
Höegh LNG since May 2021. John Kwaak
is the Managing Partner of Zero Infinity
Partners (ZIP), a firm he founded. ZIP is a
New York investment firm focused on early
and growth stage infrastructure and infra-
tech opportunities. Previously, John Kwaak
served as Executive Director & Head of
Americas Transportation Sector of Morgan
Stanley Infrastructure Partners (MSIP). Before
joining MSIP, he was a Senior Vice President
at Fortress Investment Group in their private
equity division with focus on natural gas
and LNG. Prior to that, he was an investment
banker at Evercore. He also served as First
Lieutenant in the Republic of Korea Air Force.
John Kwaak holds an MBA from the Wharton
School of the University of Pennsylvania and
an AB in Government from Harvard College.
• Tammy Richardson-Augustus has served as
a director of Höegh LNG since November
2023. Tammy Richardson-Augustus is a
partner of Appleby (Bermuda) Limited in
the Corporate department. She maintains a
diversified business transactions practice,
with emphasis on M&A, joint ventures,
capital markets and securities, lending
transactions and general corporate
governance matters. She has extensive
experience working with clients in a wide
range of industries, including in energy, oil
and gas exploration, and maritime shipping.
Tammy Richardson-Augustus is a founding
member of WISTA Bermuda, serves on
the board of several Bermuda companies
(including statutory bodies). She is a
member of the Bermuda Bar Association and
is a justice of the peace.
The company has one shareholder, Larus
Holding Limited, which is a 50-50 joint venture
between Leif Höegh & Co. Ltd. and Floating
Infrastructure LP. Leif Höegh & Co. Ltd. is
indirectly controlled by Leif O. Høegh and family
trusts under which Morten W. Høegh and his
immediate family are the primary beneficiaries.
Leif Höegh & Co. Ltd. is represented on the board
by Morten W. Høegh, Carlo Ravizza and Eric den
Besten. Leif O. Høegh is an alternate director.
Floating Infrastructure LP is owned by
funds which is managed by Morgan Stanley
Infrastructure Partners. Floating Infrastructure
LP is represented on the board by Johan
Pfeiffer, Alberto Donzelli and John Kwaak.
The board held three physical board meetings
in 2023 in addition to one physical meeting with
the manager, Höegh LNG AS, with all directors
present, as well as several briefing calls.
The board held 14 interim meetings, with the
Bermuda-resident director and/or alternate(s)
present.
Bye-laws 36 and 40 regulates the appointment
and removal of directors, respectively.
Deviations from the code:
• As a private company, only one director
is independent of the company’s main
shareholders.
• The chairman of the board of directors is
elected by the board of directors.
34 Corporate governance report
HÖEGH LNG
• As a private company, the members of the
board of directors are not elected for a
specific time period.
• As a private company, the members of the
board of directors are not encouraged to
own shares in the company.
The work of the board
of directors
The board is responsible for overseeing the
management of Höegh LNG, safeguarding the
business and implementing sound corporate
governance for the group to follow.
The board has authorised Höegh LNG AS to
carry out the day-to-day management of Höegh
LNG’s assets under a management agreement
comprising administrative, commercial and
technical activities. The board has established
and defined authorities through a delegation
authority matrix.
The main responsibilities of the board as well as
the framework for proceedings of its work are
set out in a charter for the board of directors.
In general, the board will approve the strategy,
business plans, financial statements, investment
decisions, debt financings and budgets for
Höegh LNG.
The board has adopted procedures and
standards which cover and impose an obligation
on individuals who are members of the group
executive team and hold other group roles to
secure sound governance and control. The
board will also ensure that Höegh LNG protects
its reputation in relation to owners, employees,
customers and the public.
The work of the board is scheduled in an annual
plan with fixed information and decision points.
If required, interim board meetings are arranged
in accordance with the board charter.
Each director is responsible for continuously
assessing whether a conflict exists or could
potentially arise between the interests of the
company and the interests of the director in
question. Existence of a conflict extends to, but
is not limited to, matters put before a director
involving a personal interest, direct or indirect,
financial or otherwise, in the matter concerned.
Circumstances referred to above will be
discussed without undue delay with the
chairman of the board. Where a director’s
employment relationship or other duties
regularly give rise to a conflict of interest to
occur, and in other special circumstances,
specific guidelines will be prepared for review by
the board which prevent, as far as possible, such
conflict of interests from arising.
The board conducts a self-evaluation of its own
performance and expertise on an annual basis,
which includes an evaluation of the composition
of the board and the manner in which its
members function, both individually and as a
group, in relation to the objectives set out for
the board’s work.
The work of the board committees
Following the privatisation of the company,
the board has decided that the entire board
of directors shall act as the company’s audit
committee.
As all the directors are independent of the
executive personnel, the company does not have
a remuneration committee.
Deviations from the code:
• As a private company, the full board act as
the company’s audit committee.
• As all of the directors of the board are
independent of the executive personnel,
the company does not have a remuneration
committee.
Corporate governance report 35
HÖEGH LNG
Risk management and
internal control
The board is responsible for overseeing that
the company has sound internal control and
systems for risk management which are
appropriate in relation to the extent and nature
of the group’s activities.
Risk management
Höegh LNG has an enterprise risk management
system based on ISO 31000 Risk Management.
The board is responsible for overseeing that
the accumulated risks which could influence
the achievement of HLNG’s strategic and key
operational objectives are being consistently
and effectively identified and managed.
The President and CEO assumes the overall
responsibility for enterprise risk management
and reports the enterprise risk status to the
board on a regular basis. The group has a risk
monitoring committee comprising the senior
management team and the VP QA and Risk. Its
objectives are to support business decisions by
monitoring the accumulated strategic risk for
HLNG, and to assess risk mitigation measures
and the effect of changes and new commitments.
Höegh LNG has a QA and risk management
function, which assists the company in
achieving its objectives by taking a systematic,
disciplined approach to evaluating and
improving the effectiveness of enterprise
risk and security management, control and
governance processes. The function meets
regularly with the full board.
36 Corporate governance report
HÖEGH LNG
The group has implemented an integrated
governing management system (GMS) to
govern its processes for planning, operating
and controlling the services rendered. Health
(including occupational health), safety and
environmental management, as well as project
and security risk management are all included
in the GMS. The latter is certified to ISO
9001:2015 Quality Management Systems and
ISO 14001:2015 Environmental Management
Systems by an accredited certification body.
The GMS complies with the requirements of
ISO45001:2018 Occupational Health and Safety
Management Systems as well as meeting
the International Safety Management (ISM)
standard. In addition, the group’s integrated fleet
management company has a separate HSEQ
function.
See also the “Risk and risk management” section
in the directors’ report included in this annual
report and Note 3.2 “Financial risk management
objectives and policies” for further information.
Internal control
The group has policies and procedures in
place and an effective system for internal
controls over financial reporting (ICFR), which is
based on the internationally recognised COSO
2013 framework (Committee of Sponsoring
Organisations of the Treadway Commission).
The internal control process is supervised by
the Chief Legal & Compliance Officer and the
Chief Financial Officer, and comprises an annual
process which includes risk assessment and
scoping, evaluating whether existing controls are
designed and operating as intended, reviewing
and testing implementation and operational
effectiveness of the controls, reporting and
continuous performance monitoring.
Höegh LNG is also subject to extensive external
control by its external auditor, external partners
in joint ventures and charterers.
The group has an ethical hotline in place which
allows employees, as well as external parties, to
report any non-compliance issues (anonymously
if desired). These reports are received by the
Chief Legal and Compliance Officer.
Deviations from the code: None.
Remuneration of the
board of directors
Save as set out in below paragraph, the
current board of directors does not receive any
remuneration.
John Kwaak receives a remuneration of USD
6 000 per month effective from 1 July 2023 until
2024 AGM.
Appleby Global Services (Bermuda) Ltd. is
remunerated on the basis of invoices for its
services, including the provision of Tammy
Richardson-Augustus as a director and the
services of alternate directors to the company.
The company has no pension or retirement
benefits for directors.
Deviations from the code: None
Remuneration of
executive personnel
The board approves the remuneration package
for the President and CEO.
In addition, the board approves the main
terms of the remuneration package offered
to employees in Höegh LNG, including the
parameters of any annual salary adjustments,
pension schemes, and short- and long-term
incentives schemes. The compensation and
Corporate governance report 37
HÖEGH LNG
benefits package are determined on the basis
of an evaluation of the qualifications and
competencies of the individual employee and
is designed to be competitive with comparable
positions in the market and the achievement
of Höegh LNG’s corporate goals, operating
performance and sustainability targets.
Further details on remuneration of the executive
personnel for the current financial year are
provided in Note 5.3 to the 2023 annual
financial statements.
Deviations from the code:
• The board does not produce a separate
statement on the remuneration of executive
personnel, and consequently no such
statement is submitted to the AGM for
consideration, since the company is a
Bermudian company and the section 6-16a
of the Norwegian Public Company Act and
section 7-31b of the Norwegian Accounting
Act do not apply to the company.
Information and
communications
Höegh LNG has a policy of openness on
reporting information to stakeholders. Periodical
reports include quarterly interim reports and the
annual report. All reports are published through
stock exchange releases and on the company’s
website. Important events are also reported
through press and/or stock exchange releases.
The board’s charter includes guidelines to
ensure disclosure in accordance with the
financial calendar adopted by the board.
Contact with the external stakeholders is
handled by the President and CEO, the CFO
and Head of External Communications and
Marketing.
Deviations from the code: None.
Takeovers
As a private company ultimately owned by two
shareholders, the board has not established
explicit guiding principles for dealing with
takeover bids.
Deviation from the code: As a private company,
the board has not established explicit guiding
principles for dealing with takeover bids.
Auditor
The auditor is appointed by the general meeting
and has the duty to audit the company’s
financial reporting. The company’s auditor has
been Ernst & Young since 2006. Lead partners
have been changed in accordance with rotation
requirements for publicly listed entities.
In order to safeguard the board’s access to and
control of the auditor’s work, the auditor meets
with the full board when quarterly and annual
reports are reviewed. The auditor is also given
access to the agenda of, documentation for and
minutes from board meetings.
Deviations from the code: None.
Financial
statements
04
40 4.1 Consolidated financial statements
Höegh LNG Group
96 4.2 Financial statements Höegh LNG
Holdings Ltd.
114 4.3 Directors’ responsibility statement
118 4.4 Independent auditors report
124 4.5 Alternative performance measures (APMs)
4.1
For the year ended 31 December 2023
Consolidated financial
statements Höegh LNG Group
42 Consolidated statement of income
42 Consolidated statement of comprehensive income
43 Consolidated statement of financial position
45 Consolidated statement of changes in equity
46 Consolidated statement of cash flows
48 Index to notes
42 Consolidated Financial Statements Höegh LNG Group
CONSOLIDATED STATEMENT OF INCOME 1 JANUARY – 31 DECEMBER
USD'000 | Note | 2023 | 2022 |
Time charter revenues | 3.1 | ||
Management and other income | 5.1 | ||
Share of results from investments in associates and joint ventures | 3.6 | ( | |
TOTAL INCOME | |||
Vessel operating expenses | 5.2 | ( | ( |
Administrative expenses | 5.3 | ( | ( |
OPERATING PROFIT BEFORE DEPRECIATION AND AMORTISATION (EBITDA) | |||
Depreciation | 6.1 | ( | ( |
OPERATING PROFIT | |||
Interest income | |||
Interest expenses | 5.4 | ( | ( |
Income from other financial items | 5.5 | ||
Expenses from other financial items | 5.5 | ( | ( |
NET FINANCIAL ITEMS | ( | ( | |
ORDINARY PROFIT (LOSS) BEFORE TAX | ( | ||
Income taxes | 6.11 | ( | ( |
ORDINARY PROFIT (LOSS) FOR THE YEAR AFTER TAX | ( | ||
| Profit (loss) for the year attributable to (from): | |||
Equity holders of the parent | ( | ||
Non-controlling interests | |||
TOTAL | ( |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1 JANUARY – 31 DECEMBER
USD’000 | Note | 2023 | 2022 |
Profit (loss) for the year | ( | ||
| Items that will not be reclassified to loss | |||
Net gain (loss) on other capital reserves | ( | ||
| Items that may be subsequently reclassified to profit | |||
Net gain (loss) on hedging reserves | 3.2 | ( | |
Share of other comprehensive income from joint ventures and associates | 3.2 | ||
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET OF TAX | ( | ||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET OF TAX | |||
| Total comprehensive income (loss) attributable to (from): | |||
Equity holders of the parent | |||
Non-controlling interests | |||
TOTAL |
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 43
HÖEGH LNG
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
| ASSETS | |||
| Non-current assets | |||
Deferred tax assets | 6.11 | ||
Vessels and spare parts | 6.1 | ||
Right-of-use assets | 6.2 | ||
Investments in associates and joint ventures | 3.6 | ||
Other non-current financial assets | 6.3 | ||
Other non-current assets | 6.6 | ||
Shareholder loans | 4.1 | ||
Non-current restricted cash | 6.5 | ||
Total non-current assets | |||
| Current assets | |||
Bunker fuel and inventories | |||
Trade and other receivables | 6.4 | ||
Other current financial assets | 6.3 | ||
Current restricted cash | 6.5 | ||
Cash and cash equivalents | 6.5 | ||
Total current assets | |||
TOTAL ASSETS | |||
| EQUITY AND LIABILITES | |||
| Equity | |||
Share capital | 6.7 | ||
Other paid-in capital | |||
Hedge and other capital reserves | ( | ||
Retained earnings | ( | ( | |
Equity attributable to equity holders of the parent | |||
Non-controlling interests | |||
Total equity | |||
| Non-current liabilities | |||
Deferred tax liabilities | 6.11 | ||
Non-current interest-bearing debt | 6.3 | ||
Non-current lease liabilities | 6.2 | ||
Other non-current financial liabilities | 6.3 | ||
Deferred revenues | 6.10 | ||
Total non-current liabilities | |||
| Current liabilities | |||
Current interest-bearing debt | 6.3 | ||
Current lease liabilities | 6.2 | ||
Income tax payable | |||
Trade and other payables | 6.8 | ||
Other current financial liabilities | 6.3 | ||
Other current liabilities | 6.9 | ||
Total current liabilities | |||
TOTAL EQUITY AND LIABILITIES |
44 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Hamilton, Bermuda, 18 April 2024
The Board of Directors and the President and CEO of Höegh LNG Holdings Ltd.
Morten W. Høegh
Chairman
Johan Pfeiffer
Deputy Chairman
Carlo Ravizza
Director
Eric den Besten
Director
Alberto Donzelli
Director
John Kwaak
Director
Tammy L. Richardson-Augustus
Director
Erik Nyheim
President and CEO
Consolidated Financial Statements Höegh LNG Group 45
HÖEGH LNG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to equity holders of Höegh LNG Holdings Ltd. | ||||||||||
| Other | Other | Non- | ||||||||
| Share | Share | Contributed | paid-in | Hedging | capital | Retained | controlling | TOTAL | ||
| USD’000 | capital | premium | surplus | capital | reserves | reserves | earnings | TOTAL | interests | EQUITY |
As of 1 January 2023 | ( | ( | ( | |||||||
Profit for the year | - | - | - | - | - | - | ||||
Other comprehensive income (loss) for the year | - | - | - | ( | - | ( | - | ( | ||
Total comprehensive income (loss) for the year | - | - | - | ( | ||||||
HMLP dividend to non- controlling interests | - | - | - | - | - | - | - | ( | ( | |
Other changes in equity | - | - | - | - | - | ( | - | ( | - | ( |
| Total other transactions | - | - | - | - | - | ( | - | ( | ( | ( |
| recognised directly in equity | ||||||||||
As of 31 December 2023 | ( | ( | ( | ( |
| Attributable to equity holders of Höegh LNG Holdings Ltd. | ||||||||||
| Other | Other | Non- | ||||||||
| Share | Share | Contributed | paid-in | Hedging | capital | Retained | controlling | TOTAL | ||
| USD’000 | capital | premium | surplus | capital | reserves | reserves | earnings | TOTAL | interests | EQUITY |
As of 1 January 2022 | ( | ( | ( | |||||||
Profit (loss) for the year | - | - | - | - | - | - | ( | ( | ( | |
Other comprehensive income (loss) for the year | - | - | - | ( | - | |||||
| Total comprehensive income | - | - | ( | ( | ||||||
| (loss) for the year | ||||||||||
Shareholder contribution | - | - | - | - | - | - | - | |||
| Acquisition of public common | ||||||||||
| units in HMLP including internal | - | - | ( | ( | ( | ( | ||||
| capital changes | ||||||||||
Transaction cost | - | - | ( | - | - | - | - | ( | - | ( |
HMLP dividend to non- controlling interests | - | - | - | - | - | - | ( | ( | ||
Other changes in equity | - | - | - | - | - | ( | - | ( | - | ( |
| Total other transactions | - | - | ( | ( | ( | |||||
| recognised directly in equity | ||||||||||
| As of 31 December 2022 | ( | ( | ( |
46 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
CONSOLIDATED STATEMENT OF CASH FLOWS 1 JANUARY - 31 DECEMBER
USD’000 | Note | 2023 | 2022 |
| Cash flows from operating activities: | |||
Profit (loss) for the year before tax | ( | ||
| Adjustments to reconcile profit (loss) before tax to net operational cash flows | |||
Depreciation | 6.1 | ||
Interest income | ( | ( | |
Interest expenses | 5.4 | ||
Net gain on interest rate hedges and other derivatives | ( | ( | |
Gain on exchange and other non-cash adjustments | ( | ( | |
Share of results from investments in associates and joint ventures | 3.6 | ( | |
| Working capital adjustments | |||
Change in inventories, receivables and payables | ( | ||
Payment of corporate income tax | ( | ( | |
I) NET CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Cash flows from investing activites: | |||
Acquisition of public common units in Höegh LNG Partners LP | ( | ||
Investment in vessels, assets under construction and class renewals | ( | ( | |
Investment in intangibles, equipment and other | ( | ( | |
Grants to joint ventures and assoicates | ( | ( | |
Interest received | |||
II) NET CASH FLOWS FROM INVESTING ACTIVITIES | ( | ( | |
| Cash flows from financing activites: | |||
Capital contribution from owners | |||
Dividend paid to non-controlling interests (HMLP) | ( | ( | |
Transaction cost paid | ( | ||
Proceeds from borrowings gross | 6.3 | ||
Payment of financing and refinancing fees and debt issuance cost | ( | ( | |
Proceeds from sale of own bonds | 6.3 | ||
Repayment of borrowings | 6.3 | ( | ( |
Settlement of interest rate swaps | |||
Interest paid on mortgage debt and bonds | ( | ( | |
Lease payments | 6.2 | ( | ( |
(Increase) decrease in restricted cash and cash collateral | ( | ||
III) NET CASH FLOWS FROM FINANCING ACTIVITIES | ( | ||
NET INCREASE IN CASH AND CASH EQUIVALENTS (I+II+III) | |||
Current cash and cash equivalents as of 1 January | |||
CURRENT CASH AND CASH EQUIVALENTS AS OF 31 DECEMBER | 6.5 | ||
The group's share of aggregated cash flows in its associates and joint ventures | ( |
Consolidated Financial Statements Höegh LNG Group 47
HÖEGH LNG
INDEX TO NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
50 NOTE 1 – CORPORATE AND GROUP INFORMATION
50 Note 1.1 Corporate information
50 Note 1.2 Group Information
52 NOTE 2 – BASIS OF PREPARATION AND OTHER ACCOUNTING POLICIES
52 Note 2.1 Basis of preparation
53 Note 2.2 Summary of other significant accounting policies
53 Note 2.3 Changes in accounting policies and disclosures
53 Note 2.4 Fair value measurement
56 Note 2.5 Climate-related matters
57 Note 2.6 Standards issued but not yet effective
57 NOTE 3 – GROUP BUSINESS, OPERATIONS AND MANAGEMENT
57 Note 3.1 Revenue from contract with customers
61 Note 3.2 Financial instruments management objectives and policies
67 Note 3.3 Capital management
67 Note 3.4 Segment reporting
68 Note 3.5 Investment in subsidiaries
68 Note 3.6 Investment in joint ventures and associates
71 NOTE 4 – SIGNIFICANT TRANSACTIONS AND EVENTS
71 Note 4.1 Transactions with related parties
72 Note 4.2 Subsequent events
73 NOTE 5 – DETAILED INFORMATION ON STATEMENT OF PROFIT OR LOSS AND OCI ITEMS
73 Note 5.1 Management and other income
73 Note 5.2 Vessel operating expenses
74 Note 5.3 Administrative expenses
75 Note 5.4 Interest expenses
75 Note 5.5 Income and expenses from other financial items
76 NOTE 6 – DETAILED INFORMATION ON STATEMENT OF FINANCIAL POSITION ITEMS
76 Note 6.1 Vessels and spare parts
78 Note 6.2 Right-of-use assets and Lease liabilities
81 Note 6.3 Financial assets and financial liabilities
88 Note 6.4 Trade and other receivables
88 Note 6.5 Restricted and unrestricted cash
89 Note 6.6 Other non-current assets
89 Note 6.7 Issued capital
89 Note 6.8 Trade and other payables
90 Note 6.9 Other current liabilities
90 Note 6.10 Non-current deferred revenues
90 Note 6.11 Corporate income tax expenses and deferred taxes
93 NOTE 7 – COMMITMENTS AND CONTINGENCIES
93 Note 7.1 Security granted, guarantees and commitments
95 Note 7.2 Contingent liabilities
124 ALTERNATIVE PERFORMANCE MEASURES (APMs)
50 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Note 1.2 Group information
Consolidated Financial Statements Höegh LNG Group 51
HÖEGH LNG
Subsidiaries | Country | Principal activity |
Höegh LNG Ltd. | Bermuda | Holding |
Höegh LNG AS | Norway | Management |
Höegh LNG Fleet Management AS | Norway | Management |
Höegh LNG Services AS | Norway | Management |
Leif Hoegh (U.K.) Limited | England | Disponent vessel owner |
Hoegh LNG Asia Pte. Ltd. | Singapore | Business development |
Hoegh LNG Shipping Services Pte. Ltd. | Singapore | Management |
Hoegh LNG Maritime Management Pte. Ltd. | Singapore | Management |
Port Dolphin Energy LLC | USA | Dormant |
Port Dolphin Holding Company, LLC | USA | Dormant |
Hoegh LNG Giant Pte. Ltd. | Singapore | Vessel owning |
Hoegh LNG India Private Ltd. | India | Dormant |
Hoegh LNG Klaipeda Pte. Ltd. | Singapore | Vessel owning |
Hoegh LNG Gannet Pte. Ltd. | Singapore | Vessel owning |
Höegh LNG Galleon Ltd. | Bermuda | Dormant |
Hoegh LNG Klaipeda, UAB | Lithuania | Disponent vessel owner |
Höegh LNG Egypt LCC | Egypt | Business development |
Höegh LNG Egypt Holding I Ltd. | Cayman Islands | Holding |
Höegh LNG Egypt Holding II Ltd. | Cayman Islands | Holding |
Hoegh LNG Galleon Pte. Ltd. | Singapore | Vessel owning |
Höegh LNG Brazil Holding Ltd. | Cayman Islands | Holding |
Hoegh LNG Brasil Ltda. | Brazil | Vessel operating |
Höegh LNG Wilhelmshaven GmbH | Germany | Vessel operating |
Höegh LNG Brunsbüttel GmbH | Germany | Vessel operating |
Hoegh LNG Gandria Pte. Ltd. | Singapore | Vessel owning |
Höegh LNG Germany GmbH | Germany | Management |
Höegh LNG GP LLC | Marshall Islands | General partner in the HMLP |
Höegh LNG FSRU VI Ltd. | Cayman Islands | Vessel owning |
Hoegh LNG Chartering LLC | Marshall Islands | Management |
Höegh LNG Partners LP | Marshall Islands | Holding |
Höegh LNG Partners Operating LLC | Marshall Islands | Holding |
Hoegh LNG Lampung Pte. Ltd. | Singapore | Holding |
PT Hoegh LNG Lampung ¹ | Indonesia | Vessel owning |
Hoegh LNG Cyprus Limited | Cyprus | Vessel owning |
Höegh LNG Colombia Holding Ltd. | Cayman Islands | Holding |
Höegh LNG Colombia S.A.S. | Colombia | Vessel operating |
Höegh LNG FSRU IV Ltd. | Cayman Islands | Vessel owning |
Hoegh LNG Jamaica Limited | Jamaica | Vessel operating |
Branches | Country | Principal activity |
Höegh LNG AS - Representative office in Shanghai | China | Liquidation in progress |
Hoegh LNG Cyprus Limited - Branch | Egypt | Liquidation in progress |
Höegh LNG Services AS - Regional office HQ in Manila | Philippines | Managment |
Höegh LNG Fleet Management AS - Permanent establishment | England | Management |
Höegh LNG Fleet Management AS - Permanent establishment | Lithuania | Management |
52 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Associate and joint arrangements in which the group is a joint venture partner
The group had ownership in four joint ventures and one associate as of year-end 2023. For more
details, reference is made to Note 3.6.
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 53
54 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Financial assets | ||||
Carrying value | Fair value | |||
USD’000 | 31 Dec 2023 | 31 Dec 2022 | 31 Dec 2023 | 31 Dec 2022 |
Financial instruments at fair value through profit and loss | ||||
| Currency forward contracts | 1 615 | - | 1 615 | - |
Marketable securities | 219 | 155 | 219 | 155 |
Ineffective portion of cash flow hedges | 1 101 | - | 1 101 | - |
Total financial assets at FVTPL | 2 935 | 155 | 2 935 | 155 |
Financial instruments at fair value through other comprehensive income | ||||
Derivatives in effective cash flow hedges | 26 270 | 44 249 | 26 270 | 44 249 |
Total financial assets at FVTOCI | 26 270 | 44 249 | 26 270 | 44 249 |
| Financial assets at amortised cost | ||||
Non-current restricted cash | 33 432 | 15 790 | 33 432 | 15 790 |
Trade and other receivables | 53 590 | 65 623 | 53 590 | 65 623 |
Shareholder loans | 16 137 | 13 800 | 16 137 | 13 800 |
Other non-current financial assets | 7 858 | 2 704 | 7 858 | 2 704 |
| Cash and cash equivalents (incl. current | ||||
restricted cash) | 241 743 | 162 016 | 241 743 | 162 016 |
Total financial assets at amortised cost | 352 760 | 259 932 | 352 760 | 259 932 |
TOTAL | 381 965 | 304 335 | 381 965 | 304 335 |
TOTAL NON-CURRENT | 65 455 | 52 923 | 65 455 | 52 923 |
TOTAL CURRENT | 316 510 | 251 412 | 316 510 | 251 412 |
Consolidated Financial Statements Höegh LNG Group 55
HÖEGH LNG
| Financial liabilities | ||||
Carrying value | Fair value | |||
USD’000 | 31 Dec 2023 | 31 Dec 2022 | 31 Dec 2023 | 31 Dec 2022 |
Financial instruments at fair value through other profit and loss | ||||
Ineffective portion of cash flow hedges | - | 105 | - | 105 |
Total financial liabilities at FVTPL | - | 105 | - | 105 |
Financial instruments at fair value through other comprehensive income | ||||
Derivatives in effective cash flow hedges | 34 145 | 23 855 | 34 145 | 23 855 |
Total financial liabilities at FVTOCI | 34 145 | 23 855 | 34 145 | 23 855 |
| Other financial liabilities at amortised cost | ||||
Trade and other payables | 25 205 | 22 975 | 25 205 | 22 975 |
Other financial liabilities | 19 134 | 36 532 | 19 134 | 36 532 |
Interest-bearing loans and borrowings | 1 599 720 | 1 423 983 | 1 603 887 | 1 429 186 |
Lease liabilities | 76 087 | 107 693 | 76 087 | 107 693 |
Total financial liabilities at amortised cost | 1 720 146 | 1 591 183 | 1 724 313 | 1 596 387 |
TOTAL | 1 754 291 | 1 615 143 | 1 758 457 | 1 620 347 |
TOTAL NON-CURRENT | 1 289 756 | 1 193 936 | 1 293 922 | 1 199 139 |
TOTAL CURRENT | 464 535 | 421 208 | 464 535 | 421 208 |
56 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Assets as of 31 december 2023 | ||||
USD’000 | Level 1 | Level 2 | Level 3 | Total |
| Financial assets at FVTPL | ||||
Marketable securities | - | 219 | - | 219 |
Currency forward contracts | - | 1 615 | - | 1 615 |
| Financial assets at FVTOCI | ||||
Derivatives used for hedging | - | 26 270 | - | 26 270 |
TOTAL ASSETS | - | 28 103 | - | 28 103 |
| Liabilities as of 31 december 2023 | ||||
USD’000 | Level 1 | Level 2 | Level 3 | Total |
| Derivatives used for hedging | ||||
Derivatives in effective cash flow hedges | - | 34 145 | - | 34 145 |
Financial liabilities not measured at fair value, but for which fair values are disclosed | ||||
Bonds | - | 130 808 | - | 130 808 |
Mortgage debt | - | 1 473 079 | - | 1 473 079 |
Lease liabilities | - | - | 76 087 | 76 087 |
TOTAL LIABILITIES | - | 1 638 032 | 76 087 | 1 714 119 |
| Assets as of 31 december 2022 | ||||
USD’000 | Level 1 | Level 2 | Level 3 | Total |
| Financial assets at FVTPL | ||||
Marketable securities | - | 155 | - | 155 |
| Financial assets at FVTOCI | ||||
Derivatives used for hedging | - | 44 249 | - | 44 249 |
TOTAL ASSETS | - | 44 404 | - | 44 404 |
| Liabilities as of 31 december 2022 | ||||
USD’000 | Level 1 | Level 2 | Level 3 | Total |
| Derivatives used for hedging | ||||
Derivatives in effective cash flow hedges | - | 23 855 | - | 23 855 |
Financial liabilities not measured at fair value, but for which fair values are disclosed | ||||
Bonds | - | 291 746 | - | 291 746 |
Mortgage debt | - | 1 093 440 | - | 1 093 440 |
Corporate Bank facility | - | 44 000 | - | 44 000 |
Lease liabilities | - | - | 107 695 | 107 695 |
TOTAL LIABILITIES | - | 1 453 041 | 107 695 | 1 560 736 |
Consolidated Financial Statements Höegh LNG Group 57
HÖEGH LNG
58 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
• tax reimbursement element which covers taxes as defined by the provisions of the individual time
Consolidated Financial Statements Höegh LNG Group 59
HÖEGH LNG
| Time charter contracts as of 31 December 2023 | ||||||
| Current | Country of | |||||
| Vessel | contract | Charterer | domiciliation | TCP | Expiry | Option |
Arctic Princess | LNGC | Equinor ASA | Norway | 20 years | Jan 2026 | - |
Arctic Lady | LNGC | Total E&P Norge AS | Norway | 20 years | Apr 2026 | 5 + 5 years |
Independence | FSRU | AB Klaipédos Nafta | Lithuania | 10 years | Dec 2024 | - |
PGN FSRU Lampung | FSRU | PT PGN LNG Indonesia | Indonesia | 20 years | Oct 2034 | 5 + 5 years |
Höegh Gallant | FSRU | New Fortress Energy International | USA | 10 years | Nov 2031 | 1 year |
| Shipping LLC | ||||||
Hoegh Giant | FSRU | TRSP – Terminal de Regaseificacäo | Brazil | 10 years | Jul 2033 | 5 + 5 years |
| de gnl de Säo Paulo S.A. | ||||||
Höegh Grace | FSRU | Sociedad Portuaria El Cayao S.A. | Colombia | 20 years | Dec 2036 | - |
Höegh Esperanza | FSRU | The Federal Republic of Germany | Germany | 10 years | Dec 2032 | - |
Hoegh Gannet | FSRU | The Federal Republic of Germany | Germany | 10 years | Nov 2033 | - |
Hoegh Galleon | LNGC/FSRU | Australian Industrial Energy | Australia | 15 years | Nov 2038 | 5 + 5 years |
Hoegh Gandria | LNGC | Mitsui O.S.K. Lines Ltd. | 1 year | Mar 2024 | - | |
| Accounted for as investments in joint ventures | ||||||
Neptune | FSRU | Total Gas & Power Ltd | France | 20 years | Nov 2029 | 5 + 5 years |
Cape Ann | FSRU | Total Gas & Power Ltd | France | 20 years | Jun 2030 | 5 + 5 years |
60 Consolidated Financial Statements Höegh LNG Group
| Receivables, contract assets and contract liabilities | |||
USD'000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Trade receivables for time charter revenues, included in Trade and other receivables | 6.4 | 22 658 | 22 693 |
Total contract assets, included in Trade and other receivables | 296 | 425 | |
Refund liabilities to customers, included in Other current liabilities | 6.9 | (4 395) | (2 765) |
Contract liabilities, included in Other current liabilities | 6.9 | (8 107) | (12 882) |
Contract liabilities, included in Deferred revenues | 6.10 | (3 669) | (8 540) |
Contract assets, included in Other non-current financial assets | 554 | 554 | |
Total contract liabilities | (15 617) | (23 634) |
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 61
HÖEGH LNG
| Contracted expected future time charter revenues (undiscounted) from 1 Jan 2024 | |||||||
USDm | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | > 5 years | Total |
TOTAL | 429 | 359 | 317 | 308 | 310 | 1 738 | 3 460 |
62 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 63
HÖEGH LNG
| Market-to-market valuations of hedges | |||
USD'000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Non-current financial assets | 6.3 | 8 028 | 20 629 |
Current financial assets | 6.3 | 19 342 | 23 619 |
Total financial assets | 27 371 | 44 249 | |
Non-current financial liabilities | 6.3 | (34 145) | (8 058) |
Current financial liabilities | 6.3 | - | (15 902) |
Total financial liabilities | (34 145) | (23 960) | |
NET FINANCIAL ASSETS (LIABILITIES) | (6 774) | 20 289 | |
| Changes in fair value of designated instruments | |||
(see below table reconciling changes in FV) | (27 063) | 75 097 | |
Changes in fair value designated hedged item | 27 063 | (75 097) | |
NOTIONAL AMOUNTS | 1 434 555 | 1 918 429 | |
Maturity dates | Multiple | Multiple | |
Hedge ratio | 1:1 | 1:1 |
| Reconciliation of the changes in fair value of designated instruments | |||
USD'000 | Note | 2023 | 2022 |
Net gain (loss) on hedging reserves | (27 431) | 91 018 | |
Separate component of equity (currency portion of CCIRS) recorded to profit or (loss) | 10 867 | (25 276) | |
Ineffectiveness of IRS hegdes recorded to gain | 5.5 | 1 206 | 5 938 |
Settlement of interest rate swaps | (11 863) | 3 302 | |
Other movements in mark-to-market valuations | 158 | 115 | |
Change in fair value of designated instruments | (27 063) | 75 097 |
| Market-to-market valuations of hedges in joint ventures and associates | ||
USD'000 | 31 Dec 2023 | 31 Dec 2022 |
Non-current financial assets | 3 981 | 6 370 |
Current financial assets | 3 445 | 3 719 |
Total Financial assets | 7 426 | 10 089 |
Non-current financial liabilities | (17 916) | (22 312) |
Current financial liabilities | (4 388) | (4 944) |
Total Financial liabilities | (22 304) | (27 257) |
NET FINANCIAL LIABILITIES | (14 878) | (17 168) |
| Changes in fair value of designated instruments | ||
(see below table reconciling changes in FV) | 2 290 | 29 506 |
Changes in fair value designated hedged item | (2 290) | (29 506) |
NOTIONAL AMOUNTS | 201 939 | 236 280 |
Maturity dates | Multiple | Multiple |
Hedge ratio | 1:1 | 1:1 |
| Reconciliation of the changes in fair value of designated instruments in joint ventures | ||
USD'000 | 2023 | 2022 |
Share of other comprehensive income from joint ventures and associates | 84 | 28 285 |
Ineffectiveness of IRS hedges recorded to loss | (2 512) | (3 010) |
Settlement of swaps | 4 718 | 4 231 |
Change in fair value of designated instruments | 2 290 | 29 506 |
64 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Net interest-bearing debt | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Interest-bearing debt including lease liabilities, current and non-current | (1 655 580) | (1 514 628) | |
Restricted cash, non-current | 6.5 | 33 432 | 15 790 |
| Cash and cash equivalents including restricted | |||
current cash and marketable securities | 241 962 | 162 170 | |
NET INTEREST-BEARING DEBT | (1 380 186) | (1 336 668) |
Consolidated Financial Statements Höegh LNG Group 65
HÖEGH LNG
| Maturity schedule, interest-bearing debt as of 31 December 2023 | ||||||
| Due in | ||||||
| Due in | Due in | Due in | Due in | year 5 | ||
| USD’000 | year 1 | year 2 | year 3 | year 4 | and later | Total |
Independence facility | 144 084 | - | - | - | - | 144 084 |
PGN FSRU Lampung facility | 18 150 | 9 800 | - | - | - | 27 950 |
Höegh Esperanza facility | 24 618 | 25 806 | 27 052 | 28 357 | 225 682 | 331 515 |
Hoegh Giant facility | 12 750 | 12 750 | 110 813 | - | - | 136 313 |
Hoegh Gannet facility | 22 322 | 23 399 | 24 528 | 25 712 | 223 268 | 319 228 |
Hoegh Galleon facility | 141 946 | - | - | - | - | 141 946 |
USD 385 million facility | 25 597 | 25 597 | 210 268 | - | - | 261 463 |
Hoegh Gandria facility | 6 026 | 12 052 | 92 502 | - | - | 110 580 |
Bond debt | - | 126 641 | - | - | - | 126 641 |
| INTEREST-BEARING DEBT | ||||||
OUTSTANDING | 395 494 | 236 046 | 465 162 | 54 069 | 448 950 | 1 599 720 |
Lease liabilities | 33 991 | 35 436 | 6 620 | 28 | 12 | 76 087 |
| TOTAL INTEREST-BEARING DEBT | ||||||
INCLUDING LEASE LIABILITIES | 429 485 | 271 482 | 471 782 | 54 097 | 448 962 | 1 675 807 |
Debt issuance cost | (20 228) | |||||
TOTAL | 429 485 | 271 482 | 471 782 | 54 097 | 448 962 | 1 655 580 |
USD'000 | < 1 year | 1-5 years | > 5 years | Total |
| Instalments on mortage debt, unsecured bonds | ||||
and coporate facilities | 395 494 | 811 955 | 392 272 | 1 599 720 |
| Estimated interest on mortgage debt, unsecured bonds | ||||
and corporate facilities | 106 992 | 199 654 | 84 765 | 391 411 |
| Estimated interest on interest rate swaps | ||||
and cross-currency interest rate swaps | (29 540) | (53 976) | (20 457) | (103 974) |
Lease liabilities including interest | 33 991 | 42 096 | - | 76 087 |
TOTAL | 506 937 | 999 728 | 456 579 | 1 963 244 |
66 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
• The sale and leaseback debt facility for Hoegh Galleon matures in Q3 2031 (see Note 4.2 related
| Maturity profile on financial derivatives as of 31 December 2023 | ||||
USD'000 | < 1 year | 1-5 years | > 5 years | Total |
| Interest rate swaps designated as effective hedging instruments | ||||
in parent and subsidiaries | 19 342 | (23 824) | (2 292) | (6 774) |
| Interest rate swaps designated as effective hedging instruments | ||||
in the group’s joint ventures (100%) | (2 057) | (23 091) | (8 029) | (33 176) |
TOTAL | 17 285 | (46 914) | (10 321) | (39 950) |
Tax risk
In some of the group’s charter contracts, eligible revenues may include direct and indirect tax
elements. These encompass withholding taxes, payroll taxes, other local taxes and current income
tax expense for the jurisdiction in which the vessel operates as defined by the provisions of the
individual time charter contract. Operating in developing markets with unstable tax regimes poses
challenges for the group, including navigating various tax regulations encompassing withholding
taxes, VAT, payroll taxes, property taxes, taxes on financial transactions, permanent establishments,
and corporate income taxes. Ambiguities in these regulations, lead to uncertainty in tax liabilities.
Tax laws related to FSRU operations are subject to interpretation changes driven by audits, requiring
ongoing monitoring and adaptation to ensure compliance and effectively mitigate risks.
Consolidated Financial Statements Höegh LNG Group 67
HÖEGH LNG
| Adjusted equity ratio | ||
USD’000 | 31 Dec 2023 | 31 Dec 2022 |
Equity adjusted for hedging transactions | 780 609 | 699 216 |
Total assets adjusted for hedging transactions | 2 597 746 | 2 404 144 |
EQUITY RATIO ADJUSTED FOR HEDGING | 30% | 29% |
HÖEGH LNG
68 Consolidated Financial Statements Höegh LNG Group
Consolidated Financial Statements Höegh LNG Group 69
HÖEGH LNG
| Joint ventures and associates in Höegh LNG | ||||
| Ownership in % | ||||
Joint ventures and associates | Country | Principal activity | 31 Dec 2023 | 31 Dec 2022 |
Joint Gas Ltd. | Cayman Islands | Vessel owning | 33.98 | 33.98 |
Joint Gas Two Ltd. | Cayman Islands | Vessel owning | 50.00 | 50.00 |
SRV Joint Gas Ltd. | Cayman Islands | Vessel owning | 50.00 | 50.00 |
SRV Joint Gas Two Pte. Ltd.¹ | Singapore | Vessel owning | 50.00 | 50.00 |
Avenir LNG Limited | Bermuda | Vessel owning | 23.67 | 23.67 |
| Reconciliation of change in carrying values of joint ventures and associates | ||
USD'000 | 2023 | 2022 |
As of 1 January | 114 997 | 91 198 |
Share of result | 9 326 | (3 149) |
Other comprehensive income | 266 | 26 947 |
As of 31 DECEMBER | 124 589 | 114 997 |
Included in non-current assets | 124 589 | 114 997 |
70 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Condensed statement of comprehensive income for the group’s joint ventures and associates | ||||||||||
| Joint Gas | Joint Gas | SRV Joint | SRV Joint Gas | Avenir LNG | ||||||
| Ltd. | Two Ltd. | Gas Ltd. | Two Pte. Ltd.¹ | Limited | ||||||
USD’000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Charter revenues | 18 003 | 17 913 | 17 759 | 17 667 | 51 136 | 43 095 | 50 866 | 44 067 | 72 785 | 63 874 |
Operating expenses | (119) | (99) | (144) | (112) | (14 116) | (14 042) | (14 822) | (9 858) | (66 718) | (57 840) |
EBITDA | 17 884 | 17 814 | 17 616 | 17 555 | 37 020 | 29 053 | 36 044 | 34 209 | 6 068 | 6 034 |
Depreciation | (13 171) | (6 098) | (13 006) | (6 070) | (14 879) | (13 263) | (14 721) | (12 304) | (12 621) | (10 834) |
Impairment | - | (11 268) | - | (9 678) | - | - | - | - | - | (3 000) |
Interest income | 1 315 | 351 | 1 316 | 355 | 1 018 | 487 | 1 086 | 455 | - | - |
Interest expenses | (5 241) | (5 357) | (6 300) | (5 773) | (9 527) | (10 250) | (9 367) | (11 812) | (11 676) | (7 899) |
Other financial items and income taxes | - | - | - | - | - | - | - | (2 096) | (1 466) | |
| PROFIT (LOSS) | ||||||||||
FOR THE YEAR | 787 | (4 558) | (374) | (3 611) | 13 631 | 6 029 | 13 043 | 10 548 | (20 326) | (17 165) |
Other comprehensive income (loss) | 808 | 11 976 | 207 | 11 368 | (435) | 16 459 | (154) | 20 604 | 806 | (3 708) |
TOTAL COMPREHENSIVE INCOME (LOSS) | 1 595 | 7 418 | (167) | 7 756 | 13 196 | 22 488 | 12 889 | 31 152 | (19 519) | (20 874) |
| Condensed statement of financial position at year-end for the group’s joint ventures and associates | ||||||||||
| Joint Gas | Joint Gas | SRV Joint | SRV Joint Gas | Avenir LNG | ||||||
| Ltd. | Two Ltd. | Gas Ltd. | Two Pte. Ltd.¹ | Limited | ||||||
USD’000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| ASSETS | ||||||||||
| Cash and cash | ||||||||||
equivalents | 19 633 | 19 095 | 26 060 | 24 060 | 5 834 | 1 728 | 8 742 | 6 968 | 17 127 | 20 587 |
Other current assets | 8 | - | 620 | 197 | 6 218 | 6 444 | 8 237 | 3 220 | 8 267 | 13 592 |
| TOTAL CURRENT | ||||||||||
ASSETS | 19 640 | 19 095 | 26 680 | 24 257 | 12 051 | 8 172 | 16 979 | 10 188 | 25 393 | 34 180 |
| Vessels/Right-of-use | ||||||||||
assets | 68 440 | 81 611 | 71 348 | 84 354 | 212 290 | 226 656 | 208 907 | 211 528 | 262 945 | 267 845 |
| Other non-current | ||||||||||
assets | 13 300 | 10 528 | 13 000 | 11 000 | 19 943 | 22 285 | 16 111 | 17 125 | 1 180 | 2 215 |
TOTAL NON- CURRENT ASSETS | 81 740 | 92 139 | 84 348 | 95 354 | 232 233 | 248 940 | 225 017 | 228 653 | 264 125 | 270 060 |
TOTAL ASSETS | 101 380 | 111 234 | 111 027 | 119 611 | 244 285 | 257 112 | 241 997 | 238 841 | 289 519 | 304 240 |
| LIABILITIES | ||||||||||
| TOTAL CURRENT | ||||||||||
LIABILITIES | 11 630 | 11 559 | 10 146 | 9 723 | 24 706 | 29 546 | 27 195 | 19 252 | 39 665 | 89 854 |
Non-current interest- bearing debt | 71 724 | 82 575 | 80 935 | 89 855 | 105 045 | 121 762 | 113 418 | 129 411 | 128 194 | 73 673 |
| Other non-current | ||||||||||
liabilities | 10 145 | 10 815 | 6 345 | 6 265 | 51 441 | 55 907 | 26 612 | 28 295 | - | - |
| TOTAL NON-CURRENT | ||||||||||
LIABILITIES | 81 869 | 93 389 | 87 280 | 96 119 | 156 485 | 177 668 | 140 030 | 157 706 | 128 194 | 73 673 |
TOTAL LIABILITIES | 93 499 | 104 948 | 97 426 | 105 842 | 181 191 | 207 214 | 167 225 | 176 958 | 167 859 | 163 526 |
NET ASSETS | 7 881 | 6 286 | 13 602 | 13 768 | 63 094 | 49 898 | 74 772 | 61 883 | 121 660 | 140 714 |
Consolidated Financial Statements Höegh LNG Group 71
| Reconciliation of group’s share of investments in joint ventures and associates as of 31 december | ||||||||||
| Joint Gas | Joint Gas | SRV Joint | SRV Joint Gas | Avenir LNG | ||||||
| Ltd. | Two Ltd. | Gas Ltd. | Two Pte. Ltd.¹ | Limited | ||||||
USD’000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
NET ASSETS AS OF 1 JANUARY | 6 287 | (1 131) | 13 766 | 6 010 | 49 900 | 27 412 | 61 884 | 30 732 | 140 714 | 163 533 |
Profit (loss) for the year | 787 | (4 558) | (374) | (3 611) | 13 631 | 6 029 | 13 043 | 10 548 | (20 326) | (17 165) |
Other comprehensive income (loss) | 808 | 11 976 | 207 | 11 368 | (435) | 16 459 | (154) | 20 604 | 806 | (3 708) |
Other changes in equity | - | - | - | - | - | - | - | - | (37) | (1 945) |
Issuance of shares | - | - | - | - | - | - | - | - | - | - |
NET ASSETS AS OF 31 DECEMBER | 7 882 | 6 287 | 13 599 | 13 766 | 63 096 | 49 900 | 74 773 | 61 884 | 121 158 | 140 714 |
Interest in joint venture | 33.98% | 33.98% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 23.67% | 23.67% |
Investment in capital | - | - | - | - | - | - | - | - | - | - |
| Aggregate consolidation | ||||||||||
adjustments | 517 | 978 | 840 | 1 650 | 7 235 | 6 153 | 6 075 | 5 068 | 2 837 | 2 937 |
CARRYING VALUES AS OF 31 DECEMBER | 3 195 | 3 114 | 7 640 | 8 533 | 38 783 | 31 103 | 43 462 | 36 010 | 31 509 | 36 238 |
NOTE 4: SIGNIFICANT TRANSACTIONS AND EVENTS
| Management income from related parties | ||
USD’000 | 2023 | 2022 |
Joint Gas Ltd. | 82 | 77 |
Joint Gas Two Ltd. | 82 | 77 |
SRV Joint Gas Ltd. | 1 422 | 1 007 |
SRV Joint Gas Two Pte. Ltd. | 1 559 | 1 417 |
Larus Holding Limited | 102 | 102 |
Avenir LNG Limited | 474 | 594 |
TOTAL | 3 721 | 3 275 |
| Shareholder loans with joint ventures and associates | ||
USD’000 | 31 Dec 2023 | 31 Dec 2022 |
| Non-current | ||
SRV Joint Gas Ltd. | 10 429 | 9 624 |
SRV Joint Gas Two Pte. Ltd. | - | 2 256 |
Avenir LNG Limited | 5 708 | 1 920 |
TOTAL | 16 137 | 13 800 |
HÖEGH LNG
72 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Receivables against related parties | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
SRV Joint Gas Ltd. and SRV Joint Gas Two Ltd.¹ | 967 | 1 021 | |
Joint Gas Ltd. and Joint Gas Two Ltd. | (128) | 76 | |
Avenir LNG Limited | 1 489 | 5 812 | |
Larus Holding Limited | 17 | 8 | |
TOTAL | 6.4 | 2 345 | 6 918 |
| Administrative services from other related parties | ||
USD’000 | 2023 | 2022 |
Höegh Capital Partners Advisors Ltd. | - | 17 |
Höegh Capital Partners Ltd. | 89 | 594 |
Höegh Autoliners Management AS | 49 | 47 |
Höegh Autoliners Inc | 330 | 397 |
Hoegh Autoliners (India) Pvt Ltd. | - | - |
Other | 34 | 18 |
TOTAL | 502 | 1 072 |
Consolidated Financial Statements Höegh LNG Group 73
HÖEGH LNG
NOTE 5: DETAILED INFORMATION ON STATEMENT OF PROFIT OR LOSS
| AND OCI ITEMS | |
USD’000 | 2023 | 2022 |
Commercial and technical management fees | 3 722 | 3 275 |
Environmental taxes reimbursed by charterer | 6 941 | 3 736 |
Reimbursement of project cost | 9 263 | 14 469 |
Other income | 5 985 | 1 275 |
TOTAL | 25 911 | 22 755 |
USD’000 | 2023 | 2022 |
Salaries and personnel expenses offshore | 45 833 | 35 459 |
Bunker and other voyage related expenses | 2 264 | 6 097 |
Services | 10 488 | 10 325 |
Spare parts and modification work | 43 640 | 40 746 |
Insurance and taxes | 13 986 | 10 172 |
Ship management and other expenses | 15 686 | 10 369 |
TOTAL | 131 897 | 113 168 |
USD’000 | 2023 | 2022 |
Salaries offshore personnel | 32 833 | 26 705 |
Bonus | 2 167 | 2 500 |
Employer's contribution | 10 144 | 5 069 |
Crew agency fee | 478 | 986 |
Other social cost | 211 | 200 |
TOTAL SALARIES AND PERSONNEL EXPENSES OFFSHORE | 45 833 | 35 459 |
74 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Note 5.3 Administrative expenses | ||
USD’000 | 2023 | 2022 |
Salaries and personnel expenses onshore | 25 892 | 27 541 |
External services | 25 944 | 81 410 |
Remuneration to board members | 403 | 756 |
Office cost | 3 565 | 3 369 |
Travel cost | 2 302 | 1 812 |
Other | 1 592 | 6 745 |
Reclassified to operating expenses | (8 909) | (7 244) |
TOTAL | 50 788 | 114 389 |
USD’000 | 2023 | 2022 |
Salaries onshore personnel and other | 16 877 | 17 541 |
Bonus, share based payment expenses and other benefits employees | 4 843 | 5 617 |
Pension cost | 1 402 | 1 586 |
Employer’s contribution | 2 769 | 2 796 |
TOTAL SALARIES AND PERSONNEL EXPENSES | 25 892 | 27 541 |
| Remuneration to the Senior Management and Board of Directors | ||
USD'000 | 2023 | 2022 |
Salaries | 2 001 | 2 418 |
Pension compensation (cash allowance) | 94 | 99 |
Share-based payment | - | 150 |
Other taxable benefits | 235 | 393 |
Bonus | 1 128 | 2 302 |
Board of Directors' Fee | 403 | 756 |
TOTAL | 3 861 | 6 117 |
Consolidated Financial Statements Höegh LNG Group 75
HÖEGH LNG
Senior Management Team comprises President and CEO, Chief Financial Officer, Chief Commercial
Officer, Chief Operating Officer, Chief Legal & Compliance Officer and EVP, Clean Energy. The EVP,
Clean Energy was appointed 1 April 2023.
Note 5.4 | Interest expenses | ||
USD'000 | Note | 2023 | 2022 |
Interest expenses on mortgage debt and corporate facilities | 88 361 | 64 809 | |
Interest expenses on bonds | 21 991 | 26 015 | |
Interest expenses on leases | 6.2 | 4 417 | 5 940 |
Other interest expenses | 70 | 57 | |
TOTAL | 114 839 | 96 821 | |
Note 5.5 | Income and expenses from other financial items | ||
USD'000 | Note | 2023 | 2022 |
| Income from other financial items | |||
Currency gain | 2 294 | 5 795 | |
Ineffectiveness on interest rate hedges | 3.2 | 2 973 | 6 102 |
Other | 103 | 372 | |
INCOME FROM OTHER FINANCIAL ELEMENTS - GROSS | 5 370 | 12 269 |
| Expenses from other financial items | |||
Currency loss | (250) | (5 574) | |
Withholding tax | (4 115) | (2 720) | |
Ineffectiveness on interest rate hedges | 3.2 | (1 767) | (163) |
Break-cost related to refinancing | (4 200) | - | |
Guarantee fees and other | (1 896) | (596) | |
EXPENSES FROM OTHER FINANCIAL ELEMENTS - GROSS | (12 227) | (9 053) | |
INCOME (EXPENSES) FROM OTHER FINANCIAL ELEMENTS - NET | (6 857) | 3 216 |
76 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 77
HÖEGH LNG
| Carrying amounts of vessels and spare parts 31 December | ||
USD'000 | 2023 | 2022 |
Cost as of 1 January | 2 379 753 | 2 364 986 |
Acquistion of vessels | 184 300 | - |
Capitalisation of class renewals and modification cost | 4 182 | 14 767 |
Investment in equipment | 23 841 | - |
COST AS OF 31 DECEMBER | 2 592 076 | 2 379 753 |
Accumulated depreciation and impairment 1 January | (484 139) | (401 006) |
Depreciation charge vessels and depot spares | (85 772) | (83 133) |
ACCUMULATED DEPRECIATION AND IMPAIRMENT 31 DECEMBER | (569 911) | (484 139) |
NET CARRYING AMOUNT AS OF 31 DECEMBER | 2 022 165 | 1 895 614 |
USD'000 | 31 Dec 2023 | 31 Dec 2022 |
Vessels | 1 975 823 | 1 870 170 |
Class renewals | 14 396 | 16 326 |
Spare parts and long-lead items | 31 946 | 9 118 |
TOTAL | 2 022 165 | 1 895 614 |
| Depreciation charges per asset class | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Vessels and spare parts | 80 328 | 77 331 | |
Class renewals | 5 444 | 5 801 | |
Equipment | 6.6 | 955 | 1 180 |
Right-of-use assets | 6.2 | 31 067 | 30 963 |
Other | (16) | - | |
TOTAL | 117 779 | 115 276 |
78 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 79
HÖEGH LNG
THE GROUP AS A LESSEE
Carrying values of right-of-use assets recognised and the movements during 2023 and 2022 were as
follows:
| Right-of-use assets | |||||
USD’000 | Note | Vessels | Premises | Other | Total |
Right-of-use assets as of 1 January 2023 | 95 874 | 3 285 | 85 | 99 245 | |
Increase during the year due to lease modifications | 205 | 670 | 132 | 1 007 | |
Decrease from accumulated depreciation due to termination of leases | - | - | (2) | (2) | |
Depreciation | 6.1 | (29 959) | (1 069) | (39) | (31 067) |
RIGHT-OF-USE ASSETS AS OF 31 DECEMBER 2023 | 66 120 | 2 887 | 176 | 69 183 |
USD’000 | Note | Vessels | Premises | Other | Total |
Right-of-use assets as of 1 January 2022 | 125 744 | 4 004 | 167 | 129 916 | |
Increase during the year due to lease modifications | 26 | 293 | 2 | 322 | |
Decrease from accumulated depreciation due to termination of leases | - | (1) | (29) | (30) | |
Depreciation | 6.1 | (29 896) | (1 011) | (56) | (30 963) |
RIGHT-OF-USE ASSETS AS OF 31 DECEMBER 2022 | 95 875 | 3 285 | 84 | 99 245 |
80 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Vessels are Arctic Lady and Arctic Princess, two LNG carriers that are bareboat chartered by Leif
Hoegh (U.K.) Limited, a wholly owned subsidiary of Höegh LNG Ltd from the joint venture companies
Joint Gas Ltd. and Joint Gas Two Ltd., in which Höegh LNG Ltd. has a 33.98% and 50.00% ownership
respectively. Arctic Princess and Arctic Lady are chartered on operating lease by Leif Hoegh (U.K.)
Limited to Equinor and Total, respectively. The group assess at lease commencement, whether it
is reasonably certain to exercise the extension and termination options related to lease contracts
and reflect these options in the lease term. The charterers of Arctic Princess and Arctic Lady have
options to extend the lease term, but the group is not certain that the options will be exercised and
has concluded that it is not reasonably certain to exercise the extension and termination options
in any existing contract. Lease liabilities are therefore calculated based on fixed lease terms and
finalised contracts.
The carrying values of lease liabilities and the movements during 2023 and 2022 were as follows:
| Lease liabilities | |||
USD’000 | Note | 2023 | 2022 |
As of 1 January | 107 693 | 138 604 | |
Increase during the year due to lease modifications | 1 000 | 289 | |
Forex revaluation of lease liabilities | (356) | (446) | |
Interest expenses | 5.4 | 4 417 | 5 940 |
Payments | (36 667) | (36 694) | |
TOTAL LEASE LIABILITIES AS OF 31 DECEMBER | 76 087 | 107 693 | |
Non-current lease liabilities | 3.2 | 42 096 | 75 492 |
Current lease liabilities | 3.2 | 33 991 | 32 201 |
TOTAL LEASE LIABILITIES AS OF 31 DECEMBER | 76 087 | 107 693 |
The maturity analysis of lease liabilities is disclosed in Note 3.2.
The following are the amounts recognised in consolidated statement of income
USD’000 | Note | 2023 | 2022 |
Depreciation of Right-of-use assets | 6.1 | (31 067) | (30 963) |
Interest expenses, lease liabilities | 5.4 | (4 417) | (5 940) |
| Expenses related to short-term land low-value leases | |||
(included in administrative expenses) | (391) | (460) | |
TOTAL | (35 875) | (37 363) |
THE GROUP AS A LESSOR
The group has entered into operating leases on its vessels. These leases have terms between 1 and
20 years, reference made to disaggregation of time charter revenues disclosed in Note 3.1. Lease
revenues recognised by the group during 2023 was USD 350 million (USD 239 million in 2022). Future
minimum payment receivables under non-cancellable operating leases as of 31 December 2023 were
USD 2.7 billion (USD 2.4 billion) with following maturity profile:
Consolidated Financial Statements Höegh LNG Group 81
HÖEGH LNG
| Expected future lease revenues (undiscounted)from 1 Jan 2024: | |||||||
USDm | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | > 5 years | Total |
TOTAL | 317 | 270 | 238 | 231 | 232 | 1 309 | 2 597 |
82 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 83
HÖEGH LNG
84 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Interest-bearing debt as of 31 December 2023 | ||||
USD’000 | Note | Non-current | Current | Total |
Independence facility | - | 144 084 | 144 084 | |
PGN FSRU Lampung facility | 9 800 | 18 150 | 27 950 | |
Höegh Esperanza facility | 306 897 | 24 618 | 331 515 | |
Hoegh Giant facility | 123 563 | 12 750 | 136 313 | |
Hoegh Gannet facility | 296 906 | 22 322 | 319 228 | |
Hoegh Galleon facility | - | 141 946 | 141 946 | |
USD 385 million facility | 235 866 | 25 597 | 261 463 | |
Hoegh Gandria facility | 104 554 | 6 026 | 110 580 | |
Bond debt | 126 641 | - | 126 641 | |
Debt issuance cost | (17 231) | (2 997) | (20 228) | |
| TOTAL INTEREST-BEARING DEBT EXCLUDING | ||||
LEASE LIABILITIES | 1 186 996 | 392 497 | 1 579 493 | |
Lease liabilities | 6.2 | 42 096 | 33 991 | 76 087 |
| TOTAL INTEREST-BEARING DEBT INCLUDING | ||||
LEASE LIABILITIES | 1 229 092 | 426 488 | 1 655 580 |
| Interest-bearing debt as of 31 December 2022 | ||||
USD’000 | Note | Non-current | Current | Total |
Independence facility | 144 084 | 15 248 | 159 332 | |
PGN FSRU Lampung facility | 34 919 | 18 150 | 53 069 | |
Höegh Esperanza facility | 78 125 | 62 500 | 140 625 | |
Hoegh Giant facility | 136 313 | 12 750 | 149 063 | |
Hoegh Gannet facility | 142 292 | 11 042 | 153 333 | |
Hoegh Galleon facility | 141 946 | 9 012 | 150 959 | |
USD 385 million facility | 261 463 | 25 597 | 287 060 | |
Bond debt | 129 582 | 153 978 | 283 560 | |
Corporate Bank facility | 14 667 | 29 333 | 44 000 | |
Debt issuance cost and bond issue discount | (14 067) | - | (14 067) | |
| TOTAL INTEREST-BEARING DEBT EXCLUDING | ||||
LEASE LIABILITIES | 1 069 323 | 337 611 | 1 406 935 | |
Lease liabilities | 6.2 | 75 492 | 32 201 | 107 693 |
| TOTAL INTEREST-BEARING DEBT INCLUDING | ||||
LEASE LIABILITIES | 1 144 815 | 369 812 | 1 514 628 |
Consolidated Financial Statements Höegh LNG Group 85
HÖEGH LNG
| Cash flows new | Lease | Foreign | |||||
| 1 Jan | Cash flows | interest-bearing | modifi- | exchange | 31 Dec | ||
| USD’000 | 2023 | repayment | debt | cations | movement | Other | 2023 |
| Current interest-bearing loans | |||||||
| and borrowings (excluding lease | 183 633 | (29 333) | 6 026 | - | - | 232 172 | 392 497 |
| liabilities and bond issues) | |||||||
Current lease liabilities | 32 201 | 2 147 | - | - | (356) | - | 33 991 |
Current bond issues | 153 978 | (168 956) | - | 15 458 | (480) | - | |
| Non-current interest-bearing | |||||||
| loans and borrowings (excluding | 939 741 | (519 836) | 878 782 | - | - | (236 496) | 1 062 190 |
| lease liabilities and bond issues) | |||||||
Non-current lease liabilities | 75 492 | (34 396) | - | 1 000 | - | - | 42 096 |
Non-current bond issues | 129 582 | - | - | - | (6 396) | 1 619 | 124 806 |
TOTAL LIABILITIES FROM FINANCING ACTIVITIES | 1 514 627 | (750 375) | 884 808 | 1 000 | 8 706 | (3 185) | 1 655 580 |
| Cash flows new | |||||||
| interest-bearing | Lease | Foreign | |||||
| 1 Jan | Cash flows | debt and sale of | modifi- | exchange | 31 Dec | ||
| USD’000 | 2022 | repayment | own bonds | cations | movement | Other | 2022 |
| Current interest-bearing loans | |||||||
| and borrowings (excluding lease | 106 937 | - | - | - | - | 76 695 | 183 633 |
| liabilities and bond issues) | |||||||
Current lease liabilities | 30 814 | 1 833 | - | - | (446) | - | 32 201 |
Current bond issues | 266 447 | - | 40 555 | - | (12 120) | (140 904) | 153 978 |
| Non-current interest-bearing | |||||||
| loans and borrowings (excluding | 1 101 756 | (115 508) | 22 500 | - | - | (69 007) | 939 741 |
| lease liabilities and bond issues) | |||||||
Non-current lease liabilities | 107 790 | (32 587) | - | 289 | - | - | 75 492 |
Non-current bond issues | - | - | - | - | (14 397) | 143 979 | 129 582 |
TOTAL LIABILITIES FROM FINANCING ACTIVITIES | 1 613 744 | (146 262) | 63 055 | 289 | (26 962) | 10 763 | 1 514 627 |
86 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Interest-bearing debt in the consolidated entities as of 31 December 2023 | ||||||||
| Höegh | ||||||||
| Gallant/ | ||||||||
| PGN FSRU | Höegh | Hoegh | Höegh | Hoegh | Hoegh | Hoegh | ||
USD’000 | Independence | Lampung | Grace | Giant | Esperanza | Gannet | Galleon | Gandria |
| Drawdown | 08.05.2014 | 17.04.2014 | 31.01.2019 | 09.08.2021 | 17.02.2023 | 16.11.2023 | 27.08.2019 | 30.06.2023 |
| date | ||||||||
| Original amount | 242 000 | 225 000 | 383 000 | 165 000 | 355 000 | 319 228 | 180 250 | 110 580 |
| drawn | ||||||||
Refinancing/top- up amount | 45 000 | - | - | - | - | - | - | - |
Refinancing/top- up date | 28.04.2020 | 24.12.2021 | - | - | - | - | - | - |
| ECA/ | ECA/ | ECA/ | ECA/ | ECA/ | ||||
| commercial | commercial | commercial | Commercial | commercial | commercial | Commercial | ||
| Type of financing | banks | banks | banks | banks | banks | banks | SLB | banks |
Blended tenor on the debt | 10 | 11 | 7 | 5 | 10 | 10 | 12 | 3 |
| (years ) | ||||||||
| Blended profile | ||||||||
| on the debt | 16 | 12 | 15 | 13 | 12 | 12 | 20 | NA |
| (years ) | ||||||||
| Blended fixed | 4.10% | 5.37% | 4.90% | 3.94% | 5.60% | 5.73% | 5.71% | 7.02% |
| all-in-rate |
| Interest-bearing debt in joint ventures as of 31 December 2023 | ||||
| Arctic | ||||
USD’000 | Arctic Lady | Princess | Neptune | Cape Ann |
Drawdown date | 12.04.2006 | 13.01.2006 | 29.11.2021 | 01.06.2022 |
Original amount drawn under the facility | 195 508 | 196 361 | 154 000 | 154 000 |
| Commercial | Commercial | |||
Type of financing | SLB | SLB | banks | banks |
Blended tenor on the debt ( years ) | 25 | 25 | 8 | 8 |
Blended profile on the debt ( years ) | 25 | 25 | 8 | 8 |
Blended fixed all-in-rate | 5.11% | 5.39% | 7.43% | 7.42% |
Consolidated Financial Statements Höegh LNG Group 87
HÖEGH LNG
| Non-current financial assets | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Interest rate swaps designated as hedges | 3.2 | 8 028 | 20 629 |
Cash collateral related to interest rate swaps | 5 851 | 2 116 | |
Other | 2 007 | 588 | |
TOTAL | 15 887 | 23 334 | |
| Non-current financial liabilities | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Interest rate swaps designated as hedges | 3.2 | 34 145 | 8 058 |
Pension liabilities (defined benefit) | 521 | 246 | |
Other | 8 768 | 23 768 | |
TOTAL | 43 434 | 32 072 | |
| Other current financial assets | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Interest rate swaps designated as effective hedging instruments | 3.2 | 19 342 | 23 619 |
Currency forward contracts | 1 615 | - | |
Investment in marketable securities | 219 | 155 | |
TOTAL | 21 176 | 23 774 | |
| Other current financial liabilities | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Interest rate swaps designated as effective hedging instruments | 3.2 | - | 15 902 |
Accrued interest on mortgage debt | 7 912 | 6 845 | |
Accrued interest on bonds and corporate facilties | 1 933 | 5 673 | |
TOTAL | 9 845 | 28 420 |
88 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Trade receivables | 3.1 | 22 658 | 22 693 |
Accrued and unbilled charter hire and cost pass-through | 10 257 | 11 067 | |
Unbilled class renewal and modification cost | 296 | 10 349 | |
Receivables towards related parties (joint ventures, associates and owner) | 4.1 | 2 345 | 6 917 |
Prepaid administrative, operating and class renewal cost | 11 432 | 9 363 | |
VAT receivables | 1 470 | 825 | |
Other receivables and prepayments | 5 132 | 4 410 | |
TOTAL | 53 590 | 65 623 |
| Non-current restricted cash as of 31 December | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Hoegh LNG Gannet Pte. Ltd., debt service | - | 4 799 | |
Höegh LNG Ltd., project financing | 10 010 | - | |
Höegh LNG FSRU VI Ltd, debt service | 12 430 | - | |
PT Hoegh LNG Lampung, debt service | 10 991 | 10 991 | |
TOTAL | 3.2 | 33 432 | 15 790 |
| Current restricted cash | ||
USD’000 | 31 Dec 2023 | 31 Dec 2022 |
PT Hoegh LNG Lampung | 23 255 | 15 264 |
TOTAL | 23 255 | 15 264 |
Consolidated Financial Statements Höegh LNG Group 89
HÖEGH LNG
USD'000 | 31 Dec 2023 | 31 Dec 2022 |
Pre-contract cost | 3 720 | 4 261 |
Investment in IT (hardware and software) and office equipment | 1 520 | 2 275 |
Arctic vessels' class renewal cost | 3 513 | 8 145 |
Fees on undrawn facilities | 2 349 | 337 |
TOTAL | 11 102 | 15 018 |
USD'000 | Note | 2023 | 2022 |
Cost as of 1 January | 11 707 | 11 459 | |
Additons | 201 | 245 | |
Net disposals | - | 3 | |
COST AS OF 31 DECEMBER | 11 909 | 11 707 | |
Accumulated deprecation as of 1 January | (9 433) | (8 253) | |
Depreciation charge | 6.1 | (955) | (1 180) |
ACCUMULATED DEPRECIATION AS OF 31 DECEMBER | (10 389) | (9 433) | |
CARRYING VALUE AS OF 31 DECEMBER | 1 520 | 2 275 |
Note 6.7 Issued capital
As of 31 December 2023, the company’s share capital was USD 12 000, consisting of 1 200 000 fully
paid common shares, each with a par value of USD 0.01. All the shares in the company are owned by
Morgan Stanley Infrastructure Partners.
Note 6.8 | Trade and other payables | |
USD’000 | 31 Dec 2023 | 31 Dec 2022 |
Trade payables | 11 279 | 12 364 |
Public duties | 9 696 | 6 543 |
Accrued holiday and leave pay | 4 231 | 4 069 |
TOTAL | 25 205 | 22 975 |
90 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Note 6.9 | Other current liabilities | ||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Contract liabilities (prepaid charter revenues) | 3.1 | 8 107 | 12 882 |
Refund liabilities to customers (audit matters, tax element) | 3.1 | 4 395 | 2 765 |
Bonus provisions | 7 102 | 5 719 | |
Accrued operational and class renewal cost | 4 711 | 6 083 | |
Other provisions and accruals | 36 870 | 44 768 | |
TOTAL | 61 185 | 72 218 |
USD’000 | Note | 2023 | 2022 |
Non-current deferred revenues as of 1 January | 8 540 | 14 989 | |
Amortisation of charter hire (revenue recognition) Arctic Lady and Arctic Princess | (4 630) | (4 630) | |
Other | (241) | (1 819) | |
CARRYING VALUE AS OF 31 DECEMBER | 3.1 | 3 669 | 8 540 |
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 91
| Tax expenses for the year | ||
USD’000 | 2023 | 2022 |
| Current income tax charge incl. adjustments of previous years | (5 520) | (58) |
Changes in deferred taxes | (6 253) | (2 447) |
INCOME TAX EXPENSES REPORTED IN THE INCOME STATEMENT | (11 773) | (2 505) |
| EFFECTIVE TAX RATE | ||
PROFIT (LOSS) BEFORE INCOME TAX | 108 728 | (52 904) |
At Bermuda's statutory income tax rate of 0% | - | - |
Income tax expense reported outside Bermuda | (11 773) | (2 505) |
INCOME TAX EXPENSES REPORTED IN THE INCOME STATEMENT | (11 773) | (2 505) |
EFFECTIVE TAX RATE | 11% | n/a |
| Changes in deferred taxes | ||
USD’000 | 31 Dec 2023 | 31 Dec 2022 |
| Deferred tax assets | ||
Tax loss carried forward | 92 | 738 |
Other tangible assets | 417 | 418 |
TOTAL DEFERRED TAX ASSETS GROSS | 509 | 1 156 |
| Deferred tax liabilities | ||
Vessels | (19 057) | (14 093) |
Accrued interest income net of tax credits carried forward | (5 197) | (4 620) |
Other | (65) | - |
TOTAL DEFERRED TAX LIABILITIES GROSS | (24 319) | (18 713) |
TOTAL DEFERRED TAX LIABILITIES NET | (23 810) | (17 557) |
92 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
Colombian source income
The charterer in Colombia pays certain taxes directly to the Colombian tax authorities on behalf
of Höegh LNG’s subsidiaries that own and operate the Höegh Grace. The tax payments are a
mechanism for advance collection of part of the income taxes for the Colombian subsidiary and
a final income tax on Colombian source income for the non-Colombian subsidiary. Höegh LNG
concluded these third-party payments to the tax authorities represent income taxes that must
be accounted for under the guidance for income taxes. The amount of non-cash income tax
expense was USD 0.8 million and USD 0.9 million for the year ended 31 December 2023 and 2022,
respectively.
In 2022, Höegh LNG’s Colombian subsidiary received a notification from the Tax Administration of
Cartagena assessing a penalty of approximately USD 1.8 million for failure to file the 2016 to 2021
Municipal Industry and Commerce Tax (“ICT”) returns. While Höegh LNG disagrees that this tax is
applicable, the claimed tax amount of approximately USD 0.4 million was paid and the charterer
reimbursed the amount in May 2023 and have continued to pay the ICT on regular basis for the years
ended 2022 and 2023 of which in return have been reimbursed by charterer.
Consolidated Financial Statements Höegh LNG Group 93
HÖEGH LNG
Vessel | Performance guarantee issued in favour of charterer | Guarantor |
Hoegh Galleon | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Holdings |
| customer subject to a maximum cap of USD 55.5 million | Ltd. | |
Hoegh Gannet | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Holdings |
| customer | Ltd. | |
Höegh Esperanza | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Holdings |
| customer | Ltd. | |
Hoegh Giant | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Holdings |
| customer | Ltd. | |
Independence | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Ltd. is |
| customer | the guarantor and is | |
| counter-guaranteed by | ||
| Höegh LNG Holdings | ||
| Ltd. | ||
Arctic Princess | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Ltd. is |
| customer | the guarantor and is | |
| counter-guaranteed by | ||
| Höegh LNG Holdings | ||
| Ltd. | ||
Arctic Lady | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Ltd. |
| customer | ||
Neptune | Guarantee of the obligations of the joint venture’s JV’s charter with | Höegh LNG Ltd. |
| the customer equal to the pro rata (50%) ownership share | ||
Cape Ann | Guarantee of the obligations of the joint venture’s charter with the | Höegh LNG Ltd. |
| customer equal to the pro rata (50%) ownership share | ||
PGN FSRU Lampung | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Holdings |
| customer | Ltd. | |
Höegh Grace | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Partners LP |
| customer | ||
Höegh Gallant | Guarantee of the obligations of the subsidiary’s charter with the | Höegh LNG Partners LP |
| customer |
94 Consolidated Financial Statements Höegh LNG Group
HÖEGH LNG
| Overview of securities and guarantees granted and outstanding as of 31 December 2023 for the | |||
| group’s debt facilities | |||
Debt facility | Pledges | Guarantee | Guarantor |
Corporate debt facility | Customary pledge of shares | Höegh LNG Ltd. has | Höegh LNG Ltd. |
| in guarantor | guaranteed Höegh LNG | ||
| Holdings Ltd.’s obligations | |||
| related to the debt facility | |||
Hoegh Galleon | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd. |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Hoegh Gannet | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd. |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Höegh Esperanza | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd. |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Hoegh Giant | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd. |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Independence | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd. |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Hoegh Gandria | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Holdings Ltd |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps | ||
Arctic Princess | Not applicable for the vessel | Sponsor’s guarantee pro-rata | Höegh LNG Ltd. and Höegh |
| since this is a finance lease. | according to its shareholding | LNG Holdings Ltd. | |
| Customary pledge of certain | for payment obligations under | ||
| bank accounts and shares in | the lease agreements and | ||
| the vessel-owning entity | interest rate swaps entered | ||
| into by the JV | |||
Arctic Lady | Not applicable for the vessel | Sponsor’s guarantee pro-rata | Höegh LNG Ltd. and Höegh |
| since this is a finance lease. | according to its shareholding | LNG Holdings Ltd. | |
| Customary pledge of certain | for payment obligations under | ||
| bank accounts and shares in | the lease agreements and | ||
| the vessel-owning entity | interest rate swaps entered | ||
| into by the JV | |||
Neptune | Customary pledge of vessel, | Sponsor guarantee for the | Höegh LNG Partners LP |
| certain bank accounts and | obligations related to the | ||
| shares in the vessel-owning | debt facility and interest rate | ||
| entity. | swaps, limited to maximum | ||
| USD 7.5 million. | |||
Cape Ann | Customary pledge of vessel, | Sponsor guarantee for the | Höegh LNG Partners LP |
| certain bank accounts and | obligations related to the | ||
| shares in the vessel-owning | debt facility and interest rate | ||
| entity | swaps, limited to maximum | ||
| USD 7.5 million. | |||
PGN FSRU Lampung | Customary pledge of vessel, | Parent company guarantee | Höegh LNG Partners LP |
| certain bank accounts and | for the obligations related to | ||
| shares in the vessel-owning | the debt facility and interest | ||
| entity | rate swaps |
HÖEGH LNG
Consolidated Financial Statements Höegh LNG Group 95
4.2
Financial statements
Höegh LNG Holdings Ltd.
For the year ended 31 December 2023
98 Statement of income
98 Statement of comprehensive income
99 Statement of financial position
101 Statement of changes in equity
102 Statement of cash flows
103 Notes
98 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
STATEMENT OF INCOME 1 JANUARY – 31 DECEMBER
USD’000 | Note | 2023 | 2022 |
Administrative expenses | 9 | (2 610) | (57 051) |
OPERATING RESULT | (2 610) | (57 051) | |
Interest income | 6 | 20 338 | 13 376 |
Dividend received | 16 | 20 000 | 458 |
Impairment reversal of loan to subsidiaries | 5 | - | 82 061 |
Impairment of investment in associates | 5 | (12 000) | - |
Interest expenses | 7 | (29 821) | (32 115) |
Income from other financial items | 17 | 5 451 | 4 693 |
Expenses from other financial items | 17 | (1 598) | (3 676) |
PROFIT (LOSS) FOR THE YEAR AFTER TAX | (241) | 7 746 | |
| STATEMENT OF COMPREHENSIVE INCOME 1 JANUARY – 31 DECEMBER | |||
USD’000 | Note | 2023 | 2022 |
PROFIT (LOSS) FOR THE YEAR AFTER TAX | (241) | 7 746 | |
| Items that may be subsequently reclassified to loss (profit) | |||
Net gain (loss) on cash flow hedges | 8 | (4 629) | 16 376 |
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET OF TAX | (4 629) | 16 376 | |
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET OF TAX | (4 870) | 24 122 |
HÖEGH LNG
Financial Statements Höegh LNG Holdings Ltd. 99
STATEMENT OF FINANCIAL POSITION
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
| ASSETS | |||
| Non-current assets | |||
Investment in subsidiaries | 3 | 597 566 | 596 382 |
Loan to subsidiaries | 5 | 40 770 | 277 082 |
Investment in associates | 4 | 31 125 | 43 125 |
Loan to associates | 5 | 5 708 | 1 920 |
Cash collateral | 13 | 5 808 | 490 |
Other non-current financial assets | - | 137 | |
Total non-current assets | 680 978 | 919 136 | |
| Current assets | |||
Trade receivables | 1 854 | 1 663 | |
Other current financial assets | 8, 14 | 3 536 | 3 135 |
Cash and cash equivalents | 10 | 17 196 | 22 595 |
Total current assets | 22 586 | 27 394 | |
TOTAL ASSETS | 703 563 | 946 529 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
Share capital | 11 | 12 | 12 |
Share premium reserves | 556 260 | 556 260 | |
Contributed surplus | 350 821 | 350 821 | |
Other paid-in equity | 295 | 295 | |
Hedging reserves | 8 | 5 186 | 9 815 |
Retained earnings | (378 831) | (378 590) | |
Total equity | 533 743 | 538 613 | |
| Non-current liabilities | |||
Other non-current financial liabilities | 8 | 25 132 | 31 808 |
Other debt | 14 | - | 14 667 |
Bonds | 12 | 124 806 | 129 582 |
Total non-current liabilities | 149 937 | 176 057 | |
| Current liabilities | |||
Other debt | 14 | - | 29 333 |
Bonds | 12 | - | 153 978 |
Accrued interest | 12 | 1 933 | 5 673 |
Trade and other payables | 498 | 308 | |
Provisions and accruals | 17 452 | 26 664 | |
Other current financial liabilities | 8 | - | 15 902 |
Total current liabilities | 19 883 | 231 859 | |
TOTAL EQUITY AND LIABILITIES | 703 563 | 946 529 |
100 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
Hamilton, Bermuda, 18 April 2024
The Board of Directors and the President and CEO of Höegh LNG Holdings Ltd.
Morten W. Høegh
Chairman
Johan Pfeiffer
Deputy Chairman
Carlo Ravizza
Director
Eric den Besten
Director
Alberto Donzelli
Director
John Kwaak
Director
Tammy L. Richardson-Augustus
Director
Erik Nyheim
President and CEO
Financial Statements Höegh LNG Holdings Ltd. 101
HÖEGH LNG
STATEMENT OF CHANGES IN EQUITY
| Share | Other | |||||||
| Share | premium | Contribut - | paid-in | Hedging | Retained | Total | ||
USD’000 | Note | capital | reserves | ed surplus | equity | reserves | earnings | equity |
1 January 2022 | 12 | 556 260 | 154 753 | 295 | (6 561) | (386 336) | 318 424 | |
Total comprehensive income | 8 | - | - | - | - | 16 376 | 7 746 | 24 122 |
Shareholder contribution | - | - | 207 368 | - | - | - | 207 368 | |
Transaction cost | - | - | (11 300) | - | - | - | (11 300) | |
31 December 2022 | 12 | 556 260 | 350 821 | 295 | 9 815 | (378 590) | 538 613 | |
Total comprehensive loss | 8 | - | - | - | - | (4 629) | (241) | (4 870) |
31 December 2023 | 12 | 556 260 | 350 821 | 295 | 5 186 | (378 831) | 533 743 |
102 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
STATEMENT OF CASH FLOWS 1 JANUARY – 31 DECEMBER
USD’000 | Note | 2023 | 2022 |
| Cash flows from operating activities: | |||
Profit (loss) for the year before tax | (241) | 7 746 | |
| Adjustments to reconcile profit or loss before tax to net operational cash flows | |||
Interest income | 6 | (20 338) | (13 376) |
Interest expenses | 7 | 29 821 | 32 115 |
Impairment reversal of loan to subsidiaries | 5 | - | (82 061) |
Impairment of investment in associates | 5 | 12 000 | - |
Net gain on derivatives and other financial instruments | (3 497) | (1 080) | |
Dividend received from Höegh LNG Partners LP | 16 | (20 000) | ( 458) |
Working capital adjustments (changes in receivables and payables) | (15 532) | 38 208 | |
I) NET CASH FLOWS FROM OPERATING ACTIVITIES | (17 787) | (18 906) | |
| Cash flows from investing activites: | |||
Dividend received from Höegh LNG Partners LP | 16 | 20 000 | 458 |
Grants lending to subsidiaries | 5 | (10 000) | (49 500) |
Grants lending to associates | 5 | (3 500) | - |
Repayments lending to subsidiaries | 5 | 264 700 | 16 272 |
Interest received | 1 661 | 1 776 | |
Investment in subsidiaries | 3 | (1 184) | (166 119) |
II) NET CASH FLOWS FROM INVESTING ACTIVITIES | (271 677) | (197 113) | |
| Cash flows from financing activites: | |||
Interest paid | (30 111) | (27 605) | |
Payment of financing and refinancing fees and debt issuance cost | 14 | (2 311) | - |
Repayment of borrowings | 14 | (312 956) | (3 301) |
Proceeds from borrowings | 14 | 100 000 | 40 555 |
Transaction cost paid | (8 593) | - | |
Shareholder contribution | - | 203 289 | |
Increase in restricted cash and cash collateral | 13 | (5 318) | ( 470) |
III) NET CASH FLOWS FROM FINANCING ACTIVITIES | (259 289) | 212 468 | |
NET DECREASE IN CASH AND CASH EQUIVALENTS (I+II+III) | (5 399) | (3 551) | |
Cash and cash equivalents 1 January | 22 595 | 26 146 | |
CASH AND CASH EQUIVALENTS 31 DECEMBER | 10 | 17 196 | 22 595 |
Financial Statements Höegh LNG Holdings Ltd. 103
HÖEGH LNG
NOTE 1: CORPORATE INFORMATION
Höegh LNG Holdings Ltd. (the company) is an exempted company limited by shares and incorporated
under the laws of Bermuda. The company’s registered office is at Canon’s Court, 22 Victoria Street,
Hamilton HM 12, Bermuda.
The financial statements and note disclosures are presented in USD and all values are rounded to the
nearest thousand (USD’000) unless otherwise indicated. As a result of rounding differences amounts
and percentages may not add up to the total. The annual accounts for the company for the year
ended 31 December 2023 were approved by the Board of Directors 18 April 2024.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the company are prepared in accordance with IFRS Accounting
Standards® as adopted by the EU.
The accounting policies as described in the consolidated financial statements generally apply to the
company unless otherwise stated within the relevant note disclosures of the financial statements for
Höegh LNG Holdings Ltd.
2.1 Income tax
The company is not subject to income tax as it operates in a jurisdiction not imposing such tax.
NOTE 3: INVESTMENTS IN SUBSIDIARIES
Investment in subsidiaries is recorded at historical cost. Such investments are reviewed for impair-
ment when there are indications that carrying value may not be recoverable.
USD’000 2023 2022
Carrying value as of 1 January 596 382 218 183
Investment in HMLP 1 184 178 198
Conversion of intra-group loan to paid-in equity in Höegh LNG Ltd. | - | 200 000 |
CARRYING VALUE AS OF 31 DECEMBER | 597 566 | 596 382 |
| The investment in Höegh LNG Partners LP (“HMLP”) during 2023 related to indemnification of agreed | ||
| cost sharing for certain project cost. The indemnified project cost was paid to HMLP. | ||
USD’000 | 2023 | 2022 |
Höegh LNG Ltd. | 200 000 | 200 000 |
Höegh LNG Partners LP | 397 564 | 396 380 |
Höegh LNG General Partner LLC | 1 | 1 |
CARRYING VALUE AS OF 31 DECEMBER | 597 566 | 596 382 |
104 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
Countryofincorporation
Companies Country of incorporation
Ownership
share
Höegh LNG Ltd. Bermuda 100%
Höegh LNG Partners LP Marshall Islands 100%
Höegh LNG General Partner LLC Marshall Islands 100%
Impairment assessment
There were no impairment indicators related to investment in subsidiaries as of 31 December 2023
and as such no impairments were recognised. No impairments were recognised in 2022.
NOTE 4: INVESTMENTS IN ASSOCIATES
Investment in associated companies is recorded at historical cost. Such investments are reviewed for
impairment when there are indications that carrying value may not be recoverable.
USD’000 2023 2022
Carrying value as of 1 January 43 125 43 125
Impairment of investment in associates (12 000) -
CARRYING VALUE AS OF 31 DECEMBER 31 125 43 125
The company made an investment in Avenir LNG Limited (Avenir LNG) in 2018, initially a joint venture
with Golar LNG Ltd. (Golar LNG) and Stolt-Nielsen Ltd. (Stolt-Nielsen) to pursue opportunities in the
small-scale LNG market. The shares in Avenir LNG were subsequently registered on the Norwegian
OTC market under the ticker AVENIR. Höegh LNG Holdings Ltd. held 23.67% of the shares in Avenir
LNG as of 31 December 2023 (year-end 2022: 23.67%). The company had no remaining capital
commitments as of 31 December 2023.
The company considered the relationship between its market capitalisation and its book value,
among other factors, when reviewing for indicators of impairment. As of 31 December 2023, the
market capitalisation of the company was below the book value of its equity, indicating a potential
impairment. Impairment assessment of investment in Avenir LNG Limited resulted in an impairment of
USD 12 million.
The basis for the impairment was aligning the company’s book value to book value of the group’s
investment in Avenir LNG Limited.
Reference is made to Note 3.6 in the consolidated financials disclosing 100% of condensed numbers
in the associate’s statement of comprehensive income for 2023 and 2022 and statement of financial
position as of 31 December 2023 and 2022, respectively.
Financial Statements Höegh LNG Holdings Ltd. | 105 | |
NOTE 5: LOANS TO SUBSIDIARIES AND ASSOCIATES | ||
HÖEGH LNG Loanto |
USD’000 Note 2023 2022
Carrying value as of 1 January 277 082 358 608
Grants lending to subsidiaries 10 000 49 500
Repayments/indemnifications lending to subsidiaries (264 700) (24 545)
Conversion of intra-group loan to paid-in equity in Höegh LNG Ltd. - (200 000)
Reversal of impairment on loans to subsidiaries - 82 061
Accrued interest during the year added to loan balance 18 388 11 458
CARRYING VALUE AS OF 31 DECEMBER 15 40 770 277 082
On 22 May 2013, the company entered a loan facility with Höegh LNG Ltd. of up to USD 600 million.
The interest rate of the facility is 3 months Term SOFR plus a margin of 2.5%. Repayment of the
facility shall be done in one or several amounts, as agreed between the parties.
Based on an impairment assessment by 31 December 2022, a reversal of previous impairments of
USD 82.1 million related to the loan to Höegh LNG Ltd was made. No impairments or reversals of
previous impairments were made during 2023 related to the Höegh LNG Ltd. loan from the company.
On 12 August 2014, the company issued a revolving credit facility to the borrower Höegh LNG Partners
LP. The revolving credit facility was fully repaid during 2022 and ceased to exist 1 January 2023.
Loantoassociates
USD’000 | Note | 2023 | 2022 |
Carrying value as of 1 January | 1 920 | 1 777 | |
Grants lending to associates | 3 500 | - | |
Accrued interest during the year added to loan balance | 289 | 142 | |
CARRYING VALUE AS OF 31 DECEMBER | 15 | 5 708 | 1 920 |
| On 23 November 2021, the company entered into a revolving loan agreement with Avenir LNG. The |
loan initially matured 23 November 2022 but was extended by an amendment agreement signed 13
October 2022 to 13 October 2025. Another amendment was signed April 2023 increasing the interest
rate from 5% to 7% per annum, whilst the commitment fee of 40% of the interest rate on the undrawn
amount was reinstated and the loan facility was increased from USD 2.65 million to USD 5.25 million.
As of 31 December 2023, the loan facility was fully drawn. No impairment has historically been
recognised on the loan to Avenir LNG.
See Note 6 for recognition of interest income and Note 15 for transactions with related parties.
106 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
NOTE 6: INTEREST INCOME
USD’000 Note 2023 2022
Interest income from loan to Höegh LNG Ltd. 15 18 388 11 458
Interest income from revolving credit facility with Höegh LNG Partners LP 15 - 1 384
Interest income from revolving loan to Avenir LNG 15 289 142
Interest income from cash and cash equivalents and cash collaterals 1 661 392
TOTAL 20 338 13 376
See Note 5 for outstanding interest-bearing loan receivables.
NOTE 7: INTEREST EXPENSES
USD’000 | 2023 | 2022 |
Interest expenses from bond HLNG03 | 9 005 | 12 937 |
Interest expenses from bond HLNG04 | 12 985 | 13 078 |
Interest expenses from Other debt | 3 146 | 6 054 |
Interest expenses from revolving credit facility | 4 685 | - |
Other interest expenses | - | 46 |
TOTAL | 29 821 | 32 115 |
NOTE 8: FINANCIAL DERIVATIVES
| Interestrateswapsandswaptionsinthefinancialposition | ||
| Mark-to-market (MTM) of interest rate swaps and swaptions in the financial position | ||
USD’000 | 2023 | 2022 |
MTMs presented as financial assets non-current portion | - | 137 |
MTMs presented as financial assets current portion | 1 932 | 3 135 |
MTMs presented as financial liabilities non-current portion | (16 382) | (8 058) |
MTMs presented as financial liabilities current portion | - | (15 902) |
Net MTMs of interest rate swaps as of 31 December | (14 449) | (20 688) |
Accumulated exchange losses under CCIRS' included in MTM | 19 635 | 30 503 |
INTEREST RATE SWAPS RECORDED AGAINST EQUITY AS OF 31 DECEMBER | 5 186 | 9 815 |
Changes in MTMs of interest rate swaps and swaptions from previous year | 6 239 | (5 599) |
USD’000 | 2023 | 2022 |
Changes recorded to other comprehensive income (loss) | (4 629) | 16 376 |
Separate component of equity (currency portion of CCIRS) recorded to profit or (loss) | 10 867 | (21 975) |
TOTAL CHANGES IN MTMS OF INTEREST RATE SWAPS FROM PREVIOUS YEAR | 6 239 | (5 599) |
Notional amounts of hedge instruments as of 31 December¹ | 146 277 | 961 519 |
Hedge ratio | 1:1 | 1:1 |
Financial Statements Höegh LNG Holdings Ltd. 107
HÖEGH LNG
The company has entered cross currency interest rate swaps relating to HLNG04 and had similar
financial instruments related to HLNG03 which was settled on maturity date 1 August 2023. On
31 December 2023, the mark-to-market valuation of the interest rate swaps and swaptions were
recognised in the financial position with a net liability of USD 14.4 million (net liabilities 31 December
2022 USD 20.7 million). On 31 December 2023, interest rate swaps and swaptions recorded against
equity was USD 5.2 million (USD 9.8 million at year-end 2022).
In 2022, the company entered cash flow hedge swaptions to mitigate floating interest rate risk for
the new loan facility for USD 685 million to refinance the existing debt for the Höegh Esperanza and
the Hoegh Gannet. A swaption is a single zero-cost derivative instrument, comprising a combination
of a written option and a purchased option with the same notional amounts, that form an interest
rate collar locking future fixed interest rates within a range. After the successful refinancing, the
swaptions were restructured into interest rate swaps that were novated to the vessel-owning entities
of Höegh Esperanza and Hoegh Gannet. On 31 December 2022, swaptions recorded against equity
was USD 2.1 million.
¹ As of 31 December 2022, the outstanding notional amount included the notional of swaptions related to future debt. The swaptions
were restructured and novated during 2023 due to successful refinancing of the Höegh Esperanza and the Hoegh Gannet.
NOTE 9: ADMINISTRATIVE EXPENSES
USD’000 | Note | 2023 | 2022 |
Remuneration to board members | 58 | 32 | |
Audit fees | 162 | 389 | |
External services | (9) | 54 072 | |
Indemnification of boil-off claim | 15 | - | 272 |
Management fee from companies within the group | 15 | 2 340 | 2 236 |
Other | 60 | 51 | |
TOTAL | 2 610 | 57 051 |
NOTE 10: CASH AND CASH EQUIVALENTS
Currency
E x c h a n g e r a t e
| U S D ' 0 0 0 | E x c h a n g e r a t e | U S D ' 0 0 0 | ||
| 31 Dec 2023 | 31 Dec 2023 | 31 Dec 2022 | 31 Dec 2022 | |
US Dollars (USD) | 1 | 16 840 | 1 | 22 126 |
Norwegian Kroner (NOK) | 10.2652 | 356 | 9.7717 | 469 |
CASH AND CASH EQUIVALENTS | 17 196 | 22 595 |
108 Financial Statements Höegh LNG Holdings Ltd.
HÖEGH LNG
NOTE 11: SHARE CAPITAL
As of 31 December 2023, the company’s share capital was USD 12 000, consisting of 1 200 000 fully
paid common shares, each with a par value of USD 0.01. All the shares in the company are owned by
Larus Holding Limited, a 50/50 joint venture between Leif Höegh & Co Ltd. and funds managed by
Morgan Stanley Infrastructure Partners.
NOTE 12: BONDS
Non-currentliabilities
USD’000 2023 2022
HLNG04 126 641 133 037
Unamortised debt issuance cost and unamortised bond discount HLNG04 | (1 836) | (3 455) |
CARRYING VALUE AS OF 31 DECEMBER | 124 806 | 129 582 |
| Currentliabilities | ||
USD’000 | 2023 | 2022 |
HLNG03 | - | 153 505 |
Unamortised debt issuance cost HLNG03 | - | 474 |
CARRYING VALUE AS OF 31 DECEMBER | - | 153 978 |
The HLNG04 bond loan matures in January 2025, while the HLNG03 bond loan was fully repaid
on maturity date 1 August 2023. The repayment of the HLNG03 was NOK 1 500 million. Interest
expenses on the bonds was USD 22.0 million for 2023 (2022: USD 26.0 million). Accrued interest as
of 31 December 2023 related to HLNG04 was USD 1.9 million.
NOTE 13: CASH COLLATERAL
USD’000 | 2023 | 2022 |
Carrying value as of 1 January | 490 | 20 |
Change in cash collateral | 5 318 | 470 |
CARRYING VALUE AS OF 31 DECEMBER | 5 808 | 490 |
In connection with the company’s cross currency interest rate swaps for HLNG03 and HLNG04,
credit support agreements (CSAs) have been requested by swap bank lenders. Höegh LNG Holdings
Ltd. is therefore exposed to liquidity risk if the negative market value of the swaps is higher than a
pre-defined threshold, as the company will be required to post cash collateral for the difference.
As of 31 December 2023, the company had posted USD 5.8 million in cash collateral (USD 0.5 million
as of 31 December 2022).
Financial Statements Höegh LNG Holdings Ltd. 109
HÖEGH LNG
NOTE 14: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The groups objectives and policies related to capital management and financial risks are described in
Notes 3.2 and 3.3 in the consolidated financial statements.
Financialassets
Carrying value Fair value
USD’000 | 31 Dec 2023 | 31 Dec 2022 | 31 Dec 2023 | 31 Dec 2022 |
| Financial assets at fair value through other | ||||
| comprehensive income (FVTOCI) | ||||
| Mark-to-market of interest rate swaps | 1 932 | 3 272 | 1 932 | 3 272 |
Total | 1 932 | 3 272 | 1 932 | 3 272 |
| Financial assets at fair value through profit or loss (FVTPL) | ||||
| Derivatives | 1 604 | - | 1 604 | - |
Total | 1 604 | - | 1 604 | - |
| Financial assets at amortised cost | ||||
Interest-bearing receivables | 46 478 | 279 002 | 46 478 | 279 002 |
Trade receivables | 1 854 | 1 663 | 1 854 | 1 663 |
Cash collateral | 5 808 | 490 | 5 808 | 490 |
Cash and cash equivalents | 17 196 | 22 595 | 17 196 | 22 595 |
Total | 71 336 | 303 750 | 71 336 | 303 750 |
TOTAL FINANCIAL ASSETS | 74 873 | 307 023 | 74 873 | 307 023 |
TOTAL NON-CURRENT FINANCIAL ASSETS | 52 286 | 279 629 | 52 286 | 279 629 |
TOTAL CURRENT FINANCIAL ASSETS | 22 586 | 27 394 | 22 586 | 27 394 |
Financialliabilities
Carrying value Fair value
USD’000 31 Dec 2023 31 Dec 2022 31 Dec 2023 31 Dec 2022
| Financial liabilities at fair value through other | ||||
| comprehensive income (FVTOCI) | ||||
| Mark-to-market of interest rate swaps | 16 382 | 23 960 | 16 382 | 23 960 |
Total | 16 382 | 23 960 | 16 382 | 23 960 |
| Financial liabilities at amortised cost | ||||
Trade and other payables and accrued interest | 28 633 | 56 395 | 28 633 | 56 395 |
Other debt | - | 44 000 | - | 44 000 |
Bonds excl. debt issuance cost and bond discount | 126 641 | 286 542 | 130 808 | 291 746 |
Total | 155 274 | 386 937 | 159 441 | 392 141 |
TOTAL FINANCIAL LIABILITIES | 171 656 | 410 897 | 175 882 | 416 101 |
TOTAL NON-CURRENT FINANCIAL LIABILITIES | 151 773 | 176 057 | 155 940 | 182 505 |
TOTAL CURRENT FINANCIAL LIABILITIES | 19 883 | 231 859 | 19 883 | 233 595 |
HÖEGH LNG
110 Financial Statements Höegh LNG Holdings Ltd.
The fair value of the financial assets and liabilities are included in the amount at which the
instruments could be exchanged in a current transaction between willing parties other than in a
forced or liquidation sale. The following methods and assumptions were used to estimate the fair
value of each class of financial instrument:
The fair values of cash and cash equivalents and trade receivables approximate their carrying values
largely due to the short-term maturities of these instruments.
Trade and other payables and accrued interest consist of both current and non-current liabilities.
The fair values of the current portion approximate their carrying values largely due to the short-term
maturities on these financial instruments. The fair values of the non-current portion are considered
to materially approximate their carrying values.
Long-term fixed rate and variable-rate receivables are evaluated by the company based on interest
rates and expected recovery of future contractual cash flows. The discounted estimates of cash
flows approximate the carrying value.
The fair value of financial instruments measured at fair value (interest rate swaps and derivatives) is
calculated by using valuation techniques with market observable inputs, including forward pricing
and swap models, using present calculations. The models incorporate various inputs including the
credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.
The fair value of other debt was determined by using the DCF method using discount rate that
reflected the issuer’s borrowing rate as of the end of the reporting period. The own non-performance
risk as of 31 December 2023 and 2022 was assessed to be insignificant.
The bond issued by the company (HLNG04 issued January 2020) is listed on Oslo Stock Exchange,
and its fair value is disclosed based on traded information. As of 31 December 2023, the fair value
was 103.29% (102.25% as of 31 December 2022). Bond HLNG03, which was issued in 2017 and repaid
on maturity in 2023, had a fair value as of 31 December 2022 of 101.44%.
Financial Statements Höegh LNG Holdings Ltd. 111
HÖEGH LNG
Changesinliabilitiesarisingfromfinancingactivities
USD’000 1 Jan 2023
Cash flows
repayment
bond, other
debt and RCF
| Cash flows of | |||||||
| financing fees | Foreign | ||||||
| Cash flows | and debt | exchange | Other | 31 Dec | |||
| draw RCF | issuance cost | movement | movements | 2023 | |||
Current bonds | 153 978 | (168 956) | - | (1 468) | 15 458 | 988 | - |
Non-current bonds | 129 582 | - | - | - | (6 396) | 1 619 | 124 806 |
Non-current other debt | 14 667 | (14 667) | - | - | - | - | - |
Current other debt | 29 333 | (29 333) | - | - | - | - | - |
RCF | - | (100 000) | 100 000 | ( 843) | - | 843 | - |
TOTAL | 327 560 | (312 956) | 100 000 | (2 311) | 9 062 | 3 451 | 124 806 |
1 August 2023, the company fully repaid the HLNG03 bond loan on maturity date. In June 2023, the
company completed a new revolving credit facility (“RCF”) of USD 100 million, primarily serving as a
bridge until the group completed the pending refinancing of Hoegh Gannet. On 27 June 2023, USD
100 million was drawn in full, whereof USD 37 million of the proceeds were applied to repay and
cancel the remaining loan related to the Other debt loan facility. After the successful refinancing of
Hoegh Gannet, the RCF was fully repaid on 29 November 2023. The RCF is split into two tranches,
each amounting to USD 50 million. These tranches are accessible up to and including the date falling
one month before maturity. On January 2, 2024, both tranches within the RCF were extended to
have a new maturity date of January 2, 2025. Additionally, the company retains the option to cancel
the USD 100 million RCF at any time. Notably, no interest rate swap agreements were entered into
concerning the USD 100 million RCF facility. Other movements in the table comprise amortisation of
debt issuance cost and bond issue discount.
| Cash flows new | Foreign | ||||
| interest- | exchange | Other | 31 Dec | ||
| USD’000 1 Jan 2022 | bearing debt | movements | movements | 2022 | |
Current bonds | 266 447 | 40 555 | (12 120) | (140 904) | 153 978 |
Non-current bonds | - | - | (14 397) | 143 979 | 129 582 |
Non-current other debt | 44 000 | - | - | (29 333) | 14 667 |
Current other debt | - | - | - | 29 333 | 29 333 |
TOTAL | 310 447 | 40 555 | (26 516) | 3 075 | 327 560 |
Refer to Note 2.4 in the consolidated financial statements for fair value hierarchy and Note 3.3 for further outline of fin |
HÖEGH LNG
112 Financial Statements Höegh LNG Holdings Ltd.
NOTE 15: RELATED PARTY TRANSACTIONS
| Loanstorelatedparties | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
| Subsidiaries: | |||
Höegh LNG Ltd. | 5 | 40 770 | 277 082 |
| Associates: | |||
Avenir LNG Limited | 5 | 5 708 | 1 920 |
TOTAL | 46 478 | 279 002 |
| Interestincomeandfeesfromrelatedparties | |||
USD’000 | Note | 2023 | 2022 |
| Subsidiaries: | |||
Höegh LNG Ltd. | 6 | 18 448 | 11 458 |
Höegh LNG Partners LP | 6 | - | 1 384 |
| Associates: | |||
Avenir LNG Limited | 6,17 | 349 | 243 |
Joint Gas Two Ltd. | 120 | - | |
TOTAL | 18 917 | 13 085 |
| Administrativeexpensestorelatedparties | |||
USD’000 | Note | 2023 | 2022 |
| Subsidiaries: | |||
Höegh LNG AS | 9 | 2 340 | 2 236 |
Höegh LNG Partners LP | 9 | - | 272 |
TOTAL | 2 340 | 2 508 | |
| As for the company’s investment in Höegh LNG Partners LP, reference is made to Note 3. |
NOTE 16: DIVIDENDS
During 2023, the company received dividends from Höegh LNG Partners LP, totalling USD 20 million
(2022: USD 0.5 million). The company did not pay out any dividends to its shareholders in 2023 or
2022.
Financial Statements Höegh LNG Holdings Ltd. 113
HÖEGH LNG
NOTE 17: INCOME AND EXPENSES FROM OTHER FINANCIAL ITEM
USD’000 | Note | 2023 | 2022 |
| Income from other financial items | |||
Gain on foreign exchange | 5 210 | 4 591 | |
Guarantee fees accrued | 15 | 240 | 101 |
Income from other financial items - gross | 5 451 | 4 693 | |
| Expenses from other financial items | |||
Loss on foreign exchange | (21) | (3 600) | |
Fair value adjustment USD/NOK FX call options | - | ( 13) | |
Other financial expenses | (1 577) | ( 63) | |
Expenses from other financial items - gross | (1 598) | (3 676) | |
EXPENSES FROM OTHER FINANCIAL ITEMS - NET | 3 853 | 1 016 |
NOTE 18: COMMITMENTS AND GUARANTEES
As of 31 December 2023, Höegh LNG had no remaining outstanding investment commitment in
Avenir LNG Limited. By the end of 2022, Avenir had completed the construction of all of its six
newbuilds. In connection with the debt financing of one of the completed vessels, Höegh LNG
Holdings Ltd. has provided a sponsor’s guarantee with a maximum liability amount of USD 6.9 million
plus interests and costs. Reference is made to Note 7 in the consolidated financial statements
disclosing guarantees provided by the company as well as the group.
NOTE 19: SUBSEQUENT EVENTS
Refer to Note 4.2 in the consolidated financial statements for events after the balance sheet date.
4.3
Directors’
responsibility statement
116 Directors’ responsibility statement
HÖEGH LNG
116 Directors’ Responsibility Statement
Directors’
responsibility statement
Today, the board and the President and CEO
reviewed and approved the board of directors’
report, the corporate governance report, and
the consolidated and separate annual financial
statements for Höegh LNG Holdings Ltd., for the
year ending 31 December 2023 (Annual Report
2023).
To the best of our knowledge:
• The consolidated and separate annual
financial statements for 2023 have been
prepared in accordance with IFRS Accounting
Standards® as adopted by the EU and
additional disclosure requirements set out in
the Norwegian Securities Trading Act.
• The consolidated and separate annual
financial statements give a true and fair view
of the assets, liabilities, financial position and
result for the period for the group and the
parent company; and
• The board of directors’ report for the group
and the parent company includes a true and
fair review of:
• The development and performance of
the business and the position of the
group and the parent company; and
• The principal risks and uncertainties the
group and the parent company face.
Hamilton, Bermuda, 18 April 2024
The Board of Directors and the President and CEO of Höegh LNG Holdings Ltd.
Morten W. Høegh
Chairman
Johan Pfeiffer
Deputy Chairman
Carlo Ravizza
Director
Eric den Besten
Director
Alberto Donzelli
Director
John Kwaak
Director
Tammy L. Richardson-Augustus
Director
Erik Nyheim
President and CEO
HÖEGH LNG
Directors’ Responsibility Statement 117
4.4
Independent
auditor’s report
120 Independent auditor’s report
HÖEGH LNG
120 Auditor’s report
Statsautoriserte revisorer
Ernst & Young AS
Stortorvet 7, 01
55 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Höegh LNG Holdings Ltd
Opinion
We have audited the financial statements of Höegh LNG Holdings Ltd (the Company and the Group),
which comprise the statement of financial position as at 31 December 2023, the statement of income,
statement of comprehensive income, statement of cash flows and statement of changes in equity for the
year then ended, and notes to the financial statements, including a summary of significant accounting
policies.
In our opinion, the financial statements comply with applicable legal requirements and give a true and fair
view of the financial position of the Company and the Group as at 31 December 2023 and their financial
performance and cash flows for the year then ended in accordance with IFRS Accounting Standards as
adopted by the EU.
Our opinion is consistent with our additional report to the board of directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the Company and the Group in
accordance with the requirements of the relevant laws and regulations in Norway and the International
Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 18 years from the incorporation and election by the general
meeting of shareholders in 2006 for the accounting year 2006 with a renewed election on the 27 August
2022.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for 2023. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the financial statements.
Penneo document key: VPUGA-N6KCG-IX138-M5EM0-5MTW2-DPEUB
HÖEGH LNG
Auditor’s report 121
2
Independent auditor's report - Höegh LNG Holdings Ltd 2023
A member firm of Ernst & Young Global Limited
Revenue recognition – new time charter contracts
Basis for the key audit matter
Time charter revenues is the single largest
account in the consolidated statement of income.
The Group recognises revenue in accordance
with IFRS 15, Revenue from Contracts with
Customers and IFRS 16, Leases. Several of the
Group’s vessels have during 2023 commenced
new long-term time charter contracts.
Assessment of revenue recognition requires
managements judgement. Determining revenue to
be recognized is complex due to the significant
consideration and assessment in understanding
the contractual terms. The contractual terms for
each long-term time charter contract are
independent and the assessment of the terms can
significantly impact the timing of revenue
recognition.
Revenue recognition on new time charter
contracts is a key audit matter because of the
significant consideration and judgement involved
in understanding the contractual terms.
Our audit response
Our audit procedures include obtaining,
inspecting, and evaluating the new time charter
contracts. We obtained management accounting
memos and evaluated management’s accounting
assessment for the new time charter contracts.
We further performed detailed analysis of
expected time charter revenue recognition based
on our contract review. We tested and confirmed
outgoing invoices to ingoing payments and
evaluated any adjustments in recognized
revenue. Lastly, we assessed the adequacy of the
note disclosures for revenue recognition from new
time charter contracts.
We refer to note 3 in the consolidated financial
statements.
Other information
Other information consists of the information included in the annual report other than the financial
statements and our auditor’s report thereon. Management (the board of directors and the president and
CEO) is responsible for the other information. Our opinion on the financial statements does not cover the
other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information,
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information or that the information required by applicable legal requirements is not included, we are
required to report that fact.
We have nothing to report in this regard.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS Accounting Standards as adopted by the EU, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or the Group, or to cease operations, or has no realistic alternative but to do so.
Penneo document key: VPUGA-N6KCG-IX138-M5EM0-5MTW2-DPEUB
122 Auditor’s report
HÖEGH LNG
3
Independent auditor's report - Höegh LNG Holdings Ltd 2023
A member firm of Ernst & Young Global Limited
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s and the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company and the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Penneo document key: VPUGA-N6KCG-IX138-M5EM0-5MTW2-DPEUB
Auditor’s report 123
HÖEGH LNG
4
Independent auditor's report - Höegh LNG Holdings Ltd 2023
A member firm of Ernst & Young Global Limited
Report on other legal and regulatory requirement
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of our audit of the financial statements of Höegh LNG Holdings Ltd we have performed an
assurance engagement to obtain reasonable assurance whether the financial statements included in the
annual report, with the file name hoeghlngholdingsltd-2023-12-31-en, has been prepared, in all material
respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815
on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of
the Norwegian Securities Trading Act, which includes requirements related to the preparation of the
annual report in XHTML format and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements included in the annual report have been prepared, in all material
respects, in compliance with the ESEF Regulation.
Management’s responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
Regulation. This responsibility comprises an adequate process and such internal control as management
determines is necessary.
Auditor’s responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material
respects, the financial statements included in the annual report have been prepared in accordance with
the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance
Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial
information”. The standard requires us to plan and perform procedures to obtain reasonable assurance
about whether the financial statements included in the annual report have been prepared in accordance
with the ESEF Regulation.
As part of our work, we perform procedures to obtain an understanding of the company’s processes for
preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial
statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL
tagging of the consolidated financial statements and assess management’s use of judgement. Our
procedures include reconciliation of the iXBRL tagged data with the audited financial statements in
human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Oslo, 18 April 2024
ERNST & YOUNG AS
The auditor's report is signed electronically
Jon-Michael Grefsrød
State Authorised Public Accountant (Norway)
Penneo document key: VPUGA-N6KCG-IX138-M5EM0-5MTW2-DPEUB
4.5
Alternative performance
measures (APMs)
126 Alternative performance measures
HÖEGH LNG
126 Consolidated Financial Statements Höegh LNG Group
ALTERNATIVE PERFORMANCE MEASURES (APMs)
Höegh LNG’s financial information is prepared in accordance with the International Financial
Reporting Standards (IFRS). In addition, it is management’s intent to provide additional performance
measures when this is deemed relevant for the understanding of Höegh LNG’s financial performance.
Alternative performance measures are used by Höegh LNG to provide supplemental information
to the different users of its external financial reporting. Financial APMs are intended to enhance
comparability of the results and to give supplemental information related to measures not within the
applicable financial reporting framework, and it is Höegh LNG’s experience that these measures are
frequently used by equity and debt investors, analysts and other stakeholders. Management uses
these measures internally to drive performance in terms of target setting and as basis for measuring
actual financial performance. These measures are adjusted IFRS measures defined, calculated and
used in a consistent and transparent manner over the years and across the group.
Operational measures such as, but not limited to, volumes, technical availability of vessels/fleet and
contract backlog are not defined as financial APMs.
Financial APMs should not be considered as a substitute for measures of performance in accordance
with the IFRS. The alternative performance measures presented may be determined or calculated
differently by other companies. The below overview shows the group’s APMs:
Höegh LNG’s APMs
• Earnings before interest, depreciation, amortisation and impairments (EBITDA): EBITDA is
defined as the line-item Operating profit before depreciation and impairment in the consolidated
statement of income
• Net interest-bearing debt: non-current and current interest-bearing debt deducted cash,
marketable securities and restricted cash (current and non-current)
• Equity adjusted for hedging: Total book equity adjusted for mark-to-market value of financial
derivative swaps recorded against equity (hedging reserves). Financial derivative swaps consist
of interest-rate and cross-currency interest-rate swaps. In the money mark-to-market, financial
derivative swaps will increase equity, while out of the money mark-to-market financial derivative
swaps will reduce equity. Mark-to-market value of interest-rate swaps in Höegh LNG’s joint
ventures are recorded as part of line-item Investment in joint ventures. The computation of
equity adjusted for hedging is consistent with the definitions set out in the group’s covenants in
loan agreements
• Equity ratio adjusted for hedging: Total book equity adjusted for hedging reserves divided by
total assets adjusted for hedging related assets. Hedging related assets represents an increase
in investment in joint ventures when removing the negative impact of out of the money mark-to-
market financial derivative swaps
Consolidated Financial Statements Höegh LNG Group 127
HÖEGH LNG
Alternativeperformancemeasures,summary
USD’000 31 Dec 2023 31 Dec 2022
Net interest-bearing debt | 1 380 186 | 1 336 667 | |
Equity adjusted for hedging | 780 609 | 699 216 | |
EQUITY RATIO ADJUSTED FOR HEDGING | 30% | 29% | |
| Netinterest-bearingdebt | |||
USD’000 | 31 Dec 2023 | 31 Dec 2022 | |
Interest-bearing debt, current and non-current | (1 655 579) | (1 514 628) | |
Restricted cash, non-current | 33 432 | 15 790 | |
Cash and cash equivelents including restricted cash and marketable securities | 241 962 | 162 170 | |
NET INTEREST-BEARING DEBT | (1 380 186) | (1 336 667) | |
| Hedgereserves | |||
USD’000 | Note | 31 Dec 2023 | 31 Dec 2022 |
Net MTMs of financial liabilities in parent and subsidiaries | 3.2 | (6 774) | 20 289 |
Net MTMs of financial liabilities in joint ventures and associates | 3.2 | (14 878) | (17 168) |
| Changes in MTMs not recorded as OCI: | |||
Net foreign exchange (gain) losses under cross currency swaps included in MtM | 19 635 | 30 502 | |
Accumulated settlements of swaps received (paid) | 4 277 | (7 586) | |
Accumulated loss (gain) on swap in profit or loss | (2 506) | 906 | |
HEDGE RESERVES INCLUDING NON-CONTROLLING INTEREST SHARE | (247) | 26 942 | |
| Equityadjustedforhedgingtransactions | |||
USD’000 | 31 Dec 2023 | 31 Dec 2022 | |
Equity | 780 362 | 726 159 | |
Hedge reserve, including non-controlling interest share | 247 | (26 942) | |
EQUITY ADJUSTED FOR HEDGING TRANSACTIONS | 780 609 | 699 216 | |
| Equityratioadjustedforhedgingtransactions | |||
USD’000 | 31 Dec 2023 | 31 Dec 2022 | |
Total assets | 2 610 238 | 2 431 225 | |
Hedge reserves in JVs for investments presented as assets | 14 878 | 17 168 | |
Hedges recorded as assets | (27 371) | (44 249) | |
TOTAL ASSETS ADJUSTED FOR HEDGING TRANSACTIONS | 2 597 746 | 2 404 145 | |
EQUITY ADJUSTED FOR HEDGING TRANSACTIONS | 780 609 | 699 216 | |
EQUITY RATIO ADJUSTED FOR HEDGING TRANSACTIONS | 30% | 29% |
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