Incomas Holding ApS
Tangen 6, DK-8200 Aarhus N
Annual Report for 1 January – 31
December 2022
CVR No 38 38 10 83
The Annual Report was
presented and adopted at the
Annual General Meeting of
the Company on 22/6 2023
Chairman of the General
Meeting
Contents
Management’s Statement ................................................................................................................................................................. 1
Independent Auditor’s Report ........................................................................................................................................................ 2
Company Information ........................................................................................................................................................................ 4
Group Chart ............................................................................................................................................................................................ 5
Financial Highlights ............................................................................................................................................................................ 6
Management’s Review ....................................................................................................................................................................... 7
Consolidated Income Statement for the year ended 31 December .............................................................................. 26
Consolidated Statement of comprehensive income for the year ended 31 December ........................................ 27
Consolidated Balance Sheet as at 31 December ................................................................................................................... 28
Consolidated Balance Sheet as at 31 December ................................................................................................................... 29
Consolidated Statement of Changes in Equity for the Year ended 31 December ................................................... 30
Consolidated Statement of Changes in Equity for the Year Ended 31 December .................................................. 31
Consolidated Statement of Cash Flows for the Year Ended 31 December ................................................................ 32
Contents of the Notes to the Consolidated Financial Statements ................................................................................. 33
Notes to the Financial Statements ............................................................................................................................................. 34
Parent company ................................................................................................................................................................................. 67
Parent Income Statement for the Year Ended 31 December .......................................................................................... 68
Parent Balance Sheet as at 31 December ................................................................................................................................ 69
Parent Balance Sheet as at 31 December ................................................................................................................................ 70
Parent Statement of Changes in Equity for the Year Ended 31 December ............................................................... 71
Parent Statement of Changes in Equity for the Year Ended 31 December ............................................................... 72
Contents of the Notes to the Consolidated Financial Statements ................................................................................. 73
Notes to the Financial Statements ............................................................................................................................................. 74
1
Executive Board
Board of Directors
2
Independent Auditor’s Report
3
CVR No 33 77 12 31
mne24826 mne42786
4
Company Information
The Company
CVR No: 38 38 10 83
Financial period: 1 January - 31 December
Incorporated: 1 February 2017
Financial year: 5th financial year
Municipality of reg. office: Aarhus
Board of Directors
Jeppe Bülow Højgaard, Chairman
Emil Kildegaard Gerhardt
Christian Bach
Jesper Severin Johanson
Executive Board
Jesper Severin Johanson
Christian Bach
Auditors
5
Group Chart
6
Financial Highlights
Seen over a five-year period, the development of the Group is described by the following financial highlights:
In thousands EUR 2022
2021
2020
2019
2018
Key figures
Profit/loss
Revenue -
-
2.116.865
1.003.510
417.058
Gross profit 1.607.124
177.642
45.590
20.177
11.060
Operating profit before financial income and
expenses and tax (EBIT) 1.388.529
142.567
33.945
14.653
8.173
Net financials - 5.393
- 1.868
- 436
- 127
- 258
Profit before tax (EBT) 1.383.136
140.699
33.509
14.526
7.915
Profit for the year 1.074.662
109.170
26.548
11.306
6.171
Balance sheet
Balance sheet total 1.460.608
274.339
87.419
33.793
28.952
Investment in property, plant and equipment 1.071
-
-
-
-
Equity 896.357
123.196
45.165
21.755
10.449
Cash flows
Cash flows from operating activities 1.023.009
75.424
10.011
13.913
- 4.713
Cash flows from investing activities - 201.481
- 876
- 21
-
-
Cash flows from financing activities - 151.668
- 9.104
4.239
-
-
Change in cash and cash equivalents for the year 669.860
65.444
14.229
13.913
- 4.713
Number of employees - average for the year 122
90
64
36
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Key ratios
Return on assets 73.6%
39.8%
38.8%
43.4%
28.2%
Solvency ratio 61.4%
44.9%
51.7%
64.4%
36.1%
Return on equity 210.8%
129.7%
79.3%
70.2%
83.8%
For definitions of financial key figures and ratios, please refer to note 1.
*The implementation of IFRS as from 1 January 2021 had an impact on the financial statements and key ratios
for 2021 and onwards. Comparative figures for 2018, 2019 and 2020 have not been restated and were prepared
in accordance with Danish GAAP.
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Management’s Review
The Incomas Holding ApS-group (hereafter InCommodities) is a Danish technology company specializing in
energy trading and asset management. We trade power and natural gas and offer power purchase agreements to
renewable asset owners. Our transactions balance the energy markets by matching supply and demand,
ensuring security of supply, and contributing to lower energy prices.
We have digitalized and automated every aspect of our value chain. We combine deep market insights with
advanced technologies such as automation, quantitative analysis, and AI, allowing us to efficiently move energy
across time and geographies, manage renewables output, and store energy until it is needed.
Founded in 2017 in Aarhus, Denmark, InCommodities has grown from four founders to almost 140 people with
diverse nationalities and educational backgrounds.
Headquarted in Aarhus, Denmark, we conduct trading activities across Europe and USA. We have grown
exponentially since our founding, making us one of the world’s fastest-growing energy trading companies.
A Letter from Our CEO
2022 was a year of unprecedented events, and I can only describe it as “extraordinary” if I had to choose just
one word. It was extraordinary because we witnessed a war on European soil for the first time in many years,
which had devastating consequences for the people of Ukraine. It was also an extraordinary year because we saw
the energy markets hit by extreme conditions – not least a shortage of gas and widely fluctuating market prices.
This uncertainty affected nearly all European residents and companies and set the agenda for the trading
industry, more than anything else.
At InCommodities, the extraordinary year meant higher risks and a dramatic increase in the need for liquidity to
hold our market positions. We even saw bankruptcies of retail companies and national utilities within the
industry. We are proud to say that InCommodities navigated successfully through the unprecedented market
situation. We quickly adapted our portfolio and strategies to the new challenges and continued to operate
throughout 2022. There is no doubt that liquidity risk has been the biggest and most complex task to handle.
Capital has been in short supply, and we could have deployed much more capital to our advantage and to benefit
consumers. Sufficient access to liquidity is a key component in ensuring market efficiency, and due to the
increase in energy prices, a corresponding amount of capital has been required to make the market function
smoothly. Unfortunately, not many market participants had access to the capital necessary which, in the worst
cases, resulted in positions being liquidated by the exchanges creating large spikes in prices in some instances.
However, those who did have the capital and managed their risks performed extremely well. In other words, the
energy trading companies that emerged from 2022 with record-high results were the ones that helped Europe
through the energy crisis. They had the necessary capital to invest and the flexibility to adapt their framework to
the new situation.
Being successful in a time when others are challenged comes with mixed emotions. We have deep sympathy for
those affected by the Russia- Ukraine war and for those who have suffered as the result of increased energy
costs. It can be difficult to explain to outsiders that a liberalized energy market in fact contributes to lower
energy prices – not the opposite. In this regard, we made a difference by balancing the markets in favor of
consumers, while the market structure proved its resilience under the most extreme conditions. Because of the
war in Ukraine and its impact on the global energy supply and the net-zero transition, the need for balancing
and redistributing energy is greater than ever. We need to push the transition towards more green energy for
the sake of the planet, and we need to move power and gas across time and geographies in real time to
accommodate fluctuations in supply and demand. As energy traders, we play a crucial role in making this
happen. This is what our business model, the liberalized energy markets, and the entire energy trading industry
are all about. We take pride in our significant contribution to supporting Europe through the energy crisis and
ensuring lower energy prices for consumers. Our team has shown immense dedication and effective
collaboration. As the CEO of our company, I am proud of our contribution during 2022, as well as the efforts of
our people and the industry in general. Having done well comes with a responsibility, and we want to give
something back and help drive the world towards a more sustainable future – not just by the way we do
8
business, but also with a dedicated net zero initiative. On the 4 following pages, you can read about our new
commitment called the InCommodities Sustainable Investment Initiative, where we target to spend 5% of our
annual earnings starting from 2022 on investment in infrastructure, companies or renewable assets that
support the green transition. We have already planned our first project, a 5.5 MW solar park outside of Aarhus,
Denmark, able to meet the power demand of 1,200 households, going into production in 2024.
I would like to take this opportunity to thank all of our partners and InCommodities colleagues for a successful
co-operation in 2022.
Thank you for your interest in InCommodities, and happy reading.
Kind regards,
Jesper Severin Johanson, CEO
Business Perspective 2022: A 100-year Event for the Energy Market
As we entered 2022, we held onto the hope that the world would finally overcome the COVID-19 pandemic and
be able to return to a normal state without lockdowns and other restrictions. Instead, 2022 turned out to be a
100-year event for the energy market, characterized by extreme conditions and widely fluctuating market prices.
At no other time since the liberalization of energy markets in Europe have we seen such turbulence in the
market or so much political focus on our sector as we did over the past year. The extraordinary market situation
was triggered by two improbable – and successively occurring – ‘black swan’ events. The first event was the
COVID-19 pandemic and the stimulus packages from governments across the world. This prompted ahigh, post-
pandemic demand for energy, putting a heavy strain on the global energy market by September 2021. The
second event was the outbreak of war in Europe in February 2022, preceded by the tactical depletion of gas
storages across Europe, which – combined with a strong reliance on Russian energy – had had a significant
impact on the market. Almost overnight, energy became weaponized as Russia invaded Ukraine and gradually
cut off the supply of Russian natural gas to Europe – a supply that usually accounts for almost 40% of European
gas demand. Prior to the invasion, there were already challenges in the energy sector, in part caused by a
historically low availability of critical production facilities.
Political decisions were made to boost the economy. Although these were in the best interest of citizens during
the COVID-19 lockdown, they resulted in market inefficiencies and uncertainty – also for the energy sector. The
energy markets faced a significant responsibility to ensure security of supply during these challenging times.
The fact that Europe has almost fully freed itself from Russian energy in such a short time span is a significant
achievement. We are proud to have contributed to this transition.
Energy policy has become an object of public interest
From an industry perspective, an unexpected resilience u development in 2022 is also how energy has gone
from low to high public interest overnight – among politicians and consumers alike. This is a natural reaction to
a situation in which many consumers have felt the direct impact of wildly fluctuating energy prices. At the same
time, the new reality has prompted renewed focus on the energy industry even if many stakeholders still lack
sufficient insight into the essential role of energy traders in balancing the world’s energy markets.
In light of the heightened interest and misconceptions surrounding the industry, we welcome the dialogue and
take it upon ourselves to actively engage and clarify any misunderstandings.
Russia’s invasion of Ukraine threw Europe into a situation characterized by huge geopolitical challenges,
because so many countries had chosen to be - or failed to realize that they were – highly dependent on Russia
for energy. The governments of several major European countries had not adequately diversified their energy
supply over the last decades. This plunged all of Europe into an energy policy crisis, which had an enormous
impact on consumers and businesses alike. Despite the uncertainties and challenges in the supply 6 chain, the
market effectively responded by solving them, securing a stable supply and balancing the fluctuating prices. This
clearly signals the effectiveness of a liberalized energy market.
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Meeting the challenges
In our industry, we have seen vast differences in how the various participants have made it through 2022. At
one end of the scale, there have been bankruptcies among retailers and utilities, as well as nationalizations,
across Europe.
At the other end, in a year with numerous challenges, energy traders proved to play a crucial role in meeting
these challenges. Traders with their risk and liquidity under control played a crucial role in addressing the
challenges and did extremely well, with significant opportunities to increase their earnings. We are pleased to
note that InCommodities belongs to the latter category. Because of our risk management, liquidity, and constant
monitoring of market developments, we were able to play a crucial role in balancing the energy markets during
the crisis.
From the outside, it may seem like we had an easy,‘business as usual’ year, but everything about 2022 was
different for us, too, as we faced unprecedented challenges. Despite these obstacles, we achieved extraordinary
results. Moreover, we discovered that our business model was highly robust during the crisis, whereas other
market participants were pushed to, or even beyond, their limits. Although risk management has always been a
key aspect of our business operations, solid risk and liquidity management has been more crucial than ever over
the past year. In several instances, the prices of power and gas positions have fluctuated up to 100% from one
day to the next, requiring 20 or even 50 times the amount of liquidity we usually need to operate.
When prices rise, the size of the required margin calls increases. Energy traders must provide security for any
price fluctuations in the period from when a trade is entered until the energy is delivered. The current market
with high price volatility therefore places great liquidity demands on energy traders, especially when prices rise,
and the required amounts of capital cannot be met without engaging in close dialogue with financing partners
and without rigorous day-to-day risk assessments.
Nonetheless, our risk mitigation procedures have proven themselves to be well-functioning, even under highly
volatile conditions. This, along with the strategic and tactical excellence we have developed over the previous
years, is one of the main reasons we ended the year in an exceptionally strong financial position.
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Record high profit
Despite the extreme pressure on the industry, InCommodities achieved a remarkable record gross profit of EUR
1,607 million and earnings before tax (EBT) of EUR 1,383 million for FY 2022, far exceeding expectations and
surpassing the previous year’s achievements.
We have demonstrated our ability to navigate our business through an extremely turbulent market, as well as
our ability to generate profits across all our activities - whether related to power or natural gas.
We changed our accounting principles in 2022 and are now following the international standard, IFRS. This
means that our revenue has been calculated in a different manner than before. By virtue of our annual and
ongoing earnings, equity also increased significantly, which in turn raised our borrowing limits. At the start of
2023, this solidifies our position and consolidates our financial strength, so we can scale up and expand our
business. At the same time, we are keenly aware that 100-year events are exceptions, and we expect a return to
more of a normality in 2023, even though the energy system may remain volatile in certain periods of time.
“The turbulent conditions of 2022 provided the ultimate proof of the resilience of our business model and
culture. Our team demonstrated unwavering diligence, effective collaboration, and professionalism. The
efforts of our risk and compliance team contributed to a near-perfect execution, of which we are exceptionally
proud.”
Christian Bach, CFO
People & Culture: We Nurture Our Culture in a Period of Growth
The DNA of InCommodities was drawn up by our four founders when the company was established. The
fundamental values are key to how we run our business, and despite our rapid growth, our leadership and
owners prioritize preserving and building the original culture.
In December 2022, InCommodities was named the Gazelle Company of the Year in Denmark. The Gazelle
Award is presented by Børsen, Denmark’s leading business media, and is awarded to the company that has
achieved the greatest continuous revenue growth over a four-year period.
Measured by number of people, the company has gone from four founders in 2017 to 138 people by the end of
2022. In recent years, the YoY growth in team members has been 35%. And this places great demands on the
corporate culture. In the early phase of the company, we defined our values as: Rethink. Honesty. Transparency.
As more and more new colleagues have joined us, our culture and values have become even more important and
adhering to them in everything we do is crucial for how we run our business in practice. In 2022, we therefore
ran a comprehensive bottom-up process to revise our company’s purpose. Approximately a quarter of our
people across the company were actively involved in the process through a series of workshops focused on
exploring and articulating our purpose. As a result, we have formulated our purpose as “We 8 Advance
Together”. Our purpose is underpinned by a number of key features, including Autonomy. This feature
embodies the management’s desire to empower all individuals and teams and to provide scope for
decentralizing many decision-making processes.
Autonomy has always been a fundamental cornerstone of our culture, and its success depends on trust and
honesty. In a growing organization of almost 140 people, we need to work consistently with our cultural beliefs
to preserve them.
Our goal is to preserve our DNA of flexibility, strong relationships, and distributed decision making by growing
our business through autonomous units, and we believe that a flat organizational structure, distributed
decision-making, and efficient advice processes are important drivers of employee job satisfaction and
performance.
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Engagement is a crucial metric
InCommodities’ success thrives on attracting and retaining the most talented people in the industry while also
ensuring that new hires are the right cultural fit. Soft skills are just as important as hard skills. We are
committed to finding the right match for our organization and do not compromise on this aspect.
Given the competition with top international companies for the best talent, brain drain is a pervasive risk in our
industry. The most talented candidates are courted by everyone from global tech companies to specialized and
highly esteemed hedge funds from the world’s financial centers, as well as a continuously growing domestic
trading industry. The best way to mitigate this risk is to create an extraordinary workplace where our colleagues
can master their craft, develop personally and professionally, and be the best version of themselves. We recruit
the whole person – not just their skills and experience.
To make sure we live up to the aspiration of being an extraordinary workplace, we monitor our colleagues’
engagement as one of our most important metrics. We measure this continuously through a highly embraced
digital platform which incorporates various parameters to calculate the total engagement score. But we do not
just measure; we also proactively react and engage in dialogue based on the feedback we get, and this provides
us with valuable insight and transparency.
By not shying away from surveying our colleagues’ job satisfaction on an ongoing basis and being transparent
with the results, we have the opportunity to provide additional support if we detect improvement opportunities
in specific teams. Historically, our average engagement score has been around 9 on a scale from 1 to 10, which is
well above the global benchmark level at 8.6 for top 5% companies using the digital platform as us. Over the last
four months of 2022, we saw an upward curve that brought the score up to 9.2 by year-end, and our ambition is
to remain a top 5% company on the platform we use. We are proud that we have managed to hold on to this goal
- and even raise the score - while growing as a company.
Based in Denmark – with a global mindset
Denmark - particularly Greater Aarhus – has managed to position itself as the Silicon Valley of energy trading.
The region has fostered several successful trading companies, and the 9 industry currently employs over 1,500
highly educated colleagues. In 2021, the industry contributed significantly by paying more than DKK 1.2 billion
in Danish corporate tax, and we expect this figure to increase significantly in 2022. These developments have
generated a critical mass of talent in Greater Aarhus that we and other companies draw on.
The competition among Danish trading companies ensures that everybody raises the bar on performance,
resulting in a very high overall level. The strong local competition has contributed to Denmark achieving a
unique and leading international position within the sector.
However, from a strategic business perspective, the Danish energy market is of minor importance to
InCommodities’ business, as more than 97% of our earnings are generated outside Denmark.
Today, our international team includes colleagues with 18 different nationalities. We have offices in Austin,
Texas, and in the year ahead we expect to establish offices in Singapore, and potentially Switzerland and Japan.
Strategy: Scaling, Increased Co-ownership and Net-Zero Transition
Our algorithm framework needs further development. More of our colleagues must be given the option of
becoming co-owners of InCommodities. And our latest business pillar - renewable asset management, launched
in late 2022 - will be scaled to a much greater extent.
Concurrently with the shifting conditions in our surroundings in 2022, we put a lot of effort into securing a
strong strategic foundation for the company. Our new purpose, vision and long-term strategic ambitions were
revised and refined through a bottom-up process, which generated a strong sense of ownership. We identified
these key strategic priorities: people engagement and ownership, algorithmic trading and renewable asset
management.
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Building on our vision to pioneer algorithmic trading and renewables management, we strive to reach our 2030
ambitions by advancing in these two areas, along with a set of 2030 ambitions on people engagement, employee
co-ownership, global expansion and our role in creating a sustainable future.
Securing our foundation for future growth is central to our current 18-month company-wide priorities,
following our extraordinary growth path in the last six years. We are committed to ensuring the stability of our
foundation as we approach the next growth wave. This will enable us to realize our long-term ambitions and
pursue extraordinary growth in the future. Beyond securing our foundation in 2023-2024, we intend to scale
and expand our European, and renewable asset management businesses as well as establish a presence in new
markets.
Further development of the IT platform and algorithm framework
The major trend in our industry right now is the movement toward algorithms and digitalization. When
InCommodities started six years ago, algorithmic trading was not as commonly adopted in the markets across
Europe and the US as it is today. However, integration of algorithms has accelerated over the last few years.
InCommodities was founded with the core belief that algorithms will play a significant role in the energy
markets of the future, and the area has been highly prioritized from day one.
Development of the algorithm framework is a long-term project that requires multi-year investment. This will
also be reflected in the composition of our team, as we expect to expand our expertise in the areas of IT, as well
as the quantitative and computer science fields. We see ourselves as the place where energy and technology
meet to rethink the energy markets of the future.
Ownership strategy
We recognize that the foundation of our commercial success is built upon the expertise and dedication of our
team and our unique organizational culture. That is why we constantly aim to enhance our incentive programs.
Our ambition is to attract and retain the best talents and brightest minds in the industry while preserving our
culture, even though competition is fierce.
We strive to create a compensation package customized to each team member’s unique needs and contributions
while ensuring appropriate and mutually beneficial incentive structures in all scenarios. Co-ownership is a key
component here, as it mitigates excessive risk taking. Additionally, we are excited to extend the opportunity for
more of our colleagues to become co-owners of InCommodities, as we believe in sharing our success with those
who help us achieve it.
Today, 85% of the company is owned by people who are actively involved in our corporate operations -
including the four founders. It is part of our strategy and DNA that primary ownership must remain in the
hands of our own people, despite our collaboration with other investors, such as Goldman Sachs, who joined the
shareholder group as a minority investor in 2021
We have implemented a strategy as part of our efforts to retain our skilled workforce, allowing every team
member the chance to become a co-owner of InCommodities. Our goal is to increase the number of shares held
by non-founder employees, and we aim to double that number in the coming years. That is why everyone in the
organization, including student assistants, is given access to our warrant program that can be converted into
shares.
We firmly believe that co-ownership triggers a focus on long-term benefit rather than short-term profit, and it
contributes to increased engagement, motivation, job satisfaction and compliance. With as many colleagues as
possible invested in their workplace, we will inspire our team members to make the right choices for
InCommodities.
New business pillar: Renewable asset management Just before Christmas 2022, we announced that
InCommodities had taken the first steps into the renewable asset management market by signing new Power
Purchase Agreements (PPA) totaling 413 MW. Agreements were entered with five different renewable
developers in Germany. Underlying this strategic venture is our wish to become a company able to more directly
support the net-zero transition – a high priority on our agenda.
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Our classic trading business involves optimizing the already-existing energy market based on the liberalized
market model implemented in Europe and the US. But our decision to become actively involved in renewable
asset management embodies a new hands-on approach to the green energy transition. More specifically, we
want to assist in making it more attractive to develop wind and photovoltaic (PV) renewable assets.
By entering PPAs with renewable asset owners, InCommodities can help balance the generation of power and
ensure producers’ earnings over several years. In doing so, we mitigate much of the renewable asset owners’
risk, which, among other things, makes it easier for them to finance their development projects and thereby
speed up the process toward net-zero. PPAs are excellently aligned with our business model because we can
leverage the principles of our digital trading platform, which is based on a combination of AI and
comprehensive market insight.
Risk Management: A Comprehensive Framework for Risk Management
InCommodities employs a comprehensive risk management framework to ensure effective governance and
procedures. Risk management is embedded at the highest level of the organization, with a risk policy reviewed
at least annually. Risk management is conducted at two levels within InCommodities: Strategic and operational.
Strategic considerations and choices provide the framework for specifying operational risk management
procedures, including partnership structure, values and leadership principles, recruiting and employee
engagement policies, and outsourcing policies. Our policies are documented to include the key points suggested
by FIA Principal Traders Group. In addition, we adhere to the guidelines and principles proposed by the
Committee of European Banking Supervisors for governance of operational risk.
Market risk
Market risk is the risk of open positions changing value due to changes in supply, demand, and other market
conditions. In 2022, this aspect of the framework was significantly tested due to a series of events, including the
after-effects of COVID-19 stimulus packages, Russia’s invasion of Ukraine and other geopolitical actions, which
led to the widest price fluctuations the market had ever seen.
InCommodities has implemented several procedures to continuously maintain an appropriate level of market
risk. Risk mandates are defined at several levels in the company based on Value at Risk (VaR) measurements
with daily and monthly limits. Controlling mechanisms are integrated in the trading platform.
Liquidity risk
Liquidity risk is defined as InCommodities’ risk of not being able to meet its payment obligations vis-à-vis
partners and trading partners. Our experience is that we are operating in a market with more rigorous demands
on capital, and many competitors in the market have encountered liquidity challenges in 2022, when
requirements were up to 50 times greater than 29 previously seen. The very existence of several European
trading companies was threatened because they failed to adapt their business to the funds at their disposal, and
because the environment for acquiring liquidity has been under pressure.
Without liquidity, we cannot trade or run our core business, which is why we give this area top priority. For the
same reason, we run a closely monitored forecasting and controlling operation, focused on our equity ratio and
leverage of the balance sheet, so that we are continuously able to predict the need for capital. During periods of
wide-ranging market volatility, the cash requirements for margins are significantly increased to maintain an
unchanged activity level.
In addition to our procedures for trading limits, etc., we manage this by maintaining close dialogue with our
permanent banking partners. Our profitability has enabled us to continuously amass a steadily increasing
capital reserve, which cushions us against future periods of crisis involving volatile markets.
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IT risk
As an organization that heavily relies on technology, cyber security is a critical area of focus for our company.
With our trading activity increasingly relying on algorithms and Electronic Trading Systems (ETSs), we are
aware of the potential risks involved and are continuously working to mitigate them. To ensure a secure trading
environment, our IT department manages all access controls, and all of our traders monitor their trades.
Additionally, we have implemented kill-switch mechanisms for all ETSs to prevent or mitigate losses in the
event of a malfunction or security breach. The European energy industry continues to be a target for
cyberattacks, and during 2022 InCommodities experienced a significant increase in tailored spear-phishing
campaigns and countless attempts to breach our IT perimeter. To mitigate new risks, we continuously update
our IT security policies and procedures. We also work around the clock to detect and take immediate action
against threats. Our recurring initiatives include mandatory cyber awareness training programs, external
penetration tests, patch management, and vendor assessments. Additionally, we prioritize a secure software
development life cycle and work with highly regarded companies in IT security for best practice
implementations and strategic guidance.
We also actively participate in multiple forums to share knowledge about attacks and best practices across
industries. IT security is a regular strategic topic for the board and management to ensure continuous
improvements. While we cannot guarantee that we will be immune to all cyberattacks, we remain committed to
staying vigilant and mitigating risks to keep our trading environment secure.
Compliance risk
Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation that
companies may suffer as a result of its failures to comply with laws, regulations, rules, related self-regulatory
organization standards, and codes of conduct applicable to its trading activities.
In InCommodities’ various business areas, there are several laws and regulations that must be adhered to, and it
is the responsibility of the Head of Compliance to ensure that stakeholders have a detailed understanding of
them.
InCommodities has a strong compliance culture and we do not compromise on ensuring internal adherence and
a cultural match with any potential new hire. All candidates recruited, even before they are formally hired, are
informed that InCommodities has and expects a culture of compliance, and all new colleagues must complete
compliance training as part of their onboarding and on an ongoing basis.
Internal or external compliance breaches must immediately be reported to the Head of Compliance, and this
can be done anonymously. The Head of Compliance is responsible for escalating such information to the CEO.
People risk
We consider the greatest asset of the company to be our people and their knowledge. People risks involve both
the risk of recruiting the wrong employees as well as the risk of essential employees leaving the company.
Recruiting standards are crucial to increasing the likelihood of a successful hire and to enhancing and
improving the culture of compliance in the company, all of which is essential to reducing risk. For new hires,
with candidates’ consent, we conduct structured and proven tests and reference checks to increase the
probability of a successful hire. It is key to our success that we maintain and continue to develop the drive and
skills of our people. To do so, we measure employee engagement biweekly and work continuously with both
personal and professional development, depending on who the employee is and where he/she is in their career
and life situation.
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Political risk
Political risk is a significant concern for InCommodities. Political risk can arise from both global and local
political situations. The impact of these risks can be radically different and will be discussed below.
Global politics
The current political climate has become increasingly volatile in recent years, particularly due to the war in
Ukraine, which is significantly impacting energy stability in Europe. Additional disruptions, such as those
caused by the COVID-19 pandemic, changing relations between China and Western countries, and fluctuations
in monetary politics may also lead to increased volatility in energy markets. During these challenging times
when external factors disrupt and increase the volatility of the market, the role of InCommodities and other
energy trading companies has become even more essential. We have a significant role to play in securing
stability, balance, lower energy costs and an efficient green transition. From a financial perspective, fluctuations
in the market may benefit InCommodities and the rest of the trading industry. This is in line with the general
idea that companies achieve higher earnings, the larger problems they solve and the better they are at solving
the problems. Our role is to do what we can to mitigate the negative impact of problems that are caused in part
or in full by global politics, and to support both European consumers by lowering energy costs and supporting
the green transition.
National politics
The extreme fluctuations in energy prices in 2022 have led to new discussions about the liberalized market in
Europe, including among Danish legislators and in the press. ACER (The European Union Agency for the
Cooperation of Energy Regulators) has well-documented that the liberalized market works and has resulted in
lower energy prices and savings for European consumers. We hope and expect that Danish politicians
acknowledge this contribution and preserve and maintain a stable political environment for the energy sector
going forward. We are currently witnessing a highly volatile political environment surrounding national tax
policies and potential sector governance. This situation raises concerns, and we see it as a significant risk if
liberalized markets become locally regulated. This risk affects not only InCommodities but the entire industry
located in Denmark. This will also result in a weakening of the acces to energy at the lowest possible price point
for consumers and companies. The Danish energy trading sector has achieved tremendous success and is a
significant value creator. In just a few years, InCommodities has - together with other trading companies -
played a pivotal role in establishing the ‘Silicon Valley of Energy Trading’ in the Aarhus region.
However, our company’s success depends on legislation promoting fair competition across EU borders and
beyond. We hope that national policymakers and regulators will acknowledge the value and success of our
sector as a unique Danish strength in line with other global successes originating from Denmark, and recognize
that any regulation must be done from an EU perspective to ensure fair competition.
As a sector, we represent an unprecedented leap forward in entrepreneurship and revenue streams. The value
we create benefits not only the industry but society at large, including tax payments from us and our colleagues
in the sector. 97% of our revenue comes from trading activities performed outside the borders of our home
country, and we grow exponentially while we help balance the global energy market - to the benefit of the
consumers. This is not a political problem. It is a solution. In our eyes, it is a huge opportunity for Denmark and
should be treated as such.
ESG
Shouldering Our ESG Responsibilities
2022 has been a landmark year for InCommodities – also in terms of our environmental, social and governance
(ESG) efforts. While sustainable commitment has always been a focus area for us, we now have a greater
understanding of our impact and can work more purposefully with our ESG approach and efforts. This progress
means we have a solid foundation for our future work with ESG. At InCommodities, we strive to be responsible
and act responsibly in all aspects of our business – including our ESG initiatives.
Since 2017, our company has been rapidly growing, and the key focus has been to create a profitable, reliable,
and self-supporting business in an uncertain world. The last six years have taught us valuable lessons regarding
16
business management and development, and we are now in a position where we can look outside our company
and focus on our contributions to the world outside our headquarters.
At the end of 2022, we made the significant decision to elevate and expand our efforts within the field of ESG. It
is a big leap for a company like ours, and the work is still new to us. Our goal is to create a comprehensive ESG
framework tailored for InCommodities, and we are committed to seeing it through with dedication and
diligence. We understand that the ESG framework is only the first step towards an actual ESG strategy, and the
process requires a deliberate approach, which takes time.
The upcoming ESG strategy will be aligned with both our strategic actions and our strong corporate culture, and
we will not rush it. Our intention is to design a strategy which takes our entire business into account. Little by
little, the level of details will expand alongside the data collection and the metric measurements to create a well-
founded baseline. This work should not only benefit our ongoing business developments, but also provide a new
level of transparency for all stakeholders.
Environment and Climate
17
18
Our People are Our Number One Priority
Statutory reporting on environment and climate in accordance with §99a of the Danish
Financial Statements Act
19
20
21
22
23
24
Outlook
Energy Markets to Remain Volatile in 2023
Following a turbulent 2022, energy markets are expected to return to more of a normality this year, which also
applies to InCommodities’ business.
As of the beginning of 2023, the energy market is much better positioned than we ever imaginednsmpossible
when Russia invaded Ukraine in February 2022. The starting point for Europe is positive, with full inventories
of natural gas. However, it is important to note that 2023 will mark the first year when European countries will
have to manage without significant gas supplies from Russia. As a result, these countries’ ability to replenish
their gas inventories has not yet normalized. Therefore, European residents cannot return to normal gas
consumption without it having significant consequences on the price level.
From a global perspective, we expect to see the consequences of China’s reopening of society after a prolonged
COVID-19 lockdown. In 2021 and 2022, Europe was able to access vast quantities of LNG due to China’s
lockdown and reduced demand in the industry. However, this is expected to change in 2023, as we anticipate
intensified competition for LNG. In other words, the energy crisis and the accompanying concerns are not over
yet. A cold beginning of the 2023-2024 winter could rapidly destabilize the situation again. In the long-term, we
anticipate the shifting world-wide energy scenario to have a lasting, massive impact in the decades ahead, on a
scale that we have yet to fully comprehend. 2022 has created a new situation in which uncertainty about energy
supplies will have significant consequences for a number of industries.
Energy-intensive industries in particular may face increasing pressure to relocate away from Europe as a result.
To us, gradual normalization will mean a return to more normal growth rates. We are still committed to
developing and scaling our business, but our realistic expectation is that our 2023 earnings will be at least 50%
lower than our profit in 2022. Thus, earnings before tax is expected to be EUR 100-250 million. The latest
political declarations remain unclear on whether the trading industry will be subject to a windfall tax after a
turbulent 2022. It is uncertain whether political intervention could undermine free energy markets with
incalculable consequences. As the past year has demonstrated, volatile markets place significant demands on
trading companies’ liquidity to maintain their capacity. A market with fewer participants able to participate will
result in reduced efficiency, ultimately leading to negative impacts on energy prices for consumers and a slower
transition towards net-zero
Committed To Spend 5% of Earnings to Support Net–Zero
In the future, part of our earnings will be invested in advancing the green transition across different initiatives.
In 2023, we are taking further steps to support the movement towards net-zero emissions. Through a new
commitment called the InCommodities Sustainable Investment Initiative, we are targeting spending 5% of our
earnings every year on investment in infrastructure, companies, or renewable assets that support the transition
towards net-zero.
As a well-run company that grows profitably, we want to take greater responsibility in the energy sector we are
part of. Although the war in Ukraine has shown that fossil fuels cannot be phased out at the drop of a hat, we
believe that the transition towards net-zero is proceeding too slowly. It takes too long to get permits for solar
and wind parks, and too many good ambitions are impeded by bureaucracy. The risk of political interference in
the market creates new uncertainty, and this uncertainty causes projects to be stopped.
Many European countries have wasted decades of political stagnation and failed to drive a genuine green
transition. The initiative is in part driven by our experiences in the energy market, which have given us a unique
insight into investing intelligently by spending resources where they have the biggest impact. This ability
imposes a duty on us. But in addition, we want to create a lasting impact in more dimensions than we do today.
Our 5% contribution will be implemented in various ways. For example, we will invest in infrastructure such as
solar parks, where our active ownership can make a difference for the climate, the environment, and society.
We will also investigate our options for investing in startups with interesting green technology, or in funds
which excel at investing in technology that makes a real difference.
25
We believe that technological development needs to accelerate. There is a need to develop new solutions that are
unknown to us today, and we need to scale the technologies we already know. We want to be an active part of
these processes.
Building our first solar park
As one of the first projects under the InCommodities Sustainable Investment Initiative, we are currently
developing a solar project in Favrskov municipality outside Aarhus, approximately 15km from our headquarters.
We plan to transform a closed plant nursery into a 5.5 MW solar park, which will be able to power up to 1,200
households or approximately 26 times InCommodities own electricity consumption. The park is expected to be
operational in the first half of 2024.
We are excited to invest in projects that have a net positive impact on the climate, the local community, and
society, which is in line with our goal to focus on sustainable solutions that benefit both our internal and
external business.
26
Consolidated Income Statement for the year ended 31 December
In thousands EUR Notes 2022
2021
Fair value adjustment of financial and physical energy contracts
3
Gross profit
Other external expenses
- 8.282
- 4.083
Staff costs
4
- 210.006
- 30.819
Depreciation
- 307
- 173
Operating profit before financial income
and expenses (EBIT)
Financial income
5
Financial expenses
5
- 22.920
- 3.652
Profit before tax (EBT)
Tax on profit for the year
6
- 308.474
- 31.529
Net profit for the year
Total net profit for the period is attributable to the owners of
Incomas Holding ApS
27
Consolidated Statement of comprehensive income for the year ended 31
December
In thousands EUR Notes 2022
2021
Profit for the year 1.074.662
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations -
Income tax relating to these items
6
Other comprehensive income for the period, net of tax -
Total comprehensive income for the period
Total comprehensive income for the period is attributable to the
owners of Incomas Holding ApS
28
Consolidated Balance Sheet as at 31 December
As at
1 January 2021
In thousands EUR
Notes
2022
2021
Assets
Non-current assets
Land and buildings
Right-of-use assets
7
Deposits
Total non
-
current
assets
Current assets
Inventories
8
Trade receivables
9
Other receivables
Deferred tax asset
Derivatives
10
Prepayments
Asset investment
Cash and cash equivalents
Total current assets
Total assets
29
Consolidated Balance Sheet as at 31 December
In thousands EUR Notes 2022
2021
As at
1 January 2021
Equity
Share capital
16
Share premium account
Reserve for exchange rate adjustments - 476
- 148
- 138
Retained earnings
Total equity
Liabilities
Non-current liabilities
Provisions
13
Lease liabilities
7
Payables to owners and Management 173.376
Credit institutions
11
Other payables
11
Total non-current liabilities
Current liabilities
Lease liabilities
7
Credit institutions
11
Trade payables
Payables to owners and Management -
Derivatives
10
Corporation tax
Other payables
11
Total current liabilities
Total liabilities
Total liabilities and equity
30
Consolidated Statement of Changes in Equity for the Year ended
31 December
In thousands EUR
As at 1 January 2022 907
-
Profit for the period -
Exchange adjustments -
- 328
Other comprehensive income -
-
Cash capital increase 10
Share-based payments -
- 7.575
Tax on share-based payments -
Extraordinary dividends paid -
- 304.175
As at 31 December 2022 917
- 476
Total equity
Retained earnings
Reserve for exhange
rate adjustments
Share premium
account
Share capital
Total comprehensive income
Transactions with owners in their
capacity as owners
31
Consolidated Statement of Changes in Equity for the Year Ended
31 December
In thousands EUR
As at 1 January 2021 907
-
Profit for the period -
Other comprehensive income -
Exchange adjustments -
- 10
-
Share-based payments -
Extraordinary dividends paid -
- 31.246
As at 31 December 2021 907
-
Total equity Total equity Retained earnings
Share premium
account
Share capital
Reserve for exhange
rate adjustments
Transactions with owners in their
capacity as owners
Total comprehensive income
Transactions with owners in their
capacity as owners
32
Consolidated Statement of Cash Flows for the Year Ended 31 December
In thousands EUR
Notes
2022
2021
Cash flows from operating activities
Net profit (loss) for the year 1.074.662
Adjustments
15
Changes in net working capital
15
- 151.634 - 62.097
Financial income received 5
Financial expenses paid 5
- 22.920 - 3.652
Corporation tax paid 6
- 208.472 - 3.348
Net cash inflow from operating activities 1.023.009
Cash flows from investing activities
Payment for fixed assets etc - 1.131
- 876
Current investment assets - 200.350 -
Net cash outflow from investing activities - 201.481 - 876
Cash flows from financing activities
Change of loans from credit institutions
11
- 2.483 68
Lease payments - 130
Other long-term debt payment - 21.258 -
Cash capital increase 8.883
Share based payments - 5.881 117
Rasing of other long-term debt
11
Dividends paid to company's shareholders - 304.175 - 31.246
Net cash outflow from financing activities - 151.668
- 9.104
Net increase in cash and cash equivalents 669.860
Cash and cash equivalents at the beginning of the financial year 88.654
Effects of exchange rate changes on cash and cash equivalents -
Cash and cash equivalents at end of year 758.514
33
Contents of the Notes to the Consolidated Financial Statements
Note 1 Summary of significant accounting policies
Note 2 Critical estimates and judgements
Note 3 Fair value adjustments
Note 4 Staff costs
Note 5 Financial income and expenses
Note 6 Income tax expense
Note 7 Leases
Note 8 Inventories
Note 9 Trade receivables
Note 10 Fair value
Note 11 Financial assets and financial liabilities
Note 12 Financial risk management
Note 13 Provisions
Note 14 Offsetting financial assets and financial liabilities
Note 15 Cash flow specifications
Note 16 Share capital
Note 17 Capital management
Note 18 Contingent liabilities and commitments
Note 19 Related party transactions
Note 20 Interests in other entities
Note 21 Fee to auditors appointed at the general meeting
Note 22 Subsequent events
Note 23 First time adoption of IFRS
34
Notes to the Financial Statements
1
Summary of significant accounting policies
The consolidated financial statements of Incomas Holding ApS ('the Group') for the year ended 31
December 2022 were authorised for issue in accordance with a resolution of the directors on 22 June
2023.
This note provides a list of the significant accounting policies adopted in the preparation of these
consolidated financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU as well as additional the Danish disclosure
requirements applying to entities of reporting class C for large enterprises.
The consolidated financial statements have been prepared on a historical cost basis, except for the
following financial assets and liabilities, which are measured at fair value.
- Contracts for sale and purchase of gas, power and capacities which are not entered into for the
Group's own use.
- Derivative financial instruments.
The consolidated financial statements are presented in Euro (EUR) and all values are rounded to the
nearest thousand, except when otherwise indicated.
First-time adoption of IFRS
These consolidated financial statements are the first financial statements that are presented in
accordance with IFRS.
The comparative figures for 2021 in the income statement and the balance sheet as at 1 January 2021 and
31 December 2021 were restated in accordance with IFRS. The accounting policies applied are based on
the standards and interpretations effective for 2022. No standards or interpretations which are not yet
effective have been adopted.
Refer to note 23 for information on how the Group adopted IFRS.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been
published that are not mandatory for 31 December 2022 reporting periods and have not been early
adopted by the Group. These standards, amendments or interpretations are not expected to have a
material impact on the Group in the current or future reporting periods and on foreseeable future
transactions.
Principles of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity where the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from
the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
35
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary
economic environment in which the Group operates (‘the functional currency’). The consolidated
financial statements are presented in Euro (EUR), which is the Group’s functional and presentation
currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates, are generally recognised in profit or loss. They are deferred in
equity if they are attributable to part of the net investment in a foreign operation.
The results and financial position of foreign operations that have a functional currency different from
Euro are translated into Euro as follows:
- assets and liabilities for each balance sheet presented are translated at the closing rate at the date
of that balance sheet
- income and expenses for each statement of profit or loss and statement of comprehensive income
are translated at average exchange rates, and
- all resulting exchange differences are recognised in other comprehensive income.
Derivative financial instruments
Derivative financial instruments are initially recognised in the balance sheet at fair value and are
subsequently remeasured at their fair values. Positive and negative fair values of derivative financial
instruments which are not settled at year end are classified as ”Other receivables” and ”Other payables”,
respectively. The fair values of derivative financial instruments which are settled at year end are classified
as ”Cash at bank” and ”Credit institutions”, respectively. Derivative financial instruments with positive
fair values are offset against derivative financial instruments with negative fair values when settled on a
net basis.
Contracts for the delivery of power and gas are classified as derivative financial instruments when there is
a practice of net settlement in respect of similar contracts, including offsetting contracts before delivery.
Changes in the fair values of derivative financial instruments are recognised in the income statement
unless the derivative financial instrument is designated and qualify as hedge accounting.
Income Statement
Fair value adjustments of financial and physical energy contracts
The Group routinely enters into exchange traded sale and purchase transactions for physical delivery of
energy commodities. A considerable part of these transactions for physical delivery of a non-financial
item are considered within the scope of IFRS 9 due to the fact that the Group has a practice of entering
into offsetting contracts before the delivery date. Consequently, they are measured at fair value on initial
recognition and subsequently measured at fair value through profit and loss.
For contracts whose fair value cannot be determined solely based on observable market data, any
difference between the transaction price and transaction date fair value determined by applying a
valuation model is deferred and recognized over the term of the contract.
A portion of the sale and purchase transactions for physical delivery of energy commodities takes the
form of contracts that were entered into and continue to be held for the purpose of receipt or delivery of
the physical commodity in accordance with the Group’s expected sale, purchase or usage requirements
36
(“own use”) and are not within the scope of IFRS 9.
The assessment of whether a contract is deemed to be “own use” is based on the nature of the contract as
well as facts and circumstances of how the contract is included in the Group's activities.
Cost of sales
Cost of sales includes the purchase of power, gas, and certificates for resale and transportation thereof
where physical delivery takes place.
Other external expenses
Other external expenses comprise expenses for premises, marketing, office expenses etc.
Staff costs
Staff expenses comprise direct wages and salaries, pension contributions, social security contributions,
sick leave, bonuses, and share-based payments which are recognized in the year in which the associated
services are rendered by employees of the Group.
Employee benefits - Pensions
For defined contribution plans, the Group pays contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further
payment obligations once the contributions have been paid. The contributions are recognized as
employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the
extent that a cash refund or a reduction in the future payments is available.
Share-based payments
A number of employees have been granted equity-settled warrants. Issued warrants become exercisable
after a certain period of time or upon an earlier exit event subject to the employee still being employed at
the exercise date. The grant date fair value is recognized as a compensation expense over the vesting
period with a corresponding entry to equity.
Other operating income and expenses
Financial income and expenses comprise interest income and interest expenses, realized and unrealized
exchange rate adjustments, fair value adjustment of current asset investments as well as interest on extra
payments and repayment under the on-account taxation scheme and interest in respect of lease liabilities.
Other financial income primarily comprises realized gains on exchange forward derivatives as well as
interest income.
Other financial expenses primarily comprise realized and unrealized exchange rate adjustments as well as
interest expenses.
Tax on profit/loss for the year
The income tax expense or credit for the period is the tax payable on the taxable income of the current
period, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where the company and its subsidiaries generate
taxable income. The management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and considers whether it is
probable that a taxation authority will accept an uncertain tax treatment.
The Group measures its tax balances either based on the most likely amount or the expected value,
depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. A deferred income tax asset or liability is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that, at the time of
37
the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realized or the deferred
income tax liability is settled.
Balance sheet
Leases
The Group leases properties. Property contracts are typically made for 1 to 5 years but may have
extension and termination options.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of fixed payments (including in-substance fixed payments); any variable
lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date and the exercise price of a purchase option if the Group is reasonably certain to
exercise that option. Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease or lessee’s incremental
borrowing rate if the implicit interest rate cannot be readily determined.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of
the liability for each period.
Right-of-use assets are measured at cost which comprises the amount of the initial measurement of lease
liability; any initial direct costs; the estimated restoration costs and any lease payments made at or before
the commencement date less any lease incentives received.
Payments associated with short-term leases of property and all leases of low-value assets are recognized
on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12
months or less without a purchase option. Low-value assets comprise IT equipment and small items of
office furniture.
Fixed asset investments
Fixed asset investments consist of deposits from leasehold.
Inventories
Inventories comprise gas used for trading. Inventories are measured at the lower of cost under the FIFO
method adjusted for gains and losses from hedging instruments and net realizable value. The net
realizable value of inventories is calculated at the amount expected to be generated by sale of the
inventories in the process of normal operations with deduction of selling expenses. The net realisable
value is determined allowing for marketability, obsolescence and development in expected selling price.
Trade receivables
Trade receivables are amounts due from power and gas sold as part of the ordinary course of business.
Trade receivables are recognized initially at the amount of consideration that is unconditional. The Group
holds the trade receivable with the objective of collecting the contractual cash flows and therefore
measures them subsequently at amortized cost using the effective interest method, less allowance for life-
time expected losses. The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss for all trade receivables.
Impairment losses on trade receivables are presented as net impairment losses within operating profit.
Subsequent recoveries of amounts previously written down are recognized as a reduction of costs against
the same line item.
Derivatives
When derivatives do not meet the hedge accounting criteria, they are primarily classified as ‘held for
trading’ for accounting purpose and initially recognised, and subsequently measured at fair value through
38
profit and loss and recognised in the balance sheet as ‘derivatives ”. Derivatives that are held for trading
are classified as current assets and liabilities regardless of their maturity date. The Group does not apply
any type of hedge accounting in the financial statements. Derivatives are categorised by means of shared
risk and underlying commodity.
The Group routinely enters into sale and purchase transactions for physical delivery of energy
commodities. A considerable part of these transactions for physical delivery of a nonfinancial item is
considered within the scope of IFRS 9 since the contracts are net settled, and they are consequently
accounted for as derivatives measured at fair value through profit and loss.
Other receivables
Other receivables consist of deposits related to trading, receivable VAT and miscellaneous receivables.
Other receivables are measured at amortized cost. Deposits represent the amount of cash required for
trading positions with certain counterparties.
Prepayments
Prepayments comprise prepaid expenses concerning rent, insurance premiums, subscriptions and
interest.
Deferred tax
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to
utilize those temporary differences and losses.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax
assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items
recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in
other comprehensive income or directly in equity, respectively.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognized in profit or loss over the period of the borrowings using the
effective interest method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized
over the period of the facility to which it relates.
Equity reserves
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from the proceeds.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer
at the discretion of the entity, on or before the end of the reporting period but not distributed at the end
of the reporting period. Payments of dividends are subject to debt covenants.
Cash Flow Statement
39
The cash flow statement shows the Group's cash flows for the year broken down by operating, investing
and financing activities, changes for the year in cash and cash equivalents as well as the Group's cash and
cash equivalents at the beginning and end of the year.
Cash flows from operating activities
Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes
in working capital and non-cash operating items such as depreciation, amortisation and impairment
losses, and provisions. Working capital comprises current assets less short-term debt excluding items
included in cash and cash equivalents.
Cash flows from investing activities
Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible
assets, property, plant and equipment as well as fixed asset investments.
Cash flows from investing activities
Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible
assets, property, plant and equipment as well as fixed asset investments.
Cash flows from financing activities
Cash flows from financing activities comprise cash flows from the raising and repayment of long-term
debt as well as payments to and from shareholders.
Cash and cash equivalents
Cash and cash equivalents comprise ”Cash at bank and in hand” and ”Overdraft facilities”.
The cash flow statement cannot be immediately derived from the published financial records.
Financial Highlights
Explanation of financial ratios
Return on assets
Solvency ratio
Return on equity
40
2
Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will
seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s
accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to
be wrong. Detailed information about each of these estimates and judgements is included in other notes
together with information about the basis of calculation for each affected line item in the financial
statements. In addition, this note also explains where there have been actual adjustments this year as a
result of an error and of changes to previous estimates.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to
be wrong. Detailed information about each of these estimates and judgements is included in other notes
together with information about the basis of calculation for each affected line item in the financial
statements. In addition, this note also explains where there have been actual adjustments this year as a
result of an error and of changes to previous estimates.
Judgements
Measurement of gas trading inventory
Determining the measurement method of gas trading inventories require management to make
judgements.
Management uses significant judgement when determining whether the Group acts as a broker-trader. In
this assessement, management takes into consideration both characteristics of the sales contracts entered
into, the frequency and volumes of gas trading and the strategic use of the gas trading inventory.
Evaluating all the facts and circumstances relating to the gas trading inventories, the Group does not act
as a broker-trader and gas trading inventories are consequently measured at historic cost.
The carrying amount of gas trading inventory as per the balance sheet date amount to TEUR 73,145
(2021: 44,021).
Estimates
Valuation of derivatives and commodity contracts not entered into for the Group's own use
In some cases, the fair values of derivatives are estimated using internal models due to the absence of
quoted prices or other observable, market-corroborated data. This primarily applies to the Group’s
longer-term, structured derivative contracts or contracts in illiquid markets. The majority of these
contracts are valued using models with inputs that include price curves for each of the different products.
These price curves are built up from available active market pricing data including volatility and
correlation and modelled using the maximum available market-derived information. Additionally, when
limited data exist for certain products or market areas, prices are determined using historical and long-
term pricing relationships. The use of alternative estimates or valuation methodologies may result in
significantly different values for these derivatives. The Group also trades capacities for which no active
market exists hence the price is estimated. The estimate is based on the future spreads between the given
market areas, which may result in different values for these derivatives.
41
3
Fair Value adjustments
Gains and losses arising from trading with energy commodity derivatives including futures, options,
swaps and certain forward sales and purchases are excluded from revenue and presented separately.
Likewise, energy commodity contracts with physical delivery with a net settlement option or past practice
of settlement of contracts in net cash or other financial instruments are also to be excluded from revenue
since these energy commodity contracts and treated considered within the scope of IFRS 9 Financial
instruments.
Given the nature of the company's business model and contracts with counterparties all gains and losses
arising from trading with energy commodity derivatives are accounted for using IFRS 9 Financial
instruments.
42
4
Staff costs
In thousands EUR
2022
2021
Wages and salaries 205.206
29.407
Share-based payments 125
117
Pension cost, defined contribution plans 504
366
Other social security costs 149
70
Other staff costs 4.022
814
210.006
30.774
Average number of employees 122
Key management personnel compensation
Key management personnel (Others) consists of the Board of Directors and the Executive Board. The
compensation paid or payables to key management personnel for employee services is shown below:
2022
In thousands EUR
Wages and salaries 291
-
363
654
Share-based payments -
-
-
-
Pension cost, defined contribution plans 14
-
18
32
Other social security costs 1
-
1
2
Other staff costs -
-
-
-
306
-
382
688
2021
In thousands EUR
Wages and salaries -
-
323
323
Share-based payments -
-
-
-
Pension cost, defined contribution plans -
-
24
24
Other social security costs -
-
1
1
Other staff costs -
-
1
-
-
-
349
348
Remuneration to the Executive Board has not been disclosed for 2021 in accordance with section 98 B(3)
of the Danish Financial Statements Act.
Share-based payments
Warrant program
To motivate and retain certain employees, the Group has established a warrant programme.
74.366 warrants were granted in August 2020 and 29.800 warrants were granted in April 2021 and 21.600
warrants were granted in May 2022. Warrants vest within 3-4 years from the grant date.
Vesting requirements of the warrants are based on non-terminated employment at maturity or upon an
exit event.
Executive
Board
Board of
Directors
Others
Total
Executive
Board
Board of
Directors
Others
Total
43
The fair value of the warrants have been determined based on a Black-Scholes option pricing model with
data input from historical share prices of a peer group.
Key input in the Black-Scholes option pricing model includes excercise prices in a range of DKK 118,3-375
and volatility in a range of 29%-31%.
The fair value of warrants granted in 2022 amount to tEUR 568 (2021: tEUR 225). No key management
personnel are included in the warrant program. The employees that have been given warrants have the
option to buy the predefined amount of shares at a predefined value.
Number of shares
2022
2021
Outstanding at the beginning of the
period
102.466
74.366
Granted during the period
21.600
29.800
Forfeited during the period
- 6.300
-
1.700
Excercised during the period
- 74.366
-
Expired during the period
-
-
Outstanding at the end of the
period
43.400
102.466
Weighted-average remainingcontractual life, years
3
2
None of the warrants are exercisable at the end of the period.
44
5
Financial income and expenses
In thousands EUR
2022
2021
Financial income
Currency exchanges gains 14.650
1.354
Other financial income 2.877
430
Total financial income 17.527
1.784
Financial expenses
Interest on lease
liabilities
38
28
17.983
1.282
4.899
2.342
Currency exchanges
losses
Total financial
expenses
22.920
3.652
Other financial expenses
45
6
Income tax expense
In thousands EUR
2022
2021
Current tax
Current tax on profits for the year 308.689
31.127
Adjustments for current tax of prior periods - 214
402
Income tax expense 308.475
31.529
In thousands EUR
2022
%
2021
%
Reconcilliation of effective tax rate
Tax at the Danish tax rate of 22% (2021: 22%) 304.313
22%
30.954
22%
Less tax in foreign operations in relation to the Danish tax
rate of 22% rate (2021: 22%) -
-
-
-
Tax effects of amounts which are not deductible (taxable)
in calculating taxable income: [skal tilpasses]
Other timing differences 4.286
0.3%
118
0.1%
Non-deductible expenses 90
0.0%
20
0.0%
Adjustments for current tax of prior periods - 214
0.0%
402
0.3%
Income tax expense 308.475
22.3%
31.494
22.4%
46
7
Leases
In thousands EUR
2022
2021
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Properties 415
720
415
720
Additions to the right-of-use assets -
895
Lease liabilities
Current 303
215
Non-current 216
434
519
649
Amounts recognized in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Properties 307
173
307
173
Interest expense on lease liabilities 38
28
Expense relating to short-term 17
42
Total cash outlow for leases
362
243
47
8
Inventories
The Group's inventories comprise the following:
1
January
2021
In thousands EUR
2022
2021
Gas storage 73.145
44.021
11.389
73.145
44.021
11.389
The following inventory write downs are included in the carrying amount presented in the table above.
Changes in inventory write-downs
In thousands EUR
2022
2021
Inventories write down at 1 January - 14.656
-
Write-downs for the year, additions - 16.921
- 14.656
Write-downs for the year, reversal 14.656
-
Total inventory write-downs - 16.921
-
14.656
Amounts recognised in profit and loss
Inventories recognised as an expense during 2022 amounted to TEUR 1.940.396 (2021: TEUR 916.953).
These were included in fair value adjustment of financial and physical energy contracts.
48
9
Trade receivables
1
January
2021
In thousands EUR
2022
2021
Trade receivables from contracts 177.965
84.063
29.156
Loss allowance -
-
-
177.965
84.063
29.156
Due to the short-term nature of the current receivables, the carrying amount is considered to be
the same as the fair value.
Refer to note 12 for a description of the expected credit losses and risks regarding trade
receivables.
49
10
Fair Value
In thousands DKK
Level 1
Level 2
Level 3
Total
2022
Financial assets
Power derivatives -
-
-
-
Gas derivatives
127.510
-
-
127.510
Foreign currency derivatives -
-
-
-
Total
127.510
-
-
127.510
Financial liabilities
Power derivatives 32.292
38.187
-
70.479
Gas derivatives
-
-
-
-
Foreign currency derivatives 1.209
-
-
1.209
Total
33.501
38.187
-
71.688
2021
Financial assets
Power derivatives -
12.392
-
12.392
Gas derivatives
-
4.128
-
4.128
Foreign currency derivatives -
-
-
-
Total
-
16.520
-
16.520
Financial liabilities
Power derivatives 19.851
-
-
19.851
Gas derivatives
-
-
-
-
Foreign currency derivatives -
-
-
-
Total
19.851
-
-
19.851
50
11 Financial assets and financial liabilities
The group holds the following financial instruments:
1
Januar
y 2021
In thousands EUR 2022
2021
Financial assets
Financial assets measured at fair value through profit and loss
Derivatives and commodity contracts 127.510
16.520
3.819
Derivatives and commodity contracts (cash and cash equivalents) 173.034
27.127
6.004
300.544
43.647
9.823
Financial assets at amortised cost
Deposits 223
109
70
Trade receivables 177.965
84.063
29.156
Other receivables 121.377
39.531
7.944
Cash and cash equivalents 585.480
88.654
34.990
885.045
212.357
72.160
Financial assets
1.185.589
81.983
Due to the short
-
term nature of the financial assets
measured at amortised cost, their carrying
amount is considered to be the same as their fair value.
Financial liabilities
Financial liabilities measured at fair value through profit and loss
Derivatives and commodity contracts 71.688
19.851
8.534
71.688
19.851
8.534
Financial liabilities at amortised cost
Trade payables 81.550
44.810
4.206
Credit institutions 4.824
7.307
19.019
Lease liabilities 519
649
-
Payables to owners and Management 173.376
-
67
Other payables 101.051
46.564
7.481
361.320
99.330
30.773
Financial liabilities
433.008
119.181
39.307
256.004
51
Due to the short-term nature of the financial liabilities measured at amortised cost, their carrying amount is
considered to be the same as their fair value. The Group's exposure to various risks associated with the
financial instruments is discussed in note 10.
Borrowings
2022 2021
In thousands EUR
Credit
institutions -
4.824
4.824
2.127
5.180
7.307
Other loans -
173.376
173.376
-
-
-
-
178.200
178.200
2.127
5.180
7.307
For the borrowings, the fair values are not materially different from their carrying amounts, since the
interest payable on those borrowings is either close to current market rates or the borrowings are of a short-
term nature.
The nature of the Group's borrowings are primarily credit line facilities, which can be used to borrow cash
or to provide guarantees or letter of credit to counterparts. The maturites of the credit line facilities are
flexible and are based on variable interest rates.
The borrowing from credit institutions consists of a loan from Vækstfonden. The loan is maturing in 2025
and cannot be terminated unilaterally by Vækstfonden. The loan is based on a variable interest rate. Other
loans consist of loans from owners. The loan is maturing in 2026 and cannot be terminated unilaterally by
the owners. The loan is based on a fixed interest rate.
Total
Non-current
Current
Total
Non-current
Current
52
12
Financial risk management
The Group’s principal financial liabilities, comprise loans and borrowings, and trade and other
payables. The main purpose of these financial liabilities is to finance the group’s operations. The
Group's principal financial assets include trade receivables, and cash and cash equivalents.
The Group is exposed to market risk, credit risk, liquidity risk.
Market risk
Market risk is the risk of losses or gains caused by changes in the market value of the Group’s financial
assets and liabilities resulting from changes in market prices or rates. Market risk affects the Group’s
consolidated financial statement through the valuation of the Group’s financial instruments.
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows of an exposure will fluctuate
because of changes in underlying commodity prices. The Group's exposure to the risk of changes in
commodity prices and volumes relates to the trading performed by the Group in gas and power.
● Pre-Trade Risk Limits: The pre-trade risk limits are set and administrated at several levels of the
Group to operationalize and mitigate the market risk:
1. Board of Directors: At the board level an overall risk appetite is defined. The risk level is
defined in terms of 1% daily VaR and 1% monthly VaR. As such the board of directors allows
that, the Group loses up to the daily (monthly) VaR level 1% of the days (months). If the VaR
limits are breached the BoD must be informed. Limits at this level are primarily determined
based on the Group's solidity and risk appetite of the owners.
2. 2. Founding Partners: The founding partners set the 1% VaR limits for each department under
consideration of the VaR limits specified by the BoD. If the VaR limit is breached the BoD must
be informed. Limits at this level are primarily determined based on the experience of the
teams, clearing arrangements, exchange arrangements and market risk. The founding partners
are also responsible for distributing limits for larger “one off” events like capacity auctions.
3. Head of Trading Department and Head of Risk: The practical risk limits formulated in terms of
concrete risk mandates are formulated jointly by the head of the relevant trading unit and the
Head of Risk under the considerations of the 1% VaR limits set by the BoD and the founding
partners. These mandates are set at the department level and differentiate between the various
business areas. These can be in the form of VaR, EUR, MW or MWh limits. The mandates must
be visual to the entire company. The mandates can be dynamic in the sense that they can
automatically increase or decrease as a function of accumulated GP. Limits at this level are
primarily determined based on the experience of the individuals and the market risk.
Value-at-Risk
The Group is assessing the market risk by measuring the Value-At-Risk (VaR) on an ongoing basis. VaR
is a statistical measure that quantifies the extent of possible financial losses during a certain period of
time given normal market conditions. To manage market risk and collective portfolio exposure, The
Board of Directors have set specific limits to the VaR.
VaR is calculated under the assumption of 1-day and 1 month holding periods, 99% confidence and 1-
year historical data. A decay factor is applied, meaning that the influence of historical data decreases
with a predefined factor each day, i.e. most recent market data has the highest weight. Below figures
are based on 1-day holding period.
In thousands EUR
2022
2021
Power at 31 December 12.385
31.707
Gas at 31 December 26.470
3.094
53
Foreign currency risk
Foreign currency risk is the risk that fair value or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Group's exposure to foreign currency risk is derived
from the Group’s trading activities in which trade receivables, account payables and derivatives are
denominated in a currency other than the functional currency.
The Group manages its risk towards foreign currency by occasionally entering forward contracts on
specific currencies to which the daily commercial business is exposed. However, there is no single
currency exposure that is considered material. The majority of the Group's activities are in EUR as the
majority of the activities are performed in market areas where commodity products are traded in EUR.
Monetary items and sensitivity
2022 2021
In thousands EUR
Cash and
receivables
Potential
change in
exchange
rate
Impact on
profit or loss
before tax
Cash and
receivables
Potential
change in
exchange
rate
Impact on
profit or loss
before tax
DKK/EUR 1.780
1%
18
207
1%
2
USD/EUR 27.554
5%
1.312
9.627
5%
458
GBP/EUR 63.248
5%
3.012
52.986
5%
2.523
Interest rate risk
Due to the limited magnitude of the loans as well as the short-term nature of the business activities the
Group does not consider this risk to be significant.
The Group funds the company via equity and debt. The debt carries a variable interest rate and as such
interest rate risk exists.
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as
well as credit exposures to retail customers, including outstanding receivables.
Credit risk is considered very limited due to the limited receivables from individual counterparts and a
very low probability of default for each of the counterparties.
However, the Company is expanding its bilateral trading activities and hence the credit risk increases.
When exposed to credit risk towards a trading counterpart an extensive credit assessment must be
performed, which minimum involves:
- Collecting credit and compliance reports through our business-acknowledged external partner
- Profound screening of most recent annual reports
- Getting an overview of ownership structure
Based on the assessment we set a credit limit on how much EUR exposure we are willing to accept
towards the trading counterpart. Such screening must be performed on all trading counterparts at least
annually.
The majority of the Company's trading activities are still performed towards exchanges, TSOs, clearing
banks and banks. Such counterparts are in general low risk counterparts. Thus, the overall credit risk of
the Company is considered low.
For more information about the trade receivables please refer to note 9. Please refer to note 14 for more
detailed information about offsetting of financial assets and liabilities.
Trade receivables
54
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables. However, due to the nature of the Group's
business activities, the Group considers its credit risk related to trade receivables to be immaterial.
There is no history of credit loss and no provision for expected credit loss.
Liquidity risk
We consider the current liquidity risk very limited due to the significant amount of cash on account,
low debt and limited hedges.
Liquidity risk is a significant element of the risk sphere of the Group. To ensure that the group always
has sufficient liquidity for all possible future scenarios the group has a large array of tools at hand and
takes a number of measures. These tools and measures must include:
● Vast buffers set aside in budgets for:
● Variation margin
● An extended period of weak performance
● The unknown.
● Liquidity projection (both budget and in operations)
● Daily liquidity monitoring
● Excess cash holding
● Flexible lines with banks
● The ability to scale cash intensive operations down
● Education of key front office employees in liquidity management and risk.
The Risk Department is responsible for monitoring the group's liquidity risk, and most importantly
how it would be affected under various scenarios. As such, the Risk Department must stress-test open
power and gas positions where liquidity risk arises. The tool must take price-correlations into
consideration and contain the ability to play around with price-volatilities. Hence, capturing how the
group's liquidity situation would look e.g. under a worst-case scenario. If a worst-case scenario would
cause severe liquidity stress the Head of Risk must act accordingly to reduce exposure.
Maturities of financial liabilities
The amounts disclosed in the following table are the contractual undiscounted cash flows. Balances due
within 12 months equal their carrying balances as the impact of discounting is not significant.
Contractual maturities of financial liabilities < 1 year 1 - 5 years > 5 years
Total
contractual
cash flows
Carrying
amount
At 31 December 2022
Trade payables
81.550
-
-
81.550
81.550
Borrowings
241
224.741
-
224.982
178.200
Lease liabilities
401
433
-
834
519
Other payables
103.384
-
-
103.384
101.051
Derivatives held for trading
71.688
-
-
71.688
71.688
257.264
225.174
-
482.438
433.008
55
Contractual maturities of financial liabilities < 1 year 1 - 5 years > 5 years
Total
contractual
cash flows
Carrying
amount
At 31 December 2021
Trade payables 44.810
-
-
44.810
44.810
Borrowings 2.368
4.193
1.991
8.552
7.307
Lease liabilities 313
651
- 964 649
Other payables 25.306
26.721
- 52.027 46.564
Derivatives held for trading 19.851
-
-
19.851
19.851
92.648
31.565
1.991
126.204
119.181
13
Provisions
2022 2021
In thousands EUR Current Non-current Total Current Non-current Total
Refurbishment of tenancy - 113 113
-
113 113
Other provisions -
-
-
-
-
-
- 113 113
-
113 113
The provision to refurbishment of tenancy consist of an obligation to refurbish leased property when the
lease contract lapse.
Refurbish-ment
of tenancy
Other
provisions In thousands EUR Total
At 1 January 2021 -
-
-
Additional provision charged to land and buildings 113
-
113
Charged to profit and loss -
-
-
- Additional provision recognised -
-
-
- Unused amounts reversed -
-
-
Amounts used during the year -
-
-
At 31 December 2021 113
-
113
At 1 January 2022 113
-
113
Charged to profit and loss -
-
-
- Additional provision recognised -
-
-
- Unused amounts reversed -
-
-
Amounts used during the year -
-
-
At 31 December 2022 -
-
-
113
-
113
56
14
Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where the
Group currently has a legally enforceable right to offset the recognised amounts, and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously. The Group
has also entered into arrangements that do not meet the criteria for offsetting but still allow for the
related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a
contract.
The following table presents the recognised financial instruments that are offset, or subject to
enforceable master netting arrangements and other similar agreements but not offset. The column ‘net
amount’ shows the impact on the Group’s balance sheet if all set-off rights were exercised.
Effects of offsetting on the
balance sheet
Related amounts not
offset
Net
amounts
presented
in the
balance
sheet
Gross
amounts
offset in the
balance
sheet
Cash
collateral
(received
/ pledged)
Gross
amounts
Net
amount In thousands EUR
2022
Financial
assets
Trade receivables 249.400
- 71.239
178.161
33.347
211.508
Derivatives held for trading 2.526.328
- 2.398.818
127.510
-
127.510
Total financial assets 2.775.728
2.470.057
305.671
33.347
339.018
Financial liabilities
Trade receivables 152.788
- 71.239 81.549
- 87.419
-
5.870
Derivatives held for trading 2.466.964
- 2.398.818 68.146
-
68.146
Total financial liabilities 2.619.752
- 2.470.057
149.695
- 87.419
62.276
Effects of offsetting on the
balance sheet
Related amounts not
offset
Net
amounts
presented
in the
balance
sheet
Gross amounts
offset in the
balance sheet
Cash
collateral
(received /
pledged) Gross amounts
Net
amount In thousands EUR
2021
Financial assets
Trade receivables 139.512
- 55.499 84.013
9.071
93.084
Derivatives held for trading 885.432
- 869.275 16.157
-
16.157
Total financial assets 1.024.944
- 924.774
100.170
9.071
109.241
Financial liabilities
Trade receivables 100.265
- 55.449 44.816
- 21.436
23.380
Derivatives held for trading 889.126
- 869.275 19.851
-
19.851
Total financial liabilities 989.391
- 924.724
64.667
21.436
43.231
57
15
Cash flow specifications
In thousands EUR
2022
2021
Adjustments
Financial income - 17.527
- 1.687
Financial expenses 22.920
3.618
Depreciations
307
117
Income tax
308.474
31.529
Other adjustments - 328
- 10
313.846
33.567
Changes in net working
capital
Change in inventories - 29.124
- 32.632
Change in receivables - 286.832
- 99.144
Change in trade payables 164.322
69.679
151.634
62.097
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods
presented.
In thousands EUR
Net debt:
At 1 January 2021
19.019
-
19.019
Cash flows
9.546
- 159
9.387
New leases -
780
780
Other
changes -
28
28
At 31 December 2021 28.565
649
29.214
Cash flows 149.635
- 130
149.505
New leases -
-
-
Other
changes -
-
-
At 31 December 2022 178.200
519
178.719
Borrowings
Total
Leases
58
16
Share capital
2022 2021
The share capital comprises:
Ordinary shares at 1 January 6.760.737
907
6.760.737
907
Capital increase
74.366 10
-
-
Ordinary shares at 31 December
6.835.103
917
6.760.737
907
No shares carry any special rights. All shares are fully paid
2022
2021
EUR per share
Total dividend paid out for the year
45
16
Total dividend proposed for the year
-
-
TEUR
Number of
shares
Nominal
value
Nominal
value
Number of
shares
TEUR
59
17
Capital management
The Group’s objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide
returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the following gearing
ratio: Net debt, as per note 15: Cash flow specifications divided by Total equity, as shown in the balance
sheet.
During 2022, the Group’s strategy, which was unchanged from 2021, was to maintain a debt to equity
ratio of 2. The debt to equity ratio at 31 December 2022 was 0,20 (2021: 0,24). The debt to equity ratio at
31 December 2022 decreased due to the financial performance of 2022 and thus increase in equity.
In general during 2023 we will seek to increase debt / equity ratio with agreement with new financial
partners. We need to ensure a stronger gearing of our equity to ensure our future growth. At the moment
we are primarily founded by our own equity and that is not optimal. AS we have done historically we pay
out dividends to owners when we have sufficient excess cash.
60
18
Contingent liabilities and commitments
Contingent liabilities
In thousands EUR
2022
2021
The Group had contingent liabilities at year end in respect of:
Charges and security
The following assets have been placed as security with bankers:
Liquid funds of
233.724
70.366
The following assets have been placed as security with counterparties:
The following cash deposits are placed with counterparts to meet standard requirements related
to credit risk
-
-
Guarantee obligation
The Group has placed payment guarantees to counterparties of to meet standard
requirements related to credit risk
197.256
107.545
Commitments
As a part of the main activities the Group has entered into contracts with counterparties whereof
contractual commitments amount to TEUR 219.201 (2021: tEUR 73.263). All contracts run between 0-69
months (2021: 0- 36 months).
Other contingent liabilities
The group companies are jointly and severally liable for tax on the jointly taxed incomes etc. of the
Group. The total amount of corporation tax payable is disclosed in the Annual Report of Incomas Holding
ApS, which is the management company of the joint taxation purposes. Moreover, the group companies
are jointly and severally liable for Danish withholding taxes by way of dividend tax, tax on royalty
payments and tax on unearned income. Any subsequent adjustments of corporation taxes and
withholding taxes may increase the Company’s liability.
61
19
Related party transactions
Incomas Holding ApS has no related parties with control of the Group and no related parties with
significant influence other than key management personnel – mainly in the form of the Board of
Directors and the Executive Board.
Information about renumeration to key management personnel has been disclosed in note 4.
Transactions with other related parties
In thousands EUR
2022
2021
The following transactions occurred with related parties:
Key management personnel
Financial expensese 835
670
Loans from key management personnel 153.639
19.120
Terms and conditions
The loans to key management personnel are repayable within four years from the reporting date. The
average interest rate on the loans during the year was 6%.
62
20
Interests in other entities
The Group’s principal subsidiaries at 31 December 2022 are set out below. Unless otherwise stated, they
have share capital consisting solely of ordinary shares that are held directly by the Group, and the
proportion of ownership interests held equals the voting rights held by the Group. The country of
incorporation or registration is also their principal place of business.
Ownership interest held
by the group, %
Ownership interest held
by non-controlling
interests, %
Name of entity Place of business 2022 2021 2022 2021
In Commodities A/S
Aarhus, Denmark 100%
100%
-
-
In Commodities Global ApS
Aarhus, Denmark 100%
N/A
-
-
In Commodities APAC ApS
Aarhus, Denmark 100%
N/A
-
-
In Commodities US ApS
Aarhus, Denmark 100%
100%
-
-
In Commodities US LLC Delaware, USA 100%
100%
-
-
In Commodities PV ApS
Aarhus, Denmark 100%
N/A
-
-
63
21
Fee to auditors appointed at the general meeting
In thousands EUR
2022
2021
PricewaterhouseCoopers
Audit fee 122
54
Other assurance services 97
40
Tax advisory services 101
101
Other services 210
182
530
377
64
22
Subsequent events
After the end of the financial year, no events have occurred which could significantly affect the Group's
financial position.
65
2
3
First time adoption of IFRS
The consolidated financial statements for the year ended 31 December 2022 are the first that the Group
has prepared in accordance with IFRS. For periods up to and including the year ended 31 December 2021
the Group prepared its consolidated financial statements in accordance with The Danish Financial
Statements Act (’Danish GAAP’)
The Group has prepared consolidated financial statements that comply with IFRS applicable as at 31
Decemeber 2022, together with the comparative period information for the year ended 31 December
2021.
In preparing these consolidated financial statements, the Group's opening statement of financial position
was prepared as at 1 January 2021 (date of transition to IFRS).
The disclosures required by IFRS 1 First-time Adoption of IFRS explaining the principal adjustments
made by the Group in restating Danish GAAP financial statements are provided below.
Except in respect of leases, as described below, there was no material impact on the cash flow statement
in the adoption of IFRS.
Notes to the reconciliation from Danish GAAP to IFRS
Leases
In accordance with the provisions in IFRS 1, the Group has adopted IFRS 16 Leases from the date of
transition. With the adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which
under Danish GAAP were classified as operating leases. These liabilities were measured at the present
value of the remaining lease liabilities as at the transition date using the incremental borrowing rates of 1
January 2021. The weighted average incremental borrowing rate applied was 5,57% at the date of
transition. The associated right-of-use assets were measured at the amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments.
By 31 December 2021, a lease liability of tEUR 649 and a right-of-use asset of tEUR 722 was recognised.
In the cash flow statement, lease payments were presented in cash flow from operating activities Danish
GAAP. Under IFRS, the principal element of lease payments are presented in cash flows from financing
activities, whereas the interest element is presented as cash flows from operating activities.
Exemptions applied
IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain
requirements under IFRS. The Group has applied the following exemptions:
- Leases: Lease liabilities were measured at the present value of the remaining lease payments,
discounted using the lessee’s incremental borrowing rate at 1 January 2021. Right-of-use assets
were measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the statement of financial position
immediately before 1 January 2021. The lease payments associated with leases for which the
lease term ends within 12 months of the date of transition to IFRS and leases for which the
underlying asset is of low value have been recognised as an expense on either a straight-line basis
over the lease term or another systematic basis.
- Exchange differences on translation of foreign operations are deemed to be zero as at 1 January
2021.
Classification of revenue
Gains and losses arising from trading with energy commodity derivatives including futures, options,
swaps and certain forward sales and purchases are excluded from revenue and presented separately.
Likewise, energy commodity contracts with physical delivery with a net settlement option or past practice
of settlement of contracts in net cash or other financial instruments are also to be excluded from revenue
since these energy commodity contracts and treated considered within the scope of IFRS 9 Financial
66
instruments. Given the nature of the company’s business model and contracts with counterparties all
gains and losses arising from trading with energy commodity derivatives are accounted for using IFRS 9
Financial instruments
Consequently, the Group has reduced revenue by tEUR 13.513.813 in 2021 from revenue and recognized
'Fair value adjustment of financial and physical energy contracts' amounting to tEUR 177,642 in 2021.
Share-based payments
The Group has granted equity-settled warrants to certain key employees, which according to IFRS 2 -
Share-based payments is recognized as a compensation expense, measured at fair value at the grant date,
in the profit and loss over the vesting period with a corresponding entry to equity. Under Danish GAAP,
the Company has not recognized any expenses for equity-settled warrants.
As a consequence, the Group has recognized 125 tEUR in 2022 and 117 tEUR in 2021 as a compensation
expense with a corresponding entry to equity.
Reconciliation
As at 1 January 2021
For the
year
ended 31
December
2021
As at 31 December 2021
Profit for
the year
In thousands EUR Assets Liabilities Equity Assets Liabilities Equity
According to the
Danish Financial
Statements Act 87.419
42.254
45.165
109.329
1.459.888
273.577
123.238
IFRS adjustments
Leases -
-
-
- 42
720
649
- 42
Provisions -
-
-
-
-
113
-
Share-based payment -
-
-
- 117
-
-
-
-
-
-
- 159
720
762
- 42
According to IFRS 87.419
42.254
45.165
109.170
1.460.608
274.339
123.196
67
Parent company
68
Parent Income Statement for the Year Ended 31 December
In thousands EUR
Notes
2022
2021
Gross profit/loss
- 57
- 246
Income from investment in
subsidiaries
1.079.803
109.140
Financial income
2
1.089
219
Financial expenses
2
- 3.044
- 128
Profit/loss before income tax
1.077.791
109.231
Tax on profit/loss for the year
3
- 3.068
344
Profit/loss for the year
1.074.723
109.575
69
Parent Balance Sheet as at 31 December
In thousands EUR
Notes
2022
2021
Assets
Fixed asset investments
Investment in subsidiaries
4
712.342
117.666
Receivables from group enterprises
5
144.337
-
Fixed assets
856.679
117.666
Receivables
Receivables from group enterprises
8.538
5.008
Other receivables
610
1
Deferred tax asset
6
-
721
Corporation tax receivable from group companies
-
75
Total receivables
9.148
5.805
Current asset investment
7
200.350
-
Cash and cash equivalents
18.888
566
Total current assets
228.386
6.371
Total assets
1.085.065
124.037
70
Parent Balance Sheet as at 31 December
In thousands EUR
Notes
2022
2021
Equity
Share capital
8
917
907
Share premium account
8.873
-
Reserve for net revaluation under the equity method -
113.109
Retained earnings
886.670
9.222
Total equity
896.460
123.238
Long-term debt
Payables to owners and Management
173.374
-
Total long-term debt
173.374
-
Short-term debt
Payables to group enterprises
-
758
Corporation tax
2.347
-
Other payables
12.884
41
Total short-term debt
15.231
799
Total debt
188.605
799
Total liabilities
1.085.065
124.037
71
Parent Statement of Changes in Equity for the Year Ended 31 December
72
Parent Statement of Changes in Equity for the Year Ended 31 December
73
Contents of the Notes to the Consolidated Financial Statements
Note 1 Summary of significant accounting policies
Note 2 Financial income and expenses
Note 3 Income tax expense
Note 4 Investment in subsidiaries
Note 5 Other fixed asset investments
Note 6 Deferred tax asset
Note 7 Other investments at fair value
Note 8 Share capital
Note 9 Distribution of profit
Note 10 Long-term debt
Note 11 Contingent liabilities and commitments
Note 12 Related party transactions
74
Notes to the Financial Statements
1
Summary of significant accounting policies
The separate financial statements of Incomas Holding ApS
('Parent Company') for the year ended 31
December 2022 were authorised for issue in accordance with a resolution of the directors on 22 June
2023.
This note provides a list of the significant accounting policies adopted in the preparation of these separate
financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.
Basis of preparation
The seperate financial statements of the Parent Company for 2022 have been prepared in accordance
with the provisions of the Danish Financial Statements Act applying to large enterprises of reporting class
C.
The separate financial statements have been prepared on a historical cost basis.
The separate financial statements are presented in Euro (EUR) and all values are rounded to the nearest
thousand, except when otherwise indicated.
With reference to section 86(4) of the Danish Financial Statements Act and to the cash flow statement
included in the consolidated financial statements of , the Company has not prepared a cash flow
statement.
Recognition and measurement
Revenues are recognised in the income statement as earned. Furthermore, value adjustments of financial
assets and liabilities measured at fair value or amortised cost are recognised. Moreover, all expenses
incurred to achieve the earnings for the year are recognised in the income statement, including
depreciation, amortisation, impairment losses and provisions as well as reversals due to changed
accounting estimates of amounts that have previously been recognised in the income statement.
Assets are recognised in the balance sheet when it is probable that future economic benefits attributable
to the asset will flow to the Parent Company, and the value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow
out of the Parent Company, and the value of the liability can be measured reliably.
Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as
described for each item below.
Foreign currency translation
Functional and presentation currency
Items included in the separate financial statements of the parent are measured using the currency of the
primary economic environment in which the Parent Company operates (‘the functional currency’). The
separate financial statements are presented in Euro (EUR), which is the Parent Company’s functional and
presentation currency.
Transactions in foreign currencies are translated at the exchange rates at the dates of transaction.
Exchange differences arising due to differences between the transaction date rates and the rates at the
dates of payment are recognised in financial income and expenses in the income statement. Where
foreign exchange transactions are considered hedging of future cash flows, the value adjustments are
recognised directly in equity.
Receivables, payables and other monetary items in foreign currencies that have not been settled at the
balance sheet date are translated at the exchange rates at the balance sheet date. Any differences between
75
the exchange rates at the balance sheet date and the rates at the time when the receivable or the debt
arose are recognised in financial income and expenses in the income statement.
Income statement
Other external expenses
Other external expenses comprise expenses for premises, sales and distribution as well as office expenses,
etc.
Gross profit/loss
With reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a
summary of other external expenses.
Income from investments in subsidiaries
The item “Income from investments in subsidiaries” in the income statement includes the proportionate
share of the profit for the year.
Tax on profit/loss for the year
Tax for the year consists of current tax for the year and changes in deferred tax for the year. The tax
attributable to the profit/loss for the year is recognised in the income statement, whereas the tax
attributable to equity transactions is recognised directly in equity.
The Parent Company is jointly taxed with Danish group companies. The tax effect of the joint taxation is
allocated to enterprises in proportion to their taxable incomes.
Balance sheet
Investments in subsidiaries
Investments in subsidiaries are recognised and measured under the equity method.
The item “Investments in subsidiaries” in the balance sheet include the proportionate ownership share of
the net asset value of the enterprises calculated on the basis of the fair values of identifiable net assets at
the time of acquisition with deduction or addition of unrealised intercompany profits or losses and with
addition of the remaining value of any increases in value and goodwill calculated at the time of
acquisition of the enterprises.
The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to
“Reserve for net revaluation under the equity method“ under equity. The reserve is reduced by dividend
distributed to the Parent Company and adjusted for other equity movements in the subsidiaries.
Subsidiaries with a negative net asset value are recognised at EUR 0. Any legal or constructive obligation
of the Parent Company to cover the negative balance of the enterprise is recognised in provisions.
Receivables
Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value,
which corresponds to nominal value less provisions for bad debts.
Current assets investments
Current asset investments, which consist of listed bonds and shares, are measured at their fair values at
the balance sheet date. Fair value is determined on the basis of the latest quoted market price.
76
Deferred tax assets and liabilities
Deferred tax is recognised in respect of all temporary differences between the carrying amount and the
tax base of assets and liabilities. However, deferred tax is not recognised in respect of temporary
differences concerning goodwill not deductible for tax purposes and other items - apart from business
acquisitions - where temporary differences have arisen at the time of acquisition without affecting the
profit for the year or the taxable income.
Deferred tax is measured on the basis of the tax rules and tax rates that will be effective under the
legislation at the balance sheet date when the deferred tax is expected to crystallise as current tax. In
cases where the computation of the tax base may be made according to alternative tax rules, deferred tax
is measured on the basis of the intended use of the asset and settlement of the liability, respectively.
Deferred tax assets, including the tax base of tax loss carry-forwards, are measured at the value at which
the asset is expected to be realised, either by elimination in tax on future earnings or by set-off against
deferred tax liabilities.
Deferred tax assets and liabilities are offset within the same legal tax entity.
Current tax receivables and liabilities
Current tax receivables and liabilities are recognised in the balance sheet at the amount calculated on the
basis of the expected taxable income for the year adjusted for tax on taxable incomes for prior years. Tax
receivables and liabilities are offset if there is a legally enforceable right of set-off and an intention to
settle on a net basis or simultaneously.
Financial debts
Loans are recognised initially at the proceeds received net of transaction expenses incurred.
Subsequently, the loans are measured at amortised cost; the difference between the proceeds and the
nominal value is recognised as an interest expense in the income statement over the loan period.
Other debts are measured at amortised cost, substantially corresponding to nominal value.
77
2
Financial income and expenses
In thousands EUR
2022
2021
Financial income
Interest received from group enterprises 598
213
Other financial income 491
6
Total financial income 1.089
219
Financial expenses
Interest paid to group enterprises 1.886
110
Other financial expenses 1.158
18
Total financial expenses 3.044
128
3
Income tax expense
In thousands EUR
2022
2021
Current tax on profits for the year 2.347
- 75
Deferred tax for the year 721
- 721
Adjustments of tax concerning previous years -
452
Income tax expense 3.068
- 344
78
4
Investment in subsidiaries
The separate financial statements of Incomas Holding ApS ('Parent Company') for the year ended 31
December 2022 were authorised for issue in accordance with a resolution of the directors on 22 June
2023.
This note provides a list of the significant accounting policies adopted in the preparation of these separate
financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.
In thousands EUR
2022
2021
Cost at 1 January 3.119
3.119
Additions for the year 712.348
-
Disposals for the year - 3.125
-
Cost at 31 december 712.342
3.119
Value adjustments at 1 January 113.109
42.234
Disposals for the year - 709.201
-
Exchange adjustments - 328
10
Net profit/loss for the year 1.079.803
109.141
Dividend to the Parent Company - 477.502
- 38.276
Other equity movements, net - 5.881
-
Value adjustments at 31 December -
113.109
Equity investments with negative net asset value amortised over receivables -
1.438
Carrying amount at 31 December 712.342
117.666
Investments in subsidiaries are specified as follows:
Name of entity Place of registered office Share capital Votes and ownership
In Commodities A/S Aarhus TEUR 3,114 100%=>0%
In Commodities Global ApS Aarhus TEUR 5 100%
In Commodities US ApS Aarhus TEUR 5 100%=>0%
In Commodities PV ApS Aarhus TEUR 5 100%
79
5
Other fixed asset investments
In thousands EUR
2022
2021
Cost at 1 January -
-
Additions for the year 144.337
-
Cost at 31 december 144.337
-
Carrying amount at 31 December 144.337
-
6
Other fixed asset investments
In thousands EUR
2022
2021
Tax loss carry-forward -
- 721
Transferred to deferred tax asset -
-
-
- 721
Deferred tax asset
Calculated tax asset -
721
Carrying amount -
721
The recognised tax asset comprises tax loss carry-forwards expected to be utilised within the next year.
7
Other investments at fair value
Value
adjustment,
income
statement
Fair value at
31 December
Shares - 1.968
65.177
Bonds - 1.115
135.173
Total
200.350
8
Share capital
The share capital is broken as the following:
Number
Nominal value
A-shares
6.457.533
867
B-shares
377.570
50
Total
917
80
9
Distribution of profit
In thousands EUR
2022
2021
Extraordinary dividend paid
304.175
31.246
Reserve for net revaluation under the
equity method
- 112.781
70.885
Retained earnings
883.329
7.198
Total
1.074.723
109.329
10
Long-term debt
In thousands EUR
2022
2021
Payments due within 1 year are recognised in short-term debt.
Other debt is recognised in long-term debt.
The debt falls due for payment as specified below:
Payables to owner and Management
After 5 years -
-
Between 1 and 5 years 173.374
-
Long-term part 173.374
-
Within 1 year -
-
173.374
-
81
11 Contingent liabilities and commitments
In thousands EUR
2022 2021
Charges and security
The following assets have been placed as security with bankers:
Investments in subsidiaries limited to the value of -
117.666
of to meet standard requirements related to credit risk
Guarantee obligations
The parent company has placed payment guarantees to subsidiaries' counterparties
197.256
-
The parent company has provided a limited surety bond of TEUR 40,341 for In Commodities A/S to
credit institutions. The total debt per 31 December 2022 is TEUR 0.
The parent company has provided an unlimited surety bond for In Commodities A/S to other credit
institutions. The total debt per 31 December 2022 is TEUR 0.
12
Related party transactions
Other related parties
Other related parties in the period 1 January 2021 to 31 December 2022 comprise the management of
subsidiaries as well as the Board of Directors and Executive Board of the subsidiaries together with
their immediate families.
Transactions
The Company has chosen only to disclose transactions which have not been made on an arm’s length
basis in accordance with section 98(c)(7) of the Danish Financial Statements Act.