CVR.no. 43 66 76 37
2022
Annual Report
Ultranav International ApS
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 2
TABLE OF CONTENT
Ultranav International at a glance ..................................................................... 3
Mission & vision ............................................................................................................... 4
Main activities .................................................................................................................. 5
Part of a large and diversified shipping group ................................................................. 6
Group key figures and ratios ............................................................................................ 7
Financial review ................................................................................................. 8
2022 financial performance ............................................................................................. 9
Our business .................................................................................................... 11
Sustainability .................................................................................................................. 12
Corporate governance ................................................................................................... 13
Signatures ........................................................................................................ 14
Statement by the Board of Directors and Executive Management ............................... 15
Independent Auditor’s Report ....................................................................................... 16
Consolidated financial statements ................................................................... 19
Consolidated income statement .................................................................................... 20
Consolidated balance sheet ........................................................................................... 21
Consolidated statement of cash flows ........................................................................... 22
Consolidated statement of changes in equity ................................................................ 23
Notes to the consolidated financial statements ............................................................ 24
Parent company financial statements .............................................................. 73
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 3
ULTRANAV INTERNATIONAL AT A GLANCE
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 4
Excellence
We seek to contribute to
competitiveness to our customers
by anticipating and meeting their
needs.
We encourage creativity and
innovation, introducing solutions
that are beyond the ordinary.
We strive to continuously improve
the quality and effectiveness of
services rendered.
Passion
We believe that personal
commitment and work well
done makes a difference.
We challenge ourselves to
create value and to exceed
customers’ expectations.
We are passionate about our
work and our company.
Integrity
We act in an ethical manner,
focused on sustainability and
safeguarding our reputation.
We encourage personal and
professional development and a
fair balance between work and
private life.
We promote team spirit in a
multicultural environment,
without discrimination of any
kind.
Safety
We are committed to developing
and stimulating a safe working
culture onboard ships and ashore.
We place safety first, to keep
health, life, environment,
cargoes, and assets free of risks.
We consider safety an integral
part of our mindset and key to
our business success.
Core values
MISSION & VISION
We aspire to be a partner you can
trust who provides efficient and safe
maritime transportation services to
the mutual benefit of our customers,
employees, communities and the
environment.
A partner you
can trust
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 5
MAIN ACTIVITIES
Tankers
Through Ultratank, we operate a modern fleet of
stainless-steel chemical carriers of 20,000
deadweight tonnage (“dwt”) mainly in the East and
West Coasts of South America and the Caribbean.
We are also active in the clean petroleum product
segment through the ownership and operation of
MR (medium range) tankers (40,000-55,000 dwt)
under the business unit Austral Product Tankers.
Additionally, via Cape Tankers, we offer niche
services in the transportation of crude oil and fuel
oil, operating Panamax vessels between 60,000 to
75,000 dwt and Aframax vessels ranging between
100,000 and 120,000 dwt, mainly in the Americas.
Dry bulk
Our dry bulk units Ultrabulk and Horizon serve a
wide range of dry bulk segments. The fleet
transports numerous types of dry cargo, but core
products include minerals, coal, fertilizers, grains,
salt and steel.
The fleet size qualifies the Group as one of the
world’s leading dry bulk operators within the
Handysize, Supramax and Panamax segments, as
well as the specialised MPP and parcelling services.
The trading platform supports its customers’ local
and worldwide requirements with offices all over
the world, ready to cater to the needs of our
customers. Long-term partnerships with close
customers combined with a freight trading
approach and a strong focus on risk management
are the core of our dry bulk business.
Gas carriers
Ultranav International is one of the main
shareholders of Navigator Gas, holding around 28 %
of its outstanding common stock.
Navigator is the owner and operator of the world’s
largest fleet of handysize liquefied gas carriers and
is a global leader in the seaborne transportation of
petrochemical gases, such as ethylene and ethane,
liquefied petroleum gas and ammonia to energy
companies, industrial users and commodity traders.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 6
PART OF A LARGE AND DIVERSIFIED SHIPPING GROUP
Ultranav International ApS Group is part of the
Ultranav Group, a privately owned shipping
company active for over six decades and operating
globally with offices in 17 countries.
Through twelve business units, the Ultranav Group
operates in five market segments: oil, gas, dry
bulk, coastal trades, and towage & offshore.
Ultranav operates a fleet of gas and chemical
carriers, tankers for crude oil and clean petroleum
products, bulk carriers, feeder container ships,
multipurpose vessels, harbour tugs, PSVs, AHTS,
pusher tugs, barges and pilot boats.
As of 31 December 2022, the Ultranav Group
counts 3,743 employees (sea and shore) and
operates a fleet of 422 ocean going vessels and
tugs.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 ULTRANAV INTERNATIONAL AT A GLANCE | PAGE 7
GROUP KEY FIGURES AND RATIOS
INCOME STATEMENT (USD '000)
[A]
2022
[A]
2021
[B]
2020
[B], [C]
2019
[B], [C]
2018
Revenue
3,116,315
2,445,766
696,536
720,457
654,111
Gross profit (Net earnings from shipping activities)
552,989
335,258
148,317
168,479
120,706
Operating profit before depreciation, amortization and impairment loss (EBITDA)
478,273
274,529
127,156
143,219
93,940
Operating profit (EBIT)
302,261
75,938
66,692
49,712
-8,433
Net financials
-12,808
-29,319
-4,070
-14,701
-16,321
Profit before tax
309,873
43,110
62,622
35,011
-24,754
Net result of continuing operations
304,002
40,831
62,622
35,011
-24,754
Net result of discontinuing operations
-
-10,792
2,877
-
-
Net result
304,002
30,039
65,499
35,011
-24,754
STATEMENT OF FINANCIAL POSITION (USD '000)
Non-current assets
947,770
984,522
656,446
741,693
804,044
Current assets
1,005,072
595,304
292,359
291,317
210,681
Total assets
1,952,842
1,579,856
948,805
1,033,010
1,014,725
Equity, incl. non-controlling interests
1,054,253
769,674
555,881
531,965
527,370
Non-controlling interests
20,174
13,672
9,158
6,332
2,165
Non-current liabilities
404,460
355,092
230,029
297,918
319,730
Current liabilities
494,130
455,090
162,895
203,127
167,625
Net interest-bearing (liabilities)/assets, including leases
91,300
-179,408
-97,131
-217,741
-310,224
Net interest-bearing (liabilities)/assets, excluding leases
402,539
130,713
-32,925
-121,542
-169,640
Cash and cash equivalents, including restricted cash
410,313
169,289
163,012
67,426
28,710
CASH FLOW (USD '000)
From operating activities
462,373
263,860
201,014
152,284
68,898
From investing activities
-100,502
-246,578
43,251
-36,513
7,689
- of which relates to investment in tangible assets
-109,436
-90,558
25,199
-61,305
-26,302
From financing activities
-136,555
-99,523
-148,679
-77,055
-138,814
Total net cash flow
225,315
-82,241
95,586
38,716
-62,227
Change in restricted cash
-11,145
-5,663
6,951
-2,678
4,624
Total net cash flow, excluding changes in restricted cash
236,460
-76,578
88,635
41,394
-57,603
FINANCIAL RATIOS
Gross profit margin (Net earnings from shipping activities margin)
17.7%
13.7 %
21.3 %
23.4 %
18.5 %
EBITDA margin
15.3%
11.2 %
18.3 %
19.9 %
14.4 %
Return on equity (ROE)
[D]
28.8%
3.9 %
11.8 %
6.6 %
-4.4 %
Equity ratio
[D]
54.0%
48.7 %
58.6 %
51.5 %
52.0 %
[A] Key figures and ratios for the financial years 2022 and 2021 have been adjusted to reflect the business combination of entities under common control which were completed in November 2022.
[B] Comparative key figures and ratios for the period 2018 – 2020 were not updated to reflect the business combination of entities under common control, which were completed in November 2022
[C] Comparative key figures and ratios, related to profit or loss, for the period 2018 – 2019 were not updated to reflect the divestment of the Group’s gas carrier activities which were completed in August 2021.
[D] The Return on equity and equity ratio for 2021 and Equity ratio are based upon the equity at the end of 2021 as comparatives for the preceding year are not restated.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 FINANCIAL REVIEW | PAGE 8
FINANCIAL REVIEW
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 FINANCIAL REVIEW | PAGE 9
2022 FINANCIAL PERFORMANCE
Results
Revenues increased to USD 3,116 million, a 27%
increase on last year’s revenue. The increase in
revenues was linked to positioning of vessels and a
strong performance across the tanker and dry bulk
segments.
Gross profit increased to USD 553 million
corresponding to a gross margin of 17.7%, against
13.7% in 2021.
EBITDA grew to USD 478 million against USD 275
million last year, corresponding to an EBITDA
margin of 15.3% (11.2% in 2021).
Depreciations amounted to USD 178 million (USD
207 million in 2021), mainly related to depreciation
on right-of-use assets and own vessels. Gain from
sale of vessels amounted to USD 37 million.
Financial items amounted to a net expense of USD
13 million (net expense of USD 29 million in 2021).
The majority of financial expenses relate to interest
expenses on lease liabilities and bank loans.
Net result from continuing operations amounted to
a profit of USD 304 million (USD 40 million in 2021),
which is significantly above the expectations set out
last year. The profit is related to the favourable
market conditions and strong positioning gains.
Balance Sheet
Total assets increased to USD 1,953 million, against
USD 1,580 million in 2021. The increase in total
assets relate primarily to a strong cash generation
(USD 225 million).
Total liabilities increased to USD 899 million
compared to USD 810 million in 2021. The majority
of liabilities comprise of lease liabilities which
amounted to USD 311 million at the end of 2022
(USD 310 million at the end of 2021), as well as
interest bearing loans of USD 276 million at the end
of 2022 (USD 200 million at the end of 2021).
Total equity increased to USD 1,054 million from
USD 770 million in 2021, driven by profit for the year
of USD 304 million.
Return on equity was 28.8% (3.9% in 2021) and
equity ratio was 54.0% at the end of 2022 against
48.7% at the end of 2021.
Cash flow
The cash flow for the year, excluding restricted cash,
netted at an inflow of USD 236 million against a net
outflow of USD 71 million last year.
Cash flow from operating activities was an inflow of
USD 462 million (USD 264 million in 2021), driven by
cash flows generated from the shipping activities,
while cash flow from investing activities was an
outflow of USD 101 million (outflow of USD 247
million in 2021).
Cash flow from financing activities was an outflow
of USD 137 million (outflow of USD 100 million in
2021) and is mainly related to repayment of lease
liabilities and interests (USD 172 million) which
were only partly offset by net inflows from
borrowings at financial institutions (USD 71 million).
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 FINANCIAL REVIEW | PAGE 10
Business combination of entities under
common control
In 2022, the Ultranav Group completed a
simplification of its group structure through a
redomiciling of Ultranav International S.A (now
“Ultranav International ApS”) to Denmark and a
subsequent merger of Ultranav International ApS
(continuing) and Ultranav Denmark ApS. Both were
wholly-owned subsidiaries of the Ultranav Group.
The Ultranav Group has been present in Denmark
for more than 15 years via its dry bulk activities
(Ultrabulk A/S) and its fleet of gas carriers (now
merged with Navigator Holdings Ltd). Today, the
Danish holding company is also the owner of the
Ultranav Group’s international activities.
The reason for choosing Denmark as the new
domicile for the international holding company is
that Copenhagen is recognised as a shipping cluster
with good access to qualified people within the
shipping industry and, along with the Ultranav
Group’s historic presence in Denmark and a stable
political environment with support for the shipping
industry, it was a natural step to combine the
holding of the Ultranav Group’s international
acitivities in Denmark.
For more information about the financial impact of
the merger, reference is made to note 1.3 to the
Financial Statements.
Dividends
The Board of Directors has not proposed to pay any
ordinary dividend for the year.
Outlook
Based on the Group’s current coverage, and the
expected market conditions, the Group expects net
result of the Group and the parent company in the
range of USD 125 – 175 million.
Financial risk management
A description of the financial risks, to which the
Group is exposed through its shipping activities, is
included in note 5.4 to the Consolidated Financial
Statements.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 OUR BUSINESS | PAGE 11
OUR BUSINESS
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 OUR BUSINESS | PAGE 12
SUSTAINABILITY
The time to act is now! Ultranav takes its
responsibility for the environment very
seriously and we are committed to reduce
emissions and support the development of
zero emission vessels in the global fleet.
Worldwide focus on the climate is intensifying
rapidly. According to IMO, shipping accounts for
85% of the world trade and 2.5% of global
greenhouse gas emissions. While shipping remains
the most carbon-efficient means of global
transportation, the industry still has an important
role to play on the road to a sustainable future.
Climate targets
Ultranav has identified the following climate
targets:
• By 2030, Ultranav is committed to reducing the
carbon intensity of the fleet by 50% compared
to 2008.
• By 2045, Ultranav aims to have a zero-emission
fleet in domestic commercial operations.
• By 2050, Ultranav is committed to having a zero-
emission fleet in international commercial
operations and to be climate neutral.
Climate actions
• Chartered fleet: Ultranav is committed to
chartering zero emission vessels when they
become commercially viable and available from
2030 latest.
• Owned fleet: From 2021, Ultranav has been
committed to ordering only zero emission ready
vessels and from 2030 only zero emission
vessels.
• Ultranav is committed to developing and
improving digital and other management tools
to measure GHG emissions from the full supply
chain to compare activities and optimise
operations.
• Ultranav will measure and disclose GHG
emission intensity and total GHG emissions from
owned and operated vessels.
Decarbonisation strategy
Ultranav has identified 8 interconnected pillars that
will navigate us into a lower emission future.
More information
Ultranav.dk/sustainability
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 OUR BUSINESS | PAGE 13
CORPORATE GOVERNANCE
The Board of Directors and Executive Management
of Ultranav International ApS are convinced that
efficient and clear division of responsibilities as well
as transparent decision-making processes are
prerequisites of a Group’s long-term value creation.
Ultranav International ApS therefore reviews at
least annually the Group’s corporate governance
practices and principles in accordance with
legislation, customs and recommendations. As part
of this process, the Board and Executive
Management review the Group’s strategy,
organisation, business processes, risks, control
mechanisms and relations with its shareholders,
customers, employees and other stakeholders.
Remuneration of Board of Directors
The Board of Directors has refrained from receiving
any compensation for their work in 2022,
unchanged from 2021. In 2023, likewise, the
members of the Board of Directors intend to refrain
from receiving any compensation for their work. If
the Group’s activities require a temporary, but
extraordinary workload by the Board, a fee may be
authorised. Likewise, the members of the Board
receive no incentive pay for their work on the
Board.
Remuneration of Executive
Management
As of January 2023, Executive Management
comprises of two members who are employed on
contractual terms fixed by the Board of Directors.
The members of Executive Management receive a
competitive remuneration package consisting of a
fixed and variable salary, and benefits such as a
company phone.
ULTRABULK ANNUAL REPORT 2021 ACCOUNTS AND PERFORMANCE | PAGE 14
SIGNATURES
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 SIGNATURES | PAGE 15
STATEMENT BY THE BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 SIGNATURES | PAGE 16
INDEPENDENT AUDITOR’S REPORT
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 SIGNATURES | PAGE 17
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 SIGNATURES | PAGE 18
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
CVR no. 33 77 12 31
mne33226
mne35447
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 SIGNATURES | PAGE 19
CONSOLIDATED FINANCIAL STATEMENTS
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | PAGE 20
CONSOLIDATED INCOME STATEMENT
PROFIT OR LOSS
1 JANUARY – 31 DECEMBER
USD thousands
Note
2022
2021
Revenue
2.1
Vessel operating costs and voyage related expenses
2.2
-2,563,326
-2,110,508
Gross profit (Net earnings from shipping activities)
Other income
Other external expenses
6.2
-33,708
-31,733
Staff costs
2.3, 6.1
-42,354
-28,996
Operating profit before depreciation (EBITDA)
Depreciations and amortisations
3.4
-177,530
-206,941
Impairment charge on goodwill
3.1
-35,172
Gain/(loss) from sale of vessels, net
3.2
Operating profit (EBIT)
Share of associates’ & joint ventures’ profit after tax
3.5
-3,509
Financial income
5.1
Financial expenses
5.1
-26,279
-32,486
Profit/loss before tax
Tax
2.4
-5,871
-2,279
Profit/loss for the period – continuing operations
Gain from divestment of operations
2.5
-12,932
Profit/loss from discontinuing operations
2.5
Profit/loss for the period
Attributable to
Equity holders of the parent
Non-controlling interests
Profit/loss for the period
STATEMENT OF OTHER COMPREHENSIVE INCOME
1 JANUARY – 31 DECEMBER
USD thousands
Note
2022
2021
Profit/loss for the period
Items that will be reclassified subsequently to the
Consolidated Profit or Loss when specific conditions are
met:
Cash flow hedges, gain/loss for the year (net)
5.6
-12,669
Income tax relating to other comprehensive income
-429
Other items
-87
Other comprehensive income, net of tax
-12,756
Total comprehensive income
Attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | PAGE 21
CONSOLIDATED BALANCE SHEET
ASSETS
USD thousands
Note
2022
2021
Goodwill & contractual rights
3.1
Vessels & right-of-use assets
3.2
Fixtures, fittings, and equipment
3.2
Intangible & tangible assets
Investments in associates
3.5
Loans to related companies
4.1
Trade receivables from related companies
4.1
Derivative financial instruments
5.6
Receivable from subleases
Deposits
Other receivables
4.1
Deferred Tax
2.4
Financial assets, non-current
Total non-current assets
Inventories
4.2
Trade and other receivables
4.1
Trade receivables from related companies
4.1
Loans to related companies
4.1
Receivables from subleases
Prepayments
4.1
Derivative financial instruments
5.6
Other financial assets
Cash and cash equivalents, incl. restricted cash
4.3
Assets classified as held for sale
3.3
Current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
USD thousands
Note
2022
2021
Share capital
6.8
Retained earnings
Other reserves
Total equity of majority interests
Non-controlling interest
Total Equity
Other payables
4.4
Interest bearing loans and borrowings
5.2
Lease liabilities
5.3
Derivative financial instruments
5.6
Loans payables to related companies
4.4
Deferred tax
2.4
Total non-current liabilities
Trade and other payables
4.4
Payables to related companies
4.4
Loans payables to related companies
4.4
Interest bearing loans and borrowings
5.2
Lease liabilities
5.3
Derivative financial instruments
5.6
Income tax payable
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | PAGE 22
CONSOLIDATED STATEMENT OF CASH FLOWS
Amount in USD thousands
Note
2022
2021
Profit/(loss) before tax – continuing operations
Profit/(loss) before tax – discontinuing operations
2.5
-10,792
Instalments received from sub-lease receivables
Tax paid
-354
-1,436
Adjustment of other non-cash operating items
6.4
Change in working capital
6.5
-29,415
-13,285
Net cash flows from operating activities
Dividends received
Investments in tangible assets
-109,436
-90,558
Sale of tangible assets
Investment in associates
-7,933
-25,332
Loans to related companies, net
-126,831
-156,008
Interest on loans to related parties
Divestment of subsidiaries and activities
2.5
-20,442
Investment in other financial assets
-7,106
Change in restricted cash
4.3
-11,145
-5,663
Other
Net cash flow from investing activities
-100,502
-246,578
Free cash flow
Dividends paid to equity minority holders
-5,053
-290
Raising of loans from financial institutions
6.6
Repayment of loans to financial institutions
6.6
-89,075
-19,979
Interest payments on loans to financial institutions
-7,579
-12,676
Raising of loans from related parties
Repayment of loans from related parties
-19,202
-16,588
Interest payments on loans from related parties
-4,011
Repayment of lease liabilities
6.6
-161,312
-218,671
Interest payments on lease liabilities
-10,323
-17,575
Other
-15,405
Net cash flows from financing activities
-136,555
-99,523
Net change in cash and cash equivalents
-82,241
Amount in USD thousands
Note
2022
2021
Cash and cash equivalents at 1 January
Net change in cash and cash equivalents
-76,578
Revaluation of cash deposits in foreign currencies
Cash and cash equivalents at 31 December
Restricted cash
4.3
Cash and cash equivalents
Cash and cash equivalents, including restricted cash at 31 December
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | PAGE 23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
USD thousands
Share
capital
Cash flow
hedge
reserve
Retained earnings
Total
Non-controlling
interests
Total
equity
Equity as 1 January 2022
18,311
17,355
720,336
756,002
13,672
769,674
Net result
-
-
291,194
291,194
12,808
304,002
Cash flow hedges
-
-16,882
-
-16,882
-
-16,882
Revaluation of cash deposit in foreign currencies
-
4,213
-
4,213
-
4,213
Other changes
-
-
-89
-89
-
-89
Other comprehensive income for the year
-
-12,669
89
-12,758
-
-12,758
Total comprehensive income for the year
-
-12,669
291,105
278,436
12,808
291,244
Distributed dividend
-
-
-
-
-5,053
-5,053
Other transactions with shareholders
-
-
-359
-359
-1,253
-1,612
Transactions with shareholders
-
-
-359
-359
-6,306
-6,665
Equity as 31 December 2022
18,311
4,686
1,011,082
1,034,079
20,174
1,054,253
Equity as 1 January 2021
18,311
-9,033
707,211
716,489
13,172
729,661
Net result
-
-
29,249
29,249
790
30,039
Cash flow hedges
-
26,388
-
26,388
-
26,388
Other changes
-
-
-429
-429
-
-429
Other comprehensive income for the year
-
26,388
-429
25,959
-
25,959
Total comprehensive income for the year
-
26,388
28,820
55,208
790
55,998
Distributed dividend
-
-
-15,695
-15,695
-290
-15,985
Other transactions with shareholders
-
-
-
-
-
-
Transactions with shareholders
-
-
-15,695
-15,695
-290
-15,985
Equity as 31 December 2021
18,311
17,355
720,336
756,002
13,672
769,674
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | PAGE 24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SECTION 1: BASIS OF PREPARATION ................................................................ 25
1.1 Basis of reporting ..................................................................................................... 26
1.2 Significant accounting judgments and estimates ..................................................... 29
1.3 Business combination under common control ........................................................ 30
1.4 Redomicilation and change in jurisdiction ............................................................... 33
SECTION 2: PROFIT OR LOSS ............................................................................ 34
2.1 Revenues .................................................................................................................. 35
2.2 Vessel operating costs and voyage related expenses .............................................. 36
2.3 Staff costs ................................................................................................................. 36
2.4 Tax ............................................................................................................................ 37
2.5 Discontinued operations .......................................................................................... 38
SECTION 3: INVESTED CAPITAL ......................................................................... 39
3.1 Intangible assets ...................................................................................................... 40
3.2 Tangible assets & right-of-use assets ....................................................................... 42
3.3 Assets classified as held for sale .............................................................................. 46
3.4 Depreciations and amortisations ............................................................................. 46
3.4 Investments in associates ........................................................................................ 47
3.5 Investments in Joint Ventures .................................................................................. 48
3.6 Business combinations ............................................................................................. 49
SECTION 4: WORKING CAPITAL ........................................................................ 50
4.1 Receivables and prepayments .................................................................................. 51
4.2 Inventories ............................................................................................................... 52
4.3 Restricted cash ......................................................................................................... 52
4.4 Trade and other payables......................................................................................... 53
SECTION 5: CAPITAL STRUCTURE ...................................................................... 54
5.1 Financial items.......................................................................................................... 55
5.2 Interest bearing loans and borrowings .................................................................... 55
5.3 Lease liabilities ......................................................................................................... 56
5.4 Risks arising from financial instruments ................................................................... 58
5.6 Derivative financial instruments .............................................................................. 61
SECTION 6: OTHER NOTES ................................................................................ 66
6.1 Remuneration of management ................................................................................ 67
6.2 Fee to the statutory auditors ................................................................................... 67
6.3 Contingent liabilities & Commitments ..................................................................... 67
6.4 Other non-operating cash items (cash-flow) ............................................................ 69
6.5 Change in working capital (cash-flow)...................................................................... 69
6.6 Changes in liabilities (cash flow) ............................................................................... 70
6.7 Related party disclosures ......................................................................................... 71
6.8 Share capital ............................................................................................................. 71
6.9 Events after the balance sheet date ......................................................................... 71
6.10 Group structure ..................................................................................................... 72
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 25
SECTION 1: BASIS OF PREPARATION
1.1 Basis of reporting
1.2 Significant accounting judgements and estimates
1.3 Redomicilation and change in jurisdiction
1.4 Business combination under common control
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 26
1.1 BASIS OF REPORTING
§ GENERAL ACCOUNTING POLICIES
Ultranav International ApS is a company domiciled in Denmark.
The Consolidated Financial Statements of Ultranav International ApS for 2022 have been
prepared in accordance with International Financial Reporting Standards as adopted by the
EU and additional requirements of the Danish Financial Statements Act.
Measurement basis
The Consolidated Financial Statements have been prepared on the historical cost basis
except certain financial assets and liabilities. These financial assets and liabilities have been
measured at fair value.
The Consolidated Financial Statements have been presented in USD thousands except when
otherwise indicated. The DKK/USD rate applied at 31 December 2022 was 694.73 (2021:
656.12) and the average DKK/USD applied for the year was 707.82 (2021: 629.18).
Apart from the general accounting policies, which are summarised in this note, the Group’s
accounting policies are described in each of the individual notes to the Consolidated Financial
Statements to which they relate.
The accounting policies, as described below and in the respective notes, have been used
consistently in respect of the financial year and the comparative figures.
New and amended accounting standards effective in 2022
Management has analysed the effect of new and amended standards, including relevent
interpreations, which are effective for the financial year 2022. The analysis showed that
these did not have a material impact on the consolidated financial statements.
New and amended accounting standards which are not yet effective
The new and amended standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the consolidated financial statements are either insiginificant
or irrelevant to the Group. The Group intends to adopt these new and amended standards
and interpretations, if applicable, when they become effective. Management does not
anticipate any significant impact on future periods from the adoption of these new
amendments.
Basis of consolidation
The Consolidated Financial Statements comprise the Parent Company Ultranav International
ApS and subsidiaries in which Ultranav International ApS has control (the Group), i.e. the
power to govern the financial and operating policies so as to obtain benefits from its
activities. Control is obtained when the Company directly or indirectly holds more than 50%
of the voting rights in the subsidiary or which it, in some other way, controls.
Enterprises over which the Group exercises significant influence, but which it does not
control, are considered associates. Significant influence is generally obtained by direct or
indirect ownership or control of more than 20% of the voting rights but less than 50%.
When assessing whether Ultranav International ApS exercises control or significant influence,
potential voting rights which are exercisable at the balance sheet date are taken into account.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 27
1.1 BASIS OF REPORTING (CONTINUED)
§ GENERAL ACCOUNTING POLICIES
Basis of consolidation (continued)
The Consolidated Financial Statements has been prepared as a consolidation of the Parent
Company's and the individual subsidiaries' financial statements prepared according to the
Group accounting policies.
On consolidation, intra-group income and expenses, shareholdings, intra-group balances and
dividends, and realised and unrealised gains on intra-group transactions are eliminated.
Unrealised gains on transactions with associates are eliminated in proportion to the Group's
ownership share of the enterprise. Unrealised losses are eliminated in the same way as
unrealised gains to the extent that impairment has not taken place.
The accounting items of subsidiaries are included in full in The Consolidated Financial
Statements.
Non-controlling interests
Non-controlling interests represent the portion of profit or loss and net assets not held by
Ultranav International ApS and are presented separately in the income statement and within
equity in the consolidated balance sheet, separately from the parent shareholders’ equity.
Initially the non-controlling interest is recognised based on their share of the fair value of the
assets and liabilities acquired.
Foreign currency translation
For each of the reporting entities in the Group, a functional currency is determined. The
functional currency is the currency used in the primary financial environment in which the
reporting entity operates. Transactions denominated in other currencies than the functional
currency are foreign currency transactions.
On initial recognition, foreign currency transactions are translated to the functional currency
at the exchange rates at the transaction date. Foreign exchange differences arising between
the transaction date and at the date of payment are recognised in the income statement as
financial income or financial expenses.
Receivables and payables and other monetary items denominated in foreign currencies are
translated to the functional currency at the exchange rates at the balance sheet date.
The difference between the exchange rates at the balance sheet date and at the date at
which the receivable or payable arose or was recognised in the latest annual report is
recognised in the income statement as financial income or financial expenses.
In The Consolidated Financial Statements, the income statements of entities with another
functional currency than USD are translated at the exchange rates at the transaction date
and the balance sheet items are translated at the exchange rates at the balance sheet date.
An average exchange rate for each month is used as the transaction date exchange rate to
the extent that this does not significantly distort the presentation of the underlying
transactions.
Foreign exchange differences arising on translation of the opening balance of equity of such
foreign operations at the exchange rates at the balance sheet date and on translation of the
income statements from the exchange rates at the transaction date to the exchange rates at
the balance sheet date are recognised in other comprehensive income and presented in
equity under a separate translation reserve.
Applying materiality
The financial statements are a result of processing large numbers of transactions and
aggregating those transactions into classes according to their nature or function. When
aggregated, the transactions are presented in classes of similar items in the financial
statements. If a line item is not individually material, it is aggregated with other items of a
similar nature in the financial statements or in the notes.
There are substantial disclosure requirements throughout IFRS. Management provides
specific disclosures required by IFRS unless the information is considered immaterial to the
economic decision-making of the users of these financial statements or not applicable.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 28
1.1 BASIS OF REPORTING (CONTINUED)
§ GENERAL ACCOUNTING POLICIES
Statement of Cash Flows
The Statement of Cash Flows shows the cash flows from operating, investing and financing
activities for the year, the year's changes in cash and cash equivalents as well as cash and
cash equivalents at the beginning and end of the year.
Cash flows from operating activities are calculated according to the indirect method as the
profit/loss before tax adjusted for non-cash operating items, changes in working capital,
interest payments, dividends and income taxes paid.
Cash flows from investing activities comprise payments in connection with acquisitions and
disposals of businesses and of intangible assets, property, plant, and equipment and other
non-current assets as well as acquisition and disposal of securities not classified as cash and
cash equivalents, along with movements in restricted cash.
Cash flows from financing activities comprise changes in the share capital and related costs
as well as the raising of loans, repayment of interest-bearing debt and leases, interest
payments, acquisition and disposal of treasury shares and payment of dividends to
shareholders.
Cash and cash equivalents comprise cash and short-term marketable securities with a term
of three months or less at the acquisition date which are subject to an insignificant risk of
changes in value.
Cash flows in other currencies than the functional currency are translated using average
exchange rates unless these deviate significantly from the rate at the transaction date.
Statement of changes in equity
Dividends are recognised as a liability at the date when they are adopted at the annual
general meeting (declaration date). The proposed dividend payment for the year is disclosed
as a separate item under equity. Interim dividends are recognised as a liability at the date
when the decision to pay interim dividends is made.
The translation reserve comprises foreign exchange differences arising on translation of
financial statements of entities that have a functional currency different from USD. On full or
partial realisation of the net investment, the foreign exchange adjustments are recognised in
the income statement.
The hedging reserve comprises the cumulative net change in the fair value of hedging
transactions, and net of tax, that qualify for recognition as a cash flow hedge and where the
hedged transaction has not been realised.
Financial ratios
Financial ratios are calculated in accordance with the Recommendations and Ratios issued
by The Danish Finance Society, unless specifically stated.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 29
1.2 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
§ ACCOUNTING POLICIES
The preparation of the Group's Consolidated Financial Statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets, and liabilities and the disclosure of contingent liabilities, at the
end of the reporting period. However, uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amounts of
asset and liability affected in future periods.
Significant judgements
In the process of applying the accounting policies, management has made the following
judgements which are considered to be significant to the Consolidated Financial
Statements:
Impairment test of goodwill (note 3.1)
Assessing indicators of impairment and cash-generating units of vessels (note 3.2)
Significant estimates
Management has made the following estimates which are considered to be significant to
the Consolidated Financial Statements:
Measurement of non-lease components (note 5.3)
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 30
1.3 BUSINESS COMBINATION UNDER COMMON CONTROL
§ ACCOUNTING POLICIES
Business combinations of entities under common control, which do not affect non-
controlling shareholders of the receiving entity, are combined on a predecessor basis.
In applying the book-value method to a business combination under common control, the
assets and liabilities received from the transferred company are measured using the
transferred entity’s book values. Any differences between consideration paid and the book
value of the assets and liabilities received are recognised in equity.
The business combination is made using the retrospective approach in which the opening
balance and comparative information are restated to include the assets and liabilities of the
transferred entity.
Merger of Ultranav International ApS and
Ultranav Denmark ApS
In November 2022, the Group completed the merger between Ultranav International ApS
(the receiving entity) and Ultranav Denmark ApS (the transferred company), a sister
company to Ultranav International ApS. The merger was carried out as part of a
simplification of the current group structure. The transferred company, Ultranav Denmark
ApS, was the former holding company of the Group’s activities in Denmark.
In line with the accounting policies, opening balances and comparative information was
restated using the retrospective approach to include the assets and liabilities of the
transferred entity from 1 January 2021.
The tables below comprise an overview of the combined opening balance of the receiving
entity and the transferred entity at 1 January 2022.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 31
1.3 BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)
Combined assets at 1 January 2022
USD thousands
Receiving
Entity
Transferred
Entity
Eliminations
Combined
Vessels & right-of-use assets
230,805
228,682
-
459,487
Investments in associates
269,686
26,258
-
295,944
Loans and trade receivables from related companies
24,746
160,395
-
185,141
Other non-current assets
9,604
36,343
-1,967
43,980
Non-current assets
534,841
451,678
-1,967
984,552
Cash and cash equivalents, incl. restricted cash
33,216
136,073
-
169,289
Inventories
19,577
35,133
-
54,710
Other current assets
168,654
202,651
-
371,305
Current assets
221,447
373,857
-
595,304
TOTAL ASSETS
756,288
825,535
-1,967
1,579,856
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 32
1.3 BUSINESS COMBINATION UNDER COMMON CONTROL (CONTINUED)
Combined equity and liabilities at 1 January 2022
USD thousands
Receiving
Entity
Transferred
Entity
Eliminations
Combined
Equity
527,460
242,214
-
769,674
Interest bearing loans and borrowings
37,840
149,978
-
187,818
Lease liabilities
25,187
125,667
-
150,854
Other non-current liabilities
14,827
1,593
-
16,420
Non-current liabilities
77,854
277,238
-
355,092
Interest bearing loans and borrowings
3,863
9,929
-
13,792
Lease liabilities
31,051
128,216
-
159,267
Other current liabilities
116,060
167,938
-1,967
282,031
Current liabilities
150,974
306,083
-1,967
455,090
TOTAL EQUITY AND LIABILITIES
756,288
825,535
-1,967
1,579,856
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 33
1.4 REDOMICILATION AND CHANGE IN JURISDICTION
The Consolidated Financial Statements of Ultranav International ApS (the Company) are
prepared in accordance with IFRS. In 2022, the Company redomiciled to Denmark, and
therefore it became subject to EU interpretation of IFRS. Following this change in
jurisdiction, the Company must now prepare its Financial Statements in accordance with
IFRS as adopted by EU including Danish or European interpretations hereof.
Through an evaluation of the Company’s accounting policies, management identified one
area where its accounting policies, along with consequential changes to comparative
information, had to be aligned with interpretations enforced in its new jurisdiction.
Management has concluded a need to revise the initial measurement made of its shares in
Navigator Holdings Ltd, which the Company received as remuneration through a
transaction completed in 2021, as EU interpretations in this area entails that the shares
must be measured at fair value using the share price on the transaction date (Navigator
Holdings Ltd is listed on the New York Stock Exchange).
Subsequent measurement of the shares held in Navigator Holdings Ltd. is recorded through
the equity method as the Company is regarded as a shareholder with significant influence.
As a result, Management has concluded that it is appropriate to adjust the excess of the
Company’s share of the fair value of net identifiable assets over the cost of investment, and
taking into account the fact the fleet of gas carriers makes up the majority of the identified
assets, through the fair value of the fleet of gas carriers at the transaction date when
applying the equity method.
Effect on opening equity on 1 January 2021 is nil, as the transaction was completed during
2021. Effect on closing equity on 31 December 2021, as well as other comprehensive
income for 2021, was USD 93m.
The tables below shows the effect from change in accounting policies, due to the
aforementioned change in jurisdiction, by line item in the profit or loss and the balance
sheet:
Profit or loss, USD thousands
Reported
2021
Change
Adjusted
2021
Operating profit (EBIT)
75,938
-
75,938
Share of associates’ profit after tax
-7,404
3,895
-3,509
Financial income
3,167
-
3,167
Financial expenses
-32,486
-
-32,486
Profit/loss before tax
39,215
3,895
43,110
Tax
-2,279
-
-2,279
Profit/loss for the period – continuing operations
36,936
3,895
40,831
Gain from divestment of operations
86,629
-99,561
-12,932
Profit/loss from discontinuing operations
2,140
-
2,140
Profit/loss for the period
125,705
-95,666
30,039
Other comprehensive income, net of tax
23,612
2,347
25,959
Total comprehensive income
149,317
-93,319
55,998
Balance sheet, USD thousands
Reported
2021
Change
Adjusted
2021
Investments in Joint Ventures & Associates
389,263
-93,319
295,944
Equity
862,993
-93,319
769,674
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 34
SECTION 2: PROFIT OR LOSS
2.1 Revenues
2.2 Vessel operating costs and voyage related expenses
2.3 Staff costs
2.4 Tax
2.5 Discontinuing operations
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 35
2.1 REVENUES
§ ACCOUNTING POLICIES
Revenue
Revenues from freight and time-charters are recognised as the services are rendered based
the percentage of completion method. According to the method, revenues are recognised
over the period from the vessel’s load date to the delivery of the cargo (Load to Discharge).
Demurrage is included if a claim is considered probable. Losses arising from time or voyage
charter are provided for in full when they become probable.
Realised gains and losses on derivatives, which are accounted for as hedges of revenue
transactions, are recognised in revenues.
Disaggregation of revenue
Revenues from contracts with customers are disaggregated by type of vessel and type of
contracts with customers.
As the Company is neither listed at any stock market, nor have debt or equity instruments
are traded in a public market, it has been decided not to apply IFRS 8 Operating Segments,
and not disclose any segment information.
USD thousands
2022
2021
Bulk carriers
2,485,058
2,033,248
Tankers
561,911
377,675
Other
69,346
34,843
Revenue by type of vessel
3,116,315
2,445,766
USD thousands
2022
2021
Income from freight
2,361,912
1,966,346
Income from Time-Charter
716,985
442,030
Other
37,418
37,390
Revenue by type of contract
3,116,315
2,445,766
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 36
2.2 VESSEL OPERATING COSTS AND VOYAGE
RELATED EXPENSES
§ ACCOUNTING POLICIES
Voyage expenses, time-charter hire and operating expenses are recognised as the services
are rendered bases the percentage of completion method. According to the method all spot
voyages and voyages servicing Contract of Affreightment (CoA) related expenses are
recognised over the period from the vessel’s load date to the delivery of the cargo (Load to
Discharge).
Expenses directly attributable to positioning the vessel to the loading port are capitalised
and expensed over the period from the vessel’s load date to the delivery of the cargo (Load
to Discharge).
Vessel operating costs and voyage related expenses comprise mainly of time charter hire,
bunker and port expenses, including realised gains or losses on bunker and FFA hedges,
which are accounted for as hedges of voyage related expenses and time charter hire.
Non-lease components of lease arrangements are described further in note 5.3 Lease
liabilities.
USD thousands
2022
2021
Bunkers
-606,684
-409,520
Other voyage related expenses
-444,734
-333,135
Voyage related expenses
-1,051,418
-742,655
Time-Charter hire, short-term leases
-1,369,215
-1,203,382
Operating expenses, long-term leases (non-lease component)
-106,830
-130,483
Operating expenses, own vessels
-35,863
-33,988
Time-Charter hire and operating expenses
-1,511,908
-1,367,853
Vessel operating costs and voyage related expenses
-2,563,326
-2,110,508
2.3 STAFF COSTS
§ ACCOUNTING POLICIES
Staff costs comprise wages and salaries, including incentives, to onshore employees.
USD thousands
2022
2021
Wages and salaries
-40,508
-27,077
Pensions – defined contribution plans
-1,339
-1,306
Other staff costs
-507
-613
Staff cost to on-shore employees
-42,354
-28,996
Staff costs
-42,354
-28,996
Average number of employees
147
138
The staff cost to onshore employees are recognised as “Staff costs” in profit or loss. Staff
cost to crew on vessels are recognised as “Vessel operating costs and voyage related
expenses”.
Remuneration of certain employees, who are remunerated by related companies, are
expensed as management fee, and consequently recognised as “Other external expenses”.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 37
2.4 TAX
§ ACCOUNTING POLICIES
Taxes
Ultranav International ApS is jointly taxed with other Danish companies in the Group, with
Ultranav International ApS (Parent Company) being the administration company for the
jointly taxed companies. The Danish corporation tax is allocated between the jointly taxed
companies in proportion to their taxable income. In relation to the shipping activities,
Ultranav International ApS participates in the Danish Tonnage Tax Scheme.
Companies that use tax losses in other companies pay the joint tax contribution to the
Parent Company at an amount corresponding to the tax value of the tax losses used.
Companies, whose tax losses are used by other companies, receive joint tax contributions
from the Parent Company corresponding to the tax value of the losses used (full
absorption). The jointly taxed companies are taxed under the tax prepayment scheme.
Tax for the year comprises current tax and changes in deferred tax for the year. The tax
expense relating to the profit/loss for the year is recognised in the income statement. Tax
attributable to entries directly under comprehensive income is recognised directly in other
comprehensive income.
USD thousands
2022
2021
Current tax on profit for the year
-7,248
-1,566
Deferred tax for the year
1,228
-692
Tax on profit for the year
-6,020
-2,258
Adjustments related to previous years – current tax
149
-21
Tax in the income statement
-5,871
-2,279
Computation of effective tax rate (%):
Statutory corporate income tax in Denmark
22 %
22 %
Effects from Tonnage Tax Scheme
-12.1 %
-20.8 %
Effects of adjustments related to prior years
0.0 %
-0.1 %
Deviation in foreign subsidiaries’ tax rates compared to the
Danish tax rate, net
-7.9 %
4,2 %
Effective tax rate
1.9 %
5.3 %
§ ACCOUNTING POLICIES (CONTINUED)
Tonnage taxation scheme and deferred tax
All significant Danish entities within the Group entered into the Danish tonnage taxation
scheme for a binding 10 year period with effect from 2017. Under the Danish tonnage
taxation scheme, taxable income is not calculated on the basis of income and expenses as
under the normal corporate taxation. Instead, taxable income is calculated with reference
to the tonnage used during the year. The taxable income for a company for a given period
is calculated as the sum of the taxable income from the activities under the tonnage
taxation scheme and the taxable income from the activities that are not covered by the
tonnage taxation scheme made up in accordance with the ordinary Danish corporate tax
system. If the participation in the Danish tonnage taxation scheme is abandoned, or if the
entities’ level of investment and activity is significant reduced, a deferred tax liability will
become payable.
For the taxable income which is made up in accordance to the ordinary corporate tax
system, a deferred tax is recognized at each period end and is accounted for using the
balance sheet liability method. Deferred tax assets, including the tax value of tax loss carry
forwards, are recognised under other non-current assets at the expected value of their
utilisation – either as a set-off against tax on future income or as a set-off against deferred
tax liabilities in the same legal tax entity and jurisdiction.
Deferred tax assets and liabilities are offset if the Company has a legally enforceable right
to set off current tax liabilities and tax assets or intends either to settle current tax liabilities
and tax assets on a net basis or to realise the assets and settle the liabilities simultaneously.
Deferred tax at 31 December 2022
The deferred tax receiveable relates to tax losses to be carried forward and amounted to
USD 0.6 million at the reporting date (2021: USD -0.7 million).
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 38
2.5 DISCONTINUED OPERATIONS
§ ACCOUNTING POLICIES
Discontinuing operations are excluded from the results of continuing operations and are
presented as a single amount as profit or loss after tax from discontinuing operations in the
statement of profit or loss. Discontinuing operations comprise of the divestment of Othello
Shipping Company S.A and Ultragas ApS along with its subsidiaries.
On 4
th
of August 2021, Ultranav executed the divestment of Othello Shipping Company S.A
and Ultragas ApS as Navigator Holdings Ltd acquired 100% of the shares in a combined share
and debt transaction.
The divestment of the operations was recognised at the closing date, where the control was
transferred to the Navigator Holdings Ltd. Gain or loss from discontinuing operations are
calculated as the net of divested assets and the consideration received. The consideration
received is measured at fair value of the received shares in Navigator Holdings Ltd.
Profit or loss for the period – discontinuing operations
USD thousands
2021
7 mths
Revenue
91,295
Expenses
-64,117
Depreciation and amortisation
-19,689
Financial items, net
-5,349
Profit from discontinuing operations
2,140
Loss from divestment of operations
-12,932
Net loss from divestment
-10,792
Gain or loss on divestment
USD thousands
4
th
of August 2021
Property, plant & equipment
-403,339
Receivables
-25,271
Cash
-17,476
Bank debt
190,537
Trade and other payables
22,201
Net divested assets
-233,348
Value of consideration received
220,416
Loss on divestment
-12,932
Cash flow for the period – discontinuing operations
USD thousands
2021
Cash flow from operating activities
35,044
Cash flow used for investing activities
-816
Cash flow from financing activities
-56,528
Net cash flow from discontinued operations
-22,300
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 39
SECTION 3: INVESTED CAPITAL
3.1 Intangible assets
3.2 Tangible assets & right-of-use assets
3.3 Assets classified as held for sale
3.4 Depreciations
3.5 Investments in associates and joint ventures
3.6 Business combinations
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 40
3.1 INTANGIBLE ASSETS
§ ACCOUNTING POLICIES
Intangible assets are measured at cost less accumulated amortisation and impairment
losses. Amortisation and impairment losses are included in the income statement.
Goodwill, and other intangible assets with indefinite lives are not subject to amortisation.
Those assets are instead tested anually, or upon indication, for impairment. When carrying
out the impairment test, the carrying values of CGUs are compared to the value in use
(discounted value of future cash flows). If the carrying values are higher, the difference is
charged to the income statement. The value in use is calculated using a valuation model
based on discounted expected future cash flows (DCF-model), based on management’s
projections.
Contractual rights have finite useful lives. Amortisation of contractual rights is recognised
in the income statement based on the period to which the contracts relate. The contractual
rights are amortised over a period of up to 10 years. Amortisation methods, useful lives and
residual values are reviewed at each reporting date and adjusted if appropriate. Intangible
assets with finite lives are tested for impairment upon indication.
2022
USD thousands
Goodwill
Contractual
Rights
Total
Costs as of 1 January, accumulated
35,172
57,453
92,625
Cost at 31 December, accumulated
35,172
57,453
92,625
Amortisations at 1 January, accumulated
-
-55,105
-55,105
Impairment charge
-35,172
-
-35,172
Amortisation
-
-1,492
-1,492
Amortisation at 31 December, accumulated
-35,172
-56,597
-91,769
Carrying amount 31 December
-
856
856
2021
USD thousands
Goodwill
Contractual Rights
Total
Costs as of 1 January, accumulated
35,172
57,453
92,625
Cost at 31 December, accumulated
35,172
57,453
92,625
Amortisations at 1 January, accumulated
-
-50,481
-50,481
Amortisation
-
-4,264
-4,264
Amortisation at 31 December, accumulated
-
-55,105
-55,105
Carrying amount 31 December
35,172
2,348
37,520
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 41
3.1 INTANGIBLE ASSETS (CONTINUED)
! ACCOUNTING ESTIMATES
IMPAIRMENT TEST OF GOODWILL
Goodwill is related to the acquisition of activities in the dry bulk segment. In the annual impairment test of goodwill, an estimate is made to determine how the cash generating units (“CGUs”)
will be able to generate sufficient positive net cash flow in the future to support the value of goodwill, and other net assets allocated to that CGU.
Management prepared the annual impairment test as a value-in-use calculation based upon 5-year forecasts and a terminal value based on normalised levels of profitability. As time-charters
expire, it is generally assumed that current time-charter vessels are replaced with new time charters. Freight rates for open vessel days (uncovered capacity) in the forecast period are based
externally available forward rates in the first two years of the forecast period and then normalised historic index rates in the remaining years of the forecast period. The estimated future cash
flows were discounted with a pre-tax rate of 9.4%.
In conclusion, the annual impairment test shows that goodwill is impaired and, consequently, an impairment charge of USD 35.2 million was recorded in profit or loss. As a result, the book
value of goodwill is written down to nil. We did not identify further assets, including right-of-use vessels, which were impaired.
The reason for the impairment need is related to the future market expectations. Market conditions in dry bulk were favourable during the first half of 2022, a continuation of the fleet
inefficiencies and strong demand which began in 2021 on the back of COVID disruptions. Towards the end of 2022, however, we did experience diminishing effects of the favourable market
conditions, which was leading to – from a historical perspective – normalised market conditions. Further, macro-economic and political factors added a general uncertainty and volatility to
freight rates linked to, but not limited to, the Ukraine/Russia war, trade tensions between the United States and China, and the indications of a general economic downturn fuelled by high
inflation rates and slowing economic growth.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 42
3.2 TANGIBLE ASSETS & RIGHT-OF-USE ASSETS
§ ACCOUNTING POLICIES
Tangible assets
Tangible assets are measured at cost less accumulated depreciation and impairment losses.
Cost comprises the purchase price and any costs directly attributable to the acquisition until
the date when the asset is available for use. Instalments and costs incurred during the
construction period on new building contracts are capitalised as they are paid. Borrowing
costs (interest) that are attributable to the construction of the vessels are capitalised and
included as part of the cost. The capitalised value is reclassified from new buildings to vessels
upon delivery from the yard.
Where individual components of an item of tangible assets have different useful lives, they
are depreciated separately. Depreciation is provided on a straight-line basis over the
expected useful lives of the assets/components. The expected useful lives are as follows:
• Vessels: 20 – 25 years
• Fixtures, fittings and equipment: 2 – 10 years
Dry docking costs are recognised in the carrying amount of vessels when incurred and
depreciated over the period until the next dry docking.
Depreciation is calculated on the basis of the residual value and impairment losses, if any.
The useful life and residual value are determined at the acquisition date and reassessed
annually. If the residual value exceeds the carrying amount, depreciation is discontinued, The
residual value of the vessels is estimated as the lightweight tonnage of each vessel multiplied
by scrap value per ton.
When changing the depreciation period or the residual value, the effect on the depreciation
is recognised prospectively as a change in accounting estimates.
The carrying values of vessels and new buildings are reviewed for impairments when events
or changes in circumstances indicate that the carrying value may not be recoverable.
Valuations are performed frequently to ensure that the fair value of the asset does not differ
materially from its carrying amount.
Right-of-use assets
Right-of-use assets primarily consist of leased vessels.
Ultranav International recognises right-of-use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, and lease
payments made before the commencement date.
Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of
the lease term, the recognised right-of-use assets are depreciated on a straight-line basis
over the shorter of its estimated useful life and the lease term.
Right-of-use assets are subject to testing for impairment if there is an indicator of
impairment, as for owned assets.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 43
3.2 TANGIBLE ASSETS & RIGHT-OF-USE ASSETS (CONTINUED)
§ ACCOUNTING POLICIES
Impairment of tangible assets
The carrying amount of non-current assets is reviewed annually for indicators of
impairment. When there is an indication that assets may be impaired, the recoverable
amount of the asset is determined.
The recoverable amount is the higher of an asset’s fair value less expected costs to sell and
its value in use. Value in use is the present value of the future cash flows expected to be
derived from an asset or the cash-generating unit to which the asset belongs. An
impairment loss is recognised if the carrying amount of an asset or a cash-generating unit,
respectively, exceeds the recoverable amount of the asset or the cash-generating unit.
Impairment losses are recognised in the income statement in a separate line item.
Impairment is reversed only to the extent of changes in the assumptions and estimates
underlying the impairment calculation. Impairment is only reversed to the extent that the
asset’s increased carrying amount does not exceed the carrying amount that would have
been determined (net of amortisation or depreciation) had no impairment loss been
recognised for the asset in prior years.
! ACCOUNTING ESTIMATES
DETERMINING CGU
Management’s assessment of indicators of impairment on right-of-use assets (vessels) is
based on the cash-generating units in which assets are included. The identification of such
cash‑generating units involves significant judgement.
Management has concluded that the fleet of dry bulk vessels (owned and leased)
constitutes a cash generating unit, as the vessels are managed on a portfolio basis and
considered to be interchangeable.
Further, Management has concluded that the fleet of tankers does likewise constitute a
cash generating unit, as the vessels are managed on a portfolio basis and considered to be
interchangeable.
! ACCOUNTING ESTIMATES
ASSESSING INDICATIONS OF IMPAIRMENT
Management’s assessment of whether there is any indication that an asset, or a CGU, may
be impaired comprise, among other things, financial performance, broker values,
newbuilding prices, and freight and time charter rates. This assessment involves significant
judgment.
The market conditions in dry bulk and tanker segments remained favourable during 2022,
a continuation of the fleet inefficiencies and strong demand which began in 2021 on the
back of COVID disruptions. Towards the end of 2022, however, we did experience
diminishing effects of the favourable market conditions in dry bulk, which is leading to –
from a historical perspective – normalised market conditions.
Macro-economic and political factors add a general uncertainty and volatility to freight
rates linked to, but not limited to, the Ukraine/Russia war, trade tensions between the
United States and China, and the indications of a general economic downturn fuelled by
high inflation rates and slowing economic growth.
On the other hand, a low newbuilding orderbook for dry cargo carriers and tankers does
indicate generally healthy market fundamentals, which are expected to keep long- and
medium-term freight rates at a sustainable level. Consequently, the expected long- and
medium-term freight rates are expected to continue to generate positive free cash flow
supporting the carrying amount of the right-of-use vessels. As such, no indications of need
for impairments were identified for the Group’s tangible assets and right-of-use vessels.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 44
3.2 TANGIBLE ASSETS & RIGHT-OF-USE ASSET (CONTINUED)
2022
USD thousands
Vessels
Fixtures, fittings
and equipment
Right-of-use assets
Total
Costs as of 1 January, accumulated
232,204
6,931
795,700
1,034,835
Additions
100,403
1,472
197,646
299,521
Disposals
-52,339
-4,354
-204,160
-260,853
Remeasurements
-
-
-15,899
-15,899
Cost at 31 December, accumulated
280,268
4,049
773,287
1,057,604
Q
Depreciation and impairments at 1 January, accumulated
-56,160
-5,972
-512,257
-574,389
Depreciations
-23,442
-1,104
-151,498
-176,044
Depreciations on disposals
2,999
4,354
187,687
195,040
Depreciation and impairment at 31 December, accumulated
-76,603
-2,722
-476,068
-555,393
Carrying amount 31 December
203,665
1,327
297,219
502,211
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 45
3.2 TANGIBLE ASSETS & RIGHT-OF-USE ASSET (CONTINUED)
2021
USD thousands
Vessels
Fixtures, fittings
and equipment
Right-of-use assets
Total
Costs as of 1 January, accumulated
191,468
6,131
823,808
1,021,407
Additions
105,464
1,008
82,541
189,013
Disposals
-40,499
-208
-137,258
-177,965
Remeasurement
-
-
26,609
26,609
Transferred to assets classified as held for sale
-24,229
-
-
-24,229
Cost at 31 December, accumulated
232,204
6,931
795,700
1,034,835
Q
Depreciation and impairments at 1 January, accumulated
-49,502
-5,400
-463,594
-518,496
Depreciations
-16,011
-745
-185,921
-202,707
Depreciations on disposals
5,216
173
137,258
142,677
Transferred to assets classified as held for sale
4,137
-
4,137
Depreciation and impairment at 31 December, accumulated
-56,160
-5,972
-512,257
-574,389
Carrying amount 31 December
176,044
959
283,443
460,446
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 46
3.3 ASSETS CLASSIFIED AS HELD FOR SALE
§ ACCOUNTING POLICIES
The Group classifies non-current assets and disposal groups as held for sale if their carrying
amounts will be recovered principally through a sale transaction rather than through
continuing use. Non-current assets and disposal groups classified as held for sale are
measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell
are the incremental costs directly attributable to the disposal of an asset (disposal group),
excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly
probable and the asset or disposal group is available for immediate sale in its present
condition. Actions required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision to sell will be withdrawn.
Management must be committed to the plan to sell the asset and the sale expected to be
completed within one year from the date of the classification.
Assets are no longer depreciated or amortised once classified as held for sale.
USD thousands
2022
2021
Carrying amount at 1 January
20,092
15,900
Sold during the year
-20,092
-15,900
Transferred to assets classified as held for sale
-
20,092
Carrying amount at 31 December
-
20,092
The carrying amount at 1 January 2022 comprised of one vessel which was sold in 2021 and
subsequently transferred to assets classified as held for sale. In 2022, the vessel was
delivered to its new owners.
3.4 DEPRECIATIONS AND AMORTISATIONS
§ ACCOUNTING POLICIES
For accounting policies related to depreciations, reference is made to note 3.2 Tangible
assets.
USD thousands
2022
2021
Depreciations on owned vessels
-23,442
-16,011
Depreciations on right-of-use assets
-151,498
-185,921
Depreciations on fixture, fittings, and equipment
-1,104
-745
Amortisations on contractual rights
-1,486
-4,264
Depreciations and amortisations for the year
-177,530
-206,941
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 47
3.5 INVESTMENTS IN ASSOCIATES & JOINT VENTURES
§ ACCOUNTING POLICIES
Investments in associates are recognised in The Consolidated Financial Statements
according to the equity method. Investments in associates are measured at the
proportionate share of the enterprises' net asset values calculated in accordance with the
Group's accounting policies minus or plus the proportionate share of unrealised intra-group
profits and losses and plus additional value on acquisition, including goodwill.
Investments in associates are tested for impairment when impairment indicators are
identified.
Investments in associates with negative net asset values are measured at USD 0 (nil). If the
Group has a legal or constructive obligation to cover a deficit in the associate, the remaining
amount is recognised under provisions. Amounts owed by associates are measured at
amortised cost. Write-down is made for bad debt losses.
The proportionate share of the result after tax of associates is recognized in the
consolidated income statement after elimination of the proportionate share of intra-group
profits/losses.
Undertakings which are contractually operated jointly with another counterparty (joint
ventures) and thus are jointly controlled are recognised in The Consolidated Financial
Statements according to the equity method. Investments in joint ventures are measured at
the proportionate share of the enterprises' net asset values calculated in accordance with
the Group's accounting policies minus or plus the proportionate share of unrealised intra-
group profits and losses and plus additional value on acquisition, including goodwill.
Investments in joint ventures are tested for impairment when impairment indicators are
identified.Investments in joint ventures with negative net asset values are measured at USD
0 (nil). If the Group has a legal or constructive obligation to cover a deficit in the joint
ventures, the remaining amount is recognised under provisions.
Amounts owed by joint ventures are measured at amortised cost. Write-down is made for
bad debt losses. The proportionate share of the result after tax of the joint ventures is
recognized in the consolidated income statement after elimination of the proportionate
share of intra-group profit/losses.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 48
3.5 INVESTMENTS IN ASSOCIATES & JOINT VENTURES (CONTINUED)
2022
USD thousands
Navigator
Holdings Ltd.
Other
investments
Total
Cost at 1 January
220,416
72,016
292,432
Additions
-
7,933
7,933
Cost at 31 December
220,416
79,949
300,365
Value adjustment at 1 January,
accumulated
-8,846
12,358
3,512
Share of the result for the year
21,611
-1,191
20,420
Dividends
-
-800
-800
Other increase/(decrease)
-530
-9,190
-9,720
Value adjustment at 31 December,
accumulated
12,235
1,177
13,412
Carrying amount at 31 December
232,651
81,126
313,777
2021
USD thousands
Navigator
Holdings Ltd.
Other
investments
Total
Cost at 1 January
-
46,880
46,880
Additions
220,416
25,136
245,552
Cost at 31 December
220,416
72,016
292,432
Value adjustment at 1 January,
accumulated
-
10,432
10,432
Share of the result for the year
-8,846
5,337
-3,509
Dividends
-
-3,420
-3,420
Other increase (decrease)
-
9
9
Value adjustment at 31 December,
accumulated
-8,846
12,358
3,512
Carrying amount at 31 December
211,570
84,374
295,944
Navigator Holdings Ltd.
Ultranav International ApS owns 28% of the shares in Navigator Holdings Ltd., an
owner and operator of the world’s largest fleet of handysize liquefied gas carriers.
The shares of Navigator Holdings Ltd is listed on the New Your Stock Exchange and
is incorporated on Marshall Islands. The share price at the reporting date was USD
11.96 resulting in a market valuation of the investment at USD 253.6 million
against a book value of USD 232,7 million.
The summarised financial information below is adjusted for allocation of
difference between purchase price and book value at the acquisition date
(purchase price allocation).
Summarised financial information
Navigator Holdings Ltd.
USD millions
2022
2021
Revenues
473.8
406.5
Profit or loss
78.3
28.1
Other comprehensive income
-0.2
0.0
Total comprehensive income
78.1
28.1
Current assets
228.3
215.3
Non-current assets
1.549
1,597.5
Current liabilities
270.6
204.7
Non-current liabilities
652.7
835.2
Net assets
853.7
772.9
Non-controlling interest
10.9
3.6
Equity attributable to shareholders
842.8
769.3
Ownership % at closing date
27.6%
27.5%
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 49
3.6 BUSINESS COMBINATIONS
On 28th February 2023, the Group completed a share purchase transaction in which the
Group obtained 99.75% ownership of Petrolera Transoceanica S.A. (“Petranso”). The
objective of the transaction is to increase the Group’s participation in the Peruvian towage
operation and reach a controlling interest.
At the closing date, the Group owned only 50% of shares and voting rights in Petranso.
Hence the investment was measured and presented in accordance with the equity method
applied for investments in associates and joint ventures, cf. note 3.5.
Through the transaction completed on 28
th
February 2023, the Group obtained a controlling
interest and will thus include the financial statements of Petranso in its consolidated
financials from the acquisition date and onwards. The transaction does not impact the
Consolidated Financial Statements reported at 31
st
December 2022 as the transaction
occurred after the reporting date.
Due to the short time between the transaction date and finalisation of the Annual Report
2022, the Group had not yet completed the initial accounting for the business combination.
For this reason, certain disclosures required for business combinations occuring after the
reporting date, but before the financial statements are authorised for issue, have not been
included. The omitted disclosures comprise the amounts to be recognised for each major
class of assets and liabilities acquired, contingent liabilities, description of factors that make
up any goodwill recognised, detailed information of trade receivables and any gain or loss
that are to be recognised through remeasurement of the equity interest in Petranso held
prior to the business combination.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 50
SECTION 4: WORKING CAPITAL
4.1 RECEIVABLES AND PREPAYMENTS
4.2 INVENTORIES
4.3 RESTRICTED CASH
4.4 TRADE AND OTHER PAYABLES
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 51
4.1 RECEIVABLES AND PREPAYMENTS
§ ACCOUNTING POLICIES
Receivables
Receivables are measured at amortised cost less provisions for impairment losses. The
Group applies the simplified approach to providing the expected credit losses prescribed by
IFRS 9, which permits the use of the lifetime expected loss provision for trade receivables.
To measure the expected credit losses trade receivables have been grouped based on credit
risks and the day past due. In accordance with IFRS 9, non-due trade receivables have also
been impaired.
For a description of the Group’s payment terms as well as management of credit risk,
reference is made to note 5.4 Financial risks.
Contract assets
Contract assets include accrued revenue for voyages that are not completed at 31
December, and which were not yet invoiced or prepaid at that date. Contract assets are
recognised when a sales transaction fulfils the criteria for revenue recognition but no final
invoice has yet been issued to the customer for the services delivered.
Prepayments
Prepayments comprise cost incurred in relation to subsequent financial years.
Trade receivables
In the shipping industry, it is standard terms that freight payments are made within few
days of departing from the loading port and time charter payments are even paid in
advance. It is also standard terms that the vessel owner, or disponent owner, has a lien in
the cargo, should the freight payment not have been made prior to arriving at the discharge
port. The credit risk on trade receivables is therefore generally low.
Loans to related companies
Loans to related companies comprise of interest-bearing intragroup loans to a related
company outside the Ultranav International ApS Group. The loans are entered with a fixed
margin of 1.83% – 2.20% + USDLIBOR 6M. Management considers the credit risk to be low.
USD thousands
2022
2021
Customers (trade receivables)
137,304
131,472
Contract assets
61,348
52,780
Other receivables
36,305
15,600
Trade and other receivables
234,957
199,852
Receivables from related companies
73,839
39,325
Loans to related companies
271,087
179,877
Loans and receivables, related companies
344,926
219,202
Prepayments
64,812
74,511
Prepayments
64,812
74,511
- Receivables not due
69,207
64,398
- Less than 90 days
64,334
63,436
- Between 91 days and 180 days
6,194
7,430
- Between 181 days and 360 days
5,639
1,309
- More than 360 days
1,115
1,204
Carrying amount of trade receivables excluding provisions
146,489
137,777
Provisions at 31 December
-9,185
-6,305
Carrying amount of trade receivables
137,304
131,472
Provision at 1 January
6,071
1,578
Net change in provision
3,114
4,727
Provision 31 December
9,185
6,305
Trade receivables are non-interest bearing and are generally due within 5 – 90 days.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 52
4.2 INVENTORIES
§ ACCOUNTING POLICIES
Inventories are valued at the lower of cost and net realisable value. Cost is determined on
a first-in, first-out (FIFO) basis. Net realisable value is the estimated selling price in the
ordinary course of business, less applicable variable selling expense. Costs of bunkers
include the transfer from equity to profit and loss on qualifying cash flow hedges.
USD thousands
2022
2021
Bunkers
59,178
54,649
Lube oil
-
61
Inventories
59,178
54,710
Bunker expenses recognised in profit and loss
606,684
409,521
A part of the future bunker consumption has been hedged through derivatives in
accordance with the Group’s risk management policy. This is further described in note 5.4
Financial risks.
4.3 RESTRICTED CASH
§ ACCOUNTING POLICIES
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand, short-
term deposits with an original maturity of three months or less, and cash balances which
are restricted.
USD thousands
2022
2021
Cash and cash equivalents
393,505
163,626
Restricted cash in the form of deposits with clearing houses
16,808
5,663
Cash and cash equivalents, including restricted cash
410,313
169,289
The Group trades derivative financial instruments through clearing houses. In that
connection, the Group has established margin accounts with those clearing houses on
which cash is deposited as security.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 53
4.4 TRADE AND OTHER PAYABLES
§ ACCOUNTING POLICIES
Trade and other payables
Trade payables, payables to related parties, and other payables are measured at amortised
cost.
Contract liabilities
Contract liabilities relate to voyages which are not completed at 31 December. Contract
liabilities are recognised when a sales transaction does not fulfil the criteria for revenue
recognition but the customer has prepaid for the service delivery. If contract liabilities are
beyond one year the contract assets are included in non-current liabilities.
USD thousands
2022
2021
Funds received from pool members
5,500
5,000
Other payables
-
21
Other payables, non-current
5,500
5,021
Trade payables
127,268
122,894
Accruals and other payables
86,617
55,779
Contract liabilities
54,446
60,775
Trade and other payables, current
268,331
239,448
Loans payable to related companies
-
9,806
Payables to related companies, non-current
-
9,806
Payables to related companies
16,123
5,706
Loans payable to related companies
10,229
20,577
Payables to related companies, current
26,352
26,283
Funds received from pool members comprise of funds received from members of the pool
Clean Product Tankers Alliance (CPTA) to finance the working capital related to pool
operations.
The contract liability balance at the beginning of the year was recognised as revenue during
the reporting period. Outstanding performance obligations will be performed within one
year.
Trade payables are non-interest bearing and are normally settled on 30 days terms. Other
payables, including accrued expenses, are non-interest bearing and vary in payment terms.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 54
SECTION 5: CAPITAL STRUCTURE
5.1 FINANCIAL ITEMS
5.2 INTEREST BEARING LOANS AND BORROWINGS
5.3 LEASE LIABILITIES
5.4 RISKS ARISING FROM FINANCIAL INSTRUMENTS
5.5 FINANCIAL INSTRUMENTS
5.6 DERIVATIVE FINANCIAL INSTRUMENTS
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 55
5.1 FINANCIAL ITEMS
§ ACCOUNTING POLICIES
Financial income and expenses comprise interest income and expense as well as exchange
rate differences from transactions denominated in foreign currencies.
USD thousands
2022
2021
Interest income
6,466
2,168
Interest income, loans to related parties
5,794
761
Gain from modification of lease liabilities
1,211
238
Financial income
13,471
3,167
-
Interest expenses, bank loans and overdrafts
-10,778
-1,190
Interest expenses, loans from related parties
-3,060
-12,718
Interest expenses, lease liabilities
-10,323
-13,139
Other financial items, net
-2,118
-5,439
Financial expenses
26,279
-32,486
5.2 INTEREST BEARING LOANS AND
BORROWINGS
§ ACCOUNTING POLICIES
Loans are recognised at the time the loans are obtained in the amount of the proceeds after
deduction of transaction costs. In subsequent periods, the loans are recognised at
amortised costs.
Carrying amount
USD thousands
Type
2022
2021
Interest bearing loans
Fixed
37,898
42,640
Interest bearing loans
Floating
237,839
158,970
Interest bearing loans and borrowings
275,737
201,610
Non-current portion
268,387
187,818
Current portion
7,350
13,792
Interest bearing loans and borrowings
275,737
201,610
The fixed-rate loans are fixed at an interest rate of 3.15% - 3.20% (2021: 3.15% - 3.20%).
The floating-rate loans are based upon the USDLIBOR and SOFR6M with an additional
margin of 1.80% – 2.65% (2021: 1.30% – 2.10%). The interest rate on the floating rate
interest bearing loan was between 3.25% - 5.20% (2021: 1.90% – 2.60%).
The fair value of the fixed loans is not materially different from the carrying amount.
The loans are subject to financial and operational covenants, including a minimum equity.
Management assesses that Ultranav International and the related company guarantor meet
these covenants at the closing date as well as throughout the financial year.
Fixed loans are partly secured by vessels. The carrying amount of the vessels provided as
security is USD 62.5 million (2021: USD 63.0 million).
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 56
5.3 LEASE LIABILITIES
§ ACCOUNTING POLICIES
Lease liabilities
At the commencement date of the lease, the Group recognises a lease liability which is
measured at the present value of lease payments to be made over the lease term. The
service fee included in the payments (non-lease component) is not included as part of the
lease liabilities.
The lease term comprises the non-cancellable period with addition of periods covered by
options to extend the lease if it is reasonably certain that the extension option will be
exercised. This assessment is made on inception of the lease.
The lease payments include fixed payments and variable payments depending on an index
or a rate. The lease payments do also include the exercise price of a purchase option if it is
reasonably certain that it will be exercised.
In calculating the present value of lease payments, Ultranav International uses the
incremental borrowing rate at the lease commencement date. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification,
a change in the lease term, a change in the fixed lease payments or a change in the
assessment to purchase the underlying asset.
Lease contracts for vessels have been entered into with a mutually interminable lease
period. As a general rule, lease contracts include an option to renew for one additional year
at a time for up to three years.
Some lease contracts include customary option for extension of the lease period. The
liability concerning the extension period is only included in lease liabilities if it is reasonably
certain the extension period will be exercised.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 57
5.3 LEASE LIABILITIES (CONTINUED)
The development in lease liabilities is explained in the table below:
USD thousands
2022
2021
Lease liabilities 1 January
310,121
612,769
Additions for the period
224,086
82,541
Remeasurements
-36,609
26,609
Instalments made
-161,312
-218,671
Disposals
-25,047
-193,127
Lease liabilities 31 December
311,239
310,121
Non-current portion
129,708
150,854
Current portion
181,531
159,267
Lease liabilities 31 December
311,239
310,121
Of the total lease liabilities, USD 11.8 million (2021: USD 25.1 million) is related to flexible
hire lease contracts. The flexible hire is based upon the Baltic Exchange index and a change
in the index of 10% will result in a 10% increase in the hire payment for flexible lease hire
contracts.
Leases to which the Group is committed, but for which lease terms have not yet
commenced have an undiscounted value of USD 124.5 million (2021: USD 36.5 million).
The total cash outflow from leases in 2022 was USD 1,679.6 million (2021: USD 1,726.9
million) which includes short term leases.
Some lease agreements include a purchase option which is typically exercisable as from the
end of the fifth year to the expiry of the period of renewal. Some of the purchase options
are, however, shared with third parties which limits the potential gain from exercising such
purchase options.
! ACCOUNTING ESTIMATES
Measurement of non-lease components
The Group has elected to separate lease and non-lease components for leases of time
charter contracts on vessels. For these contracts, the estimated non-lease component
(operating expenses) is excluded from the measurement of right-of-use assets and lease
liabilities. Assessing the measurement of the non-lease component involves significant
estimates. The measurement of the non-lease component takes several factors into
consideration such as operating costs, aging of the vessels, vessel types, etc.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 58
5.4 RISKS ARISING FROM FINANCIAL INSTRUMENTS
Through the Group’s shipping activities, the Group is exposed to a number of risks arising from financial instruments, which the overall management programme focuses on minimising.
Market Risk
The Group’s market risk relates to its currency risk, which occurs as all revenue is
denominated in USD, while the expenses of the Group are incurred in a wide range of
currencies such as EUR, DKK, SGD, and AUD.
The main purpose of hedging the Group’s currency risk is to hedge the USD value of the
Group’s net cash flow and reduce fluctuatuions in the Group’s profit. The key aspects of the
currency hedging policy are that Net Cash Flows in other significant currenciens other than
USD are hedged with a 12-24-month horizon, significant capital commitments or
divestments in other currencies than USD are hedged and most non-USD debt is hedged.
Credit Risk
The Group is exposed to credit risk in various ways, however mainly in relation to trade
receivables from customers, prepaid time-charter hire, cash deposits with financial
institutions and the settlement receivables from derivative instruments (namely FFAs and
bunker hedges).
The credit risk of receivables from trade and derivative instruments, along with prepaid
time charter hire, is reduced through systematic credit assessment of each counterparty
and by monitoring their creditworthiness. With respect to FFAs, those instruments are
generally entered with international clearing houses. Similarly, cash at banks is deposited
with international financial institutions with solid credit ratings.
Liquidity Risk
The Group’s strategy is to maintain a solid cash balance that is sufficient to cover cash flows
even through a period of volatile or stressed markets. Cash flows are closely monitored to
evaluate the current cash position.
Derivative instruments
The Group is utilising derivatives to cover exposures in freight rates, bunker prices, and
currencies. The cash flow from derivative contracts are subject to changes in market prices,
to which the derivatives are linked. The Group is monitoring the effectiveness of the
derivatives as hedging instruments to compare if changes in cash flow match the underlying
exposure which they are meant to cover.
Interest rate risk
The financing structure of the Group is based partly on floating rate loans. Consequently,
the Group is exposed to fluctuations in USDLIBOR and SOFR6M. The Group has extended
loans on similar terms and amounts to related companies which partly offsets the risk
arising for fluctuating interest rates. The residual risk is continuously monitored by
management.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 59
5.5 FINANCIAL INSTRUMENTS BY CATEGORY
Carrying amount and fair value of financial items by class of
financial assets and liabilities
On the next page is a breakdown of the financial assets into categories as defined in IFRS 9.
The fair value is estimated using appropriate market information and valuation
methodologies. The carrying amount of cash and cash equivalents and loan payables to
bank are a reasonable estimate of their fair value.
Fair value for derivatives and borrowings has been calculated by discounting the expected
future cash flows at relevant interest rates. Judgement is required to develop estimates of
fair value. Hence, the estimates provided herein are only indicative of the amounts that
could be realised in the market.
The contractual cash flows are non-discounted and include all liabilities according to
contracts. The USD values of future interests and principal loans in foreign currencies are
calculated based on the rates at the balance sheet date.
Categories of financial instruments
The fair value of financial assets and financial liabilities measured at amortized cost is
approximately equal to the carrying amount.
Financial instruments measured at fair value are divided in accordance with the following
accounting hierarchy:
- Level 1: observable market prices of identical instruments.
- Level 2: valuation models primarily based on observable prices or trading prices of
comparable instruments
- Level 3: valuation models primarily based on non-observable prices.
The fair value of all derivative financial instruments, forward exchange contracts and other
derivative financial instruments (commodity instruments), is considered fair value
measurement at level 2 as the fair value is based on observable pricing information.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 60
5.5 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED)
Tables with carrying amounts of financial items by class of financial assets and liabilities
USD thousands
December 31
st
2022
December 31
st
2021
0-1 Year
1-5 Years
Contractual
cash flow
Carrying
amount
0-1 Year
1-5 Years
Contractual
cash flow
Carrying
amount
Recognised at amortised cost
Loans from financial institutions
19,419
319,477
338,896
275,737
17,363
201,819
219,182
201,610
Loans payable to related companies
10,229
-
10,229
10,229
20,557
9,806
30,363
30,363
Payables to related companies
16,513
-
16,513
16,513
5,706
-
5,706
5,706
Trade and other payables
267,895
5,500
273,395
273,395
239,448
5,021
244,469
244,469
Lease liabilities
184,788
133,488
318,276
311,239
160,145
163,943
324,088
310,121
Total
498,844
458,465
957,309
887,113
443,219
380,589
823,808
792,289
Recognised at fair value
Derivative financial instruments
3,702
865
4,567
4,567
14,956
948
15,904
15,904
Total
3,702
865
4,567
4,567
14,956
948
15,904
15,904
Total financial liabilities
502,546
459,330
961,876
891,680
458,175
381,537
839,712
808,193
Recognised at amortised cost
Cash and restricted cash
410,313
-
410,313
410,313
169,289
-
169,289
169,289
Trade and other receivables
234,957
8,654
243,611
243,611
197,914
-
197,914
197,914
Receivables from subleases
-
-
-
-
12,297
1,243
13,540
13,540
Receivables from related companies
66,485
-
66,485
66,485
33,053
-
33,053
33,053
Loans receivables from related companies
169,360
115,511
284,871
271,086
1,008
198,457
199,465
186,149
Total
881,115
124,165
1,005,280
991,495
413,561
199,700
613,261
599,945
Recognised at fair value
Derivative financial instruments
3,089
2,114
5,203
5,203
32,430
2,031
34,461
34,461
Total
3,089
2,114
5,203
5,203
32,430
2,031
34,461
34,461
Total financial assets
884,204
126,279
1,010,483
996,698
445,991
201,731
647,722
634,406
Contractual cash flow arising from financial guarantee contracts are disclosed in note 6.3 to the Consolidated Financial Statements.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 61
5.6 DERIVATIVE FINANCIAL INSTRUMENTS
§ ACCOUNTING POLICIES
The Group uses derivative financial instruments such as forward currency contracts, bunker
hedges and FFAs to hedge part of risks. Such derivative financial instruments are initially
recognized at fair value on the date on which a derivate contract is entered into and are
subsequently re-measured at fair value. Derivatives are carried as assets when the fair value
is positive and as liabilities when the fair value is negative. Any gains or losses arising from
changes in fair value on derivatives that do not qualify for hedge accounting are taken
directly to profit or loss.
The fair value of forward currency contracts is calculated by reference to current forward
exchange rates for contracts with similar maturity profiles. The fair value of bunker hedge
and the fair value of FFAs are determined by reference to market values for similar
instruments.
For the purpose of accounting, hedges are classified as:
• fair value hedges when hedging the exposure to change in fair value of a recognised
asset or liability or an unrecognised firm commitment (except for foreign currency risk);
or
• cash flow hedge when hedging exposure to variability in cash flow that is either
attributable to a particular risk associated with a recognised asset or liability or a highly
probable forecast transaction or the foreign currency risk in an unrecognised firm
commitment.
At time of entering into a hedge relationship, the Group designates and documents the
hedge relationship to which the Group wishes to apply for hedge accounting and the risk
management objectives and strategy for undertaking the hedge. The documentation
includes identification of the hedging instrument, the hedged item or transaction, the
nature of the risk being hedged and how the entity will assess the hedging instrument’s
effectiveness requirements.
The criteria for classifying a derivative as a hedging instrument for accounting purposes are
as follows:
• there is an economic relationship between the hedged item and the hedging instrument
• the effect of credit risk does not dominate the value changes that result from the
economic relationship
• the hedge ratio of the hedging relationship is the same as that resulting from the
quantity of the hedged items that the entity actually hedges and the quantity of the
hedging instrument that the entity actually uses to hedge that quantity of hedged item.
Hedges which meet the criteria for hedge accounting are accounted for as follows:
Fair value hedges
Derivatives designated as hedging instruments are measured at fair value and changes in
fair value are recognised in the income statement. Correspondingly, a change in the fair
value of the hedged item attributable to the hedged risk is recognised in the income
statement. The fair value hedge accounting is discontinued if the hedging instrument
expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for
hedge accounting stated above.
Cash flow hedges
Changes in the fair value of a hedging instrument that meet the criteria for cash flow hedge
accounting are recognized in other comprehensive income. The ineffective part of the
hedging instrument is recognised directly in the income statement. Gains and losses that
are recognised in other comprehensive income are taken to the income statement in the
same period or periods as the cash flow which comprises the hedged item is recognised in
the income statement. The principle also applies if the hedged forecasted transaction
results in an asset or liability being recognised in the balance sheet. If the cash flow hedge
no longer meets the criteria for hedge accounting, hedge accounting is discontinued. The
cumulative gain or loss of the hedging instrument recognised in other comprehensive
income remains separately recognised in other comprehensive income until the forecast
transaction occurs. If the cash flow hedged transaction is no longer expected to occur, any
previously accumulated gain or loss of the hedging instrument that has been recognised in
other comprehensive income will be carried to profit or loss. Derivatives not accounted for
as hedging instruments are classified as financial assets at fair value through profit or loss
and measured at fair value.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 62
5.6 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
§ ACCOUNTING POLICIES (CONT.)
Economic trading
Gains and losses, realised or unrealised, from derivatives used for economic trading are
recognised in the income statement.
Determination of fair value
The fair value of financial assets and liabilities is measured on the basis of quoted market
prices of financial instruments traded in an active market. If an active market exists, fair
value is based on the most recent observed market price at the end of the reporting period.
If an active market does not exist, the fair value is measured according to generally accepted
valuation techniques. Market-based parameters are used to measure fair value.
For bunker contracts the price is based on the prices from Platts Bunkerwire. The value of
FFAs is assessed on basis of daily recorded prices from the Baltic Exchange.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 63
5.6 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Bunker hedges
The Group has entered bunker derivatives in order to hedge future bunker expenses. The
bunker derivatives are accounted for as cash flow hedges.
The bunker derivatives are entered simultaneously with the Contracts of Affreightment
(CoA) or single cargoes, as part of the Group’s risk management. The bunker derivatives
cover the bunker expenses in connection with the CoA and the duration of the bunker
derivative is therefore similar to the duration of the CoA. 84% of the nominal value is
realised within 1 year and 16% is realised within 1-2 years. The nominal value at the end of
the year is USD 54.6 million and a drop in bunker prices of 10% will have a negative impact
on equity of USD 5.5 million. Ultranav International has established a hedge ratio of 1:1 as
the underlying risk of the hedging instrument is identical to the hedged risk component.
Hedge ineffectiveness can arise from differences in timing of the cash flows as well as
changes to the forecasted amounts. No ineffectiveness has been recognised.
FFA hedges
The Group has entered into freight derivatives (“FFAs”) in order to hedge future cargo and
vessel commitments. The FFAs are accounted for as cash flow hedges. The FFAs are entered
simultaneously with the cargo and vessel commitments as part of the Group’s risk
management. 70% of the nominal value is realised within 1 year and 30% is realised within
1-2 years. The nominal value at the end of the year is USD 195.5 million and a drop in the
Baltic Dry rates of 10% will have a positive impact on equity of USD 19.6 million.
The Group has established a hedge ratio of 1:1 as the underlying risk of the hedging
instrument is identical to the hedged risk component. Hedge ineffectiveness can arise from
price difference between the Baltic Dry and the actual freight rates and difference in
number of days and timing of cash flows. No ineffectiveness has been recognised.
Economic hedging using FFAs
In continuation of above, the Group has also entered certain FFAs with the purpose of
hedging specific routes and vessel types for which the availability of data points is not
sufficient to document an effective hedging relationship. Those FFAs are labelled
economic hedging and are regarded as a business-related hedge for internal reporting
purposes. Changes in fair value of economic hedges are recognised in profit or loss.
Economic trading in FFAs
In line with its freight trading approach, the Group has entered certain FFAs with the
purpose of economic trading. Strict control systems are in place to monitor developments
and ensuring that risk is constrained at acceptable pre-defined levels, which are duly aligned
with our strategy and proportionate with our financial strength. Changes in fair value of
those FFAs are recognised in profit or loss.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 64
5.6 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Overview of derivative financial instruments at year-end
December 31st 2022
December 31st 2021
Nominal
(USDm)
Net
days/MT
Duration
(months)
Recognised
in equity
(USDm)
Fair value
(USDm)
Nominal
(USDm)
Net
days/MT
Duration
(months)
Recognised
in equity
(USDm)
Fair value
(USDm)
Hedge accounting applied
FX hedges
16.6
-
1-12
1.1
1.1
6.7
-
1-12
-0.1
-0.1
FFAs
195.5
13,692
1-36
-0.1
-0.1
85.3
5,750
1-36
11.3
11.3
Bunker hedges
54.6
117,540
1-60
-0.6
-0.6
63.3
152,257
1-60
6.1
6.1
Hedge accounting not applied
FFAs (Days)
3.0
240
1-24
0.2
3.0
135
1-24
-
1.2
Net fair value of derivative instruments
0.6
17.3
18.5
USD millions
Fair value
Fair value
Presentation in the Consolidated Financial Statement as:
Derivative financial instruments, non-current assets
2.1
2.0
Derivative financial instruments, current asset
3.0
32.4
Derivative financial instruments, non-current liabilities
-0.8
-0.9
Derivative financial instruments, current liabilities
-3.7
-15.0
Net fair value of derivative financial instruments
0.6
18.5
MT
days
MT
days
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 65
5.6 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Net amount recognised in Other Comprehensive Income
USD millions
2022
2021
Effective portion of changes in fair value from:
FX hedges
0.1
-2.1
Interest rate swaps
-
0.1
Bunker hedges
5.2
45.4
FFA hedges
-14.8
-92.2
Amounts reclassified to profit and loss:
FX hedges reclassified to financial items
1.2
0.1
Bunker hedges reclassified to voyage related
expenses
-19.5
-10.8
FFA hedges reclassified to revenue
5.6
87.0
FFA hedges reclassified to voyage expenses
5.3
-7.2
Cash flow hedges, gain/loss for the year (net)
-16.9
20.3
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 66
SECTION 6: OTHER NOTES
6.1 REMUNERATION OF MANAGEMENT
6.2 FEE TO THE STATUTORY AUDITORS
6.3 CONTINGENT LIABILITIES AND COMMITMENTS
6.4 OTHER NON-OPERATING CASH ITEMS (CASH FLOW)
6.5 CHANGE IN WORKING CAPITAL (CASH FLOW)
6.6 CHANGE IN LIABILITIES (CASH FLOW)
6.7 RELATED PARTY DISCLOSURES
6.8 SHARE CAPITAL
6.9 EVENTS AFTER THE BALANCE SHEET DATE
6.10 GROUP STRUCTURE
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 67
6.1 REMUNERATION OF MANAGEMENT
Board of Directors & Executive Management
The members of the Board of Directors do not receive any fees or incentives from the Group
during 2022, unchanged from 2021.
Until 25 November 2022, the parent company was managed by the Board of Directors. On
26 November 2022, when the parent company was redomiciled to Denmark, Per Lange was
appointed to CEO. The remuneration to the CEO is not disclosed pursuant to the Danish
Financial Statement Act section 98b(3).
Key management personnel
In 2022, key management personnel of Ultranav International ApS Group comprise seven
members, of which five members do not receive any remuneration or incentives directly
from the Ultranav International ApS or its subsidiaries. Those five members were
remunerated through other related companies. Consequently, the remuneration included
in staff expenses comprise only the remuneration paid to two members of key management
personnel. The fee for key management personnel services were recorded “Other external
expenses” in the Profit or Loss.
USD thousands
2022
Fixed salaries
473
Pensions – defined contribution plans
19
Incentive payments (cash based)
837
Remuneration included in Staff expenses
1,329
Fee included in Other external expenses
1,800
Total expense for Key Management Personnel
3,129
In 2021, key management personnel comprised of 6 members, of which five members did
not receive any remuneration or incentives directly from the Ultranav International ApS or
its subsidiaries. The total remuneration of key management personnel for 2021 was USD
2,958 thousands, comprising of expenses included in Staff expenses as wel as Other external
expenses. With reference to the Danish Financial Statement Act section 98b(3), the
remuneration included in Staff expenses is therefore not disclosed by type of remuneration.
6.2 FEE TO THE STATUTORY AUDITORS
Total fee for statutory auditors breaks down as follows:
USD thousands
2022
Statutory audit
338
Other assurance engagements
-
Tax assurance services
33
Other services
55
Fees to statutory auditors
426
In the jurisdiction, in which the Company were previouily domiciled, there was no
requirement to elect a statutory auditor and therefore, no audit fee to statutory auditors
for 2021 is disclosed.
Other information regarding key management personnel
Key management personnel are subject to a notice of up to 18 months and can resign from
Management with a notice of up to 9 months. Senior Management and a number of
employees are covered by a cash-based incentive scheme.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 68
6.3 CONTINGENT LIABILITIES & COMMITMENTS
§ ACCOUNTING POLICIES
Provisions are recognised when Ultranav International has a present obligation (legal or
constructive) as a result of a past event, it is probable that the obligation has to be settled
and that a reliable estimate of the obligation can be made.
Contingent liabilities
The Group is part in certain litigation proceedings. In the opinion of management,
settlement or continuation of these proceedings are not expected to have a material effect
on the Group’s financial position, operating profit or cash flow.
The parent company is jointly taxed with other Danish companies in the Ultranav
International ApS Group. The companies are jointly and unlimited liable for Danish
corporation tax and withholding taxes on dividends, interest and royalties in the joint
taxation. Any subsequent corrections of joint taxation of income or withholding taxes on
dividends, etc, could lead to Company’s liability constituting a larger amount.
The Group's Danish companies are jointly and separately liable for the joint registration of
VAT.
Guarantees
The Group has issued guarantees for loans to joint ventures and related companies. The
table below summarises guarantees at year-end:
USD thousands
2022
2021
Guarantees
The Group has issued guarantees for loans to joint ventures
16,017
22,800
The Group has issued guarantees for credit facilities in related
companies
75,000
50,000
Total
91,017
72,800
Short-term leases and low value leases
The Group has recognized right-of-use assets in line with IFRS 16, except for short term and
low value leases. The table below summarises future commitments on short term and low
value leases which are entered at year-end:
USD thousands
2022
2021
Short term leases and low value leases
continuing operations
250,297
266,340
Within one year
250,297
266,340
Total
250,297
266,340
COAs and Time Charter commitments as service provider
At 31 December, the Group had entered into Contracts of Affreightment (“COAs”) and time
charters with customers amounting to:
USD thousands
2022
2021
COAs and Time Charter commitments as service provider
continuing operations
Within one year
280,149
304,220
Between 1 – 5 years
223,109
231,048
More than 5 years
5,533
6,640
Total
508,791
541,908
COAs constitute a commitment to transport cargoes in a predetermined period and at a
predetermined price per ton. Time charter commitments as a service provider constitute a
commitment to charter a vessel to a customer.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 69
6.4 OTHER NON-OPERATING CASH ITEMS
(CASH-FLOW)
USD thousands
2022
2021
Gain on sale of vessels, plant, and equipment
-36,690
-8,350
Gain on divestment of subsidiaries and activities
-
12,932
Depreciation and impairment loss
212,702
206,941
Share of gain/loss in associated companies
-20,420
3,509
Interest income on loans
-3,586
-
Interest expenses on loans
7,579
1,190
Interest expenses on lease liabilities
10,323
17,575
Interest expenses on to related parties
4,012
-
Modification of lease liabilities
-1,211
-
Economic trading
1,256
158
Economic hedge
-242
-
Other non-cash operating items
-3,921
-
Total
169,802
233,955
6.5 CHANGE IN WORKING CAPITAL
(CASH-FLOW)
USD thousands
2022
2021
Change in receivables
-64,726
-7,037
Change in inventories
-4,468
-1,178
Change in liabilities
39,779
-5,070
Total
-29,415
-13,285
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 70
6.6 CHANGES IN LIABILITIES (CASH FLOW)
Changes in liabilities arising from finance activities
2022
USD thousands
1 January
Cash in-flow
Cash out-flow
Divestment of
subsidiaries and
activities
Other
31 December
Lease liabilities
310,121
-
-161,312
-
162,430
311,239
Interest-bearing loans and borrowings
201,610
160,000
-89,075
-
3,202
275,737
Total liabilities from financing activities
511,731
160,000
-250,387
-
165,632
586,976
2021
USD thousands
1 January
Cash in-flow
Cash out-flow
Divestment of
subsidiaries and
activities
Other
31 December
Lease liabilities
654,729
-
-218,671
-186,443
60,506
310,121
Interest-bearing loans and borrowings
29,523
191,578
-19,979
-
488
201,610
Total liabilities from financing activities
684,252
191,578
-238,650
-186,443
60,994
511,731
The category ‘Other’ comprise primarily of additions and remeasurements of lease liabilities as well as interest accruals included in the carrying value of interest-bearing loans and
borrowings. Reference is made to note 5.3 – Lease liabilities.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 71
6.7 RELATED PARTY DISCLOSURES
Ownership
Ultranav International ApS is a wholly-owned subsidiary of Naviera Ultranav Dos Limitada,
Av, El Bosque Norte 500 Piso 20, 7550092 Las Condes, Santiago, Chile.
The Consolidated Financial Statements of Ultranav International ApS is available at the
Company's address. The ultimate controlling party of Ultranav International ApS is
Inversiones Volcán Mocho S.A., Av, El Bosque Norte 500 Piso 22, 7550092 Las Condes,
Santiago, Chile.
Transactions with related parties
The table below summarises transactions made in the financial year and amounts owed at
year-end:
Sales/(Purchases)
Amounts owed by/(to)
USD thousands
2022
2021
2022
2021
Related companies
Charter income
58,827
20,434
-
-
Management fee income
3,368
100
-
-
Management fee expense
-24,664
-19,131
-
-
Loans & interests
-1,089
-11,957
261,555
186,149
Receivables and payables
-
-
3,461
-
Purchases of vessels
-
-46,228
-
-
Sales of vessels
1,142
21,000
-
-
Guarantees
-
-
-
50,000
Joint Ventures & Associates
Charter hire
138,211
51,124
-
-
Charter expenses
-59,130
-103,939
-
-
Management fee income
5,964
-
-
-
Receivables and payables
-
-
51,701
30,017
Guarantees
-
-
16,017
22,800
Loans
302
188
-
-
6.8 SHARE CAPITAL
The share capital is split in 135,360,000 shares of DKK 1 per share, totalling a nominal share
capital of 135,360,000 DKK. In connection with the parent company’s redomiciliation of its
registered office to Denmark on 25 November 2022, the share capital was converted to be
denominated in DKK. Apart from this, there has been no changes in the share capital over
the last 5 years.
6.9 EVENTS AFTER THE BALANCE SHEET DATE
Disclosure of events after the balance sheet date
No events have occurred after the balance sheet date that materially affect the financial
position of the Group. Reference is made to note 3.6 to the Consolidated Financial
Statements with regards to a business combination that has occured after the reporting
date.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 72
6.10 GROUP STRUCTURE
The Ultranav International ApS Group comprise of more than 30 subsidiaries of which the largest
are listed below.
List of material subsidiaries included in the consolidated Financial Statements
Share of ownership
Ultrabulk A/S, Denmark
98.1%
Ultrabulk (Asia) Pte. Ltd., Singapore
98.1%
Ultrabulk Cargo Services GmbH, Germany
98.1%
Cape Tankers Inc., Panama
87.5%
Ultratank Shipping S.A., Uruguay
100.0%
Horizon Shipping, Inc, Panama
100.0%
Austral Product Tankers Inc, Panama
100,0%
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 NOTES | PAGE 73
PARENT COMPANY FINANCIAL STATEMENTS
The domicile of Ultranav International ApS changed to Denmark as of
25 November 2022 and, as a consequence of that, the Parent
Company Financial Statements became subject to audit with effect
from the financial year 2022. The comparative figures of the Parent
Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 74
PROFIT OR LOSS
1 JANUARY – 31 DECEMBER
USD thousands
Note
2022
(a)
2021
Revenue
14,047
130,538
Vessel operating costs and voyage related expenses
-10,217
-105,317
Gross profit
3,830
25,221
Other external expenses
-1,011
-8,155
Staff costs
2
-38
0
Operating profit before depreciation (EBITDA)
2,781
17,066
Depreciations and amortisations
-1,738
-25,977
Operating profit (EBIT)
1,043
-8,911
Gain/(loss) from sale of subsidiaries
3
-
-13,017
Share of subsidiaries’ profit after tax
3
138,866
-3,992
Share of associates’ profit after tax
4
25,069
-3.184
Financial income
5
2,915
395
Financial expenses
5
-2,708
-12,494
Profit/loss before tax
165,185
-41,203
Tax
6
-4,628
-
Profit/loss for the period
160,557
-41,203
Proposal for the distribution of net result:
Reserve for net revaluation according to equity method
163,935
-7,176
Retained earnings
-3,378
-34,027
Profit/loss for the period
160,557
-41,203
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 75
BALANCE SHEET
ASSETS
USD thousands
Note
2022
(a)
2021
Right-of-use assets
7
-
24,955
Tangible assets
-
24,955
Investments in subsidiaries
3
735,796
282,057
Investments in associates
4
248,205
269,686
Loans to related companies
110,000
86,579
Other receivables
3
1,938
Derivative financial instruments
-
689
Deferred tax assets
6
583
-
Financial assets, non-current
1,094,587
640,949
Total non-current assets
1,094,587
665,904
Trade and other receivables
38
20,559
Prepayments
21
4,356
Receivables from related companies
984
23,808
Loans to related companies
157,349
-
Derivative financial instruments
-
25,728
Cash and short-term deposits
26,572
7,763
Total current assets
184,964
82,214
TOTAL ASSETS
1,279,551
748,118
EQUITY AND LIABILITIES
USD thousands
Note
2022
(a)
2021
Share capital
18,311
18,311
Retained earnings
897,659
215,971
Reserve for net revaluation according to equity method
118,109
285,310
Cash flow hedge reserve
-
-51
Total equity
1,034,079
519,541
Interest bearing loans and borrowings
9
234,350
-
Loans from related companies
-
131,381
Lease liabilities
8
-
20,032
Derivative financial instruments
-
689
Total non-current liabilities
234,350
152,102
Trade and other payables
353
1,494
Interest bearing loans and borrowings
9
3,488
-
Income tax payable
7,281
-
Lease liabilities
8
-
5,014
Payables to related companies
-
17,690
Loans from related companies
-
9,923
Derivative financial instruments
-
25,779
Other financial liabilities
-
16,575
Total current liabilities
11,122
76,475
Total liabilities
245,472
228,577
TOTAL EQUITY AND LIABILITIES
1,279,551
748,118
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 76
STATEMENT OF CHANGES IN EQUITY
USD thousands
Share capital
Cash flow hedge reserve
Reserve for net revaluation
according to equity method
Retained earnings
Total equity
Equity as 1 January 2022
18,311
-51
285,310
215,971
519,541
Net result
-
-
163,935
-3,378
160,557
Dividends received from subsidiaries and associates
-
-
-125,706
125,706
-
Other equity movements in subsidiaries and associates
-
-
-24,769
-
-24,769
Business combination under common control
-
-
-
379,229
379,229
Cash flow hedges
-
51
-
-
51
Other changes
-
-
-180,661
180,131
-530
Equity as 31 December 2022
18,311
-
118,109
897,659
1,034,079
Equity as 1 January 2021
18,311
406
562,586
-34,579
546,724
Net result
-
-
-7,176
-34,027
-41,203
Dividends received from subsidiaries and associates
-
-
-72,823
72,823
-
Other equity movements in subsidiaries and associates
-
-
26,747
-
26,747
Cash flow hedges
-
-457
-
-
-457
Other changes
-
-
-224,024
227,448
3,424
Dividend distributed to shareholders
-
-
-
-15,695
-15,695
Equity as 31 December 2021
18,311
-51
285,310
215,971
519,541
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 77
1 BASIS OF REPORTING
⌂ MAIN ACTIVITIES
The main activities of parent company, UItranav International ApS, comprise holding of shares in subsidiaries, associates and joint ventures., as well as group funding and cash management.
§ GENERAL ACCOUNTING POLICIES
The Parent Company Financial Statements of Ultranav International ApS have been
prepared pursuant to the provisions for large class C enterprises of the Danish Financial
Statements Act.
The Company’s business is primarily based on the US Dollar. All income in the form of freight
income is in US Dollar, and most costs are in US Dollars as well. Based on this, the Company
has designated the US Dollar as its functional and reporting currency. Consequently, all
amounts are recognised in US Dollar. For USD conversion rate to DKK please refer to note
1.1 of the consolidated financial statements.
The Consolidated Financial Statements have been prepared in accordance with IFRS. The
accounting policies applied for the Consolidated Financial Statements regarding recognition
and measurement have also been applied for the Parent Company with the below
exemptions.
With reference to the provisions of the Danish Financial Statements Act §86 para. 4., the
Company has refrained from preparing a cash flow statement in the Parent Company
Financial Statements. For this information, see the Consolidated Financial Statements for
Ultranav International ApS.
§ BUSINESS COMBINATIONS UNDER COMMON CONTROL
On 26 November 2022, the parent company Ultranav International ApS (the receiving
entity) completed a merger with Ultranav Denmark ApS (the transferred company), a sister
company to Ultranav International ApS. The merger was carried out as part of a
simplification of the current group structure. The transferred company, Ultranav Denmark
ApS, was the former holding company of the Group’s activities in Denmark.
The Parent Company Financial Statements, which is prepared in accordance with the Danish
Financial Statement Act, combines the merged entities from the actual combination date
and onwards using the book-value method. In applying the book-value method, the assets
and liabilities received from the transferred company are measured using the transferred
entity’s book values as they were reported in the Consolidated Financial Statements of their
immediate parent.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 78
2 STAFF COSTS
USD thousands
2022
(a)
2021
Wages and salaries
34
-
Pensions – defined contribution plans
4
-
Staff costs
38
-
Average number of employees in the year
0
0
Headcount at end of year
4
0
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 79
3 INVESTMENTS IN SUBSIDIARIES
§ ACCOUNTING POLICIES
Investments in subsidiaries are recognised and measured according to the equity method.
The proportional share of profit or loss of subsidiaries are included in Profit or Loss. The
proportional share of net assets of subsidiaries are included in the balance sheet.
Subsidiaries with negative net asset value are recognised at USD 0 million, and a provision
to cover the negative balance is recognised if such a present obligation for this purpose
exists.
The net value adjustment to the cost of investments in subsidiaries is, when positive,
recognised in the “Reserve for net revaluation according to equity method” under equity.
The reserve is reduced by dividend payments from subsidiaries.
USD thousands
2022
(a)
2021
Cost at 1 January
28,525
28,535
Acquired through business combination
330,305
Additions for the year
313,329
-
Disposals
-28,535
-10
Cost at 31 December
643,624
28,525
Value adjustment at 1 January
253,531
523,775
Share of result for the year
138,866
-3,992
Dividends
-124,906
-71,078
Disposals
-150,305
-221,853
Movements in equity in subsidiaries
-24,769
26,679
Other increase/(decrease)
-245
-
Value adjustment at 31 December
92,172
253,531
Carrying amount at 31 December
735,796
282,057
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit..
Specification of direct investments:
Company
Registered office
Ownership
Ultrabulk A/S
Denmark
98.1%
Ultranav Business Support ApS
Denmark
100.0%
Ultratank Shipping ApS
Denmark
100.0%
Ultratug ApS
Denmark
100.0%
Ultranav International II S.A.
Panama
100.0%
Merger with Ultranav Denmark ApS
Investments in subsidiaries acquired through business combinuations relate to the merger
with Ultranav Denmark ApS which was carried out in November 2022. Reference is made
to note 1.3 to the Consolidated Financial Statements.
Divestment of Othello Shipping Co. S.A. in 2021
Disposals in 2021 comprise primarily of the divestment of Othello Shippig Co S.A. to
Navigator Holdings Ltd. In return, the Parent Company received shares in Navigator
Holdings Ltd. which were initially measurered at fair value (quoted share price at the
transaction date). The transaction resulted in a loss from sale of subsidiaries of USD 10.4
million in 2021.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 80
4 INVESTMENTS IN ASSOCIATES
§ ACCOUNTING POLICIES
Investments in associates are recognised and measured according to the equity method.
The proportional share of profit or loss of associates are included in Profit or Loss. The
proportional share of net assets of associates are included in the balance sheet. Associates
with negative net asset value are recognised at USD 0 million, and a provision to cover the
negative balance is recognised if such a present obligation for this purpose exists.
The net value adjustment to the cost of investments in associates is, when positive,
recognised in the “Reserve for net revaluation according to equity method” under equity.
The reserve is reduced by dividend payments from associates.
USD thousands
2022
(a)
2021
Cost at 1 January
-
Additions for the year
7,645
237,907
Disposals
-23,284
-
Cost at 31 December
222,268
237,907
Value adjustment at 1 January
31,779
38,811
Share of result for the year
25,069
-3,184
Dividends
-800
-1,745
Disposals
-29,580
-
Movements in equity in associates
-
68
Other increase/(decrease)
-531
-2,171
Value adjustment at 31 December
25,937
31,779
Carrying amount at 31 December
248,205
269,686
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
Specification of direct investments:
Company
Registered office
Ownership
Navigator Holdings Ltd.
Marshall Islands
27.6%
Petrolera Transoceanica S.A.
Peru
50,0%
Naviera Transoceanica S.A.
Peru
1.0%
Upteko ApS
Denmark
11.9%
Port-Safety ApS
Denmark
15.0%
United Overseas Product II AS
Norway
10.0%
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 81
5 FINANCIAL ITEMS
USD thousands
2022
(a)
2021
Interest income
1,293
395
Interest income, loans to related parties
1,622
-
Financial income
2,915
395
-
Interest expenses, bank loans and overdrafts
-2,011
-135
Interest expenses, loans from related parties
-318
-11,570
Interest expenses, lease liabilities
-239
-756
Other financial items, net
-140
-33
Financial expenses
-2,708
-12,494
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
6 TAX
USD thousands
2022
(a)
2021
Current tax on profit for the year
-5,225
-
Deferred tax for the year
583
-
Tax on profit for the year
-4,642
-
Adjustments related to previous years – current tax
14
-
Tax in the income statement
-4,628
-
Deferred tax assets
At the reporting date, deferred tax assets on the balance sheet amounted to USD
583 thousands (2021:USD nil). The deferred tax assets relate to tax losses to be
carried forward.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 82
7 RIGHT-OF-USE ASSETS
USD thousands
2022
(a)
2021
Costs as of 1 January, accumulated
26,244
121,535
Additions
-
42,640
Disposals
-26,244
-137,931
Cost at 31 December, accumulated
-
26,244
Depreciation and impairments at 1 January, accumulated
1,289
92,109
Depreciations
1,738
25,977
Disposals
-3,027
-116,797
Depreciation and impairment at 31 December, accumulated
-
1,289
Carrying amount 31 December
-
24,955
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
8 LEASE LIABILITIES
USD thousands
2022
(a)
2021
Lease liabilities 1 January
25,046
30,412
Additions for the period
-
42,640
Instalments made
-1,632
-26,712
Disposals
-23,414
-21,294
Lease liabilities 31 December
-
25,046
Non-current portion
-
20,032
Current portion
-
5,014
Lease liabilities 31 December
-
25,046
The total cash outflow from leases in 2022 was USD 11.4 million (2021: USD 131.9 million)
which includes short term leases.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 83
9 INTEREST BEARING LOANS AND BORROWINGS
§ ACCOUNTING POLICIES
Loans are recognised at the time the loans are obtained in the amount of the proceeds after
deduction of transaction costs. In subsequent periods, the loans are recognised at
amortised costs.
Carrying amount
USD thousands
Type
2022
(a)
2021
Interest bearing loans
Floating
237,838
-
Interest bearing loans and borrowings
237,838
-
Non-current portion
234,350
-
Current portion
3,488
-
Interest bearing loans and borrowings
237,838
-
The floating rate loans are based upon the USDLIBOR and SOFR6M with an additional
margin of 1.80% – 2.65% (2021: 1.30% – 2.10%). The interest rate on the floating rate
interest bearing loan was between 3.25% - 5.20%.
The fair value of the fixed loans is not materially different from the carrying amount.
The loans are subject to financial and operational covenants, including a minimum equity.
Management assesses that Parent Company and the Group meet these covenants at the
closing date as well as throughout the financial year.
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 84
10 CONTINGENT LIABILITIES
Ultranav International ApS is in joint taxation with other Danish companies in the Group.
Reference is made to note 6.3 to the Consolidated Financial Statements.
11 GUARANTEES
Ultranav International ApS loans to joint ventures and related companies. The table below
summarises guarantees at year-end:
USD thousands
2022
(a)
2021
Guarantees
The company has issued guarantees for loans to related
companies
112,818
91,750
The company has issued performance guarantees to
subsidiaries
81,147
33,639
Total
193,965
125,389
In addition to above, Ultranav International ApS has issued guarantees to certain
counterparties through which we are entering derivative financial instruments for hedging
purposes. Reference is made to note 5.6 to the Consolidated Financial Statements which
details the maximum exposure of the Group.
(a)
Comparative figures of the Parent Company Financial Statements have not been subject to audit.
12 RELATED PARTY DISCLOSURES
Reference is made to note 6.7 in the consolidated financial statements, for related party
transactions with other than wholly owned subsidiaries of Ultranav International ApS.
In accordance with section 98c(3) of the Danish Financial Statements Act, the Company has
not disclosed any related party transactions with its wholly owned subsidiaries.
Ownership:
Ultranav International ApS is a wholly-owned subsidiary of Naviera Ultranav Dos Limitada,
Av, El Bosque Norte 500 Piso 20, 7550092 Las Condes, Santiago, Chile.
The Consolidated Financial Statements of Ultranav International ApS is available at the
Company's address. The ultimate controlling party of Ultranav International ApS is
Inversiones Volcán Mocho S.A., Av, El Bosque Norte 500 Piso 22, 7550092 Las Condes,
Santiago, Chile.
13 EVENTS AFTER THE BALANCE SHEET DATE
For subsequent events, reference is made to note 6.9 in the Consolidated Financial
Statements.
ULTRANAV INTERNATIONAL ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | PAGE 85
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