CVR no. 29 97 58 84
Annual Report
2025
The annual report has been presented and adopted at
the Company’s annual general meeting.
Kalundborg, 30 April 2026
Alan Pai, chairman
Contents
01 Directors’ Report
02 Financial Statements
03 Key contacts
REPORTS
•
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 4
REPORTS
REPORTS
STATEMENT BY THE BOARD OF DIRECTORS AND EXECUTIVE BOARD
Executive Board:
Board of Directors:
REGISTERED OFFICE
Company Registration No. 29975884
Denmark
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 5
REPORTS
REPORTS
INDEPENDENT AUDITOR’S REPORT
CVR no. 25 57 81 98
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 6
REPORTS
REPORTS
DIRECTORS’ REPORT
MANAGEMENT’S REVIEW
The directors present the annual report and financial statements of Kalundborg Refinery A/S for the year ended 31 December 2025.
About Kalundborg Refinery A/S (“the Company”)
We are a Danish energy company with around 400 engaged employees. We are the largest oil refinery in Denmark processing approximately 5.0
million tonnes of crude oil, condensate, and feedstock each year and have tank storage capacity of 1.2 million m3. Our primary markets are Denmark
and Scandinavia.
The refinery produces naphtha, petrol, diesel, fuel oil and heavy fuel. The refinery’s processing plant configuration allows for certain flexibility, enabling
product output optimization towards market demand and margin development through optimizing crude and condensate mix.
Klesch Petroleum SA (“KPSA”) operates a Group supply and trading function that is responsible, in conjunction with the Company and inventory services
providers, for supplying all crude oil, condensate and feedstock transported by tanker. There are around 500 shipping movements per year, the
discharge of which is facilitated by our own harbour facilities which are integrated into the processing plant.
Additionally, we operate two fuel truck terminals for fuel and LPG (Liquefied Petroleum Gas). These product terminals are located in Kalundborg and
Hedehusene, and therefore we are an important supplier of petrol and diesel to the Metropolitan area of Copenhagen.
The Company’s risk exposure and mitigation
The Company is part of the Klesch Group Limited, which implemented the Integrated Supply and Trading (“IST”) Model effective from 1 January 2024.
The IST Model was formalised on 4 October 2024, through the respective agreements concluded between Raffinerie Heide GmbH and Kalundborg
Refinery A/S and Klesch Petroleum S.A. and Klesch DL SA and Klesch MK SA. The purpose of the IST Model is to align the impact of market risk to the
entities within Klesch Group Limited, where the expertise in managing market risk / volatility and associated decision-making was already
concentrated. The Group continues to seek further new petroleum and other commodity opportunities. By implementing the IST Model, the Company
has significantly reduced the market related risks by transferring these to other entities, effectively operating at a cost-plus basis going forward. The
Company is exposed to a new credit risk from related parties instead.
The Company has sold a significant portion of its trade receivables to a third party under a non-recourse Receivable Purchase Agreement and has
entered into crude oil supply and product inventory services agreements under a Crude Supply and Inventory Program. The continued geopolitical
tension remains a significant uncertainty for the Group as it creates volatility on the markets for commodities in which we operate. In addition, it requires
an increased attention to the security of our assets. The refinery industry is increasingly exposed to regulatory risk, which can relate to GHG and
environmental regulations, taxes and duties, and other governmental requirements.
Primary activities in 2025
The operating availability 2025 was 92.7% (2024: 92.9%, with a planned turnaround) which was somewhat impacted by two unplanned shutdowns
following process incidents. With dedicated people and focus on safety these unforeseen shutdowns were well executed with no incidents. Despite
throughput being slightly below plan the Company still refined the quantities and qualities of products in accordance with market developments. As
a response to the ongoing market uncertainties and to maintain a strong operational effectiveness, the Company decided to make some adjustments
to the organization which meant that the Company lowered the number of employees. This came after years with increased number of employees
from 2022.
A strong focus on safety meant that a significant number of initiatives was taken during 2025. The Company expects to see the benefit with improved
safety performance during 2026. The improvement program towards more efficient operations called “Take-off” which was initiated in 2022 continues
and has been embedded across the organization.
Financial results in 2025
In 2025, the Company delivered a total comprehensive income before tax of EUR 23.1 million compared to EUR 23.6 million in 2024. The result is in line
with expectations. The throughput in the refinery was largely similar to 2024.
Events after the balance sheet date
The 2026 financial year will be influenced by geopolitical developments relating to the conflict in Iran. In particular, the increased uncertainty in the
energy markets and the rise in oil and gas prices are leading to changes in the operating environment for procurement and logistics. While the increase
in oil and gas prices is expected to be temporary, the extent and duration of the conflict remain uncertain. This uncertainty limits the ability to assess
potential long-term effects should the conflict continue for a prolonged period. Given the variability of the types of crude oil that can be processed,
the management does not anticipate any material impacts resulting from direct disruptions to key trade and transport routes. Further impacts on the
Group are currently expected to be moderate and are being closely monitored, particularly in operational planning and risk management. The
implemented IST-model does somewhat mitigate the exposure to the uncertainty for the refinery.
Other than the above, no significant events affecting the Company’s financial position have occurred after the balance sheet date.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 7
REPORTS
REPORTS
DIRECTORS’ REPORT—CONTINUED
Outlook
A positive annual result of EUR 15-20 million is expected for the financial year 2026 which is similar to 2025. The operational availability of the plant for
2026 is expected to be at the same level of around 93%.
Statement on corporate social responsibility – Danish Financial Statements Act § 99 a
Kalundborg Refinery A/S’s statutory statement on corporate social responsibility, following the Danish Financial Statements Act §99a, is included in
Kalundborg Refinery A/S’s Sustainability Report for 2025. This is available on the Company’s homepage:
Financial highlights
In million € 2025 2024 2023 2022 2021 (*)
Revenue 3,435 3,752 4,
383 5,688 2,955
EBITDA 76 57 226 169 165
Net operating income 25 12 185 392 43
Profit/loss from financial income and expenses (8) 12 1 (11) (13)
Profit/loss before tax 17 24 186 380 30
Tax on profit/loss for the year (5) (6) (101) (23) (15)
Profit/loss for the year
12 18 85 357 15
T
otal assets 606 653 638 681 652
Equity 361 344 326 348 109
Investment in property, plant and equipment 30 64 40 57 52
Net cash flow from operating activities 84 15 126 352 164
Net cash flow from investing activities (10) (42) (40) (54) (30)
Average number of employees 398 405 356 346 348
Key financial ratios
2025 2024 2023 2022 2021 (*)
Operating margin 1% 0% 4% 7% 1%
Operating profit/loss x 100 / Revenue
Return on invested capital 7% 3% 55% 171% 17%
Operating profit/loss x 100 / Average equity
Return on equity 3% 5% 25% 156% 6%
Profit/loss for the year x 100 / Average equity
Solvency ratio 59% 53% 51% 51% 17%
Equity at year end x 100 / Total equit y and liabilites at year end
Comparative figures for 2021-2022 have not been restated with reference to applicable exemptions in first-time adoption of IFRS.
(*) In the period before 1st of January 2022 the Company was part of the Equinor Group.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 8
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Statement of Comprehensive Income
in € ’000
Notes
Year ended 31
December 2025
Year ended 31
December 2024
Revenue 17
Revenue
Work for own account and recognised as assets
Other operating income 18
Cost of materials 19
(3,142,752 ) (3,457,216 )
Other production related costs 20
Other operating expenses 21 (186,784 ) (234,143 )
Gross profit/(loss)
Personnel expenses 22
(49,946 ) (48,250 )
EBITDA 75,926 57,269
Amortisation and depreciation 23
(51,383 ) (45,598 )
Finance income 24
Finance costs 24 (16,752 ) (12,623 )
Net finance income / (costs)
(7,801 )
Profit / (loss) before income taxes
Income tax (expense) / benefit 14 (5,108 ) (5,813 )
Profit / (loss) for the year
Note: EBITDA - Earnings before interest, taxes, depreciation and amortisation
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 9
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Statement of Comprehensive Income
in €’000 Notes
Year ended 31
December 2025
Year ended 31
December 2024
Profit for the year 11,634 17,777
Other comprehensive income
Translati on from functi onal currency to presentation
currency:
Translation impact arising during the year (31 ) 18
Other comprehensive income that may be reclassified to
profit or loss in subsequent periods
Cash flow hedges – effective portion of change in fair
value
8 10,314 -
Cash flow hedges - reclassified to profit or loss 8 (3,880 ) -
Income tax benefit / (charge) on derivatives 14 (1,416 ) -
Net other comprehensive income that may be reclassi fied
to profit or l oss in subsequent periods
Other comprehensive income/(l oss) for the year, net of tax
Total comprehensive income/(loss) for the year
Distribution of profit
Proposed dividend for the year 2,000 -
Retained Earnings 9,634 17,777
Cash flow hedge reserve 5,018 -
Currency translation reserve (31 ) 18
Distributed total comprehensive income / (loss) 16,622 17,795
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 10
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
in € ’000
Notes 31 D
ecember 2025 31 December 2024
Assets
Non-current assets
Intangible assets 5 872 888
Property, plant and equipment 6 329,246 358,533
Deferred tax asset 14 6,791 5,186
Other receivables 9 14,353 4,787
Total non-current assets 351,263 369,394
Current Assets
Inventories 10
Trade and other receivables 9 58,188 111,336
Derivative assets 4.4 11,315 -
Cash at banks and in hand 12 162,667 140,745
Total current assets 255,212 284,098
Total assets 606,475 653,492
Equity and liabilities
Equity
Share capital 26,316 26,316
Reserves 5,005 18
Retained earnings 327,392 317,757
Proposed dividend for the financial year 2,000 -
Total equity 360,713 344,091
Non-current liabilities
Non-current Income tax liabilities 25 57,237 51,562
Lease liabilities 16 5,850 1,381
Provision for liabilities and charges 15 24,268 25,553
Total non-current liabilities 87,355 78,496
Current liabilities
Provision for liabilities and charges 15 6,809 3,803
Trade and other payables 11 142,469 200,934
Derivative liabilities 4.4 786 155
Lease liabilities 16 6,736 4,386
Current income tax liabilities 1,607 5,494
Interest-bearing loans and borrowings 13 - 16,133
Total current liabilities 158,407 230,905
Total liabilities 245,762 309,401
Total equity and liabilities 606,475 653,492
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 11
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY
(note 8)
As at 1 January 2024 26,316 - - 299,980 - 326,296
Profit/(Loss) for the year 17,777 17,777
Other comprehensive
income/(loss)
Total comprehensive income - 18 17,777 17,795
Transactions with owners of the Company:
Distribution to owners - -
As at 31 December 2024 26,316 - 18 317,757 - 344,091
Profit/(Loss) for the year 9,634 9,634
Other comprehensive
income/(loss)
Total comprehensive income 5,018 (31 ) 9,634 - 14,622
Transactions with owners of the Company:
Distributions to owners 2,000 2,000
As at 31 December 2025 26,316 5,018 (13 ) 329,392 2,000 360,713
in € ’000
Retained
earnings
Share
capital
Total
equity
Cash flow
hedge
reserve
Currency
translation
reserve
Proposed
dividend
T
he share capital consists of nominally 2.3 million shares which are fully paid each with par value (rounded) DKK 85.09.
All ordinary shares rank equally with regard to the Company's residual assets. Holders of shares are entitled to dividends as declared from time to time
and are entitled to one vote per share at the general meetings of the Company.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 12
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
in € ’000
Notes 31 December 2025 31 December 2024
Operating Activities
Profit / (Loss) before income tax
Adjustments for
-
Depreciation 6, 23
-
Amortisation 5, 23
-
Loss / (Gain) on disposal of non-current assets (net)
(652 ) (2,861 )
-
Finance income 24
(8,952 ) (24,542 )
- Finance costs 24
-
Unrealised net foreign exchange (gain)/loss 1,201 171
-
Change in provisions 1,721 (4,320 )
Changes in working capital
- Inventories 8,975 (9,818 )
-
Trade and other receivables
-
Trade and other payables
(35,637 ) 419
Cash flows from / (used in) operati ng activities 92,890
-
Interest expense paid (481 )
(4,960 )
-
Interest income received
-
Income taxes received - -
-
Income tax paid (11,551 )
(51,930 )
Net cash from / (used in) operating activiti es 84,986 14,776
Investing activities
Purchase of property, plant and equipment 6
(18,321 ) (57,191 )
Proceeds from disposal of property, plant and equipment
Net cash from / (used in) investing activities
(10,260 ) (41,861 )
Financing activities
Dividends paid to parent company 26 -
Proceeds from settlement of derivatives (6,449 )
Proceeds from / (Settlem ent of) loans due to related
parties
26 (34,905 )
Payment of lease liabilities 16 (4,352 ) (4,171 )
Net cash from / (used in) financing activities (45,705 )
Net (decrease) / increase in cash and cash equivalents 29,020
Cash and cash equivalents at beginning of year 140,745 119,625
Exchange gain / (loss) on cash and cash equivalents (7,098 ) 10,553
Cash and cash equivalents at end of year 162,667 140,745
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 13
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
1 GENERAL INFORMATION
Kalundborg Refinery A/S (the “Company”) is a limited liability company incorporated and domiciled in Denmark under CVR no. 29 97 58 84. The address
of its registered office is Melbyvej 17, DK-4400 Kalundborg, Denmark. The sole shareholder of the Company is Klesch Refining Denmark A/S, a limited
liability company with registered office at Melbyvej 17, DK-4400 Kalundborg, Denmark, CVR no. 42 13 41 63. The ultimate parent company which
prepares consolidated financial statements of which the Company forms part of is Klesch Group Limited, a company incorporated in Malta with
registered address Victoria Buildings, No. 2a, Triq l-Ghenieq, c/w 21
st
September Avenue, Naxxar, NXR 3622. The consolidated financial statements of
Klesch Group Limited can be obtained by contacting the Company or at the following website: https://www.klesch.com/get-in-touch/. T
he Company
is also included in the consolidated financial statements of Klesch Refining Denmark Holding Limited, having the same registered addressed as Klesch
Group Limited, and which is the smallest group in which it is included as a subsidiary. The ultimate controlling party is Mr. A. G. Klesch.
The Company forms part of the Klesch Group held by Klesch Group Limited. The Klesch Group implemented the Integrated Supply and Trading (“IST”)
M
odel effective from 1 January 2024. The IST Model was formalised on 4 October 2024, through the respective agreements concluded between
Raffinerie Heide GmbH and Kalundborg Refinery A/S and Klesch Petroleum S.A., and Klesch DL SA and Klesch MK SA.
The purpose of the IST Model is to align the impact of market risk to the entities within Klesch Group, where the expertise in managing market risk /
volatility and associated decision-making was already concentrated.
2 BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE
STATEMENT OF COMPLIANCE
These annual financial statements have been prepared in accordance with IFRS Accounting Standards as adopted by the European Union ("EU") and
further requirements in the Danish Financial Statements Act applying to reporting class C large entities.
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated. These financial statements are presented in Euro, and all values are rounded to the nearest
thousand (Euro ‘000), unless otherwise stated.
3.1 RECLASSIFICATION
Referring to the true and fair view set out in the International Financial Reporting Standards as adopted by the EU, the Company has reclassified
individual items in the income statement, and the statement of financial position, and the statement of cash flows. The reclassifications to the income
statement have affected the items cost of materials, finance income and finance costs but have not affected profit before tax, profit for the year or
equity. The reclassifications have affected trade and other receivables, current portion of the items provision for liabilities and charges, trade and other
payables, derivative liabilities and prepayments received from customers and the corresponding items in the statement of cash flows but have not
affected profit before tax, profit for the year or equity, the net cashflows cash flow or the net cash position. Comparative figures have been restated
accordingly.
3.2 BASIS OF MEASUREMENT
These financial statements have been prepared on the historical cost basis, except for certain financial instruments (see note 4.4) measured at fair
value.
3.3 NEW STANDARDS AND INTERPRETATIONS
EFFECTIVE AND ADOPTED
A number of new standards, interpretations and amendments to published standards are effective for annual periods beginning 1 January 2025. The
Company has adopted the new or amended standards in preparing these financial statements.
• Amendments to IAS 21 – Lack of exchangeability
None of these standards, interpretations and amendments have a significant impact on the financial position or performance of the Company.
ISSUED BUT NOT YET EFFECTIVE
A number of new standards are effective for annual periods beginning after 1 January 2025 and earlier application is permitted; however, the
Company has not early adopted the new or amended standards in preparing these financial statements.
• Amendments to IFRS 9 and IFRS 7 – Classification and measurement of financial instruments (Effective 1 January 2026)
• Amendments to IFRS 9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity (Effective 1 January 2026)
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 14
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.3 NEW STANDARDS AND INTERPRETATIONS—CONTINUED
• Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency (Effective 1
January 2027) (not yet adopted by the EU)
• Annual improvements to IFRS Accounting Standards – Volume 11 (Effective 1 January 2026)
• IFRS 18 – Presentation and disclosure in financial statements (Effective 1 January 2027)
• IFRS 19 – Subsidiaries without Public Accountability: Disclosures (Effective 1 January 2027) (not yet adopted by the EU)
IFRS 18 will replace IAS 1 and applies for annual reporting periods beginning on or after 1 January 2026. The new standard introduces new key
requirements regarding presentation of income and expenses and management-defined performance measures.
The Company is still in the process of assessing the impact of the new standard.
IFRS 19 and amendments to IAS 21 are pending adoption by the EU and potential impact will be assessed once adopted.
The Company is closely monitoring these developments. None of these standards, interpretations and amendments are expected to have a significant
impact on the financial position or performance of the Company.
3.4 FOREIGN CURRENCIES
A)
FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Euro (EUR), whereas the Company’s functional currency is Danish Kroner (DKK). The functional currency is
the currency of the primary economic environment in which the entity operates. The Company considers presenting the financial statements in Euro
more relevant because key suppliers and customers operate primarily within the eurozone. The effect from translation from functional to presentation
currency is recognised in other comprehensive income. However, due to the pegged exchange rate policy between DKK/EUR the effect is considered
immaterial.
B)
TRANSACTIONS AND BALANCES
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting
date. Foreign currency differences are generally recognised in profit or loss and presented within net exchange gains/(losses), unless they relate to
investing or financing activities, in which case they are presented within finance income or costs.
Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the
transaction.
3.5 REVENUE
The objective of the Company is primarily the refining of crude oil, other raw materials, and feedstocks for the purpose of the production of petroleum
products and by-products, the purchase and sale of petroleum products and by-products, and the performance of other associated activities.
Revenue is measured based on the consideration specified in a contract with a customer. Revenue from contracts with customers is recognised upon
satisfaction of the performance obligation for the transfer of goods in each contract or rendering of service. Revenue is being presented on a net
basis, i.e. after deduction of e.g., energy tax, as is customary industry practice.
SALES OF GOODS
Revenue from the sale of petroleum products to the ultimate customer is recognised when a customer obtains control of those products, which normally
is when title passes at point of delivery, based on the contractual terms of the agreements. Each such sale normally represents a single performance
obligation. Sales to ultimate customers are presented on a gross basis as revenues from contracts with customers.
The Company performs sales activities in its own name and on its own account. Revenue is recognised in the amount of consideration that the
Company expects to receive in exchange for these goods, excluding taxes or other charges.
To determine the transaction price, the Company uses the contractually agreed formula prices. In these formula prices, the data provided by
internationally recognised service companies that provide a price index or benchmark on capital and commodity markets are used. In this respect,
the Company may precisely determine the transaction price at the time of performance of its performance obligation and at the time when the claim
to the consideration arises. The Company does not have variable considerations, non-cash considerations or considerations to be paid to a customer.
The period between fulfilment of the performance obligation and the time the customer settles payment is a few days.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 15
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.5 REVENUE—CONTINUED
RENDERING OF REFINING SERVICES
The refinery entered into ongoing agreements with inventory facility providers encompassing the purchase, sale and storage of crude oil refined
products and associated feedstocks. Under the arrangements, crude oil is supplied by the inventory facility providers whereupon it is refined into oil
products by the Company and sold back to the inventory facility providers. The refined products may be purchased by the Company at the discretion
of the inventory facility providers for sale to ultimate customers. Since the purchase of the crude oil and sale of the resulting refined products constitutes
a repurchase transaction, the Company does not recognise the crude oil or the resulting refined products as its inventory. Accordingly, the Company
recognises revenue for this refining service on the sale of the resulting refined products to the inventory facility providers. This corresponds with the
satisfaction of the performance obligation over time of refining the crude oil into the refined products for the inventory facility providers. The
consideration for the refining service is the difference between the market price of refined products and market price of crude oil processed.
The refined products are stored by inventory facility providers in the Company’s tanks, in accordance with a Storage and Services Agreement, in respect
of which a fee is earned by the Company.
3.6 FINANCE INCOME AND FINANCE COST
Finance income and costs comprise interest income on financial assets and interest expense on borrowings, leases and provisions, bank charges, and
foreign currency exchange gains or losses.
Interest income or expense is recognised under the effective interest method. The ‘effective interest rate’ is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the
amortised cost of the financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount
of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-
impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial
asset.
3.7 INCOME TAXES
Income taxes disclosed in the income statement include the current tax expenses (or income) and the deferred tax expenses (or income). Income tax
is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case
the related tax is recognised in other comprehensive income or directly into equity.
CURRENT TAX
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year (which differs from the net profit as reported
in the income statement because it is determined in accordance with the rules established by the applicable tax authorities) and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount
expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively
enacted at the reporting date. Current tax assets and liabilities are offset only if certain criteria are met.
DEFERRED TAX
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable
temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for the Company. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are
reversed when the probability of future taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 16
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.8 PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are initially recognised at cost.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Maintenance, repairs and minor renewals that do not result in a technical enhancement of the asset beyond its original capability are expensed as
incurred and charged to profit and loss.
Depreciation is provided on all property, machinery and equipment, at rates calculated to write off the cost, less estimated residual value, of each
asset on a straight-line basis over its expected useful life as follows:
Buildings
10 - 50 years
Machinery and equipment
3 - 61 years
Furniture, fittings and equipment
3 - 10 years
Land is not depreciated. Depreciation is generally recognised in profit or loss.
Assets under construction, which includes cost of construction and other direct costs, are stated at cost. Construction in progress is not depreciated
until such time as the relevant assets are completed and are available for use and at which time they are transferred to other asset classes.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An assets carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of property, plant and equipment (calculated as the difference between the net disposal proceeds and
carrying amount of the asset), is included in the income statement when the asset is derecognised and are recognised within ‘Other (losses)/gains-
net’ in the income statement as incurred.
3.9 INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated impairment losses. Cost comprises of purchase price and any cost directly attributable to the
acquisition until the date on which the asset is available for use.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other
expenditure, including expenditure on internally generated goodwill, is recognised in profit or loss as incurred.
The useful lives of intangible assets are assessed as either finite or indefinite. For intangible assets with definite useful lives, amortisation is computed on
straight-line basis over its expected useful lives which is 5 to 10 years for software and licenses owned by the Company, taking into account residual
value, and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and
amortisation method are reviewed at the end of each reporting period. Amortisation is reported in the income statement under amortisation and
depreciation.
Gains or losses arising from the de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised within ‘Other gains/(losses)’ in the income statement.
Other relevant policies on impairment of intangible assets are disclosed in note 3.13.
3.10 LEASES
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration, it is a lease.
A)
As a lessee
Right-of-use assets (ROU)
The Company 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, initial direct costs incurred, and lease payments made at or before
the commencement date less any lease incentives received.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 17
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.10 LEASES—CONTINUED
The Company presents right-of-use assets in property, plant, and equipment.
Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term and the expected useful life of the leases and are allocated to asset classes.
Right-of-use assets are subject to impairment. Other relevant policy on impairment of ROU is recognised in note 3.13.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over
the lease term, using the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily
determinable. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of asset leased.
The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects
the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense
in the period on which the event or condition that triggers the payment occurs.
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 in-
substance fixed lease payments or a change in the assessment to purchase the underlying asset. Interest expense in lease liabilities is recognised in the
financial costs in the income statement.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a
lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that are considered of low value (i.e., below €5,000). Lease payments on short-term leases and
leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.
B)
As a lessor
Leases where the Company does not transfer substantially all the risks and benefits of ownership of the underlying asset are classified as operating
leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the
lease term on the same basis as rental income.
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term. Contingent
rent is recognised as revenue in the period in which it is earned.
3.11 INVENTORIES
Inventories, other than hedged inventory or inventory held for short-term trading purposes are stated at the lower of cost and net realisable value. Cost
is typically determined by first-in, first-out method and comprises direct purchase cost, cost of production, transportation and manufacturing expenses.
Net realisable value is determined by reference to prices existing at the balance sheet date. Net realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
If derivative financial instruments are used to hedge the fair value of inventories, this is accounted for in accordance with IFRS 9. Inventories held for
short-term trading purposes are stated at fair value less cost to sell and any changes in fair value are recognised in the income statement.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
MATERIALS AND SUPPLIES
Marketable materials and spare parts in the general warehouse have been valued using the first-in, first-out (FIFO) method.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 18
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.11 INVENTORIES—CONTINUED
EMISSION RIGHTS
The European Union (EU) requires Kalundborg Refinery A/S to comply with the requirements of the European Emission Trading Group regards emissions
of CO2. For this purpose, the emissions of the refinery are measured, and a free allowance of EU Allowance certificates is granted annually to the
refinery. The difference between the allowance granted and the actual emissions must be purchased in the form of EU Allowance certificates from
the tradeable market. Emission certificates are an input cost in the production process, similar to inventories. The Company has elected to account for
emissions certificates as inventories.
EU Allowance certificates are measured at cost on a first-in, first-out (FIFO) basis. The cost of EU allowance certificates is the purchase price.
Subsequently, these are measured at lower of cost and net realisable value. The annual allowances of EU Allowance certificates are used in the period
for which they are granted and recognised at the estimated cost that is equal and opposite to the obligation extinguished by the certificate, i.e. the
net impact in the financial statements is nil for the allowances and related obligations.
FINISHED GOODS
The cost of finished goods comprises of raw materials, direct labour, other direct costs and related production overheads (based on normal operating
capacity).
3.12 PROVISIONS
The amount recognised as provision, including tax, legal, contractual and other exposures or obligations, is the best estimate of the consideration
required to settle the related liability, including any related interest charges, taking into account the risks and uncertainties surrounding the obligation.
Provisions for environmental restoration and legal claims are recognised when:
-
there is a present legal or constructive obligation as a result of past events;
-
it is probable that an outflow of resources will be required to settle the obligation; and
-
the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of
obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end
of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects the current market assessments of the time
value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Provision for emission schemes
The Company participates in a ‘cap and trade’ scheme in various countries. Under the scheme, the Government in each country sets specific annual
limits for emitting pollutants and grants the Company the respective number of emission certificates. The Company can settle its annual obligation
created by the emissions of pollutants only by surrendering emissions certificates. If the Company’s annual emissions are below the limit, then it can sell
the remaining certificates to other parties on a trading platform. Conversely, if the annual emissions exceed the limit, then the Company purchases
additional certificates to settle its obligation.
The Company receives free emission rights as a result of the European Trading Schemes. Emission rights granted free of charge are stated separately
at EUR 0 on the grant date and used for the obligation for the fiscal year for which they were granted. The rights are received on an annual basis and
in return the Company is required to remit the rights equal to actual emissions.
The Company recognises a liability for emissions that it satisfies through the surrender of EU Allowances. Based on this obligation, the Company
recognises provisions for emissions. The value of the provisions is based on the following:
−
The quantities and carrying amount of EU Allowances purchased and recognised under inventories; and
−
The market rates as of the reporting date for any part of the emissions obligations not yet covered by the purchase of EU Allowances.
The provision for emissions is based on the actual emissions for the year less the allocation of free EU Allowances granted to the refinery annually. The
liability is presented as emission rights under provision for liabilities and the related charges are included in the statement of financial position. The
provision is derecognised when the certificates are surrendered to the Government.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 19
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.13 IMPAIRMENT OF NON-FINANCIAL ASSETS
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (which include property, plant, and equipment, and
intangible assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or cash-generating units (CGUs). The recoverable amount of an asset or CGU is the greater of its value
in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit
or loss. They are allocated first to reduce the carrying amount of goodwill allocated to the CGU (if any), and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.14 SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
3.15 DIVIDEND DISTRIBUTION
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the
dividends are approved by the Company’s shareholders.
3.16 EMPLOYEE BENEFITS
Wages, salaries, bonuses, social security contributions, paid annual leave and sick leave are accrued in the period in which the associated services
are rendered by the employee to the Company. Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably
.
3.17 FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset for one company and to financial liability or equity instrument for another
company.
i.
Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other liabilities are initially recognised when the Company becomes a party to
the contractual provisions of the instrument. Regular purchase and sales of financial instruments are recognised on trade date, being the date on
which the Company commits to purchase or sell the financial instrument.
A financial asset (unless it is a trade receivable without a significant financing component, which is initially measured at its transaction price) or
financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition
or issue.
ii.
Classification and subsequent measurement
Financial assets - Classification
On initial recognition, financial assets are classified as subsequently measured at amortised cost or fair value through profit and loss.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets,
in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 20
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.17 FINANCIAL INSTRUMENTS—CONTINUED
Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount
outstanding.
Financial assets at amortised cost are subsequently measured at amortised cost under the effective interest method. The gross carrying amount is
reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
The Company’s financial assets at amortised cost mainly comprise trade and other receivables and cash at banks. Cash at banks include cash in
hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.
Financial Assets at Fair Value through Profit or Loss (FVTPL)
All financial assets not classified as measured at amortised cost are measured at FVTPL. This includes all derivative financial assets. Financial assets at
FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
However, derivatives designated as hedging instruments refer to note 3.19.
Financial assets – business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects
the way the business is managed and information is provided to management. Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose, consistent with the Company’s continuing recognition of the assets.
The business models of the Company are as follows:
−
Held to collect
−
The Company holds financial assets which arise from trade and other receivables. The business model for these financial instruments is to
collect the amounts due from the Company’s trade and other receivables.
−
Held for trading
−
The Company holds a portfolio of forwards, futures, swaps, and options for the purposes of trading.
Financial liabilities - Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading,
it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost under the
effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.
The Company’s financial liabilities classified as measured at amortised cost mainly comprise trade and other payables and borrowings.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Borrowings
Borrowings are recognised initially at their fair value net of transaction costs incurred. Any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some
or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to
which it relates.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 21
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.17 FINANCIAL INSTRUMENTS—CONTINUED
Financial Liabilities at FVTPL
The Company’s financial liabilities classified as at FVTPL comprise derivative financial liabilities, unless these have been designated as hedging
instruments.
iii.
Derecognition of Financial Assets And Financial Liabilities
Financial assets are primarily derecognised where:
−
The right to receive cash flow from an asset has expired;
−
The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flow in full
without material delay to a third party under a ‘pass through’ agreement and either the Company has transferred substantially all the risks
and rewards of the asset or has transferred the control of the asset.
A financial liability is derecognised when the obligation under the financial liability is discharged or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of existing liability are substantially modified, such an
exchange or modification is treated as derecognition of the original liability and the recognition of a new one. The difference in the respective amounts
is included in profit or loss.
iv.
Offsetting of Balances
Financial assets and financial liabilities are presented gross in the statement of financial position unless both of the following criteria are met: (i) the
Company currently has a legally enforceable right to set off the recognised amounts, and (ii) the Company intends to either settle on a net basis or
realise the asset and settle the liability simultaneously. A right of set off is the Company’s legal right to settle an amount payable to a creditor by
applying against it an amount receivable from the same counterparty. The relevant legal jurisdiction and laws applicable to the relationships between
the parties are considered when assessing whether a current legally enforceable right to set off exists.
v.
Impairment of Non-Derivative Financial Assets
The Company recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost.
The Company measures loss allowances at an amount equal to 12-month ECLs. 12-month ECLs are the portion of ECLs that result from default events
that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the
Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking
information. The Company assumes that the credit risk on a financial asset has increased significantly if it is more than one (1) day past due date. The
Company considers a financial asset to be in default when:
−
the debtor is unlikely to pay its credit obligations to the Company in full; or
−
the financial asset is more than thirty (30) days past due date.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i. e. the difference
between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive). ECLs are
discounted at the effective interest rate of the financial asset.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 22
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.17 FINANCIAL INSTRUMENTS—CONTINUED
Credit- impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-
impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Presentation of allowance in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Loss allowances for
financial guarantee contracts are recognised as a provision charged to profit or loss.
Write-off
The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its
entirety or a portion thereof.
3.18 FAIR VALUE MEASUREMENT
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair
value of a liability reflects its non-performance risk. A number of the Company’s accounting policies and disclosures require the measurement of fair
values for financial assets and liabilities. The fair values of financial instruments measured at amortised cost are disclosed in note 8.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
that market participants act in their economic best interest. The Company uses valuation techniques that are appropriate in the circumstances and
for which sufficient data is available to measure fair value, maximising the relevant observable inputs and minimising the unobservable inputs.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
•
Level 1 - Quoted (unadjusted) market prices in active market for identical assets or liabilities
•
Level 2 - Valuation techniques for which the lowest level of input that is significant to the fair value measurement is directly or indirectly
observable
•
Level 3 - Valuation techniques for which lowest level input that is significant to the fair value measurement is unobservable.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Movements in the fair value of financial assets and liabilities at fair value through profit or loss, primarily derivative instruments held by the Company,
are recognised within cost of materials in profit or loss unless the instrument is designated in an effective hedge relationship. At the close of business
on the reporting date the fair value of financial assets traded in an active market is determined by reference to the quoted market prices or dealer
price quotations, without any deduction for transaction costs. The bid price is applied to any net open financial asset positions and the ask price is
applied to any net open financial liability positions. Where the financial instrument is not traded in an active market, fair value is determined using
valuation techniques. These include using recent arm’s length market transactions, reference to the current market value of another instrument which
is substantially the same, discounted cash flow analysis and option pricing models. Where one or more significant inputs into a valuation technique
are based on inputs that are not observable, no gain or loss is recognised on initial recognition in respect of that financial instrument. Gains and losses
are recognised after initial recognition to the extent that it arises from a change in a factor that market participants would consider in setting a price.
3.19 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
The Company uses derivative financial instruments to manage exposures to financial risks, such as commodity price risks, operating margin risks and
foreign exchange risks arising in the normal course of business.
The Company’s policy is to initially recognise and subsequently measure these instruments at fair value, with resulting gains or losses being reported
within cost of materials of the statement of comprehensive income. The fair value of derivative financial instruments is determined using actual market
information data and valuation techniques based on prevailing market rates for similar instruments as appropriate. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 23
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.19 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING–CONTINUED
Contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments as
if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of receipt
or delivery of non-financial item in accordance with the Company’s expected purchase, sale or usage requirements, are accounted for as a
derivative at fair value through profit or loss. Gains or losses arising from changes in the fair value on these derivatives (that are not designated as
effective hedging instruments) are recognised in the statement of comprehensive income. If, at inception of a contract, the valuation cannot be
supported by observable market data, any gain or loss determined by the valuation methodology is not recognised in the income statement over the
life of the contract until all the remaining contract term can be valued using observable market data at which point any remaining deferred gain or
loss is recognised in the income statement only to the extent that it arises from a change in a factor (including time) that market participants would
take into account when pricing the asset or liability.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented at its inception. This
documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how effectiveness will be
measured throughout its duration. Such hedges are expected at inception to be highly effective.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging the exposure to variability in cash flows that is either
attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction.
The treatment of gains and losses arising from revaluation of derivatives designated as hedging instruments depends on the nature of the hedging
relationship.
Hedges that meet the strict criteria for hedge accounting are accounted for as described below:
CASH FLOW HEDGES
Cash flow hedges are used to hedge the risk of variability in cash flows related to an asset or liability carried on the statement of financial position or
related to a highly probable forecast transaction.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in OCI and
accumulated in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in cost of materials in the
statement of comprehensive income. The Company uses cash flow hedges to address the volatility of commodity prices in accordance with its risk
management policy to hedge the margin of part of its production. The ineffective portion relating to foreign currency contracts is recognised in
finance costs.
Amounts recognised in OCI are reclassified to cost of materials in the statement of comprehensive income in the periods when the hedged item is
recognised in profit or loss, in the same line of the statement of comprehensive income as the recognised hedged item. However, when the forecast
transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognised in
OCI are transferred and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge
accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in OCI is
recognised immediately to profit or loss as a reclassification adjustment.
CURRENT VERSUS NON-CURRENT CLASSIFICATION OF DERIVATIVE INSTRUMENTS
Derivative instruments that are not designated as effective hedging instruments are classified as current or non-current or separated into current and
non-current portions based on an assessment of the facts and circumstances (i.e. the underlying contracted cash flows):
−
When the Company expects to hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 months
after the reporting date, the derivative is classified as non-current (or separated into current and non-current portions) consistent with the classification
of the underlying item.
−
Derivative instruments that are designated as, and are effective hedging instruments, are classified consistently with the classification of the
underlying hedged item. The derivative instrument is separated into a current portion and a non-current portion only if a reliable allocation can be
made.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 24
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES—CONTINUED
3.20 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amount of assets
and liabilities as well as disclosures. Management also makes certain judgments, apart from those involving estimations, in the process of applying the
accounting policies.
Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results may differ from management estimates, and our estimates can be revised in the
future, either negatively or positively, depending upon the outcome or changes in expectations based on the facts surrounding each estimate.
In the opinion of the directors, the accounting estimates and judgements made in the course of preparing these financial statements are not difficult,
subjective, or complex to a degree which would warrant their description as critical in terms of the requirements of the IAS 1 – ‘Presentation of
financial statements’ except for the item addressed below.
A)
USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT
The estimation of the useful life of an item of property, plant and equipment is a matter of management judgment based upon experience with similar
assets. The Company reviews the estimated useful lives of property, plant, and equipment on an ongoing basis. In determining the useful life of an
asset, management considers the expected usage based on production and reserve estimates, estimated technical obsolescence, physical wear
and tear and the physical environment in which the asset is operated. Changes in any of these conditions or estimates may result in adjustments to
future depreciation rates. The estimates are considered to have medium potential impact on the financial statements.
The Company has reassessed the estimated useful lives of Property, Plant and Equipment in 2023. Details of the change of the estimated useful lives is
disclosed in note 6.
B)
PROVISION FOR ENVIRONMENTAL RESTORATION
The estimation of the provision for environmental restoration is a matter of management judgment based upon experience and updates of prices for
remediation costs. In determining the impact management has based its estimate on advice from specialized consultants. While circumstances
affecting the regulatory requirements and remediation methods used may change and result in adjustments to the financial statements, the estimates
are considered to have low potential impact on the financial statements.
C)
RECOGNITION AND MEASUREMENT OF DEFERRED TAX ASSETS AND UNCERTAIN TAX POSITIONS
Deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or
other future taxable profits. Before making such judgement management assesses the likelihood and recoverability based on business plans and future
outlooks for the Company and the markets in which it operates. By nature, this estimate is uncertain. However, the estimates are considered to have
low potential impact on the financial statements. With reference to note 25, judgements have been applied with respect to assessment of potential
risk related to additional tax exposure from the intergroup transactions.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 25
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to multiple financial and operational risks arising from its petroleum and commodity trading and marketing activities in the
refining business.
Approach to risk management
The Group’s approach to risk management focuses on early identification of key risks and planning mitigating actions to reduce the likelihood of these
having a detrimental impact on our businesses. We continue to assess and strengthen our processes and reporting capabilities to ensure early
identification of key risks and their appropriate management. We regularly assess our approach to risk management to ensure they meet our changing
business needs and support the effective management of risks and meet the requirements of statutory governance codes in the countries the Group
operates in.
Prudent management of these risks is an integral part of the Group’s business strategy and has been institutionalised since the Group’s formation. The
risks are managed and mitigated via the implementation of relevant policies and delegation of authorities. Where appropriate, risks are managed via
hedging strategies which may include hedging foreign currency exchange exposure, commodity price risk and credit risk.
The importance of managing risk is clearly defined in the Klesch group’s Risk Management Policy (“Policy”) which has been established to ensure that
the Group conducts its business within a defined and acceptable risk management framework.
The effective management of risks enables the Group to:
A)
Deliver our strategic objectives
B)
Effectively deal with risks should they arise
C)
Ensure the implementation of consistent risk management framework across the Klesch Group
D)
Ensure business units commercial activities are based on reliable and validated information and data and pre-define risks which are within
defined and agreed risk tolerance of the Klesch Group
E)
Ensure business units have clearly defined processes in place in order to mitigate and manage financial and operational risks
F)
Ensure employees are operating under highest professional and ethical behaviour
G)
Pursue opportunities while keeping risks at an acceptable level in a rapidly changing external environment
Our risk framework
The main forum for the Group’s risk management is the Group Risk Management Committee (GRMC). The purpose of the GRMC is to provide a platform
for both the review and the setting of common standards for control of all risks associated with the Group’s business activities which includes ensuring
that each business unit’s risks have been adequately identified, assessed, mitigated and have an acceptable risk management framework in place
to monitor and report the risks on a regular basis.
The Group’s day to day risk function is managed by the Klesch Group Limited’s risk team. The GRMC provides guidelines for overall risk management,
as well as principles and policies covering specific areas such as commodity price risk, foreign currency risk, interest rate risk, credit risk, use of derivative
and non-derivative financial instruments and management of liquidity.
4.1 FINANCIAL RISK FACTORS
The Company’s financial assets and financial liabilities are summarised in note 7.
A)
MARKET RISK
Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of the business and
includes commodity price risk, foreign exchange risk and interest rate risk.
The primary market risk that the Klesch Group is exposed to is commodity price risk which includes fluctuations in the crack margins of its oil products
and the cost of crude oil, natural gas, carbon certificates, and other commodity-based products that could adversely affect the value of the Group’s
financial assets, liabilities or expected future cash flows. This risk is particularly pronounced given the industry's exposure to global economic and political
instability, which can lead to increased competition, loss of customers, and pricing pressures. The volatility of crude and product prices is a significant
component of market risk, as these prices are influenced by a myriad of factors such as geopolitical events, supply disruptions, and changes in
regulatory environments. The market risk is wholly managed by Klesch Groups entities in Geneva and London who undertake value chain optimisation
and supply, comprehensive risk management (hedging activities) and crude and product pricing decisions to actively manage market risk and
mitigate its impact on the financial performance of the Group. By introducing the IST Model, the Company has significantly reduced the risk exposure
related to market risk.
In addition to commodity price risk, the Klesch Group is exposed to market risk in the form of foreign currency exchange risk and interest rate risk, which
are discussed below.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 26
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.1 FINANCIAL RISK FACTORS—CONTINUED
1)
FOREIGN CURRENCY RISK FACTORS
The Group operates internationally and is therefore exposed to currency risk on foreign currency denominated monetary assets and liabilities
(transactional exposure), forecast transactions, firm commitments to the extent that there is a mismatch between the currencies in which sales,
purchases, receivables and borrowings are denominated and the respective functional currency of the Group companies’ operations. The majority of
the Group’s trading is denominated in US Dollars.
The Group manages its net exposure to foreign exchange risk by balancing both financial assets and financial liabilities denominated in selected
foreign currencies.
When currency exposure arises as a result of purchase and sale commitments the Group seeks to use forward foreign exchange transactions to hedge
the exposure. Changes in fair value of these contracts are recorded in profit or loss.
The Group has foreign currency exposure arising from its foreign operations. The Group does not have a formal hedging policy to protect the Euro asset
value of its net investments in foreign operations; however, budgeted exchange rates are set and Group performance against budgeted exchange
rates is monitored by management. The Group does not consider itself to be exposed to fluctuations in currency risk due to the safeguards applied.
The Company is exposed to minor foreign currency exchange rate risks from its operating activities and seeks to match the currency of its purchases
to the currency of its sales, when possible, and with such transactions being generally carried out and settled over a short timeframe thus limiting
exposure. The Company is therefore minimally exposed to fluctuations in foreign currency exchange rates, and as such a sensitivity analysis has not
been disclosed.
An analysis of the Company’s primary net monetary assets (liabilities) in currencies other than Euro is presented below along with the exchange rates
applicable as at the reporting date:
in € ’000
31 December 2025
31 December 2024
USD
103,295
200,366
DKK
19,369
(152,531)
GBP
301
1,789
The following significant exchange rates have been applied to outstanding monetary assets at year-end:
31 December 2025
31 December 2024
USD/EUR
1.17501
1.0389
DKK/EUR
7.46890
7.4600
GBP/EUR
0.87260
0.8292
Monetary assets include trade receivables and cash at banks, and derivative assets, while monetary liabilities include trade payables, accruals, lease
liabilities, and derivative liabilities.
2)
COMMODITY PRICE RISK
The risk is primarily that market prices for commodities will fluctuate between the time that sales prices are fixed and the time at which the corresponding
procurement cost is fixed, thereby potentially impacting expected margins.
The Company’s cash flows and profitability are sensitive to the underlying price of a number of commodities, including crack spreads on its product
basket, crude oil, natural gas, and carbon credit prices which are dependent on a number of factors and on global supply and demand.
Due to the implementation of the IST Model effective from 1 January 2024, the inherent risks related to such spreads and prices are transferred to the
Group, hence the Company considers the commodity risk as low.
3)
CASH FLOW AND FAIR VALUE INTEREST RATE RISK
The Company is exposed to the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.
As at the reporting date, the Company has loans at fixed interest rates. These loans are contractually agreed with related parties at fixed rates in line
with market rates at respective issuance date. This exposes the Company to fair value interest rate risk. Refer to note 13 for an overview of the
borrowings.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 27
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.1 FINANCIAL RISK FACTORS—CONTINUED
A)
MARKET RISK–CONTINUED
The Group does not have a formal policy of determining how much the Group’s exposure should be to fixed or variable rates. However, the Group
performs periodic analysis of the current interest rate environment and depending on that analysis at the time of raising new debts, management
makes decisions whether obtaining financing on a fixed-rate or variable-rate basis would be more beneficial to the Group over the expected period
until maturity.
The Company considers its risk from fluctuating market interest rates as low since the neither the Company nor the Group have external borrowings
with third parties. As at the reporting date, the Company only had borrowings from related parties as disclosed in note 13. As a result, no sensitivity
analysis has been disclosed.
B)
CREDIT RISK
Credit risk refers to the risk exposure that a potential financial loss to the Company may occur if a counterparty defaults on its contractual obligations.
The maximum exposure to credit risk is the value of the assets which might be lost.
Credit risk arises from cash at banks, deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding trade
receivables and committed transactions.
Credit risks related to trade receivables is systematically monitored, taking into account a customer’s financial position, credit insurance, past
experience and other factors. Whilst the Company is contractually exposed to credit risk, financially, the Company is not exposed to major credit risks
from its operating activities as under the IST Model the Company receives an appropriate target margin. In addition, Klesch Group Limited entities in
Geneva (Klesch Petroleum SA and Klesch DL SA, collectively known as the Principals”) undertake comprehensive measures to mitigate credit risk,
which includes KYC checks, evaluating credit risk on a deal-by-deal basis, and securing insurance coverage through third-party credit insurers. If the
credit limits exceed the insurer's risk tolerance, customers are required to obtain letters of credit, parent company guarantees, bank guarantees or
request of prepayment should the customer not be willing to provide any security.
Counterparty credit exposures are monitored by individual counterparty and by category of credit rating and are subject to approved limits. For
transactions financed by banks, only independently rated parties with an acceptable rating are accepted by the Klesch Group. If customers are
independently rated, these ratings are used. If there is no independent rating, risk control assesses the credit quality of the customer, taking into
account its financial position, credit insurance, past experience and other factors. Individual risk limits are set based on internal or external ratings in
accordance with limits set by the GMRC. The utilisation of credit limits is regularly monitored. No credit limits were materially exceeded during the
reporting period, and Klesch Group management does not expect any losses from non-performance by these counterparties.
The maximum credit risk generally equals the carrying amount of all financial assets recognised in the statement of financial position and is presented
in the table below.
in € ’000
Notes
31 December 2025 31 December 2024
Cash at banks 12 162,667 140,745
Trade and other receivables excluding prepayments 9 52,215 70,408
Other receivables, non-current 9 14,353 4,787
Total 229,235 215,940
The Company also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry
and country in which customers operate. Details of concentration of revenue and related credit risk are found below.
(a)
Trade receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers
the factors that may influence the credit risk of its customer base, including the default risk associated with the industry, credit insurance available and
country in which customers operate.
Customer credit risk is managed by the finance department subject to the Group’s established procedures and controls related to customer credit risk
management before the Group’s standard payment and delivery terms and conditions are offered. The credit quality of the customers is assessed
considering its credit rating, beneficial owners, sanctions list, financial position and performance.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 28
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.1 FINANCIAL RISK FACTORS—CONTINUED
B)
CREDIT RISK–CONTINUED
The Company limits its exposure to credit risk from trade receivables by entering non-recourse receivables purchase agreement with third parties
(Coface and DZ Bank) for certain approved customers. The factoring arrangements are subject to a purchase price reverse (holdback) of 5% for The
Company. Loss resulting from a bad debt events is borne entirely by the factor, with no resource to the Company. Details of factoring arrangements
are included in note 9. Outstanding customer receivables not sold to the factor are regularly monitored and any shipments to major customers are
generally covered by letters of credit and other forms of credit insurance.
The Company does not require collateral in respect of trade receivables. The Company does not have trade receivable for which no loss allowance
is recognised because of collateral.
None of these customers’ balances have been written off or are credit impaired as at the reporting date. In monitoring customer credit risk, customers
are grouped according to their credit characteristics, including whether they have trading history with the Group and existence of previous financial
difficulties.
56% (2024: 75% of total sale of goods to customers approximately amounting to EUR 1,435 million (2024: EUR 2,071 million) are generated from a total
of top 5 customers. The remaining revenue is generated across multiple customers.
As at 31 December 2025 and 2024, the exposure to credit risk for trade receivables by geographic location was as follows:
in € ’000
Notes
31 December 2025
31 December 2024
Denmark
-
1,497
Total
-
1,497
The following table provides information about the exposure to credit risk and ECLs for trade receivables for customers as at 31 December 2025 and
2024.
in € ’000
Weighted-average loss rate
Gross carrying amount
Loss allowance
Credit-impaired
At 31 December 2025
Current (not past due date)
0%
-
-
-
1-30 days past due
-
-
-
-
31-60 days past due
-
-
-
-
61-90 days past due
-
-
-
-
More than 90 days past due
-
-
-
-
in €’000
Weighted-average loss rate
Gross carrying amount
Loss allowance
Credit-impaired
At 31 December 2024
Current (not past due date)
0%
1,497
-
-
1-30 days past due
-
-
-
-
31-60 days past due
-
-
-
-
61-90 days past due
-
-
-
-
More than 90 days past due
-
-
-
-
The actual credit loss experience over the past two years is nil. Allowance for ECLs in respect of trade receivables is nil in 2025 and 2024. There were no
bad debts write-off for 2025 and 2024.
(b)
Other receivables
Other receivables include receivables from financing partners for hedging transactions, for non-recourse receivables purchase arrangements and for
inventory facilities. The Company limits its exposure to credit risk on other receivables by transacting with financing partners that have a credit rating
of at least A1 from Moody’s and internal rating.
(c)
Cash at banks
As at 31 December 2025, the Company held cash at banks of EUR 162,667 (2024: EUR 140,745). The Company’s cash deposits are held with banks and
financial institutions which are rated A1 to A3, based on Moody’s ratings.
Expected credit losses on cash at bank have been measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The
Company considers that its cash at bank has low credit risk based on the external credit ratings of the counterparties.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 29
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.1 FINANCIAL RISK FACTORS—CONTINUED
B)
CREDIT RISK–CONTINUED
in €’000 31 December 2025 31 December 2024
A1 39,392 103,
543
A2 6,650 30,
740
A3 116,625 6,462
Cash and cash equival ents in the statement of financial position 162,667 140,745
Allowance for ECLs in respect of cash at bank is calculated at EUR 258 thousand in 2025 and considered negligible and similarly for 2024.
C)
LIQUIDITY RISK
Liquidity risk is the risk that the Company is unable to meet its payment obligations when due, or that it is unable, on an on-going basis, to borrow funds
in the market on an unsecured or secured basis at an acceptable price to fund actual or proposed commitments.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient cash at banks and ready sources of
committed funding available to meet anticipated and unanticipated funding needs. Sound financial management with a focus on liquidity has been
instrumental to the Company’s success.
Cash flow forecasting is performed in the Company and aggregated by Group finance. The Group finance function monitors rolling forecasts of the
business units and the Group’s total liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient
headroom to ensure the Group does not breach borrowing limits or covenants (where applicable) on any of its facilities. Such forecasting takes into
consideration the Group’s debt financing plans, covenant compliance, compliance with internal statement of financial position ratio targets and, if
applicable external regulatory or legal requirements – for example, currency restrictions.
The table below analyses the contractual undiscounted cash flows arising from the Company’s financial liabilities into relevant maturity groupings
based on the remaining period at the statements of financial position date to the contractual maturity date.
At 31 December 2025
in € ’000 Notes 2 mths or less 2 -12 mths 1 - 5 years Over 5 years Total
Lease liabilities, inclusive of interest
16 1,208 6,041 5,355 974 13,578
Trade and other payables
11 129,168 9,885 - - 139,053
Payables to related parties
11 4,181 - - - 4,181
Derivative liabilities
4.4 - 786 - - 786
Net book value 134,557 16,712 5,355 974 157,598
At 31 December 2024
in € ’000 Notes 2 mths or less 2 -12 mths 1 - 5 years Over 5 years Total
Related party borrowings 13 16,133 16,133
Lease liabilities, inclusive of interest 16 755 3,777 548 898 5,978
Trade and other payables 11
178,111 - - -
178,111
Payables to related parties 11 - 22,978 - - 22,978
Derivative liabilities 4.4 - 155 - - 155
Net book value 178,866 43,043 548 898 223,355
When the amount payable is not fixed, the amount disclosed has been determined by reference to the projected settlement amounts based on
commodity price curves and other relevant market data at the reporting date.
The Company has agreed to comply with certain financial covenants with regards to certain agreements, including a monthly minimum liquidity test.
Non-compliance of these financial covenants will mean that the outstanding payable must be settled applying the accelerated terms. All covenants
were complied with during 2025 and 2024.
C)
CONCENTRATION RISK
The management of the Group is proactively looking to diversify its customer base to minimise the exposure to any one counterparty across the
segments. In 2025, turnover with top two customers represented 38% of total of goods (2024: 45%).
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 30
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.2 CAPITAL RISK MANAGEMENT
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to minimise the cost of capital. The Company finances
its operations by a combination of retained profit and borrowings with related parties.
For the purpose of the Company’s capital management, capital includes issued share capital and all other equity reserves attributable to the owners
of the Company amounting to EUR 360.8 million (2024: EUR 344.1 million) plus net debt. The Company monitors capital using a gearing ratio, which is
net debt
The Company reviews its capital structure regularly and where necessary makes adjustments in light of change in economic conditions. No changes
were made in the objectives, policies or processes for managing capital during the current and comparative years.
4.3 DERIVATIVE FINANCIAL INSTRUMENTS
As part of its business operations, the Company uses derivative financial instruments (“derivatives”) in order to manage exposure to fluctuations in
commodity prices and foreign exchange rates.
Within the ordinary course of business, the Company routinely enters into sale and purchase transactions for commodities, and these physical contracts
are treated as derivatives in accordance with IFRS 9 due to the nature of the Company’s activities. These contracts include pricing terms that are
based on a variety of commodities and indices. They are recognised in the statement of financial position at fair value with movements in fair value
recognised in the statement of comprehensive income.
The Company also uses various commodity-based derivative instruments to manage some of the risks arising from its normal operating activities that
give rise to commodity price exposures. Such instruments include financial or net-settled forwards, futures, swaps and options.
Where these derivatives have been designated as cash flow hedges of underlying commodity price exposures, certain gains and losses attributable
to these instruments are deferred in equity and subsequently recognised in the statement of comprehensive income when the underlying hedged
transaction affects profit or loss. All commodity derivatives that are not part of a hedging relationship are recognised in the statement of financial
position at fair value with movements in fair value recognised in the statement of comprehensive income.
Note 7 summarises the information on the gross derivative balances. Open position balances with certain brokers are presented on a net basis, where
master netting agreements are in place.
4.4 FAIR VALUE ESTIMATION
FAIR VALUE HIERARCHY
Based on the observability of inputs to the valuation techniques employed, the Company is able to classify all financial assets and financial liabilities
carried at fair value. The determination of the classification is based on the lowest level input that is significant to the fair value measurement as a
whole. Refer to note 4.4 for details on the fair value hierarchy.
• Level 1 – Quoted prices are available in active exchange markets for identical assets and liabilities as of the reporting date. Active exchange
markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an
ongoing basis. Level 1 instruments are primarily exchange traded derivatives.
• Level 2 – Quoted prices are not available; however, pricing inputs are either directly or indirectly observable at the reporting date. Level 2
instruments include those valued using industry standard models and valuation techniques. These inputs include quoted forward prices for
commodities, time value, volatility factors, current market prices, contractual prices and expected volumes of the underlying instruments.
Substantially all of these inputs or assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from
observable data or are supported by observable transaction prices executed in the marketplace. Level 2 instruments include non-exchange
traded derivatives.
• Level 3 – Valuation techniques or models include significant inputs that are generally less observable. These inputs may be used with internally
developed methodologies that result in management’s best estimate of fair value. Level 3 instruments include those that may be more structured
or individually tailored. At each reporting date, the Company performs an analysis of all assets and liabilities at fair value and includes in level 3 of
those whose fair value is derived using significant unobservable inputs.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 31
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.4 FAIR VALUE ESTIMATION—CONTINUED
The following tables show, according to their level within the fair value hierarchy, the Company’s financial instruments that were accounted for at fair
value at the reporting date:
At 31 December 2025
in € ‘000 Level 1 Level 2 Total
Assets
Derivative financial instruments used as hedging instruments
Future contracts - - -
Other derivatives - 10,313 10,313
Derivatives measured at fair value through profit or loss (FVTPL)
Future contracts - - -
Other derivatives - 1,002 1,002
Total assets - 11,315 11,315
Liabilities
Derivative financial instruments used as hedging instruments
Disposals - - -
Future contracts - - -
Other derivatives - - -
Derivatives measured at fair value through profit or loss (FVTPL)
Options - - -
Future contracts 693 - 693
Other derivatives - 786 786
Other derivatives - Group - (2,069) (2,069)
Total liabilities 693 (1,282) (589)
At 31 December 2024
in € ‘000 Level 1 Level 2 Total
Assets
Derivative financial instrumetns used as hedging instruments
Future contracts 3,709 - 3,709
Other derivatives - 168 168
Derivatives measured at fair value through profit or loss (FVTPL)
Future contracts - - -
Other derivatives - 4 4
Total assets 3,709 172 3,881
Liabilities
Derivative financial instrumetns used as hedging instruments
Disposals - - -
Future contracts - - -
Other derivatives - - -
Derivatives measured at fair value through profit or loss (FVTPL)
Options - 119 119
Future contracts 4,529 - 4,529
Other derivatives - 1,643 1,643
Other derivatives - Group - 36 36
Total liabilities 4,529 1,797 6,326
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 32
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—CONTINUED
4.5 OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
In connection with its derivative activities, the Company generally enters into master netting agreements and collateral agreements with its
counterparties. These agreements provide the Company with the right to, in the event of a default by the counterparty (such as bankruptcy or a failure
to pay or perform), net counterparty’s rights and obligations under the agreement and to liquidate and set off collateral against any net amount owed
by the counterparty.
5 INTANGIBLE ASSETS
in € ’000 Notes Software and licenses
At 1 January 2024
Cost or valuation 7,795
Accumulated amortisation (6,888)
Net book value 907
2024:
Net book value
Amortisation charge 23 (19)
Net book value 888
At 31 December 2024
Cost 7,795
Accumulated amortisation (6,907)
Net book value 888
2025:
Net book value
Amortisation charge 23 (16)
Net book value 872
At 31 December 2025
Cost 7,795
Accumulated amortisation (6,923)
Net book value 872
Management assessed that there are no indicators that intangible assets are impaired at 31 December 2025 and 2024.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 33
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
6 PROPERTY, PLANT AND EQUIPMENT
in € ’000 Notes
Land and
buildings
Right-of-use
assets
Machinery
and
Equipment
Assets under
construction
Total
At 1 January 2024
Cost or valuation 276,592 6,906 1,250,633 48,355 1,582,486
Accumulated depreciation (172,433) (3,806) (1,053,364) - (1,229,604)
Net book value 104,159 3,100 197,268 48,355 352,882
2024:
Net book value
Additions 589 6,591 38,970 17,632 63,782
Disposals / Retirements (1,313) - (13,834) (76) (15,224)
Indexation and contract changes 16 - (7) - - (7)
Reclassification 6,108 - 33,118 (39,226) -
Depreciation charge 23 (10,529) (4,198) (30,852) - (45,579)
Depreciation released on disposal 562 - 2,116 - 2,678
Net book value 99,575 5,486 226,787 26,685 358,533
At 31 December 2024
Cost or valuation 281,976 13,491 1,308,886 26,685 1,631,038
Accumulated depreciation (182,401) (8,005) (1,082,100) - (1,272,505)
Net Book Value 99,575 5,486 226,787 26,685 358,533
2025:
Net book value
Additions 2,348 11,253 3,167 12,806 29,574
Disposals / Retirements (83) (10,920) (7,418) - (18,421)
Indexation and contract changes 16 - (76) - - (76)
Reclassification 2,253 - 5,383 (7,636) -
Depreciation charge 23 (10,673) (4,163) (36,530) - (51,367)
Depreciation released on disposal 83 10,920 - - 11,003
Net book value 93,503 12,500 191,388 31,855 329,246
At 31 December 2025
Cost or valuation 286,494 13,748 1,310,018 31,855 1,642,115
Accumulated depreciation (192,991) (1,247) (1,118,630) - (1,312,868)
Net Book Value 93,503 12,500 191,388 31,855 329,246
Management assessed that there are no indicators that property, plant and equipment assets are impaired at 31 December 2025 and 2024.
Assets under construction
During 2025, the Company incurred construction costs amounting to EUR 13 million (2024: EUR 18 million) with the intention of constructing various
facilities for the refinery. During 2025, EUR 8 million (2024: EUR 39 million) of these costs were transferred to the respective property, plant, and equipment
type.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 34
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
7 FINANCIAL ASSETS AND LIABILITIES
The following tables summarise the Company’s financial assets and liabilities. The carrying amount of financial instruments classified at amortised cost
is a reasonable approximation of their fair value. The fair value hierarchy for financial instruments at FVTPL is found in note 4.4.
Financial assets
in € ‘000 Notes
Financial assets at
amorti sed cost
Financial assets at
fair value through
profit or loss
Total
At 31 December 2025
Derivative financial assets at FVTPL 4.4 - 1,002 1,002
Derivative financial assets used as hedging
instruments
4.4 - 10,313 10,313
Trade and other receivables excluding pre-
paym ent s
9 54,186 - 54,186
Other receivables, non-current 9 14,353 - 14,353
Cash at banks 12 162,667 - 162,667
Total 231,206 11,315 242,521
At 31 December 2024
Derivative financial assets at FVTPL 4.4 - 4 4
Derivative financial assets used as hedging
instruments
4.4 - 3,877 3,877
Trade and other receivables excluding pre-
paym ent s
9 108,441 - 108,441
Other receivables, non-current 9 4,787 - 4,787
Cash at banks 12 140,745 - 140,745
Total 253,973 3,881 257,854
Financial liabilities
in € ‘000 Notes
Financial liabilities
at amortised cost
Financial liabilities
at fair value
through profit or
loss
Total
At 31 December 2025
Lease liabilities 16 13,578 - 13,578
Overdraft with brokers 1,400 - 1,400
Derivative financial liabilities at FVTPL
4.4 - (589) (589)
Related party borrowings 11 4,201 - 4,201
Trade and other payables 11 138,268 - 138,268
Total 157,447 (589) 156,858
At 31 December 2024
Interest-bearing loans and borrowings 13 16,133 - 16,133
Lease liabilities
16 5,978 - 5,978
Derivative financial liabilities at FVTPL
4.4 - 6,326 6,326
Related party borrowings 11 22,978 - 22,978
Trade and other payables 11 177,956 - 177,956
Total 223,045 6,326 229,371
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 35
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
8 GENERAL OVERVIEW OF DERIVATIVE INSTRUMENTS
The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12
months and, as a current asset or liability if the maturity of the hedged item is less than 12 months.
Hedging of price and risks
The Company uses derivative financial instruments to hedge price risks. They are used by the Company to hedge sales and purchase contracts as well
as hedge the price risk of stock. As of 31 December 2025, these transactions had a total negative fair value of EUR -6.2 million (2024: positive EUR 4
million).
Contango hedge
Average market
price (in €)
Average trading
price (in €)
Nominal value (in
€’000)
Positive fair value (in
€’000)
Negative fair value
(in €’000)
At 31 December 2025
Forward contracts – barrels (bbl)
-
-
-
-
-
Forward contracts – metric tons (MT)
471
472
301
301
-
Margin hedge
Average market
price (in €)
Average trading
price (in €)
Nominal value (in
€’000)
Positive fair value (in
€’000)
Negative fair value
(in €’000)
At 31 December 2025
Forward contracts – barrels (bbl)
12,37
16,13
43,542
10,154
-
Forward contracts – metric tons (MT)
-
-
-
-
-
Flat price hedge
Average market
price (in €)
Average trading
price (in €)
Nominal value (in
€’000)
Positive fair value (in
€’000)
Negative fair value
(in €’000)
At 31 December 2025
Forward contracts – barrels (bbl)
52,46
53,82
5,570
-
141
Forward contracts – metric tons (MT)
-
-
-
-
-
Cash flow hedge— Statement of financial position
Carrying Amount
in € ’000
Nominal Amount
Assets
Liabilities
Line item in the statement of financial position where the
hedging instrument is included
Structure
301
301
-
Other payables / receivables
Margin risk
43,543
10,154
-
Derivate Assets
Flat price risk
5,570
-
141
Derivative Liabilities
Cash flow hedge—Income statement
During the period – 2025
in € ’000
Changes in the value of
the hedging Instrument
recognised in OCI
Hedge
ineffectiveness
recognised in profit
or loss
Amount of hedging
transferred to cost of
inventory
Amount reclassified from
cash flow hedge reserve to
profit or loss
Line item in profit or loss
affected by the
reclassifications
Structure
301
-
-
3,880
Cost of materials
Margin risk
10,154
-
-
-
Cost of materials
Flat price risk
(141)
-
-
-
Cost of materials
Changes in cash flow hedge reserve
in € ’000
Notes
2025 2024
Balance at 1 January - -
Changes in fair value: -
Structure 301 -
Margin risk 10,154 -
Flat price risk (141) -
Amounts reclassified to profit or loss:
Structure (3,880) -
Tax on movements on reserves during the year 14 (1,416) -
Balance at 31 December 5,018 -
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 36
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
9 TRADE AND OTHER RECEIVABLES
Trade and other receivables as at year-end are as follows:
in € ’000
Note
31 December 2025 31 December 2024
Trade receivables - 1,497
Prepayments 4,002 2,895
Other receivables, deposits and collaterals 52,215 68,911
Receivables from related parties 26 1,971 38,033
Current portion 58,188 111,336
Other receivables, deposits and collaterals 14,353 4,787
Non-current portion 14,353 4,787
Total 72,541 116,123
Trade receivables
The Company has entered non-course factoring agreements with COFACE FINANZ GmbH with a maximum credit facility of EUR 300 million plus up to
an additional EUR 100 million with DZ Bank for the exclusive use of the Company for certain approved customers to manage credits risks and improve
working capital position. The agreements expire on 31 January 2028.
Receivables are purchased by the factor at the full face value, less a purchase price reserve (holdback) of 5% of the notional amount to cover dilution
in the event that final invoices issued to customers amount to less than invoices issued on account. If the final invoiced amount is more than the on
account invoices, the factor pays the full reserve to the company. If the final amount is less, the factor and the company settle the difference based
on whether the amount is above or below 95% of the on account invoices.
Interest is payable by the company to the factor on the financing provided, which is the purchase price paid for the receivable from purchase until
payment by the debtor or a bad debt event. Interest accrues at a 3-month reference rate, depending on the receivable's currency.
The factor has taken over all rights to cash flows for receivables purchased by the factor. The derecognition criteria have been applied as, per
management judgement, substantial all of the risks and rewards are transferred through the agreements, even though the Company retains late
payment risk.
At 31 December 2025, the amount of outstanding receivables sold under the factoring agreement was EUR 24 million (2024: EUR 44 million).
As at 31 December 2025, trade receivables of EUR 18 million (2024: EUR 16 million) were fully performing and related to a number of independent
customers for whom there is no recent history of default. None of the trade receivables were past due date and not impaired as at 31 December 2025
(2024: Nil).
Repayment terms for trade receivables are based on industry standard practices and can range from spot deals to 45 days and no interest is charged
on overdue amounts. All reported trade receivables have been assigned as collateral for inventory facility agreements.
The carrying amount of trade and other receivables approximate their fair value as at the reporting date.
Prepayments
As of 31 December 2025, current prepayments consisted primarily of prepaid insurance premiums, software licenses and financing costs covering
periods after the balance sheet date of EUR 4 million (2024: EUR 3 million).
Other receivables, deposits and collaterals
As of 31 December 2025, current other receivables consisted primarily of amounts receivable from the non-recourse receivable purchase agreement
of EUR 24 million (2024: EUR 44 million) and receivables related to products in pipelines and tanks operated by business partners of EUR 28 million (2024:
EUR 24 million).
As at 31 December 2025, non-current other financial assets in the amount of EUR 14.4 million (USD 16.9 million) (2024: EUR 4.8 million or USD 5 million)
result from a cash collateral for the purpose of security against certain inventory facility agreements.
The Company does not consider it is exposed to any significant concentration of credit risk of the trade and other receivables balance (see note 4).
The carrying value of other receivables approximate their fair value as at reporting date.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 37
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
9 TRADE AND OTHER RECEIVABLES—CONTINUED
Receivables from related parties
Receivables from related parties relate to income from provision of various professional services and disbursements. These are all unsecured, interest
free, and due on demand.
Transactions with related parties and balances of these receivables are disclosed in note 26. The carrying amounts of other receivables from related
parties approximate their fair value as at the reporting date.
10 INVENTORIES
in €’000 31 December 2025 31 December 2024
Raw materials 428 255
Finished Goods 22,614 31,762
Total 23,042 32,017
There were no provisions for obsolescence required at the end of the reporting period (2024: Nil). No inventories were written off during 2025 (2024: Nil).
The inventories have been pledged as security to the third parties. Apart from customary retentions of title, the inventories are free of third-party rights.
The cost of inventories, including EU allowance certificates, is recognised as an expense and included in the cost of materials as disclosed in note 19.
11 TRADE AND OTHER PAYABLES
The trade and other payables as at year end were as follows:
in €’000 31 December 2025 31 December 2024
Trade payables 91,481 132,578
Social security, energy and other taxes 18,437 17,881
Accrued expenses and other payables 28,350 27,497
Payables to related parties 4,201 22,978
Total 142,469 200,934
Social security and other taxes comprise of
in €’000 31 December 2025 31 December 2024
Social Security 94 96
VAT 18,343 17,785
Total 18,437 17,881
Trade payables and accruals principally comprise of amounts outstanding for trade purchases and on-going costs. No interest is being incurred on
these trade payables.
Other accrued expenses consist of amounts payable to providers of crude oil under crude supply agreements and amounts for salary and holiday
pay.
Other payables to related parties are unsecured, interest free and repayable on demand. Transactions with related parties are set out in note 26.
The carrying amount of trade and other payables approximate their fair value as at reporting date.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 38
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
12 CASH AT BANKS AND IN HAND
Cash at banks include the following as at the reporting date:
in €’000 31 December 2025 31 December 2024
Cash at banks and in hand 162,667 140,745
Cash at banks in the statement of financial position 162,667 140,745
Cash at banks in the statement of cash flow were reconciled as follows:
in €’000 31 December 2025 31 D
ecember 2024
Cash at bank and in hand 162,667 140,
745
Cash at banks i n the statement of cash fl ows 162,667 140,
745
On 31 December 2025, EUR 156 million of cash at banks (2024: EUR 110 million) was pledged as collateral under agreements with the inventory facility
providers.
The fair values of cash at banks correspond to their carrying amounts as at 31 December 2025 and 2024.
13 INTEREST-BEARING LOANS AND BORROWINGS
Carrying amount
in € ’000
Currency
Security
Nominal interest
rate p.a.
Year of
maturity
31 December 2025
31 December 2024
Loans payable to related Party
DKK
Unsecured
4.34%
On demand
-
16,133
Total interest-bearing loans payable
-
16,133
The Company can repay the loans payable to related party at any time prior to the mutually agreed period without any penalty. Parent Company
and subsidiary at any time prior to the mutually agreed period without any penalty. Loan initially EUR 75 million settled in full in 2025.
Transactions with related parties are set out in note 26. The carrying amount of interest-bearing loans and borrowings approximate their fair value as
at reporting date.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 39
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
14 INCOME TAX
DEFERRED TAX
The detailed analysis of deferred tax assets and deferred tax liabilities are shown below:
2025
in € ‘000
Property, plant and
equipment
(2,012) 1,266 2 (744) (744)
Intangible assets (107) (18) - (125) (125)
Provisions 6,458 387 (8) 6,837 6,837
Inventories 1,314 81 (2) 1,393 1,393
Receivables (533) (60) 1 (593) (593)
Payables - - - -
Other 66 (42) - 24 24
Total 5,186 1,613 (7) 6,791 8,253 (1,462)
Deferred tax
liabilities at
31 December
Net balance
at 1 January
Recogni sed in
income
statement
Foreign
currency
translation
Net balance
at 31
December
Deferred tax
assets at 31
December
2024
in € ‘000
Property, plant and
equipment
(908) (1,104) - (2,012) (2,012)
Intangible assets (81) (25) - (107) (107)
Provisions 5,765 698 (4) 6,458 6,458
Inventories 2,153 (837) (2) 1,314 1,314
Receivables (801) 268 - (533) (533)
Payables 212 (212) - -
Other (60) 126 - 66 66
Total 6,278 (1,087) (6) 5,186 7,838 (2,652)
Net balance
at 1 January
Recogni sed
in income
statement
Foreign
currency
translation
Net balance
at 31
December
Deferred tax
assets at 31
December
Deferred tax
liabilities at
31 December
INCOME TAX RECOGNISED IN PROFIT OR LOSS
Details of tax charge in the income statement are as follows:
in € ’000 31 December 2025 31 December 2024
Income tax
Income tax charge (7,551) (5,659)
Tax prior year adjustment 830 933
Solidarity Contribution - -
Total income tax expense (6,721) (4,726)
Deferred tax:
Organisation and reversal of temporary differences 2,606 (1,087)
Tax prior year adjustment (993) -
Total deferred tax expense 1,613 (1,087)
Income tax expense (5,108) (5,813)
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 40
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
14 INCOME TAX–CONTINUED
INCOME TAX RECOGNISED IN OCI
Details of tax charges/(credits) to OCI are as follows:
in € ’000 31 December 2025 31 D
ecember 2024
Income tax and deferred tax on:
Net income tax benefit / (charge) on derivatives (1,416) -
Income tax and deferred Tax on OCI (1,416) -
RECONCILIATION OF EFFECTIVE TAX RATE
The Company’s tax expense for the year, and the theoretical tax charge based on accounting before tax at effective weighted average tax rate
applicable for the Company is reconciled as follows:
in € ’000 31 December 2025 31 December 2024
Profit/ (Loss) before tax 16,742 23,590
Tax calculated at the effective tax rate of 22% (2024: 22%)
(3,683) (5,190)
Tax effects of:
Income Tax adjustments
− Expenses not deductible for tax purposes (1,341) (1,572)
− Other effects 80 103
− Adjustment in respect of prior years (163) 933
− Effect of temporary difference - (87)
Total Tax Expense (5,108) (5,813)
TAX CONSOLIDATION
The Group's Danish enterprises are jointly and severally liable for tax on the Group's income subject to joint taxation. The jointly taxed enterprises' total
net liability to SKAT amounted to DKK 64 million as at 31 December 2025 (2024: DKK 433 million). Any subsequent corrections of the income subject to
joint taxation or withholding taxes on dividends, etc., may entail an increase in the enterprises' liability or receivable. The Group as a whole is not liable
to any other parties.
The Company is jointly taxed with other Danish Group entities and is jointly and severally liable with other jointly taxed group entities for payment of
income taxes as well as dividends due for payment.
The Company posted certain liabilities for solidarity contribution in the financial year ended 31 December 2023 (at a tax rate of 33% on the relevant
tax base). Klesch Group Limited and the Company are still in the process of determining if these solidarity contributions will apply to the refinery
subsidiaries but posted the amount corresponding to the claimed solidarity contribution as a liability in the interim for the amounts concerned.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 41
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
15 PROVISIONS FOR LIABILITIES AND CHARGES
in € ‘000
Environmental
restoration
Emission rights Total
At 1 January 2024 (24,835) (8,841) (33,676)
Provisions made (741) (38,399) (39,140)
Provisions used - 8,841 8,841
Provisions reversed - 34,596 34,596
Currency translation 23 - 23
At 31 December 2024 (25,553) (3,803) (29,356)
Provisions made - (57,546) (57,546)
Provisions used - 3,803 3,803
Provisions reversed 1,254 50,732 51,986
Currency translation 31 5 36
At 31 December 2025 (24,268) (6,809) (31,077)
Current - (6,809) (6,809)
Non-current (24,268) - (24,268)
At 31 December 2025 (24,268) (6,809) (31,077)
A.
Environmental restoration
As at 31 December 2025 and 2024, the Company recognised a non-current environment provision for the rehabilitation costs for cleaning the soil
surrounding the refinery and gasoline installations amounting to EUR 24 million (2024: EUR 26 million). This provision includes rehabilitation costs in relation
to any new spills identified where immediate remediation has not yet been completed. Recognition of environmental provisions is inherently uncertain,
due to the judgment and estimation involved. Determining whether a legal or constructive obligation exists to remediate contamination requires
interpretation of environmental laws and regulations. Once the obligation is identified, estimating the financial impact involves assessing both the
expected costs and timing of the cleanup activities. In determining the provision, management has based its estimate on advice from specialised
environmental consultants engaged as part of the regulatory approval process. These consultants provide detailed estimates, considering the current
conditions, remediation methods, and regulatory requirements. As such, the provision reflects management's best estimate as of the reporting date,
with the understanding that it may require adjustment as new information becomes available or circumstances change. Estimates are currently
calculated for a period from the balance sheet date and until approximately 2041, during which period the provisions are expected to be utilised.
B.
Emission rights
The provision for emission rights amounting to EUR 7 million (2024: EUR 4 million) relates to the obligation of the Company to remit rights equivalent to
the actual emissions in the prior year. Remittance can be made through purchase of emission rights or grants of free emission rights.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 42
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
16 LEASES
Leases as lessee
The Company leases land and buildings, machinery, motor vehicles, and other equipment. The leases typically vary for a period of 2 to 10 years with
an option to renew the leases at maturity. Information about leases for which the Company is a lessee is presented below.
i.
Right-of-use assets
In 2025 the Company entered into various lease agreements and recognised right-of-use assets amounting to EUR 11,253 thousand (2024: EUR 6,591).
See note 6.
in € ‘000 Notes
Land and
buildings
Machinery and
equipment
Total
At 1 January 2024
Cost 5,369 1,537 6,906
Accumulated depreciation (3,295) (511) (3,806)
Net book value 2,074 1,026 3,100
2024:
Net book value
Additions 6,591 - 6,591
Indexation and contract changes (7) - (7)
Depreciation charge recognised in profit or loss 6, 23 (3,687) (511) (4,198)
Net book value 4,971 515 5,486
At 31 December 2024
Cost 11,954 1,537 13,491
Accumulated depreciation (6,982) (1,022) (8,005)
Net Book Value 4,971 515 5,486
2025:
Net book value
Additions 6,506 4,748 11,253
Disposals (7,901) (3,019) (10,920)
Indexation and contract changes (76) - (76)
Depreciation charge recognised in profit or loss 6, 23 (3,653) (510) (4,163)
Depreciation released on disposal 7,901 3,019 10,920
Net book value 7,748 4,752 12,500
At 31 December 2025
Cost 10,482 3,265 13,748
Accumulated depreciation (2,734) 1,487 (1,247)
Net Book Value 7,748 4,752 12,500
The Company has chosen to apply the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-
value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below €5,000). Lease payments on short-term
leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. The costs for exempted leases in 2025
amounts to EUR 93 thousand (2024: EUR 37 thousand).
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 43
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
16 LEASES–CONTINUED
ii.
Lease liabilities
Movement in lease liabilities for the years ended 31 December are as follows:
Lease liabilities
Balance at 1 January (5,760) (3,354)
Additions 6 (11,253) (6,591)
Principal payments recognised in statement of cash flows 4,352 4,171
Interest payments recognised in statement of cash flow s 146 274
Interest expense recognised in profit or loss 24 (146) (274)
Other movements 76 7
Balance at 31 December (12,585) (
5,767)
Current (6,736) (4,386)
Non-current (5,850) (1,381)
Total (12,586) (
5,767)
in € ‘000
Notes
31 December 2025
31 December 2024
17 REVENUE
The segmentation of the revenue by product is as follows:
in € ‘000
Year ended 31
December 2025
Year ended 31
December 2024
Gas oil products 1,363,024 1,647,819
Gasoline 915,249 1,014,438
Residual oils 255,323 386,235
Feedstocks 1,791 25,643
Others 22,071 24,076
Total net revenue from sale of goods to customers 2,557,458 3,098,211
Revenue from refining services 361,505 368,321
Revenue as principal in repurchase agreem ent 255,280 285,656
Initial sale of inventory 260,497 -
Total revenue 3,434,740 3,752,188
The segmentation of the revenue, net of energy tax, by country is as follows:
in € ‘000
Year ended 31
December 2025
Year ended 31
December 2024
Germany 91,313 67,176
Denmark 1,879,433 2,137,425
Other EU Countries 1,165,554 1,234,214
Rest of Europe 189,480 74,960
Rest of World 108,959 238,413
Total net revenue from sale to customers 3,434,740 3,752,188
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 44
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
17 REVENUE–CONTINUED
REVENUE FROM REFINING SERVICE
The refinery entered into ongoing agreements with inventory facility providers for the purchase, sale and storage of crude oil refined products and
associated feedstocks. Under the agreements, crude oil is supplied, refined into oil products and sold to the inventory facility providers. The refined
products may be purchased by the refineries at the discretion of the inventory facility providers for sale to third party customers. The purchase of the
crude oil and sale of the resulting refined products constitute a repurchase transaction as detailed in the accounting policy in note 3.5.
The Company recognises revenue from refining service on resale of the resulting refined products to the inventory facility providers. This corresponds
with the satisfaction of the performance obligation of refining the crude oil into the resulting refined products.
The existing arrangements with Aramco Trading Limited (ATL) were terminated and Kalundborg Refinery A/S bought the inventories of ATL and sold
them to Macquarie Products Ireland Limited for a total revenue of EUR 260 million in March 2025 (initial sale of inventory). The cost of the inventories
purchased from ATL was approximately the revenue recognized, resulting in no material impact on the net gross margin on the transaction.
18 OTHER OPERATING INCOME
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Storage and handling fees 4,674 24,774
Gains on disposal of fixed assets 652 3,727
Other income 12,697 11,
803
Total other operating income 18,023 40,305
19 COST OF MATERIALS
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Consumption of products and feedstock (3,096,240) (3,405,821)
Transport (45,320) (49,744)
Others (1,193) (1,651)
Total (3,142,752) (3,457,216)
Consumption of products and feedstock includes crude oil and other raw materials used for refining including the initial purchase of inventory,
electricity and gas supplies, freight and expenses from the recognition of provisions for the obligation to remit emissions rights for emissions used in the
fiscal year.
20 OTHER PRODUCTION RELATED COSTS
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Changes in environmental provision (1,254) 740
Losses on disposal of fixed assets - 865
Other production related costs (1,254) 1,605
21 OTHER OPERATING EXPENSES
The Company forms part of the Klesch Group held by Klesch Group Limited (“Klesch Group“). The Klesch Group implemented the Integrated Supply
and Trading (“IST”) Model effective from 1 January 2024. The IST Model was formalised on 4 October 2024, through the respective agreements
concluded between Raffinerie Heide GmbH and Kalundborg Refinery A/S and Klesch DL SA and Klesch MK SA.
The purpose of the IST Model is to align the impact of market risk to the entities within Klesch Group, where the expertise in managing market risk /
volatility and associated decision-making was already concentrated. In reflection of this agreement for 2025 EUR 48 million (2024: EUR 97 million) have
been charged net to the Company.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 45
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
22 PERSONNEL EXPENSES
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Wages and salaries (43,443) (43,169)
Pensions (4,468) (4,066)
Social security costs (2,036) (1,015)
Total (49,946) (48,250)
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Wages and salaries (302) (298)
Pensions (30) (32)
Remuneration pai d to the executive board (332) (330)
The total remuneration paid to key management personnel (the Board of Directors and Executive Board) of the Company in the reporting year was
EUR 332 thousand (2024: EUR 330 thousand). There was no share-based payment, termination benefits and advances to/from key management
personnel as at and for the years ended 31 December 2025 and 2024. The Board of Directors did not receive remuneration from the Company for
provision of board-related services as they are employed by other group entities. Any allocation of remuneration to their services as board members
in the Company would be immaterial. In accordance with section 98b (3) (i) of the Danish Financial Statements Act, management remuneration is
disclosed as an aggregate amount for all management categories.
AVERAGE NUMBER OF PEOPLE EMPLOYED
Year ended 31
December 2025
Year ended 31
December 2024
Average number of full-time employees during the year 398 405
23 AMORTISATION AND DEPRECIATION
in € ’000 Notes
Year ended 31
December 2025
Year ended 31
December 2024
Land and buildings 6 (10,673) (10,529)
Right-of-use assets 6, 16 (4,163) (4,198)
Machinery and equipment 6 (36,530) (30,852)
Intangible assets 5 (16) (19)
Total (51,383) (45,598)
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 46
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
24 FINANCE INCOME AND COSTS
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Finance income:
Interest income on bank deposits 3,819 9,619
Interest income from group enterprises
308 -
Interest income others - 1
Foreign currency exchange gains 4,824 14,923
Finance income 8,951 24,543
Finance cost:
Bank borrowings and other costs (158) (156)
Interest expense on loan from group enterprises (107) (695)
Interest expense on lease liabilities (146) (274)
Interest expense others (6,096) (7,151)
Foreign currency exchange losses (10,176) (4,293)
Other charges (70) (54)
Finance costs (16,753) (12,623)
Net finance costs (7,802) 11,920
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 47
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
25 COMMITMENTS, COLLATERALS AND CONTINGENCIES
Commitments
Rental- and lease obligations not included in lease liabilities amounted to less than EUR 1 million at 31 December 2025 (2024: <EUR 1 million) with a
non-terminability period of up to 30 months. There are no purchase obligations at the end of the non-terminability period. The majority of these not
included lease obligations relate to minor leases or leases with commencement date after the balance sheet date.
During 2025, the Company entered into contracts to purchase property, plant and equipment and operational expenses in the following financial
years for approximately EUR 5 million and EUR 6 million respectively.
Collaterals
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Collaterals
The follow ing assets have been placed as collateral w ith bankers:
Cash in bank 156,017 110,004
The follow ing assets have been placed as security with the Danish
Environmental Agency:
Cash in bank 327 51
The follow ing assets have been placed as collateral in an escrow
account with lawyers in favour of an inventory facility provider:
Non-current other receivables 14,353 4,787
The follow ing assets have been placed as collateral thorugh an ow ner's
mortgage deed totalling USD 382 million in favour of an inventory
facility provider:
Trade receivables
- 1,497
Inventories 23,042 32,017
Carrying amount of assets placed as collateral 193,739 148,357
Contingencies
Contingent liabilities
From FY2024, the Klesch Group operationalised the integrated supply and trading (“IST”) model. As a result of this, an updated transfer pricing
arrangement has been put in place which the Group is proactively discussing with the tax authorities.
The Company have filed a bilateral advance pricing agreement in 2025, and the Company do not expect any conclusion hereon in a foreseeable
future.
Management considers that the tax authorities are more likely than not to accept the updated arrangement and the tax calculations have been
prepared on this basis. As such, no contingent liability or provision has been recognised in the Company’s financial statement. Should the tax authorities
not accept the updated arrangement the effect could be material.
Contingent assets
As of the balance sheet date, the Company has a dispute with the EU and the Danish government concerning the temporary solidarity taxation
scheme (Solidarity Contribution) which was adopted on 6 October 2022. Management currently expects the dispute to be heard and resolved during
2027 in favour of the Company. Currently, the tax liability related to the dispute is recorded as a non-current income tax liability of EUR 57 million (2024:
EUR 52 million) in the balance sheet.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 48
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
26 RELATED PARTY DISCLOSURES
The Company is controlled by Klesch Refining Denmark A/S (incorporated in Denmark) which owns 100% of the Company’s shares. The ultimate
controlling party of the Company is Mr. A. Gary Klesch (see note 1). Summary of gross transactions and outstanding balances with related parties were
as follows:
A)
TRANSACTIONS WITH RELATED PARTIES
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Parent Company
Dividends declared to - -
Professional services purchased from (7.601) (7.911)
Entities under common control by UBO (sister companies)
Services provided to / (by) (48.866) (107.095)
Revenue from 2.733 21.053
Purchases from (38.058) (9.949)
Interest incom e 308 -
Interest expense on loan (107) (695)
Net income / (costs) from transactions with related parties
(91.591) (104.598)
B)
BALANCES WITH RELATED PARTIES
in € ’000
Year ended 31
December 2025
Year ended 31
December 2024
Parent Company
Receivables from - 84
Payables to (20) (125)
Entities under common control by UBO (sister companies)
Receivables from 1.971 37.949
Interest-bearing loans and borrowings due to - (16.133)
Payables to (4.181) (22.853)
Net receivables / (payabl es) to rel ated parties
(2.230) (1.078)
Terms and conditions of transactions with related parties
Outstanding balances as of the end of the fiscal year are unsecured, interest free and settlement occurs in cash. Terms of related party loans are
disclosed in note 13. No guarantees have been provided or received for any related party receivables or payables other than disclosed in note 25.
Details of dividends declared to Parent Company are as disclosed in the Statement of Changes to Equity. Transactions with key management
personnel is included in note 22.
27 AUDITORS FEE
Fees to auditors appointed at the general meeting have not been disclosed in accordance with section 96 (3) of the Danish Financial Statements Act.
Reference is made to the Consolidated Financial Statements of Klesch Group Limited (see note 1).
The 2026 financial year will be influenced by geopolitical developments relating to the conflict in Iran. In particular, the increased uncertainty in the
energy markets and the rise in oil and gas prices are leading to changes in the operating environment for procurement and logistics. While the increase
in oil and gas prices is expected to be temporary, the extent and duration of the conflict remain uncertain. This uncertainty limits the ability to assess
potential long-term effects should the conflict continue for a prolonged period. Given the variability of the types of crude oil that can be processed,
the management does not anticipate any material impacts resulting from direct disruptions to key trade and transport routes. Further impacts on the
Group are currently expected to be moderate and are being closely monitored, particularly in operational planning and risk management. The
implemented IST-model does somewhat mitigate the exposure to the uncertainty for the refinery.
Other than the above no significant events affecting the Company’s financial position have occurred after the balance sheet date.
Kalundborg Refinery A/S | Financial Statements | 31 December 2025 | 49
CONTACTS
www.klesch.com
Klesch Malta
Victoria Buildings
No:2A, Triq I – Ghenieq
c/w 21st September
Avenue
Naxxar NXR 3622
Malta
Klesch Geneva
Klesch Petroleum SA
3rd Floor
24 Quai du Seujet
1201 Geneva
Switzerland
Klesch London
Klesch & Company Ltd
16 Palace Street
London, SW1E 5JD
United Kingdom
www.heiderefinery.com
Raffinerie Heide GmbH
Meldorfer StraBe 43
25770 Hemmingstedt,
Germany
www.kalundborgrefinery.com
Kalundborg Refinery A/S
Melbyvej 17
4400 Kalundborg
Denmark
KEY CONTACTS