Annual Report 2021
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
CONTENTS
2021 – CEO statement Page 3
Key figures Page 4
The Board of Directors Page 5
Report of the Board of Directors 2020 Page 7
Corporate governance Page 16
HSEQ report for 2021 Page 19
Extraxt of the Environmental, Social and Governance report Page 22
Declaration by the Board and CEO Page 28
Financial statements – consolidated accounts Page 29
Notes to the consolidated accounts Page 35
Financial statements – parent company Page 65
Notes to the annual accounts – parent company Page 69
Appendix 1 – Alternative performance measures definitions Page 75
Auditor’s report Page 76
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
2021 – CEO STATEMENT
2021 was another year where the COVID-19 pandemic affected the daily lives and operations of our personnel
both at sea and on shore. Ensuring the health and safety of our employees during the pandemic, while still
maintaining successful operations, was our continued priority. We were able to uphold our operations with no
COVID-related downtime in 2021.
The safety of our employees and our operations constitute the foundation of all activities in Eidesvik. We are
proud to have reached our goal of zero LTIs in 2021 much thanks to our seafarers’ continuous focus on safety, a
focus we strive to enhance every day.
Our financial performance has improved considerably in 2021 compared to the previous year. During Q3 we
came to an agreement with our financial institutions for refinancing of our debt. With a combination of extension
of debt maturities and reduced amortization payments, the agreed terms significantly strengthen the Group’s
financial position. We highly appreciate the support and confidence our financial institutions are showing us.
In January, 2022, we entered into a MoA with DEME, for the sale of Viking Neptun, following a letter of intent
being entered into in December, 2021. The MoA is expected to complete in the 4th Quarter of 2022, post
completion of the ongoing contract with Havfram, and the sale will further strengthen our financial position.
Eidesvik have for decades piloted and implemented environmental friendly solutions onboard our vessels to
reduce our emissions. 2021 was not an exception, as we continued our work on the European innovation project
ShipFC in addition to launching two new groundbreaking technology projects: Project Retrofit together with our
client Aker BP and Project Apollo together with technology supplier Wärtsilä.
We also continued the electrification of our fleet with the installation of batteries on board two additional
vessels.
Alongside this annual report, we release our first stand-alone ESG report. With this report, we aim to share
valuable information on our approach to sustainability and be transparent with our progress. For Eidesvik
sustainability is a strategic imperative for generating long-term value, and I am pleased to see that in 2021 we
made good progress in this respect.
Our strategy is based on building long-term relationships with our customers. Our frame agreement with Aker
BP utilised Viking Lady for the entire year and Viking Prince for most of the year. Furthermore, Viking Lady was
awarded a new 3-year contract with Aker BP commencing in January 2022.
Viking Energy, Viking Avant and Viking Queen continued their work for our long-term client Equinor throughout
the entire year.
In January 2021, Siemens Gamesa extended the fixed contract for Viking Wind Power (previously named Acergy
Viking) from January 2022 to January 2027.
The start of 2022 have seen an ease in COVID-19 restrictions and necessary preventive measures. However, the
geopolitical situation has changed dramatically since Russia’s invasion of Ukraine. We monitor the situation
closely.
We have been through some challenging years and the contribution from everyone in the organization during
these difficult times have been truly impressive. You have all stood up and made the efforts needed to ensure
the safe and efficient execution of our commitments. I am very grateful to be part of such an excellent team and
convinced we together are well prepared to take on whatever lies ahead.
Gitte Gard Talmo
President & CEO
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Eidesvik Offshore ASA
KEY FIGURES
*) Book equity plus added value of broker estimates per December 31, 2021, on vessels on the assumption that the vessels are contract-free.
**) Excluding IFRS 16.
Liabilities related to Assets held for sale will become due and payable at the time of completion of the sale.
(all figures in TNOK)
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Operating income 587 798 530 760 681 559 489 229 754 716 784 106 1 238 936 984 749 993 745 980 494
EBITDA 178 712 131 113 243 188 96 919 385 291 415 284 770 286 492 173 551 242 558 876
EBITDA margin 30 % 25 % 36 % 20 % 51 % 53 % 62 % 50 % 55 % 57 %
Profit/loss for the year 30 737 -132 434 -690 273 -316 625 147 368 -564 519 -239 892 -230 575 140 863 282 170
Profit per share -0,25 -1,99 -9,64 -4,83 5,15 -18,34 -6,53 -5,77 4,67 9,36
Total assets 2 750 583 3 097 113 3 360 275 4 100 576 4 297 512 5 068 060 6 070 157 5 556 166 5 700 197 5 631 445
Equity 521 098 480 519 729 474 1 424 825 1 542 006 1 457 051 2 041 814 2 125 385 2 348 288 2 180 283
Equity ratio 19 % 16 % 22 % 35 % 36 % 29 % 34 % 38 % 41 % 39 %
Value-adjusted equity
*)
1 402 098 1 284 519 2 094 474 2 291 825 2 434 806 2 701 029 3 676 354 4 190 385 4 476 288 4 228 283
Value-adjusted equity ratio 39 % 33 % 44 % 46 % 47 % 43 % 48 % 55 % 57 % 55 %
Market value at 31 December 252 951 188 936 325 666 284 647 244 215 186 629 289 139 738 675 1 040 175 994 950
Market value per share at 31 December 4,07 3,04 5,24 4,58 8,10 6,19 9,59 24,50 34,50 33,00
Dividend paid per share 0,00 0,00 0,00 0,00 0,00 0,00 0,00 1,00 1,00 1,00
Liquid funds incl. unused credit 330 401 429 183 408 319 515 605 557 440 549 738 702 276 549 556 782 773 454 988
Working capital incl. unused credit 237 467 527 918 432 256 477 152 264 646 395 827 420 631 -40 897 259 292 171 423
First year’s repayment of long-term liabilities
**)
128 364 157 725 93 756 93 232 304 836 322 187 335 039 391 243 324 073 319 054
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
THE BOARD OF DIRECTORS
ARNE AUSTREID (CHAIR OF THE BOARD)
is a trained petroleum engineer and holds an MBA from the University of Aberdeen, UK. From January 2011 to
December 2020 he was the CEO of Sparebank 1 SR-Bank ASA. He has previously worked for Transocean ASA and
Prosafe SE, offshore, onshore and abroad, where his final position was President and CEO of Prosafe SE. He has
sat on a number of boards, and is today chair for North Sea Energy Park AS and GL Gruppen AS, and attending
deputy board member for OBOS. Austreid is independent of the main shareholder in the Company.
BORGNY EIDESVIK (BOARD MEMBER)
is the co-owner and general manager of Bømmelfjord AS, which owns 55% of Eidesvik Invest AS. Eidesvik Invest
AS owns 60% of Eidesvik Offshore ASA. Borgny Eidesvik is associated with the main shareholder in the Company.
LARS EIDESVIK (BOARD MEMBER)
is the co-owner and general manager of Evik AS, which owns 45% of Eidesvik Invest AS. Eidesvik Invest AS owns
60% of Eidesvik Offshore ASA. Lars Eidesvik is associated with the main shareholder in the Company.
JOHN STANGELAND (BOARD MEMBER)
is a mechanical engineer by education, and has a BBA in economics and management from University of Texas,
Austin. He also has an Executive MBA from BI and Nanyang Technological University, Singapore from 2011. He
was a shipbroker in Seabrokers AS, Stavanger from 1990 to 1997, and then a business developer in Eidesvik AS
until 2003. Since 2004 he has been employed by the base company NorSea Group AS, and he has been CEO since
2012. Stangeland is independent of the main shareholder in the Company.
LAURITZ EIDESVIK (BOARD MEMBER)
is co-owner and chair of Bømmelfjord AS, which owns 55% of the shares in Eidesvik Invest AS. Eidesvik Invest AS
owns 60% of Eidesvik Offshore ASA. He has nautical training and experience as a ship’s officer, a BA in economics
and administration from Stord/Haugesund University College from 2008, and an Executive MBA in Developing
and Managing Digital Organisations from BI from 2020. Since 2008, he has held various positions in Eidesvik AS
within operations, technical, HSE, strategy, and most recently as chartering manager, leaving in the summer of
2018 to join the family company Bømmelfjord AS. Lauritz Eidesvik is associated with the main shareholder of the
Company.
KRISTINE SKEIE (BOARD MEMBER)
is general manager and co-owner of HK Shipping Group AS, which wholly or partly owns 24 bulk vessels. She has
sat on several boards, including Gruppen for Nærskipsfart i Norges Rederiforbund and Reach Subsea ASA (from
2018), and has chaired the board of Karmsund Havn IKS from 2012 to 2019. She was educated at Norges
Varehandelshøgskole (now part of BI) and has further educations in board work, organisation and management,
and tax law. Skeie is independent of the main shareholder in the Company.
BJØRG MARIT EKNES (BOARD MEMBER)
graduated with a Master in Business and Economics from NHH in 1993, and has an Executive MBA from
Bond University, Australia (2006), and an MBA from NHH (2021). She has held various managing positions in
the Sparebanken Vest group from 1997 to 2021, and was part of the executive management from 2013 to 2021.
Since 2021 she has been director and part of the top management at the Norwegian School of Economics. She
is, and has sat on, a number of boards within finance and real estate. Eknes is independent of the main
shareholder in the Company.
TORE HETTERVIK (EMPLOYEE ELECTED BOARD MEMBER)
is a deck foreman on Eidesvik’s Seven Viking and is an employee representative. He started his maritime career
on board his family’s fishing vessel. After some years working onshore, he started in Eidesvik in 1997 as an able
seaman on board the first Viking Prince, and has been a crane operator in Eidesvik since 2000. Hettervik is
independent of the main shareholder in the Company.
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
Arne Austreid Borgny Eidesvik Lars Eidesvik John Stangeland
Lauritz Eidesvik Kristine Skeie Bjørg Marit Eknes Tore Hettervik
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
REPORT OF THE BOARD OF DIRECTORS 2021
degree of long-term employment on sustainable day rate levels.
Nav
igating through 2021 has been challenging for the Company’s business, however the operational restraints
related to Covid-19 were reduced compared to the previous year. As we entered 2022, we saw signs of
improvements as the oil price had increased significantly. The geo-political situation in Europe has since changed
considerably, pushing oil prices, among a multitude of commodities, to levels that are far above what anyone
expected at the end of 2021. Public Policy in Western Europe is at the same time favouring non-Eastern supply,
which should bode well for an increase in activity in the markets wherein the Company operates.
There is still however overcapacity in the segments where Eidesvik operates. Thus, a combination of increased
activity and phasing out of older vessels will still be necessary in order to improve profitability in the industry.
The Company continues to develop our strategic projects for environmentally friendly shipping to ensure we
remain competitive in the current market as well as the expected future market.
In light of the negative development of the market and outlook early in 2020, Eidesvik entered into amendments
to its credit facilities with all of the Group’s financial institutions in June 2020 for the period from July 1, 2020, to
June 30, 2021. The Group deferred the instalments on all its credit facilities during said period to the end of 2022,
amounting to approximately MNOK 90. Due to receipt of the cash proceeds from the PUT-option mentioned
below, the unpaid deferred instalments became due and were paid in March 2021, and the remainder of the
deferred instalments were paid according to the original schedule during the first half of 2021.
On August 27, 2021, Eidesvik announced that it had agreed on a term sheet (“Term Sheet”) with its financial
institutions for refinancing of its debt. With a combination of extension of debt maturities and reduced
amortization payments, the agreed terms significantly strengthened the Group’s financial position. On
September 10, 2021, the final agreements and documentation were in place and the new terms for the Group’s
financing became effective.
The agreed terms provide mechanisms for extension of final maturities of debt facilities from the end of 2022 to
the end of 2023, and there will be no final maturities until year end 2023. The extension is subject to Eidesvik
meeting certain financial and operational triggers. Please see note 20 for further information.
THE BUSINESS
Eidesvik Offshore ASA is the parent company of the Eidesvik Group. The Company’s purpose, according to its
Articles of Association, is to “operate a shipping company and all that relates to this, including owning shares in
companies operating similar or related businesses”. This objective has been realised through 2021 by operating
16 vessels, with 14 vessels wholly or partly owned by the Eidesvik Group.
We aim to charter the vessels mainly on long-term contracts on sustainable day rate levels in the Supply, Seismic
and Subsea/Wind segments. Because of the weak market, more vessels have been operating on short-term
contracts in 2021 compared to previous years. The announcements of the long term contract for Viking Wind
Power (previous named Acergy Viking) for Siemens Gamesa in early 2021, and the 3-year contract for Viking Lady
for Aker BP, were very welcome. At Year-End 2021, the Company had four seismic vessels in layup.
The sale of Global Seismic Shipping AS (“GSS”) was completed on January 8, 2020. As consideration for Eidesvik’s
shares in GSS, Eidesvik received shares in Shearwater GeoServices Holding AS (Shearwater”). In January 2021,
Eidesvik exercised the PUT-option for its shares in Shearwater effectively selling all its shares in Shearwater to
CGG SA for a total consideration of USD 30 million in cash. The cash settlement was received in January 2021.
In January 2022, Eidesvik Neptun AS, a subsidiary of Eidesvik entered into a Memorandum of Agreement (“MoA)
with Dredging, Environmental and Marine Engineering NV (“DEME”), for the sale of the CSV Viking Neptun. The
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
MoA is expected to complete in the 4
th
Quarter of 2022, post completion of the ongoing contract with Havfram.
The sale will considerably strengthen the Company’s financial position, and enable us to reinforce the strategic
focus on pioneering new emissions-reducing technologies in the fleet.
Eidesvik’s continuous work to develop feasible approaches for large-scale CO2 emission reductions in the fleet
has commenced with full speed in 2021. In addition to the ongoing ShipFC project, Eidesvik launched three new
technology projects within the use of new green fuels during 2021.
The Retrofit Project is a collaboration between Eidesvik and Aker BP, and the Retrofit’s mission is to capture
emission reductions of 70 percent or more on selected vessels.
As part of the Retrofit project, Eidesvik entered into a MoU with Aker BP and Alma in November 2021. The
companies will explore retrofit installation of Alma’s ammonia fuel cell technology on two offshore support
vessels: Eidesvik-owned Viking Lady and Aker BP-owned NS Frayja currently under Eidesvik’s management.
Eidesvik and the technology group Wärtsilä signed a cooperation agreement aimed at converting an offshore
supply vessel to operate with ammonia-fuelled combustion engines, including fuel supply and safety system. The
“Apollo” project will be the first of its kind ever in the world and has a provisional completion target of 2024.
Eidesvik’s activities are managed from the headquarters in
The shipping business is organised
in accordance with the special tax rules for shipping companies in Norway. The vessels are owned by various
ship-owning companies, and Eidesvik AS performs the general and business management functions for these
companies.
T
he Group’s wholly-owned subsidiaries had 424 permanent employees at the end of the year, and in addition
there were 85 contracted workers. The Company and the industry encourage women to seek a maritime
education. We currently have several women in leading positions. As part of an international industry, the
employees in the Group represent many nationalities. Our focus is to make all employees, regardless of
nationality, gender and cultural background, have equal career opportunities in the Group, and we see nothing
to suggest that this is not the case.
HEALTH, SAFETY AND THE ENVIRONMENT
In 2021, the Company has focused on enhancing development of its work on health, safety and the environment.
The quality and safety system “Eidesvik Management System” (EMS) certified by DNV. EMS meet requirements
of ISM code, ISO standards: 9001-2015, 14001-2015, MLC 2006 and ISPS Code.
Throughout 2021, our EMS are built on “Simplified and improved safety management”, and all of our operational
vessels are using updated manuals for bridge, deck, engine, galley and crane operations as applicable. We receive
very positive feedback from both users and clients. Required revisions considered on an ongoing basis, including
new procedures as needed. Good working environments are established at all vessels, with focus on awareness
and monitoring of health, safety and environmental aspects identified by Eidesvik.
The management is continuously carrying out awareness work within HSEQ, with a particular focus on the
exchange of lessons learned, which facilitates continuous improvement.
Absence due to illness in 2021 was 8.1 %. This is a 18.5% increase from 2020 (6.6 %). The main part of the increase
in 2021 is related to Covid-19 restrictions. The Company is maintaining the agreement with NAV on inclusive
working life, which aims to follow up on absence due to illness.
The Company had zero lost time incident (LTI) in 2021 - a very well performance. Last year without any LTI was
in 2016. This underlines the importance of a continuing strong focus on HSE in all parts of the Company’s
operations, to ensure all our employees are at same good health when travelling home as they were when they
were travelling for work.
To avoid and prevent injuries, the main priorities in 2021 have been:
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Eidesvik Offshore ASA
• Keeping and follow up on Protection Environmental Committee, HSE-QA meetings and safety
inspection tours
• Basic safety requirements
• Compliance with the management tool throughout the organisation
• Familiarisation and training
• Focus on the “Safety observation” form of reporting, particularly proactive reports
• “Time out for safety” meetings
• Increased understanding and execution of risk assessments
• “Tool box talks” as a last barrier before any task starts
• “Stop the job” obligations for all
• Continuous focus on safety representatives, safety and environmental work
• Work on board carried out according to the Company’s “permit to work system”
External environment
Eidesvik has a targeted environmental focus in its operations. Eidesvik has continued its efforts to develop
environmentally friendly and energy efficient vessels.
Our operations at sea are operated in accordance with international and national laws and regulations. To reduce
the risk of accidents, we focus on preventive maintenance, as well as manning the vessels with highly qualified
personnel. Eidesvik is constantly working to reduce the total emission balance associated with operating our
vessels.
The blue:E scheme, the Company’s programme for environmentally friendly operations, has continued with the
same focus and resource usage in 2021. blue:E is important to the Company’s goal of running our business in the
most environmentally friendly whilst cost-effective way. Awareness of energy efficiency and its impact on both
the environment and costs is increasing, and this focus has become an important part of day-to-day operations.
All vessels in Eidesvik’s fleet are approved according to the new IMO requirements for energy efficiency. This is
in line with the Company’s blue:E initiative.
The ESI (Environmental Ship Index) is recognised by the Norwegian Coastal Administration and many ports as the
basis for environmental differentiation of fees/rates. 10 of our vessels are registered in ESI, all with a very
favourable environmental profile. This has given us a lot of positive publicity, and shows that it is possible to
reduce costs through environmentally responsible choices.
A separate ESG report has been prepared, and an extract of the report is included in the annual report. Please
read more about Eidesvik’s impact, and our actions for reducing the impact, on the external environment in the
extract. The full report is available on the Eidesvik website.
In addition, a separate HSEQ report has been prepared, and is included in the annual report.
SHAREHOLDERS, CORPORATE GOVERNANCE AND MANAGEMENT
At year-end, there were a total of 62,150,000 shares in the Company. At the end of the year there were 1,916
shareholders in the Company. Foreign investors had a 3.3% stake at the end of 2021. In 2021, the share was last
traded at NOK 4.07.
As at December 31, 2021, the Company owned no own shares.
All information is provided in such a way that all shareholders are treated equally. The information is shared
through stock exchange announcements, press releases and open presentations, and is also available on the
Eidesvik website.
The Group has an insurance agreement (the “Agreement”) for physical persons that previous had, currently has,
or in the future will hold positions as member or deputy member of a board or a corresponding governing body,
CEO, other leader and/or employee that may incur personal leader responsibility. The Agreement cover their
partner as well in cases where the claim is based on the insured personal leader responsibility.
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Eidesvik Offshore ASA
The Agreement is a group coverage for Eidesvik Offshore ASA, including all subsidiaries with ownership of 50%
or more. The Agreement applies to property damage that may incur worldwide for business related to shipping
and that the insured person is liable in damages for according to applicable law in Norway. The sum insured is
MNOK 50 per insurance event and total per year. Internal claims between the companies are not covered.
The Agreement does not cover events following legal offences as breach of information protection, forge of
documents, embezzlement, theft, fraud, betrayal, corruption, and/or unjustified gain. The Agreement does not
cover fines/day fines, libels and/or remedy for noneconomic loss, nor liabilities after the Nature Diversity Act or
property damage related to pollution or tipping of waste.
The “Norwegian code of practice for corporate governance” forms the basis for the discharge of these duties by
the Board and management. Minor, company-specific changes and adaptations have been made to the code of
practice. A separate explanation has been provided in the annual report and on the Eidesvik website.
After year end 2021 the following changes in management have been announced:
- Gitte Gard Talmo replaced Jan Fredrik Meling as CEO effective from January 1, 2022.
- Arve Nilsen will replace Jan Lodden as COO effective from approximately end of June 2022
- Ellen Sofie Ottesen started in a new position as CTO effective from April 20, 2022.
- The CFO of Eidesvik, Tore Byberg, announced his resignation in April 2022. A process to find a
replacement has been started.
PROFIT & LOSS, BALANCE SHEET AND FINANCIAL RISK
The consolidated accounts have been submitted in accordance with IFRS, as approved by the EU.
The Company accounts for the parent company Eidesvik Offshore ASA are submitted in accordance with the
Norwegian Accounting Act and generally accepted accounting principles in Norway.
Profit & loss
Consolidated operating income for Eidesvik in 2021 is MNOK 587.8 (MNOK 530.8 in 2020), of which MNOK 12.4
is related to a reversal of previous impairment on repayments received from Oceanic Seismic Vessels AS (MNOK
20.3).
Operating profit before depreciation and amortisation (EBITDA) for 2021 were MNOK 178.7 (MNOK 131.1 in
2020). Depreciation and amortisation totalled MNOK 64.2 in 2021 (MNOK 328.3), whereof MNOK 220.7 was
related to the reversed impairments on Viking Neptun. Profits from joint ventures were MNOK -5.9 (MNOK -5.2).
This gives a total operating result of MNOK 108.6 in 2021 (MNOK -202.4).
Due to observed impairment indicators, the vessels’ book values were tested for impairment per December 31,
2021. Based on these tests, impairments of MNOK 76.9 related to four vessels have been recorded to the
accounts in 2021, compared to impairments of MNOK 120.7 related to eight vessels in 2020. This covered vessels
in two of three segments where the Company owns vessels.
The net financial result of MNOK -77.9 in 2021 (MNOK 67.8 in 2020) includes financial income of MNOK 10.5
(MNOK 116.1, whereof MNOK 106.7 of financial income was related to the sale of GSS and the associated
translation differences in the joint venture – the effect was reversed in Comprehensive Income, and had no effect
on the Total equity). Financial and interest expenses were MNOK -50.8 (MNOK -119.3), and the net gain/loss on
currency and derivatives was MNOK -37.6 (MNOK 71.0).
Profit/loss after tax was MNOK 30.7 in 2021 (MNOK -132.4 in 2020) and total comprehensive income was MNOK
40.6 (MNOK -220.5).
Taken in the effect of the reversed impairments of MNOK 220.7, the results reflect that the market for the
Company’s services continued to be challenging also in 2021.
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Eidesvik Offshore ASA
For the parent company Eidesvik Offshore ASA, the profit/loss after tax was MNOK -6.5 (MNOK -12.7).
Balance sheet
The consolidated book equity is MNOK 521.1 per December 31, 2021 (MNOK 480.5 per December 31, 2020). This
is 19% (16%) of the Group’s total capital. For the parent company, Eidesvik Offshore ASA, the equity is MNOK
470.8 (MNOK 477.3).
Vessels account for MNOK 1,931.0 (whereof MNOK 1,022.5 is classified as Assets held for sale), an increase of
MNOK 8.1. The increase is primarily due to reversed impairments on Viking Neptun. Current assets decreased by
MNOK 346.1, mainly due to the sale of the Shearwater shares in January 2021 and debt repayments. Total assets
are MNOK 2,750.6 (MNOK 3,097.1), a reduction of MNOK 346.5.
Impairment tests are performed on individual cash generating entities (vessels) when indications of impairment
are identified. At December 31, 2021, indicators of impairment were still present and the Group’s assessment of
impairment was updated. The value in use calculations of the consolidated fleet concluded with impairment
charges of MNOK 76.9 per December 31, 2021 (MNOK 120.7 per December 31, 2021). Refer to note 12 for further
information.
An average of fair value assessments conducted by two independent brokers, values the consolidated part of the
fleet free of charters to NOK 2,812 million per December 31, 2021 (MNOK 2,727 per December 31, 2020), which
would indicate an excess value before tax of MNOK 881 (MNOK 804) compared to the book value of the vessels
(the book values are tested against value in use calculations). The Board is aware of the low turnover for the type
of vessels Eidesvik owns, and that there is significant uncertainty regarding the vessels’ actual market values in
the current market.
The Group’s non-current liabilities are MNOK 1,095.3 per December 31, 2021 (MNOK 2,267.4 per December 31,
2020). The decrease is mainly a result of instalments and the reclassification from non-current liabilities to
liabilities related to assets held for sale of MNOK 840.7 (MNOK 0). Current liabilities are MNOK 293.5 (MNOK
349.2).
The parent company’s assets are MNOK 646.0 per December 31, 2021 (MNOK 649.5 per December 31, 2020).
The company’s assets consist mainly of investments in and loans to subsidiaries, financial investments and cash.
The company has liabilities of MNOK 175.2 (MNOK 172.1). This consists of non-current liabilities of MNOK 165.0
(MNOK 171.3) and current liabilities of MNOK 10.2 (MNOK 0.9). The company’s equity is MNOK 470.8 (MNOK
477.3), which gives an equity ratio of 73% (73%).
Cash flow
Cash and cash equivalents decreased from MNOK 429.2 December 31, 2020, to MNOK 330.4 December 31, 2021,
whereof MNOK 9.4 is restricted cash and MNOK 17.9 is funding restricted to the ShipFC ammonia project.
Net cash flow from operating activities for 2021 was MNOK 151.3 (MNOK 247.5).
Net cash flow from investment activities of MNOK 228.5 (MNOK -77.5) was mainly due to investments and
periodic maintenance on existing vessels, payment of long-term receivables and sale of the shares in Shearwater.
The Group has a negative cash flow from financing activities of MNOK -480.8 (MNOK -156.1). This is mainly
related to paid instalments and interests.
The parent company has cash and cash equivalents of MNOK 138.2 (MNOK 34.4). This is an increase of MNOK
103.8.
Profit allocation
The Board proposes that the loss for the year of MNOK -6.5 for Eidesvik Offshore ASA is transferred from other
equity.
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Eidesvik Offshore ASA
Going concern
During 2021, the oil price increased to levels around the pre-pandemic level, and the levels have further
increased in 2022 due to the major requirement for stable energy supplies. The demand side for all of the Groups
segments is expected to increase over the coming years. The oversupply of vessels is however still significant,
and will need to decrease for day rates to improve to levels which are sustainable over time for our industry.
In 2021, the Group entered into an agreement with all of the financial institutions. With a combination of
extension of debt maturities and reduced amortization payments, the agreed terms significantly strengthened
the Group’s financial position. In addition, the Group’s liquidity position will further improve from the completion
of the sale of Viking Neptun.
Based on this, the Group’s contract backlog, and the forecast for the next 12 months including the high
probability of the Company qualifying for an extension of final maturities of debt facilities to the end of 2023,
the Board is of the opinion that the conditions for a going concern are present, and the financial statements have
been prepared based on this assumption.
Financial risk
Currency risk
In 2021, Eidesvik had its revenues in NOK, USD and EUR. Operating costs are mainly in NOK. Eidesvik is therefore
exposed to fluctuations in the exchange rates between NOK and the other currencies. In order to mitigate the
risk, cash flow hedges have been established by having parts of the Group’s long-term financing in USD. Forward
contracts are also made where parts of the operational income in USD and EUR are presold with settlement in
NOK.
Credit risk
Eidesvik’s customers are mainly solid companies with good solvency. The risk that the counterparties do not have
the financial capacity to fulfil their obligations is considered low.
Liquidity risk
The liquidity position is assessed as satisfactory for the next 12 months considering the agreed refinancing in 3
rd
Quarter 2021, and also the expected improved liquidity position after completion of the sale of Viking Neptun.
Other risks
Eidesvik is exposed to other risks, as market and operational risks, including cyber security risk. In addition, the
Company experience increase in both expenses and lead time from suppliers, primarily as a consequence of the
geopolitical situation related to the war in Ukraine.
Please see Note 3 for further information.
FRAMEWORK CONDITIONS
Access to and development of highly qualified personnel are vital to ensuring good operation and delivery of an
optimum product, helping our customers to a better overall result. In order to ensure that Norwegian maritime
competence is also developed and utilised in the future, the industry is dependent on stable and predictable
framework conditions. The availability of training positions is vital to building up expertise over time, even in a
cyclical industry.
Eidesvik currently employs both Norwegian and international crew on board its vessels.
The entire petro maritime cluster, oil companies, shipping firms, shipyards and other oil service companies, will
depend on building up maritime competence in the future.
Legislation on net pay schemes is a positive move on the part of the political authorities. However, Eidesvik
believes that net pay schemes should be further reinforced.
Historically, the Company has been at the forefront of increasing the recruitment of Norwegian seamen.
Considerable resources have been allocated to this work through initiatives to increase the incentives for young
Eidesvik Offshore ASA Annual Report 2021
13
Eidesvik Offshore ASA
people to choose a maritime education. The Company cooperates in various forums to strengthen and enhance
Norwegian maritime competence. At the same time, the industry is experiencing increasing international
competition, not least when it comes to expertise and costs. It is important for further investment in Norwegian
maritime competence in the future that the framework conditions should be organised in such a way as to make
it attractive for the industry to build up Norwegian maritime competence over time.
CORPORATE SOCIAL RESPONSIBILITY
The Company’s core values and ethical policy are set out in “Ethical guidelines and core values for Eidesvik
Offshore ASA”, and its social responsibility policy is covered by the “Human rights policy” and “Environmental
policy”. These state that the work of achieving the business goals must be carried out to high ethical standard
and in a manner calculated to safeguard the environment and society. This means that we should act with respect
and honesty towards customers, suppliers, employees, authorities, owners and society, and that the Company
and the individual should comply with relevant legislation. The policy states that the Company and the individual
employee should refrain from all forms of corruption, and sets out how the Company’s employees should act if
they are offered gifts or other benefits because of their employment.
It is further stated that the Company and all employees must comply with all recognised rules for human rights,
including refraining from all forms of discrimination.
No breaches of the Company’s ethical policies were recorded in 2021.
BUSINESS SEGMENTS AND OUTLOOK
Eidesvik owns and operates vessels in the three segments of Supply, Subsea/Wind and Seismic.
Supply
At year end 2021, Eidesvik operated 8 large supply vessels. Out of the supply vessels, 5 run on LNG, and all 8 have
batteries and hybrid solutions installed. Batteries and hybrid solutions were installed on board the 8
th
vessel,
Viking Prince, in January 2022.
Viking Lady was on contract with Aker BP under the frame agreement the entire year, and commenced a 3-year
contract for Aker BP in January 2022 which was awarded in 3
rd
Quarter 2021.
Viking Prince was on contract with Aker BP for most of 2021, and in January 2022 batteries and hybrid solutions
were installed on board the vessel. In the 1
st
Quarter 2022, Viking Prince worked for Aker BP as a substitute vessel
during Viking Lady’s docking, and in the spot market. In March 2022, Eidesvik received a 6 months firm contract
for the vessel with Equinor, with further options for extensions. Commencement was April 2022.
Viking Avant was on charter to Equinor entire 2021, and will continue on this charter until year end 2022.
Viking Queen worked for Equinor for most of 2021, and is on contract with Equinor to May 2022, with options
for extensions.
Viking Energy worked for Equinor entire 2021, as it has done since the vessel was delivered in 2003. The firm
contract for the vessel is to April 2025.
Viking Princess worked for Wintershall entire 2021. Wintershall declared options to extend the contract to
January 2023, and has further options for extensions.
The effects of the combination of Covid-19 and the low oil-prices, which hit the market severely in 2020,
continued throughout 2021. Although we saw a decent increase in number of fixtures during the last three
quarters of 2021 compared to the same period in 2020, the increase in demand was to some extent offset with
vessels taken out of lay-up. Hence, vessel utilization and rate levels were overall below sustainable levels,
although improved compared to in 2020.
Eidesvik Offshore ASA Annual Report 2021
14
Eidesvik Offshore ASA
We expect market improvements in the year to come driven by increase in rig activity both for exploration and
development on the Norwegian Continental Shelf. The Norwegian authorities’ support package for the oil and
gas industry will have a positive impact on the activity levels with gradual market improvements from 2022.
Operators’ preference for large and environmental friendly supply vessels are beneficial drivers for the
Company’s supply fleet.
Subsea/Wind
Eidesvik currently has 4 vessels in the Subsea/Wind segment, of which one is owned in a JV with Subsea 7 (50/50).
Viking Neptun started 2021 working for DEME Offshore in the offshore wind market, and commenced a contract
for Havfram in April 2021. Viking Neptun worked for Havfram until December 2021, before commencing a firm
contract for Havfram for approximately 9 months in the start of January 2022.
On January 12, 2022, Eidesvik Neptun AS, a subsidiary of Eidesvik, entered into a MoA with DEME, for the sale of
Viking Neptun, following a letter of intent being entered into between DEME and Eidesvik on December 23, 2021.
The MoA is expected to complete in the 4
th
Quarter of 2022, post completion of the ongoing contract with
Havfram.
Viking Wind Power has been contracted to Siemens Gamesa all year, which extended the fixed contract in
January 2021 from January 2022 to January 2027. Viking Wind Power has in the 1
st
Quarter 2022 been through
installation of batteries and hybrid solutions, docking, and a major conversion towards the offshore wind market.
Subsea Viking worked for Seabed Geosolutions the entire year, and was most of the year offshore Brazil. In
December 2021, the vessel entered into a stand-by contract, and will in April 2022 commence a firm contract for
PXGEO for 100 days, with further options for extensions.
Seven Viking is on contract for Subsea 7 to 2025 with a 1-year option thereafter.
The activity in the subsea market remained affected by COVID-19 and oil prices that remained low in 2020 and
the first half of 2021. As a result, projects have been deferred over the last couple of years.
The overall utilization level in 2021 was in line with 2020 with a slight improvement towards the end of the year.
In the second half of 2021 we experienced an increase in tender activities for long term contracts. We expect
that to continue and the market to improve from 2022 and onwards.
The wind market experiences a growing demand for vessels as new offshore windmill parks are developed and
commissioned.
Seismic
Within this segment, Eidesvik owned 4 vessels 100% at year end, whereof all were in layup.
Veritas Viking was taken out of layup in 2
nd
Quarter 2021, and commenced a bareboat contract for approximately
five months in June 2021. The vessel has thereafter been in layup. In March 2022, Eidesvik received a firm
bareboat contract with commencement in April 2022 for Veritas Viking for 100 days, with further options for
extensions
Vantage, Viking Vision and Viking Vanquish have been in layup throughout the year.
By year end 2021 we experienced increased tender activities in the ocean bottom seismic segment which may
indicate that the activity level will increase for this segment as well.
Eidesvik Offshore ASA Annual Report 2021
15
Eidesvik Offshore ASA
Bømlo, April 27, 2022
Borgny Eidesvik Lars Eidesvik John Stangeland
Board member Board member Board member
Lauritz Eidesvik Kristine Elisabeth Skeie
Board member Board member
Gitte Gard Talmo
CEO
Arne Austreid
Chair of the Board
Bjørg Marit Eknes
Board member
Eidesvik Offshore ASA Annual Report 2021
16
Eidesvik Offshore ASA
CORPORATE GOVERNANCE
PRINCIPLES AND VALUES FOR CORPORATE GOVERNANCE IN EIDESVIK OFFSHORE ASA
The Board of Directors of Eidesvik Offshore ASA (the “Company”) shall ensure that the Company complies with
the “Norwegian Code of Practice for Corporate Governance” of October 14, 2021. The Group’s compliance with,
and any deviations from the code of practice, must be commented by the Board in relation to every point in the
Norwegian Code of Practice for Corporate Governance, and made available to the Company’s stakeholders along
with the annual report.
The purpose of the guidelines for corporate governance in Eidesvik Offshore ASA is to clarify the roles between
shareholders, the General Meeting, the Board and executive management exceeding what is evident by
legislation.
The principles and core values for corporate governance in Eidesvik Offshore ASA are set out in the following
documents (complete documents are available from the Company’s website at www.eidesvik.no)
:
• The Board’s annual report for the Company’s corporate governance.
• Articles of Association of Eidesvik Offshore ASA of May 20, 2020.
• Instructions for the Board of Directors.
• Instructions for CEO.
• Guidelines for planning and budgeting.
• The Company’s core values and ethical guidelines.
• The Company’s guidelines for social responsibility.
• Guidelines for handling price-sensitive information and insider trading.
• Guidelines for determination salaries and other remuneration to management (revised guidelines to be
proposed for adoption by the ordinary general meeting in 2022).
• Guidelines for use of the auditor as an advisor to the Company.
• Guidelines for information from the Company.
The Company shall be based on open interaction and coordination between the Company’s shareholders, Board
and management, as well as other stakeholders such as employees, customers, suppliers, creditors, public
authorities and society in general.
The Company’s core values and ethical policy are set out in “Ethical guidelines and core values for Eidesvik
Offshore ASA”, and its social responsibility policy is covered by the “Human rights policy” and “Environmental
policy”.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Business
The Company’s business is described in Article 3 of its Articles of Association. The Board determines the Group’s
overall goals, strategy and risk profile. The strategic plan is revised annually. The mission statement in the Articles
of Association and the Company’s goals and strategies are set out in the Annual Report, which are also published
on the Company’s website at www.eidesvik.no.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Equity and dividends
The Board shall ensure that the Company holds equity commensurate with the risk from and scope of the
Company’s operations, cf. “Instructions for the Board of Directors”. The Board determines the Company’s
dividend policy, and presents this with its proposed dividend to the Company’s General Meeting. There is
currently no outstanding authorisation for the Board to issue new shares to increase the Company’s capital.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Eidesvik Offshore ASA Annual Report 2021
17
Eidesvik Offshore ASA
Equal treatment of shareholders
Eidesvik Offshore ASA has only one class of shares.
In the event of an increase in share capital, the principle of equal rights for all shareholders to buy shares applies.
Own shares are bought on the stock exchange at market value.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Shares and negotiability
The shares in the Company are listed and freely negotiable. The Articles of Association do not impose any form
of restrictions on negotiability.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
General Meetings
The notice of and procedure for the Company’s General Meeting follow the regulations given by the Public
Limited Liability Companies Act with regards to contents and deadlines. The registration deadline is set as close
to the meeting as practicable. Shareholders who are unable to attend may vote by proxy.
Notice of the meeting, proposed resolutions, proxy forms, other case documents and information on
shareholders’ right to raise matters at the General Meeting are made available at the Company’s website as soon
as they have been approved by the Board.
The Board and the chair of the General Meeting must arrange for the general meeting to vote for each candidate
nominated for election to corporate bodies.
The minutes of the General Meetings are made available on the Company’s website as soon as possible.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Nomination committee
The Nomination Committee shall according the Articles of Association consist of three to five members. The
Nomination committee shall make proposals for election of Board Members and members of the Nomination
Committee to the General Meeting. The General Meeting may adopt guidelines for the Nomination Committee.
COMMENT: Deviates from the Norwegian Code of Practice for Corporate Governance in that one Board Member currently also is part of the
Nomination Committee.
Board of Directors: composition and independence
The composition of the Board of Directors of Eidesvik Offshore ASA is made to safeguard the interests of
shareholders and the Company’s need for competence, capacity and diversity. The Board considers it important
that the Board can function well as a collegial body.
The Board is composed in such a way that it can act independently of special interests.
The majority of the members elected by shareholders are independent of the Company’s executive management
and major business associates.
At least two of the members elected by shareholders are independent of the Company’s main shareholders.
Representatives of the executive management are not members of the Board.
The Chair is elected by the General Meeting, as the Company does not have a corporate assembly.
The Board members are elected for two years at a time. In the Annual Report, the Board provides details of the
Board members’ competence and capacity, as well as which Board members are considered to be independent.
Board members are encouraged to own shares in the Company.
COMMENT: Deviates from the Norwegian Code of Practice for Corporate Governance in that there is no mention in the annual report of
attendance at Board meetings. This is not considered relevant as it is very rare directors are not attending Board meetings, either physically
or by telephone/video.
The work of the Board of Directors
A separate instruction for the Board of Directors of Eidesvik Offshore ASA has been prepared.
The Group has an audit committee, and the Board of Directors of Eidesvik Offshore has established instructions
for the audit committee.
Eidesvik Offshore ASA Annual Report 2021
18
Eidesvik Offshore ASA
For transactions between companies of the Group, there are guidelines in “Instructions for the Board of
Directors”.
For significant transactions between the Company and shareholders, board members, senior executives or
persons related to them, an independent valuation must be obtained. This does not apply when the General
Meeting is to discuss the matter according to the provisions of the Public Limited Liability Companies Act. The
same applies to transactions between companies in the Group where there are minority shareholders.
The instructions for the Board, the instructions for the CEO, and the ethical guidelines have rules for impartiality.
COMMENT: No deviations, all related parties transactions are presented in the notes to the financial statement in the annual report.
Risk management and internal control
According to the instruction for the Board of Directors of Eidesvik Offshore ASA, the Board ensures that the
Company has good internal control and appropriate systems for risk management. The Board receives monthly
status reports on Company operations, including financials with deviation analysis and liquidity forecasts.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Remuneration of the Board of Directors
The remuneration of the Board is determined by the General Meeting and does not depend on results.
Information on remuneration is given in the annual report.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Salary and other remuneration for executive personnel
The Board has adopted revised guidelines proposed for approval by the annual general meeting for remuneration
for executives stating the main principles of the Company’s executive remuneration policy. The guidelines are
submitted annually to the General Meeting.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Information and communications
The Board has adopted guidelines for the Company’s contact with shareholders outside the General Meeting.
These are set out in the Board’s annual report. The Company publishes a financial calendar each year, and all
interim reports and results presentations are published on the Company’s website and the Oslo Stock Exchange.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Take-overs
The Board has not prepared guiding principles for how to act in the event of a takeover bid.
COMMENT: Deviates from the Norwegian Code of Practice for Corporate Governance. With the current composition of shareholders, a
takeover is not considered likely without the main owner working in close cooperation with the Board.
Auditor
The external auditor is elected at the General Meeting, which also approves the auditor’s fees for the parent
company. On an annual basis, the auditor presents an audit plan to the audit committee, and participates in
audit committee meetings to review the Group’s internal control and financial risk management systems and
procedures. The auditor also participates in board meetings when considered appropriate, with and without
management present. Information about the auditor’s fees, including a breakdown of audit related fees and fees
for other services is included in the notes to the financial statements in accordance with the Norwegian
Accounting Act. The Company’s external auditor is Ernst & Young AS.
COMMENT: No deviations from the Norwegian Code of Practice for Corporate Governance.
Eidesvik Offshore ASA Annual Report 2021
19
Eidesvik Offshore ASA
HSEQ REPORT FOR 2021
INTRODUCTION
The quality and safety system “Eidesvik Management System” is certified by DNV to meet the requirements of
the ISM Code, ISO 9001:2015, ISO 14001:2015, MLC 2006 and the ISPS Code.
Throughout 2021, our EMS are built on “Simplified and improved safety management”, and all of our operational
vessels are using updated manuals for bridge, deck, engine, galley and crane operations as applicable. We receive
very positive feedback from both users and clients. Required revisions considered on an ongoing basis, including
new procedures as needed. Good working environments are established at all vessels, with focus on awareness
and monitoring of health, safety and environmental aspects identified by Eidesvik.
Eidesvik has prepared an annual HSEQ program that specifically addresses future focus areas, including “Key
Performance Indicators” (“KPIs”). The KPIs are communicated to all vessels and departments, and posted in
public areas both on vessels and at office. Eidesvik focuses on a strong commitment to the HSEQ program in
order to achieve the goals within the various areas. The guiding documents are continuously evaluated in order
to ensure optimal and functioning operating procedures for the employees both offshore and onshore.
The Company had zero lost time incident (LTI) in 2021 - a very well performance. Last year with any LTI was in
2016. This underlines the importance of a continuing strong focus on HSE in all parts of the Company’s
operations, to ensure all our employees are at same good health when travelling home for leave as they were
when joining.
The statistic below illustrates the number of personal injuries per million working hours over the last 5 years.
Target
Target
Target
Eidesvik Offshore ASA Annual Report 2021
20
Eidesvik Offshore ASA
Emphasising the analysis of causal relations and underlying causes are important as a basis for lessons learned
to other vessels within Eidesvik. Focusing on operations and compliance with the EMS are important
accompanying measures. In addition to preventing injuries, we also focus on the following actions:
• Focus on “safety observations” reporting method, especially proactive reports. This has contributed to
an increase in reporting. Reports are reviewed at safety meetings on board. In 2021, 4,434 “safety
observations” were reported; whereof 52% was proactive. This constitutes a large percentage of the
total number of reports in the HSEQ field.
• Extensive use of risk analysis. All vessels and office are analysing tasks/jobs to avoid accidents/
injuries, and any hazards are highlighted and actions are implemented to reduce and/or remove the
hazards. In 2021, 883 new and/or revised risk analysis were done.
• By holding “Tool Box Talk” meetings (“TBT”), this help us to avoid accidents and injuries. The people
executing the jobs are also doing the planning and receive information on potential hazards in
connection with the job. Total number of TBT in 2021 was 20,154.
• Work on board is performed according to a “Permit to Work” system (“PTW”). This help us to avoid
accidents and injuries. Everyone needs to obtain permission from the vessel’s management before
performing jobs that could cause a risk to personnel, environment and vessel.
INCIDENT REPORTING
In 2021, 600 incident reports in all categories were logged. In addition, 618 document of change requests were
submitted from vessels and from the office. The office issued 37 experience feedback reports to vessels and
office. The incident, near miss, improvement suggestion, document of change request, and improvement
suggestions and lesson learned reports are a positive foundation for learning and implementing specific actions
to avoid reoccurrences. A strong and healthy culture for reporting enables the organisation to identify
developments and trends within specific operations or tasks. This is used to improve areas in order to prevent
incidents from recurring. Reporting of incidents has a preventive effect, and the Company has a strong focus on
this.
Eidesvik Offshore ASA Annual Report 2021
21
Eidesvik Offshore ASA
QUALITY
Our goal is to provide services of a quality that exceeds the customer’s expectations, and we follow up on surveys
of customer satisfaction from every vessel and crew. Quality is to do the job right first time.
WORK ENVIRONMENT ACTIONS
Please read about Eidesvik’s work environment actions in the extract to the ESG report. The full report is available
on the Eidesvik website.
SICK LEAVE
Absence due to illness in 2021 was 8.1%. This is an increase of 18.5% from 2020 (6.6%). The main part of the
increase in 2021 is related to Covid-19 restrictions.
Eidesvik has high focus on preventive actions and closer follow-up from company and management in order to
increase attendance at work. Employees have also been enabled to subscribe to private health services, as well
as cover for physiotherapy. Eidesvik’s occupational health service is an important support in these efforts.
Eidesvik Offshore ASA Annual Report 2021
22
Eidesvik Offshore ASA
EXTRACT OF THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
This section provides a summary of Eidesvik’s approach to environmental, social and governance (ESG) issues,
and the associated key performance indicators. A detailed 2021 ESG report is published as a separate document.
The report has been prepared in accordance with the Norwegian Shipowners' Association Guidelines for ESG
reporting in the shipping and offshore industries. Determination of material topics was done in accordance with
the Global Reporting Initiative Materiality Standard, GRI 3 (2021).
KEY HIGHLIGHTS 2021
In 2021, good progress was made on Eidesvik’s sustainability agenda. Key highlights include:
E
• 20.4% reduction in CO2 from PSV and 13.7% from Subsea fleet since the baseline year
(2008)
• 24% reduction in CO2 emissions per nautical mile travelled compared to 2020
• 14% reduction in CO2 emission per operational day compared to 2020
• 2 additional vessels have been fitted with battery hybrid solutions, now 83% of the
operational fleet have hybrid technology.
• Launched 3 new groundbreaking technology projects for low and zero emission
technologies.
S
• Zero lost time incidents
• No Covid-related vessel delay or down-time
G
• Conducted the first materiality assessment to determine our sustainability priorities
• Strengthened capacity within green technology with the establishment of new positions:
Director of Sustainability, Commercial Environmental Manager and Technology
Development Manager
SUSTAINABILITY AT EIDESVIK
Eidesvik works proactively to ensure that ESG is included in all its operations. The company has established
policies and procedures to ensure a consistent ESG management and risk mitigation.
Sustainability is anchored with the Board of Directors (BoD) and the Executive Management Team. The CEO,
together with the Executive Management Team, has the overall responsibility for the integration of sustainability
into Eidesvik’s operations, to set priorities, targets and drive implementation, and for including sustainability in
core processes related to strategy, planning and risk management.
Eidesvik prioritizes the areas within ESG that are most material to its industry, and where the company can have
the most significant impact. Eidesvik’s priorities are also guided by those topics that can have a financial impact
on our operations. Overall, Eidesvik’s sustainability work is focused on the following priorities:
• Be a safe and fair employer
• Reduce our emissions
• Contribute to the energy transition
• Be a responsible partner
The priority areas are based on a materiality assessment that was conducted in 2021, which included stakeholder
dialogue with employees, suppliers, customers, selected associations, and investors. Following the materiality
assessment, Eidesvik involved all areas of operations to define KPIs related to the material sustainability topics.
The company will start reporting on these KPIs from 2022.
In a broader perspective Eidesvik aims to contribute to the UN Sustainable Development Goals (“SDGs”), and the
company has prioritized five SDGs to which it can contribute the most:
Eidesvik Offshore ASA Annual Report 2021
23
Eidesvik Offshore ASA
- SDG 8 – Decent work and economic growth
- SDG 9 – Industry, Innovation, and Infrastructure
- SDG 13 – Climate Action
- SDG 14 – Life below water
- SDG 17 – Partnership for the goals
KEY TARGETS AND PERFORMANCE
ENVIRONMENTAL IMPACT
The shipping industry may have negative implication for both human and ecosystem health in the form of
emissions, pollution, spills and discharges. The company’s ability to manage these risks and to mitigate the
negative environmental impact is critical not only for the environment, but for Eidesvik’s business.
Eidesvik strives to be a powerhouse for future oriented shipping and marine operational solutions, and to
position the company at the forefront of the development of zero-emission shipping solutions. To reach this goal,
the company is actively engaged in both reducing greenhouse gas emissions from its fleet, and to contribute with
the development of new technology that will reduce emissions across the industry.
The ambition is to have a climate neutral fleet by 2050 and to reduce emissions by 50% in 2030, compared to a
2008 baseline. In 2021, Eidesvik’s emissions totalled 97 082 metric tonnes CO2. While this is an increase from
the previous year due to increased activity, we are seeing a decline in emission intensity indicators. Overall, the
CO2 emissions per nautical mile has decreased from 0.426 tonnes CO2/nautical mile in 2020 to 0.324 in 2021.
The CO2 emissions per operational day has decreased from 34.78 tonnes CO2/operational day in 2020 to 29.83
1
The largest spill of 4m
3
was spillage of water-based mud. This incident was related to a broken mudhouse during
discharging to rig. The other spills were caused by leaking hydraulic oil during ROV operations (couplings).
2
The number of Total Reportable Cases per million Exposure Hours worked during the period (excluding first aid)
Target
2021
2020
SDG
Environmental
50% reduction in CO2 emissions by 2030, 100% by
2050 (baseline 2008)
20.4% (PSV)
13.7% (Subsea)
18.2% (PSV)
11.2 (Subsea)
Yearly reduction in tonnes CO2 emissions per
nautical mile (baseline 2008)
23.9% 20.1%
Yearly reduction in tonnes CO2 emissions per
operational day (baseline 2008)
14.2% 15.6%
Zero spills to sea (number) 4.3 m3
1
(19)
1m
3
(16)
100% of fleet running on battery hybrid solutions 83% 60%
Social
Employee satisfaction (eNPS scope >30) 37 34
Trainee rate 7% of workforce 9.3 7
Performance appraisal reviews (100%) 70% 70%
Zero Lost Time Incidents 0 0.50
<2 Total recordable case frequency (TRCF
1
)
2
0.46 2.52
Governance
All suppliers representing 25 MNOK+ or defined as
critical for our operations will be audited within a
three-year period
1 -
Eidesvik Offshore ASA Annual Report 2021
24
Eidesvik Offshore ASA
in 2021. Eidesvik aims to reduce this year by year. Due to the scope of operations for offshore vessels, the GHG
emissions intensity indicators used by the IMO, such as the AER, are not considered suitable, and Eidesvik has
chosen to monitor CO2 emissions per nautical mile and per operational day as these better reflect the
development.
Emissions from Eidesvik’s vessels are directly linked to energy efficiency, and the focus is on:
• The Eidesvik Energy Efficiency Programme blue:E (EEEP) - a set of measures to reduce energy
consumption and GHG emissions has been defined and implemented on each vessel.
• Retrofitting – installing battery hybrid systems and shore-based power systems on our existing fleet
o 83% of our vessels in operations have battery hybrid systems installed
o 64% of our vessels in operation can utilise shore-based power
• Research and development of new technologies and use of new green fuels
Eidesvik recognizes that climate changes can have risks on the company business strategy. This is why Eidesvik
in 2021 conducted a climate risk review in accordance with the Task Force on Climate-related Financial
Disclosures (TCFD). Please see the 2021 ESG report for the full review.
Efforts go beyond focusing on carbon emissions. The company aims to minimize any forms of pollution to air and
sea. Eidesvik complies with all laws and regulations related to waste management and air pollution, and the
company has established a plan to be compliant with the Ballast Water Management Convention. Eidesvik uses
Eidesvik’s continuous work to develop feasible approaches for large-scale CO2 emission
reductions in our fleet has commenced with full speed in 2021. During the year, we launched
three new technology projects within the use of new green fuels.
The Retrofit Project: Aker BP & Eidesvik - Eidesvik and E&P company Aker BP launched the
ambitious joint technology project “Retrofit” in mid-2021. Retrofit’s mission is to capture
emission reductions of 70 percent or more on selected vessels. The work to map available new
technologies from a cost-benefit perspective is now well under way. The project is based on the
belief that large emissions reduction can be achieved, as well as save CapEX, by prolonging the
lifetime of existing vessels with new green technologies.
Apollo Project - In October 2021, Eidesvik and the technology group Wärtsilä signed a
cooperation agreement aimed at converting an offshore supply vessel to operate with ammonia-
fuelled combustion engines, including fuel supply and safety system. The “Apollo” project will
be the first of its kind ever in the world and has a provisional completion target of 2024. The
supply vessel considered for the retrofit currently has Wärtsilä dual-fuel engines operating
primarily with LNG fuel. The conversion will allow the vessel to operate with a 70 percent
ammonia blend, cutting its CO2 emissions by 70 %.
Ammonia Fuel Cell Project - As part of the Retrofit project, Eidesvik entered into a MoU with
Aker BP and Alma in November 2021 to explore opportunities for utilising Alma’s fuel cell
technology to accelerate the move to zero emissions shipping. Specifically, the companies will
explore retrofit installation of Alma’s ammonia fuel cell technology on two offshore support
vessels: Eidesvik-owned Viking Lady and Aker BP-owned NS Frayja currently under Eidesvik’s
management.
Eidesvik Offshore ASA Annual Report 2021
25
Eidesvik Offshore ASA
LNG and low-sulfur emissions to fuel its vessels, which result in less emissions of SOx, NOx and PM. The aim is to
have zero spills, and the company has systems in place to mitigate the risks of such events happening. If spills do
happen, the incidents are reviewed so that the organization can learn from them.
HEALTH AND SAFETY
Safety is Eidesvik’s number one priority. The company’s personnel often operate under challenging conditions,
particularly when working on board our vessels. This requires the highest levels of diligence to ensure that our
crew return home safe. Eidesvik works systematically with health and safety to mitigate risks that can expose
our employees to injuries or health related challenges. The Executive Management Team is focused on incident
reporting, training, awareness work and sharing best practice across the fleet to prevent incidents from
happening. Our quality and safety system “Eidesvik Management System” (EMS) is certified by DNV GL and meets
the requirements of the ISM code, ISO standards: 9001-2015, 14001-2015, MLC 2006 and ISPS Code.
Eidesvik’s Lost time incident rate (LTI) was 0 in 2021. Absence due to illness was 8.1%. Eidesvik is focused on
preventive actions, both related to the physical and psycho-social working environment, and closer follow-up
from the company and management to increase attendance at work.
WORKING ENVIRONMENT
Eidesvik believes that creating a diverse and inclusive working environment where all employees feel valued and
have equal career opportunities is not only the right thing to do, but also financially beneficial for the company.
Eidesvik’s priorities in this area include:
• High focus on retaining and developing employees.
• Ensure high quality leadership in all levels of the organization.
• Securing an inclusive and safe working environment for all.
• Maintaining a dynamic apprentice program through the availability of a wide range of trainee and cadet
positions.
• Supporting competence development through a combination of formal training, on the job training and
own initiative.
Eidesvik uses the Employee Net Promoter Score as a measure for employee wellbeing. The aim is a score above
30. In 2021, the score achieved was 37, a slight increase from 34 in 2020. Eidesvik aims to give all employees the
opportunity to participate in annual performance and career development reviews. In 2021, 70% of employees
completed such reviews. Eidesvik is focused on career development and aims to recruit internally/by promotions
whenever possible.
EQUALITY AND INCLUSION
Eidesvik considers it a competitive advantage to have a diverse team, and does not discriminate based on race,
caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership or
political affiliation. In 2021, Eidesvik experienced zero breaches of the Human Resources Policy on gender, age
and ethnicity.
At the end of 2021, Eidesvik employed 471 people, females accounted for 13% (61). The male domination of the
shipping industry is reflected in these figures. At the Executive Management level 20% were female and at
Management level 48% were female in 2021. No employees at Eidesvik are employed on a part-time or
temporary basis.
Eidesvik analyses the gender pay gaps of its employees. A salary comparison of employees at all levels shows
that women’s income was 79% to that of men’s in 2021.
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
Eidesvik has guidelines in place for salary placement and salary adjustment, which is outlined in the company’s
Employee Handbook, which is based on our HR policy and Code of Conduct. Eidesvik determines each employee’s
salary individually after a fair judgement of the persons’ qualifications, including competence, performance,
results and responsibility.
The majority of Eidesvik’s employees are seafarers. All seafarers are covered by collective bargaining agreements
between the Norwegian Shipowners’ Association and the seafarer’s unions, who set wage agreements that a
company cannot deviate from. These agreements ensure equal treatment in relation to wages and working
conditions.
Onshore employees have been divided into “Management” and “Other employees”. For Managers, women’s
income was 89% to that of men’s in 2021. The group "Other employees” consists of job categories with large
variations in competence requirements, pay levels and differences regarding what positions are held by women
and men, such as technical specialists and administrative positions. Technical specialists have substantial
specialized competence and experience, and thus have a higher pay compared to administrative positions. These
positions are typically held by individuals with experience as seafarers at management level, whereof the
majority are men. The majority of administrative positions in Eidesvik are held by women.
Table: Gender pay gap ratio for onshore employees
Group
Total number of
employees
Females
Men
Ratio of basic salary
of women to men
Management
21
10
11
89%
Other employees
28
12
16
65%
1 female and 2 men have taken parental leave in 2021. The average number of weeks for females was 52 weeks,
while for men this figure was 9.5 weeks.
A full description of the Company’s work with equality and inclusion can be found in the 2021 ESG report.
LABOUR CONDITIONS AND HUMAN RIGHTS
Eidesvik aims to carry out its business in a way that supports and respects the protection of international
proclaimed human rights. We do not engage in, or support the use of, child labour, and support the elimination
of all forms of forced labour, as outlined in Eidesvik’s Code of Conduct. Eidesvik has measures in place to ensure
that all our employees, onshore and offshore, are working under conditions that meet the requirements set out
in the International Labour Conventions and the Maritime Labour Conventions. Freedom of association and the
right to collective bargaining is respected and outlined in the Code of Conduct. In 2021, Eidesvik did not conduct
operations in countries with heightened risk of human rights violations.
In 2022, Eidesvik will focus on implementing measures to ensure compliance
with the Norwegian Transparency
Law that comes into force in July this year. This includes the development of a Supplier Code of Conduct,
which will incorporate human rights and other topics related to business ethics and environmental issues.
BUSINESS ETHICS AND ANTI-CORRUPTION
Eidesvik is committed to operating with the highest ethical standards in all its operations. The Code of Conduct
is the main governing document outlining our principles, rules and expectations regarding ethical business
practices. Eidesvik conducts its business in compliance with all anti-bribery, anti-corruption and anti-money
laundering laws, rules and regulations including, but not limited to, the UK Bribery Act 2010, the US Foreign
Corrupt Practices Act 1977, the Norwegian Penalty code section 276 a – 276 c and other legislation applicable to
our industry. Eidesvik has not been involved in any legal proceedings associated with bribery, corruption or anti-
Eidesvik Offshore ASA Annual Report 2021
27
Eidesvik Offshore ASA
competition in 2021. When conducting operations in countries with a higher risk of corruption, the company
conducts a risk assessment for that specific country in line with established policies and procedures.
Eidesvik has a whistleblowing function in place, which all employees can utilise to report breaches of the Code
of Conduct or any form of unethical business conduct. No cases were reported in 2021.
Eidesvik Offshore ASA Annual Report 2021
28
Eidesvik Offshore ASA
DECLARATION BY THE BOARD OF DIRECTORS AND CEO
The Board and the CEO have today reviewed and approved the annual report and the consolidated annual
accounts and notes for Eidesvik Offshore ASA as at December 31, 2021, and for the year 2021, including
consolidated comparative figures as at December 31, 2020, and for the year 2020.
T
he annual accounts are submitted in accordance with the requirements of IFRS as adopted by the EU and
additional Norwegian requirements in the Securities Trading Act
T
he Board and CEO believe that the annual accounts for 2021 have been prepared in accordance with
applicable accounting standards, and that the information in the accounts gives a true picture of the Group’s
assets, liabilities, financial position and overall performance as at December 31, 2021, and December 31, 2020.
To the best of the Board’s and CEO’s knowledge, the director’s report gives a true view of important events
during the accounting period and their influence on the annual accounts. To the best of the Board’s and CEO’s
knowledge, the description of the most important risk and uncertainty factors the business is facing in the next
accounting period, as well as the description of significant transactions with related parties, gives a true
account.
Bømlo, April 27, 2022
A
rne Austreid Borgny Eidesvik Lars Eidesvik John Stangeland
Chair of the Board Board member Board member Board member
Bjørg Marit Eknes Lauritz Eidesvik Kristine Elisabeth Skeie
Board member Board member Board member
Gitte Gard Talmo
CEO
Eidesvik Offshore ASA Annual Report 2021
29
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
(NOK 1,000)
2021
2020
Note
1.1-31.12
Freight income
Other income
5
Total operating income
4
Payroll expenses
11
Other operating expenses
6
Total operating expenses
Operating profit before depreciation and impairment
Depreciation
12,22
Impairment of tangible fixed assets
12
-143 797
Operating profit before profit from joint ventures
-197 194
Profit from joint ventures
7
-5 916
-5 204
Operating profit
-202 398
Financial income
8
Financial expenses
8
-50 805
-119 286
Net currency gain/loss
8
-37 610
Net financial items
-77 912
Profit/loss before taxes
-134 560
Tax costs
9
Profit/loss for the year
-132 434
Attributable to:
The parent company’s shareholders
-15 746
-123 569
Non-controlling interests
7
-8 866
Profit/loss for the year
-132 434
Earnings per share
10
-0.25
-1.99
Diluted earnings per share
10
-0.25
-1.99
Eidesvik Offshore ASA Annual Report 2021
30
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(NOK 1,000)
2021
2020
Note
1.1-31.12
1.1-31.12
Statement of comprehensive income
Profit/loss for the year
-132 434
Items that will not be reclassified via profit/loss in later
periods
Actuarial gains/losses
-55
Items that will be reclassified via profit/loss in later periods
Translation differences joint ventures
7
-106 712
Change in value financial investments
21
-9 900
Total comprehensive income for the year
-220 546
Attributable to:
The parent company’s shareholders
-5 901
-211 681
Non-controlling interests
-8 866
Total comprehensive income for the year
-220 546
Eidesvik Offshore ASA Annual Report 2021
31
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF BALANCE SHEET
(NOK 1,000)
Note
31.12.2021
31.12.2020
Assets
Non-current assets
Vessels
12
Buildings, land and other operating assets
12
Financial derivatives
23
Right-of-use asset
22
Investments in joint ventures
7
Shares
21, 7
Pension funds
18
Other non-current receivables
13
Total non-current assets
Current assets
Financial investments
21
Accounts receivable
14
Derivatives
23
Other current assets
15
Cash and cash equivalents
16
Total current assets
Assets held for sale
4, 7, 12, 27
Total assets
Eidesvik Offshore ASA Annual Report 2021
32
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF BALANCE SHEET
(NOK 1,000)
Note
31.12.2021
31.12.2020
EQUITY AND LIABILITIES
Equity
Equity attributable to the Company’s shareholders:
Share capital
17
Share premium
Other paid-in equity
Other reserves
-590
-535
Translation differences
21
-9 900
Other equity
Total equity majority shareholders
Non-controlling interests
-101 145
Total equity
Liabilities
Non-current liabilities
Interest-bearing debt
20
Lease liabilities
22
Derivatives
23
Pension liabilities
18
Other long-term liabilities
19
Total non-current liabilities
Current liabilities
Interest-bearing debt
20
Derivatives
23
Lease liabilities
22
Accounts payable
Other current liabilities
19
Total current liabilities
Liabilities related to Assets held for sale
22
Total liabilities
Total equity and liabilities
Bømlo, April 27, 2022
Borgny Eidesvik Lars Eidesvik John Stangeland Arne Austereid
Chair of the Board
Board member Board member Board member
Kristine Elisabeth Skeie Gitte Gard Talmo
Bjørg Marit Eknes Lauritz Eidesvik
Board member Board member
Board member CEO
Eidesvik Offshore ASA Annual Report 2021
33
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF CASH FLOW
(NOK 1,000)
Note
2021
2020
1.1-31.12
1.1-31.12
Cash flow from operations
Payments from customers
Payment to suppliers, employees and others
-475 091
-377 825
Payments from reimbursement scheme, Norwegian seamen
Interest received/paid
Net paid and refunded taxes
-13
Net cash flow from operating activities
Cash flow from investment activities
Sales of non-current assets
12
Received long-term receivables
13
Sales of other investments
12
Purchase of tangible fixed assets
12
-93 135
-144 941
Net cash flow from investment activities
-77 459
Cash flow from financing activities
Installment financial lease
22
-3 714
-3 061
Realised currency derivatives
23
Repayment of debt
20
-420 514
-52 303
Paid interest
20
-80 163
-100 729
Net cash flow from financing activities
-480 824
-156 093
Currency gain/loss on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
-98 782
Cash and cash equivalents at start of period
16
Cash and cash equivalents at end of period
16
Eidesvik Offshore ASA Annual Report 2021
34
Eidesvik Offshore ASA
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(NOK 1,000)
Majority share
Minority
share
Total
equity
Share
capital
Share
premium
Other
reserves
Other
paid-in
equity
Other
equity
Total
Translation
differences
Equity at 01.01.2020:
-29 034
-92 280
Result for the year
-123 569
-123 569
-8 866
-132 434
Currency translation
differences*
-106 712
-106 712
-106 712
Actuarial effects**
Other adjustments**
-9 900
-9 900
-9 900
Total comprehensive income
-116 612
-123 569
-211 681
-8 866
-220 546
Other adjustments not
included in OCI**
-28 409
-28 409
-28 409
Equity at 31.12.2020
-535
-9 900
-101 145
Result for the year
-15 746
-15 746
Actuarial effects
-55
-55
-55
Other adjustments**
-2
Total comprehensive income
2021
-55
-15 746
-5 901
Change in non-controlling
interests ***
-57 230
-57 230
Equity at 31.12.2021
-590
* As the sale of Global Seismic Shipping AS to Shearwater was completed January 8, 2020, the Translation differences recognized in Equity
have been recognized as financial income, and with reverse effect in Comprehensive income. See Note 7 and 8 for further information.
** The NOK -9,900 thousands are translation differences of the financial investments on the consolidated statement of financial position,
and the NOK -28,409 thousands is the effect of the discontinued defined-benefit pension scheme for the employees in Eidesvik Maritime AS
in 2020. This was replaced with a defined-contribution scheme from 01.01,2020. As of December 31, 2020, there are no employees in Eidesvik
Maritime AS on the defined-benefit scheme.
*** As of September 1, 2021, Eidesvik bought the non-controlling shares in Eidesvik Supply AS and holds 100% of the shares in this company,
hence the re-distribution of capital from minority to other equity.
Eidesvik Offshore ASA Annual Report 2021
35
Eidesvik Offshore ASA
NOTES TO THE CONSOLIDATED ACCOUNTS
Note 1
Eidesvik Offshore ASA (the Company) and its subsidiaries (collectively the Group) offer services within the maritime sector. The Group
operates in several segments where the main segments are seismic, subsea and platform supply vessel services. The Group’s vessels are
located across large parts of the world.
Eidesvik Offshore ASA is a pub lic lim ited compa ny registered in No rway and headquartered at
municipality. Eidesvik
Offshore ASA is listed at the Oslo Stock Exchange, and is subject to the provisions of the Public Limited Liability Companies Act with regards
to limitations in shareholders’ liability to the Company’s creditors. The annual accounts were submitted by the Board on April 27, 2022, and
approved for publication. The General Meeting approves the final annual accounts and is authorised to require changes to the accounts
before it is approved. All amounts are presented in Norwegian kroner (NOK), and are rounded to the nearest thousand unless otherwise
specified.
I
nformation on the ultimate parent company is presented in Note 24.
Overview of Group relations:
Company Reg. office Owner share
Eidesvik Shipping AS Bømlo 100%
Eidesvik AS Bømlo 100%
Eidesvik MPSV AS Bømlo 100%
Eidesvik Shipping International AS Bømlo 100%
Eidesvik Subsea Vessels AS Bømlo 100%
Eidesvik Management AS Bømlo 100%
Eidesvik Maritime AS Bømlo 100%
Eidesvik Neptun AS Bømlo 74.75%
Eidesvik Neptun II AS Bømlo 74.75%
Eidesvik Supply AS Bømlo 100%
Hordaland Maritime Miljøselskap AS Bømlo 91%
Norsk Rederihelsetjeneste AS Bømlo 100%
Eidesvik Shipping II AS
Bømlo
100%
Eidesvik UK LTD
UK
100%
Eidesvik Shipping Mexico
Mexico
PE
Joint Ventures:
Eidesvik Seven AS Bømlo 50%
Eidesvik Seven Chartering AS Bømlo 50%
Please refer to Note 7 for further information.
In addition, the Group owns the following shares:
Simsea Holding AS Haugesund 10.4%
Bleivik Eiendom AS Haugesund 22.6%
Eidesvik Ghana Ltd. Ghana 49%
The total book value of these amounts to MNOK 2,595 and is not considered material. Please refer to Note 21 for further information.
Eidesvik Offshore ASA Annual Report 2021
36
Eidesvik Offshore ASA
Note 2 - Accounting principles
The most important accounting principles used in the preparation of the consolidated accounts are described below. These principles are
applied in the same way in all periods presented, unless otherwise stated in the description.
2.1 Main principles
The consolidated accounts of the Eidesvik Offshore Group have been prepared in accordance with International Financial Reporting
Standards (IFRS), as adopted by the EU, and interpretations adopted by the International Accounting Standards Board (IASB).
The consolidated accounts have been prepared on the basis of the historical cost principle, however, it has been modified for the following:
financial derivatives and financial assets classified as “fair value through the profit and loss account”, which have been valuated at fair value.
An asset is presented as short-term if it is expected to be realised within twelve months of the balance sheet date as part of ordinary
operations, if it is an asset owned with purchase and sale as its main purpose, or if it is cash or cash equivalents.
Debt is presented as short-term if there is no unconditional right to postpone payment at least twelve months from the balance sheet date,
or it is a debt with purchase and sale as its main purpose. Long-term debt is reclassified as short-term debt when there are 12 months left to
maturity. The same applies to the first year’s repayment on long-term debt maturing within twelve months from the balance sheet date.
The accounts are prepared in accordance with IFRS. This means that the management has used estimates and assumptions that have affected
assets, debt, income, expenses, and information on potential liabilities.
Cash flow statements are prepared according to the direct method.
2.2 Principles of consolidation
The consolidated accounts include parent company Eidesvik Offshore ASA and companies controlled by Eidesvik Offshore ASA. Control is
obtained when the Group is exposed to, or is entitled to, variable return resulting from the Group’s involvement, and the Group is able to
influence the return through its influence in the Company.
a) Subsidiaries
Subsidiaries are all entities where the Group has controlling influence on the entity’s financial and operational strategy, normally through
owning more than half the voting capital. When determining whether there is controlling influence, one includes the effect of potential
voting rights which can be exercised or converted on the balance sheet date. Subsidiaries are consolidated from the time control is
transferred to the Group, and are excluded from consolidation when control ceases. Stocks and shares in subsidiaries are recorded at cost,
and eliminated against the equity of the subsidiary at the time of takeover or establishment.
b) Joint ventures
A joint arrangement is either a joint operation or a joint venture. Companies where the Group has joint control with another party, are
defined as joint ventures, as it has rights to the net assets of the arrangement. Joint ventures exist if there is 50/50 ownership, or if it is
otherwise regulated so that the parties have joint control. Investments in joint ventures are recognised in accordance with the equity method.
The Group does not capitalise its share of deficits if this means that the capitalised value of the investment will be negative (including
unhedged receivables on the entity), unless the Group has assumed liabilities or provided guarantees for the joint venture’s liabilities.
c) Non-controlling interests
Non-controlling interests’ (minority interests) share of the equity is shown on a separate line in the Group’s equity. Non-controlling interests
include the minority share of the capitalised value of subsidiaries, including the share of identifiable added value at the time of acquisition
of a subsidiary.
2.3 Segment Information
Segments are reported in the same way as for reporting to the Company’s supreme decision maker. The Board is defined as the Company’s
supreme decision maker, and is responsible for allocating resources and assessment of earnings in the various segments. The Group’s
reporting format is associated with business areas, secondary information associated with geographical areas is not used, as this does not
make sense strategically. The three primary operating segments are divided into Supply vessels (PSV), Subsea/Wind, and Seismic. In addition
to this, other activities, which includes, among other things, vessels under construction, is placed in a separate segment.
As the joint ventures are significant with regard to the core activities, gross figures from underlying companies are included in segment
information.
2.4 Conversion of foreign currencies
a) Functional currency and presentation currency
The accounts of the individual entities in the Group are measured in the currency mainly used in the economic area where the entity operates
(functional currency). The consolidated accounts are presented in Norwegian kroner (NOK), which is both the functional currency and the
presentation currency of the parent company. In order to calculate the share of profit from joint ventures, balance sheet figures in a different
currency are translated at the exchange rate of the balance sheet date, while profit and loss items are translated at the quarterly average
exchange rate. Translation differences are recognised as other income or costs directly in the equity.
b) Transactions and balance sheet items
Transactions in foreign currencies are translated to the functional currency using the transaction exchange rate. Currency gain and loss
occurring when paying such transactions, and when translating monetary items (assets and liabilities) in foreign currencies at year end on
the balance sheet date, are recognised. Monetary items and liabilities in other currencies are translated at the exchange rate of the balance
sheet date.
Currency gains and losses are included in the income statement as “Net currency gain/loss”.
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Eidesvik Offshore ASA
2.5 Vessels, depreciation and other fixed assets
Vessels and other fixed assets are recognised at historical cost minus accumulated depreciation and impairments. Each part of the asset that
has material share of the total cost is depreciated separately and linearly over the useful life of the asset. Components with the same useful
life are depreciated as one component. The depreciation period and method are evaluated at each balance sheet date to ensure that the
method and the period used correspond with the financial realities for the asset. The same applies to scrap value, which is subject to an
annual assessment.
Estimated useful life:
Vessels 15-30 years
Property/fixtures 5-20 years
Equipment 3-5 years
Periodic maintenance 30-60 months
Port facilities N/A
At the time of delivery for new vessels, an amount corresponding to the expected cost at the first ordinary classification/periodic
maintenance is separated. This amount is depreciated over the period until the next docking date. Costs associated with subsequent periodic
maintenance are capitalised and depreciated until the next periodic maintenance, generally over 30–60 months. Costs of ongoing
maintenance and minor repairs and maintenance are expensed as they incur.
2.6 Assets held for sale
Non-current assets held for sale consist of vessels that have been decided to be disposed of, by sale or otherwise. Noncurrent assets
classified as held for sale are measured at the lower of their previous carrying amount and their fair value less costs of disposal. Any excess
of the carrying amount over the fair value less cost of disposal is recognized as an impairment loss. Depreciation of such assets is
discontinued as from their classification as held for sale.
Leases
The Group 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.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets.
The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
i) Right-of-use assets
The Group 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. Right-of-use assets are depreciated on a straight-
line basis over the shorter of the lease term and the estimated useful life of the assets, as follows:
Buildings 0,5-32 years
Vehicles 8-17 months
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments (including insubstance 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 Group and payments of penalties for
terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because
the interest rate implicit in the lease is not readily determinable. 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 lease payments (e.g., changes to future payments resulting
from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the
underlying asset.
iii) Short-term leases and leases of low-value assets
The Group 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 to be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Group as a lessor
Eidesvik Offshore ASA Annual Report 2021
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Eidesvik Offshore ASA
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the
statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging 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. Contingent rents are
recognised as revenue in the period in which they are earned.
2.6 Impairment of fixed assets
The book value of tangible fixed assets is assessed for impairment when events or changes in circumstances indicate that book value cannot
be recovered. If such indications are discovered, and the book value exceeds the recoverable amount, the asset is impaired to the recoverable
amount, which for tangible fixed assets is the higher of expected net sales price and value in use. Value in use is calculated as the present
value of future cash flows. If the reason for the impairment lapses at a later time, and the lapse can be tied to an event taking place after the
impairment is recognised, the previous impairment is reversed.
2.7 Sale of vessels
Profit or loss on the sale of vessels is recorded on the line of other income.
2.8 New builds
Vessels under construction are capitalised as instalments are paid, along with costs directly associated with the construction, such as
supervision, other construction costs and interest on external financing during the construction period. The capitalised value is reclassified
to vessels when the vessel is delivered from the shipyard and is ready for use. Depreciation of vessels starts on the same date.
2.9 Financial assets
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive
income (OCI), and fair value through profit or loss. Fair value through other comprehensive income (OCI) is not relevant for the Group.
The Group uses derivatives such as currency contracts and interest swaps to reduce the risk associated with currency and interest rate
fluctuations. The derivatives are presented as an asset with a positive value or a liability with a negative value.
a) Financial assets at fair value through profit and loss
A financial asset is classified in this category if it is acquired primarily to make a profit from short-term price fluctuations, or if the
management chooses to classify it in this category. Derivatives are also classified as ‘held for trading’. Assets in this category are classified as
current assets if they are held for trading or if they are expected to be realised within 12 months after the balance sheet date.
Profit or loss from changes in fair value of assets classified as “financial assets at fair value through profit and loss”, including interest income
and dividends, is included in the income statement under “change in value, derivatives” in the period where they occur.
b) Financial assets at amortised cost
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that
are “solely payments of principal and interest” (“SPPI”) on the principal amount outstanding. This assessment is referred to as the SPPI test
and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through
profit or loss, irrespective of the business model. Loans and receivables are non-derivative financial assets with fixed payments that are not
traded on an active market. They are classified as current assets, unless they mature more than 12 months after the balance sheet date. In
such cases, they are classified as non-current assets. Loans and receivables are classified as accounts receivable and other receivables on the
balance sheet.
Ordinary acquisitions and sales of investments are recognised at the date of the transaction. All financial assets that are not recognised at
fair value through profit and loss are initially recorded at fair value plus transaction costs. The exception is accounts receivable, which are
recognised for the first time at the transaction price in accordance with IFRS 15, ref. IFRS 9.1.5.3. Financial assets recognised at fair value
through profit and loss are recognised on acquisition at fair value and transaction costs are posted to expenses. Investments are removed
from the balance sheet when the entitlement to cash flows from the investments cease, or when such entitlement is transferred and the
Group has basically transferred all risk and all potential profit from ownership. Financial assets available for sale and financial assets at fair
value through the profit and loss account are valuated at fair value after the first recognition. Loans and receivables are recognised at
amortised cost using the effective interest method.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs
are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
2.10 Derivatives and hedging
The Group does not use accounting hedging, and none of the Group’s derivatives are designated hedging instruments. The Group recognises
derivatives at fair value with value changes through profit/loss. The purpose of the derivatives is to secure the Group’s cash flow against
fluctuations in interest and exchange rates. Refer to Note 23 for an overview of the Group’s derivatives at 31.12.2021.
2.11 Accounts receivable
Accounts receivable are measured the first time at the transaction price in accordance with IFRS 15. For subsequent measurements, accounts
receivable is assessed at amortised cost determined by using the effective interest method, less provision for expected loss. The Group has
chosen to apply the practical simplification approach to calculate losses on accounts receivable. The group has established a provision model
that is based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The group has historical had minor losses on trade receivables. See Notes 3 and 14.
Eidesvik Offshore ASA Annual Report 2021
39
Eidesvik Offshore ASA
2.12 Cash and cash equivalents
Cash and cash equivalents consist of cash, bank deposits, and other short-term and easily negotiable investments with a maximum of three
months’ original maturity and overdraft facilities. In the balance sheet, overdraft facilities are included in loans under short-term liabilities.
2.13 Share capital
Ordinary shares are classified as share capital.
Expenses directly associated with issuing new shares or options with tax deductions, are recorded as reduction in received consideration in
equity (premium on shares).
2.14 Accounts payable
Payables are measured at fair value at the first recognition. For subsequent measurements, payables are assessed at amortised cost
determined by using the effective interest method.
2.15 Loans
Loans are recognised at the accrued amount when the loan is disbursed, less transaction costs. In subsequent periods, loans are recognised
at amortised cost using the effective interest method. The difference between the disbursed loan amount (minus transaction costs) and the
redemption value is recognised over the term of the loan.
When loans are renegotiated, a view is taken as to whether the renegotiated loan should be treated as a continuation of the old loan or as
a new loan (IFRS 9.3.3.1-9.3.3.3). The main rule of IFRS 9.3.3.1 is that a financial liability should only be derecognised in cases where the
liabilities specified in the contract have been discharged, cancelled or expired. When a company has its debts renegotiated without a change
of lender, however, the old loan is derecognised and a new loan recognised if the renegotiation involves significant changes in the conditions
related to the debt. If there are no significant changes, the difference between the present value of the modified cash flow and the original
amortised cost is recognised through profit/loss (see Note 8).
2.16 Pension liabilities, bonus schemes and other compensation schemes for employees
a) Pension liabilities
The companies in the Group have different pension schemes. Pension schemes are mainly financed through payments to insurance
companies or pension funds. The Group’s pension schemes are a defined contribution scheme and defined benefit plans. A defined benefit
plan is typically a pension scheme which defines a pension payment an employee will receive on retirement. Pension payments normally
depend on several factors, such as age, number of years in the company, and salary.
The recognised liability associated with defined benefit plans is the present value of the defined benefits on the balance sheet date minus
the fair value of the pension funds (in cases where the scheme is hedged). The pension liability is calculated annually by an independent
actuary using a linear accrual method. The present value of the defined benefits is determined by discounting estimated future
disbursements based on the interest on corporate bonds with high credit rating using OMF interest rates.
Changes in benefits from the pension plan are recorded as income or charged to expenses on an ongoing basis, unless the rights under the
new pension scheme are conditional on the employee remaining in service for a specified period in the vesting period. In this case the cost
associated with the changed benefit is amortised on a linear basis over the vesting period.
b) Bonus agreements and severance pay
In some cases, employment agreements are made which give the right to bonus in relation to fulfilment of defined financial and non-financial
criteria, as well as agreements which give the right to severance pay if the employer terminates the employment. The Group raises provisions
in cases where there is a formal obligation to make disbursements.
2.17 Provisions
The Group raises provisions for environmental improvements and legal requirements when: There is a statutory or self-imposed obligation
arising from previous events, there is a strong likelihood that the obligation will have to be met in the form of a transfer of financial resources,
and the size of the obligation can be estimated with a sufficient degree of reliability.
In cases where there is more than one obligation of the same nature, the probability of the obligation having to be met will be determined
by assessing the group as a whole. Provisions for the Group are raised even though the probability of settlement with regard to the individual
elements in the group is low.
Provisions are measured at present value of expected disbursements to fulfil the obligation. A discount rate before tax is used which reflects
the current market situation and risk specific to the obligation. The increase in the obligation due to changes in time value is recorded as
interest expenses.
2.18 Income and expense recognition principles
Income from the sale of goods and services is measured at fair value, net of commission, rebates and discounts. Intragroup sales are
eliminated. Income is recognised as follows:
a) Sale of services
Except for the seismic fleet, most of the Group’s vessels have been contracted on time charters (TC) throughout the year. This means that
the charter is agreed as a lease of a vessel with crew. The charterer decides (within agreed limitations) how the vessel is to be used. The time
charter lapses in periods when the vessel is not operational (is “off hire”), e.g. during repairs. The shipping company pays for the crew,
supplies, insurance, repairs, administration, etc., while the charterer pays the “voyage-dependent” expenses such as bunkers, port fees and
expenses for loading and unloading.
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Eidesvik Offshore ASA
In addition to leasing the vessel, there may be agreements for additional services in the form of hiring extra crew, sale of provisions and
coverage of other operating expenses.
Lease income for leasing vessels is recognised on a linear basis through the lease period. The lease period starts from the date when the
vessel is at the lessee’s disposal, and ends with its agreed return.
Lease of crew and payments to cover other operating expenses are recognised on a linear basis through the contract period
When a contract is cancelled, the remaining contract is recorded as income when the vessel is returned.
b) Interest income
Interest income is recognised proportionally over time in accordance with the effective interest method. When receivables are written down,
the capitalised value is reduced to the recoverable amount. The recoverable amount is the estimated future cash flow discounted at the
original effective interest rate. After impairment, the interest income is recognised on the basis of the original effective interest rate.
36
c) Dividend income
Dividend income is recognised when this has been determined by the General Meeting.
2.19 Public subsidies
Subsidies from the net pay scheme and the reimbursement scheme for seamen are recorded as a cost reduction (under “payroll expenses”).
2.20 Dividends
Disbursements of dividends to the Company’s shareholders are classified as debt from the date when the dividend is determined by the
General Meeting.
2.21 Events after the balance sheet date
New information after the balance sheet date on the Company’s financial position on that date has been considered in the annual accounts.
Subsequent events that do not affect the Company’s financial position on the balance sheet date, but will affect it in the future, are reported
if they are significant.
2.22 Earnings per share accruing to the parent company’s shareholders
The calculation of earnings per share is based on the majority share of net profit, using the weighted average outstanding number of shares
through the year. The diluted earnings per share are based on the majority share of the net profit using the average outstanding number of
shares and outstanding options.
2.23 Taxes
Taxes are expensed as they are incurred. The tax costs consist of tax payable and the change in deferred taxes. Deferred tax/deferred tax
assets are calculated by the liability method. Deferred tax/deferred tax assets are calculated based on tax rates and tax legislation which has
been adopted (or adopted for all practical purposes) on the balance sheet date, and which is assumed to be used when the deferred tax is
settled. Deferred tax/deferred tax assets are calculated per tax area and is presented gross in the balance sheet.
Deferred tax assets are recognised to the extent that it is likely that there will be taxable income in the future, and that the temporary
differences can be deducted from this income.
The parent company and some other companies in the Group are subject to ordinary taxation. Several companies in the Group are subject
to tonnage tax, classified as an operating expense and not in accordance with IAS 12
Taxes abroad are recorded in the periods in which they are incurred. To the extent that tax is calculated on the basis of income, this is
classified as an income reduction and presented together with operating income. Taxes abroad calculated on the basis of net profit are
classified as tax costs.
2.24 Discontinued operations – assets and liabilities held for sale
Non-current assets (or disposal groups) are classified as ‘held for sale’ when the capitalised amount is mainly realised through a sales
transaction, and a sale is considered highly likely. They are measured at the lower of capitalised value and fair value minus sales costs.
2.25 Changes in accounting policies
The accounting principles applied are consistent with the principles used in previous periods.
2.26 Significant accounting estimates and matters associated with uncertainty in estimates
Preparing accounts in accordance with applicable standards and practice requires the management to prepare estimates and make
assessments that affect recorded assets and liabilities as well as information on contingent assets and latent obligations on the reporting
date, including income and expenses for the reported period. The final outcomes may differ from the estimates. Some amounts included in
or affecting the accounts and associated notes require estimates, which in turn mean that the Group has to make assessments with regard
to values and matters which are not known at the time of preparing the accounts. A significant “accounting estimate” could be defined as
an estimate which is important to giving a true picture of the Group’s financial position, but is also the result of difficult, subjective and
complex assessments made by the management. Such estimates are often uncertain by nature. The management reviews such estimates on
an ongoing basis, based on both history and experience, but also from consultations with experts, trend analyses, and other methods which
are considered relevant for each estimate. Estimates and assessments that could have a significant effect on the accounts are described
below.
a) Vessels
Eidesvik Offshore ASA Annual Report 2021
41
Eidesvik Offshore ASA
- Economic life/useful life
The level of depreciation depends on the estimated economic life of the vessels. The estimate is based on history and experience related to
the vessels which are included in the Group. The Group’s main strategy is to keep the vessels until they are scrapped. However, there are
ongoing evaluations where the main strategy can be deviated from when financial conditions dictate. The estimate is reviewed each year. A
change in the estimate will affect depreciation in future periods.
- R
esidual value at the end of economic life
The level of depreciation depends on the estimated residual value on the balance sheet date. Expected residual value is based on the
knowledge of scrap values for vessels. The scrap value is dependent on steel prices. The estimate of scrap value is subject to annual review.
- Impairment
O
n the balance sheet date, the Group has made an assessment of whether there are indications that vessels may need to be impaired.
W
hen such indications exist, the recoverable amount for the vessel is estimated, and the value of the vessel is written down to the
recoverable amount.
Refer to Note 12 for more details on the principles that have been applied.
b) Leases
Operational lease requires recognition of an asset (the right to use the leased item) and a financial liability representing its obligation to make
lease payments. The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
12 months or less, and leases of low-value assets.
Leases in which a significant portion of the risks and rewards of ownership were not transferred to the Group as lessee were classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a
straight-line basis over the period of the lease.
Lease income from operating leases where the Group is a lessor is recognised in income on a straightline basis over the lease term. Initial
direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over
the lease term on the same basis as lease income. The respective leased assets are included in the balance sheet based on their nature.
c) Pension liabilities
Determination of the liabilities under defined benefit plans is a complex area because it requires estimates for both actuarial and financial
assumptions. The liabilities are also measured on the basis of present value because the benefit will be paid many years in the future. The
Group’s assumptions are based on recommended assumptions from the Norwegian Accounting Foundation for the Norwegian schemes. The
calculation of the pension liabilities is mainly influenced by the assumed discount rate.
d)
Acquisition of assets
W
hen several assets are acquired together, their individual cost must be determined. The Group uses valuation methods and assessments
from third parties to determine the fair value of each identified asset, and allocates the total cost in relation to the individual values.
e) Joint ventures
T
he Company has the following joint ventures:
Eidesvik Seven AS Bømlo 50%
Eidesvik Seven Chartering AS Bømlo 50%
These are recorded by the equity method. In
f)
Long-term receivables
Under other non-current receivables, EIOF recorded in 2017 a receivable of MUSD 27.5 (total MNOK 235). The 2017 accounts assumed that
the receivables from Global Seismic Shipping AS had a value of 45% of par. Consequently, in the accounts as at December 31, 2017, these
receivables were written down by 55%. No changes have been made to this as at December 31, 2021.
I
f the reason for the impairment lapses at a later time, and the lapse can be tied to an event taking place after the impairment is recognised,
the previous impairment is reversed. This evaluation has to be made each quarter based on an overall assessment. Refer to Note 7 for a
more detailed description/analysis.
A
s the repayments are repaid, the impaired part of the payment will be recorded as income. Any reversal will be recorded as other financial
income.
g
) Climate risk
Eidesvik is considered to be exposed to climate related risks which can affect the future cash flow estimates. Climate changes as harder
weather and increasing sea level are considered to have low effect as Eidesvik’s vessels are built for a rough climate. Both CO
2
-taxes and the
transition from fossil energy towards renewable increases the risk for the Eidesvik fleet.
E
idesvik has been a pioneer to adopt new technology that reduces emissions, and has multiple world records of being the first to adopt new
technologies. Please read Eidesvik’s ESG report for information of the many major emission reducing projects that Eidesvik is part of (available
on the Company’s website). By the end of 1
st
Quarter 2022, Eidesvik operates 11 vessels with batteries and hybrid solutions, out of total 12
vessels in operation. In the impairment assessment, climate risk effects are including in the forecasted cash flow estimates.
Eidesvik Offshore ASA Annual Report 2021
42
Eidesvik Offshore ASA
Note 3 - Financial risk management
Financial risk
The Group is exposed to a variety of financial market risk factors through its activities. Financial market risk is the risk that fluctuations in
exchange rates, interest rates and charter rates will affect the value of the Group’s assets, liabilities and future cash flows.
The Group’s overall risk management plan focuses on the unpredictability of the capital markets and seeks to minimize the potential adverse
effects on the Group’s financial performance. Elements included in the management of financial risk are the contract length on charters, use
of currency and interest-bearing instruments, and debt in the same currency as expected payments of charter income. The main focus for
the management of currency and interest rate risk is to hedge future cash flows. The hedge positions for the cash flows are recorded at fair
value with value changes through profit/loss. This exposes the accounts to fluctuations in the value of the hedging instruments for the cash
flow. In Eidesvik Offshore ASA, risk management of the revenues reported in the accounts is subordinate to risk management of the cash
flows.
The Group’s risk management is handled by management according to guidelines from the Board.
a) Market risk
(i) Currency risk (see also Note 23)
The Group operates internationally and is exposed to fluctuations in exchange rates for several currencies. Currency risk arises from future
transactions, and relates to booked assets and liabilities.
To manage the currency risk from future commercial transactions and booked assets and liabilities, the Group uses currency derivatives. The
Group also, to a certain extent, have loans in the same currency as expected future income.
The Group is particularly exposed to fluctuations in USD, as it has considerable charter income but low operating costs in this currency. It
seeks to reduce fluctuations with loans and currency forward contracts in the same currency. At December 31, 2021, the Group’s long-term
liabilities were divided between 45% NOK and 55% USD. At December 31, 2020 it was 44% NOK and 56% USD.
The Company’s exposure to USD on the balance sheet date is shown in table below. The table below shows estimated change in net profit
before tax in million NOK if the USD rate against NOK had been 50 øre higher/lower at December 31, 2021. The table does not reflect
potential effects on impairment regarding value in use for vessels with income in USD.
(ii) Interest rate risk (see also Note 23)
The Group’s interest rate risk is related to long-term loans and deposits of surplus liquidity. Loans with floating interest rates involve a risk
for the Group’s cash flow. Fixed rate loans exposes the Group to fair value interest rate risk. The interest rate risk is managed by use of
interest derivatives (swaps and caps) within guidelines from the Board.
The effect of a change in interest rates is simulated in order to support decisions on fixed rate contracts. The simulation illustrates the cash
effect of a change in interest rate based on the size of the loan and the level of current interest rate hedging. An increase of 1 percentage
point in the interest rate, all else being equal, would reduce net profit before tax by approximately MNOK 12. The Group’s loans are recorded
at amortised cost, and thus no change in value will occur from interest rate fluctuations.
(b) Credit risk
The Group has a concentration risk as charter contracts are signed with relatively few customers. Eidesvik’s customers are mainly solid
companies with good solvency. The risk of counterparties not having the financial capacity to fulfil their obligations is considered relatively
low. Overdue receivables are followed up monthly. The Group has chosen to apply the practical simplification rule to calculate losses on
accounts receivable. Loss provisions are raised based on historical data, adjusted for forward-looking factors specific to the debtors and the
economic environment.
The following table categorises the Group’s receivables according to the risk of non-recovery of outstanding amounts:
Group 1: Established customer relationship, good solvency/willingness
Group 2: New customers, possibly slow recovery
Group 3: Established customer relationship, weaker solvency/willingness
+50 øre
-50 øre
Operating profit before profit from associates and joint ventures 0,0 0,0
Profit from joint ventures 0,0 0,0
Net financial income excluding agio/disagio on long-term debt 0,0 0,0
Agio/disagio -50,8 50,8
Profit/loss for the year -50,8 50,8
Translation difference, shares 0,0 0,0
Total comprehensive income -50,8 50,8
Accounts receivable 2021 2020
Group 1 120 800 84 453
Group 2 8 681 11 914
Group 3 1 462 5 049
Total 130 942 101 416
Eidesvik Offshore ASA Annual Report 2021
43
Eidesvik Offshore ASA
The Group has significant long-term receivables from a company in the Global Seismic Shipping AS group that was sold in January 2020. These
receivables are posted in the accounts at a significantly lower value due to provisions for counterparty risk from the company’s charterer.
The recorded value of the receivables was measured for revenue recognition in 2017 at less than the nominal value. This was in accordance
with observable sales of securities issued by the same counterparty. The credit risk on the receivables is considered to be lower, and
indications of changes in the valuation of these are assessed continuously. The impairment of the long-term receivables has been reversed
to reflect the repayments received. See Notes 5 and 13 for further information.
Maximum risk exposure is represented by the capitalised value of the financial assets, including derivatives, on the balance sheet. As the
counterparties in derivatives trading are large well-known banks, the credit risk associated with derivatives is considered low.
(c) Liquidity risk
The Group aims to manage the cash flow from operations by focusing on long-term charters with little price volatility. Surplus liquidity is
mainly placed in ordinary bank deposits.
The Group monitors the risk of a lack of available capital through liquidity budgets for subsequent years, as well as a monthly 24-month
liquidity forecasts. Longer term liquidity forecasts are prepared several times per year.
The current liquidity position of the Group is satisfactory for the next 12 months considering the agreed refinancing in 3
rd
Quarter 2021.
See also Note 20 for information on amortisation profiles/refinancing needs for long-term liabilities.
The following table sums up the maturity profile for the Group’s liabilities at December 31, 2021, based on contractual, non-discounted cash
flows. Estimated interest is based on current interest and exchange rates at December 31, 2021.
*Liabilities related to Assets held for sale will become due and payable at the time of completion of the sale.
Risk management of capital
A primary goal for the Group is to secure long-term financing of its assets. In light of the negative development of the market and outlook
early in 2020, Eidesvik entered into amendments to its credit facilities with all of the Group’s financial institutions in June 2020 for the period
from July 1, 2020, to June 30, 2021. The Group deferred the instalments on all its credit facilities during said period to the end of 2022,
amounting to approximately MNOK 90. Due to receipt of the cash proceeds from the PUT-option mentioned below, the unpaid deferred
instalments became due and were paid in March 2021, and the remainder of the deferred instalments were paid according to the original
schedule during the first half of 2021.
On August 27, 2021, Eidesvik announced that it had agreed on a term sheet (“Term Sheet”) with its financial institutions for refinancing of
its debt. With a combination of extension of debt maturities and reduced amortization payments, the agreed terms significantly strengthened
the Group’s financial position. On September 10, 2021, the final agreements and documentation were in place and the new terms for the
Group’s financing became effective.
The agreed terms provide mechanisms for extension of final maturities of debt facilities from the end of 2022 to the end of 2023, and there
will be no final maturities until year end 2023. The extension is subject to Eidesvik meeting certain financial and operational triggers. Please
see note 20 for further information.
Maturity statement for capitalised liabilities
2022
2023
2024 2025
2026 Later
Loans* 128 364 1 676 479 80 035 36 494 36 494 18 247
Accrued interest 7 674 0 0 0 0 0
Derivatives 1 445 -4 869 -4 869 -2 435 0 0
Tax payable 0 0 0 0 0 0
Accounts payable 48 234 0 0 0 0 0
Other current liabilities 140 929 0 0 0 0 0
Pension liabilities (assumed maturity) 0 0 0 0 0 0
Subtotal debt items excl. market value derivatives 326 644 1 671 610 75 166 34 059 36 494 18 247
Estimated interest
Interest payments on existing loans 73 274 70 038 5 034 2 323 1 161 749
Adjustment incurred 31.12.2021 -7 674 0 0 0 0 0
Subtotal assumed interest 65 600 70 038 5 034 2 323 1 161 749
Leases
Leases (Note 22) 6 476 6 460 6 460 6 460 6 460 38 761
Total contractual commitments falling due 398 720 1 748 108 86 660 42 842 44 115 57 757
Eidesvik Offshore ASA Annual Report 2021
44
Eidesvik Offshore ASA
Covid-19 Pandemic
The Covid-19 pandemic generally increased several financial risks in 2020. Fortunately, most of these risks returned to more normalized
levels during 2021.
Currency risk: The volatility in the currency market were more stable in 2021.
Credit risk: Eidesvik’s customers are mainly solid companies with good solvency, which limits the increase in credit risk.
Liquidity risk: The market uncertainty returned to more normalized levels, and Eidesvik managed in 2021 to secure several
contracts.
Other risks
Eidesvik is exposed to other risks, as market and operational risks, including cyber security risk. In addition, the Company experience increase
in both expenses and lead time from suppliers, primarily as a consequence of the geopolitical situation related to war in Ukraine.
Assessment of fair value
IFRS 7 requires financial instruments measured at fair value on the balance sheet date to be presented by level, with the following level
classification for measuring fair value:
1) Quoted price in an active market for an identical asset or liability (level 1)
2) Valuation based on other observable factors, either directly (price) or indirectly (derived from prices) other than the quoted
price (used in level 1) for the asset or liability (level 2)
3) Valuation based on factors not taken from observable markets (non-observable assumptions) (level 3)
The following balance sheet items represent financial instruments at fair value:
Derivatives are recognised on the basis of valuations from the counterparty (mark to market).
Debts to credit institutions with floating interest rates are recognised at amortised cost, and are valued at approximate fair value. Fixed-rate
loans (CIRR) are recorded at amortised cost, and the estimated value is described in Note 23. The fair value of fixed-rate loans is calculated
by discounting the difference between the fixed rate and the market rate at December 31, 2021, with a duration equal to the term of the
loan.
Cost is considered equivalent to fair value for the equity investments discussed in Note 21.
Note 4 - Segment information
The Group’s activities are divided into strategic operating segments according to the nature of the vessels’ activities. The various operating
segments offer different shipping services, address partially different customer groups, and have different risk profiles. The Group is divided
into the following operating segments:
a. Seismic
b. Subsea/Offshore Wind
c. Supply
d. Other
The Seismic segment delivers shipping services to customers who produce seismic data, and the market has traditionally been characterised
by relatively long contracts. Over the last few years this has changed to shorter term contracts for specific projects. The vessels belonging to
this segment are not bound to particular geographical areas, but operate all over the world according to the customers’ needs.
The Subsea/Offshore Wind segment delivers shipping services for subsea work for the oil industry. The vessels are specially adapted to tasks
such as subsea inspection, maintenance, repairs and construction. Several of the Company’s subsea vessels meet the requirements in the
Offshore Wind market, and one vessel is currently chartered in this market.
The Supply segment delivers services to the offshore oil industry. The vessels deliver supplies to rigs, and function as part of the rig’s
emergency preparedness.
Transactions between segments are eliminated. These are mainly administration costs that are charged to each segment.
Long-term financial items in the Group are not allocated, as the Group’s liabilities are mainly included in fleet facilities.
Short-term liabilities are allocated to the segments where possible. Items that do not belong to any of the segments is recorded under
“Other”.
S
egment performance is assessed on the basis of operating profit, and is consistently measured against operating profit in the consolidated
financial accounts.
The effect of applying IFRS 15 to the Group’s revenues from contracts with customers is described in Note 2.
Balance sheet item:
Level
Cash and cash equivalents 1
Derivatives 2
Financial investments 2
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45
Eidesvik Offshore ASA
Operating segments
In 2021, the Seismic / Offshore Wind segment had an impairment of MNOK 48.6 and the Subsea/Offshore Wind segment a reversal
impairment of MNOK -192.4. In 2020, the Seismic segment had an impairment of MNOK 54.1, the Subsea / Offshore Wind segment MNOK
46.1 and the Supply segment MNOK 20.4
*) For shares in joint ventures, the figures in the table are included with the share corresponding to the Group’s ownership interest. Refer to
Note 7.
*) For shares in joint ventures, the amounts in the table are included in proportions equal to the Group’s ownership interest.
Information on large customers
The majority of the Group’s income is earned from a small number of large customers. The table below shows the total operating income
from all customers representing more than 10% of the Group’s operating income. The amounts are distributed by segments.
Secondary segments are not reported. The Seismic, Subsea/Offshore Wind and Supply business segments are the only groups reported
internally. Although the vessels in the Seismic and Subsea/Offshore Wind segments operate in various parts of the world, this is mainly a
(NOK thousands)
Operating segments 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Segment result
Operating income (IFRS 15) 0 7 967 130 600 106 725 181 071 181 887 20 882 19 882 332 553 316 460
Bareboat income (IFRS 16) 21 515 31 259 156 020 106 425 77 710 76 614 0 0 255 245 214 299
Operating income from JV * (IFRS 15) 0 0 35 861 33 392 0 0 0 0 35 861 33 392
Bareboat income from JV * (IFRS 16) 0 0 16 197 38 507 0 0 0 0 16 197 38 507
Total operating income 21 515 39 226 338 677 285 049 258 781 258 501 20 882 19 882 639 855 602 658
Operating expenses 13 798 35 078 158 172 136 868 191 748 202 581 45 368 25 120 409 086 399 647
Operating expenses share from JV * 0 0 34 604 34 041 0 0 0 0 34 604 34 041
Total operating expenses 13 798 35 078 192 776 170 909 191 748 202 581 45 368 25 120 443 689 433 688
Depreciation 36 135 45 469 86 281 84 982 80 009 71 290 5 536 5 886 207 961 207 627
Depreciations share from JV *
0 0 18 673 19 174 0 0 0 0 18 673 19 174
Impairment on assets
48 599 54 108 -192 396 46 139 0 20 432 0 0 -143 797 120 679
Impairment on assets share from JV *
0 0 0 16 679 0 0 0 0 0 16 679
Total depreciation 84 734 99 577 -87 442 166 975 80 009 91 722 5 536 5 886 82 837 364 160
Operating profit incl. share of the JVs * -77 017 -95 429 233 344 -52 834 -12 976 -35 802 -30 022 -11 124 113 329 -195 189
Net finance items and tax in JV * 0 0 -5 571 -7 209 0 0 0 0 -5 571 -7 209
Impairment JV ** 0 0 0 0 0 0 0 0 0 0
Operating profit -77 017 -95 429 227 773 -60 043 -12 976 -35 802 -30 022 -11 124 108 632 -202 398
Net financial items -77 912 67 838
Tax costs 17 2 126
Profit/loss for the year 30 737 -132 434
Seismic
Subsea / Offshore Wind
Supply
Other
Consolidated
(NOK thousands)
Operating segments 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Segment assets 53 128 201 885 303 408 1 118 298 696 649 724 222 197 013 469 210 1 250 198 2 513 614
Proportion of assets in JV * 0 0 296 000 355 567 0 0 0 0 296 000 355 567
Unallocated assets (cash) 0 0 0 0 0 0 0 0 330 401 429 183
Assets held for sale 63 217 0 959 242 0 0 0 0 0 1 022 459 0
Total consolidate d assets 116 346 201 885 303 408 1 118 298 696 649 724 222 197 013 469 210 2 603 058 2 942 797
Assets incl. share of JV * 116 346 201 885 1 558 650 1 473 865 696 649 724 222 197 013 469 210 2 899 058 3 298 364
Segment current liabilities (excl. mortgage deb
-526 -2 907 -23 170 -35 752 -31 244 -29 370 -151 828 -123 413 -206 769 -191 443
Proportion of debts from JV * 0 0 -148 475 -201 251 0 0 0 0 -
148 475 -201 251
Segment mortgage debt and other long-term
liabilities
-292 646 -436 315 -991 590 -1 077 425 -686 278 -836 754 788 463 -74 656 -1 182 051 -2 425 151
Total liabilities incl. share of JV * -293 172 -439 222 -1 163 235 -1 314 429 -717 522 -866 125 636 634 -198 069 -1 537 294 -2 817 845
Investments in non-current assets (excl.
periodic maintenance)
0 10 350 8 261 17 018 43 360 18 095 0 2 301 51 621 47 763
Gross sales of non-current assets 0 0 0 0 0 0 0 0 0 0
Seismic
Subsea / Offshore Wind
Supply
Other
Consolidated
Operating segments
Seismic Subsea / Offshore Wind Supply
2021 2020 2021 2020 2021 2020
Customer 1 86 824 81 322
Customer 2 133 334 142 104
Customer 3 29 027 6
7 090 36 097
Customer 4 93 415 100 761
Customer 5 164 131 136 314
Total operating income large customers 0 29 027 318 045 253 733 226 748 242 865
Eidesvik Offshore ASA Annual Report 2021
46
Eidesvik Offshore ASA
consequence of the customer's preferred areas of operation, not necessarily a decision on a geographical focus area. Presenting geographical
areas for these segments is considered misleading. For the Supply segment, all operations in 2020 and 2021 are in just one geographical area
defined as Europe. Secondary segmentations is therefore omitted. The performance obligations for time charter income is satisfied over
time, hence the group have not any contract assets or contract liabilities, as of December 31, 2021.
Note 5 - Other income
Other income of MNOK 18.3 (12.3) is related to the reversal of previous impairments on repayments received against the claim against
Oceanic Seismic Vessels AS; see note 13. MNOK 1.9 is associated with the sale of Viking Athene in 2021 and remaining MNOK 4 dividend
from “Den Norske Krigsforsikring”.
Note 6 - Other operating expenses
Technical operation of vessels includes ongoing operating costs and maintenance of the Group’s vessels; classification costs are capitalised
and depreciated until the next classification and so do not appear as a separate operating cost.
Administration costs consist mainly of travel, consultancy, legal, audit, leasing and other office costs.
The auditor’s fees are presented excluding VAT.
Note 7 - Investments in joint ventures and associated companies with minority interests
(NOK thousands)
The Eidesvik Offshore ASA Group has the following investments in joint ventures:
Eidesvik Seven AS and Eidesvik Seven Chartering AS are classified as joint ventures, as Subsea 7 Norge AS and Eidesvik each own 50% of the
shares in the company. Eidesvik Shipping AS is guarantor for 50% of the debt in Eidesvik Seven AS.
(NOK thousands) 2021 2020
Dividend from "Den Norske Krigsforsikring " 4 025 0
Reversal of previous write-downs related to receivables from
12 350 20 315
Profit/loss on the sale of vessels 1 942 0
Other income 18 317 20 315
(NOK thousands) 2021 2020
Technical operation of vessels 82 940 103 847
Insurance 13 107 11 846
Communication costs 5 734 6 779
Administrative costs 34 233 4 345
Other expenses 0 0
Other operating expenses 136 014 126 817
Auditor:
(NOK thousands) 2021 2020
Statutory audit 1 743 1 742
Other financial audit 192 73
Tax advice 0 410
Financial advice 0 0
Total audit 1 935 2 225
Entity Country Industry
Ownership/
voting share
Book value
31.12.2020
Share of profit
2021
Translation
differences
Dividends
Addition /
disposal
Assets he ld
for sale
Book value
31.12.2021
Eidesvik Seven AS
Norway
Shipping
50,0 % 140 843 -8 686 0 0 0 0 132 157
Eidesvik Seven Chartering AS
Norway
Shipping
50,0 % 13 473 1 895 0 0 0 0 15 368
Total 154 316 -6 790 0 0 0 0 147 525
Entity Country Industry
Ownership/
voting share
Book value
31.12.2019
Share of profit
2020
Translation
differences
Dividends
Addition /
disposal
Assets he ld
for sale
Book value
31.12.2020
Eidesvik Seven AS
Norway
Shipping
50,0 % 146 039 -5 196 0 0 0 0 140 843
Eidesvik Seven Chartering AS
Norway
Shipping
50,0 % 13 481 -8 0 0 0 0 13 473
Total 159 520 -5 204 0 0 0 0 154 316
Eidesvik Offshore ASA Annual Report 2021
47
Eidesvik Offshore ASA
Summary of financial information for the joint ventures:
2021:
2020:
Associated companies
The group has the following investments in these individual associated companies:
Refer to note 21, other shares.
Subsidiaries with substantial minority interests
The Group has two subsidiaries where there are substantial minority interests. Of companies with minority interests, only the companies
below are considered material.
Entity Assets
Non-current
assets
Current
assets
Of this bank Equity Liabilities Long-term Short-term
Eidesvik Seven AS
533 325 518 708 14 616 182 264 314 269 011 266 918 2 093
Eidesvik Seven Chartering AS
58 675 0 58 675 29 906 30 737 27 938 0 27 938
Entity Revenue EBITDA
Depr. /
impairment
Financial
income
Financial
expenses
Net financial
items
Taxe s
Profit/loss
for the year
Group share
Eidesvik Seven AS
32 393 31 138 37 346 0 11 164 -11 164 0 -17 371 -8 686
Eidesvik Seven Chartering AS
103 848 3 769 0 22 1 22 0 3 791 1 895
-6 790
Entity Assets
Non-current
assets
Current
assets
Of this bank Equity Liabilities Long-term Short-term
Eidesvik Seven AS
655 226 553 557 101 669 81 111 281 685 373 541 0 373 541
Eidesvik Seven Chartering AS
55 907 0 55 907 23 100 26 946 28 961 0 28 961
Entity Revenue EBITDA
Depr. /
impairment
Financial
income
Financial
expenses
Net financial
items
Taxe s
Profit/loss
for the year
Group share
Eidesvik Seven AS
77 014 75 951 71 706 98 14 697 -14 599 0 -10 354 -5 197
Eidesvik Seven Chartering AS
143 798 -194 0 182 1 182 0 -13 -7
-5 204
Entity Country
Ownership/
Book value
Result
Simsea Holding AS
Norway 10,37 % 0 0
Bleivik Eiendom AS
Norway 22,59 % 2 595 1 940
Eidesvik Ghana Ltd.
Ghana 49,00 % 0 -1 065
2 595 874
2020
Entity Country
Ownership/
Book value
Result
Simsea Holding AS
Norway 10,37 % 0 0
Bleivik Eiendom AS
Norway 22,59 % 655 0
Eidesvik Ghana Ltd.
Ghana 49,00 % 1 065 0
1 720 0
2021
Entity Country
Minority
intere sts (%)
Minority
share of
profit/loss
Eidesvik Supply AS *
Norway 19,89 % -1 897
Eidesvik Neptun AS
Norway 25,25 % 48 673
Eidesvik Neptun II AS
Norway 25,25 % -292
46 482
2020
Entity Country
Minority
intere sts (%)
Minority
share of
profit/loss
Eidesvik Supply AS
Norway 19,89 % -4 006
Eidesvik Neptun AS
Norway 25,25 % -2 752
Eidesvik Neptun II AS
Norway 25,25 % -2 108
-8 866
Eidesvik Offshore ASA Annual Report 2021
48
Eidesvik Offshore ASA
Summary of financial information for subsidiaries with substantial minority interests:
Note 8 - Net financial items
Other financial income in 2020 is relates to reversed translation differences due to the sale of Global Seismic Shipping AS in January 2020.
2021
Entity Assets
Non-current
assets
Current
assets
Of which bank Equity Liabilities Long-term Short-term
Eidesvik Supply AS
196 773 170 667 26 105 3 442 1 207 195 566 132 329 63 236
Eidesvik Neptun AS
1 016 679 944 775 71 904 1 345 33 473 983 206 942 107 41 099
Eidesvik Neptun II AS
76 003 0 76 003 34 788 -24 207 100 209 0 100 209
Entity Revenue EBITDA
Depr. /
impairment
Financial
income
Financial
expenses
Net financial
items
Taxe s
Profit/loss
for the year
Eidesvik Supply AS
41 047 7 564 14 781 27 12 931 -12 904 0 -20 121
Eidesvik Neptun AS
103 727 86 240 -165 581 26 59 109 -59 082 0 192 739
Eidesvik Neptun II AS
128 095 -4 942 0 3 476 382 3 094 0 -1 848
2020
Entity Assets
Non-current
assets
Current
assets
Of which bank Equity Liabilities Long-term Short-term
Eidesvik Supply AS
171 715 155 161 16 554 3 446 -170 472 342 186 152 734 189 452
Eidesvik Neptun AS
832 270 771 863 60 406 15 212 -159 265 991 535 911 545 79 991
Eidesvik Neptun II AS
24 546 0 24 546 12 523 -22 359 46 905 0 46 905
Entity Revenue EBITDA
Depr. /
impairment
Financial
income
Financial
expenses
Net financial
items
Taxe s
Profit/loss
for the year
Eidesvik Supply AS
41 853 10 179 14 722 17 15 612 -15 595 0 -20 138
Eidesvik Neptun AS
73 734 51 637 49 251 26 721 40 006 -13 285 0 -10 899
Eidesvik Neptun II AS
28 092 -2 871 0 15 5 491 -5 476 0 -8 347
(NOK thousands) 2021 2020
Interest income 10 502 9 126
Other financial income 0 106 998
Total financial income 10 502 116 124
Interest expense on loans
-71 529 -
93 727
Other interest expenses 17 153 -17 579
Interest cost - lease liabilities -2 885 -3 142
Reversal of previous write-downs of receivables 7 366 7 268
Other financial expenses -910 -12 106
Total financial expenses -50 805 -119 286
Realised currency gains (losses) -17 667 -11 675
Unrealised currency gains (losses) - related to other
items
-14 222 53 755
Value change on currency futures recognised at fair
value via profit/loss
-5 721 28 920
Total currency gains -37 610 7
1 000
Net financial items -77 913 67 838
Eidesvik Offshore ASA Annual Report 2021
49
Eidesvik Offshore ASA
Note 9 – Tax
Deferred tax assets are not recognised in the balance sheet due to uncertainty as to when such assets may be realised.
* Temporary differences are estimated based on preliminary tax assessments.
The tonnage tax, which is determined based on the vessel`s net weight, is booked as other operating expenses
Note 10 - Earnings per share
No dividends were paid in 2021, and the Board has not proposed any payment of dividends in 2022. This is in line with the dividend
restrictions in the existing covenants. Due to the financial restructuring completed in 2021 the dividend restrictions have been retained. See
Note 20.
(NOK thousands) 2021 2020
Tax cost Norway and abroad -16 -2 126
Tax costs -16 -2 126
Fixed asset reserve 20 585 46 136
Receivables -127 0
Profit and loss account -19 638 -24 518
Pension liabilities 282 -236
Loss carried forward -464 433 -578 472
* Total temporary differences -463 332 -557 089
Recognised deferred tax assets 0 0
Applied tax rate 22 % 22 %
Tax payable
Other corporation tax payable, Norway and abroad -16 -
832
Total tax payable -16 -
832
Explanation of taxes in the income statement:
Profit/loss before taxes 30 720 -
134 560
Calculated 22%/22% tax 6 758 -
29 603
Tax effect of:
Permanent differences/ results subject to the tonnage
tax/ difference tax rate abroad
-6 775 27 477
Calculated tax for the year -16 -2 126
The Group’s effective tax rate 0 % 2
%
(NOK thousands) 2021 2020
Profit/loss for the year attributable to the majority
shareholders
-15 746 -123 569
Number of issued ordinary shares (thousands) 62 150 62 150
Number of issued ordinary shares (thousands) 62 150 62 150
Earnings per share -0,25 -1,99
Diluted earnings per share -0,25 -1,99
Eidesvik Offshore ASA Annual Report 2021
50
Eidesvik Offshore ASA
Note 11 - Payroll expenses and number of employees
In 2021, NOK 57.2 thousand (NOK 60 thousand in 2020) was received in connection with the reimbursement scheme for Norwegian seafarers.
In 2021, NOK 2.6thousand (NOK 3.3 thousand in 2020) was received from Stiftelsen Norsk Maritim Kompetanse.
All received refunds are presented as a reduction of payroll expenses.
Note 12 - Tangible fixed assets
(*) right-of-use assets TNOK 50 502 and depreciation TNOK 4 707 is not included in the table above. Refer to note 22 IFRS 16, Lease.
Please refer to Note 20 for information on mortgaged assets.
Refer to Note 2, point 2.5, for details of depreciation periods for vessels and lumping together of components.
The company has in Q1 2022 entered into a Memorandum of Agreement for sale of Viking Neptun. The asset is classified as held-for-sale in
the consolidated statement of financial position. Further two seismic vessels are classified as held-for-sale. Refer to note 20 for Liabilities
related to Assets held for sale.
The PSV Viking Athene was sold in April 2021, and sale generated a gain of MNOK 1.9.
(NOK thousands) 2021 2020
Payroll after net pay refund 161 021 1
77 798
Social security costs * 58 278 5
2 702
Defined benefit pension (see Note 18) 268 -6 411
Hired personnel 23 435 20 789
Other personnel costs 30 070 27 951
Total personnel costs 273 072 2
72 829
* Including pension costs related to defined contribution
Salaries and payroll tax are shown after deduction for the reimbursement scheme for seafarers.
The average number of full-time equivalents was: 4
26 411
Number of employees at end of year: 424 420
2021
(NOK thousands) Property P
ort facilities
Operating
equipment
Total other
fixed assets
Vessels
Periodic
maintenance
Total
vessels
New build
contracts
Total (*)
Acquisition cost
1 January 2021 37 414 3 717 42 529 83 660 5 989 257 352 385 6 341 641 0 6 425 301
Addition 0 0 3
1 31 51 621 36 899 88 521 0 88 551
Disposal 0 -123 0 -123 -150 336 -29 651 -179 988 0 -180 111
31 December 2021 37 414 3 594 42 559 83 567 5 890 541 359 633 6 250 174 0 6 333 741
Accumulated depreciation and
1 January 2021 19 443 3 494 39 277 62 215 4 170 167 248 592 4 418 759 0 4 480 974
Depreciation in the year 180 0 648 829 140 026 62 399 202 425 0 203 254
Impairment / reversal impairment
(-) for the year
0 0 0 0 -143 797 0 -143 797 0 -143 797
31 December 2021 19 624 3
494 39 926 63 044 4 034 132 285 076 4 319 208 0 4 382 251
Book value 17 790 100 2 633 20 523 1 856 410 74 557 1 930 965 0 1 951 490
2020
(NOK thousands) Property
Port
facilities
Operating
equipment
Total other
fixed assets
Vessels
Periodic
maintenance
Total
vessels
New build
contracts
Tota l (*)
Acquisition cost
1 January 2020 37 414 3 717 40 228 81 359 5 943 794 260 182 6 203 976 0 6 285 335
Addition 0 0 2 301 2 301 45 463 92 202 137 665 0 139 966
Disposal 0 0 0 0 0 0 0 0 0
31 December 2020 37 414 3 717 42 529 83 660 5 989 257 352 385 6 341 641 0 6 425 301
Accumulated depreciation and
1 January 2020 19 095 3 494 38 493 61 082 3 897 545 198 793 4 096 338 0 4 157 421
Depreciation in the year 348 0 784 1 132 151 942 49 799 201 741 0 202 874
31 December 2020 19 443 3 494 39 277 62 215 4 170 167 248 592 4 418 759 0 4 480 974
Book value 17 971 223 3 251 21 445 1 819 089 103 792 1 922 881 0 1 944 327
Eidesvik Offshore ASA Annual Report 2021
51
Eidesvik Offshore ASA
Property/port facilities include plots/land valued at MNOK 17.9 (MNOK 18.2) which are not depreciated.
Impairment tests are performed on individual cash generating entities (vessels) when indications of impairment are identified. Due to
observed impairment indicators, the vessels’ book values were tested for impairment per December 31, 2021. Based on these tests,
impairments of MNOK 76.9 related to eight vessels were charged to the accounts.
The Group monitors the presence of impairment indicators during the periodical financial reporting, and thus may update its assessments of
impairments to reflect further changes in the underlying market assumptions.
Broker estimates are not used as an approximate sales value on the balance sheet date as there are few observed sales of the type of vessels
the Company owns. In the assessment of value in use, expected future cash flows are used, discounted to net present value using a discount
rate after taxes reflecting the market-based time value of money, as well as risk specific to the asset. The discount rate is derived from a
weighted average cost of capital (WACC) for market players. The WACC used in the calculation as of April 27, 2022 is in the range of 8.9% to
9.1%, depending on currency for each vessel, with a weighted average of 9%. This takes into account that the Group’s business is mainly
within the tonnage tax system, and the calculated WACC is assumed to apply both before and after tax. Future cash flows are estimated on
the basis of estimated remaining useful life, which may exceed 5 years. The cash flows used in the impairment tests for 2021 are based on
and reconciled against the financial forecasts which the Group uses for internal planning purposes as well as present to its lenders. The
capital structure used in the weighted average cost of capital is based on an assumed capital structure in comparable companies with similar
assets in a normal situation. Equity cost is based on the expected required rate of return for the Company’s investors. Debt costs are based
on the terms of the Group’s loan agreements, which is marginally above the Company’s weighted average for all interest-bearing liabilities.
The beta factors are evaluated quarterly when deemed necessary, and otherwise at least annually, on the basis of publicly available market
data for identified comparable companies and the main index on the Oslo Stock Exchange. Other important elements in estimated cash flows
are the long-term inflation rate, the contract situation (order reserve), the utilisation rate, ordinary operating expenses, periodic
maintenance (docking), charter rates, and exchange rates.
In 2021, the Seismic segment had an impairment charge of MNOK 48.6 (recoverable amount MNOK 129.2), the Subsea segment MNOK
-192.4 (MNOK 1,351.7). In 2020, impairment of MNOK 154 were charged.
There is significant uncertainty associated with the assumptions for the value in use calculations. The calculation is based on market prospects
which are weak in all three segments in the short and medium term. On a general view, it is considered that the seismic survey market will
see a few years after the balance sheet date where layups or reduced rates must be expected for the vessels that are not on fixed contracts.
The same considerations apply to the subsea and supply markets.
The expected future earnings used in the calculations are implicitly adjusted for utilisation rate adapted to this general market view.
Therefore, sensitivity calculations have also been performed for the value in use calculations and the impaired amounts, in order to highlight
the uncertainty in the calculations.
If the earnings or utilisation rate for the entire fleet are assumed to be reduced by 5%, the impairment would increase by MNOK 7.7 and
cover five vessels. If the WACC assumed had increased to 10%, the impairment charge would have increased by MNOK 3.0 and included four
vessels.
Note 13 - Other long-term receivables
Long-term receivables from OSEV are related to the company Oceanic Seismic Vessels AS (subsidiary of Global Seismic Shipping AS, "GSS"),
regarding the reorganisation of shares in the company and the establishment of GSS (sold in January 2020), as well as the receipt of
receivables against the same companies from CGG as part-settlement for the amendment in the contract for Viking Vanquish in 2017. The
nominal value as at December 31, 2021, was MUSD 12.60 (MUSD 16.55 as at December 31, 2020), but the value recognised in the accounts
is substantially lower due to provisions for counterparty risk with the company’s charterer. In 2021 repayments were paid in accordance with
the agreed plan, and write-downs on the payments received were reversed (see Note 5 and Note 8).
(NOK thousands) 31.12.2021 31.12.2020
Loan for onboard supplies 0 294
Long-term receivables, OSEV 51 178 64 161
Total other long-term receivables 51 178 64 455
Eidesvik Offshore ASA Annual Report 2021
52
Eidesvik Offshore ASA
Note 14 - Accounts receivable
Note 15 - Other current assets
Prepaid expenses include expenses for pre-paid insurance, refund for crew costs and other grants, unbilled expenses for expenses and loan
to employees.
Note 16 - Cash and cash equivalents
Of total cash and cash equivalents at December 31, 2021, of MNOK 330.4 (MNOK 429.2 at December 31, 2020), restricted tax funds represent
MNOK 9.4 (MNOK 6.9). Restricted cash of MNOK 17.9 (MNOK 14.7) is funding restricted to the ShipFC ammonia project. There are no other
restricted funds.
At December 31, 2020, restricted cash of MNOK 45.8 related to the insurance settlement for Viking Vision was set as security for the related
loan. This was fully paid during 2021 related to the refinancing process in 2021.
(NOK thousands) 31.12.2021 31.12.2020
Accounts receivable 125 302 89 643
Accounts receivable related parties/join ventures 12 485 13 173
Provision for losses -6 845 -
1 400
Total accounts receivable 130 942 101 416
Of overdue accounts receivable related to other than
related parties, the distribution before provisions for
l
oss is:
0-3 months 8 884 6 557
3-6 months 2 065 605
6 months < 11 492 6 722
Total overdue accounts receivable 22 441 13 884
Of overdue accounts receivable related to other than
related parties, the expected loss rate is as follows:
0-3 months 1 % 0 %
3-6 months 0 % 0 %
6 months < 58 % 21 %
Recorded value of the Group’s accounts receivable per currency:
EUR 22 447 25 817
USD 27 569 2 220
GBP 47 47
NOK 80 879 73 333
Total accounts receivable 130 942 101 416
Net change in provisions for impairment of accounts receivable:
2021 2020
At January 1 1 400 1 582
Provision for impairment of receivables 5 445 -182
Accounts receivable recorded as loss during the year 0 0
At December 31 6 845 1 400
(NOK thousands) 31.12.2021 31.12.2020
Inventories (bunkers and lube oil) 21 756 16 845
Other shares 34 34
VAT receivable 10 068 4 113
Insurance settlement receivable 5 363 7 627
Accrued unbilled income 0 2 574
Net payroll 14 697 15 186
Prepaid expenses 16 345 18 844
Total other current assets 68 265 65 224
Eidesvik Offshore ASA Annual Report 2021
53
Eidesvik Offshore ASA
Note 17 - Share capital and premium
Changes in paid share capital:
Nominal value per share in Eidesvik Offshore ASA is NOK 0.05 (5 øre).
The 20 largest shareholders in Eidesvik Offshore ASA as at December 31, 2021:
The Company had 1,916 shareholders as at December 31, 2021. Foreign share owners held 3.3% of the shares.
See also Note 24.
(NOK thousands)
2021 2020 2021 2020
Ordinary shares
Opening balance 62 150 62 150 3 108 3 108
Share issue 0 0 0 0
At December 31 62 150 62 150 3 108 3 108
Number of shares
Share capital
Shareholder Country
Number
of shares
Ownership
share
EIDESVIK INVEST AS NORWAY 37 200 000 59,86 %
JAKOB HATTELAND HOLDING AS NORWAY 3 061 741 4,93 %
VINGTOR INVEST AS NORWAY 1 434 719 2,31 %
STANGELAND HOLDING AS NORWAY 1 096 401 1,76 %
BERGTOR INVESTERING AS NORWAY 1 096 401 1,76 %
HELGØ FORVALTNING NORWAY 668 033 1,07 %
DUNVOLD INVEST AS NORWAY 588 206 0,95 %
SKANDINAVISKA ENSKILDA BANKEN AB SWEDEN 508 922 0,82 %
HELGØ INVEST AS NORWAY 500 000 0,80 %
HELLAND AS NORWAY 474 585 0,76 %
CALIFORNIA INVEST AS NORWAY 455 000 0,73 %
TVEITÅ, OLAV MAGNE NORWAY 441 700 0,71 %
HJELTEFJORDEN AS NORWAY 422 500 0,68 %
TVEITÅ, EINAR KRISTIAN NORWAY 400 000 0,64 %
COLORADO EIENDOM AS NORWAY 390 000 0,63 %
MELING, JAN FREDRIK NORWAY 335 244 0,54 %
CAIANO SHIP AS NORWAY 322 575 0,52 %
OLAVS HOLDING AS NORWAY 292 338 0,47 %
SKANDINAVISKA ENSKILDA BANKEN AB SWEDEN 284 886 0,46 %
LGJ INVEST AS NORWAY 250 000 0,40 %
Others 11 926 749 19,19 %
Total 62 150 000 100,00 %
Eidesvik Offshore ASA Annual Report 2021
54
Eidesvik Offshore ASA
Note 18 - Pensions and other long-term employee benefits
The Company is required to have an occupational pension scheme under the Mandatory Occupational Pensions Act. The Company’s pension
schemes satisfy the requirements of this Act.
Defined benefit pension
This pension scheme was replaced by a defined contribution scheme for all employees, except for previous CEO.
The estimated payment into the defined benefit scheme in 2021 is NOK 272 thousand.
Capitalised liability is determined as follows:
Change in fair value of pension funds:
Estimate deviations due to changes in actuarial assumptions included in other income and costs (OCI):
(NOK thousands) 2021 2
020
Net present value of accrued defined benefit pension
liabilities in fund based schemes
3 520 3 256
F
air value of pension funds -3 802 -3 020
Net capitalised pension liability/fund December 31 -282 2
36
Changes in defined benefit pension liability during the year:
2021 2020
Pension liability January 1 3 256 1
00 391
Net present value of pension contribution of the year 240 2
30
Interest expenses 58 363
Transfer/acquisition/moving members/new contracts 0 -97 530
Payroll tax on employer’s contribution -104 -12
Actuarial loss/(gain) 0 0
Benefits paid 69 -187
Pension liability December 31 3 519 3
256
2021 2020
Pension funds January 1 3 020 93 558
Expected return on pension funds 32 44
Transfer/acquisition/moving members/new contracts 0 -90 570
Actuarial (gains)/losses 14 -96
Payroll tax on employer’s contribution -104 -12
Employer’s contribution 839 95
Pension funds December 31 3 802 3 020
Total cost included in net profit:
2021 2020
Cost of pension contribution for the period 207 6 163
Net changes in plan, scaling down, settlement 0 -6 960
Interest expenses 4 142
Expected return on pension funds -3 290
Administrative costs 29 28
Payroll tax on pension costs 30 889
Changes in SCC (Service Cost) incl. interest and payroll tax 0 -6 964
Total, included in payroll expenses (Note 11) 268 -6 411
2021 2020
Changes in the discount rate -108 330
Changes in other financial assumptions DBO -53 37
Changes in other DBO 177 -517
Changes in other - pension funds -7 18
Funds and interest guarantees 46 41
Estimate deviation losses/(gains) against OCI 55 -91
Eidesvik Offshore ASA Annual Report 2021
55
Eidesvik Offshore ASA
The pension funds are placed in various investments through external insurance companies. They manage all transactions for the pension
schemes. Breakdown into investment categories:
To calculate pension costs and net pension liabilities, the following assumptions are used:
The discount rate is based on interest on covered bonds (OMF), whereas this was previously based on the government bond rate.
Mortality table K2013 BE is used as a basis for mortality.
Sensitivity of the calculation of pension liability to changes in the assumptions:
The table below shows an estimate of potential effects of a change in certain assumptions for defined benefit pension schemes in Norway.
Risk assessment
Through the defined benefit schemes, the Group is affected by a number of risks arising from uncertainty in assumptions and future
developments.
The key risks are described here:
Life expectancy
The Group has undertaken to pay pensions to the employees for the remainder of their lives. So an increase in life expectancy among the
members will lead to an increase in the liability for the Company.
Return risk
The Group is affected by a reduction in the actual return on the pension funds. This will lead to an increase in the liability for the Company,
as the return on the funds will not be sufficient to meet the obligation.
Inflation and wage increase risk
The Group’s pension liability carries risk associated with both inflation and wage growth, although wage development is closely linked to
inflation. Higher inflation and wage growth than assumed in the pension estimates will lead to a larger liability for the Group
2021 2020
Shares 10 % 7 %
Bonds 46 % 51 %
Real estate 14 % 14 %
Money market 11 % 11 %
Other 20 % 17 %
2021 2020
Discount rate 1,90 % 1,70 %
Return on pension assets 1,90 % 1,70 %
Wage growth 2,75 % 2,25 %
Pension adjustment 0,00 % 0,00 %
G adjustment 2,50 % 2,00 %
Change in amount Discount rate Annual wage growth
1,00 % -1,00 % 1,00 % -1,00 %
Total
Pension liability PBO 3 031 4 111 3 520 3 520
Pension cost for period SCC 221 282 249 249
Active members
Pension liability PBO 3 031 4 111 3 520 3 520
Pension cost for period SCC 221 282 249 249
Pensioners
Pension liability PBO - - - -
Eidesvik Offshore ASA Annual Report 2021
56
Eidesvik Offshore ASA
Note 19 - Other liabilities
Accrued expenses are mainly related to provisions for accrued operating costs and docking/average adjustment.
Note 20 - Long-term liabilities
Amortisation profile on long-term liabilities at December 31, 2021:
*Liabilities related to Assets held for sale will become due and payable at the time of completion of the sale.
The company has in Q1 2022 entered into a Memorandum of Agreement for the sale of Viking Neptun. The assets is classified as held-for-
sale in the Consolidated statement of Financial Position, and the corresponding debt is classified as Liabilities related to assets held for sale.
Further two seismic vessels are classified as held-for-sale, and the corresponding debt is classified as Liabilities related to assets held for sale.
Refer to note 12 for assets held for sale.
Other current liabilities
(NOK thousands) 31.12.2021 31.12.2020
Public taxes and charges 35 474 26
592
Salaries and holiday pay 33 639 32
925
Accrued expenses 51 890 58
297
Prepaid costs Eidesvik SHIP-FC project 19 925 0
Total other current liabilities 140 929 11
7 813
Other long-term liabilities
(NOK thousands) 31.12.2021 31.12.2020
Prepaid costs Eidesvik SHIP-FC project 0 11 373
Total other non-current liabilities 0 11 373
(NOK thousands) 31.12.2021 31.12.2020
Mortgage (NOK) 884 165 1 062 178
Mortgage (USD) 1 091 947 1 297 472
Other loan 1 056 1 028
Capitalised establishment costs -5 599 -9 155
Total interest-bearing long-term liabilities 1 971 570 2 351 523
Total long-term liabilities 1 971 570 2 351 523
Short-term portion of long-term liabilities -86 705 -157 725
Liabilities related to Assets held for sale -840 666 0
Total long-term liabilities excl. first year’s repayment 1 044 199 2 193 798
Short-term loans
First year’s repayment of long-term liabilities 86 705 157 725
Accrued interest 7 674 8 871
Total 94 379 166 596
Liabilities related to Assets held for sale 840 666 0
Total 840 666 0
Book value of liabilities in currency
NOK 879 623 1 054 051
USD 1 091 947 1 297 472
Total 1 971 570 2 351 523
Book value
2022 128 364
2023 1 676 479
2024 80 035
2025 36 494
2026 36 494
Later 18 247
Total repayments 1 976 112
Eidesvik Offshore ASA Annual Report 2021
57
Eidesvik Offshore ASA
Of total liabilities, MNOK 1,939.1 are secured against mortgages in vessels recorded at MNOK 1,931.0
For an assessment of the fair value of long-term liabilities, see Notes 3 and 23.
*Liabilities related to Assets Held for sale
Covenants
The majority of the Company’s fleet is financed with mortgage loans, mainly fleet loans. After restructuring, the most important financial
covenants are:
- Free liquidity of MNOK 70.
- Positive working capital (current assets less current liabilities, excluding current portion of long-term debt).
- Loan to value: Suspended until the end of the refinancing period.
- Limitations on investments and dividends.
There are also clauses related to change of control concerning the Eidesvik families.
No companies in the Eidesvik Offshore Group were in breach of any covenants at December 31, 2021, or during 2021.
At December 31, 2021, free liquidity was MNOK 294, and working capital was MNOK 332.
The refinancing
On August 27, 2021, Eidesvik announced that it had agreed on a term sheet (“Term Sheet”) with its financial institutions for refinancing of
its debt. On September 10, 2021, the final agreements and documentation were in place and the new terms for the Group’s financing
became effective. The agreed terms provide mechanisms for extension of final maturities of debt facilities from the end of 2022 to the end
of 2023, and there will be no final maturities until year end 2023. The extension is subject to Eidesvik meeting certain financial and
operational triggers.
Summary of the refinancing
Amortization:
• Facility prepayment of approximately NOK 209 million was made on the date of signing and final documentation. This was a
combination of prepayment of agreed instalments for H2 2021 and surplus cash on facility levels as per June 30, 2021.
• NOK 100 million in up-front prepayment from corporate cash was made on the date of signing and final documentation. This was
distributed pro-rata to the financial institutions based on outstanding debt per Q2 2021, after facility prepayment.
• In 2022, scheduled amortization amounts to approximately NOK 112 million, in total for the Group.
• In H1 2023, scheduled amortization amounts to approximately NOK 8 million in total for the Group. Depending on market
conditions related to one vessel, additional NOK 24 million may become payable as fixed amortization and distributed pro-rata
among the financial institutions during H1 2023 based on the outstanding debt under each facility per January 1, 2023.
• In H2 2023, scheduled amortization amounts to approximately NOK 72 million in total for the Group.
Cash Sweep:
During the refinancing period, all excess cash above certain threshold levels with respect to each facilities agreement shall be applied towards
repayment of the outstanding debt under that facilities agreement, in inverse order of maturity. Excess cash will be measured semi-annualy.
• Per December 31, 2021, cash sweep of MNOK 16.1 was calculated and was paid in March 2022.
Interest rates:
• No amendments
Financial covenants:
• Minimum free liquidity of NOK 70 million on a consolidated basis.
• Positive working capital (current assets less current liabilities, excluding current portion of long term debt)
• Loan to value: Suspended until the end of the refinancing period.
Other covenants:
Change of control (no amendments):
• If Eidesvik Invest AS or the Eidesvik family controls less than 33.4% of the shares and votes in the Group, or
• Someone other than Eidesvik Invest AS gains negative control in the Group
Change in liabilities Interest expenses
Interest-bearing
short-term debt
Current lease
liabilities
Assets held for
sale*
Interest-bearing
long-term debt
Non-current
lease liabilities
Total
At January 1, 2021 166 596 3 256 0 2
193 798 54 862 2 418 512
Repayment of debt -420 514 -3 714 0 0 0 -424 228
Interest paid -71 291 -8 871 0 0 0 0 -80 163
Cash flow from financing -71 291 -429 386 -3 714 0 0 0 -504 392
Exchange rate effects -6 635 0 0 43 611 0 36 976
Capitalisation costs 0 0 0 3 557 0 3 557
Interest accrued but not paid 7 674 0 0 7 674
Other changes 356 129 3 714 840 666 -1 196 767 -3 714 28
At December 31, 2021 94 379 3 256 840 666 1 044 199 51 147 2 033 647
Eidesvik Offshore ASA Annual Report 2021
58
Eidesvik Offshore ASA
Other conditions:
• Cash pooling: There will be no cash pooling between the subsidiaries in Eidesvik. To the extent necessary, Eidesvik Offshore ASA
may transfer a subordinated, non-cash interest bearing and assigned intercompany loans for payments of upcoming liabilities in
any facility. Any such loan having been received in any facility must be repaid in full to Eidesvik prior to any calculation of excess
cash or payment of any cash sweep under the relevant facility.
• Sale of none-core vessels: Eidesvik has identified and classified 4 vessels as none-core. According to the agreement, a plan
regulating the sales process for these vessels was established.
Note 21 - Other shares
(NOK thousands)
Simsea is a simulation centre for training nautical personnel. Bleivik Eiendom AS leases out properties to companies conducting safety
training for maritime personnel.
Simsea Holding AS was written down to NOK 0 because of the bankruptcy of Simsea AS in the winter of 2017. Eidesvik Ghana Ltd has been
written down to NOK 0 based on the probability of getting the funds out of Ghana.
The investments are valued by the equity method.
(*) Eidesvik and CGG Marine Resources Norge AS and CGG S.A. (“CGG”) agreed June 4, 2019 on a term sheet for a transaction whereby CGG
was contemplating to acquire Eidesvik’s 50% ownership share in Global Seismic Shipping AS (“GSS”). The sale of GSS to Shearwater
GeoServices Holding AS (“Shearwater”) was completed January 8, 2020. As consideration for Eidesvik’s shares in GSS, Eidesvik received
shares in Shearwater, and these are classified as “Financial investments” in the balance sheet per December 31, 2020.
Note 22 - Leases
(NOK thousands)
Right-of-use assets
IFRS 16 “Leases” sets out the principles for the recognition, measurement and disclosure requirements for both parties to a lease contract.
IFRS 16 is effective for reporting periods beginning on or after January 1, 2019. The Group adopted IFRS 16 on the effective date using a
modified retrospective approach and will not restate comparative information.
The Group is both a lessor, as it charters vessels to customers, and a lessee. The new requirements result in significant changes to the
accounting model applied by lessees and will primarily affect the Group’s accounting for the operating leases as a lessee. The accounting for
lessors will not significantly change.
To determine whether a contract contains a lease, it is considered whether the contract conveys the right to control the use of an identified
asset. This is for the Group considered to only be the case for office leases and vehicles. The Group has long term lease agreements on office
premises and vehicles that will be affected by implementation of IFRS 16. For the Group, these lease commitments will result in the
recognition of an asset (right-of-use) and a lease liability. The rental period is calculated based on the duration of the agreement plus any
option periods if these with reasonable certainty will be exercised. Joint expenses etc. are not recognised in the lease liability for the rental
contracts.
As permitted by IFRS 16, the Group chose to measure the right-of-use asset equal to the amount of the liability at the implementation date.
The future payments under each lease arrangement have been discounted using the incremental borrowing rate applicable to the leased
assets in order to calculate the lease liability recognized on the date of adoption.
The Group has used the following practical expedients when applying IFRS 16 to leases:
• Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term
• Excluded initial direct costs from measuring the right-of-use assets at the date of initial application
Shares
Entity Country Industry
Ownership/voting
share
Book value
31.12.2021
Book value
31.12.2020
Simsea Holding AS
Norway Training 10,4 % 0 0
Bleivik Eiendom AS
Norway Real estate 22,6 % 2 595 655
Eidesvik Ghana Ltd.
Ghana Shipping 49,0 % 0 1 065
Total 2 595 1 720
Financial investments
Entity Country I
ndustry
Ownership/voting
share
Book value
31.12.2021
Book value
31.12.2020
Shearwater GeoService Holding AS (*)
Norway Shipping 3,75 % 0 255 978
Eidesvik Offshore ASA Annual Report 2021
59
Eidesvik Offshore ASA
The liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing
rate as of 1 January 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was
5.0%. As of January 1, 2019, the implementation effects were as following:
• Right-of-use assets in the statement of financial position increased by MNOK 64.4
• Lease liability in the statement of financial position increased by MNOK 64.4
• Effect on equity amounted to 0
Right-of-use assets Buildings V
ehicles Total
Acquisition cost January 1, 2021 64 048 386 64 434
Addition of right-of-use assets 0
Disposals 0
Transfers and reclassifications 0
Acquisition cost December 31, 2021 64 048 386 64 434
Accumulated depreciation and impairment
Depreciation 2019 4 293 179 4 472
Depreciation 2020 4 575 179 4 754
Depreciation 2021 4 679 28 4 707
Impairment losses in the period 0
Disposals 0
Transfers and reclassifications 0
Accumulated depreciation and impairment December 31, 2021 13 547 386 13 933
Carrying amount of right-of-use assets December 31, 2021 50 502 0 50 502
Lower of remaining lease term or economic life
0,5 - 32
years
8-17
months
Lease liabilities
Undiscounted lease liabilities and maturity of cash outflows B
uildings Vehicles Total
Less than 1 year 6 476 0 6 476
1-2 years 6 460 0 6 460
2-3 years 6 460 0 6 460
3-4 years 6 460 0 6 460
4-5 years 6 460 0 6 460
More than 5 years 45 221 0 45 221
Total undiscounted lease liabilities at December 31, 2021 77 537 0 77 537
Summary of the lease liabilities Buildings Vehicles Total
At initial application 01.01.2021 58 086 32 58 118
New lease liabilities recognised in the year 0
Installment -6 566 -34 -6 600
Interest expense on lease liabilities 2 883 2 2 885
Total lease liabilities at December 31, 2021 54 403 0 54 402
Current lease liabilities 3 256 0 3 256
Non-current lease liabilities 51 146 0 51 146
Total cash flow for leases 6 600
Eidesvik Offshore ASA Annual Report 2021
60
Eidesvik Offshore ASA
The Group as lessor
The Group’s main activity is leasing of offshore tonnage. See overview as of April 27, 2022, below.
Future minimum lease terms as at April 27, 2022, for consolidated vessels on firm contracts have the following maturity:
The Group has operating lease contract on its vessels representing income. The leases have terms of between 4 and 73 months. As payments
from the lessee to the Group is determined based on the fixed day rate agreed in the contract, no portion of the payments varies other than
the passage of time.
Note 23 - Financial instruments
(NOK thousands)
Capitalised financial assets and liabilities
Capitalised value equals fair value, except for loans. For details of fair value loans, see the section on “Interest” below. The Group does not
practise hedge accounting, financial derivatives held for financial hedging which are recorded at fair value.
Vessels, consolidated Contract type Customer Contract expiry, fixed Contract expiry, charterer's option
Viking Lady Time charter
Aker BP December 2024 December 2030
Viking Queen Time charter
Equinor May 2022 November 2022
Viking Avant Time charter
Equinor December 2022
Viking Energy Time charter Equinor April 2025 April 2030
Viking Prince Spot, TC from April 2022
Equinor October 2022 February 2023
Viking Princess Time charter Wintershall January 2023 January
2026
Viking Wind Power Time charter Siemens Gamesa January 2027 June 2027
Subsea Viking Time charter Seabed Geosolutions August 2022 December 2022
Viking Neptun Time charter Havfram September 2022 November 2022
Viking Vanquish Layup
Viking Vision Layup
Veritas Viking Bareboat July 2022 December 2022
Vantage Layup
Vesssel in joint venture Contract type Customer Contract expiry, fixed Contract expiry, charterer's option
Seven Viking Time charter
Subsea 7 November 2025 December 2026
Next 1 year 463 000
1 to 5 years 512 000
After 5 years 6 000
Future minimum lease 981 000
31.12.2021 31.12.2020
Assets
Market-based shares for trading 9 9
Currency derivatives 363 25 284
Interest derivatives 17 042 0
Other shares (Note 21) 2 595 1 720
Financial investments (Note 21) 0 255 978
Accounts receivable (Note 14) 130 942 101 416
Cash and cash equivalents (Note 16) 330 401 429 183
Total 481 351 813 591
Liabilities
Interest rate derivatives 6 677 20 600
Loans (Note 20) 1 976 112 2 359 650
Total 1 982 789 2 380 250
Eidesvik Offshore ASA Annual Report 2021
61
Eidesvik Offshore ASA
Currency
The Group has entered into currency derivative contracts as part of the management of the Group’s currency exposure. The contract terms
are as follows:
All currency futures are recorded at fair value.
Interest
The Group has the following fixed rate agreements:
At December 31, 2021, 71% (69%) of the Group’s loans were at fixed interest or swap/cap.
The Group has two fixed-interest loans in NOK with a maturity of 12 years originally (CIRR), which are recorded at amortised cost in the
balance sheet. If these loans were to be refinanced today with a new margin and money market rate, and retained the same repayment
profile, the net present value of the difference between the current interest payments and the refinanced interest payments would be
MNOK 8.3 (level 2, see Note 3). If these loans were recorded at fair value, they would have been reported correspondingly higher.
See Note 20 for information on long-term loans.
At December 31, 2021 Currency sold Amount Maturity
Exchange rate
(average)
Fair value (MTM)
Currency derivatives
Currency futures for the sale of
current cash flow
EUR 1 220
2022 10,2987 363
1 220
363
At December 31, 2020 Currency sold Amount Maturity
Exchange rate
(average)
Fair va lue (MTM)
Currency derivatives
Currency futures for the sale of
current cash flow
EUR 9 165
2021-2022 10,3680 -
1 183
Currency futures for the sale of
current cash flow
USD 3 000
2021 9,2083 2 037
Currency option, put USD 25 000 2021 9,5000 24 430
12 165
25 284
At December 31, 2021
Type C
urrency Floor Cap/Swap Maturity
NOK principal
Fair value (incl.
accrued interest)
Annual
downscaling
be
fore maturity
(average)
Fixed rate loan NOK 3,36 % 27.03.2024
142 392
Variable
Fixed rate loan NOK 3,41 % 13.09.2024
158 355
Variable
Swap USD 2
,36 % 21.11.2022
176 388
-3 480 None
Swap USD 2
,27 % 12.12.2022
176 388
-3 197 None
Cap NOK 1,00 % 01.07.2025
150 000
4 376 None
Cap NOK 1
,00 % 15.07.2025
150 000
4 382 None
Cap USD 1
,00 % 01.07.2025
220 485
4 231 None
Cap USD 1
,00 % 15.07.2025
220 485
4 053 None
Unhedged
581 620
Total liabilities, hedged and unhedged
1 976 112 10 365
At December 31, 2020
Type C
urrency Floor Cap/Swap Maturity
NOK principal
Fair value (incl.
accrued interest)
Annual
downscaling
b
efore maturity
(average)
Fixed rate loan NOK 3,36 % 27.03.2024
167 109
28 750
Fixed rate loan NOK 3,41 % 13.09.2024
184 115
29 166
Swap USD 2,92 % 23.12.2021
217 581
-5 959 None
Swap USD 2
,36 % 21.11.2022
170 652
-7 466 None
Swap USD 2,27 % 12.12.2022
170 652
-7 175 None
Cap NOK 1,00 % 01.07.2025
150 000
None
Cap NOK 1,00 % 15.07.2025
150 000
None
Cap USD 1,00 % 01.07.2025
213 315
None
Cap USD 1,00 % 15.07.2025
213 315
None
Unhedged
722 911
Total liabilities, hedged and unhedged
2 359 650 -20 600
Eidesvik Offshore ASA Annual Report 2021
62
Eidesvik Offshore ASA
Other information
No financial assets have been reclassified such that the valuation method has been changed from amortised cost to fair value, or vice
versa.
For assessment of fair value (MTM), see Note 3.
Note 24 - Transactions with related parties
(NOK thousands)
The Group has some transactions with related parties, concerning crew hire, management services for vessel operations, business and
accounting services and leasing of offices. All transactions are based on the arm’s length principle.
* These companies were sold January 8, 2020. Refer to note 7 and 21.
The balance sheet includes the following amounts resulting from transactions with related parties:
Shares owned/controlled by Board members/senior executives:
(1) Eidesvik Invest AS is 55%-controlled by Bømmelfjord AS, where Borgny Eidesvik holds 20% of the shares (A-shares), and Lauritz Eidesvik
holds 20% of the shares (B-shares). The remaining 45% of Eidesvik Invest AS is owned by Evik AS, where Lars Eidesvik indirectly holds 20%
of the shares.
(
2) Jan Fredrik Meling retired from his position on December 31, 2021. Gitte Gard Talmo replaced Meling effective from January 1, 2022.
The Eidesvik Offshore ASA Group is a subsidiary of E ide s vi k I nves t AS , which is a subsidiary of the ultimate parent company Bø m mel fj or d A S.
2021 2020
Lease of offices from AS Langevåg Senter
-8 277 -8 137
Lease of offices to Evik AS
586 586
Lease of apartment from Evik AS
-79 -13
Lease of offices to Bømmelfjord AS
595 488
Lease of other services from Bømmelfjord AS
0 -4
Lease of offices and other services to Eidesvik Invest AS
52 764
Lease of stockroom and other services from Eidesvik Invest AS
0 -375
Lease of stockroom and other services from Klubben Eiendom AS
-473 -117
Sale of crew and management services to Eidesvik Seven Chartering AS
71 769 70 791
Sale of management services to Eidesvik Seven AS
2 793 1 546
Sale of office services and lease of apartment to Bømlo Skipservice AS
39 73
Purchase of technical and layup services from Bømlo Skipservice AS
-6 380 -3 529
Sale of management services to Oceanic Seismic Vessels AS *
0 6 360
Sale of crew and office services to CGG Eidesvik Ship Management AS *
0 0
Sale of crew and office services to CGG Eidesvik Crewing I AS *
0 0
Sale of management services to Geo Vessels AS *
0 9 695
Sale of management services to Global Seismic Vessels AS *
0 86
31.12.2021 31.12.2020
Accounts receivable 12 485 13
098
Accounts payable -1 489 -385
Total 10 996 12 714
2021 2020
Eidesvi k Invest AS (1) 37 200 000 37 200 000
Kolbein Rege 135 000 136 450
John Egil Stangeland 30 000 30 000
Kristine Elisabeth Skeie
25 000 0
Bjørg Marit Eknes 25 000 0
Jan Fredrik Meling (2) 335 244 335 244
Jan Lodden 146 642 146 642
Gitte Gard Tal mo 500 500
Eidesvik Offshore ASA Annual Report 2021
63
Eidesvik Offshore ASA
Remuneration to senior executives:
The Company has published a separate Report on Remuneration to the Board of Directors, CEO and Senior Executives, available for
download from the Company’s website.
The CEO has a bonus scheme on given terms up to MNOK 0.5 per December 31, 2021, which is subject to an overall assessment.
The entire executive team except the CEO have a mutual notice period of 3 months.
The CEO has a mutual notice period of 6 months and is entitled to 18 months of severance pay on certain terms per December 31, 2021.
Jan Fredrik Meling retired from his position on December 31, 2021. Gitte Gard Talmo replaced Meling effective from January 1, 2022.
Jan Fredrik Meling will continue to receive 60% of his salary in 2022 and 2023, and his pension costs will be covered by Eidesvik Offshore
ASA in 2022 and 2023.
The Board Remuneration Annual Change 9,23%
Board remuneration is decided by the General Meeting. Disbursements for 2021 are for the period up until the next General Meeting.
Arne Austreid, Bjørg Marit Eknes and Tore Hettervik were, respectively, elected as chair of the board member and employee representative
for the board in 2021.
From AGM 2019, the employees have had one employee representative in the Board, and one deputy employee representative. The total
remuneration for these two representatives are equal to a original Board Member, and the split is originally 70/30 between the two employee
representatives, depending on the number of meetings the deputy employee representative has attended. The employee representatives
rotate on a yearly basis, from July to July.
2021
Base salary Bonus Other
Pension
costs
CEO Jan Fredrik Meling 2.224 384 137 385
COO Jan Lodden 1.730 291 108 125
CFO Tore Byberg 1.594 273 226 115
CCO Gitte Talmo 1.298 221 164 126
VP HR Erling Lodden 1.203 203 128 104
VP HSEQ Terje Sagebakken 1.221 200 109 96
Total 2021 9.271 1.571 871 951
2020
Base salary Bonus Other
Pension
costs
CEO Jan Fredrik Meling 2.174 0 144 242
COO Jan Lodden 1.660 0 100 120
CFO Tore Byberg 1.554 0 172 110
CCO Gitte Talmo 1.245 0 197 124
VP HR Erling Lodden 1.141 0 127 103
VP HSEQ Terje Sagebakken 1.137 0 184 95
Total 2020 8.912 0 924 794
Remuneration of the Board 2021 2
020
Kolbein Rege
525 502
Borgny Eidesvik
279 272
Lars Eidesvik
236 230
Synne Syrrist
279 272
John Egil Stangeland
236 230
Lauritz Eidesvik
246 230
Kristine Elisabeth Skeie
236 230
Petter Lønning
88 76
Børre Lindanger
113 40
Tore Hettervik
35 0
2 273 2 081
Nomination Committee 2021 2020
Per Åge Hauge
15 0
Ellen Hatteland
10 0
Kjetil Eidesvik
10 0
Lauritz Eidesvik*
10 0
Kolbein Rege*
10 0
Eidesvik Offshore ASA Annual Report 2021
64
Eidesvik Offshore ASA
*This compensation is included in the table for remuneration of the board.
Kjetil Eidesvik, Per-Åge Hauge and Ellen Hatteland were elected as members of the election committee in 2021.
At the AGM 2020, the Nomination Committee was established. The remuneration fee for the Nomination Committee in the tables is only for
the second half of 2020.
Note 25 - Liabilities and unexpected events
The Company has a framework agreement with Reach Subsea AS for WROV services for the vessel Viking Neptun. Remaining commitment
for 2021 is firm MNOK 10.3.
Note 26 - Exchange rates
Exchange rates from the Norwegian Central Bank’s website.
Note 27 – Subsequent events and other information
Sale of Viking Neptun
Eidesvik Neptun AS, a subsidiary of Eidesvik, entered January 12, 2022 into a Memorandum of Agreement (“MoA) with Dredging,
Environmental and Marine Engineering NV (“DEME”), for the sale of the CSV Viking Neptun, following a letter of intent being entered into
between DEME and Eidesvik on December 23, 2021. The MoA is expected to complete in the 4th Quarter of 2022, post completion of the
ongoing contract with Havfram. Based on the terms of the MoA, Eidesvik has reversed MNOK 220.7 in previous impairments on the vessel
in the 4th Quarter 2021 accounts. Further, the book value of Viking Neptun is classified as “Assets held for sale” per December 31, 2021,
and the associated debt is classified as “Liabilities related to Assets held for sale”.
New contracts
Eidesvik was awarded a contract by PXGEO UK Ltd under the Master Time Charter Agreement for Subsea Viking. The contract will
commence ultimo April 2022, in direct continuation of the existing stand-by contract. The firm period is 100 days with options for
extensions.
Eidesvik was awarded a bareboat contract for 100 days with options for extensions with an undisclosed 3rd party operator for Veritas
Viking. The vessel is mobilized from its current location at Bømlo and is scheduled to commence the bareboat contract ultimo April 2022.
Eidesvik was awarded a contract with Equinor for Viking Prince. The firm period is six months with options for further extensions. The
contract will commenced in April 2022.
War in Ukraine
The Ukraine-conflict escalated in February and March 2022.- Although this has no direct impact on the Group, the increased uncertainty
and volatility in the global economy are likely to have an indirect impact. The magnitude and duration of this are not possible to predict
precisely at the date of this report.
Average exchange
rate 2021
Exchange rate
31.12.2021
Average exchange
rate 2020
Exchange rate
31.12.2020
Euro 10,1648 9
,9888 10,7207 10,4703
UK pound 11,8254 11,8875 12,0514 11,6462
US dollar 8,5991 8,8194 9,4004 8,5326
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ANNUAL ACCOUNTS – PARENT COMPANY
STATEMENT OF PROFIT AND LOSS – PARENT COMPANY
(NOK 1,000)
Note
1.1.-31.12.
2021
1.1.-31.12.
2020
Payroll etc.
8,9
5,643
5,715
Depreciation
3
105
105
Other operating expenses
8.11
8,538
6,295
Total operating expenses
14,286
12,116
Operating profit
-14,286
-12,116
Interest income from companies in the same group
6
20,819
11,332
Other interest income
14
163
Other financial income
20,232
2,481
Impairment of financial assets
2
-25,460
0
Interest expenses to companies in the same group
6
-3,631
-3,029
Other financial expenses
-4,197
-11,531
Net financial items
7,776
-583
Profit/loss before taxes
-6,510
-12,698
Tax costs
4
0
0
Profit/loss for the year
-6,510
-12,698
Allocation (coverage) of profit/loss for the year
Transferred to/from other equity
-6,510
-12,698
Total allocated (covered)
-6,510
-12,698
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Eidesvik Offshore ASA
STATEMENT OF BALANCE SHEET – PARENT COMPANY
(NOK 1,000)
Note
31.12.2021
31.12.2020
Assets
Tangible fixed assets
Buildings and land
8,921
8,921
Operating equipment
288
393
Total tangible fixed assets
3
9,209
9,314
Financial assets
Investments in subsidiaries
2
298,217
242,517
Loans to Group companies
6
200,021
97,327
Other financial assets
2
56
56
Pension funds
9
282
0
Total financial assets
498,576
339,900
Total non-current assets
507,784
349,214
Current assets
Receivables
Other receivables
4
30
Total receivables
4
30
Financial investments
2
0
265,878
Bank deposits, cash etc.
1
138,206
34,421
Total current assets
138,210
300,329
TOTAL ASSETS
645,994
649,543
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Eidesvik Offshore ASA
STATEMENT OF BALANCE SHEET – PARENT COMPANY
(NOK 1,000)
Note
31.12.2021
31.12.2020
EQUITY AND LIABILITIES
Paid-in equity
Share capital
7
3,108
3,108
Share premium
5
177,275
177,275
Other paid-in equity
5
549
549
Total paid-in equity
180,932
180,932
Retained earnings
Other equity
289,899
296,409
Total retained earnings
289,899
296,409
Total equity
5
470,831
477,341
LIABILITIES
Other non-current liabilities
Liabilities to Group companies
6
165,008
171,052
Pension liabilities
9
0
236
Total other non-current liabilities
165,008
171,288
Current liabilities
Accounts payable
525
424
Public duties payable
502
244
Other current liabilities
9,128
246
Total current liabilities
10,155
914
Total liabilities
175,163
172,202
TOTAL EQUITY AND LIABILITIES
645,994
649,543
Bømlo, April 27, 2022
Arne Austreid Borgny Eidesvik Lars Eidesvik John Egil Stangeland
Chair of the Board Board member Board member Board member
Lauritz Eidesvik Kristine Elisabeth Skeie
Gitte Gard Talmo
Bjørg Marit Eknes
Board member
Board member Board member
CEO
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STATEMENT OF CASH FLOWS – PARENT COMPANY
(NOK 1,000)
1.1-31.12
1.1-31.12
Note
2021
2020
Cash flow from operations
Payments to suppliers and employees
8,10
-6,798
-10,103
Interest received/paid
13
163
Net cash flows from operations
-6,785
-9,940
Cash flow from investment activities
Purchase of tangible fixed assets
0
0
Acquisition of shares
0
0
Sale of shares
285,078
0
Net cash flow from investment activities
285,078
0
Cash flow from financing activities
Issuance of share capital
7
0
0
Paid intrest
-3,631
-3,038
Repayment of debt to subsidiaries/joint ventures
6
-170,877
-15,328
Net cash flow from financing activities
-174,508
-18,366
Net increase (decrease) in cash and cash equivalents
1
103,785
-28,307
Cash and cash equivalents at start of period
1
34,421
62,729
Cash and cash equivalents at end of period
138,206
34,421
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NOTES TO THE ANNUAL ACCOUNTS – PARENT COMPANY
Accounting principles
The financial statements have been prepared in accordance with the Norwegian Accounting Act of 1998 and generally accepted accounting
principles.
Classification and valuation of balance sheet items
Current assets and short-term liabilities include items maturing within one year after the balance sheet date. Other items are classified as
fixed assets/long-term liabilities.
Current assets are valuated at the lower of acquisition cost and fair value. Short-term liabilities are capitalised at nominal value at the time
of establishment.
Non-current assets are valued at acquisition cost, but depreciated to fair value if the impairment in value is not expected to be transient.
Long-term liabilities are capitalised at nominal value at the time of establishment.
Accounts receivable
Accounts receivable and other receivables are listed in the balance sheet at fair value after deduction of provisions for expected loss.
Provisions for loss are made on the basis of individual assessments of individual receivables. An unspecified provision is also made for other
accounts receivable in order to cover presumed loss.
Currency
Monetary items in foreign currency are valued according to the exchange rate at the end of the accounting year.
Subsidiaries/associated companies
Subsidiaries and associated companies are valued according to the cost method in the company accounts. The investment is valued at
acquisition cost for the shares, unless write-downs have been necessary. Group contributions to subsidiaries, with taxes deducted, are listed
as increased cost for shares. Dividends/group contributions are recorded in the same year as the provision is made in the
subsidiary/associated company. When a dividend/group contribution substantially exceeds the share of retained profits after the acquisition,
the excess amount is treated as a repayment of invested capital, and is deducted from the value of the investment in the balance sheet.
For loans to subsidiaries, refer to Note 6.
Tangible fixed assets
Tangible fixed assets are capitalised and depreciated over the useful life of the asset. Maintenance of fixed assets is expensed on an ongoing
basis under operating costs, while upgrades or improvements are added to the cost of the asset and depreciated in step with the asset. The
distinction between maintenance and upgrades is calculated in relation to the condition of the asset when it was acquired.
Tax
The tax costs in the income statement include both tax payable for the period and the change in deferred taxes. Deferred tax assets are
calculated at 22% on the basis of the temporary differences that exist between accounting and tax values, and losses carried forward for tax
purposes at the end of the accounting year. Temporary differences that increase and decrease taxes and that reverse or may reverse during
the same period are offset and netted off.
Pension liabilities
The Company finances its pension liabilities to the employees through a group pension scheme. Accounting is done in line with the NRS 6
accounting standard for pension costs. Pension liabilities are calculated as the present value of future pension benefits considered to be
incurred on the balance sheet date, based on the fact that employees acquire their pension rights evenly throughout their working lives.
Pension funds are valued at fair value and are netted against the pension liabilities for each pension scheme. Net pension funds are presented
as long-term receivables under financial assets. The net pension cost for the period is included in payroll and social security costs, and consists
of the pension entitlements for the period, interest costs on the calculated pension liabilities, expected returns on the pension funds,
recorded effects of changes in estimates and pension plans, recorded effects of discrepancies between actual and expected returns, and
accrued payroll tax. The effects of changes in pension plans are expensed in the period in which they occur.
Cash flow statement
The cash flow statement has been prepared according to the direct method. Cash and cash equivalents include cash, bank deposits, and
other short-term liquid placements which can be converted to known cash amounts immediately and without significant risk of bankruptcy
and which mature in less than three months from the date of acquisition.
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Note 1 – Bank deposits
Of the MNOK 138.206 (MNOK 34.4) in bank deposits, restricted tax funds represent MNOK 0.4 (MNOK 0.2).
Note 2 - Investments in subsidiaries and associated companies
Impairments in 2021 was MNOK 111.4 related to impairments in Eidesvik Shipping AS (MNOK 1.4) and Eidesvik Shipping II (MNOK 110).
The impairments in Eidesvik Shipping II is associated with the conversion of the receivable to equity. Reversed impairments in 2021 was
MNOK 47.6 related to Eidesvik Neptun AS.
Note 3 - Summary of tangible fixed assets
Company Share capital
Owner share /
voting share
Number Nominal
Book value
Equity at
31.12.2021
Profit 2021
(*)
Eidesvik Shipping AS 170,749 100 % 291 380 586 162 638 111 322 -281 366
Eidesvik AS 11 000 100 % 11 000 1 000 76 720 133 059 -6 077
Eidesvik Shipping Int. AS 100 100 % 100 1 000 104 -5 336 -12 429
Eidesvik Subsea Vessels AS 100 100 % 1 000 100 112 43 840 52
Hordaland Maritime Miljøs. AS 4483 91 % 39 933 100 563 467 -39
Eidesvik Management AS 100 100 % 1 000 100 9 -1 636 -109
Norsk Rederihelsetjeneste AS 100 100 % 100 1 000 784 126 -352
Eidesvik Maritime AS 100 100 % 1 000 100 112 12 2 697
Eidesvik Neptun II AS 88 74,75 % 747 474 0,10 75 -11 664 -34 023
Eidesvik Shipping II AS 100 100 % 1 1 000 9 501 690 -19 168
Eidesvik UK Ltd. 0 100 % 1 1 1 61 -5
Eidesvik Neptun AS 792 74,75 % 594 0,1 47 600 63 631 222 896
Total 298 217 334 572 -127 923
Associated companes
Company Share capital
Owner share /
voting share
Number Nominal
Book value
Equity at
31.12.2021
Profit 2021(*)
Eidesvik Seven Chartering AS 100 50 % 5000 10 56
30 670 3 723
Total 56
Residential
property
Transport
equipment
Inventory and
equipment
Non-depreciable
assets
Total
Acquisition cost 1 January 8 921 526 1 248 156 10 851
Addition 0 0 0 0
Disposal 0 0 0 0
Acquisition cost 31 December 8 921 526 1 248 156 10 851
Accumulated depreciation 1 January 0 289 1 248 0 1 537
Depreciation in the year 0 105 - 0 105
Reduction in depreciation 0 0 0 0 0
A
ccumulated depreciation 31 December 0 394 1 248 0 1 642
Booked value 31 December 8 921 132 0 156 9 209
Depreciation rates 0 % 20 % 10 % 0
Depreciation method Linear Linear
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Note 4 - Taxes
Tax effect of temporary differences and loss carry-forwards which have given rise to deferred tax and deferred tax assets, broken down by
categories of temporary differences:
No deferred tax assets have been posted.
Note 5 - Equity
Tax expense for the year
2021 2020
Recognised tax on ordinary profit:
Tax payable - -
Change in deferred tax assets - -
Tax expense on ordinary profit - -
Taxable income:
Ordi nary profi t before ta x -6 510 -12 698
Permanent differences 9 297 5 237
Changes in temporary differences -355 381
Group contributions made - -
Us e of l os s carry-forwa rd -2 432 -
Taxable Income - -7 080
Tax payable in the balance sheet:
Tax payable on profit for the year - -
Tax payable on group contributions made - -
Total tax payable in the balance sheet - -
2021 2020 Change
Tangible fixed assets -149 -114 35
Receivables -127 - 127
Pension funds 281 -236 -517
Total 5 -351 -356
Accumulated loss carry-forward -10 400 -12 832 -2 432
Basis for calculating deferred tax -10 395 -13 183 -2 788
Deferred tax assets (22%) -2 287 -2 900 -613
Effect of change of tax rate - - -
Other paid-in Other
Share capital Share premium equity equity Total
Equity 31.12.20 3 108 177 275 549 296 409 477 341
Profit/loss for the year -6 510 -6 510
Equity 31.12.21 3 108 177 275 549 289 899 470 831
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Note 6 - Long-term receivables from and loans to subsidiaries
The interest on the intercompany balances is calculated quarterly using 3-month NIBOR + 1% margin.
The Company has provided guarantees for loans in subsidiaries. A guarantee commission of 0.25-1.00% has been charged for this, depending
on the net outstanding amount covered by the guarantee.
Note 7 - Share capital and shareholder information
The Company’s share capital consists of 62,150,000 shares at NOK 0.05 each.
All shares have equal voting rights.
For the 20 largest shareholders in Eidesvik Offshore ASA as at 31.12.2021, see Note 17 to the consolidated accounts.
(1) Eidesvik Invest AS is 55%-controlled by Bømmelfjord AS, where Borgny Eidesvik holds 20% of the shares (A-shares), and Lauritz Eidesvik
holds 20% of the shares (B-shares). The remaining 45% of Eidesvik Invest AS is owned by EVIK AS, where Lars Eidesvik indirectly holds 20% of
the shares.
(2) Jan Fredrik Meling retired from his position on December 31, 2021. Gitte Gard Talmo replaced Meling effective from January 1, 2022.
Note 8 - Payroll costs, number of employees, remuneration, loans to employees
The Company had 1 employee at the end of the year. The Company has established an occupational pension scheme.
The CEO has a bonus scheme on given terms up to MNOK 0.5 per December 31, 2021, which is subject to an overall assessment.
The CEO has a mutual notice period of 6 months. He is also entitled to 18 months of severance pay on certain terms per December 31, 2021.
Jan Fredrik Meling retired from his position on December 31, 2021. Gitte Gard Talmo replaced Meling effective from January 1, 2022.
Jan Fredrik Meling will continue to receive 60% of his salary in 2022, and Eidesvik Offshore ASA will cover his pension costs in 2022 and 2023.
Receivables 2021 2020
Eidesvik Management AS 3 256 3 211
Eidesvik Supply AS 33 727 17 197
Eidesvik Neptun AS 164 658 116 879
Eidesvik Seven 0 22
Total (*) 201 641 137 308
* Loss on account receivabl e pr 31.12.21 is MNOK 1,6
Liabilities 2021 2020
Eidesvik AS 51 143 50 969
Eidesvik Shipping AS 103 181 102 511
Eidesvik Shipping II AS 9 500 0
Eidesvik MPSV AS 1 184 17 572
Total 165 008 171 052
2021 2020
Ei des vi k Inve s t AS (1) 37 200 000 37 200 000
Kolbein Rege 135 000 136 450
John Egil Stangeland 30 000 30 000
Jan Fredrik Meling (2) 335 244 335 244
Kristine Skeie 25 000 0
Bjørg Marit Eknes 25 000 0
Payroll costs 2021 2020
Salaries 2 486 2 598
Payroll tax 455 556
Pension costs 385 242
Boa rd remunerati on 2 308 2 081
Other remunerati on 9 238
Total 5 643 5 715
Remuneration to the CEO: 2021 2020
Salary 2 486 2 598
Pension costs 385 242
Other remunerati on 9 137
Total 2 880 2 977
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* Board remuneration is decided by the General Meeting. Disbursements for 2021 are for the period up until the next General Meeting.
* Arne Austreid, Bjørg Marit Eknes and Tore Hettervik were, respectively, elected as chairman of the board, board member and employee
representative for the board in 2021.
* From AGM 2019, the employees have had one employee representative in the Board, and one deputy employee representative. The total
remuneration for these two representatives are equal to a original Board Member, and the split is originally 70/30 between the two employee
representatives, depending on the number of meetings the deputy employee representative has attended. The employee representatives
rotate on a yearly basis, from July to July.
*
Kjetil Eidesvik, Per-Åge Hauge and Ellen Hatteland were elected as member of the election committee in 2021.
* From AGM 2020, the Nomination Committee was established. The remuneration fee for the Nomination Committee in the tables is only
for the second half of 2020.
Note 9 - Pension costs and liabilities
The Company’s pension schemes meet the requirements of the Mandatory Occupational Pensions Act.
The Company has pension schemes which cover its only employee. The schemes give rights to future benefits. These depend mainly on the
number of qualifying years, salary level at retirement and the amount of the benefits from national insurance. The liabilities are covered
through an insurance company.
Remuneration to the Board: 2021 2020
Kolbein Rege 525
502
Borgny Eidesvik 279
272
Lars Eidesvik 236
230
Synne Syrri s t 279
272
John Egil Stangeland 236
230
Lauritz Eidesvik 246
230
Kristine Elisabeth Skeie
236
230
Børre Lindanger
113
40
Tore Hettervik
35,4
0
Petter Lønning
87,6
76
2 273 2 081
The Board Remuneration Annual Change 9,23 %
Other members of the Nomination Committee 2021 2020
Per Åge Hauge 15
0
Ellen Hatteland 10
0
Kjetil Eidesvik 10
0
Auditor 2021 2020
Expenses to auditor are distributed as follows:
Statutory audit 825 868
Tax advice 0 410
Other certification services 0 18
Total expenses to the auditor excl. VAT 825 1 296
2021 2020
Estimated liability 3 520 3 256
Value of pension funds 3 802 3 020
Under/over-funded 282 -236
Reconciliation of this year’s pension cost
2021 2020
Present value of this year’s pension contribution 256 225
Interest expense on the pension liability 4 5
Expected return on pension funds -3 0
Administrative costs 29 28
Changes in this year’s pension contribution incl. interest and payroll tax 0 -3
Net pension cost 286 256
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Note 10 – Long-term liabilities
Financial risk
The Company has provided guarantees for all ship mortgage debt in the consolidated subsidiaries. The guarantees involve substantial risk.
The Company has no currency risk. For more details, see the discussion of financial risk management in Note 3 to the consolidated
accounts.
Note 11 - Other operating expenses
Of which, from related parties:
Management and accounting services, MNOK 6.3 (MNOK 5.0) provided by the subsidiary Eidesvik AS.
The offices are leased from Langevåg Senter AS, a wholly-owned subsidiary of Eidesvik Invest AS, the Company’s largest shareholder.
The lease on the office runs to 2033, with 6 x 5-year options thereafter. The gross lease cost is MNOK 6.3 (MNOK 6.3).
The offices are subleased, 23% to companies related to the principal shareholder, and 69% to the subsidiary Eidesvik AS.
8% of the premises are used by the lessor itself. The item “Office lease” represents this share
Note 12 – Subsequent events
War in Ukraine
The Ukraine-conflict escalated in February and March 2022- Although this has no direct to the Group, the increased uncertainty and
volatility in the global economy will have an indirect impact. The magnitude and duration of this, is not possible to predict.
The following economic and actuarial assumptions form the basis of the calculation:
2021 2020
Di scount rate 1,90 % 1,70 %
Return on pension assets 1,90 % 1,
70 %
Wage growth
2,75 %
2,25 %
Pension adjustment 0,00 % 0,00 %
G adjustment 2,50 % 2,
00 %
2 021
2020
Management and accounting 6 325 5 000
Investor relations cos ts 531 445
Statutory audit 934 858
Consultant/legal advice 766 204
Office lease 538 524
Margin reinvoice office lease -1 001 -1 162
Other reinvoices -203 -632
Other expenses 647 1 058
Total other operating expenses 8 538 6 295
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Appendix 1 – Alternative performance measures definitions
The Group’s financial information is prepared in accordance with international financial reporting standards (IFRS). In addition, the Group
discloses alternative performance measures as a supplement to the financial statement prepared in accordance with IFRS. Such performance
measures are used to provide better insight into the operating performance, financing and future prospects of the Group and are frequently
used by securities analysts, investors and other interested parties.
The definitions of these measures are as follows:
• Contract coverage: Number of future sold days compared with total actual available days (incl. vessels in layup), excluding
options.
• Backlog: Sum of undiscounted revenue related to secured contracts in the future.
• Utilization: Actual days with revenue divided by total actual available days.
• Equity Ratio: Equity divided by total assets
• Net interest bearing debt: Interest bearing debt less current and non-current interest bearing receivables and cash and cash
equivalents. The use of term “net debt” does not necessarily mean cash included in the calculation are available to settle
debt if included in the term. Reference is made to Note 12.
• EBITDA: Operating result (earnings) before depreciation, impairment, amortisation, net financial costs and taxes is a key
financial parameter. The term is useful for assessing the profitability of operations, as it is based on variable costs and
excludes depreciation, impairment and amortised costs related to investments. EBITDA is also important in evaluating
performance relative to competitors. See table below for matching to the accounts.
• EBIT: Operating result (earnings) before net financial costs and taxes. See table below for matching to the accounts.
• Working capital: Current assets less short-term liabilities.
• Minimum market value clause: Booked value of an asset shall not be lower than a given ratio compared to outstanding debt
on the same asset.
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Eidesvik Offshore ASA
4
Eidesvik Offshore ASA
Norway
+47 53 44 80 00
office@eidesvik.no
www.eidesvik.no
Annual Report 2021
Eidesvik Offshore ASA