| | |
| | |
| | |
Salaries and wages including holiday allowance | | |
Social security contributions | | |
| | |
| | |
| | |
| | |
Total compensation to key management personnel | | |
services to the auditor.
| | | | | | |
| | | |
Amounts in NOK million (excl. VAT) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Climate Risk
Aker Solutions delivers integrated solutions, products, and services to the global
energy industry. We enable low-carbon oil and gas production and develop
renewable solutions to meet future energy needs. The oil and gas industry has
been identified as high risk by the Task Force on Climate-Related Financial
Disclosures (TCFD), and Aker Solutions has conducted a climate-related
scenario analysis in order to improve company strategy resilience.
Scenario analysis
Together with an external consulting partner, Aker Solutions has developed
three customized climate scenarios tailored to consider our full value chain,
titled Net Zero 2050 (1.5\u00b0C), Delayed Transition (2\u00b0C), and Hot House World
(+3\u00b0C). The Net Zero scenario tests for immediate transition risk and low
physical risk, the Delayed Transition scenario tests for delayed and high
transition risk, and the Hot House World scenario tests for severe physical risk.
As a part of the scenario analysis, short term, medium term, and long term was
defined as 2025, 2030, and 2050 respectively. A workshop was held with key
personnel in order to assess the climate scenarios with risks and opportunities,
including financial materiality and potential impact on our business model and
strategy. Aker Solutions identified three material climate-related risks and two
climate-related opportunities as a result of the scenario analysis:
\u25aaRisk 1: Declining investment in upstream oil and gas in core markets
\u25aaRisk 2: Attraction and retention of talent
\u25aaRisk 3: Impact on supply chain and facilities due to extreme weather
\u25aaOpportunity 1: Increase competitiveness in oil and gas through
decarbonization solutions and services
\u25aaOpportunity 2: Revenue diversification into markets supported by the energy
transition
Environmental objectives
Aker Solutions has an ambition that projects within renewable and transitional
energy solutions will represent one third of our total revenues in 2025, and two
thirds of total revenue by 2030. Furthermore, we are committed to reducing our
emissions with 50 percent by 20301. Our goal is to be net zero by 2050.
1)Scope 1 and 2 emissions with 2019 as a baseline.
Effects on Aker Solutions\u2019 Financial Statements
In the net zero 2050 scenario, demand for oil and gas falls to levels that do not
necessitate new oil and gas field developments beyond those already approved.
However, investment in existing fields remains. In all three scenarios, the
demand for North Sea oil and gas supply decreases. The energy transition may
curtail the expected useful lives of oil and gas related assets thereby
accelerating depreciation charges. Our assets related to oil and gas are likely to
be fully depreciated within the next 10-15 years and projects related to oil and
gas will be a part of Aker Solutions\u2019 business activities over this period. Aker
Solutions will be engaged in traditional oil and gas projects and will also be
engaged in projects relating to decarbonization solutions and services for
existing platforms. Therefore, Aker Solutions does not expect any changes to
the useful lives of our property, plant, and equipment. Assessment of effect on
useful lives is not considered to be a significant accounting judgment or
estimate. We note that assessment of useful lives of future capital expenditure
may be different, and local climate changes in the future may affect useful lives
of certain assets.
Following the climate-related scenario analysis and workshop, both risks and
opportunities related to the energy transition are identified. The different
scenarios and risks that are assessed are not considered to entail significant
changes in the market or regulatory environment in which Aker Solutions
operates in the short or medium term. There are no significant changes to our
plans for our assets following our emission or revenue transition targets. We
have currently not identified any risk factors related to climate-change that will
lead to material reductions in recoverable amounts of assets.
Under all three climate scenarios we expect an increase in the frequency and
intensity of extreme weather events. This expectation is not assessed to lead to
any effects on expected useful economic life of property, plant and equipment
per 2022, and no assets have been affected by extreme weather events during
the year.
There has not been identified any material impacts on judgments and estimates
in the 2022 financial report. Aker Solutions has considered the impact of climate
change on going concern and capital expenditure commitments. While there are
no identified immediate or short-term impacts from climate change, Aker
Solutions is aware of the ever-changing risks and opportunities related to
climate change. We will regularly assess these risks against judgments and
estimates made in preparation of the group\u2019s financial statements. Subsequent Events
Financing and liquidity
Bond buyback
On February 14, 2023, the issuer Aker Solutions ASA invited holders of its
outstanding NOK 1,000 million senior unsecured floating rate bonds due June
2024 (ISIN NO0010853286) to tender any and all of their bonds for purchase by
the issuer for cash at a purchase price of 102 percent.
Valid tenders in an aggregate nominal amount of NOK 477 million was accepted.
Following completion of the buy-back, the Issuer holds bonds for a total nominal
amount of NOK 563 million corresponding to 56 percent of the total outstanding
nominal amount.
Revolving Credit Facility
Aker Solutions ASA has signed a new five year NOK 3,000 million multi-currency
Revolving Credit Facility (RCF) dated January 30, 2023, with a syndicate of 10
banks. The new facility replaces the NOK 5,000 million RCF dated March 13,
2018, with maturity March 13, 2023.
Changes in ownership
Aker Solutions has entered into an agreement to acquire all minority
shareholdings (10 percent) in Aker Solutions Ghana Ltd in February 2023. The
transaction is expected to be completed by December 31, 2023. The transaction
is completed as a preparation for the contribution of the subsea business into
the Joint Venture with SLB and Subsea 7.
Property, Plant and Equipment",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-345": {
"value": "Aker Solutions",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-346": {
"value": "The company had about 15,000 own employees and was present in 20 countries at the end of 2022. The main office is in Fornebu, Norway and the parent company Aker Solutions ASA is listed on the Oslo Stock Exchange under the ticker AKSO. The consolidated financial statements in this report include the financial performance and position of the company and its subsidiaries collectively referred to as \u201cthe group\u201d or \u201cthe company\u201d and separately as group companies.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-347": {
"value": "Norway",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-348": {
"value": "Norway",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-349": {
"value": "Aker Solutions ASA",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-350": {
"value": "ASA",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-351": {
"value": "Basis of Preparation
Statement of Compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as approved by the European
Union, their interpretations adopted by the International Accounting Standards
Board (IASB) and the additional requirements of the Norwegian Accounting Act as
of December 31, 2022.
The consolidated financial statements were approved by the Board of Directors
and the chief executive officer (CEO) on March 21, 2023. The consolidated
financial statements will be authorized at the Annual General Meeting on April 13,
2023. Until this date the Board of Directors has the authority to amend the
financial statements.
Basis of Measurement
The consolidated balance sheet has been prepared on the historical cost basis
except for certain financial assets and liabilities as presented in note 25 measured
at fair value on each reporting date. The financial information presented in
Norwegian Kroner (NOK) has been rounded to the nearest million (NOK million),
therefore the subtotals and totals in some tables may not equal the sum of the
amounts shown.
Consolidation
The consolidated financial statements comprise the parent company Aker
Solutions ASA and its subsidiaries. Intra-group balances and transactions, and any
unrealized gains and losses or income and expenses arising from intra-group
transactions, are eliminated in the consolidated financial statements.
Translation of foreign currency
The consolidated financial statements are presented in Norwegian kroner (NOK).
Assets and liabilities of subsidiaries that have a different functional currency are
translated to NOK using the exchange rate on the balance sheet date. Income and
expenses are translated using the\u00a0 average exchange rate for the year, calculated
on the basis of 12 monthly rates. Foreign exchange differences arising from these
translations are recognized in other comprehensive income, and presented as a
separate component in equity (translation reserve). The translation differences are
reclassified to the income statement upon disposal or liquidation of the related
operations. Exchange differences arising from non-current monetary receivable or
payable by a foreign operation where settlement is neither planned nor likely in
the foreseeable future, forms part of the net investment in that entity and are also
recognized in other comprehensive income.
Judgments and Estimates
The preparation of consolidated financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions each
reporting period that affect the income statement and balance sheet. The
accounting estimates will by definition seldom precisely match actual results. The
main areas where judgments and estimates have been made are described in each
of the following notes:
\u25fcNote 9 Income Tax
\u25fcNote 10 Property, Plant and Equipment
\u25fcNote 11 Intangible Assets and Goodwill
\u25fcNote 12 Impairment of Assets
\u25fcNote 13 Inventories
\u25fcNote 14 Trade and Other Receivables
\u25fcNote 18 Leases and Investment Property
\u25fcNote 19 Pension Obligations
\u25fcNote 20 Provisions and Contingent Liabilities
\u25fcNote 28 Business Combinations
The main area where significant judgment has been made is described in:
\u25fcNote 3 Revenue
New or Changed Financial Reporting Principles
Amendments to standards and interpretations that have become effective in 2022
has not had a\u00a0 material impact on the consolidated financial statements, nor are
any material changes expected.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-352": {
"value": "
Statement of Compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as approved by the European
Union, their interpretations adopted by the International Accounting Standards
Board (IASB) and the additional requirements of the Norwegian Accounting Act as
of December 31, 2022.
",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-353": {
"value": "2022-12-31",
"dimensions": {
"concept": "ifrs-full:DateOfEndOfReportingPeriod2013",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-354": {
"value": "
Consolidation
The consolidated financial statements comprise the parent company Aker
Solutions ASA and its subsidiaries. Intra-group balances and transactions, and any
unrealized gains and losses or income and expenses arising from intra-group
transactions, are eliminated in the consolidated financial statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-355": {
"value": "
Translation of foreign currency
The consolidated financial statements are presented in Norwegian kroner (NOK).
Assets and liabilities of subsidiaries that have a different functional currency are
translated to NOK using the exchange rate on the balance sheet date. Income and
expenses are translated using the\u00a0 average exchange rate for the year, calculated
on the basis of 12 monthly rates. Foreign exchange differences arising from these
translations are recognized in other comprehensive income, and presented as a
separate component in equity (translation reserve). The translation differences are
reclassified to the income statement upon disposal or liquidation of the related
operations. Exchange differences arising from non-current monetary receivable or
payable by a foreign operation where settlement is neither planned nor likely in
the foreseeable future, forms part of the net investment in that entity and are also
recognized in other comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-356": {
"value": "
Translation of foreign currency
The consolidated financial statements are presented in Norwegian kroner (NOK).
Assets and liabilities of subsidiaries that have a different functional currency are
translated to NOK using the exchange rate on the balance sheet date. Income and
expenses are translated using the\u00a0 average exchange rate for the year, calculated
on the basis of 12 monthly rates. Foreign exchange differences arising from these
translations are recognized in other comprehensive income, and presented as a
separate component in equity (translation reserve). The translation differences are
reclassified to the income statement upon disposal or liquidation of the related
operations. Exchange differences arising from non-current monetary receivable or
payable by a foreign operation where settlement is neither planned nor likely in
the foreseeable future, forms part of the net investment in that entity and are also
recognized in other comprehensive income.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-357": {
"value": "
Judgments and Estimates
The preparation of consolidated financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions each
reporting period that affect the income statement and balance sheet. The
accounting estimates will by definition seldom precisely match actual results. The
main areas where judgments and estimates have been made are described in each
of the following notes:
\u25fcNote 9 Income Tax
\u25fcNote 10 Property, Plant and Equipment
\u25fcNote 11 Intangible Assets and Goodwill
\u25fcNote 12 Impairment of Assets
\u25fcNote 13 Inventories
\u25fcNote 14 Trade and Other Receivables
\u25fcNote 18 Leases and Investment Property
\u25fcNote 19 Pension Obligations
\u25fcNote 20 Provisions and Contingent Liabilities
\u25fcNote 28 Business Combinations
The main area where significant judgment has been made is described in:
\u25fcNote 3 Revenue
Judgments and Estimates
It can be challenging to estimate the expected revenue and cost in the company's
customer contracts, in particular if there are operational challenges. The most
significant judgments and estimates in the customer contracts are described
below.
Performance Obligations
Significant management judgment is sometimes required in order to identify
distinct performance obligations in customer contracts. This includes an analysis
of the customer contract to determine if the goods or services are distinct
deliveries or input to an overall promise to deliver a combined system of products
and services. As most of the contracts represent a single, combined output for the
customers, contracts will normally contain one performance obligation.
Variable Consideration
Incentive payments are integral and significant parts of contract revenue on
certain reimbursable contracts. They can also be present in lump sum contracts.
Incentive payments include key performance indicators, bonuses, target sum
mechanisms and productivity measures and can potentially both increase and
decrease revenue. Most incentives are estimated using the most likely amount.
Revenue from variable consideration is included only when it is highly probable
that the revenue will not be reversed. There is a risk that the actual payment of
incentives may differ from the estimated amount.
Liquidated Damages (LDs)
LDs are penalties for not achieving defined milestones on time. LDs are common
in construction contracts, but can also be present in service contracts. If a project
does not meet the defined milestone in a contract, a provision reducing the
transaction price is made unless it is highly probable that LD will not be imposed.
The estimated LD provision is highly judgmental. The assessment of the LD
provision is based on experience from similar LD situations in addition to client
relationship, contractual position and status on negotiations.
Total Contract Cost
The estimates of total contract cost can be judgmental and sensitive to changes.
The cost estimates can significantly impact revenue recognition for contracts
using cost progress, particularly in lump sum construction contracts. The
forecasting of total project cost depends on the ability to properly execute the
engineering and design phase, availability of skilled resources, manufacturing
capacity, productivity and quality factors, performance of subcontractors and
sometimes also weather conditions. Experience, systematic use of the project
execution model and focus on core competencies reduce, but do not eliminate,
the risk that cost estimates may change significantly.
Judgments and Estimates
The group is subject to income taxes in numerous jurisdictions, and judgment may
be involved when determining the taxable amounts. Tax authorities in different
jurisdictions may challenge calculation of taxes payable from prior periods.
Management judgment is required when assessing valuation of unused losses, tax
credits and other deferred tax assets. The recoverability is assessed by estimating
taxable profits in future years taking into consideration also expected changes in
temporary differences. The profits are compared to book value of the tax assets.
The estimate of future taxable profits is sensitive to future market development for
the projects and services of Aker Solutions. Forecasts are based on firm orders in
the backlog and identified prospects in addition to expected service revenue.
Changes in the assumptions related to the expected prospects and services can
have a significant impact on the forecasted cash flows. Economic conditions may
change and lead to a different conclusion regarding recoverability, and such
changes may affect future reporting periods.
Judgment and Estimates
Judgment is involved when determining the depreciation period and when assessing
impairment or reversal of impairment. Impairment is assessed for individual assets
and for cash generating units. The impairment testing involves judgmental
assumptions about future market development, cash flows, determination of
weighted average cost of capital (WACC), growth rate, and other assumptions that
may change over time.
Judgments and Estimates
The decision to capitalize a development program involves management
judgment. There are strict internal rules defining what qualifies for capitalization,
and the documentation of the assessment is monitored centrally. Management
makes assessment of future market opportunities, ability to successfully achieve
the desired technological solution and the time and cost it takes to develop it.
These factors may change over time.
Judgment is involved when determining the amortization period and when
assessing impairment or reversal of impairment. Impairment indicators are
assessed for individual development projects, other intangible assets, and for cash
generating units including goodwill. Impairment testing is performed when
impairment indicators have been identified. In addition, goodwill and capitalized
development programs that have not been completed are subject to an annual
impairment test. The impairment testing involves judgmental assumptions about
future market development, cash flows, determination of weighted average cost
of capital (WACC), growth rate, and other assumptions that may change over time.
Judgments and Estimates
The impairment testing of assets is by nature highly judgmental as it includes
estimates such as future market development, cash flows, determination of CGUs
and WACC, growth rate used for calculation of terminal value and other
assumptions that may change over time. In particular, future cash flows are
uncertain as they are impacted by market developments beyond Aker Solutions'
control. The oil price impacts for example the investment levels in capex and
maintenance projects by the oil companies. Carbon taxation impacts the
investment levels of carbon capture and offshore wind investments. These
external factors in turn impact the markets in which Aker Solutions operates.
Judgments and Estimates
The assessment of obsolete and slow-moving inventory in order to determine
inventory write-downs is subject to management judgment. The selling price in the
market has to be estimated, and there is a risk that the actual selling price may
turn out to be different than the amount estimated by management.
Judgments and Estimates
Judgment is involved when determining the impairment losses on receivables and
customer contract assets. The impairment is based on individual assessments of
each customer and default risk in the industry and the country in which the
customer operates. The customers of Aker Solutions are mainly large,
international energy companies with low credit risk.
Judgments and Estimates
Judgment is involved when determining impairment of the investment property.
Impairment is assessed for separable parts of leased buildings that have been or
will be vacated in the near future. The impairment is sensitive to changes in
estimated future expected sub-lease income and sub-lease period. Further,
judgment is involved when determining whether sub-lease contracts are financial
or operational, as well as when determining lease term for contracts that has
extension or termination options. Determination of the discount rate also include
judgment.
Judgments and Estimates
The present value of the pension obligations depends on a number of factors
determined on the basis of actuarial assumptions. These assumptions include
financial factors such as the discount rate, expected salary growth, inflation and
return on assets as well as demographical factors concerning mortality, employee
turnover, disability and early retirement. Assumptions about all these factors are
based on the situation at the time the assessment is made. However, it is
reasonably certain that such factors will change over long periods for which
pension calculations are made. Any changes in these assumptions will affect the
calculated pension obligations with immediate recognition in other comprehensive
income.
Judgments and Estimates
The provisions are estimated based on a number of assumptions and are highly
judgmental in nature. The various provisions with assumptions and estimation
uncertainties are discussed in the table to the right.
Judgments and Estimates
Judgment has been applied when assessing the fair value of the acquired assets
and liabilities, including weighted average cost of capital, and when determining
the amortization period for excess values. Various valuation techniques have
been used in the purchase price allocation, including a cost replacement
approach for assembled workforce and excess earnings method for customer
relationships. Management judgment is also applied when valuing contingent
considerations which are based on estimated future profits.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-358": {
"value": "Property, Plant and EquipmentProperty, Plant and Equipment
The majority of property, plant and equipment relates to subsea manufacturing
plants and service bases in Norway, Brazil, Malaysia, the US and the UK. Property,
plant and equipment also include furniture and fittings in office buildings.
Financial Reporting Principles
Property, plant and equipment (PPE) are stated at cost less accumulated
depreciation and impairment losses. Components of property, plant and equipment
with different useful lives are accounted for separately. Assets are normally
depreciated on a straight-line basis over their expected economic lives as follows:
\u25fcMachinery and equipment: 3-15 years
\u25fcBuildings: 8-30 years
\u25fcLand: No depreciation
Impairment triggers are assessed quarterly and impairment testing is performed
when triggers have been identified. Borrowing costs are capitalized as part of the
cost of the asset when significant. The cost of self-constructed assets includes the
cost of materials, direct labor, production overheads and borrowing cost.
Judgment and Estimates
Judgment is involved when determining the depreciation period and when assessing
impairment or reversal of impairment. Impairment is assessed for individual assets
and for cash generating units. The impairment testing involves judgmental
assumptions about future market development, cash flows, determination of
weighted average cost of capital (WACC), growth rate, and other assumptions that
may change over time.
Commitments
Aker Solutions has entered into contractual commitments for the acquisition of
property, plant and equipment amounting to NOK 1,552 million as of December 31,
2022, of which NOK 1,185 million expire in 2023 and NOK 367 million expire in
2024. Contractual commitments were NOK 137 million per December 31, 2021.
Property, Plant and Equipment
| | | | |
| | | | |
| | | | |
| | | | |
Balance as of December 31, 2020 | | | | |
| | | | |
Reclassification from assets under construction | | | | |
| | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
| | | | |
Acquisition of subsidiaries2 | | | | |
Reclassification from assets under construction | | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
|
Accumulated depreciation and impairment | | | |
Balance as of December 31, 2020 | | | | |
Depreciation for the year | | | | |
| | | | |
| | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
Depreciation for the year | | | | |
| | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
|
Book value as of December 31, 2021 | | | | |
Book value as of December 31, 2022 | | | | |
1)Includes NOK 82 million unpaid capital expenditure.
2)Includes NOK 34 million related to acquisition of EPE Eigedom which was later partly sold and
reclassified to equity accounted investee.
See note 12 for more information about impairment testing See note 17 for more information about PPE being held as security for borrowings See note 18 for more information about right-of-use lease assets Property, Plant and Equipment",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-359": {
"value": "
New or Changed Financial Reporting Principles
Amendments to standards and interpretations that have become effective in 2022
has not had a\u00a0 material impact on the consolidated financial statements, nor are
any material changes expected.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-360": {
"value": "Revenue
The revenue in Aker Solutions consists of large engineering, procurement and
construction (EPC) contracts within the renewables and oil and gas energy sector.
The company also has engineering contracts and frame agreements for
maintenance of various energy installations. The compensation format is both lump
sum and reimbursable, and the contracts often include various incentive
mechanisms. Project execution is a key component of all deliveries.
Financial Reporting Principles
Customer contracts are assessed using the five-step model. Only approved
customer contracts with a firm commitment are basis for revenue recognition.
Variation orders are included when they have been approved, either verbally, in
writing or implied by customary business practice. The deliveries in the contracts
are reviewed to identify distinct performance obligations. For the vast majority of
the identified performance obligations, control has been assessed to be
transferred to the customer over time as the performance obligation is satisfied.
Revenue is recognized over time using a cost based progress method, or as time
and materials are delivered to the customer. The cost progress method is
commonly used on lump sum contracts and reimbursable contracts when scope of
work is firm. The time and materials method is more commonly used for
reimbursable contracts with less firm scope. These methods are used to best
reflect the pattern of transfer of control of goods and services to the customer.
Variable considerations, such as incentive payments, are included in revenue
when they are highly probable. Expected liquidated damages (LDs) are recognized
as a reduction of revenue unless it is highly probable LDs will not be incurred. The
transaction price of performance obligations is adjusted for significant financing
components to reflect the time value of money. Financing components may exist
when the expected time period between the transfer of the promised goods and
services and the payment is more than twelve months. This assessment is
performed at the contract inception. Profit is not recognized until the outcome of
the performance obligations can be measured reliably. Contract costs are
expensed as incurred. The full loss is recognized immediately when identified on
loss-making contracts. The loss is determined based on revenue less direct cost
(i.e.labour, subcontractor and material cost) and an allocation of overhead that
relate directly to the contract or activities required to fulfil the contract.
Judgments and Estimates
It can be challenging to estimate the expected revenue and cost in the company's
customer contracts, in particular if there are operational challenges. The most
significant judgments and estimates in the customer contracts are described
below.
Performance Obligations
Significant management judgment is sometimes required in order to identify
distinct performance obligations in customer contracts. This includes an analysis
of the customer contract to determine if the goods or services are distinct
deliveries or input to an overall promise to deliver a combined system of products
and services. As most of the contracts represent a single, combined output for the
customers, contracts will normally contain one performance obligation.
Variable Consideration
Incentive payments are integral and significant parts of contract revenue on
certain reimbursable contracts. They can also be present in lump sum contracts.
Incentive payments include key performance indicators, bonuses, target sum
mechanisms and productivity measures and can potentially both increase and
decrease revenue. Most incentives are estimated using the most likely amount.
Revenue from variable consideration is included only when it is highly probable
that the revenue will not be reversed. There is a risk that the actual payment of
incentives may differ from the estimated amount.
Liquidated Damages (LDs)
LDs are penalties for not achieving defined milestones on time. LDs are common
in construction contracts, but can also be present in service contracts. If a project
does not meet the defined milestone in a contract, a provision reducing the
transaction price is made unless it is highly probable that LD will not be imposed.
The estimated LD provision is highly judgmental. The assessment of the LD
provision is based on experience from similar LD situations in addition to client
relationship, contractual position and status on negotiations.
Total Contract Cost
The estimates of total contract cost can be judgmental and sensitive to changes.
The cost estimates can significantly impact revenue recognition for contracts
using cost progress, particularly in lump sum construction contracts. The
forecasting of total project cost depends on the ability to properly execute the
engineering and design phase, availability of skilled resources, manufacturing
capacity, productivity and quality factors, performance of subcontractors and
sometimes also weather conditions. Experience, systematic use of the project
execution model and focus on core competencies reduce, but do not eliminate,
the risk that cost estimates may change significantly.
Different Types of Customer Contracts
The revenue in Aker Solutions consists of various contracts for the engineering,
procurement, construction, modification and maintenance within the oil and gas
and renewables energy sector.
Renewables and Field Development
Deliveries include foundations for carbon capture, offshore wind and traditional oil
and gas installations, topside modules, substructures, floating production units
(FPSOs), decommissioning, hook-up services and marine operations. Most
contracts last between three to five years. The contracts include a combination of
FEED, engineering, procurement, construction and installation (EPCI) of
equipment. Each contract is usually assessed as one performance obligation as
the deliveries are combined in one output. The contracts may be lump sum,
reimbursable, target cost or a combination. The contracts regularly include
incentives for achievement of key performance indicators (KPIs) or penalties for
late delivery. Payment terms are normally 30-45 days according to predefined
milestones or monthly billing. Revenue is recognized over time using a cost
progress method. Estimates of total contract revenue and cost may require
management judgment. No profit is recognized unless the outcome can be
measured reliably, usually at 20 percent progress.
The following table shows a selection of the largest projects in the segment:
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Northern Lights, Carbon Storage | | | |
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Electrification, Maintenance and Modification Contracts
Deliveries include electrification, maintenance, modification and hook-up
contracts for oil and gas installations. The contracts are mainly reimbursable, but
can also include lump sum elements. The majority of the contracts have incentive
mechanisms including bonuses, target sum mechanisms, key performance
indicators and productivity measures. Each contract or purchase order under a
frame agreement (FA) is usually assessed as a separate performance obligation.
The contracts usually last from one to five years. Revenue is recognized over time
using a cost progress method or revenue is recognized according to delivered
time and materials. Payment terms are normally 30 days after time and materials
are delivered.
The following table shows a selection of the largest projects in the segment:
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| | | |
| | | |
Aker BP EMM / Modific. Alliance\u00a0 (FA) | | | |
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Troll West, electrification | | | |
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ConocoPhillips M&M\u00a0 (FA) | | | |
Tommeliten Alpha, topside modification | | | |
Johan Sverdrup Hook Up, phase 2 | | | |
Shell Modification Contract (FA) | | | |
The following tables show the revenue from customer contracts by type. Revenue
by country is shown in note 4 (operating segments).
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Renewables and field development | | |
Electrification, modifications and maintenance | | |
Subsea construction contracts | | |
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Total revenue from customer contracts | | |
Timing of Revenue
The satisfaction of performance obligations in customer contracts vary from a few
months to as long as five years. The order backlog as of December\u00a031, 2022 was
NOK 97.3 billion, compared to NOK 49.2 billion the year before. The table below
shows the expected timing of future revenue for ongoing and not yet started
performance obligations at year-end.
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Backlog phasing of ongoing performance obligations | | | | | |
Backlog phasing of performance obligations not yet started | | | | | |
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Aker Solutions had a high order intake in fourth quarter, and secured multiple
contracts with Aker BP in December. These contracts were expected and the
company was ready to initiate supplier purchase orders and working on internal
scope before year end. As work on these projects was started in 2022, some
revenues related to these projects are recognised in 2022 and the backlog
phasing are presented as ongoing performance obligations in the table above.
Revenue recognized in 2022 for performance obligations satisfied in prior years
was NOK 137 million, compared to NOK -64 million the year before. The negative
amount in 2021 included provisions for penalties for late deliveries.
Contract Balances
The company has recognized the following assets and liabilities related to
contracts with customers:
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Customer contract liabilities | | |
at Aker Solutions. The accounting principles of the reporting segments are the
same as described in this annual report, except for hedge accounting. When
contract revenues and contract costs are denominated in a foreign currency, the
subsidiary hedges the exposure against corporate treasury. Hedge accounting is
applied independently of whether the hedge qualifies for hedge accounting in
accordance with IFRS. The correction of the non-qualifying hedges to secure that
the consolidated financial statements are in accordance with IFRS is made as an
adjustment at the corporate level and reported in the Other segment. This means
that the group's segment reporting reflects all hedges as qualifying even though
they may not qualify according to IFRS. Transactions between the segments are
based on negotiations between the parties, and management believes that the
agreed prices are a fair approximation to arms length prices. Transactions
between segments are eliminated upon consolidation. Aker Solutions has a central
treasury function. Financing of the various segments does not necessarily reflect
the financial strength of the individual segments. Financial items are therefore
presented only for the group as a whole.
Renewables and Field Development
The Renewables and Field Development segment pursues and executes projects
within offshore wind power, green onshore as well as the market for traditional oil
and gas platforms, onshore facilities, decommissioning and marine operations.
The objective of the segment is to add value by improving efficiency and reducing
carbon footprint in oil and gas deliveries. Furthermore accelerating the transition
to renewables and become a key supplier to renewables and carbon capture
solutions by building execution and collaboration through a digital value chain.
The Renewables and Field Development reporting segment includes three
operating segments in Aker Solutions that are organized separately and provide
individual management reporting to the CEO. The following three operating
segments are included: (1) Engineering, (2) Renewables and (3) Topside &
Facilities. The operating segments have been aggregated in the external reporting
as they share resources and production capacity, and engineering is often an
integrated scope of renewables and topside customer contracts. The operating
segments have similar commercial risks, they operate in the same economic
climate and have the same markets and customers. They also have similar
operational characteristics and use the same type of KPI's to monitor the
business.
Electrification, Maintenance and Modifications
The Electrification, Maintenance and Modification segment provides optimized
field life solutions driven by decarbonization and environmentally sound offerings
both for offshore and onshore facilities. The segment provides a full-range
offering of maintenance and modification services including electrification
projects, digitally enabled asset integrity services, hook-up and installation
services as well as late-life and decommissioning activities. The segment has a
global presence across regions with main execution in Norway, UK, Canada,
Brazil, Brunei and Angola.
Subsea
The Subsea segment provides market-leading intelligent subsea systems,
products, services and low-carbon solutions, used in oil and gas production. The
segment provides design, engineering, procurement, manufacturing, fabrication,
installation, and life-of-field services for subsea systems and field infrastructure.
The broad product offering includes, but is not limited to, trees, controls systems,
umbilicals, intervention- and workover systems, manifolds, tie-in and connection
systems, pumps, and market-leading subsea gas compression and boosting
systems. The segment also provides extensive life-of-field services including
installation and commissioning, conditional monitoring, inspection, maintenance,
repair, upgrades and spares supply, related to subsea equipment and
infrastructure. The segment has a global delivery model with service bases across
all main offshore oil and gas basins globally, and with main manufacturing hubs for
subsea equipment in Brazil, Malaysia, Norway and UK. The subsea umbilicals are
being manufactured in Norway and the United States.
Other
The Other segment includes unallocated corporate costs, the recently acquired
Rainpower business and the effect of hedges not qualifying for hedge accounting.
The Other segment also includes impairments of right-of-use lease assets for
certain leases, as certain lease decisions are taken by the corporate center. The
number of employees in corporate functions and finance support functions are
reported in the Other segment while the related cost is allocated to the segments.
Note 4 continues on next page
Note 4 Segments cont.
Segment Performance 2022
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| | Renewables & Field Development | Electrification, Maintenance & Modifications | | | | | |
| | | | | | | | |
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Revenue from customer contracts | | | | | | | | |
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Operating income before depreciation, amortization and impairment | | | | | | | | |
Depreciation and amortization | | | | | | | | |
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Property, plant and equipment | | | | | | | | |
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Current operating liabilities | | | | | | | | |
Net current operating assets | | | | | | | | |
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Cash flow from operating activities | | | | | | | | |
Acquisition of property, plant and equipment | | | | | | | | |
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Note 4 continues on next page
Note 4 Segments cont.
Segment Performance 2021
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| | Renewables & Field Development | Electrification, Maintenance & Modifications | | | | | |
| | | | | | | | |
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Revenue from customer contracts | | | | | | | | |
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Operating income before depreciation, amortization and impairment | | | | | | | | |
Depreciation and amortization | | | | | | | | |
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Property, plant and equipment | | | | | | | | |
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Current operating liabilities | | | | | | | | |
Net current operating assets | | | | | | | | |
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Cash flow from operating activities | | | | | | | | |
Acquisition of property, plant and equipment | | | | | | | | |
| | | | | | | | |
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Note 4 continues on next page
Note 4 Segments cont.
Reconciliation of Information on Reporting Segments to IFRS
Measures
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Derivative financial instruments | | |
Current interest-bearing receivables | | |
Non-current interest-bearing receivables | | |
| | |
Cash and cash equivalents | | |
| | |
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Total operating liabilities | | |
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Non-current lease liabilities | | |
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Other non-current liabilities | | |
| | |
Current lease liabilities | | |
Derivative financial instruments | | |
| | |
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| | |
at Aker Solutions. The accounting principles of the reporting segments are the
same as described in this annual report, except for hedge accounting. When
contract revenues and contract costs are denominated in a foreign currency, the
subsidiary hedges the exposure against corporate treasury. Hedge accounting is
applied independently of whether the hedge qualifies for hedge accounting in
accordance with IFRS. The correction of the non-qualifying hedges to secure that
the consolidated financial statements are in accordance with IFRS is made as an
adjustment at the corporate level and reported in the Other segment. This means
that the group's segment reporting reflects all hedges as qualifying even though
they may not qualify according to IFRS. Transactions between the segments are
based on negotiations between the parties, and management believes that the
agreed prices are a fair approximation to arms length prices. Transactions
between segments are eliminated upon consolidation. Aker Solutions has a central
treasury function. Financing of the various segments does not necessarily reflect
the financial strength of the individual segments. Financial items are therefore
presented only for the group as a whole.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-365": {
"value": "Personnel Expenses
Financial Reporting Principles
Personnel expenses include wages, salaries, social security contributions, sick
leave, parental leave and other employee benefits. The benefits are recognized in
the year in which the associated services are rendered by the employees.
Personnel Expenses
| | |
| | |
| | |
Salaries and wages including holiday allowance | | |
Social security contribution | | |
| | |
| | |
| | |
| | |
Total number of employees as of December 31 | | |
Average number of employees | | |
Employee Share Purchase Program
In 2022, 1,313 employees participated in the share purchase programs in Aker
Solutions. Employees received a 25 percent reduction of cost price limited to a
total of NOK 7,500. Employees could sign up for shares up to a maximum amount
of NOK 60,000 and management an additional amount of maximum 20 percent of
annual salary. Employees that are still working in the company three years after
completion of the program will receive one bonus share for every two shares still
held by the employee. Costs related to the bonus shares are expensed over the
vesting period. Aker Solutions expensed a total of NOK 8 million in 2022 related
to share purchase programs (NOK 12 million in 2021). There were no loans to
employees as of 31 December, 2022, same as in the previous year.
See note 19 for more information about the pension cost and obligations ",
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"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-366": {
"value": "
Financial Reporting Principles
Personnel expenses include wages, salaries, social security contributions, sick
leave, parental leave and other employee benefits. The benefits are recognized in
the year in which the associated services are rendered by the employees.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-367": {
"value": "
Employee Share Purchase Program
In 2022, 1,313 employees participated in the share purchase programs in Aker
Solutions. Employees received a 25 percent reduction of cost price limited to a
total of NOK 7,500. Employees could sign up for shares up to a maximum amount
of NOK 60,000 and management an additional amount of maximum 20 percent of
annual salary. Employees that are still working in the company three years after
completion of the program will receive one bonus share for every two shares still
held by the employee. Costs related to the bonus shares are expensed over the
vesting period. Aker Solutions expensed a total of NOK 8 million in 2022 related
to share purchase programs (NOK 12 million in 2021). There were no loans to
employees as of 31 December, 2022, same as in the previous year.
See note 19 for more information about the pension cost and obligations Pension Obligations
Aker Solutions operates several pension plans around the world. The most
common type of plan is the defined contribution plan, where Aker Solutions makes
contributions to the employee's individual pension account. Aker Solutions also
has a closed defined benefit plan where the impact is gradually reduced.
Financial Reporting Principles
Defined Contribution Plans
A defined contribution plan is a type of retirement plan where the employer makes
contributions on a regular basis to the employee\u2019s individual pension account. The
benefits received by the employee are based on the employer contributions and
gains or losses from investing the capital. Contributions to defined contribution
pension plans are recognized as an expense in the income statement as incurred.
Defined Benefit Plans
A defined benefit plan is a type of pension plan where the employer promises an
annual pension on retirement based on a percentage of the salary upon retirement
and the employee's earnings history, years of service and age. The calculation of
defined benefit obligations is performed annually by a qualified actuary using the
projected unit credit method.
The defined benefit obligation is calculated separately for each plan by
discounting the estimated amount of future benefit that employees have earned in
the current and prior periods and deducting the fair value of any plan assets. The
change of the defined benefit obligation as a result of the change of assumptions
(actuarial gains and losses) and the return on plan assets are recognized
immediately in other comprehensive income. Net interest expense and other
expenses related to defined benefit plans are recognized in the income statement.
When the benefits of a plan are changed, settled or when a plan is curtailed, the
change relating to past service or the gain or loss on curtailment or settlement is
recognized immediately in the income statement.
Judgments and Estimates
The present value of the pension obligations depends on a number of factors
determined on the basis of actuarial assumptions. These assumptions include
financial factors such as the discount rate, expected salary growth, inflation and
return on assets as well as demographical factors concerning mortality, employee
turnover, disability and early retirement. Assumptions about all these factors are
based on the situation at the time the assessment is made. However, it is
reasonably certain that such factors will change over long periods for which
pension calculations are made. Any changes in these assumptions will affect the
calculated pension obligations with immediate recognition in other comprehensive
income.
Pension Plans in Norway
The main pension arrangement in Norway is a general pension plan organized by
the Norwegian state providing a basic pension entitlement to all taxpayers. The
additional pension plans which all Norwegian employers are obliged to provide
according to current legislation, represent limited additional pension entitlements.
The occupational plans in Aker Solutions in Norway are described below.
Defined Contribution Plans
All employees in Norway are offered participation in a defined contribution plan.
The annual contributions, premium and administration cost expensed for the
Norwegian plans in 2022 were NOK 407 million, compared to NOK 340 million in
2021. The estimated contribution, premium and administration cost expected to
be paid in 2023 is NOK 465 million.
Defined Benefit Plans
The defined benefit plans at the Norwegian companies in Aker Solutions are split
between funded and unfunded plans. The plans are organized in Aker
Pensjonskasse. Aker Solutions companies in Norway closed the defined benefit
plans in 2008. Employees who were 58 years or older in 2008 are still members of
the closed defined benefit plan. This is a funded plan and represents the funded
pension liability reported in the tables below. Aker Solutions also has various
unfunded early retirement plans and executive pension plans that are partially
closed for new members. The estimated premium cost expected to be paid during
2023 is NOK 63 million. The liability is calculated using a projected unit credit
method.
Note 19 continues on next page
Note 19 Pension Obligations cont.
Compensation Plans
All employees in 2008 who had a calculated loss of more than NOK 1,000 per year
upon transition to the defined contribution plan were offered compensation. The
compensation amount will be adjusted annually in accordance with the adjustment
of the employees' pensionable income, and accrued interest according to market
interest. If the employee leaves the company voluntarily before the age of 67
years, the accrued compensation amount will be paid out. The compensation plan
is an unfunded plan, and is included in the unfunded pension liability reported in
the tables below. The liability is equal to the compensation balance.
Tariff Based Pension Agreement (AFP)
Employees in Norway have a tariff based lifelong retirement arrangement (AFP)
organized by the main labor unions and the Norwegian state. The pension can be
withdrawn from the age of 62. The information required to estimate the pension
obligation from this defined benefit plan is not available from the plan
administrator. Aker Solutions therefore currently accounts for the plan as if it was
a defined contribution plan. The company will account for it as a defined benefit
plan if information becomes available from the plan administrator. The annual
contributions expensed in 2022 were NOK 136 million, compared to NOK 116
million in 2021. The estimated contribution expected to be paid in 2023 is NOK
141 million.
Pension Plans Outside Norway
Pension plans outside Norway are mainly defined contribution plans. The annual
contributions expensed for plans outside Norway in 2022 were NOK 140 million,
compared to NOK 101 million in 2021. The estimated contributions expected to be
paid in 2023 is NOK 161 million to the plans outside Norway.
Total Pension Cost
| | |
| | |
| | |
| | |
Defined contribution plans | | |
| | |
The net liability disclosed above relates to funded and unfunded plans as follows:
| | | | | | | | |
| Present value of obligation | Fair value of plan assets | | Net defined benefit liability |
| | | | | | | | |
| | | | | | | | |
Net defined benefit liability funded plan | | | | | | | | |
Net defined benefit liability unfunded plans | | | | | | | | |
Balance as of December 31 | | | | | | | | |
Note 19 continues on next page
Note 19 Pension Obligations cont.
Assets in the Defined Benefit Plan
| | |
| | |
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| | |
| | |
Total plan assets at fair value | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-369": {
"value": "Financial Income and Expenses
Financial Reporting Principles
Interest income and expenses include effects from using the effective interest rate
method where fees, interest paid, transaction costs and other premiums are
deferred and amortized over the life of the instrument. Interest income from lease
receivables and interest expense from lease liabilities are included.
Foreign exchange gains and losses arise upon settlement of monetary assets and
liabilities that are not hedged. Translation of monetary assets and liabilities
denominated in foreign currencies related to operating activities such as trade
receivables and payables are included in operating expenses before depreciation,
amortization and impairment. However, the currency gains and losses are offset
by the effects from hedging derivatives. Translation of operational monetary
assets and liabilities in countries with hyperinflationary or non-convertible
currencies are presented as financial items. Translation of assets and liabilities
related to general financing of the entity are included as financial income and
expenses. Foreign exchange gains and losses also include effects from translating
monetary assets and liabilities denominated in foreign currencies at the balance
sheet date. The profit or loss on foreign exchange forward contracts include
effects from derivatives that do not qualify for hedge accounting, embedded
derivatives and the ineffective portion of qualifying hedges.
Financial Income and Expenses
| | |
| | |
| | |
Interest income from lease receivables | | |
| | |
| | |
| | |
Interest expense on lease liability | | |
Interest expense on financial liabilities measured at amortized cost | | |
Interest expense on financial liabilities measured at fair value | | |
| | |
| | |
Net foreign exchange gain (loss) | | |
Profit (loss) on foreign currency forward contracts | | |
| | |
| | |
Net other financial items | | |
| | |
| | |
Recoverability of deferred tax assets has been subject to assessment following
market volatility and outlook in the jurisdictions where we operate. As a result
deferred tax assets related to net operating losses and tax credits has been
written down by NOK 64 million in 2022.
Taxes in OCI and Equity
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| | |
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Cash flow hedges, deferred tax | | |
Remeasurement of defined benefit pension plans | | |
Income taxes included in OCI | | |
Note 9 continues on next page
Note 9 Income Tax cont.
Effective Tax Rate
The table below reconciles the tax expense as if the Norwegian tax rate of 22 percent was applied.
| | | | |
| | |
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Income tax when applying Norwegian tax rate of 22 percent | | | | |
| | | | |
| | | | |
Effect of different tax rates in other jurisdictions | | | | |
| | | | |
Effect of withholding tax | | | | |
Current tax adjustments related to prior years | | | | |
Deferred tax adjustments related to prior years | | | | |
Previously unrecognized tax losses used to reduce payable tax | | | | |
Write down of deferred tax assets | | | | |
Impact of change in tax rate | | | | |
| | | | |
Income tax and effective tax rate | | | | |
Note 9 continues on next page
Note 9 Income Tax cont.
Deferred Tax Assets and Liabilities
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Property, plant and equipment | | | | | | |
| | | | | | |
Projects under construction | | | | | | |
| | | | | | |
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1)Development cost funded by third-party totalled NOK 55 million in 2022 (NOK 54 million in 2021).
2)Includes NOK 12 million of unpaid capital expenditure.
| | | | |
| | | | |
| | | | |
Accumulated depreciation and impairment | | | |
Balance as of December 31, 2020 | | | | |
Amortization for the year | | | | |
| | | | |
Disposal of subsidiaries and assets | | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
Amortization for the year | | | | |
| | | | |
Disposal of subsidiaries and assets | | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
| | | | |
Book value as of December 31, 2021 | | | | |
Book value as of December 31, 2022 | | | | |
control. The oil price impacts for example the investment levels in capex and
maintenance projects by the oil companies. Carbon taxation impacts the
investment levels of carbon capture and offshore wind investments. These
external factors in turn impact the markets in which Aker Solutions operates.
Cash Flow Assumptions
When estimating future cash flows, five years of cash flows for the period 2023 to
2027 have been used as basis. The forecasted cash flows are based on firm
orders in the backlog and identified prospects in addition to expected service
revenue. ROU lease assets are included in the impairment test. Management has
defined the growth rate, post-tax discount rate and estimated future cash flows as
the most sensitive assessment in the value-in-use calculation. The forecasted
cash flows used in the impairment tests reflect organic growth only. Other
parameters in the assessment are the predicted long-term oil price per barrel, mix
of projects and services, level of operating expenses and capital expenditure for
maintenance of the asset portfolio.
Discount and Growth Rate
Estimated future cash flows are discounted to their present value using the
weighted average cost of capital (WACC), which is a post-tax discount rate. The
WACC is based on a risk-free interest rate, a risk premium and average beta
values of peers within each market. A separate WACC has been calculated for
each of the CGUs taken into consideration country specific risk premiums and
long-term risk free interest rates. A growth rate has been applied to calculate
terminal value after the five-year period.
Note 12 continues on next page
Note 12 Impairment of Assets cont.
Impairment Testing of Individual Assets and CGUs
The table below summarizes the impairments recognized per group of assets and per segment.
| | | | | | | | | | |
| Renewables & Field Development | Electrification, Maintenance & Modifications | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Impairment of intangible assets | | | | | | | | | | |
Impairment of property, plant and equipment | | | | | | | | | | |
Impairment of right-of-use assets | | | | | | | | | | |
| | | | | | | | | | |
The WACC used in the impairment testing of goodwill is shown below.
| | | | |
| | |
| | | | |
| | | | |
| | | | |
| | | | |
Electrification, modifications and maintenance | | | | |
| | | | |
| | | | |
Aging of Trade Receivables
| | |
| | |
| | |
| | |
| | |
| | |
Past due 91 days to one year | | |
Past due more than one year | | |
| | |
The war in Ukraine and the COVID-19 pandemic have generally increased the
global credit risk. In Aker Solutions, the credit risk has not changed significantly,
as the majority of customers are large, international energy companies.
See note 3 for more information about customer contract assets and trade receivables
See note 22 for more information about credit risk and the ECL method See note 25 for more information about financial assets and liabilities See note 30 for more information about receivables to related parties ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-389": {
"value": "
Financial Reporting Principles
Trade and other receivables are recognized at the original invoiced amount, less
impairment losses. The invoiced amount is considered to be approximately equal
to the value derived if the amortized cost method would have been used.
Impairment losses are estimated based on the expected credit loss method (ECL)
for trade receivables, contract assets and other receivables.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-390": {
"value": "Cash and Cash Equivalents
Financial Reporting Principles
Cash and cash equivalents include cash on hand, demand deposits in banks and
other short-term highly liquid deposits with original maturity of three months or
less.
Cash and Cash Equivalents
| | |
| | |
| | |
| | |
Interest-bearing deposits | | |
Non interest-bearing deposits and other | | |
| | |
Hedging Reserve
The hedge reserve mainly relates to effects of currency cash flow hedges that
are not yet recognized in the income statement. The hedging effects are
recognized in the income statement according to the progress of the underlying
customer contract.
Translation Reserve
The currency translation reserve includes foreign exchange differences arising
from the translation of the subsidiaries into the presentation currency of the
consolidated financial statements.
Fair Value Reserve
The fair value reserve includes fair value adjustments of equity securities at fair
value through other comprehensive income (FVOCI).
See note 2 for more information about currency translation of subsidiaries See note 27 for more information about equity securities in the fair value reserve ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-393": {
"value": "
Treasury Shares
The group purchases its own shares to meet obligations under employee share
purchase programs and variable pay programs for management. Treasury shares
are not included in the weighted average number of ordinary shares. Earnings
per share have been calculated based on an average of 486,899,547 shares
outstanding December 31, 2022. Consideration for treasury shares sold in 2022
was NOK 71 million.
| |
| |
| |
Treasury shares as of December 31, 2021 | |
| |
Treasury shares as of December 31, 2022 | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-394": {
"value": "
Hedging Reserve
The hedge reserve mainly relates to effects of currency cash flow hedges that
are not yet recognized in the income statement. The hedging effects are
recognized in the income statement according to the progress of the underlying
customer contract.
Translation Reserve
The currency translation reserve includes foreign exchange differences arising
from the translation of the subsidiaries into the presentation currency of the
consolidated financial statements.
Fair Value Reserve
The fair value reserve includes fair value adjustments of equity securities at fair
value through other comprehensive income (FVOCI).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-395": {
"value": "Borrowings
Financial Reporting Principles
Interest-bearing borrowings are recognized initially at fair value less transaction
costs. Subsequent to initial recognition, interest-bearing borrowings are stated
at amortized cost with any difference between cost and redemption value being
recognized in the income statement over the period of the borrowings on an
effective interest basis.
Revolving Credit Facility
The revolving credit facility agreement of NOK 5,000 million with maturity in
March 2023 has been refinanced and will be replaced with a five year NOK
3,000 million revolving credit facility, effective January 30, 2023. The facility is
provided by a syndicate of high-quality international banks. The revolving credit
facility was undrawn as of December 31, 2022. The terms and conditions include
restrictions which are customary for these kind of facilities, including inter alia
negative pledge provisions, financial covenants and restrictions related to
acquisitions, disposals and mergers. There are also certain provisions of change
of control included in the agreement. There are no restrictions for dividend
payments and the facility is unsecured.
Norwegian Bonds
The group has one bond amounting to NOK 1 billion listed on the Oslo Stock
Exchange denominated in Norwegian Kroner. The interest rate for the bond is
three months floating interbank rate (NIBOR) plus a predefined margin. Trustee
services are provided by Nordic Trustee and the loan documentation is based on
Nordic Trustee's standard loan agreement for bond issues. The bonds loan is
unsecured on a negative pledge basis and include no dividend restrictions. Aker
Solutions' strategy is to have between 30-50 percent of borrowings at fixed
interest rates. Parts of the external loans with floating interest rates are swapped
to fixed interest rates by means of interest rate derivatives to maintain the
desired split between fixed and floating interest rates. In 2022, Aker Solutions
re-purchased NOK 20 million in the bond loan maturing 2024. Bond loan
amounting to NOK 1.5 billion was settled in 2022.
Note 17 continues on next page
Note 17 Borrowings cont.
Bonds and Borrowings
2022
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Revolving credit facility (NOK 5,000 million)2 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
1)The carrying amount is calculated by reducing the nominal value of NOK 914 million by total issue costs that are amortized over the duration of the loans. The carrying amount includes NOK -3 million in remaining
issue costs and NOK 4 million of accrued interest related to the bonds. Nominal currency value is presented excluding accrued interest.
2)The carrying amount relates to fees for establishing the credit facility which is deferred according to the amortized cost method and accrued fees for the period.
3)The margin applicable to the facility is decided by a price grid based on the gearing ratio. Commitment fee is 35 percent of the margin.
Note 17 continues on next page
Note 17 Borrowings cont.
Maturity of Bonds and Borrowings
2022
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Revolving credit facility (NOK 5,000 million)2 | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
2021
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Revolving credit facility (NOK 5,000 million)2 | | | | | | |
Brazilian Development Bank loans | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The weighted-average discount rate applied to calculate lease liability was 4.3\u00a0
percent in 2022 (4.3 percent in 2021). The company has not had any material
lease concessions as a result of COVID-19 pandemic.
The maturity of lease payments and sub-lease income per December 31 are
presented below:
| | | | | | |
| | Financial sub- lease income | Operational sub-lease income |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Maturity later than 10 years | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Lease liabilities and lease receivable | | | | | | |
Short-term leases include storage and accommodation for expats and workers in
addition to rental of tools, machinery, cranes, containers and other equipment
used in production.
See note 6 for more information about operating expenses for land and buildings See note 12 for more information about impairment testing of right-of-use assets See note 20 for more information about onerous lease provisions for operating leases
See note 30 for more information about leasing contracts with related parties ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-398": {
"value": "
Leases and Investment Property The company leases a number of office buildings, manufacturing and service sites
in addition to some machines and vehicles. Contracts that contain a lease are
recognized on the balance sheet as a right-of-use asset and lease liability unless
the lease is short-term or low-value. Vacated leased property made available for
sub-lease and property with operational sub-leases are classified as investment
property.
Financial Reporting Principles
The lease liability represents the net present value of the lease payments to be
made over the remaining lease period. The discount rate is calculated for each
lease based on a model that includes swap-rates, credit risk and country risk. The
right-of-use asset is depreciated over the lease term and is subject to impairment
testing. Several property leases contain extension options or cancellation clauses.
The non-cancellable lease period is basis for the lease commitment. Periods
covered by extension or termination options are included when it is reasonably
certain that the lease period will be extended. When management has decided to
extend the lease period is typically an event that would trigger an updated
assessment of the reasonably certain criteria.
Non-lease components such as electricity, insurance and other property-related
expenses paid to the landlord are excluded from the lease commitment for offices
and manufacturing sites, but included when renting apartments and vehicles if
included in the agreed lease amount. Future index or rate adjustments of lease
payments are only included in the lease liability when a minimum adjustment has
been contractually agreed and is in-substance fixed.
When a separable part of a leased property has been vacated by Aker Solutions,
the right-of-use asset is reclassified as investment property and assessed for
impairment. The investment property is measured using the cost model, meaning
that the book value and depreciation of the lease term from the ROU asset is the
basis for measuring also the investment property. When testing the investment
property for impairment, the expected future sub-lease income is discounted to
present value and compared to the value of the investment property. The cost
model together with impairment assessments is also an estimate of fair value of
the right-of-use asset classified as investment property.
The company has a number of sub-leases. Income from operational sub-leases on
investment property is recognized as other income. Sub-leases covering the major
part of the lease term in the head-lease are classified as financial sub-leases. The
portion of the right-of-use asset or investment property subject to financial sub-
lease is de-recognized and a sub-lease receivable is recognized in the balance
sheet when the sub-lease commences.
Judgments and Estimates
Judgment is involved when determining impairment of the investment property.
Impairment is assessed for separable parts of leased buildings that have been or
will be vacated in the near future. The impairment is sensitive to changes in
estimated future expected sub-lease income and sub-lease period. Further,
judgment is involved when determining whether sub-lease contracts are financial
or operational, as well as when determining lease term for contracts that has
extension or termination options. Determination of the discount rate also include
judgment.
Note 18 continues on next page
Note 18 Leases and Investment Property cont.
Right-of-Use (ROU) Assets
The movement in the right-of-use assets is summarized below.
| | | | |
| | | Machinery, vehicles and other | |
| | | | |
| | | | |
Balance at January 1, 2021 | | | | |
Additions and remeasurement | | | | |
De-recognition through financial sublease | | | | |
Disposals through early exit of lease contract | | | | |
Transfer between categories | | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
Additions and remeasurement | | | | |
Acquisition of subsidiaries | | | | |
De-recognition through financial sublease | | | | |
Disposals through early exit of lease contract | | | | |
Transfer between categories | | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
| | | | |
Accumulated depreciation and impairment | | | | |
Balance at January 1, 2021 | | | | |
| | | | |
| | | | |
Reversal of impairments this period | | | | |
De-recognition through financial sublease | | | | |
Depreciation and impairment on disposal of ROU, acc. | | | | |
Transfer between categories | | | | |
Currency translation difference | | | | |
Balance as of December 31, 2021 | | | | |
| | | | |
| | | | |
Reversal of impairments this period | | | | |
De-recognition through financial sublease | | | | |
Depreciation and impairment on disposal of ROU, acc. | | | | |
Currency translation difference | | | | |
Balance as of December 31, 2022 | | | | |
| | | | |
Book value as of December 31, 2021 | | | | |
Book value as of December 31, 2022 | | | | |
The weighted-average discount rate applied to calculate lease liability was 4.3\u00a0
percent in 2022 (4.3 percent in 2021). The company has not had any material
lease concessions as a result of COVID-19 pandemic.
The maturity of lease payments and sub-lease income per December 31 are
presented below:
| | | | | | |
| | Financial sub- lease income | Operational sub-lease income |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Maturity later than 10 years | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Lease liabilities and lease receivable | | | | | | |
Short-term leases include storage and accommodation for expats and workers in
addition to rental of tools, machinery, cranes, containers and other equipment
used in production.
See note 6 for more information about operating expenses for land and buildings See note 12 for more information about impairment testing of right-of-use assets See note 20 for more information about onerous lease provisions for operating leases
See note 30 for more information about leasing contracts with related parties ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-399": {
"value": "
Financial Reporting Principles
The lease liability represents the net present value of the lease payments to be
made over the remaining lease period. The discount rate is calculated for each
lease based on a model that includes swap-rates, credit risk and country risk. The
right-of-use asset is depreciated over the lease term and is subject to impairment
testing. Several property leases contain extension options or cancellation clauses.
The non-cancellable lease period is basis for the lease commitment. Periods
covered by extension or termination options are included when it is reasonably
certain that the lease period will be extended. When management has decided to
extend the lease period is typically an event that would trigger an updated
assessment of the reasonably certain criteria.
Non-lease components such as electricity, insurance and other property-related
expenses paid to the landlord are excluded from the lease commitment for offices
and manufacturing sites, but included when renting apartments and vehicles if
included in the agreed lease amount. Future index or rate adjustments of lease
payments are only included in the lease liability when a minimum adjustment has
been contractually agreed and is in-substance fixed.
When a separable part of a leased property has been vacated by Aker Solutions,
the right-of-use asset is reclassified as investment property and assessed for
impairment. The investment property is measured using the cost model, meaning
that the book value and depreciation of the lease term from the ROU asset is the
basis for measuring also the investment property. When testing the investment
property for impairment, the expected future sub-lease income is discounted to
present value and compared to the value of the investment property. The cost
model together with impairment assessments is also an estimate of fair value of
the right-of-use asset classified as investment property.
The company has a number of sub-leases. Income from operational sub-leases on
investment property is recognized as other income. Sub-leases covering the major
part of the lease term in the head-lease are classified as financial sub-leases. The
portion of the right-of-use asset or investment property subject to financial sub-
lease is de-recognized and a sub-lease receivable is recognized in the balance
sheet when the sub-lease commences.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-400": {
"value": "
Financial Reporting Principles
The lease liability represents the net present value of the lease payments to be
made over the remaining lease period. The discount rate is calculated for each
lease based on a model that includes swap-rates, credit risk and country risk. The
right-of-use asset is depreciated over the lease term and is subject to impairment
testing. Several property leases contain extension options or cancellation clauses.
The non-cancellable lease period is basis for the lease commitment. Periods
covered by extension or termination options are included when it is reasonably
certain that the lease period will be extended. When management has decided to
extend the lease period is typically an event that would trigger an updated
assessment of the reasonably certain criteria.
Non-lease components such as electricity, insurance and other property-related
expenses paid to the landlord are excluded from the lease commitment for offices
and manufacturing sites, but included when renting apartments and vehicles if
included in the agreed lease amount. Future index or rate adjustments of lease
payments are only included in the lease liability when a minimum adjustment has
been contractually agreed and is in-substance fixed.
When a separable part of a leased property has been vacated by Aker Solutions,
the right-of-use asset is reclassified as investment property and assessed for
impairment. The investment property is measured using the cost model, meaning
that the book value and depreciation of the lease term from the ROU asset is the
basis for measuring also the investment property. When testing the investment
property for impairment, the expected future sub-lease income is discounted to
present value and compared to the value of the investment property. The cost
model together with impairment assessments is also an estimate of fair value of
the right-of-use asset classified as investment property.
The company has a number of sub-leases. Income from operational sub-leases on
investment property is recognized as other income. Sub-leases covering the major
part of the lease term in the head-lease are classified as financial sub-leases. The
portion of the right-of-use asset or investment property subject to financial sub-
lease is de-recognized and a sub-lease receivable is recognized in the balance
sheet when the sub-lease commences.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-401": {
"value": "
Financial Reporting Principles
Defined Contribution Plans
A defined contribution plan is a type of retirement plan where the employer makes
contributions on a regular basis to the employee\u2019s individual pension account. The
benefits received by the employee are based on the employer contributions and
gains or losses from investing the capital. Contributions to defined contribution
pension plans are recognized as an expense in the income statement as incurred.
Defined Benefit Plans
A defined benefit plan is a type of pension plan where the employer promises an
annual pension on retirement based on a percentage of the salary upon retirement
and the employee's earnings history, years of service and age. The calculation of
defined benefit obligations is performed annually by a qualified actuary using the
projected unit credit method.
The defined benefit obligation is calculated separately for each plan by
discounting the estimated amount of future benefit that employees have earned in
the current and prior periods and deducting the fair value of any plan assets. The
change of the defined benefit obligation as a result of the change of assumptions
(actuarial gains and losses) and the return on plan assets are recognized
immediately in other comprehensive income. Net interest expense and other
expenses related to defined benefit plans are recognized in the income statement.
When the benefits of a plan are changed, settled or when a plan is curtailed, the
change relating to past service or the gain or loss on curtailment or settlement is
recognized immediately in the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-402": {
"value": "Provisions and Contingent Liabilities
Financial Reporting Principles
A provision is a liability with uncertain timing and amount. Provisions are
recognized when cash outflow is considered probable, the amount can be reliably
estimated and the obligation is a result of a past event. All provisions are
presented as short-term as they are part of the operating cycle.
A contingent liability is a possible obligation that arises from past events that
typically depends on a future event outside of the company's control, for example
a court decision. A provision is made when it is considered as probable that cash
outflow will take place, and the obligation can be measured reliably.
Judgments and Estimates
The provisions are estimated based on a number of assumptions and are highly
judgmental in nature. The various provisions with assumptions and estimation
uncertainties are discussed in the table to the right.
Provisions
| | | | |
| | | | |
| | | | |
Balance as of December 31, 2020 | | | | |
Provisions made during the year | | | | |
Provisions used during the year | | | | |
Provisions reversed during the year | | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
Provisions made during the year | | | | |
Provisions used during the year | | | | |
Provisions reversed during the year | | | | |
Acquisition of subsidiaries | | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
| | | | |
| | | | |
| | | | |
Expected timing of payments | | | | |
| | | | |
| | | | |
Total as of December 31, 2021 | | | | |
| | | | |
| | | | |
Total as of December 31, 2022 | | | | |
a court decision. A provision is made when it is considered as probable that cash
outflow will take place, and the obligation can be measured reliably.
Judgments and Estimates
The provisions are estimated based on a number of assumptions and are highly
judgmental in nature. The various provisions with assumptions and estimation
uncertainties are discussed in the table to the right.
Provisions
| | | | |
| | | | |
| | | | |
Balance as of December 31, 2020 | | | | |
Provisions made during the year | | | | |
Provisions used during the year | | | | |
Provisions reversed during the year | | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2021 | | | | |
Provisions made during the year | | | | |
Provisions used during the year | | | | |
Provisions reversed during the year | | | | |
Acquisition of subsidiaries | | | | |
| | | | |
Currency translation differences | | | | |
Balance as of December 31, 2022 | | | | |
| | | | |
| | | | |
| | | | |
Expected timing of payments | | | | |
| | | | |
| | | | |
Total as of December 31, 2021 | | | | |
| | | | |
| | | | |
Total as of December 31, 2022 | | | | |
a court decision. A provision is made when it is considered as probable that cash
outflow will take place, and the obligation can be measured reliably.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-405": {
"value": "
A contingent liability is a possible obligation that arises from past events that
typically depends on a future event outside of the company's control, for example
a court decision. A provision is made when it is considered as probable that cash
outflow will take place, and the obligation can be measured reliably.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-406": {
"value": "Trade and Other Payables
Financial Reporting Principles
Trade and other payables are recognized at the original invoiced amount. The
invoiced amount is considered to be approximately equal to the value derived if
the amortized cost method would have been used. Aker Solutions has established
factoring arrangements where payments are received from financial institutions
for customer contract assets (prior to issuance of the customer invoice), so-called
\"sale of unbilled receivables\u201d. The payments from financial institutions are based
on the progress of the customer contract. Some creditors have entered into
factoring agreements for the sale of their receivables on Aker Solutions to
financial institutions, so-called \"reverse factoring\u201d. The amounts related to
\"reverse factoring\" and \"sale of unbilled receivables\" are included in trade and
other payables in the balance sheet as they relate to operational activities. The
amounts are also disclosed individually below.
Trade and Other Payables
| | |
| | |
| | |
| | |
Trade creditors, related parties | | |
| | |
| | |
| | |
Other current liabilities | | |
| | |
| | |
Trade creditors include an amount of NOK 99 million as of December 31, 2022,
(NOK 154 million in 2021) subject to reverse factoring. Other payables did not
include any payments received from sale of unbilled receivables as of December
31, 2022 (NOK 0 million in 2021). Trade creditors include NOK 0 million as of
December 31, 2022 (NOK 5 million in 2021) due after one year.
See note 3 for more information about customer contract liabilities See note 30 for more information about payables to related parties ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-407": {
"value": "
Financial Reporting Principles
Trade and other payables are recognized at the original invoiced amount. The
invoiced amount is considered to be approximately equal to the value derived if
the amortized cost method would have been used. Aker Solutions has established
factoring arrangements where payments are received from financial institutions
for customer contract assets (prior to issuance of the customer invoice), so-called
\"sale of unbilled receivables\u201d. The payments from financial institutions are based
on the progress of the customer contract. Some creditors have entered into
factoring agreements for the sale of their receivables on Aker Solutions to
financial institutions, so-called \"reverse factoring\u201d. The amounts related to
\"reverse factoring\" and \"sale of unbilled receivables\" are included in trade and
other payables in the balance sheet as they relate to operational activities. The
amounts are also disclosed individually below.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-408": {
"value": "Financial Risk Management and Exposures
The objective of financial risk management is to manage and control financial risk
exposures to increase the predictability of earnings and minimize potential adverse
effects on the company\u2019s financial performance. Last year the financial risks
generally increased as a result of the COVID-19 pandemic. In 2022, societies have
re-opened and the situation is perceived as stable. The energy landscape has
evolved significantly during the year, as energy markets were strongly impacted by
the war in Ukraine. Aker Solutions uses derivatives to hedge currency risk
exposures and aims to apply hedge accounting whenever possible in order to
reduce the volatility resulting from the periodic market-to-market revaluation of
financial instruments in the income statement. The company is also exposed to
interest rate risk, credit risk, liquidity risk and price risk.
Risk Management
Risk management of financial risks is performed in every project and is the
responsibility of the project manager. They cooperate with local finance managers
and corporate treasury to identify, evaluate and hedge financial risks under
policies approved by the Board of Directors. The company has well-established
procedures for overall risk management, as well as policies for the use of
derivatives and financial investments.
War in Ukraine and COVID-19 Pandemic
The tragic war in Ukraine has amplified several trends, including increased
commodity prices, broad-based inflation and global supply chain constraints. The
COVID-19 has generally increased several financial risks. During 2021, the impact
on the financial risks started to decline and in 2022 the situation is perceived as
stable. However, there is a risk that a new and virulent virus could increase the
risks again. The unstable situation generally increase financial risk.
\u25fcCurrency risk: The war in Ukraine and the COVID-19 pandemic increased the
volatility in the currency market and there is a risk that the contingency buffer
included in tender prices may be insufficient to cover currency losses when
market fluctuations are significant. Currency variation clauses, escalation
mechanisms and currency options are used to mitigate contingent currency
exposures in tenders.
\u25fcCredit risk: Operational challenges due to restrictions on mobility, volatile
commodity prices and an increasing transition towards greener energy has
increased credit risk more in the oil and gas industry than in other industries.
Due to a predominance of large international oil companies with a relatively low
credit risk in its customer base, the exposure of Aker Solutions to this
increased credit risk is limited.
\u25fcLiquidity risk: The current market uncertainty as a result of the war has
increased the liquidity risk. However, solid order intake and strong cash
generation from operations have contributed to an improved balance sheet and
visibility.
Currency Risk
Aker Solutions has international operations and is exposed to currency risk on
commercial transactions, assets and liabilities when payments and revenues are
denominated in a currency other than the functional currency of the respective
entity. The company's exposure to currency risk is primarily related to USD, EUR,
GBP, BRL and AOA (Angolan Kwanza). The company's primary translation risk is
related to USD, EUR, GBP and BRL.
Use of Currency Derivatives
The Aker Solutions' policy requires that all entities mitigate currency exposure in
all contracts. Aker Solutions manages the currency risk in the tender period by
including currency clauses in the tender, by entering into currency options or by
adding a contingency in the tender price to cover for potential currency
fluctuations. Each entity identify and hedge their exposure with the corporate
treasury department and the corporate treasury department manages the overall
currency exposures by entering into currency derivative instruments in the foreign
exchange market. The Aker Solutions group has a large number of contracts
related to hedging of foreign currency exposures and the currency risk policy has
been well established.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Each business unit designates all foreign currency hedge contracts with corporate
treasury as cash flow hedges or as hedges of separate embedded derivatives.
Corporate treasury enters into external foreign exchange contracts separately for
revenue and cost exposure. More than 80 percent of the value of the hedging
instruments either qualify for hedge accounting or are hedges of separate
embedded derivatives. Corporate treasury monitors hedges not qualifying for
hedge accounting and non-qualifying hedges are reported in the \"other\" segment.
Currency exposure from long-term investments in foreign currencies is only
hedged when specifically instructed by management.
Non-Convertible Currencies
Aker Solutions operates in some jurisdictions where regulations and requirements
may limit the convertibility of local currency and restrict free flow of cash.\u00a0
Mitigating actions are taken to minimize the currency exposure. However, Aker
Solutions has historically experienced currency exposures in such jurisdictions
where no means of hedging has been available.
Exposure to Currency Risk
Corporate treasury is allowed to hold positions within an approved trading
mandate. The net exposure as of December 31 is shown in the following table. A
bank deposit in a currency different than the functional currency of the entity
represent an exposure for the group. A negative amount on bank deposits
represent an overdraft for the entities. Estimated forecasted cash flows in the
table are calculated based on the entity's hedge transactions through corporate
treasury, as these are considered to be the best estimate of future revenue and
cost in foreign currencies. The net exposure is closely monitored by corporate
treasury and reported on a daily basis to management.
| | | | | | | | |
| | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Intercompany deposits (+) and loan (-) | | | | | | | | |
| | | | | | | | |
Forecasted receipts from customers | | | | | | | | |
Forecasted payments to vendors | | | | | | | | |
| | | | | | | | |
Forward exchange contracts | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
The currency exposures in USD, EUR and GBP per December 31, 2022 and 2021,
were within the trading mandate. The currency exposure of NOK 163 million in
Angolan Kwanza (AOA) represent the amount that has not been possible to
hedge. Angolan Kwanza and other non-convertible currencies are not included in
the trading mandate.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Sensitivity Analysis - Fair Value of Financial Instruments
The impact on income and equity from a 15 percent strengthening of EUR, USD,
GBP and AOA against other currencies is shown below. A 15 percent weakening
would have had the equal, but opposite effect. This sensitivity analysis shows the
impact on financial instruments denominated in a foreign currency per December
31 and assumes that all other variables, in particular interest rates, remain
constant. The analysis does not include the effect on future transactions (not
invoiced as of December 31) or any effect from translation of subsidiaries.
| | | | |
| | |
| | Equity increase (decrease) | | Equity increase (decrease) |
| | | | |
USD - 15 percent strengthening | | | | |
EUR - 15 percent strengthening | | | | |
GBP - 15 percent strengthening | | | | |
AOA - 15 percent strengthening | | | | |
Interest Rate Risk
Borrowings issued at variable rates expose the company to cash flow interest rate
risk. Borrowings issued at fixed rates do not affect profit and loss when held to
maturity, as these borrowings are measured at amortized cost.
The company\u2019s interest exposure mainly arises from external funding in bank and
debt capital markets. Currently all external borrowings in Aker Solutions are at
floating interest rates. The company\u2019s risk management strategy is that 30-50
percent of the interest exposure shall be fixed interest rate for the duration of the
debt. The company uses interest rate swaps to achieve the desired fixed / floating
ratio of the external debt.
As the company has no significant interest-bearing operating assets, operating
income and operating cash flow are substantially independent of changes in
market interest rates. At year-end, 55 percent of NOK 914 million in bonds was
fixed for the duration of the bonds through interest rate swaps.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Interest Rates Sensitivity
An increase of 100 basis points in interest rates during 2020 would have
increased (decreased) equity and profit and loss by the amounts shown on the
table below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant.
| | | | |
| | |
| | Equity increase (decrease)1 | | Equity increase (decrease)1 |
| | | | |
Interest on cash and cash equivalents | | | | |
| | | | |
Effect of interest rate swap | | | | |
Cash flow sensitivity (net) | | | | |
credit risk is considered to be limited. Risk related to lower rated companies is
monitored closely. The maximum exposure to credit risk at the reporting date
equals the book value of each category of financial assets. The company does
not hold collateral as security.
Measurement of Expected Credit Losses (ECLs)
Impairment is assessed using the expected credit loss (ECL) method for financial
assets. The company considers a financial asset to be in default when the
borrower is unlikely to pay its credit obligation to the company in full. ECLs are
estimated probability-weighted net present value of future expected credit
losses. ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for trade receivables, contract assets and lease receivables are
always measured at an amount equal to lifetime ECLs. Twelve month ECLs are
used for interest-bearing receivables and bank balances for which credit risk has
not increased significantly since initial recognition.
At each reporting date, the company assesses whether any financial assets are
credit-impaired. Evidence that a financial asset is credit-impaired includes when
invoices are more than 90 days past due without agreed postponement,
knowledge of significant financial difficulty of the customer or debtor or other
forward-looking information. The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the company determines
that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to write-off.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Liquidity Risk
Liquidity risk is the risk that the company is unable to meet the obligations associated with its financial liabilities. The company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity reserves to meet its liabilities when due.
Prudent liquidity risk management includes maintaining sufficient cash, the availability of funding from an adequate amount of committed credit facilities and the ability to
close out market positions. Management monitors rolling weekly and monthly forecasts of the company\u2019s liquidity reserve on the basis of expected cash flow. Due to the
dynamic nature of the underlying businesses, corporate treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Financial Liabilities and the Period in which they Mature
| | | | | | | |
|
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net derivative financial instruments | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net derivative financial instruments | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
1)Nominal currency value including interest.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Cash Pool Arrangements
The company policy for the purpose of optimizing availability and flexibility of
cash within the company is to operate centrally managed cash pooling
arrangements. Such arrangements are either organized with a bank as a service
provider, or as a part of the operation of corporate treasury. An important
condition for the participants (business units) in such cash pooling arrangements
is that Aker Solutions as an owner of such pools is financially viable and is able
to prove its capability to service its obligations concerning repayment of any net
deposits made by business units. The company policy is not applied in countries
where local laws prohibit international cash pool arrangements, such as Brazil,
Angola and India.
Price Risk
The company is exposed to fluctuations in market prices both in the investment
portfolio and in the operating businesses related to individual contracts. The
units are exposed to changes in market price for raw materials, equipment and
development in wages. This is managed in the bid process by locking in
committed prices from key vendors as basis for offers to customers or through
escalation clauses with customers.
Guarantees
The company has provided the following guarantees on behalf of wholly owned
subsidiaries as of December 31 (all obligations are per date of issue):
\u25fcNon-financial parent company guarantees related to project performance on
behalf of group companies
\u25fcFinancial parent company indemnity guarantees for fulfilment of lease
obligations, credits and loans were NOK 10.3 billion (NOK 10.8 billion in 2021)
\u25fcFinancial guarantees including counter guarantees for bank/surety bonds
and guarantees for pension obligations to employees were NOK 8.2\u00a0 billion
(NOK 7.8 billion in 2021)
Guarantee on Behalf of Akastor
Aker Solutions was demerged from Akastor in 2014, and parties in a demerger
have joint liability according to Norwegian law. If an obligation that arose prior to
the completion of the demerger is not met by either party, the other party will
have secondary joint liability for such obligation. The remaining value of the
financial guarantees where Aker Solutions has a secondary joint liability was
NOK 1.9 billion per December 31, 2022, compared to NOK 2.5 billion per
December 31, 2021. There are no provisions related to the guarantee as the
likelihood of any payments related to the joint liability is considered to be low.
See note 14 for more information about trade and other receivables See note 15 for more information about cash and available credit facility See note 18 for more information about lease liabilities See note 21 for more information about trade and other payables See note 25 for more information about financial assets and liabilities ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-409": {
"value": "
Interest Rate Risk
Borrowings issued at variable rates expose the company to cash flow interest rate
risk. Borrowings issued at fixed rates do not affect profit and loss when held to
maturity, as these borrowings are measured at amortized cost.
The company\u2019s interest exposure mainly arises from external funding in bank and
debt capital markets. Currently all external borrowings in Aker Solutions are at
floating interest rates. The company\u2019s risk management strategy is that 30-50
percent of the interest exposure shall be fixed interest rate for the duration of the
debt. The company uses interest rate swaps to achieve the desired fixed / floating
ratio of the external debt.
As the company has no significant interest-bearing operating assets, operating
income and operating cash flow are substantially independent of changes in
market interest rates. At year-end, 55 percent of NOK 914 million in bonds was
fixed for the duration of the bonds through interest rate swaps.
Note 22 continues on next page
Note 22 Financial Risk Management and Exposures cont.
Interest Rates Sensitivity
An increase of 100 basis points in interest rates during 2020 would have
increased (decreased) equity and profit and loss by the amounts shown on the
table below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant.
| | | | |
| | |
| | Equity increase (decrease)1 | | Equity increase (decrease)1 |
| | | | |
Interest on cash and cash equivalents | | | | |
| | | | |
Effect of interest rate swap | | | | |
Cash flow sensitivity (net) | | | | |
credit risk is considered to be limited. Risk related to lower rated companies is
monitored closely. The maximum exposure to credit risk at the reporting date
equals the book value of each category of financial assets. The company does
not hold collateral as security.
Measurement of Expected Credit Losses (ECLs)
Impairment is assessed using the expected credit loss (ECL) method for financial
assets. The company considers a financial asset to be in default when the
borrower is unlikely to pay its credit obligation to the company in full. ECLs are
estimated probability-weighted net present value of future expected credit
losses. ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for trade receivables, contract assets and lease receivables are
always measured at an amount equal to lifetime ECLs. Twelve month ECLs are
used for interest-bearing receivables and bank balances for which credit risk has
not increased significantly since initial recognition.
At each reporting date, the company assesses whether any financial assets are
credit-impaired. Evidence that a financial asset is credit-impaired includes when
invoices are more than 90 days past due without agreed postponement,
knowledge of significant financial difficulty of the customer or debtor or other
forward-looking information. The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the company determines
that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to write-off.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-411": {
"value": "
Liquidity Risk
Liquidity risk is the risk that the company is unable to meet the obligations associated with its financial liabilities. The company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity reserves to meet its liabilities when due.
Prudent liquidity risk management includes maintaining sufficient cash, the availability of funding from an adequate amount of committed credit facilities and the ability to
close out market positions. Management monitors rolling weekly and monthly forecasts of the company\u2019s liquidity reserve on the basis of expected cash flow. Due to the
dynamic nature of the underlying businesses, corporate treasury maintains flexibility in funding by maintaining availability under committed credit lines.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-412": {
"value": "Capital Management
The objective of Aker Solutions' capital management policy is to optimize the
capital structure to ensure sufficient and timely funding over time to finance its
activities at the lowest cost, in addition to investing in projects and businesses
which will increase the company's return on capital employed over time.
Investment Policy
Aker Solutions\u2019 capital management is based on a rigorous investment selection
process which considers not only Aker Solutions\u2019 weighted average cost of capital
and strategic orientation, but also external factors such as market expectations
and extrinsic risk factors. This selection process is coupled with a centralized
approval process for all capital expenditures to be incurred by the group.
Funding Policy
Liquidity Planning
Aker Solutions has a strong focus on liquidity in order to meet its working capital
needs short-term and to ensure solvency for its financial obligations long-term.
The group\u2019s internal guideline is to have a minimum liquidity reserve of NOK 3
billion, including cash and undrawn committed credit facilities. As per December
31, 2022 the liquidity reserve amounted to NOK 11.2 billion compared to NOK 9.6
billion in the prior year. It was composed of an undrawn committed credit facility,
cash in bank accounts and bank deposits.
Funding of Operations
Aker Solutions\u2019 funding policy states that all operating units will be funded through
corporate treasury. This ensures optimal availability and transfer of cash within the
group, better control of the group's overall debt as well as discounted funding for
its operations. The group policy is not applied in countries where local laws
prohibit international cash pool arrangements, such as Brazil, Angola and India.
Aker Solutions emphasizes financial flexibility and steers its capital structure
accordingly to ensure a balance between liquidity risk and refinancing risk. In this
perspective, loans and other external borrowings are to be renegotiated well in
advance of their due date.
Aker Solutions aims to have diversified mix of funding sources in order to obtain
an optimal cost of capital. These funding sources include:
\u25fcThe use of banks based on syndicated credit facilities or bilateral agreements
\u25fcThe issue of debt instruments in the Norwegian capital market
\u25fcThe issue of debt instruments in foreign capital markets
Debt Covenants
The majority of drawn debt in Aker Solutions was from bonds issued in the
Norwegian market in 2022 (89.5 percent as of December 31, 2022 and 99.0
percent in 2021). The remaining debt is bank facilities related to the acquired
subsidiary Rainpower. The group monitors capital on the basis of gearing and
interest cover ratios. All debt covenants are based on IFRS excluding the impact
of IFRS 16. At year-end, all ratios are within the requirements in the loan
agreements.
Aker Solutions has the following debt covenants for the revolving facility:
\u25fcThe company\u2019s gearing ratio shall not exceed 3.5, calculated from the net debt
to the adjusted EBITDA
\u25fcThe company\u2019s interest cover ratio shall not be less than 3.5, calculated from
the adjusted EBITDA to net finance cost
Aker Solutions has the following debt covenant for the bond ISIN NO 0010853286
(expire in 2024):
\u25fcThe company\u2019s gearing ratio shall not exceed 3.5, calculated from the net debt
to the adjusted EBITDA
These guidelines aim to maintain a strong financial position for Aker Solutions,
which enable the company to comply with its covenants on existing debt and to
maintain satisfactory external credit rating to ensure reliable access to capital
over time.
Note 23 continues on next page
Note 23 Capital Management cont.
Gearing and Interest Cover Ratios at December 31
| | |
| | |
| | |
| | |
Non-current interest-bearing borrowings | | |
Current interest-bearing borrowings | | |
Gross interest-bearing debt | | |
Cash and cash equivalents | | |
| | |
| | |
| | |
Restructuring and other special items as defined in the loan agreement | | |
| | |
Gross interest-bearing debt/adjusted EBITDA | | |
| | |
| | |
| | |
Adjusted EBITDA excl. IFRS 161 | | |
Net interest expense as defined in the loan agreement | | |
Adjusted EBITDA/Net finance cost | | |
1)Excluding IFRS 16 means that leasing cost is reported as part of operating cost and included in EBITDA.
See note 22 for more information about financial risk management See note 24 for more information about interest rate derivatives See note 25 for more information about financial assets and liabilities ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-413": {
"value": "Derivative Financial Instruments
Aker Solutions has future cash flows to be settled in foreign currencies, and
forward contracts are the most commonly used derivative to hedge such
exposures. The risk management policy states that all foreign exchange
exposure shall be hedged, of which at least 80 percent shall qualify for hedge
accounting or be hedges of separated embedded derivatives. Aker Solutions also
has interest rate exposure from its external funding. Interest rate swaps are used
to achieve the risk management strategy of having 30-50 percent at fixed
interest rates.
Financial Reporting Principles
Cash Flow Hedges of Foreign Currency
Forward contracts are the most commonly used derivative to hedge foreign
currency exposure. In addition, currency options are sometimes used to hedge
exposures. In case of changes in the expected maturity dates, currencies or
amounts of the hedged items corresponding derivatives are routinely adjusted
(pre-matured or rolled over), usually by means of currency swaps.
The hedged transactions in foreign currency subject to cash flow hedge
accounting are highly probable future transactions expected to occur at various
dates during the next one to four years, depending on progress of the projects
and firm commitments. The derivatives are recognized initially and subsequently
at fair value in the balance sheet, and the effective portion of changes in the fair
value is recognized in other comprehensive income as a hedge reserve.
Aker Solutions designates the full forward foreign exchange contracts to hedge
its currency risk and applies a hedge ratio of 1:1. The policy covers critical terms
such as currency pair, amount and timing of the forward exchange contracts to
align with the hedged item. The existence of an economic relationship between
the hedging instrument and hedged item is determined based on matching
critical terms of their respective cash flows. In addition, an assessment is made
to determine whether the derivative designated in each hedging relationship is
expected to be, and has been, effective in offsetting changes in cash flows of
the hedged item by the hypothetical derivative method.
In these hedge relationships, the main sources of ineffectiveness are:
\u25fcany sequential change of timing of the hedged item;
\u25fcchange in the total amount of the hedge item; and
\u25fcsignificant change in the counterparty's and Aker Solutions' credit risk
Aker Solutions does not designate any net positions in a hedging relationship.
Some hedged transactions are not accounted for by applying hedge accounting,
primarily because internal hedged transactions are grouped and netted before
external hedge transactions are established. Changes in the fair value of
derivatives will be reported as financial income or expenses. Remaining
derivatives not applying hedge accounting include derivatives used by corporate
treasury to hedge the residual exposure of the company as part of its risk
mandate. As of December 31, 2022, these hedging instruments include currency
forwards, interest swaps and foreign exchange swaps.
Hedge accounting is discontinued with immediate recognition in finance income
and expenses in the income statement when the hedge no longer qualifies for
hedge accounting, for example upon sale, expiration, termination or when a
forecasted transaction is no longer probable. The derivative financial
instruments are classified as current assets or liabilities as they are part of the
operating cycle.
Note 24 continues on next page
Note 24 Derivative Financial Instruments cont.
Foreign Currency as Embedded Derivatives
Embedded derivatives may exist in contracts with a currency other than the
currency of the contracting partners. The embedded derivative will under certain
circumstances be separated and recognized at fair value in the balance sheet
and changes recognized in the income statement. These entries will result in
corresponding and opposite effects compared to the hedging instrument.
Aker Solutions applies the following separation criteria for embedded
derivatives:
\u25fcThe embedded derivative needs to be separated if the agreed payment is in a
currency different from any of the major contract parties' own functional
currency, or
\u25fcthat the contract currency is not considered to be commonly used for the
relevant economic environment defined as the countries involved in the
cross-border transaction.
Cash Flow Hedges of Interest Rates
Aker Solutions' interest exposure mainly arises from external funding from bank
and debt capital markets. Most of the external debt in Aker Solutions is at
floating interest rates. The risk management strategy is that 30-50 percent of
the interest exposure shall be fixed interest rate for the duration of the debt.
Interest rate swaps are used to achieve the desired fixed/floating ratio of the
external debt.
Hedge accounting is applied using the cash flow model for interest rate swaps
which means that gains and losses from floating to fixed interest rates are
recognized in the hedging reserve in equity and will be continuously released to
the income statement until the bank borrowings are repaid. This is done based
on the periodic market-to-market revaluation of the interest rate swaps whose
fair value tends to reach zero upon maturity.
Note 24 continues on next page
Note 24 Derivative Financial Instruments cont.
Fair Values and Maturity
The following table presents the fair value of the derivatives and a maturity analysis of the derivatives undiscounted cash flows. Given Aker Solutions hedging policy and
the assumption that projects are cash neutral, this table also indicates when the cash flows related to project expenses are expected to impact profit and loss. Project
revenues are recognized over time according to the progress of the project. This may result in differences between cash flow and revenue recognition.
| | | | | | | | | | | | |
| | |
| Instruments at fair value1 | | | | | | Instruments at fair value1 | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Cash flow hedging instruments | | | | | | | | | | | | |
Fair value adjustments to hedged instruments2 | | | | | | | | | | | | |
| | | | | | | | | | | | |
Embedded derivatives in ordinary commercial contracts | | | | | | | | | | | | |
Financial instruments not hedge accounted | | | | | | | | | | | | |
Total forward foreign exchange contracts | | | | | | | | | | | | |
| | | | | | | | | | | | |
Cash flow hedges interest rate assets | | | | | | | | | | | | |
Total financial instrument assets | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Cash flow hedging instruments | | | | | | | | | | | | |
Fair value adjustments to hedged instruments | | | | | | | | | | | | |
Embedded derivatives in ordinary commercial contracts | | | | | | | | | | | | |
Financial instruments not hedge accounted | | | | | | | | | | | | |
Total forward foreign exchange contracts | | | | | | | | | | | | |
| | | | | | | | | | | | |
Cash flow hedges interest rate liability | | | | | | | | | | | | |
Total financial instrument liabilities | | | | | | | | | | | | |
| | | | | | | | | | | | |
Net financial instruments | | | | | | | | | | | | |
1)Cash flows from matured derivatives are translated to NOK using the exchange rates on the balance sheet date.
2)Fair value of settled derivatives not yet booked in the income statement are recognized in balance sheet and will be reclassified to the income statement over the next years as the projects progress.
3)The proceeds from a possible sale of Subsea represent a significant currency exposure, and Aker Solutions has therefore entered into FX put option contracts of USD 175 million to hedge for a part of the exposed
proceeds as of December 31, 2022.
Note 24 continues on next page
Note 24 Derivative Financial Instruments cont.
Unsettled Hedges
The table below shows the impact from the unsettled cash flow hedges on profit and loss and equity (not adjusted for tax).
| | | | | | |
| | |
| Fair value of all hedging instruments | Recognized in profit and loss | Deferred in equity (the hedge reserve) | Fair value of all hedging instruments | Recognized in profit and loss | Deferred in equity (the hedge reserve) |
| | | | | | |
Forward exchange contracts (cash flow hedges) | | | | | | |
| | | | | | |
| | | | | | |
Aker Solutions does not designate any net positions in a hedging relationship.
Some hedged transactions are not accounted for by applying hedge accounting,
primarily because internal hedged transactions are grouped and netted before
external hedge transactions are established. Changes in the fair value of
derivatives will be reported as financial income or expenses. Remaining
derivatives not applying hedge accounting include derivatives used by corporate
treasury to hedge the residual exposure of the company as part of its risk
mandate. As of December 31, 2022, these hedging instruments include currency
forwards, interest swaps and foreign exchange swaps.
Hedge accounting is discontinued with immediate recognition in finance income
and expenses in the income statement when the hedge no longer qualifies for
hedge accounting, for example upon sale, expiration, termination or when a
forecasted transaction is no longer probable. The derivative financial
instruments are classified as current assets or liabilities as they are part of the
operating cycle.
Note 24 continues on next page
Note 24 Derivative Financial Instruments cont.
Foreign Currency as Embedded Derivatives
Embedded derivatives may exist in contracts with a currency other than the
currency of the contracting partners. The embedded derivative will under certain
circumstances be separated and recognized at fair value in the balance sheet
and changes recognized in the income statement. These entries will result in
corresponding and opposite effects compared to the hedging instrument.
Aker Solutions applies the following separation criteria for embedded
derivatives:
\u25fcThe embedded derivative needs to be separated if the agreed payment is in a
currency different from any of the major contract parties' own functional
currency, or
\u25fcthat the contract currency is not considered to be commonly used for the
relevant economic environment defined as the countries involved in the
cross-border transaction.
Cash Flow Hedges of Interest Rates
Aker Solutions' interest exposure mainly arises from external funding from bank
and debt capital markets. Most of the external debt in Aker Solutions is at
floating interest rates. The risk management strategy is that 30-50 percent of
the interest exposure shall be fixed interest rate for the duration of the debt.
Interest rate swaps are used to achieve the desired fixed/floating ratio of the
external debt.
Hedge accounting is applied using the cash flow model for interest rate swaps
which means that gains and losses from floating to fixed interest rates are
recognized in the hedging reserve in equity and will be continuously released to
the income statement until the bank borrowings are repaid. This is done based
on the periodic market-to-market revaluation of the interest rate swaps whose
fair value tends to reach zero upon maturity.
Note 24 continues on next page
Note 24 Derivative Financial Instruments cont.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-415": {
"value": "Financial Assets and Liabilities
The fair value hierarchy defines a framework for categorizing financial assets and liabilities based on fair value valuation techniques. Fair value of
assets and liabilities in level one is based on quoted prices in an active market, whereas level three fair values are based on assumptions made by the
company in the absence of quoted prices.
The Fair Value Hierarchy
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
For financial instruments measured at fair value, the levels in the fair value hierarchy are:
\u25fcLevel 1: Fair values are based on prices quoted in an active market for identical assets or liabilities.
\u25fcLevel 2: Fair values are based on price input other than quoted prices. Such prices are derived from observable market transactions in an active
market for identical assets or liabilities. Level 2 includes currency or interest derivatives and interest bonds, typically when the group uses forward
prices on foreign exchange rates or interest rates as inputs to valuation models.
\u25fcLevel 3: Fair values are based on unobservable input, mainly based on internal assumptions used in the absence of quoted prices from an active
market or other observable price inputs.
Note 25 continues on next page
Note 25 Financial Assets and Liabilities cont.
Financial Instruments as of December 31, 2022
| | | | | | | | | | | |
| | | | |
| Fair value - hedging instruments | | Equity investments at FVOCI1 | Other financial liabilities | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Trade and other receivables | | | | | | | | | | | |
Forward foreign exchange contracts | | | | | | | | | | | |
Fair value embedded derivatives | | | | | | | | | | | |
Interest rate instruments | | | | | | | | | | | |
Current interest-bearing receivables | | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Trade and other payables4 | | | | | | | | | | | |
| | | | | | | | | | | |
Forward foreign exchange contracts | | | | | | | | | | | |
Fair value embedded derivatives | | | | | | | | | | | |
| | | | | | | | | | | |
1)FVOCI is short for fair value through other comprehensive income.
2)Investments in level 1 consist of listed shared with quoted market prices, and investments in level 3 are shares where fair value cannot be measured reliably as the financial instrument is not
traded in an active market. The best estimate of fair value is initial purchase price.
3)Fair value is quoted prices for the bonds noted on the Oslo Stock Exchange.
4)Trade and other payables that are not financial liabilities at negative NOK 6,612 million in 2022 are not included.
Note 25 continues on next page
Note 25 Financial Assets and Liabilities cont.
Financial Instruments as of December 31, 2021
| | | | | | | | | |
| | |
| Fair value - hedging instruments | | Equity investments at FVOCI1 | Other financial liabilities | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Trade and other receivables | | | | | | | | | |
Forward foreign exchange contracts | | | | | | | | | |
Fair value embedded derivatives | | | | | | | | | |
Current interest-bearing receivables | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Trade and other payables4 | | | | | | | | | |
| | | | | | | | | |
Forward foreign exchange contracts | | | | | | | | | |
Fair value embedded derivatives | | | | | | | | | |
Interest rate instruments | | | | | | | | | |
| | | | | | | | | |
| | Aker Solutions (Shenzhen) Co. Ltd | | | |
Kvaerner Engineering & Technology (Beijing) Co Ltd | | | |
Rainpower Hangzhou Co Ltd | | | |
| | | |
Aker Solutions Cyprus Limited | | | |
Aker Solutions Finland Oy | | | |
| | | |
| | | |
Aker Solutions Ghana Holding Ltd | | | |
Aker Solutions Deepwater Ghana Ltd | | | |
| | | |
Aker Engineering International Sdn Bhd | | | |
Aker Engineering Malaysia Sdn Bhd | | | |
Aker Solutions APAC Sdn Bhd | | | |
Aker Solutions India Sdn Bhd | | | |
Aker Solutions Malaysia Sdn Bhd | | | |
Aker Solutions Umbilical Asia Pacific Sdn Bhd | | | |
| | | |
Aker Solutions Mocambique Ltda | | | |
| | | |
| | | |
| | | |
Aker Solutions Nigeria Ltd | | | |
| | | |
| | | |
Aker Insurance Services AS | | | |
| | | |
Aker Solutions Contracting AS | | | |
Aker Solutions Holding AS | | | |
Aker Solutions Middle East AS | | | |
| | | |
| | | |
| | | |
Kv\u00e6rner Resources AS | | | |
| | | |
| | | |
| | | |
| | | |
Aker Solutions Gulf Services WLL | | | |
| | | |
Aker Solutions Saudi Arabia Co. Ltd. | | | |
Aker Solutions Korea Co. Ltd | | | |
| | | |
| | | |
Rainpower Kristinehamn AB | | | |
| | | |
Aker Solutions Tanzania Ltd | | | |
Rainpower Hydro Enerji ve Ticaret Ltd | | | |
Aker Engineering and Technology Ltd | | | |
Aker Engineering Malaysia Ltd | | | |
Aker Offshore Partner Ltd | | | |
Aker Solutions Angola Ltd | | | |
Aker Solutions DC Trustees Ltd | | | |
Aker Solutions EAME Limited | | | |
| | | |
| | | |
Aker Solutions Enterprises International (UK) Limited | | | |
Aker Solutions Holding Limited | | | |
Aker Solutions IP Limited | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Aker Solutions USA Corporation | | | |
Kvaerner Americas Holdings Inc | | | |
Kvaerner Renewables US LLC | | | |
1)Kvaerner LLC is under liquidation.
Subsidiaries where Aker Solutions does not have the Majority
of Shares
Aker Solutions has less than 50 percent of the shares in three subsidiaries as
shown in the table. Aker Solutions has control over relevant activities through
shareholders agreements. The subsidiaries are fully consolidated and the non-
controlling interest share of profit and equity is presented in the income statement
and in the balance sheet.\u00a0
Non-Controlling Interests
Aker Solutions acquired the 51 percent minority share in Aker Solutions
Enterprises Ltd in 2022.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-417": {
"value": "Subsidiaries and NCIs
Financial Reporting Principles
The consolidated statements include all entities controlled by Aker Solutions ASA.
Control exists when the company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from its
activities. The financial statements of the subsidiaries are included in the
consolidated financial statements from the date control commences until the date
control ceases. Non-controlling interests (NCIs) are measured on initial recognition
at their portion of fair values, and yearly earnings are allocated to the NCI
according to their ownership interest.
Subsidiaries
Aker Solutions has 72 subsidiaries in 30 countries at the reporting date. The
number of countries where Aker Solutions had employees was about 20. The
group holds the majority of the shares in all subsidiaries except three, see
description below. If not stated otherwise, ownership equals the percentage of
voting shares.
| | | |
| | | |
Aker Solutions Enterprises, LDA | | | |
| | | |
Aker Solutions Azerbaijan LLC | | | |
Aker Solutions do Brasil Ltda | | | |
C.S.E. Mec\u00e2nica e Instrumenta\u00e7\u00e2o Ltda | | | |
| | | |
Aker Solutions Asset Integrity and Management Canada Inc. | | | |
Aker Solutions Canada Inc | | | |
Aker Solutions Marine Contractors Limited | | | |
Aker Solutions (Shenzhen) Co. Ltd | | | |
Kvaerner Engineering & Technology (Beijing) Co Ltd | | | |
Rainpower Hangzhou Co Ltd | | | |
| | | |
Aker Solutions Cyprus Limited | | | |
Aker Solutions Finland Oy | | | |
| | | |
| | | |
Aker Solutions Ghana Holding Ltd | | | |
Aker Solutions Deepwater Ghana Ltd | | | |
| | | |
Aker Engineering International Sdn Bhd | | | |
Aker Engineering Malaysia Sdn Bhd | | | |
Aker Solutions APAC Sdn Bhd | | | |
Aker Solutions India Sdn Bhd | | | |
Aker Solutions Malaysia Sdn Bhd | | | |
Aker Solutions Umbilical Asia Pacific Sdn Bhd | | | |
| | | |
Aker Solutions Mocambique Ltda | | | |
| | | |
| | | |
| | | |
Aker Solutions Nigeria Ltd | | | |
| | | |
| | | |
Aker Insurance Services AS | | | |
| | | |
Aker Solutions Contracting AS | | | |
Aker Solutions Holding AS | | | |
Aker Solutions Middle East AS | | | |
| | | |
| | | |
| | | |
Kv\u00e6rner Resources AS | | | |
| | | |
| | | |
| | | |
| | | |
Aker Solutions Gulf Services WLL | | | |
| | | |
Aker Solutions Saudi Arabia Co. Ltd. | | | |
Aker Solutions Korea Co. Ltd | | | |
| | | |
| | | |
Rainpower Kristinehamn AB | | | |
| | | |
Aker Solutions Tanzania Ltd | | | |
Rainpower Hydro Enerji ve Ticaret Ltd | | | |
Aker Engineering and Technology Ltd | | | |
Aker Engineering Malaysia Ltd | | | |
Aker Offshore Partner Ltd | | | |
Aker Solutions Angola Ltd | | | |
Aker Solutions DC Trustees Ltd | | | |
Aker Solutions EAME Limited | | | |
| | | |
| | | |
Aker Solutions Enterprises International (UK) Limited | | | |
Aker Solutions Holding Limited | | | |
Aker Solutions IP Limited | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Aker Solutions USA Corporation | | | |
Kvaerner Americas Holdings Inc | | | |
Kvaerner Renewables US LLC | | | |
1)Kvaerner LLC is under liquidation.
Subsidiaries where Aker Solutions does not have the Majority
of Shares
Aker Solutions has less than 50 percent of the shares in three subsidiaries as
shown in the table. Aker Solutions has control over relevant activities through
shareholders agreements. The subsidiaries are fully consolidated and the non-
controlling interest share of profit and equity is presented in the income statement
and in the balance sheet.\u00a0
Non-Controlling Interests
Aker Solutions acquired the 51 percent minority share in Aker Solutions
Enterprises Ltd in 2022.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-418": {
"value": "
Financial Reporting Principles
The consolidated statements include all entities controlled by Aker Solutions ASA.
Control exists when the company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from its
activities. The financial statements of the subsidiaries are included in the
consolidated financial statements from the date control commences until the date
control ceases. Non-controlling interests (NCIs) are measured on initial recognition
at their portion of fair values, and yearly earnings are allocated to the NCI
according to their ownership interest.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-419": {
"value": "
Financial Reporting Principles
The consolidated statements include all entities controlled by Aker Solutions ASA.
Control exists when the company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from its
activities. The financial statements of the subsidiaries are included in the
consolidated financial statements from the date control commences until the date
control ceases. Non-controlling interests (NCIs) are measured on initial recognition
at their portion of fair values, and yearly earnings are allocated to the NCI
according to their ownership interest.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-420": {
"value": "
Investments in Companies Financial Reporting Principles
Joint ventures are those entities where the company has joint control and rights
to net assets. Associates are those entities where the company has significant
influence, but not control or joint control (usually between twenty and fifty
percent of the voting power). Interests in joint ventures and associates are
accounted for using the equity method. The investments are initially recognized
at cost (including transaction costs) and subsequently increased or decreased to
recognize the share of the profit or loss. The profit or loss for the equity-
accounted investees is presented as other income when the operations are
closely linked to the current operations of Aker Solutions, otherwise they are
presented as financial income.
Other investments are those entities in which the company does not have
significant influence. These are usually entities where the company holds less
than twenty percent of the voting power. Such investments are designated as
equity securities at fair value through other comprehensive income (FVOCI) as
they represent long-term strategic investments. When the investments are sold,
the accumulated gain or loss in equity is not reclassified to the income
statement.
Investments in Companies
The company has recognized the following balances for its investment in other
companies:
| | |
| | |
| | |
Joint Ventures and Associates | | |
| | |
Total investment in companies | | |
Note 27 continues on next page
Note 27 Investment in Companies cont.
Other Investments
| | |
| | |
| | |
Shares in Aker Horizons AS | | |
Shares in Aker Carbon Capture ASA | | |
Shares in unlisted companies | | |
| | |
Note 27 continues on next page
Note 27 Investment in Companies cont.
Other Investments
| | |
| | |
| | |
Shares in Aker Horizons AS | | |
Shares in Aker Carbon Capture ASA | | |
Shares in unlisted companies | | |
| | |
voltage electrical power systems. By leveraging Unitech Power Systems\u2019 strong
expertise and track record with Aker Solutions' existing front end, engineering
and project management capabilities, the acquisition will drive growth in markets
supported by the energy transition.
Revenue and net profit from Unitech in Aker Solutions\u2019 consolidated income
statement were NOK 69 million and NOK 7 million, respectively. If the
acquisition had taken place at the beginning of the year, the group\u2019s revenue
would have increased by NOK 15 million and net profit would have increased by
NOK 4 million.
Consideration transferred and contingent consideration
NOK 104 million was paid in cash to the selling shareholders at the acquisition
date. Aker Solutions has included a liability of NOK 33 million as deferred
consideration to be paid in cash in first half year 2024. The total consideration of
NOK 137 million represents the fair value at the acquisition date. The liability of
NOK 33 million follows a contingent consideration arrangement based on future
EBITDA performance of Unitech. The range of this element is NOK 24 million to
NOK 44 million. Updated forecast as per year-end 2022 has been used to
estimate the contingent consideration. Transaction costs related to the
acquisition were insignificant.
Measurement of fair value
Customer relationships have been identified as intangible assets assumed in the
acquisition. They are valued at NOK 31 million based on a multi-period excess
earnings method. NOK 96 million has been allocated to goodwill. Goodwill
resulting from the transaction is mainly attributable to value of assembled
workforce and expected synergies from Unitech being part of a global company.
Rainpower
On May 10, 2022, Aker Solutions acquired 100 percent of the shares and voting
rights of the Norwegian company Rainpower from related party Aker Horizons.
The company is a leading technology provider to the hydropower industry. The
acquisition builds on Aker Solutions\u2019 growth strategy and will further strengthen
its offering within renewables. Aker Solutions sees strong industrial synergies in
further developing Rainpower into an innovative hydropower technology
company to optimize hydropower developments and operations.
The company has a subordinated perpetual equity linked loan of NOK 113 million
with no instalments or scheduled maturity date. As Rainpower has no\u00a0
contractual obligation to repay the loan, the hybrid loan is assessed to not meet
the requirements in the definition of a financial liability. The fair value of the
hybrid loan is estimated to NOK 12 million and has been classified as non-
controlling interests within equity.
Revenue and net loss from Rainpower in Aker Solutions\u2019 consolidated income
statement were NOK 218 million and NOK 105 million, respectively. If the
acquisition had taken place at the beginning of the year, the group\u2019s revenue
would have increased by NOK 113 million and net profit would have decreased
by NOK 44 million.
Note 28 continues on next page
Consideration transferred
The purchase price of NOK 100 million was settled in financial instruments,
being shares in Aker Carbon Capture. Aker Solutions took over Rainpower\u2019s
cash and debt. In addition there is a discretionary element which may bring the
purchase price to NOK 150 million. The share purchase agreement does not
contain trigger elements for the discretionary element, but future material
strengthening of the company\u2019s equity may lead to a payment. Transaction costs
related to the acquisition were insignificant. Transaction with related party Aker
Horizons was based on negotiations between the parties, and management
believes that the agreed prices is a fair approximation to arms length prices.
Measurement of fair value
Customer relationships have been identified as intangible assets and are valued
at NOK 50 million based on a multi-period excess earnings method. NOK 82
million has been allocated to goodwill, which mainly is attributable to value of
assembled workforce and expected synergies from Rainpower being part of a
larger organization with extensive project execution experience.
Frontica Engineering
On June 30, 2022, Aker Solutions acquired 100 percent of the shares and voting
rights of the Norwegian company Frontica Engineering to secure engineering
capacity. The company is serving the offshore energy sector in the domestic and
international markets and has a multidisciplinary staff of around 50 individuals.
NOK 16 million was paid in cash for the company. A provisional purchase price
allocation shows excess values of NOK 18 million that are allocated to goodwill
and represent value of assembled workforce. Revenue and net loss from
Frontica Engineering in Aker Solutions\u2019 consolidated income statement were
NOK 7 million and NOK 2 million, respectively. If the acquisition had taken place
at the beginning of the year, the group\u2019s revenue would have increased by NOK
20 million and net profit would have decreased by NOK 4 million. In December
2022, Frontica Engineering was merged with Aker Solutions AS.
Consideration transferred
| | | |
| | | |
| | | |
| | | |
| | | |
Consideration transferred | | | |
Of which non-cash consideration | | | |
| | | |
| | | |
Goodwill arising from the acquisitions has been recognized as follows:
| | | |
| | | |
| | | |
Consideration transferred | | | |
| | | |
| | | |
Non-controlling interests | | | |
Fair value of identifiable net asset | | | |
| | | |
Of the total goodwill of NOK 196 million NOK 9 million related to Rainpower is
expected to be deductible for tax purposes.
In 2022, Aker Solutions also acquired the 51 percent minority share in Aker
Solutions Enterprises Limited and a 50 percent ownership in EPE Eigedom for a
total cash consideration of NOK 83 million. Aker Solutions first purchased 100
percent of EPE Eigedom, and later sold 50 percent making the company an
equity accounted investee.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-425": {
"value": "
Financial Reporting Principles
Business combinations are transactions where Aker Solutions obtains control of
one or more businesses. Business combinations are accounted for using the
acquisition method when control is transferred to the group. The consideration
transferred in the acquisition is generally measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is tested annually for
impairment. Goodwill is allocated to the cash generating unit that is expected to
benefit from synergies from the acquisition. In some business combinations
goodwill will arise due to the requirement to recognize deferred tax on the
difference between the assigned fair values and the related tax bases. This is
referred to as technical goodwill. Transactions costs are expenses as incurred,
except if related to the issue of debt or equity securities incurred in connection
with a business combination.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-426": {
"value": "Subsea JV Transaction
In 2022 Aker Solutions entered into agreements with SLB (formerly
Schlumberger) and Subsea 7 to form a joint venture to deliver a step change in
subsea production economics by helping unlock reserves, reduce time to first oil
and lower development costs while simultaneously delivering on their
decarbonization objectives.
Aker Solutions and SLB will contribute their subsea business into the joint
venture with respectively 40 and 60 percent of the values, and the transactions
are expected to close during the second half of 2023. Following the
establishment of the Joint Venture Aker Solutions will sell 10 percent of the
shares to SLB and 10 percent to Subsea 7. The Joint Venture will be owned by
SLB (70 percent), Aker Solutions (20 percent) and Subsea 7 (10 percent) once
the transactions are completed. Aker Solutions will receive USD 700 million in
consideration for the sale of the 20 percent ownership in the Joint Venture as
follows:
\u25fcUSD 306.5 million in proceeds from SLB which will be settled in the form of
shares in SLB. The shares will be settled based on the volume weighted
average price for the ten trading days ending on the fifth trading day
preceding closing of the transaction and is subject to a lock-up period of
minimum 180 days
\u25fcUSD 306.5 million in proceeds from 10 percent divestment to Subsea 7 which
will be settled in cash. USD 153 million of these will be settled at closing and
the remaining USD 153.5 million will be settled, with interest, at the latest on
June 30, 2024
\u25fcUSD 87.5 million in proceeds from a vendor note from the JV to be paid, with
interest, to Aker Solutions with minimum 50 percent one year from closing
and the remainder within two years from closing
These proceeds represent a significant currency exposure, and Aker Solutions
has therefore entered into a FX put option contract of USD 175 million to hedge
for a part of the exposed proceeds as of December 31, 2022. Aker Solutions
gets the right, but not the obligation, to sell USD at a pre-defined exchange rate.
This will provide full protection for a falling USD, but gives full upside potential
from a rising USD for the hedged share of the expected proceeds.
The Subsea business that will be contributed into the Joint Venture will largely
correspond to the Subsea Segment in Aker Solutions. This segment made up 34
percent of revenues and 79 percent of EBITDA in 2022. The transactions to
establish the Joint Venture is subject to approval by regulatory authorities in a
number of jurisdictions. Until such clearances are obtained, Aker Solutions and
SLB will continue to operate their respective subsea businesses completely
independent and autonomous of each other. Aker Solutions expects to retain an
estimated USD 300 million of cash generation from the business in the time
period between the agreement was signed and the expected closing.
Aker Solutions has assessed the effects of the transactions on the 2022
financial statements and has concluded that the subsea business will not be
classified as held for sale while pending regulatory approvals. The transactions
will therefore not have any effects on presentation of the 2022 financial
statements. Costs related to the transactions are expensed as incurred.
Following the closing of the transactions, the Joint Venture will be presented as
an equity accounted investee in the financial statement for Aker Solutions. The
transactions are expected to close during the second half of 2023 if approved
by regulatory bodies.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-427": {
"value": "Related Parties and Key Management Compensation
Financial Reporting Principles
Related party relationships are defined to be entities under joint control or
significant influence by Aker Solutions, and companies outside the Aker Solutions
group that are under control (either directly or indirectly) or joint control by the
owners having significant influence over Aker Solutions. The management and the
Board of Aker Solutions are also related parties.
Related Parties of Aker Solutions
The largest shareholder of Aker Solutions is Aker Holdings AS (previously Aker
Kv\u00e6rner Holding AS), which is wholly-owned by Aker ASA. Aker Solutions is an
associate of Aker ASA, and entities controlled by Aker ASA and entities which
Kjell Inge R\u00f8kke and his close family controls through The Resource Group TRG
AS are considered related parties to Aker Solutions. These entities include
companies like Aker Carbon Capture, Aker Offshore Wind and Cognite and are
referred to as Aker entities in this note. Companies that are associates of Aker
ASA or The Resource Group TRG AS are not considered related parties of Aker
Solutions, such as Akastor and Aker BP.
Related party relationships also include entities under joint control or significant
influence by Aker Solutions. Non-controlling interests with significant influence
are also considered as related parties of Aker Solutions.
Related parties are in a position to enter into transactions with the company that
would potentially not be undertaken between unrelated parties. Transactions with
related parties are based on negotiations between the parties, and management
believes that the agreed prices is a fair approximation to arms length prices.
Note 30 continues on next page
Note 30 Related Parties cont.
Transactions and Balances with Related Parties
| | | | | | |
| | |
| | Joint ventures and associates | | | Joint ventures and associates | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Depreciation and impairment of ROU assets | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Right-of-use (ROU) assets | | | | | | |
| | | | | | |
Non-current interest-bearing receivables | | | | | | |
Current interest-bearing receivables | | | | | | |
Non-current leasing liabilities | | | | | | |
| | | | | | |
Current leasing liabilities | | | | | | |
representative function with NOK 740,000 in 2022 (NOK 765,000 in 2021).
Compensation to Key Management
The key management personnel of Aker Solutions include the Board of Directors
and the executive management team. Refer to further description about
management compensation in the Management Remuneration Report available
| | |
| | |
| | |
Salaries and wages including holiday allowance | | |
Social security contributions | | |
| | |
| | |
| | |
| | |
Total compensation to key management personnel | | |
representative function with NOK 740,000 in 2022 (NOK 765,000 in 2021).
Compensation to Key Management
The key management personnel of Aker Solutions include the Board of Directors
and the executive management team. Refer to further description about
management compensation in the Management Remuneration Report available
| | |
| | |
| | |
Salaries and wages including holiday allowance | | |
Social security contributions | | |
| | |
| | |
| | |
| | |
Total compensation to key management personnel | | |
services to the auditor.
| | | | | | |
| | | |
Amounts in NOK million (excl. VAT) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-432": {
"value": "Subsequent Events
Financing and liquidity
Bond buyback
On February 14, 2023, the issuer Aker Solutions ASA invited holders of its
outstanding NOK 1,000 million senior unsecured floating rate bonds due June
2024 (ISIN NO0010853286) to tender any and all of their bonds for purchase by
the issuer for cash at a purchase price of 102 percent.
Valid tenders in an aggregate nominal amount of NOK 477 million was accepted.
Following completion of the buy-back, the Issuer holds bonds for a total nominal
amount of NOK 563 million corresponding to 56 percent of the total outstanding
nominal amount.
Revolving Credit Facility
Aker Solutions ASA has signed a new five year NOK 3,000 million multi-currency
Revolving Credit Facility (RCF) dated January 30, 2023, with a syndicate of 10
banks. The new facility replaces the NOK 5,000 million RCF dated March 13,
2018, with maturity March 13, 2023.
Changes in ownership
Aker Solutions has entered into an agreement to acquire all minority
shareholdings (10 percent) in Aker Solutions Ghana Ltd in February 2023. The
transaction is expected to be completed by December 31, 2023. The transaction
is completed as a preparation for the contribution of the subsea business into
the Joint Venture with SLB and Subsea 7.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-433": {
"value": "Oksen\u00f8yveien 81366 LysakerNorway",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-434": {
"value": "Oksen\u00f8yveien 81366 LysakerNorway",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:5967007LIEEXZXG42836",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}