Grieg Seafood ASA is an integrated Norwegian seafood company engaged in farming of Atlantic salmon.\u00a0The Group\u2019s integrated sales organization sell the farmed salmon from our regions to the market, primarily as fresh head-on gutted, but also processed through external processing partners.\u00a0Grieg Seafood ASA is a public limited company\u00a0registered in Norway. Its head office is located at C. Sundtsgt. 17/19, Bergen, Norway. The Company was listed on the Oslo Stock Exchange (Euronext) on 21 June 2007 and has operations in Norway and Canada. Until 15 December 2021, the Company also had operations in Shetland in the UK. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS, which in turn own 100 % of Grieg Aqua AS, which owns 50.17% of Grieg Seafood ASA.
The consolidated financial statements as per 31\u00a0December 2022 for the period 1 January to 31 December have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, and were approved by the Board of Directors on 30\u00a0March 2023.
All amounts in these financial statements with note disclosures are stated in NOK thousand unless otherwise specified.
In the following, \"Group\" describes information relating to the Grieg Seafood Group, while \"Company\" refers to the parent company, Grieg Seafood ASA.
In November 2020, we announced that the Board of Grieg Seafood had decided to divest our investment and operations in Shetland, as we wished to focus on our operations in Norway and Canada going forward. Grieg Seafood ASA sold 100% of the shares in Grieg Seafood Hjaltland Ltd on 15 December 2021 to Scottish Sea Farms Ltd. In turn, Grieg Seafood Hjaltland Ltd owned 100 % of Grieg Seafood Shetland Ltd, which operated the Group's salmon farming (and as from 2021 related sales) operations. Grieg Seafood Shetland Ltd owned 100% of the (up until 15 December 2021) dormant company Isle of Skye Salmon Ltd. Grieg Seafood Hjaltland Ltd, together with Grieg Seafood Shetland Ltd and Isle of Skye Salmon Ltd, form the Shetland disposal group. The operations of the Grieg Seafood Hjaltland UK Ltd Group were, from Q4 2020 until their sale on 15 December 2021, classified as held for sale in the consolidated statement of financial position, and presented as discontinued operations in the consolidated income statement and consolidated cash flow statement of
Grieg Seafood. The Shetland disposal group includes the prior reporting segment of Shetland UK, in addition to the UK sales operations. The Shetland disposal group was deconsolidated from the Group as of 15 December 2021. The financial position of the Shetland disposal group is therefore not included in Grieg Seafood\u2019s consolidated statement of financial position at year-end 2021. The Group received a preliminary cash settlement in December 2021. However, settlement was not finalized until February 2023. For more information, see Note 6.
Grieg Seafood Group comprised the following entities at 31\u00a0December 2022:
Grieg Seafood Sales Ltd (owned 100% by Grieg Seafood Norway AS) is domiciled in the UK. Grieg Seafood Sales Ltd was not part of the Shetland disposal group, and the entity has been dormant throughout 2021-2022. Grieg Seafood BC Ltd. (and its 100% owned subsidiary Grieg Seafood Sales North America Inc) is domiciled in British Columbia, Canada, while Grieg Seafood Newfoundland Ltd (incl. the subsidiaries Grieg Marine NL Ltd and Grieg NL Nurseries Ltd) is domiciled in Newfoundland, Canada. Grieg Seafood Premium Brands Inc (domiciled in the USA) is owned 100% by Grieg Seafood Sales North America Inc. Grieg Seafood Sales USA Inc (domiciled in the USA) is owned 100% by Grieg Seafood Norway AS.
To be able to correctly calculate and report the proposed resource rent tax in Norway as from 2023 (see Note 15), Grieg Seafood has considered it necessary to reorganize the ownership of aquaculture licenses in Norway into separate commercial and non-commercial aquaculture licenses by legal entities. As such, Grieg Seafood Rogaland Sj\u00f8 AS has been established as a subsidiary (100%) of Grieg Seafood Rogaland AS, and Grieg Seafood Finnmark Sj\u00f8 AS as a subsidiary (100%) of Grieg Seafood Finnmark AS. The commercial aquaculture licenses in Norway are owned by Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS. These four entities are all domiciled in Norway.
The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA.
Grieg Seafood Canada AS and Grieg Seafood Newfoundland AS are holding companies within the Group, and wholly own the production companies Grieg Seafood BC Ltd. (incl. subsidiaries) and Grieg Seafood Newfoundland Ltd (incl. subsidiaries), respectively.
Grieg Seafood ASA is an integrated Norwegian seafood company engaged in farming of Atlantic salmon.\u00a0The Group\u2019s integrated sales organization sell the farmed salmon from our regions to the market, primarily as fresh head-on gutted, but also processed through external processing partners.\u00a0Grieg Seafood ASA is a public limited company\u00a0registered in Norway. Its head office is located at C. Sundtsgt. 17/19, Bergen, Norway. The Company was listed on the Oslo Stock Exchange (Euronext) on 21 June 2007 and has operations in Norway and Canada. Until 15 December 2021, the Company also had operations in Shetland in the UK. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS, which in turn own 100 % of Grieg Aqua AS, which owns 50.17% of Grieg Seafood ASA.
The consolidated financial statements as per 31\u00a0December 2022 for the period 1 January to 31 December have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, and were approved by the Board of Directors on 30\u00a0March 2023.
All amounts in these financial statements with note disclosures are stated in NOK thousand unless otherwise specified.
In the following, \"Group\" describes information relating to the Grieg Seafood Group, while \"Company\" refers to the parent company, Grieg Seafood ASA.
In November 2020, we announced that the Board of Grieg Seafood had decided to divest our investment and operations in Shetland, as we wished to focus on our operations in Norway and Canada going forward. Grieg Seafood ASA sold 100% of the shares in Grieg Seafood Hjaltland Ltd on 15 December 2021 to Scottish Sea Farms Ltd. In turn, Grieg Seafood Hjaltland Ltd owned 100 % of Grieg Seafood Shetland Ltd, which operated the Group's salmon farming (and as from 2021 related sales) operations. Grieg Seafood Shetland Ltd owned 100% of the (up until 15 December 2021) dormant company Isle of Skye Salmon Ltd. Grieg Seafood Hjaltland Ltd, together with Grieg Seafood Shetland Ltd and Isle of Skye Salmon Ltd, form the Shetland disposal group. The operations of the Grieg Seafood Hjaltland UK Ltd Group were, from Q4 2020 until their sale on 15 December 2021, classified as held for sale in the consolidated statement of financial position, and presented as discontinued operations in the consolidated income statement and consolidated cash flow statement of
Grieg Seafood. The Shetland disposal group includes the prior reporting segment of Shetland UK, in addition to the UK sales operations. The Shetland disposal group was deconsolidated from the Group as of 15 December 2021. The financial position of the Shetland disposal group is therefore not included in Grieg Seafood\u2019s consolidated statement of financial position at year-end 2021. The Group received a preliminary cash settlement in December 2021. However, settlement was not finalized until February 2023. For more information, see Note 6.
Grieg Seafood Group comprised the following entities at 31\u00a0December 2022:
Grieg Seafood Sales Ltd (owned 100% by Grieg Seafood Norway AS) is domiciled in the UK. Grieg Seafood Sales Ltd was not part of the Shetland disposal group, and the entity has been dormant throughout 2021-2022. Grieg Seafood BC Ltd. (and its 100% owned subsidiary Grieg Seafood Sales North America Inc) is domiciled in British Columbia, Canada, while Grieg Seafood Newfoundland Ltd (incl. the subsidiaries Grieg Marine NL Ltd and Grieg NL Nurseries Ltd) is domiciled in Newfoundland, Canada. Grieg Seafood Premium Brands Inc (domiciled in the USA) is owned 100% by Grieg Seafood Sales North America Inc. Grieg Seafood Sales USA Inc (domiciled in the USA) is owned 100% by Grieg Seafood Norway AS.
To be able to correctly calculate and report the proposed resource rent tax in Norway as from 2023 (see Note 15), Grieg Seafood has considered it necessary to reorganize the ownership of aquaculture licenses in Norway into separate commercial and non-commercial aquaculture licenses by legal entities. As such, Grieg Seafood Rogaland Sj\u00f8 AS has been established as a subsidiary (100%) of Grieg Seafood Rogaland AS, and Grieg Seafood Finnmark Sj\u00f8 AS as a subsidiary (100%) of Grieg Seafood Finnmark AS. The commercial aquaculture licenses in Norway are owned by Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS. These four entities are all domiciled in Norway.
The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA.
Grieg Seafood Canada AS and Grieg Seafood Newfoundland AS are holding companies within the Group, and wholly own the production companies Grieg Seafood BC Ltd. (incl. subsidiaries) and Grieg Seafood Newfoundland Ltd (incl. subsidiaries), respectively.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise indicated.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The consolidated financial statements have been prepared under the historical cost convention, modified for biological assets, equity instruments and financial assets/liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgement in the process of applying the company\u2019s accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated financial statements are described in Note 4.
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in 2022. See Note 30 for more information concerning relevant amendments and interpretations.
CONSOLIDATION PRINCIPLES
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the Group exercises control. Control over an entity arises when the Group is exposed to variability in the return from the entity and has the ability to impact this return by virtue of its influence over the entity. Subsidiaries are consolidated from the day control arises and deconsolidated when control ceases.
The acquisition method of accounting is applied for acquisitions. The consideration is measured as the fair value of any transferred assets, liabilities or issued equity instruments. The fair value of all the assets or liabilities resulting from contingent consideration agreements is included in the consideration. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. Non-controlling interests in the acquired entity are measured from time to time either at fair value, or at their proportionate share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are incurred. In the case of multi-stage acquisitions, the proportion of ownership from any earlier purchases is restated at fair value at the date of control, with changes in value recognized in the income statement.
Contingent consideration classified as equity shall not be remeasured and its subsequent settlement shall be accounted for within equity. Other contingent considerations shall be measured at fair value at each reporting date and changes in fair value shall be recognized in the income statement.
Intragroup transactions, intercompany balances, and unrealized profits and losses between Group companies are eliminated. Reported figures from the subsidiaries are restated when this is necessary to achieve consistency with the Group's accounting policies.
CHANGES IN SHAREHOLDINGS IN SUBSIDIARIES WITHOUT LOSS OF CONTROL
Transactions with non-controlling owners of subsidiaries that do not involve loss of control are treated as equity transactions. When shares are purchased from non-controlling owners, the difference between the consideration and the proportionate percentage of net assets recognized in the subsidiary\u2019s statement of financial position relating to such shares is recognized in the parent company\u2019s owners\u2019 equity. Gains or losses on disposals of non-controlling owners are similarly recognized in equity.
DIVESTMENT OF SUBSIDIARIES
When the Group no longer has control, any residual ownership interest is measured at fair value with changes in value recognized in profit or loss. Using this fair value as deemed cost, the interest is subsequently classified either as an investment in associates or as a financial asset. Amounts previously recognized in other comprehensive income relating to this company are treated as if the Group had disposed of the underlying assets and liabilities. This could mean that amounts that were previously recognized in other comprehensive income are reclassified to profit or loss.
ASSOCIATES
Associates are entities over which the Group exercises significant influence, but not control. Significant influence will generally exist when the Group has a shareholding of between 20% and 50% of the voting rights. Investments are recognized at cost at the time of acquisition, and the Group\u2019s share of the results in subsequent periods is recognized through profit or loss. The amount recognized in the statement of financial position includes any implicit goodwill identified at the date of purchase.
The Group\u2019s share of its associates\u2019 post-acquisition profits or losses is recognized in the income statement, the share of other comprehensive income is recognized in the consolidated statement of comprehensive income and both are added to the investment in associates in the statement of financial position. When the Group\u2019s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables towards the entity, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. If necessary, the associates\u2019 financial statements are restated to achieve consistency with the Group\u2019s accounting policies.
At the end of each accounting period, the Group determines whether there is any need to recognize an impairment of the investment in the associate. In such cases, the impairment amount is measured as the difference between the recoverable amount of the investment and its carrying value, and the difference is recognized in the income statement together with share of profit or loss in \u201cShare of profit from associates\u201d.
In the event of any gains or losses on transactions between the Group and its associates, only the proportionate share relating to external shareholders is recognized. Unrealized losses are eliminated unless there is a need to recognize an impairment for the asset that was the subject of the transaction. Accounting policies of associates are changed when necessary to ensure consistency with the accounting policies adopted by the Group. Dilution gains and losses arising on investments in associates are recognized in the income statement.
In the event of a reduction in a shareholding in an associate where the Group continues to exercise significant influence, only a proportionate share of amounts previously recognized in other comprehensive income is reclassified to profit or loss.
DISCONTINUED OPERATIONS
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
Disclosures for the Group\u2019s discontinued operations are provided in Note 6. All other notes to this consolidated financial statement refer to the Group\u2019s continuing operations, unless the note explicitly states otherwise.
SEGMENT INFORMATION
Operating segments are reported in a manner consistent with internal reporting to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group management.
FOREIGN CURRENCY TRANSLATION
The financial statements of each of the Group\u2019s entities are generally measured using the currency of the economic area in which the entity operates (\u201cthe functional currency\u201d). The consolidated financial statements are presented in Norwegian Kroner (NOK), which is the parent company\u2019s functional and presentation currency.
TRANSACTIONS AND BALANCE SHEET ITEMS
Foreign currency transactions are translated into the functional currency using the exchange rates in force at the transaction date. Foreign exchange gains or losses resulting from the settlement of such transactions, are recognized in profit or loss. Translation differences on monetary items (assets and liabilities) that are not denominated in the entity\u00b4s functional currency are also recognized through profit or loss.
GROUP COMPANIES
The income statements and statements of financial positions of the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
\u2022The statement of financial position is translated using the closing rate at the end of the period.
\u2022Income and expense items are translated at average exchange rates for the period (if the average is not a reasonable estimate of the cumulative effects of using the transaction rate, the transaction rate is used).
\u2022Translation differences are recognized in other comprehensive income and specified separately.
When a foreign operation is sold, the exchange difference, which in previous periods was recognized in other comprehensive income, is not accrued. The accumulated exchange difference on the sale of the foreign operation is hence reversed in other comprehensive income. Gains or losses on the sale are recognized on a basis of zero exchange difference in the net profit on ordinary activities.
Goodwill and fair value adjustments of assets and liabilities on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated using the closing currency rate at the balance sheet date.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the asset.
Improvements are recognized in the asset\u2019s carrying amount or as a separate asset when it is probable that future economic benefits associated with the improvement will flow to the Group and the cost of the item can be reliably measured. All other repairs and maintenance are recognized in the income statement during the financial period in which the costs are incurred.
Land and buildings mainly comprise freshwater facilities, harvesting plants and offices. Land is not depreciated. Other operating assets are depreciated in accordance with the straight-line method so that the cost, or remeasured value, is written down to residual value over its expected useful economic life as follows:
\u2022Buildings/real estate 10\u201350 years
\u2022Plants, barges, onshore power supply 5\u201330 years
\u2022Nets/cages/moorings 5\u201325 years
\u2022Other equipment 3\u201335 years
The assets\u2019 useful lives and residual values are estimated at each balance sheet date and adjusted if necessary. In 2022 there has not been any changes to the estimated useful life of the Group\u2019s property, plant and equipment as a consequence of climate-related risk.
An asset\u2019s carrying value is written down to its recoverable amount if the carrying value is greater than its estimated recoverable amount. Gains and losses on disposals are recognized on a net basis as \u201cother gains and losses\u201d in the income statement and represent the difference between the sales price and the carrying value.
INTANGIBLE ASSETS
Intangible assets that arise internally within the Group are not recognized.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill on acquisitions of subsidiaries is classified as an intangible asset. Goodwill on the purchase of a share in an associate is included in \u201cinvestments in associates\u201d. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
For the purpose of impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
LICENSES
Fish-farming licenses with an indefinite useful life are not amortized but reviewed for impairment annually, or more frequently if there are indications that the carrying value may have decreased.
The Group considers the following licenses to have indefinite useful lives:
\u2022Licenses granted with an indefinite useful life, where the company has no other contractual restrictions relating to the use of the license.
\u2022Licenses granted with a finite useful life, but where the license holders can renew the licenses without incurring considerable expenses.
Licenses with a finite useful life are amortized over their useful lives, and tested for impairment if there are indications that future earnings do not justify the asset\u2019s carrying value. Such licenses relate to water licenses for hatcheries and some specific seawater licenses. The following sections provide a description of licenses in Norway and Canada. See Note 10 Intangible assets for an overview of the licenses.
Norway
The licensing regime for the production of salmon in Norway is enacted by the Norwegian Parliament through the Aquaculture Act. The Ministry of Trade, Industry and Fisheries grants permits for aquaculture (licenses). All aquaculture operations are subject to licensing, and no one can produce salmon without permission from the authorities, see Section 4 of the Aquaculture Act.
The aquaculture permit allows the production of salmon in limited geographic areas within the current determined limitations of the permit scope. The Aquaculture Act is administered centrally by the Ministry of Trade, Industry and Fisheries, with the Directorate of Fisheries as the supervisory authority. Regionally, several industry authorities jointly manage full administrative and supervisory responsibility within the regulating range of the Aquaculture Act. The county council is the regional administrative body, while the Directorate of Fisheries serves as appellate body in locality and licensing matters.
Seawater licenses
Each license for the farming of salmon in the sea is subject to a production limit in the form of \u201cmaximum allowed biomass\u201d (MAB)\u00a0 on both company and location/seawater site level. The system means the license holder can at no time have a standing biomass (number of kg of live fish in seawater) that exceeds the company level MAB, in addition that no location can have a standing biomass that exceeds the seawater site\u2019s MAB. When a seawater site is approved, a maximum level of tonnes of fish is set, based on the location and environmental conditions on the site. The normal size of a permit is 780 tonnes at the license level ex. the county of Troms and Finnmark, while the normal size of a permit in Troms and Finnmark is 945 tonnes. While the extent of biomass a company can possess primarily depends on the type and number of licenses, the limitation at site level is primarily dependent on the site\u2019s environmental sustainability. See Section 15 of the Salmon Allocation Regulation (\u201cLaksetildelingsforskriften\u201d).
Norway also has green licenses, with stricter environmental criteria. The sea lice limit is half that of regular licenses, with stricter criteria for escape prevention technologies and limits on the amount of medical treatment permitted per generation.
Hatchery licenses
Young salmon are defined as eggs, juveniles, parr or smolt to be released at another location, see Section 4(f) of the Salmon Allocation Regulation. Such licenses are not limited and thus subject to continuous application for new licenses or changes to existing licenses. Pursuant to the regulations, annual production is limited to 15 million fish.
\u00a0
Broodstock and R&D licenses
These licenses are not limited in number. The purpose of broodstock licenses is to produce roe and milt from salmon with improved and/or specific traits. Broodstock licenses include both a land and sea phase, i.e. broodfish and egg production are covered by the same licensing process. The purpose of an R&D license is to encourage important research projects that can bring the Norwegian aquaculture industry forward. Permits are means tested, meaning that the applicant must demonstrate a need for the production of eggs, specific research projects or for educational purposes.
Educational licenses
Educational licenses in Norway are given to universities, colleges or high schools offering aquaculture-related courses of study. Salmon farming companies can lease educational licenses from the educational institution. Part of the students\u2019 training will then take place at these salmon farms.
Harvesting pen licenses
Licenses utilized for holding pens where live fish are kept prior to harvesting. These relate to specific locations.
Duration and renewal
The Ministry may in individual decisions or regulations specify further provisions on the content of aquaculture licenses, including matters relating to scope and time limitations, see Section 5(2) of the Aquaculture Act. Nonetheless, the preparatory work for the Aquaculture Act specifies that licenses are normally granted without a time limit.
Grieg Seafood\u2019s general fish farming and hatchery licenses are not time-limited under current regulations. After the reform in 2009, a number of licenses were time-limited, mainly for 15 years. As no government practices have been established relating to the renewal of broodstock licenses, the current understanding is that they will be renewed upon application. Expiration of licenses allows for application for renewal on demand. A license for harvesting pens is valid for ten years and must be renewed on expiration, provided that the license is still connected to an approved harvesting facility.
Disposal and withdrawal
All licenses can be transferred and mortgaged in accordance with Section 19 of the Aquaculture Act. Transfers and mortgages must be recorded in a separate register (the Aquaculture Register). It is not permitted to rent out licenses or license capacity.
Section 9 of the Aquaculture Act sets out the basis for withdrawal of an aquaculture license. This states that there must be significant breaches of the terms of an aquaculture license before it can be revoked.
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and east coasts of Vancouver Island. To operate farms in British Columbia, Canada, the following three licenses must be in place:
1.Aquaculture license \u2013 issued by the Department of Fisheries and Oceans and the First Nations.
2.License of Occupation (Tenures) \u2013 issued by the Ministry of Forest, Lands and Natural Resource Operations.
3.Navigation Water Permit \u2013 issued by Transport Canada (Canadian public authority).
For restrictions regarding production quantity, see table in Note 10.
Duration and renewal
1.Aquaculture license \u2013 duration of one year, renewal each year is a formality.
2.License of Occupation \u2013 duration of 2\u201320 years. Renewal is applied for on expiration.
3.Navigation Water Permit \u2013 duration of five years, but possible to apply for renewal.
New renewal process in Canada West
In British Columbia, licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, were the next renewal should have been in June 2022. This has been put on hold because of the current Canadian federal Government has in its mandate letter to the Minister of Fisheries, Ocean and Canadian Coast Guard stated that a transition plan should be developed by 2025 in collaboration with Indigenous communities and the BC Province, outlining how the industry will transition from open-net pen in coastal BC. See Note 4 for more information.
Newfoundland
Grieg Seafood Newfoundland has exclusive farming rights to Placentia Bay. To operate aquaculture sites in Newfoundland, Canada, the following approvals and licenses must be in place:
\u2022Aquaculture License \u2013 issued by the Department of Fisheries Forestry and Agriculture
\u2022Lease License for Occupancy \u2013 issued by Crown Lands division of Department of Fisheries Forestry and Agriculture
\u2022Canadian Navigable Waters Act - issued by Transport Canada
\u2022Water Use Approval \u2013 issued by Department of Environment, Climate Change, and Municipalities
Duration and renewal
Aquaculture licenses are granted for a six-year term. Each year, licensees must complete the validation process and abide by the legislative references: Aquaculture Act and the Policy cross references as Aquaculture License Renewal AP 6, Annual reporting AP 7 and site utilization. For renewal,\u00a0 licensees are required to follow and comply with the requirements set out in AP 6 License Renewal. Licensees must abide by license conditions, policies, and regulations at all times. Licenses may be suspended or cancelled if a breach occurs, or they may not be renewed.
The timeline supports two production cycles and promotes longer-term investment and stability.\u00a0 Ensuring sites are being utilized and developed by\u00a0 license holders in accordance with approved plans on file with the department falls under AP 8 Site Utilization. If sites are not being utilized based on approved plans on file, they may not be renewed.
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses are recognized in the statement of financial position at cost and amortized over their estimated useful lives. Customer portfolios are recognized in the statement of financial position at cost on the date of purchase. Amortization is calculated using the straight-line method over the estimated useful life, as follows:
\u2022Computer software 3\u201310 years
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets with an indefinite useful life are not amortized but are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever there are indications that future earnings do not justify the carrying value.
An impairment loss is recognized for the amount by which the asset\u2019s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for indicators of possible reversal of the impairment at each reporting date.
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. The classification is performed in accordance with the substance of the contractual arrangement, and in line with the definitions of a financial asset, a financial liability and an equity instrument.
Ordinary purchases and sales of investments are recognized on the trade-date, the date on which the Group commits to purchase or sell the asset. All financial assets that are not stated at fair value through profit or loss are initially recognized at fair value plus transaction costs.
FAIR VALUE HIERARCHY
The following of the Group\u2019s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. See Note 3 for information on valuation techniques.
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments:
\u2022Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
\u2022Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
\u2022Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the 2022 reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
FINANCIAL ASSETS
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. The Group has financial assets classified as follows:
\u2022Financial assets at amortized cost (debt instruments)
\u2022Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
\u2022Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group's financial assets at amortized cost includes trade receivables and other short-term deposit. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from Contracts with Customers.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognized in the income statement.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis. The category also include the Group\u2019s investments in debt instruments and money market funds.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
a.The rights to receive cash flows from the asset have expired, or
b.The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u201cpass-through\u201d arrangement; and either
i.the Group has transferred substantially all the risks and rewards of the asset, or
ii.the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
See the \u201cTrade receivable\u201d section in this note for specific accounting principles on expected credit loss on trade receivables.
FINANCIAL LIABILITIES
Financial liabilities are classified, at initial recognition, as amortized cost (loans and borrowings), or as financial liabilities at fair value through profit or loss.
Financial liabilities at amortized cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial derivative contracts. Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the income statement.
HEDGING
Hedge accounting
The Group do not utilize the hedge accounting principles of IFRS 9.
Non-hedge accounting
The Group engage in short-term derivative contracts to hedge currency- and interest risk. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses.
FISH POOL SALE AND PURCHASE AGREEMENTS
For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively.
INVENTORIES
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The net realizable value is the estimated sales price less the estimated costs of completion and sale.
BIOLOGICAL ASSETS
The accounting treatment of live fish by enterprises applying IFRS is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy of methods for the measurement of biological assets at level 3. The basic principle is that such assets shall be measured at fair value less costs to sell. Fair value is defined in IFRS 13 as \u201cthe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date\u201d. According to IFRS 13, the highest and best use of the biological asset establishes the valuation premise.
Biological assets comprise of smolt and fish in the sea. The fish are divided into two main groups, depending on the stage of the life cycle. At the earliest stage of the life cycle, the fish are classified in group 1) roe, fry and smolt. Group 1 biological assets is disclosed as \u201cbiological assets on land\u201d in Note 9.
When the fish are large enough to be transferred to the sea, they are classified in group 2) biomass in sea. The group 2 biological assets classification is further decomposed in Note 9 as \u201cimmature fish in sea, round weight < 4.60 kg\u201d and \u201cmature fish in sea, round weight >\u00a04.60 kg\u201d.
\u2022Fish onshore (smolt) are recognized at accumulated cost. The best estimate of fair value is the accumulated cost because of very little biological transformation. This assessment must be seen in the light of the fact that smolt are currently transferred to the sea at a stage when their weight is still relatively low.
\u2022For fish in sea, the fair value is calculated by applying a cash-flow based present value model.
The fair value of fish in the sea is estimated for each location.
In accordance with the principle relating to highest and best use, Grieg Seafood considers that the fish have optimal harvest weight when they have a live round weight of 4.60 kg, which corresponds to 4.00 kg gutted weight. Fish with a live round weight of 4.60 kg or more are classified as ready for harvest (mature fish), while fish that have still not achieved this weight are classified as not ready for harvest (immature fish).
The cash-flow based present value model does not rely on historical and company specific factors. In a hypothetical market with perfect competition, a hypothetical buyer of live fish would maximum be willing to pay the present value of the estimated future profit from the sale of the fish when it is ready for harvest. The estimated future profit, considering all price adjustments
and payable fees for completion, constitutes the cash flow. No deductions are made for sales expenses, as these are not observable in the market. Such expenses are also deemed immaterial.
Incoming cash flow is calculated as a function of estimated volume multiplied by estimated price. For fish not ready for harvest, a deduction is made to cover estimated residual costs to grow the fish to harvestable weight. The cash flow is discounted monthly by a discount rate. The discount rate comprises three main components: 1) the risk of incidents that influence cash flow, 2) hypothetical license lease and 3) the time value of money. See Note 4 on significant accounting estimates for more information.
When estimating the actual accumulated cost at the respective seawater facility, direct costs (fish feed and similar) are allocated to each group of fish transferred to the sea at the same location. Financial costs are not included in the costs of production.
The sales price for fish in the sea is based on the forward price from Fish Pool. Fish Pool is a marketplace for financial purchase and sale agreements for superior Norwegian Salmon size 3-6 kg head-on gutted weight. The volume on Fish Pool is limited, but Grieg Seafood\u2019s opinion is that the observable forward prices must be seen as the best approach to a price for the sale of salmon. Regarding foreign countries, the most relevant price information available for the expected harvesting period is applied. For fish in the sea, the forward price in Norway is adjusted for historical differences in achieved prices between Norway and Canada. The price/net sales value is adjusted for quality differences (superior, ordinary and production grade), and for logistics expenses and sales commissions. Estimated harvesting expenses are deducted.
The volume (biomass) is based on the actual number of individuals in the sea at the balance sheet date, adjusted to cover estimated mortality up to harvest date and multiplied by the estimated harvest weight per individual at the time of harvest. The fair value estimate for the fish in sea figure is adjusted for gutting waste, as the price is measured for gutted weight. Budgeted harvesting and freight costs are applied. Foreign currency forward contracts associated with the date of harvesting are applied when translating the price to CAD.
The change in the fair value of biological assets is recognized in the income statement as \u201cfair value adjustment of biological assets\u201d.
Onerous contracts are contracts where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. The Group enters from time to time into contracts for future deliveries of salmon. As biological assets are recognized at fair value, the fair value adjustments of the biological assets will be included in the
estimated expenses required to fulfil the contract. This implies that the Group may experience loss-making (onerous) contracts according to IAS 37 even if the contract price for physical delivery contracts is higher than the actual production cost for the products. If that occurs, a provision is made for the estimated negative value.
Changes arising from physical delivery contracts are recognized as \u201cfair value adjustment of biological assets\u201d. The liability in the statement of financial position is recognized as other current liabilities.
Fish farming naturally comes with a certain level of loss of fish along the production cycle, and our budgets are typically produced with an inherent assumption of a 0.5-1% monthly mortality. The losses associated with normal levels of survival are not directly recognized in the income statement. In periods where specific abnormal incidents lead to reduced survival, we immediately recognize write-downs of the biomass inventory to better reflect the actual biomass in the sea or on land. The write-down costs are recorded in the income statement as they arise, included in the financial statement line item \u201craw materials and consumables used\u201d.
TRADE RECEIVABLES
Trade receivables arising from the trading of goods or services within the ordinary operating cycle and under normal terms of payment are initially recognized at nominal value. Trade receivables with longer terms of payment are discounted to present value and represents the Group\u2019s unconditional right to consideration from the customer.
EXPECTED CREDIT LOSS (ECL) ON TRADE RECEIVABLES
For trade receivables, the Group applies a simplified approach in calculating ECLs. For receivables where the credit risk has increased substantially after establishment, a write-down shall be made for the expected credit loss over the maturity of the receivables. The model for calculating loss allowance classifies the trade receivables into two groups: normal risk and high-risk, based on their country of origin. Furthermore, the trade receivables are classified as credit-insured receivable or not. The provision is the difference between nominal and recoverable amount, which is the present value of estimated future cash flows, discounted at the original effective interest rate. Loss allowance is recognized as \u201cother operating expenses\u201d in the income statement.
FACTORING AGREEMENTS
The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Receivables purchased by the factoring company are derecognized from the statement of financial position. See the section \u201cDerecognition of financial assets\u201c in this note for the related accounting principle.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, bank deposits and other short-term highly liquid investments with original maturities of three months or less. The overdraft facility is included in current borrowings in the statement of financial position.
SHARE CAPITAL
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options, net of tax, are shown in equity as a deduction, net of tax, from the proceeds.
BORROWINGS
Borrowings are initially recognized at fair value when the funds are received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost applying the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
INCOME TAX EXPENSE AND DEFERRED TAX
Income tax expense consists of the tax payable and changes to deferred tax.
Deferred tax is provided for in full at nominal value, using the liability method, on temporary differences arising between the value of assets and liabilities for tax and accounting purposes. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply when the related deferred tax asset is realized, or the deferred income liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available, from which the temporary differences can be deducted. Deferred tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions.
EMPLOYEE BENEFITS
PENSION OBLIGATIONS
The Company pays premiums to local, defined-contribution schemes for all employees. The Company's Norwegian pension schemes meet the requirements of the Norwegian Mandatory Occupational Pension Act. Pension premiums are recognized in the income statement through operations on an ongoing basis. Employer\u2019s social security contributions are expensed based on paid pension premiums. The Group companies Grieg
Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). The financial commitments associated with this scheme are included in the Group\u2019s pension expenses. The AFP early retirement scheme follows the rules for public sector AFP, and both companies are members of the Norwegian Confederation of Trade Unions (LO)/the Confederation of Norwegian Enterprise (NHO) scheme. The pension payment calculations are based on standard assumptions relating to the development of mortality and disability as well as other factors such as age, years of service and remuneration. Pension premiums are recognized in the income statement through operations as they arise.
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration scheme with settlement in cash. Under the scheme, individual employees may buy shares proportionate to their annual salary. The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be charged over the vesting period is calculated based on the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the company revises its estimates of the number of options that are expected to be vested and recognizes the impact of the revision relative to original estimates, if any, in the income statement. The Black and Scholes option pricing model is used for valuation. The company\u00b4s obligations are recognized under non-current liabilities if the latest possible redemption date is more than one year into the future.
SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its employees in 2018 and it was continued throughout 2022. It is the Board's intention that the plan shall be a continuing part of the company's employee incentive scheme. The Board shall, however, have the right to decide, at its sole discretion, whether the plan will be extended in the future, and the terms of the plan.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
PROFIT-SHARING AND BONUS SCHEMES
The Group recognizes a provision where it has a contractual obligation or where there is a past practice that has created a constructive obligation.
PROVISIONS
Provisions (e.g. environmental improvements, restructuring costs and legal claims) are recognized when:
\u2022the Group has a present legal or constructive obligation as a result of past events;
\u2022it is more likely than not that an outflow of resources will be required to settle the obligation;
\u2022the amount of the obligation can be reliably estimated.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured as the present value of the expenditures expected to be required to settle the obligation, using a pre-tax discount rate that reflects the current market situation and the risks specific to the obligation. The increase in the provision due to the change in value because of the passage of time is recognized as a financial expense.
REVENUE RECOGNITION
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group\u2019s revenue derives primarily from the sale of whole and processed fish. Sales contracts cover both spot sales and fixed-price deliveries. Revenue from the sale of salmon is generally recognized upon delivery, as the Group considers delivery as the point in time when control of the goods/service is transferred to the customer. Each sales contract \u2013 either for a spot sale or a fixed delivery \u2013 is considered as one performance obligation. Each week, the sale of fish is settled with the customer. The fixed-price delivery contracts that are entered into with customers, specify a per-week volume.
The sales price is determined upon contract settlement and is based on available market price (for example Nasdaq prices including transport and margin, and the price is per kilogram). The price varies according to the quality of the salmon and its size, and the fish is mainly sold Delivery Duty Paid (DDP) to the customer. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. That also applies to the fulfillment of physical delivery contracts.
The normal credit term of the Group\u2019s sales transactions is 30 days. Based on the nature of the sale of fresh and frozen fish, the Group generally has no material contract liabilities. The Group does not generally engage in customer contracts where fulfillment of the performance obligation lies more than one year in the future. Therefore, the Group does not disclose further information on contract liabilities and related performance obligations.
Cash refunds are given to the customer if the sold product is delivered with discrepancies compared to the agreed sales contract, or if the product is damaged. Generally, refunds are not material.
Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating intragroup sales.
OTHER REVENUE STREAMS
In addition to the sale of fresh and frozen salmon, the Group also sells roe, smolt and ensilage. Harvesting (processing) for external companies are performed if overcapacity on our own harvesting plants. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood.
DIVIDEND INCOME
Dividend income from investments or equity instruments is recognized when the right to receive payment is established. Dividend income from entities recognized under the equity method are not recognized but recorded as a reduction in the carrying value of the investment.
GOVERNMENT GRANTS
Government grants are recognized when it is reasonably certain that the company will meet the conditions stipulated for the grants and that the grants will be received. Operating grants are recognized systematically during the grant period. Grants are deducted from the cost which the grant is meant to cover. Investment grants are capitalized and recognized systematically over the asset\u2019s useful life. Investment grants are recognized either as deferred income or as a deduction of the asset\u2019s carrying amount.
LEASES
IDENTIFYING A LEASE
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
RECOGNITION OF LEASES AND EXEMPTIONS
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for short-term leases (defined as 12 months or less) and lease agreements where the leased asset is of low value.
Lease liabilities
The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option.
The lease payments included in the measurement comprise:
\u2022Fixed lease payments (including in-kind fixed payments), less any lease incentives receivable
\u2022Variable lease payments that depend on an index or a rate, initially measured using the index or rate in effect on the commencement date
Lease payments generally also include any exercise price of a purchase option/payments of penalties for terminating a lease, provided that the Group is reasonably certain to exercise such an option.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The Group presents its lease liability separately from other liabilities in the statement of financial position.
Right-of-use assets
The Group measures the right-of-use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprises:
\u2022The amount of the initial measurement of the lease liability recognized,
\u2022Any lease payments made at or before the commencement date, less any incentives received, and
\u2022Any initial direct costs incurred by the Group.
The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment when depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
DIVIDENDS
Dividends payable to the company\u2019s shareholders are recognized as a liability in the Group\u2019s financial statements when the dividends are approved by the AGM.
BORROWING COSTS
Borrowing costs incurred during the construction of operating assets are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed in the income statement.
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities are defined as:
\u2022possible obligations resulting from past events whose existence depends on future events,
\u2022obligations that are not recognized because it is not probable that they will lead to an outflow of resources entailing financial benefits from the company,
\u2022obligations that cannot be measured with sufficient reliability.
Contingent liabilities are not recognized in the annual financial statements apart from contingent liabilities resulting from the acquisition of an entity. Material contingent liabilities are disclosed, with the exception of contingent liabilities where the probability of the liability materializing is remote.
Contingent liabilities acquired through the purchase of operations (an acquisition) are recognized at fair value even if it is not probable that the liability will become unconditional. The assessment of probability and fair value is subject to constant review. Subsequent measurement is at the higher of the amount initially recognized (less any amount recognized as revenue) and the amount according to the general provision-measurement rules.
Contingent assets are not recognized in the statement of financial position, but are disclosed if it is likely that a benefit will accrue to the Group.
CASH FLOW STATEMENT
The Group\u2019s cash flow statement shows the overall cash flow broken down into operating, investing and financing activities using the indirect method. The cash flow statement illustrates the effect of the various activities on cash and cash equivalents.
The Group has prepared an overview of cash and non-cash changes in the Group\u2019s liabilities, which is included in Note 12.
Changes in financial assets are disclosed if cash flows have been, or will be, included in the cash flow from financing activities. This may be the case, for instance, for assets pledged as security for financial liabilities.
EARNINGS PER SHARE
Earnings per share are calculated by allocating the profit for the year to the Company\u2019s shareholders based on a weighted average of the number of issued ordinary shares during the year. Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
CAPITAL MANAGEMENT
The Group aims to ensure sufficient access to capital to enable the business to develop in accordance with adopted strategies, and thus continue to be one of the leading players in the sector. Historically, the industry has always been vulnerable to price fluctuations in the market. For this reason, accounting results may fluctuate considerably from year to year. Consequently, the Group strives to ensure that the business maintains an appropriate level of disposable liquidity.
Grieg Seafood aims to provide shareholders with a competitive return on invested capital through payment of dividends and share price increases. The Board of Directors maintains that, as an average over time, dividends should correspond to 30-40% of the Group\u2019s profit after tax, adjusted for the effect of the fair value of biological assets (limited to 50 % by Green Bond agreement). At the same time, the Group\u2019s net interest-bearing debt per kg harvested salmon should remain below NOK 30, but can be exceeded in periods of growth investments.\u00a0As at 31\u00a0December 2022, Grieg Seafood was in a solid financial position to execute strategic priorities and deliver shareholder return.
At 31 December 2022, the Group had net interest-bearing liabilities, including lease liabilities, of NOK 2 223 million, see Note 12. The Group\u2019s funding is primarily a green bond issue of NOK 1 500 million issued in 2020 (with NOK 1 424 million currently outstanding, as bonds have been repurchased throughout 2022), sustainability-linked bank loans and leasing liabilities. At year-end 2022, 75% (2021: 47%) of our gross interest-bearing liabilities derived from green or sustainability-linked financing. The level of liabilities and alternative forms of funding are subject to constant evaluation.
FINANCIAL RISK FACTORS
The Group is exposed to a number of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group\u2019s overall risk management program focuses on the volatility of the financial markets and seeks to minimize potential adverse effects on the Group\u2019s financial performance. The Group uses financial derivatives to reduce certain risks. As at 31 December 2022 (31 December 2021), the Group does not apply hedge accounting. The Group identifies, evaluates and hedges financial risks in close cooperation with the Group\u2019s operational units. The Board has established written principles for the management of foreign exchange risk, interest rate risk and use of the Group\u2019s financial instruments.
IBOR reform
The Group is exposed to the ongoing IBOR reform, as the Group has bank and bond loans, and engages in interest-rate swaps, which are exposed to the the relevant IBOR rate. The bank loans, which are denominated in NOK and EUR, carry an interest rate which is based on the 3M IBOR plus a margin set per interest period based on a margin ratchet. The 3M IBOR and the margin is fixed per interest period. The bond loan\u2019s interest rate, which is denominated in NOK, is 3M NIBOR plus a margin of 3.4 percentage points. 3M NIBOR is fixed per interest rate period.
The Group monitors the IBOR reform and its potential impacts on the Group. As at 31 December 2022, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed below, explicitly states the swaps exposed to NIBOR. At the very end of this Note, we have disclosed the maturity profile of the bank loans and bond loan. See also Note 12 for more information on our interest-bearing liabilities.
I) MARKET RISKS
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions, recognized assets, and liabilities and net investments in foreign operations. The Group enters into foreign currency forward contracts to manage this risk.
TRADE RECEIVABLES AND | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Trade receivables | 214\u00a0681 | 17\u00a0207 | 23\u00a0901 | 1\u00a0517 | 1\u00a0911 | \u2014 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 1\u00a0044 | 12\u00a0590 | 174 | 143\u00a0587 | \u2014 | 3\u00a0193 | 717\u00a0498 |
2021 | ||||||||
Trade receivables | 44\u00a0591 | 64\u00a0959 | 23\u00a0912 | \u2014 | 18\u00a0907 | -576 | \u2014 | 151\u00a0793 |
Trade payables | 391\u00a0599 | 2\u00a0298 | 9\u00a0608 | 15\u00a0494 | 101\u00a0844 | \u2014 | 2\u00a0353 | 523\u00a0196 |
NET INTEREST-BEARING LIABILITIES | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Cash and cash equivalents | 284\u00a0965 | 88\u00a0647 | 87\u00a0485 | 41\u00a0877 | 134\u00a0040 | 209 | 5\u00a0496 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Interest-bearing liabilities* | 2\u00a0678\u00a0379 | \u2014 | 755\u00a0679 | \u2014 | 452\u00a0331 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | -88\u00a0647 | 668\u00a0194 | -41\u00a0877 | 318\u00a0292 | -209 | -5\u00a0496 | 2\u00a0222\u00a0522 |
2021 | ||||||||
Cash and cash equivalents | -22\u00a0537 | 44\u00a0252 | 58\u00a0346 | 750\u00a0778 | 94\u00a0238 | 44 | 3\u00a0223 | 928\u00a0342 |
Loans to associated companies | 2\u00a0111 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2\u00a0111 |
Interest-bearing liabilities* | 2\u00a0893\u00a0312 | \u2014 | \u2014 | \u2014 | 327\u00a0662 | \u2014 | \u2014 | 3\u00a0220\u00a0974 |
Net interest-bearing liabilities | 2\u00a0913\u00a0737 | -44\u00a0252 | -58\u00a0346 | -750\u00a0778 | 233\u00a0424 | -44 | -3\u00a0223 | 2\u00a0290\u00a0520 |
*See Note 12 for more information on the Group\u2019s net interest-bearing liabilities.
The Group has a group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. Subsidiaries party to the agreement can utilize the group cash pool arrangement and overdraft individual bank accounts (currencies), provided that Group's total bank deposit is positive. Not all subsidiaries are part of the cash pool arrangement. The subsidiaries participating in the group account scheme are jointly and severally liable for the entire amount of the commitment under the scheme. Cash and cash equivalents include the currency exposure in the group account scheme. At 31 December 2022, the net amount of bank deposits in the group account scheme amounted to NOK 524 million (2021: NOK 787 million).
The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group\u2019s foreign operations was previously managed primarily through borrowings denominated in the relevant foreign currencies.
The base currency of the syndicated bank loan is split into NOK 750 million and EUR 75 million. Since a substantial portion of the Group's sales revenues are denominated in EUR, the EUR loan acts as a natural, economical hedge on foreign currency translation rate fluctuations.
In 2020, we issued our first green bond, worth a total of NOK 1 500 million, through two tap issues. Throughout 2022, the Group has repurchased NOK 77 million of the green bond. The outstanding amount of the bond loan was NOK 1\u00a0424 million at year-end 2022. The bond matures in 2025, and is denominated in NOK.
The holding companies in the Group extend current and non-current loans to the subsidiaries, denominated in these companies\u2019 functional currencies. The non-current loans, with some exceptions, are considered to be equity in these companies, as there is no planned repayment of the principal amount outstanding. The currency effect of loans is recognized under \"currency effect on loans to subsidiaries\" in the Other Comprehensive Income (OCI) statement. The numerical effects for 2022 and 2021 are presented in the table below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 | 2022 | 2021 |
Currency effect | 24\u00a0792 | 32\u00a0222 |
Tax effect (22%) | -5\u00a0454 | -7\u00a0089 |
Currency effect - recycled accumulated OCI related to sale of Shetland* | \u2014 | -103\u00a0223 |
Tax effect (22 %) - recycled accumulated OCI related to sale of Shetland* | \u2014 | 22\u00a0709 |
Net effect recognized in equity through OCI | 19\u00a0338 | -55\u00a0380 |
*See Note 6 for more information.
Sensitivity analysis
A depreciation (appreciation) of 10% in the rate of exchange between the NOK and the USD, CAD, GBP and EUR at the reporting date (all other factors remaining unchanged) would be expected to have the following effects on net interest-bearing liabilities (NOK 1 000). The numerical effects for net interest-bearing liabilities for year-end 2022 and 2021 are presented below.
SENSITIVITY NOK 1 000 | 10 % change in FX-rate | USD | EUR | GBP | CAD |
2022 | |||||
Assets | -/+ | -8\u00a0865 | -8\u00a0749 | -4\u00a0188 | -13\u00a0404 |
Liabilities | -/+ | \u2014 | -75\u00a0568 | \u2014 | -45\u00a0233 |
Net interest-bearing liabilities | -/+ | 8\u00a0865 | -66\u00a0819 | 4\u00a0188 | -31\u00a0829 |
2021 | |||||
Assets | -/+ | -4\u00a0425 | -5\u00a0835 | -75\u00a0078 | -9\u00a0424 |
Liabilities | -/+ | \u2014 | -42\u00a0452 | \u2014 | -32\u00a0766 |
Net interest-bearing liabilities | -/+ | 4\u00a0425 | -36\u00a0618 | 75\u00a0078 | -23\u00a0342 |
A depreciation of NOK versus USD/EUR/GBP/CAD will, in general, decrease the assets (which increases net interest-bearing liabilities), and decrease the liabilities, which reduces the net interest-bearing liabilities.
FORWARD CURRENCY CONTRACTS
The Group does not apply hedge accounting. Value changes in current forward contracts affect profit or loss, as these contracts are recognized at fair value through profit or loss, see accounting policies (Note 2).
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2022 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5180 | 01.01.2023 - 03.01.2023 | 29 |
USD | 3\u00a0518 | NOK | 37\u00a0091 | 10.5433 | 9.8573 | 03.01.2023 - 29.12.2023 | 2\u00a0721 |
USD | 415 | CAD | 561 | 1.3515 | 1.3538 | 06.01.2023 - 03.02.2023 | -9 |
Total | 2\u00a0741 |
*Maturity specified as an interval for multiple contracts
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2021 |
EUR | 6\u00a0408 | NOK | 63\u00a0597 | 9.9246 | 9.9888 | 01.02.2022 - 31.12.2022 | -1\u00a0149 |
EUR | 1\u00a0000 | NOK | 10\u00a0031 | 1.2651 | 9.9888 | 01.01.2022 - 31.01.2022 | 42 |
USD | 7\u00a0771 | CAD | 9\u00a0921 | 1.2767 | 1.2692 | 01.01.2022 - 28.02.2022 | 404 |
Total | -704 |
*Maturity specified as an interval for multiple contracts
(ii) Interest rate risk
Since the Group has no significant interest-bearing assets apart from bank deposits and money market funds, its income and operating cash flows are largely independent of changes in market interest rates. The Group\u2019s interest rate risk arises from borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest rate exposure. The Group calculates the impact on profit or loss of a defined interest rate change. The same change in the interest rate is used for all currencies in each simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.
Sensitivity calculations show the following expected values: If the interest rate had been 1% lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 28.3 million in 2022 and NOK 38.5 million in 2021 due to the floating rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing liabilities from our bank loans (term loans in NOK and EUR, including revolving credit facility) and bond loan during 2022 and 2021, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN INTEREST RATE POINTS | 2022 | 2021 |
Effect on profit before income tax | -/+1% | +/- 28 257 | +/-38 545 |
The sensitivity table is for our bank and bond loans. A reduction in interest rates will increase profit before tax.
INTEREST RATE SWAP AGREEMENTS
The purpose of the Group\u2019s risk management activities is to establish an overview of the financial risk that exists at any given time and to provide more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to establish greater stability for the Group\u2019s loan-related, variable-rate interest expenses. The Group has decided that at any given time, a certain percentage of its variable interest-bearing liabilities should be hedged using interest rate swap agreements. The Group does not apply hedge accounting. A given proportion will always be at a floating rate, while the remainder will be subject to potential hedging. This situation is constantly reviewed in light of the market situation.
INTEREST RATE SWAP | PRINCIPAL | FIXED | BASIS OF | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | 2\u00a0670 | -590 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 5\u00a0018 | 874 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 7\u00a0627 | 2\u00a0628 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 9\u00a0963 | 5\u00a0561 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 9\u00a0961 | 5\u00a0524 |
Total | 35\u00a0238 | 13\u00a0997 |
Interest rate swap contracts assessed at market value, excluding accrued interest
CROSS CURRENCY INTEREST RATE SWAP | PRINCIPAL | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Cross-currency interest rate swap (NOK/EUR) | NOK 200 million / EUR 23 million | 25.06.2025 | \u2014 | 22\u00a0327 |
Interest rate option, floor | NOK 250 million | 25.06.2025 | \u2014 | 233 |
Total | \u2014 | 22\u00a0560 |
The cross currency interest-rate swap contract was settled in 2022, see Note 26.
(iii) Price risk
Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group uses financial contracts to hedge the sales price for the volume harvested by our two Norwegian regions, Rogaland and Finnmark. As at 31 December 2022, the estimated contract share for the Norwegian harvest volume is 15% for the full-year 2023. We target a contract share of 20-50% of our Norwegian volume. Although the contract market has been impacted by the proposed resource rent tax on salmon farming in Norway, we see signs of improvement going into 2023.
In 2022, fixed-price contracts accounted for 22% of the volume harvested in our Norwegian regions. The financial contracts are presented gross in the balance sheet, with changes in value recognized through profit/loss as part of the fair value adjustment of biological assets. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment.
As at 31 December 2022, the Group had financial salmon contracts for 2022 totaling NOK -64.9 million (2021: NOK -20.6 million), of which all were sales contracts.
Fair value of financial derivatives
The carrying value of derivatives and other financial instruments as at 31 December 2022 and 31 December 2021 is shown in the table below.\u00a0All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy. For more information, see the section on the \u201cFair value estimation\u201d below, as well as Note 14.
2022 | 2021 | |||
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | ASSETS | CURRENT | ASSETS | CURRENT |
Forward currency contracts at fair value through profit or loss | 2\u00a0749 | 9 | 446 | 1\u00a0149 |
Cross-currency interest rate swap w/ interest rate floor-option | \u2014 | \u2014 | 22\u00a0560 | \u2014 |
Interest rate swap agreements | 35\u00a0238 | \u2014 | 14\u00a0587 | 590 |
Financial salmon contract - sales contracts* | \u2014 | 64\u00a0920 | \u2014 | 20\u00a0611 |
Total financial instruments at fair value** | 37\u00a0988 | 64\u00a0928 | 37\u00a0592 | 22\u00a0350 |
*In addition, as at year-end 2022, Grieg Seafood had NOK 31 million (2021: NOK 13 million) classified as current liabilities (see note Note 29) related to realized financial salmon contracts. This amount represents settled price contracts, not part of the fair value-derivative amount.
**Measured according to level 2 of the fair value hierarchy.
II) CREDIT RISK
Credit risk is managed at Group level. Credit risk arises from transactions involving derivatives and deposits in banks and financial institutions, transactions with customers, including trade receivables, and fixed contracts as well as loans to associates. The sales companies secure the bulk of the sales through credit insurance and bank guarantees. The Group has procedures to ensure that products are only sold to customers with satisfactory creditworthiness. The Group normally sells to new customers solely against presentation of a letter of credit or against advance payment. For customers who have a reliable track record with the Group, sales up to certain previously agreed levels are permitted without any security. The Group utilizes a factoring arrangement for sales transactions entered into by the Norwegian sales organization.
The book value of financial assets represents the maximum credit exposure. For further information about loss allowance, please refer to Note 22.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2022 | 2021 |
Trade receivables | 22 | 64\u00a0283 | 50\u00a0443 |
Cash and cash equivalents | 20 | 642\u00a0719 | 928\u00a0342 |
Total | 707\u00a0002 | 978\u00a0785 |
III) LIQUIDITY RISK
The Group adopts a prudent approach to liquidity risk management, which includes maintaining sufficient cash and marketable securities, securing funding through sufficient credit facilities and maintaining the ability to close market positions when considered appropriate.
Due to the dynamic underlying nature of the business, the Group aims to secure flexibility through available credit lines. The Group maintains a sustainability-linked financing agreement through a syndicate comprising DNB and Nordea. The agreement is on aggregate NOK 3 200 billion, and consists of two term loans of NOK 750 million and EUR 75 million, a revolving credit facility of NOK 1 500 million and an overdraft facility of NOK 200 million. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 12), cash and cash equivalents (Note 20), and short-term money market investments (Note 21), based on expected cash flows. This is generally carried out at Group level in cooperation with the operating companies. Available financing could be impacted by the proposed Norwegian resource rent tax regime, as - all else equal - less cash will be available to service debt and provide a return on investment for shareholders.
Management and the Board seek to maintain a high equity ratio (50% at 31 December 2022), to be well positioned to meet financial and operational challenges. The Group factors in the expected outcome, as well as different scenarios relating to, the resource rent tax proposed by the Norwegian government (see political risk above) in the Group's liquidity projections and forecasts.
At year-end 2022, the Group had undrawn credit facilities of NOK 1 700 million (2021: NOK 885 million), in addition to cash reserves of NOK 643 million (2021: NOK 928 million). In 2022, a cash surplus of approximately NOK 1 000 million has been placed in money market funds. In total, the Group\u2019s free liquidity, calculated as the sum of bank deposits, undrawn credit facilities and the short-term investment in money market funds, stood at NOK 3 356 billion at 31 December 2022 (2021: NOK 1 813 million).
As at 31 December 2022, the equity ratio was 50% (2021: 52%), while the equity ratio (ex. the effect of IFRS 16), which is measured according to covenants, was 52% (2021: 54%). The Group is continuously monitoring the liquidity levels. Cash flow forecasts for all farming regions, sales and the Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out.
The following table shows a breakdown of the Group\u2019s non-derivative financial liabilities (including estimated interest payment), classified by maturity structure. The amounts in the table are undiscounted contractual cash flows (however for lease liabilities the undiscounted cash flows are according to the estimated lease component of the contract, and the total undiscounted amount equals the principal and the interests) . Note 12 shows the payment profile for the Group\u2019s non-current liabilities.
31.12.2022 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest - floating | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current syndicated term-loan installments | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Syndicated loan interest - floating | 10\u00a0860 | 31\u00a0273 | 38\u00a0412 | 34\u00a0470 | 30\u00a0638 | 7\u00a0007 | \u2014 | 152\u00a0661 |
Other non-current liabilities | 4\u00a0829 | 12\u00a0609 | 14\u00a0471 | 12\u00a0615 | 12\u00a0860 | 13\u00a0770 | 61\u00a0285 | 132\u00a0439 |
Interest on other non-current liabilities | 961 | 2\u00a0720 | 3\u00a0161 | 2\u00a0671 | 3\u00a0004 | 2\u00a0765 | 9\u00a0257 | 24\u00a0539 |
Lease liabilities (prior IAS 17 finance leases) | 24\u00a0606 | 68\u00a0702 | 79\u00a0970 | 65\u00a0520 | 59\u00a0691 | 52\u00a0892 | 105\u00a0684 | 457\u00a0065 |
Interest on lease liabilities (prior IAS 17 finance leases) | 3\u00a0982 | 10\u00a0910 | 12\u00a0291 | 10\u00a0017 | 8\u00a0092 | 6\u00a0274 | 8\u00a0885 | 60\u00a0451 |
Lease liabilities (prior IAS 17 operational leases) | 46\u00a0854 | 118\u00a0836 | 146\u00a0350 | 73\u00a0925 | 67\u00a0558 | 44\u00a0220 | 31\u00a0302 | 529\u00a0046 |
Interest on lease liabilities (prior IAS 17 operational leases) | 5\u00a0059 | 12\u00a0137 | 12\u00a0586 | 7\u00a0369 | 4\u00a0657 | 2\u00a0356 | 936 | 45\u00a0100 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 978\u00a0411 | 393\u00a0387 | 531\u00a0404 | 1\u00a0806\u00a0012 | 314\u00a0711 | 1\u00a0090\u00a0869 | 217\u00a0349 | 5\u00a0332\u00a0143 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
31.12.2021 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0500\u00a0000 | \u2014 | \u2014 | 1\u00a0500\u00a0000 |
Green bond loan interest - floating | 15\u00a0840 | 49\u00a0500 | 65\u00a0700 | 65\u00a0880 | 32\u00a0760 | \u2014 | \u2014 | 229\u00a0680 |
Non-current syndicated term-loan installments | 24\u00a0972 | 24\u00a0972 | 374\u00a0580 | \u2014 | \u2014 | \u2014 | \u2014 | 424\u00a0524 |
Syndicated loan interest - floating | 2\u00a0248 | 8\u00a0283 | 2\u00a0619 | \u2014 | \u2014 | \u2014 | \u2014 | 13\u00a0150 |
Non-current syndicated credit facility | \u2014 | \u2014 | 440\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | 440\u00a0000 |
Interest non-current syndicated credit facility | 2\u00a0330 | 9\u00a0361 | 3\u00a0076 | \u2014 | \u2014 | \u2014 | \u2014 | 14\u00a0767 |
Other non-current liabilities | 4\u00a0873 | \u2014 | 11\u00a0773 | 12\u00a0310 | 9\u00a0200 | 8\u00a0114 | 54\u00a0353 | 100\u00a0622 |
Interest on other non-current liabilities | 912 | 2\u00a0396 | 3\u00a0037 | 2\u00a0541 | 2\u00a0049 | 2\u00a0816 | 15\u00a0288 | 29\u00a0040 |
Lease liabilities (prior IAS 17 finance leases) | 18\u00a0502 | 54\u00a0415 | 67\u00a0410 | 57\u00a0199 | 43\u00a0909 | 39\u00a0525 | 79\u00a0535 | 360\u00a0496 |
Interest on lease liabilities (prior IAS 17 finance leases) | 2\u00a0523 | 6\u00a0831 | 7\u00a0420 | 5\u00a0752 | 4\u00a0357 | 3\u00a0178 | 3\u00a0596 | 33\u00a0658 |
Lease liabilities (prior IAS 17 operational leases) | 22\u00a0140 | 82\u00a0632 | 81\u00a0209 | 80\u00a0980 | 51\u00a0033 | 37\u00a0084 | 40\u00a0255 | 395\u00a0332 |
Interest on lease liabilities (prior IAS 17 operational leases) | 3\u00a0453 | 9\u00a0209 | 9\u00a0298 | 6\u00a0030 | 3\u00a0621 | 2\u00a0084 | 4\u00a0127 | 37\u00a0823 |
Trade payables | 523\u00a0196 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 523\u00a0196 |
Other current liabilities | 36\u00a0603 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 36\u00a0603 |
Total liabilities | 657\u00a0593 | 247\u00a0600 | 1\u00a0066\u00a0123 | 230\u00a0692 | 1\u00a0646\u00a0928 | 92\u00a0801 | 197\u00a0153 | 4\u00a0138\u00a0891 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
FAIR VALUE ESTIMATION
See Note 14 for information on classes of financial instruments measured at fair value, in addition to information on the fair value hierarchy. The information below describes valuation techniques for fair value estimation used by Grieg Seafood, including leases and the fair value adjustment of biological assets.
(I) FINANCIAL DERIVATIVE INSTRUMENTS
The fair value of quoted financial assets classified as financial assets at fair value through OCI is determined by reference to published price quotations in an active market. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques (see Note 2). The Group uses different methods and makes assumptions based on market conditions at each reporting date. The fair value of forward currency contracts is determined using the forward exchange rate at the end of the reporting period. The fair value of interest rate swaps is determined by the present value of future cash flows. The fair value of options is determined using option pricing models. For all the above-mentioned derivatives, the fair value is confirmed by the financial institution with which the Group has entered into the contracts. The fair value of financial salmon price contracts is determined using forward prices from Fish Pool.
(II) TRADE RECEIVABLES, OTHER RECEIVABLES AND TRADE PAYABLES
The nominal value less write-downs for realized losses on trade receivables and trade payables is assumed to correspond to the fair value of these items, as they are short term and entered into on \u201cnormal\u201d terms and conditions.
(III) CASH AND CASH EQUIVALENTS
The carrying amount of cash and cash equivalents is approximately equal to fair value, since these instruments have a short term to maturity.
(IV) BANK AND BOND LOANS
The carrying amount of bank loans is assessed to be approximately equal to fair value because the floating interest rate is adjusted to reflect current conditions. The fair value of the bond loan is disclosed in Note 12.
(V) LEASES
The fair value of financial assets and liabilities recognized at their carrying amount is calculated as the present value of estimated cash flows discounted by the interest rate that applies to corresponding liabilities and assets at the end of the reporting period. This applies to lease liabilities, see Note 13.
(VI) BIOLOGICAL INVENTORIES
Fish in the sea is measured at estimated fair value. Consequently, the value of biological inventories is likely to vary more than the value of inventories based on cost. The estimated fair value varies for a number of reasons, including volatility in the price of Atlantic salmon, factors relating to production, changes in harvesting schedules and changes in the composition of inventories. Grieg Seafood considers three components to be key parameters for valuation: price, estimated harvest biomass volume and the applied monthly discount rate. The monthly discount rate is applied to expected future cash flows to account for risk, the time value of money and the cost of contributory assets. The following table is a sensitivity analysis, showing the change in the fair value of the biological assets, and hence the Group\u2019s profit before tax, in the event of changes in these parameters.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000 | 2022 | 2021 |
Change in discount rate +1% | -175\u00a0527 | -130\u00a0357 |
Change in discount rate -1% | 207\u00a0074 | 158\u00a0916 |
Changes in sales price +1 NOK/kg | 69\u00a0555 | 62\u00a0677 |
Changes in sales price -1 NOK/kg | -68\u00a0073 | -59\u00a0093 |
Changes in sales price +5 NOK/kg | 357\u00a0629 | 316\u00a0740 |
Changes in sales price -5 NOK/kg | -325\u00a0903 | -289\u00a0634 |
Changes in biomass volume +1% kg | 54\u00a0202 | 37\u00a0936 |
Changes in biomass volume -1% kg | -53\u00a0427 | -35\u00a0376 |
ACCOUNTING ESTIMATES AND ASSUMPTIONS
Management is required to make estimates and assumptions concerning the future, which affect the reported amounts for assets and liabilities, as well as income and expenses for the accounting year in accordance with IFRS. Estimates and underlying assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be probable under the present circumstances. The final outcomes may deviate from these estimates. Changes in accounting estimates are recognized in the period in which the estimates are changed.\u00a0 The Group is involved in claims and complaints related to the sale of goods on a continuous basis. As of year-end there were no material ongoing issues concerning claims and complaints related to the sale of goods, besides what\u2019s referred to in Note 28 and Note 31.
ESTIMATED IMPAIRMENT OF GOODWILL, LICENSES AND PROPERTY, PLANT AND EQUIPMENT
The Group tests whether goodwill and licenses have suffered any impairment on an annual basis, in accordance with the accounting policy stated in Note 2. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. These calculations require the use of estimates of future cash flows from the cash-generating unit, and the application of a discount rate to calculate the present value of future cash flows. Expectations of future cash flows will vary over time. Changes in market conditions and expected cash flows can result in losses due to future value decreases. The value of long-term growth in demand, changes in market competition, the strength of the production stage in the value chain and thus also expectations of the long-term profit margin are also of significance. The different parameters could variously affect the value of the licenses over time. Any changes in these critical assumptions will result in related write-downs, or the reversal of write-downs of the value of licenses in accordance with the accounting policies described\u00a0 in Note 2. Please also refer to Note 10 for further comments on tests relating to value impairment.
CLASSIFICATION OF LICENSES
A significant judgment is whether a license should be amortized over its definite life, or whether it is deemed to have an indefinite life and tested for impairment only. All licenses where the Group has no other contractual restrictions relating to the use of the licenses have indefinite lives and, as such, are not amortized. Also, licenses granted with a finite useful life, but where the license holder can renew the licenses without incurring considerable expenses are assessed as having indefinite lives. However, the Group\u2019s licenses in each country are subject to certain requirements and the Group risks penalties, sanctions or even license revocation if the Group fails to comply with license requirements or related regulations. Local governments may, moreover, change the way licenses are renewed.
In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. In June 2022, all licenses were renewed for two years. The Canadian Government has launched a new strategy for salmon farming in BC, to transition the sector from traditional open-net pen practices into an improved industry (it does not specify what the industry should transition to). The process was launched 29 June 2022, with the following objectives: Minimize or eliminate interactions between
farmed and wild salmon, improve transparency on how the government assesses and responds to new scientific information, provide greater opportunities for collaborative planning and decision-making with First Nations partners and advance innovation and attracting investment to support the adoption of alternative production technologies in British Columbia. Stakeholders, including industry and First Nations, are participating in the process, which is expected to be concluded during 2023. Grieg Seafood supports the transition, and it aligns with the Group\u2019s technological investments to improve biological control, such as post-smolt and barrier systems. The possibility of introducing different types of licenses to advance improvements are discussed as a part of the transition strategy. It is expected that regular licenses will be incorporated into the strategy. Grieg Seafood is committed to working with the government and Indigenous communities to find a viable path forward.
In addition, farm tenures in BC are renewed by the province on a regular basis. From 2022, farm tenures that are not accepted by the First Nation that is the rights-holder of the territory where the farm is located will not be renewed. Grieg Seafood supports the implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into BC regulations, and we are engaging in the ongoing process of reconciliation between the government, First Nations and industries. In 2022, the Coalition of First Nations for Finfish Stewardship was launched, highlighting the positive role that the salmon farming industry can play as part of the reconciliation process. Grieg Seafood recognizes the First Nations as an additional level of government where we operate, and we are working to ensure that our production takes place under agreements with the rights-holders of the territories where it is located. The vast majority of Grieg Seafood\u2019s production are under long-term agreements with the First Nations in those areas, and we are pursuing agreements with more First Nations. The current agreements we have with First Nations last until 2037-2045. Even though the agreements cannot be said to be everlasting, the Group has nevertheless classified the licenses as having indefinite lives, based on the lack of sufficient relevant factors to change the principle at this point. Work on the transition plan has not been completed, and based on the experience we have with the work so far, it is not considered reasonable to change estimates regarding the economic life of the aquaculture licenses in BC. Given that it is desirable for both First Nations partners and the Group to have close and good working relationships, and that they want the Group to operate in the area, the Group\u2019s best estimate is that the licenses will still be classified as having indefinite lives. This will be continuously assessed. If the situation changes and the Group agrees not to use the option to extend the duration of the agreement, the estimate of the remaining depreciation period must be re-evaluated.\u00a0For further information, please see Note 10.
Grieg Seafood Newfoundland has 13 approved farming licenses. The licenses are granted for terms of six years. To renew the licenses, licensees must follow the Provincial Aquaculture Policy and Procedures Manual. As long as licenses follow and comply with the requirements, the license will be renewed. For this reason, the licenses are classified as having indefinite lives and, as such, are not amortized.
Grieg Seafood Newfoundland has the exclusive long-term right to farm salmon in the Placentia Bay area. The fair value of the right to operate exclusively is amortized over the duration of the agreement.
BIOLOGICAL ASSETS
The Group\u2019s biological assets comprise smolt and fish in the sea. Biological assets are measured at fair values less costs to sell. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. The fair value model assessed by the Group calculates the net present value of expected cash flow. Valuation is based on a variety of premises, many of which are non-observable. The premises are divided into the following four categories:
1.Sales price
2.Estimated remaining production cost
3.Volume
4.Discount rate
For mature fish (ready for harvesting) on the reporting date, uncertainty mainly involves realized prices and volume. For immature fish (not ready for harvesting), the level of uncertainty is higher. Price, volume and discount rate are the main uncertainty factors. However, uncertainty is also related to biological transformation and mortality prior to the harvest date for the fish.
Sales price
Salmon sales prices are volatile. The sales price is based on forward prices and/or the most relevant pricing information available for the period in which the fish is expected to be mature (ready for harvesting). Changes in price assumptions have the greatest impact on the fair-value estimate. The market price constitutes the basis for calculating fair value for both mature and immature fish. The forward prices for superior Norwegian salmon weighing 3-6 kg gutted weight from Fish Pool are applied. For fish ready for harvest, the forward price for the following month is applied. For fish not ready for harvest, the forward price for the month when the fish is expected to be harvested is applied. The price is adjusted for export margin and clearing costs. This accounts for both fish ready for harvest and not.
Estimating remaining production cost
The planned point of harvesting is assumed to be when the fish reaches a live round weight of 4.60 kg, however, there may be uncertainty regarding the estimated growth rate. For immature fish, the fair value is adjusted by the estimated remaining cost necessary to grow the fish to optimal harvest weight. Forecast production costs include provisions for estimated feed prices, the cost of lice treatments and other costs to prevent biological accidents. Here, estimations are affected by uncertainty regarding the number of lice treatments to be carried out, the sea temperature and other conditions affecting growth and costs.
Volume
Estimated harvest volume is based on the estimated number of fish on the reporting date, less estimated future mortality multiplied by optimal harvest weight (4.60 kg round weight). Actual harvest volume may differ from the estimated volume due to changes in biological conditions or due to special events, such as a mass mortality. The estimated number of fish is based on the number of smolt transferred to the sea, and mortality is a given percentage of the fish in the sea. The normal estimated harvest weight is assessed to be the live round weight of fish that results in a gutted weight of 4.0 kg. If there are any specific conditions at the reporting date resulting in the fish being harvested before they reach optimal weight, the estimated harvest weight is adjusted. Mortality during the period from the reporting date to the date when the fish reach harvest weight is estimated to be 1% of the number of opening balance of fish per month in the forecast period.
Discount rate
The sales revenue and remaining expenses are allocated to the same period in which the fish is harvested. The cash flows from all localities where the Group has fish in the sea will then be distributed over the entire period it takes to farm the fish in the sea. With the current size of the smolt released and the frequency of the smolt transfers, this period may be from 12 to 18 months. The estimated future cash flow is discounted by a monthly rate, which is 5.0% for Rogaland and Finnmark, and 3.5% for British Columbia and Newfoundland as of 31\u00a0December 2022. The discount rate considers both risk adjustment (risk related to volume, cost and price), compensation for the value of the licenses (hypothetical rent) and time value (tying up capital). The reason for differentiating the discount rate at the regional level is the different prerequisites for biological production, which also requires a differentiation of the recognized synthetic license rent. The risk adjustment shall reflect the price discount a hypothetical buyer would demand as compensation for the risk assumed by investing in live fish rather than a different object. The longer it takes to reach harvest date, the higher the risk that something may occur that will affect the cash flow. Three significant factors could have an impact on the cash flow: volume, costs and price. The one thing all three factors have in common is that the sample space is asymmetrical.
Due to limited access to licenses for the farming of fish, the license value is currently considered to be very high. For a hypothetical buyer of live fish to take over and continue to farm the fish, the buyer needs a license, locality and other permits required for such production. However, in a hypothetical market for the purchase and sale of live fish, one must assume that this would be possible. In that scenario, a hypothetical buyer would claim a significant discount to allocate a sufficient share of the returns to the buyer's own licenses. It is difficult to create a model that would allow a hypothetical annual lease cost to be derived from prices for sold licenses as the curve in the model would be based on projections of future profit performance in the industry.
A discount must be made for the time value of the tied-up capital linked to the share of the present value of the cash flow allocated to the biomass. The buyer who is investing in live fish rather than some other type of object, would claim compensation for the alternative cost. The production cycle for salmon in the sea currently takes up to 18 months. The cash flow will therefore extend over a similar period. Assuming a constant sales price throughout the period, the cash flow would decrease for each month, as costs are incurred to farm the fish to harvest weight. The cost increases for every month the fish are in the sea. As such, the effect of deferred cash flow is lower than would be the case if the cash flow had been constant. This component is, however, deemed important due to the substantial value the stock of fish represents. Please refer to Note 2 and Note 9 for further information on the estimation and calculation of fish values.
Significant assumptions sensitivity
Impact on financial reporting and estimates as at 31 December 2022
As at 31 December 2022, there has been no material impact identified on financial reporting judgments and estimates. The Group recognizes the ever-changing risks related to climate change and will regularly assess these risks against judgments and estimates made in the preparation of the Group\u2019s financial statements.
Climate-related risk
The effects of climate change, such as extreme weather events, fluctuating temperatures in seawater and a decline in biodiversity, could have a significant financial impact in the decades ahead. Knowledge of the possible financial consequences of global warming, biodiversity loss, or even ecosystem collapse, and the integration of climate risk and nature risk as a separate risk category, are an essential part of Grieg Seafood\u2019s risk management strategy. Grieg Seafood aims to increase its understanding of climate and nature-related risks, in order to find solutions to reduce adverse impacts.
Grieg Seafood has mapped its climate-related risks, which the Group reports in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Grieg Seafood has also prepared a climate-related scenario analysis, assessing the impact of transitional risks and physical risks. These risks and opportunities are included in the Group\u2019s risk assessment as part of Grieg Seafood\u2019s regular forecast process. The results from the TCFD scenario analysis are summarized below.
Overall, Grieg Seafood expects the impacts of climate-related risks to be moderate in the short term, with no quantifiable impact as per year-end 2022, but these impacts could become more severe in the medium to long term. Any significant physical change is likely to interfere with the Group\u2019s current business model or damage the Group\u2019s facility infrastructure, both of which could be costly. Similarly, the transitional risks related to increased climate-change regulation or significant changes in consumer preferences could affect the Group\u2019s bottom line and access to capital. On the other hand, the Group sees Grieg Seafood as being uniquely placed to mitigate these risks and take advantage of climate-related opportunities.
Climate-related scenario analysis
The scenario analysis helps Grieg Seafood to understand the potential impact of climate change on the Group\u2019s core business in the future, and is used to stress-test the Group\u2019s strategical and financial planning. Grieg Seafood has performed a thorough assessment of the impact on the Group\u2019s salmon production of 2C and 4C of global warming. Grieg Seafood aims to meet the Paris Agreement criteria to keep global warming below 2C, compared to pre-industrial levels. The Group is currently increasing its production volume, and the assessments for 2030 and 2050 are based on our 2026 business strategy and the targeted production volumes.
2C of global warming
In this scenario, Grieg Seafood assumes that the Paris Agreement targets will be met. The Group assumes production of 2026 target volumes until 2030. How the Group\u2019s production will change towards 2050 is difficult to predict, but many initiatives and forecasts look towards the ocean and aquaculture to provide more food for the future. With 2C of global warming, Grieg Seafood\u2019s business is well positioned to seize opportunities for sustainable growth.
Main impacts from the scenario:
\u2013Higher risk from transitional risks
\u2013Carbon taxing
\u2013Initiatives to reduce deforestation increase cost of raw feed materials
\u2013Increased cost of procured aquaculture equipment
\u2013Policies and legislation that restrict production
4C of global warming
In this scenario, Grieg Seafood sees the need to differentiate our products to prove their value with respect to sustainability. This comes with an increased cost and risk of lower earnings potential. Meeting the Group\u2019s Paris Agreement targets may adversely impact Grieg Seafood\u2019s margins compared to our competitors, and the Group must base its business viability on specific customer groups.
Main impacts from the scenario:
\u2013Temperature increases and daily temperature variations may increase events that are stressful for the salmon
\u2013More frequent extreme weather events increase the personnel risk (HSE) associated with operating exposed sites
\u2013More droughts and floods reduce the production of land-based feed ingredients, which increases feed cost
Managing physical risks and opportunities
Assessing the impact of increased seawater temperature
The analysis shows that Grieg Seafood expects increased risks and costs related to global warming. 4C is a vastly greater threat than 2C. However, the risks associated with global warming indicate a shift towards the necessity of alternating sites, increasing post-smolt production on land and investing in heavy equipment at those sites which are exposed to harsh weather. This is in line with the Group\u2019s current strategy, where large concrete production vessels, and overlay protected work boats have been introduced to our fleet recent years. Together with increased personnel training, education and specialization, communication investments and Grieg Seafood\u2019s focus on improving its smolt facilities, we believe that Grieg Seafood is prepared to meet the challenges it will face in the future. The issue of lice and their implications for the Group\u2019s future production is associated with high levels of uncertainty and varies between regions. The future effects of increased seawater temperature on lice levels in the Group\u2019s regions, cannot be predicted without performing a comprehensive analysis. This is a topic Grieg Seafood will further pursue in the future.
Reducing carbon emission
In 2022, Grieg Seafood developed a Climate Action Plan, which describes the measures and investments needed to reach the Group\u2019s climate targets (reducing our carbon emissions by 35% towards 2030, and 100% in 2050, with 2018 as a baseline year). This plan stresses the importance of both operational measures, which affect Scope 1 and 2, and supply chain measures in Scope 3. Grieg Seafood needs to reduce its operations\u2019 fossil fuel consumption, purchase renewable electricity and set supplier requirements to be able to reduce its absolute emissions. The Group needs to invest in the electrification of sites and boats, choose fish feed that has a lower emission factor and reduce emissions from transportation. Fish feed is our largest single source of GHG emissions (Scope 3). We are committed to continually challenging our fish feed suppliers on the carbon emission from their production of the fish feed. The Group\u2019s largest direct source of emissions is from the fuel that powers our boats, including well-boats, vehicles, and on-site electricity generators.
As the Climate Action Plan is staged in 2030 and 2050 targets, the Group\u2019s current efforts are focused on actionable measures to meet the 2030 target. Actionable measures to meet the 2050 target will be set when we are closer to the calender year of 2030.
We are working closely with our fish feed suppliers and focus on sustainable fish feed ingredients. In addition, the Group expects that new technology will enable it to reduce its carbon emissions from freight transport.
In December 2021, Shetland was sold to Scottish Sea Farms Ltd, and deconsolidated from the Grieg Seafood Group in December 2021. The decision to divest Shetland was made in 2020, and the income and expenses from the Shetland activity has been presented as discontinued operations of the Grieg Seafood Group (as well as the Shetland assets being classified as assets held for sale as from 2020 until the sale in 2021). For more information, see the 2021 Annual Report of Grieg Seafood.
The discontinued operations was defined by Grieg Seafood as the farming and sales operations in Shetland. The discontinued operation in Shetland included the prior reporting segment of Shetland UK and the UK sales operations.
The enterprise value of the transaction with Scottish Sea Farms Ltd. was set to GBP 164 million, assuming a normalized net working capital and adjusted for net debt. On the closing date of the transaction, in December 2021, Grieg Seafood received a preliminary purchase price for the Shetland assets of NOK 2 087 million. In addition, Scottish Sea Farms Ltd settled a GBP intercompany long-term loan granted by Grieg Seafood ASA (\"Seller\u2019s debt\"). The preliminary purchase price has been calculated pursuant to a pre-closing statement, which was prepared in good faith and set out the net debt and net working capital of the Shetland assets. The actual net debt and net working capital will be calculated in accordance with prevailing accounting principles and set out in a closing statement.
At year-end last year, 31 December 2021, the calculation of the gain/loss from sale of the Shetland assets was based on the preliminary purchase price. The preliminary gain after income tax resulting from the sale of the Shetland assets is NOK 424 million. The preliminary gain was calculated by deducting Grieg Seafood Group's book value of the Shetland assets on the closing date and transaction costs from the sum of the preliminary purchase and the settlement of the Seller\u2019s debt. In addition, the gain/loss calculation included recycling of accumulated OCI of NOK 106 million before tax and NOK 83 million after tax, whereas the tax expense of NOK 23 million related to the tax position on the Seller\u2019s debt.
According to the sales purchase agreement, the closing statement and the calculation of the final purchase price was to be performed subsequent to the closing date of the transaction.
Final purchase price
In February 2023, the closing statement and the calculation of the final purchase price has been finalized. Grieg Seafood had, as at year-end 2021, estimated approximately NOK 7.5 million in receivables on Scottish Sea Farms Ltd. The estimate was also included in the gain/loss calculation of 2021. In February 2023, there was no material deviation between the estimated receivable on Scottish Sea Farms Ltd. at 31 December 2022, and the actual received payment of the final part of the transaction settlement for the sale of Shetland.
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS | TOTAL | |
2022 | 2021 | |
Operating income | \u2014 | 951\u00a0334 |
Operating expenses | \u2014 | -775\u00a0822 |
Operational EBIT | \u2014 | 175\u00a0512 |
Production fee | \u2014 | -5\u00a0219 |
Fair value adjustment of biological assets | \u2014 | 75\u00a0697 |
EBIT (Earnings before interest and taxes) | \u2014 | 245\u00a0990 |
Net financial items | \u2014 | 1\u00a0902 |
Impairment loss recognized on the remeasurement to fair value less cost to sell | \u2014 | \u2014 |
Profit before tax from discontinued operations | \u2014 | 247\u00a0893 |
Income tax expense | \u2014 | -71\u00a0280 |
Profit for the period from discontinued operations | \u2014 | 176\u00a0613 |
Gain on the sale of the subsidiary after income tax | \u2014 | 423\u00a0678 |
Net profit for the period from discontinued operations | \u2014 | 600\u00a0291 |
GAIN ON THE SALE OF THE SUBSIDIARY AFTER INCOME TAX | TOTAL | |
(NOK 1 000) | 2022 | 2021 |
Sale/purchase price | \u2014 | 2\u00a0087\u00a0494 |
Transaction costs | \u2014 | -26\u00a0950 |
Recycling of accumulated OCI | \u2014 | 83\u00a0139 |
Total consideration | \u2014 | 2\u00a0143\u00a0683 |
Book value | \u2014 | 1\u00a0720\u00a0004 |
Gain on the sale of the subsidiary after income tax | \u2014 | 423\u00a0678 |
The recycled accumulated OCI in the gain/loss calculation consists of: | ||
Currency effect on investment in subsidiaries | \u2014 | 3\u00a0261 |
Currency effects on loans to subsidiaries | \u2014 | 103\u00a0223 |
Other gains and losses | \u2014 | -636 |
Tax effects | \u2014 | -22\u00a0709 |
Reserve of disposal group classified as held for sale | \u2014 | 83\u00a0139 |
CASH FLOWS FROM DISCONTINUED OPERATIONS | TOTAL | |
2022 | 2021 | |
Net cash flow from operating activities | \u2014 | 145\u00a0228 |
Net cash flow from investing activities | \u2014 | 2\u00a0041\u00a0801 |
Net cash flow from financing activities | \u2014 | -145\u00a0836 |
Total | \u2014 | 2\u00a0041\u00a0193 |
Cash discontinued operations cash and cash equivalents - other changes | \u2014 | -842 |
Net change in cash and cash equivalents from discontinued operations | \u2014 | 2\u00a0040\u00a0350 |
Associates that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in EBIT when the relevant associates operate in the same position in the value chain as the Group. All investments in associates in 2022 and 2021 are closely related. See Note 8 regarding the associated companies included in the segment information.
The Group owns, through Grieg Seafood Finnmark AS, a 50% interest in Nordnorsk Smolt AS, together with SalMar ASA (50%). Nordnorsk Smolt AS is located in Troms and Finnmark County in Northern Norway. The annual production is approximately 900 tonnes of smolt per year. There is currently no production of smolt at Nordnorsk Smolt AS due to an ongoing redesign of the facility, which is scheduled for completion in Q2 2023. In December 2021, a capital increase was carried out, whereby both owners invested NOK 12.5 million each. At 31 December 2022, Grieg Seafood Finnmark AS provided a long-term loan to Nordnorsk Smolt AS of NOK 2.3 million (NOK 2.1 million at December 2021), which is included in other non-current receivables. The accrued interest is recognized under current receivables.\u00a0
The Group owns, through Grieg Seafood Rogaland AS, a 33.33% interest in Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS is located in Ryfylke in Rogaland, Norway. Through Tytlandsvik Aqua AS, the partners secure increased and improved access to post-smolt fish, with an annual production capacity of 4 500 tonnes, 50% of which falls to Grieg Seafood Rogaland.
Through Grieg Seafood Rogaland AS, the Group owns a 44.44% interest in \u00c5rdal Aqua AS, together with Vest Havbruk AS and Omfar AS. Omfar AS was brought in as a co-owner of the company through two private placement share issues. The other two shareholders were diluted first from 50% to 37.04% and then to 33.33% ownership. At the same time, Grieg Seafood Rogaland AS entered into a post-smolt
agreement with \u00c5rdal Aqua AS. The share capital from Omfar AS and the post-smolt agreement were consequently recognized as income with a dilution gain of NOK 22.6 million. In 2021, the dilution of NOK 6.7 million was not recognized as a gain, but set aside as a liability until certain milestones which the project depends on had been reached. The milestones were approved in 2022 and the dilution gain of NOK 6.7 million was recognized together with the dilution gain of NOK 15.8 million for 2022, a total of NOK 22.6 million. The total gain has been presented as a separate item below Operational EBIT in the Group\u2019s segment reporting (see Note 8). The share of profit from associates in the income statement is presented at the gross amount. In October 2022, there was a capital increase of NOK 150 million in \u00c5rdal Aqua AS, of which Grieg Seafood Rogaland AS contributed NOK 90 million. After the capital increase, Grieg Seafood Rogaland AS increased its shareholding to 44.44%. In addition, Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million to \u00c5rdal Aqua AS. Construction of \u00c5rdal Aqua AS\u2019s land-based farming and post-smolt facility has started. Production is expected to commence in 2024, with a capacity of 4 500 tonnes.
In January 2022, Grieg Seafood Rogaland AS invested NOK 7.6 million to acquire an ownership interest of 50% in Nextseafood AS. Nextseafood AS is co-owned with Havbrukskompaniet AS, and aims to explore and realize the closed-containment system known as FishGLOBE V6. FishGLOBE AS was awarded two development licenses (1 560 tonnes MAB) in 2019. As at year-end 2022, Grieg Seafood Rogaland AS has provided a long-term, interest-free loan to FishGLOBE AS, an affiliated company of Nextseafood AS, in the amount of NOK\u00a08.6\u00a0million.
INVESTMENT IN ASSOCIATES | EQUITY INTEREST AT 31.12.2022 | BOOK VALUE AT 01.01.2022 NOK 1 000 | PROFIT/LOSS 2022 NOK 1 000 | CHANGES IN THE | BOOK VALUE AT 31.12.2022 NOK 1 000 |
Nordnorsk Smolt AS | 50.00% | 47\u00a0710 | -8\u00a0658 | \u2014 | 39\u00a0053 |
Tytlandsvik Aqua AS | 33.33% | 48\u00a0087 | 7\u00a0864 | \u2014 | 55\u00a0951 |
\u00c5rdal Aqua AS | 44.44% | 8\u00a0878 | 21\u00a0915 | 83\u00a0254 | 114\u00a0047 |
Nextseafood AS | 50.00% | \u2014 | -26 | 7\u00a0600 | 7\u00a0574 |
Total | 104\u00a0675 | 21\u00a0096 | 90\u00a0854 | 216\u00a0624 |
AT 31.12.2022 | TIME OF | EQUITY INTEREST |
| DEPRECIATION OF | BOOK VALUE OF |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 5\u00a0958 | 11\u00a0064 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 4\u00a0674 | 9\u00a0926 |
\u00c5rdal Aqua AS | 15.01.2020 | 44.44% | 17\u00a0634 | \u2014 | 17\u00a0634 |
Nextseafood AS | 31.01.2022 | 50.00% | \u2014 | \u2014 | \u2014 |
Total ownership | 49\u00a0257 | 10\u00a0632 | 38\u00a0625 |
The share issue and shareholder agreement relating to Nordnorsk Smolt AS were signed on 30 June 2019. Excess value relating to the investment has been allocated to hatcheries under construction, based on provisional accounting figures from Nordnorsk Smolt AS on the acquisition date. The value added is amortized from the date of acquisition.
The share issue and shareholder agreement relating to Tytlandsvik Aqua AS were signed on 1 June 2017. Excess value relating to the investment has been allocated to hatcheries under construction, based on provisional accounting figures from Tytlandsvik Aqua AS as at 31 December 2018. The fair value adjustment is amortized from the time the facility was completed and commissioned.
The excess value relating to the \u00c5rdal Aqua AS investment has been allocated to hatcheries under construction. The facility is expected to be completed in 2024, and depreciation of the excess value will start when its completed.
Tytlandsvik Aqua AS, Nordnorsk Smolt, \u00c5rdal Aqua AS and Nextseafood AS have the same financial year as the Group. The following table displays provisional financial information at 31 December 2022 (100%).
Segment information
The operating segments are identified on the basis of the reports which Group management uses to assess performance and profitability at a strategic level. Group management assesses business activities from a geographical perspective, based on the location of assets. The Group has one production segment: Production of farmed salmon. Earnings from the sales companies in the Group are reported per producer. Geographically, management assesses the results of production in Rogaland \u2013 Norway, Finnmark \u2013 Norway, British Columbia \u2013 Canada, and Newfoundland \u2013 Canada. Group management evaluates the results from the segments based on Operational EBIT. The operating segments are divided geographically by country or region, based on the reporting applied by Group management when assessing performance and profitability at a strategic level.
The method by which Operational EBIT is calculated excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and impairment of goodwill and intangible assets, when impairment is attributable to an isolated event which is not expected to recur. Furthermore, the measurement method for Operational EBIT includes, but is not reported per region, the effect of share-based payments, as well as unrealized gains and losses on financial instruments. These gains/losses and costs are reported in the \"Elim/Other\" column in the segment information. Costs or gains which relate to prior years and not to the current operation of Grieg Seafood, are not included as Operational EBIT, as such costs are not considered meaningful for the comparability of the Group's results from one period to another. See Alternative Performance Measures\u00a0for more information. Elim/Other items comprise, in addition to intercompany eliminations, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. In the segment reporting, sales revenue at the regional level includes revenue from the sale of Atlantic salmon. At the
regional level, other income includes the sale of byproducts (such as ensilage), as well as income from the sale of smolt, fry and roe. At the Group level, such income is reclassified to sales revenue in the \"Elim/Other\"column in the Group's segment information. Other income also includes, at both the regional and Group level, rental income and income from overcapacity of operational assets. Other gains/losses, such as gains/losses from the sale of fixed assets and other equipment, are included in the line \u201cother gains/losses\u201d in the segment information. Associated companies that are closely related to the Group's operations and included in the Group\u2019s value chain, for example when the relevant associates operate in the same position in the value chain as the Group, are included in the Group's operational EBITDA and Operational EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group\u2019s segment information.
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Sales revenues | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
Other income | 31\u00a0490 | 70\u00a0745 |
Other gains/losses | 13\u00a0393 | -6\u00a0752 |
Share of profit from associates (operational) | -1\u00a0463 | -1\u00a0486 |
Raw materials and consumables used | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
Salaries and personnel expenses | -695\u00a0577 | -577\u00a0434 |
Other operating expenses | -2\u00a0087\u00a0310 | -1\u00a0527\u00a0347 |
Operational EBITDA | 2\u00a0190\u00a0834 | 818\u00a0044 |
Depreciation property, plant and equipment | -434\u00a0641 | -368\u00a0482 |
Amortization licenses and other intangible assets | -16\u00a0706 | -7\u00a0192 |
Operational EBIT | 1\u00a0739\u00a0486 | 442\u00a0370 |
Share of profit from associates (non-operational) | 22\u00a0558 | \u2014 |
Production fee | -26\u00a0350 | -24\u00a0463 |
Fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Write-down of non-current assets (non-operational) | -140\u00a0074 | \u2014 |
Litigation and legal claims | -157\u00a0065 | \u2014 |
Decommissioning costs | -24\u00a0382 | \u2014 |
EBIT (Earnings before interest and taxes) | 1\u00a0497\u00a0586 | 940\u00a0944 |
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0123\u00a0671 | 2\u00a0629\u00a0226 | 1\u00a0665\u00a0105 | \u2014 | 745\u00a0954 | 7\u00a0163\u00a0956 |
Other income | 81\u00a0137 | 18\u00a0619 | 8\u00a0649 | 321 | -77\u00a0237 | 31\u00a0490 |
Other gains/losses | -1\u00a0954 | 11\u00a0965 | -4\u00a0475 | \u2014 | 7\u00a0858 | 13\u00a0393 |
Share of profit from associates | 7\u00a0195 | -8\u00a0658 | \u2014 | \u2014 | \u2014 | -1\u00a0463 |
Operating costs before depreciation and amortization | -1\u00a0356\u00a0928 | -1\u00a0579\u00a0017 | -1\u00a0279\u00a0079 | -40\u00a0576 | -760\u00a0943 | -5\u00a0016\u00a0543 |
Operational EBITDA | 853\u00a0121 | 1\u00a0072\u00a0136 | 390\u00a0200 | -40\u00a0254 | -84\u00a0368 | 2\u00a0190\u00a0834 |
Depreciation, amortization and reversals | -98\u00a0536 | -145\u00a0997 | -119\u00a0789 | -74\u00a0474 | -12\u00a0552 | -451\u00a0347 |
Operational EBIT | 754\u00a0585 | 926\u00a0139 | 270\u00a0411 | -114\u00a0728 | -96\u00a0920 | 1\u00a0739\u00a0486 |
Harvest volume (tonnes GWT) | 28\u00a0387 | 36\u00a0024 | 20\u00a0286 | 84\u00a0697 | ||
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | \u2014 | \u2014 | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | \u2014 | \u2014 | 52.7 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | \u2014 | \u2014 | 20.5 |
Total assets | 2\u00a0920\u00a0718 | 3\u00a0422\u00a0148 | 1\u00a0913\u00a0438 | 3\u00a0116\u00a0131 | 1\u00a0502\u00a0930 | 12\u00a0875\u00a0365 |
Total liabilities | 1\u00a0236\u00a0330 | 1\u00a0610\u00a0495 | 692\u00a0878 | 2\u00a0735\u00a0606 | 114\u00a0349 | 6\u00a0389\u00a0657 |
AT 31.12.2022 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 91\u00a0295 | 36\u00a0227 | 55\u00a0068 | 195 | -13\u00a0911 |
Tytlandsvik Aqua AS | 623\u00a0770 | 485\u00a0682 | 138\u00a0088 | 322\u00a0999 | 34\u00a0631 |
\u00c5rdal Aqua AS | 220\u00a0614 | 3\u00a0665 | 216\u00a0949 | \u2014 | -1\u00a0449 |
Nextseafood AS | 15\u00a0149 | \u2014 | 15\u00a0149 | \u2014 | -45 |
INVESTMENT IN ASSOCIATES | EQUITY INTEREST AT 31.12.2021 | BOOK VALUE AT 01.01.2021 NOK 1 000 | PROFIT/LOSS 2021 NOK 1 000 | CHANGES IN THE | BOOK VALUE AT 31.12.2021 NOK 1 000 |
Nordnorsk Smolt AS | 50.00% | 41\u00a0264 | -6\u00a0053 | 12\u00a0500 | 47\u00a0711 |
Tytlandsvik Aqua AS | 33.33% | 43\u00a0158 | 4\u00a0929 | \u2014 | 48\u00a0087 |
\u00c5rdal Aqua AS | 37.04% | \u2014 | -363 | 9\u00a0241 | 8\u00a0878 |
Total | 84\u00a0421 | -1\u00a0486 | 21\u00a0741 | 104\u00a0675 |
AT 31.12.2021 | TIME OF | EQUITY INTEREST | EXCESS VALUE | DEPRECIATION OF | BOOK VALUE OF |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 4\u00a0256 | 12\u00a0766 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 3\u00a0214 | 11\u00a0386 |
\u00c5rdal Aqua AS | 15.01.2020 | 37.04% | 2\u00a0188 | \u2014 | 2\u00a0188 |
Total ownership | 33\u00a0811 | 7\u00a0470 | 26\u00a0341 |
AT 31.12.2021 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 93\u00a0076 | 24\u00a0097 | 68\u00a0979 | 57\u00a0636 | -11\u00a0169 |
Tytlandsvik Aqua AS | 518\u00a0466 | 408\u00a0353 | 110\u00a0113 | 216\u00a0387 | 24\u00a0802 |
\u00c5rdal Aqua AS | 25\u00a0972 | 7\u00a0624 | 18\u00a0348 | 50 | -979 |
2021 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 1\u00a0430\u00a0949 | 1\u00a0756\u00a0292 | 1\u00a0023\u00a0474 | \u2014 | 387\u00a0870 | 4\u00a0598\u00a0585 |
Other income | 76\u00a0640 | 48\u00a0868 | 9\u00a0114 | 569 | -64\u00a0445 | 70\u00a0745 |
Other gains/losses | 140 | -52 | -6\u00a0839 | \u2014 | \u2014 | -6\u00a0752 |
Share of profit from associates | 4\u00a0567 | -6\u00a0053 | \u2014 | \u2014 | \u2014 | -1\u00a0486 |
Operating costs before depreciation and amortization | -1\u00a0167\u00a0414 | -1\u00a0405\u00a0878 | -781\u00a0973 | -93\u00a0388 | -394\u00a0395 | -3\u00a0843\u00a0048 |
Operational EBITDA | 344\u00a0882 | 393\u00a0176 | 243\u00a0776 | -92\u00a0819 | -70\u00a0970 | 818\u00a0044 |
Depreciation, amortization and reversals | -102\u00a0865 | -142\u00a0640 | -93\u00a0541 | -24\u00a0039 | -12\u00a0590 | -375\u00a0674 |
Operational EBIT | 242\u00a0017 | 250\u00a0537 | 150\u00a0235 | -116\u00a0858 | -83\u00a0561 | 442\u00a0370 |
Harvest volume (tonnes GWT) | 26\u00a0670 | 34\u00a0484 | 14\u00a0448 | 75\u00a0601 | ||
Sales revenue/kg (NOK) | 53.7 | 50.9 | 70.8 | \u2014 | \u2014 | 55.7 |
Farming cost/kg (NOK) | 44.6 | 43.7 | 60.4 | \u2014 | \u2014 | 47.2 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.7 |
Operational EBIT/kg (NOK) | 9.1 | 7.3 | 10.4 | \u2014 | \u2014 | 5.9 |
Total assets | 2\u00a0181\u00a0546 | 3\u00a0076\u00a0166 | 2\u00a0057\u00a0524 | 2\u00a0487\u00a0713 | 911\u00a0299 | 10\u00a0714\u00a0248 |
Total liabilities | 1\u00a0088\u00a0328 | 1\u00a0502\u00a0171 | 1\u00a0018\u00a0999 | 1\u00a0948\u00a0082 | -406\u00a0634 | 5\u00a0150\u00a0946 |
Sales revenue/kg reported in the segment information is equal to the sum of sales revenues from the regions divided by the related harvest volume. Group sales revenue is calculated based on the Group\u2019s farming operations, excluding sales revenue from Group companies not geared to production.
Farming cost/kg reported in the segment information encompasses all costs directly related to the production and harvest of salmon, divided by the related harvest volume. Thus, at the regional level, farming cost equals operational costs. Other income is included in the farming cost metric as representing cost reduction activities. Group farming cost is calculated based on the Group\u2019s farming operations, excluding ownership costs and costs from Group companies not geared to production.
Other costs incl. ownership and headquarters costs/kg reported in the segment information include all costs and revenue not directly related to the production and harvest of salmon, such as costs deriving from activities conducted by the parent company and other Group companies not geared to production, divided by the Group's harvest volume. In addition, until the first harvest in Newfoundland is carried out, net costs attributable to the Newfoundland region are included as other costs/kg.
Operational EBIT/kg reported in the segment information is equal to Operational EBIT divided by the related harvest volume.
See Alternative Performance Measures for more information on the non-IFRS measures relating to sales revenue/kg, farming cost/kg, other costs incl. ownership and headquarters costs/kg and Operational EBIT/kg.
Sales revenues from contracts with customers
The Group's revenues mainly comprise revenues from the sale of whole fresh Atlantic salmon, in addition to processed Atlantic salmon. The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt and and third-party harvesting if the Group has overcapacity at its facilities.
Sales revenues are recognized at the point in time when control of the fish has been transferred to the customer. This will normally be upon delivery. In 2022, the sale of fresh whole Atlantic salmon totaled 97% (2021: 95%) of the Group's sales revenues (excluding other products), while processed fish accounted for 2% (2021: 4%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET | NORWAY* | CANADA* | TOTAL | |||||
2022 | 2021 | 2022 | 2021 | 2022 | 2022% | 2021 | 2021% | |
Continental Europe | 4\u00a0152\u00a0843 | 2\u00a0968\u00a0604 | \u2014 | \u2014 | 4\u00a0152\u00a0843 | 58% | 2\u00a0968\u00a0604 | 65% |
UK | 247\u00a0295 | 114\u00a0887 | \u2014 | \u2014 | 247\u00a0295 | 3% | 114\u00a0887 | 2% |
USA | 181\u00a0659 | 85\u00a0953 | 1\u00a0323\u00a0551 | 831\u00a0003 | 1\u00a0505\u00a0210 | 21% | 916\u00a0957 | 20% |
Canada | 87\u00a0722 | 22\u00a0778 | 466\u00a0935 | 284\u00a0238 | 554\u00a0657 | 8% | 307\u00a0016 | 7% |
Asia | 584\u00a0914 | 277\u00a0836 | 67\u00a0028 | 7\u00a0274 | 651\u00a0943 | 9% | 285\u00a0111 | 6% |
Other markets | 52\u00a0008 | 6\u00a0011 | \u2014 | \u2014 | 52\u00a0008 | 1% | 6\u00a0011 | \u2014% |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 100% | 4\u00a0598\u00a0585 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations.
Grieg Seafood did not have any sales to Russia\u00a0in 2022 or in 2021.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS | NORWAY* | CANADA* | TOTAL | |||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
Fresh whole fish | 5\u00a0149\u00a0017 | 3\u00a0429\u00a0432 | 1\u00a0805\u00a0633 | 955\u00a0179 | 6\u00a0954\u00a0650 | 4\u00a0384\u00a0611 |
Fresh processed fish | 57\u00a0142 | 287 | 51\u00a0588 | 166\u00a0380 | 108\u00a0729 | 166\u00a0666 |
Frozen processed fish | 53\u00a0373 | \u2014 | 10 | 508 | 53\u00a0383 | 508 |
Other products and services | 46\u00a0909 | 46\u00a0351 | 284 | 449 | 47\u00a0193 | 46\u00a0800 |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
TONNES | NOK 1 000 | |||
2022 | 2021 | 2022 | 2021 | |
Biological assets at 01.01. | 59\u00a0121 | 52\u00a0619 | 3\u00a0449\u00a0412 | 2\u00a0545\u00a0903 |
Currency translation differences | N/A | N/A | 36\u00a0945 | 22\u00a0840 |
Increase due to production | 93\u00a0134 | 99\u00a0590 | 4\u00a0348\u00a0288 | 3\u00a0428\u00a0102 |
Decrease due to abnormal mortality/loss | -3\u00a0455 | -5\u00a0534 | -224\u00a0924 | -117\u00a0450 |
Decrease due to sales | -98\u00a0186 | -87\u00a0553 | -3\u00a0743\u00a0033 | -3\u00a0053\u00a0236 |
Fair value adjustment at 01.01. | N/A | N/A | -970\u00a0480 | -347\u00a0227 |
Fair value adjustment at 31.12. | N/A | N/A | 1\u00a0149\u00a0591 | 970\u00a0480 |
Biological assets at 31.12. | 50\u00a0614 | 59\u00a0121 | 4\u00a0045\u00a0800 | 3\u00a0449\u00a0412 |
RECOGNIZED FAIR VALUE ADJUSTMENT | 2022 | 2021 |
Change in fair value adjustment of biological assets1 | 129\u00a0331 | 619\u00a0439 |
Change in physical delivery contracts relating to fair value adjustment of biological assets2 | -1\u00a0610 | \u2014 |
Change in fair value of financial derivatives from salmon (Fish Pool contracts)3 | -44\u00a0309 | -96\u00a0403 |
Total recognition of fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Recognized value adjustments of biological assets include:
1 Fair value adjustments of biological assets
2 Fair value (liability) change in loss-making contracts
3 Change in unrealized gains/losses from financial purchases/sales contracts (derivatives) from fish at Fish Pool
In accordance with IAS 41, biological assets are measured at fair value, unless the fair value cannot be measured reliably.
Broodstock (classified as inventory and not biological assets) and smolt are measured at cost less impairment losses. Fair value of biological assets is calculated on a discounted cash flow-based present value model, which does not rely on historical cost.
Provisions allocated to future physical delivery contracts that require fair value adjustments are recognized as other current liabilities in the balance sheet. The contracts are calculated based on the same forward prices used for the fair value calculation of biological assets. Changes in the value of salmon-related financial derivatives\u00a0 are recognized in the balance sheet under derivatives and other financial instruments. Financial derivatives are calculated at market value. See Note 3 for further information.
For further information on accounting policies for biological assets, please refer to Note 2 and Note 4.
BASIS FOR VALUES | NORWAY | BRITISH COLUMBIA | NEWFOUNDLAND |
Weighted price per kg GWT | NOK 84.06 | CAD 12.83 | CAD 11.66 |
Source | Fish Pool | Fish Pool | Fish Pool |
Forward prices from Fish Pool are adjusted for expected quality reductions and stated before logistics expenses.
The standard deduction for quality reduction is applied. Forward prices are weighted in relation to the intended harvesting period.
The price for British Columbia and Newfoundland is based on the forward price in Norway, adjusted for historical differences in price levels between Norway and Canada. Forward exchange rates are used to translate prices into CAD in relation to the harvesting period.
The estimated future cash flow is discounted by a monthly rate, which is assessed individually for each region. The discount rate reflects a combination of the cost of capital for the biological assets, risk adjustment (the risk related to volume, cost and price of the biological assets) and a synthetic license rent. The discount rate is differentiated to take account of each region\u2019s different prerequisites for biological production, which also results in a differentiation of the recognized synthetic license rent. See the table below for the applied discount rates per region, and see Note 4 for more information.
DISCOUNT RATE PER REGION | 2022 | 2021 |
Rogaland | 5.0% | 5.0% |
Finnmark | 5.0% | 5.0% |
British Columbia | 3.5% | 3.5% |
Newfoundland* | 3.5% | N/A |
*Newfoundland fish stocked at sea for the first time in 2022.
STATUS OF BIOLOGICAL ASSETS | NUMBER OF | BIOLOGICAL | ACCRUED COST | FAIR VALUE | BOOK VALUE |
2022 | |||||
Biological assets on land * | 17\u00a0680 | 547 | 181\u00a0569 | \u2014 | 181\u00a0569 |
Immature fish at sea, round weight < 4.60 kg | 26\u00a0562 | 41\u00a0614 | 2\u00a0370\u00a0985 | 934\u00a0708 | 3\u00a0305\u00a0693 |
Mature fish at sea, round weight > 4.60 kg | 1\u00a0648 | 8\u00a0453 | 343\u00a0655 | 214\u00a0883 | 558\u00a0537 |
Total | 45\u00a0890 | 50\u00a0614 | 2\u00a0896\u00a0209 | 1\u00a0149\u00a0591 | 4\u00a0045\u00a0800 |
2021 | |||||
Biological assets on land * | 28\u00a0522 | 539 | 164\u00a0959 | \u2014 | 164\u00a0959 |
Immature fish at sea, round weight < 4.60 kg | 28\u00a0266 | 51\u00a0944 | 2\u00a0080\u00a0957 | 873\u00a0626 | 2\u00a0954\u00a0583 |
Mature fish at sea, round weight > 4.60 kg | 1\u00a0292 | 6\u00a0638 | 233\u00a0018 | 96\u00a0854 | 329\u00a0872 |
Total | 58\u00a0080 | 59\u00a0121 | 2\u00a0478\u00a0934 | 970\u00a0480 | 3\u00a0449\u00a0412 |
* Smolt production
Abnormal mortality - write-down
Cost related to abnormal mortality will be immediately recognized in profit or loss, and presented as \"decrease due to abnormal mortality/loss\" in the table for opening-to-closing balance reconciliation as disclosed above. Normal mortality is classified as part of the production cost. The classification of mortality only affects the note presentation, and not the fair value calculation.
In Rogaland, the main causes of abnormal mortality at sea in 2022 were sea lice treatment, pancreas disease (PD), winter ulcers and cardiomyopathy syndrome (CMS). In Finnmark, Spironucleus salmonicida (Spiro) and winter ulcers were the main causes. In BC, algae/low oxygen levels, SRS and lice treatment were the main causes for the abnormal mortality.
Spiro was detected in some fish in certain pens in Finnmark. This led to the early harvesting and culling of fish showing signs of ill health in order to protect fish welfare. Spiro in Finnmark is also the main reason the average size of the fish recorded under abnormal mortality is lower in 2022 compared to 2021. Newfoundland did not have abnormal mortality at its sea farms in 2022. We incurred costs related to both mortality and abnormal mortality at our freshwater facilities in Finnmark and BC. Lower quality roe significantly impacted BC\u2019s freshwater production, leading to reduced survival recognized as abnormal mortality.
In 2021, the main causes of abnormal mortality were pancreas disease and sea lice treatment in Rogaland, winter ulcers and a chlorine accident at the harvesting plant in Finnmark, and low oxygen levels in BC.
ABNORMAL MORTALITY - WRITE-DOWN | NUMBER OF | BIOLOGICAL | AVERAGE | ACCRUED COST |
2022 | ||||
Biological assets on land | 3\u00a0116 | 47 | 0.02 | 11\u00a0034 |
Immature fish in sea, round weight < 4.60 kg | 2\u00a0290 | 2\u00a0994 | 1.31 | 154\u00a0694 |
Mature fish in sea, round weight > 4.60 kg | 85 | 414 | 4.89 | 16\u00a0983 |
Total | 5\u00a0491 | 3\u00a0455 | 0.63 | 182\u00a0710 |
2021 | ||||
Biological assets on land | 1\u00a0176 | 186 | 0.16 | 18\u00a0565 |
Immature fish in sea, round weight < 4.60 kg | 957 | 2\u00a0678 | 2.80 | 44\u00a0098 |
Mature fish in sea, round weight > 4.60 kg | 515 | 2\u00a0670 | 5.18 | 54\u00a0787 |
Total | 2\u00a0648 | 5\u00a0534 | 2.09 | 117\u00a0450 |
The abnormal mortality in 2022 includes the culling of fish in Finnmark due to Spiro.\u00a0The write-down in 2022 was significantly impacted by lower quality roe in BC (see the opening-to-closing balance reconciliation at the start of this note). Roe is not included in this table. In 2022, the write-down due to lower quality roe in BC came to NOK 42 million, bringing total write-down for 2022 to NOK 225 million.
OTHER INVENTORIES NOK 1 000 | 2022 | 2021 |
Raw materials (feed) at cost price | 105\u00a0585 | 67\u00a0355 |
Roe | 41\u00a0219 | 3\u00a0000 |
Other (goods in transit, frozen fish, supplementary products) | 93\u00a0368 | 57\u00a0944 |
Total inventories | 240\u00a0172 | 128\u00a0299 |
Impairment of inventories recognized at year-end | 507 | 20\u00a0020 |
COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000 | 2022 | 2021 |
Inventories at 01.01. (inverted number) | -128\u00a0299 | -78\u00a0001 |
Raw materials and consumables purchased | -2\u00a0345\u00a0528 | -1\u00a0788\u00a0565 |
Inventories at 31.12. | 240\u00a0172 | 128\u00a0299 |
Total | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
2022 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
Currency translation differences | 31\u00a0023 | 50\u00a0560 | -4\u00a0439 | 1\u00a0483 | 78\u00a0627 |
Reclassifications1 | \u2014 | -104\u00a0159 | 124\u00a0845 | -20\u00a0687 | \u2014 |
Additions | \u2014 | \u2014 | 7\u00a0380 | 2\u00a0669 | 10\u00a0048 |
Amortization | \u2014 | \u2014 | -11\u00a0103 | -5\u00a0603 | -16\u00a0706 |
Impairment2 | \u2014 | -135\u00a0693 | \u2014 | \u2014 | -135\u00a0693 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
ACCUMULATED VALUES | |||||
Acquisition cost | 780\u00a0697 | 1\u00a0463\u00a0687 | 173\u00a0274 | 61\u00a0944 | 2\u00a0479\u00a0602 |
Accumulated amortization | \u2014 | \u2014 | -42\u00a0499 | -47\u00a0255 | -89\u00a0754 |
Accumulated impairments | -89\u00a0603 | -130\u00a0752 | \u2014 | \u2014 | -220\u00a0355 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that has been considered as having finite economic life and subject to amortization. In addition, the reclassification lite item relate to other intangible assets reclassified to indefinite licenses following formal approval of license application in Newfoundland.
2For information concerning he impairment of aquaculture licenses in 2022 see Note 28.
2021 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 638\u00a0019 | 1\u00a0493\u00a0419 | 15\u00a0034 | 38\u00a0015 | 2\u00a0184\u00a0486 |
Currency translation differences | 22\u00a0053 | 28\u00a0767 | 524 | 747 | 52\u00a0090 |
Additions | \u2014 | 41 | \u2014 | 3\u00a0792 | 3\u00a0833 |
Amortization | \u2014 | \u2014 | -1\u00a0466 | -5\u00a0726 | -7\u00a0192 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
ACCUMULATED VALUES | |||||
Acquisition cost | 749\u00a0674 | 1\u00a0522\u00a0227 | 44\u00a0397 | 78\u00a0506 | 2\u00a0394\u00a0804 |
Accumulated amortization | \u2014 | \u2014 | -30\u00a0305 | -41\u00a0678 | -71\u00a0983 |
Accumulated impairments | -89\u00a0603 | \u2014 | \u2014 | \u2014 | -89\u00a0603 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
LICENSES
The tables below provide an overview of the Group\u2019s licenses. See Note 2 for further information on licenses.
NORWAY
NORWAY LICENSE CATEGORY | TOTAL NUMBER | CAPACITY TONNES |
Seawater licenses | 35 | 30\u00a0853 |
Green licenses 1 | 8 | 7\u00a0743 |
R&D permit | 3 | 2\u00a0340 |
Broodstock | 3 | 2\u00a0340 |
Smolt | 3 | 4\u00a0045 |
Harvesting pens | 2 | 1\u00a0106 |
Education 2 | 2 | 1\u00a0560 |
Total licenses in production | 56 | 49\u00a0987 |
Visitor center for fish farming 3 | 1 | 780 |
Total | 57 | 50\u00a0767 |
1 Of which four green licenses are converted.
2 Finnmark and Rogaland lease education licenses from the Troms and Finnmark and Rogaland County Councils, respectively.
3 Finnmark has a license for a visitor center for fish farming. The center is under construction, and expected to be completed in 2024. The license cannot be utilized before the visitor center is constructed.
CANADA - BC
All owners of industrial open-net pens must be approved by the the Department of Fisheries and Oceans Canada (DFO), which has regulated the industry since 2009. From 2022, farming companies need to obtain support from local First Nations in the area where the company has its licenses, together with the DFO. Each local First Nation establishes its own protocol and procedures for engaging with companies operating in its territory. Grieg Seafood BC is working with all the local First Nations in their areas of operations and has engaged positively with all of them. The new regulation will contribute to a more sustainable future for local communities and workers. See Note 4 for further information.
West Coast of Vancouver Island | East Coast of Vancouver Island | Total capacity | |
Total | 38\u00a0500 | 17\u00a0500 | 56\u00a0000 |
- Of which relates to Sechelt | 0 | 11\u00a0000 | 11\u00a0000 |
The capacity in BC is merely theoretical capacity, as all locations cannot be utilized simultaneously. BC also has a license for broodstock and smolt.
In 2022, the licenses for Sechelt farming area has been written down (see the section for \u201cWrite-down of tangible and intangible non-current assets\u201d below). Grieg Seafood formally holds the licenses as at year-end 2022, however we have decommissioned our farming operations at the sites.
CANADA - NEWFOUNDLAND
Newfoundland currently holds 13 seawater licenses and one freshwater license, with the aim to develop additional licenses as the project progresses. The regulations for salmon farming in Placentia Bay are based on the number of fish in the sea at any one site. Per license there is a maximum of one million fish in the sea in the first generation, and a maximum of two million fish in the second generation. In addition there are regulations related to fallowing and adherence to certain environmental indicators. See Note 4 for more information.
WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS
In 2022, Grieg Seafood has recorded write-down of tangible and intangible non-current assets totalling NOK 140 million. The write-down is related to reorganization of ownership structure of licenses, and decommissioning of farming operations.
In 2022, Grieg Seafood has reorganized the ownership of commercial aquaculture licenses in Norway, as the Group considered it necessary to separate Norwegian commercial and non-commercial aquaculture licenses by legal entities to be able to correctly calculate and report the resource rent tax proposed by the Norwegian government. As the licenses have been sold intra-group to the estimated fair value, a write-down of NOK 47 million has been recorded in the income statement of Grieg Seafood for the part of book value exceeding
the estimated fair value, estimated as the fair value less cost of disposals (fair value hierarchy level 3) for one specific commercial aquaculture license in our region Rogaland, Norway. The fair value has been estimated using a combination of valuation techniques, incl. used available information in the market (action prices, stock prices) and discounted cash flow model for a standard commercial aquaculture license.
Grieg Seafood has in 2022 discontinued production in the sh\u00edsh\u00e1lh (Sechelt) farming area in British Columbia (BC), which negatively impacted the income statement with a write down of commercial aquaculture licenses by NOK 88 million (recoverable amount of NOK 0 million), in addition to the write-down of related seawater production equipment and -assets by NOK 4 million, in total NOK 93 million. At year-end 2022, all fish in the Sechelt farming area has been harvested.
WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 | Note | 2022 | 2021 |
Commercial aquaculture licenses in Rogaland, Norway | 47\u00a0242 | \u2014 | |
Commercial aquaculture licenses in British Columbia, Canada | 88\u00a0451 | \u2014 | |
Non-current tangible assets in British Columbia, Canada | 11 | 4\u00a0382 | \u2014 |
Total write-down | 140\u00a0074 | \u2014 | |
- Of which total write-down of intangible non-current assets | 135\u00a0693 | \u2014 |
IMPAIRMENT TESTING OF GOODWILL AND LICENSES
As at year-end 2022, except for the write-down of non-current tangible and intangible assets for the specific events as disclosed above, no impairments of goodwill or licenses were recognized in 2022.
Goodwill and licenses with indefinite economic lives are subject to an annual impairment test. Tests are performed more frequently where indications of impairment exist. Licenses with finite useful lives are tested for impairment only if there are indications of a decline in value. The estimated value in use (VIU) is used as a basis for calculating the recoverable amount, except for Grieg Newfoundland where the fair value less cost of disposal (FVLCD) has been used as basis for recoverable amount. Grieg Newfoundland was acquired in 2020 and reported as a segment as from 2021. During 2022, the first transfer of smolt to sea was successfully completed. The first harvest is expected to commence late 2023.
CASH-GENERATING UNIT NOK 1 000 | LOCATION | BOOK VALUE OF | BOOK VALUE | TOTAL |
Rogaland | Norway | 20\u00a0463 | 206\u00a0394 | 226\u00a0857 |
Finnmark | Norway | \u2014 | 397\u00a0218 | 397\u00a0218 |
British Columbia (BC) | Canada | 10\u00a0441 | 88\u00a0999 | 99\u00a0441 |
Newfoundland | Canada | 660\u00a0190 | 771\u00a0099 | 1\u00a0431\u00a0289 |
Total value | 691\u00a0094 | 1\u00a0463\u00a0710 | 2\u00a0154\u00a0804 |
Goodwill arises on the acquisition of the subsidiaries and is measured on the basis of a group of cash-generating units that are expected to benefit from the synergy effects in the overall segment. Annual impairment tests are carried out on goodwill and licenses. The recoverable amount is calculated on the basis of value-in-use, except for Grieg Newfoundland where the calculation is based on fair value less cost of disposal (FVLCD). These calculations use after tax cash flow projections based on financial budgets from the respective cash-generating units over a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. For Newfoundland, the period is 13 years based on the first harvest expected in 2023. During the first few years, the cash flow will be negative due to low production and harvest volume, in addition to capital allocated to building of biomass and growth investments.
Assumptions used for estimating recoverable amount | Rogaland | Finnmark | BC | Newfoundland |
Budget period | 3 years | 3 years | 3 years | 13 years |
Increase in revenues in budget period | 5% | 14% | 76% | NA |
Operational EBITDA margin\u00a0 1) | 29% -34% | 34% - 39% | 28% - 34% | 0% -36% |
Operational EBITDA margin in terminal period | 30% | 39% | 33% | 36% |
Harvest growth \u2013 tonnes 2) | 2% | 8% | 54% | NA |
Required rate of return before tax 3) | 11% | 11% | 11% | 14.2% |
Required rate of return after tax 3) | 8.2% | 8.2% | 8.3% | 10.0% |
Growth rate 4) | 1% | 1% | 1% | 1% |
The budget period/explicit period is three years for Rogaland, Finnmark and BC. Impairment tests are initially based on the Group\u2019s rolling four-year projections, which are also used in connection with the Group's liquidity planning. Future price levels are estimated by using Fish Pool forward prices as a basis, adjusted for other considerations such as quality reductions and shipping costs. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 13 years to reflect production at full capacity in the terminal year. Although production will increase at a slow pace in the first few years, it will pick up speed once the facilities are completed and more smolt are transferred to the sea. We target a harvest volume of 15 000 tonnes in 2026, which we aim to increase to 45 000 tonnes in 2035.
The notes for the table \u201cAssumptions used for estimating recoverable amount\u201d (above) are presented below:
1. Budgeted Operational EBITDA margin: The margin remains more stable for the Norwegian regions, and is assumed to increase for our overseas regions during the budget period. Increase in harvest volume is assumed in all regions towards 2025.
2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2022 volume. A corresponding increase in output is assumed over time.
3. Weighted required return on capital employed before and after tax. Cash flow forecasts are thus estimated after tax. In the calculation, the return on capital employed is also after tax.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2025, the annual reinvestment is assumed to be equal to annual depreciation.
OPERATIONAL EBITDA MARGIN IN THE BUDGET AND TERMINAL PERIOD
The budgeted Operational EBITDA margin is based on past performance, expected cost of production and expected market developments. An increase in gutted weight output is assumed towards 2025 (2035 for Grieg Newfoundland). The increased harvest volume assumes an increase in utilization of existing production capacity and licenses, reflecting the Group's post-smolt strategy and operational improvements. We expect further growth to come from better utilization of our seawater licenses by moving more growth to land through our post-smolt program. We have come far with our post-smolt strategy in Rogaland, and will increase post-smolt capacity also in Finnmark and BC. The expansion of the smolt facility in BC was completed in 2022. Better utilization of our seawater licenses by improving biosecurity, fish health, welfare and survival rates, is also expected to secure on-growth and harvest volumes. Flexibility is a requirement to achieve better utilization of our capacity, and we are continuously looking for opportunities to secure access to new locations.
The assumptions in the terminal year are based on the budget, adjusted for inflation. The applied discount rates are after tax and reflect specific risks relating to the relevant operating segments.
SENSITIVITY ANALYSIS
The assessment of fair value less cost of disposal and value-in-use is sensitive to changes in the assumptions made, the most important of which are the discount rate and Operational EBIT/kg. A sensitivity analysis has been carried out based on these assumptions for all groups of cost-generating units. An isolated increase in the discount rate by two percentage points would result in an estimated impairment for the Newfoundland operations of NOK 225 million, while a reduction of NOK 6 in Operational EBIT/kg for the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 79 million. The other cost-generating units are not sensitive to equivalent changes\u00a0 in the same assumptions.
2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Currency translation differences | 28\u00a0997 | 15\u00a0431 | 8\u00a0944 | 17\u00a0390 | 70\u00a0762 |
Reclassification | -35\u00a0799 | 21\u00a0046 | -747 | 15\u00a0501 | \u2014 |
Grants received and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions2 | 106\u00a0449 | 393\u00a0178 | 180\u00a0331 | 256\u00a0922 | 936\u00a0879 |
Disposals | -269 | -5\u00a0889 | -3\u00a0160 | -2\u00a0803 | -12\u00a0121 |
Depreciation | -41\u00a0726 | -108\u00a0632 | -106\u00a0867 | -177\u00a0416 | -434\u00a0641 |
Impairment3 | \u2014 | -113 | -4\u00a0065 | -204 | -4\u00a0382 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0611\u00a0916 | 2\u00a0178\u00a0260 | 1\u00a0439\u00a0973 | 1\u00a0320\u00a0913 | 6\u00a0551\u00a0062 |
Accumulated depreciation | -309\u00a0317 | -797\u00a0339 | -832\u00a0197 | -572\u00a0483 | -2\u00a0511\u00a0335 |
Accumulated impairments | \u2014 | -107 | -3\u00a0838 | -192 | -4\u00a0137 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Of which book value of non-depreciable property | 113\u00a0016 | \u2014 | \u2014 | \u2014 | 113\u00a0016 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
See Note 13 for specification of the Group's right-of-use assets and further information on its leases.
1Grants received and other deductions to historic cost, of which NOK -86 million relates to the reversal of Investment Tax Credit (ITC) carried over from 31 December 2021 in Newfoundland (see Note 23) and NOK 9 million relates to government grants received in 2022 in Newfoundland.
2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region.
3Impairment in 2022 is related to the Sechelt farming area in British Columbia, Canada. See Note 10 and 28 for more information.
2021 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0182\u00a0595 | 893\u00a0039 | 510\u00a0212 | 447\u00a0308 | 3\u00a0033\u00a0154 |
Currency translation differences | 25\u00a0126 | -16\u00a0908 | 34\u00a0232 | 4\u00a0830 | 47\u00a0280 |
Reclassification | -132\u00a0195 | 112\u00a0098 | 2\u00a0798 | 17\u00a0299 | \u2014 |
Grants received | -88\u00a0910 | \u2014 | \u2014 | \u2014 | -88\u00a0910 |
Additions | 220\u00a0066 | 187\u00a0024 | 89\u00a0446 | 303\u00a0638 | 800\u00a0175 |
Disposals | 40 | -8\u00a0812 | -6\u00a0613 | -5\u00a0201 | -20\u00a0587 |
Depreciation | -37\u00a0436 | -101\u00a0422 | -100\u00a0574 | -129\u00a0050 | -368\u00a0482 |
Book value at 31.12 | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0436\u00a0555 | 1\u00a0786\u00a0948 | 1\u00a0281\u00a0384 | 1\u00a0153\u00a0100 | 5\u00a0657\u00a0987 |
Accumulated depreciation | -267\u00a0270 | -721\u00a0930 | -751\u00a0882 | -514\u00a0276 | -2\u00a0255\u00a0358 |
Accumulated impairments | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Book value at 31.12. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Of which book value of non-depreciable property | 107\u00a0839 | \u2014 | \u2014 | \u2014 | 107\u00a0839 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
Grieg Seafood ASA has a syndicated loan provided by DNB and Nordea. The syndicated financing from secured lenders of Grieg Seafood consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities. The debt structure comprises a NOK 750 million term loan, an EUR 75 million term loan, a NOK 1 500 million revolving credit facility and a NOK 200 million overdraft facility. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date. The financing carries floating interest rates, calculated as the relevant three month IBOR plus the applicable margin per interest period. The financial covenant of the facility is a minimum equity-ratio requirement of 31%, measured excl. the effect of IFRS 16.
In addition to the senior secured facility, the Group also has a green bond (GSF01 G, listed at Euronext), which matures in June 2025. The outstanding amount of the bond loan was NOK 1 424 million at the end of 2022. The bond carries a coupon rate of three months NIBOR + 3.4% p.a. The bond's financial covenant is an equity ratio requirement of minimum 30%, measured consistent with the Group\u2019s equity-ratio financial covenants as defined in its syndicated loan agreement with secured lenders.
Grieg Seafood ASA was in compliance with its financial covenant at 31 December 2022. At 31 December 2022, the Group had an equity ratio of 50% (2021: 52%) while the equity ratio according to financial covenant was 52%, compared to 54% at 31 December 2021.
In addition to bank- and bond loan, the Group's financing consists of lease agreements with credit institutions, in addition to the effect of IFRS 16 by capitalizing leases on the balance sheet (operational leases according to IFRS in force prior to 1 January 2019).
Total unutilized credit facilities of the Group amount to NOK 1 700 million as at 31 December 2022 (2021: NOK 885 million).
NON-CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
NON-CURRENT LIABILITIES (INTEREST BEARING) | ||
Green bond | 1\u00a0423\u00a0500 | 1\u00a0500\u00a0000 |
Non-current syndicated loan | 1\u00a0346\u00a0218 | 374\u00a0580 |
Non-current credit facility | \u2014 | 440\u00a0000 |
Non-current lease liabilities (prior IAS 17 finance leases) | 318\u00a0198 | 287\u00a0578 |
Non-current lease liabilities (prior IAS 17 operational leases) | 335\u00a0452 | 290\u00a0219 |
Other non-current liabilities | 94\u00a0144 | 96\u00a0091 |
Total | 3\u00a0517\u00a0512 | 2\u00a0988\u00a0468 |
Amortization effect of loans | -25\u00a0053 | -29\u00a0671 |
Total non-current liabilities | 3\u00a0492\u00a0459 | 2\u00a0958\u00a0797 |
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000 | 2022 | 2021 |
Current portion of borrowings | 141\u00a0968 | 54\u00a0475 |
Current portion lease liabilities (prior IAS 17 finance leases) | 78\u00a0416 | 72\u00a0918 |
Current portion lease liabilities (prior IAS 17 operational leases) | 148\u00a0494 | 105\u00a0114 |
Total current liabilities (interest-bearing) | 368\u00a0878 | 232\u00a0507 |
NET INTEREST-BEARING LIABILITIES NOK 1 000 | 2022 | 2021 |
Total non-current interest-bearing liabilities (see above)* | 3\u00a0517\u00a0512 | 2\u00a0988\u00a0468 |
Total current interest-bearing liabilities (see above) | 368\u00a0878 | 232\u00a0507 |
Gross interest-bearing liabilities | 3\u00a0886\u00a0390 | 3\u00a0220\u00a0974 |
Cash and cash equivalents | 642\u00a0719 | 928\u00a0342 |
Investments in money market funds | 1\u00a0012\u00a0848 | \u2014 |
Loans to associates | 8\u00a0300 | 2\u00a0111 |
Net interest-bearing liabilities | 2\u00a0222\u00a0522 | 2\u00a0290\u00a0520 |
Lease liabilities (prior IAS 17 operational leases)** | -483\u00a0946 | -395\u00a0332 |
Net interest-bearing liabilities ex. the effect of IFRS 16 | 1\u00a0738\u00a0576 | 1\u00a0895\u00a0188 |
*Green bond and non-current borrowings including syndicated term loan and revolving facility as presented above, are presented excluding amortized effect of loans.
**Leasing liabilities that would, according to the IFRS in force prior to 1 January 2019, be classified as operational leases, are excluded from the net interest-bearing liabilities according to the covenant calculation.
PAYMENT PROFILE NON-CURRENT LIABILITIES 31.12.2022 | 2023 | 2024 | 2025 | 2026 | 2027 | LATER | TOTAL |
Green bond | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Non-current syndicated term-loan | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Lease liabilities (prior IAS 17 finance leases) | 78\u00a0416 | 67\u00a0679 | 55\u00a0503 | 51\u00a0599 | 46\u00a0618 | 96\u00a0799 | 396\u00a0614 |
Lease liabilities (prior IAS 17 operational leases) | 148\u00a0494 | 133\u00a0764 | 66\u00a0556 | 62\u00a0901 | 41\u00a0864 | 30\u00a0366 | 483\u00a0946 |
Other non-current liabilities* | 13\u00a0757 | 11\u00a0310 | 9\u00a0944 | 9\u00a0856 | 11\u00a0004 | 52\u00a0029 | 107\u00a0900 |
Total | 368\u00a0878 | 340\u00a0965 | 1\u00a0683\u00a0714 | 252\u00a0568 | 1\u00a0061\u00a0071 | 179\u00a0194 | 3\u00a0886\u00a0390 |
*NOK 107.8 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity.
PAYMENT PROFILE NON-CURRENT LIABILITIES 31.12.2021 | 2022 | 2023 | 2024 | 2025 | 2026 | LATER | TOTAL |
Green bond | \u2014 | \u2014 | \u2014 | 1\u00a0500\u00a0000 | \u2014 | \u2014 | 1\u00a0500\u00a0000 |
Non-current syndicated term-loan | 49\u00a0944 | 374\u00a0580 | \u2014 | \u2014 | \u2014 | \u2014 | 424\u00a0524 |
Non-current syndicated revolving credit facility | \u2014 | 440\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | 440\u00a0000 |
Lease liabilities (prior IAS 17 finance leases) | 72\u00a0918 | 67\u00a0410 | 57\u00a0199 | 43\u00a0909 | 39\u00a0525 | 79\u00a0535 | 360\u00a0496 |
Lease liabilities (prior IAS 17 operational leases) | 104\u00a0772 | 81\u00a0209 | 80\u00a0980 | 51\u00a0033 | 37\u00a0084 | 40\u00a0255 | 395\u00a0332 |
Other non-current liabilities* | 4\u00a0873 | 11\u00a0773 | 12\u00a0310 | 9\u00a0200 | 8\u00a0114 | 54\u00a0353 | 100\u00a0622 |
Total | 232\u00a0507 | 974\u00a0972 | 150\u00a0489 | 1\u00a0604\u00a0141 | 84\u00a0723 | 174\u00a0142 | 3\u00a0220\u00a0974 |
*NOK 98.6 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity.
NOK 1 000 | 2022 | 2021 |
Liabilities secured by mortgages/charges on assets* | 1\u00a0899\u00a0364 | 1\u00a0248\u00a0889 |
*See the comment below the table for assets pledged as security.
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2022 | 2021 |
Licenses | 1\u00a0463\u00a0709 | 1\u00a0536\u00a0319 |
Property, plant and equipment * | 3\u00a0562\u00a0816 | 3\u00a0017\u00a0023 |
Trade receivables | 259\u00a0137 | 151\u00a0793 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0136\u00a0381 | 2\u00a0607\u00a0231 |
Total assets pledged as security | 8\u00a0422\u00a0043 | 7\u00a0312\u00a0366 |
*Book value of liabilities secured by mortgage/charges on assets, and the property, plant and equipment does not include the book value of the effect of IFRS 16 (compared to the IFRS in force prior to 1 January 2019) on right-of-use and lease liability.
Pledges also include shares in subsidiaries. The book value of these shares in the consolidated financial statements is NOK 0.
BOOK VALUE OF GROUP BORROWINGS BY | 31.12.2022 | NOK | EUR | CAD |
Green bond | 1\u00a0423\u00a0500 | 1\u00a0423\u00a0500 | \u2014 | \u2014 |
Non-current syndicated term-loan | 1\u00a0474\u00a0429 | 718\u00a0750 | 755\u00a0679 | \u2014 |
Lease liability (prior IAS 17 finance leases) | 396\u00a0614 | 396\u00a0087 | \u2014 | 527 |
Lease liability (prior IAS 17 operational leases) | 483\u00a0946 | 140\u00a0042 | \u2014 | 343\u00a0904 |
Other non-current and current liabilities | 107\u00a0900 | \u2014 | \u2014 | 107\u00a0900 |
Amortization effect of loans | -25\u00a0053 | -25\u00a0053 | \u2014 | \u2014 |
Total | 3\u00a0861\u00a0337 | 2\u00a0653\u00a0326 | 755\u00a0679 | 452\u00a0331 |
BOOK VALUE OF GROUP BORROWINGS BY | 31.12.2021 | NOK | EUR | CAD |
Green bond | 1\u00a0500\u00a0000 | 1\u00a0500\u00a0000 | \u2014 | \u2014 |
Non-current syndicated term-loan | 424\u00a0524 | \u2014 | 424\u00a0524 | \u2014 |
Non-current syndicated revolving credit facility | 440\u00a0000 | 440\u00a0000 | \u2014 | \u2014 |
Lease liability (prior IAS 17 finance leases) | 360\u00a0496 | 357\u00a0942 | \u2014 | 2\u00a0554 |
Lease liability (prior IAS 17 operational leases) | 395\u00a0332 | 170\u00a0846 | \u2014 | 224\u00a0487 |
Other non-current and current liabilities | 100\u00a0622 | \u2014 | \u2014 | 100\u00a0622 |
Amortization effect of loans | -29\u00a0671 | -29\u00a0671 | \u2014 | \u2014 |
Total | 3\u00a0191\u00a0303 | 2\u00a0439\u00a0117 | 424\u00a0524 | 327\u00a0662 |
AVERAGE INTEREST RATE ON BANK- AND BOND LOAN | 2022 | 2021 |
Average interest rate (NOK) | 4.61% | 3.76% |
Average interest rate (EUR) | 1.77% | 3.50% |
The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities.
BOOK VALUE | FAIR VALUE | |||
BOOK VALUE AND FAIR VALUE OF BORROWINGS NOK 1 000 | 2022 | 2021 | 2022 | 2021 |
Green bond | 1\u00a0423\u00a0500 | 1\u00a0500\u00a0000 | 1\u00a0414\u00a0532 | 1\u00a0500\u00a0000 |
Borrowings (non-current syndicated loan and credit facility, incl. current part of the non-current liability) | 1\u00a0474\u00a0429 | 864\u00a0524 | 1\u00a0474\u00a0429 | 864\u00a0524 |
Total | 2\u00a0897\u00a0929 | 2\u00a0364\u00a0524 | 2\u00a0888\u00a0961 | 2\u00a0364\u00a0524 |
Book values in the table above are excluding the amortization effect of loan cost.
The book value of borrowings (excluding the green bond) closely approximates to the fair value.
Our green bond is listed on Oslo B\u00f8rs (Euronext). Our green bond is listed on Oslo B\u00f8rs (Euronext). Market price of the bond was 99.37% of par value at year-end 2022 (2021: 100%).
LIABILITIES ARISING FROM FINANCING ACTIVITIES | |||
CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 | LEASE LIABILITY | BORROWINGS | TOTAL |
At 01.01.2021 | 684\u00a0839 | 3\u00a0480\u00a0613 | 4\u00a0165\u00a0454 |
Cash movements: | |||
Revolving credit facility (net draw-down/repayment) | \u2014 | -556\u00a0222 | -556\u00a0222 |
Draw-down other non-current loan | \u2014 | 39\u00a0147 | 39\u00a0147 |
Repayment non-current syndicated term-loan (NOK and EUR) | \u2014 | -526\u00a0602 | -526\u00a0602 |
Repayment other non-current loan | \u2014 | -1\u00a0050 | -1\u00a0050 |
Repayment lease liability (prior IAS 17 finance leases) | -77\u00a0662 | \u2014 | -77\u00a0662 |
Repayment lease liability (prior IAS 17 operational leases) | -107\u00a0263 | \u2014 | -107\u00a0263 |
Loan costs | \u2014 | -3\u00a0895 | -3\u00a0895 |
Total cash movements | -184\u00a0925 | -1\u00a0048\u00a0623 | -1\u00a0233\u00a0548 |
Non-cash movements: | |||
Draw-down lease liability (prior IAS 17 finance leases) | 4\u00a0804 | \u2014 | 4\u00a0804 |
Draw-down lease liability (prior IAS 17 operational leases) | 249\u00a0437 | \u2014 | 249\u00a0437 |
Non-cash movements (ex. foreign currency adjustments) | -4\u00a0058 | \u2014 | -4\u00a0058 |
Foreign currency adjustments | 5\u00a0730 | -13\u00a0508 | -7\u00a0778 |
Loan costs | \u2014 | 16\u00a0992 | 16\u00a0992 |
Total non-cash movements | 255\u00a0914 | 3\u00a0484 | 259\u00a0398 |
At 31.12.2021 | 755\u00a0828 | 2\u00a0435\u00a0474 | 3\u00a0191\u00a0303 |
At 01.01.2022 | 755\u00a0828 | 2\u00a0435\u00a0474 | 3\u00a0191\u00a0303 |
Cash movements: | |||
Revolving credit facility (net draw-down/repayment) | \u2014 | -440\u00a0000 | -440\u00a0000 |
Draw-down non-current syndicated term-loan (NOK and EUR) | \u2014 | 1\u00a0463\u00a0423 | 1\u00a0463\u00a0423 |
Repayment non-current syndicated term-loan (NOK and EUR) | \u2014 | -469\u00a0288 | -469\u00a0288 |
Repayment other non-current loan | \u2014 | -52\u00a0857 | -52\u00a0857 |
Repayment lease liability (prior IAS 17 finance leases) | -78\u00a0879 | \u2014 | -78\u00a0879 |
Repayment lease liability (prior IAS 17 operational leases) | -146\u00a0589 | \u2014 | -146\u00a0589 |
Loan costs | \u2014 | -11\u00a0854 | -11\u00a0854 |
Total cash movements | -225\u00a0468 | 489\u00a0423 | 263\u00a0956 |
Non-cash movements: | |||
Draw-down lease liability (prior IAS 17 finance leases) | 114\u00a0926 | \u2014 | 114\u00a0926 |
Draw-down lease liability (prior IAS 17 operational leases) | 140\u00a0975 | \u2014 | 140\u00a0975 |
Non-cash movements (ex. foreign currency adjustments) | 83\u00a0397 | -21\u00a0177 | 62\u00a0220 |
Foreign currency adjustments | 10\u00a0902 | 60\u00a0584 | 71\u00a0486 |
Loan costs | \u2014 | 16\u00a0471 | 16\u00a0471 |
Total non-cash movements | 350\u00a0200 | 55\u00a0879 | 406\u00a0079 |
At 31.12.2022 | 880\u00a0560 | 2\u00a0980\u00a0777 | 3\u00a0861\u00a0338 |
THE GROUP AS A LESSEE
The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions, for leases that would be classified as finance leases according to IFRS in force prior to 1 January 2019, as well as capitalized leases due to the effect of IFRS 16. Well-boats and workboats charted in time charters with a duration of more than one year contributes significantly to the effect of IFRS 16.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. The leases are recognized in the respective Group companies in local currencies, and translated to the Group\u2019s presentation currency at the balance sheet date.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The Group reassesses the incremental borrowing rates applicable for new lease agreements annually. The applied incremental borrowing rates for new leases as from 2022 ranged from 4.7% - 4.8% for buildings and properties, and 3.9% - 4.2% for other assets. The applied rates for new leases as from 2021 ranged from 3.9% - 4.2% for buildings and properties, and 3.6% - 3.7% for other assets.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset\u2019s useful life.
The Group leases smaller office equipment, such as coffee machines with contract terms of 1-3 years. The Group has elected to apply the practical expedient of low-value assets for some of these leases. Leases that have a present value as new lower than USD 5 000, are considered low value leases. The Group has also applied the practical expedient for short-term leases. Short term is defined as a lease term of 12 month or less at the commencement date. For low-value leases and short-term leases, the Group does not recognize lease liabilities or right-of-use assets. These leases are recognized as operating expenses over the life of the contract.
Some of the Group's agreements have extension options which may by exercised during the last period of the lease term. The Group assesses at the commencement whether it is reasonably certain to exercise the renewal right. The Group's potential future lease payments not included in the lease liabilities related to extension options is NOK 267 million (NOK 134 million at 31 December 2021).
SPECIFICATION OF RIGHT-OF-USE ASSETS
The Group's right-of-use assets are included in the financial statement line item \"Property, plant and equipment incl. right-of-use-assets\" in the statement of financial position. These leased assets include both assets that would be treated as financial leases according to the IFRS in force prior to 1 January 2019, as well as operational leases (\"the effect of IFRS 16\").
RIGHT-OF-USE ASSETS 2022 NOK 1 000 | BUILDINGS/ | PROD. PLANTS | NETS, CAGES | OTHER | TOTAL |
Book value at 01.01. | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
Currency translation differences | 1\u00a0760 | 26 | 43 | 13\u00a0220 | 15\u00a0048 |
Additions | 10\u00a0036 | 69\u00a0549 | 8\u00a0058 | 251\u00a0807 | 339\u00a0450 |
Cancellation of lease and other changes | -1\u00a0399 | -743 | -7\u00a0792 | -14\u00a0915 | -24\u00a0849 |
Depreciation | -11\u00a0703 | -19\u00a0556 | -15\u00a0749 | -140\u00a0396 | -187\u00a0404 |
Book value at 31.12. | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
RIGHT-OF-USE ASSETS 2021 NOK 1 000 | BUILDINGS/ | PROD. PLANTS | NETS, CAGES | OTHER | TOTAL |
Book value at 01.01. | 77\u00a0659 | 260\u00a0832 | 105\u00a0232 | 297\u00a0732 | 741\u00a0454 |
Currency translation differences | 69 | 52 | 38 | 8\u00a0299 | 8\u00a0458 |
Additions | 1\u00a0219 | 1\u00a0095 | 3\u00a0709 | 247\u00a0959 | 253\u00a0983 |
Cancellation of lease and other changes | -17 | -2\u00a0014 | -4\u00a0592 | -20\u00a0308 | -26\u00a0931 |
Depreciation | -11\u00a0003 | -17\u00a0032 | -16\u00a0644 | -96\u00a0388 | -141\u00a0067 |
Book value at 31.12. | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
LEASE LIABILITY
SUMMARY OF THE LEASE LIABILITIES NOK 1 000 | 2022 | 2021 |
Lease liabilities at 01.01. | 755\u00a0828 | 684\u00a0839 |
New leases recognized during the year | 255\u00a0901 | 254\u00a0242 |
Cash payments for the principal portion of the lease liability | -225\u00a0468 | -184\u00a0925 |
Currency exchange differences | 10\u00a0902 | 5\u00a0730 |
Cancellation of lease and other changes | 83\u00a0397 | -4\u00a0058 |
Total lease liabilities at 31.12. | 880\u00a0560 | 755\u00a0828 |
2022 | |||
MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000 | FORMER IAS 17 | FORMER IAS 17 | TOTAL LEASE |
Less than one year | 93\u00a0308 | 165\u00a0690 | 258\u00a0998 |
One to two years | 79\u00a0970 | 146\u00a0648 | 226\u00a0618 |
Two to three years | 65\u00a0520 | 73\u00a0925 | 139\u00a0445 |
Three to four years | 59\u00a0691 | 67\u00a0558 | 127\u00a0249 |
Four to five years | 52\u00a0892 | 44\u00a0220 | 97\u00a0112 |
More than five years | 105\u00a0684 | 31\u00a0302 | 136\u00a0986 |
Total undiscounted liabilities at 31.12 | 457\u00a0065 | 529\u00a0344 | 986\u00a0408 |
Lease liabilities included in the statement of financial position at 31.12 | 396\u00a0614 | 483\u00a0946 | 880\u00a0560 |
Current portion | 78\u00a0416 | 148\u00a0494 | 226\u00a0910 |
Non-current portion | 318\u00a0198 | 335\u00a0452 | 653\u00a0650 |
2021 | |||
MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000 | FORMER IAS 17 | FORMER IAS 17 | TOTAL LEASE |
Less than one year | 82\u00a0272 | 117\u00a0435 | 199\u00a0706 |
One to two years | 74\u00a0830 | 90\u00a0507 | 165\u00a0337 |
Two to three years | 62\u00a0951 | 87\u00a0010 | 149\u00a0961 |
Three to four years | 48\u00a0266 | 54\u00a0654 | 102\u00a0920 |
Four to five years | 42\u00a0703 | 39\u00a0168 | 81\u00a0871 |
More than five years | 83\u00a0131 | 44\u00a0382 | 127\u00a0513 |
Total undiscounted liabilities at 31.12 | 394\u00a0153 | 433\u00a0155 | 827\u00a0309 |
Lease liabilities included in the statement of financial position at 31.12 | 360\u00a0496 | 395\u00a0332 | 755\u00a0828 |
Current portion | 72\u00a0918 | 105\u00a0114 | 178\u00a0032 |
Non-current portion | 287\u00a0578 | 290\u00a0219 | 577\u00a0797 |
AMOUNTS RECOGNIZED IN PROFIT OR LOSS NOK 1 000 | 2022 | 2021 |
Interest on lease liabilities | -33\u00a0613 | -22\u00a0709 |
Foreign currency effect | 3\u00a0746 | -5\u00a0112 |
Depreciation right-of-use assets | -187\u00a0404 | -141\u00a0067 |
Income from subleasing of right-of-use assets | 31\u00a0261 | 14\u00a0591 |
Expenses relating to short-term leases | -40\u00a0530 | -5\u00a0446 |
Expenses relating to leases of low-value assets, excl. short-term leases of low-value assets | -1 | -8 |
Total | -226\u00a0543 | -159\u00a0752 |
NOK 1 000 | 2022 | 2021 |
Total cash outflow for leases | -259\u00a0081 | -207\u00a0634 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2022 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 16\u00a0900 | 271 | 17\u00a0171 |
Trade receivables | \u2014 | 259\u00a0137 | \u2014 | 259\u00a0137 |
Other current receivables | \u2014 | 8\u00a0863 | \u2014 | 8\u00a0863 |
Investment in money market fund4 | 1\u00a0012\u00a0848 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Derivatives5 | 37\u00a0988 | \u2014 | \u2014 | 37\u00a0988 |
Cash and cash equivalents | \u2014 | 642\u00a0719 | \u2014 | 642\u00a0719 |
Total financial assets | 1\u00a0050\u00a0836 | 927\u00a0618 | 271 | 1\u00a0978\u00a0725 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0980\u00a0777 | \u2014 | 2\u00a0980\u00a0777 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 396\u00a0614 | \u2014 | 396\u00a0614 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 483\u00a0946 | \u2014 | 483\u00a0946 |
Share-based payments6 | 6\u00a0510 | \u2014 | \u2014 | 6\u00a0510 |
Derivatives5 | 64\u00a0928 | \u2014 | \u2014 | 64\u00a0928 |
Trade payables | \u2014 | 717\u00a0498 | \u2014 | 717\u00a0498 |
Other current liabilities | \u2014 | 76\u00a0585 | \u2014 | 76\u00a0585 |
Total financial liabilities | 71\u00a0439 | 4\u00a0655\u00a0420 | \u2014 | 4\u00a0726\u00a0859 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2021 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 2\u00a0111 | 271 | 2\u00a0382 |
Trade receivables | \u2014 | 151\u00a0793 | \u2014 | 151\u00a0793 |
Other current receivables | \u2014 | 12\u00a0592 | \u2014 | 12\u00a0592 |
Derivatives5 | 37\u00a0592 | \u2014 | \u2014 | 37\u00a0592 |
Cash and cash equivalents | \u2014 | 928\u00a0342 | \u2014 | 928\u00a0342 |
Total financial assets | 37\u00a0592 | 1\u00a0094\u00a0837 | 271 | 1\u00a0132\u00a0700 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0435\u00a0475 | \u2014 | 2\u00a0435\u00a0475 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 360\u00a0496 | \u2014 | 360\u00a0496 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 395\u00a0332 | \u2014 | 395\u00a0332 |
Share-based payments6 | 9\u00a0792 | \u2014 | \u2014 | 9\u00a0792 |
Derivatives5 | 22\u00a0350 | \u2014 | \u2014 | 22\u00a0350 |
Trade payables | \u2014 | 523\u00a0196 | \u2014 | 523\u00a0196 |
Other current liabilities | \u2014 | 36\u00a0603 | \u2014 | 36\u00a0603 |
Total financial liabilities | 32\u00a0142 | 3\u00a0751\u00a0102 | \u2014 | 3\u00a0783\u00a0244 |
1 FVPL: Fair value through profit or loss.
2 FVOCI: Fair value through other comprehensive income.
3 Investments in non-listed shares (equity instruments). Measured at level 3.
4 Investments in money market funds. Measured at level 2. See Note 3 for specification.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See Note 3 for specification.
6 Synthetic option scheme. Measured at level 3. See Note 17 for more information.
The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
CREDITWORTHINESS OF FINANCIAL ASSETS
Credit risk attaching to financial instruments that have not matured or have not been written down is shown in accordance with the internal classification of historical information on breaches of credit covenants. Further information about credit risk is provided in Note 3.
TRADE RECEIVABLES NOK 1 000 | 2022 | 2021 |
COUNTERPARTIES WITH NO EXTERNAL CREDIT RATING | ||
Group 1 | 742 | 12\u00a0996 |
Group 2 | 251\u00a0123 | 100\u00a0854 |
Group 3 | 7\u00a0272 | 37\u00a0943 |
Total trade receivables | 259\u00a0137 | 151\u00a0793 |
BANK DEPOSITS NOK 1 000 | 2022 | 2021 |
AAA | \u2014 | \u2014 |
AA | 642\u00a0719 | 928\u00a0342 |
A | \u2014 | \u2014 |
Total bank deposits | 642\u00a0719 | 928\u00a0342 |
Group 1 - new customers/related parties (less than 6 months).
Group 2 - existing customers/related parties (more than 6 months) with no history of credit covenant breaches.
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Norway | 263\u00a0084 | 99\u00a0682 |
Aboard | 59\u00a0422 | -15\u00a0777 |
Tax on profits | 322\u00a0506 | 83\u00a0905 |
Norway | 116\u00a0873 | 57\u00a0973 |
Aboard | -145\u00a0516 | 107\u00a0424 |
Changes in deferred tax | -28\u00a0643 | 165\u00a0397 |
Total income taxes related to profit for the year | 293\u00a0863 | 249\u00a0301 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2022 | 2021 |
Profit before tax | 1\u00a0447\u00a0642 | 853\u00a0678 |
Taxes calculated at nominal tax rate | 286\u00a0185 | 226\u00a0472 |
Withholding tax | 6\u00a0085 | 7\u00a0049 |
Non-taxable income/loss from associated companies | -4\u00a0641 | 327 |
Effect of adjustment of income tax from previous years | -27\u00a0453 | -18\u00a0428 |
Effect of recognition of previously non-recognized tax assets | -4\u00a0187 | 696 |
Effect of non-recognition of losses and tax assets | 37\u00a0189 | 11\u00a0026 |
Other permanent differences | 24\u00a0714 | 4\u00a0741 |
Other effects not listed above | -24\u00a0029 | 17\u00a0418 |
Total income tax expense | 293\u00a0863 | 249\u00a0301 |
Weighted average tax rate | 20.3% | 29.2% |
TAX PAYABLE BOOK IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Tax payable in Norway | 286\u00a0586 | 87\u00a0739 |
Tax payable aboard | 66\u00a0605 | 903 |
Total tax payable in the statement of financial position | 353\u00a0191 | 88\u00a0641 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2022 | 2021 |
Balance sheet value at 01.01. | 1\u00a0069\u00a0743 | 879\u00a0665 |
Currency conversion | 30\u00a0467 | 17\u00a0592 |
Tax effect of OCI transactions (see Note 3) | 5\u00a0454 | 7\u00a0089 |
Change in deferred tax recognized in income in period | -27\u00a0453 | -17\u00a0043 |
Changes to income in the period | -37\u00a0111 | 182\u00a0440 |
Net deferred tax liability at balance sheet date | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
The nominal tax rate in Norway is 22%. The nominal tax rate for 2022 in Canada was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2022 | 2021 |
Deferred tax assets | \u2014 | 59 |
Deferred tax liabilities | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0802 |
Net deferred tax | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0743 |
The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. The Norwegian and Canadian parts of the Group each have a net deferred tax position. Deferred tax assets linked to tax losses are offset against deferred tax liabilities in the tax jurisdictions where acceptable.\u00a0
SPECIFICATION OF DEFERRED TAX AND BASIS FOR DEFERRED TAX/DEFERRED TAX ASSETS NOK 1 000 | 2022 | 2021 |
Non-current assets | 572\u00a0722 | 539\u00a0668 |
Current assets | 617\u00a0349 | 609\u00a0378 |
Debt (lease, other liabilities) | 1\u00a0493 | -15\u00a0790 |
Other effect (government grant/ investment tax credit) | \u2014 | -4\u00a0350 |
Tax losses carried forward | -150\u00a0461 | -59\u00a0162 |
Total temporary differences | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2022 | 2021 |
Tax losses carried forward in Norway | \u2014 | \u2014 |
Tax losses carried forward in Canada | -150\u00a0461 | -59\u00a0162 |
Tax losses carried forward in USA | \u2014 | \u2014 |
Total | -150\u00a0461 | -59\u00a0162 |
PROPOSED RESOURCE RENT TAX IN NORWAY
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2022 | 2021 |
Salaries | 533\u00a0629 | 451\u00a0530 |
Social security costs | 38\u00a0635 | 25\u00a0616 |
Share options granted to directors and key employees, incl. social security costs (Note 17) | 30\u00a0399 | 7\u00a0924 |
Pension costs | 29\u00a0069 | 26\u00a0146 |
Other personnel costs | 63\u00a0844 | 66\u00a0218 |
Total | 695\u00a0577 | 577\u00a0434 |
Average number of employees | 718 | 703 |
Share savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2022. Each year has its own set of terms and conditions concerning how much each employee can invest in the program that year. In addition, each year has it\u2019s set of terms for the lock-up period. The saved amount is deducted from the monthly net salary and used to purchase Grieg Seafood shares on behalf of the employees. The purchase will be made from transfer of Grieg Seafood's treasury shares or bought in the market. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2022, loan to employees related to the share savings program\u00a0equals NOK 4.9 million (2021: NOK 2.7 million). The total shares sold to employees was 96 150 in 2022 (2021: 38 513).
Management remuneration
The guidelines for management remuneration are available on Grieg Seafood ASA\u2019s website.
The remuneration to the Group Executive Operational Management Team is disclosed below. In addition to the executive operational management team (Chief Executive Officer, the Chief Financial Officer, the Group\u2019s Chief Operating Officers, and the Chief Commercial Officer), the Group Management include the support functions of the Chief Technology Officer (CTO), the Chief Human Resource Officer (CHRO) and the Global Communication Manager.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL\u00a0 MANAGEMENT TEAM 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT | OPTIONS | OTHER | TOTAL |
Andreas Kvame (CEO) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (CFO) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (COO Farming Canada until June 2022)** | 1\u00a0802 | -26 | \u2014 | 2\u00a0917 | 47 | 4\u00a0740 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0247 | 483 | \u2014 | 3\u00a0070 | 123 | 5\u00a0923 |
Total remuneration | 12\u00a0109 | 2\u00a0397 | \u2014 | 16\u00a0644 | 3\u00a0576 | 34\u00a0726 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
**Grant Cumming was appointed as COO Farming Canada in Q1 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
REMUNERATION PAID TO BOARD MEMBERS IN 2022 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 516 |
Tore Holand2 | 401 |
Marianne Ribe1 | 328 |
Katrine Trovik2 | 372 |
Nicolai Hafeld Grieg | 308 |
Ragnhild Fresvik (from 9 of June 2022) | 183 |
Total remuneration including social security costs | 2\u00a0107 |
1 Payment for work performed on the Remuneration Committee of NOK 25 673 is included in the remuneration paid to Per Grieg jr. and Marianne Ribe.\u00a0
2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 68 460.
The amounts include social security costs.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL MANAGEMENT TEAM IN 2021 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (CEO) | 3\u00a0165 | \u2014 | 540 | \u2014 | 250 | 3\u00a0956 |
Atle Harald Sandtorv (CFO) | 2\u00a0280 | \u2014 | 313 | \u2014 | 115 | 2\u00a0707 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0116 | 75 | 203 | \u2014 | 113 | 2\u00a0507 |
Roy Tore Rikardsen (COO Farming Canada) | 1\u00a0772 | \u2014 | 244 | \u2014 | \u2014 | 2\u00a0016 |
Erik Holvik (Chief Commercial Officer) | 1\u00a0996 | 161 | 350 | \u2014 | 115 | 2\u00a0621 |
Total remuneration | 11\u00a0328 | 236 | 1\u00a0650 | \u2014 | 593 | 13\u00a0807 |
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
The 2021 table has been represented to include only the Group Executive Operational Management Team.
REMUNERATION PAID TO BOARD MEMBERS IN 2021\u00a0 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 479 |
Tore Holand2 | 371 |
Sirine M. Fodstad (until 13 of August 2021)1 | 205 |
Marianne Ribe1 | 308 |
Katrine Trovik2 | 342 |
Nicolai Hafeld Grieg (from 4 of November 2021) | \u2014 |
Total remuneration including social security costs | 1\u00a0706 |
1 Payment of NOK 22 820 for service on the Remuneration Committee is included in the remuneration paid to Per Grieg Jr. and Marianne Ribe, while Sirine Fodstad received NOK 15 213 for the same.
2 Payment of NOK 57 050 for service on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik.
The company has issued options to the executive management team and regional directors. The options\u2019 strike price is the stock market price on the date of issue, rising by 0.5% per month until the exercise date. Since 2009, an option scheme with settlement in cash has been established for the management and regional directors. The most recent allocation was in 2020, totalling 1 890 000 options. The final exercise date is 31 May 2024. The options have a term of two years, where 50% is vested each year.
Employees taken on after the initial allocation of options are allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy (see Note 2 and Note 3). The table below shows the movement in outstanding options in 2022 and 2021.
OVERVIEW 2022\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2022 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (CTO) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | 104\u00a0212 | \u2014 | 65\u00a0788 |
Others | 600\u00a0000 | \u2014 | 416\u00a0863 | 47\u00a0877 | 135\u00a0260 |
Total | 2\u00a0690\u00a0000 | \u2014 | 1\u00a0780\u00a0273 | 134\u00a0709 | 775\u00a0016 |
OVERVIEW 2021 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2020 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2021 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | \u2014 | \u2014 | 540\u00a0000 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Knut Utheim (COO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | \u2014 | \u2014 | 200\u00a0000 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | \u2014 | \u2014 | 100\u00a0000 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Roy Tore Rikardsen (COO Farming Canada) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | \u2014 | \u2014 | 170\u00a0000 |
Others | 700\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 600\u00a0000 |
Total | 2\u00a0790\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 2\u00a0690\u00a0000 |
OPTIONS | |||||
ALLOCATION: | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | STRIKE PRICE NOK PER SHARE AT 31.12.2021 | 2022 | 2021 |
2017 - 11 | 2021 - 05 | \u2014 | 106.28 | \u2014 | 800\u00a0000 |
2020 - 12 | 2023 - 05 | 88.99 | 83.82 | 64\u00a0898 | 945\u00a0000 |
2020 - 12 | 2024 - 05 | 88.99 | 83.82 | 710\u00a0118 | 945\u00a0000 |
Total | 775\u00a0016 | 2\u00a0690\u00a0000 |
2022 | 2021 | |
Cash-based options available for settlement | 775\u00a0016 | 2\u00a0690\u00a0000 |
Weighted average exercise price on outstanding options (NOK per option) | 78.96 | 80.16 |
AMOUNTS IN NOK 1 000 | ||||||||
2022 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2022 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 511 | -157 | 1\u00a0773 | \u2014 | 354 |
Alexander Knudsen (COO Farming Norway) | 78.96 | 5.87 | 999 | 847 | -193 | 1\u00a0917 | \u2014 | 654 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (CTO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0282 | 34\u00a0137 | 6\u00a0887 | 6\u00a0510 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
AMOUNTS IN NOK 1 000 | ||||||||
2021 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2021 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2021 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2021 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2021 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 56 | 1\u00a0352 | \u2014 | \u2014 | 1\u00a0408 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 41 | 868 | \u2014 | \u2014 | 909 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 37 | 803 | \u2014 | \u2014 | 840 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 27 | 573 | \u2014 | \u2014 | 600 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 23 | 488 | \u2014 | \u2014 | 511 |
Alexander Knudsen (COO Farming Europe) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Roy Tore Rikardsen (COO Farming North America) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 39 | 842 | \u2014 | \u2014 | 881 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 467 | -460 | \u2014 | \u2014 | 7 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 316 | -313 | \u2014 | \u2014 | 4 |
Knut Utheim (COO) | 83.00 | 2.79 | 557 | 296 | -293 | \u2014 | \u2014 | 4 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 247 | -243 | \u2014 | \u2014 | 4 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 132 | 2\u00a0788 | \u2014 | \u2014 | 2\u00a0921 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 1\u00a0085 | -1\u00a0074 | \u2014 | \u2014 | 11 |
Total | 15\u00a0802 | 2\u00a0842 | 6\u00a0951 | \u2014 | 6\u00a0887 | 9\u00a0792 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
ACCRUED COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2022 | 2021 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | -3\u00a0282 | 6\u00a0951 | Other provisions for liabilities | |
Exercised options during the year | 34\u00a0137 | \u2014 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 30\u00a0855 | 6\u00a0951 | ||
Social security costs | -456 | 973 | Public taxes payable | |
Total costs incl. social security costs | 30\u00a0399 | 7\u00a0924 | Salaries and personnel expense |
Cost relating to cash-based remuneration in 2022 totaled NOK 30\u00a0399 thousands. This is recognized in the income statement as a personnel cost. Social security contributions are provided for on an ongoing basis based on the fair value of the options.
As at 31\u00a0December 2022, outstanding options with the right to cash settlement were stated at NOK 6\u00a0510 thousands excl. social security
costs, of which NOK 589 thousands were classified as current liabilities. The book value of long-term liabilities including social security cost was NOK 6 756 thousands.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2022 | 2021 |
Anticipated volatility (%) | 58.29% | 36.44% |
Risk-free rate of interest (%) | 3.12% | 1.13% |
Estimated qualification period (years) | 1.11 | 1.39 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
As at 31\u00a0December 2022, the company had 113\u00a0447\u00a0042 shares with a nominal value of NOK 4 per share. All shares issued by the company are fully paid-up. There is one class of shares and all shares confer the same rights.
SHARE CAPITAL AND NUMBER OF SHARES 31.12.2022 | NOMINAL VALUE | TOTAL SHARE CAPITAL NOK 1 000 | NO. OF ORDINARY SHARES |
Total | 4.00 | 453\u00a0788 | 113\u00a0447\u00a0042 |
Holdings of treasury shares | 4.00 | -5\u00a0407 | -1\u00a0351\u00a0811 |
Total excl treasury shares | 4.00 | 448\u00a0381 | 112\u00a0095\u00a0231 |
Treasury shares
In 2011, Grieg Seafood ASA purchased 1\u00a0250\u00a0000\u00a0treasury shares at NOK\u00a014.40 per share. As from 2018, the treasury shares have been sold to employees for the share savings program. In 2022, 96 150 shares were sold to employees through the share savings program at an average price of NOK 71.0958. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 have been settled within year-end. As at 31\u00a0December 2022, the company has 1\u00a0351\u00a0811 treasury shares.
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2022 | 31.12.2022 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
OM Holding AS | 5\u00a0110\u00a0982 | 4.51% |
Folketrygdfondet | 2\u00a0939\u00a0985 | 2.59% |
Ystholmen Felles AS | 1\u00a0923\u00a0197 | 1.70% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0717\u00a0439 | 1.51% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0692\u00a0877 | 1.49% |
Morgan Stanley & Co. Int. Plc. (Nominee) | 1\u00a0470\u00a0346 | 1.30% |
Clearstream Banking S.A. (Nominee) | 1\u00a0376\u00a0622 | 1.21% |
Grieg Seafood ASA | 1\u00a0351\u00a0811 | 1.19% |
JPMorgan Chase Bank, N.A., London (Nominee) | 1\u00a0136\u00a0470 | 1.00% |
G\u00e5s\u00f8 N\u00e6ringsutvikling AS | 1\u00a0116\u00a0323 | 0.98% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Ferd AS | 924\u00a0407 | 0.81% |
State Street Bank and Trust Comp (Nominee) | 724\u00a0407 | 0.64% |
DZ Privatbank S.A. (Nominee) | 698\u00a0518 | 0.62% |
J.P. Morgan SE (Nominee) | 687\u00a0236 | 0.61% |
Danske Invest Norge Vekst | 540\u00a0000 | 0.48% |
Six Sis AG (Nominee) | 534\u00a0229 | 0.47% |
J.P. Morgan SE (Nominee) | 526\u00a0442 | 0.46% |
DNB Bank ASA (Broker) | 482\u00a0561 | 0.43% |
Total 20 largest shareholders | 82\u00a0864\u00a0979 | 73.04% |
Total others | 30\u00a0582\u00a0063 | 26.96% |
Total number of shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2021 | 31.12.2021 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
Folketrygdfondet | 5\u00a0312\u00a0207 | 4.68% |
OM Holding AS | 4\u00a0917\u00a0957 | 4.34% |
Ystholmen Felles AS | 2\u00a0428\u00a0197 | 2.14% |
State Street Bank and Trust Comp (nominee) | 1\u00a0867\u00a0464 | 1.65% |
Clearstream Banking S.A. (nominee) | 1\u00a0711\u00a0386 | 1.51% |
BNP Paribas Securities Services (nominee) | 1\u00a0634\u00a0500 | 1.44% |
Ferd AS | 1\u00a0456\u00a0453 | 1.28% |
Six Sis AG (nominee) | 1\u00a0380\u00a0743 | 1.22% |
CACEIS Bank Spain SA (nominee) | 1\u00a0212\u00a0652 | 1.07% |
Banque Degroof Petercam Lux. SA (nominee) | 1\u00a0164\u00a0795 | 1.03% |
Grieg Seafood ASA | 1\u00a0132\u00a0981 | 1.00% |
JPMorgan Chase Bank, N.A., London (nominee) | 1\u00a0035\u00a0915 | 0.91% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Verdipapirfondet Pareto Investment | 916\u00a0000 | 0.81% |
State Street Bank and Trust Comp (nominee) | 883\u00a0362 | 0.78% |
State Street Bank and Trust Comp (nominee) | 862\u00a0797 | 0.76% |
Ronja Capital II AS | 755\u00a0004 | 0.67% |
Pictet & Cie (Europe) S.A. (nominee) | 646\u00a0320 | 0.57% |
Danske Invest Norge Vekst | 561\u00a0000 | 0.49% |
Total 20 largest shareholders | 87\u00a0790\u00a0860 | 77.38% |
Other shareholders | 25\u00a0656\u00a0182 | 22.62% |
Total shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | NO. OF SHARES | SHAREHOLDING | |
SHARES CONTROLLED BY BOARD MEMBERS AND GROUP MANAGEMENT | 31.12.2022 | 31.12.2022 | 31.12.2021 | 31.12.2021 |
BOARD OF DIRECTORS | ||||
Per Grieg Jr. | 57\u00a0926\u00a0127 | 51.06% | 60\u00a0356\u00a0985 | 53.20% |
Tore Holand (Skippergata 24 AS, and privately) | 2\u00a0000 | 0.00% | 2\u00a0000 | 0.00% |
Marianne Ribe | \u2014 | \u2014% | \u2014 | \u2014% |
Katrine Trovik | \u2014 | \u2014% | \u2014 | \u2014% |
Nicolai Hafeld Grieg (board member from 4 November 2021) * | \u2014 | \u2014% | \u2014 | \u2014% |
Ragnhild Janbu Fresvik (board member from 9 June 2022) | \u2014 | \u2014% | \u2014 | \u2014% |
GROUP MANAGEMENT | ||||
Andreas Kvame (CEO) | 40\u00a0513 | 0.04% | 39\u00a0809 | 0.04% |
Atle Harald Sandtorv (CFO) | 25\u00a0556 | 0.02% | 24\u00a0852 | 0.02% |
Knut Utheim (CTO) | 24\u00a0855 | 0.02% | 24\u00a0151 | 0.02% |
Alexander Knudsen (COO Farming Norway) | 23\u00a0513 | 0.02% | 22\u00a0809 | 0.02% |
Kathleen O. Mathisen (CHRO) | 15\u00a0074 | 0.01% | 12\u00a0380 | 0.01% |
Kristina Furnes (Global Communications Manager) | 4\u00a0711 | 0.00% | 644 | 0.00% |
Erik Holvik (CCO) | 8\u00a0831 | 0.01% | 644 | 0.00% |
THE SHARES OWNED BY THE FOLLOWING COMPANIES ARE CONTROLLED BY PER GRIEG JR. AND FAMILY | ||||
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% | 56\u00a0914\u00a0355 | 50.17% |
Ystholmen Felles AS | \u2014 | \u2014% | 2\u00a0428\u00a0197 | 2.14% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% | 996\u00a0772 | 0.88% |
Per Grieg Jr. privately | 15\u00a0000 | 0.01% | 15\u00a0000 | 0.01% |
Thomas Willumsen Grieg | \u2014 | \u2014% | 2\u00a0661 | 0.00% |
Total shares | 57\u00a0926\u00a0127 | 51.06% | 60\u00a0356\u00a0985 | 53.20% |
CALCULATION OF EARNINGS PER SHARE | 2022 | 2021 |
Profit / loss after tax continued operations (majority share) | 1\u00a0153\u00a0779 | 604\u00a0377 |
Profit / loss discontinued operations (majority share) | \u2014 | 600\u00a0291 |
Profit / loss after tax (majority share) | 1\u00a0153\u00a0779 | 1\u00a0204\u00a0668 |
Number of shares at 01.01 | 113\u00a0447\u00a0042 | 113\u00a0447\u00a0042 |
Effect of treasury shares (Note 18) | -1\u00a0132\u00a0981 | -1\u00a0171\u00a0494 |
Repurchased shares | -314\u00a0980 | \u2014 |
Sale of treasury shares to employees | 96\u00a0150 | 38\u00a0513 |
Number of outstanding shares at 31.12. | 112\u00a0095\u00a0231 | 112\u00a0314\u00a0061 |
Effect of share repurchased | 307\u00a0473 | \u2014 |
Effect of shares sold to employees | -92\u00a0989 | -33\u00a0870 |
Weighted average number of outstanding shares at 31.12. | 112\u00a0309\u00a0715 | 112\u00a0280\u00a0191 |
Diluted average number of outstanding shares at 31.12. | 112\u00a0309\u00a0715 | 112\u00a0280\u00a0191 |
Earnings per share (NOK) | ||
Continued operations | 10.3 | 5.4 |
Discontinued operations | 0.0 | 5.3 |
Earnings per share - Total | 10.3 | 10.7 |
Diluted earnings per share (NOK) | ||
Continued operations | 10.3 | 5.4 |
Discontinued operations | 0.0 | 5.3 |
Earnings per share - Total | 10.3 | 10.7 |
DIVIDENDS | 2022 | 2021 |
Proposed dividend per share (NOK)* | 4.5 | 3.0 |
Distributed dividend to owners during the year per share (NOK) | 3.0 | 0.0 |
CASH AND CASH EQUIVALENTS NOK 1 000 | 2022 | 2021 |
Restricted deposits incl. employee tax deductions* | 1\u00a0000 | 25\u00a0067 |
Other cash and bank deposits | 641\u00a0719 | 903\u00a0274 |
Total | 642\u00a0719 | 928\u00a0342 |
*The change in the line item \"restricted deposits incl. employee tax deductions\" 2022 compared to 2021 is due to bank guarantee covering the employee tax deductions in 2022 (and going forward), compared to 2021 where the employee tax deductions were held on a tax deduction bank account.
The Group's currency and interest rate exposure is described in Note 3.
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | Note | 2022 | 2021 |
Investment in money market funds | 1\u00a0000\u00a0224 | \u2014 | |
Unrealized gain/loss | 12\u00a0624 | \u2014 | |
Total investment in money market funds | 1\u00a0012\u00a0848 | \u2014 | |
Unrealized fair value gains (losses) recognized in the income statement | 26 | 12\u00a0624 | \u2014 |
TRADE RECEIVABLES NOK 1 000 | 2022 | 2021 |
Gross amount of trade receivables | 690\u00a0226 | 479\u00a0228 |
Trade receivables deducted* | -416\u00a0053 | -312\u00a0469 |
Loss allowance | -15\u00a0036 | -14\u00a0965 |
Trade receivables at 31.12. | 259\u00a0137 | 151\u00a0793 |
*Trade receivables bought by the factoring company.
RECOGNIZED LOSSES NOK 1 000 | 2022 | 2021 |
Change in loss allowance | 71 | 1\u00a0427 |
Confirmed losses in the year | 33 | \u2014 |
Total recognized losses on receivables | 104 | 1\u00a0427 |
Losses on receivables are classified as other operating expenses in the income statement.
In the Group's expected credit loss (ECL) calculation model, customers are categorized as high or low risk, depending on their country of origin, and as credit insured or unsecured. The group of unsecured receivables also consists of some receivables that have other types of security. The risk of loss is therefore considered low and no loss allowance is calculated for these receivables. The risk evaluation
is based on our own experience and input from credit insurance companies. A loss allowance is calculated as a percentage of the aging
distribution (days past due). The Group also makes manual accruals if significant information implies that there is a higher risk of losses.
Around 5% credit risk also remains for the factored trade receivables. The aging analysis given below is therefore based on the total receivables rather than total receivables less the factored receivables. For more information about credit risk, refer to Note 3.
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 | OVERDUE 61-90 | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2022 | ||||||||||
Regular/normal risk countries | TR Credit insured | 615\u00a0863 | \u2014 | 486\u00a0463 | 121\u00a0035 | 6\u00a0332 | 381 | 1\u00a0616 | 36 | 615\u00a0863 |
TR Unsecured | 59\u00a0939 | 61\u00a0444 | 33\u00a0057 | 1\u00a0550 | 10\u00a0898 | 601 | 60 | 13\u00a0773 | 59\u00a0939 | |
High risk countries | TR Credit insured | 11\u00a0583 | \u2014 | 5\u00a0399 | 5\u00a0732 | 474 | \u2014 | -22 | \u2014 | 11\u00a0583 |
TR Unsecured | 2\u00a0841 | 2\u00a0839 | 2\u00a0839 | 2 | \u2014 | \u2014 | \u2014 | \u2014 | 2\u00a0841 | |
Total | 690\u00a0226 | 64\u00a0283 | 527\u00a0757 | 128\u00a0319 | 17\u00a0704 | 982 | 1\u00a0655 | 13\u00a0809 | 690\u00a0226 | |
LOSS ALLOWANCE 31.12.2022 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | \u2014 | 271 | 8 | 316 | 79 | 512 | 36 | 1\u00a0223 |
TR Unsecured | \u2014 | 61\u00a0444 | 8 | \u2014 | \u2014 | \u2014 | \u2014 | 13\u00a0773 | 13\u00a0780 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | 3 | 16 | 12 | \u2014 | \u2014 | \u2014 | 31 |
TR Unsecured | \u2014 | 2\u00a0839 | 2 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2 | |
Total | \u2014 | 64\u00a0283 | 283 | 25 | 328 | 79 | 512 | 13\u00a0809 | 15\u00a0036 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 | OVERDUE 61-90 | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2021 | ||||||||||
Regular/normal risk countries | TR Credit insured | 425\u00a0546 | 52 | 289\u00a0555 | 126\u00a0792 | 4\u00a0344 | 5\u00a0238 | -382 | \u2014 | 425\u00a0546 |
TR Unsecured | 50\u00a0334 | 50\u00a0334 | 17\u00a0596 | 16\u00a0599 | 302 | -1\u00a0131 | 1\u00a0018 | 15\u00a0951 | 50\u00a0334 | |
High risk countries | TR Credit insured | 3\u00a0291 | \u2014 | 1\u00a0431 | 1\u00a0872 | \u2014 | \u2014 | -12 | \u2014 | 3\u00a0291 |
TR Unsecured | 56 | 56 | \u2014 | \u2014 | 4 | \u2014 | 52 | \u2014 | 56 | |
Total | 479\u00a0228 | 50\u00a0443 | 308\u00a0582 | 145\u00a0264 | 4\u00a0650 | 4\u00a0106 | 676 | 15\u00a0951 | 479\u00a0228 | |
LOSS ALLOWANCE 31.12.2021 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | 52 | \u2014 | 11 | 4 | 11 | 31 | \u2014 | 57 |
TR Unsecured | \u2014 | 50\u00a0334 | \u2014 | 304 | 93 | 1\u00a0029 | 1\u00a0100 | 12\u00a0333 | 14\u00a0859 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 48 | \u2014 | 49 |
TR Unsecured | \u2014 | 56 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | \u2014 | 50\u00a0443 | \u2014 | 316 | 98 | 1\u00a0040 | 1\u00a0179 | 12\u00a0333 | 14\u00a0965 |
OTHER NON-CURRENT RECEIVABLES NOK 1 000 | Note | 2022 | 2021 |
Investment tax credit* | 11 | \u2014 | 81\u00a0575 |
Loan to associated company | 7 | 16\u00a0900 | 2\u00a0111 |
Investments in shares | 14 | 271 | 271 |
Other non-current receivables | 764 | 6\u00a0940 | |
Total | 17\u00a0935 | 90\u00a0897 |
*Investment tax credit, related to the freshwater facility in Newfoundland, has been derecognized from the statement of financial position as at 31 December 2022 as Newfoundland is in a net deferred tax position. Investment tax credits are deferred and offset against future tax liability. The derecognition has been carried out as a balance sheet entry, by reversing the credit entry to the acquisition cost of the property, plant and equipment booked as at 31 December 2021 and by reversing the non-current receivable related to the investment tax credit booked as at 31 December 2021, see Note\u00a011. The investment tax credit was in 2021 booked in line with a government grant, as a direct decrease in property, plant and equipment.
NOTE 24\u00a0 OTHER CURRENT RECEIVABLES
OTHER CURRENT RECEIVABLES NOK 1 000 | 2022 | 2021 |
VAT receivable | 87\u00a0431 | 57\u00a0594 |
Prepaid expenses | 44\u00a0113 | 43\u00a0490 |
Other current receivables | 25\u00a0515 | 46\u00a0247 |
Total | 157\u00a0060 | 147\u00a0332 |
2022 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 33\u00a0742 | \u2014 | -1\u00a0906 |
Total related parties as associates | \u2014 | 168\u00a0353 | 16\u00a0650 | -40\u00a0879 |
Total | \u2014 | 202\u00a0095 | 16\u00a0650 | -42\u00a0785 |
2021 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 37\u00a0389 | \u2014 | -15\u00a0915 |
Total related parties as associates | 9\u00a0698 | 153\u00a0086 | 2\u00a0111 | -23\u00a0615 |
Total | 9\u00a0698 | 190\u00a0475 | 2\u00a0111 | -39\u00a0530 |
The Grieg Seafood Group carries out, in the normal course of business, transactions with companies controlled by Grieg Maturitas II AS, which is the parent company of Grieg Aqua AS, the majority owner of Grieg Seafood ASA. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS. These transactions relate to:
\u2022ICT-related services and other functions such as catering, reception, etc., are provided by Grieg Group Resources AS on an arm\u2019s length basis.
\u2022Grieg Seafood ASA rents its offices from Grieg Gaarden AS on an arm\u2019s length basis. The office rental agreement runs for a period of ten years.
\u2022Grieg Seafood ASA purchases services from Grieg Investor AS.
\u2022The regions purchased cleaner fish from Rensefiskgruppen AS including subsidiaries, a company owned by Grieg Kapital AS.
Furthermore, the Group is also purchases goods and services from associated companies, including companies affiliated with the Group through managerial positions in Grieg Seafood and the related party. These transactions relate to:
\u2022Purchase of smolt from the associated company Tytlandsvik Aqua AS, which is owned 33.33% by Grieg Seafood Rogaland AS.
\u2022Purchase of smolt from the associated company Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS.
\u2022Interest-bearing loan provided to \u00c5rdal Aqua AS, which is owned 44.44% by Grieg Seafood Rogaland AS.
\u2022Interest-bearing loan provided to Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS.
\u2022Non-interest bearing loan provided to an affiliated company of NextSeafood AS, which is owned 50.00% by Grieg Seafood Rogaland AS.
\u2022Fuel is purchased from Eidsvaag AS, which is affiliated with Grieg Seafood through a board member of Grieg Seafood being the Chair of Board of Directors of the affiliated company.
\u2022Algae monitoring services are purchased from Blue Planet AS, which is affiliated with Grieg Seafood through Grieg Seafood COO Norway being the Chair of the Board of Directors of the affiliated company.
The parent company provides a range of services to its subsidiaries. The services include administrative services and services relating to the provision of parent company non-current loans and current credit facilities to subsidiaries. Interest is charged on an arm's length basis. In addition, Grieg Seafood ASA engages in hedge contracts on behalf of subsidiaries. The arrangement is intended to reduce these companies' exposure to salmon prices. Agreements with the subsidiaries are priced on the basis of a \"back-to-back\" arrangement.
The Board and Group Management are related parties. See Note 17 on share-based options and Note 18 on shares controlled by members of the Board and Group Management.
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
OTHER OPERATING EXPENSES NOK 1 000 | 2022 | 2021 |
Transportation costs | 497\u00a0679 | 265\u00a0639 |
Maintenance costs | 327\u00a0031 | 295\u00a0270 |
Electricity and fuel | 177\u00a0902 | 113\u00a0778 |
Lease expenses1 | 60\u00a0490 | 24\u00a0555 |
Outsourced services and audit fees | 107\u00a0318 | 94\u00a0100 |
Insurance | 66\u00a0512 | 54\u00a0223 |
IT expenses | 77\u00a0298 | 59\u00a0437 |
Marketing costs | 6\u00a0642 | 2\u00a0942 |
Other operating expenses2 | 119\u00a0311 | 64\u00a0397 |
Other production-related costs1,3 | 647\u00a0128 | 553\u00a0005 |
Total other operating expenses | 2\u00a0087\u00a0310 | 1\u00a0527\u00a0347 |
1Includes lease expenses and lease-related expenses, including the effect of IFRS 16.
2Includes equipment, telephony/postage, office supplies, fees, travel costs and the like.
3Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, vaccination, delousing, oxygen, and analyses and the like.
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2022 | 2021 |
AUDITOR'S FEES | ||
Group auditor | 3\u00a0049 | 4\u00a0132 |
Other auditors | 1\u00a0128 | 500 |
OTHER CERTIFICATION SERVICES | ||
Group auditor | 783 | 752 |
Other auditors | \u2014 | \u2014 |
TAX ADVICE | ||
Group auditor | 764 | 883 |
Other auditors | 124 | \u2014 |
OTHER SERVICES | ||
Group auditor | 26 | 86 |
Other auditors | \u2014 | 206 |
Total Group auditor | 4\u00a0622 | 5\u00a0852 |
Total other auditors | 1\u00a0252 | 706 |
Total auditor's fees | 5\u00a0873 | 6\u00a0558 |
The audit fee specification for 2022 include fees from Advokatfirmaet PricewaterhouseCoopers AS of NOK 26 thousands (2021: NOK 38 thousands).
Litigation and legal claims
Grieg Seafood had also been sued by indirect purchasers in the USA. In 2022, a settlement offer from the indirect purchaser plaintiffs was accepted. In February 2023, the settlement was finally approved by the court of Southern District of Florida. The settlement does not involve any admission of liability or wrongdoing. Costs incurred and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million have been expensed in 2022, of which NOK 129 million were used at year end. The remaining NOK 28 million are accrued as other current liability in the Statement of Financial Position. The total amount of NOK 157 million for the year is reported on the financial statement line item \"Litigation and legal claims\". See also Note 31.
Decommissioning costs
OTHER CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Accrued expenses1 | 150\u00a0241 | 133\u00a0385 |
Production fee (Norway)2 | 7\u00a0987 | 24\u00a0463 |
Realized gain/loss on fixed-price contracts3 | 30\u00a0930 | 12\u00a0530 |
Other current liabilities4 | 99\u00a0135 | 42\u00a0044 |
Other current liabilities | 288\u00a0293 | 212\u00a0422 |
1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
2 Production fee charged by NOK 0.405/kg (NOK 0.400/kg in 2021) of harvested volume (gutted weight) in Rogaland and Finnmark in Norway. For 2021, the production fee was payable in 2022 as 2021 was the first year harvested volume in Norway was charged with a fixed production fee. As from 2022, the production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement (\"Production fee\").
3 See Note 3.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURE OF NEW STANDARDS
A) NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2022
The accounting policies adopted are consistent with those of the previous financial year, except for the amendments to IFRS which have been implemented by the Group during the current financial year. Below we have listed the amendments in IFRS which have been applicable for the Group\u2019s 2022 financial statements, as well as the effect of the amendments.
In the section below new and amended standards and interpretations that have been implemented for the first time in 2022 are stated (no new IFRS standards implemented in 2022). This section is however not a complete summary of changes in IFRS, and merely a summary of changes that are relevant for Grieg Seafood.
Amendments to IAS 37 - Onerous Contracts, Costs of Fulfilling a Contract
A onerous contract is a contract under which the unavoidable cost of meeting the obligations under the contract costs exceed the economic benefits expected to be received under that contract. The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contract activities. The effect of the adoption has not had any effects for the 2022 financial statement compared with prior year\u2019s accounting policies.
Annual Improvements 2018-2020 Cycle Issued May 2020, effective from 1 January 2022
IFRS 9 Financial Instruments - Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities
The amendment clarifies the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. In 2022, Grieg Seafood refinanced its syndicated arrangement with secured lenders. The amendment in IFRS 9 has had no effect on the Group\u2019s financial statement in 2022 compared with prior year\u2019s accounting policies.
IAS 41 Agriculture - Taxation in fair value measurements
The amendment, which removed the requirement in IAS 41.22 to exclude cash flows for taxation when measuring the fair value of biological assets has had no effect on the Group\u2019s financial statement in 2022 compared with prior year\u2019s accounting policies as the Group\u2019s methodology for fair value measurement of biological assets at sea is unaffected by the change.
B) NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS - NOT YET ADOPTED
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group. This section is not a complete summary of all changes in IFRS not yet adopted as at 31 December 2022. The Group\u2019s intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approval, before the consolidated financial statements are issued. Generally, the Group does not aim to early-adopt, if available, changes to IFRS.
This section does provide a summary of the most relevant new standards, amendments and interpretations for Grieg Seafood, that are not yet adopted. These are:
\u2013Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies
\u2013Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
These standards, amendments or interpretations are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions as to the Group\u2019s financial position and -results. Both of the amendments listed above are effective as from 1 January 2023, and both will have an impact on the note disclosures of the Group in 2023 and beyond. For more information concerning these two amendments in IFRS, see the sections below.
Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies
The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments define what is \u2018material accounting policy information\u2019 and explain how to identify when accounting policy information is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. The amendments are effective for annual periods beginning on or after 1 January 2023, but earlier application is permitted as long as this fact is disclosed. The Group has not early-adopted the amendment. It is not expected that the amendments will materially impact the substance of the disclosed accounting policies of Grieg Seafood in 2023 compared with prior years.
Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments to IAS 12 Income Taxes narrow the scope of the initial recognition exemption of IAS 12.15 and IAS 12.24 and specifically require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. The most relevant part of the amendment for Grieg Seafood is leases. The Group has leases capitalized in the balance sheet through the effect of IFRS 16, and leases which would be classified as finance leases, according to the IFRS in force prior to 1 January 2019. Deferred tax is as at 31 December 2022 recognized for leases according to the net approach. Because of the amendment to IAS 12, Grieg Seafood will be required to recognize both a deferred tax asset and deferred tax liability on the initial recognition of a lease. While these qualify for offsetting in the statement of financial position, the notes to the financial statements need to disclose the gross amounts.
The amendments are effective for annual periods beginning on or after 1 January 2023. The amendment is applied by the modified retrospective approach, meaning the beginning of the earliest comparative period presented (for 2023, that is 1.1.2022). Thus, Grieg Seafood does not expect that the amendment to IAS 12 will impact the statement of financial position of the Group, but the change will impact the granularity of the note disclosure to the consolidated financial statement, with impact to the 2022 comparable note disclosures in the 2023 financial statements.
OTHER STANDARDS, AMENDMENTS AND INTERPRETATIONS
To be able to correctly calculate and report the proposed resource rent tax in Norway as from 2023 (see Note 15), Grieg Seafood has considered it necessary to reorganize the ownership of aquaculture licenses in Norway into separate commercial and non-commercial aquaculture licenses by legal entities. As such, Grieg Seafood Rogaland Sj\u00f8 AS has been established as a subsidiary (100%) of Grieg Seafood Rogaland AS, and Grieg Seafood Finnmark Sj\u00f8 AS as a subsidiary (100%) of Grieg Seafood Finnmark AS. The commercial aquaculture licenses in Norway are owned by Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS. These four entities are all domiciled in Norway.
The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA.
Grieg Seafood Canada AS and Grieg Seafood Newfoundland AS are holding companies within the Group, and wholly own the production companies Grieg Seafood BC Ltd. (incl. subsidiaries) and Grieg Seafood Newfoundland Ltd (incl. subsidiaries), respectively.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise indicated.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The consolidated financial statements have been prepared under the historical cost convention, modified for biological assets, equity instruments and financial assets/liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgement in the process of applying the company\u2019s accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated financial statements are described in Note 4.
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in 2022. See Note 30 for more information concerning relevant amendments and interpretations.
CONSOLIDATION PRINCIPLES
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the Group exercises control. Control over an entity arises when the Group is exposed to variability in the return from the entity and has the ability to impact this return by virtue of its influence over the entity. Subsidiaries are consolidated from the day control arises and deconsolidated when control ceases.
The acquisition method of accounting is applied for acquisitions. The consideration is measured as the fair value of any transferred assets, liabilities or issued equity instruments. The fair value of all the assets or liabilities resulting from contingent consideration agreements is included in the consideration. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. Non-controlling interests in the acquired entity are measured from time to time either at fair value, or at their proportionate share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are incurred. In the case of multi-stage acquisitions, the proportion of ownership from any earlier purchases is restated at fair value at the date of control, with changes in value recognized in the income statement.
Contingent consideration classified as equity shall not be remeasured and its subsequent settlement shall be accounted for within equity. Other contingent considerations shall be measured at fair value at each reporting date and changes in fair value shall be recognized in the income statement.
Intragroup transactions, intercompany balances, and unrealized profits and losses between Group companies are eliminated. Reported figures from the subsidiaries are restated when this is necessary to achieve consistency with the Group's accounting policies.
CHANGES IN SHAREHOLDINGS IN SUBSIDIARIES WITHOUT LOSS OF CONTROL
Transactions with non-controlling owners of subsidiaries that do not involve loss of control are treated as equity transactions. When shares are purchased from non-controlling owners, the difference between the consideration and the proportionate percentage of net assets recognized in the subsidiary\u2019s statement of financial position relating to such shares is recognized in the parent company\u2019s owners\u2019 equity. Gains or losses on disposals of non-controlling owners are similarly recognized in equity.
DIVESTMENT OF SUBSIDIARIES
When the Group no longer has control, any residual ownership interest is measured at fair value with changes in value recognized in profit or loss. Using this fair value as deemed cost, the interest is subsequently classified either as an investment in associates or as a financial asset. Amounts previously recognized in other comprehensive income relating to this company are treated as if the Group had disposed of the underlying assets and liabilities. This could mean that amounts that were previously recognized in other comprehensive income are reclassified to profit or loss.
ASSOCIATES
Associates are entities over which the Group exercises significant influence, but not control. Significant influence will generally exist when the Group has a shareholding of between 20% and 50% of the voting rights. Investments are recognized at cost at the time of acquisition, and the Group\u2019s share of the results in subsequent periods is recognized through profit or loss. The amount recognized in the statement of financial position includes any implicit goodwill identified at the date of purchase.
The Group\u2019s share of its associates\u2019 post-acquisition profits or losses is recognized in the income statement, the share of other comprehensive income is recognized in the consolidated statement of comprehensive income and both are added to the investment in associates in the statement of financial position. When the Group\u2019s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables towards the entity, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. If necessary, the associates\u2019 financial statements are restated to achieve consistency with the Group\u2019s accounting policies.
At the end of each accounting period, the Group determines whether there is any need to recognize an impairment of the investment in the associate. In such cases, the impairment amount is measured as the difference between the recoverable amount of the investment and its carrying value, and the difference is recognized in the income statement together with share of profit or loss in \u201cShare of profit from associates\u201d.
In the event of any gains or losses on transactions between the Group and its associates, only the proportionate share relating to external shareholders is recognized. Unrealized losses are eliminated unless there is a need to recognize an impairment for the asset that was the subject of the transaction. Accounting policies of associates are changed when necessary to ensure consistency with the accounting policies adopted by the Group. Dilution gains and losses arising on investments in associates are recognized in the income statement.
In the event of a reduction in a shareholding in an associate where the Group continues to exercise significant influence, only a proportionate share of amounts previously recognized in other comprehensive income is reclassified to profit or loss.
DISCONTINUED OPERATIONS
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
Disclosures for the Group\u2019s discontinued operations are provided in Note 6. All other notes to this consolidated financial statement refer to the Group\u2019s continuing operations, unless the note explicitly states otherwise.
SEGMENT INFORMATION
Operating segments are reported in a manner consistent with internal reporting to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group management.
FOREIGN CURRENCY TRANSLATION
The financial statements of each of the Group\u2019s entities are generally measured using the currency of the economic area in which the entity operates (\u201cthe functional currency\u201d). The consolidated financial statements are presented in Norwegian Kroner (NOK), which is the parent company\u2019s functional and presentation currency.
TRANSACTIONS AND BALANCE SHEET ITEMS
Foreign currency transactions are translated into the functional currency using the exchange rates in force at the transaction date. Foreign exchange gains or losses resulting from the settlement of such transactions, are recognized in profit or loss. Translation differences on monetary items (assets and liabilities) that are not denominated in the entity\u00b4s functional currency are also recognized through profit or loss.
GROUP COMPANIES
The income statements and statements of financial positions of the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
\u2022The statement of financial position is translated using the closing rate at the end of the period.
\u2022Income and expense items are translated at average exchange rates for the period (if the average is not a reasonable estimate of the cumulative effects of using the transaction rate, the transaction rate is used).
\u2022Translation differences are recognized in other comprehensive income and specified separately.
When a foreign operation is sold, the exchange difference, which in previous periods was recognized in other comprehensive income, is not accrued. The accumulated exchange difference on the sale of the foreign operation is hence reversed in other comprehensive income. Gains or losses on the sale are recognized on a basis of zero exchange difference in the net profit on ordinary activities.
Goodwill and fair value adjustments of assets and liabilities on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated using the closing currency rate at the balance sheet date.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the asset.
Improvements are recognized in the asset\u2019s carrying amount or as a separate asset when it is probable that future economic benefits associated with the improvement will flow to the Group and the cost of the item can be reliably measured. All other repairs and maintenance are recognized in the income statement during the financial period in which the costs are incurred.
Land and buildings mainly comprise freshwater facilities, harvesting plants and offices. Land is not depreciated. Other operating assets are depreciated in accordance with the straight-line method so that the cost, or remeasured value, is written down to residual value over its expected useful economic life as follows:
\u2022Buildings/real estate 10\u201350 years
\u2022Plants, barges, onshore power supply 5\u201330 years
\u2022Nets/cages/moorings 5\u201325 years
\u2022Other equipment 3\u201335 years
The assets\u2019 useful lives and residual values are estimated at each balance sheet date and adjusted if necessary. In 2022 there has not been any changes to the estimated useful life of the Group\u2019s property, plant and equipment as a consequence of climate-related risk.
An asset\u2019s carrying value is written down to its recoverable amount if the carrying value is greater than its estimated recoverable amount. Gains and losses on disposals are recognized on a net basis as \u201cother gains and losses\u201d in the income statement and represent the difference between the sales price and the carrying value.
INTANGIBLE ASSETS
Intangible assets that arise internally within the Group are not recognized.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill on acquisitions of subsidiaries is classified as an intangible asset. Goodwill on the purchase of a share in an associate is included in \u201cinvestments in associates\u201d. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
For the purpose of impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
LICENSES
Fish-farming licenses with an indefinite useful life are not amortized but reviewed for impairment annually, or more frequently if there are indications that the carrying value may have decreased.
The Group considers the following licenses to have indefinite useful lives:
\u2022Licenses granted with an indefinite useful life, where the company has no other contractual restrictions relating to the use of the license.
\u2022Licenses granted with a finite useful life, but where the license holders can renew the licenses without incurring considerable expenses.
Licenses with a finite useful life are amortized over their useful lives, and tested for impairment if there are indications that future earnings do not justify the asset\u2019s carrying value. Such licenses relate to water licenses for hatcheries and some specific seawater licenses. The following sections provide a description of licenses in Norway and Canada. See Note 10 Intangible assets for an overview of the licenses.
Norway
The licensing regime for the production of salmon in Norway is enacted by the Norwegian Parliament through the Aquaculture Act. The Ministry of Trade, Industry and Fisheries grants permits for aquaculture (licenses). All aquaculture operations are subject to licensing, and no one can produce salmon without permission from the authorities, see Section 4 of the Aquaculture Act.
The aquaculture permit allows the production of salmon in limited geographic areas within the current determined limitations of the permit scope. The Aquaculture Act is administered centrally by the Ministry of Trade, Industry and Fisheries, with the Directorate of Fisheries as the supervisory authority. Regionally, several industry authorities jointly manage full administrative and supervisory responsibility within the regulating range of the Aquaculture Act. The county council is the regional administrative body, while the Directorate of Fisheries serves as appellate body in locality and licensing matters.
Seawater licenses
Each license for the farming of salmon in the sea is subject to a production limit in the form of \u201cmaximum allowed biomass\u201d (MAB)\u00a0 on both company and location/seawater site level. The system means the license holder can at no time have a standing biomass (number of kg of live fish in seawater) that exceeds the company level MAB, in addition that no location can have a standing biomass that exceeds the seawater site\u2019s MAB. When a seawater site is approved, a maximum level of tonnes of fish is set, based on the location and environmental conditions on the site. The normal size of a permit is 780 tonnes at the license level ex. the county of Troms and Finnmark, while the normal size of a permit in Troms and Finnmark is 945 tonnes. While the extent of biomass a company can possess primarily depends on the type and number of licenses, the limitation at site level is primarily dependent on the site\u2019s environmental sustainability. See Section 15 of the Salmon Allocation Regulation (\u201cLaksetildelingsforskriften\u201d).
Norway also has green licenses, with stricter environmental criteria. The sea lice limit is half that of regular licenses, with stricter criteria for escape prevention technologies and limits on the amount of medical treatment permitted per generation.
Hatchery licenses
Young salmon are defined as eggs, juveniles, parr or smolt to be released at another location, see Section 4(f) of the Salmon Allocation Regulation. Such licenses are not limited and thus subject to continuous application for new licenses or changes to existing licenses. Pursuant to the regulations, annual production is limited to 15 million fish.
\u00a0
Broodstock and R&D licenses
These licenses are not limited in number. The purpose of broodstock licenses is to produce roe and milt from salmon with improved and/or specific traits. Broodstock licenses include both a land and sea phase, i.e. broodfish and egg production are covered by the same licensing process. The purpose of an R&D license is to encourage important research projects that can bring the Norwegian aquaculture industry forward. Permits are means tested, meaning that the applicant must demonstrate a need for the production of eggs, specific research projects or for educational purposes.
Educational licenses
Educational licenses in Norway are given to universities, colleges or high schools offering aquaculture-related courses of study. Salmon farming companies can lease educational licenses from the educational institution. Part of the students\u2019 training will then take place at these salmon farms.
Harvesting pen licenses
Licenses utilized for holding pens where live fish are kept prior to harvesting. These relate to specific locations.
Duration and renewal
The Ministry may in individual decisions or regulations specify further provisions on the content of aquaculture licenses, including matters relating to scope and time limitations, see Section 5(2) of the Aquaculture Act. Nonetheless, the preparatory work for the Aquaculture Act specifies that licenses are normally granted without a time limit.
Grieg Seafood\u2019s general fish farming and hatchery licenses are not time-limited under current regulations. After the reform in 2009, a number of licenses were time-limited, mainly for 15 years. As no government practices have been established relating to the renewal of broodstock licenses, the current understanding is that they will be renewed upon application. Expiration of licenses allows for application for renewal on demand. A license for harvesting pens is valid for ten years and must be renewed on expiration, provided that the license is still connected to an approved harvesting facility.
Disposal and withdrawal
All licenses can be transferred and mortgaged in accordance with Section 19 of the Aquaculture Act. Transfers and mortgages must be recorded in a separate register (the Aquaculture Register). It is not permitted to rent out licenses or license capacity.
Section 9 of the Aquaculture Act sets out the basis for withdrawal of an aquaculture license. This states that there must be significant breaches of the terms of an aquaculture license before it can be revoked.
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and east coasts of Vancouver Island. To operate farms in British Columbia, Canada, the following three licenses must be in place:
1.Aquaculture license \u2013 issued by the Department of Fisheries and Oceans and the First Nations.
2.License of Occupation (Tenures) \u2013 issued by the Ministry of Forest, Lands and Natural Resource Operations.
3.Navigation Water Permit \u2013 issued by Transport Canada (Canadian public authority).
For restrictions regarding production quantity, see table in Note 10.
Duration and renewal
1.Aquaculture license \u2013 duration of one year, renewal each year is a formality.
2.License of Occupation \u2013 duration of 2\u201320 years. Renewal is applied for on expiration.
3.Navigation Water Permit \u2013 duration of five years, but possible to apply for renewal.
New renewal process in Canada West
In British Columbia, licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, were the next renewal should have been in June 2022. This has been put on hold because of the current Canadian federal Government has in its mandate letter to the Minister of Fisheries, Ocean and Canadian Coast Guard stated that a transition plan should be developed by 2025 in collaboration with Indigenous communities and the BC Province, outlining how the industry will transition from open-net pen in coastal BC. See Note 4 for more information.
Newfoundland
Grieg Seafood Newfoundland has exclusive farming rights to Placentia Bay. To operate aquaculture sites in Newfoundland, Canada, the following approvals and licenses must be in place:
\u2022Aquaculture License \u2013 issued by the Department of Fisheries Forestry and Agriculture
\u2022Lease License for Occupancy \u2013 issued by Crown Lands division of Department of Fisheries Forestry and Agriculture
\u2022Canadian Navigable Waters Act - issued by Transport Canada
\u2022Water Use Approval \u2013 issued by Department of Environment, Climate Change, and Municipalities
Duration and renewal
Aquaculture licenses are granted for a six-year term. Each year, licensees must complete the validation process and abide by the legislative references: Aquaculture Act and the Policy cross references as Aquaculture License Renewal AP 6, Annual reporting AP 7 and site utilization. For renewal,\u00a0 licensees are required to follow and comply with the requirements set out in AP 6 License Renewal. Licensees must abide by license conditions, policies, and regulations at all times. Licenses may be suspended or cancelled if a breach occurs, or they may not be renewed.
The timeline supports two production cycles and promotes longer-term investment and stability.\u00a0 Ensuring sites are being utilized and developed by\u00a0 license holders in accordance with approved plans on file with the department falls under AP 8 Site Utilization. If sites are not being utilized based on approved plans on file, they may not be renewed.
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses are recognized in the statement of financial position at cost and amortized over their estimated useful lives. Customer portfolios are recognized in the statement of financial position at cost on the date of purchase. Amortization is calculated using the straight-line method over the estimated useful life, as follows:
\u2022Computer software 3\u201310 years
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets with an indefinite useful life are not amortized but are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever there are indications that future earnings do not justify the carrying value.
An impairment loss is recognized for the amount by which the asset\u2019s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for indicators of possible reversal of the impairment at each reporting date.
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. The classification is performed in accordance with the substance of the contractual arrangement, and in line with the definitions of a financial asset, a financial liability and an equity instrument.
Ordinary purchases and sales of investments are recognized on the trade-date, the date on which the Group commits to purchase or sell the asset. All financial assets that are not stated at fair value through profit or loss are initially recognized at fair value plus transaction costs.
FAIR VALUE HIERARCHY
The following of the Group\u2019s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. See Note 3 for information on valuation techniques.
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments:
\u2022Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
\u2022Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
\u2022Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the 2022 reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
FINANCIAL ASSETS
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. The Group has financial assets classified as follows:
\u2022Financial assets at amortized cost (debt instruments)
\u2022Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
\u2022Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group's financial assets at amortized cost includes trade receivables and other short-term deposit. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from Contracts with Customers.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognized in the income statement.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis. The category also include the Group\u2019s investments in debt instruments and money market funds.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
a.The rights to receive cash flows from the asset have expired, or
b.The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u201cpass-through\u201d arrangement; and either
i.the Group has transferred substantially all the risks and rewards of the asset, or
ii.the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
See the \u201cTrade receivable\u201d section in this note for specific accounting principles on expected credit loss on trade receivables.
FINANCIAL LIABILITIES
Financial liabilities are classified, at initial recognition, as amortized cost (loans and borrowings), or as financial liabilities at fair value through profit or loss.
Financial liabilities at amortized cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial derivative contracts. Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the income statement.
HEDGING
Hedge accounting
The Group do not utilize the hedge accounting principles of IFRS 9.
Non-hedge accounting
The Group engage in short-term derivative contracts to hedge currency- and interest risk. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses.
FISH POOL SALE AND PURCHASE AGREEMENTS
For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively.
INVENTORIES
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The net realizable value is the estimated sales price less the estimated costs of completion and sale.
BIOLOGICAL ASSETS
The accounting treatment of live fish by enterprises applying IFRS is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy of methods for the measurement of biological assets at level 3. The basic principle is that such assets shall be measured at fair value less costs to sell. Fair value is defined in IFRS 13 as \u201cthe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date\u201d. According to IFRS 13, the highest and best use of the biological asset establishes the valuation premise.
Biological assets comprise of smolt and fish in the sea. The fish are divided into two main groups, depending on the stage of the life cycle. At the earliest stage of the life cycle, the fish are classified in group 1) roe, fry and smolt. Group 1 biological assets is disclosed as \u201cbiological assets on land\u201d in Note 9.
When the fish are large enough to be transferred to the sea, they are classified in group 2) biomass in sea. The group 2 biological assets classification is further decomposed in Note 9 as \u201cimmature fish in sea, round weight < 4.60 kg\u201d and \u201cmature fish in sea, round weight >\u00a04.60 kg\u201d.
\u2022Fish onshore (smolt) are recognized at accumulated cost. The best estimate of fair value is the accumulated cost because of very little biological transformation. This assessment must be seen in the light of the fact that smolt are currently transferred to the sea at a stage when their weight is still relatively low.
\u2022For fish in sea, the fair value is calculated by applying a cash-flow based present value model.
The fair value of fish in the sea is estimated for each location.
In accordance with the principle relating to highest and best use, Grieg Seafood considers that the fish have optimal harvest weight when they have a live round weight of 4.60 kg, which corresponds to 4.00 kg gutted weight. Fish with a live round weight of 4.60 kg or more are classified as ready for harvest (mature fish), while fish that have still not achieved this weight are classified as not ready for harvest (immature fish).
The cash-flow based present value model does not rely on historical and company specific factors. In a hypothetical market with perfect competition, a hypothetical buyer of live fish would maximum be willing to pay the present value of the estimated future profit from the sale of the fish when it is ready for harvest. The estimated future profit, considering all price adjustments
and payable fees for completion, constitutes the cash flow. No deductions are made for sales expenses, as these are not observable in the market. Such expenses are also deemed immaterial.
Incoming cash flow is calculated as a function of estimated volume multiplied by estimated price. For fish not ready for harvest, a deduction is made to cover estimated residual costs to grow the fish to harvestable weight. The cash flow is discounted monthly by a discount rate. The discount rate comprises three main components: 1) the risk of incidents that influence cash flow, 2) hypothetical license lease and 3) the time value of money. See Note 4 on significant accounting estimates for more information.
When estimating the actual accumulated cost at the respective seawater facility, direct costs (fish feed and similar) are allocated to each group of fish transferred to the sea at the same location. Financial costs are not included in the costs of production.
The sales price for fish in the sea is based on the forward price from Fish Pool. Fish Pool is a marketplace for financial purchase and sale agreements for superior Norwegian Salmon size 3-6 kg head-on gutted weight. The volume on Fish Pool is limited, but Grieg Seafood\u2019s opinion is that the observable forward prices must be seen as the best approach to a price for the sale of salmon. Regarding foreign countries, the most relevant price information available for the expected harvesting period is applied. For fish in the sea, the forward price in Norway is adjusted for historical differences in achieved prices between Norway and Canada. The price/net sales value is adjusted for quality differences (superior, ordinary and production grade), and for logistics expenses and sales commissions. Estimated harvesting expenses are deducted.
The volume (biomass) is based on the actual number of individuals in the sea at the balance sheet date, adjusted to cover estimated mortality up to harvest date and multiplied by the estimated harvest weight per individual at the time of harvest. The fair value estimate for the fish in sea figure is adjusted for gutting waste, as the price is measured for gutted weight. Budgeted harvesting and freight costs are applied. Foreign currency forward contracts associated with the date of harvesting are applied when translating the price to CAD.
The change in the fair value of biological assets is recognized in the income statement as \u201cfair value adjustment of biological assets\u201d.
Onerous contracts are contracts where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. The Group enters from time to time into contracts for future deliveries of salmon. As biological assets are recognized at fair value, the fair value adjustments of the biological assets will be included in the
estimated expenses required to fulfil the contract. This implies that the Group may experience loss-making (onerous) contracts according to IAS 37 even if the contract price for physical delivery contracts is higher than the actual production cost for the products. If that occurs, a provision is made for the estimated negative value.
Changes arising from physical delivery contracts are recognized as \u201cfair value adjustment of biological assets\u201d. The liability in the statement of financial position is recognized as other current liabilities.
Fish farming naturally comes with a certain level of loss of fish along the production cycle, and our budgets are typically produced with an inherent assumption of a 0.5-1% monthly mortality. The losses associated with normal levels of survival are not directly recognized in the income statement. In periods where specific abnormal incidents lead to reduced survival, we immediately recognize write-downs of the biomass inventory to better reflect the actual biomass in the sea or on land. The write-down costs are recorded in the income statement as they arise, included in the financial statement line item \u201craw materials and consumables used\u201d.
TRADE RECEIVABLES
Trade receivables arising from the trading of goods or services within the ordinary operating cycle and under normal terms of payment are initially recognized at nominal value. Trade receivables with longer terms of payment are discounted to present value and represents the Group\u2019s unconditional right to consideration from the customer.
EXPECTED CREDIT LOSS (ECL) ON TRADE RECEIVABLES
For trade receivables, the Group applies a simplified approach in calculating ECLs. For receivables where the credit risk has increased substantially after establishment, a write-down shall be made for the expected credit loss over the maturity of the receivables. The model for calculating loss allowance classifies the trade receivables into two groups: normal risk and high-risk, based on their country of origin. Furthermore, the trade receivables are classified as credit-insured receivable or not. The provision is the difference between nominal and recoverable amount, which is the present value of estimated future cash flows, discounted at the original effective interest rate. Loss allowance is recognized as \u201cother operating expenses\u201d in the income statement.
FACTORING AGREEMENTS
The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Receivables purchased by the factoring company are derecognized from the statement of financial position. See the section \u201cDerecognition of financial assets\u201c in this note for the related accounting principle.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, bank deposits and other short-term highly liquid investments with original maturities of three months or less. The overdraft facility is included in current borrowings in the statement of financial position.
SHARE CAPITAL
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options, net of tax, are shown in equity as a deduction, net of tax, from the proceeds.
BORROWINGS
Borrowings are initially recognized at fair value when the funds are received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost applying the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
INCOME TAX EXPENSE AND DEFERRED TAX
Income tax expense consists of the tax payable and changes to deferred tax.
Deferred tax is provided for in full at nominal value, using the liability method, on temporary differences arising between the value of assets and liabilities for tax and accounting purposes. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply when the related deferred tax asset is realized, or the deferred income liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available, from which the temporary differences can be deducted. Deferred tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions.
EMPLOYEE BENEFITS
PENSION OBLIGATIONS
The Company pays premiums to local, defined-contribution schemes for all employees. The Company's Norwegian pension schemes meet the requirements of the Norwegian Mandatory Occupational Pension Act. Pension premiums are recognized in the income statement through operations on an ongoing basis. Employer\u2019s social security contributions are expensed based on paid pension premiums. The Group companies Grieg
Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). The financial commitments associated with this scheme are included in the Group\u2019s pension expenses. The AFP early retirement scheme follows the rules for public sector AFP, and both companies are members of the Norwegian Confederation of Trade Unions (LO)/the Confederation of Norwegian Enterprise (NHO) scheme. The pension payment calculations are based on standard assumptions relating to the development of mortality and disability as well as other factors such as age, years of service and remuneration. Pension premiums are recognized in the income statement through operations as they arise.
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration scheme with settlement in cash. Under the scheme, individual employees may buy shares proportionate to their annual salary. The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be charged over the vesting period is calculated based on the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the company revises its estimates of the number of options that are expected to be vested and recognizes the impact of the revision relative to original estimates, if any, in the income statement. The Black and Scholes option pricing model is used for valuation. The company\u00b4s obligations are recognized under non-current liabilities if the latest possible redemption date is more than one year into the future.
SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its employees in 2018 and it was continued throughout 2022. It is the Board's intention that the plan shall be a continuing part of the company's employee incentive scheme. The Board shall, however, have the right to decide, at its sole discretion, whether the plan will be extended in the future, and the terms of the plan.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
PROFIT-SHARING AND BONUS SCHEMES
The Group recognizes a provision where it has a contractual obligation or where there is a past practice that has created a constructive obligation.
PROVISIONS
Provisions (e.g. environmental improvements, restructuring costs and legal claims) are recognized when:
\u2022the Group has a present legal or constructive obligation as a result of past events;
\u2022it is more likely than not that an outflow of resources will be required to settle the obligation;
\u2022the amount of the obligation can be reliably estimated.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured as the present value of the expenditures expected to be required to settle the obligation, using a pre-tax discount rate that reflects the current market situation and the risks specific to the obligation. The increase in the provision due to the change in value because of the passage of time is recognized as a financial expense.
REVENUE RECOGNITION
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group\u2019s revenue derives primarily from the sale of whole and processed fish. Sales contracts cover both spot sales and fixed-price deliveries. Revenue from the sale of salmon is generally recognized upon delivery, as the Group considers delivery as the point in time when control of the goods/service is transferred to the customer. Each sales contract \u2013 either for a spot sale or a fixed delivery \u2013 is considered as one performance obligation. Each week, the sale of fish is settled with the customer. The fixed-price delivery contracts that are entered into with customers, specify a per-week volume.
The sales price is determined upon contract settlement and is based on available market price (for example Nasdaq prices including transport and margin, and the price is per kilogram). The price varies according to the quality of the salmon and its size, and the fish is mainly sold Delivery Duty Paid (DDP) to the customer. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. That also applies to the fulfillment of physical delivery contracts.
The normal credit term of the Group\u2019s sales transactions is 30 days. Based on the nature of the sale of fresh and frozen fish, the Group generally has no material contract liabilities. The Group does not generally engage in customer contracts where fulfillment of the performance obligation lies more than one year in the future. Therefore, the Group does not disclose further information on contract liabilities and related performance obligations.
Cash refunds are given to the customer if the sold product is delivered with discrepancies compared to the agreed sales contract, or if the product is damaged. Generally, refunds are not material.
Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating intragroup sales.
OTHER REVENUE STREAMS
In addition to the sale of fresh and frozen salmon, the Group also sells roe, smolt and ensilage. Harvesting (processing) for external companies are performed if overcapacity on our own harvesting plants. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood.
DIVIDEND INCOME
Dividend income from investments or equity instruments is recognized when the right to receive payment is established. Dividend income from entities recognized under the equity method are not recognized but recorded as a reduction in the carrying value of the investment.
GOVERNMENT GRANTS
Government grants are recognized when it is reasonably certain that the company will meet the conditions stipulated for the grants and that the grants will be received. Operating grants are recognized systematically during the grant period. Grants are deducted from the cost which the grant is meant to cover. Investment grants are capitalized and recognized systematically over the asset\u2019s useful life. Investment grants are recognized either as deferred income or as a deduction of the asset\u2019s carrying amount.
LEASES
IDENTIFYING A LEASE
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
RECOGNITION OF LEASES AND EXEMPTIONS
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for short-term leases (defined as 12 months or less) and lease agreements where the leased asset is of low value.
Lease liabilities
The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option.
The lease payments included in the measurement comprise:
\u2022Fixed lease payments (including in-kind fixed payments), less any lease incentives receivable
\u2022Variable lease payments that depend on an index or a rate, initially measured using the index or rate in effect on the commencement date
Lease payments generally also include any exercise price of a purchase option/payments of penalties for terminating a lease, provided that the Group is reasonably certain to exercise such an option.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The Group presents its lease liability separately from other liabilities in the statement of financial position.
Right-of-use assets
The Group measures the right-of-use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprises:
\u2022The amount of the initial measurement of the lease liability recognized,
\u2022Any lease payments made at or before the commencement date, less any incentives received, and
\u2022Any initial direct costs incurred by the Group.
The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment when depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
DIVIDENDS
Dividends payable to the company\u2019s shareholders are recognized as a liability in the Group\u2019s financial statements when the dividends are approved by the AGM.
BORROWING COSTS
Borrowing costs incurred during the construction of operating assets are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed in the income statement.
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities are defined as:
\u2022possible obligations resulting from past events whose existence depends on future events,
\u2022obligations that are not recognized because it is not probable that they will lead to an outflow of resources entailing financial benefits from the company,
\u2022obligations that cannot be measured with sufficient reliability.
Contingent liabilities are not recognized in the annual financial statements apart from contingent liabilities resulting from the acquisition of an entity. Material contingent liabilities are disclosed, with the exception of contingent liabilities where the probability of the liability materializing is remote.
Contingent liabilities acquired through the purchase of operations (an acquisition) are recognized at fair value even if it is not probable that the liability will become unconditional. The assessment of probability and fair value is subject to constant review. Subsequent measurement is at the higher of the amount initially recognized (less any amount recognized as revenue) and the amount according to the general provision-measurement rules.
Contingent assets are not recognized in the statement of financial position, but are disclosed if it is likely that a benefit will accrue to the Group.
CASH FLOW STATEMENT
The Group\u2019s cash flow statement shows the overall cash flow broken down into operating, investing and financing activities using the indirect method. The cash flow statement illustrates the effect of the various activities on cash and cash equivalents.
The Group has prepared an overview of cash and non-cash changes in the Group\u2019s liabilities, which is included in Note 12.
Changes in financial assets are disclosed if cash flows have been, or will be, included in the cash flow from financing activities. This may be the case, for instance, for assets pledged as security for financial liabilities.
EARNINGS PER SHARE
Earnings per share are calculated by allocating the profit for the year to the Company\u2019s shareholders based on a weighted average of the number of issued ordinary shares during the year. Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The consolidated financial statements have been prepared under the historical cost convention, modified for biological assets, equity instruments and financial assets/liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgement in the process of applying the company\u2019s accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated financial statements are described in Note 4.
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in 2022. See Note 30 for more information concerning relevant amendments and interpretations.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The consolidated financial statements have been prepared under the historical cost convention, modified for biological assets, equity instruments and financial assets/liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgement in the process of applying the company\u2019s accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated financial statements are described in Note 4.
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in 2022. See Note 30 for more information concerning relevant amendments and interpretations.
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in 2022. See Note 30 for more information concerning relevant amendments and interpretations.
A) NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2022
The accounting policies adopted are consistent with those of the previous financial year, except for the amendments to IFRS which have been implemented by the Group during the current financial year. Below we have listed the amendments in IFRS which have been applicable for the Group\u2019s 2022 financial statements, as well as the effect of the amendments.
In the section below new and amended standards and interpretations that have been implemented for the first time in 2022 are stated (no new IFRS standards implemented in 2022). This section is however not a complete summary of changes in IFRS, and merely a summary of changes that are relevant for Grieg Seafood.
Amendments to IAS 37 - Onerous Contracts, Costs of Fulfilling a Contract
A onerous contract is a contract under which the unavoidable cost of meeting the obligations under the contract costs exceed the economic benefits expected to be received under that contract. The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contract activities. The effect of the adoption has not had any effects for the 2022 financial statement compared with prior year\u2019s accounting policies.
Annual Improvements 2018-2020 Cycle Issued May 2020, effective from 1 January 2022
IFRS 9 Financial Instruments - Fees in the \u201910 per cent\u2019 test for derecognition of financial liabilities
The amendment clarifies the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. In 2022, Grieg Seafood refinanced its syndicated arrangement with secured lenders. The amendment in IFRS 9 has had no effect on the Group\u2019s financial statement in 2022 compared with prior year\u2019s accounting policies.
IAS 41 Agriculture - Taxation in fair value measurements
The amendment, which removed the requirement in IAS 41.22 to exclude cash flows for taxation when measuring the fair value of biological assets has had no effect on the Group\u2019s financial statement in 2022 compared with prior year\u2019s accounting policies as the Group\u2019s methodology for fair value measurement of biological assets at sea is unaffected by the change.
CONSOLIDATION PRINCIPLES
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the Group exercises control. Control over an entity arises when the Group is exposed to variability in the return from the entity and has the ability to impact this return by virtue of its influence over the entity. Subsidiaries are consolidated from the day control arises and deconsolidated when control ceases.
The acquisition method of accounting is applied for acquisitions. The consideration is measured as the fair value of any transferred assets, liabilities or issued equity instruments. The fair value of all the assets or liabilities resulting from contingent consideration agreements is included in the consideration. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. Non-controlling interests in the acquired entity are measured from time to time either at fair value, or at their proportionate share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are incurred. In the case of multi-stage acquisitions, the proportion of ownership from any earlier purchases is restated at fair value at the date of control, with changes in value recognized in the income statement.
Contingent consideration classified as equity shall not be remeasured and its subsequent settlement shall be accounted for within equity. Other contingent considerations shall be measured at fair value at each reporting date and changes in fair value shall be recognized in the income statement.
Intragroup transactions, intercompany balances, and unrealized profits and losses between Group companies are eliminated. Reported figures from the subsidiaries are restated when this is necessary to achieve consistency with the Group's accounting policies.
CHANGES IN SHAREHOLDINGS IN SUBSIDIARIES WITHOUT LOSS OF CONTROL
Transactions with non-controlling owners of subsidiaries that do not involve loss of control are treated as equity transactions. When shares are purchased from non-controlling owners, the difference between the consideration and the proportionate percentage of net assets recognized in the subsidiary\u2019s statement of financial position relating to such shares is recognized in the parent company\u2019s owners\u2019 equity. Gains or losses on disposals of non-controlling owners are similarly recognized in equity.
DIVESTMENT OF SUBSIDIARIES
When the Group no longer has control, any residual ownership interest is measured at fair value with changes in value recognized in profit or loss. Using this fair value as deemed cost, the interest is subsequently classified either as an investment in associates or as a financial asset. Amounts previously recognized in other comprehensive income relating to this company are treated as if the Group had disposed of the underlying assets and liabilities. This could mean that amounts that were previously recognized in other comprehensive income are reclassified to profit or loss.
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the Group exercises control. Control over an entity arises when the Group is exposed to variability in the return from the entity and has the ability to impact this return by virtue of its influence over the entity. Subsidiaries are consolidated from the day control arises and deconsolidated when control ceases.
The acquisition method of accounting is applied for acquisitions. The consideration is measured as the fair value of any transferred assets, liabilities or issued equity instruments. The fair value of all the assets or liabilities resulting from contingent consideration agreements is included in the consideration. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. Non-controlling interests in the acquired entity are measured from time to time either at fair value, or at their proportionate share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are incurred. In the case of multi-stage acquisitions, the proportion of ownership from any earlier purchases is restated at fair value at the date of control, with changes in value recognized in the income statement.
Contingent consideration classified as equity shall not be remeasured and its subsequent settlement shall be accounted for within equity. Other contingent considerations shall be measured at fair value at each reporting date and changes in fair value shall be recognized in the income statement.
Intragroup transactions, intercompany balances, and unrealized profits and losses between Group companies are eliminated. Reported figures from the subsidiaries are restated when this is necessary to achieve consistency with the Group's accounting policies.
The acquisition method of accounting is applied for acquisitions. The consideration is measured as the fair value of any transferred assets, liabilities or issued equity instruments. The fair value of all the assets or liabilities resulting from contingent consideration agreements is included in the consideration. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. Non-controlling interests in the acquired entity are measured from time to time either at fair value, or at their proportionate share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are incurred. In the case of multi-stage acquisitions, the proportion of ownership from any earlier purchases is restated at fair value at the date of control, with changes in value recognized in the income statement.
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities are defined as:
\u2022possible obligations resulting from past events whose existence depends on future events,
\u2022obligations that are not recognized because it is not probable that they will lead to an outflow of resources entailing financial benefits from the company,
\u2022obligations that cannot be measured with sufficient reliability.
Contingent liabilities are not recognized in the annual financial statements apart from contingent liabilities resulting from the acquisition of an entity. Material contingent liabilities are disclosed, with the exception of contingent liabilities where the probability of the liability materializing is remote.
Contingent liabilities acquired through the purchase of operations (an acquisition) are recognized at fair value even if it is not probable that the liability will become unconditional. The assessment of probability and fair value is subject to constant review. Subsequent measurement is at the higher of the amount initially recognized (less any amount recognized as revenue) and the amount according to the general provision-measurement rules.
Contingent assets are not recognized in the statement of financial position, but are disclosed if it is likely that a benefit will accrue to the Group.
ASSOCIATES
Associates are entities over which the Group exercises significant influence, but not control. Significant influence will generally exist when the Group has a shareholding of between 20% and 50% of the voting rights. Investments are recognized at cost at the time of acquisition, and the Group\u2019s share of the results in subsequent periods is recognized through profit or loss. The amount recognized in the statement of financial position includes any implicit goodwill identified at the date of purchase.
The Group\u2019s share of its associates\u2019 post-acquisition profits or losses is recognized in the income statement, the share of other comprehensive income is recognized in the consolidated statement of comprehensive income and both are added to the investment in associates in the statement of financial position. When the Group\u2019s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables towards the entity, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. If necessary, the associates\u2019 financial statements are restated to achieve consistency with the Group\u2019s accounting policies.
At the end of each accounting period, the Group determines whether there is any need to recognize an impairment of the investment in the associate. In such cases, the impairment amount is measured as the difference between the recoverable amount of the investment and its carrying value, and the difference is recognized in the income statement together with share of profit or loss in \u201cShare of profit from associates\u201d.
In the event of any gains or losses on transactions between the Group and its associates, only the proportionate share relating to external shareholders is recognized. Unrealized losses are eliminated unless there is a need to recognize an impairment for the asset that was the subject of the transaction. Accounting policies of associates are changed when necessary to ensure consistency with the accounting policies adopted by the Group. Dilution gains and losses arising on investments in associates are recognized in the income statement.
In the event of a reduction in a shareholding in an associate where the Group continues to exercise significant influence, only a proportionate share of amounts previously recognized in other comprehensive income is reclassified to profit or loss.
ASSOCIATES
Associates are entities over which the Group exercises significant influence, but not control. Significant influence will generally exist when the Group has a shareholding of between 20% and 50% of the voting rights. Investments are recognized at cost at the time of acquisition, and the Group\u2019s share of the results in subsequent periods is recognized through profit or loss. The amount recognized in the statement of financial position includes any implicit goodwill identified at the date of purchase.
The Group\u2019s share of its associates\u2019 post-acquisition profits or losses is recognized in the income statement, the share of other comprehensive income is recognized in the consolidated statement of comprehensive income and both are added to the investment in associates in the statement of financial position. When the Group\u2019s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured receivables towards the entity, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. If necessary, the associates\u2019 financial statements are restated to achieve consistency with the Group\u2019s accounting policies.
At the end of each accounting period, the Group determines whether there is any need to recognize an impairment of the investment in the associate. In such cases, the impairment amount is measured as the difference between the recoverable amount of the investment and its carrying value, and the difference is recognized in the income statement together with share of profit or loss in \u201cShare of profit from associates\u201d.
In the event of any gains or losses on transactions between the Group and its associates, only the proportionate share relating to external shareholders is recognized. Unrealized losses are eliminated unless there is a need to recognize an impairment for the asset that was the subject of the transaction. Accounting policies of associates are changed when necessary to ensure consistency with the accounting policies adopted by the Group. Dilution gains and losses arising on investments in associates are recognized in the income statement.
In the event of a reduction in a shareholding in an associate where the Group continues to exercise significant influence, only a proportionate share of amounts previously recognized in other comprehensive income is reclassified to profit or loss.
DISCONTINUED OPERATIONS
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
Disclosures for the Group\u2019s discontinued operations are provided in Note 6. All other notes to this consolidated financial statement refer to the Group\u2019s continuing operations, unless the note explicitly states otherwise.
SEGMENT INFORMATION
Operating segments are reported in a manner consistent with internal reporting to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group management.
Segment information
The operating segments are identified on the basis of the reports which Group management uses to assess performance and profitability at a strategic level. Group management assesses business activities from a geographical perspective, based on the location of assets. The Group has one production segment: Production of farmed salmon. Earnings from the sales companies in the Group are reported per producer. Geographically, management assesses the results of production in Rogaland \u2013 Norway, Finnmark \u2013 Norway, British Columbia \u2013 Canada, and Newfoundland \u2013 Canada. Group management evaluates the results from the segments based on Operational EBIT. The operating segments are divided geographically by country or region, based on the reporting applied by Group management when assessing performance and profitability at a strategic level.
The method by which Operational EBIT is calculated excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and impairment of goodwill and intangible assets, when impairment is attributable to an isolated event which is not expected to recur. Furthermore, the measurement method for Operational EBIT includes, but is not reported per region, the effect of share-based payments, as well as unrealized gains and losses on financial instruments. These gains/losses and costs are reported in the \"Elim/Other\" column in the segment information. Costs or gains which relate to prior years and not to the current operation of Grieg Seafood, are not included as Operational EBIT, as such costs are not considered meaningful for the comparability of the Group's results from one period to another. See Alternative Performance Measures\u00a0for more information. Elim/Other items comprise, in addition to intercompany eliminations, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. In the segment reporting, sales revenue at the regional level includes revenue from the sale of Atlantic salmon. At the
regional level, other income includes the sale of byproducts (such as ensilage), as well as income from the sale of smolt, fry and roe. At the Group level, such income is reclassified to sales revenue in the \"Elim/Other\"column in the Group's segment information. Other income also includes, at both the regional and Group level, rental income and income from overcapacity of operational assets. Other gains/losses, such as gains/losses from the sale of fixed assets and other equipment, are included in the line \u201cother gains/losses\u201d in the segment information. Associated companies that are closely related to the Group's operations and included in the Group\u2019s value chain, for example when the relevant associates operate in the same position in the value chain as the Group, are included in the Group's operational EBITDA and Operational EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group\u2019s segment information.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXH5VC37", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "f-375": { "value": "FOREIGN CURRENCY TRANSLATION
The financial statements of each of the Group\u2019s entities are generally measured using the currency of the economic area in which the entity operates (\u201cthe functional currency\u201d). The consolidated financial statements are presented in Norwegian Kroner (NOK), which is the parent company\u2019s functional and presentation currency.
TRANSACTIONS AND BALANCE SHEET ITEMS
Foreign currency transactions are translated into the functional currency using the exchange rates in force at the transaction date. Foreign exchange gains or losses resulting from the settlement of such transactions, are recognized in profit or loss. Translation differences on monetary items (assets and liabilities) that are not denominated in the entity\u00b4s functional currency are also recognized through profit or loss.
GROUP COMPANIES
The income statements and statements of financial positions of the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
\u2022The statement of financial position is translated using the closing rate at the end of the period.
\u2022Income and expense items are translated at average exchange rates for the period (if the average is not a reasonable estimate of the cumulative effects of using the transaction rate, the transaction rate is used).
\u2022Translation differences are recognized in other comprehensive income and specified separately.
When a foreign operation is sold, the exchange difference, which in previous periods was recognized in other comprehensive income, is not accrued. The accumulated exchange difference on the sale of the foreign operation is hence reversed in other comprehensive income. Gains or losses on the sale are recognized on a basis of zero exchange difference in the net profit on ordinary activities.
Goodwill and fair value adjustments of assets and liabilities on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated using the closing currency rate at the balance sheet date.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the asset.
Improvements are recognized in the asset\u2019s carrying amount or as a separate asset when it is probable that future economic benefits associated with the improvement will flow to the Group and the cost of the item can be reliably measured. All other repairs and maintenance are recognized in the income statement during the financial period in which the costs are incurred.
Land and buildings mainly comprise freshwater facilities, harvesting plants and offices. Land is not depreciated. Other operating assets are depreciated in accordance with the straight-line method so that the cost, or remeasured value, is written down to residual value over its expected useful economic life as follows:
\u2022Buildings/real estate 10\u201350 years
\u2022Plants, barges, onshore power supply 5\u201330 years
\u2022Nets/cages/moorings 5\u201325 years
\u2022Other equipment 3\u201335 years
The assets\u2019 useful lives and residual values are estimated at each balance sheet date and adjusted if necessary. In 2022 there has not been any changes to the estimated useful life of the Group\u2019s property, plant and equipment as a consequence of climate-related risk.
Land and buildings mainly comprise freshwater facilities, harvesting plants and offices. Land is not depreciated. Other operating assets are depreciated in accordance with the straight-line method so that the cost, or remeasured value, is written down to residual value over its expected useful economic life as follows:
\u2022Buildings/real estate 10\u201350 years
\u2022Plants, barges, onshore power supply 5\u201330 years
\u2022Nets/cages/moorings 5\u201325 years
\u2022Other equipment 3\u201335 years
The assets\u2019 useful lives and residual values are estimated at each balance sheet date and adjusted if necessary. In 2022 there has not been any changes to the estimated useful life of the Group\u2019s property, plant and equipment as a consequence of climate-related risk.
INTANGIBLE ASSETS
Intangible assets that arise internally within the Group are not recognized.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill on acquisitions of subsidiaries is classified as an intangible asset. Goodwill on the purchase of a share in an associate is included in \u201cinvestments in associates\u201d. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
For the purpose of impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
LICENSES
Fish-farming licenses with an indefinite useful life are not amortized but reviewed for impairment annually, or more frequently if there are indications that the carrying value may have decreased.
The Group considers the following licenses to have indefinite useful lives:
\u2022Licenses granted with an indefinite useful life, where the company has no other contractual restrictions relating to the use of the license.
\u2022Licenses granted with a finite useful life, but where the license holders can renew the licenses without incurring considerable expenses.
Licenses with a finite useful life are amortized over their useful lives, and tested for impairment if there are indications that future earnings do not justify the asset\u2019s carrying value. Such licenses relate to water licenses for hatcheries and some specific seawater licenses. The following sections provide a description of licenses in Norway and Canada. See Note 10 Intangible assets for an overview of the licenses.
Norway
The licensing regime for the production of salmon in Norway is enacted by the Norwegian Parliament through the Aquaculture Act. The Ministry of Trade, Industry and Fisheries grants permits for aquaculture (licenses). All aquaculture operations are subject to licensing, and no one can produce salmon without permission from the authorities, see Section 4 of the Aquaculture Act.
The aquaculture permit allows the production of salmon in limited geographic areas within the current determined limitations of the permit scope. The Aquaculture Act is administered centrally by the Ministry of Trade, Industry and Fisheries, with the Directorate of Fisheries as the supervisory authority. Regionally, several industry authorities jointly manage full administrative and supervisory responsibility within the regulating range of the Aquaculture Act. The county council is the regional administrative body, while the Directorate of Fisheries serves as appellate body in locality and licensing matters.
Seawater licenses
Each license for the farming of salmon in the sea is subject to a production limit in the form of \u201cmaximum allowed biomass\u201d (MAB)\u00a0 on both company and location/seawater site level. The system means the license holder can at no time have a standing biomass (number of kg of live fish in seawater) that exceeds the company level MAB, in addition that no location can have a standing biomass that exceeds the seawater site\u2019s MAB. When a seawater site is approved, a maximum level of tonnes of fish is set, based on the location and environmental conditions on the site. The normal size of a permit is 780 tonnes at the license level ex. the county of Troms and Finnmark, while the normal size of a permit in Troms and Finnmark is 945 tonnes. While the extent of biomass a company can possess primarily depends on the type and number of licenses, the limitation at site level is primarily dependent on the site\u2019s environmental sustainability. See Section 15 of the Salmon Allocation Regulation (\u201cLaksetildelingsforskriften\u201d).
Norway also has green licenses, with stricter environmental criteria. The sea lice limit is half that of regular licenses, with stricter criteria for escape prevention technologies and limits on the amount of medical treatment permitted per generation.
Hatchery licenses
Young salmon are defined as eggs, juveniles, parr or smolt to be released at another location, see Section 4(f) of the Salmon Allocation Regulation. Such licenses are not limited and thus subject to continuous application for new licenses or changes to existing licenses. Pursuant to the regulations, annual production is limited to 15 million fish.
\u00a0
Broodstock and R&D licenses
These licenses are not limited in number. The purpose of broodstock licenses is to produce roe and milt from salmon with improved and/or specific traits. Broodstock licenses include both a land and sea phase, i.e. broodfish and egg production are covered by the same licensing process. The purpose of an R&D license is to encourage important research projects that can bring the Norwegian aquaculture industry forward. Permits are means tested, meaning that the applicant must demonstrate a need for the production of eggs, specific research projects or for educational purposes.
Educational licenses
Educational licenses in Norway are given to universities, colleges or high schools offering aquaculture-related courses of study. Salmon farming companies can lease educational licenses from the educational institution. Part of the students\u2019 training will then take place at these salmon farms.
Harvesting pen licenses
Licenses utilized for holding pens where live fish are kept prior to harvesting. These relate to specific locations.
Duration and renewal
The Ministry may in individual decisions or regulations specify further provisions on the content of aquaculture licenses, including matters relating to scope and time limitations, see Section 5(2) of the Aquaculture Act. Nonetheless, the preparatory work for the Aquaculture Act specifies that licenses are normally granted without a time limit.
Grieg Seafood\u2019s general fish farming and hatchery licenses are not time-limited under current regulations. After the reform in 2009, a number of licenses were time-limited, mainly for 15 years. As no government practices have been established relating to the renewal of broodstock licenses, the current understanding is that they will be renewed upon application. Expiration of licenses allows for application for renewal on demand. A license for harvesting pens is valid for ten years and must be renewed on expiration, provided that the license is still connected to an approved harvesting facility.
Disposal and withdrawal
All licenses can be transferred and mortgaged in accordance with Section 19 of the Aquaculture Act. Transfers and mortgages must be recorded in a separate register (the Aquaculture Register). It is not permitted to rent out licenses or license capacity.
Section 9 of the Aquaculture Act sets out the basis for withdrawal of an aquaculture license. This states that there must be significant breaches of the terms of an aquaculture license before it can be revoked.
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and east coasts of Vancouver Island. To operate farms in British Columbia, Canada, the following three licenses must be in place:
1.Aquaculture license \u2013 issued by the Department of Fisheries and Oceans and the First Nations.
2.License of Occupation (Tenures) \u2013 issued by the Ministry of Forest, Lands and Natural Resource Operations.
3.Navigation Water Permit \u2013 issued by Transport Canada (Canadian public authority).
For restrictions regarding production quantity, see table in Note 10.
Duration and renewal
1.Aquaculture license \u2013 duration of one year, renewal each year is a formality.
2.License of Occupation \u2013 duration of 2\u201320 years. Renewal is applied for on expiration.
3.Navigation Water Permit \u2013 duration of five years, but possible to apply for renewal.
New renewal process in Canada West
In British Columbia, licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, were the next renewal should have been in June 2022. This has been put on hold because of the current Canadian federal Government has in its mandate letter to the Minister of Fisheries, Ocean and Canadian Coast Guard stated that a transition plan should be developed by 2025 in collaboration with Indigenous communities and the BC Province, outlining how the industry will transition from open-net pen in coastal BC. See Note 4 for more information.
Newfoundland
Grieg Seafood Newfoundland has exclusive farming rights to Placentia Bay. To operate aquaculture sites in Newfoundland, Canada, the following approvals and licenses must be in place:
\u2022Aquaculture License \u2013 issued by the Department of Fisheries Forestry and Agriculture
\u2022Lease License for Occupancy \u2013 issued by Crown Lands division of Department of Fisheries Forestry and Agriculture
\u2022Canadian Navigable Waters Act - issued by Transport Canada
\u2022Water Use Approval \u2013 issued by Department of Environment, Climate Change, and Municipalities
Duration and renewal
Aquaculture licenses are granted for a six-year term. Each year, licensees must complete the validation process and abide by the legislative references: Aquaculture Act and the Policy cross references as Aquaculture License Renewal AP 6, Annual reporting AP 7 and site utilization. For renewal,\u00a0 licensees are required to follow and comply with the requirements set out in AP 6 License Renewal. Licensees must abide by license conditions, policies, and regulations at all times. Licenses may be suspended or cancelled if a breach occurs, or they may not be renewed.
The timeline supports two production cycles and promotes longer-term investment and stability.\u00a0 Ensuring sites are being utilized and developed by\u00a0 license holders in accordance with approved plans on file with the department falls under AP 8 Site Utilization. If sites are not being utilized based on approved plans on file, they may not be renewed.
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses are recognized in the statement of financial position at cost and amortized over their estimated useful lives. Customer portfolios are recognized in the statement of financial position at cost on the date of purchase. Amortization is calculated using the straight-line method over the estimated useful life, as follows:
\u2022Computer software 3\u201310 years
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets with an indefinite useful life are not amortized but are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever there are indications that future earnings do not justify the carrying value.
An impairment loss is recognized for the amount by which the asset\u2019s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for indicators of possible reversal of the impairment at each reporting date.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill on acquisitions of subsidiaries is classified as an intangible asset. Goodwill on the purchase of a share in an associate is included in \u201cinvestments in associates\u201d. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
For the purpose of impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
LICENSES
Fish-farming licenses with an indefinite useful life are not amortized but reviewed for impairment annually, or more frequently if there are indications that the carrying value may have decreased.
The Group considers the following licenses to have indefinite useful lives:
\u2022Licenses granted with an indefinite useful life, where the company has no other contractual restrictions relating to the use of the license.
\u2022Licenses granted with a finite useful life, but where the license holders can renew the licenses without incurring considerable expenses.
Licenses with a finite useful life are amortized over their useful lives, and tested for impairment if there are indications that future earnings do not justify the asset\u2019s carrying value. Such licenses relate to water licenses for hatcheries and some specific seawater licenses. The following sections provide a description of licenses in Norway and Canada. See Note 10 Intangible assets for an overview of the licenses.
Norway
The licensing regime for the production of salmon in Norway is enacted by the Norwegian Parliament through the Aquaculture Act. The Ministry of Trade, Industry and Fisheries grants permits for aquaculture (licenses). All aquaculture operations are subject to licensing, and no one can produce salmon without permission from the authorities, see Section 4 of the Aquaculture Act.
The aquaculture permit allows the production of salmon in limited geographic areas within the current determined limitations of the permit scope. The Aquaculture Act is administered centrally by the Ministry of Trade, Industry and Fisheries, with the Directorate of Fisheries as the supervisory authority. Regionally, several industry authorities jointly manage full administrative and supervisory responsibility within the regulating range of the Aquaculture Act. The county council is the regional administrative body, while the Directorate of Fisheries serves as appellate body in locality and licensing matters.
Seawater licenses
Each license for the farming of salmon in the sea is subject to a production limit in the form of \u201cmaximum allowed biomass\u201d (MAB)\u00a0 on both company and location/seawater site level. The system means the license holder can at no time have a standing biomass (number of kg of live fish in seawater) that exceeds the company level MAB, in addition that no location can have a standing biomass that exceeds the seawater site\u2019s MAB. When a seawater site is approved, a maximum level of tonnes of fish is set, based on the location and environmental conditions on the site. The normal size of a permit is 780 tonnes at the license level ex. the county of Troms and Finnmark, while the normal size of a permit in Troms and Finnmark is 945 tonnes. While the extent of biomass a company can possess primarily depends on the type and number of licenses, the limitation at site level is primarily dependent on the site\u2019s environmental sustainability. See Section 15 of the Salmon Allocation Regulation (\u201cLaksetildelingsforskriften\u201d).
Norway also has green licenses, with stricter environmental criteria. The sea lice limit is half that of regular licenses, with stricter criteria for escape prevention technologies and limits on the amount of medical treatment permitted per generation.
Hatchery licenses
Young salmon are defined as eggs, juveniles, parr or smolt to be released at another location, see Section 4(f) of the Salmon Allocation Regulation. Such licenses are not limited and thus subject to continuous application for new licenses or changes to existing licenses. Pursuant to the regulations, annual production is limited to 15 million fish.
\u00a0
Broodstock and R&D licenses
These licenses are not limited in number. The purpose of broodstock licenses is to produce roe and milt from salmon with improved and/or specific traits. Broodstock licenses include both a land and sea phase, i.e. broodfish and egg production are covered by the same licensing process. The purpose of an R&D license is to encourage important research projects that can bring the Norwegian aquaculture industry forward. Permits are means tested, meaning that the applicant must demonstrate a need for the production of eggs, specific research projects or for educational purposes.
Educational licenses
Educational licenses in Norway are given to universities, colleges or high schools offering aquaculture-related courses of study. Salmon farming companies can lease educational licenses from the educational institution. Part of the students\u2019 training will then take place at these salmon farms.
Harvesting pen licenses
Licenses utilized for holding pens where live fish are kept prior to harvesting. These relate to specific locations.
Duration and renewal
The Ministry may in individual decisions or regulations specify further provisions on the content of aquaculture licenses, including matters relating to scope and time limitations, see Section 5(2) of the Aquaculture Act. Nonetheless, the preparatory work for the Aquaculture Act specifies that licenses are normally granted without a time limit.
Grieg Seafood\u2019s general fish farming and hatchery licenses are not time-limited under current regulations. After the reform in 2009, a number of licenses were time-limited, mainly for 15 years. As no government practices have been established relating to the renewal of broodstock licenses, the current understanding is that they will be renewed upon application. Expiration of licenses allows for application for renewal on demand. A license for harvesting pens is valid for ten years and must be renewed on expiration, provided that the license is still connected to an approved harvesting facility.
Disposal and withdrawal
All licenses can be transferred and mortgaged in accordance with Section 19 of the Aquaculture Act. Transfers and mortgages must be recorded in a separate register (the Aquaculture Register). It is not permitted to rent out licenses or license capacity.
Section 9 of the Aquaculture Act sets out the basis for withdrawal of an aquaculture license. This states that there must be significant breaches of the terms of an aquaculture license before it can be revoked.
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and east coasts of Vancouver Island. To operate farms in British Columbia, Canada, the following three licenses must be in place:
1.Aquaculture license \u2013 issued by the Department of Fisheries and Oceans and the First Nations.
2.License of Occupation (Tenures) \u2013 issued by the Ministry of Forest, Lands and Natural Resource Operations.
3.Navigation Water Permit \u2013 issued by Transport Canada (Canadian public authority).
For restrictions regarding production quantity, see table in Note 10.
Duration and renewal
1.Aquaculture license \u2013 duration of one year, renewal each year is a formality.
2.License of Occupation \u2013 duration of 2\u201320 years. Renewal is applied for on expiration.
3.Navigation Water Permit \u2013 duration of five years, but possible to apply for renewal.
New renewal process in Canada West
In British Columbia, licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, were the next renewal should have been in June 2022. This has been put on hold because of the current Canadian federal Government has in its mandate letter to the Minister of Fisheries, Ocean and Canadian Coast Guard stated that a transition plan should be developed by 2025 in collaboration with Indigenous communities and the BC Province, outlining how the industry will transition from open-net pen in coastal BC. See Note 4 for more information.
Newfoundland
Grieg Seafood Newfoundland has exclusive farming rights to Placentia Bay. To operate aquaculture sites in Newfoundland, Canada, the following approvals and licenses must be in place:
\u2022Aquaculture License \u2013 issued by the Department of Fisheries Forestry and Agriculture
\u2022Lease License for Occupancy \u2013 issued by Crown Lands division of Department of Fisheries Forestry and Agriculture
\u2022Canadian Navigable Waters Act - issued by Transport Canada
\u2022Water Use Approval \u2013 issued by Department of Environment, Climate Change, and Municipalities
Duration and renewal
Aquaculture licenses are granted for a six-year term. Each year, licensees must complete the validation process and abide by the legislative references: Aquaculture Act and the Policy cross references as Aquaculture License Renewal AP 6, Annual reporting AP 7 and site utilization. For renewal,\u00a0 licensees are required to follow and comply with the requirements set out in AP 6 License Renewal. Licensees must abide by license conditions, policies, and regulations at all times. Licenses may be suspended or cancelled if a breach occurs, or they may not be renewed.
The timeline supports two production cycles and promotes longer-term investment and stability.\u00a0 Ensuring sites are being utilized and developed by\u00a0 license holders in accordance with approved plans on file with the department falls under AP 8 Site Utilization. If sites are not being utilized based on approved plans on file, they may not be renewed.
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses are recognized in the statement of financial position at cost and amortized over their estimated useful lives. Customer portfolios are recognized in the statement of financial position at cost on the date of purchase. Amortization is calculated using the straight-line method over the estimated useful life, as follows:
\u2022Computer software 3\u201310 years
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets with an indefinite useful life are not amortized but are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever there are indications that future earnings do not justify the carrying value.
An impairment loss is recognized for the amount by which the asset\u2019s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for indicators of possible reversal of the impairment at each reporting date.
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. The classification is performed in accordance with the substance of the contractual arrangement, and in line with the definitions of a financial asset, a financial liability and an equity instrument.
Ordinary purchases and sales of investments are recognized on the trade-date, the date on which the Group commits to purchase or sell the asset. All financial assets that are not stated at fair value through profit or loss are initially recognized at fair value plus transaction costs.
FAIR VALUE HIERARCHY
The following of the Group\u2019s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. See Note 3 for information on valuation techniques.
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments:
\u2022Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
\u2022Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
\u2022Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the 2022 reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
FINANCIAL ASSETS
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. The Group has financial assets classified as follows:
\u2022Financial assets at amortized cost (debt instruments)
\u2022Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
\u2022Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group's financial assets at amortized cost includes trade receivables and other short-term deposit. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from Contracts with Customers.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognized in the income statement.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis. The category also include the Group\u2019s investments in debt instruments and money market funds.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
a.The rights to receive cash flows from the asset have expired, or
b.The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u201cpass-through\u201d arrangement; and either
i.the Group has transferred substantially all the risks and rewards of the asset, or
ii.the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
See the \u201cTrade receivable\u201d section in this note for specific accounting principles on expected credit loss on trade receivables.
FINANCIAL LIABILITIES
Financial liabilities are classified, at initial recognition, as amortized cost (loans and borrowings), or as financial liabilities at fair value through profit or loss.
Financial liabilities at amortized cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial derivative contracts. Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the income statement.
HEDGING
Hedge accounting
The Group do not utilize the hedge accounting principles of IFRS 9.
Non-hedge accounting
The Group engage in short-term derivative contracts to hedge currency- and interest risk. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses.
FISH POOL SALE AND PURCHASE AGREEMENTS
For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively.
FAIR VALUE HIERARCHY
The following of the Group\u2019s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. See Note 3 for information on valuation techniques.
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments:
\u2022Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
\u2022Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
\u2022Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the 2022 reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
FAIR VALUE HIERARCHY
The following of the Group\u2019s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. See Note 3 for information on valuation techniques.
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments:
\u2022Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
\u2022Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
\u2022Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the 2022 reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
FINANCIAL ASSETS
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. The Group has financial assets classified as follows:
\u2022Financial assets at amortized cost (debt instruments)
\u2022Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
\u2022Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group's financial assets at amortized cost includes trade receivables and other short-term deposit. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from Contracts with Customers.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognized in the income statement.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis. The category also include the Group\u2019s investments in debt instruments and money market funds.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
a.The rights to receive cash flows from the asset have expired, or
b.The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u201cpass-through\u201d arrangement; and either
i.the Group has transferred substantially all the risks and rewards of the asset, or
ii.the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
See the \u201cTrade receivable\u201d section in this note for specific accounting principles on expected credit loss on trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognized in the income statement.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis. The category also include the Group\u2019s investments in debt instruments and money market funds.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial derivative contracts. Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
a.The rights to receive cash flows from the asset have expired, or
b.The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u201cpass-through\u201d arrangement; and either
i.the Group has transferred substantially all the risks and rewards of the asset, or
ii.the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the income statement.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
See the \u201cTrade receivable\u201d section in this note for specific accounting principles on expected credit loss on trade receivables.
FINANCIAL LIABILITIES
Financial liabilities are classified, at initial recognition, as amortized cost (loans and borrowings), or as financial liabilities at fair value through profit or loss.
Financial liabilities at amortized cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial derivative contracts. Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and are subsequently stated at fair value on an ongoing basis.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the income statement.
HEDGING
Hedge accounting
The Group do not utilize the hedge accounting principles of IFRS 9.
Non-hedge accounting
The Group engage in short-term derivative contracts to hedge currency- and interest risk. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses.
FISH POOL SALE AND PURCHASE AGREEMENTS
For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively.
HEDGING
Hedge accounting
The Group do not utilize the hedge accounting principles of IFRS 9.
Non-hedge accounting
The Group engage in short-term derivative contracts to hedge currency- and interest risk. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses.
FISH POOL SALE AND PURCHASE AGREEMENTS
For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively.
INVENTORIES
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The net realizable value is the estimated sales price less the estimated costs of completion and sale.
BIOLOGICAL ASSETS
The accounting treatment of live fish by enterprises applying IFRS is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy of methods for the measurement of biological assets at level 3. The basic principle is that such assets shall be measured at fair value less costs to sell. Fair value is defined in IFRS 13 as \u201cthe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date\u201d. According to IFRS 13, the highest and best use of the biological asset establishes the valuation premise.
Biological assets comprise of smolt and fish in the sea. The fish are divided into two main groups, depending on the stage of the life cycle. At the earliest stage of the life cycle, the fish are classified in group 1) roe, fry and smolt. Group 1 biological assets is disclosed as \u201cbiological assets on land\u201d in Note 9.
When the fish are large enough to be transferred to the sea, they are classified in group 2) biomass in sea. The group 2 biological assets classification is further decomposed in Note 9 as \u201cimmature fish in sea, round weight < 4.60 kg\u201d and \u201cmature fish in sea, round weight >\u00a04.60 kg\u201d.
\u2022Fish onshore (smolt) are recognized at accumulated cost. The best estimate of fair value is the accumulated cost because of very little biological transformation. This assessment must be seen in the light of the fact that smolt are currently transferred to the sea at a stage when their weight is still relatively low.
\u2022For fish in sea, the fair value is calculated by applying a cash-flow based present value model.
The fair value of fish in the sea is estimated for each location.
In accordance with the principle relating to highest and best use, Grieg Seafood considers that the fish have optimal harvest weight when they have a live round weight of 4.60 kg, which corresponds to 4.00 kg gutted weight. Fish with a live round weight of 4.60 kg or more are classified as ready for harvest (mature fish), while fish that have still not achieved this weight are classified as not ready for harvest (immature fish).
The cash-flow based present value model does not rely on historical and company specific factors. In a hypothetical market with perfect competition, a hypothetical buyer of live fish would maximum be willing to pay the present value of the estimated future profit from the sale of the fish when it is ready for harvest. The estimated future profit, considering all price adjustments
and payable fees for completion, constitutes the cash flow. No deductions are made for sales expenses, as these are not observable in the market. Such expenses are also deemed immaterial.
Incoming cash flow is calculated as a function of estimated volume multiplied by estimated price. For fish not ready for harvest, a deduction is made to cover estimated residual costs to grow the fish to harvestable weight. The cash flow is discounted monthly by a discount rate. The discount rate comprises three main components: 1) the risk of incidents that influence cash flow, 2) hypothetical license lease and 3) the time value of money. See Note 4 on significant accounting estimates for more information.
When estimating the actual accumulated cost at the respective seawater facility, direct costs (fish feed and similar) are allocated to each group of fish transferred to the sea at the same location. Financial costs are not included in the costs of production.
The sales price for fish in the sea is based on the forward price from Fish Pool. Fish Pool is a marketplace for financial purchase and sale agreements for superior Norwegian Salmon size 3-6 kg head-on gutted weight. The volume on Fish Pool is limited, but Grieg Seafood\u2019s opinion is that the observable forward prices must be seen as the best approach to a price for the sale of salmon. Regarding foreign countries, the most relevant price information available for the expected harvesting period is applied. For fish in the sea, the forward price in Norway is adjusted for historical differences in achieved prices between Norway and Canada. The price/net sales value is adjusted for quality differences (superior, ordinary and production grade), and for logistics expenses and sales commissions. Estimated harvesting expenses are deducted.
The volume (biomass) is based on the actual number of individuals in the sea at the balance sheet date, adjusted to cover estimated mortality up to harvest date and multiplied by the estimated harvest weight per individual at the time of harvest. The fair value estimate for the fish in sea figure is adjusted for gutting waste, as the price is measured for gutted weight. Budgeted harvesting and freight costs are applied. Foreign currency forward contracts associated with the date of harvesting are applied when translating the price to CAD.
The change in the fair value of biological assets is recognized in the income statement as \u201cfair value adjustment of biological assets\u201d.
Onerous contracts are contracts where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. The Group enters from time to time into contracts for future deliveries of salmon. As biological assets are recognized at fair value, the fair value adjustments of the biological assets will be included in the
estimated expenses required to fulfil the contract. This implies that the Group may experience loss-making (onerous) contracts according to IAS 37 even if the contract price for physical delivery contracts is higher than the actual production cost for the products. If that occurs, a provision is made for the estimated negative value.
Changes arising from physical delivery contracts are recognized as \u201cfair value adjustment of biological assets\u201d. The liability in the statement of financial position is recognized as other current liabilities.
Fish farming naturally comes with a certain level of loss of fish along the production cycle, and our budgets are typically produced with an inherent assumption of a 0.5-1% monthly mortality. The losses associated with normal levels of survival are not directly recognized in the income statement. In periods where specific abnormal incidents lead to reduced survival, we immediately recognize write-downs of the biomass inventory to better reflect the actual biomass in the sea or on land. The write-down costs are recorded in the income statement as they arise, included in the financial statement line item \u201craw materials and consumables used\u201d.
TRADE RECEIVABLES
Trade receivables arising from the trading of goods or services within the ordinary operating cycle and under normal terms of payment are initially recognized at nominal value. Trade receivables with longer terms of payment are discounted to present value and represents the Group\u2019s unconditional right to consideration from the customer.
EXPECTED CREDIT LOSS (ECL) ON TRADE RECEIVABLES
For trade receivables, the Group applies a simplified approach in calculating ECLs. For receivables where the credit risk has increased substantially after establishment, a write-down shall be made for the expected credit loss over the maturity of the receivables. The model for calculating loss allowance classifies the trade receivables into two groups: normal risk and high-risk, based on their country of origin. Furthermore, the trade receivables are classified as credit-insured receivable or not. The provision is the difference between nominal and recoverable amount, which is the present value of estimated future cash flows, discounted at the original effective interest rate. Loss allowance is recognized as \u201cother operating expenses\u201d in the income statement.
FACTORING AGREEMENTS
The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Receivables purchased by the factoring company are derecognized from the statement of financial position. See the section \u201cDerecognition of financial assets\u201c in this note for the related accounting principle.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, bank deposits and other short-term highly liquid investments with original maturities of three months or less. The overdraft facility is included in current borrowings in the statement of financial position.
SHARE CAPITAL
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options, net of tax, are shown in equity as a deduction, net of tax, from the proceeds.
BORROWINGS
Borrowings are initially recognized at fair value when the funds are received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost applying the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
INCOME TAX EXPENSE AND DEFERRED TAX
Income tax expense consists of the tax payable and changes to deferred tax.
Deferred tax is provided for in full at nominal value, using the liability method, on temporary differences arising between the value of assets and liabilities for tax and accounting purposes. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply when the related deferred tax asset is realized, or the deferred income liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available, from which the temporary differences can be deducted. Deferred tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions.
Income tax expense consists of the tax payable and changes to deferred tax.
Deferred tax is provided for in full at nominal value, using the liability method, on temporary differences arising between the value of assets and liabilities for tax and accounting purposes. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply when the related deferred tax asset is realized, or the deferred income liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available, from which the temporary differences can be deducted. Deferred tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions.
EMPLOYEE BENEFITS
PENSION OBLIGATIONS
The Company pays premiums to local, defined-contribution schemes for all employees. The Company's Norwegian pension schemes meet the requirements of the Norwegian Mandatory Occupational Pension Act. Pension premiums are recognized in the income statement through operations on an ongoing basis. Employer\u2019s social security contributions are expensed based on paid pension premiums. The Group companies Grieg
Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). The financial commitments associated with this scheme are included in the Group\u2019s pension expenses. The AFP early retirement scheme follows the rules for public sector AFP, and both companies are members of the Norwegian Confederation of Trade Unions (LO)/the Confederation of Norwegian Enterprise (NHO) scheme. The pension payment calculations are based on standard assumptions relating to the development of mortality and disability as well as other factors such as age, years of service and remuneration. Pension premiums are recognized in the income statement through operations as they arise.
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration scheme with settlement in cash. Under the scheme, individual employees may buy shares proportionate to their annual salary. The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be charged over the vesting period is calculated based on the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the company revises its estimates of the number of options that are expected to be vested and recognizes the impact of the revision relative to original estimates, if any, in the income statement. The Black and Scholes option pricing model is used for valuation. The company\u00b4s obligations are recognized under non-current liabilities if the latest possible redemption date is more than one year into the future.
SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its employees in 2018 and it was continued throughout 2022. It is the Board's intention that the plan shall be a continuing part of the company's employee incentive scheme. The Board shall, however, have the right to decide, at its sole discretion, whether the plan will be extended in the future, and the terms of the plan.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
PROFIT-SHARING AND BONUS SCHEMES
The Group recognizes a provision where it has a contractual obligation or where there is a past practice that has created a constructive obligation.
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration scheme with settlement in cash. Under the scheme, individual employees may buy shares proportionate to their annual salary. The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be charged over the vesting period is calculated based on the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the company revises its estimates of the number of options that are expected to be vested and recognizes the impact of the revision relative to original estimates, if any, in the income statement. The Black and Scholes option pricing model is used for valuation. The company\u00b4s obligations are recognized under non-current liabilities if the latest possible redemption date is more than one year into the future.
SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its employees in 2018 and it was continued throughout 2022. It is the Board's intention that the plan shall be a continuing part of the company's employee incentive scheme. The Board shall, however, have the right to decide, at its sole discretion, whether the plan will be extended in the future, and the terms of the plan.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
PROVISIONS
Provisions (e.g. environmental improvements, restructuring costs and legal claims) are recognized when:
\u2022the Group has a present legal or constructive obligation as a result of past events;
\u2022it is more likely than not that an outflow of resources will be required to settle the obligation;
\u2022the amount of the obligation can be reliably estimated.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured as the present value of the expenditures expected to be required to settle the obligation, using a pre-tax discount rate that reflects the current market situation and the risks specific to the obligation. The increase in the provision due to the change in value because of the passage of time is recognized as a financial expense.
REVENUE RECOGNITION
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group\u2019s revenue derives primarily from the sale of whole and processed fish. Sales contracts cover both spot sales and fixed-price deliveries. Revenue from the sale of salmon is generally recognized upon delivery, as the Group considers delivery as the point in time when control of the goods/service is transferred to the customer. Each sales contract \u2013 either for a spot sale or a fixed delivery \u2013 is considered as one performance obligation. Each week, the sale of fish is settled with the customer. The fixed-price delivery contracts that are entered into with customers, specify a per-week volume.
The sales price is determined upon contract settlement and is based on available market price (for example Nasdaq prices including transport and margin, and the price is per kilogram). The price varies according to the quality of the salmon and its size, and the fish is mainly sold Delivery Duty Paid (DDP) to the customer. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. That also applies to the fulfillment of physical delivery contracts.
The normal credit term of the Group\u2019s sales transactions is 30 days. Based on the nature of the sale of fresh and frozen fish, the Group generally has no material contract liabilities. The Group does not generally engage in customer contracts where fulfillment of the performance obligation lies more than one year in the future. Therefore, the Group does not disclose further information on contract liabilities and related performance obligations.
Cash refunds are given to the customer if the sold product is delivered with discrepancies compared to the agreed sales contract, or if the product is damaged. Generally, refunds are not material.
Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating intragroup sales.
OTHER REVENUE STREAMS
In addition to the sale of fresh and frozen salmon, the Group also sells roe, smolt and ensilage. Harvesting (processing) for external companies are performed if overcapacity on our own harvesting plants. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood.
GOVERNMENT GRANTS
Government grants are recognized when it is reasonably certain that the company will meet the conditions stipulated for the grants and that the grants will be received. Operating grants are recognized systematically during the grant period. Grants are deducted from the cost which the grant is meant to cover. Investment grants are capitalized and recognized systematically over the asset\u2019s useful life. Investment grants are recognized either as deferred income or as a deduction of the asset\u2019s carrying amount.
LEASES
IDENTIFYING A LEASE
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
RECOGNITION OF LEASES AND EXEMPTIONS
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for short-term leases (defined as 12 months or less) and lease agreements where the leased asset is of low value.
Lease liabilities
The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option.
The lease payments included in the measurement comprise:
\u2022Fixed lease payments (including in-kind fixed payments), less any lease incentives receivable
\u2022Variable lease payments that depend on an index or a rate, initially measured using the index or rate in effect on the commencement date
Lease payments generally also include any exercise price of a purchase option/payments of penalties for terminating a lease, provided that the Group is reasonably certain to exercise such an option.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The Group presents its lease liability separately from other liabilities in the statement of financial position.
Right-of-use assets
The Group measures the right-of-use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprises:
\u2022The amount of the initial measurement of the lease liability recognized,
\u2022Any lease payments made at or before the commencement date, less any incentives received, and
\u2022Any initial direct costs incurred by the Group.
The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment when depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
THE GROUP AS A LESSEE
The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions, for leases that would be classified as finance leases according to IFRS in force prior to 1 January 2019, as well as capitalized leases due to the effect of IFRS 16. Well-boats and workboats charted in time charters with a duration of more than one year contributes significantly to the effect of IFRS 16.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. The leases are recognized in the respective Group companies in local currencies, and translated to the Group\u2019s presentation currency at the balance sheet date.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The Group reassesses the incremental borrowing rates applicable for new lease agreements annually. The applied incremental borrowing rates for new leases as from 2022 ranged from 4.7% - 4.8% for buildings and properties, and 3.9% - 4.2% for other assets. The applied rates for new leases as from 2021 ranged from 3.9% - 4.2% for buildings and properties, and 3.6% - 3.7% for other assets.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset\u2019s useful life.
The Group leases smaller office equipment, such as coffee machines with contract terms of 1-3 years. The Group has elected to apply the practical expedient of low-value assets for some of these leases. Leases that have a present value as new lower than USD 5 000, are considered low value leases. The Group has also applied the practical expedient for short-term leases. Short term is defined as a lease term of 12 month or less at the commencement date. For low-value leases and short-term leases, the Group does not recognize lease liabilities or right-of-use assets. These leases are recognized as operating expenses over the life of the contract.
Some of the Group's agreements have extension options which may by exercised during the last period of the lease term. The Group assesses at the commencement whether it is reasonably certain to exercise the renewal right. The Group's potential future lease payments not included in the lease liabilities related to extension options is NOK 267 million (NOK 134 million at 31 December 2021).
DIVIDENDS
Dividends payable to the company\u2019s shareholders are recognized as a liability in the Group\u2019s financial statements when the dividends are approved by the AGM.
BORROWING COSTS
Borrowing costs incurred during the construction of operating assets are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed in the income statement.
CASH FLOW STATEMENT
The Group\u2019s cash flow statement shows the overall cash flow broken down into operating, investing and financing activities using the indirect method. The cash flow statement illustrates the effect of the various activities on cash and cash equivalents.
The Group has prepared an overview of cash and non-cash changes in the Group\u2019s liabilities, which is included in Note 12.
Changes in financial assets are disclosed if cash flows have been, or will be, included in the cash flow from financing activities. This may be the case, for instance, for assets pledged as security for financial liabilities.
EARNINGS PER SHARE
Earnings per share are calculated by allocating the profit for the year to the Company\u2019s shareholders based on a weighted average of the number of issued ordinary shares during the year. Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
CAPITAL MANAGEMENT
The Group aims to ensure sufficient access to capital to enable the business to develop in accordance with adopted strategies, and thus continue to be one of the leading players in the sector. Historically, the industry has always been vulnerable to price fluctuations in the market. For this reason, accounting results may fluctuate considerably from year to year. Consequently, the Group strives to ensure that the business maintains an appropriate level of disposable liquidity.
Grieg Seafood aims to provide shareholders with a competitive return on invested capital through payment of dividends and share price increases. The Board of Directors maintains that, as an average over time, dividends should correspond to 30-40% of the Group\u2019s profit after tax, adjusted for the effect of the fair value of biological assets (limited to 50 % by Green Bond agreement). At the same time, the Group\u2019s net interest-bearing debt per kg harvested salmon should remain below NOK 30, but can be exceeded in periods of growth investments.\u00a0As at 31\u00a0December 2022, Grieg Seafood was in a solid financial position to execute strategic priorities and deliver shareholder return.
At 31 December 2022, the Group had net interest-bearing liabilities, including lease liabilities, of NOK 2 223 million, see Note 12. The Group\u2019s funding is primarily a green bond issue of NOK 1 500 million issued in 2020 (with NOK 1 424 million currently outstanding, as bonds have been repurchased throughout 2022), sustainability-linked bank loans and leasing liabilities. At year-end 2022, 75% (2021: 47%) of our gross interest-bearing liabilities derived from green or sustainability-linked financing. The level of liabilities and alternative forms of funding are subject to constant evaluation.
FINANCIAL RISK FACTORS
The Group is exposed to a number of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group\u2019s overall risk management program focuses on the volatility of the financial markets and seeks to minimize potential adverse effects on the Group\u2019s financial performance. The Group uses financial derivatives to reduce certain risks. As at 31 December 2022 (31 December 2021), the Group does not apply hedge accounting. The Group identifies, evaluates and hedges financial risks in close cooperation with the Group\u2019s operational units. The Board has established written principles for the management of foreign exchange risk, interest rate risk and use of the Group\u2019s financial instruments.
IBOR reform
The Group is exposed to the ongoing IBOR reform, as the Group has bank and bond loans, and engages in interest-rate swaps, which are exposed to the the relevant IBOR rate. The bank loans, which are denominated in NOK and EUR, carry an interest rate which is based on the 3M IBOR plus a margin set per interest period based on a margin ratchet. The 3M IBOR and the margin is fixed per interest period. The bond loan\u2019s interest rate, which is denominated in NOK, is 3M NIBOR plus a margin of 3.4 percentage points. 3M NIBOR is fixed per interest rate period.
The Group monitors the IBOR reform and its potential impacts on the Group. As at 31 December 2022, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed below, explicitly states the swaps exposed to NIBOR. At the very end of this Note, we have disclosed the maturity profile of the bank loans and bond loan. See also Note 12 for more information on our interest-bearing liabilities.
I) MARKET RISKS
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions, recognized assets, and liabilities and net investments in foreign operations. The Group enters into foreign currency forward contracts to manage this risk.
TRADE RECEIVABLES AND | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Trade receivables | 214\u00a0681 | 17\u00a0207 | 23\u00a0901 | 1\u00a0517 | 1\u00a0911 | \u2014 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 1\u00a0044 | 12\u00a0590 | 174 | 143\u00a0587 | \u2014 | 3\u00a0193 | 717\u00a0498 |
2021 | ||||||||
Trade receivables | 44\u00a0591 | 64\u00a0959 | 23\u00a0912 | \u2014 | 18\u00a0907 | -576 | \u2014 | 151\u00a0793 |
Trade payables | 391\u00a0599 | 2\u00a0298 | 9\u00a0608 | 15\u00a0494 | 101\u00a0844 | \u2014 | 2\u00a0353 | 523\u00a0196 |
NET INTEREST-BEARING LIABILITIES | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Cash and cash equivalents | 284\u00a0965 | 88\u00a0647 | 87\u00a0485 | 41\u00a0877 | 134\u00a0040 | 209 | 5\u00a0496 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Interest-bearing liabilities* | 2\u00a0678\u00a0379 | \u2014 | 755\u00a0679 | \u2014 | 452\u00a0331 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | -88\u00a0647 | 668\u00a0194 | -41\u00a0877 | 318\u00a0292 | -209 | -5\u00a0496 | 2\u00a0222\u00a0522 |
2021 | ||||||||
Cash and cash equivalents | -22\u00a0537 | 44\u00a0252 | 58\u00a0346 | 750\u00a0778 | 94\u00a0238 | 44 | 3\u00a0223 | 928\u00a0342 |
Loans to associated companies | 2\u00a0111 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2\u00a0111 |
Interest-bearing liabilities* | 2\u00a0893\u00a0312 | \u2014 | \u2014 | \u2014 | 327\u00a0662 | \u2014 | \u2014 | 3\u00a0220\u00a0974 |
Net interest-bearing liabilities | 2\u00a0913\u00a0737 | -44\u00a0252 | -58\u00a0346 | -750\u00a0778 | 233\u00a0424 | -44 | -3\u00a0223 | 2\u00a0290\u00a0520 |
*See Note 12 for more information on the Group\u2019s net interest-bearing liabilities.
The Group has a group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. Subsidiaries party to the agreement can utilize the group cash pool arrangement and overdraft individual bank accounts (currencies), provided that Group's total bank deposit is positive. Not all subsidiaries are part of the cash pool arrangement. The subsidiaries participating in the group account scheme are jointly and severally liable for the entire amount of the commitment under the scheme. Cash and cash equivalents include the currency exposure in the group account scheme. At 31 December 2022, the net amount of bank deposits in the group account scheme amounted to NOK 524 million (2021: NOK 787 million).
The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group\u2019s foreign operations was previously managed primarily through borrowings denominated in the relevant foreign currencies.
The base currency of the syndicated bank loan is split into NOK 750 million and EUR 75 million. Since a substantial portion of the Group's sales revenues are denominated in EUR, the EUR loan acts as a natural, economical hedge on foreign currency translation rate fluctuations.
In 2020, we issued our first green bond, worth a total of NOK 1 500 million, through two tap issues. Throughout 2022, the Group has repurchased NOK 77 million of the green bond. The outstanding amount of the bond loan was NOK 1\u00a0424 million at year-end 2022. The bond matures in 2025, and is denominated in NOK.
The holding companies in the Group extend current and non-current loans to the subsidiaries, denominated in these companies\u2019 functional currencies. The non-current loans, with some exceptions, are considered to be equity in these companies, as there is no planned repayment of the principal amount outstanding. The currency effect of loans is recognized under \"currency effect on loans to subsidiaries\" in the Other Comprehensive Income (OCI) statement. The numerical effects for 2022 and 2021 are presented in the table below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 | 2022 | 2021 |
Currency effect | 24\u00a0792 | 32\u00a0222 |
Tax effect (22%) | -5\u00a0454 | -7\u00a0089 |
Currency effect - recycled accumulated OCI related to sale of Shetland* | \u2014 | -103\u00a0223 |
Tax effect (22 %) - recycled accumulated OCI related to sale of Shetland* | \u2014 | 22\u00a0709 |
Net effect recognized in equity through OCI | 19\u00a0338 | -55\u00a0380 |
*See Note 6 for more information.
Sensitivity analysis
A depreciation (appreciation) of 10% in the rate of exchange between the NOK and the USD, CAD, GBP and EUR at the reporting date (all other factors remaining unchanged) would be expected to have the following effects on net interest-bearing liabilities (NOK 1 000). The numerical effects for net interest-bearing liabilities for year-end 2022 and 2021 are presented below.
SENSITIVITY NOK 1 000 | 10 % change in FX-rate | USD | EUR | GBP | CAD |
2022 | |||||
Assets | -/+ | -8\u00a0865 | -8\u00a0749 | -4\u00a0188 | -13\u00a0404 |
Liabilities | -/+ | \u2014 | -75\u00a0568 | \u2014 | -45\u00a0233 |
Net interest-bearing liabilities | -/+ | 8\u00a0865 | -66\u00a0819 | 4\u00a0188 | -31\u00a0829 |
2021 | |||||
Assets | -/+ | -4\u00a0425 | -5\u00a0835 | -75\u00a0078 | -9\u00a0424 |
Liabilities | -/+ | \u2014 | -42\u00a0452 | \u2014 | -32\u00a0766 |
Net interest-bearing liabilities | -/+ | 4\u00a0425 | -36\u00a0618 | 75\u00a0078 | -23\u00a0342 |
A depreciation of NOK versus USD/EUR/GBP/CAD will, in general, decrease the assets (which increases net interest-bearing liabilities), and decrease the liabilities, which reduces the net interest-bearing liabilities.
FORWARD CURRENCY CONTRACTS
The Group does not apply hedge accounting. Value changes in current forward contracts affect profit or loss, as these contracts are recognized at fair value through profit or loss, see accounting policies (Note 2).
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2022 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5180 | 01.01.2023 - 03.01.2023 | 29 |
USD | 3\u00a0518 | NOK | 37\u00a0091 | 10.5433 | 9.8573 | 03.01.2023 - 29.12.2023 | 2\u00a0721 |
USD | 415 | CAD | 561 | 1.3515 | 1.3538 | 06.01.2023 - 03.02.2023 | -9 |
Total | 2\u00a0741 |
*Maturity specified as an interval for multiple contracts
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2021 |
EUR | 6\u00a0408 | NOK | 63\u00a0597 | 9.9246 | 9.9888 | 01.02.2022 - 31.12.2022 | -1\u00a0149 |
EUR | 1\u00a0000 | NOK | 10\u00a0031 | 1.2651 | 9.9888 | 01.01.2022 - 31.01.2022 | 42 |
USD | 7\u00a0771 | CAD | 9\u00a0921 | 1.2767 | 1.2692 | 01.01.2022 - 28.02.2022 | 404 |
Total | -704 |
*Maturity specified as an interval for multiple contracts
(ii) Interest rate risk
Since the Group has no significant interest-bearing assets apart from bank deposits and money market funds, its income and operating cash flows are largely independent of changes in market interest rates. The Group\u2019s interest rate risk arises from borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest rate exposure. The Group calculates the impact on profit or loss of a defined interest rate change. The same change in the interest rate is used for all currencies in each simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.
Sensitivity calculations show the following expected values: If the interest rate had been 1% lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 28.3 million in 2022 and NOK 38.5 million in 2021 due to the floating rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing liabilities from our bank loans (term loans in NOK and EUR, including revolving credit facility) and bond loan during 2022 and 2021, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN INTEREST RATE POINTS | 2022 | 2021 |
Effect on profit before income tax | -/+1% | +/- 28 257 | +/-38 545 |
The sensitivity table is for our bank and bond loans. A reduction in interest rates will increase profit before tax.
INTEREST RATE SWAP AGREEMENTS
The purpose of the Group\u2019s risk management activities is to establish an overview of the financial risk that exists at any given time and to provide more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to establish greater stability for the Group\u2019s loan-related, variable-rate interest expenses. The Group has decided that at any given time, a certain percentage of its variable interest-bearing liabilities should be hedged using interest rate swap agreements. The Group does not apply hedge accounting. A given proportion will always be at a floating rate, while the remainder will be subject to potential hedging. This situation is constantly reviewed in light of the market situation.
INTEREST RATE SWAP | PRINCIPAL | FIXED | BASIS OF | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | 2\u00a0670 | -590 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 5\u00a0018 | 874 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 7\u00a0627 | 2\u00a0628 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 9\u00a0963 | 5\u00a0561 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 9\u00a0961 | 5\u00a0524 |
Total | 35\u00a0238 | 13\u00a0997 |
Interest rate swap contracts assessed at market value, excluding accrued interest
CROSS CURRENCY INTEREST RATE SWAP | PRINCIPAL | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Cross-currency interest rate swap (NOK/EUR) | NOK 200 million / EUR 23 million | 25.06.2025 | \u2014 | 22\u00a0327 |
Interest rate option, floor | NOK 250 million | 25.06.2025 | \u2014 | 233 |
Total | \u2014 | 22\u00a0560 |
The cross currency interest-rate swap contract was settled in 2022, see Note 26.
(iii) Price risk
Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group uses financial contracts to hedge the sales price for the volume harvested by our two Norwegian regions, Rogaland and Finnmark. As at 31 December 2022, the estimated contract share for the Norwegian harvest volume is 15% for the full-year 2023. We target a contract share of 20-50% of our Norwegian volume. Although the contract market has been impacted by the proposed resource rent tax on salmon farming in Norway, we see signs of improvement going into 2023.
In 2022, fixed-price contracts accounted for 22% of the volume harvested in our Norwegian regions. The financial contracts are presented gross in the balance sheet, with changes in value recognized through profit/loss as part of the fair value adjustment of biological assets. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment.
As at 31 December 2022, the Group had financial salmon contracts for 2022 totaling NOK -64.9 million (2021: NOK -20.6 million), of which all were sales contracts.
Fair value of financial derivatives
The carrying value of derivatives and other financial instruments as at 31 December 2022 and 31 December 2021 is shown in the table below.\u00a0All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy. For more information, see the section on the \u201cFair value estimation\u201d below, as well as Note 14.
2022 | 2021 | |||
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | ASSETS | CURRENT | ASSETS | CURRENT |
Forward currency contracts at fair value through profit or loss | 2\u00a0749 | 9 | 446 | 1\u00a0149 |
Cross-currency interest rate swap w/ interest rate floor-option | \u2014 | \u2014 | 22\u00a0560 | \u2014 |
Interest rate swap agreements | 35\u00a0238 | \u2014 | 14\u00a0587 | 590 |
Financial salmon contract - sales contracts* | \u2014 | 64\u00a0920 | \u2014 | 20\u00a0611 |
Total financial instruments at fair value** | 37\u00a0988 | 64\u00a0928 | 37\u00a0592 | 22\u00a0350 |
*In addition, as at year-end 2022, Grieg Seafood had NOK 31 million (2021: NOK 13 million) classified as current liabilities (see note Note 29) related to realized financial salmon contracts. This amount represents settled price contracts, not part of the fair value-derivative amount.
**Measured according to level 2 of the fair value hierarchy.
II) CREDIT RISK
Credit risk is managed at Group level. Credit risk arises from transactions involving derivatives and deposits in banks and financial institutions, transactions with customers, including trade receivables, and fixed contracts as well as loans to associates. The sales companies secure the bulk of the sales through credit insurance and bank guarantees. The Group has procedures to ensure that products are only sold to customers with satisfactory creditworthiness. The Group normally sells to new customers solely against presentation of a letter of credit or against advance payment. For customers who have a reliable track record with the Group, sales up to certain previously agreed levels are permitted without any security. The Group utilizes a factoring arrangement for sales transactions entered into by the Norwegian sales organization.
The book value of financial assets represents the maximum credit exposure. For further information about loss allowance, please refer to Note 22.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2022 | 2021 |
Trade receivables | 22 | 64\u00a0283 | 50\u00a0443 |
Cash and cash equivalents | 20 | 642\u00a0719 | 928\u00a0342 |
Total | 707\u00a0002 | 978\u00a0785 |
III) LIQUIDITY RISK
The Group adopts a prudent approach to liquidity risk management, which includes maintaining sufficient cash and marketable securities, securing funding through sufficient credit facilities and maintaining the ability to close market positions when considered appropriate.
Due to the dynamic underlying nature of the business, the Group aims to secure flexibility through available credit lines. The Group maintains a sustainability-linked financing agreement through a syndicate comprising DNB and Nordea. The agreement is on aggregate NOK 3 200 billion, and consists of two term loans of NOK 750 million and EUR 75 million, a revolving credit facility of NOK 1 500 million and an overdraft facility of NOK 200 million. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 12), cash and cash equivalents (Note 20), and short-term money market investments (Note 21), based on expected cash flows. This is generally carried out at Group level in cooperation with the operating companies. Available financing could be impacted by the proposed Norwegian resource rent tax regime, as - all else equal - less cash will be available to service debt and provide a return on investment for shareholders.
Management and the Board seek to maintain a high equity ratio (50% at 31 December 2022), to be well positioned to meet financial and operational challenges. The Group factors in the expected outcome, as well as different scenarios relating to, the resource rent tax proposed by the Norwegian government (see political risk above) in the Group's liquidity projections and forecasts.
At year-end 2022, the Group had undrawn credit facilities of NOK 1 700 million (2021: NOK 885 million), in addition to cash reserves of NOK 643 million (2021: NOK 928 million). In 2022, a cash surplus of approximately NOK 1 000 million has been placed in money market funds. In total, the Group\u2019s free liquidity, calculated as the sum of bank deposits, undrawn credit facilities and the short-term investment in money market funds, stood at NOK 3 356 billion at 31 December 2022 (2021: NOK 1 813 million).
As at 31 December 2022, the equity ratio was 50% (2021: 52%), while the equity ratio (ex. the effect of IFRS 16), which is measured according to covenants, was 52% (2021: 54%). The Group is continuously monitoring the liquidity levels. Cash flow forecasts for all farming regions, sales and the Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out.
The following table shows a breakdown of the Group\u2019s non-derivative financial liabilities (including estimated interest payment), classified by maturity structure. The amounts in the table are undiscounted contractual cash flows (however for lease liabilities the undiscounted cash flows are according to the estimated lease component of the contract, and the total undiscounted amount equals the principal and the interests) . Note 12 shows the payment profile for the Group\u2019s non-current liabilities.
31.12.2022 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest - floating | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current syndicated term-loan installments | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Syndicated loan interest - floating | 10\u00a0860 | 31\u00a0273 | 38\u00a0412 | 34\u00a0470 | 30\u00a0638 | 7\u00a0007 | \u2014 | 152\u00a0661 |
Other non-current liabilities | 4\u00a0829 | 12\u00a0609 | 14\u00a0471 | 12\u00a0615 | 12\u00a0860 | 13\u00a0770 | 61\u00a0285 | 132\u00a0439 |
Interest on other non-current liabilities | 961 | 2\u00a0720 | 3\u00a0161 | 2\u00a0671 | 3\u00a0004 | 2\u00a0765 | 9\u00a0257 | 24\u00a0539 |
Lease liabilities (prior IAS 17 finance leases) | 24\u00a0606 | 68\u00a0702 | 79\u00a0970 | 65\u00a0520 | 59\u00a0691 | 52\u00a0892 | 105\u00a0684 | 457\u00a0065 |
Interest on lease liabilities (prior IAS 17 finance leases) | 3\u00a0982 | 10\u00a0910 | 12\u00a0291 | 10\u00a0017 | 8\u00a0092 | 6\u00a0274 | 8\u00a0885 | 60\u00a0451 |
Lease liabilities (prior IAS 17 operational leases) | 46\u00a0854 | 118\u00a0836 | 146\u00a0350 | 73\u00a0925 | 67\u00a0558 | 44\u00a0220 | 31\u00a0302 | 529\u00a0046 |
Interest on lease liabilities (prior IAS 17 operational leases) | 5\u00a0059 | 12\u00a0137 | 12\u00a0586 | 7\u00a0369 | 4\u00a0657 | 2\u00a0356 | 936 | 45\u00a0100 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 978\u00a0411 | 393\u00a0387 | 531\u00a0404 | 1\u00a0806\u00a0012 | 314\u00a0711 | 1\u00a0090\u00a0869 | 217\u00a0349 | 5\u00a0332\u00a0143 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
31.12.2021 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0500\u00a0000 | \u2014 | \u2014 | 1\u00a0500\u00a0000 |
Green bond loan interest - floating | 15\u00a0840 | 49\u00a0500 | 65\u00a0700 | 65\u00a0880 | 32\u00a0760 | \u2014 | \u2014 | 229\u00a0680 |
Non-current syndicated term-loan installments | 24\u00a0972 | 24\u00a0972 | 374\u00a0580 | \u2014 | \u2014 | \u2014 | \u2014 | 424\u00a0524 |
Syndicated loan interest - floating | 2\u00a0248 | 8\u00a0283 | 2\u00a0619 | \u2014 | \u2014 | \u2014 | \u2014 | 13\u00a0150 |
Non-current syndicated credit facility | \u2014 | \u2014 | 440\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | 440\u00a0000 |
Interest non-current syndicated credit facility | 2\u00a0330 | 9\u00a0361 | 3\u00a0076 | \u2014 | \u2014 | \u2014 | \u2014 | 14\u00a0767 |
Other non-current liabilities | 4\u00a0873 | \u2014 | 11\u00a0773 | 12\u00a0310 | 9\u00a0200 | 8\u00a0114 | 54\u00a0353 | 100\u00a0622 |
Interest on other non-current liabilities | 912 | 2\u00a0396 | 3\u00a0037 | 2\u00a0541 | 2\u00a0049 | 2\u00a0816 | 15\u00a0288 | 29\u00a0040 |
Lease liabilities (prior IAS 17 finance leases) | 18\u00a0502 | 54\u00a0415 | 67\u00a0410 | 57\u00a0199 | 43\u00a0909 | 39\u00a0525 | 79\u00a0535 | 360\u00a0496 |
Interest on lease liabilities (prior IAS 17 finance leases) | 2\u00a0523 | 6\u00a0831 | 7\u00a0420 | 5\u00a0752 | 4\u00a0357 | 3\u00a0178 | 3\u00a0596 | 33\u00a0658 |
Lease liabilities (prior IAS 17 operational leases) | 22\u00a0140 | 82\u00a0632 | 81\u00a0209 | 80\u00a0980 | 51\u00a0033 | 37\u00a0084 | 40\u00a0255 | 395\u00a0332 |
Interest on lease liabilities (prior IAS 17 operational leases) | 3\u00a0453 | 9\u00a0209 | 9\u00a0298 | 6\u00a0030 | 3\u00a0621 | 2\u00a0084 | 4\u00a0127 | 37\u00a0823 |
Trade payables | 523\u00a0196 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 523\u00a0196 |
Other current liabilities | 36\u00a0603 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 36\u00a0603 |
Total liabilities | 657\u00a0593 | 247\u00a0600 | 1\u00a0066\u00a0123 | 230\u00a0692 | 1\u00a0646\u00a0928 | 92\u00a0801 | 197\u00a0153 | 4\u00a0138\u00a0891 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
FAIR VALUE ESTIMATION
See Note 14 for information on classes of financial instruments measured at fair value, in addition to information on the fair value hierarchy. The information below describes valuation techniques for fair value estimation used by Grieg Seafood, including leases and the fair value adjustment of biological assets.
(I) FINANCIAL DERIVATIVE INSTRUMENTS
The fair value of quoted financial assets classified as financial assets at fair value through OCI is determined by reference to published price quotations in an active market. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques (see Note 2). The Group uses different methods and makes assumptions based on market conditions at each reporting date. The fair value of forward currency contracts is determined using the forward exchange rate at the end of the reporting period. The fair value of interest rate swaps is determined by the present value of future cash flows. The fair value of options is determined using option pricing models. For all the above-mentioned derivatives, the fair value is confirmed by the financial institution with which the Group has entered into the contracts. The fair value of financial salmon price contracts is determined using forward prices from Fish Pool.
(II) TRADE RECEIVABLES, OTHER RECEIVABLES AND TRADE PAYABLES
The nominal value less write-downs for realized losses on trade receivables and trade payables is assumed to correspond to the fair value of these items, as they are short term and entered into on \u201cnormal\u201d terms and conditions.
(III) CASH AND CASH EQUIVALENTS
The carrying amount of cash and cash equivalents is approximately equal to fair value, since these instruments have a short term to maturity.
(IV) BANK AND BOND LOANS
The carrying amount of bank loans is assessed to be approximately equal to fair value because the floating interest rate is adjusted to reflect current conditions. The fair value of the bond loan is disclosed in Note 12.
(V) LEASES
The fair value of financial assets and liabilities recognized at their carrying amount is calculated as the present value of estimated cash flows discounted by the interest rate that applies to corresponding liabilities and assets at the end of the reporting period. This applies to lease liabilities, see Note 13.
(VI) BIOLOGICAL INVENTORIES
Fish in the sea is measured at estimated fair value. Consequently, the value of biological inventories is likely to vary more than the value of inventories based on cost. The estimated fair value varies for a number of reasons, including volatility in the price of Atlantic salmon, factors relating to production, changes in harvesting schedules and changes in the composition of inventories. Grieg Seafood considers three components to be key parameters for valuation: price, estimated harvest biomass volume and the applied monthly discount rate. The monthly discount rate is applied to expected future cash flows to account for risk, the time value of money and the cost of contributory assets. The following table is a sensitivity analysis, showing the change in the fair value of the biological assets, and hence the Group\u2019s profit before tax, in the event of changes in these parameters.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000 | 2022 | 2021 |
Change in discount rate +1% | -175\u00a0527 | -130\u00a0357 |
Change in discount rate -1% | 207\u00a0074 | 158\u00a0916 |
Changes in sales price +1 NOK/kg | 69\u00a0555 | 62\u00a0677 |
Changes in sales price -1 NOK/kg | -68\u00a0073 | -59\u00a0093 |
Changes in sales price +5 NOK/kg | 357\u00a0629 | 316\u00a0740 |
Changes in sales price -5 NOK/kg | -325\u00a0903 | -289\u00a0634 |
Changes in biomass volume +1% kg | 54\u00a0202 | 37\u00a0936 |
Changes in biomass volume -1% kg | -53\u00a0427 | -35\u00a0376 |
CAPITAL MANAGEMENT
The Group aims to ensure sufficient access to capital to enable the business to develop in accordance with adopted strategies, and thus continue to be one of the leading players in the sector. Historically, the industry has always been vulnerable to price fluctuations in the market. For this reason, accounting results may fluctuate considerably from year to year. Consequently, the Group strives to ensure that the business maintains an appropriate level of disposable liquidity.
Grieg Seafood aims to provide shareholders with a competitive return on invested capital through payment of dividends and share price increases. The Board of Directors maintains that, as an average over time, dividends should correspond to 30-40% of the Group\u2019s profit after tax, adjusted for the effect of the fair value of biological assets (limited to 50 % by Green Bond agreement). At the same time, the Group\u2019s net interest-bearing debt per kg harvested salmon should remain below NOK 30, but can be exceeded in periods of growth investments.\u00a0As at 31\u00a0December 2022, Grieg Seafood was in a solid financial position to execute strategic priorities and deliver shareholder return.
At 31 December 2022, the Group had net interest-bearing liabilities, including lease liabilities, of NOK 2 223 million, see Note 12. The Group\u2019s funding is primarily a green bond issue of NOK 1 500 million issued in 2020 (with NOK 1 424 million currently outstanding, as bonds have been repurchased throughout 2022), sustainability-linked bank loans and leasing liabilities. At year-end 2022, 75% (2021: 47%) of our gross interest-bearing liabilities derived from green or sustainability-linked financing. The level of liabilities and alternative forms of funding are subject to constant evaluation.
I) MARKET RISKS
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions, recognized assets, and liabilities and net investments in foreign operations. The Group enters into foreign currency forward contracts to manage this risk.
TRADE RECEIVABLES AND | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Trade receivables | 214\u00a0681 | 17\u00a0207 | 23\u00a0901 | 1\u00a0517 | 1\u00a0911 | \u2014 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 1\u00a0044 | 12\u00a0590 | 174 | 143\u00a0587 | \u2014 | 3\u00a0193 | 717\u00a0498 |
2021 | ||||||||
Trade receivables | 44\u00a0591 | 64\u00a0959 | 23\u00a0912 | \u2014 | 18\u00a0907 | -576 | \u2014 | 151\u00a0793 |
Trade payables | 391\u00a0599 | 2\u00a0298 | 9\u00a0608 | 15\u00a0494 | 101\u00a0844 | \u2014 | 2\u00a0353 | 523\u00a0196 |
NET INTEREST-BEARING LIABILITIES | NOK | USD | EUR | GBP | CAD | JPY | OTHER | TOTAL |
2022 | ||||||||
Cash and cash equivalents | 284\u00a0965 | 88\u00a0647 | 87\u00a0485 | 41\u00a0877 | 134\u00a0040 | 209 | 5\u00a0496 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Interest-bearing liabilities* | 2\u00a0678\u00a0379 | \u2014 | 755\u00a0679 | \u2014 | 452\u00a0331 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | -88\u00a0647 | 668\u00a0194 | -41\u00a0877 | 318\u00a0292 | -209 | -5\u00a0496 | 2\u00a0222\u00a0522 |
2021 | ||||||||
Cash and cash equivalents | -22\u00a0537 | 44\u00a0252 | 58\u00a0346 | 750\u00a0778 | 94\u00a0238 | 44 | 3\u00a0223 | 928\u00a0342 |
Loans to associated companies | 2\u00a0111 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2\u00a0111 |
Interest-bearing liabilities* | 2\u00a0893\u00a0312 | \u2014 | \u2014 | \u2014 | 327\u00a0662 | \u2014 | \u2014 | 3\u00a0220\u00a0974 |
Net interest-bearing liabilities | 2\u00a0913\u00a0737 | -44\u00a0252 | -58\u00a0346 | -750\u00a0778 | 233\u00a0424 | -44 | -3\u00a0223 | 2\u00a0290\u00a0520 |
*See Note 12 for more information on the Group\u2019s net interest-bearing liabilities.
The Group has a group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. Subsidiaries party to the agreement can utilize the group cash pool arrangement and overdraft individual bank accounts (currencies), provided that Group's total bank deposit is positive. Not all subsidiaries are part of the cash pool arrangement. The subsidiaries participating in the group account scheme are jointly and severally liable for the entire amount of the commitment under the scheme. Cash and cash equivalents include the currency exposure in the group account scheme. At 31 December 2022, the net amount of bank deposits in the group account scheme amounted to NOK 524 million (2021: NOK 787 million).
The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group\u2019s foreign operations was previously managed primarily through borrowings denominated in the relevant foreign currencies.
The base currency of the syndicated bank loan is split into NOK 750 million and EUR 75 million. Since a substantial portion of the Group's sales revenues are denominated in EUR, the EUR loan acts as a natural, economical hedge on foreign currency translation rate fluctuations.
In 2020, we issued our first green bond, worth a total of NOK 1 500 million, through two tap issues. Throughout 2022, the Group has repurchased NOK 77 million of the green bond. The outstanding amount of the bond loan was NOK 1\u00a0424 million at year-end 2022. The bond matures in 2025, and is denominated in NOK.
The holding companies in the Group extend current and non-current loans to the subsidiaries, denominated in these companies\u2019 functional currencies. The non-current loans, with some exceptions, are considered to be equity in these companies, as there is no planned repayment of the principal amount outstanding. The currency effect of loans is recognized under \"currency effect on loans to subsidiaries\" in the Other Comprehensive Income (OCI) statement. The numerical effects for 2022 and 2021 are presented in the table below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 | 2022 | 2021 |
Currency effect | 24\u00a0792 | 32\u00a0222 |
Tax effect (22%) | -5\u00a0454 | -7\u00a0089 |
Currency effect - recycled accumulated OCI related to sale of Shetland* | \u2014 | -103\u00a0223 |
Tax effect (22 %) - recycled accumulated OCI related to sale of Shetland* | \u2014 | 22\u00a0709 |
Net effect recognized in equity through OCI | 19\u00a0338 | -55\u00a0380 |
*See Note 6 for more information.
Sensitivity analysis
A depreciation (appreciation) of 10% in the rate of exchange between the NOK and the USD, CAD, GBP and EUR at the reporting date (all other factors remaining unchanged) would be expected to have the following effects on net interest-bearing liabilities (NOK 1 000). The numerical effects for net interest-bearing liabilities for year-end 2022 and 2021 are presented below.
SENSITIVITY NOK 1 000 | 10 % change in FX-rate | USD | EUR | GBP | CAD |
2022 | |||||
Assets | -/+ | -8\u00a0865 | -8\u00a0749 | -4\u00a0188 | -13\u00a0404 |
Liabilities | -/+ | \u2014 | -75\u00a0568 | \u2014 | -45\u00a0233 |
Net interest-bearing liabilities | -/+ | 8\u00a0865 | -66\u00a0819 | 4\u00a0188 | -31\u00a0829 |
2021 | |||||
Assets | -/+ | -4\u00a0425 | -5\u00a0835 | -75\u00a0078 | -9\u00a0424 |
Liabilities | -/+ | \u2014 | -42\u00a0452 | \u2014 | -32\u00a0766 |
Net interest-bearing liabilities | -/+ | 4\u00a0425 | -36\u00a0618 | 75\u00a0078 | -23\u00a0342 |
A depreciation of NOK versus USD/EUR/GBP/CAD will, in general, decrease the assets (which increases net interest-bearing liabilities), and decrease the liabilities, which reduces the net interest-bearing liabilities.
FORWARD CURRENCY CONTRACTS
The Group does not apply hedge accounting. Value changes in current forward contracts affect profit or loss, as these contracts are recognized at fair value through profit or loss, see accounting policies (Note 2).
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2022 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5180 | 01.01.2023 - 03.01.2023 | 29 |
USD | 3\u00a0518 | NOK | 37\u00a0091 | 10.5433 | 9.8573 | 03.01.2023 - 29.12.2023 | 2\u00a0721 |
USD | 415 | CAD | 561 | 1.3515 | 1.3538 | 06.01.2023 - 03.02.2023 | -9 |
Total | 2\u00a0741 |
*Maturity specified as an interval for multiple contracts
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2021 |
EUR | 6\u00a0408 | NOK | 63\u00a0597 | 9.9246 | 9.9888 | 01.02.2022 - 31.12.2022 | -1\u00a0149 |
EUR | 1\u00a0000 | NOK | 10\u00a0031 | 1.2651 | 9.9888 | 01.01.2022 - 31.01.2022 | 42 |
USD | 7\u00a0771 | CAD | 9\u00a0921 | 1.2767 | 1.2692 | 01.01.2022 - 28.02.2022 | 404 |
Total | -704 |
*Maturity specified as an interval for multiple contracts
(ii) Interest rate risk
Since the Group has no significant interest-bearing assets apart from bank deposits and money market funds, its income and operating cash flows are largely independent of changes in market interest rates. The Group\u2019s interest rate risk arises from borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest rate exposure. The Group calculates the impact on profit or loss of a defined interest rate change. The same change in the interest rate is used for all currencies in each simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.
Sensitivity calculations show the following expected values: If the interest rate had been 1% lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 28.3 million in 2022 and NOK 38.5 million in 2021 due to the floating rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing liabilities from our bank loans (term loans in NOK and EUR, including revolving credit facility) and bond loan during 2022 and 2021, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN INTEREST RATE POINTS | 2022 | 2021 |
Effect on profit before income tax | -/+1% | +/- 28 257 | +/-38 545 |
The sensitivity table is for our bank and bond loans. A reduction in interest rates will increase profit before tax.
INTEREST RATE SWAP AGREEMENTS
The purpose of the Group\u2019s risk management activities is to establish an overview of the financial risk that exists at any given time and to provide more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to establish greater stability for the Group\u2019s loan-related, variable-rate interest expenses. The Group has decided that at any given time, a certain percentage of its variable interest-bearing liabilities should be hedged using interest rate swap agreements. The Group does not apply hedge accounting. A given proportion will always be at a floating rate, while the remainder will be subject to potential hedging. This situation is constantly reviewed in light of the market situation.
INTEREST RATE SWAP | PRINCIPAL | FIXED | BASIS OF | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | 2\u00a0670 | -590 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 5\u00a0018 | 874 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 7\u00a0627 | 2\u00a0628 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 9\u00a0963 | 5\u00a0561 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 9\u00a0961 | 5\u00a0524 |
Total | 35\u00a0238 | 13\u00a0997 |
Interest rate swap contracts assessed at market value, excluding accrued interest
CROSS CURRENCY INTEREST RATE SWAP | PRINCIPAL | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Cross-currency interest rate swap (NOK/EUR) | NOK 200 million / EUR 23 million | 25.06.2025 | \u2014 | 22\u00a0327 |
Interest rate option, floor | NOK 250 million | 25.06.2025 | \u2014 | 233 |
Total | \u2014 | 22\u00a0560 |
The cross currency interest-rate swap contract was settled in 2022, see Note 26.
(iii) Price risk
Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group uses financial contracts to hedge the sales price for the volume harvested by our two Norwegian regions, Rogaland and Finnmark. As at 31 December 2022, the estimated contract share for the Norwegian harvest volume is 15% for the full-year 2023. We target a contract share of 20-50% of our Norwegian volume. Although the contract market has been impacted by the proposed resource rent tax on salmon farming in Norway, we see signs of improvement going into 2023.
In 2022, fixed-price contracts accounted for 22% of the volume harvested in our Norwegian regions. The financial contracts are presented gross in the balance sheet, with changes in value recognized through profit/loss as part of the fair value adjustment of biological assets. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment.
As at 31 December 2022, the Group had financial salmon contracts for 2022 totaling NOK -64.9 million (2021: NOK -20.6 million), of which all were sales contracts.
Fair value of financial derivatives
The carrying value of derivatives and other financial instruments as at 31 December 2022 and 31 December 2021 is shown in the table below.\u00a0All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy. For more information, see the section on the \u201cFair value estimation\u201d below, as well as Note 14.
2022 | 2021 | |||
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | ASSETS | CURRENT | ASSETS | CURRENT |
Forward currency contracts at fair value through profit or loss | 2\u00a0749 | 9 | 446 | 1\u00a0149 |
Cross-currency interest rate swap w/ interest rate floor-option | \u2014 | \u2014 | 22\u00a0560 | \u2014 |
Interest rate swap agreements | 35\u00a0238 | \u2014 | 14\u00a0587 | 590 |
Financial salmon contract - sales contracts* | \u2014 | 64\u00a0920 | \u2014 | 20\u00a0611 |
Total financial instruments at fair value** | 37\u00a0988 | 64\u00a0928 | 37\u00a0592 | 22\u00a0350 |
*In addition, as at year-end 2022, Grieg Seafood had NOK 31 million (2021: NOK 13 million) classified as current liabilities (see note Note 29) related to realized financial salmon contracts. This amount represents settled price contracts, not part of the fair value-derivative amount.
**Measured according to level 2 of the fair value hierarchy.
FORWARD CURRENCY CONTRACTS
The Group does not apply hedge accounting. Value changes in current forward contracts affect profit or loss, as these contracts are recognized at fair value through profit or loss, see accounting policies (Note 2).
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2022 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5180 | 01.01.2023 - 03.01.2023 | 29 |
USD | 3\u00a0518 | NOK | 37\u00a0091 | 10.5433 | 9.8573 | 03.01.2023 - 29.12.2023 | 2\u00a0721 |
USD | 415 | CAD | 561 | 1.3515 | 1.3538 | 06.01.2023 - 03.02.2023 | -9 |
Total | 2\u00a0741 |
*Maturity specified as an interval for multiple contracts
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
SOLD | AMOUNT | BOUGHT | AMOUNT | WEIGHTED | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 31.12.2021 |
EUR | 6\u00a0408 | NOK | 63\u00a0597 | 9.9246 | 9.9888 | 01.02.2022 - 31.12.2022 | -1\u00a0149 |
EUR | 1\u00a0000 | NOK | 10\u00a0031 | 1.2651 | 9.9888 | 01.01.2022 - 31.01.2022 | 42 |
USD | 7\u00a0771 | CAD | 9\u00a0921 | 1.2767 | 1.2692 | 01.01.2022 - 28.02.2022 | 404 |
Total | -704 |
*Maturity specified as an interval for multiple contracts
(ii) Interest rate risk
Since the Group has no significant interest-bearing assets apart from bank deposits and money market funds, its income and operating cash flows are largely independent of changes in market interest rates. The Group\u2019s interest rate risk arises from borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest rate exposure. The Group calculates the impact on profit or loss of a defined interest rate change. The same change in the interest rate is used for all currencies in each simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.
Sensitivity calculations show the following expected values: If the interest rate had been 1% lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 28.3 million in 2022 and NOK 38.5 million in 2021 due to the floating rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing liabilities from our bank loans (term loans in NOK and EUR, including revolving credit facility) and bond loan during 2022 and 2021, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN INTEREST RATE POINTS | 2022 | 2021 |
Effect on profit before income tax | -/+1% | +/- 28 257 | +/-38 545 |
The sensitivity table is for our bank and bond loans. A reduction in interest rates will increase profit before tax.
INTEREST RATE SWAP AGREEMENTS
The purpose of the Group\u2019s risk management activities is to establish an overview of the financial risk that exists at any given time and to provide more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to establish greater stability for the Group\u2019s loan-related, variable-rate interest expenses. The Group has decided that at any given time, a certain percentage of its variable interest-bearing liabilities should be hedged using interest rate swap agreements. The Group does not apply hedge accounting. A given proportion will always be at a floating rate, while the remainder will be subject to potential hedging. This situation is constantly reviewed in light of the market situation.
INTEREST RATE SWAP | PRINCIPAL | FIXED | BASIS OF | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | 2\u00a0670 | -590 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 5\u00a0018 | 874 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 7\u00a0627 | 2\u00a0628 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 9\u00a0963 | 5\u00a0561 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 9\u00a0961 | 5\u00a0524 |
Total | 35\u00a0238 | 13\u00a0997 |
Interest rate swap contracts assessed at market value, excluding accrued interest
CROSS CURRENCY INTEREST RATE SWAP | PRINCIPAL | MATURITY | MARKET VALUE NOK 1 000 31.12.2022 | MARKET VALUE NOK 1 000 31.12.2021 |
Cross-currency interest rate swap (NOK/EUR) | NOK 200 million / EUR 23 million | 25.06.2025 | \u2014 | 22\u00a0327 |
Interest rate option, floor | NOK 250 million | 25.06.2025 | \u2014 | 233 |
Total | \u2014 | 22\u00a0560 |
The cross currency interest-rate swap contract was settled in 2022, see Note 26.
(iii) Price risk
Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group uses financial contracts to hedge the sales price for the volume harvested by our two Norwegian regions, Rogaland and Finnmark. As at 31 December 2022, the estimated contract share for the Norwegian harvest volume is 15% for the full-year 2023. We target a contract share of 20-50% of our Norwegian volume. Although the contract market has been impacted by the proposed resource rent tax on salmon farming in Norway, we see signs of improvement going into 2023.
In 2022, fixed-price contracts accounted for 22% of the volume harvested in our Norwegian regions. The financial contracts are presented gross in the balance sheet, with changes in value recognized through profit/loss as part of the fair value adjustment of biological assets. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment.
As at 31 December 2022, the Group had financial salmon contracts for 2022 totaling NOK -64.9 million (2021: NOK -20.6 million), of which all were sales contracts.
Fair value of financial derivatives
The carrying value of derivatives and other financial instruments as at 31 December 2022 and 31 December 2021 is shown in the table below.\u00a0All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy. For more information, see the section on the \u201cFair value estimation\u201d below, as well as Note 14.
2022 | 2021 | |||
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | ASSETS | CURRENT | ASSETS | CURRENT |
Forward currency contracts at fair value through profit or loss | 2\u00a0749 | 9 | 446 | 1\u00a0149 |
Cross-currency interest rate swap w/ interest rate floor-option | \u2014 | \u2014 | 22\u00a0560 | \u2014 |
Interest rate swap agreements | 35\u00a0238 | \u2014 | 14\u00a0587 | 590 |
Financial salmon contract - sales contracts* | \u2014 | 64\u00a0920 | \u2014 | 20\u00a0611 |
Total financial instruments at fair value** | 37\u00a0988 | 64\u00a0928 | 37\u00a0592 | 22\u00a0350 |
*In addition, as at year-end 2022, Grieg Seafood had NOK 31 million (2021: NOK 13 million) classified as current liabilities (see note Note 29) related to realized financial salmon contracts. This amount represents settled price contracts, not part of the fair value-derivative amount.
**Measured according to level 2 of the fair value hierarchy.
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2022 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 16\u00a0900 | 271 | 17\u00a0171 |
Trade receivables | \u2014 | 259\u00a0137 | \u2014 | 259\u00a0137 |
Other current receivables | \u2014 | 8\u00a0863 | \u2014 | 8\u00a0863 |
Investment in money market fund4 | 1\u00a0012\u00a0848 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Derivatives5 | 37\u00a0988 | \u2014 | \u2014 | 37\u00a0988 |
Cash and cash equivalents | \u2014 | 642\u00a0719 | \u2014 | 642\u00a0719 |
Total financial assets | 1\u00a0050\u00a0836 | 927\u00a0618 | 271 | 1\u00a0978\u00a0725 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0980\u00a0777 | \u2014 | 2\u00a0980\u00a0777 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 396\u00a0614 | \u2014 | 396\u00a0614 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 483\u00a0946 | \u2014 | 483\u00a0946 |
Share-based payments6 | 6\u00a0510 | \u2014 | \u2014 | 6\u00a0510 |
Derivatives5 | 64\u00a0928 | \u2014 | \u2014 | 64\u00a0928 |
Trade payables | \u2014 | 717\u00a0498 | \u2014 | 717\u00a0498 |
Other current liabilities | \u2014 | 76\u00a0585 | \u2014 | 76\u00a0585 |
Total financial liabilities | 71\u00a0439 | 4\u00a0655\u00a0420 | \u2014 | 4\u00a0726\u00a0859 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2021 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 2\u00a0111 | 271 | 2\u00a0382 |
Trade receivables | \u2014 | 151\u00a0793 | \u2014 | 151\u00a0793 |
Other current receivables | \u2014 | 12\u00a0592 | \u2014 | 12\u00a0592 |
Derivatives5 | 37\u00a0592 | \u2014 | \u2014 | 37\u00a0592 |
Cash and cash equivalents | \u2014 | 928\u00a0342 | \u2014 | 928\u00a0342 |
Total financial assets | 37\u00a0592 | 1\u00a0094\u00a0837 | 271 | 1\u00a0132\u00a0700 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0435\u00a0475 | \u2014 | 2\u00a0435\u00a0475 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 360\u00a0496 | \u2014 | 360\u00a0496 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 395\u00a0332 | \u2014 | 395\u00a0332 |
Share-based payments6 | 9\u00a0792 | \u2014 | \u2014 | 9\u00a0792 |
Derivatives5 | 22\u00a0350 | \u2014 | \u2014 | 22\u00a0350 |
Trade payables | \u2014 | 523\u00a0196 | \u2014 | 523\u00a0196 |
Other current liabilities | \u2014 | 36\u00a0603 | \u2014 | 36\u00a0603 |
Total financial liabilities | 32\u00a0142 | 3\u00a0751\u00a0102 | \u2014 | 3\u00a0783\u00a0244 |
1 FVPL: Fair value through profit or loss.
2 FVOCI: Fair value through other comprehensive income.
3 Investments in non-listed shares (equity instruments). Measured at level 3.
4 Investments in money market funds. Measured at level 2. See Note 3 for specification.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See Note 3 for specification.
6 Synthetic option scheme. Measured at level 3. See Note 17 for more information.
The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
II) CREDIT RISK
Credit risk is managed at Group level. Credit risk arises from transactions involving derivatives and deposits in banks and financial institutions, transactions with customers, including trade receivables, and fixed contracts as well as loans to associates. The sales companies secure the bulk of the sales through credit insurance and bank guarantees. The Group has procedures to ensure that products are only sold to customers with satisfactory creditworthiness. The Group normally sells to new customers solely against presentation of a letter of credit or against advance payment. For customers who have a reliable track record with the Group, sales up to certain previously agreed levels are permitted without any security. The Group utilizes a factoring arrangement for sales transactions entered into by the Norwegian sales organization.
The book value of financial assets represents the maximum credit exposure. For further information about loss allowance, please refer to Note 22.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2022 | 2021 |
Trade receivables | 22 | 64\u00a0283 | 50\u00a0443 |
Cash and cash equivalents | 20 | 642\u00a0719 | 928\u00a0342 |
Total | 707\u00a0002 | 978\u00a0785 |
III) LIQUIDITY RISK
The Group adopts a prudent approach to liquidity risk management, which includes maintaining sufficient cash and marketable securities, securing funding through sufficient credit facilities and maintaining the ability to close market positions when considered appropriate.
Due to the dynamic underlying nature of the business, the Group aims to secure flexibility through available credit lines. The Group maintains a sustainability-linked financing agreement through a syndicate comprising DNB and Nordea. The agreement is on aggregate NOK 3 200 billion, and consists of two term loans of NOK 750 million and EUR 75 million, a revolving credit facility of NOK 1 500 million and an overdraft facility of NOK 200 million. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 12), cash and cash equivalents (Note 20), and short-term money market investments (Note 21), based on expected cash flows. This is generally carried out at Group level in cooperation with the operating companies. Available financing could be impacted by the proposed Norwegian resource rent tax regime, as - all else equal - less cash will be available to service debt and provide a return on investment for shareholders.
Management and the Board seek to maintain a high equity ratio (50% at 31 December 2022), to be well positioned to meet financial and operational challenges. The Group factors in the expected outcome, as well as different scenarios relating to, the resource rent tax proposed by the Norwegian government (see political risk above) in the Group's liquidity projections and forecasts.
At year-end 2022, the Group had undrawn credit facilities of NOK 1 700 million (2021: NOK 885 million), in addition to cash reserves of NOK 643 million (2021: NOK 928 million). In 2022, a cash surplus of approximately NOK 1 000 million has been placed in money market funds. In total, the Group\u2019s free liquidity, calculated as the sum of bank deposits, undrawn credit facilities and the short-term investment in money market funds, stood at NOK 3 356 billion at 31 December 2022 (2021: NOK 1 813 million).
As at 31 December 2022, the equity ratio was 50% (2021: 52%), while the equity ratio (ex. the effect of IFRS 16), which is measured according to covenants, was 52% (2021: 54%). The Group is continuously monitoring the liquidity levels. Cash flow forecasts for all farming regions, sales and the Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out.
The following table shows a breakdown of the Group\u2019s non-derivative financial liabilities (including estimated interest payment), classified by maturity structure. The amounts in the table are undiscounted contractual cash flows (however for lease liabilities the undiscounted cash flows are according to the estimated lease component of the contract, and the total undiscounted amount equals the principal and the interests) . Note 12 shows the payment profile for the Group\u2019s non-current liabilities.
31.12.2022 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest - floating | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current syndicated term-loan installments | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Syndicated loan interest - floating | 10\u00a0860 | 31\u00a0273 | 38\u00a0412 | 34\u00a0470 | 30\u00a0638 | 7\u00a0007 | \u2014 | 152\u00a0661 |
Other non-current liabilities | 4\u00a0829 | 12\u00a0609 | 14\u00a0471 | 12\u00a0615 | 12\u00a0860 | 13\u00a0770 | 61\u00a0285 | 132\u00a0439 |
Interest on other non-current liabilities | 961 | 2\u00a0720 | 3\u00a0161 | 2\u00a0671 | 3\u00a0004 | 2\u00a0765 | 9\u00a0257 | 24\u00a0539 |
Lease liabilities (prior IAS 17 finance leases) | 24\u00a0606 | 68\u00a0702 | 79\u00a0970 | 65\u00a0520 | 59\u00a0691 | 52\u00a0892 | 105\u00a0684 | 457\u00a0065 |
Interest on lease liabilities (prior IAS 17 finance leases) | 3\u00a0982 | 10\u00a0910 | 12\u00a0291 | 10\u00a0017 | 8\u00a0092 | 6\u00a0274 | 8\u00a0885 | 60\u00a0451 |
Lease liabilities (prior IAS 17 operational leases) | 46\u00a0854 | 118\u00a0836 | 146\u00a0350 | 73\u00a0925 | 67\u00a0558 | 44\u00a0220 | 31\u00a0302 | 529\u00a0046 |
Interest on lease liabilities (prior IAS 17 operational leases) | 5\u00a0059 | 12\u00a0137 | 12\u00a0586 | 7\u00a0369 | 4\u00a0657 | 2\u00a0356 | 936 | 45\u00a0100 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 978\u00a0411 | 393\u00a0387 | 531\u00a0404 | 1\u00a0806\u00a0012 | 314\u00a0711 | 1\u00a0090\u00a0869 | 217\u00a0349 | 5\u00a0332\u00a0143 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
31.12.2021 NOK 1 000 | < 3 M | 3 M | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan installments | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0500\u00a0000 | \u2014 | \u2014 | 1\u00a0500\u00a0000 |
Green bond loan interest - floating | 15\u00a0840 | 49\u00a0500 | 65\u00a0700 | 65\u00a0880 | 32\u00a0760 | \u2014 | \u2014 | 229\u00a0680 |
Non-current syndicated term-loan installments | 24\u00a0972 | 24\u00a0972 | 374\u00a0580 | \u2014 | \u2014 | \u2014 | \u2014 | 424\u00a0524 |
Syndicated loan interest - floating | 2\u00a0248 | 8\u00a0283 | 2\u00a0619 | \u2014 | \u2014 | \u2014 | \u2014 | 13\u00a0150 |
Non-current syndicated credit facility | \u2014 | \u2014 | 440\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | 440\u00a0000 |
Interest non-current syndicated credit facility | 2\u00a0330 | 9\u00a0361 | 3\u00a0076 | \u2014 | \u2014 | \u2014 | \u2014 | 14\u00a0767 |
Other non-current liabilities | 4\u00a0873 | \u2014 | 11\u00a0773 | 12\u00a0310 | 9\u00a0200 | 8\u00a0114 | 54\u00a0353 | 100\u00a0622 |
Interest on other non-current liabilities | 912 | 2\u00a0396 | 3\u00a0037 | 2\u00a0541 | 2\u00a0049 | 2\u00a0816 | 15\u00a0288 | 29\u00a0040 |
Lease liabilities (prior IAS 17 finance leases) | 18\u00a0502 | 54\u00a0415 | 67\u00a0410 | 57\u00a0199 | 43\u00a0909 | 39\u00a0525 | 79\u00a0535 | 360\u00a0496 |
Interest on lease liabilities (prior IAS 17 finance leases) | 2\u00a0523 | 6\u00a0831 | 7\u00a0420 | 5\u00a0752 | 4\u00a0357 | 3\u00a0178 | 3\u00a0596 | 33\u00a0658 |
Lease liabilities (prior IAS 17 operational leases) | 22\u00a0140 | 82\u00a0632 | 81\u00a0209 | 80\u00a0980 | 51\u00a0033 | 37\u00a0084 | 40\u00a0255 | 395\u00a0332 |
Interest on lease liabilities (prior IAS 17 operational leases) | 3\u00a0453 | 9\u00a0209 | 9\u00a0298 | 6\u00a0030 | 3\u00a0621 | 2\u00a0084 | 4\u00a0127 | 37\u00a0823 |
Trade payables | 523\u00a0196 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 523\u00a0196 |
Other current liabilities | 36\u00a0603 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 36\u00a0603 |
Total liabilities | 657\u00a0593 | 247\u00a0600 | 1\u00a0066\u00a0123 | 230\u00a0692 | 1\u00a0646\u00a0928 | 92\u00a0801 | 197\u00a0153 | 4\u00a0138\u00a0891 |
KEY FOR TABLE\u00a0\u00a0\u00a0\u00a0M = Months \u00a0\u00a0\u00a0\u00a0Y = Year\u00a0\u00a0\u00a0\u00a0YRS = Years
FAIR VALUE ESTIMATION
See Note 14 for information on classes of financial instruments measured at fair value, in addition to information on the fair value hierarchy. The information below describes valuation techniques for fair value estimation used by Grieg Seafood, including leases and the fair value adjustment of biological assets.
(I) FINANCIAL DERIVATIVE INSTRUMENTS
The fair value of quoted financial assets classified as financial assets at fair value through OCI is determined by reference to published price quotations in an active market. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques (see Note 2). The Group uses different methods and makes assumptions based on market conditions at each reporting date. The fair value of forward currency contracts is determined using the forward exchange rate at the end of the reporting period. The fair value of interest rate swaps is determined by the present value of future cash flows. The fair value of options is determined using option pricing models. For all the above-mentioned derivatives, the fair value is confirmed by the financial institution with which the Group has entered into the contracts. The fair value of financial salmon price contracts is determined using forward prices from Fish Pool.
(II) TRADE RECEIVABLES, OTHER RECEIVABLES AND TRADE PAYABLES
The nominal value less write-downs for realized losses on trade receivables and trade payables is assumed to correspond to the fair value of these items, as they are short term and entered into on \u201cnormal\u201d terms and conditions.
(III) CASH AND CASH EQUIVALENTS
The carrying amount of cash and cash equivalents is approximately equal to fair value, since these instruments have a short term to maturity.
(IV) BANK AND BOND LOANS
The carrying amount of bank loans is assessed to be approximately equal to fair value because the floating interest rate is adjusted to reflect current conditions. The fair value of the bond loan is disclosed in Note 12.
(V) LEASES
The fair value of financial assets and liabilities recognized at their carrying amount is calculated as the present value of estimated cash flows discounted by the interest rate that applies to corresponding liabilities and assets at the end of the reporting period. This applies to lease liabilities, see Note 13.
(VI) BIOLOGICAL INVENTORIES
Fish in the sea is measured at estimated fair value. Consequently, the value of biological inventories is likely to vary more than the value of inventories based on cost. The estimated fair value varies for a number of reasons, including volatility in the price of Atlantic salmon, factors relating to production, changes in harvesting schedules and changes in the composition of inventories. Grieg Seafood considers three components to be key parameters for valuation: price, estimated harvest biomass volume and the applied monthly discount rate. The monthly discount rate is applied to expected future cash flows to account for risk, the time value of money and the cost of contributory assets. The following table is a sensitivity analysis, showing the change in the fair value of the biological assets, and hence the Group\u2019s profit before tax, in the event of changes in these parameters.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000 | 2022 | 2021 |
Change in discount rate +1% | -175\u00a0527 | -130\u00a0357 |
Change in discount rate -1% | 207\u00a0074 | 158\u00a0916 |
Changes in sales price +1 NOK/kg | 69\u00a0555 | 62\u00a0677 |
Changes in sales price -1 NOK/kg | -68\u00a0073 | -59\u00a0093 |
Changes in sales price +5 NOK/kg | 357\u00a0629 | 316\u00a0740 |
Changes in sales price -5 NOK/kg | -325\u00a0903 | -289\u00a0634 |
Changes in biomass volume +1% kg | 54\u00a0202 | 37\u00a0936 |
Changes in biomass volume -1% kg | -53\u00a0427 | -35\u00a0376 |
ACCOUNTING ESTIMATES AND ASSUMPTIONS
Management is required to make estimates and assumptions concerning the future, which affect the reported amounts for assets and liabilities, as well as income and expenses for the accounting year in accordance with IFRS. Estimates and underlying assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be probable under the present circumstances. The final outcomes may deviate from these estimates. Changes in accounting estimates are recognized in the period in which the estimates are changed.\u00a0 The Group is involved in claims and complaints related to the sale of goods on a continuous basis. As of year-end there were no material ongoing issues concerning claims and complaints related to the sale of goods, besides what\u2019s referred to in Note 28 and Note 31.
ESTIMATED IMPAIRMENT OF GOODWILL, LICENSES AND PROPERTY, PLANT AND EQUIPMENT
The Group tests whether goodwill and licenses have suffered any impairment on an annual basis, in accordance with the accounting policy stated in Note 2. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. These calculations require the use of estimates of future cash flows from the cash-generating unit, and the application of a discount rate to calculate the present value of future cash flows. Expectations of future cash flows will vary over time. Changes in market conditions and expected cash flows can result in losses due to future value decreases. The value of long-term growth in demand, changes in market competition, the strength of the production stage in the value chain and thus also expectations of the long-term profit margin are also of significance. The different parameters could variously affect the value of the licenses over time. Any changes in these critical assumptions will result in related write-downs, or the reversal of write-downs of the value of licenses in accordance with the accounting policies described\u00a0 in Note 2. Please also refer to Note 10 for further comments on tests relating to value impairment.
CLASSIFICATION OF LICENSES
A significant judgment is whether a license should be amortized over its definite life, or whether it is deemed to have an indefinite life and tested for impairment only. All licenses where the Group has no other contractual restrictions relating to the use of the licenses have indefinite lives and, as such, are not amortized. Also, licenses granted with a finite useful life, but where the license holder can renew the licenses without incurring considerable expenses are assessed as having indefinite lives. However, the Group\u2019s licenses in each country are subject to certain requirements and the Group risks penalties, sanctions or even license revocation if the Group fails to comply with license requirements or related regulations. Local governments may, moreover, change the way licenses are renewed.
In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. In June 2022, all licenses were renewed for two years. The Canadian Government has launched a new strategy for salmon farming in BC, to transition the sector from traditional open-net pen practices into an improved industry (it does not specify what the industry should transition to). The process was launched 29 June 2022, with the following objectives: Minimize or eliminate interactions between
farmed and wild salmon, improve transparency on how the government assesses and responds to new scientific information, provide greater opportunities for collaborative planning and decision-making with First Nations partners and advance innovation and attracting investment to support the adoption of alternative production technologies in British Columbia. Stakeholders, including industry and First Nations, are participating in the process, which is expected to be concluded during 2023. Grieg Seafood supports the transition, and it aligns with the Group\u2019s technological investments to improve biological control, such as post-smolt and barrier systems. The possibility of introducing different types of licenses to advance improvements are discussed as a part of the transition strategy. It is expected that regular licenses will be incorporated into the strategy. Grieg Seafood is committed to working with the government and Indigenous communities to find a viable path forward.
In addition, farm tenures in BC are renewed by the province on a regular basis. From 2022, farm tenures that are not accepted by the First Nation that is the rights-holder of the territory where the farm is located will not be renewed. Grieg Seafood supports the implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into BC regulations, and we are engaging in the ongoing process of reconciliation between the government, First Nations and industries. In 2022, the Coalition of First Nations for Finfish Stewardship was launched, highlighting the positive role that the salmon farming industry can play as part of the reconciliation process. Grieg Seafood recognizes the First Nations as an additional level of government where we operate, and we are working to ensure that our production takes place under agreements with the rights-holders of the territories where it is located. The vast majority of Grieg Seafood\u2019s production are under long-term agreements with the First Nations in those areas, and we are pursuing agreements with more First Nations. The current agreements we have with First Nations last until 2037-2045. Even though the agreements cannot be said to be everlasting, the Group has nevertheless classified the licenses as having indefinite lives, based on the lack of sufficient relevant factors to change the principle at this point. Work on the transition plan has not been completed, and based on the experience we have with the work so far, it is not considered reasonable to change estimates regarding the economic life of the aquaculture licenses in BC. Given that it is desirable for both First Nations partners and the Group to have close and good working relationships, and that they want the Group to operate in the area, the Group\u2019s best estimate is that the licenses will still be classified as having indefinite lives. This will be continuously assessed. If the situation changes and the Group agrees not to use the option to extend the duration of the agreement, the estimate of the remaining depreciation period must be re-evaluated.\u00a0For further information, please see Note 10.
Grieg Seafood Newfoundland has 13 approved farming licenses. The licenses are granted for terms of six years. To renew the licenses, licensees must follow the Provincial Aquaculture Policy and Procedures Manual. As long as licenses follow and comply with the requirements, the license will be renewed. For this reason, the licenses are classified as having indefinite lives and, as such, are not amortized.
Grieg Seafood Newfoundland has the exclusive long-term right to farm salmon in the Placentia Bay area. The fair value of the right to operate exclusively is amortized over the duration of the agreement.
BIOLOGICAL ASSETS
The Group\u2019s biological assets comprise smolt and fish in the sea. Biological assets are measured at fair values less costs to sell. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. The fair value model assessed by the Group calculates the net present value of expected cash flow. Valuation is based on a variety of premises, many of which are non-observable. The premises are divided into the following four categories:
1.Sales price
2.Estimated remaining production cost
3.Volume
4.Discount rate
For mature fish (ready for harvesting) on the reporting date, uncertainty mainly involves realized prices and volume. For immature fish (not ready for harvesting), the level of uncertainty is higher. Price, volume and discount rate are the main uncertainty factors. However, uncertainty is also related to biological transformation and mortality prior to the harvest date for the fish.
Sales price
Salmon sales prices are volatile. The sales price is based on forward prices and/or the most relevant pricing information available for the period in which the fish is expected to be mature (ready for harvesting). Changes in price assumptions have the greatest impact on the fair-value estimate. The market price constitutes the basis for calculating fair value for both mature and immature fish. The forward prices for superior Norwegian salmon weighing 3-6 kg gutted weight from Fish Pool are applied. For fish ready for harvest, the forward price for the following month is applied. For fish not ready for harvest, the forward price for the month when the fish is expected to be harvested is applied. The price is adjusted for export margin and clearing costs. This accounts for both fish ready for harvest and not.
Estimating remaining production cost
The planned point of harvesting is assumed to be when the fish reaches a live round weight of 4.60 kg, however, there may be uncertainty regarding the estimated growth rate. For immature fish, the fair value is adjusted by the estimated remaining cost necessary to grow the fish to optimal harvest weight. Forecast production costs include provisions for estimated feed prices, the cost of lice treatments and other costs to prevent biological accidents. Here, estimations are affected by uncertainty regarding the number of lice treatments to be carried out, the sea temperature and other conditions affecting growth and costs.
Volume
Estimated harvest volume is based on the estimated number of fish on the reporting date, less estimated future mortality multiplied by optimal harvest weight (4.60 kg round weight). Actual harvest volume may differ from the estimated volume due to changes in biological conditions or due to special events, such as a mass mortality. The estimated number of fish is based on the number of smolt transferred to the sea, and mortality is a given percentage of the fish in the sea. The normal estimated harvest weight is assessed to be the live round weight of fish that results in a gutted weight of 4.0 kg. If there are any specific conditions at the reporting date resulting in the fish being harvested before they reach optimal weight, the estimated harvest weight is adjusted. Mortality during the period from the reporting date to the date when the fish reach harvest weight is estimated to be 1% of the number of opening balance of fish per month in the forecast period.
Discount rate
The sales revenue and remaining expenses are allocated to the same period in which the fish is harvested. The cash flows from all localities where the Group has fish in the sea will then be distributed over the entire period it takes to farm the fish in the sea. With the current size of the smolt released and the frequency of the smolt transfers, this period may be from 12 to 18 months. The estimated future cash flow is discounted by a monthly rate, which is 5.0% for Rogaland and Finnmark, and 3.5% for British Columbia and Newfoundland as of 31\u00a0December 2022. The discount rate considers both risk adjustment (risk related to volume, cost and price), compensation for the value of the licenses (hypothetical rent) and time value (tying up capital). The reason for differentiating the discount rate at the regional level is the different prerequisites for biological production, which also requires a differentiation of the recognized synthetic license rent. The risk adjustment shall reflect the price discount a hypothetical buyer would demand as compensation for the risk assumed by investing in live fish rather than a different object. The longer it takes to reach harvest date, the higher the risk that something may occur that will affect the cash flow. Three significant factors could have an impact on the cash flow: volume, costs and price. The one thing all three factors have in common is that the sample space is asymmetrical.
Due to limited access to licenses for the farming of fish, the license value is currently considered to be very high. For a hypothetical buyer of live fish to take over and continue to farm the fish, the buyer needs a license, locality and other permits required for such production. However, in a hypothetical market for the purchase and sale of live fish, one must assume that this would be possible. In that scenario, a hypothetical buyer would claim a significant discount to allocate a sufficient share of the returns to the buyer's own licenses. It is difficult to create a model that would allow a hypothetical annual lease cost to be derived from prices for sold licenses as the curve in the model would be based on projections of future profit performance in the industry.
A discount must be made for the time value of the tied-up capital linked to the share of the present value of the cash flow allocated to the biomass. The buyer who is investing in live fish rather than some other type of object, would claim compensation for the alternative cost. The production cycle for salmon in the sea currently takes up to 18 months. The cash flow will therefore extend over a similar period. Assuming a constant sales price throughout the period, the cash flow would decrease for each month, as costs are incurred to farm the fish to harvest weight. The cost increases for every month the fish are in the sea. As such, the effect of deferred cash flow is lower than would be the case if the cash flow had been constant. This component is, however, deemed important due to the substantial value the stock of fish represents. Please refer to Note 2 and Note 9 for further information on the estimation and calculation of fish values.
Significant assumptions sensitivity
In December 2021, Shetland was sold to Scottish Sea Farms Ltd, and deconsolidated from the Grieg Seafood Group in December 2021. The decision to divest Shetland was made in 2020, and the income and expenses from the Shetland activity has been presented as discontinued operations of the Grieg Seafood Group (as well as the Shetland assets being classified as assets held for sale as from 2020 until the sale in 2021). For more information, see the 2021 Annual Report of Grieg Seafood.
The discontinued operations was defined by Grieg Seafood as the farming and sales operations in Shetland. The discontinued operation in Shetland included the prior reporting segment of Shetland UK and the UK sales operations.
The enterprise value of the transaction with Scottish Sea Farms Ltd. was set to GBP 164 million, assuming a normalized net working capital and adjusted for net debt. On the closing date of the transaction, in December 2021, Grieg Seafood received a preliminary purchase price for the Shetland assets of NOK 2 087 million. In addition, Scottish Sea Farms Ltd settled a GBP intercompany long-term loan granted by Grieg Seafood ASA (\"Seller\u2019s debt\"). The preliminary purchase price has been calculated pursuant to a pre-closing statement, which was prepared in good faith and set out the net debt and net working capital of the Shetland assets. The actual net debt and net working capital will be calculated in accordance with prevailing accounting principles and set out in a closing statement.
At year-end last year, 31 December 2021, the calculation of the gain/loss from sale of the Shetland assets was based on the preliminary purchase price. The preliminary gain after income tax resulting from the sale of the Shetland assets is NOK 424 million. The preliminary gain was calculated by deducting Grieg Seafood Group's book value of the Shetland assets on the closing date and transaction costs from the sum of the preliminary purchase and the settlement of the Seller\u2019s debt. In addition, the gain/loss calculation included recycling of accumulated OCI of NOK 106 million before tax and NOK 83 million after tax, whereas the tax expense of NOK 23 million related to the tax position on the Seller\u2019s debt.
According to the sales purchase agreement, the closing statement and the calculation of the final purchase price was to be performed subsequent to the closing date of the transaction.
Final purchase price
In February 2023, the closing statement and the calculation of the final purchase price has been finalized. Grieg Seafood had, as at year-end 2021, estimated approximately NOK 7.5 million in receivables on Scottish Sea Farms Ltd. The estimate was also included in the gain/loss calculation of 2021. In February 2023, there was no material deviation between the estimated receivable on Scottish Sea Farms Ltd. at 31 December 2022, and the actual received payment of the final part of the transaction settlement for the sale of Shetland.
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS | TOTAL | |
2022 | 2021 | |
Operating income | \u2014 | 951\u00a0334 |
Operating expenses | \u2014 | -775\u00a0822 |
Operational EBIT | \u2014 | 175\u00a0512 |
Production fee | \u2014 | -5\u00a0219 |
Fair value adjustment of biological assets | \u2014 | 75\u00a0697 |
EBIT (Earnings before interest and taxes) | \u2014 | 245\u00a0990 |
Net financial items | \u2014 | 1\u00a0902 |
Impairment loss recognized on the remeasurement to fair value less cost to sell | \u2014 | \u2014 |
Profit before tax from discontinued operations | \u2014 | 247\u00a0893 |
Income tax expense | \u2014 | -71\u00a0280 |
Profit for the period from discontinued operations | \u2014 | 176\u00a0613 |
Gain on the sale of the subsidiary after income tax | \u2014 | 423\u00a0678 |
Net profit for the period from discontinued operations | \u2014 | 600\u00a0291 |
GAIN ON THE SALE OF THE SUBSIDIARY AFTER INCOME TAX | TOTAL | |
(NOK 1 000) | 2022 | 2021 |
Sale/purchase price | \u2014 | 2\u00a0087\u00a0494 |
Transaction costs | \u2014 | -26\u00a0950 |
Recycling of accumulated OCI | \u2014 | 83\u00a0139 |
Total consideration | \u2014 | 2\u00a0143\u00a0683 |
Book value | \u2014 | 1\u00a0720\u00a0004 |
Gain on the sale of the subsidiary after income tax | \u2014 | 423\u00a0678 |
The recycled accumulated OCI in the gain/loss calculation consists of: | ||
Currency effect on investment in subsidiaries | \u2014 | 3\u00a0261 |
Currency effects on loans to subsidiaries | \u2014 | 103\u00a0223 |
Other gains and losses | \u2014 | -636 |
Tax effects | \u2014 | -22\u00a0709 |
Reserve of disposal group classified as held for sale | \u2014 | 83\u00a0139 |
CASH FLOWS FROM DISCONTINUED OPERATIONS | TOTAL | |
2022 | 2021 | |
Net cash flow from operating activities | \u2014 | 145\u00a0228 |
Net cash flow from investing activities | \u2014 | 2\u00a0041\u00a0801 |
Net cash flow from financing activities | \u2014 | -145\u00a0836 |
Total | \u2014 | 2\u00a0041\u00a0193 |
Cash discontinued operations cash and cash equivalents - other changes | \u2014 | -842 |
Net change in cash and cash equivalents from discontinued operations | \u2014 | 2\u00a0040\u00a0350 |
Associates that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in EBIT when the relevant associates operate in the same position in the value chain as the Group. All investments in associates in 2022 and 2021 are closely related. See Note 8 regarding the associated companies included in the segment information.
The Group owns, through Grieg Seafood Finnmark AS, a 50% interest in Nordnorsk Smolt AS, together with SalMar ASA (50%). Nordnorsk Smolt AS is located in Troms and Finnmark County in Northern Norway. The annual production is approximately 900 tonnes of smolt per year. There is currently no production of smolt at Nordnorsk Smolt AS due to an ongoing redesign of the facility, which is scheduled for completion in Q2 2023. In December 2021, a capital increase was carried out, whereby both owners invested NOK 12.5 million each. At 31 December 2022, Grieg Seafood Finnmark AS provided a long-term loan to Nordnorsk Smolt AS of NOK 2.3 million (NOK 2.1 million at December 2021), which is included in other non-current receivables. The accrued interest is recognized under current receivables.\u00a0
The Group owns, through Grieg Seafood Rogaland AS, a 33.33% interest in Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS is located in Ryfylke in Rogaland, Norway. Through Tytlandsvik Aqua AS, the partners secure increased and improved access to post-smolt fish, with an annual production capacity of 4 500 tonnes, 50% of which falls to Grieg Seafood Rogaland.
Through Grieg Seafood Rogaland AS, the Group owns a 44.44% interest in \u00c5rdal Aqua AS, together with Vest Havbruk AS and Omfar AS. Omfar AS was brought in as a co-owner of the company through two private placement share issues. The other two shareholders were diluted first from 50% to 37.04% and then to 33.33% ownership. At the same time, Grieg Seafood Rogaland AS entered into a post-smolt
agreement with \u00c5rdal Aqua AS. The share capital from Omfar AS and the post-smolt agreement were consequently recognized as income with a dilution gain of NOK 22.6 million. In 2021, the dilution of NOK 6.7 million was not recognized as a gain, but set aside as a liability until certain milestones which the project depends on had been reached. The milestones were approved in 2022 and the dilution gain of NOK 6.7 million was recognized together with the dilution gain of NOK 15.8 million for 2022, a total of NOK 22.6 million. The total gain has been presented as a separate item below Operational EBIT in the Group\u2019s segment reporting (see Note 8). The share of profit from associates in the income statement is presented at the gross amount. In October 2022, there was a capital increase of NOK 150 million in \u00c5rdal Aqua AS, of which Grieg Seafood Rogaland AS contributed NOK 90 million. After the capital increase, Grieg Seafood Rogaland AS increased its shareholding to 44.44%. In addition, Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million to \u00c5rdal Aqua AS. Construction of \u00c5rdal Aqua AS\u2019s land-based farming and post-smolt facility has started. Production is expected to commence in 2024, with a capacity of 4 500 tonnes.
In January 2022, Grieg Seafood Rogaland AS invested NOK 7.6 million to acquire an ownership interest of 50% in Nextseafood AS. Nextseafood AS is co-owned with Havbrukskompaniet AS, and aims to explore and realize the closed-containment system known as FishGLOBE V6. FishGLOBE AS was awarded two development licenses (1 560 tonnes MAB) in 2019. As at year-end 2022, Grieg Seafood Rogaland AS has provided a long-term, interest-free loan to FishGLOBE AS, an affiliated company of Nextseafood AS, in the amount of NOK\u00a08.6\u00a0million.
INVESTMENT IN ASSOCIATES | EQUITY INTEREST AT 31.12.2022 | BOOK VALUE AT 01.01.2022 NOK 1 000 | PROFIT/LOSS 2022 NOK 1 000 | CHANGES IN THE | BOOK VALUE AT 31.12.2022 NOK 1 000 |
Nordnorsk Smolt AS | 50.00% | 47\u00a0710 | -8\u00a0658 | \u2014 | 39\u00a0053 |
Tytlandsvik Aqua AS | 33.33% | 48\u00a0087 | 7\u00a0864 | \u2014 | 55\u00a0951 |
\u00c5rdal Aqua AS | 44.44% | 8\u00a0878 | 21\u00a0915 | 83\u00a0254 | 114\u00a0047 |
Nextseafood AS | 50.00% | \u2014 | -26 | 7\u00a0600 | 7\u00a0574 |
Total | 104\u00a0675 | 21\u00a0096 | 90\u00a0854 | 216\u00a0624 |
AT 31.12.2022 | TIME OF | EQUITY INTEREST |
| DEPRECIATION OF | BOOK VALUE OF |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 5\u00a0958 | 11\u00a0064 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 4\u00a0674 | 9\u00a0926 |
\u00c5rdal Aqua AS | 15.01.2020 | 44.44% | 17\u00a0634 | \u2014 | 17\u00a0634 |
Nextseafood AS | 31.01.2022 | 50.00% | \u2014 | \u2014 | \u2014 |
Total ownership | 49\u00a0257 | 10\u00a0632 | 38\u00a0625 |
The share issue and shareholder agreement relating to Nordnorsk Smolt AS were signed on 30 June 2019. Excess value relating to the investment has been allocated to hatcheries under construction, based on provisional accounting figures from Nordnorsk Smolt AS on the acquisition date. The value added is amortized from the date of acquisition.
The share issue and shareholder agreement relating to Tytlandsvik Aqua AS were signed on 1 June 2017. Excess value relating to the investment has been allocated to hatcheries under construction, based on provisional accounting figures from Tytlandsvik Aqua AS as at 31 December 2018. The fair value adjustment is amortized from the time the facility was completed and commissioned.
The excess value relating to the \u00c5rdal Aqua AS investment has been allocated to hatcheries under construction. The facility is expected to be completed in 2024, and depreciation of the excess value will start when its completed.
Tytlandsvik Aqua AS, Nordnorsk Smolt, \u00c5rdal Aqua AS and Nextseafood AS have the same financial year as the Group. The following table displays provisional financial information at 31 December 2022 (100%).
AT 31.12.2022 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 91\u00a0295 | 36\u00a0227 | 55\u00a0068 | 195 | -13\u00a0911 |
Tytlandsvik Aqua AS | 623\u00a0770 | 485\u00a0682 | 138\u00a0088 | 322\u00a0999 | 34\u00a0631 |
\u00c5rdal Aqua AS | 220\u00a0614 | 3\u00a0665 | 216\u00a0949 | \u2014 | -1\u00a0449 |
Nextseafood AS | 15\u00a0149 | \u2014 | 15\u00a0149 | \u2014 | -45 |
INVESTMENT IN ASSOCIATES | EQUITY INTEREST AT 31.12.2021 | BOOK VALUE AT 01.01.2021 NOK 1 000 | PROFIT/LOSS 2021 NOK 1 000 | CHANGES IN THE | BOOK VALUE AT 31.12.2021 NOK 1 000 |
Nordnorsk Smolt AS | 50.00% | 41\u00a0264 | -6\u00a0053 | 12\u00a0500 | 47\u00a0711 |
Tytlandsvik Aqua AS | 33.33% | 43\u00a0158 | 4\u00a0929 | \u2014 | 48\u00a0087 |
\u00c5rdal Aqua AS | 37.04% | \u2014 | -363 | 9\u00a0241 | 8\u00a0878 |
Total | 84\u00a0421 | -1\u00a0486 | 21\u00a0741 | 104\u00a0675 |
AT 31.12.2021 | TIME OF | EQUITY INTEREST | EXCESS VALUE | DEPRECIATION OF | BOOK VALUE OF |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 4\u00a0256 | 12\u00a0766 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 3\u00a0214 | 11\u00a0386 |
\u00c5rdal Aqua AS | 15.01.2020 | 37.04% | 2\u00a0188 | \u2014 | 2\u00a0188 |
Total ownership | 33\u00a0811 | 7\u00a0470 | 26\u00a0341 |
AT 31.12.2021 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 93\u00a0076 | 24\u00a0097 | 68\u00a0979 | 57\u00a0636 | -11\u00a0169 |
Tytlandsvik Aqua AS | 518\u00a0466 | 408\u00a0353 | 110\u00a0113 | 216\u00a0387 | 24\u00a0802 |
\u00c5rdal Aqua AS | 25\u00a0972 | 7\u00a0624 | 18\u00a0348 | 50 | -979 |
Segment information
The operating segments are identified on the basis of the reports which Group management uses to assess performance and profitability at a strategic level. Group management assesses business activities from a geographical perspective, based on the location of assets. The Group has one production segment: Production of farmed salmon. Earnings from the sales companies in the Group are reported per producer. Geographically, management assesses the results of production in Rogaland \u2013 Norway, Finnmark \u2013 Norway, British Columbia \u2013 Canada, and Newfoundland \u2013 Canada. Group management evaluates the results from the segments based on Operational EBIT. The operating segments are divided geographically by country or region, based on the reporting applied by Group management when assessing performance and profitability at a strategic level.
The method by which Operational EBIT is calculated excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and impairment of goodwill and intangible assets, when impairment is attributable to an isolated event which is not expected to recur. Furthermore, the measurement method for Operational EBIT includes, but is not reported per region, the effect of share-based payments, as well as unrealized gains and losses on financial instruments. These gains/losses and costs are reported in the \"Elim/Other\" column in the segment information. Costs or gains which relate to prior years and not to the current operation of Grieg Seafood, are not included as Operational EBIT, as such costs are not considered meaningful for the comparability of the Group's results from one period to another. See Alternative Performance Measures\u00a0for more information. Elim/Other items comprise, in addition to intercompany eliminations, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. In the segment reporting, sales revenue at the regional level includes revenue from the sale of Atlantic salmon. At the
regional level, other income includes the sale of byproducts (such as ensilage), as well as income from the sale of smolt, fry and roe. At the Group level, such income is reclassified to sales revenue in the \"Elim/Other\"column in the Group's segment information. Other income also includes, at both the regional and Group level, rental income and income from overcapacity of operational assets. Other gains/losses, such as gains/losses from the sale of fixed assets and other equipment, are included in the line \u201cother gains/losses\u201d in the segment information. Associated companies that are closely related to the Group's operations and included in the Group\u2019s value chain, for example when the relevant associates operate in the same position in the value chain as the Group, are included in the Group's operational EBITDA and Operational EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group\u2019s segment information.
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Sales revenues | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
Other income | 31\u00a0490 | 70\u00a0745 |
Other gains/losses | 13\u00a0393 | -6\u00a0752 |
Share of profit from associates (operational) | -1\u00a0463 | -1\u00a0486 |
Raw materials and consumables used | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
Salaries and personnel expenses | -695\u00a0577 | -577\u00a0434 |
Other operating expenses | -2\u00a0087\u00a0310 | -1\u00a0527\u00a0347 |
Operational EBITDA | 2\u00a0190\u00a0834 | 818\u00a0044 |
Depreciation property, plant and equipment | -434\u00a0641 | -368\u00a0482 |
Amortization licenses and other intangible assets | -16\u00a0706 | -7\u00a0192 |
Operational EBIT | 1\u00a0739\u00a0486 | 442\u00a0370 |
Share of profit from associates (non-operational) | 22\u00a0558 | \u2014 |
Production fee | -26\u00a0350 | -24\u00a0463 |
Fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Write-down of non-current assets (non-operational) | -140\u00a0074 | \u2014 |
Litigation and legal claims | -157\u00a0065 | \u2014 |
Decommissioning costs | -24\u00a0382 | \u2014 |
EBIT (Earnings before interest and taxes) | 1\u00a0497\u00a0586 | 940\u00a0944 |
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0123\u00a0671 | 2\u00a0629\u00a0226 | 1\u00a0665\u00a0105 | \u2014 | 745\u00a0954 | 7\u00a0163\u00a0956 |
Other income | 81\u00a0137 | 18\u00a0619 | 8\u00a0649 | 321 | -77\u00a0237 | 31\u00a0490 |
Other gains/losses | -1\u00a0954 | 11\u00a0965 | -4\u00a0475 | \u2014 | 7\u00a0858 | 13\u00a0393 |
Share of profit from associates | 7\u00a0195 | -8\u00a0658 | \u2014 | \u2014 | \u2014 | -1\u00a0463 |
Operating costs before depreciation and amortization | -1\u00a0356\u00a0928 | -1\u00a0579\u00a0017 | -1\u00a0279\u00a0079 | -40\u00a0576 | -760\u00a0943 | -5\u00a0016\u00a0543 |
Operational EBITDA | 853\u00a0121 | 1\u00a0072\u00a0136 | 390\u00a0200 | -40\u00a0254 | -84\u00a0368 | 2\u00a0190\u00a0834 |
Depreciation, amortization and reversals | -98\u00a0536 | -145\u00a0997 | -119\u00a0789 | -74\u00a0474 | -12\u00a0552 | -451\u00a0347 |
Operational EBIT | 754\u00a0585 | 926\u00a0139 | 270\u00a0411 | -114\u00a0728 | -96\u00a0920 | 1\u00a0739\u00a0486 |
Harvest volume (tonnes GWT) | 28\u00a0387 | 36\u00a0024 | 20\u00a0286 | 84\u00a0697 | ||
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | \u2014 | \u2014 | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | \u2014 | \u2014 | 52.7 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | \u2014 | \u2014 | 20.5 |
Total assets | 2\u00a0920\u00a0718 | 3\u00a0422\u00a0148 | 1\u00a0913\u00a0438 | 3\u00a0116\u00a0131 | 1\u00a0502\u00a0930 | 12\u00a0875\u00a0365 |
Total liabilities | 1\u00a0236\u00a0330 | 1\u00a0610\u00a0495 | 692\u00a0878 | 2\u00a0735\u00a0606 | 114\u00a0349 | 6\u00a0389\u00a0657 |
2021 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 1\u00a0430\u00a0949 | 1\u00a0756\u00a0292 | 1\u00a0023\u00a0474 | \u2014 | 387\u00a0870 | 4\u00a0598\u00a0585 |
Other income | 76\u00a0640 | 48\u00a0868 | 9\u00a0114 | 569 | -64\u00a0445 | 70\u00a0745 |
Other gains/losses | 140 | -52 | -6\u00a0839 | \u2014 | \u2014 | -6\u00a0752 |
Share of profit from associates | 4\u00a0567 | -6\u00a0053 | \u2014 | \u2014 | \u2014 | -1\u00a0486 |
Operating costs before depreciation and amortization | -1\u00a0167\u00a0414 | -1\u00a0405\u00a0878 | -781\u00a0973 | -93\u00a0388 | -394\u00a0395 | -3\u00a0843\u00a0048 |
Operational EBITDA | 344\u00a0882 | 393\u00a0176 | 243\u00a0776 | -92\u00a0819 | -70\u00a0970 | 818\u00a0044 |
Depreciation, amortization and reversals | -102\u00a0865 | -142\u00a0640 | -93\u00a0541 | -24\u00a0039 | -12\u00a0590 | -375\u00a0674 |
Operational EBIT | 242\u00a0017 | 250\u00a0537 | 150\u00a0235 | -116\u00a0858 | -83\u00a0561 | 442\u00a0370 |
Harvest volume (tonnes GWT) | 26\u00a0670 | 34\u00a0484 | 14\u00a0448 | 75\u00a0601 | ||
Sales revenue/kg (NOK) | 53.7 | 50.9 | 70.8 | \u2014 | \u2014 | 55.7 |
Farming cost/kg (NOK) | 44.6 | 43.7 | 60.4 | \u2014 | \u2014 | 47.2 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.7 |
Operational EBIT/kg (NOK) | 9.1 | 7.3 | 10.4 | \u2014 | \u2014 | 5.9 |
Total assets | 2\u00a0181\u00a0546 | 3\u00a0076\u00a0166 | 2\u00a0057\u00a0524 | 2\u00a0487\u00a0713 | 911\u00a0299 | 10\u00a0714\u00a0248 |
Total liabilities | 1\u00a0088\u00a0328 | 1\u00a0502\u00a0171 | 1\u00a0018\u00a0999 | 1\u00a0948\u00a0082 | -406\u00a0634 | 5\u00a0150\u00a0946 |
Sales revenue/kg reported in the segment information is equal to the sum of sales revenues from the regions divided by the related harvest volume. Group sales revenue is calculated based on the Group\u2019s farming operations, excluding sales revenue from Group companies not geared to production.
Farming cost/kg reported in the segment information encompasses all costs directly related to the production and harvest of salmon, divided by the related harvest volume. Thus, at the regional level, farming cost equals operational costs. Other income is included in the farming cost metric as representing cost reduction activities. Group farming cost is calculated based on the Group\u2019s farming operations, excluding ownership costs and costs from Group companies not geared to production.
Other costs incl. ownership and headquarters costs/kg reported in the segment information include all costs and revenue not directly related to the production and harvest of salmon, such as costs deriving from activities conducted by the parent company and other Group companies not geared to production, divided by the Group's harvest volume. In addition, until the first harvest in Newfoundland is carried out, net costs attributable to the Newfoundland region are included as other costs/kg.
Operational EBIT/kg reported in the segment information is equal to Operational EBIT divided by the related harvest volume.
See Alternative Performance Measures for more information on the non-IFRS measures relating to sales revenue/kg, farming cost/kg, other costs incl. ownership and headquarters costs/kg and Operational EBIT/kg.
Sales revenues from contracts with customers
The Group's revenues mainly comprise revenues from the sale of whole fresh Atlantic salmon, in addition to processed Atlantic salmon. The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt and and third-party harvesting if the Group has overcapacity at its facilities.
Sales revenues are recognized at the point in time when control of the fish has been transferred to the customer. This will normally be upon delivery. In 2022, the sale of fresh whole Atlantic salmon totaled 97% (2021: 95%) of the Group's sales revenues (excluding other products), while processed fish accounted for 2% (2021: 4%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET | NORWAY* | CANADA* | TOTAL | |||||
2022 | 2021 | 2022 | 2021 | 2022 | 2022% | 2021 | 2021% | |
Continental Europe | 4\u00a0152\u00a0843 | 2\u00a0968\u00a0604 | \u2014 | \u2014 | 4\u00a0152\u00a0843 | 58% | 2\u00a0968\u00a0604 | 65% |
UK | 247\u00a0295 | 114\u00a0887 | \u2014 | \u2014 | 247\u00a0295 | 3% | 114\u00a0887 | 2% |
USA | 181\u00a0659 | 85\u00a0953 | 1\u00a0323\u00a0551 | 831\u00a0003 | 1\u00a0505\u00a0210 | 21% | 916\u00a0957 | 20% |
Canada | 87\u00a0722 | 22\u00a0778 | 466\u00a0935 | 284\u00a0238 | 554\u00a0657 | 8% | 307\u00a0016 | 7% |
Asia | 584\u00a0914 | 277\u00a0836 | 67\u00a0028 | 7\u00a0274 | 651\u00a0943 | 9% | 285\u00a0111 | 6% |
Other markets | 52\u00a0008 | 6\u00a0011 | \u2014 | \u2014 | 52\u00a0008 | 1% | 6\u00a0011 | \u2014% |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 100% | 4\u00a0598\u00a0585 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations.
Grieg Seafood did not have any sales to Russia\u00a0in 2022 or in 2021.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS | NORWAY* | CANADA* | TOTAL | |||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
Fresh whole fish | 5\u00a0149\u00a0017 | 3\u00a0429\u00a0432 | 1\u00a0805\u00a0633 | 955\u00a0179 | 6\u00a0954\u00a0650 | 4\u00a0384\u00a0611 |
Fresh processed fish | 57\u00a0142 | 287 | 51\u00a0588 | 166\u00a0380 | 108\u00a0729 | 166\u00a0666 |
Frozen processed fish | 53\u00a0373 | \u2014 | 10 | 508 | 53\u00a0383 | 508 |
Other products and services | 46\u00a0909 | 46\u00a0351 | 284 | 449 | 47\u00a0193 | 46\u00a0800 |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Sales revenues | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
Other income | 31\u00a0490 | 70\u00a0745 |
Other gains/losses | 13\u00a0393 | -6\u00a0752 |
Share of profit from associates (operational) | -1\u00a0463 | -1\u00a0486 |
Raw materials and consumables used | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
Salaries and personnel expenses | -695\u00a0577 | -577\u00a0434 |
Other operating expenses | -2\u00a0087\u00a0310 | -1\u00a0527\u00a0347 |
Operational EBITDA | 2\u00a0190\u00a0834 | 818\u00a0044 |
Depreciation property, plant and equipment | -434\u00a0641 | -368\u00a0482 |
Amortization licenses and other intangible assets | -16\u00a0706 | -7\u00a0192 |
Operational EBIT | 1\u00a0739\u00a0486 | 442\u00a0370 |
Share of profit from associates (non-operational) | 22\u00a0558 | \u2014 |
Production fee | -26\u00a0350 | -24\u00a0463 |
Fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Write-down of non-current assets (non-operational) | -140\u00a0074 | \u2014 |
Litigation and legal claims | -157\u00a0065 | \u2014 |
Decommissioning costs | -24\u00a0382 | \u2014 |
EBIT (Earnings before interest and taxes) | 1\u00a0497\u00a0586 | 940\u00a0944 |
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0123\u00a0671 | 2\u00a0629\u00a0226 | 1\u00a0665\u00a0105 | \u2014 | 745\u00a0954 | 7\u00a0163\u00a0956 |
Other income | 81\u00a0137 | 18\u00a0619 | 8\u00a0649 | 321 | -77\u00a0237 | 31\u00a0490 |
Other gains/losses | -1\u00a0954 | 11\u00a0965 | -4\u00a0475 | \u2014 | 7\u00a0858 | 13\u00a0393 |
Share of profit from associates | 7\u00a0195 | -8\u00a0658 | \u2014 | \u2014 | \u2014 | -1\u00a0463 |
Operating costs before depreciation and amortization | -1\u00a0356\u00a0928 | -1\u00a0579\u00a0017 | -1\u00a0279\u00a0079 | -40\u00a0576 | -760\u00a0943 | -5\u00a0016\u00a0543 |
Operational EBITDA | 853\u00a0121 | 1\u00a0072\u00a0136 | 390\u00a0200 | -40\u00a0254 | -84\u00a0368 | 2\u00a0190\u00a0834 |
Depreciation, amortization and reversals | -98\u00a0536 | -145\u00a0997 | -119\u00a0789 | -74\u00a0474 | -12\u00a0552 | -451\u00a0347 |
Operational EBIT | 754\u00a0585 | 926\u00a0139 | 270\u00a0411 | -114\u00a0728 | -96\u00a0920 | 1\u00a0739\u00a0486 |
Harvest volume (tonnes GWT) | 28\u00a0387 | 36\u00a0024 | 20\u00a0286 | 84\u00a0697 | ||
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | \u2014 | \u2014 | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | \u2014 | \u2014 | 52.7 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | \u2014 | \u2014 | 20.5 |
Total assets | 2\u00a0920\u00a0718 | 3\u00a0422\u00a0148 | 1\u00a0913\u00a0438 | 3\u00a0116\u00a0131 | 1\u00a0502\u00a0930 | 12\u00a0875\u00a0365 |
Total liabilities | 1\u00a0236\u00a0330 | 1\u00a0610\u00a0495 | 692\u00a0878 | 2\u00a0735\u00a0606 | 114\u00a0349 | 6\u00a0389\u00a0657 |
2021 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 1\u00a0430\u00a0949 | 1\u00a0756\u00a0292 | 1\u00a0023\u00a0474 | \u2014 | 387\u00a0870 | 4\u00a0598\u00a0585 |
Other income | 76\u00a0640 | 48\u00a0868 | 9\u00a0114 | 569 | -64\u00a0445 | 70\u00a0745 |
Other gains/losses | 140 | -52 | -6\u00a0839 | \u2014 | \u2014 | -6\u00a0752 |
Share of profit from associates | 4\u00a0567 | -6\u00a0053 | \u2014 | \u2014 | \u2014 | -1\u00a0486 |
Operating costs before depreciation and amortization | -1\u00a0167\u00a0414 | -1\u00a0405\u00a0878 | -781\u00a0973 | -93\u00a0388 | -394\u00a0395 | -3\u00a0843\u00a0048 |
Operational EBITDA | 344\u00a0882 | 393\u00a0176 | 243\u00a0776 | -92\u00a0819 | -70\u00a0970 | 818\u00a0044 |
Depreciation, amortization and reversals | -102\u00a0865 | -142\u00a0640 | -93\u00a0541 | -24\u00a0039 | -12\u00a0590 | -375\u00a0674 |
Operational EBIT | 242\u00a0017 | 250\u00a0537 | 150\u00a0235 | -116\u00a0858 | -83\u00a0561 | 442\u00a0370 |
Harvest volume (tonnes GWT) | 26\u00a0670 | 34\u00a0484 | 14\u00a0448 | 75\u00a0601 | ||
Sales revenue/kg (NOK) | 53.7 | 50.9 | 70.8 | \u2014 | \u2014 | 55.7 |
Farming cost/kg (NOK) | 44.6 | 43.7 | 60.4 | \u2014 | \u2014 | 47.2 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.7 |
Operational EBIT/kg (NOK) | 9.1 | 7.3 | 10.4 | \u2014 | \u2014 | 5.9 |
Total assets | 2\u00a0181\u00a0546 | 3\u00a0076\u00a0166 | 2\u00a0057\u00a0524 | 2\u00a0487\u00a0713 | 911\u00a0299 | 10\u00a0714\u00a0248 |
Total liabilities | 1\u00a0088\u00a0328 | 1\u00a0502\u00a0171 | 1\u00a0018\u00a0999 | 1\u00a0948\u00a0082 | -406\u00a0634 | 5\u00a0150\u00a0946 |
Sales revenue/kg reported in the segment information is equal to the sum of sales revenues from the regions divided by the related harvest volume. Group sales revenue is calculated based on the Group\u2019s farming operations, excluding sales revenue from Group companies not geared to production.
Farming cost/kg reported in the segment information encompasses all costs directly related to the production and harvest of salmon, divided by the related harvest volume. Thus, at the regional level, farming cost equals operational costs. Other income is included in the farming cost metric as representing cost reduction activities. Group farming cost is calculated based on the Group\u2019s farming operations, excluding ownership costs and costs from Group companies not geared to production.
Other costs incl. ownership and headquarters costs/kg reported in the segment information include all costs and revenue not directly related to the production and harvest of salmon, such as costs deriving from activities conducted by the parent company and other Group companies not geared to production, divided by the Group's harvest volume. In addition, until the first harvest in Newfoundland is carried out, net costs attributable to the Newfoundland region are included as other costs/kg.
Operational EBIT/kg reported in the segment information is equal to Operational EBIT divided by the related harvest volume.
See Alternative Performance Measures for more information on the non-IFRS measures relating to sales revenue/kg, farming cost/kg, other costs incl. ownership and headquarters costs/kg and Operational EBIT/kg.
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Sales revenues | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
Other income | 31\u00a0490 | 70\u00a0745 |
Other gains/losses | 13\u00a0393 | -6\u00a0752 |
Share of profit from associates (operational) | -1\u00a0463 | -1\u00a0486 |
Raw materials and consumables used | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
Salaries and personnel expenses | -695\u00a0577 | -577\u00a0434 |
Other operating expenses | -2\u00a0087\u00a0310 | -1\u00a0527\u00a0347 |
Operational EBITDA | 2\u00a0190\u00a0834 | 818\u00a0044 |
Depreciation property, plant and equipment | -434\u00a0641 | -368\u00a0482 |
Amortization licenses and other intangible assets | -16\u00a0706 | -7\u00a0192 |
Operational EBIT | 1\u00a0739\u00a0486 | 442\u00a0370 |
Share of profit from associates (non-operational) | 22\u00a0558 | \u2014 |
Production fee | -26\u00a0350 | -24\u00a0463 |
Fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Write-down of non-current assets (non-operational) | -140\u00a0074 | \u2014 |
Litigation and legal claims | -157\u00a0065 | \u2014 |
Decommissioning costs | -24\u00a0382 | \u2014 |
EBIT (Earnings before interest and taxes) | 1\u00a0497\u00a0586 | 940\u00a0944 |
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0123\u00a0671 | 2\u00a0629\u00a0226 | 1\u00a0665\u00a0105 | \u2014 | 745\u00a0954 | 7\u00a0163\u00a0956 |
Other income | 81\u00a0137 | 18\u00a0619 | 8\u00a0649 | 321 | -77\u00a0237 | 31\u00a0490 |
Other gains/losses | -1\u00a0954 | 11\u00a0965 | -4\u00a0475 | \u2014 | 7\u00a0858 | 13\u00a0393 |
Share of profit from associates | 7\u00a0195 | -8\u00a0658 | \u2014 | \u2014 | \u2014 | -1\u00a0463 |
Operating costs before depreciation and amortization | -1\u00a0356\u00a0928 | -1\u00a0579\u00a0017 | -1\u00a0279\u00a0079 | -40\u00a0576 | -760\u00a0943 | -5\u00a0016\u00a0543 |
Operational EBITDA | 853\u00a0121 | 1\u00a0072\u00a0136 | 390\u00a0200 | -40\u00a0254 | -84\u00a0368 | 2\u00a0190\u00a0834 |
Depreciation, amortization and reversals | -98\u00a0536 | -145\u00a0997 | -119\u00a0789 | -74\u00a0474 | -12\u00a0552 | -451\u00a0347 |
Operational EBIT | 754\u00a0585 | 926\u00a0139 | 270\u00a0411 | -114\u00a0728 | -96\u00a0920 | 1\u00a0739\u00a0486 |
Harvest volume (tonnes GWT) | 28\u00a0387 | 36\u00a0024 | 20\u00a0286 | 84\u00a0697 | ||
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | \u2014 | \u2014 | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | \u2014 | \u2014 | 52.7 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | \u2014 | \u2014 | 20.5 |
Total assets | 2\u00a0920\u00a0718 | 3\u00a0422\u00a0148 | 1\u00a0913\u00a0438 | 3\u00a0116\u00a0131 | 1\u00a0502\u00a0930 | 12\u00a0875\u00a0365 |
Total liabilities | 1\u00a0236\u00a0330 | 1\u00a0610\u00a0495 | 692\u00a0878 | 2\u00a0735\u00a0606 | 114\u00a0349 | 6\u00a0389\u00a0657 |
2021 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
GEOGRAPHICAL SEGMENTS | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 1\u00a0430\u00a0949 | 1\u00a0756\u00a0292 | 1\u00a0023\u00a0474 | \u2014 | 387\u00a0870 | 4\u00a0598\u00a0585 |
Other income | 76\u00a0640 | 48\u00a0868 | 9\u00a0114 | 569 | -64\u00a0445 | 70\u00a0745 |
Other gains/losses | 140 | -52 | -6\u00a0839 | \u2014 | \u2014 | -6\u00a0752 |
Share of profit from associates | 4\u00a0567 | -6\u00a0053 | \u2014 | \u2014 | \u2014 | -1\u00a0486 |
Operating costs before depreciation and amortization | -1\u00a0167\u00a0414 | -1\u00a0405\u00a0878 | -781\u00a0973 | -93\u00a0388 | -394\u00a0395 | -3\u00a0843\u00a0048 |
Operational EBITDA | 344\u00a0882 | 393\u00a0176 | 243\u00a0776 | -92\u00a0819 | -70\u00a0970 | 818\u00a0044 |
Depreciation, amortization and reversals | -102\u00a0865 | -142\u00a0640 | -93\u00a0541 | -24\u00a0039 | -12\u00a0590 | -375\u00a0674 |
Operational EBIT | 242\u00a0017 | 250\u00a0537 | 150\u00a0235 | -116\u00a0858 | -83\u00a0561 | 442\u00a0370 |
Harvest volume (tonnes GWT) | 26\u00a0670 | 34\u00a0484 | 14\u00a0448 | 75\u00a0601 | ||
Sales revenue/kg (NOK) | 53.7 | 50.9 | 70.8 | \u2014 | \u2014 | 55.7 |
Farming cost/kg (NOK) | 44.6 | 43.7 | 60.4 | \u2014 | \u2014 | 47.2 |
Other costs incl. ownership and headquarters costs/kg (NOK) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2.7 |
Operational EBIT/kg (NOK) | 9.1 | 7.3 | 10.4 | \u2014 | \u2014 | 5.9 |
Total assets | 2\u00a0181\u00a0546 | 3\u00a0076\u00a0166 | 2\u00a0057\u00a0524 | 2\u00a0487\u00a0713 | 911\u00a0299 | 10\u00a0714\u00a0248 |
Total liabilities | 1\u00a0088\u00a0328 | 1\u00a0502\u00a0171 | 1\u00a0018\u00a0999 | 1\u00a0948\u00a0082 | -406\u00a0634 | 5\u00a0150\u00a0946 |
Sales revenue/kg reported in the segment information is equal to the sum of sales revenues from the regions divided by the related harvest volume. Group sales revenue is calculated based on the Group\u2019s farming operations, excluding sales revenue from Group companies not geared to production.
Farming cost/kg reported in the segment information encompasses all costs directly related to the production and harvest of salmon, divided by the related harvest volume. Thus, at the regional level, farming cost equals operational costs. Other income is included in the farming cost metric as representing cost reduction activities. Group farming cost is calculated based on the Group\u2019s farming operations, excluding ownership costs and costs from Group companies not geared to production.
Other costs incl. ownership and headquarters costs/kg reported in the segment information include all costs and revenue not directly related to the production and harvest of salmon, such as costs deriving from activities conducted by the parent company and other Group companies not geared to production, divided by the Group's harvest volume. In addition, until the first harvest in Newfoundland is carried out, net costs attributable to the Newfoundland region are included as other costs/kg.
Operational EBIT/kg reported in the segment information is equal to Operational EBIT divided by the related harvest volume.
See Alternative Performance Measures for more information on the non-IFRS measures relating to sales revenue/kg, farming cost/kg, other costs incl. ownership and headquarters costs/kg and Operational EBIT/kg.
Sales revenues from contracts with customers
The Group's revenues mainly comprise revenues from the sale of whole fresh Atlantic salmon, in addition to processed Atlantic salmon. The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt and and third-party harvesting if the Group has overcapacity at its facilities.
Sales revenues are recognized at the point in time when control of the fish has been transferred to the customer. This will normally be upon delivery. In 2022, the sale of fresh whole Atlantic salmon totaled 97% (2021: 95%) of the Group's sales revenues (excluding other products), while processed fish accounted for 2% (2021: 4%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET | NORWAY* | CANADA* | TOTAL | |||||
2022 | 2021 | 2022 | 2021 | 2022 | 2022% | 2021 | 2021% | |
Continental Europe | 4\u00a0152\u00a0843 | 2\u00a0968\u00a0604 | \u2014 | \u2014 | 4\u00a0152\u00a0843 | 58% | 2\u00a0968\u00a0604 | 65% |
UK | 247\u00a0295 | 114\u00a0887 | \u2014 | \u2014 | 247\u00a0295 | 3% | 114\u00a0887 | 2% |
USA | 181\u00a0659 | 85\u00a0953 | 1\u00a0323\u00a0551 | 831\u00a0003 | 1\u00a0505\u00a0210 | 21% | 916\u00a0957 | 20% |
Canada | 87\u00a0722 | 22\u00a0778 | 466\u00a0935 | 284\u00a0238 | 554\u00a0657 | 8% | 307\u00a0016 | 7% |
Asia | 584\u00a0914 | 277\u00a0836 | 67\u00a0028 | 7\u00a0274 | 651\u00a0943 | 9% | 285\u00a0111 | 6% |
Other markets | 52\u00a0008 | 6\u00a0011 | \u2014 | \u2014 | 52\u00a0008 | 1% | 6\u00a0011 | \u2014% |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 100% | 4\u00a0598\u00a0585 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations.
Grieg Seafood did not have any sales to Russia\u00a0in 2022 or in 2021.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS | NORWAY* | CANADA* | TOTAL | |||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
Fresh whole fish | 5\u00a0149\u00a0017 | 3\u00a0429\u00a0432 | 1\u00a0805\u00a0633 | 955\u00a0179 | 6\u00a0954\u00a0650 | 4\u00a0384\u00a0611 |
Fresh processed fish | 57\u00a0142 | 287 | 51\u00a0588 | 166\u00a0380 | 108\u00a0729 | 166\u00a0666 |
Frozen processed fish | 53\u00a0373 | \u2014 | 10 | 508 | 53\u00a0383 | 508 |
Other products and services | 46\u00a0909 | 46\u00a0351 | 284 | 449 | 47\u00a0193 | 46\u00a0800 |
Total | 5\u00a0306\u00a0441 | 3\u00a0476\u00a0069 | 1\u00a0857\u00a0515 | 1\u00a0122\u00a0516 | 7\u00a0163\u00a0956 | 4\u00a0598\u00a0585 |
TONNES | NOK 1 000 | |||
2022 | 2021 | 2022 | 2021 | |
Biological assets at 01.01. | 59\u00a0121 | 52\u00a0619 | 3\u00a0449\u00a0412 | 2\u00a0545\u00a0903 |
Currency translation differences | N/A | N/A | 36\u00a0945 | 22\u00a0840 |
Increase due to production | 93\u00a0134 | 99\u00a0590 | 4\u00a0348\u00a0288 | 3\u00a0428\u00a0102 |
Decrease due to abnormal mortality/loss | -3\u00a0455 | -5\u00a0534 | -224\u00a0924 | -117\u00a0450 |
Decrease due to sales | -98\u00a0186 | -87\u00a0553 | -3\u00a0743\u00a0033 | -3\u00a0053\u00a0236 |
Fair value adjustment at 01.01. | N/A | N/A | -970\u00a0480 | -347\u00a0227 |
Fair value adjustment at 31.12. | N/A | N/A | 1\u00a0149\u00a0591 | 970\u00a0480 |
Biological assets at 31.12. | 50\u00a0614 | 59\u00a0121 | 4\u00a0045\u00a0800 | 3\u00a0449\u00a0412 |
RECOGNIZED FAIR VALUE ADJUSTMENT | 2022 | 2021 |
Change in fair value adjustment of biological assets1 | 129\u00a0331 | 619\u00a0439 |
Change in physical delivery contracts relating to fair value adjustment of biological assets2 | -1\u00a0610 | \u2014 |
Change in fair value of financial derivatives from salmon (Fish Pool contracts)3 | -44\u00a0309 | -96\u00a0403 |
Total recognition of fair value adjustment of biological assets | 83\u00a0412 | 523\u00a0036 |
Recognized value adjustments of biological assets include:
1 Fair value adjustments of biological assets
2 Fair value (liability) change in loss-making contracts
3 Change in unrealized gains/losses from financial purchases/sales contracts (derivatives) from fish at Fish Pool
In accordance with IAS 41, biological assets are measured at fair value, unless the fair value cannot be measured reliably.
Broodstock (classified as inventory and not biological assets) and smolt are measured at cost less impairment losses. Fair value of biological assets is calculated on a discounted cash flow-based present value model, which does not rely on historical cost.
Provisions allocated to future physical delivery contracts that require fair value adjustments are recognized as other current liabilities in the balance sheet. The contracts are calculated based on the same forward prices used for the fair value calculation of biological assets. Changes in the value of salmon-related financial derivatives\u00a0 are recognized in the balance sheet under derivatives and other financial instruments. Financial derivatives are calculated at market value. See Note 3 for further information.
For further information on accounting policies for biological assets, please refer to Note 2 and Note 4.
BASIS FOR VALUES | NORWAY | BRITISH COLUMBIA | NEWFOUNDLAND |
Weighted price per kg GWT | NOK 84.06 | CAD 12.83 | CAD 11.66 |
Source | Fish Pool | Fish Pool | Fish Pool |
Forward prices from Fish Pool are adjusted for expected quality reductions and stated before logistics expenses.
The standard deduction for quality reduction is applied. Forward prices are weighted in relation to the intended harvesting period.
The price for British Columbia and Newfoundland is based on the forward price in Norway, adjusted for historical differences in price levels between Norway and Canada. Forward exchange rates are used to translate prices into CAD in relation to the harvesting period.
The estimated future cash flow is discounted by a monthly rate, which is assessed individually for each region. The discount rate reflects a combination of the cost of capital for the biological assets, risk adjustment (the risk related to volume, cost and price of the biological assets) and a synthetic license rent. The discount rate is differentiated to take account of each region\u2019s different prerequisites for biological production, which also results in a differentiation of the recognized synthetic license rent. See the table below for the applied discount rates per region, and see Note 4 for more information.
DISCOUNT RATE PER REGION | 2022 | 2021 |
Rogaland | 5.0% | 5.0% |
Finnmark | 5.0% | 5.0% |
British Columbia | 3.5% | 3.5% |
Newfoundland* | 3.5% | N/A |
*Newfoundland fish stocked at sea for the first time in 2022.
STATUS OF BIOLOGICAL ASSETS | NUMBER OF | BIOLOGICAL | ACCRUED COST | FAIR VALUE | BOOK VALUE |
2022 | |||||
Biological assets on land * | 17\u00a0680 | 547 | 181\u00a0569 | \u2014 | 181\u00a0569 |
Immature fish at sea, round weight < 4.60 kg | 26\u00a0562 | 41\u00a0614 | 2\u00a0370\u00a0985 | 934\u00a0708 | 3\u00a0305\u00a0693 |
Mature fish at sea, round weight > 4.60 kg | 1\u00a0648 | 8\u00a0453 | 343\u00a0655 | 214\u00a0883 | 558\u00a0537 |
Total | 45\u00a0890 | 50\u00a0614 | 2\u00a0896\u00a0209 | 1\u00a0149\u00a0591 | 4\u00a0045\u00a0800 |
2021 | |||||
Biological assets on land * | 28\u00a0522 | 539 | 164\u00a0959 | \u2014 | 164\u00a0959 |
Immature fish at sea, round weight < 4.60 kg | 28\u00a0266 | 51\u00a0944 | 2\u00a0080\u00a0957 | 873\u00a0626 | 2\u00a0954\u00a0583 |
Mature fish at sea, round weight > 4.60 kg | 1\u00a0292 | 6\u00a0638 | 233\u00a0018 | 96\u00a0854 | 329\u00a0872 |
Total | 58\u00a0080 | 59\u00a0121 | 2\u00a0478\u00a0934 | 970\u00a0480 | 3\u00a0449\u00a0412 |
* Smolt production
Abnormal mortality - write-down
Cost related to abnormal mortality will be immediately recognized in profit or loss, and presented as \"decrease due to abnormal mortality/loss\" in the table for opening-to-closing balance reconciliation as disclosed above. Normal mortality is classified as part of the production cost. The classification of mortality only affects the note presentation, and not the fair value calculation.
In Rogaland, the main causes of abnormal mortality at sea in 2022 were sea lice treatment, pancreas disease (PD), winter ulcers and cardiomyopathy syndrome (CMS). In Finnmark, Spironucleus salmonicida (Spiro) and winter ulcers were the main causes. In BC, algae/low oxygen levels, SRS and lice treatment were the main causes for the abnormal mortality.
Spiro was detected in some fish in certain pens in Finnmark. This led to the early harvesting and culling of fish showing signs of ill health in order to protect fish welfare. Spiro in Finnmark is also the main reason the average size of the fish recorded under abnormal mortality is lower in 2022 compared to 2021. Newfoundland did not have abnormal mortality at its sea farms in 2022. We incurred costs related to both mortality and abnormal mortality at our freshwater facilities in Finnmark and BC. Lower quality roe significantly impacted BC\u2019s freshwater production, leading to reduced survival recognized as abnormal mortality.
In 2021, the main causes of abnormal mortality were pancreas disease and sea lice treatment in Rogaland, winter ulcers and a chlorine accident at the harvesting plant in Finnmark, and low oxygen levels in BC.
ABNORMAL MORTALITY - WRITE-DOWN | NUMBER OF | BIOLOGICAL | AVERAGE | ACCRUED COST |
2022 | ||||
Biological assets on land | 3\u00a0116 | 47 | 0.02 | 11\u00a0034 |
Immature fish in sea, round weight < 4.60 kg | 2\u00a0290 | 2\u00a0994 | 1.31 | 154\u00a0694 |
Mature fish in sea, round weight > 4.60 kg | 85 | 414 | 4.89 | 16\u00a0983 |
Total | 5\u00a0491 | 3\u00a0455 | 0.63 | 182\u00a0710 |
2021 | ||||
Biological assets on land | 1\u00a0176 | 186 | 0.16 | 18\u00a0565 |
Immature fish in sea, round weight < 4.60 kg | 957 | 2\u00a0678 | 2.80 | 44\u00a0098 |
Mature fish in sea, round weight > 4.60 kg | 515 | 2\u00a0670 | 5.18 | 54\u00a0787 |
Total | 2\u00a0648 | 5\u00a0534 | 2.09 | 117\u00a0450 |
The abnormal mortality in 2022 includes the culling of fish in Finnmark due to Spiro.\u00a0The write-down in 2022 was significantly impacted by lower quality roe in BC (see the opening-to-closing balance reconciliation at the start of this note). Roe is not included in this table. In 2022, the write-down due to lower quality roe in BC came to NOK 42 million, bringing total write-down for 2022 to NOK 225 million.
OTHER INVENTORIES NOK 1 000 | 2022 | 2021 |
Raw materials (feed) at cost price | 105\u00a0585 | 67\u00a0355 |
Roe | 41\u00a0219 | 3\u00a0000 |
Other (goods in transit, frozen fish, supplementary products) | 93\u00a0368 | 57\u00a0944 |
Total inventories | 240\u00a0172 | 128\u00a0299 |
Impairment of inventories recognized at year-end | 507 | 20\u00a0020 |
COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000 | 2022 | 2021 |
Inventories at 01.01. (inverted number) | -128\u00a0299 | -78\u00a0001 |
Raw materials and consumables purchased | -2\u00a0345\u00a0528 | -1\u00a0788\u00a0565 |
Inventories at 31.12. | 240\u00a0172 | 128\u00a0299 |
Total | -2\u00a0233\u00a0655 | -1\u00a0738\u00a0267 |
2022 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
Currency translation differences | 31\u00a0023 | 50\u00a0560 | -4\u00a0439 | 1\u00a0483 | 78\u00a0627 |
Reclassifications1 | \u2014 | -104\u00a0159 | 124\u00a0845 | -20\u00a0687 | \u2014 |
Additions | \u2014 | \u2014 | 7\u00a0380 | 2\u00a0669 | 10\u00a0048 |
Amortization | \u2014 | \u2014 | -11\u00a0103 | -5\u00a0603 | -16\u00a0706 |
Impairment2 | \u2014 | -135\u00a0693 | \u2014 | \u2014 | -135\u00a0693 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
ACCUMULATED VALUES | |||||
Acquisition cost | 780\u00a0697 | 1\u00a0463\u00a0687 | 173\u00a0274 | 61\u00a0944 | 2\u00a0479\u00a0602 |
Accumulated amortization | \u2014 | \u2014 | -42\u00a0499 | -47\u00a0255 | -89\u00a0754 |
Accumulated impairments | -89\u00a0603 | -130\u00a0752 | \u2014 | \u2014 | -220\u00a0355 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that has been considered as having finite economic life and subject to amortization. In addition, the reclassification lite item relate to other intangible assets reclassified to indefinite licenses following formal approval of license application in Newfoundland.
2For information concerning he impairment of aquaculture licenses in 2022 see Note 28.
2021 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 638\u00a0019 | 1\u00a0493\u00a0419 | 15\u00a0034 | 38\u00a0015 | 2\u00a0184\u00a0486 |
Currency translation differences | 22\u00a0053 | 28\u00a0767 | 524 | 747 | 52\u00a0090 |
Additions | \u2014 | 41 | \u2014 | 3\u00a0792 | 3\u00a0833 |
Amortization | \u2014 | \u2014 | -1\u00a0466 | -5\u00a0726 | -7\u00a0192 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
ACCUMULATED VALUES | |||||
Acquisition cost | 749\u00a0674 | 1\u00a0522\u00a0227 | 44\u00a0397 | 78\u00a0506 | 2\u00a0394\u00a0804 |
Accumulated amortization | \u2014 | \u2014 | -30\u00a0305 | -41\u00a0678 | -71\u00a0983 |
Accumulated impairments | -89\u00a0603 | \u2014 | \u2014 | \u2014 | -89\u00a0603 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
LICENSES
The tables below provide an overview of the Group\u2019s licenses. See Note 2 for further information on licenses.
NORWAY
NORWAY LICENSE CATEGORY | TOTAL NUMBER | CAPACITY TONNES |
Seawater licenses | 35 | 30\u00a0853 |
Green licenses 1 | 8 | 7\u00a0743 |
R&D permit | 3 | 2\u00a0340 |
Broodstock | 3 | 2\u00a0340 |
Smolt | 3 | 4\u00a0045 |
Harvesting pens | 2 | 1\u00a0106 |
Education 2 | 2 | 1\u00a0560 |
Total licenses in production | 56 | 49\u00a0987 |
Visitor center for fish farming 3 | 1 | 780 |
Total | 57 | 50\u00a0767 |
1 Of which four green licenses are converted.
2 Finnmark and Rogaland lease education licenses from the Troms and Finnmark and Rogaland County Councils, respectively.
3 Finnmark has a license for a visitor center for fish farming. The center is under construction, and expected to be completed in 2024. The license cannot be utilized before the visitor center is constructed.
CANADA - BC
All owners of industrial open-net pens must be approved by the the Department of Fisheries and Oceans Canada (DFO), which has regulated the industry since 2009. From 2022, farming companies need to obtain support from local First Nations in the area where the company has its licenses, together with the DFO. Each local First Nation establishes its own protocol and procedures for engaging with companies operating in its territory. Grieg Seafood BC is working with all the local First Nations in their areas of operations and has engaged positively with all of them. The new regulation will contribute to a more sustainable future for local communities and workers. See Note 4 for further information.
West Coast of Vancouver Island | East Coast of Vancouver Island | Total capacity | |
Total | 38\u00a0500 | 17\u00a0500 | 56\u00a0000 |
- Of which relates to Sechelt | 0 | 11\u00a0000 | 11\u00a0000 |
The capacity in BC is merely theoretical capacity, as all locations cannot be utilized simultaneously. BC also has a license for broodstock and smolt.
In 2022, the licenses for Sechelt farming area has been written down (see the section for \u201cWrite-down of tangible and intangible non-current assets\u201d below). Grieg Seafood formally holds the licenses as at year-end 2022, however we have decommissioned our farming operations at the sites.
CANADA - NEWFOUNDLAND
Newfoundland currently holds 13 seawater licenses and one freshwater license, with the aim to develop additional licenses as the project progresses. The regulations for salmon farming in Placentia Bay are based on the number of fish in the sea at any one site. Per license there is a maximum of one million fish in the sea in the first generation, and a maximum of two million fish in the second generation. In addition there are regulations related to fallowing and adherence to certain environmental indicators. See Note 4 for more information.
WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS
In 2022, Grieg Seafood has recorded write-down of tangible and intangible non-current assets totalling NOK 140 million. The write-down is related to reorganization of ownership structure of licenses, and decommissioning of farming operations.
In 2022, Grieg Seafood has reorganized the ownership of commercial aquaculture licenses in Norway, as the Group considered it necessary to separate Norwegian commercial and non-commercial aquaculture licenses by legal entities to be able to correctly calculate and report the resource rent tax proposed by the Norwegian government. As the licenses have been sold intra-group to the estimated fair value, a write-down of NOK 47 million has been recorded in the income statement of Grieg Seafood for the part of book value exceeding
the estimated fair value, estimated as the fair value less cost of disposals (fair value hierarchy level 3) for one specific commercial aquaculture license in our region Rogaland, Norway. The fair value has been estimated using a combination of valuation techniques, incl. used available information in the market (action prices, stock prices) and discounted cash flow model for a standard commercial aquaculture license.
Grieg Seafood has in 2022 discontinued production in the sh\u00edsh\u00e1lh (Sechelt) farming area in British Columbia (BC), which negatively impacted the income statement with a write down of commercial aquaculture licenses by NOK 88 million (recoverable amount of NOK 0 million), in addition to the write-down of related seawater production equipment and -assets by NOK 4 million, in total NOK 93 million. At year-end 2022, all fish in the Sechelt farming area has been harvested.
WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 | Note | 2022 | 2021 |
Commercial aquaculture licenses in Rogaland, Norway | 47\u00a0242 | \u2014 | |
Commercial aquaculture licenses in British Columbia, Canada | 88\u00a0451 | \u2014 | |
Non-current tangible assets in British Columbia, Canada | 11 | 4\u00a0382 | \u2014 |
Total write-down | 140\u00a0074 | \u2014 | |
- Of which total write-down of intangible non-current assets | 135\u00a0693 | \u2014 |
IMPAIRMENT TESTING OF GOODWILL AND LICENSES
As at year-end 2022, except for the write-down of non-current tangible and intangible assets for the specific events as disclosed above, no impairments of goodwill or licenses were recognized in 2022.
Goodwill and licenses with indefinite economic lives are subject to an annual impairment test. Tests are performed more frequently where indications of impairment exist. Licenses with finite useful lives are tested for impairment only if there are indications of a decline in value. The estimated value in use (VIU) is used as a basis for calculating the recoverable amount, except for Grieg Newfoundland where the fair value less cost of disposal (FVLCD) has been used as basis for recoverable amount. Grieg Newfoundland was acquired in 2020 and reported as a segment as from 2021. During 2022, the first transfer of smolt to sea was successfully completed. The first harvest is expected to commence late 2023.
CASH-GENERATING UNIT NOK 1 000 | LOCATION | BOOK VALUE OF | BOOK VALUE | TOTAL |
Rogaland | Norway | 20\u00a0463 | 206\u00a0394 | 226\u00a0857 |
Finnmark | Norway | \u2014 | 397\u00a0218 | 397\u00a0218 |
British Columbia (BC) | Canada | 10\u00a0441 | 88\u00a0999 | 99\u00a0441 |
Newfoundland | Canada | 660\u00a0190 | 771\u00a0099 | 1\u00a0431\u00a0289 |
Total value | 691\u00a0094 | 1\u00a0463\u00a0710 | 2\u00a0154\u00a0804 |
Goodwill arises on the acquisition of the subsidiaries and is measured on the basis of a group of cash-generating units that are expected to benefit from the synergy effects in the overall segment. Annual impairment tests are carried out on goodwill and licenses. The recoverable amount is calculated on the basis of value-in-use, except for Grieg Newfoundland where the calculation is based on fair value less cost of disposal (FVLCD). These calculations use after tax cash flow projections based on financial budgets from the respective cash-generating units over a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. For Newfoundland, the period is 13 years based on the first harvest expected in 2023. During the first few years, the cash flow will be negative due to low production and harvest volume, in addition to capital allocated to building of biomass and growth investments.
Assumptions used for estimating recoverable amount | Rogaland | Finnmark | BC | Newfoundland |
Budget period | 3 years | 3 years | 3 years | 13 years |
Increase in revenues in budget period | 5% | 14% | 76% | NA |
Operational EBITDA margin\u00a0 1) | 29% -34% | 34% - 39% | 28% - 34% | 0% -36% |
Operational EBITDA margin in terminal period | 30% | 39% | 33% | 36% |
Harvest growth \u2013 tonnes 2) | 2% | 8% | 54% | NA |
Required rate of return before tax 3) | 11% | 11% | 11% | 14.2% |
Required rate of return after tax 3) | 8.2% | 8.2% | 8.3% | 10.0% |
Growth rate 4) | 1% | 1% | 1% | 1% |
The budget period/explicit period is three years for Rogaland, Finnmark and BC. Impairment tests are initially based on the Group\u2019s rolling four-year projections, which are also used in connection with the Group's liquidity planning. Future price levels are estimated by using Fish Pool forward prices as a basis, adjusted for other considerations such as quality reductions and shipping costs. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 13 years to reflect production at full capacity in the terminal year. Although production will increase at a slow pace in the first few years, it will pick up speed once the facilities are completed and more smolt are transferred to the sea. We target a harvest volume of 15 000 tonnes in 2026, which we aim to increase to 45 000 tonnes in 2035.
The notes for the table \u201cAssumptions used for estimating recoverable amount\u201d (above) are presented below:
1. Budgeted Operational EBITDA margin: The margin remains more stable for the Norwegian regions, and is assumed to increase for our overseas regions during the budget period. Increase in harvest volume is assumed in all regions towards 2025.
2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2022 volume. A corresponding increase in output is assumed over time.
3. Weighted required return on capital employed before and after tax. Cash flow forecasts are thus estimated after tax. In the calculation, the return on capital employed is also after tax.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2025, the annual reinvestment is assumed to be equal to annual depreciation.
OPERATIONAL EBITDA MARGIN IN THE BUDGET AND TERMINAL PERIOD
The budgeted Operational EBITDA margin is based on past performance, expected cost of production and expected market developments. An increase in gutted weight output is assumed towards 2025 (2035 for Grieg Newfoundland). The increased harvest volume assumes an increase in utilization of existing production capacity and licenses, reflecting the Group's post-smolt strategy and operational improvements. We expect further growth to come from better utilization of our seawater licenses by moving more growth to land through our post-smolt program. We have come far with our post-smolt strategy in Rogaland, and will increase post-smolt capacity also in Finnmark and BC. The expansion of the smolt facility in BC was completed in 2022. Better utilization of our seawater licenses by improving biosecurity, fish health, welfare and survival rates, is also expected to secure on-growth and harvest volumes. Flexibility is a requirement to achieve better utilization of our capacity, and we are continuously looking for opportunities to secure access to new locations.
The assumptions in the terminal year are based on the budget, adjusted for inflation. The applied discount rates are after tax and reflect specific risks relating to the relevant operating segments.
SENSITIVITY ANALYSIS
The assessment of fair value less cost of disposal and value-in-use is sensitive to changes in the assumptions made, the most important of which are the discount rate and Operational EBIT/kg. A sensitivity analysis has been carried out based on these assumptions for all groups of cost-generating units. An isolated increase in the discount rate by two percentage points would result in an estimated impairment for the Newfoundland operations of NOK 225 million, while a reduction of NOK 6 in Operational EBIT/kg for the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 79 million. The other cost-generating units are not sensitive to equivalent changes\u00a0 in the same assumptions.
2022 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
Currency translation differences | 31\u00a0023 | 50\u00a0560 | -4\u00a0439 | 1\u00a0483 | 78\u00a0627 |
Reclassifications1 | \u2014 | -104\u00a0159 | 124\u00a0845 | -20\u00a0687 | \u2014 |
Additions | \u2014 | \u2014 | 7\u00a0380 | 2\u00a0669 | 10\u00a0048 |
Amortization | \u2014 | \u2014 | -11\u00a0103 | -5\u00a0603 | -16\u00a0706 |
Impairment2 | \u2014 | -135\u00a0693 | \u2014 | \u2014 | -135\u00a0693 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
ACCUMULATED VALUES | |||||
Acquisition cost | 780\u00a0697 | 1\u00a0463\u00a0687 | 173\u00a0274 | 61\u00a0944 | 2\u00a0479\u00a0602 |
Accumulated amortization | \u2014 | \u2014 | -42\u00a0499 | -47\u00a0255 | -89\u00a0754 |
Accumulated impairments | -89\u00a0603 | -130\u00a0752 | \u2014 | \u2014 | -220\u00a0355 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that has been considered as having finite economic life and subject to amortization. In addition, the reclassification lite item relate to other intangible assets reclassified to indefinite licenses following formal approval of license application in Newfoundland.
2For information concerning he impairment of aquaculture licenses in 2022 see Note 28.
2021 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 638\u00a0019 | 1\u00a0493\u00a0419 | 15\u00a0034 | 38\u00a0015 | 2\u00a0184\u00a0486 |
Currency translation differences | 22\u00a0053 | 28\u00a0767 | 524 | 747 | 52\u00a0090 |
Additions | \u2014 | 41 | \u2014 | 3\u00a0792 | 3\u00a0833 |
Amortization | \u2014 | \u2014 | -1\u00a0466 | -5\u00a0726 | -7\u00a0192 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
ACCUMULATED VALUES | |||||
Acquisition cost | 749\u00a0674 | 1\u00a0522\u00a0227 | 44\u00a0397 | 78\u00a0506 | 2\u00a0394\u00a0804 |
Accumulated amortization | \u2014 | \u2014 | -30\u00a0305 | -41\u00a0678 | -71\u00a0983 |
Accumulated impairments | -89\u00a0603 | \u2014 | \u2014 | \u2014 | -89\u00a0603 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
2022 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
Currency translation differences | 31\u00a0023 | 50\u00a0560 | -4\u00a0439 | 1\u00a0483 | 78\u00a0627 |
Reclassifications1 | \u2014 | -104\u00a0159 | 124\u00a0845 | -20\u00a0687 | \u2014 |
Additions | \u2014 | \u2014 | 7\u00a0380 | 2\u00a0669 | 10\u00a0048 |
Amortization | \u2014 | \u2014 | -11\u00a0103 | -5\u00a0603 | -16\u00a0706 |
Impairment2 | \u2014 | -135\u00a0693 | \u2014 | \u2014 | -135\u00a0693 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
ACCUMULATED VALUES | |||||
Acquisition cost | 780\u00a0697 | 1\u00a0463\u00a0687 | 173\u00a0274 | 61\u00a0944 | 2\u00a0479\u00a0602 |
Accumulated amortization | \u2014 | \u2014 | -42\u00a0499 | -47\u00a0255 | -89\u00a0754 |
Accumulated impairments | -89\u00a0603 | -130\u00a0752 | \u2014 | \u2014 | -220\u00a0355 |
Book value at 31.12. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that has been considered as having finite economic life and subject to amortization. In addition, the reclassification lite item relate to other intangible assets reclassified to indefinite licenses following formal approval of license application in Newfoundland.
2For information concerning he impairment of aquaculture licenses in 2022 see Note 28.
2021 NOK 1 000 | GOODWILL | FISH FARMING | FISH FARMING | OTHER | TOTAL |
Book value at 01.01. | 638\u00a0019 | 1\u00a0493\u00a0419 | 15\u00a0034 | 38\u00a0015 | 2\u00a0184\u00a0486 |
Currency translation differences | 22\u00a0053 | 28\u00a0767 | 524 | 747 | 52\u00a0090 |
Additions | \u2014 | 41 | \u2014 | 3\u00a0792 | 3\u00a0833 |
Amortization | \u2014 | \u2014 | -1\u00a0466 | -5\u00a0726 | -7\u00a0192 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
ACCUMULATED VALUES | |||||
Acquisition cost | 749\u00a0674 | 1\u00a0522\u00a0227 | 44\u00a0397 | 78\u00a0506 | 2\u00a0394\u00a0804 |
Accumulated amortization | \u2014 | \u2014 | -30\u00a0305 | -41\u00a0678 | -71\u00a0983 |
Accumulated impairments | -89\u00a0603 | \u2014 | \u2014 | \u2014 | -89\u00a0603 |
Book value at 31.12. | 660\u00a0071 | 1\u00a0522\u00a0227 | 14\u00a0092 | 36\u00a0828 | 2\u00a0233\u00a0218 |
See Note 2 for information on the useful economic life of assets, and Note 12 for information on assets pledged as security for financial liabilities.
2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Currency translation differences | 28\u00a0997 | 15\u00a0431 | 8\u00a0944 | 17\u00a0390 | 70\u00a0762 |
Reclassification | -35\u00a0799 | 21\u00a0046 | -747 | 15\u00a0501 | \u2014 |
Grants received and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions2 | 106\u00a0449 | 393\u00a0178 | 180\u00a0331 | 256\u00a0922 | 936\u00a0879 |
Disposals | -269 | -5\u00a0889 | -3\u00a0160 | -2\u00a0803 | -12\u00a0121 |
Depreciation | -41\u00a0726 | -108\u00a0632 | -106\u00a0867 | -177\u00a0416 | -434\u00a0641 |
Impairment3 | \u2014 | -113 | -4\u00a0065 | -204 | -4\u00a0382 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0611\u00a0916 | 2\u00a0178\u00a0260 | 1\u00a0439\u00a0973 | 1\u00a0320\u00a0913 | 6\u00a0551\u00a0062 |
Accumulated depreciation | -309\u00a0317 | -797\u00a0339 | -832\u00a0197 | -572\u00a0483 | -2\u00a0511\u00a0335 |
Accumulated impairments | \u2014 | -107 | -3\u00a0838 | -192 | -4\u00a0137 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Of which book value of non-depreciable property | 113\u00a0016 | \u2014 | \u2014 | \u2014 | 113\u00a0016 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
See Note 13 for specification of the Group's right-of-use assets and further information on its leases.
1Grants received and other deductions to historic cost, of which NOK -86 million relates to the reversal of Investment Tax Credit (ITC) carried over from 31 December 2021 in Newfoundland (see Note 23) and NOK 9 million relates to government grants received in 2022 in Newfoundland.
2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region.
3Impairment in 2022 is related to the Sechelt farming area in British Columbia, Canada. See Note 10 and 28 for more information.
2021 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0182\u00a0595 | 893\u00a0039 | 510\u00a0212 | 447\u00a0308 | 3\u00a0033\u00a0154 |
Currency translation differences | 25\u00a0126 | -16\u00a0908 | 34\u00a0232 | 4\u00a0830 | 47\u00a0280 |
Reclassification | -132\u00a0195 | 112\u00a0098 | 2\u00a0798 | 17\u00a0299 | \u2014 |
Grants received | -88\u00a0910 | \u2014 | \u2014 | \u2014 | -88\u00a0910 |
Additions | 220\u00a0066 | 187\u00a0024 | 89\u00a0446 | 303\u00a0638 | 800\u00a0175 |
Disposals | 40 | -8\u00a0812 | -6\u00a0613 | -5\u00a0201 | -20\u00a0587 |
Depreciation | -37\u00a0436 | -101\u00a0422 | -100\u00a0574 | -129\u00a0050 | -368\u00a0482 |
Book value at 31.12 | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0436\u00a0555 | 1\u00a0786\u00a0948 | 1\u00a0281\u00a0384 | 1\u00a0153\u00a0100 | 5\u00a0657\u00a0987 |
Accumulated depreciation | -267\u00a0270 | -721\u00a0930 | -751\u00a0882 | -514\u00a0276 | -2\u00a0255\u00a0358 |
Accumulated impairments | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Book value at 31.12. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Of which book value of non-depreciable property | 107\u00a0839 | \u2014 | \u2014 | \u2014 | 107\u00a0839 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS
In 2022, Grieg Seafood has recorded write-down of tangible and intangible non-current assets totalling NOK 140 million. The write-down is related to reorganization of ownership structure of licenses, and decommissioning of farming operations.
In 2022, Grieg Seafood has reorganized the ownership of commercial aquaculture licenses in Norway, as the Group considered it necessary to separate Norwegian commercial and non-commercial aquaculture licenses by legal entities to be able to correctly calculate and report the resource rent tax proposed by the Norwegian government. As the licenses have been sold intra-group to the estimated fair value, a write-down of NOK 47 million has been recorded in the income statement of Grieg Seafood for the part of book value exceeding
the estimated fair value, estimated as the fair value less cost of disposals (fair value hierarchy level 3) for one specific commercial aquaculture license in our region Rogaland, Norway. The fair value has been estimated using a combination of valuation techniques, incl. used available information in the market (action prices, stock prices) and discounted cash flow model for a standard commercial aquaculture license.
Grieg Seafood has in 2022 discontinued production in the sh\u00edsh\u00e1lh (Sechelt) farming area in British Columbia (BC), which negatively impacted the income statement with a write down of commercial aquaculture licenses by NOK 88 million (recoverable amount of NOK 0 million), in addition to the write-down of related seawater production equipment and -assets by NOK 4 million, in total NOK 93 million. At year-end 2022, all fish in the Sechelt farming area has been harvested.
WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 | Note | 2022 | 2021 |
Commercial aquaculture licenses in Rogaland, Norway | 47\u00a0242 | \u2014 | |
Commercial aquaculture licenses in British Columbia, Canada | 88\u00a0451 | \u2014 | |
Non-current tangible assets in British Columbia, Canada | 11 | 4\u00a0382 | \u2014 |
Total write-down | 140\u00a0074 | \u2014 | |
- Of which total write-down of intangible non-current assets | 135\u00a0693 | \u2014 |
IMPAIRMENT TESTING OF GOODWILL AND LICENSES
As at year-end 2022, except for the write-down of non-current tangible and intangible assets for the specific events as disclosed above, no impairments of goodwill or licenses were recognized in 2022.
Goodwill and licenses with indefinite economic lives are subject to an annual impairment test. Tests are performed more frequently where indications of impairment exist. Licenses with finite useful lives are tested for impairment only if there are indications of a decline in value. The estimated value in use (VIU) is used as a basis for calculating the recoverable amount, except for Grieg Newfoundland where the fair value less cost of disposal (FVLCD) has been used as basis for recoverable amount. Grieg Newfoundland was acquired in 2020 and reported as a segment as from 2021. During 2022, the first transfer of smolt to sea was successfully completed. The first harvest is expected to commence late 2023.
CASH-GENERATING UNIT NOK 1 000 | LOCATION | BOOK VALUE OF | BOOK VALUE | TOTAL |
Rogaland | Norway | 20\u00a0463 | 206\u00a0394 | 226\u00a0857 |
Finnmark | Norway | \u2014 | 397\u00a0218 | 397\u00a0218 |
British Columbia (BC) | Canada | 10\u00a0441 | 88\u00a0999 | 99\u00a0441 |
Newfoundland | Canada | 660\u00a0190 | 771\u00a0099 | 1\u00a0431\u00a0289 |
Total value | 691\u00a0094 | 1\u00a0463\u00a0710 | 2\u00a0154\u00a0804 |
Goodwill arises on the acquisition of the subsidiaries and is measured on the basis of a group of cash-generating units that are expected to benefit from the synergy effects in the overall segment. Annual impairment tests are carried out on goodwill and licenses. The recoverable amount is calculated on the basis of value-in-use, except for Grieg Newfoundland where the calculation is based on fair value less cost of disposal (FVLCD). These calculations use after tax cash flow projections based on financial budgets from the respective cash-generating units over a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. For Newfoundland, the period is 13 years based on the first harvest expected in 2023. During the first few years, the cash flow will be negative due to low production and harvest volume, in addition to capital allocated to building of biomass and growth investments.
Assumptions used for estimating recoverable amount | Rogaland | Finnmark | BC | Newfoundland |
Budget period | 3 years | 3 years | 3 years | 13 years |
Increase in revenues in budget period | 5% | 14% | 76% | NA |
Operational EBITDA margin\u00a0 1) | 29% -34% | 34% - 39% | 28% - 34% | 0% -36% |
Operational EBITDA margin in terminal period | 30% | 39% | 33% | 36% |
Harvest growth \u2013 tonnes 2) | 2% | 8% | 54% | NA |
Required rate of return before tax 3) | 11% | 11% | 11% | 14.2% |
Required rate of return after tax 3) | 8.2% | 8.2% | 8.3% | 10.0% |
Growth rate 4) | 1% | 1% | 1% | 1% |
The budget period/explicit period is three years for Rogaland, Finnmark and BC. Impairment tests are initially based on the Group\u2019s rolling four-year projections, which are also used in connection with the Group's liquidity planning. Future price levels are estimated by using Fish Pool forward prices as a basis, adjusted for other considerations such as quality reductions and shipping costs. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 13 years to reflect production at full capacity in the terminal year. Although production will increase at a slow pace in the first few years, it will pick up speed once the facilities are completed and more smolt are transferred to the sea. We target a harvest volume of 15 000 tonnes in 2026, which we aim to increase to 45 000 tonnes in 2035.
The notes for the table \u201cAssumptions used for estimating recoverable amount\u201d (above) are presented below:
1. Budgeted Operational EBITDA margin: The margin remains more stable for the Norwegian regions, and is assumed to increase for our overseas regions during the budget period. Increase in harvest volume is assumed in all regions towards 2025.
2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2022 volume. A corresponding increase in output is assumed over time.
3. Weighted required return on capital employed before and after tax. Cash flow forecasts are thus estimated after tax. In the calculation, the return on capital employed is also after tax.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2025, the annual reinvestment is assumed to be equal to annual depreciation.
OPERATIONAL EBITDA MARGIN IN THE BUDGET AND TERMINAL PERIOD
The budgeted Operational EBITDA margin is based on past performance, expected cost of production and expected market developments. An increase in gutted weight output is assumed towards 2025 (2035 for Grieg Newfoundland). The increased harvest volume assumes an increase in utilization of existing production capacity and licenses, reflecting the Group's post-smolt strategy and operational improvements. We expect further growth to come from better utilization of our seawater licenses by moving more growth to land through our post-smolt program. We have come far with our post-smolt strategy in Rogaland, and will increase post-smolt capacity also in Finnmark and BC. The expansion of the smolt facility in BC was completed in 2022. Better utilization of our seawater licenses by improving biosecurity, fish health, welfare and survival rates, is also expected to secure on-growth and harvest volumes. Flexibility is a requirement to achieve better utilization of our capacity, and we are continuously looking for opportunities to secure access to new locations.
The assumptions in the terminal year are based on the budget, adjusted for inflation. The applied discount rates are after tax and reflect specific risks relating to the relevant operating segments.
SENSITIVITY ANALYSIS
The assessment of fair value less cost of disposal and value-in-use is sensitive to changes in the assumptions made, the most important of which are the discount rate and Operational EBIT/kg. A sensitivity analysis has been carried out based on these assumptions for all groups of cost-generating units. An isolated increase in the discount rate by two percentage points would result in an estimated impairment for the Newfoundland operations of NOK 225 million, while a reduction of NOK 6 in Operational EBIT/kg for the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 79 million. The other cost-generating units are not sensitive to equivalent changes\u00a0 in the same assumptions.
2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Currency translation differences | 28\u00a0997 | 15\u00a0431 | 8\u00a0944 | 17\u00a0390 | 70\u00a0762 |
Reclassification | -35\u00a0799 | 21\u00a0046 | -747 | 15\u00a0501 | \u2014 |
Grants received and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions2 | 106\u00a0449 | 393\u00a0178 | 180\u00a0331 | 256\u00a0922 | 936\u00a0879 |
Disposals | -269 | -5\u00a0889 | -3\u00a0160 | -2\u00a0803 | -12\u00a0121 |
Depreciation | -41\u00a0726 | -108\u00a0632 | -106\u00a0867 | -177\u00a0416 | -434\u00a0641 |
Impairment3 | \u2014 | -113 | -4\u00a0065 | -204 | -4\u00a0382 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0611\u00a0916 | 2\u00a0178\u00a0260 | 1\u00a0439\u00a0973 | 1\u00a0320\u00a0913 | 6\u00a0551\u00a0062 |
Accumulated depreciation | -309\u00a0317 | -797\u00a0339 | -832\u00a0197 | -572\u00a0483 | -2\u00a0511\u00a0335 |
Accumulated impairments | \u2014 | -107 | -3\u00a0838 | -192 | -4\u00a0137 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Of which book value of non-depreciable property | 113\u00a0016 | \u2014 | \u2014 | \u2014 | 113\u00a0016 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
See Note 13 for specification of the Group's right-of-use assets and further information on its leases.
1Grants received and other deductions to historic cost, of which NOK -86 million relates to the reversal of Investment Tax Credit (ITC) carried over from 31 December 2021 in Newfoundland (see Note 23) and NOK 9 million relates to government grants received in 2022 in Newfoundland.
2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region.
3Impairment in 2022 is related to the Sechelt farming area in British Columbia, Canada. See Note 10 and 28 for more information.
2021 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0182\u00a0595 | 893\u00a0039 | 510\u00a0212 | 447\u00a0308 | 3\u00a0033\u00a0154 |
Currency translation differences | 25\u00a0126 | -16\u00a0908 | 34\u00a0232 | 4\u00a0830 | 47\u00a0280 |
Reclassification | -132\u00a0195 | 112\u00a0098 | 2\u00a0798 | 17\u00a0299 | \u2014 |
Grants received | -88\u00a0910 | \u2014 | \u2014 | \u2014 | -88\u00a0910 |
Additions | 220\u00a0066 | 187\u00a0024 | 89\u00a0446 | 303\u00a0638 | 800\u00a0175 |
Disposals | 40 | -8\u00a0812 | -6\u00a0613 | -5\u00a0201 | -20\u00a0587 |
Depreciation | -37\u00a0436 | -101\u00a0422 | -100\u00a0574 | -129\u00a0050 | -368\u00a0482 |
Book value at 31.12 | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0436\u00a0555 | 1\u00a0786\u00a0948 | 1\u00a0281\u00a0384 | 1\u00a0153\u00a0100 | 5\u00a0657\u00a0987 |
Accumulated depreciation | -267\u00a0270 | -721\u00a0930 | -751\u00a0882 | -514\u00a0276 | -2\u00a0255\u00a0358 |
Accumulated impairments | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Book value at 31.12. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Of which book value of non-depreciable property | 107\u00a0839 | \u2014 | \u2014 | \u2014 | 107\u00a0839 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Currency translation differences | 28\u00a0997 | 15\u00a0431 | 8\u00a0944 | 17\u00a0390 | 70\u00a0762 |
Reclassification | -35\u00a0799 | 21\u00a0046 | -747 | 15\u00a0501 | \u2014 |
Grants received and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions2 | 106\u00a0449 | 393\u00a0178 | 180\u00a0331 | 256\u00a0922 | 936\u00a0879 |
Disposals | -269 | -5\u00a0889 | -3\u00a0160 | -2\u00a0803 | -12\u00a0121 |
Depreciation | -41\u00a0726 | -108\u00a0632 | -106\u00a0867 | -177\u00a0416 | -434\u00a0641 |
Impairment3 | \u2014 | -113 | -4\u00a0065 | -204 | -4\u00a0382 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0611\u00a0916 | 2\u00a0178\u00a0260 | 1\u00a0439\u00a0973 | 1\u00a0320\u00a0913 | 6\u00a0551\u00a0062 |
Accumulated depreciation | -309\u00a0317 | -797\u00a0339 | -832\u00a0197 | -572\u00a0483 | -2\u00a0511\u00a0335 |
Accumulated impairments | \u2014 | -107 | -3\u00a0838 | -192 | -4\u00a0137 |
Book value at 31.12. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Of which book value of non-depreciable property | 113\u00a0016 | \u2014 | \u2014 | \u2014 | 113\u00a0016 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
See Note 13 for specification of the Group's right-of-use assets and further information on its leases.
1Grants received and other deductions to historic cost, of which NOK -86 million relates to the reversal of Investment Tax Credit (ITC) carried over from 31 December 2021 in Newfoundland (see Note 23) and NOK 9 million relates to government grants received in 2022 in Newfoundland.
2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region.
3Impairment in 2022 is related to the Sechelt farming area in British Columbia, Canada. See Note 10 and 28 for more information.
2021 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0182\u00a0595 | 893\u00a0039 | 510\u00a0212 | 447\u00a0308 | 3\u00a0033\u00a0154 |
Currency translation differences | 25\u00a0126 | -16\u00a0908 | 34\u00a0232 | 4\u00a0830 | 47\u00a0280 |
Reclassification | -132\u00a0195 | 112\u00a0098 | 2\u00a0798 | 17\u00a0299 | \u2014 |
Grants received | -88\u00a0910 | \u2014 | \u2014 | \u2014 | -88\u00a0910 |
Additions | 220\u00a0066 | 187\u00a0024 | 89\u00a0446 | 303\u00a0638 | 800\u00a0175 |
Disposals | 40 | -8\u00a0812 | -6\u00a0613 | -5\u00a0201 | -20\u00a0587 |
Depreciation | -37\u00a0436 | -101\u00a0422 | -100\u00a0574 | -129\u00a0050 | -368\u00a0482 |
Book value at 31.12 | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0436\u00a0555 | 1\u00a0786\u00a0948 | 1\u00a0281\u00a0384 | 1\u00a0153\u00a0100 | 5\u00a0657\u00a0987 |
Accumulated depreciation | -267\u00a0270 | -721\u00a0930 | -751\u00a0882 | -514\u00a0276 | -2\u00a0255\u00a0358 |
Accumulated impairments | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Book value at 31.12. | 1\u00a0169\u00a0285 | 1\u00a0065\u00a0018 | 529\u00a0502 | 638\u00a0824 | 3\u00a0402\u00a0629 |
Of which book value of non-depreciable property | 107\u00a0839 | \u2014 | \u2014 | \u2014 | 107\u00a0839 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 13) | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
Grieg Seafood ASA has a syndicated loan provided by DNB and Nordea. The syndicated financing from secured lenders of Grieg Seafood consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities. The debt structure comprises a NOK 750 million term loan, an EUR 75 million term loan, a NOK 1 500 million revolving credit facility and a NOK 200 million overdraft facility. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date. The financing carries floating interest rates, calculated as the relevant three month IBOR plus the applicable margin per interest period. The financial covenant of the facility is a minimum equity-ratio requirement of 31%, measured excl. the effect of IFRS 16.
In addition to the senior secured facility, the Group also has a green bond (GSF01 G, listed at Euronext), which matures in June 2025. The outstanding amount of the bond loan was NOK 1 424 million at the end of 2022. The bond carries a coupon rate of three months NIBOR + 3.4% p.a. The bond's financial covenant is an equity ratio requirement of minimum 30%, measured consistent with the Group\u2019s equity-ratio financial covenants as defined in its syndicated loan agreement with secured lenders.
Grieg Seafood ASA was in compliance with its financial covenant at 31 December 2022. At 31 December 2022, the Group had an equity ratio of 50% (2021: 52%) while the equity ratio according to financial covenant was 52%, compared to 54% at 31 December 2021.
In addition to bank- and bond loan, the Group's financing consists of lease agreements with credit institutions, in addition to the effect of IFRS 16 by capitalizing leases on the balance sheet (operational leases according to IFRS in force prior to 1 January 2019).
Total unutilized credit facilities of the Group amount to NOK 1 700 million as at 31 December 2022 (2021: NOK 885 million).
NON-CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
NON-CURRENT LIABILITIES (INTEREST BEARING) | ||
Green bond | 1\u00a0423\u00a0500 | 1\u00a0500\u00a0000 |
Non-current syndicated loan | 1\u00a0346\u00a0218 | 374\u00a0580 |
Non-current credit facility | \u2014 | 440\u00a0000 |
Non-current lease liabilities (prior IAS 17 finance leases) | 318\u00a0198 | 287\u00a0578 |
Non-current lease liabilities (prior IAS 17 operational leases) | 335\u00a0452 | 290\u00a0219 |
Other non-current liabilities | 94\u00a0144 | 96\u00a0091 |
Total | 3\u00a0517\u00a0512 | 2\u00a0988\u00a0468 |
Amortization effect of loans | -25\u00a0053 | -29\u00a0671 |
Total non-current liabilities | 3\u00a0492\u00a0459 | 2\u00a0958\u00a0797 |
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000 | 2022 | 2021 |
Current portion of borrowings | 141\u00a0968 | 54\u00a0475 |
Current portion lease liabilities (prior IAS 17 finance leases) | 78\u00a0416 | 72\u00a0918 |
Current portion lease liabilities (prior IAS 17 operational leases) | 148\u00a0494 | 105\u00a0114 |
Total current liabilities (interest-bearing) | 368\u00a0878 | 232\u00a0507 |
NET INTEREST-BEARING LIABILITIES NOK 1 000 | 2022 | 2021 |
Total non-current interest-bearing liabilities (see above)* | 3\u00a0517\u00a0512 | 2\u00a0988\u00a0468 |
Total current interest-bearing liabilities (see above) | 368\u00a0878 | 232\u00a0507 |
Gross interest-bearing liabilities | 3\u00a0886\u00a0390 | 3\u00a0220\u00a0974 |
Cash and cash equivalents | 642\u00a0719 | 928\u00a0342 |
Investments in money market funds | 1\u00a0012\u00a0848 | \u2014 |
Loans to associates | 8\u00a0300 | 2\u00a0111 |
Net interest-bearing liabilities | 2\u00a0222\u00a0522 | 2\u00a0290\u00a0520 |
Lease liabilities (prior IAS 17 operational leases)** | -483\u00a0946 | -395\u00a0332 |
Net interest-bearing liabilities ex. the effect of IFRS 16 | 1\u00a0738\u00a0576 | 1\u00a0895\u00a0188 |
*Green bond and non-current borrowings including syndicated term loan and revolving facility as presented above, are presented excluding amortized effect of loans.
**Leasing liabilities that would, according to the IFRS in force prior to 1 January 2019, be classified as operational leases, are excluded from the net interest-bearing liabilities according to the covenant calculation.
PAYMENT PROFILE NON-CURRENT LIABILITIES 31.12.2022 | 2023 | 2024 | 2025 | 2026 | 2027 | LATER | TOTAL |
Green bond | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Non-current syndicated term-loan | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Lease liabilities (prior IAS 17 finance leases) | 78\u00a0416 | 67\u00a0679 | 55\u00a0503 | 51\u00a0599 | 46\u00a0618 | 96\u00a0799 | 396\u00a0614 |
Lease liabilities (prior IAS 17 operational leases) | 148\u00a0494 | 133\u00a0764 | 66\u00a0556 | 62\u00a0901 | 41\u00a0864 | 30\u00a0366 | 483\u00a0946 |
Other non-current liabilities* | 13\u00a0757 | 11\u00a0310 | 9\u00a0944 | 9\u00a0856 | 11\u00a0004 | 52\u00a0029 | 107\u00a0900 |
Total | 368\u00a0878 | 340\u00a0965 | 1\u00a0683\u00a0714 | 252\u00a0568 | 1\u00a0061\u00a0071 | 179\u00a0194 | 3\u00a0886\u00a0390 |
*NOK 107.8 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity.
PAYMENT PROFILE NON-CURRENT LIABILITIES 31.12.2021 | 2022 | 2023 | 2024 | 2025 | 2026 | LATER | TOTAL |
Green bond | \u2014 | \u2014 | \u2014 | 1\u00a0500\u00a0000 | \u2014 | \u2014 | 1\u00a0500\u00a0000 |
Non-current syndicated term-loan | 49\u00a0944 | 374\u00a0580 | \u2014 | \u2014 | \u2014 | \u2014 | 424\u00a0524 |
Non-current syndicated revolving credit facility | \u2014 | 440\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | 440\u00a0000 |
Lease liabilities (prior IAS 17 finance leases) | 72\u00a0918 | 67\u00a0410 | 57\u00a0199 | 43\u00a0909 | 39\u00a0525 | 79\u00a0535 | 360\u00a0496 |
Lease liabilities (prior IAS 17 operational leases) | 104\u00a0772 | 81\u00a0209 | 80\u00a0980 | 51\u00a0033 | 37\u00a0084 | 40\u00a0255 | 395\u00a0332 |
Other non-current liabilities* | 4\u00a0873 | 11\u00a0773 | 12\u00a0310 | 9\u00a0200 | 8\u00a0114 | 54\u00a0353 | 100\u00a0622 |
Total | 232\u00a0507 | 974\u00a0972 | 150\u00a0489 | 1\u00a0604\u00a0141 | 84\u00a0723 | 174\u00a0142 | 3\u00a0220\u00a0974 |
*NOK 98.6 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity.
NOK 1 000 | 2022 | 2021 |
Liabilities secured by mortgages/charges on assets* | 1\u00a0899\u00a0364 | 1\u00a0248\u00a0889 |
*See the comment below the table for assets pledged as security.
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2022 | 2021 |
Licenses | 1\u00a0463\u00a0709 | 1\u00a0536\u00a0319 |
Property, plant and equipment * | 3\u00a0562\u00a0816 | 3\u00a0017\u00a0023 |
Trade receivables | 259\u00a0137 | 151\u00a0793 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0136\u00a0381 | 2\u00a0607\u00a0231 |
Total assets pledged as security | 8\u00a0422\u00a0043 | 7\u00a0312\u00a0366 |
*Book value of liabilities secured by mortgage/charges on assets, and the property, plant and equipment does not include the book value of the effect of IFRS 16 (compared to the IFRS in force prior to 1 January 2019) on right-of-use and lease liability.
Pledges also include shares in subsidiaries. The book value of these shares in the consolidated financial statements is NOK 0.
BOOK VALUE OF GROUP BORROWINGS BY | 31.12.2022 | NOK | EUR | CAD |
Green bond | 1\u00a0423\u00a0500 | 1\u00a0423\u00a0500 | \u2014 | \u2014 |
Non-current syndicated term-loan | 1\u00a0474\u00a0429 | 718\u00a0750 | 755\u00a0679 | \u2014 |
Lease liability (prior IAS 17 finance leases) | 396\u00a0614 | 396\u00a0087 | \u2014 | 527 |
Lease liability (prior IAS 17 operational leases) | 483\u00a0946 | 140\u00a0042 | \u2014 | 343\u00a0904 |
Other non-current and current liabilities | 107\u00a0900 | \u2014 | \u2014 | 107\u00a0900 |
Amortization effect of loans | -25\u00a0053 | -25\u00a0053 | \u2014 | \u2014 |
Total | 3\u00a0861\u00a0337 | 2\u00a0653\u00a0326 | 755\u00a0679 | 452\u00a0331 |
BOOK VALUE OF GROUP BORROWINGS BY | 31.12.2021 | NOK | EUR | CAD |
Green bond | 1\u00a0500\u00a0000 | 1\u00a0500\u00a0000 | \u2014 | \u2014 |
Non-current syndicated term-loan | 424\u00a0524 | \u2014 | 424\u00a0524 | \u2014 |
Non-current syndicated revolving credit facility | 440\u00a0000 | 440\u00a0000 | \u2014 | \u2014 |
Lease liability (prior IAS 17 finance leases) | 360\u00a0496 | 357\u00a0942 | \u2014 | 2\u00a0554 |
Lease liability (prior IAS 17 operational leases) | 395\u00a0332 | 170\u00a0846 | \u2014 | 224\u00a0487 |
Other non-current and current liabilities | 100\u00a0622 | \u2014 | \u2014 | 100\u00a0622 |
Amortization effect of loans | -29\u00a0671 | -29\u00a0671 | \u2014 | \u2014 |
Total | 3\u00a0191\u00a0303 | 2\u00a0439\u00a0117 | 424\u00a0524 | 327\u00a0662 |
AVERAGE INTEREST RATE ON BANK- AND BOND LOAN | 2022 | 2021 |
Average interest rate (NOK) | 4.61% | 3.76% |
Average interest rate (EUR) | 1.77% | 3.50% |
The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities.
BOOK VALUE | FAIR VALUE | |||
BOOK VALUE AND FAIR VALUE OF BORROWINGS NOK 1 000 | 2022 | 2021 | 2022 | 2021 |
Green bond | 1\u00a0423\u00a0500 | 1\u00a0500\u00a0000 | 1\u00a0414\u00a0532 | 1\u00a0500\u00a0000 |
Borrowings (non-current syndicated loan and credit facility, incl. current part of the non-current liability) | 1\u00a0474\u00a0429 | 864\u00a0524 | 1\u00a0474\u00a0429 | 864\u00a0524 |
Total | 2\u00a0897\u00a0929 | 2\u00a0364\u00a0524 | 2\u00a0888\u00a0961 | 2\u00a0364\u00a0524 |
Book values in the table above are excluding the amortization effect of loan cost.
The book value of borrowings (excluding the green bond) closely approximates to the fair value.
Our green bond is listed on Oslo B\u00f8rs (Euronext). Our green bond is listed on Oslo B\u00f8rs (Euronext). Market price of the bond was 99.37% of par value at year-end 2022 (2021: 100%).
LIABILITIES ARISING FROM FINANCING ACTIVITIES | |||
CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 | LEASE LIABILITY | BORROWINGS | TOTAL |
At 01.01.2021 | 684\u00a0839 | 3\u00a0480\u00a0613 | 4\u00a0165\u00a0454 |
Cash movements: | |||
Revolving credit facility (net draw-down/repayment) | \u2014 | -556\u00a0222 | -556\u00a0222 |
Draw-down other non-current loan | \u2014 | 39\u00a0147 | 39\u00a0147 |
Repayment non-current syndicated term-loan (NOK and EUR) | \u2014 | -526\u00a0602 | -526\u00a0602 |
Repayment other non-current loan | \u2014 | -1\u00a0050 | -1\u00a0050 |
Repayment lease liability (prior IAS 17 finance leases) | -77\u00a0662 | \u2014 | -77\u00a0662 |
Repayment lease liability (prior IAS 17 operational leases) | -107\u00a0263 | \u2014 | -107\u00a0263 |
Loan costs | \u2014 | -3\u00a0895 | -3\u00a0895 |
Total cash movements | -184\u00a0925 | -1\u00a0048\u00a0623 | -1\u00a0233\u00a0548 |
Non-cash movements: | |||
Draw-down lease liability (prior IAS 17 finance leases) | 4\u00a0804 | \u2014 | 4\u00a0804 |
Draw-down lease liability (prior IAS 17 operational leases) | 249\u00a0437 | \u2014 | 249\u00a0437 |
Non-cash movements (ex. foreign currency adjustments) | -4\u00a0058 | \u2014 | -4\u00a0058 |
Foreign currency adjustments | 5\u00a0730 | -13\u00a0508 | -7\u00a0778 |
Loan costs | \u2014 | 16\u00a0992 | 16\u00a0992 |
Total non-cash movements | 255\u00a0914 | 3\u00a0484 | 259\u00a0398 |
At 31.12.2021 | 755\u00a0828 | 2\u00a0435\u00a0474 | 3\u00a0191\u00a0303 |
At 01.01.2022 | 755\u00a0828 | 2\u00a0435\u00a0474 | 3\u00a0191\u00a0303 |
Cash movements: | |||
Revolving credit facility (net draw-down/repayment) | \u2014 | -440\u00a0000 | -440\u00a0000 |
Draw-down non-current syndicated term-loan (NOK and EUR) | \u2014 | 1\u00a0463\u00a0423 | 1\u00a0463\u00a0423 |
Repayment non-current syndicated term-loan (NOK and EUR) | \u2014 | -469\u00a0288 | -469\u00a0288 |
Repayment other non-current loan | \u2014 | -52\u00a0857 | -52\u00a0857 |
Repayment lease liability (prior IAS 17 finance leases) | -78\u00a0879 | \u2014 | -78\u00a0879 |
Repayment lease liability (prior IAS 17 operational leases) | -146\u00a0589 | \u2014 | -146\u00a0589 |
Loan costs | \u2014 | -11\u00a0854 | -11\u00a0854 |
Total cash movements | -225\u00a0468 | 489\u00a0423 | 263\u00a0956 |
Non-cash movements: | |||
Draw-down lease liability (prior IAS 17 finance leases) | 114\u00a0926 | \u2014 | 114\u00a0926 |
Draw-down lease liability (prior IAS 17 operational leases) | 140\u00a0975 | \u2014 | 140\u00a0975 |
Non-cash movements (ex. foreign currency adjustments) | 83\u00a0397 | -21\u00a0177 | 62\u00a0220 |
Foreign currency adjustments | 10\u00a0902 | 60\u00a0584 | 71\u00a0486 |
Loan costs | \u2014 | 16\u00a0471 | 16\u00a0471 |
Total non-cash movements | 350\u00a0200 | 55\u00a0879 | 406\u00a0079 |
At 31.12.2022 | 880\u00a0560 | 2\u00a0980\u00a0777 | 3\u00a0861\u00a0338 |
Grieg Seafood ASA has a syndicated loan provided by DNB and Nordea. The syndicated financing from secured lenders of Grieg Seafood consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities. The debt structure comprises a NOK 750 million term loan, an EUR 75 million term loan, a NOK 1 500 million revolving credit facility and a NOK 200 million overdraft facility. As at year-end 2022, both the revolving credit facility and the overdraft facility is unutilized. The outstanding debt on the two term loans amounts to NOK 1\u00a0474 million, of which NOK 128 million is installments due the next 12 months from the reporting date. The financing carries floating interest rates, calculated as the relevant three month IBOR plus the applicable margin per interest period. The financial covenant of the facility is a minimum equity-ratio requirement of 31%, measured excl. the effect of IFRS 16.
In addition to the senior secured facility, the Group also has a green bond (GSF01 G, listed at Euronext), which matures in June 2025. The outstanding amount of the bond loan was NOK 1 424 million at the end of 2022. The bond carries a coupon rate of three months NIBOR + 3.4% p.a. The bond's financial covenant is an equity ratio requirement of minimum 30%, measured consistent with the Group\u2019s equity-ratio financial covenants as defined in its syndicated loan agreement with secured lenders.
NOK 1 000 | 2022 | 2021 |
Liabilities secured by mortgages/charges on assets* | 1\u00a0899\u00a0364 | 1\u00a0248\u00a0889 |
*See the comment below the table for assets pledged as security.
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2022 | 2021 |
Licenses | 1\u00a0463\u00a0709 | 1\u00a0536\u00a0319 |
Property, plant and equipment * | 3\u00a0562\u00a0816 | 3\u00a0017\u00a0023 |
Trade receivables | 259\u00a0137 | 151\u00a0793 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0136\u00a0381 | 2\u00a0607\u00a0231 |
Total assets pledged as security | 8\u00a0422\u00a0043 | 7\u00a0312\u00a0366 |
*Book value of liabilities secured by mortgage/charges on assets, and the property, plant and equipment does not include the book value of the effect of IFRS 16 (compared to the IFRS in force prior to 1 January 2019) on right-of-use and lease liability.
Pledges also include shares in subsidiaries. The book value of these shares in the consolidated financial statements is NOK 0.
THE GROUP AS A LESSEE
The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions, for leases that would be classified as finance leases according to IFRS in force prior to 1 January 2019, as well as capitalized leases due to the effect of IFRS 16. Well-boats and workboats charted in time charters with a duration of more than one year contributes significantly to the effect of IFRS 16.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. The leases are recognized in the respective Group companies in local currencies, and translated to the Group\u2019s presentation currency at the balance sheet date.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The Group reassesses the incremental borrowing rates applicable for new lease agreements annually. The applied incremental borrowing rates for new leases as from 2022 ranged from 4.7% - 4.8% for buildings and properties, and 3.9% - 4.2% for other assets. The applied rates for new leases as from 2021 ranged from 3.9% - 4.2% for buildings and properties, and 3.6% - 3.7% for other assets.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset\u2019s useful life.
The Group leases smaller office equipment, such as coffee machines with contract terms of 1-3 years. The Group has elected to apply the practical expedient of low-value assets for some of these leases. Leases that have a present value as new lower than USD 5 000, are considered low value leases. The Group has also applied the practical expedient for short-term leases. Short term is defined as a lease term of 12 month or less at the commencement date. For low-value leases and short-term leases, the Group does not recognize lease liabilities or right-of-use assets. These leases are recognized as operating expenses over the life of the contract.
Some of the Group's agreements have extension options which may by exercised during the last period of the lease term. The Group assesses at the commencement whether it is reasonably certain to exercise the renewal right. The Group's potential future lease payments not included in the lease liabilities related to extension options is NOK 267 million (NOK 134 million at 31 December 2021).
SPECIFICATION OF RIGHT-OF-USE ASSETS
The Group's right-of-use assets are included in the financial statement line item \"Property, plant and equipment incl. right-of-use-assets\" in the statement of financial position. These leased assets include both assets that would be treated as financial leases according to the IFRS in force prior to 1 January 2019, as well as operational leases (\"the effect of IFRS 16\").
RIGHT-OF-USE ASSETS 2022 NOK 1 000 | BUILDINGS/ | PROD. PLANTS | NETS, CAGES | OTHER | TOTAL |
Book value at 01.01. | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
Currency translation differences | 1\u00a0760 | 26 | 43 | 13\u00a0220 | 15\u00a0048 |
Additions | 10\u00a0036 | 69\u00a0549 | 8\u00a0058 | 251\u00a0807 | 339\u00a0450 |
Cancellation of lease and other changes | -1\u00a0399 | -743 | -7\u00a0792 | -14\u00a0915 | -24\u00a0849 |
Depreciation | -11\u00a0703 | -19\u00a0556 | -15\u00a0749 | -140\u00a0396 | -187\u00a0404 |
Book value at 31.12. | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
RIGHT-OF-USE ASSETS 2021 NOK 1 000 | BUILDINGS/ | PROD. PLANTS | NETS, CAGES | OTHER | TOTAL |
Book value at 01.01. | 77\u00a0659 | 260\u00a0832 | 105\u00a0232 | 297\u00a0732 | 741\u00a0454 |
Currency translation differences | 69 | 52 | 38 | 8\u00a0299 | 8\u00a0458 |
Additions | 1\u00a0219 | 1\u00a0095 | 3\u00a0709 | 247\u00a0959 | 253\u00a0983 |
Cancellation of lease and other changes | -17 | -2\u00a0014 | -4\u00a0592 | -20\u00a0308 | -26\u00a0931 |
Depreciation | -11\u00a0003 | -17\u00a0032 | -16\u00a0644 | -96\u00a0388 | -141\u00a0067 |
Book value at 31.12. | 67\u00a0927 | 242\u00a0934 | 87\u00a0743 | 437\u00a0294 | 835\u00a0898 |
LEASE LIABILITY
SUMMARY OF THE LEASE LIABILITIES NOK 1 000 | 2022 | 2021 |
Lease liabilities at 01.01. | 755\u00a0828 | 684\u00a0839 |
New leases recognized during the year | 255\u00a0901 | 254\u00a0242 |
Cash payments for the principal portion of the lease liability | -225\u00a0468 | -184\u00a0925 |
Currency exchange differences | 10\u00a0902 | 5\u00a0730 |
Cancellation of lease and other changes | 83\u00a0397 | -4\u00a0058 |
Total lease liabilities at 31.12. | 880\u00a0560 | 755\u00a0828 |
2022 | |||
MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000 | FORMER IAS 17 | FORMER IAS 17 | TOTAL LEASE |
Less than one year | 93\u00a0308 | 165\u00a0690 | 258\u00a0998 |
One to two years | 79\u00a0970 | 146\u00a0648 | 226\u00a0618 |
Two to three years | 65\u00a0520 | 73\u00a0925 | 139\u00a0445 |
Three to four years | 59\u00a0691 | 67\u00a0558 | 127\u00a0249 |
Four to five years | 52\u00a0892 | 44\u00a0220 | 97\u00a0112 |
More than five years | 105\u00a0684 | 31\u00a0302 | 136\u00a0986 |
Total undiscounted liabilities at 31.12 | 457\u00a0065 | 529\u00a0344 | 986\u00a0408 |
Lease liabilities included in the statement of financial position at 31.12 | 396\u00a0614 | 483\u00a0946 | 880\u00a0560 |
Current portion | 78\u00a0416 | 148\u00a0494 | 226\u00a0910 |
Non-current portion | 318\u00a0198 | 335\u00a0452 | 653\u00a0650 |
2021 | |||
MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000 | FORMER IAS 17 | FORMER IAS 17 | TOTAL LEASE |
Less than one year | 82\u00a0272 | 117\u00a0435 | 199\u00a0706 |
One to two years | 74\u00a0830 | 90\u00a0507 | 165\u00a0337 |
Two to three years | 62\u00a0951 | 87\u00a0010 | 149\u00a0961 |
Three to four years | 48\u00a0266 | 54\u00a0654 | 102\u00a0920 |
Four to five years | 42\u00a0703 | 39\u00a0168 | 81\u00a0871 |
More than five years | 83\u00a0131 | 44\u00a0382 | 127\u00a0513 |
Total undiscounted liabilities at 31.12 | 394\u00a0153 | 433\u00a0155 | 827\u00a0309 |
Lease liabilities included in the statement of financial position at 31.12 | 360\u00a0496 | 395\u00a0332 | 755\u00a0828 |
Current portion | 72\u00a0918 | 105\u00a0114 | 178\u00a0032 |
Non-current portion | 287\u00a0578 | 290\u00a0219 | 577\u00a0797 |
AMOUNTS RECOGNIZED IN PROFIT OR LOSS NOK 1 000 | 2022 | 2021 |
Interest on lease liabilities | -33\u00a0613 | -22\u00a0709 |
Foreign currency effect | 3\u00a0746 | -5\u00a0112 |
Depreciation right-of-use assets | -187\u00a0404 | -141\u00a0067 |
Income from subleasing of right-of-use assets | 31\u00a0261 | 14\u00a0591 |
Expenses relating to short-term leases | -40\u00a0530 | -5\u00a0446 |
Expenses relating to leases of low-value assets, excl. short-term leases of low-value assets | -1 | -8 |
Total | -226\u00a0543 | -159\u00a0752 |
NOK 1 000 | 2022 | 2021 |
Total cash outflow for leases | -259\u00a0081 | -207\u00a0634 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2022 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 16\u00a0900 | 271 | 17\u00a0171 |
Trade receivables | \u2014 | 259\u00a0137 | \u2014 | 259\u00a0137 |
Other current receivables | \u2014 | 8\u00a0863 | \u2014 | 8\u00a0863 |
Investment in money market fund4 | 1\u00a0012\u00a0848 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Derivatives5 | 37\u00a0988 | \u2014 | \u2014 | 37\u00a0988 |
Cash and cash equivalents | \u2014 | 642\u00a0719 | \u2014 | 642\u00a0719 |
Total financial assets | 1\u00a0050\u00a0836 | 927\u00a0618 | 271 | 1\u00a0978\u00a0725 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0980\u00a0777 | \u2014 | 2\u00a0980\u00a0777 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 396\u00a0614 | \u2014 | 396\u00a0614 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 483\u00a0946 | \u2014 | 483\u00a0946 |
Share-based payments6 | 6\u00a0510 | \u2014 | \u2014 | 6\u00a0510 |
Derivatives5 | 64\u00a0928 | \u2014 | \u2014 | 64\u00a0928 |
Trade payables | \u2014 | 717\u00a0498 | \u2014 | 717\u00a0498 |
Other current liabilities | \u2014 | 76\u00a0585 | \u2014 | 76\u00a0585 |
Total financial liabilities | 71\u00a0439 | 4\u00a0655\u00a0420 | \u2014 | 4\u00a0726\u00a0859 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2021 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 2\u00a0111 | 271 | 2\u00a0382 |
Trade receivables | \u2014 | 151\u00a0793 | \u2014 | 151\u00a0793 |
Other current receivables | \u2014 | 12\u00a0592 | \u2014 | 12\u00a0592 |
Derivatives5 | 37\u00a0592 | \u2014 | \u2014 | 37\u00a0592 |
Cash and cash equivalents | \u2014 | 928\u00a0342 | \u2014 | 928\u00a0342 |
Total financial assets | 37\u00a0592 | 1\u00a0094\u00a0837 | 271 | 1\u00a0132\u00a0700 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0435\u00a0475 | \u2014 | 2\u00a0435\u00a0475 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 360\u00a0496 | \u2014 | 360\u00a0496 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 395\u00a0332 | \u2014 | 395\u00a0332 |
Share-based payments6 | 9\u00a0792 | \u2014 | \u2014 | 9\u00a0792 |
Derivatives5 | 22\u00a0350 | \u2014 | \u2014 | 22\u00a0350 |
Trade payables | \u2014 | 523\u00a0196 | \u2014 | 523\u00a0196 |
Other current liabilities | \u2014 | 36\u00a0603 | \u2014 | 36\u00a0603 |
Total financial liabilities | 32\u00a0142 | 3\u00a0751\u00a0102 | \u2014 | 3\u00a0783\u00a0244 |
1 FVPL: Fair value through profit or loss.
2 FVOCI: Fair value through other comprehensive income.
3 Investments in non-listed shares (equity instruments). Measured at level 3.
4 Investments in money market funds. Measured at level 2. See Note 3 for specification.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See Note 3 for specification.
6 Synthetic option scheme. Measured at level 3. See Note 17 for more information.
The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
CREDITWORTHINESS OF FINANCIAL ASSETS
Credit risk attaching to financial instruments that have not matured or have not been written down is shown in accordance with the internal classification of historical information on breaches of credit covenants. Further information about credit risk is provided in Note 3.
TRADE RECEIVABLES NOK 1 000 | 2022 | 2021 |
COUNTERPARTIES WITH NO EXTERNAL CREDIT RATING | ||
Group 1 | 742 | 12\u00a0996 |
Group 2 | 251\u00a0123 | 100\u00a0854 |
Group 3 | 7\u00a0272 | 37\u00a0943 |
Total trade receivables | 259\u00a0137 | 151\u00a0793 |
BANK DEPOSITS NOK 1 000 | 2022 | 2021 |
AAA | \u2014 | \u2014 |
AA | 642\u00a0719 | 928\u00a0342 |
A | \u2014 | \u2014 |
Total bank deposits | 642\u00a0719 | 928\u00a0342 |
Group 1 - new customers/related parties (less than 6 months).
Group 2 - existing customers/related parties (more than 6 months) with no history of credit covenant breaches.
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | Note | 2022 | 2021 |
Investment in money market funds | 1\u00a0000\u00a0224 | \u2014 | |
Unrealized gain/loss | 12\u00a0624 | \u2014 | |
Total investment in money market funds | 1\u00a0012\u00a0848 | \u2014 | |
Unrealized fair value gains (losses) recognized in the income statement | 26 | 12\u00a0624 | \u2014 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2022 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 16\u00a0900 | 271 | 17\u00a0171 |
Trade receivables | \u2014 | 259\u00a0137 | \u2014 | 259\u00a0137 |
Other current receivables | \u2014 | 8\u00a0863 | \u2014 | 8\u00a0863 |
Investment in money market fund4 | 1\u00a0012\u00a0848 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Derivatives5 | 37\u00a0988 | \u2014 | \u2014 | 37\u00a0988 |
Cash and cash equivalents | \u2014 | 642\u00a0719 | \u2014 | 642\u00a0719 |
Total financial assets | 1\u00a0050\u00a0836 | 927\u00a0618 | 271 | 1\u00a0978\u00a0725 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0980\u00a0777 | \u2014 | 2\u00a0980\u00a0777 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 396\u00a0614 | \u2014 | 396\u00a0614 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 483\u00a0946 | \u2014 | 483\u00a0946 |
Share-based payments6 | 6\u00a0510 | \u2014 | \u2014 | 6\u00a0510 |
Derivatives5 | 64\u00a0928 | \u2014 | \u2014 | 64\u00a0928 |
Trade payables | \u2014 | 717\u00a0498 | \u2014 | 717\u00a0498 |
Other current liabilities | \u2014 | 76\u00a0585 | \u2014 | 76\u00a0585 |
Total financial liabilities | 71\u00a0439 | 4\u00a0655\u00a0420 | \u2014 | 4\u00a0726\u00a0859 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2021 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 2\u00a0111 | 271 | 2\u00a0382 |
Trade receivables | \u2014 | 151\u00a0793 | \u2014 | 151\u00a0793 |
Other current receivables | \u2014 | 12\u00a0592 | \u2014 | 12\u00a0592 |
Derivatives5 | 37\u00a0592 | \u2014 | \u2014 | 37\u00a0592 |
Cash and cash equivalents | \u2014 | 928\u00a0342 | \u2014 | 928\u00a0342 |
Total financial assets | 37\u00a0592 | 1\u00a0094\u00a0837 | 271 | 1\u00a0132\u00a0700 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0435\u00a0475 | \u2014 | 2\u00a0435\u00a0475 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 360\u00a0496 | \u2014 | 360\u00a0496 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 395\u00a0332 | \u2014 | 395\u00a0332 |
Share-based payments6 | 9\u00a0792 | \u2014 | \u2014 | 9\u00a0792 |
Derivatives5 | 22\u00a0350 | \u2014 | \u2014 | 22\u00a0350 |
Trade payables | \u2014 | 523\u00a0196 | \u2014 | 523\u00a0196 |
Other current liabilities | \u2014 | 36\u00a0603 | \u2014 | 36\u00a0603 |
Total financial liabilities | 32\u00a0142 | 3\u00a0751\u00a0102 | \u2014 | 3\u00a0783\u00a0244 |
1 FVPL: Fair value through profit or loss.
2 FVOCI: Fair value through other comprehensive income.
3 Investments in non-listed shares (equity instruments). Measured at level 3.
4 Investments in money market funds. Measured at level 2. See Note 3 for specification.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See Note 3 for specification.
6 Synthetic option scheme. Measured at level 3. See Note 17 for more information.
The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2022 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 16\u00a0900 | 271 | 17\u00a0171 |
Trade receivables | \u2014 | 259\u00a0137 | \u2014 | 259\u00a0137 |
Other current receivables | \u2014 | 8\u00a0863 | \u2014 | 8\u00a0863 |
Investment in money market fund4 | 1\u00a0012\u00a0848 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Derivatives5 | 37\u00a0988 | \u2014 | \u2014 | 37\u00a0988 |
Cash and cash equivalents | \u2014 | 642\u00a0719 | \u2014 | 642\u00a0719 |
Total financial assets | 1\u00a0050\u00a0836 | 927\u00a0618 | 271 | 1\u00a0978\u00a0725 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0980\u00a0777 | \u2014 | 2\u00a0980\u00a0777 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 396\u00a0614 | \u2014 | 396\u00a0614 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 483\u00a0946 | \u2014 | 483\u00a0946 |
Share-based payments6 | 6\u00a0510 | \u2014 | \u2014 | 6\u00a0510 |
Derivatives5 | 64\u00a0928 | \u2014 | \u2014 | 64\u00a0928 |
Trade payables | \u2014 | 717\u00a0498 | \u2014 | 717\u00a0498 |
Other current liabilities | \u2014 | 76\u00a0585 | \u2014 | 76\u00a0585 |
Total financial liabilities | 71\u00a0439 | 4\u00a0655\u00a0420 | \u2014 | 4\u00a0726\u00a0859 |
FINANCIAL INSTRUMENTS AT\u00a0 31.12.2021 NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL |
FINANCIAL ASSETS | ||||
Other non-current receivables3 | \u2014 | 2\u00a0111 | 271 | 2\u00a0382 |
Trade receivables | \u2014 | 151\u00a0793 | \u2014 | 151\u00a0793 |
Other current receivables | \u2014 | 12\u00a0592 | \u2014 | 12\u00a0592 |
Derivatives5 | 37\u00a0592 | \u2014 | \u2014 | 37\u00a0592 |
Cash and cash equivalents | \u2014 | 928\u00a0342 | \u2014 | 928\u00a0342 |
Total financial assets | 37\u00a0592 | 1\u00a0094\u00a0837 | 271 | 1\u00a0132\u00a0700 |
FINANCIAL LIABILITIES | ||||
Borrowings | \u2014 | 2\u00a0435\u00a0475 | \u2014 | 2\u00a0435\u00a0475 |
Lease liability (prior IAS 17 finance leases) | \u2014 | 360\u00a0496 | \u2014 | 360\u00a0496 |
Lease liability (prior IAS 17 operational leases) | \u2014 | 395\u00a0332 | \u2014 | 395\u00a0332 |
Share-based payments6 | 9\u00a0792 | \u2014 | \u2014 | 9\u00a0792 |
Derivatives5 | 22\u00a0350 | \u2014 | \u2014 | 22\u00a0350 |
Trade payables | \u2014 | 523\u00a0196 | \u2014 | 523\u00a0196 |
Other current liabilities | \u2014 | 36\u00a0603 | \u2014 | 36\u00a0603 |
Total financial liabilities | 32\u00a0142 | 3\u00a0751\u00a0102 | \u2014 | 3\u00a0783\u00a0244 |
1 FVPL: Fair value through profit or loss.
2 FVOCI: Fair value through other comprehensive income.
3 Investments in non-listed shares (equity instruments). Measured at level 3.
4 Investments in money market funds. Measured at level 2. See Note 3 for specification.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See Note 3 for specification.
6 Synthetic option scheme. Measured at level 3. See Note 17 for more information.
The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | Note | 2022 | 2021 |
Investment in money market funds | 1\u00a0000\u00a0224 | \u2014 | |
Unrealized gain/loss | 12\u00a0624 | \u2014 | |
Total investment in money market funds | 1\u00a0012\u00a0848 | \u2014 | |
Unrealized fair value gains (losses) recognized in the income statement | 26 | 12\u00a0624 | \u2014 |
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Norway | 263\u00a0084 | 99\u00a0682 |
Aboard | 59\u00a0422 | -15\u00a0777 |
Tax on profits | 322\u00a0506 | 83\u00a0905 |
Norway | 116\u00a0873 | 57\u00a0973 |
Aboard | -145\u00a0516 | 107\u00a0424 |
Changes in deferred tax | -28\u00a0643 | 165\u00a0397 |
Total income taxes related to profit for the year | 293\u00a0863 | 249\u00a0301 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2022 | 2021 |
Profit before tax | 1\u00a0447\u00a0642 | 853\u00a0678 |
Taxes calculated at nominal tax rate | 286\u00a0185 | 226\u00a0472 |
Withholding tax | 6\u00a0085 | 7\u00a0049 |
Non-taxable income/loss from associated companies | -4\u00a0641 | 327 |
Effect of adjustment of income tax from previous years | -27\u00a0453 | -18\u00a0428 |
Effect of recognition of previously non-recognized tax assets | -4\u00a0187 | 696 |
Effect of non-recognition of losses and tax assets | 37\u00a0189 | 11\u00a0026 |
Other permanent differences | 24\u00a0714 | 4\u00a0741 |
Other effects not listed above | -24\u00a0029 | 17\u00a0418 |
Total income tax expense | 293\u00a0863 | 249\u00a0301 |
Weighted average tax rate | 20.3% | 29.2% |
TAX PAYABLE BOOK IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Tax payable in Norway | 286\u00a0586 | 87\u00a0739 |
Tax payable aboard | 66\u00a0605 | 903 |
Total tax payable in the statement of financial position | 353\u00a0191 | 88\u00a0641 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2022 | 2021 |
Balance sheet value at 01.01. | 1\u00a0069\u00a0743 | 879\u00a0665 |
Currency conversion | 30\u00a0467 | 17\u00a0592 |
Tax effect of OCI transactions (see Note 3) | 5\u00a0454 | 7\u00a0089 |
Change in deferred tax recognized in income in period | -27\u00a0453 | -17\u00a0043 |
Changes to income in the period | -37\u00a0111 | 182\u00a0440 |
Net deferred tax liability at balance sheet date | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
The nominal tax rate in Norway is 22%. The nominal tax rate for 2022 in Canada was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2022 | 2021 |
Deferred tax assets | \u2014 | 59 |
Deferred tax liabilities | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0802 |
Net deferred tax | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0743 |
The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. The Norwegian and Canadian parts of the Group each have a net deferred tax position. Deferred tax assets linked to tax losses are offset against deferred tax liabilities in the tax jurisdictions where acceptable.\u00a0
SPECIFICATION OF DEFERRED TAX AND BASIS FOR DEFERRED TAX/DEFERRED TAX ASSETS NOK 1 000 | 2022 | 2021 |
Non-current assets | 572\u00a0722 | 539\u00a0668 |
Current assets | 617\u00a0349 | 609\u00a0378 |
Debt (lease, other liabilities) | 1\u00a0493 | -15\u00a0790 |
Other effect (government grant/ investment tax credit) | \u2014 | -4\u00a0350 |
Tax losses carried forward | -150\u00a0461 | -59\u00a0162 |
Total temporary differences | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2022 | 2021 |
Tax losses carried forward in Norway | \u2014 | \u2014 |
Tax losses carried forward in Canada | -150\u00a0461 | -59\u00a0162 |
Tax losses carried forward in USA | \u2014 | \u2014 |
Total | -150\u00a0461 | -59\u00a0162 |
PROPOSED RESOURCE RENT TAX IN NORWAY
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2022 | 2021 |
Norway | 263\u00a0084 | 99\u00a0682 |
Aboard | 59\u00a0422 | -15\u00a0777 |
Tax on profits | 322\u00a0506 | 83\u00a0905 |
Norway | 116\u00a0873 | 57\u00a0973 |
Aboard | -145\u00a0516 | 107\u00a0424 |
Changes in deferred tax | -28\u00a0643 | 165\u00a0397 |
Total income taxes related to profit for the year | 293\u00a0863 | 249\u00a0301 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2022 | 2021 |
Profit before tax | 1\u00a0447\u00a0642 | 853\u00a0678 |
Taxes calculated at nominal tax rate | 286\u00a0185 | 226\u00a0472 |
Withholding tax | 6\u00a0085 | 7\u00a0049 |
Non-taxable income/loss from associated companies | -4\u00a0641 | 327 |
Effect of adjustment of income tax from previous years | -27\u00a0453 | -18\u00a0428 |
Effect of recognition of previously non-recognized tax assets | -4\u00a0187 | 696 |
Effect of non-recognition of losses and tax assets | 37\u00a0189 | 11\u00a0026 |
Other permanent differences | 24\u00a0714 | 4\u00a0741 |
Other effects not listed above | -24\u00a0029 | 17\u00a0418 |
Total income tax expense | 293\u00a0863 | 249\u00a0301 |
Weighted average tax rate | 20.3% | 29.2% |
TAX PAYABLE BOOK IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Tax payable in Norway | 286\u00a0586 | 87\u00a0739 |
Tax payable aboard | 66\u00a0605 | 903 |
Total tax payable in the statement of financial position | 353\u00a0191 | 88\u00a0641 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2022 | 2021 |
Balance sheet value at 01.01. | 1\u00a0069\u00a0743 | 879\u00a0665 |
Currency conversion | 30\u00a0467 | 17\u00a0592 |
Tax effect of OCI transactions (see Note 3) | 5\u00a0454 | 7\u00a0089 |
Change in deferred tax recognized in income in period | -27\u00a0453 | -17\u00a0043 |
Changes to income in the period | -37\u00a0111 | 182\u00a0440 |
Net deferred tax liability at balance sheet date | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
The nominal tax rate in Norway is 22%. The nominal tax rate for 2022 in Canada was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2022 | 2021 |
Deferred tax assets | \u2014 | 59 |
Deferred tax liabilities | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0802 |
Net deferred tax | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0743 |
The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. The Norwegian and Canadian parts of the Group each have a net deferred tax position. Deferred tax assets linked to tax losses are offset against deferred tax liabilities in the tax jurisdictions where acceptable.\u00a0
SPECIFICATION OF DEFERRED TAX AND BASIS FOR DEFERRED TAX/DEFERRED TAX ASSETS NOK 1 000 | 2022 | 2021 |
Non-current assets | 572\u00a0722 | 539\u00a0668 |
Current assets | 617\u00a0349 | 609\u00a0378 |
Debt (lease, other liabilities) | 1\u00a0493 | -15\u00a0790 |
Other effect (government grant/ investment tax credit) | \u2014 | -4\u00a0350 |
Tax losses carried forward | -150\u00a0461 | -59\u00a0162 |
Total temporary differences | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2022 | 2021 |
Tax losses carried forward in Norway | \u2014 | \u2014 |
Tax losses carried forward in Canada | -150\u00a0461 | -59\u00a0162 |
Tax losses carried forward in USA | \u2014 | \u2014 |
Total | -150\u00a0461 | -59\u00a0162 |
PROPOSED RESOURCE RENT TAX IN NORWAY
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2022 | 2021 |
Balance sheet value at 01.01. | 1\u00a0069\u00a0743 | 879\u00a0665 |
Currency conversion | 30\u00a0467 | 17\u00a0592 |
Tax effect of OCI transactions (see Note 3) | 5\u00a0454 | 7\u00a0089 |
Change in deferred tax recognized in income in period | -27\u00a0453 | -17\u00a0043 |
Changes to income in the period | -37\u00a0111 | 182\u00a0440 |
Net deferred tax liability at balance sheet date | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
The nominal tax rate in Norway is 22%. The nominal tax rate for 2022 in Canada was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2022 | 2021 |
Deferred tax assets | \u2014 | 59 |
Deferred tax liabilities | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0802 |
Net deferred tax | -1\u00a0041\u00a0101 | -1\u00a0069\u00a0743 |
The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. The Norwegian and Canadian parts of the Group each have a net deferred tax position. Deferred tax assets linked to tax losses are offset against deferred tax liabilities in the tax jurisdictions where acceptable.\u00a0
SPECIFICATION OF DEFERRED TAX AND BASIS FOR DEFERRED TAX/DEFERRED TAX ASSETS NOK 1 000 | 2022 | 2021 |
Non-current assets | 572\u00a0722 | 539\u00a0668 |
Current assets | 617\u00a0349 | 609\u00a0378 |
Debt (lease, other liabilities) | 1\u00a0493 | -15\u00a0790 |
Other effect (government grant/ investment tax credit) | \u2014 | -4\u00a0350 |
Tax losses carried forward | -150\u00a0461 | -59\u00a0162 |
Total temporary differences | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2022 | 2021 |
Salaries | 533\u00a0629 | 451\u00a0530 |
Social security costs | 38\u00a0635 | 25\u00a0616 |
Share options granted to directors and key employees, incl. social security costs (Note 17) | 30\u00a0399 | 7\u00a0924 |
Pension costs | 29\u00a0069 | 26\u00a0146 |
Other personnel costs | 63\u00a0844 | 66\u00a0218 |
Total | 695\u00a0577 | 577\u00a0434 |
Average number of employees | 718 | 703 |
Share savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2022. Each year has its own set of terms and conditions concerning how much each employee can invest in the program that year. In addition, each year has it\u2019s set of terms for the lock-up period. The saved amount is deducted from the monthly net salary and used to purchase Grieg Seafood shares on behalf of the employees. The purchase will be made from transfer of Grieg Seafood's treasury shares or bought in the market. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2022, loan to employees related to the share savings program\u00a0equals NOK 4.9 million (2021: NOK 2.7 million). The total shares sold to employees was 96 150 in 2022 (2021: 38 513).
Management remuneration
The guidelines for management remuneration are available on Grieg Seafood ASA\u2019s website.
The remuneration to the Group Executive Operational Management Team is disclosed below. In addition to the executive operational management team (Chief Executive Officer, the Chief Financial Officer, the Group\u2019s Chief Operating Officers, and the Chief Commercial Officer), the Group Management include the support functions of the Chief Technology Officer (CTO), the Chief Human Resource Officer (CHRO) and the Global Communication Manager.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL\u00a0 MANAGEMENT TEAM 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT | OPTIONS | OTHER | TOTAL |
Andreas Kvame (CEO) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (CFO) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (COO Farming Canada until June 2022)** | 1\u00a0802 | -26 | \u2014 | 2\u00a0917 | 47 | 4\u00a0740 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0247 | 483 | \u2014 | 3\u00a0070 | 123 | 5\u00a0923 |
Total remuneration | 12\u00a0109 | 2\u00a0397 | \u2014 | 16\u00a0644 | 3\u00a0576 | 34\u00a0726 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
**Grant Cumming was appointed as COO Farming Canada in Q1 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
REMUNERATION PAID TO BOARD MEMBERS IN 2022 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 516 |
Tore Holand2 | 401 |
Marianne Ribe1 | 328 |
Katrine Trovik2 | 372 |
Nicolai Hafeld Grieg | 308 |
Ragnhild Fresvik (from 9 of June 2022) | 183 |
Total remuneration including social security costs | 2\u00a0107 |
1 Payment for work performed on the Remuneration Committee of NOK 25 673 is included in the remuneration paid to Per Grieg jr. and Marianne Ribe.\u00a0
2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 68 460.
The amounts include social security costs.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL MANAGEMENT TEAM IN 2021 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (CEO) | 3\u00a0165 | \u2014 | 540 | \u2014 | 250 | 3\u00a0956 |
Atle Harald Sandtorv (CFO) | 2\u00a0280 | \u2014 | 313 | \u2014 | 115 | 2\u00a0707 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0116 | 75 | 203 | \u2014 | 113 | 2\u00a0507 |
Roy Tore Rikardsen (COO Farming Canada) | 1\u00a0772 | \u2014 | 244 | \u2014 | \u2014 | 2\u00a0016 |
Erik Holvik (Chief Commercial Officer) | 1\u00a0996 | 161 | 350 | \u2014 | 115 | 2\u00a0621 |
Total remuneration | 11\u00a0328 | 236 | 1\u00a0650 | \u2014 | 593 | 13\u00a0807 |
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
The 2021 table has been represented to include only the Group Executive Operational Management Team.
REMUNERATION PAID TO BOARD MEMBERS IN 2021\u00a0 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 479 |
Tore Holand2 | 371 |
Sirine M. Fodstad (until 13 of August 2021)1 | 205 |
Marianne Ribe1 | 308 |
Katrine Trovik2 | 342 |
Nicolai Hafeld Grieg (from 4 of November 2021) | \u2014 |
Total remuneration including social security costs | 1\u00a0706 |
1 Payment of NOK 22 820 for service on the Remuneration Committee is included in the remuneration paid to Per Grieg Jr. and Marianne Ribe, while Sirine Fodstad received NOK 15 213 for the same.
2 Payment of NOK 57 050 for service on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik.
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2022 | 2021 |
Salaries | 533\u00a0629 | 451\u00a0530 |
Social security costs | 38\u00a0635 | 25\u00a0616 |
Share options granted to directors and key employees, incl. social security costs (Note 17) | 30\u00a0399 | 7\u00a0924 |
Pension costs | 29\u00a0069 | 26\u00a0146 |
Other personnel costs | 63\u00a0844 | 66\u00a0218 |
Total | 695\u00a0577 | 577\u00a0434 |
Average number of employees | 718 | 703 |
Share savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2022. Each year has its own set of terms and conditions concerning how much each employee can invest in the program that year. In addition, each year has it\u2019s set of terms for the lock-up period. The saved amount is deducted from the monthly net salary and used to purchase Grieg Seafood shares on behalf of the employees. The purchase will be made from transfer of Grieg Seafood's treasury shares or bought in the market. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2022, loan to employees related to the share savings program\u00a0equals NOK 4.9 million (2021: NOK 2.7 million). The total shares sold to employees was 96 150 in 2022 (2021: 38 513).
The company has issued options to the executive management team and regional directors. The options\u2019 strike price is the stock market price on the date of issue, rising by 0.5% per month until the exercise date. Since 2009, an option scheme with settlement in cash has been established for the management and regional directors. The most recent allocation was in 2020, totalling 1 890 000 options. The final exercise date is 31 May 2024. The options have a term of two years, where 50% is vested each year.
Employees taken on after the initial allocation of options are allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy (see Note 2 and Note 3). The table below shows the movement in outstanding options in 2022 and 2021.
OVERVIEW 2022\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2022 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (CTO) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | 104\u00a0212 | \u2014 | 65\u00a0788 |
Others | 600\u00a0000 | \u2014 | 416\u00a0863 | 47\u00a0877 | 135\u00a0260 |
Total | 2\u00a0690\u00a0000 | \u2014 | 1\u00a0780\u00a0273 | 134\u00a0709 | 775\u00a0016 |
OVERVIEW 2021 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2020 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2021 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | \u2014 | \u2014 | 540\u00a0000 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Knut Utheim (COO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | \u2014 | \u2014 | 200\u00a0000 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | \u2014 | \u2014 | 100\u00a0000 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Roy Tore Rikardsen (COO Farming Canada) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | \u2014 | \u2014 | 170\u00a0000 |
Others | 700\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 600\u00a0000 |
Total | 2\u00a0790\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 2\u00a0690\u00a0000 |
OPTIONS | |||||
ALLOCATION: | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | STRIKE PRICE NOK PER SHARE AT 31.12.2021 | 2022 | 2021 |
2017 - 11 | 2021 - 05 | \u2014 | 106.28 | \u2014 | 800\u00a0000 |
2020 - 12 | 2023 - 05 | 88.99 | 83.82 | 64\u00a0898 | 945\u00a0000 |
2020 - 12 | 2024 - 05 | 88.99 | 83.82 | 710\u00a0118 | 945\u00a0000 |
Total | 775\u00a0016 | 2\u00a0690\u00a0000 |
2022 | 2021 | |
Cash-based options available for settlement | 775\u00a0016 | 2\u00a0690\u00a0000 |
Weighted average exercise price on outstanding options (NOK per option) | 78.96 | 80.16 |
AMOUNTS IN NOK 1 000 | ||||||||
2022 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2022 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 511 | -157 | 1\u00a0773 | \u2014 | 354 |
Alexander Knudsen (COO Farming Norway) | 78.96 | 5.87 | 999 | 847 | -193 | 1\u00a0917 | \u2014 | 654 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (CTO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0282 | 34\u00a0137 | 6\u00a0887 | 6\u00a0510 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
AMOUNTS IN NOK 1 000 | ||||||||
2021 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2021 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2021 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2021 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2021 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 56 | 1\u00a0352 | \u2014 | \u2014 | 1\u00a0408 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 41 | 868 | \u2014 | \u2014 | 909 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 37 | 803 | \u2014 | \u2014 | 840 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 27 | 573 | \u2014 | \u2014 | 600 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 23 | 488 | \u2014 | \u2014 | 511 |
Alexander Knudsen (COO Farming Europe) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Roy Tore Rikardsen (COO Farming North America) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 39 | 842 | \u2014 | \u2014 | 881 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 467 | -460 | \u2014 | \u2014 | 7 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 316 | -313 | \u2014 | \u2014 | 4 |
Knut Utheim (COO) | 83.00 | 2.79 | 557 | 296 | -293 | \u2014 | \u2014 | 4 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 247 | -243 | \u2014 | \u2014 | 4 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 132 | 2\u00a0788 | \u2014 | \u2014 | 2\u00a0921 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 1\u00a0085 | -1\u00a0074 | \u2014 | \u2014 | 11 |
Total | 15\u00a0802 | 2\u00a0842 | 6\u00a0951 | \u2014 | 6\u00a0887 | 9\u00a0792 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
ACCRUED COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2022 | 2021 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | -3\u00a0282 | 6\u00a0951 | Other provisions for liabilities | |
Exercised options during the year | 34\u00a0137 | \u2014 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 30\u00a0855 | 6\u00a0951 | ||
Social security costs | -456 | 973 | Public taxes payable | |
Total costs incl. social security costs | 30\u00a0399 | 7\u00a0924 | Salaries and personnel expense |
Cost relating to cash-based remuneration in 2022 totaled NOK 30\u00a0399 thousands. This is recognized in the income statement as a personnel cost. Social security contributions are provided for on an ongoing basis based on the fair value of the options.
As at 31\u00a0December 2022, outstanding options with the right to cash settlement were stated at NOK 6\u00a0510 thousands excl. social security
costs, of which NOK 589 thousands were classified as current liabilities. The book value of long-term liabilities including social security cost was NOK 6 756 thousands.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2022 | 2021 |
Anticipated volatility (%) | 58.29% | 36.44% |
Risk-free rate of interest (%) | 3.12% | 1.13% |
Estimated qualification period (years) | 1.11 | 1.39 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
Management remuneration
The guidelines for management remuneration are available on Grieg Seafood ASA\u2019s website.
The remuneration to the Group Executive Operational Management Team is disclosed below. In addition to the executive operational management team (Chief Executive Officer, the Chief Financial Officer, the Group\u2019s Chief Operating Officers, and the Chief Commercial Officer), the Group Management include the support functions of the Chief Technology Officer (CTO), the Chief Human Resource Officer (CHRO) and the Global Communication Manager.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL\u00a0 MANAGEMENT TEAM 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT | OPTIONS | OTHER | TOTAL |
Andreas Kvame (CEO) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (CFO) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (COO Farming Canada until June 2022)** | 1\u00a0802 | -26 | \u2014 | 2\u00a0917 | 47 | 4\u00a0740 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0247 | 483 | \u2014 | 3\u00a0070 | 123 | 5\u00a0923 |
Total remuneration | 12\u00a0109 | 2\u00a0397 | \u2014 | 16\u00a0644 | 3\u00a0576 | 34\u00a0726 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
**Grant Cumming was appointed as COO Farming Canada in Q1 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
REMUNERATION PAID TO BOARD MEMBERS IN 2022 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 516 |
Tore Holand2 | 401 |
Marianne Ribe1 | 328 |
Katrine Trovik2 | 372 |
Nicolai Hafeld Grieg | 308 |
Ragnhild Fresvik (from 9 of June 2022) | 183 |
Total remuneration including social security costs | 2\u00a0107 |
1 Payment for work performed on the Remuneration Committee of NOK 25 673 is included in the remuneration paid to Per Grieg jr. and Marianne Ribe.\u00a0
2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 68 460.
The amounts include social security costs.
REMUNERATION PAID TO GROUP EXECUTIVE OPERATIONAL MANAGEMENT TEAM IN 2021 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (CEO) | 3\u00a0165 | \u2014 | 540 | \u2014 | 250 | 3\u00a0956 |
Atle Harald Sandtorv (CFO) | 2\u00a0280 | \u2014 | 313 | \u2014 | 115 | 2\u00a0707 |
Alexander Knudsen (COO Farming Norway) | 2\u00a0116 | 75 | 203 | \u2014 | 113 | 2\u00a0507 |
Roy Tore Rikardsen (COO Farming Canada) | 1\u00a0772 | \u2014 | 244 | \u2014 | \u2014 | 2\u00a0016 |
Erik Holvik (Chief Commercial Officer) | 1\u00a0996 | 161 | 350 | \u2014 | 115 | 2\u00a0621 |
Total remuneration | 11\u00a0328 | 236 | 1\u00a0650 | \u2014 | 593 | 13\u00a0807 |
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 17.
The 2021 table has been represented to include only the Group Executive Operational Management Team.
REMUNERATION PAID TO BOARD MEMBERS IN 2021\u00a0 NOK 1 000 | TOTAL |
Per Grieg jr.1 | 479 |
Tore Holand2 | 371 |
Sirine M. Fodstad (until 13 of August 2021)1 | 205 |
Marianne Ribe1 | 308 |
Katrine Trovik2 | 342 |
Nicolai Hafeld Grieg (from 4 of November 2021) | \u2014 |
Total remuneration including social security costs | 1\u00a0706 |
1 Payment of NOK 22 820 for service on the Remuneration Committee is included in the remuneration paid to Per Grieg Jr. and Marianne Ribe, while Sirine Fodstad received NOK 15 213 for the same.
2 Payment of NOK 57 050 for service on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik.
The company has issued options to the executive management team and regional directors. The options\u2019 strike price is the stock market price on the date of issue, rising by 0.5% per month until the exercise date. Since 2009, an option scheme with settlement in cash has been established for the management and regional directors. The most recent allocation was in 2020, totalling 1 890 000 options. The final exercise date is 31 May 2024. The options have a term of two years, where 50% is vested each year.
Employees taken on after the initial allocation of options are allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy (see Note 2 and Note 3). The table below shows the movement in outstanding options in 2022 and 2021.
OVERVIEW 2022\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2022 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (CTO) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | 104\u00a0212 | \u2014 | 65\u00a0788 |
Others | 600\u00a0000 | \u2014 | 416\u00a0863 | 47\u00a0877 | 135\u00a0260 |
Total | 2\u00a0690\u00a0000 | \u2014 | 1\u00a0780\u00a0273 | 134\u00a0709 | 775\u00a0016 |
OVERVIEW 2021 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2020 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2021 |
Andreas Kvame (CEO) | 540\u00a0000 | \u2014 | \u2014 | \u2014 | 540\u00a0000 |
Atle Harald Sandtorv (CFO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Knut Utheim (COO) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Kathleen O. Mathisen (CHRO) | 200\u00a0000 | \u2014 | \u2014 | \u2014 | 200\u00a0000 |
Kristina Furnes (Group Communication Manager) | 100\u00a0000 | \u2014 | \u2014 | \u2014 | 100\u00a0000 |
Alexander Knudsen (COO Farming Norway) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Roy Tore Rikardsen (COO Farming Canada) | 270\u00a0000 | \u2014 | \u2014 | \u2014 | 270\u00a0000 |
Erik Holvik (CCO) | 170\u00a0000 | \u2014 | \u2014 | \u2014 | 170\u00a0000 |
Others | 700\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 600\u00a0000 |
Total | 2\u00a0790\u00a0000 | \u2014 | \u2014 | 100\u00a0000 | 2\u00a0690\u00a0000 |
OPTIONS | |||||
ALLOCATION: | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | STRIKE PRICE NOK PER SHARE AT 31.12.2021 | 2022 | 2021 |
2017 - 11 | 2021 - 05 | \u2014 | 106.28 | \u2014 | 800\u00a0000 |
2020 - 12 | 2023 - 05 | 88.99 | 83.82 | 64\u00a0898 | 945\u00a0000 |
2020 - 12 | 2024 - 05 | 88.99 | 83.82 | 710\u00a0118 | 945\u00a0000 |
Total | 775\u00a0016 | 2\u00a0690\u00a0000 |
2022 | 2021 | |
Cash-based options available for settlement | 775\u00a0016 | 2\u00a0690\u00a0000 |
Weighted average exercise price on outstanding options (NOK per option) | 78.96 | 80.16 |
AMOUNTS IN NOK 1 000 | ||||||||
2022 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2022 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 511 | -157 | 1\u00a0773 | \u2014 | 354 |
Alexander Knudsen (COO Farming Norway) | 78.96 | 5.87 | 999 | 847 | -193 | 1\u00a0917 | \u2014 | 654 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (CTO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0282 | 34\u00a0137 | 6\u00a0887 | 6\u00a0510 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
AMOUNTS IN NOK 1 000 | ||||||||
2021 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2021 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2021 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2021 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2021 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 56 | 1\u00a0352 | \u2014 | \u2014 | 1\u00a0408 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 41 | 868 | \u2014 | \u2014 | 909 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 37 | 803 | \u2014 | \u2014 | 840 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 27 | 573 | \u2014 | \u2014 | 600 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 23 | 488 | \u2014 | \u2014 | 511 |
Alexander Knudsen (COO Farming Europe) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Roy Tore Rikardsen (COO Farming North America) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 39 | 842 | \u2014 | \u2014 | 881 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 467 | -460 | \u2014 | \u2014 | 7 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 316 | -313 | \u2014 | \u2014 | 4 |
Knut Utheim (COO) | 83.00 | 2.79 | 557 | 296 | -293 | \u2014 | \u2014 | 4 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 247 | -243 | \u2014 | \u2014 | 4 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 132 | 2\u00a0788 | \u2014 | \u2014 | 2\u00a0921 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 1\u00a0085 | -1\u00a0074 | \u2014 | \u2014 | 11 |
Total | 15\u00a0802 | 2\u00a0842 | 6\u00a0951 | \u2014 | 6\u00a0887 | 9\u00a0792 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
ACCRUED COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2022 | 2021 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | -3\u00a0282 | 6\u00a0951 | Other provisions for liabilities | |
Exercised options during the year | 34\u00a0137 | \u2014 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 30\u00a0855 | 6\u00a0951 | ||
Social security costs | -456 | 973 | Public taxes payable | |
Total costs incl. social security costs | 30\u00a0399 | 7\u00a0924 | Salaries and personnel expense |
Cost relating to cash-based remuneration in 2022 totaled NOK 30\u00a0399 thousands. This is recognized in the income statement as a personnel cost. Social security contributions are provided for on an ongoing basis based on the fair value of the options.
As at 31\u00a0December 2022, outstanding options with the right to cash settlement were stated at NOK 6\u00a0510 thousands excl. social security
costs, of which NOK 589 thousands were classified as current liabilities. The book value of long-term liabilities including social security cost was NOK 6 756 thousands.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2022 | 2021 |
Anticipated volatility (%) | 58.29% | 36.44% |
Risk-free rate of interest (%) | 3.12% | 1.13% |
Estimated qualification period (years) | 1.11 | 1.39 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
AMOUNTS IN NOK 1 000 | ||||||||
2022 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2022 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 511 | -157 | 1\u00a0773 | \u2014 | 354 |
Alexander Knudsen (COO Farming Norway) | 78.96 | 5.87 | 999 | 847 | -193 | 1\u00a0917 | \u2014 | 654 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (CTO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0282 | 34\u00a0137 | 6\u00a0887 | 6\u00a0510 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
AMOUNTS IN NOK 1 000 | ||||||||
2021 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2021 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2021 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2021 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2021 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 56 | 1\u00a0352 | \u2014 | \u2014 | 1\u00a0408 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 41 | 868 | \u2014 | \u2014 | 909 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 37 | 803 | \u2014 | \u2014 | 840 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 27 | 573 | \u2014 | \u2014 | 600 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 23 | 488 | \u2014 | \u2014 | 511 |
Alexander Knudsen (COO Farming Europe) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Roy Tore Rikardsen (COO Farming North America) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 39 | 842 | \u2014 | \u2014 | 881 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 467 | -460 | \u2014 | \u2014 | 7 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 316 | -313 | \u2014 | \u2014 | 4 |
Knut Utheim (COO) | 83.00 | 2.79 | 557 | 296 | -293 | \u2014 | \u2014 | 4 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 247 | -243 | \u2014 | \u2014 | 4 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 132 | 2\u00a0788 | \u2014 | \u2014 | 2\u00a0921 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 1\u00a0085 | -1\u00a0074 | \u2014 | \u2014 | 11 |
Total | 15\u00a0802 | 2\u00a0842 | 6\u00a0951 | \u2014 | 6\u00a0887 | 9\u00a0792 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
OTHER CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Accrued expenses1 | 150\u00a0241 | 133\u00a0385 |
Production fee (Norway)2 | 7\u00a0987 | 24\u00a0463 |
Realized gain/loss on fixed-price contracts3 | 30\u00a0930 | 12\u00a0530 |
Other current liabilities4 | 99\u00a0135 | 42\u00a0044 |
Other current liabilities | 288\u00a0293 | 212\u00a0422 |
1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
2 Production fee charged by NOK 0.405/kg (NOK 0.400/kg in 2021) of harvested volume (gutted weight) in Rogaland and Finnmark in Norway. For 2021, the production fee was payable in 2022 as 2021 was the first year harvested volume in Norway was charged with a fixed production fee. As from 2022, the production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement (\"Production fee\").
3 See Note 3.
AMOUNTS IN NOK 1 000 | ||||||||
2022 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2022 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 511 | -157 | 1\u00a0773 | \u2014 | 354 |
Alexander Knudsen (COO Farming Norway) | 78.96 | 5.87 | 999 | 847 | -193 | 1\u00a0917 | \u2014 | 654 |
Roy Tore Rikardsen (COO Farming Canada until June 2022) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (CTO) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0282 | 34\u00a0137 | 6\u00a0887 | 6\u00a0510 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
AMOUNTS IN NOK 1 000 | ||||||||
2021 | LISTED | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2021 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2021 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2021 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2021 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (CEO) | 78.96 | 4.35 | 1\u00a0480 | 56 | 1\u00a0352 | \u2014 | \u2014 | 1\u00a0408 |
Atle Harald Sandtorv (CFO) | 78.96 | 6.34 | 1\u00a0078 | 41 | 868 | \u2014 | \u2014 | 909 |
Knut Utheim (CTO) | 78.96 | 5.82 | 989 | 37 | 803 | \u2014 | \u2014 | 840 |
Kathleen O. Mathisen (CHRO) | 78.96 | 7.20 | 720 | 27 | 573 | \u2014 | \u2014 | 600 |
Kristina Furnes (Group Communication Manager) | 78.96 | 6.04 | 604 | 23 | 488 | \u2014 | \u2014 | 511 |
Alexander Knudsen (COO Farming Europe) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Roy Tore Rikardsen (COO Farming North America) | 78.96 | 5.87 | 999 | 38 | 810 | \u2014 | \u2014 | 847 |
Erik Holvik (CCO) | 78.96 | 6.13 | 1\u00a0042 | 39 | 842 | \u2014 | \u2014 | 881 |
Andreas Kvame (CEO) | 83.00 | 2.26 | 906 | 467 | -460 | \u2014 | \u2014 | 7 |
Atle Harald Sandtorv (CFO) | 83.00 | 2.79 | 557 | 316 | -313 | \u2014 | \u2014 | 4 |
Knut Utheim (COO) | 83.00 | 2.79 | 557 | 296 | -293 | \u2014 | \u2014 | 4 |
Kathleen O. Mathisen (CHRO) | 83.00 | 2.38 | 475 | 247 | -243 | \u2014 | \u2014 | 4 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 132 | 2\u00a0788 | \u2014 | \u2014 | 2\u00a0921 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 1\u00a0085 | -1\u00a0074 | \u2014 | \u2014 | 11 |
Total | 15\u00a0802 | 2\u00a0842 | 6\u00a0951 | \u2014 | 6\u00a0887 | 9\u00a0792 |
* Amounts exclude social security costs.
** The option category for the line item \u201cFormer employees with expired contracts\u201d is equity options. All the other options in this table are options with settlement in cash.
As at 31\u00a0December 2022, the company had 113\u00a0447\u00a0042 shares with a nominal value of NOK 4 per share. All shares issued by the company are fully paid-up. There is one class of shares and all shares confer the same rights.
SHARE CAPITAL AND NUMBER OF SHARES 31.12.2022 | NOMINAL VALUE | TOTAL SHARE CAPITAL NOK 1 000 | NO. OF ORDINARY SHARES |
Total | 4.00 | 453\u00a0788 | 113\u00a0447\u00a0042 |
Holdings of treasury shares | 4.00 | -5\u00a0407 | -1\u00a0351\u00a0811 |
Total excl treasury shares | 4.00 | 448\u00a0381 | 112\u00a0095\u00a0231 |
Treasury shares
In 2011, Grieg Seafood ASA purchased 1\u00a0250\u00a0000\u00a0treasury shares at NOK\u00a014.40 per share. As from 2018, the treasury shares have been sold to employees for the share savings program. In 2022, 96 150 shares were sold to employees through the share savings program at an average price of NOK 71.0958. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 have been settled within year-end. As at 31\u00a0December 2022, the company has 1\u00a0351\u00a0811 treasury shares.
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2022 | 31.12.2022 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
OM Holding AS | 5\u00a0110\u00a0982 | 4.51% |
Folketrygdfondet | 2\u00a0939\u00a0985 | 2.59% |
Ystholmen Felles AS | 1\u00a0923\u00a0197 | 1.70% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0717\u00a0439 | 1.51% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0692\u00a0877 | 1.49% |
Morgan Stanley & Co. Int. Plc. (Nominee) | 1\u00a0470\u00a0346 | 1.30% |
Clearstream Banking S.A. (Nominee) | 1\u00a0376\u00a0622 | 1.21% |
Grieg Seafood ASA | 1\u00a0351\u00a0811 | 1.19% |
JPMorgan Chase Bank, N.A., London (Nominee) | 1\u00a0136\u00a0470 | 1.00% |
G\u00e5s\u00f8 N\u00e6ringsutvikling AS | 1\u00a0116\u00a0323 | 0.98% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Ferd AS | 924\u00a0407 | 0.81% |
State Street Bank and Trust Comp (Nominee) | 724\u00a0407 | 0.64% |
DZ Privatbank S.A. (Nominee) | 698\u00a0518 | 0.62% |
J.P. Morgan SE (Nominee) | 687\u00a0236 | 0.61% |
Danske Invest Norge Vekst | 540\u00a0000 | 0.48% |
Six Sis AG (Nominee) | 534\u00a0229 | 0.47% |
J.P. Morgan SE (Nominee) | 526\u00a0442 | 0.46% |
DNB Bank ASA (Broker) | 482\u00a0561 | 0.43% |
Total 20 largest shareholders | 82\u00a0864\u00a0979 | 73.04% |
Total others | 30\u00a0582\u00a0063 | 26.96% |
Total number of shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2021 | 31.12.2021 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
Folketrygdfondet | 5\u00a0312\u00a0207 | 4.68% |
OM Holding AS | 4\u00a0917\u00a0957 | 4.34% |
Ystholmen Felles AS | 2\u00a0428\u00a0197 | 2.14% |
State Street Bank and Trust Comp (nominee) | 1\u00a0867\u00a0464 | 1.65% |
Clearstream Banking S.A. (nominee) | 1\u00a0711\u00a0386 | 1.51% |
BNP Paribas Securities Services (nominee) | 1\u00a0634\u00a0500 | 1.44% |
Ferd AS | 1\u00a0456\u00a0453 | 1.28% |
Six Sis AG (nominee) | 1\u00a0380\u00a0743 | 1.22% |
CACEIS Bank Spain SA (nominee) | 1\u00a0212\u00a0652 | 1.07% |
Banque Degroof Petercam Lux. SA (nominee) | 1\u00a0164\u00a0795 | 1.03% |
Grieg Seafood ASA | 1\u00a0132\u00a0981 | 1.00% |
JPMorgan Chase Bank, N.A., London (nominee) | 1\u00a0035\u00a0915 | 0.91% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Verdipapirfondet Pareto Investment | 916\u00a0000 | 0.81% |
State Street Bank and Trust Comp (nominee) | 883\u00a0362 | 0.78% |
State Street Bank and Trust Comp (nominee) | 862\u00a0797 | 0.76% |
Ronja Capital II AS | 755\u00a0004 | 0.67% |
Pictet & Cie (Europe) S.A. (nominee) | 646\u00a0320 | 0.57% |
Danske Invest Norge Vekst | 561\u00a0000 | 0.49% |
Total 20 largest shareholders | 87\u00a0790\u00a0860 | 77.38% |
Other shareholders | 25\u00a0656\u00a0182 | 22.62% |
Total shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | NO. OF SHARES | SHAREHOLDING | |
SHARES CONTROLLED BY BOARD MEMBERS AND GROUP MANAGEMENT | 31.12.2022 | 31.12.2022 | 31.12.2021 | 31.12.2021 |
BOARD OF DIRECTORS | ||||
Per Grieg Jr. | 57\u00a0926\u00a0127 | 51.06% | 60\u00a0356\u00a0985 | 53.20% |
Tore Holand (Skippergata 24 AS, and privately) | 2\u00a0000 | 0.00% | 2\u00a0000 | 0.00% |
Marianne Ribe | \u2014 | \u2014% | \u2014 | \u2014% |
Katrine Trovik | \u2014 | \u2014% | \u2014 | \u2014% |
Nicolai Hafeld Grieg (board member from 4 November 2021) * | \u2014 | \u2014% | \u2014 | \u2014% |
Ragnhild Janbu Fresvik (board member from 9 June 2022) | \u2014 | \u2014% | \u2014 | \u2014% |
GROUP MANAGEMENT | ||||
Andreas Kvame (CEO) | 40\u00a0513 | 0.04% | 39\u00a0809 | 0.04% |
Atle Harald Sandtorv (CFO) | 25\u00a0556 | 0.02% | 24\u00a0852 | 0.02% |
Knut Utheim (CTO) | 24\u00a0855 | 0.02% | 24\u00a0151 | 0.02% |
Alexander Knudsen (COO Farming Norway) | 23\u00a0513 | 0.02% | 22\u00a0809 | 0.02% |
Kathleen O. Mathisen (CHRO) | 15\u00a0074 | 0.01% | 12\u00a0380 | 0.01% |
Kristina Furnes (Global Communications Manager) | 4\u00a0711 | 0.00% | 644 | 0.00% |
Erik Holvik (CCO) | 8\u00a0831 | 0.01% | 644 | 0.00% |
THE SHARES OWNED BY THE FOLLOWING COMPANIES ARE CONTROLLED BY PER GRIEG JR. AND FAMILY | ||||
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% | 56\u00a0914\u00a0355 | 50.17% |
Ystholmen Felles AS | \u2014 | \u2014% | 2\u00a0428\u00a0197 | 2.14% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% | 996\u00a0772 | 0.88% |
Per Grieg Jr. privately | 15\u00a0000 | 0.01% | 15\u00a0000 | 0.01% |
Thomas Willumsen Grieg | \u2014 | \u2014% | 2\u00a0661 | 0.00% |
Total shares | 57\u00a0926\u00a0127 | 51.06% | 60\u00a0356\u00a0985 | 53.20% |
As at 31\u00a0December 2022, the company had 113\u00a0447\u00a0042 shares with a nominal value of NOK 4 per share. All shares issued by the company are fully paid-up. There is one class of shares and all shares confer the same rights.
SHARE CAPITAL AND NUMBER OF SHARES 31.12.2022 | NOMINAL VALUE | TOTAL SHARE CAPITAL NOK 1 000 | NO. OF ORDINARY SHARES |
Total | 4.00 | 453\u00a0788 | 113\u00a0447\u00a0042 |
Holdings of treasury shares | 4.00 | -5\u00a0407 | -1\u00a0351\u00a0811 |
Total excl treasury shares | 4.00 | 448\u00a0381 | 112\u00a0095\u00a0231 |
SHARE CAPITAL AND NUMBER OF SHARES 31.12.2022 | NOMINAL VALUE | TOTAL SHARE CAPITAL NOK 1 000 | NO. OF ORDINARY SHARES |
Total | 4.00 | 453\u00a0788 | 113\u00a0447\u00a0042 |
Holdings of treasury shares | 4.00 | -5\u00a0407 | -1\u00a0351\u00a0811 |
Total excl treasury shares | 4.00 | 448\u00a0381 | 112\u00a0095\u00a0231 |
Treasury shares
In 2011, Grieg Seafood ASA purchased 1\u00a0250\u00a0000\u00a0treasury shares at NOK\u00a014.40 per share. As from 2018, the treasury shares have been sold to employees for the share savings program. In 2022, 96 150 shares were sold to employees through the share savings program at an average price of NOK 71.0958. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 have been settled within year-end. As at 31\u00a0December 2022, the company has 1\u00a0351\u00a0811 treasury shares.
CALCULATION OF EARNINGS PER SHARE | 2022 | 2021 |
Profit / loss after tax continued operations (majority share) | 1\u00a0153\u00a0779 | 604\u00a0377 |
Profit / loss discontinued operations (majority share) | \u2014 | 600\u00a0291 |
Profit / loss after tax (majority share) | 1\u00a0153\u00a0779 | 1\u00a0204\u00a0668 |
Number of shares at 01.01 | 113\u00a0447\u00a0042 | 113\u00a0447\u00a0042 |
Effect of treasury shares (Note 18) | -1\u00a0132\u00a0981 | -1\u00a0171\u00a0494 |
Repurchased shares | -314\u00a0980 | \u2014 |
Sale of treasury shares to employees | 96\u00a0150 | 38\u00a0513 |
Number of outstanding shares at 31.12. | 112\u00a0095\u00a0231 | 112\u00a0314\u00a0061 |
Effect of share repurchased | 307\u00a0473 | \u2014 |
Effect of shares sold to employees | -92\u00a0989 | -33\u00a0870 |
Weighted average number of outstanding shares at 31.12. | 112\u00a0309\u00a0715 | 112\u00a0280\u00a0191 |
Diluted average number of outstanding shares at 31.12. | 112\u00a0309\u00a0715 | 112\u00a0280\u00a0191 |
Earnings per share (NOK) | ||
Continued operations | 10.3 | 5.4 |
Discontinued operations | 0.0 | 5.3 |
Earnings per share - Total | 10.3 | 10.7 |
Diluted earnings per share (NOK) | ||
Continued operations | 10.3 | 5.4 |
Discontinued operations | 0.0 | 5.3 |
Earnings per share - Total | 10.3 | 10.7 |
DIVIDENDS | 2022 | 2021 |
Proposed dividend per share (NOK)* | 4.5 | 3.0 |
Distributed dividend to owners during the year per share (NOK) | 3.0 | 0.0 |
CASH AND CASH EQUIVALENTS NOK 1 000 | 2022 | 2021 |
Restricted deposits incl. employee tax deductions* | 1\u00a0000 | 25\u00a0067 |
Other cash and bank deposits | 641\u00a0719 | 903\u00a0274 |
Total | 642\u00a0719 | 928\u00a0342 |
*The change in the line item \"restricted deposits incl. employee tax deductions\" 2022 compared to 2021 is due to bank guarantee covering the employee tax deductions in 2022 (and going forward), compared to 2021 where the employee tax deductions were held on a tax deduction bank account.
The Group's currency and interest rate exposure is described in Note 3.
CASH AND CASH EQUIVALENTS NOK 1 000 | 2022 | 2021 |
Restricted deposits incl. employee tax deductions* | 1\u00a0000 | 25\u00a0067 |
Other cash and bank deposits | 641\u00a0719 | 903\u00a0274 |
Total | 642\u00a0719 | 928\u00a0342 |
*The change in the line item \"restricted deposits incl. employee tax deductions\" 2022 compared to 2021 is due to bank guarantee covering the employee tax deductions in 2022 (and going forward), compared to 2021 where the employee tax deductions were held on a tax deduction bank account.
The Group's currency and interest rate exposure is described in Note 3.
TRADE RECEIVABLES NOK 1 000 | 2022 | 2021 |
Gross amount of trade receivables | 690\u00a0226 | 479\u00a0228 |
Trade receivables deducted* | -416\u00a0053 | -312\u00a0469 |
Loss allowance | -15\u00a0036 | -14\u00a0965 |
Trade receivables at 31.12. | 259\u00a0137 | 151\u00a0793 |
*Trade receivables bought by the factoring company.
RECOGNIZED LOSSES NOK 1 000 | 2022 | 2021 |
Change in loss allowance | 71 | 1\u00a0427 |
Confirmed losses in the year | 33 | \u2014 |
Total recognized losses on receivables | 104 | 1\u00a0427 |
Losses on receivables are classified as other operating expenses in the income statement.
In the Group's expected credit loss (ECL) calculation model, customers are categorized as high or low risk, depending on their country of origin, and as credit insured or unsecured. The group of unsecured receivables also consists of some receivables that have other types of security. The risk of loss is therefore considered low and no loss allowance is calculated for these receivables. The risk evaluation
is based on our own experience and input from credit insurance companies. A loss allowance is calculated as a percentage of the aging
distribution (days past due). The Group also makes manual accruals if significant information implies that there is a higher risk of losses.
Around 5% credit risk also remains for the factored trade receivables. The aging analysis given below is therefore based on the total receivables rather than total receivables less the factored receivables. For more information about credit risk, refer to Note 3.
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 | OVERDUE 61-90 | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2022 | ||||||||||
Regular/normal risk countries | TR Credit insured | 615\u00a0863 | \u2014 | 486\u00a0463 | 121\u00a0035 | 6\u00a0332 | 381 | 1\u00a0616 | 36 | 615\u00a0863 |
TR Unsecured | 59\u00a0939 | 61\u00a0444 | 33\u00a0057 | 1\u00a0550 | 10\u00a0898 | 601 | 60 | 13\u00a0773 | 59\u00a0939 | |
High risk countries | TR Credit insured | 11\u00a0583 | \u2014 | 5\u00a0399 | 5\u00a0732 | 474 | \u2014 | -22 | \u2014 | 11\u00a0583 |
TR Unsecured | 2\u00a0841 | 2\u00a0839 | 2\u00a0839 | 2 | \u2014 | \u2014 | \u2014 | \u2014 | 2\u00a0841 | |
Total | 690\u00a0226 | 64\u00a0283 | 527\u00a0757 | 128\u00a0319 | 17\u00a0704 | 982 | 1\u00a0655 | 13\u00a0809 | 690\u00a0226 | |
LOSS ALLOWANCE 31.12.2022 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | \u2014 | 271 | 8 | 316 | 79 | 512 | 36 | 1\u00a0223 |
TR Unsecured | \u2014 | 61\u00a0444 | 8 | \u2014 | \u2014 | \u2014 | \u2014 | 13\u00a0773 | 13\u00a0780 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | 3 | 16 | 12 | \u2014 | \u2014 | \u2014 | 31 |
TR Unsecured | \u2014 | 2\u00a0839 | 2 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 2 | |
Total | \u2014 | 64\u00a0283 | 283 | 25 | 328 | 79 | 512 | 13\u00a0809 | 15\u00a0036 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 | OVERDUE 61-90 | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2021 | ||||||||||
Regular/normal risk countries | TR Credit insured | 425\u00a0546 | 52 | 289\u00a0555 | 126\u00a0792 | 4\u00a0344 | 5\u00a0238 | -382 | \u2014 | 425\u00a0546 |
TR Unsecured | 50\u00a0334 | 50\u00a0334 | 17\u00a0596 | 16\u00a0599 | 302 | -1\u00a0131 | 1\u00a0018 | 15\u00a0951 | 50\u00a0334 | |
High risk countries | TR Credit insured | 3\u00a0291 | \u2014 | 1\u00a0431 | 1\u00a0872 | \u2014 | \u2014 | -12 | \u2014 | 3\u00a0291 |
TR Unsecured | 56 | 56 | \u2014 | \u2014 | 4 | \u2014 | 52 | \u2014 | 56 | |
Total | 479\u00a0228 | 50\u00a0443 | 308\u00a0582 | 145\u00a0264 | 4\u00a0650 | 4\u00a0106 | 676 | 15\u00a0951 | 479\u00a0228 | |
LOSS ALLOWANCE 31.12.2021 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | 52 | \u2014 | 11 | 4 | 11 | 31 | \u2014 | 57 |
TR Unsecured | \u2014 | 50\u00a0334 | \u2014 | 304 | 93 | 1\u00a0029 | 1\u00a0100 | 12\u00a0333 | 14\u00a0859 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 48 | \u2014 | 49 |
TR Unsecured | \u2014 | 56 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | \u2014 | 50\u00a0443 | \u2014 | 316 | 98 | 1\u00a0040 | 1\u00a0179 | 12\u00a0333 | 14\u00a0965 |
TRADE RECEIVABLES NOK 1 000 | 2022 | 2021 |
Gross amount of trade receivables | 690\u00a0226 | 479\u00a0228 |
Trade receivables deducted* | -416\u00a0053 | -312\u00a0469 |
Loss allowance | -15\u00a0036 | -14\u00a0965 |
Trade receivables at 31.12. | 259\u00a0137 | 151\u00a0793 |
*Trade receivables bought by the factoring company.
RECOGNIZED LOSSES NOK 1 000 | 2022 | 2021 |
Change in loss allowance | 71 | 1\u00a0427 |
Confirmed losses in the year | 33 | \u2014 |
Total recognized losses on receivables | 104 | 1\u00a0427 |
Losses on receivables are classified as other operating expenses in the income statement.
OTHER NON-CURRENT RECEIVABLES NOK 1 000 | Note | 2022 | 2021 |
Investment tax credit* | 11 | \u2014 | 81\u00a0575 |
Loan to associated company | 7 | 16\u00a0900 | 2\u00a0111 |
Investments in shares | 14 | 271 | 271 |
Other non-current receivables | 764 | 6\u00a0940 | |
Total | 17\u00a0935 | 90\u00a0897 |
*Investment tax credit, related to the freshwater facility in Newfoundland, has been derecognized from the statement of financial position as at 31 December 2022 as Newfoundland is in a net deferred tax position. Investment tax credits are deferred and offset against future tax liability. The derecognition has been carried out as a balance sheet entry, by reversing the credit entry to the acquisition cost of the property, plant and equipment booked as at 31 December 2021 and by reversing the non-current receivable related to the investment tax credit booked as at 31 December 2021, see Note\u00a011. The investment tax credit was in 2021 booked in line with a government grant, as a direct decrease in property, plant and equipment.
NOTE 24\u00a0 OTHER CURRENT RECEIVABLES
OTHER CURRENT RECEIVABLES NOK 1 000 | 2022 | 2021 |
VAT receivable | 87\u00a0431 | 57\u00a0594 |
Prepaid expenses | 44\u00a0113 | 43\u00a0490 |
Other current receivables | 25\u00a0515 | 46\u00a0247 |
Total | 157\u00a0060 | 147\u00a0332 |
NOTE 24\u00a0 OTHER CURRENT RECEIVABLES
OTHER CURRENT RECEIVABLES NOK 1 000 | 2022 | 2021 |
VAT receivable | 87\u00a0431 | 57\u00a0594 |
Prepaid expenses | 44\u00a0113 | 43\u00a0490 |
Other current receivables | 25\u00a0515 | 46\u00a0247 |
Total | 157\u00a0060 | 147\u00a0332 |
NOTE 24\u00a0 OTHER CURRENT RECEIVABLES
OTHER CURRENT RECEIVABLES NOK 1 000 | 2022 | 2021 |
VAT receivable | 87\u00a0431 | 57\u00a0594 |
Prepaid expenses | 44\u00a0113 | 43\u00a0490 |
Other current receivables | 25\u00a0515 | 46\u00a0247 |
Total | 157\u00a0060 | 147\u00a0332 |
2022 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 33\u00a0742 | \u2014 | -1\u00a0906 |
Total related parties as associates | \u2014 | 168\u00a0353 | 16\u00a0650 | -40\u00a0879 |
Total | \u2014 | 202\u00a0095 | 16\u00a0650 | -42\u00a0785 |
2021 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 37\u00a0389 | \u2014 | -15\u00a0915 |
Total related parties as associates | 9\u00a0698 | 153\u00a0086 | 2\u00a0111 | -23\u00a0615 |
Total | 9\u00a0698 | 190\u00a0475 | 2\u00a0111 | -39\u00a0530 |
The Grieg Seafood Group carries out, in the normal course of business, transactions with companies controlled by Grieg Maturitas II AS, which is the parent company of Grieg Aqua AS, the majority owner of Grieg Seafood ASA. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS. These transactions relate to:
\u2022ICT-related services and other functions such as catering, reception, etc., are provided by Grieg Group Resources AS on an arm\u2019s length basis.
\u2022Grieg Seafood ASA rents its offices from Grieg Gaarden AS on an arm\u2019s length basis. The office rental agreement runs for a period of ten years.
\u2022Grieg Seafood ASA purchases services from Grieg Investor AS.
\u2022The regions purchased cleaner fish from Rensefiskgruppen AS including subsidiaries, a company owned by Grieg Kapital AS.
Furthermore, the Group is also purchases goods and services from associated companies, including companies affiliated with the Group through managerial positions in Grieg Seafood and the related party. These transactions relate to:
\u2022Purchase of smolt from the associated company Tytlandsvik Aqua AS, which is owned 33.33% by Grieg Seafood Rogaland AS.
\u2022Purchase of smolt from the associated company Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS.
\u2022Interest-bearing loan provided to \u00c5rdal Aqua AS, which is owned 44.44% by Grieg Seafood Rogaland AS.
\u2022Interest-bearing loan provided to Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS.
\u2022Non-interest bearing loan provided to an affiliated company of NextSeafood AS, which is owned 50.00% by Grieg Seafood Rogaland AS.
\u2022Fuel is purchased from Eidsvaag AS, which is affiliated with Grieg Seafood through a board member of Grieg Seafood being the Chair of Board of Directors of the affiliated company.
\u2022Algae monitoring services are purchased from Blue Planet AS, which is affiliated with Grieg Seafood through Grieg Seafood COO Norway being the Chair of the Board of Directors of the affiliated company.
The parent company provides a range of services to its subsidiaries. The services include administrative services and services relating to the provision of parent company non-current loans and current credit facilities to subsidiaries. Interest is charged on an arm's length basis. In addition, Grieg Seafood ASA engages in hedge contracts on behalf of subsidiaries. The arrangement is intended to reduce these companies' exposure to salmon prices. Agreements with the subsidiaries are priced on the basis of a \"back-to-back\" arrangement.
The Board and Group Management are related parties. See Note 17 on share-based options and Note 18 on shares controlled by members of the Board and Group Management.
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
FINANCIAL ITEMS NOK 1 000 | 2022 | 2021 |
FINANCIAL INCOME | ||
Other interest income | 11\u00a0893 | \u2014 |
Realized gain/loss on cross currency interest rate swap incl. option | 35\u00a0740 | \u2014 |
Unrealized gain (loss) on investment in money market fund | 12\u00a0624 | \u2014 |
Net change in fair value of derivatives | 21\u00a0453 | 28\u00a0370 |
Net currency gains | 38\u00a0205 | 96\u00a0709 |
Other financial income | 1\u00a0693 | 154 |
Total financial income | 121\u00a0609 | 125\u00a0233 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases * | 151\u00a0410 | 189\u00a0390 |
Amortized establishment cost | 16\u00a0471 | 16\u00a0476 |
Other interest expenses | \u2014 | 1\u00a0768 |
Other financial expenses | 3\u00a0672 | 4\u00a0865 |
Total | 171\u00a0553 | 212\u00a0499 |
Net financial items | -49\u00a0944 | -87\u00a0266 |
OTHER OPERATING EXPENSES NOK 1 000 | 2022 | 2021 |
Transportation costs | 497\u00a0679 | 265\u00a0639 |
Maintenance costs | 327\u00a0031 | 295\u00a0270 |
Electricity and fuel | 177\u00a0902 | 113\u00a0778 |
Lease expenses1 | 60\u00a0490 | 24\u00a0555 |
Outsourced services and audit fees | 107\u00a0318 | 94\u00a0100 |
Insurance | 66\u00a0512 | 54\u00a0223 |
IT expenses | 77\u00a0298 | 59\u00a0437 |
Marketing costs | 6\u00a0642 | 2\u00a0942 |
Other operating expenses2 | 119\u00a0311 | 64\u00a0397 |
Other production-related costs1,3 | 647\u00a0128 | 553\u00a0005 |
Total other operating expenses | 2\u00a0087\u00a0310 | 1\u00a0527\u00a0347 |
1Includes lease expenses and lease-related expenses, including the effect of IFRS 16.
2Includes equipment, telephony/postage, office supplies, fees, travel costs and the like.
3Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, vaccination, delousing, oxygen, and analyses and the like.
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2022 | 2021 |
AUDITOR'S FEES | ||
Group auditor | 3\u00a0049 | 4\u00a0132 |
Other auditors | 1\u00a0128 | 500 |
OTHER CERTIFICATION SERVICES | ||
Group auditor | 783 | 752 |
Other auditors | \u2014 | \u2014 |
TAX ADVICE | ||
Group auditor | 764 | 883 |
Other auditors | 124 | \u2014 |
OTHER SERVICES | ||
Group auditor | 26 | 86 |
Other auditors | \u2014 | 206 |
Total Group auditor | 4\u00a0622 | 5\u00a0852 |
Total other auditors | 1\u00a0252 | 706 |
Total auditor's fees | 5\u00a0873 | 6\u00a0558 |
The audit fee specification for 2022 include fees from Advokatfirmaet PricewaterhouseCoopers AS of NOK 26 thousands (2021: NOK 38 thousands).
Litigation and legal claims
Grieg Seafood had also been sued by indirect purchasers in the USA. In 2022, a settlement offer from the indirect purchaser plaintiffs was accepted. In February 2023, the settlement was finally approved by the court of Southern District of Florida. The settlement does not involve any admission of liability or wrongdoing. Costs incurred and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million have been expensed in 2022, of which NOK 129 million were used at year end. The remaining NOK 28 million are accrued as other current liability in the Statement of Financial Position. The total amount of NOK 157 million for the year is reported on the financial statement line item \"Litigation and legal claims\". See also Note 31.
Decommissioning costs
OTHER OPERATING EXPENSES NOK 1 000 | 2022 | 2021 |
Transportation costs | 497\u00a0679 | 265\u00a0639 |
Maintenance costs | 327\u00a0031 | 295\u00a0270 |
Electricity and fuel | 177\u00a0902 | 113\u00a0778 |
Lease expenses1 | 60\u00a0490 | 24\u00a0555 |
Outsourced services and audit fees | 107\u00a0318 | 94\u00a0100 |
Insurance | 66\u00a0512 | 54\u00a0223 |
IT expenses | 77\u00a0298 | 59\u00a0437 |
Marketing costs | 6\u00a0642 | 2\u00a0942 |
Other operating expenses2 | 119\u00a0311 | 64\u00a0397 |
Other production-related costs1,3 | 647\u00a0128 | 553\u00a0005 |
Total other operating expenses | 2\u00a0087\u00a0310 | 1\u00a0527\u00a0347 |
1Includes lease expenses and lease-related expenses, including the effect of IFRS 16.
2Includes equipment, telephony/postage, office supplies, fees, travel costs and the like.
3Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, vaccination, delousing, oxygen, and analyses and the like.
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2022 | 2021 |
AUDITOR'S FEES | ||
Group auditor | 3\u00a0049 | 4\u00a0132 |
Other auditors | 1\u00a0128 | 500 |
OTHER CERTIFICATION SERVICES | ||
Group auditor | 783 | 752 |
Other auditors | \u2014 | \u2014 |
TAX ADVICE | ||
Group auditor | 764 | 883 |
Other auditors | 124 | \u2014 |
OTHER SERVICES | ||
Group auditor | 26 | 86 |
Other auditors | \u2014 | 206 |
Total Group auditor | 4\u00a0622 | 5\u00a0852 |
Total other auditors | 1\u00a0252 | 706 |
Total auditor's fees | 5\u00a0873 | 6\u00a0558 |
The audit fee specification for 2022 include fees from Advokatfirmaet PricewaterhouseCoopers AS of NOK 26 thousands (2021: NOK 38 thousands).
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2022 | 2021 |
AUDITOR'S FEES | ||
Group auditor | 3\u00a0049 | 4\u00a0132 |
Other auditors | 1\u00a0128 | 500 |
OTHER CERTIFICATION SERVICES | ||
Group auditor | 783 | 752 |
Other auditors | \u2014 | \u2014 |
TAX ADVICE | ||
Group auditor | 764 | 883 |
Other auditors | 124 | \u2014 |
OTHER SERVICES | ||
Group auditor | 26 | 86 |
Other auditors | \u2014 | 206 |
Total Group auditor | 4\u00a0622 | 5\u00a0852 |
Total other auditors | 1\u00a0252 | 706 |
Total auditor's fees | 5\u00a0873 | 6\u00a0558 |
The audit fee specification for 2022 include fees from Advokatfirmaet PricewaterhouseCoopers AS of NOK 26 thousands (2021: NOK 38 thousands).
OTHER CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Accrued expenses1 | 150\u00a0241 | 133\u00a0385 |
Production fee (Norway)2 | 7\u00a0987 | 24\u00a0463 |
Realized gain/loss on fixed-price contracts3 | 30\u00a0930 | 12\u00a0530 |
Other current liabilities4 | 99\u00a0135 | 42\u00a0044 |
Other current liabilities | 288\u00a0293 | 212\u00a0422 |
1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
2 Production fee charged by NOK 0.405/kg (NOK 0.400/kg in 2021) of harvested volume (gutted weight) in Rogaland and Finnmark in Norway. For 2021, the production fee was payable in 2022 as 2021 was the first year harvested volume in Norway was charged with a fixed production fee. As from 2022, the production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement (\"Production fee\").
3 See Note 3.
OTHER CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Accrued expenses1 | 150\u00a0241 | 133\u00a0385 |
Production fee (Norway)2 | 7\u00a0987 | 24\u00a0463 |
Realized gain/loss on fixed-price contracts3 | 30\u00a0930 | 12\u00a0530 |
Other current liabilities4 | 99\u00a0135 | 42\u00a0044 |
Other current liabilities | 288\u00a0293 | 212\u00a0422 |
1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
2 Production fee charged by NOK 0.405/kg (NOK 0.400/kg in 2021) of harvested volume (gutted weight) in Rogaland and Finnmark in Norway. For 2021, the production fee was payable in 2022 as 2021 was the first year harvested volume in Norway was charged with a fixed production fee. As from 2022, the production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement (\"Production fee\").
3 See Note 3.
OTHER CURRENT LIABILITIES NOK 1 000 | 2022 | 2021 |
Accrued expenses1 | 150\u00a0241 | 133\u00a0385 |
Production fee (Norway)2 | 7\u00a0987 | 24\u00a0463 |
Realized gain/loss on fixed-price contracts3 | 30\u00a0930 | 12\u00a0530 |
Other current liabilities4 | 99\u00a0135 | 42\u00a0044 |
Other current liabilities | 288\u00a0293 | 212\u00a0422 |
1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
2 Production fee charged by NOK 0.405/kg (NOK 0.400/kg in 2021) of harvested volume (gutted weight) in Rogaland and Finnmark in Norway. For 2021, the production fee was payable in 2022 as 2021 was the first year harvested volume in Norway was charged with a fixed production fee. As from 2022, the production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement (\"Production fee\").
3 See Note 3.