AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of Grieg Seafood for the full year ended 31 December 2023 were approved for issuance by the Board of Directors on 21\u00a0March 2024 and subject to approval by the Annual General Meeting of Grieg Seafood ASA.
ORGANIZATION
The Grieg Seafood Group (Grieg Seafood) consist of the parent company Grieg Seafood ASA and its subsidiaries. Grieg Seafood ASA is incorporated and domiciled in Norway. Grieg Seafood ASA is a public limited company registered in Norway, and is listed on the Oslo Stock Exchange in Norway. The address for its registered office is C. Sundts Gate 17/19, 5008 Bergen, Norway.
Grieg Seafood is an integrated Norwegian seafood company engaged in farming of Atlantic salmon.\u00a0The consolidated Grieg Seafood\u2019s (\u201cThe Group\u201d) 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.\u00a0\u00a0The Group has operations in Norway and Canada.
The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS, which in turn owns 100 % of Grieg Aqua AS, which owns 50.17% of Grieg Seafood ASA.
COMPANIES OF THE GROUP
Grieg Seafood Group comprised the following entities at 31\u00a0December 2023:
Grieg Seafood UK Ltd (owned 100% by Grieg Seafood Sales AS) is domiciled in the UK. Grieg Seafood BC Ltd., and its 100% owned subsidiary Grieg Seafood Sales North America Inc, are domiciled in British Columbia, Canada, while Grieg Seafood Newfoundland Ltd (incl. the subsidiaries Grieg Marine NL Ltd and Grieg NL Nurseries Ltd) are 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 Sales AS.
To be able to correctly calculate and report the resource rent tax in Norway as from 2023, Grieg Seafood considered it necessary in 2022 to reorganize the ownership of aquaculture licenses in Norway into separate legal entities owning the commercial and non-commercial aquaculture licenses. Therefore, Grieg Seafood Rogaland Sj\u00f8 AS was 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. See Note 12 for more information\u00a0concerning the internal reorganization of the Rogaland and Finnmark farming regions in 2022.
The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA.
Grieg Seafood Canada AS (100%) and Grieg Seafood Newfoundland AS (99%) 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 material accounting policies applied by Grieg Seafood when preparing the consolidated financial statement are set out below and in the following note disclosures. These note disclosures of the consolidated financial statement have been structured such that the material accounting policies relevant for the various note disclosures have been presented together, and not separated by a dedicated accounting policy note. For those material note disclosures then encompass accounting policies not specific for a financial statement line item or otherwise topic of disclosure, the relevant material accounting policies have been set forth in this Note 2.
STATEMENT OF COMPLIANCE
The consolidated financial statements as per 31\u00a0December 2023 for the period 1 January to 31 December have been prepared in accordance with IFRS\u00ae Accounting Standards as adopted by the EU and with IFRSs as issued by the International Accounting Standards Board (IASB), interpretations issued by IASB and the additional requirements of the Norwegian Accounting Act, effective on 31\u00a0December 2023.
BASIS OF PREPARATION
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. 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.
The main areas where Grieg Seafood has made significant judgements when applying the accounting policies and that have the most material effect on the amounts as recognized in the consolidated financial statements are listed below, with reference to the relevant note disclosure.
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY | NOTE |
Norwegian resource rent tax scheme (assumptions made concerning the basis for taxation) | 12 |
Classification of fish-farming licenses (indefinite or definite economic life) | 13 |
Impairment test of non-financial non-current assets | 15 |
Fair value measurement of biological assets | 19 |
The material accounting policies described in these consolidated financial statements have been applied consistently to all periods presented, except as otherwise noted in in the disclosure related to the impact of new standards, amendments and interpretations adopted by the Group.
All amounts in these consolidated financial statements are stated in NOK thousand unless otherwise specified.
Certain amounts in the comparable years can be reclassified to conform to current year presentation. If such reclassification is not clearly immaterial, the reclassification is disclosed in the relevant note disclosure for the financial statement line item.
Operational expenses in the consolidated income statement are presented based on nature of expense.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE GROUP
NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2023
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 \u201cmaterial accounting policy information\u201d and explain how to identify when accounting policy information is material. If it is disclosed, it should not obscure material accounting information.The Group has adopted the amendment in 2023 when preparing the note disclosure for the consolidated financial statement of 2023.
Other standards, amendments to standards and interpretations of standards, effective as of 1 January 2023
The Group has not early adopted any standards, amendments or interpretations. Other amendments to standards, and interpretations of standards, effective as from 1 January 2023, adopted by the Group in 2023, has not had any material impact on the consolidated financial statements of Grieg Seafood.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS - NOT YET ADOPTED
At the end of 2023, there are some amendments to, and interpretations of, existing IFRS standards that are not yet effective. The Group has not early adopted any amendments or interpretations of such standards. 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. There are no amendments, or interpretations, of standards not yet adopted that are expected to have a material impact on the consolidated financial statements of Grieg Seafood.
CONSOLIDATION PRINCIPLES
The consolidated financial statements include all entities controlled by Grieg Seafood ASA.
Subsidiaries are all 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. There are no non-controlling interests recognized in the Group\u2019s equity. All the subsidiaries of Grieg Seafood ASA, except for Grieg Seafood Newfoundland AS, are wholly owned, see Note 1 in general and Note 25 for Grieg Seafood Newfoundland AS in specific.
FOREIGN CURRENCY TRANSLATION
INDIVIDUAL ENTITIES OF GRIEG SEAFOOD
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).
In preparing the financial statements of the individual entities in the Grieg Seafood Group, transactions in currencies other than the functional currency are translated at the foreign currency exchange rate at the transaction date.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency at the foreign currency exchange rate at the balance sheet date. Foreign currency translation differences are recognized in the consolidated income statement as foreign currency exchange gains or losses within the subtotal financial statement line item of \u201cNet financial items\u201d. However, there are two exceptions. Firstly, foreign currency translation differences arising from sales revenue to external customers of the Group, which is included on the financial statement line item of \u201cother gains and losses\u201d, included in the subtotal of EBIT (Earnings before interests and taxes) in the consolidated income statement. Secondly, foreign currency translation differences arising from the translation of estimate-based provisions are generally recognized as part of
the change in the underlying estimate and include within the relevant financial statement line item relevant for the item that is estimated.
Non-monetary assets measured at historical cost in a foreign currency are translated using the currency exchange rate at the date of the transaction.
CONSOLIDATED FINANCIAL STATEMENT
The consolidated financial statements are presented in Norwegian Kroner (NOK), which is the parent company\u2019s functional currency and the Group\u2019s presentation currency.
When preparing the consolidated financial statements, 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.
Grieg Seafood ASA has provided loans to subsidiaries of the Group with other functional currencies than the parent company, and for which settlement of the loan neither is planned nor likely to occur in the foreseeable future. In addition, certain parent companies of sub-consolidation levels of the Group has provided similar loans to subsidiaries of its sub-group. Foreign currency exchange differences arising on such loans are recognized in the consolidated statement of other comprehensive income in the consolidated financial statements of the Group.
CASH FLOW STATEMENT
The Group\u2019s cash flow statement shows the overall cash flow specified by 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. Operating activities are presented using the indirect method, where EBIT (Earnings before interests and taxes) is adjusted for changes in biological assets at cost, other inventories, operating receivables and liabilities, the effect of non-cash items such as depreciation, amortization and fair value adjustment of biological assets, profit and loss from investment in associates and joint ventures, and taxes paid. Increase/decrease in derivative financial instruments are included as part of the operational activities.
Impact on financial reporting and estimates as at 31 December 2023
As at 31 December 2023, 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.
As at 31 December 2023, the Group\u2019s action plan for reducing carbon emissions (see below) has not had any material impact on our accounting estimates for the useful life of property, plant and equipment, or materially impacted the Group\u2019s impairment test calculations. This is due to the gradual replacement of equipment which generally has a useful life shorter than the timeframes for the Group\u2019s climate action targets. Furthermore, our budget (basis for the impairment tests) has factored in the quantifiable nature- and climate related risks.
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 aim 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 2023, 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 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 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, investment in communication equipment and our focus on improving our smolt facilities, we believe that Grieg Seafood is prepared to meet the challenges it will face in the future. The issue of sea 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 sea 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
Last year, 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 the salmon feed suppliers and focus on sustainable feed ingredients. In addition, the Group expects that new technology and transport of more processed products will enable us to reduce our carbon emissions from freight transport.
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 salmon farming industry. 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 liquidity.
The Group\u2019s funding is primarily syndicated debt with banks in addition to a green bond loan.\u00a0The level of liabilities and alternative forms of funding are subject to constant evaluation. As at 31 December 2023, the Group had a good financial foundation, with cash and cash equivalents of NOK 216 million and unutilized facilities of NOK 887 million. See Note 27 for more information.
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 40, but can be exceeded in periods of growth investments.
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 short-term financial derivatives to reduce certain risks. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses. As at 31 December 2023 (31 December 2022), 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.
I) MARKET RISKS
(i) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, EUR, USD and GBP. 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 TRADE PAYABLES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Trade receivables | 77\u00a0744 | 79\u00a0815 | 15\u00a0276 | 154\u00a0221 | \u2014 | 104 | 327\u00a0160 |
Trade payables | 544\u00a0185 | 195\u00a0287 | 16\u00a0603 | 3\u00a0390 | 751 | 535 | 760\u00a0753 |
2022 | |||||||
Trade receivables | 214\u00a0681 | 1\u00a0911 | 23\u00a0901 | 17\u00a0207 | 1\u00a0517 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 143\u00a0587 | 12\u00a0590 | 1\u00a0044 | 174 | 3\u00a0193 | 717\u00a0498 |
NET INTEREST-BEARING LIABILITIES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Cash and cash equivalents | 30\u00a0452 | 138\u00a0121 | 144 | 47\u00a0601 | \u2014 | \u2014 | 216\u00a0318 |
Loans to associated companies | 32\u00a0529 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 32\u00a0529 |
Gross interest-bearing liabilities* | 3\u00a0749\u00a0524 | 798\u00a0184 | 650\u00a0265 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 | 5\u00a0127\u00a0730 |
Net interest-bearing liabilities | 3\u00a0686\u00a0542 | 660\u00a0062 | 650\u00a0122 | -100\u00a0077 | -16\u00a0068 | -1\u00a0698 | 4\u00a0878\u00a0884 |
2022 | |||||||
Cash and cash equivalents | 284\u00a0965 | 134\u00a0040 | 87\u00a0485 | 88\u00a0647 | 41\u00a0877 | 5\u00a0705 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Gross interest-bearing liabilities* | 2\u00a0678\u00a0379 | 452\u00a0331 | 755\u00a0679 | \u2014 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | 318\u00a0292 | 668\u00a0194 | -88\u00a0647 | -41\u00a0877 | -5\u00a0705 | 2\u00a0222\u00a0522 |
*See Note 27 for more information on the Group\u2019s interest-bearing liabilities.
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 is managed primarily through intercompany borrowings denominated in the relevant foreign currencies.
The term-loan facility of the syndicated bank loan is split into NOK and EUR. 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.
Sensitivity analysis
The sensitivity of a depreciation (appreciation) of 5% change in NOK foreign exchange rates versus CAD, EUR, USD and GBP at the balance sheet date (all other factors remaining unchanged) would be expected to have the following effects on the Group's profit after tax, other comprehensive income and total comprehensive income / equity effect. The OCI item reflect agio on intercompany long-term loans and the effect of translating the foreign subsidiary financials to the Group\u2019s presentation currency, while the profit after tax-item include trade receivables and trade payables (incl. intercompany items), term-loan, lease liabilities, cash and cash equivalents and foreign currency derivative contracts.
SENSITIVITY NOK 1 000 | CAD | EUR | USD | GBP | TOTAL | |
31.12.2023 | ||||||
Profit after tax | -/+ | 8\u00a0487 | -32\u00a0533 | -632 | -570 | -25\u00a0249 |
Other comprehensive income | -/+ | 25\u00a0660 | \u2014 | \u2014 | \u2014 | 25\u00a0660 |
Total comprehensive income / effect on equity | -/+ | 34\u00a0147 | -32\u00a0533 | -632 | -570 | 411 |
31.12.2022 | ||||||
Profit after tax | -/+ | 21\u00a0478 | -25\u00a0703 | 1\u00a0270 | \u2014 | -2\u00a0955 |
Other comprehensive income | -/+ | 24\u00a0335 | \u2014 | \u2014 | \u2014 | 24\u00a0335 |
Total comprehensive income / effect on equity | -/+ | 45\u00a0813 | -25\u00a0703 | 1\u00a0270 | \u2014 | 21\u00a0380 |
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
31.12.2023 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
USD | 2\u00a0372 | NOK | 26\u00a0259 | 11.0702 | 10.1724 | 16.01.2024 - 17.06.2024 | 2\u00a0243 |
GBP | 1\u00a0073 | NOK | 14\u00a0680 | 13.6809 | 12.9342 | 23.01.2024 - 06.02.2024 | 843 |
EUR | 8\u00a0528 | NOK | 100\u00a0580 | 11.7940 | 11.2405 | 30.01.2024 - 30.12.2024 | 4\u00a0525 |
USD | 22\u00a0147 | CAD | 29\u00a0852 | 1.3479 | 1.3251 | 04.01.2024 - 08.02.2024 | 4\u00a0241 |
Total | 11\u00a0852 |
*Maturity specified as an interval for multiple contracts
31.12.2022 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5138 | 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
(ii) INTEREST RATE RISK
Since the Group has no significant interest-bearing assets apart from bank deposits, 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 100 basis points lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 30.4 million in 2023 and NOK 28.3 million in 2022 due to the floating rate of interest on loans and deposits. The sensitivity analysis is calculated based on our term loans in NOK and EUR (including revolving credit facility and overdraft) and bond loan, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN BASIS POINTS | 2023 | 2022 |
Effect on profit before income tax | -/+100 | +/- 30 439 | +/- 28 257 |
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. 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 NOK 1 000 | FIXED RATE (%) | BASIS OF FLOATING RATE | MATURITY | MARKET VALUE NOK 1 000 31.12.2023 | MARKET VALUE NOK 1 000 31.12.2022 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | \u2014 | 2\u00a0670 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 1\u00a0677 | 5\u00a0018 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 5\u00a0391 | 7\u00a0627 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 7\u00a0187 | 9\u00a0963 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 7\u00a0181 | 9\u00a0961 |
Fixed rate paid - floating rate received | NOK 200 million | 3.16 | Nibor 3 months | 30.08.2027 | 1\u00a0875 | \u2014 |
Total | 23\u00a0312 | 35\u00a0238 |
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 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 are 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 2023, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed above, explicitly states the swaps exposed to NIBOR.
(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.
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 fair 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. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment. We target a contract share of 20-50% of our Norwegian volume. In 2023, financial fixed-price contracts accounted for 16% (22%) of the volume harvested in our Norwegian regions. As at 31 December 2023, the Group had financial salmon contracts totaling NOK -1.7 million (2022: NOK -64.9 million), of which all were sales contracts. The estimated contract share for the Norwegian harvest volume is 6% for the full-year 2024.
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 20.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2023 | 2022 |
Trade receivables | 20 | 109\u00a0187 | 64\u00a0283 |
Cash and cash equivalents | 23 | 216\u00a0318 | 642\u00a0719 |
Total | 325\u00a0505 | 707\u00a0002 |
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.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 27), cash and cash equivalents (Note 23), and short-term money market investments (Note 22). Cash flow forecasts for all farming regions, sales and the whole Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out. This is generally carried out at Group level in cooperation with the operating companies.
Management and the Board seek to maintain a high equity ratio (49% at 31 December 2023), to be well positioned to meet financial and operational challenges.
The following table is a specification of the Group\u2019s financial liabilities, classified by maturity structure.
31.12.2023 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0392\u00a0500 |
Green bond loan interest* | 28\u00a0057 | 86\u00a0693 | 57\u00a0375 | \u2014 | \u2014 | \u2014 | \u2014 | 172\u00a0125 |
Term-loan instalment | 66\u00a0377 | 66\u00a0377 | 132\u00a0753 | 132\u00a0753 | 995\u00a0648 | \u2014 | \u2014 | 1\u00a0393\u00a0908 |
Term-loan interest* | 19\u00a0634 | 65\u00a0111 | 67\u00a0318 | 59\u00a0838 | 14\u00a0025 | \u2014 | \u2014 | 225\u00a0926 |
Revolving credit and overdraft installment | 63\u00a0113 | \u2014 | \u2014 | \u2014 | 750\u00a0000 | \u2014 | \u2014 | 813\u00a0113 |
Revolving credit and overdraft interests* | 12\u00a0120 | 37\u00a0306 | 49\u00a0425 | 49\u00a0425 | 12\u00a0120 | \u2014 | \u2014 | 160\u00a0396 |
Other non-current liabilities | 5\u00a0577 | 11\u00a0176 | 13\u00a0490 | 15\u00a0772 | 15\u00a0391 | 15\u00a0262 | 67\u00a0094 | 143\u00a0761 |
Lease liabilities | 89\u00a0784 | 274\u00a0425 | 300\u00a0234 | 274\u00a0530 | 233\u00a0619 | 151\u00a0077 | 312\u00a0041 | 1\u00a0635\u00a0709 |
Trade payables | 760\u00a0753 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 760\u00a0753 |
Derivative financial instruments | 8\u00a0741 | -7\u00a0033 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0709 |
Other current liabilities | 15\u00a0667 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 15\u00a0667 |
Total liabilities | 1\u00a0069\u00a0823 | 534\u00a0055 | 2\u00a0013\u00a0094 | 532\u00a0318 | 2\u00a0020\u00a0803 | 166\u00a0339 | 379\u00a0134 | 6\u00a0715\u00a0567 |
M = Months, Y = Year, YRS = Years, * = floating
31.12.2022 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest* | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current term-loan instalment | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Term-loan interest* | 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 |
Lease liabilities | 71\u00a0460 | 187\u00a0538 | 226\u00a0320 | 139\u00a0445 | 127\u00a0249 | 97\u00a0112 | 136\u00a0986 | 986\u00a0111 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Derivative financial instruments | 28\u00a0526 | 36\u00a0401 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 64\u00a0928 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 996\u00a0935 | 404\u00a0021 | 503\u00a0366 | 1\u00a0785\u00a0955 | 298\u00a0959 | 1\u00a0079\u00a0474 | 198\u00a0271 | 5\u00a0266\u00a0981 |
ACCOUNTING POLICIES |
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. |
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 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. 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. |
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Sales revenues | 7\u00a0019\u00a0632 | 7\u00a0163\u00a0956 |
Other income | 38\u00a0497 | 31\u00a0490 |
Other gains/losses | -6\u00a0959 | 13\u00a0393 |
Share of profit from associates (operational) | -6\u00a0957 | -1\u00a0463 |
Raw materials and consumables used | -2\u00a0747\u00a0944 | -2\u00a0233\u00a0655 |
Salaries and personnel expenses | -725\u00a0653 | -695\u00a0577 |
Other operating expenses | -2\u00a0236\u00a0165 | -2\u00a0087\u00a0310 |
Operational EBITDA | 1\u00a0334\u00a0451 | 2\u00a0190\u00a0834 |
Depreciation property, plant and equipment | -532\u00a0911 | -434\u00a0641 |
Amortization licenses and other intangible assets | -21\u00a0792 | -16\u00a0706 |
Operational EBIT | 779\u00a0747 | 1\u00a0739\u00a0486 |
Share of profit from associates (non-operational) | \u2014 | 22\u00a0558 |
Write-down of non-current assets (non-operational) | 136 | -140\u00a0074 |
Production fee | -34\u00a0987 | -26\u00a0350 |
Fair value adjustment of biological assets | 217\u00a0922 | 83\u00a0412 |
Litigation and legal claims | 20\u00a0427 | -157\u00a0065 |
Decommissioning costs | -2\u00a0515 | -24\u00a0382 |
EBIT (Earnings before interest and taxes) | 980\u00a0730 | 1\u00a0497\u00a0586 |
2023 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
SEGMENTS NOK 1 000 | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0305\u00a0214 | 1\u00a0946\u00a0648 | 1\u00a0468\u00a0303 | 235\u00a0715 | 1\u00a0063\u00a0750 | 7\u00a0019\u00a0632 |
Other income | 93\u00a0550 | 28\u00a0335 | 7\u00a0884 | 2\u00a0186 | -93\u00a0458 | 38\u00a0497 |
Other gains/losses | -1\u00a0710 | -3\u00a0678 | -2\u00a0771 | \u2014 | 1\u00a0200 | -6\u00a0959 |
Share of profit from associates | 2\u00a0386 | -9\u00a0343 | \u2014 | \u2014 | \u2014 | -6\u00a0957 |
Operating costs before depreciation and amortization | -1\u00a0560\u00a0157 | -1\u00a0473\u00a0517 | -1\u00a0428\u00a0871 | -241\u00a0463 | -1\u00a0005\u00a0754 | -5\u00a0709\u00a0761 |
Depreciation and amortization | -102\u00a0834 | -161\u00a0828 | -138\u00a0444 | -142\u00a0545 | -9\u00a0051 | -554\u00a0703 |
Operational EBIT | 736\u00a0449 | 326\u00a0617 | -93\u00a0899 | -146\u00a0107 | -43\u00a0312 | 779\u00a0747 |
Harvest volume (tonnes GWT) | 25\u00a0980 | 25\u00a0170 | 17\u00a0682 | 3\u00a0184 | \u2014 | 72\u00a0015 |
Sales revenue/kg (NOK) | 88.7 | 77.3 | 83.0 | 74.0 | n/a | 82.7 |
Farming cost/kg (NOK) | 60.4 | 64.4 | 88.4 | 95.9 | n/a | 70.2 |
Other costs/kg (NOK) * | \u2014 | \u2014 | \u2014 | 24.0 | n/a | 1.7 |
Operational EBIT/kg (NOK) | 28.3 | 13.0 | -5.3 | -45.9 | n/a | 10.8 |
Total assets | 3\u00a0062\u00a0846 | 4\u00a0503\u00a0373 | 2\u00a0541\u00a0031 | 4\u00a0180\u00a0619 | -624\u00a0616 | 13\u00a0663\u00a0252 |
Total liabilities | 931\u00a0648 | 2\u00a0171\u00a0857 | 1\u00a0316\u00a0620 | 4\u00a0151\u00a0619 | -1\u00a0577\u00a0662 | 6\u00a0994\u00a0082 |
*Other costs incl. ownership and headquarters costs/kg (NOK)
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
SEGMENTS NOK 1 000 | 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 |
Depreciation and amortization | -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 | \u2014 | \u2014 | 84\u00a0697 |
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | n/a | n/a | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | n/a | n/a | 52.7 |
Other costs/kg (NOK) * | \u2014 | \u2014 | \u2014 | n/a | n/a | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | n/a | n/a | 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 |
*Other costs incl. ownership and headquarters costs/kg (NOK).
Sales revenue on regional level comprises revenue from the sale of Atlantic salmon including gains/loss on contracts. Other income at regional level 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. On regional level, other income also includes rental income and income from overcapacity of operational assets. Gains/losses from the sale of fixed assets and other equipment, are included in the line \u201cother income\u201d in the segment information. Profit and loss from 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 EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group\u2019s segment information. The elim/other items comprise, in addition to intercompany eliminations and the effect of share-based payments, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. Earnings from the sales companies in the Group are reported per producer. The elim/other column thus include the effect the sales organization has on the gross figures related to sales revenue and operating expenses, as well as the impact the other non-farming entities has on the Group\u2019s consolidated figures.
Sales revenue/kg reported in the segment information is equal to the sum of sales revenue of the regions divided by the related harvest volume. Group sales revenue is calculated based on the farming operation of the Group, excluding sales revenue from Group companies not geared for production.
Farming cost/kg reported in the segment information comprise all cost directly related to production and harvest of salmon, divided by the related harvest volume. On regional level, farming costs equal the operational costs. Other income are included in the farming cost metric, considered as cost reduction activities. Group farming cost is calculated based on the farming operation of the Group, excluding ownership costs and costs from Group companies not geared for production.
Other costs incl. ownership and headquarter costs/kg reported in the segment information include all costs and revenue not directly related to production and harvest of salmon, hereof the costs from activities conducted by the parent company and other Group companies not geared for production, divided by the Group's harvest volume. Operational EBIT/kg reported in the segment information is equal to the operational EBIT divided by the related harvest volume.
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2023 | 2022 |
Salaries | 579\u00a0759 | 533\u00a0629 |
Social security costs | 41\u00a0388 | 38\u00a0635 |
Synthetic stock options granted to directors and key employees, incl. social security costs (Note 8) | 1\u00a0584 | 30\u00a0399 |
Pension costs | 34\u00a0188 | 29\u00a0069 |
Other personnel costs | 68\u00a0733 | 63\u00a0844 |
Total | 725\u00a0653 | 695\u00a0577 |
Average full time equivalents (FTE) | 759 | 718 |
Pension obligations
The Group pays premiums to local, defined-contribution schemes for all employees. The Group'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. Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). AFP is a multi-enterprise defined benefit pension scheme that is booked as an defined contribution scheme as the Group cannot identify the obligation per employee which is part of the scheme. The financial commitments associated with the AFP scheme are therefore included in the Group\u2019s pension expenses. The AFP early retirement scheme follows the rules for private sector AFP, and both companies are members
NOTE 6\u00a0 SALES REVENUESACCOUNTING POLICIES |
SALE OF ATLANTIC SALMON 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 customers. 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, with a price per kilogram). The price varies according to the quality and weight of the salmon. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. |
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 The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt, roe and and third-party harvesting if the Group has overcapacity at its facilities. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood. |
SALES REVENUE IN TOTAL
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 2023, the sale of fresh whole Atlantic salmon totaled 93% (2022: 97%) of the Group's sales revenues (excluding other products), while fresh processed fish accounted for 4% (2022: 2%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2023% | 2022 | 2022% | |
Continental Europe | 3\u00a0690\u00a0607 | 4\u00a0152\u00a0843 | \u2014 | \u2014 | 3\u00a0690\u00a0607 | 53% | 4\u00a0152\u00a0843 | 58% |
UK | 384\u00a0716 | 247\u00a0295 | \u2014 | \u2014 | 384\u00a0716 | 5% | 247\u00a0295 | 3% |
USA | 316\u00a0139 | 181\u00a0659 | 1\u00a0228\u00a0930 | 1\u00a0323\u00a0551 | 1\u00a0545\u00a0069 | 22% | 1\u00a0505\u00a0210 | 21% |
Canada | 49\u00a0944 | 87\u00a0722 | 586\u00a0334 | 466\u00a0935 | 636\u00a0279 | 9% | 554\u00a0657 | 8% |
Asia | 702\u00a0646 | 584\u00a0914 | 36\u00a0694 | 67\u00a0028 | 739\u00a0340 | 11% | 651\u00a0943 | 9% |
Other markets | 23\u00a0621 | 52\u00a0008 | \u2014 | \u2014 | 23\u00a0621 | 0% | 52\u00a0008 | 1% |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 100% | 7\u00a0163\u00a0956 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations. See Note 5.
Grieg Seafood did not have any sales to Russia in 2023 or in 2022.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Fresh whole fish | 4\u00a0864\u00a0040 | 5\u00a0149\u00a0017 | 1\u00a0686\u00a0482 | 1\u00a0805\u00a0633 | 6\u00a0550\u00a0522 | 6\u00a0954\u00a0650 |
Fresh processed fish | 136\u00a0072 | 57\u00a0142 | 164\u00a0134 | 51\u00a0588 | 300\u00a0206 | 108\u00a0729 |
Frozen processed fish | 95\u00a0227 | 53\u00a0373 | 32 | 10 | 95\u00a0259 | 53\u00a0383 |
Other products and services | 72\u00a0335 | 46\u00a0909 | 1\u00a0310 | 284 | 73\u00a0645 | 47\u00a0193 |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 7\u00a0163\u00a0956 |
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 savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2023. 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 participating employees buy shares on a discount. The discount is recognized as a cost in the income statement and included as an other personnel cost as presented in the table above. The total costs related to the discount was NOK 2.1 million, in line with NOK 2.1 million in costs for 2022. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2023, loan to employees related to the share savings program\u00a0equals NOK 5.0 million (2022: NOK 4.9 million). The total shares sold to employees was 107 473 in 2023 (2022: 96 150). See also Note 24.
Management remuneration
The guidelines for management remuneration are available on Grieg Seafood ASA\u2019s website.
The remuneration to the Group Management Team is disclosed below.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2023 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (Chief Executive Officer) | 4\u00a0003 | \u2014 | \u2014 | \u2014 | 454 | 4\u00a0457 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0885 | \u2014 | \u2014 | \u2014 | 136 | 3\u00a0020 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0270 | \u2014 | \u2014 | \u2014 | 331 | 2\u00a0601 |
Grant Cumming (Chief Operating Officer Farming Canada) | 2\u00a0347 | \u2014 | \u2014 | \u2014 | 252 | 2\u00a0600 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0435 | \u2014 | \u2014 | \u2014 | 139 | 2\u00a0573 |
Knut Utheim (Chief Technology Officer) | 2\u00a0259 | \u2014 | \u2014 | \u2014 | 147 | 2\u00a0406 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0833 | \u2014 | \u2014 | \u2014 | 152 | 1\u00a0985 |
Nina Stangeland (Chief Strategy Officer) | 524 | \u2014 | \u2014 | \u2014 | 44 | 568 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0348 | \u2014 | \u2014 | \u2014 | 116 | 1\u00a0463 |
Total remuneration | 19\u00a0903 | \u2014 | \u2014 | \u2014 | 1\u00a0770 | 21\u00a0673 |
Grant Cumming was appointed as Chief Operating Officer Farming Canada in Q1 2023, and Nina Stangeland appointed as Chief Strategy Officer in Q3 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2023 NOK 1 000 | TOTAL |
Per Grieg1 | 542 |
Tore Holand2 | 422 |
Marianne Ribe1 | 342 |
Katrine Trovik2 | 394 |
Nicolai Hafeld Grieg | 314 |
Ragnhild Fresvik (from 9 of June 2022) | 314 |
Total remuneration including social security costs | 2\u00a0328 |
1 Payment for work performed on the Remuneration Committee of NOK 25 525 is included in the remuneration paid to Per Grieg 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 79 870.
The amounts include social security costs.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION* | TOTAL |
Andreas Kvame (Chief Executive Officer) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada until 10 of 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 |
Knut Utheim (Chief Technology Officer) | 2\u00a0098 | 426 | \u2014 | 2\u00a0883 | 131 | 5\u00a0538 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0631 | 323 | \u2014 | 2\u00a0209 | 133 | 4\u00a0296 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0229 | 172 | \u2014 | 1\u00a0773 | 108 | 3\u00a0282 |
Total remuneration | 17\u00a0067 | 3\u00a0318 | \u2014 | 23\u00a0509 | 3\u00a0948 | 47\u00a0842 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2022\u00a0 NOK 1 000 | TOTAL |
Per Grieg1 | 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 |
ACCOUNTING POLICIES |
The Group operates a share-based remuneration scheme with settlement in cash for the management team of the Group. 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. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. 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 value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 7) and as a liability in the statement of financial position (see Note 31) as well as the table in this note that specify the amounts in the balance sheet. The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax on options is recorded as a liability and is recognized over the estimated vesting period. |
The Black and Scholes option pricing model is used for valuation. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy. The table below shows the movement in outstanding options in 2023 and 2022.
OVERVIEW 2023\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2022 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2023 |
Andreas Kvame (Chief Executive Officer) | 229\u00a0764 | 380\u00a0000 | \u2014 | 59\u00a0764 | 550\u00a0000 |
Atle Harald Sandtorv (Chief Financial Officer) | 80\u00a0799 | 250\u00a0000 | \u2014 | \u2014 | 330\u00a0799 |
Knut Utheim (Chief Technology Officer) | 88\u00a0302 | 100\u00a0000 | \u2014 | 3\u00a0302 | 185\u00a0000 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 49\u00a0011 | 100\u00a0000 | \u2014 | \u2014 | 149\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 39\u00a0262 | 100\u00a0000 | \u2014 | \u2014 | 139\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 86\u00a0832 | 170\u00a0000 | \u2014 | 1\u00a0832 | 255\u00a0000 |
Grant Cumming (Chief Operating Officer Farming Canada) | \u2014 | 170\u00a0000 | \u2014 | \u2014 | 170\u00a0000 |
Erik Holvik (Chief Commercial Officer) | 65\u00a0788 | 170\u00a0000 | \u2014 | \u2014 | 235\u00a0788 |
Nina Stangeland (Chief Strategy Officer) | \u2014 | 100\u00a0000 | \u2014 | \u2014 | 100\u00a0000 |
Others | 135\u00a0260 | 1\u00a0140\u00a0000 | \u2014 | \u2014 | 1\u00a0275\u00a0257 |
Total | 775\u00a0016 | 2\u00a0680\u00a0000 | \u2014 | 64\u00a0898 | 3\u00a0390\u00a0118 |
OVERVIEW 2022 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2022 |
Andreas Kvame (Chief Executive Officer) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (Chief Financial Officer) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (Chief Technology Officer) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 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 |
OUTSTANDING OPTIONS TOTAL | OUTSTANDING OPTIONS VESTED | ||||||
ALLOCATION: YEAR - MONTH | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2023 | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | 2023 | 2022 | 2023 | 2022 |
2020 - 12 | 2023 - 05 | \u2014 | 83.82 | \u2014 | 64\u00a0898 | \u2014 | 64\u00a0898 |
2020 - 12 | 2024 - 05 | 94.03 | 94.03 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 |
2023 - 12 | 2026 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
2023 - 12 | 2027 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
Total | 3\u00a0390\u00a0118 | 775\u00a0016 | 710\u00a0118 | 775\u00a0016 |
2023 | 2022 | |
Cash-based options available for settlement | 3\u00a0390\u00a0118 | 775\u00a0016 |
Weighted average exercise price on outstanding options (NOK per option) | 76.56 | 78.96 |
AMOUNTS IN NOK 1 000 | ||||||||
2023 | LISTED PRICE ON ALLOCATION | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2023 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0652 | -1\u00a0488 | \u2014 | \u2014 | 163 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 669 | -589 | \u2014 | \u2014 | 81 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 663 | -579 | \u2014 | \u2014 | 84 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 442 | -392 | \u2014 | \u2014 | 50 |
Kristina Furnes (Chief Communication Officer) | 78.96 | 6.04 | 604 | 354 | -316 | \u2014 | \u2014 | 39 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 78.96 | 5.87 | 999 | 654 | -570 | \u2014 | \u2014 | 84 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 606 | -542 | \u2014 | \u2014 | 65 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 1\u00a0469 | -1\u00a0334 | \u2014 | \u2014 | 135 |
Andreas Kvame (Chief Executive Officer) | 75.93 | 4.29 | 1\u00a0632 | \u2014 | 803 | \u2014 | \u2014 | 803 |
Atle Harald Sandtorv (Chief Financial Officer) | 75.93 | 4.22 | 1\u00a0055 | \u2014 | 519 | \u2014 | \u2014 | 519 |
Knut Utheim (Chief Technology Officer) | 75.93 | 7.97 | 797 | \u2014 | 390 | \u2014 | \u2014 | 390 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 75.93 | 6.53 | 653 | \u2014 | 320 | \u2014 | \u2014 | 320 |
Kristina Furnes (Chief Communication Officer) | 75.93 | 5.26 | 526 | \u2014 | 258 | \u2014 | \u2014 | 258 |
Alexander Knudsen (COO Farming Norway) | 75.93 | 5.43 | 923 | \u2014 | 453 | \u2014 | \u2014 | 453 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 75.93 | 5.95 | 1\u00a0011 | \u2014 | 497 | \u2014 | \u2014 | 497 |
Erik Holvik (Chief Commercial Officer) | 75.93 | 5.30 | 901 | \u2014 | 443 | \u2014 | \u2014 | 443 |
Nina Stangeland (Chief Strategy Officer) | 75.93 | 6.24 | 624 | \u2014 | 306 | \u2014 | \u2014 | 306 |
Other options allocated in 2023 | 75.93 | 5.28 | 5\u00a0227 | \u2014 | 2\u00a0877 | \u2014 | \u2014 | 2\u00a0877 |
Total | 23\u00a0777 | 6\u00a0510 | 1\u00a0056 | \u2014 | 6\u00a0887 | 7\u00a0566 |
* 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 | ||||||||
2022 | LISTED PRICE ON ALLOCATION | 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 (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Chief Communication Officer) | 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) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Andreas Kvame (Chief Executive Officer) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (Chief Financial Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (Chief Technology Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0283 | 34\u00a0135 | 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.
RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS
As at 31\u00a0December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date.
FAIR VALUE OF SYNTHETIC OPTIONS | SOCIAL SECURITY COSTS | TOTAL RECOGNIZED LIABILITY | ||||
RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Non-current liabilities | 6\u00a0867 | 5\u00a0921 | 1\u00a0312 | 835 | 8\u00a0178 | 6\u00a0756 |
Current liabilities | 700 | 589 | 134 | 83 | 833 | 672 |
Total | 7\u00a0566 | 6\u00a0510 | 1\u00a0445 | 918 | 9\u00a0012 | 7\u00a0428 |
COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2023 | 2022 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | 1\u00a0056 | -3\u00a0282 | Other provisions for liabilities | |
Exercised options during the year | \u2014 | 34\u00a0137 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 1\u00a0056 | 30\u00a0855 | ||
Social security costs | 527 | -456 | Public taxes payable | |
Total costs incl. social security costs | 1\u00a0584 | 30\u00a0399 | Salaries and personnel expense |
The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2023 | 2022 |
Anticipated volatility (%) | 45.63% | 58.29% |
Risk-free rate of interest (%) | 4.00% | 3.12% |
Estimated qualification period (years) | 2.33 | 1.11 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
OTHER OPERATING EXPENSES NOK 1 000 | 2023 | 2022 |
Transportation costs | 433\u00a0469 | 497\u00a0679 |
Maintenance costs | 346\u00a0941 | 327\u00a0031 |
Electricity and fuel | 179\u00a0076 | 177\u00a0902 |
Lease expenses1 | 28\u00a0563 | 60\u00a0490 |
Outsourced services and audit fees | 98\u00a0980 | 107\u00a0318 |
Insurance | 115\u00a0583 | 66\u00a0512 |
IT expenses | 84\u00a0225 | 77\u00a0298 |
Marketing costs | 14\u00a0327 | 6\u00a0642 |
Other operating expenses2 | 162\u00a0689 | 119\u00a0311 |
Other production-related costs1,3 | 772\u00a0312 | 647\u00a0128 |
Total other operating expenses | 2\u00a0236\u00a0165 | 2\u00a0087\u00a0310 |
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.
CONTINGENT LIABILITIES
ACCOUNTING POLICIES |
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. |
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 32 concerning events after the balance sheet date of 2023.
LITIGATION AND LEGAL CLAIMS
Three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement in 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court in February 2024. In 2022, incurred costs and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million were expensed, of which NOK 129 million were used at year end 2022. The remaining NOK 28 million were carried over to 2023. After the settlement related payment was made, the remainder of the accrual was released. At year-end 2022, the accrual was reported as other current liability in the Statement of Financial Position, while the costs in the income statement in 2023 and 2022 are presented as a separate financial statement line item - \"Litigation and legal claims\".
DECOMMISSIONING COSTS
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2023 | 2022 |
AUDIT SERVICES | ||
Group auditor | 3\u00a0815 | 3\u00a0049 |
Other auditors | 1\u00a0180 | 1\u00a0128 |
OTHER ASSURANCE AND CERTIFICATION SERVICES | ||
Group auditor | 1\u00a0416 | 783 |
Other auditors | \u2014 | \u2014 |
TAX SERVICES | ||
Group auditor | 1\u00a0082 | 764 |
Other auditors | 20 | 124 |
OTHER SERVICES | ||
Group auditor | 563 | 26 |
Other auditors | \u2014 | \u2014 |
Total Group auditor | 6\u00a0877 | 4\u00a0622 |
Total other auditors | 1\u00a0200 | 1\u00a0252 |
Total auditor's fees | 8\u00a0077 | 5\u00a0873 |
ACCOUNTING POLICIES |
Income tax expense consists of 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. The liability method is applied both for ordinary corporate taxation as well as for the Norwegian resource rent tax scheme. 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. For the Norwegian resource rent tax scheme deferred tax liability is recognized for temporary differences on biological assets allocated to fish farming licenses subject to the resource rent tax. The deferred resource rent tax is recognized using the effective tax rate 25%. For the fish farming licenses subject to the resource rent tax, no deferred tax liability is recognized, because a subsequent sale will not be subject to resource rent tax and the carrying value is not realized through use. A deferred tax asset is recognized, with the effective rate of 25%, for any loss carried forward within the resource rent tax regime as long as it probable that there is sufficient taxable income in future periods. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
THE NORWEGIAN RESOURCE RENT TAX SCHEME |
On 31 May 2023, the Norwegian Parliament passed the resource rent tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. The tax is an additional layer of taxation on aquaculture, on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. This new tax scheme was implemented retrospectively with effect from 1\u202fJanuary 2023. The Norwegian resource rent tax will not affect the tax load of the Group\u2019s operations in British Columbia and Newfoundland. |
In December 2022, the Group carried out an internal reorganization, in which its commercial aquaculture licenses, together with the connected standing biomass of live fish in sea, were transferred from Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS to Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS, which are also (indirectly) wholly owned by Grieg Seafood ASA. The biomass was transferred by way of a sale and purchase transaction at fair value, using tax discontinuity. Both companies that acquired biomass chose to capitalize the acquisition costs in 2022 for tax purposes (as opposed to expensing the acquisition costs), thereby carrying over these tax positions into 2023. With tax effect for 2023, the companies have deducted the capitalized costs both in the basis for the ordinary corporate income tax, as well as in the basis for the new resource rent tax scheme. Consequently, the Group has not recognized an implementation effect concerning the transitioning to the resources rent tax scheme. If the deduction in the new resource rent tax scheme is not accepted by the tax authorities, the deferred tax asset released to loss carried forward in the regime will be reduced accordingly. |
As the Group has aquaculture licenses both in- and out-of-scope of the resource rent tax scheme, the income and expenses related to the tax scheme have to be identified. To be able to calculate the resource rent tax in accordance with the chapter 19 of the Norwegian tax law, a number of analyses have been performed related to transfer pricing according to the Norwegian tax law chapter 13 and the OECD guidelines for transfer pricing. The implementation of the resources tax regime has resulted in changes in process and procedures, transforming from an integrated value chain of breeding, freshwater and seawater farming and harvesting of salmon to carving out the farming business subject to the resource rent tax into individual companies. The transfer pricing model applied by the Group pursuant to the OECD transfer pricing guidelines induces that a variability in profitability mainly affects the companies subject to resources rent tax. As this is a new tax, it is unknown how the tax authorities will assess the methods used and the assumptions made. Management is, therefore, not able to quantify any meaningful sensitivity, caused by a reasonable change in the assumptions applied. Due to weak operational performance in Finnmark combined with a substantial share of non-commercial licenses (not being subject to resource rent tax) in Rogaland, the basis for the resource rent tax is limited in 2023. |
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Norway | 14\u00a0614 | 263\u00a0084 |
Norway - resource rent tax | \u2014 | \u2014 |
Abroad | 4\u00a0084 | 59\u00a0422 |
Current income tax | 18\u00a0698 | 322\u00a0506 |
Norway | 250\u00a0032 | 116\u00a0873 |
Norway - resource rent tax | 11\u00a0273 | \u2014 |
Abroad | 4\u00a0403 | -145\u00a0516 |
Changes in deferred tax | 265\u00a0708 | -28\u00a0643 |
Total income taxes related to profit for the year | 284\u00a0407 | 293\u00a0863 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2023 | 2022 |
Profit before tax | 844\u00a0157 | 1\u00a0447\u00a0642 |
Taxes calculated at nominal tax rate | 210\u00a0484 | 286\u00a0185 |
Withholding tax | 12\u00a0600 | 6\u00a0085 |
Non-taxable income/loss from associated companies | 1\u00a0531 | -4\u00a0641 |
Effect of adjustment of income tax from previous years | -10\u00a0436 | -27\u00a0453 |
Effect of recognition of previously non-recognized tax assets | \u2014 | -4\u00a0187 |
Effect of non-recognition of losses and tax assets | 74\u00a0439 | 37\u00a0189 |
Effect of resources tax | 11\u00a0273 | \u2014 |
Other permanent differences | -15\u00a0484 | 685 |
Total income tax expense | 284\u00a0407 | 293\u00a0863 |
Weighted average tax rate | 33.7% | 20.3% |
TAX PAYABLE BOOKED IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Tax payable in Norway | \u2014 | 286\u00a0586 |
Tax payable resource rent in Norway | \u2014 | \u2014 |
Tax payable abroad | 6\u00a0156 | 66\u00a0605 |
Total tax payable in the statement of financial position | 6\u00a0156 | 353\u00a0191 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2023 | 2022 |
Balance sheet value at 01.01. | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
Reclassified from deferred tax to tax payables * | -492\u00a0959 | \u2014 |
Currency conversion | 14\u00a0892 | 30\u00a0467 |
Tax effect of OCI transactions (see Note 25) | 6\u00a0332 | 5\u00a0454 |
Other effects | 7\u00a0538 | -27\u00a0453 |
Changes to income in the period | 254\u00a0435 | -37\u00a0111 |
Changes to income in the period of resource rent tax | 11\u00a0273 | \u2014 |
Net deferred tax liability at balance sheet date | 842\u00a0612 | 1\u00a0041\u00a0101 |
*After the completion of the consolidated financial statements and before the submission of tax returns for each subsidiary,\u00a0there was a reclassification of deferred tax to payable tax, resulting in an impact on the consolidated financial statement. Instead of expensing all costs associated with the biomass, the value of the biomass was capitalized for tax purposes, reflecting a general option available to taxpayers. The corresponding amount was included in the tax payment for corporate income tax paid in 2023.
The nominal tax rate in Norway is 22% and the resource rent tax is 25%. The nominal tax rate for 2023 was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 |
Deferred tax assets (+) | \u2014 | \u2014 |
Deferred tax liabilities (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
Net deferred tax (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
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.
SPECIFICATION OF DEFERRED TAX AND TAX ASSETS NOK 1 000 | 2023 | 2022 |
Non-current assets | 340\u00a0073 | 572\u00a0722 |
Current assets | 711\u00a0458 | 617\u00a0349 |
Debt (lease, other liabilities) | -76\u00a0484 | 1\u00a0493 |
Tax losses carried forward | -143\u00a0708 | -150\u00a0461 |
Total recognized deferred tax liability ordinary taxation | 831\u00a0339 | 1\u00a0041\u00a0101 |
Biological assets - deferred resource rent tax | 624\u00a0315 | \u2014 |
Tax losses carried forward - resource rent tax | -613\u00a0042 | \u2014 |
Total recognized deferred tax liability resource rent tax | 11\u00a0273 | \u2014 |
Total recognized deferred tax liability | 842\u00a0612 | 1\u00a0041\u00a0101 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2023 | 2022 |
Tax losses carried forward resources rent tax in Norway | -613\u00a0042 | \u2014 |
Tax losses carried forward in Canada | -143\u00a0708 | -150\u00a0461 |
Total | -756\u00a0750 | -150\u00a0461 |
ACCOUNTING POLICIES |
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value of the asset at the date of the acquisition. 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 is tested annually for impairment and carried at cost less accumulated impairment losses. 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 acquired by the Group are measured on initial application at cost. 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. See the separate section below for more information concerning the fish farming licenses of our farming regions. |
OTHER INTANGIBLE ASSETS Acquired customer portfolios and computer software licenses are measured on initial recognition 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: \u2022Other intangible assets 3\u201310 years |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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 (see separate section in this Note for each license regime) 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. |
BRITISH COLUMBIA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. We expect that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with our First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. 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. All of Grieg Seafood's current production is operating under agreements with First Nations. 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. |
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 amortization period must be re-evaluated. |
NEWFOUNDLAND Grieg Seafood Newfoundland has 14 approved seawater farming licenses, as well as one freshwater license. The seawater licenses are granted for terms of six years. To renew the licenses, licenses 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 is the single aquaculture operator/salmon farmer in the Placentia Bay area. The fair value related to this (the excess value of book values as identified in the acquisition of Newfoundland in 2020) is amortized over the duration of the agreement. |
INTANGIBLE ASSETS 2023 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | TOTAL |
Book value at 01.01. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
Currency translation differences | 36\u00a0016 | 37\u00a0055 | 7\u00a0461 | 357 | 80\u00a0891 |
Additions | \u2014 | \u2014 | \u2014 | 1\u00a0592 | 1\u00a0592 |
Amortization | \u2014 | \u2014 | -18\u00a0429 | -3\u00a0363 | -21\u00a0792 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
ACCUMULATED VALUES | |||||
Acquisition cost | 816\u00a0714 | 1\u00a0505\u00a0283 | 182\u00a0694 | 63\u00a0957 | 2\u00a0568\u00a0649 |
Accumulated amortization | \u2014 | \u2014 | -62\u00a0888 | -50\u00a0682 | -113\u00a0570 |
Accumulated impairments | -89\u00a0603 | -135\u00a0292 | \u2014 | \u2014 | -224\u00a0895 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
See Note 27 for information on assets pledged as security for financial liabilities.
INTANGIBLE ASSETS 2022 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | 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 27 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that have 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 the impairment of aquaculture licenses in 2022 see Note 15.
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. broodstock 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.
NORWAY LICENSE CATEGORY AND TOTAL CAPACITY | 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 2025. The license cannot be utilized before the visitor center is constructed.
CANADA - BRITISH COLUMBIA
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 the table summarizing BC licenses below.
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.
CANADA - BC TOTAL CAPACITY, WEST AND EAST OF VANCOUVER ISLAND | WEST | EAST | TOTAL |
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 were written down. Grieg Seafood formally holds the licenses with DFO as at year-end 2023, however we have decommissioned our farming operations at the sites.
CANADA - NEWFOUNDLAND
Grieg Seafood Newfoundland is the single aquaculture operator/salmon farmer in the Placentia Bay area. Newfoundland currently holds 14 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.
To operate aquaculture sites in Newfoundland, 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, 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.
ACCOUNTING POLICIES |
Property, plant and equipment incl. right-of-use assets is stated at historical cost less depreciation and impairment losses. 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 2023 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. |
TANGIBLE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Currency translation differences | 34\u00a0151 | 30\u00a0916 | 16\u00a0575 | 19\u00a0018 | 100\u00a0660 |
Grants and other deductions to historic cost1 | -25\u00a0847 | \u2014 | \u2014 | \u2014 | -25\u00a0847 |
Additions2 | 209\u00a0058 | 300\u00a0518 | 230\u00a0046 | 788\u00a0893 | 1\u00a0528\u00a0515 |
Disposals | -2\u00a0299 | -5\u00a0857 | -928 | -1\u00a0657 | -10\u00a0741 |
Depreciation | -45\u00a0705 | -129\u00a0895 | -120\u00a0458 | -236\u00a0855 | -532\u00a0911 |
Impairment3 | 136 | \u2014 | \u2014 | \u2014 | 136 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0820\u00a0899 | 2\u00a0428\u00a0996 | 1\u00a0468\u00a0702 | 1\u00a0958\u00a0891 | 7\u00a0677\u00a0488 |
Accumulated depreciation | -348\u00a0805 | -852\u00a0391 | -735\u00a0600 | -641\u00a0057 | -2\u00a0577\u00a0853 |
Accumulated impairments | \u2014 | -109 | -3\u00a0928 | -197 | -4\u00a0234 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
Of which book value of non-depreciable property | 118\u00a0833 | \u2014 | \u2014 | \u2014 | 118\u00a0833 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 28) | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 for specification of the Group's right-of-use assets and further information on its leases.
1Grants and other deductions to historic cost, of which NOK 26 million relates to government grants received in 2023 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.
3Reversal of impairment in 2023 related to Sechelt farming area in British Columbia.
TANGIBLE ASSETS 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 and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions | 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 |
Impairment | \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 28) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 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 17) 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.
ACCOUNTING POLICIES |
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. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
The Group tests whether goodwill and licenses have suffered any impairment on an annual basis. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. 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. 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. |
IMPAIRMENT TESTING OF GOODWILL AND LICENSES
No impairments of goodwill or licenses were recognized in 2023.
CASH-GENERATING UNIT NOK 1 000 | LOCATION | BOOK VALUE OF RELATED GOODWILL | BOOK VALUE OF LICENSES | TOTAL |
Rogaland | Norway | 20\u00a0463 | 206\u00a0394 | 226\u00a0857 |
Finnmark | Norway | \u2014 | 397\u00a0218 | 397\u00a0218 |
British Columbia (BC) | Canada | 10\u00a0561 | 88\u00a0898 | 99\u00a0459 |
Newfoundland | Canada | 696\u00a0086 | 797\u00a0288 | 1\u00a0493\u00a0374 |
Total value | 727\u00a0111 | 1\u00a0489\u00a0798 | 2\u00a0216\u00a0908 |
Impairment tests are initially based on the Group\u2019s rolling five-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. The explicit period in the impairment test is three years for Rogaland, Finnmark and BC. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 12 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. The methodology for estimation of the
value in use for Newfoundland is in line with previous years, and is applied due to Newfoundland being a region under development. During 2023, the second transfer of smolt to sea was successfully completed in Newfoundland. Additionally, we successfully commenced harvesting of the first generation of fish from the region. The quality of the fish was excellent. The second generation is healthy with good biological performance.
The Group has carried out climate-related scenario analysis, assessing the scenarios of 2C global warming and 4C global warming (see Note 3). With 2C of global warming, Grieg Seafood\u2019s business is well positioned to seize opportunities for sustainable growth. The 4C global warming scenario represents a risk for increased cost and lower earnings potential. In the impairment tests for year-end 2023, the scenarios have been considered. The uncertainty is high. The basis for the impairment test - the Group\u2019s budget and business plans - look five years ahead (the explicit period applied in the impairment tests are three years for Rogaland, Finnmark and BC, while in Newfoundland 12 years is used such that production at full capacity is reflected in the terminal value). The explicit periods for the impairment tests represent in general a short time interval when considering nature and climate related risks, as the risk primarily has to be adjusted for in the terminal value. Additionally, time value of money through discounting also impact any quantifiable effect caused by climate-related risks.\u00a0 At year-end 2023, the Group\u2019s budget and business plans are aligned towards the 2C global warming scenario. Overall, as disclosed in Note 3, Grieg Seafood expects the impacts of climate-related risks to be moderate in the short term, with no quantifiable impact as per year-end 2023.
Assumptions used for estimating recoverable amount | Rogaland | Finnmark | BC | Newfoundland |
Budget period | 3 years | 3 years | 3 years | 12 years |
Revenue growth - growth from base year to terminal year | 24% | 97% | 67% | NA |
Operational EBITDA margin (1) | 33%-36% | 32%-38% | 19%-30% | 0% -\u00a0 34% |
Operational EBITDA margin in terminal period | 33% | 38% | 30% | 34% |
Harvest growth (tonnes) - growth from base year to terminal year (2) | 21% | 68% | 41% | NA |
Required rate of return before tax (3) | 10.2% | 10.2% | 10.7% | 13.4% |
Required rate of return after tax (3) | 8.0% | 8.0% | 7.8% | 9.4% |
Growth rate (4) | 1% | 1% | 1% | 1% |
Other comments/explanations on assumptions applied in impairment testing are presented below.
1. Budgeted 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 the next three years.
2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2023 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 2026, 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 2026 (2035 for Grieg Seafood 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 are piloting post-smolt in Rogaland, and will increase post-smolt capacity also in Finnmark. 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 1.5% percentage points would result in an estimated impairment for the Newfoundland operations of NOK 327 million, while a reduction of NOK 5 in Operational EBIT/kg for each year in the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 254 million. The other cash-generating units (Rogaland, Finnmark and BC) are not sensitive to equivalent changes in the same assumptions.
See Alternative Performance Measures for more information on Operational EBIT, Operational EBIT/kg and Operational EBITDA.
WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS
There was no impairment of tangible and intangible non-current assets in 2023, only a reversal of impairment of NOK 0.1 million from 2022 related to the discontinuing of farming operations in the sh\u00edsh\u00e1lh (Sechelt) area in BC. In 2022, Grieg Seafood recorded write-down of tangible and intangible non-current assets totalling NOK 140 million related to reorganization of ownership structure of licenses in Norway, and decommissioning of farming operations in BC.
WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 | Note | 2023 | 2022 |
Commercial aquaculture licenses in Rogaland, Norway | 13 | \u2014 | 47\u00a0242 |
Commercial aquaculture licenses in British Columbia, Canada | 13 | \u2014 | 88\u00a0451 |
Non-current tangible assets in British Columbia, Canada | 14 | -136 | 4\u00a0382 |
Total write-down | -136 | 140\u00a0074 | |
- Of which total write-down of intangible non-current assets | \u2014 | 135\u00a0693 |
ACCOUNTING POLICIES |
The Group\u2019s investments in associated companies and joint ventures are recognized in the consolidated financial statement according to the equity method. |
Associates and joint ventures that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in the income statement and included in the subtotal of EBIT (Earnings before interests and taxes) when the relevant associates operate in the same position in the value chain as the Group (see Note 5). All investments in associates in 2023 and 2022 are closely related. The carrying value of the investment is classified on a single line item included in the subtotal of non-current assets in the statement of financial position. |
Set out below are the associated companies and joint ventures of the Group as at 31 December 2023. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. All investments in associates and joint ventures have the same financial year as the Group.
The Group owns, through Grieg Seafood Finnmark AS, 50.00% of Nordnorsk Smolt AS together with SalMar ASA (50.00%). At 31 December 2023, Grieg Seafood Finnmark AS has an outstanding interest-bearing long-term loan to Nordnorsk Smolt AS of NOK 26.5 million (NOK 2.3 million at 31 December 2022). The loan is classified as a non-current receivable in the statement of financial position (see Note 17).\u00a0 Nordnorsk Smolt AS is located in Troms and Finnmark county in Northern Norway, and has an annual production capacity of 900 tonnes. There was no production in the facility during the first half of 2023 due to a redesign of the facility. Nordnorsk Smolt AS\u00a0 commenced operations in the second half of 2023, and will be fully operational in 2024.
The Group owns, through Grieg Seafood Rogaland AS, 33.33% of Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS has an annual smolt production capacity of 6 000 tonnes, of which Grieg Seafood Rogaland AS is entitled to 50%.
The Group owns, through Grieg Seafood Rogaland AS, 44.44% of \u00c5rdal Aqua AS together with Vest Havbruk AS and Omfar AS. Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million (NOK 6 million) to \u00c5rdal Aqua AS. The loan is classified as a non-current receivable in the statement of financial position (see Note 17). The construction of \u00c5rdal Aqua AS, a land based facility with the same design as Tytlandsvik Aqua AS, is progressing according to plan. \u00c5rdal Aqua AS is expected to produce at least 4 500 tonnes of post-smolt annually from 2025.
The Group owns, through Grieg Seafood Rogaland AS, 50.00% of NextSeafood AS. NextSeafood AS is owned together 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. Grieg Seafood Rogaland AS has provided a long-term interest-free loan to FishGLOBE AS\u00a0(an affiliated company of NextSeafood AS) of NOK 8.6 million (NOK 8.6 million). The loan is classified as a non-current receivable in the statement of financial position (see Note 17). Following the resource rent tax in Norway, Grieg Seafood has put the development of FishGLOBE V6 on hold.
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2023 | BOOK VALUE AT 01.01.2023 NOK 1 000 | PROFIT/LOSS 2023 NOK 1 000 | CHANGES IN THE PERIOD, INCL. REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2023 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 39\u00a0053 | -9\u00a0343 | \u2014 | 29\u00a0710 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 55\u00a0951 | 2\u00a0264 | \u2014 | 58\u00a0215 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 114\u00a0047 | 121 | \u2014 | 114\u00a0168 |
Nextseafood AS | Rogaland County, Norway | 50.00% | 7\u00a0574 | \u2014 | \u2014 | 7\u00a0574 |
Total | 216\u00a0624 | -6\u00a0957 | \u2014 | 209\u00a0667 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2023 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 7\u00a0660 | 9\u00a0362 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 6\u00a0134 | 8\u00a0466 |
\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 | 13\u00a0794 | 35\u00a0463 |
*Depreciation of the excess values in \u00c5rdal Aqua will start when the facility of \u00c5rdal Aqua is constructed and production has commenced.
The following table displays provisional financial information at 31 December 2023 (100%).
AT 31.12.2023 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 125\u00a0099 | 88\u00a0016 | 39\u00a0084 | 25\u00a0752 | -19\u00a0395 |
Tytlandsvik Aqua AS | 746\u00a0748 | 596\u00a0389 | 150\u00a0359 | 298\u00a0620 | 13\u00a0742 |
\u00c5rdal Aqua AS | 707\u00a0436 | 490\u00a0213 | 217\u00a0223 | 2\u00a0006 | 218 |
Nextseafood AS | 15\u00a0149 | \u2014 | 15\u00a0149 | \u2014 | \u2014 |
OTHER NON-CURRENT RECEIVABLES NOK 1 000 | NOTE | 2023 | 2022 |
Loan to associated company (interest- and non-interest bearing) | 16 | 41\u00a0129 | 16\u00a0900 |
Investments in shares | 31 | 402 | 271 |
Other non-current receivables | 806 | 764 | |
Total | 42\u00a0337 | 17\u00a0935 |
ACCOUNTING POLICIES |
Inventories are stated at the lower of historical cost and net realizable value. Cost are determined by FIFO (first in, first out), with the exceptions being weighted average cost for feed, and broodstock and roe. The net realizable value is the estimated sales price less the estimated costs of completion and sale. |
Biological assets are classified on a separate financial statement line item in the statement of financial position. See Note 19 for more information. |
INVENTORIES NOK 1 000 | 2023 | 2022 |
Raw materials (feed) at cost price | 132\u00a0198 | 105\u00a0585 |
Broodstock and roe | 25\u00a0027 | 41\u00a0219 |
Other (goods in transit, frozen fish, supplementary products) | 72\u00a0828 | 93\u00a0368 |
Total inventories | 230\u00a0053 | 240\u00a0172 |
Write-down of inventories recognized in the statement of financial position at year-end | \u2014 | \u2014 |
Write-down of inventories recognized in the income statement for the year* | 34\u00a0620 | 507 |
*The impairments of inventories for the year where related to broodstock and roe.
See Note 27 for information on assets pledged as security for financial liabilities.
COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000 | 2023 | 2022 |
Inventories at 01.01. (inverted number) | -240\u00a0172 | -128\u00a0299 |
Raw materials and consumables purchased | -2\u00a0737\u00a0825 | -2\u00a0345\u00a0528 |
Inventories at 31.12. | 230\u00a0053 | 240\u00a0172 |
Total | -2\u00a0747\u00a0944 | -2\u00a0233\u00a0655 |
Specification of book value of the investments in associates and joint ventures according to the equity method:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2022 | BOOK VALUE AT 01.01.2022 NOK 1 000 | PROFIT/LOSS 2022 NOK 1 000 | CHANGES IN THE PERIOD, REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2022 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 47\u00a0710 | -8\u00a0658 | \u2014 | 39\u00a0053 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 48\u00a0087 | 7\u00a0864 | \u2014 | 55\u00a0951 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 8\u00a0878 | 21\u00a0915 | 83\u00a0254 | 114\u00a0047 |
NextSeafood AS | Rogaland County, Norway | 50.00% | \u2014 | -26 | 7\u00a0600 | 7\u00a0574 |
Total | 104\u00a0675 | 21\u00a0096 | 90\u00a0854 | 216\u00a0624 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2022 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
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 | 37.04% | 17\u00a0634 | \u2014 | 17\u00a0634 |
NextSeafood AS | 31.01.2022 | 50.00% | \u2014 | \u2014 | \u2014 |
Total ownership | 49\u00a0257 | 10\u00a0632 | 38\u00a0625 |
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 |
ACCOUNTING POLICIES |
Biological assets are recognized in the statement of financial position at their fair value less cost to sell. The fair value of biological assets are measured according to level 3 of the fair value hierarchy, based on factors not drawn from observable market rates and -prices. 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 kept on land in freshwater facilities, This group encompass roe, fry and smolt. When the fish are large enough to be transferred to the sea, they are classified as biomass in sea. In accordance with application of highest and best use when estimating the fair value of live fish, 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 with an weight less than 4.60 kg are classified as not ready for harvest (immature fish). Fish onshore (smolt) are recognized at accumulated cost, which is considered the best estimate of fair value 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. For fish in sea, the fair value is calculated by applying a cash-flow based present value model. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. When estimating the fair value of the fish, a cash flow model is applied. The cash-flow based present value model for estimating the fair value less cost to sell 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. 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 as there are limited alternative observable prices in the market. 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. |
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 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. |
OPENING TO CLOSING BALANCE RECONCILIATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS
TONNES | NOK 1 000 | |||
BIOLOGICAL ASSETS | 2023 | 2022 | 2023 | 2022 |
Biological assets at 01.01. | 50\u00a0614 | 59\u00a0121 | 4\u00a0045\u00a0800 | 3\u00a0449\u00a0412 |
Currency translation differences | NA | NA | 58\u00a0707 | 36\u00a0945 |
Increase due to production | 94\u00a0144 | 93\u00a0087 | 5\u00a0563\u00a0616 | 4\u00a0348\u00a0288 |
Decrease due to abnormal mortality/loss | -3\u00a0801 | -3\u00a0408 | -294\u00a0832 | -224\u00a0924 |
Decrease due to sales | -82\u00a0776 | -98\u00a0186 | -4\u00a0487\u00a0742 | -3\u00a0743\u00a0033 |
Fair value adjustment at 01.01. | NA | NA | -1\u00a0149\u00a0591 | -970\u00a0480 |
Fair value adjustment at 31.12. | NA | NA | 1\u00a0329\u00a0761 | 1\u00a0149\u00a0591 |
Biological assets at 31.12. | 58\u00a0181 | 50\u00a0614 | 5\u00a0065\u00a0718 | 4\u00a0045\u00a0800 |
See Note 27 for information on assets pledged as security for financial liabilities.
Tonnes is provided in live round weight.
SPECIFICATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS
STATUS OF BIOLOGICAL ASSETS | NUMBER OF FISH 1 000 | BIOLOGICAL ASSETS TONNES | ACCRUED COST OF PRODUCTION NOK 1 000 | FAIR VALUE ADJUSTMENT NOK 1 000 | BOOK VALUE NOK 1 000 |
2023 | |||||
Biological assets on land * | 27\u00a0227 | 541 | 265\u00a0069 | \u2014 | 265\u00a0069 |
Immature fish at sea, round weight < 4.60 kg | 28\u00a0854 | 39\u00a0784 | 2\u00a0497\u00a0747 | 943\u00a0998 | 3\u00a0441\u00a0745 |
Mature fish at sea, round weight > 4.60 kg | 3\u00a0262 | 17\u00a0857 | 973\u00a0142 | 385\u00a0763 | 1\u00a0358\u00a0905 |
Total | 59\u00a0343 | 58\u00a0181 | 3\u00a0735\u00a0957 | 1\u00a0329\u00a0761 | 5\u00a0065\u00a0718 |
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 |
* Smolt production
ABNORMAL MORTALITY
ACCOUNTING POLICIES |
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. |
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. |
Abnormal mortality in 2023 is related to winter ulcers, Spironucleus salmonicida (Spiro), sea lice treatment and gill disease.
ABNORMAL MORTALITY - WRITE-DOWN | NUMBER OF FISH 1 000 | BIOLOGICAL ASSETS TONNES | AVERAGE SIZE KG | WRITE-DOWN NOK 1 000 |
2023 | ||||
Immature fish in sea, round weight < 4.60 kg | 1\u00a0832 | 3\u00a0278 | 1.79 | 197\u00a0750 |
Mature fish in sea, round weight > 4.60 kg | 102 | 523 | 5.13 | 23\u00a0865 |
Total abnormal mortality in sea | 1\u00a0934 | 3\u00a0801 | 1.97 | 221\u00a0615 |
Biological assets onshore | 73\u00a0217 | |||
Total abnormal mortality | 294\u00a0832 | |||
2022 | ||||
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 abnormal mortality in sea | 2\u00a0374 | 3\u00a0408 | 1.44 | 171\u00a0677 |
Biological assets onshore | 53\u00a0247 | |||
Total abnormal mortality | 224\u00a0924 |
FAIR VALUE ESTIMATE AND RECOGNIZED FAIR VALUE ADJUSTMENT TO THE BIOLOGICAL ASSETS
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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. 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 generally 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. |
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 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. |
Biological assets are measured at fair value, unless the fair value cannot be measured reliably. The change in the fair value of biological assets is recognized in the income statement as \u201cfair value adjustment of biological assets\u201d. The table below summarizes the components of the fair value adjustment recognized in the income statement for the year.
RECOGNIZED FAIR VALUE ADJUSTMENT IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Change in fair value adjustment of biological assets1 | 156\u00a0557 | 129\u00a0331 |
Change in physical delivery contracts relating to fair value adjustment of biological assets2 | -1\u00a0846 | -1\u00a0610 |
Change in fair value of financial derivatives from salmon (Fish Pool contracts)3 | 63\u00a0211 | -44\u00a0309 |
Total recognition of fair value adjustment of biological assets | 217\u00a0922 | 83\u00a0412 |
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
Changes arising from physical delivery contracts are recognized as \u201cfair value adjustment of biological assets\u201d. The provision relates to onerous contracts for delivery of salmon, where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. 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. The contracts are calculated based on the same forward prices used for the fair value calculation of biological assets. 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. The liability in the statement of financial position is recognized as other current liabilities, see Note 29.
Changes in the value of salmon-related financial derivatives are recognized in the balance sheet under derivatives and other financial instruments. Financial derivatives are calculated at market value. See Note 31 for further information.
BASIS FOR VALUES - WEIGHTED PRICE PER KG GWT | NORWAY | BRITISH COLUMBIA | NEWFOUNDLAND |
31.12.2023 | 95.84 | 14.28 | 12.79 |
31.12.2022 | 84.06 | 12.83 | 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.
DISCOUNT RATE PER REGION | 2023 | 2022 |
Rogaland | 5.0% | 5.0% |
Finnmark | 5.0% | 5.0% |
British Columbia | 3.5% | 3.5% |
Newfoundland | 3.5% | 3.5% |
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. The estimate of fair value of the biomass will always be based on uncertain assumptions, even though the Group has built up expertise in assessing these factors.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000 | 2023 | 2022 |
Change in discount rate +1% | -215\u00a0696 | -175\u00a0527 |
Change in discount rate -1% | 264\u00a0132 | 207\u00a0074 |
Changes in sales price +1 NOK/kg | 82\u00a0860 | 69\u00a0555 |
Changes in sales price -1 NOK/kg | -70\u00a0722 | -68\u00a0073 |
Changes in sales price +5 NOK/kg | 409\u00a0732 | 357\u00a0629 |
Changes in sales price -5 NOK/kg | -359\u00a0003 | -325\u00a0903 |
Changes in biomass volume +1% kg | 62\u00a0821 | 54\u00a0202 |
Changes in biomass volume -1% kg | -50\u00a0824 | -53\u00a0427 |
ACCOUNTING POLICIES |
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. The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Generally, a financial asset is derecognized from the statement of financial position when either the rights to receive cash flows from the asset have expired, or the Group has transferred its right to receive cash flows from the asset, preconditioned that the Group has transferred substantially all risks and rewards, or control, of the financial asset to a third party. 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. Losses on receivables are classified as other operating expenses in the income statement. For trade receivables, the Group applies a simplified approach in calculating expected credit loss (ECL). In the Group's expected credit ECL 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 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 4. |
TRADE RECEIVABLES NOK 1 000 | 2023 | 2022 |
Gross amount of trade receivables | 603\u00a0229 | 690\u00a0226 |
Trade receivables deducted* | -256\u00a0597 | -416\u00a0053 |
Loss allowance | -19\u00a0472 | -15\u00a0036 |
Trade receivables at 31.12. | 327\u00a0160 | 259\u00a0137 |
*Trade receivables bought by the factoring company.
See Note 4 for a specification of the carrying value per currency.
See Note 27 for information on assets pledged as security for financial liabilities.
RECOGNIZED LOSSES ON TRADE RECEIVABLES
RECOGNIZED LOSSES NOK 1 000 | 2023 | 2022 |
Change in loss allowance | 4\u00a0436 | 71 |
Confirmed losses in the year | \u2014 | 33 |
Total recognized losses on receivables | 4\u00a0436 | 104 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | 520\u00a0137 | 27\u00a0925 | 336\u00a0869 | 169\u00a0204 | 12\u00a0480 | 293 | 1\u00a0291 | \u2014 | 520\u00a0137 |
TR Unsecured | 82\u00a0117 | 81\u00a0261 | 21\u00a0591 | 17\u00a0934 | 21\u00a0370 | 412 | 5\u00a0364 | 15\u00a0445 | 82\u00a0117 | |
High risk countries | TR Credit insured | 975 | \u2014 | 975 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 975 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | 603\u00a0229 | 109\u00a0187 | 359\u00a0434 | 187\u00a0139 | 33\u00a0850 | 705 | 6\u00a0655 | 15\u00a0445 | 603\u00a0229 | |
LOSS ALLOWANCE 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | 27\u00a0925 | 132 | 244 | 94 | 5 | 3 | \u2014 | 478 |
TR Unsecured | \u2014 | 81\u00a0261 | 2 | 7 | 28 | 202 | 4\u00a0389 | 14\u00a0365 | 18\u00a0993 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | 1 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | \u2014 | 109\u00a0187 | 135 | 251 | 122 | 207 | 4\u00a0392 | 14\u00a0365 | 19\u00a0472 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | 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 |
OTHER CURRENT RECEIVABLES NOK 1 000 | 2023 | 2022 |
VAT receivable | 80\u00a0968 | 87\u00a0431 |
Prepaid expenses | 58\u00a0656 | 44\u00a0113 |
Other current receivables | 31\u00a0625 | 25\u00a0515 |
Total | 171\u00a0249 | 157\u00a0060 |
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | NOTE | 2023 | 2022 |
Investment in money market funds | \u2014 | 1\u00a0000\u00a0224 | |
Unrealized gain/loss | \u2014 | 12\u00a0624 | |
Total investment in money market funds | \u2014 | 1\u00a0012\u00a0848 | |
Realized fair value gains (losses) recognized in the income statement | 11 | 41\u00a0461 | \u2014 |
Unrealized fair value gains (losses) recognized in the income statement | 11 | -12\u00a0624 | 12\u00a0624 |
As at 31\u00a0December 2023, 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 31.12.2023 | NOMINAL VALUE PER SHARE (NOK) | 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\u00a0255 | 1\u00a0313\u00a0654 |
Total excl treasury shares | 4.00 | 448\u00a0533 | 112\u00a0133\u00a0388 |
Treasury shares
Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31\u00a0December 2023, the company has 1\u00a0313\u00a0654 treasury shares.
In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023.
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2023 | 31.12.2023 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
OM Holding AS | 5\u00a0160\u00a0982 | 4.55% |
Folketrygdfondet | 2\u00a0419\u00a0585 | 2.13% |
Ystholmen Felles AS | 1\u00a0923\u00a0197 | 1.70% |
Clearstream Banking S.A. (Nominee) | 1\u00a0615\u00a0271 | 1.42% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0512\u00a0715 | 1.33% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0435\u00a0586 | 1.27% |
Grieg Seafood ASA | 1\u00a0313\u00a0654 | 1.16% |
BNP Paribas (Nominee) | 1\u00a0192\u00a0532 | 1.05% |
JPMorgan Chase Bank, N.A., London (Nominee) | 1\u00a0171\u00a0727 | 1.03% |
Sparebank 1 Markets AS | 1\u00a0159\u00a0872 | 1.02% |
Fr\u00f8y Kapital AS | 1\u00a0116\u00a0323 | 0.98% |
J.P. Morgan SE (Nominee) | 1\u00a0105\u00a0349 | 0.97% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0078\u00a0185 | 0.95% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Bank Pictet & Cie (Europe) AG (Nominee) | 921\u00a0918 | 0.81% |
Six Sis AG (Nominee) | 853\u00a0102 | 0.75% |
BNP Paribas (Nominee) | 842\u00a0579 | 0.74% |
Skandinaviska Enskilda Banken AB (Nominee) | 800\u00a0350 | 0.71% |
State Street Bank and Trust Comp (Nominee) | 753\u00a0837 | 0.66% |
Total 20 largest shareholders | 84\u00a0287\u00a0891 | 74.30% |
Total others | 29\u00a0159\u00a0151 | 25.70% |
Total number of shares | 113\u00a0447\u00a0042 | 100.00% |
ACCOUNTING POLICIES |
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. |
CASH AND CASH EQUIVALENTS NOK 1 000 | 2023 | 2022 |
Restricted deposits incl. employee tax deductions | 1\u00a0000 | 1\u00a0000 |
Other cash and bank deposits | 215\u00a0318 | 641\u00a0719 |
Total | 216\u00a0318 | 642\u00a0719 |
The Group has two multi-currency group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. One of the cash-pool agreements do have a multi-currency overdraft facility of NOK 200 million, which is utilized with NOK 63 million at year-end 2023. See Note 27 for more information. The subsidiaries that are part of the agreement can utilize the group cash pool arrangement provided that the arrangement without overdraft cannot be net negative, and that the arrangement with overdraft facility can not exceed negative NOK 200 million. 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 2023, the net amount of bank deposits in the group account scheme amounted to NOK 26 million (2022: NOK 524 million). At the same time, unutilized overdraft facility was NOK 137 million (NOK 200 million), in addition to unutilized revolving credit facility of NOK 750 million (NOK 1 500 million).
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% |
Other shareholders | 30\u00a0582\u00a0063 | 26.96% |
Total shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | NO. OF SHARES | SHAREHOLDING | |
SHARES CONTROLLED DIRECTLY AND INDIRECTLY BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT | 31.12.2023 | 31.12.2023 | 31.12.2022 | 31.12.2022 |
BOARD OF DIRECTORS | ||||
Per Grieg * | 2\u00a0877\u00a0206 | 2.54% | 2\u00a0877\u00a0206 | 2.54% |
Tore Holand ** | 3\u00a0160 | 0.00% | 2\u00a0000 | 0.00% |
Marianne Ribe | \u2014 | \u2014% | \u2014 | \u2014% |
Katrine Trovik | \u2014 | \u2014% | \u2014 | \u2014% |
Nicolai Hafeld Grieg * | 2\u00a0117\u00a0289 | 1.87% | 2\u00a0117\u00a0289 | 1.87% |
Ragnhild Janbu Fresvik (board member from 9 June 2022) | \u2014 | \u2014% | \u2014 | \u2014% |
GROUP MANAGEMENT | ||||
Andreas Kvame (Chief Executive Officer) | 44\u00a0372 | 0.04% | 40\u00a0513 | 0.04% |
Atle Harald Sandtorv (Chief Financial Officer) | 28\u00a0015 | 0.02% | 25\u00a0556 | 0.02% |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 24\u00a0272 | 0.02% | 23\u00a0513 | 0.02% |
Grant Cumming (Chief Operating Officer Farming Canada)*** | 9\u00a0857 | 0.01% | NA | NA |
Erik Holvik (Chief Commercial Officer) | 11\u00a0135 | 0.01% | 8\u00a0831 | 0.01% |
Knut Utheim (Chief Technology Officer) | 25\u00a0614 | 0.02% | 24\u00a0855 | 0.02% |
Kathleen O. Mathisen (Chief Human Resource Officer) | 15\u00a0833 | 0.01% | 15\u00a0074 | 0.01% |
Nina Stangeland (Chief Strategy Officer)*** | \u2014 | \u2014% | NA | NA |
Kristina Furnes (Chief Communications Officer) | 5\u00a0167 | 0.00% | 4\u00a0711 | 0.00% |
*Per Grieg and Nicolai Hafeld Grieg both own indirectly in Grieg Seafood ASA through their indirect ownership in Grieg Maturitas II AS (see Note 1). Grieg Maturitas II AS owns 100% of Grieg Aqua AS, which is the largest shareholder in Grieg Seafood ASA representing 50.17% of the shares. Additionally, both Per Grieg and Nicolai Hafeld Grieg is represented in the Board of Directors of Grieg Maturitas II AS. Together, Per Grieg and Nicolai Hafeld Grieg therefore represents, through their indirect ownership and board representation in Grieg Maturitas II AS, 50.17% of the shares in Grieg Seafood ASA through Grieg Aqua AS. Additionally, Per Grieg has further ownership interests in Grieg Seafood ASA through shares invested privately and through Kvassh\u00f8gdi AS, bringing the total percentage of shares in Grieg Seafood ASA represented by Per Grieg to 51.06%.
**Tore Holand owns shares in Grieg Seafood ASA through shares invested in Skippergata 24 AS as well as shares invested privately.
ACCOUNTING POLICIES |
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. |
CALCULATION OF EARNINGS PER SHARE | 2023 | 2022 |
Profit / loss after tax (majority share) NOK 1 000 | 559\u00a0750 | 1\u00a0153\u00a0779 |
SPECIFICATION NUMBER OF SHARES AT 31.12: | ||
Number of shares | 113\u00a0447\u00a0042 | 113\u00a0447\u00a0042 |
Number of treasury shares | 1\u00a0313\u00a0654 | 1\u00a0351\u00a0811 |
Number of outstanding shares | 112\u00a0133\u00a0388 | 112\u00a0095\u00a0231 |
Weighted average number of outstanding shares | 112\u00a0034\u00a0001 | 112\u00a0309\u00a0715 |
Diluted average number of outstanding shares | 112\u00a0034\u00a0001 | 112\u00a0309\u00a0715 |
Earnings per share (NOK) | 5.0 | 10.3 |
Diluted earnings per share (NOK) | 5.0 | 10.3 |
ACCOUNTING POLICIES |
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 annual general meeting of Grieg Seafood ASA. |
DIVIDENDS | 2023 | 2022 |
Proposed dividend per share (NOK)* | 1.75 | 4.50 |
Distributed dividend to owners during the year per share (NOK) | 4.50 | 3.00 |
CONTINGENT CONSIDERATION
ACCOUNTING POLICIES |
Equity-classified contingent consideration is measured initially at fair value on the acquisition date and is not remeasured subsequent to initial recognition. Settlement of the equity-classified contingent consideration is accounted for within equity. |
On 15 April 2020, Grieg Seafood ASA completed the acquisition of Grieg Seafood Newfoundland AS, which is the holding company for the farming operations in the Newfoundland region. On the date the acquisition was completed, 99% of the shares in Grieg Seafood Newfoundland AS were transferred, while the remaining 1% is subject to a put/call option accounted for and included in the contingent consideration (classified as equity) of the acquisition.
Through the acquisition, a contingent consideration of NOK 702 million was recognized. Depending on the planned production volume within the first 10 years following the transaction, additional payments may be triggered. The additional amount becomes unconditional when Newfoundland has reached an annual harvest volume of 15 000 tonnes, and the amount increases with planned volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000 and 20 000 tonnes, and NOK 55 per kg for volumes between 20 000 and 33 000 tonnes, with a 4% per annum inflation adjustment from the calendar year 2023.
The contingent consideration is classified as equity. It is in Grieg Seafood\u2019s sole discretion to decide when to make the expansion investments and increase production.
OTHER EQUITY
SPECIFICATION OF ACCUMULATED OTHER COMPREHENSIVE INCOME NOK 1 000 | CHANGES IN FAIR VALUE OF EQUITY INSTRUMENTS | CURRENCY EFFECT ON LOANS TO SUBSIDIARIES | CURRENCY EFFECT ON INVESTMENT IN SUBSIDIARIES | TOTAL |
Book value at 01.01.2022 | -37 | -29\u00a0010 | 97\u00a0553 | 68\u00a0506 |
Changes in 2022 | \u2014 | 19\u00a0338 | 109\u00a0336 | 128\u00a0674 |
Book value at 31.12.2022 | -37 | -9\u00a0672 | 206\u00a0888 | 197\u00a0180 |
Changes in 2023 | \u2014 | 22\u00a0451 | 98\u00a0316 | 120\u00a0767 |
Book value at 31.12.2023 | -37 | 12\u00a0780 | 305\u00a0204 | 317\u00a0947 |
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 2023 and 2022 are presented in the table below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 | 2023 | 2022 |
Currency effect | 28\u00a0784 | 24\u00a0792 |
Tax effect (22%) | -6\u00a0332 | -5\u00a0454 |
Net effect recognized in equity through OCI | 22\u00a0451 | 19\u00a0338 |
RETAINED EARNINGS
SPECIFICATION OF RETAINED EQUITY NOK 1 000 | EFFECT OF SHARE-BASED REMUNERATION | PURCHASE/ SALES OF TREASURY SHARES * | ACCUMULATED INCOME LESS ACCUMULATED DIVIDEND | TOTAL |
Book value at 01.01.2022 | 1\u00a0094 | -2\u00a0020 | 4\u00a0344\u00a0929 | 4\u00a0344\u00a0002 |
Changes in 2022 | \u2014 | -22\u00a0229 | 816\u00a0839 | 794\u00a0610 |
Book value at 31.12.2022 | 1\u00a0094 | -24\u00a0249 | 5\u00a0161\u00a0767 | 5\u00a0138\u00a0612 |
Changes in 2023 | \u2014 | 6\u00a0912 | 55\u00a0631 | 62\u00a0543 |
Book value at 31.12.2023 | 1\u00a0094 | -17\u00a0337 | 5\u00a0217\u00a0398 | 5\u00a0201\u00a0155 |
ACCOUNTING POLICIES |
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. |
Grieg Seafood ASA has a syndicated, secured loan provided by DNB and Nordea. The syndicated financing consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities with maturity date in 2027. The debt structure comprises a NOK 750 million term loan (outstanding NOK 656 million), an EUR 75 million term loan (outstanding EUR 66 million), a NOK 1\u00a0500 million revolving credit facility and a NOK 200 million overdraft facility. As at the end of 2023, the Group has NOK 887 million (NOK 1\u00a0700 million) available on the revolving credit facility and overdraft facility. The revolving credit facilities are non-current and may be redrawn. Of the syndicated debt, NOK 133 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 1 393 million at the end of 2023. The total bond issue in 2020 was NOK 1 500 million, and since the bond issue, Grieg Seafood has repurchased NOK 107 million. 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 2023. At 31 December 2023, the Group had an equity ratio of 49% (2022: 50%) while the equity ratio according to financial covenant was 53%, compared to 52% at 31 December 2022.
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).
NON-CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
NON-CURRENT BORROWINGS | ||
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0423\u00a0500 |
Non-current syndicated term-loan | 1\u00a0261\u00a0155 | 1\u00a0346\u00a0218 |
Non-current syndicated revolving credit facility | 750\u00a0000 | \u2014 |
Other non-current liabilities | 105\u00a0067 | 94\u00a0144 |
Non-current interest-bearing borrowings | 3\u00a0508\u00a0722 | 2\u00a0863\u00a0862 |
Amortization effect of loans | -16\u00a0742 | -25\u00a0053 |
Non-current borrowings according to the statement of financial position | 3\u00a0491\u00a0980 | 2\u00a0838\u00a0809 |
NON-CURRENT LEASE LIABILITIES | ||
Non-current lease liabilities according to the statement of financial position | 1\u00a0111\u00a0049 | 653\u00a0650 |
TOTAL NON-CURRENT BORROWINGS INCL AMORTIZED LOAN COSTS AND LEASE LIABILITIES | ||
Total non-current liabilities | 4\u00a0603\u00a0028 | 3\u00a0492\u00a0459 |
\u00a0
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000 | 2023 | 2022 |
CURRENT BORROWINGS | ||
Current portion of non-current syndicated term-loan | 132\u00a0753 | 128\u00a0211 |
Overdraft facilities* | 63\u00a0113 | \u2014 |
Current portion of other non-current liabilities | 12\u00a0469 | 13\u00a0757 |
Current portion of borrowings according to the statement of financial position | 208\u00a0335 | 141\u00a0968 |
CURRENT LEASE LIABILITIES | ||
Current portion of leasing liabilities according to the statement of financial position | 299\u00a0626 | 226\u00a0910 |
TOTAL CURRENT BORROWINGS AND LEASE LIABILITIES | ||
Total current liabilities | 507\u00a0960 | 368\u00a0878 |
*The Group has two multicurrency cash pool schemes, held at two different banks. One of the cash pool schemes has a multi-currency overdraft facility of NOK 200 million. As at year-end 31.12.2023, the cash pool scheme with the overdraft engagement had a net negative cash position, classified as overdraft facility at year-end. For more information on the Group's cash and cash equivalents, see Note 4 and 23.
NET INTEREST-BEARING LIABILITIES NOK 1 000 | 2023 | 2022 |
Total non-current interest-bearing liabilities | 4\u00a0619\u00a0770 | 3\u00a0517\u00a0512 |
Total current interest-bearing liabilities | 507\u00a0960 | 368\u00a0878 |
Gross interest-bearing liabilities | 5\u00a0127\u00a0730 | 3\u00a0886\u00a0390 |
Loans to associated companies | -32\u00a0529 | -8\u00a0300 |
Investment in money market fund | \u2014 | -1\u00a0012\u00a0848 |
Cash and cash equivalents | -216\u00a0318 | -642\u00a0719 |
Net interest-bearing liabilities | 4\u00a0878\u00a0884 | 2\u00a0222\u00a0522 |
Lease liabilities for contracts classified as operating lease for the lessor | -1\u00a0005\u00a0714 | -483\u00a0946 |
Net interest-bearing liabilities ex. the effect of IFRS 16 | 3\u00a0873\u00a0170 | 1\u00a0738\u00a0576 |
Loans to associated companies, investment in money market funds,\u00a0 cash and cash equivalents and lease liabilities for contracts classified as operating lease for the lessor are presented by their inverted figure in the table above.
Lease liabilities for contracts classified as operating lease for the lessor, corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of operational leases. These lease liabilities (NOK 1\u00a0006 million in 2023 and NOK 484 million in 2022), also referred to as \u201cthe effect of IFRS 16\u201d, are not included in the financial covenant\u2019s definition of net interest-bearing liabilities.
The Group monitors leverage by assessing both the net interest-bearing liabilities including the effect of IFRS 16, totalling NOK 4\u00a0879 million (NOK 2\u00a0223 million) and net interest-bearing liabilities ex. the effect of IFRS 16, totalling NOK 3\u00a0873 million (NOK 1\u00a0739 million). In this Note, the lease liabilities are reported in aggregate. See Note 28 for a specification of the Group\u2019s lease liabilities, separated into lease liabilities for contracts classified as financial lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of financial leases) and lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of operational leases).
31.12.2023 | |||||||
MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 | 2024 | 2025 | 2026 | 2027 | 2028 | LATER | TOTAL |
Green bond loan | \u2014 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0392\u00a0500 |
Syndicated term-loan | 132\u00a0753 | 132\u00a0753 | 132\u00a0753 | 995\u00a0648 | \u2014 | \u2014 | 1\u00a0393\u00a0908 |
Syndicated revolving credit facility | \u2014 | \u2014 | \u2014 | 750\u00a0000 | \u2014 | \u2014 | 750\u00a0000 |
Overdraft facility | 63\u00a0113 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 63\u00a0113 |
Lease liabilities (book values)* | 299\u00a0626 | 249\u00a0578 | 236\u00a0302 | 206\u00a0866 | 133\u00a0219 | 285\u00a0083 | 1\u00a0410\u00a0674 |
Other non-current liabilities** | 12\u00a0468 | 9\u00a0355 | 12\u00a0151 | 12\u00a0223 | 12\u00a0543 | 58\u00a0796 | 117\u00a0535 |
Total | 507\u00a0960 | 1\u00a0784\u00a0186 | 381\u00a0206 | 1\u00a0964\u00a0738 | 145\u00a0762 | 343\u00a0879 | 5\u00a0127\u00a0730 |
*See Note 4 for a specification of the nominal payments for the lease component of the contractual liability
**NOK 117.6 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.
31.12.2022 | |||||||
MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 | 2023 | 2024 | 2025 | 2026 | 2027 | LATER | TOTAL |
Green bond loan | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Syndicated term-loan | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Lease liabilities (book values)* | 226\u00a0910 | 201\u00a0443 | 122\u00a0059 | 114\u00a0500 | 88\u00a0482 | 127\u00a0165 | 880\u00a0560 |
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 |
*See Note 4 for a specification of the nominal payments for the lease component of the contractual liability
**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.
LIABILITIES SECURED BY MORTGAGES/CHANGES ON ASSETS NOK 1 000 | 2023 | 2022 |
Liabilities secured by mortgages/charges on assets | 2\u00a0642\u00a0413 | 1\u00a0899\u00a0364 |
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2023 | 2022 |
Licenses | 1\u00a0489\u00a0798 | 1\u00a0463\u00a0709 |
Property, plant and equipment (excl. the effect of IFRS 16 / prior IAS 17 operational leases) | 4\u00a0112\u00a0535 | 3\u00a0562\u00a0816 |
Trade receivables | 327\u00a0160 | 259\u00a0137 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0966\u00a0011 | 3\u00a0136\u00a0381 |
Total assets pledged as security | 9\u00a0895\u00a0503 | 8\u00a0422\u00a0043 |
Pledges also include shares in subsidiaries in addition to charges directly on assets. The book value of these shares is NOK 0 for the Group, as such shares according to the consolidation method of subsidiaries are eliminated in the Group. See Note 13 in the financial statement of the parent, Grieg Seafood ASA.
BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 | 31.12.2023 | NOK | CAD | EUR | USD | GBP | OTHER |
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Syndicated term-loan | 1\u00a0393\u00a0908 | 656\u00a0250 | \u2014 | 737\u00a0658 | \u2014 | \u2014 | \u2014 |
Syndicated revolving credit facility | 750\u00a0000 | 750\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Overdraft facility* | 63\u00a0113 | 79\u00a0924 | 140\u00a0824 | -87\u00a0393 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 |
Lease liabilities | 1\u00a0410\u00a0674 | 870\u00a0850 | 539\u00a0824 | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current and current liabilities | 117\u00a0535 | \u2014 | 117\u00a0535 | \u2014 | \u2014 | \u2014 | \u2014 |
Amortization effect of loans | -16\u00a0742 | -16\u00a0742 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Total | 5\u00a0110\u00a0989 | 3\u00a0732\u00a0782 | 798\u00a0184 | 650\u00a0265 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 |
BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 | 31.12.2022 | NOK | CAD | EUR | USD | GBP | OTHER |
Green bond loan | 1\u00a0423\u00a0500 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Syndicated term-loan | 1\u00a0474\u00a0429 | 718\u00a0750 | \u2014 | 755\u00a0679 | \u2014 | \u2014 | \u2014 |
Lease liabilities | 880\u00a0560 | 536\u00a0129 | 344\u00a0431 | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current and current liabilities | 107\u00a0900 | \u2014 | 107\u00a0900 | \u2014 | \u2014 | \u2014 | \u2014 |
Amortization effect of loans | -25\u00a0053 | -25\u00a0053 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Total | 3\u00a0861\u00a0337 | 2\u00a0653\u00a0326 | 452\u00a0331 | 755\u00a0679 | \u2014 | \u2014 | \u2014 |
AVERAGE INTEREST RATE ON BANK- AND BOND LOAN | 2023 | 2022 |
Average interest rate (NOK) | 6.62% | 4.61% |
Average interest rate (EUR) | 4.15% | 1.77% |
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 | 2023 | 2022 | 2023 | 2022 |
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0423\u00a0500 | 1\u00a0404\u00a0684 | 1\u00a0414\u00a0532 |
Borrowings (non-current syndicated loan and revolver credit facility, incl. current part of the non-current liability and overdraft facility) | 2\u00a0207\u00a0021 | 1\u00a0474\u00a0429 | 2\u00a0207\u00a0021 | 1\u00a0474\u00a0429 |
Total | 3\u00a0599\u00a0521 | 2\u00a0897\u00a0929 | 3\u00a0611\u00a0705 | 2\u00a0888\u00a0961 |
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 100.88% of par value at year-end 2023 (2022: 99.37%).
2023 | ||||||
CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 | 31.12.2022 | CASH INFLOW | CASH OUTFLOW | TOTAL CASH FLOW | TOTAL NON-CASH MOVEMENTS | 31.12.2023 |
Green bond loan | 1\u00a0423\u00a0500 | \u2014 | -56\u00a0000 | -56\u00a0000 | 25\u00a0000 | 1\u00a0392\u00a0500 |
Syndicated term-loan | 1\u00a0474\u00a0429 | \u2014 | -133\u00a0275 | -133\u00a0275 | 52\u00a0753 | 1\u00a0393\u00a0908 |
Syndicated revolving credit facility | \u2014 | 750\u00a0000 | \u2014 | 750\u00a0000 | \u2014 | 750\u00a0000 |
Other interest-bearing liabilities | 107\u00a0900 | 4\u00a0379 | -4\u00a0242 | 137 | 9\u00a0498 | 117\u00a0535 |
Long-term int.-bearing liabilities excl leases | 3\u00a0005\u00a0830 | 754\u00a0379 | -193\u00a0517 | 560\u00a0862 | 87\u00a0252 | 3\u00a0653\u00a0943 |
Overdraft facility | \u2014 | 63\u00a0113 | 63\u00a0113 | \u2014 | 63\u00a0113 | |
Short-term int.-bearing liabilities excl leases | \u2014 | 63\u00a0113 | \u2014 | 63\u00a0113 | \u2014 | 63\u00a0113 |
Amortized loan costs | -25\u00a0053 | \u2014 | \u2014 | \u2014 | 8\u00a0311 | -16\u00a0742 |
Total borrowings | 2\u00a0980\u00a0777 | 817\u00a0492 | -193\u00a0517 | 623\u00a0975 | 95\u00a0563 | 3\u00a0700\u00a0314 |
Lease liabilities | 880\u00a0560 | \u2014 | -279\u00a0830 | -279\u00a0830 | 809\u00a0944 | 1\u00a0410\u00a0674 |
Total borrowings and lease liabilities | 3\u00a0861\u00a0337 | 817\u00a0492 | -473\u00a0348 | 344\u00a0145 | 905\u00a0507 | 5\u00a0110\u00a0989 |
ACCOUNTING POLICIES |
The Group as a lessee The Group acts primarily as a lessee as the Group do not have any business directed toward a role as a lessor. However, from time to time, when overcapacity on operational assets (e.g. well-boats), leased assets may be subleased by the Group. |
Identifying a lease The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions and external parties (where the material leases are mostly with well-boat and workboat providers). 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. |
Lease payments 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 2023 ranged from 4.8% - 5.7% for buildings and properties, and 4.9% - 6.2% 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. |
Extension options 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 357 million (NOK 267 million at 31\u00a0December 2022). |
Practical expedient 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. |
Presentation The Group presents its lease liability separately from other liabilities in the statement of financial position. The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d. |
OTHER CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Accrued expenses1 | 166\u00a0326 | 150\u00a0241 |
Production fee (Norway)2 | 11\u00a0137 | 7\u00a0987 |
Realized gain/loss on fixed-price contracts3 | 8\u00a0424 | 30\u00a0930 |
Other current liabilities4 | 49\u00a0697 | 99\u00a0052 |
Other current liabilities | 235\u00a0584 | 288\u00a0210 |
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 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. 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 31.
RIGHT-OF-USE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
Currency translation differences | 1\u00a0690 | \u2014 | 17 | 13\u00a0060 | 14\u00a0767 |
Additions | 5\u00a0194 | 43\u00a0350 | 23\u00a0193 | 636\u00a0161 | 707\u00a0898 |
Other changes in the right-of-use assets* | 3\u00a0520 | -12\u00a0273 | -14\u00a0734 | 68\u00a0335 | 44\u00a0848 |
Depreciation | -12\u00a0978 | -20\u00a0179 | -14\u00a0739 | -200\u00a0681 | -248\u00a0576 |
Book value at 31.12. | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
RIGHT-OF-USE ASSETS 2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | 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 |
Other changes in the right-of-use assets* | -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 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
LEASE LIABILITIES NOK 1 000 | 2023 | 2022 |
Lease liabilities at 01.01. | 880\u00a0560 | 755\u00a0828 |
New leases recognized during the year | 708\u00a0349 | 255\u00a0901 |
Cash payments for the principal portion of the lease liability | -279\u00a0830 | -225\u00a0468 |
Currency exchange differences | 13\u00a0845 | 10\u00a0902 |
Other changes in the lease liabilities* | 87\u00a0751 | 83\u00a0397 |
Total lease liabilities at 31.12. | 1\u00a0410\u00a0674 | 880\u00a0560 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
See Note 4 for a maturity analysis for the contractual nominal amount (of the lease component in the contract) of the total lease liabilities.
2023 | |||
SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 | CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR | CLASSIFIED AS OPERATING LEASE FOR THE LESSOR | TOTAL LEASE LIABILITY |
Non-current portion | 329\u00a0013 | 782\u00a0036 | 1\u00a0111\u00a0049 |
Current portion | 75\u00a0948 | 223\u00a0678 | 299\u00a0626 |
Total lease liabilities included in the statement of financial position at 31.12 | 404\u00a0960 | 1\u00a0005\u00a0714 | 1\u00a0410\u00a0674 |
2022 | |||
SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 | CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR | CLASSIFIED AS OPERATING LEASE FOR THE LESSOR | TOTAL LEASE LIABILITY |
Non-current portion | 318\u00a0198 | 335\u00a0452 | 653\u00a0650 |
Current portion | 78\u00a0416 | 148\u00a0494 | 226\u00a0910 |
Total lease liabilities included in the statement of financial position at 31.12 | 396\u00a0614 | 483\u00a0946 | 880\u00a0560 |
\u00a0
AMOUNTS RECOGNIZED IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Interest on lease liabilities | -55\u00a0765 | -33\u00a0613 |
Foreign currency effect | 1\u00a0142 | 3\u00a0746 |
Depreciation right-of-use assets | -248\u00a0576 | -187\u00a0404 |
Income from subleasing of right-of-use assets | 8\u00a0801 | 31\u00a0261 |
Expenses relating to short-term leases | -23\u00a0176 | -40\u00a0530 |
Expenses relating to leases of low-value assets, excl. short-term leases of low-value assets | -1 | -1 |
Total amounts recognized in the income statement | -317\u00a0576 | -226\u00a0543 |
NOK 1 000 | 2023 | 2022 |
Total cash outflow for leases | 335\u00a0596 | 259\u00a0081 |
2023 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT BALANCES | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 22\u00a0797 | \u2014 | -5\u00a0039 |
Total related parties as associates | \u2014 | 174\u00a0380 | 41\u00a0129 | -182 |
Total | \u2014 | 197\u00a0177 | 41\u00a0129 | -5\u00a0221 |
2022 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT BALANCES | 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 |
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 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 the Board of Directors of the affiliated company.
\u2022Algae monitoring services are purchased from Blue Planet AS, which is affiliated with Grieg Seafood through the Chief Operating Officer Norway of the Group 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 performed on behalf of the subsidiaries of the Group. Grieg Seafood ASA is set up with facility agreements with external parties incl. banks, and lend out funds 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 8 on share-based options and Note 24 on shares controlled by members of the Board and Group Management.
ACCOUNTING POLICIES |
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. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning 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. |
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
FAIR VALUE MEASUREMENT
ACCOUNTING POLICIES |
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. 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 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. |
The information below describes valuation techniques for fair value measurement and 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. 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 carrying value of derivatives and other financial instruments as at 31 December 2023 and 31 December 2022 is shown in the table below. All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy.
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | NOTE | 2023 | 2022 | ||
ASSETS | CURRENT LIABILITIES | ASSETS | CURRENT LIABILITIES | ||
Forward currency contracts at fair value through profit or loss | 4 | 11\u00a0852 | \u2014 | 2\u00a0749 | 9 |
Interest rate swap agreements | 4 | 23\u00a0312 | \u2014 | 35\u00a0238 | \u2014 |
Financial salmon contract - sales contracts* | \u2014 | 1\u00a0709 | \u2014 | 64\u00a0920 | |
Total financial instruments at fair value | 35\u00a0164 | 1\u00a0709 | 37\u00a0988 | 64\u00a0928 |
*In addition, as at year-end 2023, Grieg Seafood had NOK 8 million (2022: NOK 31 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 amount of the financial instrument (derivative contract).
(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 27.
On 25 January 2024, Grieg Seafood received a Statement of Objections (SO) from the European Commission related to its investigation of potential anti-competitive behavior regarding the sale of farmed Norwegian Atlantic salmon which was launched back in 2019. The issuance of a SO is a common and formal step in the process without prejudice of the final outcome, where the European Commission sets out its preliminary view in the matter.
On 9 February 2024, the Federal Court in Canada approved the settlement agreement dated 22 September 2023 entered into by the plaintiffs and Grieg Seafood regarding the proposed three class-actions in Canada.
On 13 and 14 February 2024, Grieg Seafood ASA and Grieg Seafood UK Limited have received a service letter according to which certain claimants filed a claim for damages against, among other, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon.
In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the European Commission\u2019 investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. Therefore, no provision has been recognized at the current stage. We will continue to collaborate with the European Commission and follow up all processes as it deems appropriate.
(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 28.
(VI) BIOLOGICAL ASSETS
The consolidated financial statements of Grieg Seafood for the full year ended 31 December 2023 were approved for issuance by the Board of Directors on 21\u00a0March 2024 and subject to approval by the Annual General Meeting of Grieg Seafood ASA.
Grieg Seafood Group comprised the following entities at 31\u00a0December 2023:
Grieg Seafood UK Ltd (owned 100% by Grieg Seafood Sales AS) is domiciled in the UK. Grieg Seafood BC Ltd., and its 100% owned subsidiary Grieg Seafood Sales North America Inc, are domiciled in British Columbia, Canada, while Grieg Seafood Newfoundland Ltd (incl. the subsidiaries Grieg Marine NL Ltd and Grieg NL Nurseries Ltd) are 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 Sales AS.
To be able to correctly calculate and report the resource rent tax in Norway as from 2023, Grieg Seafood considered it necessary in 2022 to reorganize the ownership of aquaculture licenses in Norway into separate legal entities owning the commercial and non-commercial aquaculture licenses. Therefore, Grieg Seafood Rogaland Sj\u00f8 AS was 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. See Note 12 for more information\u00a0concerning the internal reorganization of the Rogaland and Finnmark farming regions in 2022.
The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA.
Grieg Seafood Canada AS (100%) and Grieg Seafood Newfoundland AS (99%) 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.
STATEMENT OF COMPLIANCE
The consolidated financial statements as per 31\u00a0December 2023 for the period 1 January to 31 December have been prepared in accordance with IFRS\u00ae Accounting Standards as adopted by the EU and with IFRSs as issued by the International Accounting Standards Board (IASB), interpretations issued by IASB and the additional requirements of the Norwegian Accounting Act, effective on 31\u00a0December 2023.
BASIS OF PREPARATION
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. 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.
The main areas where Grieg Seafood has made significant judgements when applying the accounting policies and that have the most material effect on the amounts as recognized in the consolidated financial statements are listed below, with reference to the relevant note disclosure.
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY | NOTE |
Norwegian resource rent tax scheme (assumptions made concerning the basis for taxation) | 12 |
Classification of fish-farming licenses (indefinite or definite economic life) | 13 |
Impairment test of non-financial non-current assets | 15 |
Fair value measurement of biological assets | 19 |
The material accounting policies described in these consolidated financial statements have been applied consistently to all periods presented, except as otherwise noted in in the disclosure related to the impact of new standards, amendments and interpretations adopted by the Group.
All amounts in these consolidated financial statements are stated in NOK thousand unless otherwise specified.
Certain amounts in the comparable years can be reclassified to conform to current year presentation. If such reclassification is not clearly immaterial, the reclassification is disclosed in the relevant note disclosure for the financial statement line item.
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. 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.
The main areas where Grieg Seafood has made significant judgements when applying the accounting policies and that have the most material effect on the amounts as recognized in the consolidated financial statements are listed below, with reference to the relevant note disclosure.
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY | NOTE |
Norwegian resource rent tax scheme (assumptions made concerning the basis for taxation) | 12 |
Classification of fish-farming licenses (indefinite or definite economic life) | 13 |
Impairment test of non-financial non-current assets | 15 |
Fair value measurement of biological assets | 19 |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
THE NORWEGIAN RESOURCE RENT TAX SCHEME |
On 31 May 2023, the Norwegian Parliament passed the resource rent tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. The tax is an additional layer of taxation on aquaculture, on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. This new tax scheme was implemented retrospectively with effect from 1\u202fJanuary 2023. The Norwegian resource rent tax will not affect the tax load of the Group\u2019s operations in British Columbia and Newfoundland. |
In December 2022, the Group carried out an internal reorganization, in which its commercial aquaculture licenses, together with the connected standing biomass of live fish in sea, were transferred from Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS to Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS, which are also (indirectly) wholly owned by Grieg Seafood ASA. The biomass was transferred by way of a sale and purchase transaction at fair value, using tax discontinuity. Both companies that acquired biomass chose to capitalize the acquisition costs in 2022 for tax purposes (as opposed to expensing the acquisition costs), thereby carrying over these tax positions into 2023. With tax effect for 2023, the companies have deducted the capitalized costs both in the basis for the ordinary corporate income tax, as well as in the basis for the new resource rent tax scheme. Consequently, the Group has not recognized an implementation effect concerning the transitioning to the resources rent tax scheme. If the deduction in the new resource rent tax scheme is not accepted by the tax authorities, the deferred tax asset released to loss carried forward in the regime will be reduced accordingly. |
As the Group has aquaculture licenses both in- and out-of-scope of the resource rent tax scheme, the income and expenses related to the tax scheme have to be identified. To be able to calculate the resource rent tax in accordance with the chapter 19 of the Norwegian tax law, a number of analyses have been performed related to transfer pricing according to the Norwegian tax law chapter 13 and the OECD guidelines for transfer pricing. The implementation of the resources tax regime has resulted in changes in process and procedures, transforming from an integrated value chain of breeding, freshwater and seawater farming and harvesting of salmon to carving out the farming business subject to the resource rent tax into individual companies. The transfer pricing model applied by the Group pursuant to the OECD transfer pricing guidelines induces that a variability in profitability mainly affects the companies subject to resources rent tax. As this is a new tax, it is unknown how the tax authorities will assess the methods used and the assumptions made. Management is, therefore, not able to quantify any meaningful sensitivity, caused by a reasonable change in the assumptions applied. Due to weak operational performance in Finnmark combined with a substantial share of non-commercial licenses (not being subject to resource rent tax) in Rogaland, the basis for the resource rent tax is limited in 2023. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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 (see separate section in this Note for each license regime) 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. |
BRITISH COLUMBIA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. We expect that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with our First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. 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. All of Grieg Seafood's current production is operating under agreements with First Nations. 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. |
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 amortization period must be re-evaluated. |
NEWFOUNDLAND Grieg Seafood Newfoundland has 14 approved seawater farming licenses, as well as one freshwater license. The seawater licenses are granted for terms of six years. To renew the licenses, licenses 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 is the single aquaculture operator/salmon farmer in the Placentia Bay area. The fair value related to this (the excess value of book values as identified in the acquisition of Newfoundland in 2020) is amortized over the duration of the agreement. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
The Group tests whether goodwill and licenses have suffered any impairment on an annual basis. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. 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. 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. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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. 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 generally 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. |
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 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. |
NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2023
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 \u201cmaterial accounting policy information\u201d and explain how to identify when accounting policy information is material. If it is disclosed, it should not obscure material accounting information.The Group has adopted the amendment in 2023 when preparing the note disclosure for the consolidated financial statement of 2023.
Other standards, amendments to standards and interpretations of standards, effective as of 1 January 2023
The Group has not early adopted any standards, amendments or interpretations. Other amendments to standards, and interpretations of standards, effective as from 1 January 2023, adopted by the Group in 2023, has not had any material impact on the consolidated financial statements of Grieg Seafood.
CONSOLIDATION PRINCIPLES
The consolidated financial statements include all entities controlled by Grieg Seafood ASA.
Subsidiaries are all 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. There are no non-controlling interests recognized in the Group\u2019s equity. All the subsidiaries of Grieg Seafood ASA, except for Grieg Seafood Newfoundland AS, are wholly owned, see Note 1 in general and Note 25 for Grieg Seafood Newfoundland AS in specific.
FOREIGN CURRENCY TRANSLATION
INDIVIDUAL ENTITIES OF GRIEG SEAFOOD
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).
In preparing the financial statements of the individual entities in the Grieg Seafood Group, transactions in currencies other than the functional currency are translated at the foreign currency exchange rate at the transaction date.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency at the foreign currency exchange rate at the balance sheet date. Foreign currency translation differences are recognized in the consolidated income statement as foreign currency exchange gains or losses within the subtotal financial statement line item of \u201cNet financial items\u201d. However, there are two exceptions. Firstly, foreign currency translation differences arising from sales revenue to external customers of the Group, which is included on the financial statement line item of \u201cother gains and losses\u201d, included in the subtotal of EBIT (Earnings before interests and taxes) in the consolidated income statement. Secondly, foreign currency translation differences arising from the translation of estimate-based provisions are generally recognized as part of
the change in the underlying estimate and include within the relevant financial statement line item relevant for the item that is estimated.
Non-monetary assets measured at historical cost in a foreign currency are translated using the currency exchange rate at the date of the transaction.
CONSOLIDATED FINANCIAL STATEMENT
The consolidated financial statements are presented in Norwegian Kroner (NOK), which is the parent company\u2019s functional currency and the Group\u2019s presentation currency.
When preparing the consolidated financial statements, 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.
Grieg Seafood ASA has provided loans to subsidiaries of the Group with other functional currencies than the parent company, and for which settlement of the loan neither is planned nor likely to occur in the foreseeable future. In addition, certain parent companies of sub-consolidation levels of the Group has provided similar loans to subsidiaries of its sub-group. Foreign currency exchange differences arising on such loans are recognized in the consolidated statement of other comprehensive income in the consolidated financial statements of the Group.
CASH FLOW STATEMENT
The Group\u2019s cash flow statement shows the overall cash flow specified by 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. Operating activities are presented using the indirect method, where EBIT (Earnings before interests and taxes) is adjusted for changes in biological assets at cost, other inventories, operating receivables and liabilities, the effect of non-cash items such as depreciation, amortization and fair value adjustment of biological assets, profit and loss from investment in associates and joint ventures, and taxes paid. Increase/decrease in derivative financial instruments are included as part of the operational activities.
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 salmon farming industry. 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 liquidity.
The Group\u2019s funding is primarily syndicated debt with banks in addition to a green bond loan.\u00a0The level of liabilities and alternative forms of funding are subject to constant evaluation. As at 31 December 2023, the Group had a good financial foundation, with cash and cash equivalents of NOK 216 million and unutilized facilities of NOK 887 million. See Note 27 for more information.
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 40, but can be exceeded in periods of growth investments.
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 short-term financial derivatives to reduce certain risks. Such contracts are recognized at fair value through profit or loss and presented as financial income/financial expenses. As at 31 December 2023 (31 December 2022), 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.
I) MARKET RISKS
(i) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, EUR, USD and GBP. 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 TRADE PAYABLES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Trade receivables | 77\u00a0744 | 79\u00a0815 | 15\u00a0276 | 154\u00a0221 | \u2014 | 104 | 327\u00a0160 |
Trade payables | 544\u00a0185 | 195\u00a0287 | 16\u00a0603 | 3\u00a0390 | 751 | 535 | 760\u00a0753 |
2022 | |||||||
Trade receivables | 214\u00a0681 | 1\u00a0911 | 23\u00a0901 | 17\u00a0207 | 1\u00a0517 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 143\u00a0587 | 12\u00a0590 | 1\u00a0044 | 174 | 3\u00a0193 | 717\u00a0498 |
NET INTEREST-BEARING LIABILITIES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Cash and cash equivalents | 30\u00a0452 | 138\u00a0121 | 144 | 47\u00a0601 | \u2014 | \u2014 | 216\u00a0318 |
Loans to associated companies | 32\u00a0529 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 32\u00a0529 |
Gross interest-bearing liabilities* | 3\u00a0749\u00a0524 | 798\u00a0184 | 650\u00a0265 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 | 5\u00a0127\u00a0730 |
Net interest-bearing liabilities | 3\u00a0686\u00a0542 | 660\u00a0062 | 650\u00a0122 | -100\u00a0077 | -16\u00a0068 | -1\u00a0698 | 4\u00a0878\u00a0884 |
2022 | |||||||
Cash and cash equivalents | 284\u00a0965 | 134\u00a0040 | 87\u00a0485 | 88\u00a0647 | 41\u00a0877 | 5\u00a0705 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Gross interest-bearing liabilities* | 2\u00a0678\u00a0379 | 452\u00a0331 | 755\u00a0679 | \u2014 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | 318\u00a0292 | 668\u00a0194 | -88\u00a0647 | -41\u00a0877 | -5\u00a0705 | 2\u00a0222\u00a0522 |
*See Note 27 for more information on the Group\u2019s interest-bearing liabilities.
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 is managed primarily through intercompany borrowings denominated in the relevant foreign currencies.
The term-loan facility of the syndicated bank loan is split into NOK and EUR. 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.
Sensitivity analysis
The sensitivity of a depreciation (appreciation) of 5% change in NOK foreign exchange rates versus CAD, EUR, USD and GBP at the balance sheet date (all other factors remaining unchanged) would be expected to have the following effects on the Group's profit after tax, other comprehensive income and total comprehensive income / equity effect. The OCI item reflect agio on intercompany long-term loans and the effect of translating the foreign subsidiary financials to the Group\u2019s presentation currency, while the profit after tax-item include trade receivables and trade payables (incl. intercompany items), term-loan, lease liabilities, cash and cash equivalents and foreign currency derivative contracts.
SENSITIVITY NOK 1 000 | CAD | EUR | USD | GBP | TOTAL | |
31.12.2023 | ||||||
Profit after tax | -/+ | 8\u00a0487 | -32\u00a0533 | -632 | -570 | -25\u00a0249 |
Other comprehensive income | -/+ | 25\u00a0660 | \u2014 | \u2014 | \u2014 | 25\u00a0660 |
Total comprehensive income / effect on equity | -/+ | 34\u00a0147 | -32\u00a0533 | -632 | -570 | 411 |
31.12.2022 | ||||||
Profit after tax | -/+ | 21\u00a0478 | -25\u00a0703 | 1\u00a0270 | \u2014 | -2\u00a0955 |
Other comprehensive income | -/+ | 24\u00a0335 | \u2014 | \u2014 | \u2014 | 24\u00a0335 |
Total comprehensive income / effect on equity | -/+ | 45\u00a0813 | -25\u00a0703 | 1\u00a0270 | \u2014 | 21\u00a0380 |
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
31.12.2023 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
USD | 2\u00a0372 | NOK | 26\u00a0259 | 11.0702 | 10.1724 | 16.01.2024 - 17.06.2024 | 2\u00a0243 |
GBP | 1\u00a0073 | NOK | 14\u00a0680 | 13.6809 | 12.9342 | 23.01.2024 - 06.02.2024 | 843 |
EUR | 8\u00a0528 | NOK | 100\u00a0580 | 11.7940 | 11.2405 | 30.01.2024 - 30.12.2024 | 4\u00a0525 |
USD | 22\u00a0147 | CAD | 29\u00a0852 | 1.3479 | 1.3251 | 04.01.2024 - 08.02.2024 | 4\u00a0241 |
Total | 11\u00a0852 |
*Maturity specified as an interval for multiple contracts
31.12.2022 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5138 | 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
(ii) INTEREST RATE RISK
Since the Group has no significant interest-bearing assets apart from bank deposits, 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 100 basis points lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 30.4 million in 2023 and NOK 28.3 million in 2022 due to the floating rate of interest on loans and deposits. The sensitivity analysis is calculated based on our term loans in NOK and EUR (including revolving credit facility and overdraft) and bond loan, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN BASIS POINTS | 2023 | 2022 |
Effect on profit before income tax | -/+100 | +/- 30 439 | +/- 28 257 |
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. 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 NOK 1 000 | FIXED RATE (%) | BASIS OF FLOATING RATE | MATURITY | MARKET VALUE NOK 1 000 31.12.2023 | MARKET VALUE NOK 1 000 31.12.2022 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | \u2014 | 2\u00a0670 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 1\u00a0677 | 5\u00a0018 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 5\u00a0391 | 7\u00a0627 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 7\u00a0187 | 9\u00a0963 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 7\u00a0181 | 9\u00a0961 |
Fixed rate paid - floating rate received | NOK 200 million | 3.16 | Nibor 3 months | 30.08.2027 | 1\u00a0875 | \u2014 |
Total | 23\u00a0312 | 35\u00a0238 |
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 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 are 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 2023, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed above, explicitly states the swaps exposed to NIBOR.
(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.
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 fair 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. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment. We target a contract share of 20-50% of our Norwegian volume. In 2023, financial fixed-price contracts accounted for 16% (22%) of the volume harvested in our Norwegian regions. As at 31 December 2023, the Group had financial salmon contracts totaling NOK -1.7 million (2022: NOK -64.9 million), of which all were sales contracts. The estimated contract share for the Norwegian harvest volume is 6% for the full-year 2024.
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 20.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2023 | 2022 |
Trade receivables | 20 | 109\u00a0187 | 64\u00a0283 |
Cash and cash equivalents | 23 | 216\u00a0318 | 642\u00a0719 |
Total | 325\u00a0505 | 707\u00a0002 |
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.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 27), cash and cash equivalents (Note 23), and short-term money market investments (Note 22). Cash flow forecasts for all farming regions, sales and the whole Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out. This is generally carried out at Group level in cooperation with the operating companies.
Management and the Board seek to maintain a high equity ratio (49% at 31 December 2023), to be well positioned to meet financial and operational challenges.
The following table is a specification of the Group\u2019s financial liabilities, classified by maturity structure.
31.12.2023 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0392\u00a0500 |
Green bond loan interest* | 28\u00a0057 | 86\u00a0693 | 57\u00a0375 | \u2014 | \u2014 | \u2014 | \u2014 | 172\u00a0125 |
Term-loan instalment | 66\u00a0377 | 66\u00a0377 | 132\u00a0753 | 132\u00a0753 | 995\u00a0648 | \u2014 | \u2014 | 1\u00a0393\u00a0908 |
Term-loan interest* | 19\u00a0634 | 65\u00a0111 | 67\u00a0318 | 59\u00a0838 | 14\u00a0025 | \u2014 | \u2014 | 225\u00a0926 |
Revolving credit and overdraft installment | 63\u00a0113 | \u2014 | \u2014 | \u2014 | 750\u00a0000 | \u2014 | \u2014 | 813\u00a0113 |
Revolving credit and overdraft interests* | 12\u00a0120 | 37\u00a0306 | 49\u00a0425 | 49\u00a0425 | 12\u00a0120 | \u2014 | \u2014 | 160\u00a0396 |
Other non-current liabilities | 5\u00a0577 | 11\u00a0176 | 13\u00a0490 | 15\u00a0772 | 15\u00a0391 | 15\u00a0262 | 67\u00a0094 | 143\u00a0761 |
Lease liabilities | 89\u00a0784 | 274\u00a0425 | 300\u00a0234 | 274\u00a0530 | 233\u00a0619 | 151\u00a0077 | 312\u00a0041 | 1\u00a0635\u00a0709 |
Trade payables | 760\u00a0753 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 760\u00a0753 |
Derivative financial instruments | 8\u00a0741 | -7\u00a0033 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0709 |
Other current liabilities | 15\u00a0667 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 15\u00a0667 |
Total liabilities | 1\u00a0069\u00a0823 | 534\u00a0055 | 2\u00a0013\u00a0094 | 532\u00a0318 | 2\u00a0020\u00a0803 | 166\u00a0339 | 379\u00a0134 | 6\u00a0715\u00a0567 |
M = Months, Y = Year, YRS = Years, * = floating
31.12.2022 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest* | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current term-loan instalment | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Term-loan interest* | 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 |
Lease liabilities | 71\u00a0460 | 187\u00a0538 | 226\u00a0320 | 139\u00a0445 | 127\u00a0249 | 97\u00a0112 | 136\u00a0986 | 986\u00a0111 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Derivative financial instruments | 28\u00a0526 | 36\u00a0401 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 64\u00a0928 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 996\u00a0935 | 404\u00a0021 | 503\u00a0366 | 1\u00a0785\u00a0955 | 298\u00a0959 | 1\u00a0079\u00a0474 | 198\u00a0271 | 5\u00a0266\u00a0981 |
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 salmon farming industry. 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 liquidity.
The Group\u2019s funding is primarily syndicated debt with banks in addition to a green bond loan.\u00a0The level of liabilities and alternative forms of funding are subject to constant evaluation. As at 31 December 2023, the Group had a good financial foundation, with cash and cash equivalents of NOK 216 million and unutilized facilities of NOK 887 million. See Note 27 for more information.
I) MARKET RISKS
(i) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign exchange risk relating to various currencies, primarily CAD, EUR, USD and GBP. 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 TRADE PAYABLES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Trade receivables | 77\u00a0744 | 79\u00a0815 | 15\u00a0276 | 154\u00a0221 | \u2014 | 104 | 327\u00a0160 |
Trade payables | 544\u00a0185 | 195\u00a0287 | 16\u00a0603 | 3\u00a0390 | 751 | 535 | 760\u00a0753 |
2022 | |||||||
Trade receivables | 214\u00a0681 | 1\u00a0911 | 23\u00a0901 | 17\u00a0207 | 1\u00a0517 | -81 | 259\u00a0137 |
Trade payables | 556\u00a0910 | 143\u00a0587 | 12\u00a0590 | 1\u00a0044 | 174 | 3\u00a0193 | 717\u00a0498 |
NET INTEREST-BEARING LIABILITIES CURRENCY IN NOK 1 000 | NOK | CAD | EUR | USD | GBP | OTHER | TOTAL |
2023 | |||||||
Cash and cash equivalents | 30\u00a0452 | 138\u00a0121 | 144 | 47\u00a0601 | \u2014 | \u2014 | 216\u00a0318 |
Loans to associated companies | 32\u00a0529 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 32\u00a0529 |
Gross interest-bearing liabilities* | 3\u00a0749\u00a0524 | 798\u00a0184 | 650\u00a0265 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 | 5\u00a0127\u00a0730 |
Net interest-bearing liabilities | 3\u00a0686\u00a0542 | 660\u00a0062 | 650\u00a0122 | -100\u00a0077 | -16\u00a0068 | -1\u00a0698 | 4\u00a0878\u00a0884 |
2022 | |||||||
Cash and cash equivalents | 284\u00a0965 | 134\u00a0040 | 87\u00a0485 | 88\u00a0647 | 41\u00a0877 | 5\u00a0705 | 642\u00a0719 |
Money market funds | 1\u00a0012\u00a0848 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0012\u00a0848 |
Loans to associated companies | 8\u00a0300 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8\u00a0300 |
Gross interest-bearing liabilities* | 2\u00a0678\u00a0379 | 452\u00a0331 | 755\u00a0679 | \u2014 | \u2014 | \u2014 | 3\u00a0886\u00a0390 |
Net interest-bearing liabilities | 1\u00a0372\u00a0266 | 318\u00a0292 | 668\u00a0194 | -88\u00a0647 | -41\u00a0877 | -5\u00a0705 | 2\u00a0222\u00a0522 |
*See Note 27 for more information on the Group\u2019s interest-bearing liabilities.
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 is managed primarily through intercompany borrowings denominated in the relevant foreign currencies.
The term-loan facility of the syndicated bank loan is split into NOK and EUR. 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.
Sensitivity analysis
The sensitivity of a depreciation (appreciation) of 5% change in NOK foreign exchange rates versus CAD, EUR, USD and GBP at the balance sheet date (all other factors remaining unchanged) would be expected to have the following effects on the Group's profit after tax, other comprehensive income and total comprehensive income / equity effect. The OCI item reflect agio on intercompany long-term loans and the effect of translating the foreign subsidiary financials to the Group\u2019s presentation currency, while the profit after tax-item include trade receivables and trade payables (incl. intercompany items), term-loan, lease liabilities, cash and cash equivalents and foreign currency derivative contracts.
SENSITIVITY NOK 1 000 | CAD | EUR | USD | GBP | TOTAL | |
31.12.2023 | ||||||
Profit after tax | -/+ | 8\u00a0487 | -32\u00a0533 | -632 | -570 | -25\u00a0249 |
Other comprehensive income | -/+ | 25\u00a0660 | \u2014 | \u2014 | \u2014 | 25\u00a0660 |
Total comprehensive income / effect on equity | -/+ | 34\u00a0147 | -32\u00a0533 | -632 | -570 | 411 |
31.12.2022 | ||||||
Profit after tax | -/+ | 21\u00a0478 | -25\u00a0703 | 1\u00a0270 | \u2014 | -2\u00a0955 |
Other comprehensive income | -/+ | 24\u00a0335 | \u2014 | \u2014 | \u2014 | 24\u00a0335 |
Total comprehensive income / effect on equity | -/+ | 45\u00a0813 | -25\u00a0703 | 1\u00a0270 | \u2014 | 21\u00a0380 |
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
31.12.2023 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
USD | 2\u00a0372 | NOK | 26\u00a0259 | 11.0702 | 10.1724 | 16.01.2024 - 17.06.2024 | 2\u00a0243 |
GBP | 1\u00a0073 | NOK | 14\u00a0680 | 13.6809 | 12.9342 | 23.01.2024 - 06.02.2024 | 843 |
EUR | 8\u00a0528 | NOK | 100\u00a0580 | 11.7940 | 11.2405 | 30.01.2024 - 30.12.2024 | 4\u00a0525 |
USD | 22\u00a0147 | CAD | 29\u00a0852 | 1.3479 | 1.3251 | 04.01.2024 - 08.02.2024 | 4\u00a0241 |
Total | 11\u00a0852 |
*Maturity specified as an interval for multiple contracts
31.12.2022 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5138 | 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
(ii) INTEREST RATE RISK
Since the Group has no significant interest-bearing assets apart from bank deposits, 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 100 basis points lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 30.4 million in 2023 and NOK 28.3 million in 2022 due to the floating rate of interest on loans and deposits. The sensitivity analysis is calculated based on our term loans in NOK and EUR (including revolving credit facility and overdraft) and bond loan, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN BASIS POINTS | 2023 | 2022 |
Effect on profit before income tax | -/+100 | +/- 30 439 | +/- 28 257 |
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. 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 NOK 1 000 | FIXED RATE (%) | BASIS OF FLOATING RATE | MATURITY | MARKET VALUE NOK 1 000 31.12.2023 | MARKET VALUE NOK 1 000 31.12.2022 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | \u2014 | 2\u00a0670 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 1\u00a0677 | 5\u00a0018 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 5\u00a0391 | 7\u00a0627 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 7\u00a0187 | 9\u00a0963 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 7\u00a0181 | 9\u00a0961 |
Fixed rate paid - floating rate received | NOK 200 million | 3.16 | Nibor 3 months | 30.08.2027 | 1\u00a0875 | \u2014 |
Total | 23\u00a0312 | 35\u00a0238 |
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 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 are 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 2023, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed above, explicitly states the swaps exposed to NIBOR.
(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.
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS
31.12.2023 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
USD | 2\u00a0372 | NOK | 26\u00a0259 | 11.0702 | 10.1724 | 16.01.2024 - 17.06.2024 | 2\u00a0243 |
GBP | 1\u00a0073 | NOK | 14\u00a0680 | 13.6809 | 12.9342 | 23.01.2024 - 06.02.2024 | 843 |
EUR | 8\u00a0528 | NOK | 100\u00a0580 | 11.7940 | 11.2405 | 30.01.2024 - 30.12.2024 | 4\u00a0525 |
USD | 22\u00a0147 | CAD | 29\u00a0852 | 1.3479 | 1.3251 | 04.01.2024 - 08.02.2024 | 4\u00a0241 |
Total | 11\u00a0852 |
*Maturity specified as an interval for multiple contracts
31.12.2022 | |||||||
SOLD | AMOUNT CURRENCY IN 1 000 | BOUGHT | AMOUNT CURRENCY IN 1 000 | WEIGHTED HEDGING RATE | MARKET RATE | MATURITY INTERVAL * | MARKET VALUE NOK 1 000 |
EUR | 2\u00a0600 | NOK | 27\u00a0376 | 10.5291 | 10.5138 | 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
(ii) INTEREST RATE RISK
Since the Group has no significant interest-bearing assets apart from bank deposits, 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 100 basis points lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 30.4 million in 2023 and NOK 28.3 million in 2022 due to the floating rate of interest on loans and deposits. The sensitivity analysis is calculated based on our term loans in NOK and EUR (including revolving credit facility and overdraft) and bond loan, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000 | CHANGE IN BASIS POINTS | 2023 | 2022 |
Effect on profit before income tax | -/+100 | +/- 30 439 | +/- 28 257 |
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. 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 NOK 1 000 | FIXED RATE (%) | BASIS OF FLOATING RATE | MATURITY | MARKET VALUE NOK 1 000 31.12.2023 | MARKET VALUE NOK 1 000 31.12.2022 |
Fixed rate paid - floating rate received | NOK 200 million | 1.61 | Nibor 3 months | 28.08.2023 | \u2014 | 2\u00a0670 |
Fixed rate paid - floating rate received | NOK 200 million | 1.35 | Nibor 3 months | 04.03.2024 | 1\u00a0677 | 5\u00a0018 |
Fixed rate paid - floating rate received | NOK 200 million | 1.07 | Nibor 3 months | 05.07.2024 | 5\u00a0391 | 7\u00a0627 |
Fixed rate paid - floating rate received | NOK 200 million | 0.71 | Nibor 3 months | 18.12.2024 | 7\u00a0187 | 9\u00a0963 |
Fixed rate paid - floating rate received | NOK 200 million | 0.72 | Nibor 3 months | 18.12.2024 | 7\u00a0181 | 9\u00a0961 |
Fixed rate paid - floating rate received | NOK 200 million | 3.16 | Nibor 3 months | 30.08.2027 | 1\u00a0875 | \u2014 |
Total | 23\u00a0312 | 35\u00a0238 |
(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.
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 fair 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. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment. We target a contract share of 20-50% of our Norwegian volume. In 2023, financial fixed-price contracts accounted for 16% (22%) of the volume harvested in our Norwegian regions. As at 31 December 2023, the Group had financial salmon contracts totaling NOK -1.7 million (2022: NOK -64.9 million), of which all were sales contracts. The estimated contract share for the Norwegian harvest volume is 6% for the full-year 2024.
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
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 20.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 | NOTE | 2023 | 2022 |
Trade receivables | 20 | 109\u00a0187 | 64\u00a0283 |
Cash and cash equivalents | 23 | 216\u00a0318 | 642\u00a0719 |
Total | 325\u00a0505 | 707\u00a0002 |
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.
Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 27), cash and cash equivalents (Note 23), and short-term money market investments (Note 22). Cash flow forecasts for all farming regions, sales and the whole Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out. This is generally carried out at Group level in cooperation with the operating companies.
Management and the Board seek to maintain a high equity ratio (49% at 31 December 2023), to be well positioned to meet financial and operational challenges.
The following table is a specification of the Group\u2019s financial liabilities, classified by maturity structure.
31.12.2023 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0392\u00a0500 |
Green bond loan interest* | 28\u00a0057 | 86\u00a0693 | 57\u00a0375 | \u2014 | \u2014 | \u2014 | \u2014 | 172\u00a0125 |
Term-loan instalment | 66\u00a0377 | 66\u00a0377 | 132\u00a0753 | 132\u00a0753 | 995\u00a0648 | \u2014 | \u2014 | 1\u00a0393\u00a0908 |
Term-loan interest* | 19\u00a0634 | 65\u00a0111 | 67\u00a0318 | 59\u00a0838 | 14\u00a0025 | \u2014 | \u2014 | 225\u00a0926 |
Revolving credit and overdraft installment | 63\u00a0113 | \u2014 | \u2014 | \u2014 | 750\u00a0000 | \u2014 | \u2014 | 813\u00a0113 |
Revolving credit and overdraft interests* | 12\u00a0120 | 37\u00a0306 | 49\u00a0425 | 49\u00a0425 | 12\u00a0120 | \u2014 | \u2014 | 160\u00a0396 |
Other non-current liabilities | 5\u00a0577 | 11\u00a0176 | 13\u00a0490 | 15\u00a0772 | 15\u00a0391 | 15\u00a0262 | 67\u00a0094 | 143\u00a0761 |
Lease liabilities | 89\u00a0784 | 274\u00a0425 | 300\u00a0234 | 274\u00a0530 | 233\u00a0619 | 151\u00a0077 | 312\u00a0041 | 1\u00a0635\u00a0709 |
Trade payables | 760\u00a0753 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 760\u00a0753 |
Derivative financial instruments | 8\u00a0741 | -7\u00a0033 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0709 |
Other current liabilities | 15\u00a0667 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 15\u00a0667 |
Total liabilities | 1\u00a0069\u00a0823 | 534\u00a0055 | 2\u00a0013\u00a0094 | 532\u00a0318 | 2\u00a0020\u00a0803 | 166\u00a0339 | 379\u00a0134 | 6\u00a0715\u00a0567 |
M = Months, Y = Year, YRS = Years, * = floating
31.12.2022 NOK 1 000 | < 3 M | 3 M - 1 Y | Y 2 | Y 3 | Y4 | Y 5 | > 5 YRS | TOTAL |
Green bond loan instalment | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Green bond loan interest* | 23\u00a0070 | 72\u00a0094 | 95\u00a0951 | 47\u00a0713 | \u2014 | \u2014 | \u2014 | 238\u00a0829 |
Non-current term-loan instalment | 64\u00a0106 | 64\u00a0106 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Term-loan interest* | 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 |
Lease liabilities | 71\u00a0460 | 187\u00a0538 | 226\u00a0320 | 139\u00a0445 | 127\u00a0249 | 97\u00a0112 | 136\u00a0986 | 986\u00a0111 |
Trade payables | 717\u00a0498 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 717\u00a0498 |
Derivative financial instruments | 28\u00a0526 | 36\u00a0401 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 64\u00a0928 |
Other current liabilities | 76\u00a0585 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 76\u00a0585 |
Total liabilities | 996\u00a0935 | 404\u00a0021 | 503\u00a0366 | 1\u00a0785\u00a0955 | 298\u00a0959 | 1\u00a0079\u00a0474 | 198\u00a0271 | 5\u00a0266\u00a0981 |
ACCOUNTING POLICIES |
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. |
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 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. 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. |
RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Sales revenues | 7\u00a0019\u00a0632 | 7\u00a0163\u00a0956 |
Other income | 38\u00a0497 | 31\u00a0490 |
Other gains/losses | -6\u00a0959 | 13\u00a0393 |
Share of profit from associates (operational) | -6\u00a0957 | -1\u00a0463 |
Raw materials and consumables used | -2\u00a0747\u00a0944 | -2\u00a0233\u00a0655 |
Salaries and personnel expenses | -725\u00a0653 | -695\u00a0577 |
Other operating expenses | -2\u00a0236\u00a0165 | -2\u00a0087\u00a0310 |
Operational EBITDA | 1\u00a0334\u00a0451 | 2\u00a0190\u00a0834 |
Depreciation property, plant and equipment | -532\u00a0911 | -434\u00a0641 |
Amortization licenses and other intangible assets | -21\u00a0792 | -16\u00a0706 |
Operational EBIT | 779\u00a0747 | 1\u00a0739\u00a0486 |
Share of profit from associates (non-operational) | \u2014 | 22\u00a0558 |
Write-down of non-current assets (non-operational) | 136 | -140\u00a0074 |
Production fee | -34\u00a0987 | -26\u00a0350 |
Fair value adjustment of biological assets | 217\u00a0922 | 83\u00a0412 |
Litigation and legal claims | 20\u00a0427 | -157\u00a0065 |
Decommissioning costs | -2\u00a0515 | -24\u00a0382 |
EBIT (Earnings before interest and taxes) | 980\u00a0730 | 1\u00a0497\u00a0586 |
2023 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
SEGMENTS NOK 1 000 | ROGALAND | FINNMARK | BRITISH COLUMBIA | NEW-FOUNDLAND | ||
Sales revenues | 2\u00a0305\u00a0214 | 1\u00a0946\u00a0648 | 1\u00a0468\u00a0303 | 235\u00a0715 | 1\u00a0063\u00a0750 | 7\u00a0019\u00a0632 |
Other income | 93\u00a0550 | 28\u00a0335 | 7\u00a0884 | 2\u00a0186 | -93\u00a0458 | 38\u00a0497 |
Other gains/losses | -1\u00a0710 | -3\u00a0678 | -2\u00a0771 | \u2014 | 1\u00a0200 | -6\u00a0959 |
Share of profit from associates | 2\u00a0386 | -9\u00a0343 | \u2014 | \u2014 | \u2014 | -6\u00a0957 |
Operating costs before depreciation and amortization | -1\u00a0560\u00a0157 | -1\u00a0473\u00a0517 | -1\u00a0428\u00a0871 | -241\u00a0463 | -1\u00a0005\u00a0754 | -5\u00a0709\u00a0761 |
Depreciation and amortization | -102\u00a0834 | -161\u00a0828 | -138\u00a0444 | -142\u00a0545 | -9\u00a0051 | -554\u00a0703 |
Operational EBIT | 736\u00a0449 | 326\u00a0617 | -93\u00a0899 | -146\u00a0107 | -43\u00a0312 | 779\u00a0747 |
Harvest volume (tonnes GWT) | 25\u00a0980 | 25\u00a0170 | 17\u00a0682 | 3\u00a0184 | \u2014 | 72\u00a0015 |
Sales revenue/kg (NOK) | 88.7 | 77.3 | 83.0 | 74.0 | n/a | 82.7 |
Farming cost/kg (NOK) | 60.4 | 64.4 | 88.4 | 95.9 | n/a | 70.2 |
Other costs/kg (NOK) * | \u2014 | \u2014 | \u2014 | 24.0 | n/a | 1.7 |
Operational EBIT/kg (NOK) | 28.3 | 13.0 | -5.3 | -45.9 | n/a | 10.8 |
Total assets | 3\u00a0062\u00a0846 | 4\u00a0503\u00a0373 | 2\u00a0541\u00a0031 | 4\u00a0180\u00a0619 | -624\u00a0616 | 13\u00a0663\u00a0252 |
Total liabilities | 931\u00a0648 | 2\u00a0171\u00a0857 | 1\u00a0316\u00a0620 | 4\u00a0151\u00a0619 | -1\u00a0577\u00a0662 | 6\u00a0994\u00a0082 |
*Other costs incl. ownership and headquarters costs/kg (NOK)
2022 | FARMING NORWAY | FARMING CANADA | ELIM/OTHER | GRIEG SEAFOOD GROUP | ||
SEGMENTS NOK 1 000 | 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 |
Depreciation and amortization | -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 | \u2014 | \u2014 | 84\u00a0697 |
Sales revenue/kg (NOK) | 74.8 | 73.0 | 82.1 | n/a | n/a | 75.8 |
Farming cost/kg (NOK) | 48.2 | 47.3 | 68.8 | n/a | n/a | 52.7 |
Other costs/kg (NOK) * | \u2014 | \u2014 | \u2014 | n/a | n/a | 2.5 |
Operational EBIT/kg (NOK) | 26.6 | 25.7 | 13.3 | n/a | n/a | 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 |
*Other costs incl. ownership and headquarters costs/kg (NOK).
Sales revenue on regional level comprises revenue from the sale of Atlantic salmon including gains/loss on contracts. Other income at regional level 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. On regional level, other income also includes rental income and income from overcapacity of operational assets. Gains/losses from the sale of fixed assets and other equipment, are included in the line \u201cother income\u201d in the segment information. Profit and loss from 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 EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group\u2019s segment information. The elim/other items comprise, in addition to intercompany eliminations and the effect of share-based payments, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. Earnings from the sales companies in the Group are reported per producer. The elim/other column thus include the effect the sales organization has on the gross figures related to sales revenue and operating expenses, as well as the impact the other non-farming entities has on the Group\u2019s consolidated figures.
Sales revenue/kg reported in the segment information is equal to the sum of sales revenue of the regions divided by the related harvest volume. Group sales revenue is calculated based on the farming operation of the Group, excluding sales revenue from Group companies not geared for production.
Farming cost/kg reported in the segment information comprise all cost directly related to production and harvest of salmon, divided by the related harvest volume. On regional level, farming costs equal the operational costs. Other income are included in the farming cost metric, considered as cost reduction activities. Group farming cost is calculated based on the farming operation of the Group, excluding ownership costs and costs from Group companies not geared for production.
Other costs incl. ownership and headquarter costs/kg reported in the segment information include all costs and revenue not directly related to production and harvest of salmon, hereof the costs from activities conducted by the parent company and other Group companies not geared for production, divided by the Group's harvest volume. Operational EBIT/kg reported in the segment information is equal to the operational EBIT divided by the related harvest volume.
ACCOUNTING POLICIES |
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. |
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 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. 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. |
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2023 | 2022 |
Salaries | 579\u00a0759 | 533\u00a0629 |
Social security costs | 41\u00a0388 | 38\u00a0635 |
Synthetic stock options granted to directors and key employees, incl. social security costs (Note 8) | 1\u00a0584 | 30\u00a0399 |
Pension costs | 34\u00a0188 | 29\u00a0069 |
Other personnel costs | 68\u00a0733 | 63\u00a0844 |
Total | 725\u00a0653 | 695\u00a0577 |
Average full time equivalents (FTE) | 759 | 718 |
Pension obligations
The Group pays premiums to local, defined-contribution schemes for all employees. The Group'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. Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). AFP is a multi-enterprise defined benefit pension scheme that is booked as an defined contribution scheme as the Group cannot identify the obligation per employee which is part of the scheme. The financial commitments associated with the AFP scheme are therefore included in the Group\u2019s pension expenses. The AFP early retirement scheme follows the rules for private 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 savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2023. 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 participating employees buy shares on a discount. The discount is recognized as a cost in the income statement and included as an other personnel cost as presented in the table above. The total costs related to the discount was NOK 2.1 million, in line with NOK 2.1 million in costs for 2022. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2023, loan to employees related to the share savings program\u00a0equals NOK 5.0 million (2022: NOK 4.9 million). The total shares sold to employees was 107 473 in 2023 (2022: 96 150). See also Note 24.
Management remuneration
The guidelines for management remuneration are available on Grieg Seafood ASA\u2019s website.
The remuneration to the Group Management Team is disclosed below.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2023 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (Chief Executive Officer) | 4\u00a0003 | \u2014 | \u2014 | \u2014 | 454 | 4\u00a0457 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0885 | \u2014 | \u2014 | \u2014 | 136 | 3\u00a0020 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0270 | \u2014 | \u2014 | \u2014 | 331 | 2\u00a0601 |
Grant Cumming (Chief Operating Officer Farming Canada) | 2\u00a0347 | \u2014 | \u2014 | \u2014 | 252 | 2\u00a0600 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0435 | \u2014 | \u2014 | \u2014 | 139 | 2\u00a0573 |
Knut Utheim (Chief Technology Officer) | 2\u00a0259 | \u2014 | \u2014 | \u2014 | 147 | 2\u00a0406 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0833 | \u2014 | \u2014 | \u2014 | 152 | 1\u00a0985 |
Nina Stangeland (Chief Strategy Officer) | 524 | \u2014 | \u2014 | \u2014 | 44 | 568 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0348 | \u2014 | \u2014 | \u2014 | 116 | 1\u00a0463 |
Total remuneration | 19\u00a0903 | \u2014 | \u2014 | \u2014 | 1\u00a0770 | 21\u00a0673 |
Grant Cumming was appointed as Chief Operating Officer Farming Canada in Q1 2023, and Nina Stangeland appointed as Chief Strategy Officer in Q3 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2023 NOK 1 000 | TOTAL |
Per Grieg1 | 542 |
Tore Holand2 | 422 |
Marianne Ribe1 | 342 |
Katrine Trovik2 | 394 |
Nicolai Hafeld Grieg | 314 |
Ragnhild Fresvik (from 9 of June 2022) | 314 |
Total remuneration including social security costs | 2\u00a0328 |
1 Payment for work performed on the Remuneration Committee of NOK 25 525 is included in the remuneration paid to Per Grieg 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 79 870.
The amounts include social security costs.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION* | TOTAL |
Andreas Kvame (Chief Executive Officer) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada until 10 of 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 |
Knut Utheim (Chief Technology Officer) | 2\u00a0098 | 426 | \u2014 | 2\u00a0883 | 131 | 5\u00a0538 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0631 | 323 | \u2014 | 2\u00a0209 | 133 | 4\u00a0296 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0229 | 172 | \u2014 | 1\u00a0773 | 108 | 3\u00a0282 |
Total remuneration | 17\u00a0067 | 3\u00a0318 | \u2014 | 23\u00a0509 | 3\u00a0948 | 47\u00a0842 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2022\u00a0 NOK 1 000 | TOTAL |
Per Grieg1 | 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 |
SALARIES AND PERSONNEL EXPENSES NOK 1 000 | 2023 | 2022 |
Salaries | 579\u00a0759 | 533\u00a0629 |
Social security costs | 41\u00a0388 | 38\u00a0635 |
Synthetic stock options granted to directors and key employees, incl. social security costs (Note 8) | 1\u00a0584 | 30\u00a0399 |
Pension costs | 34\u00a0188 | 29\u00a0069 |
Other personnel costs | 68\u00a0733 | 63\u00a0844 |
Total | 725\u00a0653 | 695\u00a0577 |
Average full time equivalents (FTE) | 759 | 718 |
ACCOUNTING POLICIES |
SALE OF ATLANTIC SALMON 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 customers. 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, with a price per kilogram). The price varies according to the quality and weight of the salmon. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. |
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 The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt, roe and and third-party harvesting if the Group has overcapacity at its facilities. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood. |
SALES REVENUE IN TOTAL
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 2023, the sale of fresh whole Atlantic salmon totaled 93% (2022: 97%) of the Group's sales revenues (excluding other products), while fresh processed fish accounted for 4% (2022: 2%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2023% | 2022 | 2022% | |
Continental Europe | 3\u00a0690\u00a0607 | 4\u00a0152\u00a0843 | \u2014 | \u2014 | 3\u00a0690\u00a0607 | 53% | 4\u00a0152\u00a0843 | 58% |
UK | 384\u00a0716 | 247\u00a0295 | \u2014 | \u2014 | 384\u00a0716 | 5% | 247\u00a0295 | 3% |
USA | 316\u00a0139 | 181\u00a0659 | 1\u00a0228\u00a0930 | 1\u00a0323\u00a0551 | 1\u00a0545\u00a0069 | 22% | 1\u00a0505\u00a0210 | 21% |
Canada | 49\u00a0944 | 87\u00a0722 | 586\u00a0334 | 466\u00a0935 | 636\u00a0279 | 9% | 554\u00a0657 | 8% |
Asia | 702\u00a0646 | 584\u00a0914 | 36\u00a0694 | 67\u00a0028 | 739\u00a0340 | 11% | 651\u00a0943 | 9% |
Other markets | 23\u00a0621 | 52\u00a0008 | \u2014 | \u2014 | 23\u00a0621 | 0% | 52\u00a0008 | 1% |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 100% | 7\u00a0163\u00a0956 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations. See Note 5.
Grieg Seafood did not have any sales to Russia in 2023 or in 2022.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Fresh whole fish | 4\u00a0864\u00a0040 | 5\u00a0149\u00a0017 | 1\u00a0686\u00a0482 | 1\u00a0805\u00a0633 | 6\u00a0550\u00a0522 | 6\u00a0954\u00a0650 |
Fresh processed fish | 136\u00a0072 | 57\u00a0142 | 164\u00a0134 | 51\u00a0588 | 300\u00a0206 | 108\u00a0729 |
Frozen processed fish | 95\u00a0227 | 53\u00a0373 | 32 | 10 | 95\u00a0259 | 53\u00a0383 |
Other products and services | 72\u00a0335 | 46\u00a0909 | 1\u00a0310 | 284 | 73\u00a0645 | 47\u00a0193 |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 7\u00a0163\u00a0956 |
ACCOUNTING POLICIES |
SALE OF ATLANTIC SALMON 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 customers. 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, with a price per kilogram). The price varies according to the quality and weight of the salmon. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. |
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 The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt, roe and and third-party harvesting if the Group has overcapacity at its facilities. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood. |
SALES REVENUE IN TOTAL
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 2023, the sale of fresh whole Atlantic salmon totaled 93% (2022: 97%) of the Group's sales revenues (excluding other products), while fresh processed fish accounted for 4% (2022: 2%).
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2023% | 2022 | 2022% | |
Continental Europe | 3\u00a0690\u00a0607 | 4\u00a0152\u00a0843 | \u2014 | \u2014 | 3\u00a0690\u00a0607 | 53% | 4\u00a0152\u00a0843 | 58% |
UK | 384\u00a0716 | 247\u00a0295 | \u2014 | \u2014 | 384\u00a0716 | 5% | 247\u00a0295 | 3% |
USA | 316\u00a0139 | 181\u00a0659 | 1\u00a0228\u00a0930 | 1\u00a0323\u00a0551 | 1\u00a0545\u00a0069 | 22% | 1\u00a0505\u00a0210 | 21% |
Canada | 49\u00a0944 | 87\u00a0722 | 586\u00a0334 | 466\u00a0935 | 636\u00a0279 | 9% | 554\u00a0657 | 8% |
Asia | 702\u00a0646 | 584\u00a0914 | 36\u00a0694 | 67\u00a0028 | 739\u00a0340 | 11% | 651\u00a0943 | 9% |
Other markets | 23\u00a0621 | 52\u00a0008 | \u2014 | \u2014 | 23\u00a0621 | 0% | 52\u00a0008 | 1% |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 100% | 7\u00a0163\u00a0956 | 100% |
*Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations. See Note 5.
Grieg Seafood did not have any sales to Russia in 2023 or in 2022.
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS NOK 1 000 | NORWAY* | CANADA* | TOTAL | |||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Fresh whole fish | 4\u00a0864\u00a0040 | 5\u00a0149\u00a0017 | 1\u00a0686\u00a0482 | 1\u00a0805\u00a0633 | 6\u00a0550\u00a0522 | 6\u00a0954\u00a0650 |
Fresh processed fish | 136\u00a0072 | 57\u00a0142 | 164\u00a0134 | 51\u00a0588 | 300\u00a0206 | 108\u00a0729 |
Frozen processed fish | 95\u00a0227 | 53\u00a0373 | 32 | 10 | 95\u00a0259 | 53\u00a0383 |
Other products and services | 72\u00a0335 | 46\u00a0909 | 1\u00a0310 | 284 | 73\u00a0645 | 47\u00a0193 |
Total | 5\u00a0167\u00a0674 | 5\u00a0306\u00a0441 | 1\u00a0851\u00a0957 | 1\u00a0857\u00a0515 | 7\u00a0019\u00a0632 | 7\u00a0163\u00a0956 |
ACCOUNTING POLICIES |
SALE OF ATLANTIC SALMON 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 customers. 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, with a price per kilogram). The price varies according to the quality and weight of the salmon. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. |
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 The Group\u2019s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt, roe and and third-party harvesting if the Group has overcapacity at its facilities. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood. |
Share savings program
Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2023. 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 participating employees buy shares on a discount. The discount is recognized as a cost in the income statement and included as an other personnel cost as presented in the table above. The total costs related to the discount was NOK 2.1 million, in line with NOK 2.1 million in costs for 2022. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations.
At 31 December 2023, loan to employees related to the share savings program\u00a0equals NOK 5.0 million (2022: NOK 4.9 million). The total shares sold to employees was 107 473 in 2023 (2022: 96 150). See also Note 24.
ACCOUNTING POLICIES |
The Group operates a share-based remuneration scheme with settlement in cash for the management team of the Group. 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. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. 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 value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 7) and as a liability in the statement of financial position (see Note 31) as well as the table in this note that specify the amounts in the balance sheet. The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax on options is recorded as a liability and is recognized over the estimated vesting period. |
The Black and Scholes option pricing model is used for valuation. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy. The table below shows the movement in outstanding options in 2023 and 2022.
OVERVIEW 2023\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2022 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2023 |
Andreas Kvame (Chief Executive Officer) | 229\u00a0764 | 380\u00a0000 | \u2014 | 59\u00a0764 | 550\u00a0000 |
Atle Harald Sandtorv (Chief Financial Officer) | 80\u00a0799 | 250\u00a0000 | \u2014 | \u2014 | 330\u00a0799 |
Knut Utheim (Chief Technology Officer) | 88\u00a0302 | 100\u00a0000 | \u2014 | 3\u00a0302 | 185\u00a0000 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 49\u00a0011 | 100\u00a0000 | \u2014 | \u2014 | 149\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 39\u00a0262 | 100\u00a0000 | \u2014 | \u2014 | 139\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 86\u00a0832 | 170\u00a0000 | \u2014 | 1\u00a0832 | 255\u00a0000 |
Grant Cumming (Chief Operating Officer Farming Canada) | \u2014 | 170\u00a0000 | \u2014 | \u2014 | 170\u00a0000 |
Erik Holvik (Chief Commercial Officer) | 65\u00a0788 | 170\u00a0000 | \u2014 | \u2014 | 235\u00a0788 |
Nina Stangeland (Chief Strategy Officer) | \u2014 | 100\u00a0000 | \u2014 | \u2014 | 100\u00a0000 |
Others | 135\u00a0260 | 1\u00a0140\u00a0000 | \u2014 | \u2014 | 1\u00a0275\u00a0257 |
Total | 775\u00a0016 | 2\u00a0680\u00a0000 | \u2014 | 64\u00a0898 | 3\u00a0390\u00a0118 |
OVERVIEW 2022 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2022 |
Andreas Kvame (Chief Executive Officer) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (Chief Financial Officer) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (Chief Technology Officer) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 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 |
OUTSTANDING OPTIONS TOTAL | OUTSTANDING OPTIONS VESTED | ||||||
ALLOCATION: YEAR - MONTH | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2023 | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | 2023 | 2022 | 2023 | 2022 |
2020 - 12 | 2023 - 05 | \u2014 | 83.82 | \u2014 | 64\u00a0898 | \u2014 | 64\u00a0898 |
2020 - 12 | 2024 - 05 | 94.03 | 94.03 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 |
2023 - 12 | 2026 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
2023 - 12 | 2027 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
Total | 3\u00a0390\u00a0118 | 775\u00a0016 | 710\u00a0118 | 775\u00a0016 |
2023 | 2022 | |
Cash-based options available for settlement | 3\u00a0390\u00a0118 | 775\u00a0016 |
Weighted average exercise price on outstanding options (NOK per option) | 76.56 | 78.96 |
AMOUNTS IN NOK 1 000 | ||||||||
2023 | LISTED PRICE ON ALLOCATION | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2023 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0652 | -1\u00a0488 | \u2014 | \u2014 | 163 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 669 | -589 | \u2014 | \u2014 | 81 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 663 | -579 | \u2014 | \u2014 | 84 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 442 | -392 | \u2014 | \u2014 | 50 |
Kristina Furnes (Chief Communication Officer) | 78.96 | 6.04 | 604 | 354 | -316 | \u2014 | \u2014 | 39 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 78.96 | 5.87 | 999 | 654 | -570 | \u2014 | \u2014 | 84 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 606 | -542 | \u2014 | \u2014 | 65 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 1\u00a0469 | -1\u00a0334 | \u2014 | \u2014 | 135 |
Andreas Kvame (Chief Executive Officer) | 75.93 | 4.29 | 1\u00a0632 | \u2014 | 803 | \u2014 | \u2014 | 803 |
Atle Harald Sandtorv (Chief Financial Officer) | 75.93 | 4.22 | 1\u00a0055 | \u2014 | 519 | \u2014 | \u2014 | 519 |
Knut Utheim (Chief Technology Officer) | 75.93 | 7.97 | 797 | \u2014 | 390 | \u2014 | \u2014 | 390 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 75.93 | 6.53 | 653 | \u2014 | 320 | \u2014 | \u2014 | 320 |
Kristina Furnes (Chief Communication Officer) | 75.93 | 5.26 | 526 | \u2014 | 258 | \u2014 | \u2014 | 258 |
Alexander Knudsen (COO Farming Norway) | 75.93 | 5.43 | 923 | \u2014 | 453 | \u2014 | \u2014 | 453 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 75.93 | 5.95 | 1\u00a0011 | \u2014 | 497 | \u2014 | \u2014 | 497 |
Erik Holvik (Chief Commercial Officer) | 75.93 | 5.30 | 901 | \u2014 | 443 | \u2014 | \u2014 | 443 |
Nina Stangeland (Chief Strategy Officer) | 75.93 | 6.24 | 624 | \u2014 | 306 | \u2014 | \u2014 | 306 |
Other options allocated in 2023 | 75.93 | 5.28 | 5\u00a0227 | \u2014 | 2\u00a0877 | \u2014 | \u2014 | 2\u00a0877 |
Total | 23\u00a0777 | 6\u00a0510 | 1\u00a0056 | \u2014 | 6\u00a0887 | 7\u00a0566 |
* 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 | ||||||||
2022 | LISTED PRICE ON ALLOCATION | 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 (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Chief Communication Officer) | 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) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Andreas Kvame (Chief Executive Officer) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (Chief Financial Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (Chief Technology Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0283 | 34\u00a0135 | 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.
RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS
As at 31\u00a0December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date.
FAIR VALUE OF SYNTHETIC OPTIONS | SOCIAL SECURITY COSTS | TOTAL RECOGNIZED LIABILITY | ||||
RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Non-current liabilities | 6\u00a0867 | 5\u00a0921 | 1\u00a0312 | 835 | 8\u00a0178 | 6\u00a0756 |
Current liabilities | 700 | 589 | 134 | 83 | 833 | 672 |
Total | 7\u00a0566 | 6\u00a0510 | 1\u00a0445 | 918 | 9\u00a0012 | 7\u00a0428 |
COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2023 | 2022 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | 1\u00a0056 | -3\u00a0282 | Other provisions for liabilities | |
Exercised options during the year | \u2014 | 34\u00a0137 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 1\u00a0056 | 30\u00a0855 | ||
Social security costs | 527 | -456 | Public taxes payable | |
Total costs incl. social security costs | 1\u00a0584 | 30\u00a0399 | Salaries and personnel expense |
The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2023 | 2022 |
Anticipated volatility (%) | 45.63% | 58.29% |
Risk-free rate of interest (%) | 4.00% | 3.12% |
Estimated qualification period (years) | 2.33 | 1.11 |
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 Management Team is disclosed below.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2023 NOK 1 000 | SALARY | BONUS | RETAINED BONUS , NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION | TOTAL |
Andreas Kvame (Chief Executive Officer) | 4\u00a0003 | \u2014 | \u2014 | \u2014 | 454 | 4\u00a0457 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0885 | \u2014 | \u2014 | \u2014 | 136 | 3\u00a0020 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0270 | \u2014 | \u2014 | \u2014 | 331 | 2\u00a0601 |
Grant Cumming (Chief Operating Officer Farming Canada) | 2\u00a0347 | \u2014 | \u2014 | \u2014 | 252 | 2\u00a0600 |
Erik Holvik (Chief Commercial Officer) | 2\u00a0435 | \u2014 | \u2014 | \u2014 | 139 | 2\u00a0573 |
Knut Utheim (Chief Technology Officer) | 2\u00a0259 | \u2014 | \u2014 | \u2014 | 147 | 2\u00a0406 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0833 | \u2014 | \u2014 | \u2014 | 152 | 1\u00a0985 |
Nina Stangeland (Chief Strategy Officer) | 524 | \u2014 | \u2014 | \u2014 | 44 | 568 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0348 | \u2014 | \u2014 | \u2014 | 116 | 1\u00a0463 |
Total remuneration | 19\u00a0903 | \u2014 | \u2014 | \u2014 | 1\u00a0770 | 21\u00a0673 |
Grant Cumming was appointed as Chief Operating Officer Farming Canada in Q1 2023, and Nina Stangeland appointed as Chief Strategy Officer in Q3 2023.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2023 NOK 1 000 | TOTAL |
Per Grieg1 | 542 |
Tore Holand2 | 422 |
Marianne Ribe1 | 342 |
Katrine Trovik2 | 394 |
Nicolai Hafeld Grieg | 314 |
Ragnhild Fresvik (from 9 of June 2022) | 314 |
Total remuneration including social security costs | 2\u00a0328 |
1 Payment for work performed on the Remuneration Committee of NOK 25 525 is included in the remuneration paid to Per Grieg 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 79 870.
The amounts include social security costs.
REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2022 NOK 1 000 | SALARY | BONUS | RETAINED BONUS, NOT YET PAID | OPTIONS EXERCISED DURING THE YEAR | OTHER REMUNERATION* | TOTAL |
Andreas Kvame (Chief Executive Officer) | 3\u00a0644 | 1\u00a0007 | \u2014 | 4\u00a0540 | 2\u00a0954 | 12\u00a0144 |
Atle Harald Sandtorv (Chief Financial Officer) | 2\u00a0349 | 612 | \u2014 | 3\u00a0202 | 120 | 6\u00a0282 |
Alexander Knudsen (Chief Operating Officer Farming Europe) | 2\u00a0066 | 321 | \u2014 | 2\u00a0917 | 332 | 5\u00a0637 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada until 10 of 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 |
Knut Utheim (Chief Technology Officer) | 2\u00a0098 | 426 | \u2014 | 2\u00a0883 | 131 | 5\u00a0538 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 1\u00a0631 | 323 | \u2014 | 2\u00a0209 | 133 | 4\u00a0296 |
Kristina Furnes (Chief Communication Officer) | 1\u00a0229 | 172 | \u2014 | 1\u00a0773 | 108 | 3\u00a0282 |
Total remuneration | 17\u00a0067 | 3\u00a0318 | \u2014 | 23\u00a0509 | 3\u00a0948 | 47\u00a0842 |
*The CEO has in 2022 received a one-time payment in arrears for pension benefits.
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8.
REMUNERATION PAID TO BOARD MEMBERS IN 2022\u00a0 NOK 1 000 | TOTAL |
Per Grieg1 | 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 |
ACCOUNTING POLICIES |
The Group operates a share-based remuneration scheme with settlement in cash for the management team of the Group. 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. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. 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 value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 7) and as a liability in the statement of financial position (see Note 31) as well as the table in this note that specify the amounts in the balance sheet. The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax on options is recorded as a liability and is recognized over the estimated vesting period. |
The Black and Scholes option pricing model is used for valuation. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy. The table below shows the movement in outstanding options in 2023 and 2022.
OVERVIEW 2023\u00a0 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2022 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2023 |
Andreas Kvame (Chief Executive Officer) | 229\u00a0764 | 380\u00a0000 | \u2014 | 59\u00a0764 | 550\u00a0000 |
Atle Harald Sandtorv (Chief Financial Officer) | 80\u00a0799 | 250\u00a0000 | \u2014 | \u2014 | 330\u00a0799 |
Knut Utheim (Chief Technology Officer) | 88\u00a0302 | 100\u00a0000 | \u2014 | 3\u00a0302 | 185\u00a0000 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 49\u00a0011 | 100\u00a0000 | \u2014 | \u2014 | 149\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 39\u00a0262 | 100\u00a0000 | \u2014 | \u2014 | 139\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 86\u00a0832 | 170\u00a0000 | \u2014 | 1\u00a0832 | 255\u00a0000 |
Grant Cumming (Chief Operating Officer Farming Canada) | \u2014 | 170\u00a0000 | \u2014 | \u2014 | 170\u00a0000 |
Erik Holvik (Chief Commercial Officer) | 65\u00a0788 | 170\u00a0000 | \u2014 | \u2014 | 235\u00a0788 |
Nina Stangeland (Chief Strategy Officer) | \u2014 | 100\u00a0000 | \u2014 | \u2014 | 100\u00a0000 |
Others | 135\u00a0260 | 1\u00a0140\u00a0000 | \u2014 | \u2014 | 1\u00a0275\u00a0257 |
Total | 775\u00a0016 | 2\u00a0680\u00a0000 | \u2014 | 64\u00a0898 | 3\u00a0390\u00a0118 |
OVERVIEW 2022 (TOTAL CASH-SETTLED OPTIONS) | OUTSTANDING OPTIONS AT 31.12.2021 | GRANTED OPTIONS | EXERCISED OPTIONS | EXPIRED/CANCELLED OPTIONS | OUTSTANDING CASH-SETTLED OPTIONS\u00a0 AT 31.12.2022 |
Andreas Kvame (Chief Executive Officer) | 540\u00a0000 | \u2014 | 310\u00a0236 | \u2014 | 229\u00a0764 |
Atle Harald Sandtorv (Chief Financial Officer) | 270\u00a0000 | \u2014 | 189\u00a0201 | \u2014 | 80\u00a0799 |
Knut Utheim (Chief Technology Officer) | 270\u00a0000 | \u2014 | 181\u00a0698 | \u2014 | 88\u00a0302 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 200\u00a0000 | \u2014 | 150\u00a0989 | \u2014 | 49\u00a0011 |
Kristina Furnes (Chief Communication Officer) | 100\u00a0000 | \u2014 | 60\u00a0738 | \u2014 | 39\u00a0262 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 270\u00a0000 | \u2014 | 183\u00a0168 | \u2014 | 86\u00a0832 |
Roy Tore Rikardsen (Chief Operating Officer Farming Canada) | 270\u00a0000 | \u2014 | 183\u00a0168 | 86\u00a0832 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 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 |
OUTSTANDING OPTIONS TOTAL | OUTSTANDING OPTIONS VESTED | ||||||
ALLOCATION: YEAR - MONTH | EXPIRY DATE: YEAR - MONTH | STRIKE PRICE NOK PER SHARE AT 31.12.2023 | STRIKE PRICE NOK PER SHARE AT 31.12.2022 | 2023 | 2022 | 2023 | 2022 |
2020 - 12 | 2023 - 05 | \u2014 | 83.82 | \u2014 | 64\u00a0898 | \u2014 | 64\u00a0898 |
2020 - 12 | 2024 - 05 | 94.03 | 94.03 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 | 710\u00a0118 |
2023 - 12 | 2026 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
2023 - 12 | 2027 - 05 | 79.20 | na | 1\u00a0340\u00a0000 | \u2014 | \u2014 | \u2014 |
Total | 3\u00a0390\u00a0118 | 775\u00a0016 | 710\u00a0118 | 775\u00a0016 |
2023 | 2022 | |
Cash-based options available for settlement | 3\u00a0390\u00a0118 | 775\u00a0016 |
Weighted average exercise price on outstanding options (NOK per option) | 76.56 | 78.96 |
AMOUNTS IN NOK 1 000 | ||||||||
2023 | LISTED PRICE ON ALLOCATION | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2023 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0652 | -1\u00a0488 | \u2014 | \u2014 | 163 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 669 | -589 | \u2014 | \u2014 | 81 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 663 | -579 | \u2014 | \u2014 | 84 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 442 | -392 | \u2014 | \u2014 | 50 |
Kristina Furnes (Chief Communication Officer) | 78.96 | 6.04 | 604 | 354 | -316 | \u2014 | \u2014 | 39 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 78.96 | 5.87 | 999 | 654 | -570 | \u2014 | \u2014 | 84 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 606 | -542 | \u2014 | \u2014 | 65 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 1\u00a0469 | -1\u00a0334 | \u2014 | \u2014 | 135 |
Andreas Kvame (Chief Executive Officer) | 75.93 | 4.29 | 1\u00a0632 | \u2014 | 803 | \u2014 | \u2014 | 803 |
Atle Harald Sandtorv (Chief Financial Officer) | 75.93 | 4.22 | 1\u00a0055 | \u2014 | 519 | \u2014 | \u2014 | 519 |
Knut Utheim (Chief Technology Officer) | 75.93 | 7.97 | 797 | \u2014 | 390 | \u2014 | \u2014 | 390 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 75.93 | 6.53 | 653 | \u2014 | 320 | \u2014 | \u2014 | 320 |
Kristina Furnes (Chief Communication Officer) | 75.93 | 5.26 | 526 | \u2014 | 258 | \u2014 | \u2014 | 258 |
Alexander Knudsen (COO Farming Norway) | 75.93 | 5.43 | 923 | \u2014 | 453 | \u2014 | \u2014 | 453 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 75.93 | 5.95 | 1\u00a0011 | \u2014 | 497 | \u2014 | \u2014 | 497 |
Erik Holvik (Chief Commercial Officer) | 75.93 | 5.30 | 901 | \u2014 | 443 | \u2014 | \u2014 | 443 |
Nina Stangeland (Chief Strategy Officer) | 75.93 | 6.24 | 624 | \u2014 | 306 | \u2014 | \u2014 | 306 |
Other options allocated in 2023 | 75.93 | 5.28 | 5\u00a0227 | \u2014 | 2\u00a0877 | \u2014 | \u2014 | 2\u00a0877 |
Total | 23\u00a0777 | 6\u00a0510 | 1\u00a0056 | \u2014 | 6\u00a0887 | 7\u00a0566 |
* 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 | ||||||||
2022 | LISTED PRICE ON ALLOCATION | 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 (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Chief Communication Officer) | 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) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Andreas Kvame (Chief Executive Officer) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (Chief Financial Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (Chief Technology Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0283 | 34\u00a0135 | 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.
RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS
As at 31\u00a0December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date.
FAIR VALUE OF SYNTHETIC OPTIONS | SOCIAL SECURITY COSTS | TOTAL RECOGNIZED LIABILITY | ||||
RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Non-current liabilities | 6\u00a0867 | 5\u00a0921 | 1\u00a0312 | 835 | 8\u00a0178 | 6\u00a0756 |
Current liabilities | 700 | 589 | 134 | 83 | 833 | 672 |
Total | 7\u00a0566 | 6\u00a0510 | 1\u00a0445 | 918 | 9\u00a0012 | 7\u00a0428 |
COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2023 | 2022 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | 1\u00a0056 | -3\u00a0282 | Other provisions for liabilities | |
Exercised options during the year | \u2014 | 34\u00a0137 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 1\u00a0056 | 30\u00a0855 | ||
Social security costs | 527 | -456 | Public taxes payable | |
Total costs incl. social security costs | 1\u00a0584 | 30\u00a0399 | Salaries and personnel expense |
The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2023 | 2022 |
Anticipated volatility (%) | 45.63% | 58.29% |
Risk-free rate of interest (%) | 4.00% | 3.12% |
Estimated qualification period (years) | 2.33 | 1.11 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
ACCOUNTING POLICIES |
The Group operates a share-based remuneration scheme with settlement in cash for the management team of the Group. 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. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. 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 value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 7) and as a liability in the statement of financial position (see Note 31) as well as the table in this note that specify the amounts in the balance sheet. The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax on options is recorded as a liability and is recognized over the estimated vesting period. |
AMOUNTS IN NOK 1 000 | ||||||||
2023 | LISTED PRICE ON ALLOCATION | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2023 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0652 | -1\u00a0488 | \u2014 | \u2014 | 163 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 669 | -589 | \u2014 | \u2014 | 81 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 663 | -579 | \u2014 | \u2014 | 84 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 442 | -392 | \u2014 | \u2014 | 50 |
Kristina Furnes (Chief Communication Officer) | 78.96 | 6.04 | 604 | 354 | -316 | \u2014 | \u2014 | 39 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 78.96 | 5.87 | 999 | 654 | -570 | \u2014 | \u2014 | 84 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 606 | -542 | \u2014 | \u2014 | 65 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 1\u00a0469 | -1\u00a0334 | \u2014 | \u2014 | 135 |
Andreas Kvame (Chief Executive Officer) | 75.93 | 4.29 | 1\u00a0632 | \u2014 | 803 | \u2014 | \u2014 | 803 |
Atle Harald Sandtorv (Chief Financial Officer) | 75.93 | 4.22 | 1\u00a0055 | \u2014 | 519 | \u2014 | \u2014 | 519 |
Knut Utheim (Chief Technology Officer) | 75.93 | 7.97 | 797 | \u2014 | 390 | \u2014 | \u2014 | 390 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 75.93 | 6.53 | 653 | \u2014 | 320 | \u2014 | \u2014 | 320 |
Kristina Furnes (Chief Communication Officer) | 75.93 | 5.26 | 526 | \u2014 | 258 | \u2014 | \u2014 | 258 |
Alexander Knudsen (COO Farming Norway) | 75.93 | 5.43 | 923 | \u2014 | 453 | \u2014 | \u2014 | 453 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 75.93 | 5.95 | 1\u00a0011 | \u2014 | 497 | \u2014 | \u2014 | 497 |
Erik Holvik (Chief Commercial Officer) | 75.93 | 5.30 | 901 | \u2014 | 443 | \u2014 | \u2014 | 443 |
Nina Stangeland (Chief Strategy Officer) | 75.93 | 6.24 | 624 | \u2014 | 306 | \u2014 | \u2014 | 306 |
Other options allocated in 2023 | 75.93 | 5.28 | 5\u00a0227 | \u2014 | 2\u00a0877 | \u2014 | \u2014 | 2\u00a0877 |
Total | 23\u00a0777 | 6\u00a0510 | 1\u00a0056 | \u2014 | 6\u00a0887 | 7\u00a0566 |
* 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 | ||||||||
2022 | LISTED PRICE ON ALLOCATION | 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 (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Chief Communication Officer) | 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) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Andreas Kvame (Chief Executive Officer) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (Chief Financial Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (Chief Technology Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0283 | 34\u00a0135 | 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.
RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS
As at 31\u00a0December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date.
FAIR VALUE OF SYNTHETIC OPTIONS | SOCIAL SECURITY COSTS | TOTAL RECOGNIZED LIABILITY | ||||
RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Non-current liabilities | 6\u00a0867 | 5\u00a0921 | 1\u00a0312 | 835 | 8\u00a0178 | 6\u00a0756 |
Current liabilities | 700 | 589 | 134 | 83 | 833 | 672 |
Total | 7\u00a0566 | 6\u00a0510 | 1\u00a0445 | 918 | 9\u00a0012 | 7\u00a0428 |
COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2023 | 2022 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | 1\u00a0056 | -3\u00a0282 | Other provisions for liabilities | |
Exercised options during the year | \u2014 | 34\u00a0137 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 1\u00a0056 | 30\u00a0855 | ||
Social security costs | 527 | -456 | Public taxes payable | |
Total costs incl. social security costs | 1\u00a0584 | 30\u00a0399 | Salaries and personnel expense |
The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2023 | 2022 |
Anticipated volatility (%) | 45.63% | 58.29% |
Risk-free rate of interest (%) | 4.00% | 3.12% |
Estimated qualification period (years) | 2.33 | 1.11 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
AMOUNTS IN NOK 1 000 | ||||||||
2023 | LISTED PRICE ON ALLOCATION | CALCULATED VALUE PER OPTION ON ALLOCATION | CALCULATED TOTAL VALUE ON ALLOCATION * | TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 | CHANGE IN PROVISION CB-OB* | EXERCISED OPTION 2023 | ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 | RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 |
Former employees with expired options** | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 6\u00a0887 | \u2014 |
Andreas Kvame (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0652 | -1\u00a0488 | \u2014 | \u2014 | 163 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 669 | -589 | \u2014 | \u2014 | 81 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 663 | -579 | \u2014 | \u2014 | 84 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 442 | -392 | \u2014 | \u2014 | 50 |
Kristina Furnes (Chief Communication Officer) | 78.96 | 6.04 | 604 | 354 | -316 | \u2014 | \u2014 | 39 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 78.96 | 5.87 | 999 | 654 | -570 | \u2014 | \u2014 | 84 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 606 | -542 | \u2014 | \u2014 | 65 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 1\u00a0469 | -1\u00a0334 | \u2014 | \u2014 | 135 |
Andreas Kvame (Chief Executive Officer) | 75.93 | 4.29 | 1\u00a0632 | \u2014 | 803 | \u2014 | \u2014 | 803 |
Atle Harald Sandtorv (Chief Financial Officer) | 75.93 | 4.22 | 1\u00a0055 | \u2014 | 519 | \u2014 | \u2014 | 519 |
Knut Utheim (Chief Technology Officer) | 75.93 | 7.97 | 797 | \u2014 | 390 | \u2014 | \u2014 | 390 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 75.93 | 6.53 | 653 | \u2014 | 320 | \u2014 | \u2014 | 320 |
Kristina Furnes (Chief Communication Officer) | 75.93 | 5.26 | 526 | \u2014 | 258 | \u2014 | \u2014 | 258 |
Alexander Knudsen (COO Farming Norway) | 75.93 | 5.43 | 923 | \u2014 | 453 | \u2014 | \u2014 | 453 |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 75.93 | 5.95 | 1\u00a0011 | \u2014 | 497 | \u2014 | \u2014 | 497 |
Erik Holvik (Chief Commercial Officer) | 75.93 | 5.30 | 901 | \u2014 | 443 | \u2014 | \u2014 | 443 |
Nina Stangeland (Chief Strategy Officer) | 75.93 | 6.24 | 624 | \u2014 | 306 | \u2014 | \u2014 | 306 |
Other options allocated in 2023 | 75.93 | 5.28 | 5\u00a0227 | \u2014 | 2\u00a0877 | \u2014 | \u2014 | 2\u00a0877 |
Total | 23\u00a0777 | 6\u00a0510 | 1\u00a0056 | \u2014 | 6\u00a0887 | 7\u00a0566 |
* 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 | ||||||||
2022 | LISTED PRICE ON ALLOCATION | 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 (Chief Executive Officer) | 78.96 | 4.35 | 1\u00a0480 | 1\u00a0408 | 244 | 2\u00a0541 | \u2014 | 1\u00a0652 |
Atle Harald Sandtorv (Chief Financial Officer) | 78.96 | 6.34 | 1\u00a0078 | 909 | -240 | 2\u00a0202 | \u2014 | 669 |
Knut Utheim (Chief Technology Officer) | 78.96 | 5.82 | 989 | 840 | -177 | 1\u00a0883 | \u2014 | 663 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 78.96 | 7.20 | 720 | 600 | -158 | 1\u00a0210 | \u2014 | 442 |
Kristina Furnes (Chief Communication Officer) | 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) | 78.96 | 5.87 | 999 | 847 | -847 | 1\u00a0917 | \u2014 | \u2014 |
Erik Holvik (Chief Commercial Officer) | 78.96 | 6.13 | 1\u00a0042 | 881 | -274 | 3\u00a0070 | \u2014 | 606 |
Andreas Kvame (Chief Executive Officer) | 83.00 | 2.26 | 906 | 7 | -7 | 1\u00a0999 | \u2014 | \u2014 |
Atle Harald Sandtorv (Chief Financial Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Knut Utheim (Chief Technology Officer) | 83.00 | 2.79 | 557 | 4 | -4 | 999 | \u2014 | \u2014 |
Kathleen O. Mathisen (Chief Human Resource Officer) | 83.00 | 2.38 | 475 | 4 | -4 | 999 | \u2014 | \u2014 |
Other options allocated in 2020 | 78.96 | 7.04 | 3\u00a0519 | 2\u00a0921 | -1\u00a0451 | 9\u00a0628 | \u2014 | 1\u00a0469 |
Other options allocated in 2017 | 83.00 | 2.35 | 1\u00a0880 | 11 | -11 | 2\u00a0998 | \u2014 | \u2014 |
Total | 15\u00a0802 | 9\u00a0792 | -3\u00a0283 | 34\u00a0135 | 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.
RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS
As at 31\u00a0December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date.
FAIR VALUE OF SYNTHETIC OPTIONS | SOCIAL SECURITY COSTS | TOTAL RECOGNIZED LIABILITY | ||||
RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Non-current liabilities | 6\u00a0867 | 5\u00a0921 | 1\u00a0312 | 835 | 8\u00a0178 | 6\u00a0756 |
Current liabilities | 700 | 589 | 134 | 83 | 833 | 672 |
Total | 7\u00a0566 | 6\u00a0510 | 1\u00a0445 | 918 | 9\u00a0012 | 7\u00a0428 |
COSTS RELATED TO CASH OPTIONS NOK 1 000 | 2023 | 2022 | CLASSIFICATION IN FINANCIAL STATEMENTS | |
Change in provisions | 1\u00a0056 | -3\u00a0282 | Other provisions for liabilities | |
Exercised options during the year | \u2014 | 34\u00a0137 | Salaries and personnel expense / cash | |
Total costs excl. social security costs | 1\u00a0056 | 30\u00a0855 | ||
Social security costs | 527 | -456 | Public taxes payable | |
Total costs incl. social security costs | 1\u00a0584 | 30\u00a0399 | Salaries and personnel expense |
The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS | 2023 | 2022 |
Anticipated volatility (%) | 45.63% | 58.29% |
Risk-free rate of interest (%) | 4.00% | 3.12% |
Estimated qualification period (years) | 2.33 | 1.11 |
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
OTHER CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Accrued expenses1 | 166\u00a0326 | 150\u00a0241 |
Production fee (Norway)2 | 11\u00a0137 | 7\u00a0987 |
Realized gain/loss on fixed-price contracts3 | 8\u00a0424 | 30\u00a0930 |
Other current liabilities4 | 49\u00a0697 | 99\u00a0052 |
Other current liabilities | 235\u00a0584 | 288\u00a0210 |
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 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. 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 31.
OTHER OPERATING EXPENSES NOK 1 000 | 2023 | 2022 |
Transportation costs | 433\u00a0469 | 497\u00a0679 |
Maintenance costs | 346\u00a0941 | 327\u00a0031 |
Electricity and fuel | 179\u00a0076 | 177\u00a0902 |
Lease expenses1 | 28\u00a0563 | 60\u00a0490 |
Outsourced services and audit fees | 98\u00a0980 | 107\u00a0318 |
Insurance | 115\u00a0583 | 66\u00a0512 |
IT expenses | 84\u00a0225 | 77\u00a0298 |
Marketing costs | 14\u00a0327 | 6\u00a0642 |
Other operating expenses2 | 162\u00a0689 | 119\u00a0311 |
Other production-related costs1,3 | 772\u00a0312 | 647\u00a0128 |
Total other operating expenses | 2\u00a0236\u00a0165 | 2\u00a0087\u00a0310 |
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.
CONTINGENT LIABILITIES
ACCOUNTING POLICIES |
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. |
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 32 concerning events after the balance sheet date of 2023.
LITIGATION AND LEGAL CLAIMS
Three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement in 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court in February 2024. In 2022, incurred costs and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million were expensed, of which NOK 129 million were used at year end 2022. The remaining NOK 28 million were carried over to 2023. After the settlement related payment was made, the remainder of the accrual was released. At year-end 2022, the accrual was reported as other current liability in the Statement of Financial Position, while the costs in the income statement in 2023 and 2022 are presented as a separate financial statement line item - \"Litigation and legal claims\".
DECOMMISSIONING COSTS
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2023 | 2022 |
AUDIT SERVICES | ||
Group auditor | 3\u00a0815 | 3\u00a0049 |
Other auditors | 1\u00a0180 | 1\u00a0128 |
OTHER ASSURANCE AND CERTIFICATION SERVICES | ||
Group auditor | 1\u00a0416 | 783 |
Other auditors | \u2014 | \u2014 |
TAX SERVICES | ||
Group auditor | 1\u00a0082 | 764 |
Other auditors | 20 | 124 |
OTHER SERVICES | ||
Group auditor | 563 | 26 |
Other auditors | \u2014 | \u2014 |
Total Group auditor | 6\u00a0877 | 4\u00a0622 |
Total other auditors | 1\u00a0200 | 1\u00a0252 |
Total auditor's fees | 8\u00a0077 | 5\u00a0873 |
CONTINGENT LIABILITIES
ACCOUNTING POLICIES |
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. |
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 32 concerning events after the balance sheet date of 2023.
CONTINGENT LIABILITIES
ACCOUNTING POLICIES |
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. |
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 32 concerning events after the balance sheet date of 2023.
LITIGATION AND LEGAL CLAIMS
Three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement in 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court in February 2024. In 2022, incurred costs and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million were expensed, of which NOK 129 million were used at year end 2022. The remaining NOK 28 million were carried over to 2023. After the settlement related payment was made, the remainder of the accrual was released. At year-end 2022, the accrual was reported as other current liability in the Statement of Financial Position, while the costs in the income statement in 2023 and 2022 are presented as a separate financial statement line item - \"Litigation and legal claims\".
DECOMMISSIONING COSTS
ACCOUNTING POLICIES |
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. |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 | 2023 | 2022 |
FINANCIAL INCOME | ||
Realized gain (loss) on investment in money market fund | 41\u00a0461 | \u2014 |
Unrealized gain (loss) on investment in money market fund | -12\u00a0624 | 12\u00a0624 |
Net change in fair value of derivatives | 26\u00a0703 | 61\u00a0851 |
Net currency gains | 79\u00a0060 | 38\u00a0205 |
Other interest income | 3\u00a0796 | 11\u00a0893 |
Other financial income | 1\u00a0800 | 1\u00a0693 |
Total financial income | 140\u00a0195 | 126\u00a0267 |
FINANCIAL EXPENSE | ||
Interest expense on external borrowings and leases | 253\u00a0706 | 156\u00a0067 |
Amortization of transaction cost on external borrowings | 8\u00a0311 | 16\u00a0471 |
Net change in fair value of derivatives | 11\u00a0926 | \u2014 |
Other financial expenses | 2\u00a0825 | 3\u00a0672 |
Total financial expenses | 276\u00a0768 | 176\u00a0210 |
Net financial items | -136\u00a0573 | -49\u00a0944 |
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 | 2023 | 2022 |
AUDIT SERVICES | ||
Group auditor | 3\u00a0815 | 3\u00a0049 |
Other auditors | 1\u00a0180 | 1\u00a0128 |
OTHER ASSURANCE AND CERTIFICATION SERVICES | ||
Group auditor | 1\u00a0416 | 783 |
Other auditors | \u2014 | \u2014 |
TAX SERVICES | ||
Group auditor | 1\u00a0082 | 764 |
Other auditors | 20 | 124 |
OTHER SERVICES | ||
Group auditor | 563 | 26 |
Other auditors | \u2014 | \u2014 |
Total Group auditor | 6\u00a0877 | 4\u00a0622 |
Total other auditors | 1\u00a0200 | 1\u00a0252 |
Total auditor's fees | 8\u00a0077 | 5\u00a0873 |
ACCOUNTING POLICIES |
Income tax expense consists of 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. The liability method is applied both for ordinary corporate taxation as well as for the Norwegian resource rent tax scheme. 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. For the Norwegian resource rent tax scheme deferred tax liability is recognized for temporary differences on biological assets allocated to fish farming licenses subject to the resource rent tax. The deferred resource rent tax is recognized using the effective tax rate 25%. For the fish farming licenses subject to the resource rent tax, no deferred tax liability is recognized, because a subsequent sale will not be subject to resource rent tax and the carrying value is not realized through use. A deferred tax asset is recognized, with the effective rate of 25%, for any loss carried forward within the resource rent tax regime as long as it probable that there is sufficient taxable income in future periods. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
THE NORWEGIAN RESOURCE RENT TAX SCHEME |
On 31 May 2023, the Norwegian Parliament passed the resource rent tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. The tax is an additional layer of taxation on aquaculture, on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. This new tax scheme was implemented retrospectively with effect from 1\u202fJanuary 2023. The Norwegian resource rent tax will not affect the tax load of the Group\u2019s operations in British Columbia and Newfoundland. |
In December 2022, the Group carried out an internal reorganization, in which its commercial aquaculture licenses, together with the connected standing biomass of live fish in sea, were transferred from Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS to Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS, which are also (indirectly) wholly owned by Grieg Seafood ASA. The biomass was transferred by way of a sale and purchase transaction at fair value, using tax discontinuity. Both companies that acquired biomass chose to capitalize the acquisition costs in 2022 for tax purposes (as opposed to expensing the acquisition costs), thereby carrying over these tax positions into 2023. With tax effect for 2023, the companies have deducted the capitalized costs both in the basis for the ordinary corporate income tax, as well as in the basis for the new resource rent tax scheme. Consequently, the Group has not recognized an implementation effect concerning the transitioning to the resources rent tax scheme. If the deduction in the new resource rent tax scheme is not accepted by the tax authorities, the deferred tax asset released to loss carried forward in the regime will be reduced accordingly. |
As the Group has aquaculture licenses both in- and out-of-scope of the resource rent tax scheme, the income and expenses related to the tax scheme have to be identified. To be able to calculate the resource rent tax in accordance with the chapter 19 of the Norwegian tax law, a number of analyses have been performed related to transfer pricing according to the Norwegian tax law chapter 13 and the OECD guidelines for transfer pricing. The implementation of the resources tax regime has resulted in changes in process and procedures, transforming from an integrated value chain of breeding, freshwater and seawater farming and harvesting of salmon to carving out the farming business subject to the resource rent tax into individual companies. The transfer pricing model applied by the Group pursuant to the OECD transfer pricing guidelines induces that a variability in profitability mainly affects the companies subject to resources rent tax. As this is a new tax, it is unknown how the tax authorities will assess the methods used and the assumptions made. Management is, therefore, not able to quantify any meaningful sensitivity, caused by a reasonable change in the assumptions applied. Due to weak operational performance in Finnmark combined with a substantial share of non-commercial licenses (not being subject to resource rent tax) in Rogaland, the basis for the resource rent tax is limited in 2023. |
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Norway | 14\u00a0614 | 263\u00a0084 |
Norway - resource rent tax | \u2014 | \u2014 |
Abroad | 4\u00a0084 | 59\u00a0422 |
Current income tax | 18\u00a0698 | 322\u00a0506 |
Norway | 250\u00a0032 | 116\u00a0873 |
Norway - resource rent tax | 11\u00a0273 | \u2014 |
Abroad | 4\u00a0403 | -145\u00a0516 |
Changes in deferred tax | 265\u00a0708 | -28\u00a0643 |
Total income taxes related to profit for the year | 284\u00a0407 | 293\u00a0863 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2023 | 2022 |
Profit before tax | 844\u00a0157 | 1\u00a0447\u00a0642 |
Taxes calculated at nominal tax rate | 210\u00a0484 | 286\u00a0185 |
Withholding tax | 12\u00a0600 | 6\u00a0085 |
Non-taxable income/loss from associated companies | 1\u00a0531 | -4\u00a0641 |
Effect of adjustment of income tax from previous years | -10\u00a0436 | -27\u00a0453 |
Effect of recognition of previously non-recognized tax assets | \u2014 | -4\u00a0187 |
Effect of non-recognition of losses and tax assets | 74\u00a0439 | 37\u00a0189 |
Effect of resources tax | 11\u00a0273 | \u2014 |
Other permanent differences | -15\u00a0484 | 685 |
Total income tax expense | 284\u00a0407 | 293\u00a0863 |
Weighted average tax rate | 33.7% | 20.3% |
TAX PAYABLE BOOKED IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Tax payable in Norway | \u2014 | 286\u00a0586 |
Tax payable resource rent in Norway | \u2014 | \u2014 |
Tax payable abroad | 6\u00a0156 | 66\u00a0605 |
Total tax payable in the statement of financial position | 6\u00a0156 | 353\u00a0191 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2023 | 2022 |
Balance sheet value at 01.01. | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
Reclassified from deferred tax to tax payables * | -492\u00a0959 | \u2014 |
Currency conversion | 14\u00a0892 | 30\u00a0467 |
Tax effect of OCI transactions (see Note 25) | 6\u00a0332 | 5\u00a0454 |
Other effects | 7\u00a0538 | -27\u00a0453 |
Changes to income in the period | 254\u00a0435 | -37\u00a0111 |
Changes to income in the period of resource rent tax | 11\u00a0273 | \u2014 |
Net deferred tax liability at balance sheet date | 842\u00a0612 | 1\u00a0041\u00a0101 |
*After the completion of the consolidated financial statements and before the submission of tax returns for each subsidiary,\u00a0there was a reclassification of deferred tax to payable tax, resulting in an impact on the consolidated financial statement. Instead of expensing all costs associated with the biomass, the value of the biomass was capitalized for tax purposes, reflecting a general option available to taxpayers. The corresponding amount was included in the tax payment for corporate income tax paid in 2023.
The nominal tax rate in Norway is 22% and the resource rent tax is 25%. The nominal tax rate for 2023 was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 |
Deferred tax assets (+) | \u2014 | \u2014 |
Deferred tax liabilities (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
Net deferred tax (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
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.
SPECIFICATION OF DEFERRED TAX AND TAX ASSETS NOK 1 000 | 2023 | 2022 |
Non-current assets | 340\u00a0073 | 572\u00a0722 |
Current assets | 711\u00a0458 | 617\u00a0349 |
Debt (lease, other liabilities) | -76\u00a0484 | 1\u00a0493 |
Tax losses carried forward | -143\u00a0708 | -150\u00a0461 |
Total recognized deferred tax liability ordinary taxation | 831\u00a0339 | 1\u00a0041\u00a0101 |
Biological assets - deferred resource rent tax | 624\u00a0315 | \u2014 |
Tax losses carried forward - resource rent tax | -613\u00a0042 | \u2014 |
Total recognized deferred tax liability resource rent tax | 11\u00a0273 | \u2014 |
Total recognized deferred tax liability | 842\u00a0612 | 1\u00a0041\u00a0101 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2023 | 2022 |
Tax losses carried forward resources rent tax in Norway | -613\u00a0042 | \u2014 |
Tax losses carried forward in Canada | -143\u00a0708 | -150\u00a0461 |
Total | -756\u00a0750 | -150\u00a0461 |
ACCOUNTING POLICIES |
Income tax expense consists of 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. The liability method is applied both for ordinary corporate taxation as well as for the Norwegian resource rent tax scheme. 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. For the Norwegian resource rent tax scheme deferred tax liability is recognized for temporary differences on biological assets allocated to fish farming licenses subject to the resource rent tax. The deferred resource rent tax is recognized using the effective tax rate 25%. For the fish farming licenses subject to the resource rent tax, no deferred tax liability is recognized, because a subsequent sale will not be subject to resource rent tax and the carrying value is not realized through use. A deferred tax asset is recognized, with the effective rate of 25%, for any loss carried forward within the resource rent tax regime as long as it probable that there is sufficient taxable income in future periods. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
THE NORWEGIAN RESOURCE RENT TAX SCHEME |
On 31 May 2023, the Norwegian Parliament passed the resource rent tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. The tax is an additional layer of taxation on aquaculture, on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. This new tax scheme was implemented retrospectively with effect from 1\u202fJanuary 2023. The Norwegian resource rent tax will not affect the tax load of the Group\u2019s operations in British Columbia and Newfoundland. |
In December 2022, the Group carried out an internal reorganization, in which its commercial aquaculture licenses, together with the connected standing biomass of live fish in sea, were transferred from Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS to Grieg Seafood Rogaland Sj\u00f8 AS and Grieg Seafood Finnmark Sj\u00f8 AS, which are also (indirectly) wholly owned by Grieg Seafood ASA. The biomass was transferred by way of a sale and purchase transaction at fair value, using tax discontinuity. Both companies that acquired biomass chose to capitalize the acquisition costs in 2022 for tax purposes (as opposed to expensing the acquisition costs), thereby carrying over these tax positions into 2023. With tax effect for 2023, the companies have deducted the capitalized costs both in the basis for the ordinary corporate income tax, as well as in the basis for the new resource rent tax scheme. Consequently, the Group has not recognized an implementation effect concerning the transitioning to the resources rent tax scheme. If the deduction in the new resource rent tax scheme is not accepted by the tax authorities, the deferred tax asset released to loss carried forward in the regime will be reduced accordingly. |
As the Group has aquaculture licenses both in- and out-of-scope of the resource rent tax scheme, the income and expenses related to the tax scheme have to be identified. To be able to calculate the resource rent tax in accordance with the chapter 19 of the Norwegian tax law, a number of analyses have been performed related to transfer pricing according to the Norwegian tax law chapter 13 and the OECD guidelines for transfer pricing. The implementation of the resources tax regime has resulted in changes in process and procedures, transforming from an integrated value chain of breeding, freshwater and seawater farming and harvesting of salmon to carving out the farming business subject to the resource rent tax into individual companies. The transfer pricing model applied by the Group pursuant to the OECD transfer pricing guidelines induces that a variability in profitability mainly affects the companies subject to resources rent tax. As this is a new tax, it is unknown how the tax authorities will assess the methods used and the assumptions made. Management is, therefore, not able to quantify any meaningful sensitivity, caused by a reasonable change in the assumptions applied. Due to weak operational performance in Finnmark combined with a substantial share of non-commercial licenses (not being subject to resource rent tax) in Rogaland, the basis for the resource rent tax is limited in 2023. |
INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Norway | 14\u00a0614 | 263\u00a0084 |
Norway - resource rent tax | \u2014 | \u2014 |
Abroad | 4\u00a0084 | 59\u00a0422 |
Current income tax | 18\u00a0698 | 322\u00a0506 |
Norway | 250\u00a0032 | 116\u00a0873 |
Norway - resource rent tax | 11\u00a0273 | \u2014 |
Abroad | 4\u00a0403 | -145\u00a0516 |
Changes in deferred tax | 265\u00a0708 | -28\u00a0643 |
Total income taxes related to profit for the year | 284\u00a0407 | 293\u00a0863 |
TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 | 2023 | 2022 |
Profit before tax | 844\u00a0157 | 1\u00a0447\u00a0642 |
Taxes calculated at nominal tax rate | 210\u00a0484 | 286\u00a0185 |
Withholding tax | 12\u00a0600 | 6\u00a0085 |
Non-taxable income/loss from associated companies | 1\u00a0531 | -4\u00a0641 |
Effect of adjustment of income tax from previous years | -10\u00a0436 | -27\u00a0453 |
Effect of recognition of previously non-recognized tax assets | \u2014 | -4\u00a0187 |
Effect of non-recognition of losses and tax assets | 74\u00a0439 | 37\u00a0189 |
Effect of resources tax | 11\u00a0273 | \u2014 |
Other permanent differences | -15\u00a0484 | 685 |
Total income tax expense | 284\u00a0407 | 293\u00a0863 |
Weighted average tax rate | 33.7% | 20.3% |
TAX PAYABLE BOOKED IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Tax payable in Norway | \u2014 | 286\u00a0586 |
Tax payable resource rent in Norway | \u2014 | \u2014 |
Tax payable abroad | 6\u00a0156 | 66\u00a0605 |
Total tax payable in the statement of financial position | 6\u00a0156 | 353\u00a0191 |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2023 | 2022 |
Balance sheet value at 01.01. | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
Reclassified from deferred tax to tax payables * | -492\u00a0959 | \u2014 |
Currency conversion | 14\u00a0892 | 30\u00a0467 |
Tax effect of OCI transactions (see Note 25) | 6\u00a0332 | 5\u00a0454 |
Other effects | 7\u00a0538 | -27\u00a0453 |
Changes to income in the period | 254\u00a0435 | -37\u00a0111 |
Changes to income in the period of resource rent tax | 11\u00a0273 | \u2014 |
Net deferred tax liability at balance sheet date | 842\u00a0612 | 1\u00a0041\u00a0101 |
*After the completion of the consolidated financial statements and before the submission of tax returns for each subsidiary,\u00a0there was a reclassification of deferred tax to payable tax, resulting in an impact on the consolidated financial statement. Instead of expensing all costs associated with the biomass, the value of the biomass was capitalized for tax purposes, reflecting a general option available to taxpayers. The corresponding amount was included in the tax payment for corporate income tax paid in 2023.
The nominal tax rate in Norway is 22% and the resource rent tax is 25%. The nominal tax rate for 2023 was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 |
Deferred tax assets (+) | \u2014 | \u2014 |
Deferred tax liabilities (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
Net deferred tax (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
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.
SPECIFICATION OF DEFERRED TAX AND TAX ASSETS NOK 1 000 | 2023 | 2022 |
Non-current assets | 340\u00a0073 | 572\u00a0722 |
Current assets | 711\u00a0458 | 617\u00a0349 |
Debt (lease, other liabilities) | -76\u00a0484 | 1\u00a0493 |
Tax losses carried forward | -143\u00a0708 | -150\u00a0461 |
Total recognized deferred tax liability ordinary taxation | 831\u00a0339 | 1\u00a0041\u00a0101 |
Biological assets - deferred resource rent tax | 624\u00a0315 | \u2014 |
Tax losses carried forward - resource rent tax | -613\u00a0042 | \u2014 |
Total recognized deferred tax liability resource rent tax | 11\u00a0273 | \u2014 |
Total recognized deferred tax liability | 842\u00a0612 | 1\u00a0041\u00a0101 |
TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 | 2023 | 2022 |
Tax losses carried forward resources rent tax in Norway | -613\u00a0042 | \u2014 |
Tax losses carried forward in Canada | -143\u00a0708 | -150\u00a0461 |
Total | -756\u00a0750 | -150\u00a0461 |
ACCOUNTING POLICIES |
Income tax expense consists of 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. The liability method is applied both for ordinary corporate taxation as well as for the Norwegian resource rent tax scheme. 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. For the Norwegian resource rent tax scheme deferred tax liability is recognized for temporary differences on biological assets allocated to fish farming licenses subject to the resource rent tax. The deferred resource rent tax is recognized using the effective tax rate 25%. For the fish farming licenses subject to the resource rent tax, no deferred tax liability is recognized, because a subsequent sale will not be subject to resource rent tax and the carrying value is not realized through use. A deferred tax asset is recognized, with the effective rate of 25%, for any loss carried forward within the resource rent tax regime as long as it probable that there is sufficient taxable income in future periods. |
CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 | 2023 | 2022 |
Balance sheet value at 01.01. | 1\u00a0041\u00a0101 | 1\u00a0069\u00a0743 |
Reclassified from deferred tax to tax payables * | -492\u00a0959 | \u2014 |
Currency conversion | 14\u00a0892 | 30\u00a0467 |
Tax effect of OCI transactions (see Note 25) | 6\u00a0332 | 5\u00a0454 |
Other effects | 7\u00a0538 | -27\u00a0453 |
Changes to income in the period | 254\u00a0435 | -37\u00a0111 |
Changes to income in the period of resource rent tax | 11\u00a0273 | \u2014 |
Net deferred tax liability at balance sheet date | 842\u00a0612 | 1\u00a0041\u00a0101 |
*After the completion of the consolidated financial statements and before the submission of tax returns for each subsidiary,\u00a0there was a reclassification of deferred tax to payable tax, resulting in an impact on the consolidated financial statement. Instead of expensing all costs associated with the biomass, the value of the biomass was capitalized for tax purposes, reflecting a general option available to taxpayers. The corresponding amount was included in the tax payment for corporate income tax paid in 2023.
The nominal tax rate in Norway is 22% and the resource rent tax is 25%. The nominal tax rate for 2023 was 27% in British Columbia (BC) and 30% in Newfoundland.
TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 | 2023 | 2022 |
Deferred tax assets (+) | \u2014 | \u2014 |
Deferred tax liabilities (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
Net deferred tax (-) | -842\u00a0612 | -1\u00a0041\u00a0101 |
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.
SPECIFICATION OF DEFERRED TAX AND TAX ASSETS NOK 1 000 | 2023 | 2022 |
Non-current assets | 340\u00a0073 | 572\u00a0722 |
Current assets | 711\u00a0458 | 617\u00a0349 |
Debt (lease, other liabilities) | -76\u00a0484 | 1\u00a0493 |
Tax losses carried forward | -143\u00a0708 | -150\u00a0461 |
Total recognized deferred tax liability ordinary taxation | 831\u00a0339 | 1\u00a0041\u00a0101 |
Biological assets - deferred resource rent tax | 624\u00a0315 | \u2014 |
Tax losses carried forward - resource rent tax | -613\u00a0042 | \u2014 |
Total recognized deferred tax liability resource rent tax | 11\u00a0273 | \u2014 |
Total recognized deferred tax liability | 842\u00a0612 | 1\u00a0041\u00a0101 |
ACCOUNTING POLICIES |
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value of the asset at the date of the acquisition. 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 is tested annually for impairment and carried at cost less accumulated impairment losses. 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 acquired by the Group are measured on initial application at cost. 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. See the separate section below for more information concerning the fish farming licenses of our farming regions. |
OTHER INTANGIBLE ASSETS Acquired customer portfolios and computer software licenses are measured on initial recognition 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: \u2022Other intangible assets 3\u201310 years |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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 (see separate section in this Note for each license regime) 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. |
BRITISH COLUMBIA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. We expect that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with our First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. 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. All of Grieg Seafood's current production is operating under agreements with First Nations. 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. |
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 amortization period must be re-evaluated. |
NEWFOUNDLAND Grieg Seafood Newfoundland has 14 approved seawater farming licenses, as well as one freshwater license. The seawater licenses are granted for terms of six years. To renew the licenses, licenses 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 is the single aquaculture operator/salmon farmer in the Placentia Bay area. The fair value related to this (the excess value of book values as identified in the acquisition of Newfoundland in 2020) is amortized over the duration of the agreement. |
INTANGIBLE ASSETS 2023 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | TOTAL |
Book value at 01.01. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
Currency translation differences | 36\u00a0016 | 37\u00a0055 | 7\u00a0461 | 357 | 80\u00a0891 |
Additions | \u2014 | \u2014 | \u2014 | 1\u00a0592 | 1\u00a0592 |
Amortization | \u2014 | \u2014 | -18\u00a0429 | -3\u00a0363 | -21\u00a0792 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
ACCUMULATED VALUES | |||||
Acquisition cost | 816\u00a0714 | 1\u00a0505\u00a0283 | 182\u00a0694 | 63\u00a0957 | 2\u00a0568\u00a0649 |
Accumulated amortization | \u2014 | \u2014 | -62\u00a0888 | -50\u00a0682 | -113\u00a0570 |
Accumulated impairments | -89\u00a0603 | -135\u00a0292 | \u2014 | \u2014 | -224\u00a0895 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
See Note 27 for information on assets pledged as security for financial liabilities.
INTANGIBLE ASSETS 2022 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | 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 27 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that have 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 the impairment of aquaculture licenses in 2022 see Note 15.
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. broodstock 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.
NORWAY LICENSE CATEGORY AND TOTAL CAPACITY | 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 2025. The license cannot be utilized before the visitor center is constructed.
CANADA - BRITISH COLUMBIA
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 the table summarizing BC licenses below.
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.
CANADA - BC TOTAL CAPACITY, WEST AND EAST OF VANCOUVER ISLAND | WEST | EAST | TOTAL |
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 were written down. Grieg Seafood formally holds the licenses with DFO as at year-end 2023, however we have decommissioned our farming operations at the sites.
CANADA - NEWFOUNDLAND
Grieg Seafood Newfoundland is the single aquaculture operator/salmon farmer in the Placentia Bay area. Newfoundland currently holds 14 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.
To operate aquaculture sites in Newfoundland, 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, 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.
ACCOUNTING POLICIES |
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value of the asset at the date of the acquisition. 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 is tested annually for impairment and carried at cost less accumulated impairment losses. 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 acquired by the Group are measured on initial application at cost. 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. See the separate section below for more information concerning the fish farming licenses of our farming regions. |
OTHER INTANGIBLE ASSETS Acquired customer portfolios and computer software licenses are measured on initial recognition 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: \u2022Other intangible assets 3\u201310 years |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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 (see separate section in this Note for each license regime) 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. |
BRITISH COLUMBIA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. We expect that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with our First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. 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. All of Grieg Seafood's current production is operating under agreements with First Nations. 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. |
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 amortization period must be re-evaluated. |
NEWFOUNDLAND Grieg Seafood Newfoundland has 14 approved seawater farming licenses, as well as one freshwater license. The seawater licenses are granted for terms of six years. To renew the licenses, licenses 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 is the single aquaculture operator/salmon farmer in the Placentia Bay area. The fair value related to this (the excess value of book values as identified in the acquisition of Newfoundland in 2020) is amortized over the duration of the agreement. |
INTANGIBLE ASSETS 2023 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | TOTAL |
Book value at 01.01. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
Currency translation differences | 36\u00a0016 | 37\u00a0055 | 7\u00a0461 | 357 | 80\u00a0891 |
Additions | \u2014 | \u2014 | \u2014 | 1\u00a0592 | 1\u00a0592 |
Amortization | \u2014 | \u2014 | -18\u00a0429 | -3\u00a0363 | -21\u00a0792 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
ACCUMULATED VALUES | |||||
Acquisition cost | 816\u00a0714 | 1\u00a0505\u00a0283 | 182\u00a0694 | 63\u00a0957 | 2\u00a0568\u00a0649 |
Accumulated amortization | \u2014 | \u2014 | -62\u00a0888 | -50\u00a0682 | -113\u00a0570 |
Accumulated impairments | -89\u00a0603 | -135\u00a0292 | \u2014 | \u2014 | -224\u00a0895 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
See Note 27 for information on assets pledged as security for financial liabilities.
INTANGIBLE ASSETS 2022 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | 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 27 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that have 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 the impairment of aquaculture licenses in 2022 see Note 15.
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. broodstock 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.
NORWAY LICENSE CATEGORY AND TOTAL CAPACITY | 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 2025. The license cannot be utilized before the visitor center is constructed.
CANADA - BRITISH COLUMBIA
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 the table summarizing BC licenses below.
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.
CANADA - BC TOTAL CAPACITY, WEST AND EAST OF VANCOUVER ISLAND | WEST | EAST | TOTAL |
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 were written down. Grieg Seafood formally holds the licenses with DFO as at year-end 2023, however we have decommissioned our farming operations at the sites.
CANADA - NEWFOUNDLAND
Grieg Seafood Newfoundland is the single aquaculture operator/salmon farmer in the Placentia Bay area. Newfoundland currently holds 14 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.
To operate aquaculture sites in Newfoundland, 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, 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.
ACCOUNTING POLICIES |
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value of the asset at the date of the acquisition. 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 is tested annually for impairment and carried at cost less accumulated impairment losses. 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 acquired by the Group are measured on initial application at cost. 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. See the separate section below for more information concerning the fish farming licenses of our farming regions. |
OTHER INTANGIBLE ASSETS Acquired customer portfolios and computer software licenses are measured on initial recognition 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: \u2022Other intangible assets 3\u201310 years |
INTANGIBLE ASSETS 2023 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | TOTAL |
Book value at 01.01. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
Currency translation differences | 36\u00a0016 | 37\u00a0055 | 7\u00a0461 | 357 | 80\u00a0891 |
Additions | \u2014 | \u2014 | \u2014 | 1\u00a0592 | 1\u00a0592 |
Amortization | \u2014 | \u2014 | -18\u00a0429 | -3\u00a0363 | -21\u00a0792 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
ACCUMULATED VALUES | |||||
Acquisition cost | 816\u00a0714 | 1\u00a0505\u00a0283 | 182\u00a0694 | 63\u00a0957 | 2\u00a0568\u00a0649 |
Accumulated amortization | \u2014 | \u2014 | -62\u00a0888 | -50\u00a0682 | -113\u00a0570 |
Accumulated impairments | -89\u00a0603 | -135\u00a0292 | \u2014 | \u2014 | -224\u00a0895 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
See Note 27 for information on assets pledged as security for financial liabilities.
INTANGIBLE ASSETS 2022 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | 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 27 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that have 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 the impairment of aquaculture licenses in 2022 see Note 15.
TANGIBLE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Currency translation differences | 34\u00a0151 | 30\u00a0916 | 16\u00a0575 | 19\u00a0018 | 100\u00a0660 |
Grants and other deductions to historic cost1 | -25\u00a0847 | \u2014 | \u2014 | \u2014 | -25\u00a0847 |
Additions2 | 209\u00a0058 | 300\u00a0518 | 230\u00a0046 | 788\u00a0893 | 1\u00a0528\u00a0515 |
Disposals | -2\u00a0299 | -5\u00a0857 | -928 | -1\u00a0657 | -10\u00a0741 |
Depreciation | -45\u00a0705 | -129\u00a0895 | -120\u00a0458 | -236\u00a0855 | -532\u00a0911 |
Impairment3 | 136 | \u2014 | \u2014 | \u2014 | 136 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0820\u00a0899 | 2\u00a0428\u00a0996 | 1\u00a0468\u00a0702 | 1\u00a0958\u00a0891 | 7\u00a0677\u00a0488 |
Accumulated depreciation | -348\u00a0805 | -852\u00a0391 | -735\u00a0600 | -641\u00a0057 | -2\u00a0577\u00a0853 |
Accumulated impairments | \u2014 | -109 | -3\u00a0928 | -197 | -4\u00a0234 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
Of which book value of non-depreciable property | 118\u00a0833 | \u2014 | \u2014 | \u2014 | 118\u00a0833 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 28) | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 for specification of the Group's right-of-use assets and further information on its leases.
1Grants and other deductions to historic cost, of which NOK 26 million relates to government grants received in 2023 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.
3Reversal of impairment in 2023 related to Sechelt farming area in British Columbia.
TANGIBLE ASSETS 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 and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions | 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 |
Impairment | \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 28) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 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 17) 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.
INTANGIBLE ASSETS 2023 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | TOTAL |
Book value at 01.01. | 691\u00a0094 | 1\u00a0332\u00a0936 | 130\u00a0775 | 14\u00a0689 | 2\u00a0169\u00a0493 |
Currency translation differences | 36\u00a0016 | 37\u00a0055 | 7\u00a0461 | 357 | 80\u00a0891 |
Additions | \u2014 | \u2014 | \u2014 | 1\u00a0592 | 1\u00a0592 |
Amortization | \u2014 | \u2014 | -18\u00a0429 | -3\u00a0363 | -21\u00a0792 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
ACCUMULATED VALUES | |||||
Acquisition cost | 816\u00a0714 | 1\u00a0505\u00a0283 | 182\u00a0694 | 63\u00a0957 | 2\u00a0568\u00a0649 |
Accumulated amortization | \u2014 | \u2014 | -62\u00a0888 | -50\u00a0682 | -113\u00a0570 |
Accumulated impairments | -89\u00a0603 | -135\u00a0292 | \u2014 | \u2014 | -224\u00a0895 |
Book value at 31.12. | 727\u00a0111 | 1\u00a0369\u00a0991 | 119\u00a0807 | 13\u00a0275 | 2\u00a0230\u00a0184 |
See Note 27 for information on assets pledged as security for financial liabilities.
INTANGIBLE ASSETS 2022 NOK 1 000 | GOODWILL | FISH FARMING LICENSES \u2013 INDEFINITE LIVES | FISH FARMING LICENSES \u2013 FINITE LIVES | OTHER INTANGIBLE ASSETS | 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 27 for information on assets pledged as security for financial liabilities.
1The reclassification primarily concerns licenses in Newfoundland that have 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 the impairment of aquaculture licenses in 2022 see Note 15.
ACCOUNTING POLICIES |
Property, plant and equipment incl. right-of-use assets is stated at historical cost less depreciation and impairment losses. 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 2023 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. |
TANGIBLE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Currency translation differences | 34\u00a0151 | 30\u00a0916 | 16\u00a0575 | 19\u00a0018 | 100\u00a0660 |
Grants and other deductions to historic cost1 | -25\u00a0847 | \u2014 | \u2014 | \u2014 | -25\u00a0847 |
Additions2 | 209\u00a0058 | 300\u00a0518 | 230\u00a0046 | 788\u00a0893 | 1\u00a0528\u00a0515 |
Disposals | -2\u00a0299 | -5\u00a0857 | -928 | -1\u00a0657 | -10\u00a0741 |
Depreciation | -45\u00a0705 | -129\u00a0895 | -120\u00a0458 | -236\u00a0855 | -532\u00a0911 |
Impairment3 | 136 | \u2014 | \u2014 | \u2014 | 136 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0820\u00a0899 | 2\u00a0428\u00a0996 | 1\u00a0468\u00a0702 | 1\u00a0958\u00a0891 | 7\u00a0677\u00a0488 |
Accumulated depreciation | -348\u00a0805 | -852\u00a0391 | -735\u00a0600 | -641\u00a0057 | -2\u00a0577\u00a0853 |
Accumulated impairments | \u2014 | -109 | -3\u00a0928 | -197 | -4\u00a0234 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
Of which book value of non-depreciable property | 118\u00a0833 | \u2014 | \u2014 | \u2014 | 118\u00a0833 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 28) | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 for specification of the Group's right-of-use assets and further information on its leases.
1Grants and other deductions to historic cost, of which NOK 26 million relates to government grants received in 2023 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.
3Reversal of impairment in 2023 related to Sechelt farming area in British Columbia.
TANGIBLE ASSETS 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 and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions | 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 |
Impairment | \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 28) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 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 17) 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.
ACCOUNTING POLICIES |
Property, plant and equipment incl. right-of-use assets is stated at historical cost less depreciation and impairment losses. 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 2023 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. |
TANGIBLE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 1\u00a0302\u00a0600 | 1\u00a0380\u00a0814 | 603\u00a0938 | 748\u00a0238 | 4\u00a0035\u00a0590 |
Currency translation differences | 34\u00a0151 | 30\u00a0916 | 16\u00a0575 | 19\u00a0018 | 100\u00a0660 |
Grants and other deductions to historic cost1 | -25\u00a0847 | \u2014 | \u2014 | \u2014 | -25\u00a0847 |
Additions2 | 209\u00a0058 | 300\u00a0518 | 230\u00a0046 | 788\u00a0893 | 1\u00a0528\u00a0515 |
Disposals | -2\u00a0299 | -5\u00a0857 | -928 | -1\u00a0657 | -10\u00a0741 |
Depreciation | -45\u00a0705 | -129\u00a0895 | -120\u00a0458 | -236\u00a0855 | -532\u00a0911 |
Impairment3 | 136 | \u2014 | \u2014 | \u2014 | 136 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
ACCUMULATED VALUES | |||||
Acquisition cost | 1\u00a0820\u00a0899 | 2\u00a0428\u00a0996 | 1\u00a0468\u00a0702 | 1\u00a0958\u00a0891 | 7\u00a0677\u00a0488 |
Accumulated depreciation | -348\u00a0805 | -852\u00a0391 | -735\u00a0600 | -641\u00a0057 | -2\u00a0577\u00a0853 |
Accumulated impairments | \u2014 | -109 | -3\u00a0928 | -197 | -4\u00a0234 |
Book value at 31.12. | 1\u00a0472\u00a0094 | 1\u00a0576\u00a0496 | 729\u00a0174 | 1\u00a0317\u00a0638 | 5\u00a0095\u00a0401 |
Of which book value of non-depreciable property | 118\u00a0833 | \u2014 | \u2014 | \u2014 | 118\u00a0833 |
RIGHT-OF-USE ASSETS | |||||
Book value at 31.12 of right-of-use assets (see separate specification in Note 28) | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 for specification of the Group's right-of-use assets and further information on its leases.
1Grants and other deductions to historic cost, of which NOK 26 million relates to government grants received in 2023 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.
3Reversal of impairment in 2023 related to Sechelt farming area in British Columbia.
TANGIBLE ASSETS 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 and other deductions to historic cost1 | 75\u00a0664 | 775 | \u2014 | 24 | 76\u00a0464 |
Additions | 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 |
Impairment | \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 28) | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
See Note 27 for information on assets pledged as security for financial liabilities.
See Note 28 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 17) 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.
ACCOUNTING POLICIES |
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. |
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
The Group tests whether goodwill and licenses have suffered any impairment on an annual basis. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. 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. 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. |
IMPAIRMENT TESTING OF GOODWILL AND LICENSES
No impairments of goodwill or licenses were recognized in 2023.
CASH-GENERATING UNIT NOK 1 000 | LOCATION | BOOK VALUE OF RELATED GOODWILL | BOOK VALUE OF LICENSES | TOTAL |
Rogaland | Norway | 20\u00a0463 | 206\u00a0394 | 226\u00a0857 |
Finnmark | Norway | \u2014 | 397\u00a0218 | 397\u00a0218 |
British Columbia (BC) | Canada | 10\u00a0561 | 88\u00a0898 | 99\u00a0459 |
Newfoundland | Canada | 696\u00a0086 | 797\u00a0288 | 1\u00a0493\u00a0374 |
Total value | 727\u00a0111 | 1\u00a0489\u00a0798 | 2\u00a0216\u00a0908 |
Impairment tests are initially based on the Group\u2019s rolling five-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. The explicit period in the impairment test is three years for Rogaland, Finnmark and BC. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 12 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. The methodology for estimation of the
value in use for Newfoundland is in line with previous years, and is applied due to Newfoundland being a region under development. During 2023, the second transfer of smolt to sea was successfully completed in Newfoundland. Additionally, we successfully commenced harvesting of the first generation of fish from the region. The quality of the fish was excellent. The second generation is healthy with good biological performance.
The Group has carried out climate-related scenario analysis, assessing the scenarios of 2C global warming and 4C global warming (see Note 3). With 2C of global warming, Grieg Seafood\u2019s business is well positioned to seize opportunities for sustainable growth. The 4C global warming scenario represents a risk for increased cost and lower earnings potential. In the impairment tests for year-end 2023, the scenarios have been considered. The uncertainty is high. The basis for the impairment test - the Group\u2019s budget and business plans - look five years ahead (the explicit period applied in the impairment tests are three years for Rogaland, Finnmark and BC, while in Newfoundland 12 years is used such that production at full capacity is reflected in the terminal value). The explicit periods for the impairment tests represent in general a short time interval when considering nature and climate related risks, as the risk primarily has to be adjusted for in the terminal value. Additionally, time value of money through discounting also impact any quantifiable effect caused by climate-related risks.\u00a0 At year-end 2023, the Group\u2019s budget and business plans are aligned towards the 2C global warming scenario. Overall, as disclosed in Note 3, Grieg Seafood expects the impacts of climate-related risks to be moderate in the short term, with no quantifiable impact as per year-end 2023.
Assumptions used for estimating recoverable amount | Rogaland | Finnmark | BC | Newfoundland |
Budget period | 3 years | 3 years | 3 years | 12 years |
Revenue growth - growth from base year to terminal year | 24% | 97% | 67% | NA |
Operational EBITDA margin (1) | 33%-36% | 32%-38% | 19%-30% | 0% -\u00a0 34% |
Operational EBITDA margin in terminal period | 33% | 38% | 30% | 34% |
Harvest growth (tonnes) - growth from base year to terminal year (2) | 21% | 68% | 41% | NA |
Required rate of return before tax (3) | 10.2% | 10.2% | 10.7% | 13.4% |
Required rate of return after tax (3) | 8.0% | 8.0% | 7.8% | 9.4% |
Growth rate (4) | 1% | 1% | 1% | 1% |
Other comments/explanations on assumptions applied in impairment testing are presented below.
1. Budgeted 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 the next three years.
2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2023 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 2026, 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 2026 (2035 for Grieg Seafood 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 are piloting post-smolt in Rogaland, and will increase post-smolt capacity also in Finnmark. 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 1.5% percentage points would result in an estimated impairment for the Newfoundland operations of NOK 327 million, while a reduction of NOK 5 in Operational EBIT/kg for each year in the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 254 million. The other cash-generating units (Rogaland, Finnmark and BC) are not sensitive to equivalent changes in the same assumptions.
See Alternative Performance Measures for more information on Operational EBIT, Operational EBIT/kg and Operational EBITDA.
WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS
There was no impairment of tangible and intangible non-current assets in 2023, only a reversal of impairment of NOK 0.1 million from 2022 related to the discontinuing of farming operations in the sh\u00edsh\u00e1lh (Sechelt) area in BC. In 2022, Grieg Seafood recorded write-down of tangible and intangible non-current assets totalling NOK 140 million related to reorganization of ownership structure of licenses in Norway, and decommissioning of farming operations in BC.
WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 | Note | 2023 | 2022 |
Commercial aquaculture licenses in Rogaland, Norway | 13 | \u2014 | 47\u00a0242 |
Commercial aquaculture licenses in British Columbia, Canada | 13 | \u2014 | 88\u00a0451 |
Non-current tangible assets in British Columbia, Canada | 14 | -136 | 4\u00a0382 |
Total write-down | -136 | 140\u00a0074 | |
- Of which total write-down of intangible non-current assets | \u2014 | 135\u00a0693 |
ACCOUNTING POLICIES |
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. |
ACCOUNTING POLICIES |
The Group\u2019s investments in associated companies and joint ventures are recognized in the consolidated financial statement according to the equity method. |
Associates and joint ventures that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in the income statement and included in the subtotal of EBIT (Earnings before interests and taxes) when the relevant associates operate in the same position in the value chain as the Group (see Note 5). All investments in associates in 2023 and 2022 are closely related. The carrying value of the investment is classified on a single line item included in the subtotal of non-current assets in the statement of financial position. |
Set out below are the associated companies and joint ventures of the Group as at 31 December 2023. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. All investments in associates and joint ventures have the same financial year as the Group.
The Group owns, through Grieg Seafood Finnmark AS, 50.00% of Nordnorsk Smolt AS together with SalMar ASA (50.00%). At 31 December 2023, Grieg Seafood Finnmark AS has an outstanding interest-bearing long-term loan to Nordnorsk Smolt AS of NOK 26.5 million (NOK 2.3 million at 31 December 2022). The loan is classified as a non-current receivable in the statement of financial position (see Note 17).\u00a0 Nordnorsk Smolt AS is located in Troms and Finnmark county in Northern Norway, and has an annual production capacity of 900 tonnes. There was no production in the facility during the first half of 2023 due to a redesign of the facility. Nordnorsk Smolt AS\u00a0 commenced operations in the second half of 2023, and will be fully operational in 2024.
The Group owns, through Grieg Seafood Rogaland AS, 33.33% of Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS has an annual smolt production capacity of 6 000 tonnes, of which Grieg Seafood Rogaland AS is entitled to 50%.
The Group owns, through Grieg Seafood Rogaland AS, 44.44% of \u00c5rdal Aqua AS together with Vest Havbruk AS and Omfar AS. Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million (NOK 6 million) to \u00c5rdal Aqua AS. The loan is classified as a non-current receivable in the statement of financial position (see Note 17). The construction of \u00c5rdal Aqua AS, a land based facility with the same design as Tytlandsvik Aqua AS, is progressing according to plan. \u00c5rdal Aqua AS is expected to produce at least 4 500 tonnes of post-smolt annually from 2025.
The Group owns, through Grieg Seafood Rogaland AS, 50.00% of NextSeafood AS. NextSeafood AS is owned together 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. Grieg Seafood Rogaland AS has provided a long-term interest-free loan to FishGLOBE AS\u00a0(an affiliated company of NextSeafood AS) of NOK 8.6 million (NOK 8.6 million). The loan is classified as a non-current receivable in the statement of financial position (see Note 17). Following the resource rent tax in Norway, Grieg Seafood has put the development of FishGLOBE V6 on hold.
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2023 | BOOK VALUE AT 01.01.2023 NOK 1 000 | PROFIT/LOSS 2023 NOK 1 000 | CHANGES IN THE PERIOD, INCL. REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2023 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 39\u00a0053 | -9\u00a0343 | \u2014 | 29\u00a0710 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 55\u00a0951 | 2\u00a0264 | \u2014 | 58\u00a0215 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 114\u00a0047 | 121 | \u2014 | 114\u00a0168 |
Nextseafood AS | Rogaland County, Norway | 50.00% | 7\u00a0574 | \u2014 | \u2014 | 7\u00a0574 |
Total | 216\u00a0624 | -6\u00a0957 | \u2014 | 209\u00a0667 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2023 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 7\u00a0660 | 9\u00a0362 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 6\u00a0134 | 8\u00a0466 |
\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 | 13\u00a0794 | 35\u00a0463 |
*Depreciation of the excess values in \u00c5rdal Aqua will start when the facility of \u00c5rdal Aqua is constructed and production has commenced.
The following table displays provisional financial information at 31 December 2023 (100%).
AT 31.12.2023 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 125\u00a0099 | 88\u00a0016 | 39\u00a0084 | 25\u00a0752 | -19\u00a0395 |
Tytlandsvik Aqua AS | 746\u00a0748 | 596\u00a0389 | 150\u00a0359 | 298\u00a0620 | 13\u00a0742 |
\u00c5rdal Aqua AS | 707\u00a0436 | 490\u00a0213 | 217\u00a0223 | 2\u00a0006 | 218 |
Nextseafood AS | 15\u00a0149 | \u2014 | 15\u00a0149 | \u2014 | \u2014 |
Specification of book value of the investments in associates and joint ventures according to the equity method:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2022 | BOOK VALUE AT 01.01.2022 NOK 1 000 | PROFIT/LOSS 2022 NOK 1 000 | CHANGES IN THE PERIOD, REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2022 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 47\u00a0710 | -8\u00a0658 | \u2014 | 39\u00a0053 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 48\u00a0087 | 7\u00a0864 | \u2014 | 55\u00a0951 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 8\u00a0878 | 21\u00a0915 | 83\u00a0254 | 114\u00a0047 |
NextSeafood AS | Rogaland County, Norway | 50.00% | \u2014 | -26 | 7\u00a0600 | 7\u00a0574 |
Total | 104\u00a0675 | 21\u00a0096 | 90\u00a0854 | 216\u00a0624 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2022 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
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 | 37.04% | 17\u00a0634 | \u2014 | 17\u00a0634 |
NextSeafood AS | 31.01.2022 | 50.00% | \u2014 | \u2014 | \u2014 |
Total ownership | 49\u00a0257 | 10\u00a0632 | 38\u00a0625 |
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 |
ACCOUNTING POLICIES |
The Group\u2019s investments in associated companies and joint ventures are recognized in the consolidated financial statement according to the equity method. |
Associates and joint ventures that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in the income statement and included in the subtotal of EBIT (Earnings before interests and taxes) when the relevant associates operate in the same position in the value chain as the Group (see Note 5). All investments in associates in 2023 and 2022 are closely related. The carrying value of the investment is classified on a single line item included in the subtotal of non-current assets in the statement of financial position. |
Set out below are the associated companies and joint ventures of the Group as at 31 December 2023. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. All investments in associates and joint ventures have the same financial year as the Group.
The Group owns, through Grieg Seafood Finnmark AS, 50.00% of Nordnorsk Smolt AS together with SalMar ASA (50.00%). At 31 December 2023, Grieg Seafood Finnmark AS has an outstanding interest-bearing long-term loan to Nordnorsk Smolt AS of NOK 26.5 million (NOK 2.3 million at 31 December 2022). The loan is classified as a non-current receivable in the statement of financial position (see Note 17).\u00a0 Nordnorsk Smolt AS is located in Troms and Finnmark county in Northern Norway, and has an annual production capacity of 900 tonnes. There was no production in the facility during the first half of 2023 due to a redesign of the facility. Nordnorsk Smolt AS\u00a0 commenced operations in the second half of 2023, and will be fully operational in 2024.
The Group owns, through Grieg Seafood Rogaland AS, 33.33% of Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS has an annual smolt production capacity of 6 000 tonnes, of which Grieg Seafood Rogaland AS is entitled to 50%.
The Group owns, through Grieg Seafood Rogaland AS, 44.44% of \u00c5rdal Aqua AS together with Vest Havbruk AS and Omfar AS. Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million (NOK 6 million) to \u00c5rdal Aqua AS. The loan is classified as a non-current receivable in the statement of financial position (see Note 17). The construction of \u00c5rdal Aqua AS, a land based facility with the same design as Tytlandsvik Aqua AS, is progressing according to plan. \u00c5rdal Aqua AS is expected to produce at least 4 500 tonnes of post-smolt annually from 2025.
The Group owns, through Grieg Seafood Rogaland AS, 50.00% of NextSeafood AS. NextSeafood AS is owned together 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. Grieg Seafood Rogaland AS has provided a long-term interest-free loan to FishGLOBE AS\u00a0(an affiliated company of NextSeafood AS) of NOK 8.6 million (NOK 8.6 million). The loan is classified as a non-current receivable in the statement of financial position (see Note 17). Following the resource rent tax in Norway, Grieg Seafood has put the development of FishGLOBE V6 on hold.
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2023 | BOOK VALUE AT 01.01.2023 NOK 1 000 | PROFIT/LOSS 2023 NOK 1 000 | CHANGES IN THE PERIOD, INCL. REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2023 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 39\u00a0053 | -9\u00a0343 | \u2014 | 29\u00a0710 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 55\u00a0951 | 2\u00a0264 | \u2014 | 58\u00a0215 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 114\u00a0047 | 121 | \u2014 | 114\u00a0168 |
Nextseafood AS | Rogaland County, Norway | 50.00% | 7\u00a0574 | \u2014 | \u2014 | 7\u00a0574 |
Total | 216\u00a0624 | -6\u00a0957 | \u2014 | 209\u00a0667 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2023 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
Nordnorsk Smolt AS | 01.07.2019 | 50.00% | 17\u00a0022 | 7\u00a0660 | 9\u00a0362 |
Tytlandsvik Aqua AS | 01.06.2017 | 33.33% | 14\u00a0600 | 6\u00a0134 | 8\u00a0466 |
\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 | 13\u00a0794 | 35\u00a0463 |
*Depreciation of the excess values in \u00c5rdal Aqua will start when the facility of \u00c5rdal Aqua is constructed and production has commenced.
The following table displays provisional financial information at 31 December 2023 (100%).
AT 31.12.2023 NOK 1 000 | TOTAL ASSETS | TOTAL LIABILITIES | TOTAL EQUITY | OPERATING INCOME | PRE-TAX PROFIT/LOSS |
Nordnorsk Smolt AS | 125\u00a0099 | 88\u00a0016 | 39\u00a0084 | 25\u00a0752 | -19\u00a0395 |
Tytlandsvik Aqua AS | 746\u00a0748 | 596\u00a0389 | 150\u00a0359 | 298\u00a0620 | 13\u00a0742 |
\u00c5rdal Aqua AS | 707\u00a0436 | 490\u00a0213 | 217\u00a0223 | 2\u00a0006 | 218 |
Nextseafood AS | 15\u00a0149 | \u2014 | 15\u00a0149 | \u2014 | \u2014 |
Specification of book value of the investments in associates and joint ventures according to the equity method:
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | PLACE OF BUSINESS / COUNTRY OF INCORPORATION | EQUITY INTEREST AT 31.12.2022 | BOOK VALUE AT 01.01.2022 NOK 1 000 | PROFIT/LOSS 2022 NOK 1 000 | CHANGES IN THE PERIOD, REPAID CAPITAL NOK 1 000 | BOOK VALUE AT 31.12.2022 NOK 1 000 |
Nordnorsk Smolt AS | Troms and Finnmark County, Norway | 50.00% | 47\u00a0710 | -8\u00a0658 | \u2014 | 39\u00a0053 |
Tytlandsvik Aqua AS | Rogaland County, Norway | 33.33% | 48\u00a0087 | 7\u00a0864 | \u2014 | 55\u00a0951 |
\u00c5rdal Aqua AS | Rogaland County, Norway | 44.44% | 8\u00a0878 | 21\u00a0915 | 83\u00a0254 | 114\u00a0047 |
NextSeafood AS | Rogaland County, Norway | 50.00% | \u2014 | -26 | 7\u00a0600 | 7\u00a0574 |
Total | 104\u00a0675 | 21\u00a0096 | 90\u00a0854 | 216\u00a0624 |
Specification of excess values included in the equity method accounting for investments in associates and joint ventures:
AT 31.12.2022 | TIME OF INVESTMENT | EQUITY INTEREST | EXCESS VALUE HATCHERY NOK 1 000 | DEPRECIATION OF EXCESS VALUE NOK 1 000 | BOOK VALUE OF EXCESS VALUE NOK 1 000 |
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 | 37.04% | 17\u00a0634 | \u2014 | 17\u00a0634 |
NextSeafood AS | 31.01.2022 | 50.00% | \u2014 | \u2014 | \u2014 |
Total ownership | 49\u00a0257 | 10\u00a0632 | 38\u00a0625 |
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 |
ACCOUNTING POLICIES |
The Group\u2019s investments in associated companies and joint ventures are recognized in the consolidated financial statement according to the equity method. |
Associates and joint ventures that are closely related to the Group's operations and included in the Group\u2019s value chain are classified on a separate line in the income statement and included in the subtotal of EBIT (Earnings before interests and taxes) when the relevant associates operate in the same position in the value chain as the Group (see Note 5). All investments in associates in 2023 and 2022 are closely related. The carrying value of the investment is classified on a single line item included in the subtotal of non-current assets in the statement of financial position. |
OTHER NON-CURRENT RECEIVABLES NOK 1 000 | NOTE | 2023 | 2022 |
Loan to associated company (interest- and non-interest bearing) | 16 | 41\u00a0129 | 16\u00a0900 |
Investments in shares | 31 | 402 | 271 |
Other non-current receivables | 806 | 764 | |
Total | 42\u00a0337 | 17\u00a0935 |
ACCOUNTING POLICIES |
Inventories are stated at the lower of historical cost and net realizable value. Cost are determined by FIFO (first in, first out), with the exceptions being weighted average cost for feed, and broodstock and roe. The net realizable value is the estimated sales price less the estimated costs of completion and sale. |
Biological assets are classified on a separate financial statement line item in the statement of financial position. See Note 19 for more information. |
INVENTORIES NOK 1 000 | 2023 | 2022 |
Raw materials (feed) at cost price | 132\u00a0198 | 105\u00a0585 |
Broodstock and roe | 25\u00a0027 | 41\u00a0219 |
Other (goods in transit, frozen fish, supplementary products) | 72\u00a0828 | 93\u00a0368 |
Total inventories | 230\u00a0053 | 240\u00a0172 |
Write-down of inventories recognized in the statement of financial position at year-end | \u2014 | \u2014 |
Write-down of inventories recognized in the income statement for the year* | 34\u00a0620 | 507 |
*The impairments of inventories for the year where related to broodstock and roe.
See Note 27 for information on assets pledged as security for financial liabilities.
COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000 | 2023 | 2022 |
Inventories at 01.01. (inverted number) | -240\u00a0172 | -128\u00a0299 |
Raw materials and consumables purchased | -2\u00a0737\u00a0825 | -2\u00a0345\u00a0528 |
Inventories at 31.12. | 230\u00a0053 | 240\u00a0172 |
Total | -2\u00a0747\u00a0944 | -2\u00a0233\u00a0655 |
ACCOUNTING POLICIES |
Inventories are stated at the lower of historical cost and net realizable value. Cost are determined by FIFO (first in, first out), with the exceptions being weighted average cost for feed, and broodstock and roe. The net realizable value is the estimated sales price less the estimated costs of completion and sale. |
Biological assets are classified on a separate financial statement line item in the statement of financial position. See Note 19 for more information. |
ACCOUNTING POLICIES |
Biological assets are recognized in the statement of financial position at their fair value less cost to sell. The fair value of biological assets are measured according to level 3 of the fair value hierarchy, based on factors not drawn from observable market rates and -prices. 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 kept on land in freshwater facilities, This group encompass roe, fry and smolt. When the fish are large enough to be transferred to the sea, they are classified as biomass in sea. In accordance with application of highest and best use when estimating the fair value of live fish, 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 with an weight less than 4.60 kg are classified as not ready for harvest (immature fish). Fish onshore (smolt) are recognized at accumulated cost, which is considered the best estimate of fair value 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. For fish in sea, the fair value is calculated by applying a cash-flow based present value model. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. When estimating the fair value of the fish, a cash flow model is applied. The cash-flow based present value model for estimating the fair value less cost to sell 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. 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 as there are limited alternative observable prices in the market. 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. |
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 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. |
OPENING TO CLOSING BALANCE RECONCILIATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS
TONNES | NOK 1 000 | |||
BIOLOGICAL ASSETS | 2023 | 2022 | 2023 | 2022 |
Biological assets at 01.01. | 50\u00a0614 | 59\u00a0121 | 4\u00a0045\u00a0800 | 3\u00a0449\u00a0412 |
Currency translation differences | NA | NA | 58\u00a0707 | 36\u00a0945 |
Increase due to production | 94\u00a0144 | 93\u00a0087 | 5\u00a0563\u00a0616 | 4\u00a0348\u00a0288 |
Decrease due to abnormal mortality/loss | -3\u00a0801 | -3\u00a0408 | -294\u00a0832 | -224\u00a0924 |
Decrease due to sales | -82\u00a0776 | -98\u00a0186 | -4\u00a0487\u00a0742 | -3\u00a0743\u00a0033 |
Fair value adjustment at 01.01. | NA | NA | -1\u00a0149\u00a0591 | -970\u00a0480 |
Fair value adjustment at 31.12. | NA | NA | 1\u00a0329\u00a0761 | 1\u00a0149\u00a0591 |
Biological assets at 31.12. | 58\u00a0181 | 50\u00a0614 | 5\u00a0065\u00a0718 | 4\u00a0045\u00a0800 |
See Note 27 for information on assets pledged as security for financial liabilities.
Tonnes is provided in live round weight.
SPECIFICATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS
STATUS OF BIOLOGICAL ASSETS | NUMBER OF FISH 1 000 | BIOLOGICAL ASSETS TONNES | ACCRUED COST OF PRODUCTION NOK 1 000 | FAIR VALUE ADJUSTMENT NOK 1 000 | BOOK VALUE NOK 1 000 |
2023 | |||||
Biological assets on land * | 27\u00a0227 | 541 | 265\u00a0069 | \u2014 | 265\u00a0069 |
Immature fish at sea, round weight < 4.60 kg | 28\u00a0854 | 39\u00a0784 | 2\u00a0497\u00a0747 | 943\u00a0998 | 3\u00a0441\u00a0745 |
Mature fish at sea, round weight > 4.60 kg | 3\u00a0262 | 17\u00a0857 | 973\u00a0142 | 385\u00a0763 | 1\u00a0358\u00a0905 |
Total | 59\u00a0343 | 58\u00a0181 | 3\u00a0735\u00a0957 | 1\u00a0329\u00a0761 | 5\u00a0065\u00a0718 |
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 |
* Smolt production
ABNORMAL MORTALITY
ACCOUNTING POLICIES |
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. |
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. |
Abnormal mortality in 2023 is related to winter ulcers, Spironucleus salmonicida (Spiro), sea lice treatment and gill disease.
ABNORMAL MORTALITY - WRITE-DOWN | NUMBER OF FISH 1 000 | BIOLOGICAL ASSETS TONNES | AVERAGE SIZE KG | WRITE-DOWN NOK 1 000 |
2023 | ||||
Immature fish in sea, round weight < 4.60 kg | 1\u00a0832 | 3\u00a0278 | 1.79 | 197\u00a0750 |
Mature fish in sea, round weight > 4.60 kg | 102 | 523 | 5.13 | 23\u00a0865 |
Total abnormal mortality in sea | 1\u00a0934 | 3\u00a0801 | 1.97 | 221\u00a0615 |
Biological assets onshore | 73\u00a0217 | |||
Total abnormal mortality | 294\u00a0832 | |||
2022 | ||||
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 abnormal mortality in sea | 2\u00a0374 | 3\u00a0408 | 1.44 | 171\u00a0677 |
Biological assets onshore | 53\u00a0247 | |||
Total abnormal mortality | 224\u00a0924 |
FAIR VALUE ESTIMATE AND RECOGNIZED FAIR VALUE ADJUSTMENT TO THE BIOLOGICAL ASSETS
ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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. 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 generally 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. |
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 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. |
Biological assets are measured at fair value, unless the fair value cannot be measured reliably. The change in the fair value of biological assets is recognized in the income statement as \u201cfair value adjustment of biological assets\u201d. The table below summarizes the components of the fair value adjustment recognized in the income statement for the year.
RECOGNIZED FAIR VALUE ADJUSTMENT IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Change in fair value adjustment of biological assets1 | 156\u00a0557 | 129\u00a0331 |
Change in physical delivery contracts relating to fair value adjustment of biological assets2 | -1\u00a0846 | -1\u00a0610 |
Change in fair value of financial derivatives from salmon (Fish Pool contracts)3 | 63\u00a0211 | -44\u00a0309 |
Total recognition of fair value adjustment of biological assets | 217\u00a0922 | 83\u00a0412 |
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
Changes arising from physical delivery contracts are recognized as \u201cfair value adjustment of biological assets\u201d. The provision relates to onerous contracts for delivery of salmon, where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. 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. The contracts are calculated based on the same forward prices used for the fair value calculation of biological assets. 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. The liability in the statement of financial position is recognized as other current liabilities, see Note 29.
Changes in the value of salmon-related financial derivatives are recognized in the balance sheet under derivatives and other financial instruments. Financial derivatives are calculated at market value. See Note 31 for further information.
BASIS FOR VALUES - WEIGHTED PRICE PER KG GWT | NORWAY | BRITISH COLUMBIA | NEWFOUNDLAND |
31.12.2023 | 95.84 | 14.28 | 12.79 |
31.12.2022 | 84.06 | 12.83 | 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.
DISCOUNT RATE PER REGION | 2023 | 2022 |
Rogaland | 5.0% | 5.0% |
Finnmark | 5.0% | 5.0% |
British Columbia | 3.5% | 3.5% |
Newfoundland | 3.5% | 3.5% |
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. The estimate of fair value of the biomass will always be based on uncertain assumptions, even though the Group has built up expertise in assessing these factors.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000 | 2023 | 2022 |
Change in discount rate +1% | -215\u00a0696 | -175\u00a0527 |
Change in discount rate -1% | 264\u00a0132 | 207\u00a0074 |
Changes in sales price +1 NOK/kg | 82\u00a0860 | 69\u00a0555 |
Changes in sales price -1 NOK/kg | -70\u00a0722 | -68\u00a0073 |
Changes in sales price +5 NOK/kg | 409\u00a0732 | 357\u00a0629 |
Changes in sales price -5 NOK/kg | -359\u00a0003 | -325\u00a0903 |
Changes in biomass volume +1% kg | 62\u00a0821 | 54\u00a0202 |
Changes in biomass volume -1% kg | -50\u00a0824 | -53\u00a0427 |
ACCOUNTING POLICIES |
Biological assets are recognized in the statement of financial position at their fair value less cost to sell. The fair value of biological assets are measured according to level 3 of the fair value hierarchy, based on factors not drawn from observable market rates and -prices. 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 kept on land in freshwater facilities, This group encompass roe, fry and smolt. When the fish are large enough to be transferred to the sea, they are classified as biomass in sea. In accordance with application of highest and best use when estimating the fair value of live fish, 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 with an weight less than 4.60 kg are classified as not ready for harvest (immature fish). Fish onshore (smolt) are recognized at accumulated cost, which is considered the best estimate of fair value 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. For fish in sea, the fair value is calculated by applying a cash-flow based present value model. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. When estimating the fair value of the fish, a cash flow model is applied. The cash-flow based present value model for estimating the fair value less cost to sell 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. 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 as there are limited alternative observable prices in the market. 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. |
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 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. |
ACCOUNTING POLICIES |
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. |
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. |
ACCOUNTING POLICIES |
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. The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Generally, a financial asset is derecognized from the statement of financial position when either the rights to receive cash flows from the asset have expired, or the Group has transferred its right to receive cash flows from the asset, preconditioned that the Group has transferred substantially all risks and rewards, or control, of the financial asset to a third party. 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. Losses on receivables are classified as other operating expenses in the income statement. For trade receivables, the Group applies a simplified approach in calculating expected credit loss (ECL). In the Group's expected credit ECL 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 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 4. |
TRADE RECEIVABLES NOK 1 000 | 2023 | 2022 |
Gross amount of trade receivables | 603\u00a0229 | 690\u00a0226 |
Trade receivables deducted* | -256\u00a0597 | -416\u00a0053 |
Loss allowance | -19\u00a0472 | -15\u00a0036 |
Trade receivables at 31.12. | 327\u00a0160 | 259\u00a0137 |
*Trade receivables bought by the factoring company.
See Note 4 for a specification of the carrying value per currency.
See Note 27 for information on assets pledged as security for financial liabilities.
RECOGNIZED LOSSES ON TRADE RECEIVABLES
RECOGNIZED LOSSES NOK 1 000 | 2023 | 2022 |
Change in loss allowance | 4\u00a0436 | 71 |
Confirmed losses in the year | \u2014 | 33 |
Total recognized losses on receivables | 4\u00a0436 | 104 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | 520\u00a0137 | 27\u00a0925 | 336\u00a0869 | 169\u00a0204 | 12\u00a0480 | 293 | 1\u00a0291 | \u2014 | 520\u00a0137 |
TR Unsecured | 82\u00a0117 | 81\u00a0261 | 21\u00a0591 | 17\u00a0934 | 21\u00a0370 | 412 | 5\u00a0364 | 15\u00a0445 | 82\u00a0117 | |
High risk countries | TR Credit insured | 975 | \u2014 | 975 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 975 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | 603\u00a0229 | 109\u00a0187 | 359\u00a0434 | 187\u00a0139 | 33\u00a0850 | 705 | 6\u00a0655 | 15\u00a0445 | 603\u00a0229 | |
LOSS ALLOWANCE 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | 27\u00a0925 | 132 | 244 | 94 | 5 | 3 | \u2014 | 478 |
TR Unsecured | \u2014 | 81\u00a0261 | 2 | 7 | 28 | 202 | 4\u00a0389 | 14\u00a0365 | 18\u00a0993 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | 1 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | \u2014 | 109\u00a0187 | 135 | 251 | 122 | 207 | 4\u00a0392 | 14\u00a0365 | 19\u00a0472 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | 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 |
ACCOUNTING POLICIES |
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. The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Generally, a financial asset is derecognized from the statement of financial position when either the rights to receive cash flows from the asset have expired, or the Group has transferred its right to receive cash flows from the asset, preconditioned that the Group has transferred substantially all risks and rewards, or control, of the financial asset to a third party. 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. Losses on receivables are classified as other operating expenses in the income statement. For trade receivables, the Group applies a simplified approach in calculating expected credit loss (ECL). In the Group's expected credit ECL 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 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 4. |
ACCOUNTING POLICIES |
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. The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Generally, a financial asset is derecognized from the statement of financial position when either the rights to receive cash flows from the asset have expired, or the Group has transferred its right to receive cash flows from the asset, preconditioned that the Group has transferred substantially all risks and rewards, or control, of the financial asset to a third party. 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. Losses on receivables are classified as other operating expenses in the income statement. For trade receivables, the Group applies a simplified approach in calculating expected credit loss (ECL). In the Group's expected credit ECL 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 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 4. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning trade receivables. |
TRADE RECEIVABLES NOK 1 000 | 2023 | 2022 |
Gross amount of trade receivables | 603\u00a0229 | 690\u00a0226 |
Trade receivables deducted* | -256\u00a0597 | -416\u00a0053 |
Loss allowance | -19\u00a0472 | -15\u00a0036 |
Trade receivables at 31.12. | 327\u00a0160 | 259\u00a0137 |
*Trade receivables bought by the factoring company.
See Note 4 for a specification of the carrying value per currency.
See Note 27 for information on assets pledged as security for financial liabilities.
RECOGNIZED LOSSES ON TRADE RECEIVABLES
RECOGNIZED LOSSES NOK 1 000 | 2023 | 2022 |
Change in loss allowance | 4\u00a0436 | 71 |
Confirmed losses in the year | \u2014 | 33 |
Total recognized losses on receivables | 4\u00a0436 | 104 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | OVERDUE > 90 days | OVERDUE > 1 year | Total | |
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | 520\u00a0137 | 27\u00a0925 | 336\u00a0869 | 169\u00a0204 | 12\u00a0480 | 293 | 1\u00a0291 | \u2014 | 520\u00a0137 |
TR Unsecured | 82\u00a0117 | 81\u00a0261 | 21\u00a0591 | 17\u00a0934 | 21\u00a0370 | 412 | 5\u00a0364 | 15\u00a0445 | 82\u00a0117 | |
High risk countries | TR Credit insured | 975 | \u2014 | 975 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 975 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | 603\u00a0229 | 109\u00a0187 | 359\u00a0434 | 187\u00a0139 | 33\u00a0850 | 705 | 6\u00a0655 | 15\u00a0445 | 603\u00a0229 | |
LOSS ALLOWANCE 31.12.2023 | ||||||||||
Regular/normal risk countries | TR Credit insured | \u2014 | 27\u00a0925 | 132 | 244 | 94 | 5 | 3 | \u2014 | 478 |
TR Unsecured | \u2014 | 81\u00a0261 | 2 | 7 | 28 | 202 | 4\u00a0389 | 14\u00a0365 | 18\u00a0993 | |
High risk countries | TR Credit insured | \u2014 | \u2014 | 1 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 1 |
TR Unsecured | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | |
Total | \u2014 | 109\u00a0187 | 135 | 251 | 122 | 207 | 4\u00a0392 | 14\u00a0365 | 19\u00a0472 |
NOK 1 000 | GROSS AMOUNT | EXPOSED AMOUNT | NOT YET DUE | OVERDUE 0-30 days | OVERDUE 31-60 days | OVERDUE 61-90 days | 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 |
OTHER CURRENT RECEIVABLES NOK 1 000 | 2023 | 2022 |
VAT receivable | 80\u00a0968 | 87\u00a0431 |
Prepaid expenses | 58\u00a0656 | 44\u00a0113 |
Other current receivables | 31\u00a0625 | 25\u00a0515 |
Total | 171\u00a0249 | 157\u00a0060 |
OTHER CURRENT RECEIVABLES NOK 1 000 | 2023 | 2022 |
VAT receivable | 80\u00a0968 | 87\u00a0431 |
Prepaid expenses | 58\u00a0656 | 44\u00a0113 |
Other current receivables | 31\u00a0625 | 25\u00a0515 |
Total | 171\u00a0249 | 157\u00a0060 |
OTHER CURRENT RECEIVABLES NOK 1 000 | 2023 | 2022 |
VAT receivable | 80\u00a0968 | 87\u00a0431 |
Prepaid expenses | 58\u00a0656 | 44\u00a0113 |
Other current receivables | 31\u00a0625 | 25\u00a0515 |
Total | 171\u00a0249 | 157\u00a0060 |
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | NOTE | 2023 | 2022 |
Investment in money market funds | \u2014 | 1\u00a0000\u00a0224 | |
Unrealized gain/loss | \u2014 | 12\u00a0624 | |
Total investment in money market funds | \u2014 | 1\u00a0012\u00a0848 | |
Realized fair value gains (losses) recognized in the income statement | 11 | 41\u00a0461 | \u2014 |
Unrealized fair value gains (losses) recognized in the income statement | 11 | -12\u00a0624 | 12\u00a0624 |
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 | NOTE | 2023 | 2022 |
Investment in money market funds | \u2014 | 1\u00a0000\u00a0224 | |
Unrealized gain/loss | \u2014 | 12\u00a0624 | |
Total investment in money market funds | \u2014 | 1\u00a0012\u00a0848 | |
Realized fair value gains (losses) recognized in the income statement | 11 | 41\u00a0461 | \u2014 |
Unrealized fair value gains (losses) recognized in the income statement | 11 | -12\u00a0624 | 12\u00a0624 |
ACCOUNTING POLICIES |
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. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning 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. |
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
FAIR VALUE MEASUREMENT
ACCOUNTING POLICIES |
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. 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 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. |
The information below describes valuation techniques for fair value measurement and 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. 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 carrying value of derivatives and other financial instruments as at 31 December 2023 and 31 December 2022 is shown in the table below. All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy.
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | NOTE | 2023 | 2022 | ||
ASSETS | CURRENT LIABILITIES | ASSETS | CURRENT LIABILITIES | ||
Forward currency contracts at fair value through profit or loss | 4 | 11\u00a0852 | \u2014 | 2\u00a0749 | 9 |
Interest rate swap agreements | 4 | 23\u00a0312 | \u2014 | 35\u00a0238 | \u2014 |
Financial salmon contract - sales contracts* | \u2014 | 1\u00a0709 | \u2014 | 64\u00a0920 | |
Total financial instruments at fair value | 35\u00a0164 | 1\u00a0709 | 37\u00a0988 | 64\u00a0928 |
*In addition, as at year-end 2023, Grieg Seafood had NOK 8 million (2022: NOK 31 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 amount of the financial instrument (derivative contract).
(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 27.
(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 28.
(VI) BIOLOGICAL ASSETS
As at 31\u00a0December 2023, 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 31.12.2023 | NOMINAL VALUE PER SHARE (NOK) | 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\u00a0255 | 1\u00a0313\u00a0654 |
Total excl treasury shares | 4.00 | 448\u00a0533 | 112\u00a0133\u00a0388 |
Treasury shares
Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31\u00a0December 2023, the company has 1\u00a0313\u00a0654 treasury shares.
In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023.
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2023 | 31.12.2023 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
OM Holding AS | 5\u00a0160\u00a0982 | 4.55% |
Folketrygdfondet | 2\u00a0419\u00a0585 | 2.13% |
Ystholmen Felles AS | 1\u00a0923\u00a0197 | 1.70% |
Clearstream Banking S.A. (Nominee) | 1\u00a0615\u00a0271 | 1.42% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0512\u00a0715 | 1.33% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0435\u00a0586 | 1.27% |
Grieg Seafood ASA | 1\u00a0313\u00a0654 | 1.16% |
BNP Paribas (Nominee) | 1\u00a0192\u00a0532 | 1.05% |
JPMorgan Chase Bank, N.A., London (Nominee) | 1\u00a0171\u00a0727 | 1.03% |
Sparebank 1 Markets AS | 1\u00a0159\u00a0872 | 1.02% |
Fr\u00f8y Kapital AS | 1\u00a0116\u00a0323 | 0.98% |
J.P. Morgan SE (Nominee) | 1\u00a0105\u00a0349 | 0.97% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0078\u00a0185 | 0.95% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Bank Pictet & Cie (Europe) AG (Nominee) | 921\u00a0918 | 0.81% |
Six Sis AG (Nominee) | 853\u00a0102 | 0.75% |
BNP Paribas (Nominee) | 842\u00a0579 | 0.74% |
Skandinaviska Enskilda Banken AB (Nominee) | 800\u00a0350 | 0.71% |
State Street Bank and Trust Comp (Nominee) | 753\u00a0837 | 0.66% |
Total 20 largest shareholders | 84\u00a0287\u00a0891 | 74.30% |
Total others | 29\u00a0159\u00a0151 | 25.70% |
Total number of shares | 113\u00a0447\u00a0042 | 100.00% |
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% |
Other shareholders | 30\u00a0582\u00a0063 | 26.96% |
Total shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | NO. OF SHARES | SHAREHOLDING | |
SHARES CONTROLLED DIRECTLY AND INDIRECTLY BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT | 31.12.2023 | 31.12.2023 | 31.12.2022 | 31.12.2022 |
BOARD OF DIRECTORS | ||||
Per Grieg * | 2\u00a0877\u00a0206 | 2.54% | 2\u00a0877\u00a0206 | 2.54% |
Tore Holand ** | 3\u00a0160 | 0.00% | 2\u00a0000 | 0.00% |
Marianne Ribe | \u2014 | \u2014% | \u2014 | \u2014% |
Katrine Trovik | \u2014 | \u2014% | \u2014 | \u2014% |
Nicolai Hafeld Grieg * | 2\u00a0117\u00a0289 | 1.87% | 2\u00a0117\u00a0289 | 1.87% |
Ragnhild Janbu Fresvik (board member from 9 June 2022) | \u2014 | \u2014% | \u2014 | \u2014% |
GROUP MANAGEMENT | ||||
Andreas Kvame (Chief Executive Officer) | 44\u00a0372 | 0.04% | 40\u00a0513 | 0.04% |
Atle Harald Sandtorv (Chief Financial Officer) | 28\u00a0015 | 0.02% | 25\u00a0556 | 0.02% |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 24\u00a0272 | 0.02% | 23\u00a0513 | 0.02% |
Grant Cumming (Chief Operating Officer Farming Canada)*** | 9\u00a0857 | 0.01% | NA | NA |
Erik Holvik (Chief Commercial Officer) | 11\u00a0135 | 0.01% | 8\u00a0831 | 0.01% |
Knut Utheim (Chief Technology Officer) | 25\u00a0614 | 0.02% | 24\u00a0855 | 0.02% |
Kathleen O. Mathisen (Chief Human Resource Officer) | 15\u00a0833 | 0.01% | 15\u00a0074 | 0.01% |
Nina Stangeland (Chief Strategy Officer)*** | \u2014 | \u2014% | NA | NA |
Kristina Furnes (Chief Communications Officer) | 5\u00a0167 | 0.00% | 4\u00a0711 | 0.00% |
*Per Grieg and Nicolai Hafeld Grieg both own indirectly in Grieg Seafood ASA through their indirect ownership in Grieg Maturitas II AS (see Note 1). Grieg Maturitas II AS owns 100% of Grieg Aqua AS, which is the largest shareholder in Grieg Seafood ASA representing 50.17% of the shares. Additionally, both Per Grieg and Nicolai Hafeld Grieg is represented in the Board of Directors of Grieg Maturitas II AS. Together, Per Grieg and Nicolai Hafeld Grieg therefore represents, through their indirect ownership and board representation in Grieg Maturitas II AS, 50.17% of the shares in Grieg Seafood ASA through Grieg Aqua AS. Additionally, Per Grieg has further ownership interests in Grieg Seafood ASA through shares invested privately and through Kvassh\u00f8gdi AS, bringing the total percentage of shares in Grieg Seafood ASA represented by Per Grieg to 51.06%.
**Tore Holand owns shares in Grieg Seafood ASA through shares invested in Skippergata 24 AS as well as shares invested privately.
As at 31\u00a0December 2023, 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 31.12.2023 | NOMINAL VALUE PER SHARE (NOK) | 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\u00a0255 | 1\u00a0313\u00a0654 |
Total excl treasury shares | 4.00 | 448\u00a0533 | 112\u00a0133\u00a0388 |
Treasury shares
Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31\u00a0December 2023, the company has 1\u00a0313\u00a0654 treasury shares.
In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023.
NO. OF SHARES | SHAREHOLDING | |
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA | 31.12.2023 | 31.12.2023 |
Grieg Aqua AS | 56\u00a0914\u00a0355 | 50.17% |
OM Holding AS | 5\u00a0160\u00a0982 | 4.55% |
Folketrygdfondet | 2\u00a0419\u00a0585 | 2.13% |
Ystholmen Felles AS | 1\u00a0923\u00a0197 | 1.70% |
Clearstream Banking S.A. (Nominee) | 1\u00a0615\u00a0271 | 1.42% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0512\u00a0715 | 1.33% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0435\u00a0586 | 1.27% |
Grieg Seafood ASA | 1\u00a0313\u00a0654 | 1.16% |
BNP Paribas (Nominee) | 1\u00a0192\u00a0532 | 1.05% |
JPMorgan Chase Bank, N.A., London (Nominee) | 1\u00a0171\u00a0727 | 1.03% |
Sparebank 1 Markets AS | 1\u00a0159\u00a0872 | 1.02% |
Fr\u00f8y Kapital AS | 1\u00a0116\u00a0323 | 0.98% |
J.P. Morgan SE (Nominee) | 1\u00a0105\u00a0349 | 0.97% |
State Street Bank and Trust Comp (Nominee) | 1\u00a0078\u00a0185 | 0.95% |
Kvassh\u00f8gdi AS | 996\u00a0772 | 0.88% |
Bank Pictet & Cie (Europe) AG (Nominee) | 921\u00a0918 | 0.81% |
Six Sis AG (Nominee) | 853\u00a0102 | 0.75% |
BNP Paribas (Nominee) | 842\u00a0579 | 0.74% |
Skandinaviska Enskilda Banken AB (Nominee) | 800\u00a0350 | 0.71% |
State Street Bank and Trust Comp (Nominee) | 753\u00a0837 | 0.66% |
Total 20 largest shareholders | 84\u00a0287\u00a0891 | 74.30% |
Total others | 29\u00a0159\u00a0151 | 25.70% |
Total number of shares | 113\u00a0447\u00a0042 | 100.00% |
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% |
Other shareholders | 30\u00a0582\u00a0063 | 26.96% |
Total shares | 113\u00a0447\u00a0042 | 100.00% |
NO. OF SHARES | SHAREHOLDING | NO. OF SHARES | SHAREHOLDING | |
SHARES CONTROLLED DIRECTLY AND INDIRECTLY BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT | 31.12.2023 | 31.12.2023 | 31.12.2022 | 31.12.2022 |
BOARD OF DIRECTORS | ||||
Per Grieg * | 2\u00a0877\u00a0206 | 2.54% | 2\u00a0877\u00a0206 | 2.54% |
Tore Holand ** | 3\u00a0160 | 0.00% | 2\u00a0000 | 0.00% |
Marianne Ribe | \u2014 | \u2014% | \u2014 | \u2014% |
Katrine Trovik | \u2014 | \u2014% | \u2014 | \u2014% |
Nicolai Hafeld Grieg * | 2\u00a0117\u00a0289 | 1.87% | 2\u00a0117\u00a0289 | 1.87% |
Ragnhild Janbu Fresvik (board member from 9 June 2022) | \u2014 | \u2014% | \u2014 | \u2014% |
GROUP MANAGEMENT | ||||
Andreas Kvame (Chief Executive Officer) | 44\u00a0372 | 0.04% | 40\u00a0513 | 0.04% |
Atle Harald Sandtorv (Chief Financial Officer) | 28\u00a0015 | 0.02% | 25\u00a0556 | 0.02% |
Alexander Knudsen (Chief Operating Officer Farming Norway) | 24\u00a0272 | 0.02% | 23\u00a0513 | 0.02% |
Grant Cumming (Chief Operating Officer Farming Canada)*** | 9\u00a0857 | 0.01% | NA | NA |
Erik Holvik (Chief Commercial Officer) | 11\u00a0135 | 0.01% | 8\u00a0831 | 0.01% |
Knut Utheim (Chief Technology Officer) | 25\u00a0614 | 0.02% | 24\u00a0855 | 0.02% |
Kathleen O. Mathisen (Chief Human Resource Officer) | 15\u00a0833 | 0.01% | 15\u00a0074 | 0.01% |
Nina Stangeland (Chief Strategy Officer)*** | \u2014 | \u2014% | NA | NA |
Kristina Furnes (Chief Communications Officer) | 5\u00a0167 | 0.00% | 4\u00a0711 | 0.00% |
*Per Grieg and Nicolai Hafeld Grieg both own indirectly in Grieg Seafood ASA through their indirect ownership in Grieg Maturitas II AS (see Note 1). Grieg Maturitas II AS owns 100% of Grieg Aqua AS, which is the largest shareholder in Grieg Seafood ASA representing 50.17% of the shares. Additionally, both Per Grieg and Nicolai Hafeld Grieg is represented in the Board of Directors of Grieg Maturitas II AS. Together, Per Grieg and Nicolai Hafeld Grieg therefore represents, through their indirect ownership and board representation in Grieg Maturitas II AS, 50.17% of the shares in Grieg Seafood ASA through Grieg Aqua AS. Additionally, Per Grieg has further ownership interests in Grieg Seafood ASA through shares invested privately and through Kvassh\u00f8gdi AS, bringing the total percentage of shares in Grieg Seafood ASA represented by Per Grieg to 51.06%.
**Tore Holand owns shares in Grieg Seafood ASA through shares invested in Skippergata 24 AS as well as shares invested privately.
CONTINGENT CONSIDERATION
ACCOUNTING POLICIES |
Equity-classified contingent consideration is measured initially at fair value on the acquisition date and is not remeasured subsequent to initial recognition. Settlement of the equity-classified contingent consideration is accounted for within equity. |
On 15 April 2020, Grieg Seafood ASA completed the acquisition of Grieg Seafood Newfoundland AS, which is the holding company for the farming operations in the Newfoundland region. On the date the acquisition was completed, 99% of the shares in Grieg Seafood Newfoundland AS were transferred, while the remaining 1% is subject to a put/call option accounted for and included in the contingent consideration (classified as equity) of the acquisition.
Through the acquisition, a contingent consideration of NOK 702 million was recognized. Depending on the planned production volume within the first 10 years following the transaction, additional payments may be triggered. The additional amount becomes unconditional when Newfoundland has reached an annual harvest volume of 15 000 tonnes, and the amount increases with planned volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000 and 20 000 tonnes, and NOK 55 per kg for volumes between 20 000 and 33 000 tonnes, with a 4% per annum inflation adjustment from the calendar year 2023.
The contingent consideration is classified as equity. It is in Grieg Seafood\u2019s sole discretion to decide when to make the expansion investments and increase production.
OTHER EQUITY
SPECIFICATION OF ACCUMULATED OTHER COMPREHENSIVE INCOME NOK 1 000 | CHANGES IN FAIR VALUE OF EQUITY INSTRUMENTS | CURRENCY EFFECT ON LOANS TO SUBSIDIARIES | CURRENCY EFFECT ON INVESTMENT IN SUBSIDIARIES | TOTAL |
Book value at 01.01.2022 | -37 | -29\u00a0010 | 97\u00a0553 | 68\u00a0506 |
Changes in 2022 | \u2014 | 19\u00a0338 | 109\u00a0336 | 128\u00a0674 |
Book value at 31.12.2022 | -37 | -9\u00a0672 | 206\u00a0888 | 197\u00a0180 |
Changes in 2023 | \u2014 | 22\u00a0451 | 98\u00a0316 | 120\u00a0767 |
Book value at 31.12.2023 | -37 | 12\u00a0780 | 305\u00a0204 | 317\u00a0947 |
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 2023 and 2022 are presented in the table below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 | 2023 | 2022 |
Currency effect | 28\u00a0784 | 24\u00a0792 |
Tax effect (22%) | -6\u00a0332 | -5\u00a0454 |
Net effect recognized in equity through OCI | 22\u00a0451 | 19\u00a0338 |
RETAINED EARNINGS
SPECIFICATION OF RETAINED EQUITY NOK 1 000 | EFFECT OF SHARE-BASED REMUNERATION | PURCHASE/ SALES OF TREASURY SHARES * | ACCUMULATED INCOME LESS ACCUMULATED DIVIDEND | TOTAL |
Book value at 01.01.2022 | 1\u00a0094 | -2\u00a0020 | 4\u00a0344\u00a0929 | 4\u00a0344\u00a0002 |
Changes in 2022 | \u2014 | -22\u00a0229 | 816\u00a0839 | 794\u00a0610 |
Book value at 31.12.2022 | 1\u00a0094 | -24\u00a0249 | 5\u00a0161\u00a0767 | 5\u00a0138\u00a0612 |
Changes in 2023 | \u2014 | 6\u00a0912 | 55\u00a0631 | 62\u00a0543 |
Book value at 31.12.2023 | 1\u00a0094 | -17\u00a0337 | 5\u00a0217\u00a0398 | 5\u00a0201\u00a0155 |
SHARE CAPITAL AND NUMBER OF SHARES 31.12.2023 | NOMINAL VALUE PER SHARE (NOK) | 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\u00a0255 | 1\u00a0313\u00a0654 |
Total excl treasury shares | 4.00 | 448\u00a0533 | 112\u00a0133\u00a0388 |
Treasury shares
Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31\u00a0December 2023, the company has 1\u00a0313\u00a0654 treasury shares.
In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023.
ACCOUNTING POLICIES |
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. |
CASH AND CASH EQUIVALENTS NOK 1 000 | 2023 | 2022 |
Restricted deposits incl. employee tax deductions | 1\u00a0000 | 1\u00a0000 |
Other cash and bank deposits | 215\u00a0318 | 641\u00a0719 |
Total | 216\u00a0318 | 642\u00a0719 |
The Group has two multi-currency group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. One of the cash-pool agreements do have a multi-currency overdraft facility of NOK 200 million, which is utilized with NOK 63 million at year-end 2023. See Note 27 for more information. The subsidiaries that are part of the agreement can utilize the group cash pool arrangement provided that the arrangement without overdraft cannot be net negative, and that the arrangement with overdraft facility can not exceed negative NOK 200 million. 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 2023, the net amount of bank deposits in the group account scheme amounted to NOK 26 million (2022: NOK 524 million). At the same time, unutilized overdraft facility was NOK 137 million (NOK 200 million), in addition to unutilized revolving credit facility of NOK 750 million (NOK 1 500 million).
ACCOUNTING POLICIES |
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. |
CASH AND CASH EQUIVALENTS NOK 1 000 | 2023 | 2022 |
Restricted deposits incl. employee tax deductions | 1\u00a0000 | 1\u00a0000 |
Other cash and bank deposits | 215\u00a0318 | 641\u00a0719 |
Total | 216\u00a0318 | 642\u00a0719 |
The Group has two multi-currency group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. One of the cash-pool agreements do have a multi-currency overdraft facility of NOK 200 million, which is utilized with NOK 63 million at year-end 2023. See Note 27 for more information. The subsidiaries that are part of the agreement can utilize the group cash pool arrangement provided that the arrangement without overdraft cannot be net negative, and that the arrangement with overdraft facility can not exceed negative NOK 200 million. 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 2023, the net amount of bank deposits in the group account scheme amounted to NOK 26 million (2022: NOK 524 million). At the same time, unutilized overdraft facility was NOK 137 million (NOK 200 million), in addition to unutilized revolving credit facility of NOK 750 million (NOK 1 500 million).
ACCOUNTING POLICIES |
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. |
ACCOUNTING POLICIES |
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. |
CALCULATION OF EARNINGS PER SHARE | 2023 | 2022 |
Profit / loss after tax (majority share) NOK 1 000 | 559\u00a0750 | 1\u00a0153\u00a0779 |
SPECIFICATION NUMBER OF SHARES AT 31.12: | ||
Number of shares | 113\u00a0447\u00a0042 | 113\u00a0447\u00a0042 |
Number of treasury shares | 1\u00a0313\u00a0654 | 1\u00a0351\u00a0811 |
Number of outstanding shares | 112\u00a0133\u00a0388 | 112\u00a0095\u00a0231 |
Weighted average number of outstanding shares | 112\u00a0034\u00a0001 | 112\u00a0309\u00a0715 |
Diluted average number of outstanding shares | 112\u00a0034\u00a0001 | 112\u00a0309\u00a0715 |
Earnings per share (NOK) | 5.0 | 10.3 |
Diluted earnings per share (NOK) | 5.0 | 10.3 |
ACCOUNTING POLICIES |
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. |
ACCOUNTING POLICIES |
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 annual general meeting of Grieg Seafood ASA. |
DIVIDENDS | 2023 | 2022 |
Proposed dividend per share (NOK)* | 1.75 | 4.50 |
Distributed dividend to owners during the year per share (NOK) | 4.50 | 3.00 |
ACCOUNTING POLICIES |
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 annual general meeting of Grieg Seafood ASA. |
ACCOUNTING POLICIES |
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. |
Grieg Seafood ASA has a syndicated, secured loan provided by DNB and Nordea. The syndicated financing consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities with maturity date in 2027. The debt structure comprises a NOK 750 million term loan (outstanding NOK 656 million), an EUR 75 million term loan (outstanding EUR 66 million), a NOK 1\u00a0500 million revolving credit facility and a NOK 200 million overdraft facility. As at the end of 2023, the Group has NOK 887 million (NOK 1\u00a0700 million) available on the revolving credit facility and overdraft facility. The revolving credit facilities are non-current and may be redrawn. Of the syndicated debt, NOK 133 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 1 393 million at the end of 2023. The total bond issue in 2020 was NOK 1 500 million, and since the bond issue, Grieg Seafood has repurchased NOK 107 million. 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 2023. At 31 December 2023, the Group had an equity ratio of 49% (2022: 50%) while the equity ratio according to financial covenant was 53%, compared to 52% at 31 December 2022.
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).
NON-CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
NON-CURRENT BORROWINGS | ||
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0423\u00a0500 |
Non-current syndicated term-loan | 1\u00a0261\u00a0155 | 1\u00a0346\u00a0218 |
Non-current syndicated revolving credit facility | 750\u00a0000 | \u2014 |
Other non-current liabilities | 105\u00a0067 | 94\u00a0144 |
Non-current interest-bearing borrowings | 3\u00a0508\u00a0722 | 2\u00a0863\u00a0862 |
Amortization effect of loans | -16\u00a0742 | -25\u00a0053 |
Non-current borrowings according to the statement of financial position | 3\u00a0491\u00a0980 | 2\u00a0838\u00a0809 |
NON-CURRENT LEASE LIABILITIES | ||
Non-current lease liabilities according to the statement of financial position | 1\u00a0111\u00a0049 | 653\u00a0650 |
TOTAL NON-CURRENT BORROWINGS INCL AMORTIZED LOAN COSTS AND LEASE LIABILITIES | ||
Total non-current liabilities | 4\u00a0603\u00a0028 | 3\u00a0492\u00a0459 |
\u00a0
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000 | 2023 | 2022 |
CURRENT BORROWINGS | ||
Current portion of non-current syndicated term-loan | 132\u00a0753 | 128\u00a0211 |
Overdraft facilities* | 63\u00a0113 | \u2014 |
Current portion of other non-current liabilities | 12\u00a0469 | 13\u00a0757 |
Current portion of borrowings according to the statement of financial position | 208\u00a0335 | 141\u00a0968 |
CURRENT LEASE LIABILITIES | ||
Current portion of leasing liabilities according to the statement of financial position | 299\u00a0626 | 226\u00a0910 |
TOTAL CURRENT BORROWINGS AND LEASE LIABILITIES | ||
Total current liabilities | 507\u00a0960 | 368\u00a0878 |
*The Group has two multicurrency cash pool schemes, held at two different banks. One of the cash pool schemes has a multi-currency overdraft facility of NOK 200 million. As at year-end 31.12.2023, the cash pool scheme with the overdraft engagement had a net negative cash position, classified as overdraft facility at year-end. For more information on the Group's cash and cash equivalents, see Note 4 and 23.
NET INTEREST-BEARING LIABILITIES NOK 1 000 | 2023 | 2022 |
Total non-current interest-bearing liabilities | 4\u00a0619\u00a0770 | 3\u00a0517\u00a0512 |
Total current interest-bearing liabilities | 507\u00a0960 | 368\u00a0878 |
Gross interest-bearing liabilities | 5\u00a0127\u00a0730 | 3\u00a0886\u00a0390 |
Loans to associated companies | -32\u00a0529 | -8\u00a0300 |
Investment in money market fund | \u2014 | -1\u00a0012\u00a0848 |
Cash and cash equivalents | -216\u00a0318 | -642\u00a0719 |
Net interest-bearing liabilities | 4\u00a0878\u00a0884 | 2\u00a0222\u00a0522 |
Lease liabilities for contracts classified as operating lease for the lessor | -1\u00a0005\u00a0714 | -483\u00a0946 |
Net interest-bearing liabilities ex. the effect of IFRS 16 | 3\u00a0873\u00a0170 | 1\u00a0738\u00a0576 |
Loans to associated companies, investment in money market funds,\u00a0 cash and cash equivalents and lease liabilities for contracts classified as operating lease for the lessor are presented by their inverted figure in the table above.
Lease liabilities for contracts classified as operating lease for the lessor, corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of operational leases. These lease liabilities (NOK 1\u00a0006 million in 2023 and NOK 484 million in 2022), also referred to as \u201cthe effect of IFRS 16\u201d, are not included in the financial covenant\u2019s definition of net interest-bearing liabilities.
The Group monitors leverage by assessing both the net interest-bearing liabilities including the effect of IFRS 16, totalling NOK 4\u00a0879 million (NOK 2\u00a0223 million) and net interest-bearing liabilities ex. the effect of IFRS 16, totalling NOK 3\u00a0873 million (NOK 1\u00a0739 million). In this Note, the lease liabilities are reported in aggregate. See Note 28 for a specification of the Group\u2019s lease liabilities, separated into lease liabilities for contracts classified as financial lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of financial leases) and lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17\u2019 definition of operational leases).
31.12.2023 | |||||||
MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 | 2024 | 2025 | 2026 | 2027 | 2028 | LATER | TOTAL |
Green bond loan | \u2014 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | 1\u00a0392\u00a0500 |
Syndicated term-loan | 132\u00a0753 | 132\u00a0753 | 132\u00a0753 | 995\u00a0648 | \u2014 | \u2014 | 1\u00a0393\u00a0908 |
Syndicated revolving credit facility | \u2014 | \u2014 | \u2014 | 750\u00a0000 | \u2014 | \u2014 | 750\u00a0000 |
Overdraft facility | 63\u00a0113 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 63\u00a0113 |
Lease liabilities (book values)* | 299\u00a0626 | 249\u00a0578 | 236\u00a0302 | 206\u00a0866 | 133\u00a0219 | 285\u00a0083 | 1\u00a0410\u00a0674 |
Other non-current liabilities** | 12\u00a0468 | 9\u00a0355 | 12\u00a0151 | 12\u00a0223 | 12\u00a0543 | 58\u00a0796 | 117\u00a0535 |
Total | 507\u00a0960 | 1\u00a0784\u00a0186 | 381\u00a0206 | 1\u00a0964\u00a0738 | 145\u00a0762 | 343\u00a0879 | 5\u00a0127\u00a0730 |
*See Note 4 for a specification of the nominal payments for the lease component of the contractual liability
**NOK 117.6 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.
31.12.2022 | |||||||
MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 | 2023 | 2024 | 2025 | 2026 | 2027 | LATER | TOTAL |
Green bond loan | \u2014 | \u2014 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | 1\u00a0423\u00a0500 |
Syndicated term-loan | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 128\u00a0211 | 961\u00a0584 | \u2014 | 1\u00a0474\u00a0429 |
Lease liabilities (book values)* | 226\u00a0910 | 201\u00a0443 | 122\u00a0059 | 114\u00a0500 | 88\u00a0482 | 127\u00a0165 | 880\u00a0560 |
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 |
*See Note 4 for a specification of the nominal payments for the lease component of the contractual liability
**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.
LIABILITIES SECURED BY MORTGAGES/CHANGES ON ASSETS NOK 1 000 | 2023 | 2022 |
Liabilities secured by mortgages/charges on assets | 2\u00a0642\u00a0413 | 1\u00a0899\u00a0364 |
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2023 | 2022 |
Licenses | 1\u00a0489\u00a0798 | 1\u00a0463\u00a0709 |
Property, plant and equipment (excl. the effect of IFRS 16 / prior IAS 17 operational leases) | 4\u00a0112\u00a0535 | 3\u00a0562\u00a0816 |
Trade receivables | 327\u00a0160 | 259\u00a0137 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0966\u00a0011 | 3\u00a0136\u00a0381 |
Total assets pledged as security | 9\u00a0895\u00a0503 | 8\u00a0422\u00a0043 |
Pledges also include shares in subsidiaries in addition to charges directly on assets. The book value of these shares is NOK 0 for the Group, as such shares according to the consolidation method of subsidiaries are eliminated in the Group. See Note 13 in the financial statement of the parent, Grieg Seafood ASA.
BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 | 31.12.2023 | NOK | CAD | EUR | USD | GBP | OTHER |
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0392\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Syndicated term-loan | 1\u00a0393\u00a0908 | 656\u00a0250 | \u2014 | 737\u00a0658 | \u2014 | \u2014 | \u2014 |
Syndicated revolving credit facility | 750\u00a0000 | 750\u00a0000 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Overdraft facility* | 63\u00a0113 | 79\u00a0924 | 140\u00a0824 | -87\u00a0393 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 |
Lease liabilities | 1\u00a0410\u00a0674 | 870\u00a0850 | 539\u00a0824 | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current and current liabilities | 117\u00a0535 | \u2014 | 117\u00a0535 | \u2014 | \u2014 | \u2014 | \u2014 |
Amortization effect of loans | -16\u00a0742 | -16\u00a0742 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Total | 5\u00a0110\u00a0989 | 3\u00a0732\u00a0782 | 798\u00a0184 | 650\u00a0265 | -52\u00a0476 | -16\u00a0068 | -1\u00a0698 |
BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 | 31.12.2022 | NOK | CAD | EUR | USD | GBP | OTHER |
Green bond loan | 1\u00a0423\u00a0500 | 1\u00a0423\u00a0500 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Syndicated term-loan | 1\u00a0474\u00a0429 | 718\u00a0750 | \u2014 | 755\u00a0679 | \u2014 | \u2014 | \u2014 |
Lease liabilities | 880\u00a0560 | 536\u00a0129 | 344\u00a0431 | \u2014 | \u2014 | \u2014 | \u2014 |
Other non-current and current liabilities | 107\u00a0900 | \u2014 | 107\u00a0900 | \u2014 | \u2014 | \u2014 | \u2014 |
Amortization effect of loans | -25\u00a0053 | -25\u00a0053 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 |
Total | 3\u00a0861\u00a0337 | 2\u00a0653\u00a0326 | 452\u00a0331 | 755\u00a0679 | \u2014 | \u2014 | \u2014 |
AVERAGE INTEREST RATE ON BANK- AND BOND LOAN | 2023 | 2022 |
Average interest rate (NOK) | 6.62% | 4.61% |
Average interest rate (EUR) | 4.15% | 1.77% |
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 | 2023 | 2022 | 2023 | 2022 |
Green bond loan | 1\u00a0392\u00a0500 | 1\u00a0423\u00a0500 | 1\u00a0404\u00a0684 | 1\u00a0414\u00a0532 |
Borrowings (non-current syndicated loan and revolver credit facility, incl. current part of the non-current liability and overdraft facility) | 2\u00a0207\u00a0021 | 1\u00a0474\u00a0429 | 2\u00a0207\u00a0021 | 1\u00a0474\u00a0429 |
Total | 3\u00a0599\u00a0521 | 2\u00a0897\u00a0929 | 3\u00a0611\u00a0705 | 2\u00a0888\u00a0961 |
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 100.88% of par value at year-end 2023 (2022: 99.37%).
2023 | ||||||
CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 | 31.12.2022 | CASH INFLOW | CASH OUTFLOW | TOTAL CASH FLOW | TOTAL NON-CASH MOVEMENTS | 31.12.2023 |
Green bond loan | 1\u00a0423\u00a0500 | \u2014 | -56\u00a0000 | -56\u00a0000 | 25\u00a0000 | 1\u00a0392\u00a0500 |
Syndicated term-loan | 1\u00a0474\u00a0429 | \u2014 | -133\u00a0275 | -133\u00a0275 | 52\u00a0753 | 1\u00a0393\u00a0908 |
Syndicated revolving credit facility | \u2014 | 750\u00a0000 | \u2014 | 750\u00a0000 | \u2014 | 750\u00a0000 |
Other interest-bearing liabilities | 107\u00a0900 | 4\u00a0379 | -4\u00a0242 | 137 | 9\u00a0498 | 117\u00a0535 |
Long-term int.-bearing liabilities excl leases | 3\u00a0005\u00a0830 | 754\u00a0379 | -193\u00a0517 | 560\u00a0862 | 87\u00a0252 | 3\u00a0653\u00a0943 |
Overdraft facility | \u2014 | 63\u00a0113 | 63\u00a0113 | \u2014 | 63\u00a0113 | |
Short-term int.-bearing liabilities excl leases | \u2014 | 63\u00a0113 | \u2014 | 63\u00a0113 | \u2014 | 63\u00a0113 |
Amortized loan costs | -25\u00a0053 | \u2014 | \u2014 | \u2014 | 8\u00a0311 | -16\u00a0742 |
Total borrowings | 2\u00a0980\u00a0777 | 817\u00a0492 | -193\u00a0517 | 623\u00a0975 | 95\u00a0563 | 3\u00a0700\u00a0314 |
Lease liabilities | 880\u00a0560 | \u2014 | -279\u00a0830 | -279\u00a0830 | 809\u00a0944 | 1\u00a0410\u00a0674 |
Total borrowings and lease liabilities | 3\u00a0861\u00a0337 | 817\u00a0492 | -473\u00a0348 | 344\u00a0145 | 905\u00a0507 | 5\u00a0110\u00a0989 |
ACCOUNTING POLICIES |
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. |
Grieg Seafood ASA has a syndicated, secured loan provided by DNB and Nordea. The syndicated financing consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities with maturity date in 2027. The debt structure comprises a NOK 750 million term loan (outstanding NOK 656 million), an EUR 75 million term loan (outstanding EUR 66 million), a NOK 1\u00a0500 million revolving credit facility and a NOK 200 million overdraft facility. As at the end of 2023, the Group has NOK 887 million (NOK 1\u00a0700 million) available on the revolving credit facility and overdraft facility. The revolving credit facilities are non-current and may be redrawn. Of the syndicated debt, NOK 133 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 1 393 million at the end of 2023. The total bond issue in 2020 was NOK 1 500 million, and since the bond issue, Grieg Seafood has repurchased NOK 107 million. 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.
LIABILITIES SECURED BY MORTGAGES/CHANGES ON ASSETS NOK 1 000 | 2023 | 2022 |
Liabilities secured by mortgages/charges on assets | 2\u00a0642\u00a0413 | 1\u00a0899\u00a0364 |
ASSETS PLEDGED AS SECURITY NOK 1 000 | 2023 | 2022 |
Licenses | 1\u00a0489\u00a0798 | 1\u00a0463\u00a0709 |
Property, plant and equipment (excl. the effect of IFRS 16 / prior IAS 17 operational leases) | 4\u00a0112\u00a0535 | 3\u00a0562\u00a0816 |
Trade receivables | 327\u00a0160 | 259\u00a0137 |
Inventories and biological assets excl. fair value of biological assets | 3\u00a0966\u00a0011 | 3\u00a0136\u00a0381 |
Total assets pledged as security | 9\u00a0895\u00a0503 | 8\u00a0422\u00a0043 |
Pledges also include shares in subsidiaries in addition to charges directly on assets. The book value of these shares is NOK 0 for the Group, as such shares according to the consolidation method of subsidiaries are eliminated in the Group. See Note 13 in the financial statement of the parent, Grieg Seafood ASA.
ACCOUNTING POLICIES |
The Group as a lessee The Group acts primarily as a lessee as the Group do not have any business directed toward a role as a lessor. However, from time to time, when overcapacity on operational assets (e.g. well-boats), leased assets may be subleased by the Group. |
Identifying a lease The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions and external parties (where the material leases are mostly with well-boat and workboat providers). 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. |
Lease payments 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 2023 ranged from 4.8% - 5.7% for buildings and properties, and 4.9% - 6.2% 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. |
Extension options 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 357 million (NOK 267 million at 31\u00a0December 2022). |
Practical expedient 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. |
Presentation The Group presents its lease liability separately from other liabilities in the statement of financial position. The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d. |
RIGHT-OF-USE ASSETS 2023 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | TOTAL |
Book value at 01.01. | 66\u00a0622 | 292\u00a0209 | 72\u00a0302 | 547\u00a0010 | 978\u00a0143 |
Currency translation differences | 1\u00a0690 | \u2014 | 17 | 13\u00a0060 | 14\u00a0767 |
Additions | 5\u00a0194 | 43\u00a0350 | 23\u00a0193 | 636\u00a0161 | 707\u00a0898 |
Other changes in the right-of-use assets* | 3\u00a0520 | -12\u00a0273 | -14\u00a0734 | 68\u00a0335 | 44\u00a0848 |
Depreciation | -12\u00a0978 | -20\u00a0179 | -14\u00a0739 | -200\u00a0681 | -248\u00a0576 |
Book value at 31.12. | 64\u00a0048 | 303\u00a0108 | 66\u00a0039 | 1\u00a0063\u00a0884 | 1\u00a0497\u00a0079 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
RIGHT-OF-USE ASSETS 2022 NOK 1 000 | BUILDINGS/ PROPERTY | PROD. PLANTS AND BARGES | NETS, CAGES AND MOORINGS | OTHER EQUIPMENT | 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 |
Other changes in the right-of-use assets* | -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 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
LEASE LIABILITIES NOK 1 000 | 2023 | 2022 |
Lease liabilities at 01.01. | 880\u00a0560 | 755\u00a0828 |
New leases recognized during the year | 708\u00a0349 | 255\u00a0901 |
Cash payments for the principal portion of the lease liability | -279\u00a0830 | -225\u00a0468 |
Currency exchange differences | 13\u00a0845 | 10\u00a0902 |
Other changes in the lease liabilities* | 87\u00a0751 | 83\u00a0397 |
Total lease liabilities at 31.12. | 1\u00a0410\u00a0674 | 880\u00a0560 |
*Incl. the effect of exercising extension options and CPI adjustment of applicable leases.
See Note 4 for a maturity analysis for the contractual nominal amount (of the lease component in the contract) of the total lease liabilities.
2023 | |||
SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 | CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR | CLASSIFIED AS OPERATING LEASE FOR THE LESSOR | TOTAL LEASE LIABILITY |
Non-current portion | 329\u00a0013 | 782\u00a0036 | 1\u00a0111\u00a0049 |
Current portion | 75\u00a0948 | 223\u00a0678 | 299\u00a0626 |
Total lease liabilities included in the statement of financial position at 31.12 | 404\u00a0960 | 1\u00a0005\u00a0714 | 1\u00a0410\u00a0674 |
2022 | |||
SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 | CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR | CLASSIFIED AS OPERATING LEASE FOR THE LESSOR | TOTAL LEASE LIABILITY |
Non-current portion | 318\u00a0198 | 335\u00a0452 | 653\u00a0650 |
Current portion | 78\u00a0416 | 148\u00a0494 | 226\u00a0910 |
Total lease liabilities included in the statement of financial position at 31.12 | 396\u00a0614 | 483\u00a0946 | 880\u00a0560 |
\u00a0
AMOUNTS RECOGNIZED IN THE INCOME STATEMENT NOK 1 000 | 2023 | 2022 |
Interest on lease liabilities | -55\u00a0765 | -33\u00a0613 |
Foreign currency effect | 1\u00a0142 | 3\u00a0746 |
Depreciation right-of-use assets | -248\u00a0576 | -187\u00a0404 |
Income from subleasing of right-of-use assets | 8\u00a0801 | 31\u00a0261 |
Expenses relating to short-term leases | -23\u00a0176 | -40\u00a0530 |
Expenses relating to leases of low-value assets, excl. short-term leases of low-value assets | -1 | -1 |
Total amounts recognized in the income statement | -317\u00a0576 | -226\u00a0543 |
NOK 1 000 | 2023 | 2022 |
Total cash outflow for leases | 335\u00a0596 | 259\u00a0081 |
ACCOUNTING POLICIES |
The Group as a lessee The Group acts primarily as a lessee as the Group do not have any business directed toward a role as a lessor. However, from time to time, when overcapacity on operational assets (e.g. well-boats), leased assets may be subleased by the Group. |
Identifying a lease The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions and external parties (where the material leases are mostly with well-boat and workboat providers). 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. |
Lease payments 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 2023 ranged from 4.8% - 5.7% for buildings and properties, and 4.9% - 6.2% 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. |
Extension options 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 357 million (NOK 267 million at 31\u00a0December 2022). |
Practical expedient 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. |
Presentation The Group presents its lease liability separately from other liabilities in the statement of financial position. The Group presents its right-of-use assets on the financial statement line item \u201cProperty, plant and equipment incl. right-of-use assets\u201d. |
OTHER CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Accrued expenses1 | 166\u00a0326 | 150\u00a0241 |
Production fee (Norway)2 | 11\u00a0137 | 7\u00a0987 |
Realized gain/loss on fixed-price contracts3 | 8\u00a0424 | 30\u00a0930 |
Other current liabilities4 | 49\u00a0697 | 99\u00a0052 |
Other current liabilities | 235\u00a0584 | 288\u00a0210 |
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 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. 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 31.
OTHER CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Accrued expenses1 | 166\u00a0326 | 150\u00a0241 |
Production fee (Norway)2 | 11\u00a0137 | 7\u00a0987 |
Realized gain/loss on fixed-price contracts3 | 8\u00a0424 | 30\u00a0930 |
Other current liabilities4 | 49\u00a0697 | 99\u00a0052 |
Other current liabilities | 235\u00a0584 | 288\u00a0210 |
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 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. 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 31.
OTHER CURRENT LIABILITIES NOK 1 000 | 2023 | 2022 |
Accrued expenses1 | 166\u00a0326 | 150\u00a0241 |
Production fee (Norway)2 | 11\u00a0137 | 7\u00a0987 |
Realized gain/loss on fixed-price contracts3 | 8\u00a0424 | 30\u00a0930 |
Other current liabilities4 | 49\u00a0697 | 99\u00a0052 |
Other current liabilities | 235\u00a0584 | 288\u00a0210 |
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 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. 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 31.
2023 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT BALANCES | CURRENT BALANCES |
Total related parties as shareholders | \u2014 | 22\u00a0797 | \u2014 | -5\u00a0039 |
Total related parties as associates | \u2014 | 174\u00a0380 | 41\u00a0129 | -182 |
Total | \u2014 | 197\u00a0177 | 41\u00a0129 | -5\u00a0221 |
2022 NOK 1 000 | OPERATING INCOME | OPERATING EXPENSES | NON-CURRENT BALANCES | 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 |
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 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 the Board of Directors of the affiliated company.
\u2022Algae monitoring services are purchased from Blue Planet AS, which is affiliated with Grieg Seafood through the Chief Operating Officer Norway of the Group 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 performed on behalf of the subsidiaries of the Group. Grieg Seafood ASA is set up with facility agreements with external parties incl. banks, and lend out funds 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 8 on share-based options and Note 24 on shares controlled by members of the Board and Group Management.
ACCOUNTING POLICIES |
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. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning 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. |
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
FAIR VALUE MEASUREMENT
ACCOUNTING POLICIES |
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. 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 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. |
The information below describes valuation techniques for fair value measurement and 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. 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 carrying value of derivatives and other financial instruments as at 31 December 2023 and 31 December 2022 is shown in the table below. All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy.
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 | NOTE | 2023 | 2022 | ||
ASSETS | CURRENT LIABILITIES | ASSETS | CURRENT LIABILITIES | ||
Forward currency contracts at fair value through profit or loss | 4 | 11\u00a0852 | \u2014 | 2\u00a0749 | 9 |
Interest rate swap agreements | 4 | 23\u00a0312 | \u2014 | 35\u00a0238 | \u2014 |
Financial salmon contract - sales contracts* | \u2014 | 1\u00a0709 | \u2014 | 64\u00a0920 | |
Total financial instruments at fair value | 35\u00a0164 | 1\u00a0709 | 37\u00a0988 | 64\u00a0928 |
*In addition, as at year-end 2023, Grieg Seafood had NOK 8 million (2022: NOK 31 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 amount of the financial instrument (derivative contract).
(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 27.
(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 28.
(VI) BIOLOGICAL ASSETS
ACCOUNTING POLICIES |
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. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning 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. |
FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied.\u00a0 The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group\u2019s categories of financial assets range from amortized cost and fair value through profit and loss. |
Financial assets at amortized cost The Group\u2019s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. |
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. |
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 Note 20 for more information concerning 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. |
31.12.2023 | |||||
FINANCIAL INSTRUMENTS NOK 1 000 | FVPL 1 | AMORTIZED COST | FVOCI 2 | TOTAL | |
FINANCIAL ASSETS | |||||
Other non-current receivables3 | 131 | 41\u00a0129 | 271 | 41\u00a0531 | |
Trade receivables | \u2014 | 327\u00a0160 | \u2014 | 327\u00a0160 | |
Other current receivables | \u2014 | 20\u00a0292 | \u2014 | 20\u00a0292 | |
Derivatives5 | 35\u00a0164 | \u2014 | \u2014 | 35\u00a0164 | |
Cash and cash equivalents | \u2014 | 216\u00a0318 | \u2014 | 216\u00a0318 | |
Total financial assets | 35\u00a0295 | 604\u00a0899 | 271 | 640\u00a0466 | |
FINANCIAL LIABILITIES | |||||
Borrowings | \u2014 | 3\u00a0491\u00a0980 | \u2014 | 3\u00a0491\u00a0980 | |
Lease liabilities | \u2014 | 1\u00a0410\u00a0674 | \u2014 | 1\u00a0410\u00a0674 | |
Share-based payments6 | 7\u00a0566 | \u2014 | \u2014 | 7\u00a0566 | |
Derivatives5 | 1\u00a0709 | \u2014 | \u2014 | 1\u00a0709 | |
Trade payables | \u2014 | 760\u00a0753 | \u2014 | 760\u00a0753 | |
Other current liabilities | \u2014 | 15\u00a0667 | \u2014 | 15\u00a0667 | |
Total financial liabilities | 9\u00a0275 | 5\u00a0679\u00a0075 | \u2014 | 5\u00a0688\u00a0349 |
31.12.2022 | |||||
FINANCIAL INSTRUMENTS 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 funds4 | 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 liabilities | \u2014 | 880\u00a0560 | \u2014 | 880\u00a0560 | |
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 |
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. Loans to associated companies at amortized cost.
4 Investments in money market funds. Measured at level 2. See Note 22 for more information.
5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group\u00b4s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price.
6 Synthetic option scheme. Measured at level 3. See Note 8 for more information.
On 25 January 2024, Grieg Seafood received a Statement of Objections (SO) from the European Commission related to its investigation of potential anti-competitive behavior regarding the sale of farmed Norwegian Atlantic salmon which was launched back in 2019. The issuance of a SO is a common and formal step in the process without prejudice of the final outcome, where the European Commission sets out its preliminary view in the matter.
On 9 February 2024, the Federal Court in Canada approved the settlement agreement dated 22 September 2023 entered into by the plaintiffs and Grieg Seafood regarding the proposed three class-actions in Canada.
On 13 and 14 February 2024, Grieg Seafood ASA and Grieg Seafood UK Limited have received a service letter according to which certain claimants filed a claim for damages against, among other, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon.
In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the European Commission\u2019 investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. Therefore, no provision has been recognized at the current stage. We will continue to collaborate with the European Commission and follow up all processes as it deems appropriate.