Annual Report
2021
Solstad Offshore ASA | Annual Report 202102
Contents
Annual Report 2021
The Contents
Letter from the CEO 06
The Board’s Annual Report 14
Sustainability in brief 24
Corporate Governance 26
Social Media Highlights 30
Group Accounts 34
Parent Accounts 88
Financial Calendar
Preliminary dates for quarterly reports and ordinary General Meeting in Solstad are:
Annual Report 2021: April 21
st
, 2022
Result 1. quarter 2022: May 9
th
, 2022
Ordinary General Meeting: May 30
th
, 2022
Result 2. quarter 2022: August 18
th
, 2022
Result 3. quarterly 2022: November 17
th
, 2022
Result 4. quarterly 2022: February 16
th
, 2023
Our
vision
is to deliver industry-
leading sustainable
operations to the global
offshore energy market.
Frontpage photo: Jetmund Grøtting
Solstad Offshore ASA | Annual Report 202104
Contents
Annual Report 2021
Safe
Safety is our main priority. Solstad vessels carry out operations all over the world,
sometimes in extreme conditions. We recognize all employees as our most valuable
asset, and we will never compromise on their safety.
We focus on quality in all parts of our services. We shall always be trusted to treat
everyone fairly and respectfully, and we keep our promises. With a vast eet and
a competent organization our clients shall trust us to perform all operations in a
safe manner and with focus on quality and efciency in all stages of our service.
Reliable
Competent Responsible
All employees in Solstad are key personnel. We aim not only to fulll our client’s
demands, but to deliver a service beyond their expectations. We ensure that our
personnel are constantly learning to have the right competence and knowledge
required at all times. Our operational knowledge shall be developed in close
interaction between the marine crew and the onshore organizations.
We care about people, assets and the environment. Our company is global, but also
local in the areas we operate. We conduct our business in a responsible manner,
respecting the law and universal human rights to benet the communities where
we work. We are aware of our environmental footprint and take measurable steps
towards a better environment with the Solstad Green Operations program.
Solstad Offshore ASA | Annual Report 202106
Contents
Annual Report 2021
Letter from
the CEO
I will start this letter with the tragic war in Ukraine. We
have many colleagues from Ukraine. Both working
from our Odessa ofce and onboard our vessels.
We can only imagine what they are experiencing
right now. They have our strong support, and we
do everything we can to follow up closely.
2021 was the turnaround year for the offshore vessel
industry. We experienced increased activity and signs
of optimism especially in the second half of the year.
This increase has been further strengthened so far in
2022. Our clients report increased investments and
activity going forward. The main drivers are higher
energy prices and continued development of offshore
wind parks. The latter to increase energy production
from renewable sources.
Solstad Offshore is well positioned for this activity
increase. During 2021, we have disposed the majority
of our non-strategic eet and we have 89 modern
vessels available for our clients around the world. All offshore activity is positive for the demand
for offshore vessels. Whether it is from renewable energy, oil and gas, mining or aquaculture. And,
as it looks, the supply side will be relatively stable the coming years, with few relevant re-activation
candidates and very few newbuilds. It has been a few years since the last time we had such an
optimistic view!
Our industry is about vessels and equipment, but our employees are even more important. I am
grateful for the people we have in our company. Onboard the vessels and in the onshore organizations
around the globe, there are dedicated people working with great enthusiasm. Competence,
dedication, exibility, and hard-working are words that describes our people well. During the past
two years, when the pandemic has challenged our organization to its limits, this has been of great
importance. I am proud to see the passion from our employees in these difcult circumstances.
Sustainable operation is a main target for us. Among others, this includes a constant focus to reduce
our emissions and to maintain a strong safety culture. I am pleased to see that our safety results
for 2021 is the best in the company’s history. However, we can always improve, and by a continued
focus on the principles of our Solstad Incident Free Operation program, I am sure we can further
strengthen our safety culture and results. Regarding emissions we target a 50 percent reduction
within 2030 (compared to 2008), by introducing new technology, investing in battery-hybrid systems,
focusing on operational excellence, and participating in pilot projects with clients and suppliers.
Reaching this goal is the only option!
To be sustainable also means being protable. It means that we can make necessary investments to
reach our environmental targets and, over time, renew our eet. With a restructured balance sheet,
promising market conditions and strong support from lenders and shareholders, we are denitively
on the right track.
Thank you!
Lars Peder Solstad
CEO
There is no doubt that the war in Ukraine has a huge
impact on the global energy markets. We already see
the effect on energy prices, and future energy security
for Europe will be a key topic going forward. This could
potentially give increased investment activities both in
renewable energies and oil and gas in the coming years.
Solstad Offshore ASA | Annual Report 202108
Contents
Annual Report 2021
Key gures
and highlights
• The Company has completed its rst full calendar year after the successful
restructuring on 20. October 2020, strengthening the company nancially,
simplifying the operational structure and divesting legacy assets.
• Tender activity has steadily increased throughout the year. The
Company has seen higher orderintake in the 2
nd
half of the year
and ending on a backlog of MNOK 5,600 at year end.
• Strengthened the Company’s presence in offshore
renewables by establishing the Windstaller Alliance in 4Q
2021 together with DeepOcean and Aker Solutions.
• Liquidity continues to be strong with MNOK 2,459 at year end 2021,
compared to year end cash position of MNOK 2,412 in 2020.
• At year end 2021, the Company had disposed 25 of 37 vessels classied
as non-strategic, while the remaining has been disposed after year end.
• Adjusted EBITDA increased with 20 percent to
MNOK 1,534 vs MNOK 1,282 in 2020.
• The Company has per year end 2021 installed battery hybrid
solutions to reduce emissions on 11 vessels. The company plans
to increase this substantially with the new investment program, and
aims to become the leading Company within green operations.
• Launched a MNOK 300 green technology investment program, in line with
the Company’s ambitions to reduce GHG-emissions with 50 percent within
2030. Granted MNOK 87 from Innovation Norway to support the investments.
Key Financials
(MNOK)
2021
01.01-31.12
2020
01.01-31.12
2019
01.01-31.12
2018
01.01-31.12
Income 5,418 5,026 5,245 4,910
Adjusted EBITDA 1,534 1,282 1,411 1,005
EBIT -7 -2,185 -1,19 6 -3,987
Prot before Tax -1,110 7,250 -2,971 -5,842
Cash and equivalents 2,459 2,412 1,13 4 1,351
Net working capital -119 -803 -26,264 -24,654
Equity 3,083 4,243 -3,835 -851
Net interest bearing debt* -18,257 -18,219 -30,983 -28,727
Order backlog 5,600 5,200 8,200 6,800
*Including recognized debt relating to IFRS 16 Leases
Solstad Offshore ASA | Annual Report 202110
Contents
Annual Report 2021
10
Financial Summary
References and denitions
1. Operating result before depreciation and impairment in percentages of total
operating income
2. Result before tax, in percentage of average equity including non-controlling
interests
3. Operating result before depreciation and impairment adjusted for Joint Ventures,
excess values charter parties from mergers, operating leases and other non-cash
related items
4. Current assets divided by current liabilities
5. Booked equity including non-controlling interests in percentage of total assets.
6. Cash and bank deposits (free and restricted)
7. Total current assets less total current liabilities (including current interest bearing
liabilities)
8. Interest bearing liabilities is the total of the accounting lines “Interest bearing
liabilities”, “Current interest bearing liabilities” and “Leasing obligations”
9. Net interest bearing liabilities is interest bearing liabilities (8) less cash and bank
deposits (6)
Solstad Offshore ASA has included the above Alternative Performance Measures
(APM), which are commonly used in the business, as they are used internally by
management to understand the Group’s nancial performance. Hence, it is deemed
that the APM’s also will provide useful information to the reader. For further denitions,
refer to page 86.
(MNOK)
2021 2020 2019 2018 Ref
PROFIT AND LOSS
Freight income 5,128 4,844 5,016 4,673
Other operating income 289 182 228 237
Operating result before depreciation and impairment 1,402 1,032 1,274 422
Operating result -7 -2,226 -1,237 -3,987
Net nancial items -1,103 9,477 -1,734 -1,855
Ordinary result before tax -1,110 7,250 -2,971 -5,842
Net result for the year -1,136 7,25 4 -3,129 -5,888
Hereof majority’s share -1,102 7,241 -3,130 -5,858
BALANCE SHEET
Defered tax asset 14 6 - 2
Long term assets 20,865 22,204 27,003 28,599
Current assets 4,072 3,869 2,830 3,015
Total assets 24,938 26,069 29,833 31,615
Equity 3,083 4,243 -3,835 -851
Deferred tax - - 17 -
Long-term liabilities and provisions 17,850 17,181 4,574 4,796
Current liabilities 4,004 4,645 29,094 27,669
Interest bearing liabilities 20,718 20,631 32,117 29,980 8
Bank overdraft - - - -
Free and restricted bank deposits 2,459 2,412 1,134 1,351
Net interest-bearing liabilities 18,259 18,219 30,983 28,629 9
PROFITABILITY
Operating margin 26 % 21 % 24 % 9 % 1
Earning on equity -30 % 3,557 % 128 % -286 % 2
LIQUIDITY
Liquid assets 2,459 2,412 1,134 1,351 6
Working capital -119 -803 -26,264 -24,654 7
Adjusted EBITDA 1,534 1,282 1,411 1,005 3
Current ratio 1.0 0.8 0.1 0.1 4
CAPITAL
Total assets 24,938 26,069 29,883 31,651
Equity 3083 4,243 -3,835 -851
Equity ratio 12 % 16 % -13 % -3 % 5
Solstad Offshore ASA | Annual Report 202112
Contents
Annual Report 2021
12
The Board of
Directors
HARALD ESPEDAL (b. 1972)
Harald Espedal is a graduate from The Norwegian
School of Economics (NHH) in economics with
additional studies in auditing. Today he is the Chairman
of Lyse AS, Sandnes Sparebank, Espedal & CO AS,
Deputy Chair in Stavanger Concert Hall, and Board
member in Aaspelin Ramm and The Norwegian National
Opera & Ballet.
Espedal has a long career within the finance and
investment industry including as CEO and Investor
Director for SKAGEN and Investment Director for Vesta.
SHARES IN SOLSTAD OFFSHORE ASA: 656 687
FRANK O. REITE (b. 1970)
Frank O. Reite first joined Aker in 1995 and was CFO in
Aker ASA from August 2015 until August 2019. He came
from the position of President & CEO of Akastor and
has previously held a variety of executive positions in
the Aker group, including overseeing and developing
Aker’s investments in Converto Capital Fund AS,
Havfisk AS, Norway Seafoods AS and Aker Yards ASA.
Frank O. Reite has experience from banking and has
served as Director in Paine & Partners. Frank O. Reite
holds a B.A. in business administration from
Handelshøyskolen BI in Oslo.
SHARES IN SOLSTAD OFFSHORE ASA: 0
INGRID KYLSTAD (b. 1985)
Ingrid Kylstad is Sustainability Lead in ZeroLab by
Torvald Klaveness. Before joining Klaveness in 2021,
Kylstad was COO in Katapult Ocean, a seed stage
investor within ocean technology. Prior to that she
worked for the Norwegian Shipowners Association and
spent several years in Brussels working on policy and
regulatory issues.
Kylstad holds an MSc in European Studies from London
School of Economics and Political Science and a BSc in
Liberal Arts from Maastricht University. She has also
completed a management program at the Solvay
Brussels School of Economics and Management.
SHARES IN SOLSTAD OFFSHORE ASA: 0
PEDER SORTLAND (b. 1963)
Peder Sortland, currently the CEO North Sea
Infrastructure AS (NSI), has 30 years’ experience from
the oil and gas industry. Prior to NSI, Sortland held
roles as the CEO of Global Maritime Group, Apply
Group and Ross Offshore/Subsea Technology Group
and as Regional Vice President for Subsea 7 in
Norway. Sortland spent 18 years in Equinor up to
Senior Vice President level, predominantly in areas of
business development, commercial negotiations and
strategy work. Sortland has a business education on
MBA level from University of Wyoming and is a
Fullbright Scholar.
SHARES IN SOLSTAD OFFSHORE ASA: 0
THORHILD WIDVEY (b. 1956)
Thorhild Widvey has held various positions in the
Norwegian Minister departments from 2002 to 2015.
Prior to this she was a Member of Parliament
(Stortinget) from 1989 to 1997, representing Høyre
(the Conservative Party of Norway). Ms Widvey is
chair of the Board in Statkraft AS; and has previous
held a number of board positions both in privately held
and stock listed companies. She was a board member
of Kværner ASA (2016-2020) and continued as
member of the board of Aker Solutions after the
merger with Kværner (2020-).
SHARES IN SOLSTAD OFFSHORE ASA: 0
ELLEN SOLSTAD (b. 1974)
Mrs. Solstad holds a bachelor’s degree from BI. She
has previous work experience from R.G Hagland AS
and Solstad Offshore UK Ltd. Mrs. Solstad is currently
Chairman of Solstad Family Office and a board mem-
ber of Wilson ASA, Solvang ASA and Karmsund
Interkommunale Havnevesen IKS.
SHARES IN SOLSTAD OFFSHORE ASA: 0
Solstad Offshore ASA | Annual Report 202114
Contents
Annual Report 2021
Board of
Director’s
Report
Solstad Offshore ASA (“the Company”
or “Solstad”) is a world leading owner
and operator of offshore service
vessels (OSVs), offering maritime
services to the global offshore
and renewable energy industry.
Per year end 2021 the Company has 3,600 highly skilled employees and
nine ofces globally. The Company owns and operates a versatile eet of
modern offshore vessels which consist of PSVs (platform supply vessels),
AHTS (anchor handling tug support vessels) and CSVs (construction service
vessels).
The supply vessels (AHTS and PSVs) support oil
eld operators in production as well as development
and exploration activities. The Company’s CSVs
eet supports subsea and renewable energy
projects world-wide and is partly working on
contracts and partly utilized for seasonal activities.
The CSVs on contracts serve the IMR (inspection,
maintenance and repair) and the SURF (subsea,
umbilicals, risers and owlines) markets, or
supporting installation and maintenance work
related to the renewable energy industry offshore.
The offshore energy market has been depressed
for several years. However, there are signs that
the market is improving. 2021 started with a
more optimistic view compared to last year, with
improved tender activity level and increased
rates and utilization in our key markets. However,
concerns regarding new variants of the Covid-19
virus affected the Company throughout the year.
The Brent Oil price started at USD 50 per barrel
and developed with an upward trend driven by
the underlying recovery in demand for oil, linked
to the reopening of societies around the world.
The Company has positioned itself in the energy
landscape with a clear strategy to grow its presence
in a more sustainable future. Over the long term the
Company expect its exposure to renewable energy
to increase, driven by xed and oating wind.
The operating income increased by about 8 percent,
to MNOK 5,418 in 2021, compared to MNOK 5,026
in 2020. Operational expence in 2021 was MNOK
4,016 compared to MNOK 3,994 in 2020. Adjusted
EBITDA for the year increased by 20 percent to
MNOK 1,534 from MNOK 1,282 in 2020. The
operating result in 2021 was MNOK -7 compared
to a negative result of MNOK -2,226 in 2020 . The
result after tax was MNOK -1,136 compared to
MNOK 7,254 in 2020. The booked equity for year
end is MNOK 3,083.
1. Vision and values
Solstad Offshore’s vision is to deliver industry-
leading sustainable operation to the global offshore
energy market. Its four core values are Safe
– Reliable – Competent – Responsible. These
values are tools to create a common culture and
dene how the Company operates and interact with
clients, suppliers, partners, and colleagues.
Solstad Offshore ASA | Annual Report 202116
Contents
Annual Report 2021
2. The Company’s activities
Solstad Offshore’s activities are primarily directed
towards the offshore markets for oil and gas and
renewable energy. During 2021, the operation
has been organized in four business areas; PSV,
AHTS, Subsea Construction and Renewable
Energy worldwide. The Company’s headquarter is
located in Skudeneshavn, Norway with ofces in
Ålesund, Aberdeen, Rio de Janeiro, Macae, Perth,
Singapore, Manila and Odessa.
The Company’s operating income in 2021 was
divided into 50 percent (2020: 49 percent) from
CSVs and 50 percent (51) from AHTS and PSVs.
Furthermore, the regional split of the income was
44 percent (45) from the North Sea, 6 percent (9)
from South America, 12 percent (5) from Africa,
3 percent (5) from North and Central America, 4
percent (18) from the Mediterranean part of Europe,
23 percent (13) from Australia, and 8 percent (5)
from Asia.
Subsea construction and renewable
energy
The CSV segment includes 25 vessels, whereof
two vessels were in layup at year-end 2021. The
Solstad CSV eet is versatile, and the vessels are
designed and equipped to support a wide range of
offshore services within oil and gas and renewable
energy projects. During 2021, the eet has
successfully been involved in projects both within
renewable energy and oil and gas. This includes
geotechnical work, walk to work-services, grouting,
SURF operations, deep-sea mining, cable laying
and repair, trenching and burial, ROV support,
installation of subsea equipment, survey work, IMR
operations, node seismic operations, diving and
topside maintenance work. Geographical areas
of operation include Asia, South America, West
Africa, North Africa, Europe and Gulf of Mexico.
The company has also signed new contracts for
the CSV segment in most of the aforementioned
geographical areas. The client portfolio for the
CSV eet includes a mix of energy companies,
subsea construction companies, wind turbine
manufacturers, cable companies and seismic
companies.
AHTS & PSV
The AHTS eet includes 26 vessels, whereof 15
vessels are operational. The PSV eet includes
45 vessels, with 38 vessels in operation. Strategic
regions are Australia, Brazil and North Sea, and
the majority of the vessels are located in these
regions. Most of the operating vessels were on
term contracts, and during 2021 we signed long
term contracts with companies such as Petrobras,
Equinor, Enquest and Chrysaor. The size of the
AHTS/PSV eet has proven its exibility as we
have been able to relocate vessels between the
strategic regions. At the end of 2021, 11 vessels
were in operation in Asia / Pacic, 10 in Brazil,
15 in the UK and 16 in Norway. The remaining
vessels operate internationally. Normand Titus
and Normand Ranger have for market reasons
been relocated from the North Sea to Brazil and
Australia, respectively.
Technical & Projects
Throughout the year, 10 dry-dockings were
completed with a total expence of MNOK 277. The
technical uptime for the year was 99,36 percent.
Nine vessels were reactivated, and two vessels
were installed with battery. A total of ten vessels
are now equipped with batteries.
HSE & HR
HSE results ended with a TRCF at 1.19 (1,28 in
2020) and the trend was positive throughout the
year. Solstad Offshore received the annual OSJ
Environmental award in London in 2021. This is the
second time the Company wins this award. The last
time was in 2012.
By the end of the year, total number of seafarers
counted 3,354. Retention rate per region / nationality
is relatively stable and varies from 93-99 percent.
2021 was a year hugely affected by Covid-19 for
both seafarers and the crewing department. During
the spring, the Company conducted a survey
amongst its seafarers to assess the impact of
the pandemic. The survey results led to several
measures being improved or implemented.
Vessel divestment in 2021
In 2021, Solstad Offshore completed divestment
of several vessels, primarily the smallest and less
modern vessels. The Company divested a total of
23 vessels: 11 PSV’s, 10 AHTSs and 2 CSVs. All 23
vessels were divested in line with the restructuring
plan for the company. At year end 2021, a total of
25 out of 37 vessels have been divested. Further
11 vessels have been divested as of 21. April 2022
and this concludes the divestment of non-strategic
vessels whereof one of the 37 non-strategic vessels
has been put into operation.
3. The Market
Oil & Gas
The effects of the Covid-19 pandemic decreased
through 2021, but still impacted some geographical
areas more than others. The year started with an oil
price of USD 50 per barrel and increased steadily to
USD 80 by year end.
Demand for vessels increased throughout the year,
with new projects driving the demand. Compared
to 2020, charterers have shifted their preference
towards vessels on longer contracts. Operations
within oil and gas will continue to be the main
activity for Solstad for many years to come. With
its eet of about 90 modern offshore vessels (not
included the non-strategic vessels to be divested),
the Company are particularly well positioned in
its strategic markets the North Sea, Australia and
Brazil.
Renewable Energy
The renewable market, and in particular offshore
wind, continued its growth momentum in 2021
despite the challenging macro environment. The
momentum is driven by increasing social and
political pressure to reduce carbon emissions, as
well as the continued reduction in the development
expence of offshore wind power. The oil operating
companies have given more attention to oating
wind installations, and consequently demand for
infrastructure has increased. The Company has
strengthened its presence in this segment through
the Windstaller Alliance and is well positioned
to take an active part in the energy transition. In
2021, about 11 percent of income came from this
segment. Activity in well established markets in
Europe, such as the North Sea, Germany and the
Netherlands, remained high, while activity in newer
markets such as Taiwan and Korea also increased.
4. Corporate particulars
As of 31. December 2021, the number of
shareholders was 7,248 whereof total international
shareholding was approximately 20 percent. The
largest shareholders, Aker Capital AS, Hemen
Holding Ltd and Jarsteinen AS, hold 24,92 percent,
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Q4-20 Q1-21 Q2-21 Q3-21 Q4-21
AHTS PSV CSV Average
Top 10 as of 31.12.2021 Number of shares Ownership
Aker Capital AS 18,843,913 24,92 %
Hemen Holsing Ltd 7,016,727 9,28 %
Jarsteinen AS 3,130,73 4 4,14 %
Citibank Europe plc 1,921,921 2,54 %
Magne Hystad 1,800,000 2,38 %
DNB Markets Aksjehandel/-analyse 1,542,780 2,04 %
The Export-Import Bank of China 1,139,842 1,51 %
Otto Rognvær 991,598 1,31 %
Sparebanken Møre 965,728 1,28 %
Knut Invest AS 800,000 1,06 %
Minority shareholders 37,455,415 49.54 %
75,608,658 100 %
Solstad Offshore ASA | Annual Report 202118
Contents
Annual Report 2021
9,28 percent and 4,14 percent, respectively.
5. Corporate governance
and management
Solstad Offshore ASA’s governance and
management adhears to the Company’s vision
and values. The Company is listed on the Oslo
Stock Exchange and is subject to the Norwegian
companies act, accounting act and stock exchange
listing and securities trading legislation. Solstad
Offshore ASA adheres to the Norwegian Code of
Practice for Corporate Governance, which was
last revised on 14. October 2021. More information
on corporate governance is given in the separate
chapter in the annual report and on www.solstad.
com.
The directors and ofcers of Solstad Offshore ASA
are covered under a “Director and Ofcer Liability
Insurance”. The insurance covers personal legal
liabilities including defence and legal expence. The
ofcers and directors of the parent company and all
subsidiaries globally are covered by the insurance.
The cover also includes employees in managerial
positions or employees who serves as Directors
in non-subsidiaries to safeguard the interest of the
Company.
6. Financial position and
development - the Group
The nancial statements for the Company for 2021
are prepared in accordance with International
Financial Reporting Standards “IFRS”, as adopted
by the European Union.
Operating income in 2021 was MNOK 5,418
compared to MNOK 5,026 in 2020. The increase
from 2020 is mainly driven by higher rates and
capasity utilization.
Operating expenses in 2021 amounted to MNOK
4,016 compared to MNOK 3,994 in 2020. Adjusted
EBITDA for the year was MNOK 1,534 compared
to MNOK 1,282 in 2020. Operating result before
nancial items and tax was MNOK -7 compared
to MNOK -2,226 in 2020, including impairments of
xed assets of MNOK 45 compared to MNOK 1,895
in 2020.
Company result after tax for 2021 was MNOK -1,136
(MNOK 7,254 in 2020). Net nancial items for 2021
were MNOK -1,103 (MNOK 9,477 in 2020). The
change from 2020 to 2021 is mainly due to effects
from the Company’s nancial restructuring in 2020.
Net earnings per share were NOK -15.13 (NOK
29.13 in 2020). Operating result before depreciation
and impairment amounted to 26 percent of income
compared to 21 percent in 2020. Booked equity
per 31.12.2021 was MNOK 3,083 (MNOK 4,243 in
2020) i.e. NOK 40.78 per share (NOK 56.7 per share
in 2020). Interest bearing debt as of 31.12.2021 was
MNOK 20,718 (MNOK 20,631 in 2020), whereof
MNOK 2,913 (MNOK 3,500 in 2020) is classied
as current liabilities. The interest-bearing debt has
the following currency split, 31 percent (33) NOK
and 69 percent (67) in USD. Overview and details
of amounts, interest rates, maturity and main
covenants are included in the account notes 5 and
6. At year-end, the Company held MNOK 2,459 in
cash deposits (MNOK 2,412 at year-end 2020). The
cash at year-end includes a MNOK 1,496 (MNOK
1,473 at year-end 2020) working capital facility
provided as a part of the restructuring agreement.
7. Health, environment, safety
and quality assurance
The Company operates in accordance with
international regulations and standards and is
certied to ISM, ISO 14001:2015, ISO 9001:2015,
ISO 45001:2018, ISO 50001:2018, MLC (Maritime
Labor Convention) and ISPS (International Ship
and Port Facility Security). The crews are trained
according to the Company’s procedures and
approved pursuant to the requirements of the
STCW 10 (Seafarers Training, Certication and
Watchkeeping Code). Internal audits are carried
out on all ships and ofces on an annual basis. The
common management system (Solstad Internal
Management System - SIMS) includes overall
objectives and policies for the Company. Further,
it describes the various processes and activities to
be performed and each employee’s responsibilities/
roles related to these.
A vital part to understand and improve safety is to
focus on preventative measures to avoid injuries
and operational accidents or interruptions. In
2021, approximately 34,328 HSE reports were
recorded and processed at different levels in the
organization. Conclusions from analyses are
used as basis for further preventative measures to
avoid future accidents. Overall, the Company had
three work-related lost-time injuries that provide
an TRCF (Total Recordable Case Frequency,
recordable injuries per 1 million working hours)
of 1.19 for 2021 (1.28 in 2020). The goal of no
incidents is maintained for 2022, and the Company
focuses on the evaluation, facilitation, planning and
preventative work to avoid all kinds of personnel-
related injuries and incidents with adverse effect
on the environment. The Company implemented
the safety behavior and culture program “Solstad
Incident Free Operations” (SIFO). Over the period
that the program was implemented the number of
incidents was considerably reduced by involving
the crew and increasing their focus on safety in their
daily work. A variation of the program has now been
implemented throughout the Solstad Offshore eet.
SIFO is a long-term program and it will realistically
take 2-3 years to get properly implemented.
In 2021 alone we achieved 1 percent improved eet
fuel efciency through technical and operational
measures. This was below our target of 3 percent
reduction. For 2022 the Company has changed
how to measure emission reductions, and this can
be found in the Sustainability Report 2021.
The eet had 292 liters of emissions of various
types of oil products to sea in 2021. The Company
has a program for sorting and reporting of all waste,
covering both ship and onshore organizations.
The Company’s onshore administration consists of
184 men (58 percent) and 130 women (42 percent).
Out of a total of 3,354 marine crew at year-end,
only 212 were women (6 percent). The Company
focuses on diversity and has equal opportunities
for all employees, regardless of their ethnic
background, nationality, descent, color, language,
religion, lifestyle or gender. The Company will select
and appoint the most suitable person for a position
based on their attitude, skills and qualications.
The Company takes part in recruitment and training
of cadets/trainees and participates in measures
towards encouraging young people to involve in
maritime education.
8. Market outlook
With the oil price per barrel back to USD 80 level
at year end 2021, oil and gas companies have
slowly started to increase their activity again after
they put the brakes on during the latest years. The
market started to show positive signs during 2021,
and expectations for 2022 is a steady increase.
The renewable energy operators and contractors
continue to increase their activity, which have a
positive demand effect for part of the CSV eet, but
also the AHTS eet. In total, an increased demand
for vessels is expected, and a limited number of
new vessels are entering the market. As a result of
increased demand, competition has stabilized with
associated increases in day rates.
The war in Ukraine will impact the energy market
and the uncertainty around this will result in a
uncertain market going forward.
9. Risk
The Company is exposed to market, commercial,
operational, and nancial risks that affect the
assets, liabilities, available liquidity and future cash
ows.
One of the key commercial risks for the Company
is the cyclical oil & gas markets it operates in, with
high volatility in freight rates, vessel values and
consequently protability. The market has been
in imbalance between supply and demand of
vessels over the last years, which determines the
freight rates. Factors affecting this is outside the
Company’s control and inuence.
Operational risks such as technical breakdown,
grounding and malfunction of equipment are
mitigated by insurrance.
The Company is exposed to interest rate and
currency risk, primarily through nancing and
contracts. The Company is exposed to interest rate
risk, as long-term debt mainly is based on oating
interest. Currency risk is reduced by having debt in
the same currency as charter agreements.
A risk mitigation framework has been established
based on identifying, assessing and managing the
Company risks. A risk mitigation framework has
been established based on identifying, assessing
and managing risks. The Board monitors the overall
risk factors for the Company.
Solstad Offshore ASA | Annual Report 202120
Contents
Annual Report 2021
Market risk
Market and operational risks are changes in
demand for and prices of the services provided
by the Company, and potential adverse effects of
the provision of such services. The market has
improved despite impacts of Covid-19 still affecting
regions where the Company operates. Despite the
still challenging market conditions, the Company
started to see signs of brightening towards the
end of 2021. The Company has avoided signicant
operational disruptions caused by Covid-19 and
has implemented a wide range of measures to
continuously manage and reduce risk.
Risk related to the ongoing invasion of
Ukraine
In February 2022, Russian armed forces invaded
Ukraine. The Company is present in Ukraine with
an ofce that manages crewing services and
employs approximately 300 Ukrainian crew. None
of the Company’s vessels have been forced to off-
hire due to the situation, but there is a risk that crew
changes and crew availability will be challenging as
long as the war persists. Management is handling
this event and its development proactively, including
sanctions and direct and indirect impacts. Actions
to mitigate its effect on services the Company
provides, and other associated risks, are taken.
There is signicant uncertainty regarding how the
invasion and the following sanctions will impact
the energy sector and we expect this will result in
a volatile market going forward. The ongoing war
in Ukraine could potentially lead to increased risk
of cyber-attacks.
Safety and environmental risks
There are inherent safety and security risks related
to operations at sea. As one of our core values,
safety is always in front of mind for all employees,
which is materialized through the Solstad Incident
Free Operations (SIFO) program. The Company
focuses on evaluation, facilitation, planning and
preventive work to avoid all type of personnel
related injuries and incidents that have an adverse
effect on the environment.
The Environmental risks mainly relates to the
vessels and includes risks such as oil spillage.
Key performance indicators are monitored, and
cause analysis performed with mitigating responses
if possible undesired events are identied.
For further information, reference is made to the
Sustainability Report.
Climate risk
The Company’s business and results of operations
could be adversely affected by climate change
and the adoption of new climate change laws,
policies, and regulations. Growing concerns about
climate change and greenhouse gas emissions
have led to the adoption of various regulations and
policies, including the Paris Agreement negotiated
at the 2015 United Nations Conference on Climate
Change (COP 21).
The climate risk is part of the Company’s risk
universe, and the Company is exposed to a variety
of climate risks. These risks vary from regulatory,
transitional, market, technology to reputational
risk. Climate risk and opportunities are one of the
Company’s top focus areas. We focus mainly on
reduction of carbon emissions from the eet and to
grow and pursue new business opportunities within
the renewable segments. Risks and opportunities
are classied as short, medium or long term
based on how effects of climate change affect
the Company, and required actions consequently
planned. The Company’s goal is to achieve a 50
percent reduction (compared to a 2008 baseline) in
emissions by 2030, and net zero by 2050. Our most
signicant nancial climate risk is related to the
vessels, and the risk of not being able to transition
efciently, and thereby losing competitiveness.
For further information, reference is made to the
Sustainability Report.
Risks related to nancing of the company
The main portion of the Company’s external debt
will mature by 1Q 2024 and therefore it is an inherent
renancing risk. A renancing is dependent on how
the market develops and many factors such as
developments in oil and gas prices. This may lead
to a need for adjustment of the capital structure.
Normand Maximus
Vessel lease liability is guaranteed by the Parent
Company with MNOK 2,424, for further reference
is made to Note 6 Mortage Debt. For the CSV
Normand Maximus the situation remains as
previously communicated. Normand Maximus
Limited continues its dialogue with its financiers
to find a long-term solution for the lease financing
of Normand Maximus. The agreements related to
Normand Maximus entitle Maximus Limited, as
owner of the vessel, to require Normand Maximus
Limited to buy the vessel and/or exercise other
rights and remedies under the lease financing if
a solution is not found. Absent a solution, there
is a risk in the current markets that Normand
Maximus Limited as bareboat charterer of the
Normand Maximus will not be able to finance such
a purchase or other claims. As all obligations of
Normand Maximus Limited are guaranteed by
Solstad Offshore ASA, this could have a material
adverse effect on Solstad Offshore ASA’s financial
situation. As advised in our 2Q 2021 report, the
Company has received summons from M. Y.
F Maximus Limited as a former shareholder in
Maximus Limited, for a declaratory relief that
M.Y.F Limited has a recourse claim against the
Company.
The hearing is scheduled to 2Q 2022.
Further details refer to Annual Report 2021 Note
6 and 8.
10. Finance - parent company
The result for Solstad Offshore ASA in 2021 was
MNOK 92 (MNOK 822 in 2020). The net nancial
result of MNOK 92 (MNOK 917 in 2020) is mainly
related to effects from the nancial restructuring of
the Company. Operating result was of MNOK 0,2
(MNOK -95 in 2020).
The Company’s assets are mainly related to the
value of shares in subsidiaries. Booked equity at
year end was MNOK 422 (MNOK 328 in 2020).
The long term debt at the same date was MNOK 2
(MNOK 2 in 2020).
11. Going concern
The annual accounts are prepared on the
assumption of a going concern. The going concern
assumption is based on the level of cash and cash
equivalents at year end, terms and conditions of
the banking and borrowing facilities, the forecasted
cash ow prognosis for the Company and backlog
position at 31 December 2021. Following the
restructuring in 2020, the Company has simplied
its legal structure and strengthened the liquidity
position within the restructured Company.
Borrowing facilities in the restructured Company
consists of one eet loan, with repayment terms
that reects the current market conditions.
12. Subsequent events
Contracts
The Company has increased its orderintake with
approximately MNOK 2,600 during Q1 2022. The
new contracts (MNOK 1,450) are from all business
segments.
Sale of vessels
The Company has disposed further 11 vessels
classied as non-strategic in 2022, with warrants
exercised for ve of the sales. This concludes the
divestment of non-strategic vessels whereof one
of the 37 non-strategic vessels has been put into
operation. Warrants are exercised in accordance to
the restructuring agreement 20 October 2020.
The situation in Ukraine
In February 2022, Russian armed forces invaded
Ukraine. The Company is present in Ukraine with
an ofce that manages crewing services and
employs approximately 300 Ukrainian crew. None
of the Company’s vessels have been forced to off-
hire due to the situation, but there is a risk that crew
changes and crew availability will be challenging as
long as the war persists. Management is handling
this event and its development proactively, including
sanctions and direct and indirect impacts. Actions
to mitigate its effect on services the Company
provide, and other associated risks are taken.
13. Prot & loss allocation
The Board proposed that the following distribution
is made for the parent company:
Transfer from other equity NOK 91,813,164
Net applied/transferred NOK 91,813,164
Solstad Offshore ASA | Annual Report 202122
Contents
Annual Report 2021
Afrmation by the Board and Managing Director
We hereby afrm that, to the best of understanding, the Annual Accounts for the period 1st January to
31st December 2021 have been prepared in accordance with current accounting standards; and that
the information in the accounts represents a true and fair view of the Company’s and the consolidated
group’s assets, liabilities, nancial position and overall performance. We further afrm that the Annual
Report provides a true and fair view of the development, earnings and standing of the Company and the
consolidated group; outlining the most important risk factors and uncertainties facing the group.
Harald Espedal
Chairman
Thorhild Widvey
Director
Ellen Solstad
Director
Ingrid Kylstad
Director
Lars Peder Solstad
CEO
Peder Sortland
Director
Frank O. Reite
Director
Board of Director in Solstad Offshore ASA
Skudeneshavn 21. April 2022
Solstad Offshore ASA | Annual Report 202124
Contents
Annual Report 2021
72 %
28 %
Baseline '20 Reduction '21
Plastic Bottles
Reduction in single-use water plastic bottles
during 2021 ended at 28 percent (65,600
bottles) and lead to a CO
2
reduction of 9
tons. For 2022 the reduction target is 50
percent.
Sustainability in brief
0
100
200
300
400
500
600
700
800
2018 2019 2020 2021
Safety
The Total Recordable Cases Frequency (TRCF) was record low with 1.19.
A total of three Lost Time Incidents (LTI) were recorded. Solstad has a zero
injuries vision.
Emissions
The total eet CO
2
emissions increased by 2.1 percent in 2021 to 711,552 tons due to higher operational
activity and more vessels in operation.
The average CO
2
emission per vessel/day has increased by 4 percent compared to the 2018-2020
average due to higher activity. Higher activity is a positive sign for Solstad. However, this results in more
longer transits for some vessels (between world-wide regions), less days idle berthed waiting for work
and more demanding DP operations for the CSV and AHTS vessels. This again results in higher total
net CO2 emissions. However, the PSV eet alone shows a postive development the last two years as a
result of the nine hybrid PSV conversions. This demonstrates that implementation of green technology
works.
Oil Spills
The number and volume of oil spills to the environment are decreasing over time
despite increased operational activity (292 litres vs 348 litres in 2020). Solstad
has a zero-spill goal.
0
5
10
15
20
25
30
35
40
AHTS CSV PSV Fleet avg
Avg tCO2 per vessel/day
2018 2019 2020 2021
0
2
4
6
8
10
12
14
-
2000 000
4000 000
6000 000
8000 000
10000 000
12000 000
14000 000
16000 000
18000 000
Hours
Total Manhours TRCF
Diversity and Inclusion
Currently, 6 percent of Solstad’s seafarers are women (5 percent in 2020) and the company had a 44 percent increase in number of
female seafarers during the year.
For the onshore organization, the total of female managers is at 22 percent and the target is to reach 35 percent by 2030.
94 %
6 %
Offshore crew
Male Female
80 %
20 %
Onshore Managers
Male Female
Solstad Offshore ASA | Annual Report 202126
Contents
Annual Report 2021
Corporate
governance
Corporate governance in Solstad Offshore ASA
is based on the Norwegian Code of Practice for
Corporate Governance of 14. October 2021 (the
Code). The Company is listed on the Oslo Stock
Exchange (OSE) and is subject to Norwegian
corporate, accounting, exchange listing and
securities trading legislation.
Implementation and reporting
It is of importance to the Company to regulate the
division or roles between Shareholders, the Board
of Directors, and the Executive Management.
Hence, the Company has adhered to the principles
of the Code.
Business
Solstad Offshore ASA´s objective as described
in the Articles of Association, is to conduct
integrated shipping operations with advanced
vessels in its market segments, utilizing owned or
chartered vessels. The operations are primarily the
provision of maritime services to the oil and gas
and renewable energy industries. The Company´s
Articles are available online at www.solstad.com.
More details about the Company´s objective and
strategy are set out in the Annual Report on page
3 - 5.
Solstad Offshore ASA maintains its guidelines for
ethical conduct and social responsibility aimed
at securing values and corporate culture in the
organization, in order to provide a basis for value
creation, safe and green operations, workplace
satisfaction, positive reputation and innovation.
Equity and dividends
At year-end 2021, the Company’s equity amounted
to MNOK 3,083. In a longer perspective, the
Company aims is to give the Shareholders an
attractive return on invested capital, by increased
share price and dividends.
Due to the current market situation and certain
restrictions of the nancial agreements with the
Company´s lenders, The Company will not pay
dividends for 2021 or for the coming years.
On the General Meeting, held on 25. May 2021, no
authorization was given to the Board of Directors in
respect of increasing of the share capital.
Equal treatment of shareholders
Solstad Offshore ASA has one class of shares. All
shares have equal rights.
An authorization to the Board of Directors to acquire
treasury shares is normally contingent to take place
at Oslo Stock Exchange.
Shares and negotiability
The shares in Solstad Offshore ASA are freely
tradable. The Articles of Association set no
limitations on transactions.
General meeting
The Annual General Meeting is held in the month
of May or June. According to the Articles of
Association, the notice and related documents are
posted on the Company’s website no later than
three weeks in advance. The Company endeav-
ours to ensure that the documents contain all
necessary information to enable shareholders to
vote on all matters. The Chairman of the Board
takes part in the General Meeting, as does the
Company Auditor. The Board aims for as many
Shareholders as possible to attend. Shareholders
who cannot attend, may be represented by
proxy and the procedures for voting by proxy are
described in the notice. The proxy authorization
form is designed to allow Shareholders to vote
on individual items and individual candidates for
election or re-election. The agenda is determined
by the Board of Directors, according to the article
6 of the Articles of Association. The Chairman of
the Board opens the General Meeting and a chair-
person for the meeting is elected. The minutes
of the General Meeting are published as a Stock
Exchange notice and on the Company’s website.
Nomination committee
The Articles of Association states that the
Company shall have a Nomination Committee of
2-3 members, the nal number to be decided by
the General Meeting. The Nomination Committee
shall propose candidates to the Board of Directors
and to the nomination committee, and propose
remuneration of the Board of Directors and
members of the nomination committee. The
General Meeting will elect the members of the
nomination committee, including the chairperson,
and set their remuneration. The guidelines for the
nomination committee and their contact details are
published on the Company website.
Board of Directors, composition,
and independence
The nomination committee’s primary goal is to
propose candidates who will ensure that the
Company has a Board of Directors with the most
relevant expertise, capacity, and diversity. The
Board should be composed of Directors who act
independently of special interests, and the majority
of the Directors should be independent of any
major Shareholder. The composition should also
reect gender equality, and both genders shall
be represented with at least 40% in the Board of
Directors. Directors are elected for a two-year term
of ofce.
Work of the Board of Directors
There are six to eight scheduled Board Meetings
annually, augmented by telephone conferences
when needed. Instructions for the Board and
Executive Management are in place. Procedures
for internal control is exercised according to the
adopted guidelines and reviewed with the auditor
and Board on an annual basis. The Board receives
a monthly nancial report. The Board elects one of
the directors to chair the meeting in the absence
of the Chairman. An audit committee consists of
three independent directors, elected by the Board
of Directors.
The Company maintains rules to ensure that the
Board of Directors and Executive Management
report to the Board in case of any direct or indirect
material interest in any contract signed by the
Company.
Risk Management and internal
control
The Board seeks through its work to ensure
that the Company maintains good standards of
internal control and appropriate systems of risk
management, considering the scope and nature
Solstad Offshore ASA | Annual Report 202128
Contents
Annual Report 2021
of the Company’s business, and the provisions
that govern the business. The Company
has established a system of operation and
administration that relies on work procedures
and job descriptions. The system also covers
social responsibility and ethical guidelines.
There is a commitment to quality assurance. The
Board receives information about operational,
administrative, and nancial developments
in monthly reports. The Board reviews the
corporate strategy and the business plan
annually, including analysis of the Company’s
risk exposure. Exposure is monitored monthly
through the reports from the Administration.
Remuneration of Directors
The remuneration of the Board of Directors is in
line with comparable companies in the industry.
The amounts involved are reported in the nancial
statements. The Directors do not have share
options. In cases where members of the Board
should undertake signicant additional work for
the Company, all Directors will be informed and
fees shall be approved by the Board. The fees
are reported in the nancial statements. All
transactions between Directors or employees (or
companies that they represent or are associated
with) on the one hand, and the Company on the
other, are implemented in accordance with the
arm’s length doctrine.
Apart from the details included in the notes
regarding remuneration of the Directors,
companies that they represent or are associated
with, the Company has no other obligations.
Remuneration of the Directors is considered to
reect the market conditions.
Remuneration to
Executive Management
The remuneration of the Managing Director
is determined by the Board. Other elements
of the remuneration are reported in the notes
to the nancial statements. The guidelines for
remuneration of the Executive Management
are presented to the General Meeting and
remuneration guidelines can be found on the
Company website.
Information and
communication
The Company has a policy of treating all
shareholders and other market participants
equally, communicating relevant information
on signicant developments of the Company´s
business and standing in a timely manner.
Presentations of the nancial reports are made
according to the nancial calendar posted on
the Company website and led as a notice with
the OSE. Furthermore, frequent briengs and
discussions are held with analysts and investors.
Information is disclosed through stock exchange
notices, discussions with analysts, and general
briengs for investors, as well as special briengs
for stockbrokers and investors. The Company
adheres to the recommendations of the OSE
regarding Investor Relations reporting.
Take- overs
The shares in the Company are freely tradable,
and the Articles of Association does not hold
specic defense mechanisms against take-over
situations. In a potential bid-situation, the Board
will work to inform Shareholders and allow time
to decide on the offer. Furthermore, the Board
will issue a statement to the Shareholders with
an assessment of the bid and a recommendation
of whether to accept it or not.
Auditor
The Auditor of the Company is elected at the
Annual General Meeting, which also approves its
remuneration. The Auditor sets out the highlights of
the audit plan to the audit committee annually. The
auditor also presents a report with its views and
observations regarding the accounting principles,
risk areas, internal control routines, and other
aspects. Furthermore, the Auditor will each year
deliver a written report to afrm its compliance
with certain impartiality and objectivity standards.
The Auditor attends Board Meetings to discuss the
nancial statements for the year and attends the
Annual General Meeting.
Important consultancy work performed by the
Auditor requires prior approval by the Directors.
The remuneration to the auditor is reported
in the nancial statements. Once a year, the
Board of Directors meets with the Auditor for
discussions without the Managing Director or other
representatives from the administration present.
Solstad Offshore ASA | Annual Report 202130
Contents
Annual Report 2021
Social Media
Highlights
2021
Solstad Offshore ASA | Annual Report 202132
Contents
Annual Report 2021
A new star in
the eet
29. October 2021, Normand Maximus
launched her actress career in the
Nordsjøen movie. The movie is
produced by Fantelm. Our vessels
operate in harsh conditions around
the world and the North Sea is no
exception. Normand Maximus had
a role in the movie, and she is the
most advance vessel in our eet.
She operates around the globe
conducting complex construction
work in challenging environments.
In the movie an oil platform dramatically
goes down on the Norwegian
continental shelf coast, and researchers
try to nd out what happened when
they realize this is just the start of
something even more serious.
Onshore and offshore personnel
was invited to a red carpet at
Karmøy and Ålesund for a sneak
peek of the movie and our star was
portrayed in an excellent manner.
#solstadoshore #wearesolstad #womeninsolstad #SIFO
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
34
Consolidated
statement of
comprehensive
income
Group accounts (NOK 1,000)
2021
01.01-31.12
2020
01.01-31.12
Note
Freight income 5,128,173 4,844,027 4, 28
Other operating income 289,327 181,603 4
Total Operating income 5,417,500 5,025,630
Personnel costs -2,044,482 -2,025,250 10, 11, 19
Administrative expenses -449,509 -476,829
Other operating expenses -1,521,986 -1,491,671 10
Operating expenses -4,015,978 -3,993,750
Operating result before depreciation and impairment 1,401,523 1,031,880
Depreciation -993,053 -1,076,114 7,8
Depreciation capitalised periodic maintenance -271,098 -282,231 7,8
Impairment xed assets -45,049 -1,895,040 7,8
Net gain/loss on sale of assets -99,730 -28,896 7
Income from investment in joint ventures 247 23,975 13
Operating result -7,159 -2,226,427
Income from investments in associated companies 108 41,423 13
Interest income 10,295 6,373
Other nancial income 173,405 12,345,724
Interest charges -1,003,543 -1,437,619
Other nancial costs -283,504 -1,479,125
Net nancial items -1,103,239 9,476,776 9
Result before taxes -1,110,398 7,250,349
Tax on ordinary result -25,664 3,517 18
Net result -1,136,062 7,253,866
Comprehensive income:
Translation adjustments foreign currency -34,851 580,397
Comprehensive income that may be creclassied in subsequent periods -34,851 580,397
Acturial gain /(loss) -3,971 -5,921 19
Comprehensive income that may not be reclassied in subsequent periods -3,971 -5,921
Total Comprehencive income -1,174,885 7,828,342
Net result attributable to:
Non-controlling interests -33,613 13,122
Equity holders of the parent -1,102,449 7,240,743
Comprehensive income attributable to:
Non-controlling interests -33,613 13,122
Equity holders of the parent -1,141,272 7,815,219
Earnings per share (NOK) -15.13 29.13 16
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
36
Consolidated
statement
of nancial
position
(NOK 1,000)
2021
31.12
2020
31.12
Note
ASSETS
LONG-TERM ASSETS:
INTANGIBLE ASSETS:
Deferred tax assets 14,497 5,581 18
Contracts - 7,499 28
TOTAL INTAGIBLE FIXED ASSETS 14,497 13,079
LONG-TERM FIXED ASSETS:
Vessels and new build contracts 17,386,500 18,716,131 7
Right-of use-assets 2,561,186 2,457,322 8
Capitalized periodic maintenance 677,518 760,223 7
Other tangible xed assets 26,309 33,265 7
TOTAL LONG-TERM FIXED ASSETS 20,651,513 21,966,941
FINANCIAL ASSETS:
Investment in joint ventures 91,127 109,904 13
Loans to associated companies and joint ventures 47,506 45,961 17
Investments in associated companies 1,279 1,128 13
Investments in shares 2,991 2,991 13
Other long-term receivables 56,460 60,195 23
TOTAL FINANCIAL ASSETS 199,364 220,179
TOTAL LONG-TERM ASSETS
CURRENT ASSETS:
Inventory 173,041 165,330 25
Receivables:
Account receivables 816,745 839,628 5, 24
Other short-term receivables 421,094 414,011 24
Total receivables 1,237,839 1,253,639
Investments:
Market based shares 15,200 11,100 9,13
Bank deposits and cash equivalents 2,459,027 2,411,905 5, 20
TOTAL CURRENT ASSETS
Assets held for sale 187,200 26,803 7
TOTAL ASSETS
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
38
Consolidated
statement
of nancial
position
(NOK 1,000)
2021
31.12
2020
31.12
Note
EQUITY & LIABILITIES:
EQUITY:
PAID-IN EQUITY:
Share capital (75,608,658 a 1,-) 75,609 74,873 15
Treasury shares - - 15
Other paid-in capital - -
Share premium 176,927 175,572
TOTAL PAID-IN EQUITY 252,536 250,445
RETAINED EARNINGS:
Other equity 2,835,545 3,976,816
TOTAL RETAINED EQUITY 2,835,545 3,976,816
Non-controlling interests -4,599 15,814
Total Equity 3,083,481 4,243,075
LIABILITIES
LONG-TERM LIABILITIES:
Deferred tax - -
Pension liabilities 25,864 25,015 19
Other nancial liabilities 17,316 12,869
Other long-term liabilities 1,917 12,372
Interest bearing liabilities 17,523,945 16,875,360 5
Leasing liabilities 280,761 255,288 5
TOTAL LONG-TERM LIABILITIES 17,849,803 17,180,904
CURRENT LIABILITIES
Accounts payable 552,077 532,405
Taxes payable 176,767 168,016 18
Other current liabilities 362,640 444,678 26
Current interest bearing liabilities 446,592 940,944 5,6
Current leasing liabilities 2,466,321 2,558,953 5
TOTAL CURRENT LIABILITIES 4,004,397 4,644,996
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Harald Espedal
Chairman
Thorhild Widvey
Director
Ellen Solstad
Director
Ingrid Kylstad
Director
Peder Sortland
Director
Frank O. Reite
Director
Board of Director in Solstad Offshore ASA
Skudeneshavn April 21, 2022
Lars Peder Solstad
CEO
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
Share
capital
Treasury
shares
Share
premium
Other
paid-in
capital
Translation
adjust-
ments
Other
equity
Total
majoirty
shares
Non-
controlling
interests
Total equity
Equity 01.01.2021
Result
Actuarial gain/
loss (-)
Translation
adjustments
Total
comprehensive
income
Share capital
increase by
convertion of debt
Share capital privat
placement
Equity 31.12.2021
40
Consolidated
statement
of changes
in equity
(NOK 1,000)
Equity 01.01.2020
Result
Actuarial gain/
loss (-)
Translation
adjustments
Total
comprehensive
income
Share capital
decrease
-582,773 281 - - - 582,492 - - -
Transfer of paid-in
capital
Share capital
increase by
convertion of debt
Share capital privat
placement
Equity 31.12.2020
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
2021
31.12
2020
31.12
Note
CASH FLOW FROM OPERATIONS
Result before tax -1,110,398 7,250,349
Taxes payable -18,917 -35,649 18
Ordinary depreciation and write downs 1,309,199 3,253,386 7
Gain (-)/ loss long-term assets 95,274 321,975
Interest income -10,295 -6,373
Interest expense 1,003,543 1,437,619
Terminated leases - 439,559
Non-cash renance effects -91,102 -11,713,286
Effect of change in pension assets 400 7,695
Change in value of nancial instruments - -170,239
Unrealised currency gain/ -loss 275,136 140,113
Change in short-term receivables and payables 34,843 212,570
Change in other accruals -103,931 -361,760
Net cash ow from operations 1,383,754 775,960
CASH FLOW FROM INVESTMENTS
Investment in tangible xed assets -72,654 -57,385 7, 8
Payment of periodic maintenance -252,192 -406,800 7, 8
Consideration sale of xed assets (vessels) 290,215 1,014,170
Payment of long-term receivables 820 64,006
Received interests 10,295 6,243
Realization of shares and holdings - 36
Net cash ow from investments
-23,515 620,270
CASH FLOW FROM FINANCING
Paid-in capital - 70,355
Lease interests paid -176,480 -241,442 6
Lease instalments -213,191 -220,335 6
Paid interests -531,847 -157,973
Drawdown long-term debt - 1,467,962
Repayment of long-term debt -397,541 -1,077,155 6
Net cash ow from nancing -1,319,059 -158,588
Effect of changes in foreign exchange rates 5,942 40,236
Net change in cash 41,180 1,237,642
Cash at 01.01 2,411,905 1,134,028
Cash at balance sheet date 2,459,027 2,411,905
42
Consolidated
statement
of cash ow
(NOK 1,000)
Solstad Offshore ASA | Annual Report 202144
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Annual Report 2021
The Group, Sol st ad O f fs ho re AS A (“SOFF” or “the Company”),
operates a shipping business from its head ofce in N es aveg en
39, 4280 Sk ude nes havn, N or way , and its main activities are
the o pe rati on o f of f sho re se r vi c e and c on str uc ti on ves se ls.
The Group is listed on Osl o Stock Exc han ge. The nancial
statements were approved by the Board of Directors on 21. April
2022 and will be presented for approval in the Annual General
Meeting.
Statement of compliance and basis for preparation
The consolidated nancial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs) and interpretations by the International Accounting
Standards Board (IASB) which have been approved by the
European Union (EU).
The consolidated nancial statements have been prepared on
a historical expences basis, except for debt relateed to non
core vessels and shares that have been measured at fair value
and are presented in Norwegian Kroner. Throughout the Notes
all gures are stated in NOK thousand unless clearly stated
otherwise.
The annual accounts are prepared on the assumption of a going
concern. The going concern assumption is based on the level
of cash and cash equivalents at year end, terms and conditions
of the banking and borrowing facilities, the forecasted cash ow
prognosis for the Group and backlog position on December
31st, 2021. Following the restructuring in 2020, the Company
has simplied its legal structure, and secured free oat of
liquidity within the restructured Group. Borrowing facilities
in the restructured group consists of one eet lowan, with
repayment terms that reects the current market conditions.
The “Restructured” Group also holds a working capital facility
of MNOK 1,494.
Changes in accounting principles
The Group has not implemented any new accounting standards
or otherwise made any signicant changes to account principles
during 2021.
Approved IFRS and IFRIC interpretations not yet
implemented
None of the issued, not yet effective, accounting standards or
amendments to such standards are expected to have signicant
effect for the Group’s nancial reporting. Nor does issued
IFRIC interpretations expect to signicantly change the Group’s
accounting policies or practices.
Consolidation
The consolidated nancial statements comprise of the nancial
statements of Solstad Offshore ASA and its subsidiaries as of
December 31st each year. Any deviating accounting principles
are adjusted for in this consolidation.
The Group accounts present the total prot & loss and nancial
position of S ol sta d O f fs hor e ASA and its subsidiaries as
one. The consolidated accounts include companies in which
the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee. Generally, there is
a presumption that ownership of more than 50 percent of the
voting shares results in control. To support this presumption
and when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over
an investee including: contractual arrangements with other vote
holders of the investee, rights arising from other contractual
arrangements, and the Group’s voting rights and potential voting
rights.
Subsidiaries are consolidated 100 percent line by line in the
group accounts.
Subsidiaries are consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the
date on which control is transferred out of the Group.
Acquisitions of subsidiaries are accounted for using the
acquisition method of accounting. The purchase price is
allocated to identiable assets and liabilities from the subsidiary
and is recognized at fair value in the consolidated accounts at
the acquisition date. Any excess expences of acquisition over
the fair value of the net identiable assets of the subsidiary
acquired calculated at the date of handover, will be recognized
as goodwill. If the expences of the acquisition is less than the
fair value of the net assets of the subsidiary acquired calculated
at the date of handover, a day-one-gain will be recognized as
income.
All inter-company transactions, receivables, liabilities and
unrealized prots, as well as intra-group prot distributions, are
eliminated. In the consolidation, the prot and loss accounts of
foreign subsidiaries, not using NOK as functional currency, are
translated using the exchange rate on the day of transaction.
The balance sheet is translated using the balance sheet date
exchange rate. The exchange differences arising on translation
for consolidation are recognized in other comprehensive income
(OCI).
The non-controlling interest in equity is reported separately in
the consolidated nancial statements.
Investment in associates and joint ventures
The Group’s investment in its associates and joint ventures
are accounted for under the equity method of accounting.
An associate is an entity in which the Group has signicant
Notes
Notes to the Consolidated
Financial Statements (NOK 1,000)
Note 1 - Accounting principles
Solstad Offshore ASA | Annual Report 202146
Contents
Annual Report 2021
inuence, but which is not a subsidiary. A joint venture is an
entity in which the Group has joint control through entering into
an agreement of joint control, requiring unanimous consent in
strategic decisions (decisions relating to relevant activities).
The reporting dates of the associates, joint venture and the
Group are the same and the same accounting principles are
applied.
Investments in an associate and joint ventures are recorded in
the balance sheet at expence plus post-acquisition changes in
the Group’s share of net assets of the associate or joint venture,
less any impairment in value. The prot and loss for the Group
reects the associates’ share under nance, and joint ventures’
share of prots under operating expences. Changes recorded
directly in the associates’ or joint ventures’ comprehensive
income or equity, are recognized pro-rata in the Group accounts,
and are, where applicable, presented in OCI.
Financial instruments
A nancial instrument is any contract that gives rise to a nancial
asset of one entity and a nancial liability or equity instrument
of another entity.
Financial assets
The Group’s nancial assets are derivatives, trade- and lease
receivables and cash and cash equivalents. The classication
of nancial assets at initial recognition depends on the nancial
asset’s contractual cash ow characteristics and the Group’s
business model for managing them. Except for trade receivables
that do not contain a signicant nancing component, the Group
initially measures a nancial asset at its fair value plus, (in the
case of a nancial asset not at fair value through prot or loss),
transaction expences. Trade receivables that do not contain a
signicant nancing component are measured at the transaction
price determined under IFRS 15 Revenue from contracts with
customers.
The Group classies its nancial assets in two categories:
• Financial assets at amortized expences
• Financial assets at fair value through prot or loss (FVTPL)
Financial assets at amortized expences
The Group measures nancial assets at amortized expences if
both of the following conditions are met:
• The nancial asset is held within a business
model with the objective to hold nancial assets
in order to collect contractual cash ows
• The contractual terms of the nancial asset give rise on
specied dates to cash ows that are solely payments of
principal and interest on the principal amount outstanding
Financial assets at amortized expences are subsequently
measured using the effective interest (EIR) method and are
subject to impairment. Gains and losses are recognized in prot
or loss when the asset is derecognized, modied or impaired.
The Group’s nancial assets at amortized expences includes
trade and other receivables, lease receivables and other non-
current assets.
Financial assets at fair value through prot or loss
Derivatives at fair value are carried in the statement of nancial
position at fair value with net changes in fair value through prot
or loss. The category includes foreign exchange contracts and
interest rate swaps.
Derecognition of nancial assets
A nancial asset (or, where applicable, a part of a nancial
asset or part of a group of similar nancial assets) is primarily
derecognized when:
• The rights to receive cash ows from
the asset have expired, or
• The Group has transferred its rights to receive cash ows
from the asset or has assumed an obligation to pay the
received cash ows in full without material delay to a third
party under a ‘pass-through’ arrangement; and either
a. the Group has transferred substantially all
the risks and rewards of the asset, or
b. the Group has neither transferred nor retained
substantially all the risks and rewards of the
asset, but has transferred control of the asset
Impairment of nancial assets
For trade and other receivables, lease receivables and other
non-current assets, the Group applies a simplied approach in
calculating ECLs. Therefore, the Group does not track changes
in credit risk, but instead recognizes a loss allowance based on
lifetime Estimated Credit Losses (ECLs) at each reporting date,
based on its historical credit loss experience.
The Group considers a nancial asset in default when internal
or external information indicates that the Group is unlikely to
receive the outstanding contractual amounts in full before taking
into account any credit enhancements held by the Group. A
nancial asset is written off when the Group has no reasonable
expectations of recovering the contractual cash ows. The
Group individually makes an assessment with respect to the
timing and amount of write-off based on whether there is a
reasonable expectation of recovery. This assessment is based
on historical experience of recoveries of similar assets. The
Group expects no signicant recovery from the amount written
off. However, nancial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group’s procedures for recovery of amounts due.
Financial liabilities
Financial liabilities are initially recognized at fair value and
subsequently measured at amortized expences except for
nancial liabilities at fair value through prot of loss (FVTPL).
Such liabilities, including debt related to non core vessels shall
be subsequently measured at fair value. Other nancial liabilities
are subsequently measured at amortized expences using the
eective interest method. Interest expense is recognized in prot
or loss. Any gain or loss on derecognition is also recognized in
prot or loss.
Derivatives are nancial liabilities when the fair value is negative,
accounted for similarly as derivatives as assets.
Derecognition of nancial liabilities
The Group derecognizes a nancial liability when its contractual
obligations are discharged or cancelled or expired. The
Group also derecognizes a nancial liability when its terms
are modied, and the cash ows of the modied liability are
substantially different in which case a new nancial liability
based on the modied terms is recognized at fair value. The
difference between the carrying amount and the consideration
paid is recognized in prot or loss.
Classication of items in the balance sheet
Current assets and short-term debt are items which mature
within one year of the balance sheet date as well as any items
relating to the normal operating cycle. The short-term portion
of the long-term debt and other liabilities for which there is no
unconditional right to defer the settlement of the liability for at
least twelve months after the reporting period are classied as
current liabilities. Investments in shares hold for trading, not
considered as strategic, or are expected to be disposed are
classied as current assets. Cash and cash equivalents are
classied as current assets, unless restricted from being used
during the following 12 months. All other assets and liabilities
are classied as long-term assets and liabilities.
Foreign currency translation
The functional and presentation currency of Solstad Offshore
ASA is Norwegian Kroner (NOK). Transactions in foreign
currencies are recorded at the currency rate on the date of
the transaction. Monetary assets and liabilities denominated
in foreign currencies are translated at the balance sheet date.
Non-monetary items such as vessels that are measured in
terms of historical expences in a foreign currency are translated
using the exchange rate at the date of initial transaction. Non-
monetary items in companies where the functional currency
deviates from the reporting currency are measured at the
exchange rate at the date of the balance sheet. Any translation
adjustments are included in comprehensive income.
The Group’s most used currencies had the following exchange
rates at the balance sheet date:
GBP USD EUR BRL AUD
Per 31.12.20 11.6 46 8.533 10.470 1.643 6.587
Per 31.12.21 11.888 8.819 9.989 1.583 6.397
Segment information
The Group reports internally on operating- and geographical
segments. The operating segments are divided into the following
four segments:
• AHTS: anchor handling vessels
• PSV: platform supply vessels
• Subsea
• Renewable
The Group has extended reporting segments as a response
to the Group’s strategy. The Group owns and operates AHTS,
PSV and CSV vessels. The different types of vessels operate
in different markets, and management review operating results
within these markets. The Group focuses on the renewable
market, and as a consequence vessel operating renewable
contracts has been highlighted as a separate segment.
The segments coincide with the operational structure of
the Company, being four departments responsible for each
segment. Comparative gures have been restated.
Any other activities, including vessels under construction,
are included in a separate segment. Overhead expences are
apportioned between the segments based on the share of
operating expenses. All accounting policies applied in the
segment reporting are the same as used in the Group reporting.
The Group presents activities by geographical markets in the
segment note based on the location of the Group’s vessels and
operations throughout the year.
Property, plant and equipment – impairment charges
and depreciation
Property, plant and equipment acquired by Group companies
are stated at historical expences, except the assets of acquired
subsidiaries that are stated at the fair value at the date of
acquisition. Depreciation is calculated on a straight-line basis
and adjusted for residual value and impairment, if any. Residual
value is the current estimated amount that would be obtained
from disposal of the asset, after deducting the estimated
expences of disposal, as if the asset were already of the age and
in the condition anticipated at the end of its useful lifespan. The
book value of the property, plant and equipment on the balance
sheet represents the expences less accumulated depreciation
and any impairment.
Each part of a xed asset that is signicant to the total expences
of the item are separately identied and depreciated over that
component’s useful lifetime. Based on the Group’s periodic
maintenance program and running replacement the vessels vital
parts, the expected lifetime of the assets is set to 20 years for
all of the components, except for planned periodic maintenance.
The residual value and expected useful lifetime assumptions
of long-lived assets are reviewed at each balance sheet date,
and where they differ signicantly from previous estimates,
depreciation charges are amended accordingly.
Ordinary repairs and maintenance expences are charged to the
income statement in the period in which they are incurred. The
expences of major conversions and periodic maintenance of
vessels is capitalized and depreciated over the useful lifespan of
the parts replaced. The useful lifespan of periodic maintenance
Solstad Offshore ASA | Annual Report 202148
Contents
Annual Report 2021
will normally be the period until the next interim- or main
classication of the vessel, which usually is ve years.
The book values of plant and equipment are reviewed for
impairment if events or changes in circumstances indicate
that the booked value may not be recoverable. If any such
indications exist and where the book value exceeds the
estimated recoverable amount, the asset or cash-generating
units are depreciated to their recoverable amount. The
recoverable amount of plant and equipment is the greater of
the net selling price and the value in use. When determining
value in use, estimated future cash ows are discounted to their
current value using a pre-tax discount rate that reects current
market assessments of the monetary value and the specic risk
to the asset. For an asset that does not generate cash inow,
a recoverable amount is calculated for the cash-generating
unit to which the asset belongs. Any previously calculated and
recognized impairment write-downs are reversed if there are
any changes to the estimates of recoverable amount. Reversals
of previous impairments are limited to the book value of the
asset if its value had not been impaired.
The business segments are the Group’s strategic units of
control. However, while calculating the recoverable amount,
each vessel is treated as one cash-generating unit.
Gains and losses on disposal are determined by comparing the
disposal proceeds with the book value and any prot or loss is
included in operating prot.
New build contracts
Instalments on new build contracts are recorded in the
balance sheet as xed assets. Expences related to the on-
site supervision and other pre-delivery construction expences
including construction loan interest are capitalized per vessel.
The depreciation starts from when a new build is delivered from
the yard.
Leases
Right-of-use-assets
Right-of-use-assets are recognized at expences, less
depreciation and impairment losses at the commencement of
the lease. The expences of the assets includes the recognized
lease liabilities, initial direct expences, and lease payments
made prior to commencement. Straight-line depreciations over
the lease term are used, unless the Company is reasonably
certain to obtain ownership of the assets at the end of the
leasing period, in which case straight-line depreciations over the
estimated economic life of the assets are used. The assets are
subject to impairment assessments under the same principles
as other assets.
The Group primarily leases vessels, but also has lease contracts
related to various ofces used in its operations.
Lease liabilities
Lease liabilities are recognized at the commencement of the
lease measured at the present value of lease payments over
the lease period. The lease payments include both xed and
variable lease payments. If a purchase option is likely to be
exercised, the option price is included. Variable lease payments
that do not depend on an index are recognized as expense in the
period when the payment trigger occurs.
When calculating present value of the lease the incremental
borrowing rate at the beginning of the lease is used, if the
implicit rate is unavailable. Subsequently, the amount of the
lease liability is increased to reect the accretion of interest and
reduced for lease payments made. The liability is remeasured if
modications or changes to the lease terms occur.
Contracts with renewal options
The Company determines the lease term as the non-cancellable
part of the lease. In addition, any periods covered by an option
for extended lease that is reasonably certain to be exercised
are included.
Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand, short-term
deposits and other short-term highly liquid investments with
maturity dates of less than three months. Bank overdrafts are
included within borrowings in current liabilities on the balance
sheet.
Restricted bank deposits are funds on separate bank accounts
for tax deductions.
Assets held for sale
Non-current assets held for sale consist of vessels that have
been decided to be disposed of, by sale or otherwise. Non-
current assets classied as held for sale are measured at the
lower of their previous carrying amount and their fair value less
expences of disposal. Any excess of the carrying amount over
the fair value less expences of disposal is recognized as an
impairment loss. Depreciation of such assets is discontinued as
from their classication as held for sale.
Treasury shares
The nominal value of treasury shares held is deducted from
registered share capital. Any differences between the nominal
value and the acquisition price of treasury shares, together
with any gains or losses on transactions therein, are recorded
directly to reserves.
Provisions
Provisions are made in the nancial statements if the Group
considers it more likely than not, based on the legal provisions
or business liabilities of past events, that an outow of resources
will be required to cover its liabilities and if the amount can be
accurately estimated. All provisions are reviewed at balance
sheet date and adjusted, if necessary, to reect best estimate.
In instances where the timeframe may be of signicance, a
provision is made for the current value of future payments to
cover liabilities.
Excess values contracts
Identied excess values in charter contracts acquired through
business combinations are classied as intangible xed assets
and are amortized over the remaining duration of each charter
contract.
Tax
Tax consists of tax payable and changes in deferred tax.
Tax payable is based on taxable prot for the year and calculated
using tax rates that have been enacted as of the balance sheet
date.
Operations on foreign continental shelves are, in a number
of cases, taxable to the state of operation. In such cases the
tax is computed according to the tax legislation of the current
state, combined with any double taxation avoidance agreement
between the state where the ship owner is registered and the
state where the operation is performed. Income tax based on a
net result is classied as income tax. Other taxes are classied
as contract related expenses.
Deferred tax is calculated using the liability method at tax rate
expected to be applied of all temporary differences between the
taxable value of assets and liabilities and their booked amounts
at the end of the accounting year. Any temporary differences
that may increase or decrease tax are offset and recorded as
a net gure.
Deferred tax is calculated for assets and liabilities for which
future realization will lead to tax payable.
The recognized amount of deferred tax assets is reviewed at
each balance sheet date. If it is no longer likely that adequate
taxable prot will be generated, then the deferred tax asset
will be reduced. Anticipated utilization of tax losses are not
discounted when calculating the deferred tax asset.
Pension obligations
The Group has a dened benet plan for seafarers and
administrative personnel, and a contribution plan for
administrative personnel hired after 1 January 2007, which is
recognized in prot and loss when incurred. The liability of the
dened benet pension plan is the present value of the dened
benet liability at the balance sheet date minus the fair value
of plan assets. The dened benet liability is calculated by
independent actuaries using the projected unit credit method
and is measured as the present value of the estimated future
cash outows using interest rates of government securities that
have terms maturing at the same time as the liability.
The expence of providing pensions is charged to prot and
loss to spread the regular expence over the working lives of
the employees. Actuarial gains and losses are recognized in
comprehensive income in the period they occur.
Income from contracts with customer - charter and
rental income
Income and expenses relating to charter contracts are
apportioned according to the number of days for each contract
occurring before and after the end of the accounting period.
The contract begins when the vessel is “delivered” to the
charterer and ends when the vessel is “redelivered”. Freight
income is recorded net after deduction for direct, contract-
related freight expence. Any loss on contracts is accrued
when a loss is probable. Income from bareboat agreements
is regulated by IFRS 16. The time charter contracts contains
both a lease component that is regulated by IFRS 16 and a
service component that is regulated by IFRS 15. Both the
lease component and the service component are recognized
together as income in operating income (ref. note 4 for split).
Leases, in which a signicant portion of the risks and rewards of
ownership are retained by the lessor, are classied as operating
leases. Lease income for the leasing of vessels is recognized
as operating leases and recognized in the income statement
on a straight-line basis over the lease period. The lease period
commences from the time the ship is made available to the
tenant and terminates upon agreed return.
Dividends
Dividends are recognized when the shareholder’s right to
receive the payment is established (by resolution at the general
meeting).
Other income
Other income, such as commissions and management fees, are
recognized in the period in which the performance obligations
are being satised.
Government grants
Grants related to the net tax agreement and crew subsidiaries
are recorded as a reduction in expences.
Insurance claims
For damage and averages on the Group’s vessels and
equipment, resulting in payments from insurance companies,
compensation is presented net with the corresponding expense.
Reimbursable and expenses are recognized and classied in
accordance with the type of expences, while compensation is
presented separately as a reduction in expences.
Related party transactions
All transactions and agreements with related parties are on an
“arm’s length” basis in the same way as transactions with third
parties.
Inventories
Inventories consists mainly of bunkers onboard the vessels.
Inventories are valued at the lower of cost price and net
realizable value. First-in-rst-out method is used.
Earnings per share
The calculation of basic earnings per share is based on the
majority’s share of the result using number of shares outstanding
at the end of the year after deduction of the average number of
treasury shares held over the period.
Cash ow
The Group applies the indirect method. Investment in shares
and other liquid assets with maturity over three months are not
included under cash equivalents.
Solstad Offshore ASA | Annual Report 202150
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Annual Report 2021
Note 2 - Accounting estimates and assessments
The preparation of nancial statements in conformity with
IFRS requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities at the date of the nancial
statements, and the reported amounts of income, expenses,
and nancial items during the reporting periods. Accounting
estimates are employed in the nancial statements to
determine reported amounts. These estimates are based on
management’s best judgement and conditions considered to be
realistic. Situations or changes may occur in the market which
may result in changes to the estimates, thereby impacting the
Group’s assets, liabilities, equity and result.
Assessments, estimates and assumptions which have a
signicant effect on the accounts are summarized below:
Assets held for sale
Management’s judgement based on an assessment of assets
available for immediate sale, and where the Group is actively
marketing for sale. Sale is also considered highly probable.
The Group’s strategy will impact the judgement, as well as the
current market conditions.
Consolidation
IFRS 10 contains a denition of control that is to be used when
assessing whether investments are to be consolidated in the
consolidated nancial statements. Assessment of control
involves the use of facts and judgment. For 2021, this has been
relevant in connection with ownership in Maximus Limited. The
Group holds 100 percent of the shares in the entity but is not
represented in the board and has not control over the relevant
activities. The shares are plegded which gives the creditors
far-reaching authorizations already from day one. Based on
an overall assessment, where all relevant factors have been
considered, the conclusion is that the investments do not
represent control in accordance with IFRS 10. The company is
therefore not consolidated and accounted for as investment in
shares.
Determining the lease term of contracts with renewal
and termination options – Group as lessee
When entering into new lease agreements, management
assesses the probability that options will be executed. The
result will impact the lease liability, period lease interest and
installments. This judgement is based on the Group strategy,
market conditions and a set of alternative scenarios.
Lease classication – Group as lessor
The Company’s income mainly derive from offering vessels
and maritime personnel to customers worldwide. Contracts
with customer is based on a day rate for hire of the vessel.
Management assesses whether a contract is to be recognized
as a nancial lease or an operational lease. This judgement is
based on terms and conditions, including length of the contract
and applicable contractual risks for the Group. The Group has
no contracts recognized as nancial lease as of 31. December
2021.
Vessel
The carrying amount of the Group’s vessels represents 82
percent of the total balance. Consequently, judgements and
estimates linked to the vessels have a signicant impact on the
Group’s nancial statements. Depreciation is calculated on a
straight-line basis over the useful life of the asset. Depreciable
amount equals historical cost less residual value.
Useful life of vessels
The depreciation depends on the estimated useful life of the
vessel. The Group’s policy is that useful life is 20 years. This is
based on strategy, experience and knowledge of the types of
vessels under the Group’s control. For some vessels useful life
may be considered higher or lower than 20 years, dependent on
the specic plan for the vessel. This is subject for managements
judgement. Incentives to prolong the useful life, in respect of
possible future changes in environmental requirements, is a
continuously process.
Residual value
The level of depreciation depends on the residual value of
the vessel. Assumptions concerning residual value are made
based on knowledge of the market for secondhand vessels.
The estimate of residual value is based on a market value of a
charter free vessel less sales related expenses. Fair values are
based on estimates obtained from three independent brokers.
Further adjustments are made to account for age of the vessel,
with a factor starting from 50 percent and increasing to 100
percent as the vessels age increase to useful life. Changes in
environmental requirements may impact the residual value, and
economical lifetime, but the Group has implemented several
measures to ensure the eet will be in compliance with changes
in such requirements. To maintain the residual value, vessels
are modied to be competitive in the market, and maintain
secondhand price.
Impairment test of vessels
For the purpose of assessing impairment for vessels, assets
are group at the lowest levels for which there are separately
identiable cash ows (cash-generating units, CGU). Each
vessel together with associated contracts is considered a
separate CGU.
Test for impairment is performed for vessels where book value
exceeds 65 percent of average brokers value. Brokers value
is set as an average of three acknowledge and independent
brokers. The brokers estimates are based on their judgement of
the market, “willing buyer and willing seller”.
Value in use
Estimated cash ows are based on next year’s budgets per
vessel and forecasted earnings going forward. For each
vessel, a budget and ve years plan are prepared. The budget
process is detailed and includes approvement up to the board
of directors. Estimated future cash ows are based on historical
performance per vessel, in combination with current market
situation and future expectations. For the period after the ve-
year plan, internal and external analyses together with historical
performance serve as a decision basis for managements
judgements. Critical assumptions in the assessment are related
to WACC and income rates/utilization.
For vessels on rm contracts over the period, the assumption
is that the contracts run up until expiry. Customer’s execution
of options is weighted to include uncertainty in the expected
cash ow. For vessels without contract, assumptions derived
from comparable vessels and contracts in combination with
other market information are considered when estimating
future income. Management’s assumption is that markets are
normalized to historical rates, with a gradual increase over the
remaining period.
Discounting rate
The discounting rate is based on a weighted average cost of
capital (WACC) for the Group. The cost of equity is derived from
the ten-year interest rate for state bonds (risk-free interest rate),
market risk premium and an unlevered beta (Damodaran for
Western Europe). The debt element of the discounting rate is
based on the risk-free interest rate, plus a premium equivalent to
the difference between risk-free interest rate and market rates.
The discounting rate used for 2021 is 9,5 percent.
Financial liabilities
Financial liabilities are initially recognized at fair value. The
methodologies applied for fair value calculations include
assessments and estimations based on available market data,
such as the level of interest rates, interest rate margins and
credit spreads at the date of recognition. These estimates are
based on Management’s knowledge combined with advice
obtained from professional external specialists. Please also
refer to Note 9.
Provisions
Provision for liabilities of uncertain timing or amount is based on
collating information on a case by case basis. The probability of
a contingent liability occurring which would affect the provision
is evaluated. The discounting rate used for liabilities is based on
a risk-free interest rate, adjusted to the maturity date.
Climate and regulatory risks
In preparing the nancial statement, the Group, has considered
the impact of regulatory changes in particular in the context in
climate change risks. The considerations did not impact our
judgement and estimates in the current year. When preparing
nancial statements future cashow impact of climate risks are
also considered.
The most important key assumptions and sources of
uncertainties identied are:
• Usefull life of vessels
• Residual value of vessels
• Cash ow from operations
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Annual Report 2021
Note 3 - Major transactions / events
Major transactions / events in 2021
Windstaller Alliance
Together with our partners in Aker Solutions and DeepOcean,
Windstaller Alliance was launched in October 2021. The
partnership aims to provide the world’s most cost-efcient
and complete product supply, fabrication and marine services
offering within offshore wind. The alliance will also pursue other
offshore renewable segments, and hence further strengthen
Solstad Offshore’s presence within renewable energy.
Sale of vessels
Throughout the year, the Group has disposed of 23 out of 37
vessels classied as non-strategic. As of year-end 2021, a
total of 25 of 37 vessels classied as non-strategic have been
disposed. Two vessels were disposed in 2020.
Fleet renewal
The Company has per year end 2021 installed battery hybrid
solutions to reduce emissions to the environment on 11 vessels,
and plan to increase this substantially with the new investment
program being the leading Company in green operations.
Normand Maximus
In May 2021, full settlement was agreed with Saipem on the
termination fee, MUSD 44,3, for the Normand Maximus charter.
The nancing of the vessel has entered into standstill pending
the ongoing renancing.
Covid-19
Covid-19 has been a challenge for the majority of 2021 as it
has affected both the market and the operational aspect of our
industry. Crew changes have in some cases been impacted
signicantly due to travel restrictions and in some cases, vessel
crews have been infected by the virus, which has caused
downtime and subsequent expences for crew changes and
cleaning. The impact has been limited to a minimum as the
Company has proactively worked on implementing preventive
measures since the early start of the pandemic.
Major transactions / events in 2020
Successful restructuring
The Company nalized a successful restructuring approved
by an Extraordinary General Meeting October 20th, 2020. The
main accounting effects from the restructuring were:
• A NOK 0.6 billion reduction of right-of use assets due to
termination of vessels recognized according to IFRS 16.
• A net NOK 9.6 billion reduction of debt to credit
institutions due to de-recognition of existing debt and
recognition of reinstated debt based on nominal values.
• An additional NOK 1.1 billion reduction of debt to
credit institutions due to fair value measurement
of recognized debt according to IFRS 9.
• A NOK 0.2 billion reduction of debt to credit
institutions due fair value measurement of
associated subscription rights (Warrants)
• A NOK 1.3 billion reduction of other current liabilities due
to lease liabilities and interest relief converted to equity.
• A NOK 1.5 billion increase in deposits, cash, etc
relating to new equity and working capital facility.
• The total effect on equity is NOK 11.6 billion.
A restructuring cost of total MNOK 109 has been recognized as
expences in the accounts for 2020. In addition, MNOK 100 was
recognized as capitalized borrowing expence.
Sale of vessels
In the rst quarter, Saipem Portugal Commercio Maritimo Ltd
exercised a purchase option for the DLB Norce Endeavour,
and the delivery of the barge took place in April 2020.
The vessel former named Normand Skude, owned
by a subsidiary Group company Sofo Skude AS,
was sold to a third party in May 2020. All debt
relating to the vessel has been repaid in full.
Normand Maximus
In September 2020, Saipem gave notice of an early termination
the time charter for Normand Maximus. Further reference is
made to Note 6 Mortage Debt and Other Long-term Liabilities.
Covid-19
Covid was a challenge for the majority of 2020 as it affected
both the market and the operational aspect of our industry, crew
changes have in some cases been impacted signicantly due to
travel restrictions and in some cases vessel crews were infected
by the virus, which caused down time and subsequent expence
for crew changes and cleaning. The impact was limited to a
minimum as the Company worked proactively on implemented
preventive measures since the start of the pandemic.
Exit Norwegian tonnage tax regime
Exit from the Norwegian tonnage tax regime was performed in
2020. The exit had effect from January 1st, 2016. An unrecovered
loss carry forward of NOK 10 billion was claimed.
Note 4 - Operating income, reporting by segments and
geographical markets
Operating income
The Company’s income mainly derive from offering vessels and maritime personnel to customers world wide. Basically all contracts
with customers are contracts with day rate. Contracts with day rate is contracts where income is eared on a day-by-day basis, based
on an agreed day rate with the customer. Income from contracts with day rate is recognized accordingly.
The agreed day rate is divided into a service element and a lease element. The service element includes the maritime services
provided to navigate the vessel according to the customers’ requirements, while the lease element is the estimated rental of the
vessel (equipment). Refer to Note 8 for more information related to the lease element.
Some of the contracts also includes victualling and onshore project management. Victualling is meals and bedding provided to the
customers personnel onboard the vessel. The Group also provides ordinary management services, such as technical services,
crewing, incurance and commercial management for vessels not owned by the Group. Income on services, mentioned above, are
recognized over time, as the performance obligation is satised over time.
Operating income For the year ended 31.12.2021
AHTS PSV Subsea Renewable Total
Service element from contracts with day rate 550,376 718,427 666,587 186,331 2,121,722
Management fees 1,571 1,903 5,495 8,969
Victualling 4,793 1,624 79,349 21,093 106,860
Project management - - - - -
Additional crew and other services 44,591 1,478 49,697 12,399 108,164
Income from contracts with customers 601,331 723,432 801,128 219,824 2,345,715
Lease element from contracts with day rate (Note 8) 659,111 702,690 1,300,824 343,827 3,006,452
Other operating income* 16,792 20,201 22,307 6,034 65,333
Total operating income 1,277,234 1,446,323 2,124,259 569,684 5,417,500
Operating income For the year ended 31.12.2020
AHTS PSV Subsea Renewable Total
Service element from contracts with day rate 528,877 685,501 669,902 148,318 2,032,599
Management fees 3,737 6,518 13,276 3,737 27,268
Victualling 5,257 - 72,041 15,814 93,111
Project management - - 3,329 - 3,329
Additional crew and other services 1,413 5,048 40,634 10,801 57,896
Income from contracts with customers 539,284 697,068 799,181 178,670 2,214,203
Lease element from contracts with day rate (Note 8) 577,764 738,736 1,243,066 251,861 2,811,427
Other operating income - - - - -
Total operating income 1,117,048 1,435,804 2,042,247 430,531 5,025,630
2021 2020
Trade receivables from charters (Note 5) 816,745 839,628
*Other operating income includes distribution from Den Norske Krigsforsikring for Skib with MNOK 52,4 in 2021
For the majority of contracts, payment is generally due within 30-60 days after the end of each month or 30-60 days after the service is
completed. Payment terms for all other services is normally 30 days after services is invoiced.
Solstad Offshore ASA | Annual Report 202154
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Annual Report 2021
Income recognised in 2021 that was included in the contract liability balance at the beginning of the year amounts to MNOK 0 (MNOK
34.7 in 2020).
The Group had no customer with more than 10 percent of total income in 2021 and 2020.
2021 2020
Freight income 5,128,173 4,844,027
Other operating income 289,327 181,603
Total operating income 5,417,500 5,025,630
Personnel costs -2,044,482 -2,025,250
Administrative expenses -449,509 -476,829
Other operating expenses -1,521,986 -1 491,671
Total operating costs -4,015,978 -3,993,750
Operating result before depreciations and impairment (EBITDA) 1,401,523 1,031,880
Leases 44,625 6,465
Accrued loss on Accounts receivables 18,589 7,115
Operational restructuring cost 61,372 108,887
Excess and less values freigth contracts 7,499 62,462
Result Joint Ventures 247 23,975
Result associated companies 108 41,423
Adjusted EBITDA 1,533,961 1,282,208
EBITDA
Operating lease
S o m e o f t h e G r o u p ’s v e s s e l s a r e r e n t e d o u t o n l o n g - t e r m c h a r t e r p a r t i e s . I n c o m e f r o m t h e s e v e s s e l s i s r e c o g n i z e d a s o p e r a t i o n a l l e a s e s.
31.12.2021 31.12.2020
Minimum
payment
Present value
minimum payment
Minimum
payment
Present value
minimum payment
Next year 3 515 665 3 429 917 3,178,154 3,100,638
Year 2 1 585 905 1 509 488 1,272,896 1,211,561
Year 3 392 557 364 529 622,587 578,134
Year 4 122 525 111 002 78,346 70,977
Year 5 15 508 13 707 69,040 61,021
Over 5 years - - 15,003 12,937
Finance cost - 203 519 - 200,757
Total minimum leas payment 5 632 161 5 632 161 5,236,026 5,236,026
Reporting by segments and geographical markets
The Group’s main activity is to offer ships and maritime personnel in all geographical regions.
The operations were in 2021 and 2020 divided into four segments based on the different types of vessels:
• AHTS: anchorhandling vessels
• PSV: platform supply vessels
• Subsea: construction vessels operating subsea construction contracts
• Renewable: vessels operating renewable contracts
Figures are exclusive share result from joint ventures
AHTS PSV
2021 2020 2021 2020
Income from contracts with customers 601,331 539,284 723,432 697,068
Other income 16,792 - 20,201 -
Lease element from contracts with day rate 659,111 577,764 702,690 738,736
Total operating income 1,277,234 1,117,048 1,446,323 1,435,804
Crew expenses 574,382 590,319 771,097 773,970
Other expenses 444,492 425,161 497,261 514,047
Total operating expenses 1,018,874 1,015,480 1,268,358 1,288,017
Bunkers 24,403 61,659 21,810 28,014
Operating result before depreciations
233,957 39,909 156,155 119,773
Assets and liabilities
Fixed assets 4,280,619 4,776,969 6,061,491 5,975,679
Total assets 4,280,619 4,776,969 6,061,491 5,975,679
Segment liabilities 4,287,163 4,344,316 6,375,384 6,349,249
Unallocated liabilities - - - -
Total liabilities 4,287,163 4,344,316 6,375,384 6,349,249
Other segment information
Investment in tangible xed assets 3,380 17,088 26,671 26,193
Addition of periodic maintenance
34,071 58,217 103,746 65,127
Operating result before depreciations and impairment (1) 310,590 909,439 373,731 839,401
CSV Renewable
2021 2020 2021 2020
Income from contracts with customers 801,128 799,182 219,824 178,670
Other income 22,307 6,034
Lease element from contracts with day rate 1,300,824 1,243,066 343,827 251,861
Total operating income 2,124,259 2,042,248 569,684 430,531
Crew expenses 519,844 552,777 181,138 109,510
Other expenses 701,634 731,485 201,877 147,099
Total operating expenses 1,221,478 1,284,262 383,014 256,609
Bunkers 63,813 52,372 14,226 7,338
Operating result before depreciations
838,968 705,614 172,444 166,584
Assets and liabilities
Fixed assets 8,832,516 9,784,531 1,411,744 1,152,028
Investments in JV and associated companies 91,127 111,032
Total assets 8,923,644 9,895,563 1,411,744 1,152,028
Segment liabilities 9,313,623 7,221,201 1,694,265 1,249,546
Unallocated liabilities - - - -
Total liabilities 9,313,623 7,221,201 1,694,265 1,249,546
Other segment information
Investment in tangible xed assets 24,691 6,448 17,914 7,657
Addition of periodic maintenance
84,093 225,936 30,995 57,519
Operating result before depreciations and impairment (1) 424,724 1,383,233 172,720 49,411
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Annual Report 2021
2021 2020
North Sea 44 % 2,379,439 45 % 2,255,509
North- and Central America 3 % 171,601 3 % 227,141
Mediterranean / remaining part of Europe 4 % 234,640 18 % 910,039
Africa 12 % 649,323 4 % 250,754
South America 6 % 340,430 15 % 459,455
Australia 23 % 1,223,186 9 % 652,298
Asia 8 % 435,853 6 % 270,435
Total 100 % 5,434,472 100 % 5,025,630
The Group’s vessels operate in several geographical areas during a year. Allocation between the different areas is based on freight
income.
Freigth income is allocated to the following areas:
The Group's vessels may operate in more than one geographic region during the year. Therefore assets cannot be allocated per
segment in accordance with IFRS 8.
Note 5 - Financial market risk, nancial instruments
General
The Group is exposed to several types of nancial risks through its operations. Financial market risks, such as currency rates,
interest rates and freight rates, inuence the value of the Group’s nancial assets, liabilities and future cash ows.
Management monitors the nancial market risks. When a risk factor is identied, action is taken to reduce this risk. The main strategy
to reduce nancial market risk is the use of nancial derivatives, both for the specic exposure and for the net exposure of the Group.
Where nancial derivatives are appropriate, only conventional derivatives are used. Given its current nancial position, the Group
has limited possibility enter into new nancial derivatives.
Derivatives are only used to manage the risk to uctuations in interest and currency rates. The Group does not use nancial
derivatives to achieve nancial income if no underlying exposure exists.
Management performs a continuous evaluation of the effect of nancial instruments on the accounts with a view to hedge accounting.
Based on this evaluation, hedge accounting is not used. The use of nancial instruments is not signicant when compared to the
Group’s level of activity, income and equity.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a nancial instrument or customer contract, leading to a
nancial loss.
The Group operates in a cyclical business, where exposure to losses on trade uctuates. The business has recovered over the last
years, and no material losses have been recognized. Due to the nature of the business concentration risk is present to some degree.
Counterparties are concentrated in few industry sectors, and even though the Group operates worldwide, there is a concentration
of counterparties in specic geographical markets. Management continuously review and assess mitigating responses to limit the
concentration risk.
Status for accounts receivables is shown in the table below. Based on the composition of the customers, the Group applies an
individual assessment for expected loss on trade receivables.
The Group is also exposed through guarantees issued on behalf of subsidiaries, joint ventures and associated companies. As the
value of the assets placed as security for the guaranteed mortgages exceeds the loans, the credit risk related to the guarantees
is considered acceptable. However, a potential forced sale situation could have a signicant impact on the value of the mortgaged
vessels. For further details refer to note 6.
Total
2021 2020
Income from contracts with customers 2,345,715 2,214,203
Other income 65,333 0
Lease element from contracts with day rate 3,006,452 2,811,427
Total operating income 5,417,500 5,025,630
Crew expenses 2,046,461 2,026,576
Other expenses 1,845,263 1,817,791
Total operating expenses 3,891,724 3,844,367
Bunkers 124,253 149,383
Operating result before depreciations
1,401,523 1,031,880
Assets and liabilities
Fixed assets 20,413,522 21,689,208
Investments in JV and associated companies 92,407 111,032
Unallocated assets 4,431,753 4,268,736
Total assets 24,937,682 26,068,976
Segment liabilities 21,670,435 19,164,312
Unallocated liabilities 183,766 2,661,589
Total liabilities 21,854,200 21,825,902
Other segment information
Investment in tangible xed assets 6,448 57,385
Addition of periodic maintenance
225,936 401,800
Operating result before depreciations and impairment (1) 1,383,233 3,129,279
(1) The segment result is presented exclusive gain/ loss sale of assets, interests, currency gain/ loss and other nancial items.
(2) Depreciation includes both ordinary depreciation and depreciation of periodic maintenance.
2021 2020
Operating segment result before depreciations and impairment (1) 1,401,523 1,031,880
Depreciation -993,053 -1,076,114
Depreciation capitalised periodic maintenance -271,098 -282,231
Impairment xed assets -45,049 -1,895,040
Net gain/ loss on sale of assets -99,730 -28,896
Income from investment in joint ventures 247 23,975
Income from investment in associated companies 108 41,423
Interest income 10,295 6,373
Other nancial income 173,405 12,345,724
Interest charges -1,003,543 -1,4 37,619
Other nance costs -283,504 -1,479,125
Result before tax -1,110,398 7,250,349
All vessel types (AHTS, PSV and CSV) perform operations reportable under the Renewable segment based on actual work
during the year. Under “Assets and liabilities” and “Other segment information” vessels are allocated to “Renewable” if the
majority (>50%) of operating days relates to “Renewable” operations.
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Annual Report 2021
The following table shows the ageing of account receivables:
per 31.12.2021
Not yet due
0 -1 month over
due
1 - 3 months
over due
Older than 3
months
Total
Net carrying amount 588,436 109,138 31,390 87,781 816,745
per 31.12.2020
Not yet due
0 -1 month over
due
1 - 3 months
over due
Older than 3
months
Total
Net carrying amount 598,036 157,932 33,969 49,690 839,628
Set out below is the movement in the allowance for expected credit losses of trade receivables:
2021 2020
As at 1 January 105,086 95,773
Provision for expected credit losses 1,613 21,025
Write-off -34,458 -9,010
Foreign exchange movement 2,982 -2,702
As at 31 December 75,223 105,086
Interest risk
Interest rate risk is the risk that the fair value of future cashows of a nancial instrument will uctuate because of changes in market
interest rates.
The Group’s exposure to changes in interest rates relates primarily to the Group’s long-term loans and leasing obligations with
oating interest rates. To mitigate exposure to interest rate uctuations the Group previously entered xed interest rate contracts for
parts of the long-term liabilities.
As of 31.12.2021 there is no xed-interest contracts. Per. 31.12.2020 there were no xed-interest contracts.
Following the restructuring of the Group in 2020, most of its loan agreements with xed interest rates through CIRR nancing was
renanced through a new senior reinstated multicurrency term loan facility. As per 31.12.2021 and 31.12.2020 3 percent of the of the
Group’s loan agreements consisted of xed interest rates through CIRR nancing. The remaining debt had oating interest rates. Per
31.12.2021 and 31.12.2020 the Group had no exposure in neither interest swaps nor currency swap agreements.
The following table shows the sensitivity of the Group’s result before taxes at a reasonable change in the interest rate, while all other
variables are unchanged:
Increase / decrease
in basis points
Effect on result
before tax
+ / - 100 2021 + / - 183,333
+ / - 100 2020 + / - 184,737
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash ows of an exposure will uctuate because of changes in foreign
exchange rates.
The Group’s presentation currency is NOK. Income are earned in NOK, USD, BRL, AUD, GBP and EUR. The Group’s future freight
income are partly hedged using foreign currency loans. This hedging reduces the effect of uctuation in currency rates on the prot
and loss account.
The following table shows the sensitivity of the Group’s prot and loss before tax due to changes in USD, GBP, AUD, EUR and BRL
versus NOK. All other variables remain unchanged. These variations are mainly due to changes in the Group’s freight income
The Group’s long-term debt has the following allocation as at 31. December 2021; NOK 31 percent and USD 69 percent. The
corresponding allocation for 2020 was NOK 33 percent and USD 67 percent.
With a change in the currency of USD versus NOK of 10 percent the effect on result before tax would have been MNOK 1,240 in
2021 (MNOK 1,194 in 2020).
Liquidity risk
Liquidity risk is the risk that the Group will be unable to full its operational- and nancial obligations as they fall due.
Liquidity risk has been reduced after the nancial restructuring of the Company was completed. Following restructuring interest-
bearing debt has been signicantly reduced, amortization relief has been given for a period of time and the Company has a working
capital facility up to MNOK 1,494. The Group monitors its available cash through a continued evaluation of its liquidity position
combined with a rolling medium and long term cash ow forecast of its operational activities.
Pursuant to a senior secured facilities agreement that renanced the restructured Group, certain banks made an additional super
senior term loan facility up to MNOK 1,494 available to Solstad Shipholding AS for general corporate and working capital purposes
(“Super senior term loan”). This has super senior status to all other liabilities under the facility and represents a non-amortizing bullet
loan with maturity 31.03.2024. As per 31.12.2021 this facility was undrawn. The funds made available under the “Super senior term
loan” facility is freely available for the restructured part of the Group subject that free cash in this group of companies is minimum
MNOK 600.
The following table shows the maturity of the Group’s nancial obligations based on contractual, undiscounted cash ows:
Change in all currencies Effect
+ / - 10 % 2021 + / - 367,082
+ / - 10 % 2020 + / - 420,774
Change in USD Effect
+ / - 10 % 2021 + / - 166,513
+ / - 10 % 2020 + / - 205,819
Change in GBP Effect
+ / - 10 % 2021 + / - 60,666
+ / - 10 % 2020 + / - 52,751
Change in AUD Effect
+ / - 10 % 2021 + / - 57,206
+ / - 10 % 2020 + / - 77,770
Change in EUR Effect
+ / - 10 % 2021 + / - 34,136
+ / - 10 % 2020 + / - 66,572
Change in BRL Effect
+ / - 10 % 2021 + / - 43,476
+ / - 10 % 2020 + / - 17,862
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Annual Report 2021
per 31.12.2021
Less than
3 months
3 to 12
months
2 to 3
years
4 to 5
years
Over 5
years
Total
Interest bearing liabilities 311,199 91,753 17,387,122 270,230 949,872 19,010,176
Lease obligations (1) 2,451,228 31,943 75,540 80,382 121,741 2,760,834
Other long-term liabilities - - - - - -
Account payables 552,077 - - - - 552,077
Interest payments 180,298 581,858 1,031,279 109,442 71,166 1,974,043
3,494,802 705,554 18,493,941 460,054 1,142,779 24,297,130
Capital structure and equity
The governing principle for the Group is that the company should have a solid balance sheet and liquidity reserves sufcient to
support its business, future liabilities and always maximize shareholder value. The 2-3 years prior to the restructuring of the Company
the equity ratio was at a very critical level. After the successful restructuring the equity ratio has improved, as a result of the debt
conversion.
per 31.12.2020
Less than
3 months
3 to 12
months
2 to 3
years
4 to 5
years
Over 5
years
Total
Interest bearing liabilities 129,354 1,007,099 1,840,414 15,405,860 781,586 19,164,313
Lease obligations (1) 2,540,275 18,678 50,106 72,097 154,753 2,835,909
Other long-term liabilities - 2,158 - - 10,215 12,372
Account payables 532,405 - - - - 532,405
Interest payments 133,401 399,206 1,019,388 177,733 50,963 1,780,691
3,335,435 1,427,141 2,909,908 15,655,690 997,517 24,325,690
31.12.2021 31.12.2020
Total equity 3,083,481 4,243,075
Total assets 24,937,682 26,068,976
Equity ratio 12 % 16 %
Financial assets
2021 2020
Note
Carrying
amounts
Fair value
Carrying
amounts
Fair value
Cash to bank 20 2,459,027 2,459,027 2,411,905 2,411,905
Investments in shares (long-term) 13 4,271 4,271 4,119 4,119
Other long-term receivables 56,460 56,460 60,195 60,195
Total nancial assets 2,519,758 2,519,758 2,476,219 2,476,219
Fair value:
The following table shows the booked and fair value of financial assets and obligations.
Financial liabilities
2021 2020
Note
Carrying
amounts
Fair value
Carrying
amounts
Fair value
Mortgage loan with oating interests 6 20,040,786 20,040,786 19,939,968 19,939,968
Mortgage loan with xed interests 6 676,833 676,833 690,577 690,577
Total nancial liabilities 20,717,619 20,717,619 20,630,545 20,630,545
Hereof short-term part of long-term debt 446,592 446,592 940,944 940,944
Fair value hierarchy:
The Group use the following hierarchy for valuation and presentation of financial instruments:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have significant effect on the recorded fair value are observable, either directly
or indirectly
Level 3: techniques which use inputs which have significant effect on the recorded fair value that are not based on observable
market data
The Group’s level 1 includes shares in listed companies, refer to note 13 for further details.
Level 2 includes fixed interest contracts, interest and currency swap contracts, currency contracts and mortgage debt, refer above
for further details.
Level 3 includes non-registered shares, refer to note 13 for further details.
The following methods and assumptions were used to estimate the fair values:
Nominal value of cash and loan obligations is normally a reasonable estimate of the items’ market value.
The fair value of listed shares are based on market value.
The fair value of shares in non-listed companies are estimated based on the relevant company’s financial report, focusing on the
Group’s share of its booked equity, and therefore a thorough evaluation is required prior to estimating the market value.
A certain part of the Group’s financial liability is linked to vessels deemed to be “non core”. Debt not covered by sales proceed
from these vessels will be settled by warrants. The debt related to these non core vessels are measured to fair value at each
accounting period. Fair value is set based on expected sales price of the vessels and share price of Solstad Offshore ASA at the
end of the accounting period. Expected sales prices end of 2021 were based on actual sale prices for those vessels disposed in
1Q22.
The following table show book value of financial instruments according to the hierarchy above:
Reclassication of long-term liabilities to current liabilities
(1) Lease obligation for Normand Maximus of MNOK 2,424 (MNOK 2,534 in 2020) is reclassied to current portion of long term debt,
due to a contractual default with a covenant waiver, given in 2021, that can be revoked at any time by the Finance Parties. For 2020
the waiver was given for less then 12 months.
Drawn Maturity interval Interest interval
Average
interest
Loan, xed interest 676 833 10.11.2026 10.03.2031 3,61 % 6,07 % 5,39 %
Loan, oating interest 18 333 343 30.06.2023 07.03.2029 2,36 % 10,85 % 3,34 %
The following table shows the total mortgage loan based on existing financing and their maturity dates as per 31.12.2020:
Drawn Maturity interval Interest interval
Average
interest
Loan, xed interest 690 577 10.12.2026 10.04.2031 3,64 % 6,10 % 5,42 %
Loan, oating interest 18 473 736 31.03.2021 07.03.2029 2,32 % 10,98 % 3,21 %
Financing risk
The main portion of the Company’s external debt will mature by 1Q 2024 and therefore it is an inherent
renancing risk. A renancing is dependent on how the market develops and many factors such as
developments in oil and gas prices. This may lead to a need for adjustment of the capital structure.
The following table shows the total mortgage loan based on existing financing and their maturity dates as per 31.12.2021:
Fair value
Estimated market values on nancial instruments nominated in other currencies than NOK are determined using the currency rate
at the balance sheet date. Fair value of the Groups interest- and interest-/currency swaps are determined using the currency and
interest rate at the balance sheet date. Nominal value of cash and loan obligations is normally a reasonable estimate of the items’
market value. The estimated fair value of the Group’s long-term loan obligations is based on the estimated market interest level at
the balance sheet date. The fair value of shares in non-listed companies are estimated based on the relevant company’s nancial
report, focusing on the Group’s share of its booked equity, and therefore a thorough evaluation is required prior to estimating the
market value.
Solstad Offshore ASA | Annual Report 202162
Contents
Annual Report 2021
2021 2020
Non current nancial assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Investment in shares - - 2,991 - - 2,991
Total per level - - 2,991 - - 2,991
Total all levels 2,991 2,991
2021 2020
Current nancial liabilities Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Debt to credit institutions - - 326,312 - - 661,717
Total per level - - 326,312 - - 661,717
Total all levels 326,312 661,717
2021 2020
Non current nancial liabilities Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Fixed interest contracts - - - - - -
Total per level - - - - - -
Total all levels - -
Note 6 - Mortgage debt and other liabilities
2021 2020
Interest bearing liabilities 17,523,945 16,875,360
Other long-term liabilities 1,917 12,372
Leasing liabilities 280,761 255,288
Total long-term debt 17,806,623 17,143,021
For maturity profile reference is made to Note 5.
Reclassification of long-term liabilities to current liabilities
Total lease obligation for Normand Maximus amounts to MNOK 2,424 (MNOK 2,534 in 2020). This is presented as current leasing
liabilities due to a contractual default with a covenant waiver that can be revoked at any time by the Finance Parties.
Short term portion of long-term debt includes a MNOK 326 (MNOK 658 in 2020) loan trance for non-core vessels. These vessels
are held for sale. Any proceeds from the sales will reduce the loan trance.
There are warrants issued for the loan trance. Any unsettled remaining debt after sale of the vessels will be converted to equity in
accordance with the warrants agreements.
Book value of pledged assets:
2021 2020
Bank deposits and cash equivalents 2,459,027 2,411,905
Account receivables 816,745 839,628
Vessels 18,064,019 19,476,354
Total booked value 21,339,791 22,727,887
All owned vessels are placed as security for the mortgages.
31.12.2021
Derivatives
not designated
as hedging
instruments
- fair value
through prot
or loss
Financial assets
and liabilities
at fair value
through prot
or loss
Financial
instruments
at fair value
through OCI
Financial
instruments at
amortized cost
Total
Assets
Equity instruments
Market based shares - 15,200 - - 15,200
Investments in stocks and shares - - - 2,991 2,991
Debt instruments
Other long-term receivables - - - 26,458 26,458
Loans to joint ventures - - - 47,506 47,50 6
Accounts receivable - - - 816,745 816,745
Cash and cash equivalents - - - 2,459,027 2,459,027
Total Financial assets - 15,200 - 3,352,728 3,367,928
Liabilities
Interest bearing loans and borrowings
Interest bearing liabilities - 326,312 - 17,644,225 17,970, 538
Other long-term liabilities - - - 1,917 1,917
Other nancial liabilities
Trade and other payables - - - 552,077 552,077
Total nancial liabilities - 326,312 - 18,198,219 18,524,532
31.12.2020
Derivatives
not designated
as hedging
instruments
- fair value
through prot
or loss
Financial assets
and liabilities
at fair value
through prot
or loss
Financial
instruments
at fair value
through OCI
Financial
instruments at
amortized cost
Total
Assets
Equity instruments
Market based shares - 11,100 - - 11,100
Non-listed equity instruments - - - 2,991 2,991
Debt instruments
Loans to joint ventures - - - 45,961 45,961
Accounts receivable - - - 839,628 839,628
Cash and cash equivalents - - - 2,411,905 2,411,905
Total Financial assets - 11,100 - 3,300,485 3,311,585
Liabilities
Interest bearing loans and borrowings
Interest bearing liabilities - 661,717 - 17,154,587 17,816,304
Other long-term liabilities - - - 12,372 12,372
Other nancial liabilities
Trade and other payables - - - 532,405 532,405
Total nancial liabilities - 661,717 - 17,699,364, 18,361,081,
2021 2020
Current nancial assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Investment in listed shares 15,200 - - 11,100 - -
Total per level 15,200 - - 11,100 - -
Total all levels 15,200 11,100
Solstad Offshore ASA | Annual Report 202164
Contents
Annual Report 2021
Covenants:
Solstad Offshore ASA is subject to various financial covenants under its prevailing financing agreements. These are divided into
two structures; one common set of covenants for the reinstated multicurrency term loan facility (including the “Super senior term
loan”) that was subject to the restructuring in 2020, with Solstad Shipholding AS as the registered borrower (“Solstad Shipholding”)
and separate covenants applicable to the remaining vessel owning companies in the Group.
In connection with the restructuring in 2020, the Group completed an organizational corporate restructuring with a view to dissolve
the former silo structure of the Group, which was a result of the combinations with the REM Offshore, Solstad Ålesund AS (pre-
viously Farstad Shipping AS) and Deep Sea Supply groups during recent years. The purpose of the corporate restructuring was
to create a new simplified group structure, which also reflects the requirements under the Group’s new financing structure. The
restructuring also reduced the complexity in the daily operations and cash management in the Group. There is free float of liquidity
between the companies in the structure that was subject to debt-to-equity conversion in the restructuring. Solstad Shipholding AS
is the registered borrower for this reinstated debt. Cash flow in the remaining part of the Group is subject to ring-fencing within
each borrower entity. There are restrictions in the Solstad Shipholding AS loan agreement to provide financial support the other
ship owning entities in the Group. Vessels owned by both Normand Ships AS and Solstad Superior AS was subject to refinancing
during the restructuring process with amended terms and conditions including extension of maturity dates to correspond to the
term of the reinstated fleet loan facility in Solstad Shipholding AS, March 2024. Termination date for the underlying vessel financing
in NISA Ltd is Feb. 2023 respectfully. The Group’s financing of four vessels financed with the Brazilian development bank, BNDES,
was not part of the restructuring, but amendments to these financings to meet the market conditions are in process of documenta-
tion. The exposure under these loan agreements is not guaranteed by the Company.
The loan agreements include customary security provisions including cross-collateralized mortgaged over relevant vessels,
assignment of insurances and earnings, pledges over shares, assignment of any relevant intra-group loans, assignment over any
monetary claims under any hedging agreements (if relevant), pledge over bank accounts, step-in rights/direct agreements with
respect to management agreements and such other security as reasonably required by the banks. Of the Groups senior secured
facilities, the loan agreements in Solstad Shipholding AS, Normand Ships AS and Solstad Superior AS are guaranteed by the
Company. The loan agreements entered into in subsidiaries of Solstad Brasil Holding AS, Farstad Shipping Ltda and Deep Sea
Navegacao Maritimos Ltda, is guaranteed by Solstad Ålesund AS and Solship Invest 3 AS respetively. The loan agreements in
NISA Ltd is not guaranteed.
Normand Maximus:
Normand Maximus Limited as bareboat charterer of the vessel “Normand Maximus” is in dialogue with Maximus Limited as owner
of “Normand Maximus” and Maximus Limited’s nanciers, to identify a long-term solution for the lease nancing of Normand Maxi-
mus. A standstill has been entered pending the ongoing refinancing. On 3 March 2021, the financiers of Maximus Limited enforced
their share pledge over the shares in Maximus Limited, and the shares are thus now controlled by a syndicate of banks. The
discussions with Maximus Limited for a solution have been ongoing for some time and are continuing notwithstanding the change
of ownership to the shares in Maximus Limited. The lease nancing has customary default provisions for lease nancings. These
i.a entitles Maximus Limited to require Normand Maximus Limited to buy the vessel and/or exercise other rights and remedies
under the lease nancing if a solution is not found. Absent a solution, there is a risk in the current markets that Normand Maximus
Limited as bareboat charterer of the Normand Maximus will not be able to nance such a purchase or other claims from Maximus
Limited. As all obligations of Normand Maximus Limited are guaranteed by the Company this could have a material adverse effect
on Solstad Offshore ASA’s nancial situation.
In June 2021 the Company received a statement of claim from MYF Limited, in capacity of former shareholder in Maximus Limited,
the owner of “Normand Maximus”. The claim is for a declaratory relief (No “fastsettelsesdom”) that MYF Limited has a recourse
claim against the Company since MYF Limited’s shares in Maximus Limited were forfeited due to the secured lenders to Maximus
Limited enforcing their share pledge over the shares in March 2021.
Since the summons is for a declaratory relief, no quantum has been specified by the claimants. In the event that MYF Limited su-
cceeds, quantum will be determined in later proceedings. From the submissions to date, the Company anticipates that a specified
claim will relate to MYF Limited’s alleged loss on its equity investment in Maximus Limited. The initial investment from MYF Limited
was approximately MUSD 91, and divided paid to MYF Limited to date is approximately MUSD 41. It is however not possible today
to give a reliable indication of how MYF Limited will ultimately calculate their quantum.
The Company’s assessment is that it is less than 50 % probability that MYF Limited will succeed with the claim. The proceedings
are for the ordinary courts and any decisions may be appealed. In the event that MYF Limited succeeds, a financial decision on
a payment obligation with due date for the Company is thus unlikely to be available until late 2023 or 2024. A payment from the
Company will not be recoverable from others.
The prevailing financial covenants for Solstad Offshore ASA are mainly summarized as follows:
Given the prevailing market conditions, the covenant with greatest associated uncertainty over the prevail-
ing next 12-month period, is the collateral vessels fair market values tested against the underlying vessel debt.
Remedies are however available for borrowers through partial down payment of relevant loan trances. Both
the Group’s working capital- and liquidity status has developed positive after the restructuring in 2020.
In addition to the financial covenants the loan agreements include customary provisions related to operational aspe-
cts related to acceptable ship registries, bareboat registrations, class requirements, information undertakings, san-
ctions provisions and such other requirements as reasonably required under bank financing agreements.
The Company is in compliance with all the covenants related to bank loan agreements at year end 2021.
Solstad Shipholding AS
1. Positive working capital
2. Min free liquidity: Available Cash min MNOK 500
3. Interest Coverage ratio > 1.0x (applicable from
01.07.2022 and first tested 30.09.2022).
4. Positive MVC
Far Superior AS
1. Positive working capital
2. Min free liquidity MNOK 5 (from 01.01.2022)
and MNOK 15 from 01.07.2022.
3. Positive MVC
NISA Ltd (50,1%)
1. Positive working capital
2. Min free liquidity MUSD 0,25
3. Min MVC 200%
Farstad Shipping Ltda
1. No applicable financial covenants
Normand Ships AS
1. Positive working capital
2. Min free liquidity MNOK 10
3. Positive MVC
SOFO Tonjer AS
1. Min free liquidity > MUSD 0,75
2. No payment of dividend, capital repayments or ot-
her form of capital distribution to its shareholders.
Normand Maximus Limited (BB Charterer)
Company to covenant that Solstad Shipholding AS maintains:
1. Positive working capital
2. Min free liquidity: Available Cash min MNOK 500
3. Interest Coverage ratio > 1.0x (applicable from
01.07.2022 and first tested 30.09.2022).
Deep Sea Navegacao Maritimos Ltda
1. No applicable financial covenants
Borrowing cost and interest relief:
2021 2020
Capitalization borrowing cost 82,404 122,570
Borrowing cost is presented net with the loans and is amortized until maturity of the loan.
Other long-term liabilities
Other long-term liabilities of NOK 2 million (NOK 12 million in 2020) are mainly convertible loans from shareholders.
In 2020, the majority of the NOK 12 million were loan from minority interests.
Solstad Offshore ASA has issued a Parent Company Guarantee of MNOK 20,837, hereof lease guarantee of MNOK 2,424.
Solstad Offshore ASA | Annual Report 202166
Contents
Annual Report 2021
The category other includes transfer from non-current liabilities to current portion and current effects.
1 January
2021
Renance
effect
Fair value
adjustment
Cash ows* Other**
31 December
2021
Current interest bearing liabilities 940,944 - -71,200 -255,163 -167,989 446,592
Non-current interest bearing liabilities 16,875,360 - - -142,379 790,964 17,523,9 45
Current leasing obligations 2,558,953 - - -213,191 120,558 2,466,321
Non-current leasing obligations 255,288 - - - 25,473 280,761
Other long-term liabilities 12,372 - - -10,456 - 1,917
Total liabilities from nancing activities 20,642,918 - -71,200 -621,188 769,006 20,719,536
1 January
2020
Renance
effect
Fair value
adjustment
Cash ows Other
31 December
2020
Current interest bearing liabilities 27,147,543 -9,852,483 - -1,077,155 -15,276,961 940,944
Non-current interest bearing liabilities 685,031 - -1,012,025 1,467,962 15,734,391 16,875,360
Current leasing obligations 484,985 -1,016,268 - -220,335 3,310,572 2,558,953
Non-current leasing obligations 3,799,298 -302,781 - - -3,241,229 255,288
Other long-term liabilities 12,172 - - 201 - 12,372
Total liabilities from nancing activities 32,129,029 -11,171,532 -1,012,025 170,673 526,773 20,642,918
Changes in liabilities arising from nancing activities
*Changes in cash flow related to current and non-current interest bearing liabilities is presented in aggregate in cash flow line
Repayment of long-term debt
** For leasing liabilities, other changes include additions, currency effects and change in portion classified as non-current.
For interest bearing liabilities, other changes include amortisation of debt recognized in 2020 at fair value, currency changes and
change in portion classified as non-current.
Note 7 - Tangible xed assets
Vessel Fixture Total
Acquisition cost 01.01.2020 35,191,317 267,797 35,459,114
Acc. depreciation/ impairment 01.01.2020 -13,367,002 -156,653 -13,523,656
Carrying value 01.01.2020 21,824,314 111,144 21,935,459
Additions 38,414 - 38,414
Disposals -3,010,794 - -3,010,794
Transferred 16,003 -41,909 -25,906
Transfer to asset held for sale -10,666 -16,138 -26,803
Disposal of acc. depreciations/ impairment
1,903,094 - 1,903,094
Translation differences 53,418 -4,496 48,922
Acquisition cost 31.12.2020
32,277,692 205,255 32,482,947
Acc. depreciations/ impairment 31.12.2020
-13,561,561 -171,990 -13,733,551
Carrying value 31.12.2020
18,716,131 33,265 18,749,396
Depreciation current period
-905,928 -12,979 -918,907
Impairment current period
-1,191,725 -2,358 -1,194,082
Vessel Fixture Total
Acquisition cost 01.01.2021 32,277,692 205,255 32,482,947
Acc. depreciations / write downs 01.01.2021 -13,561,561 -171,990 -13,733,551
Book value 01.01.2021 18,716,131 33,265 18,749,396
Additions 71,157 - 71,157
Disposals
-1,835,095 -90 -1,835,185
Transferred
- - -
Transfer to asset held for sale
-172,313 - -172,313
Disposals of acc. depreciations / write downs
1,478,706 - 1,478,706
Translation adjustment
86,467 -30 86,437
Cost price 31.12.2021
30,427,908 205,135 30,633,043
Acc. depreciations / write downs 31.12.2021
-13,041,408 -178,826 -13,220,234
Book value 31.12.2021
17,386,500 26,309 17,412,809
Depreciation current period
-893,504 -6,836 -900,340
Impairment current period
-65,049 - -65,049
Capitalized periodic maintenance
2021 2020
Capitalized periodic maintenance at 01.01 760,223 666,179
Additions this year 221,392 406,800
Disposal this year -25,789 -8,739
Transfer to asset held for sale -4,221 -
Depreciation this year
-271,098 -280,983
Impairment this year
- -958
Translation differences
-2,989 -22,077
Capitalized periodic maintenance at 31.12
677,518 760,223
Each part of a fixed asset that is significant to the total expence of the item are separately identified and depreciated over that
component’s useful lifetime. Assumed physical lifetime for all categories are 30 years, while estimated useful life is 20 years.
Estimation of residual value are based on marked values/ brokers values in the beginning of the year. The brokers values, sales
related expenses deducted, are multiplied with a factor dependent on the vessels age. The factor is 50 percent for a new build,
increasing to 100 percent for a 20 year old vessel. Periodic maintenance is depreciated over the period until the next planned interim-
and main docking takes place, respectively. The normal interval is five years for both interims- and main docking. The depreciation
rate for other equipment is 15-25 percent. Vessels with a book value of MNOK 18,064 (MNOK 19,476 in 2020) are held as a
guarantee for the Group’s loans, see note 6.
There is no capitalized interest in 2021 or 2020.
IMPAIRMENT VALUATION OF FIXED ASSETS
Quarterly, the Group assess whether there is any impairment indicators of the fixed assets. The current market, and few sales of
vessels on normal market terms, indicate need for revaluation of the vessels. As of 31.12.2021, price-to-book (P/B) ratio for the
Group is below 1.
Impairment testing (value-in-use-calculation) was performed for all vessels where book value exceeds 65 percent of broker value.
Broker value is set as an average of three acknowledged, independent brokers. Each vessel is considered a separate cash
generating unit. The value-in-use-calculations are based on budget and long-term forecast. For a majority of the vessels, value in use
was the basis for the recoverable amount.
DISCOUNTING RATE
The discounting rate is based on a weighted average cost of capital (WACC) for the Group. The cost of equity is derived from the
10-year interest rate for state bonds (risk-free interest rate), market risk premium and an unlevered beta (Damodaran for Western
Europe). The debt element of the discounting rate is based on the risk-free interest rate, plus a premium equivalent to the difference
Solstad Offshore ASA | Annual Report 202168
Contents
Annual Report 2021
between risk-free interest rate and market rates. The discounting rate used for 2021 is 9,5 percent.
INCOME ASSUMPTIONS
For vessels having firm contracts, income is based on the current contracts. For vessels without firm contracts, and for vessels
where the firm contract expires during the period, income is based on budget and long term forecast. The long term forecast
expects the market to stabilize, and a gradual increase in dayrates over the prognosis periode. Market rates after year end, gives
support to estimated rate levels in the early prognosis periode. Market uncertainty is reflected in the assumptions, based on
managements assessment and market analysis provided from independant third parties.
INFLATION
No inflation of income in 2022, while operating expence is adjusted for inflation by 2 percent. This is consistent throughout the
prognosis periode.
RESIDUAL VALUES
Estimated residual values used in the value in use calculations are set using the same principle as for the ordinally depreciations.
Initially the value is set to 50 percent of cost price, expected cost of sale deducted, and adjusted according to changes in broker
valuations. The assumption is that the broker values decline by 2,5 percent per year, until the vessel is 20 years old. It is assumed
that the vessels are disposed after 20 years in operation. Average life of the core fleet is 11 years, with respectively 12 years
average for the CSV and AHTS vessels and 9 years for the PSV vessels.
IMPAIRMENT TESTING
The Group recognized an impairment of MNOK 45 in 1Q21 related to a ”non-strategic” vessel that was sold later the same year.
SENSITIVITY CALCULATIONS
The sensitivity of the value-in-use-calculations for the vessels with impairment is analyzed by altering the key assumptions;
discounting rate, utilization and day rates. A change of discounting rate by -1% point and -2% points indicates potential additional
impairment of MNOK 100 and MNOK 520, respectively. A yearly change in dayrates or utilization for the prognosis periode
bringing the income down by 3-6%, indicates potential addional impairment by MNOK 120-390. The group has recognized
significant impairments on the vessels during the last years. If rates/utilization increases more rapidly than Group’s expectations
the vessel values are sensitive to reversals of previous year’s impairment.
CLIMATE-RELATED MATTERS
The Group constantly monitors the latest regulatory changes in relation to climate-related matters.
Regulatory changes in climate requirements may impact future cash inflows for the Company, but based on the managements
judgements as of 31.12.21 no material effects are identified for the prognosis period.
Changes in environmental requirements may impact the residual value, and economical lifetime in the future. The Group has
implemented several measures to ensure the fleet will be in compliance with changes in such requirements. Some of the initiatives
already implemented is conversion to battery hybrid, and given the financers limited willingness to finance new comparable
vessels, residual values and useful life are assumed to not be materially reduced in todays market.
The Group will adjust the key assumptions used in value-in-use calculations and sensitivity to changes in assumptions should a
change be required.
LOSS ON SALE OF ASSETS
The Group has disposed 23 vessels in 2021, where all 23 were classified as ”non-strategic” and in line with the restructuring plan
for the Company. The majority of the loss is related to the one vessels not classified as ”non-strategic”.
ASSETS HELD FOR SALE
Assets held for sale consist of 13 vessels classified as non-strategic, which the Company has disposed and not delivered. Book
value is MNOK 187,2, which agrees to salesprices less cost to sell.
Note 8 - Right-of-use assets
Right-of-use asstes
Vessels Ofce Total
Lease
liabilities
Opening balance 01.01.2020 3,521,309 250,597 3,771,906 4,284,283
Other adjustments - 22,613 22,613 -
Additions 3,393 - 3,393 -
Additions -551,297 - -551,297 -1,319,049
Translation differences 49,000 -15,819 33,181 69,343
Depreciation -109,552 -12,924 -122,475 -
Impairment -700,000 - -700,000 -
Interest expense
- - - 241,442
Leasing payment
- - - -461,777
Closing balance 31.12.2020
2,212,854 244,468 2,457,322 2,814,242
Right-of-use asstes
Vessels Ofce Total
Lease
liabilities
Balance 01.01.2021 2,212,854 244,468 2,457,322 2,814,242
Other adjustments - - - -10,839
Additions
107,855 - 107,855 75,558
Disposals - - - -332
Translation adjustment 72,953 -4,230 68,722 78,845
Depreciation -64,158 -28,554 -92,712 -
Impairment 20,000 - 20,000 -
Interest expense
- - - 176,480
Leasing payment
- - - -389,671
Closing balance 31.12.2021
2,349,503 211,683 2,561,187 2,744,284
The following are the amounts recognised in prot or loss:
2021 2020
Depreciation expense of right-of-use assets 92,712 122,475
Interest expense on lease liabilities 176,480 241,442
Variable lease payments expensed in the period* 44,625 6,500
Operating expenses in the period related to short-term leases 60 906
Total lease expenses included in other operating expenses
313,877 371,324
*The Group has two vessels on lease with variable lease payments.
The Group had total cash outflows for leases of MNOK 434 in 2021 (MNOK 469 in 2020).
Impairment testing of Right-of-use assets
Based on value-in-use-calculations a reversal of impairment of MNOK 20 was recognized in 2021 (impairment of MNOK 700 in
2020). Further reference is made to Note 7 Tangible Fixed Assets.
Normand Maximus
Guarantee
Vessel lease liability is guaranteed by the Parent Company with MNOK 2,424, for further reference is made to Note 6 Mortage
Debt.The Parent Company has also guaranteed for a put option related to the leased vessel. The put is valued at MUSD 309 as of
31.12.2021.
Solstad Offshore ASA | Annual Report 202170
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Annual Report 2021
Restructuring effects:
Restructuring effect described in the following mainly relates to 2020.
Derecognition of capitalized borrowing costs and interest relief includes all remaining balances relating to renanced loans and
obligations scheduled to be amortized over previously agreed maturity period.
Termination of Right-of-use-assets relates to 6 vessels accounted for as IFRS 16-leases. The 6 vessels were hired on long-term
leasing contracts with related parties (Ocean Yield and Ship Finance International). The cost represents the remaining book value
Default put option
The lease agreement for Normand Maximus includes a default put option. The Company received a waiver for the bareboat char-
ter including the default put option for Normand Maximus.
Variable lease payments
The Company has two vessels on lease with variable lease payments. The total payments for 2021 was MNOK 44.6 (MNOK 6.5 in
2020).
Reference is made to note 6 Mortage Debt and Other Liabilities regarding further information related to Normand Maximus.
Group as a lessor
As mentioned in note 4, the agreed day rate invoiced to customers is divided into a service element and a lease element. The
service element includes the maritime services provided to navigate the vessel according to the customers requirements, while the
lease element is the estimated rental of the vessel (equipment).
For the future minimum rentals receivable under non-cancellable operating leases, see note 4.
Note 9 - Financial items
Financial items
2021 2020
Interest expense -1,003,543 -1,437,619
Interest income 10,295 6,373
Net currency loss -275,629 -420,456
Income from investment in associated companies 108 41,423
Gain sale shares 4,932 155
Gain/ loss (-) nancial derivatives -7,875 -17,084
Impairment of shares
- -294,745
Dividends
750
Restructuring effects:
Derecognition of capitalized borrowing costs and interest relief
- -127,085
Termination of Right-of-use-assets (IFRS 16)
- -550,950
Gain debt converted to equity
- 9,644,363
Gain purchase of own debt (RDA)
- 942,343
Gain fair value recognition of debt
- 1,066,639
Gain fair value warrants
111,589 177,950
Interest relief renancing
- 514,275
Other nancial income/ -expenses (-)
56,134 -68,805
Net nancial items
-1,103,239 9,476,776
Currency gain and -loss is mainly relating unrealized currency gain and -loss on assets and liabilities in foreign currency, change in
currency rates in the period from posting of invoices and actual timing of payments and realised currency gain and -loss related to
renancing og loan.
of the vessels at the time of termination. The corresponding remaining lease obligations for the vessel is included in the debt
converted to equity.
Gain debt converterted to equity represent the book value of loans and obligations at March 31st, 2020 being converted to equity
by issuing shares in Solstad Offshore ASA.
Gain purchase of own debt relates to a pre-conversion of debt to equity process where about MNOK 966 of the debt was
re-purchased.
Gain fair value recognition of debt represents the calculated difference between face value and fair value for the renanced debt
at initial recognition. The difference will be amortized and presented as interest expense over the period until nal maturity of
the loan.
Gain fair value of warrants relates to the part of the renanced debt specically allocated to the non-core part of the eet.
Warrants are issued for this debt. The warrants are measured at the end of each accounting period.
Interest relief renancing represent the calculated interest for the period between March 31st and October 20th, 2020. Interest
for this period was calculated and recognized during 2020. At effective date for the renancing the calculated interests for this
period was relieved.
Note 10 - Other expenses, wages, employees
and distinctive contributions
Other operating expenses:
2021 2020
Technical cost 492,179 569,457
Bunker and lube oil 144,171 181,152
Insurance 107,643 106,186
IT, communications and other costs 777,993 634,876
Total other operating expenses 1,521,986 1,491,671
Wages and personnel costs:
Employees, vessels 2,044,482 2,025,675
Employees, administration
283,633 304,531
Total employee cost
2,328,115 2,330,206
Wages and employee cost:
Wages
1,673,436 1,748,737
Social security
212,344 193,903
Pension costs
41,018 12,075
Other benets
44,044 42,347
Traveling costs, courses and other personnel costs
357,273 333,144
Total employee cost
2,328,115 2,330,206
Average number of man-years
3,478 3,528
Renumeration to Directors, Managing Director and Auditors
2021
Wages Bonus Other benets Pension cost
Lars Peder Solstad (CEO) 5 313 1 430 157 109
Kjetil Ramstad (CFO) 2 245 1 318 12 104
Tor Johan Tveit (COO) 1 609 965 12 105
9,167 3,743 181 318
Solstad Offshore ASA | Annual Report 202172
Contents
Annual Report 2021
2020
Wages Bonus Other benets Pension cost
Lars Peder Solstad (CEO) 2 312 2 289 155 107
Kjetil Ramstad (CFO) 1 779 1 562 155 103
Tor Inge Dale (COO) 1 892 703 11 109
5,983 4,554 321 319
There are no distinctive agreements regarding remuneration for the Chairman of the Board and neither are there any distinctive
bonusor option programmes for any Board Member. No loans have been given to the company management.
The Chief Executive Ofcer has an agreement securing 12 months salary and in addition a right to subscribe 5,038,187 shares
in the Company with a nominal value of NOK 1 per share. The subscription right expires 20.10.2023.
Board of Directors fee:
2021 2020
Harald Espedal 600 676
Frank O. Reite 406 376
Ellen Solstad 196 370
Peder Sortland 246 -
Ingrid Kylstad 246 -
Thorhild Widvey 196 -
Toril Eidesvik (until 20.10.2020) 138 443
Harald Thorstein (untill Q1 2020) - 390
Merete Haugli (untill 20.10.2020) 104 383
Anders Onarheim 25 25
Auditors EY
2021 2020
Statutory audit 16,160 13,151
Other assurance services 1,660 2,600
Other non-audit services 16,629 14,139
Total 34,449 29,890
Audit fees relates to statutory audit of accounts. Other assurance services relates to services required by law.
Other non audit services: Fees for services related to compliance servides and restructuring process.
Note 11 - Government grants
2021 2020
Net pay scheme at NOR-vessels 250,542 206,973
Government grants to reduction of payroll expenses 250,542 206,973
Note 12 - Share in subsidaries
Simplied organization chart of Solstad Offshore ASA exclusive of dormant companies.
Solstad
Rederi AS
Farstad Shipping
Pte Ltd
Normand
Drift AS
Normand
Chartering AS
Solstad
Management AS
Solstad Shipowning
Holding AS
Solstad Operations
Holding AS
Solstad Management
Holding AS
Solstad
Supply AS
Solstad Construction
AS
Farstad
Supply AS
Solstad
Mexico AS
Deep Sea Supply
Cyprus Ltd
Solstad Offshore
Asia Pacic Pte Ltd
Solstad Australia
Pty Ltd
Solstad
Shipping AS
Solstad Offshore
UK Ltd
Solstad ROHQ
Philippines
Solstad Offshore
Crewing Services
Pte Ltd
Solstad Offshore
Singapore Pte Ltd
Solstad Offshore
Crewing Services
Philippines Inc
Solstad Offshore ASA
Solstad
Shipholding AS
Farstad
Shipping AS
Solship Invest
3 AS
Solship
AS
DESS
Invest Ltd
Solstad
Brasil AS
Normand
Installer SA
Solstad
Subsea AS
SOFO
Tonjer AS
Solship Invest
4 AS
Solstad Brasil
Holding AS
Solstad Subsea
Holding AS
Farstad Shipping
Ltda
Deep Sea Supply
Labuan Ltd
Solstad Offshore
Crewing Services
Ukraine Ltd
Farstad do Brasil
Navegacao Ltda
Solstad
Offshore Ltda
Solstad Servicos
Maritimos Ltda
Deep Sea Servicos
Maritimos Ltda
Deep Sea Supply
Navegacão
Marìtima Ltda
Normand
Ships AS
Normand
Superior AS
SOFO
Tonjer IS
Normand Ships
Operations AS
Normand
Maximus Ltd
Normand Maximus
Operations Ltd
Maximus
Limited
NM
Shipholding AS
Solstad Offshore ASA | Annual Report 202174
Contents
Annual Report 2021
The Group accounts consists of the nancial statements of Solstad Offshore ASA and the
following subsidaries 31.12.2020. Unless stated otherwise owner share is 100%
Solstad
Rederi
AS
Deep Sea
Supply
Shipowning AS
Farstad
Shipping
Pte Ltd
Normand
Drift
AS
Normand
Vision
Chartering AS
Solstad
Management
AS
Deep Sea Supply
Management
(Cyprus) Ltd
Solstad Shipowning
Holding AS
Solstad Operations
Holding AS
Solstad Management
Holding AS
Normand
Flower
AS
Deep Sea
Supply
Shipowning I AS
Farstad Shipping
Crewing Services
Pte Ltd
Trym Titan AS
Rem Ship AS
DESS
PSV IV
Ltd
Rem Supply
AS
(73,34 %)
Deep Sea
Supply
Shipowning III AS
Deep Sea
Supply
Shipowning II AS
Farstad
Construction
AS
Farstad
Marine
AS
Farstad
Supply
AS
Farstad
International
AS
Partrederiet
International
Offshore ANS
Farstad
Offshore
AS
Normand Chartering
AS
Solstad
Mexico
AS
Deep Sea Supply
Cyprus
Ltd
Solstad
Offshore Asia
Pacic Pte Ltd
Offshore
Simulation
Pty Ltd
Rem Star AS
Solstad
Australia
Pty Ltd
Farstad
Shipping
Aalesund AS
Farstad
Australia
AS
Solstad
Shipping
AS
Deep Sea Supply
Management
(Singapore) Pte Ltd
Solstad Offshore UK
Ltd
Piopro (UK) Ltd
Solstad
Cable UK
Ltd
Solstad Offshore
Service Vessel
(UK) Ltd
Pioneer
Offshore
Ltd
Progress
Offshore
Ltd
Pioneer
Offshore
LP
Progress
Offshore
LP
Solstad
ROHQ
Philippines
Norce
Offshore
Pte Ltd
Solstad Offshore
Crewing Services
Pte Ltd
Solstad
Offshore
Pty Ltd
Solstad Offshore
Singapore
Pte Ltd
Nor Offshore
Labuan
Pte Ltd
50 %50 %
0,002 %
99,998 %
Solstad Offshore ASA
Solstad
Shipholding AS
Solship
Invest 1 AS
SOFO Falnes
AS (96,12 %)
Farstad
Shipping AS
Solship
Invest 3 AS
Deep Sea
Supply AS
Solship
AS
DESS Invest Ltd
DESS
Finance
Ltd
Farstad
Brasil
AS
Solstad
Brasil
AS
Normand
Installer SA
(50,1 %)
Farstad
Subsea
AS
SOFO Tonjer AS
Solship Invest
4 AS
Solstad Brasil
Holding AS
Solstad Subsea
Holding AS
Norce Offshore
(Thailand) Ltd
(49.5 %)
Norce
Offshore
Pty Ltd
Solstad Offshore
Crewing Services
Philippines
Inc (25 %)
Rem Crewing AS
Farstad
Shipping Ltda
(99,99 %)
Rem Norway AS
Deep Sea Supply
Mgmt (Ghana)
Ltd) (90 %)
Farstad
Shipping
Ltd
Deep Sea
Supply
Laabuan Ltd
Deep Sea
Supply Crew
Cyprus Ltd
Deep Sea
Supply Labuan
II Ltd
Deep Sea
Supply Labuan
III Ltd
Solstad
Operations
AS
Deep Sea
Supply BTG
Labuan Ltd
DESS PSV III Ltd
Deep Sea Supply
Management
Malaysia Sdn Bhd
DESS PSV II Ltd
Solstad Offshore
Crewing Services
Ukraine Ltd
DESS PSV Ltd
Farstad do
Brasil Navegacao
Ltda
Solstad Offshore
Ltda
Solstad
Servicos
Maritimos Ltda
Deep Sea Servicos
Maritimos Ltda
Deep Sea Supply
Management AS
Deep Sea Supply
Navegacão
Marìtima Ltda
Normand
Ships
AS
Far Superior AS
SOFO
Tonjer IS
(56 %)
Farstad
Afrika
AS
Normand
Ships
Operations AS
SOFO Skude AS
Normand
Maximus
Ltd
Normand
Maximus
Operations Ltd
90 %
10 %
93,3 %
6,7 %
80,6 %
19,4 %
0,001 %
55 %
1 %
Maximus Limited
25 %
Solstad Offshore ASA | Annual Report 202176
Contents
Annual Report 2021
Note 13 - Share in joint ventures, associated
companies and other investments
The Group accounts consists of the following shares in joint ventures (JV) and associated companies (AC):
Place of Business Ownership
Date of
Financial
statement
Normand Installer SA (NISA) JV Marly, Sveits 50 % 31.12.2021
Solstad Offshore Crewing Services Philippines (SOCS) AC Manilla, Philippines 25 % 31.12.2021
Maximus Limited (MAXL) AC George Town, Cayman Islands 25%* 31.12.2020
* disposed in 2021
Normand Installer SA owns one construction service vessel hired on time charter
to a company associated with the other part of the joint venture.
Solstad Offshore Crewing Services Philippines deliver crewing services to the Group.
Maximus Limited is the legal owner of the vessel Normand Maximus which the Group has on nancial lease.
All the above investments are strategic for the Group.
Joint venture NISA:
2021 2020
Cost price 01.01.
1,631 1,631
Acc result and adjustments
108,273 90,928
Book value 01.01.
109,904 92,559
Share of result
247 23,975
Other adjustments
-19,024 -6,630
Book value 31.12.
91,127 109,904
Balance sheet:
Bank deposit and cash equivalents
20,881 39,496
Current assets
245 33,424
Long-term assets
529,152 504,000
Short-term liabilities
-77,914 -50,067
Long-term nancial liabilities
-290,108 -322,148
Net Assets
182,255 204,704
Share of balance sheet:
91,127 102,352
Income and prot:
Income
128,032 202,429
Operating expenses
- 67,616 -82,492
Depreciations
-40,033 -15,947
Impairment
- -30,617
Financial income
726 2,146
Interest expense
-20,615 -27, 535
Reuslt before tax
494 47,983
Taxes
- -33
Result
494 47,9 50
Share of income and prot: 247 23,975
Associated companies
2021 2020
SOCS SOCS Maximus Total
Cost price 01.01. 385 385 250,853 251,239
Acc result and adjustments 742 949 41,658 42,607
Book value 01.01. 1,128 1,335 292,511 293,846
Share of result 108 -169 41,592 41,423
Impairment of investment (1) - - -294,745 -294,745
Other adjustments 44 -38 -39,358 -39,396
Book value 31.12. 1,279 1,128 - 1,127
Share of balance sheet:
Current assets 5,391 4,886 38,613 43,499
Long-term assets 476 601 688,651 689,251
Short-term liabilities -5,492 -5,068 -11,964 -17,032
Long-term nancial liabilities -5 -5 -413,231 -413,236
Net Assets 370 414 302,069 302,483
Share of income and prot:
Income 2,391 2,573 92,341 94,914
Operating expenses -2,158 -2,757 -29,502 -32,259
Financial expense -108 104 -21,247 -21,143
Reuslt before tax 125 -81 41,592 41,511
Taxes -17 -62 - -62
Result 108 -143 41,592 41,449
(1) The investment in Maximus Limited is writen down to zero in 2020.
Financial assets at amortized
cost - long term
2021 2020
Unlisted shares Share Book value Share Book value
Bleivik SIM Holding AS 29,54 % 2,991 29,54 % 2,991
Hafast AS 2,64 % - 2,64 % -
2,991 2,991
Based on, amongst others, no board representation, the Group does not have signicant inuence on the above mentioned
companies.
The shares in Hafast AS was written down to NOK 1 in 2019.
Investments in shares - current
2021 2020
Listed shares Cost price Share Book value Cost price Share Book value
Reach Subsea ASA 10,000 5,48 % 15,200 10,000 5,48 % 11,10 0
Team Tankers International Ltd. - - - 5,000 0,03 % -
15,200 11,100
Investments available for sale are shares which have no xed maturity or return.
Shares are valued at fair value at year end. See note 5 for more information.
Solstad Offshore ASA | Annual Report 202178
Contents
Annual Report 2021
Subsidiaries with signicant non-controlling interests
The Group have two subsidiaries with signicant non-controlling interests (NCI) as of 31. Desember 2021. Information regarding
these is as follows (NOK 1,000):
2021
Name
Country NCI
Result
allocated to
NCI
Accumulated
NCI Paid dividend
Rem Supply AS Norway 27 % -1,726 -23,248 -
SOFO Tonjer IS Norway 44 % -34,526 18,649 -
2020
Name
Country NCI
Result
allocated to
NCI
Accumulated
NCI Paid dividend
SOFO Falnes AS Norway 4 % 233 -2,640 -
Solstad Supply AS Norway 27 % 5,379 -21,521 -
SOFO Tonjer IS Norway 44 % 6,322 39,975 -
2021
Condensed nancial statement Rem Supply AS SOFO Tonjer IS
Non-current assets 246,250 26,543
Current assets 63,156 40,272
Total assets 309,406 66,815
Long term liabilities 363,255 -
Short term debt 33,873 24,638
Total liabilities 397,128 24,638
Income 73,996 52,826
Result after tax -6,475 -78,469
2020
Condensed nancial statement SOFO Falnes AS Rem Supply AS SOFO Tonjer IS
Non-current assets - 229,341 176,331
Current assets 15,705 70,855 37,315
Total assets 15,705 300,195 213,646
Long term liabilities 10,215 355,372 99,992
Short term debt 73,664 26,069 23,105
Total liabilities 83,879 381,441 123,096
Income 30,843 77,299 57, 562
Result after tax 6,012 20,174 14,369
Note 14 - Insurance settlements
When damages occur to vessels or equipment that are reported as insurance cases, the Group pays for the repairs in advance.
The following compensation has been received from the insurance companies:
2021 2020
Received compensation 66,782 69,845
Insurance deductible per damage is included in Other operating expenses.
Freight income includes recognition of Loss of Hire-income of MNOK 36 and MNOK 29 for the last two years, respectively.
Capital has been called upon in SOFO Tonjer IS in 2021, with MNOK 30. MNOK 13,2 is contributed by minority interest.
Minorities in SOFO Falnes AS was acquired in 2021, following a merger with Normand Ships AS which is consolidated.
Note 15 - Share capital, shareholders
and treasury shares
Shares Share capital Treasury
01.01.2021 74 872 682 74 873
Share capital increase by conversion of debt 735 976 736 -
31.12.2021 75 608 658 75 609 -
01.01.2020 291,532,299 583,065 -281
Share capital decrease -291,240,767 -582,773 281
Share capital increase by conversion of debt 48,074,688 48,075 -
Share capital private placement 26,506,462 26,506 -
31.12.2020 74,872,682 74,873 -
At 31.12.21 the Company’s share capital represents 75,608,658 shares at NOK 1.
Capital increases by convertion of debt is through exercise of warrents issued by decision of the Company’s general meeting held on 20
October 2020. Warrents will be excersised for any unsettled debt after disposal of vessels held for sale.
Top 20 shareholders at 31.12.2021
Number of shares Ownership
Aker Capital AS 18,843,913 24,92 %
Hemen Holsing Ltd 7,016,727 9,28 %
Jarsteinen AS 3,130,73 4 4,14 %
Citibank Europe plc 1,921,921 2,54 %
Magne Hystad 1,800,000 2,38 %
DNB Markets Aksjehandel/-analyse 1,542,780 2,04 %
The Export-Import Bank of China 1,139,842 1,51 %
Otto Rognvær 991,598 1,31 %
Sparebanken Møre 965,728 1,28 %
Knut Invest AS 800,000 1,06 %
Nordea Bank ABP, Fil 793,196 1,05 %
Morten Østdahl 777,527 1,03 %
The Bank of New York Mellon SA/NV 773,570 1,02 %
Espedal & CO AS 656,687 0,87 %
BNP Paribas Securities Services 600,758 0,79 %
Nordnet Livsforsikring AS 562,889 0,74 %
Ava AS 550,012 0,73 %
Citibank, N.A. 509,270 0,67 %
Sandberg JH AS 503,986 0,67 %
Torvik Trailerrep AS 500,000 0,66 %
44,381,138 58,69 %
Solstad Offshore ASA | Annual Report 202180
Contents
Annual Report 2021
Note 17 - Transactions with related parties
In addition to general management services, the Group has the following transactions with related parties:
Income Expenses Receivables Payables
2021 2020 2021 2020 2021 2020 2021 2020
Joint venture companies
Normand Installer SA - 131 - - 47 506 45 830 - -
Other related parties
Ivan Eiendom - - 11 975 10 566 - - - -
Ocean Yield - - 44 625 35 315 - - - -
Ship Finance International - -
-
16 421 - - - -
The Group’s afliation with related parties:
Normand Installer SA is a joint venture company in which the Group has a 50 percent
share. Receivable relates to a shareholders loan. Income is interests.
The Group leases ofces and a warehouse at market price from om a company controlled by the CEO.
The Group has two vessels on bareboat from Ocean Yield (company controlled by one of the larger shareholders during
majority of 2021, but controll is ceased by 31.12.21 due to disposal). Further, the Group had ve vessels on lease
from Ship Finance International (company controlled by one of the larger shareholders) for three months in 2020.
From time to time the Group has business relationship with Aker BP ASA, a company afliated with one of the larger shareholders.
Board Members and the Company’s Management are considered as related parties. There are no
management agreements with related parties outside the Group that charge management fees.
Transactions with related parties are completed at normal market prices. Interests are not calculated
on outstanding balances with related parties considered to be normal accounts receivable or
payable. Current assets are included in the ordinary evaluation of bad debt.
Note 18 - Taxes
2021 2020
Tax payable 24,424 16,313
Under/over accrual of tax payable 1,241 8,154
Change in deferred taxed - -27,984
Tax on ordinary result 25,665 -3,517
Apportionment of tax on ordinary result:
Norwegian tax - ordinary -89 5,462
Foreign tax 25,854 -8,979
Total tax 25,665 -3,517
Temporary differences:
Fixed assets (vessels and other non-current assets) 2,903,778 1,394,912
Receivables (current assets) -29,140 -27,794
Other current assets -106,444 -106,444
Pension -25,864 -25,015
Tax position related to disposed assets -555,297 -193,601
Interest deductions carried forward -2,109,997 -2,202,254
Unrecovered loss carried forward -17,448,411 -15,203,545
Total temporary differences -17,394,055 -16,390,396
Tax effect on temporary differences:
Fixed assets (vessels and other non-current assets) 638,831 306,881
Receivables (current assets) -6,411 - 6,115
Other current assets -23,418 -23,418
Pension -5,690 -5,503
Tax position related to disposed assets -122,165 -42,592
Interest deductions carried forward - 46 4,199 -484,496
Unrecovered loss carried forward -3,838,650 -3,344,780
Deferred tax assets not recognised 3,812,195 3,600,306
Net deferred tax / deferred tax asset (-) -14,497 -5,581
Change in deferred tax in the balance sheet:
Opening balance deferred tax -5,581 16,637
Booked to prot and loss - -27,984
Changed to equity (change pension) -8,932 -1,774
Translation adjustment 16 7, 5 40
End balance deferred tax / deferred tax asset (-) -14,497 -5,581
Payable tax in the balance sheet consist of:
Other payable corporation tax 176,767 168,016
Total payable tax in the balance sheet 176,767 168,016
Analysis of effective tax rate:
22 % of pre-tax result -244,287 1,595,077
Effect of deferred tax asset nor recognised 211,889 481,787
Correction of previous years 1,241 -23,772
Differential in tax rates foreign entities 5,249 -1,747
Permanent differences/ Shipping Tax Regime 51,574 -2,054,861
Estimated tax 25,665 -3,517
Note 16 - Earnings per share
Earnings per share are calculated by dividing the Group result by the average number of
shares as of 31.12, adjusted for the average stock of treasury shares.
There are no instruments limiting the possibility of dilution.
2021 2020
Majority result from net prot for the year -1 102 449 7 240 743
Result from net prot for the year -1 136 062 7 253 866
Average number of shares 75 106 684 249 041 851
Average number of Treasury shares 139 112 830
Average number of shares to calculate earnings per share 75 106 545 248 929 021
Earnings per share (NOK) - majority -14,68 29,09
Earnings per share (NOK)
-15,13 29,13
The Chief Executive Ofcer holds 3,130,734 shares through Jarsteinen AS in addition to a right to subscribe 5,038,187 shares in the
Company with a nominal value of NOK 1 per share. The subscription right expires 20.10.2023.
The number of shareholders at 31.12.21 was 7,482. The number of shareholders at 31.12.20 was 7,773.
The Group held 124 treasury shares with cost price of MNOK 9,6 at 31.12.2021 and 31.12.2020.
Solstad Offshore ASA | Annual Report 202182
Contents
Annual Report 2021
Deferred tax asset is based on a tax rate of 22%.
Deferred tax on deviating values in associated companies with foreign partnerships has been included in the Group
accounts. Further, deferred tax is calculated on scenarios where a future realization will lead to a tax liability.
Deferred tax assets from losses carried forward are recognized under the assumption that companies
under the ordinary tax regime will have taxable income in the future. This taxable income is related
to ordinary income, gain from sale of xed assets and taxable nancial income.
The Group has an international business. The taxable treatment of transactions, operations and structures
in foreign countries may be challenged by local tax authorities, and may result in future tax obligations.
Contingent liabilities are recognized in the accounts if they are more likely than not to occur. At the end of
the year the Group has included an MNOK 160 accural for expected taxes related to operations in foreign
waters. The accounts reect the Groups best estimate for contingent liabilities at the end of the year.
Note 19 - Pension
The Group has dened benet pension plans for seafaring personnel in United Kingdom, for some of the
seafaring personnel in Norway, and for some of the administrative personnel. The pension plans are insurance
based. As at December 31, 2021, the pension plans have 7 actives and 101 pensioners as members.
The Group has a contribution plan for the majority of the seafaring personnel in Norway and administrative staff.
The Group’s pension scheme meets the requirements of the Norwegian law of Occupational pension.
The following assumptions are used:
UK
2021
UK
2020
NORWAY
2021
NORWAY
2020
Discounted interest 1,90 % 1,10 % 1,90 % 1,70 %
Expected return 1,90 % 1,70 %
Regulation of salaries 3,70 % 3,90 % 2,75 % 2,25 %
Regulation of base amount 2,50 % 2,00 %
Regulation of pension 3,00 % 2,40 % 2,50 % 1,50 %
Changes in pension obligation:
2021 2020
Estimated liability at beginning of the year 256,580 434,975
Interest expense 1,548 11,598
Annual pension earnings 3,306 9,066
Curtailment / settlement - -196,928
Payroll tax employer contribution, assets -613 -1,387
Benets paid -13,014 -13,528
Past service cost - 47
Actuarial (gain) / loss on the obligation 4,586 12,738
Estimated liability at year end 252,393 256,580
Changes in plan assets:
Opening value of plan assets 231,565 408,384
Expected return 2,611 8,531
Curtailment / settlement - -189,916
Payroll tax of employer contribution, assets -149 -591
Contributions by employer 4,344 11,028
Benets paid -11,219 -10,914
Actuarial gain / (loss) -623 5,043
Estimated plan assets at year end 226,529 231,565
2021 2020
Net plan assets/liabilities:
Pension liabilities 252,393 256,580
Plan assets 226,529 231,565
Net plan assets/ (liabilities) incl social security -25,864 -25,015
Social security -3,196 -3,091
Pension cost:
Present value of pension obligation 1,132 11,260
Interest expenses on obligation 3,306 9,066
Expected return on plan assets -2,611 -8,531
Administration expense 565 929
Recognition of past service cost - 47
Settlement/curtailmen of net obligation - -7,013
Pension cost 2,392 5,758
Payment on contribution plan 38,627 6,317
Total pension cost 41,018 12,075
Actual return on plan assets 1,988 13,574
Acturial gain and loss (-)
Total acturial gain / loss -5,209 -7,700
Currency - 5
Tax effect 1,237 1,774
Acturial gain / loss booked on Other comprehensive income -3,971 -5,921
Pension liability for 2021 and 2020 is based on table K2013 for Norway and S2IA for UK.
Individual pension agreements
From the merger with Farstad the Group has an individual pension obligation for
four former employees and one former Chairman of the Board.
A total liability of NOK 4.3 million is included in the net liability above (NOK 6.1 million in 2020).
Plan assets are invested in a wide portfolio by an external insurance company. The insurance
company is responsible for total administration of the pension plan.
For both years the “Norwegian Covered Bonds Market”-interest rate is used as basis for determination of the discounting rate.
Note 20 - Bank deposits
The Group’s tied deposits total NOK 38.8 million (NOK 40.1 million in 2020) of which is employee tax withheld.
As part of the restructuring of the Group’s debt effective from October 20th, 2020, the total bank deposits are pledged.
As a part of the renancing a MNOK 1,500 Super Senior Credit Facility (SSCF) was made available for the Group. Per 31. December
2021, drawn amount was MNOK 1,494. (MNOK 1,467 in 2020). The SSCF is classied as an ordinary bank deposit. The SSCF can
only be utilized if Group’s available cash is less than MNOK 600.
The Group can not be in any event of continuing default before, or as a result of, any use of the funds under the SSCF.
Solstad Offshore ASA | Annual Report 202184
Contents
Annual Report 2021
Note 21 - Environmental conditions
All of the company’s vessels comply with current environmental requirements. In 2021, none of the company’s vessels had
conditions imposed on them for upgrading or improving technical equipment or any other measures necessary to satisfy current
environmental standards.
The company’s HSE and ISPS system complies with international regulations (IMO’s International Safety Management Code).
All vessels and our administration hold ISM certication from Det Norske Veritas or relevant Flag State. The company’s Quality
Assurance system is certied in accordance to NS-EN ISO 9001:2000.
Reference is made to note 2.
Note 22 - Paid out and proposed dividend
2021 2020 2019
Approved and paid out during the year:
Ordinary dividend -- -- --
Proposed dividend at general meeting:
Ordinary dividend -- -- --
Per share (NOK) -- -- --
Note 23 - Other long-term receivables
2021 2020
Sellers credit (note 5) 26,458 -
Loan to associated companies - -
Loan to other companies 718 14,128
Other receivables 29,284 46,067
Total other long-term assets 56,460 60,195
Other receivables consist of advance travel card deposits and deposits for public taxes.
Note 24 - Accounts receivable and
other short-term receivables
2021 2020
Accounts,receivable,(note,5) 815,182 832,655
Receivable,from,associated,and,joint,venture,companies 1,564 6,973
Total,accounts,receivable 816,745 839,628
Prepaid,expenses 47,348 32,877
Earned,,not,invoiced,income 89,192 79,208
VAT,receivable 64,450 96,408
Other,short-term,receivables 220,104 205,518
Receivable,from,associated,and,joint,venture,cimpanies
Total,short-term,receivables 421,094 414,011
Other short-term receivables are mainly refundable insurance claims, government grants and prepaid docking expenses.
Note 25 - Inventory
2021 2020
Bunkers 84,128 80,039
Lube oil 33,312 36,638
Other 55,600 48,653
Total inventory 173,041 165,330
Note 26 - Other current liabilities
2021 2020
Accrued salaries, related taxes and VAT payable 249,277 275,714
Other current liabilities 113,363 168,964
Total short-term liabilities 362,640 444,678
Other current liabilities consist mainly of incurred operational expenses and performed
planned periodic maintenance not yet invoiced at year end.
Note 27 - Contingent liabilities, assets and provisions
Tax claims in Brazil:
Chartering of non-Brazilian built tonnage in Brazil require application for tax exemption for temporary importation of vessels and
spare parts through Brazilian Oil & Gas tax regime (REPETRO). There are several cases where Brazilian Tax Authorities claim to
have identied procedural error, and where large nes are imposed.
The Company’s subsidiaries in Brazil; Farstad Shipping Ltda., Deep Sea Supply Navegacão Marítima Ltda. and Solstad Offshore
Ltda. have all received claims related to importation of vessels and spare parts during the period 2008-2018. The claims relate to
customs duties, notices of infringement and nes. The claims are annually adjusted according to market interest rate.
All claims are handled by the Company’s lawyers in Brazil. The majority of the claims are rejected and chances to succeed are
considered high. Although most claims are rejected, they represent liabilities which, in Management’s assessment, can lead to
release of nancial resources in the future, or may need a legal deposit if the case goes to Judicial level. Management also believes
some liabilities can be measured and estimated reliably.
The total potential claim amounts to approximately MNOK 220 (MNOK 240). The reduction in 2021 is due to currency MNOK 8 and
cases closed with favourable outcome. Based on an individual assessment of each case the Group’s total recognized accrual is
MNOK 13.3 (MNOK 15.1 in 2020). Legal fees are expensed as incurred.
Reference is made to note 6 regarding information about Normand Maximus.
Stock consists of provisions, bunkers and lube oil on the Group’s vessels:
Other stock is mainly critical spare parts and dry docking work-in-progress.
Solstad Offshore ASA | Annual Report 202186
Contents
Annual Report 2021
Note 28 - Deferred income and excess value contracts
Excess values contracts
As a part of the purchase price allocation from the mergers of Rem Offshore, Farstad Shipping and Deep Sea Supply,
long-term charter contracts with excess values, contracted versus current market day rates, were identied. The excess
values are classied as intangible xed assets, and are amortised over the remaining duration of each charter contract.
2021 2020
Book value as per 01.01. 7 499 69 961
Amortised -7 499 -62 462
Book value as per 31.12. 0 7 499
Note 29 - Subsequent events
Contracts
The Company has increased its orderintake with approximately MNOK 2,600 during Q1 2022. The majority of new contracts
(MNOK 1,450) are in the subsea and renewable segments.
Sale of vessels
The Company has disposed the remaining vessels classied as non-strategic in 2022, with warrants exercised for ve of the
sales. Warrants are exercised in accordance to the restructuring agreement 20. October 2020.
The Situation in Ukraine
In February 2022, Russian armed forces invaded Ukraine. The Group is present in Ukraine with an ofce managing crewing
services within the Group, and employs approx. 300 Ukrainian crew. None of the Group’s vessels have been forced to off-hire
due to the situation, but there is a risk that crew changes and crew availability will be challenging as long as the war persists.
Management is handling this event and its development proactively, including sanctions and direct and indirect impacts. Actions
to mitigate its effect on services the Group provides and other associated risks are taken. Reference is made to the Board of
Director’s Report for further information.
In addition to reporting measures required under IFRS, the Company also use the following
alternative performance measures in the interim- and annual reports
Operating margin - Operating result before depreciation and impairment in percentages of total operating income
EBITDA - Operating result before depreciation and impairment adjusted for excess
values charter parties from mergers and operating leases
Adjusted EBITDA - Operating result before depreciation and impairment adjusted excess values
charter parties from mergers, operating leases and other non-cash related items
Adjusted Operating result before depreciations - Operating result before depreciation and impairment
adjusted excess values charter parties from mergers, operating leases and net result from Joint Ventures
Earning on equity - Result before tax, in percentage of average equity, including minority interests
Earning on capital employed - Operating result plus interest income and result from associated
company divided by average book shareholders’ equity and interest-bearing debt
Current ratio - Current assets divided by current liabilities
Equity ratio - Booked equity including minority interests in percentage of total assets
Earnings per share - Result for the period for the Group divided by weighted average
number of shares for the reporting period, adjusted for treasury shares
Comprehensive income per share - Comprehensive income for the period for the Group divided by
weighted average number of shares at the end of the reporting period, adjusted for treasury shares
Equity per share - Shareholders’ equity divided by outstanding number of shares at the end of the reporting period
Working capital - Current assets less current liabilities, including current portion of long-term debt
Interest-bearing debt - Current and long-term interest-bearing liabilities
Net interest-bearing debt - Interest-bearing liabilities less bank deposits
B2B - Book to bill, backlog less billed in period
Alternative performance measurements denitions
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
88
Corporate
accounts
for Solstad
Offshore ASA
Parent company (NOK 1,000)
PROFIT OR LOSS ACCOUNT 2021
01.01-31.12
2020
01.01-31.12
Note
Other operating income 12,951 77,172
Total operating income 12,951 77,172
Personnel costs -2,212 -10,055 4
Other operating expenses -10,523 -162,553 4
Total operating expenses -12,735 -172,608
Operating loss 216 -95,436
Other interest income 3
Other nancial income 97,9 48 1,502,192 5
Other interest charges - -5,381
Other nancial charges -6,351 -579,385 5,7
Net nancial items 91,598 917,429
Ordinary result before taxes 91,813 821,993
Tax on ordinary result - - 8
Net result for the year 91,813 821,993
Transfer and disposable income
Transfer to/from other equity 91,813 821,993 9
Total transfer and disposable income 91,813 821,993
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
90
Balance
sheet
Parent company (NOK 1,000)
2021
31.12
2020
31.12
Note
ASSETS
FIXED ASSETS
FINANCIAL FIXED ASSETS:
Investment in subsidaries 575,228 457,032 6
TOTAL FINANCIAL FIXED ASSETS 575,228 457,032
TOTAL FIXED ASSETS
575,228 457,032
CURRENT ASSETS
RECEIVABLES:
Other short-term receivables 40,033 58,359 7
Total receivables 40,033 58,359
Bank deposits and cash equivalents 379 6,558
TOTAL CURRENT ASSETS
40,412 64,917
TOTAL ASSETS
615,640 521,949
Solstad Offshore ASA | Annual Report 2021
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Annual Report 2021
92
Balance
sheet
Parent company (NOK 1,000)
2021
31.12
2020
31.12
Note
EQUITY & LIABILITIES:
EQUITY
RESTRICTED EQUITY:
Share capital (75,608,658 a 1,-) 75,609 74,873
Shared premium 176,927 175,572
TOTAL RESTRICTED EQUITY 252,536 250,445 9
EARNED EQUITY:
Other equity 169,420 77,6 0 6 11
TOTAL EARNED EQUITY 169,420 77,606
TOTAL EQUITY
421,956 328,051 9
LIABILITIES
OTHER LONG-TERM LIABILITIES:
Other long-term liabilities 1,917 2,158 13
TOTAL LONG-TERM LIABILITIES 1,917 2,158
CURRENT LIABILITIES:
Accounts payable 189,245 189,016 9
Other current liabilities 2,524 2,723
Total current liabilities 191,768 191,740
TOTAL CURRENT LIABILITIES
193,685 193,898
TOTAL EUQUITY AND LIABILITIES
615,640 521,949
Board of Director in Solstad Offshore ASA
Skudeneshavn April 21, 2021
Harald Espedal
Chairman
Thorhild Widvey
Director
Ellen Solstad
Director
Ingrid Kylstad
Director
Peder Sortland
Director
Frank O. Reite
Director
Lars Peder Solstad
CEO
Solstad Offshore ASA | Annual Report 2021
Contents
Annual Report 2021
94
Statement
of cash ow
Parent company (NOK 1,000)
2021
31.12
2020
31.12
CASH FLOW FROM OPERATIONS
Prot / loss before taxes 91,813 821,993
Impariment of nancial assets - -
Interest income - -3
Interest expense - 5,381
Non-cash renance effects -116,347 -960,971
Unrealised currency gain/ -loss - -
Change in short-term receivables and payables 228 121,224
Change in other accruals 18,126 -58,788
Net cash ow from operations -6,179 -71,164
CASH FLOW FROM INVESTMENTS
Investments in shares - -30
Pamynet of long-term receivables - 2,158
Deposal of shares - -
Net cash ow from investments
- 2,128
CASH FLOW FROM FINANCING
Paid-in capital - 70,355
Interest reiveiced - 3
Interest paid - -2,025
New / repayment of (-) long-term debt - -
Net cash ow from nancing - 68,333
Net change in cash and cash equivalents - 6,179 -703
Cash and cash equivalents at 01.01 6,558 7,261
Cash and cash equivalents at 31.12 379 6,558
Solstad Offshore ASA | Annual Report 202196
Contents
Annual Report 2021
Notes
Notes to the Parent Company
Financial Statements
(NOK 1,000)
General
The annual accounts have been prepared in accordance with
the Accounting Act and best practice accounting principles
in Norway. The most important accounting principles are
described below.
Use of estimates
In the preparation of the accounts, estimates and assumptions
are used which affect the accounts. Actual gures may differ
slightly from the estimates.
Foreign currency
Monetary items in foreign currency are converted at the
exchange rate at the balance sheet date.
The following exchange rates have been used in the accounts:
GBP USD EUR
Per 31.12.20 11.646 8.533 10.470
Per 31.12.21 11.888 8.819 9.989
Cost of borrowing
The cost of borrowing is capitalized at the time of borrowing and
the cost is charged over the maturity period of the loan.
Evaluation and presentation of current assets
Stocks are valued as the lowest of either the acquisition or the
estimated sales value. Receivables are ecorded at face value
with deduction for anticipated loss.
Financial xed assets
Long-term investment in shares and other investments are
valued at the lowest of either the acquisition cost or the estimated
sales value if the reduction in the sales value is not considered
temporary.
Taxes / Deferred tax
Deferred tax/ deferred tax assets are calculated, using the
liability method, at 22 percent based on temporary differences
between the accounting and tax-related values existing at the
end of the nancial year and any tax decits are carried forward.
Temporary tax increases and decreases are recorded in the
balance sheet as net gures.
Classication of items in the accounts
Assets determined for long-term ownership or use and
receivables which are due more than one year after the expiry
of the nancial year are recorded as xed assets. Any remaining
assets are classied as current assets.
Liability which is due more than one year after the expiry of the
nancial year is recorded as long-term debt.
Contingencies
Contingent losses that are probable and quantiable are
recorded to the accounts, whilst contingent gain/income is not.
Shares and holdings in other companies
Short-term investments related to shares are not treated as a
trading portfolio and are valued at the lowest of cost price and
market value.
Shares in subsidiaries, associated companies and
jointly-owned companies
Shares in subsidiaries, associated and jointly-owned companies
are recorded in the parent company accounts at cost and written
down to the extent that there is a signicant decit value which is
not considered temporary.
Treasury shares
Treasury shares are recorded as a nominal value under the item
“share capital”. The difference between nominal and acquisition
cost is entered as “other equity”.
Cash ow
The Group applies the indirect method. Investment in shares
and other liquid assets with maturity over three months are not
included under cash equivalents.
Note 1 - Accounting principles
Note 2 - Major transactions/events
Reference is made to Note 2 in the Group Annual Report for further information.
Note 3 - Financial risk
The company is exposed to various nancial risks in its activities. Financial risk is the risk incurred from any changes in currency and
interest rates together with counter parties ability to pay, and which impacts the value of the company’s assets, liabilities and future
cash ows.
Reference is made to Note 5 in the Group Annual Report for further information.
Solstad Offshore ASA | Annual Report 202198
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Annual Report 2021
Note 4 - Other expenses, wages, employees and
distinctive contributions
2021 2020
Wages and director fee 1,894 8,772
Employer’s National Insurance 311 1,031
Pension costs 123
Other benets 2 47
Travelling costs, courses and other personnel costs 5 83
Total employee cost 2,212 10,055
Average number of man-years 0 2
Renumeration to Directors, Managing director and Auditors
2020
Wages Bonus Other benets Pension cost
Lars Peder Solstad 2,312 2,289 155 107
In 2021, NOK 4,893,500 (NOK 2,673,877 in 2020) was charged as auditors fees and NOK 6,285,018 (NOK 10,972,898 in 2020)
relating to other non-audit related services. Both amounts are exclusive VAT. There are no distinctive agreements regarding
remuneration for the Chairman of the Board and nor are there any distinctive bonus or option programmes for any Board Member.
Note 5 - Financial items
Other nancial income of MNOK 98 relates to conversion of debt to equity.
Comparative gures for 2020 of MNOK 1,502 relates to restructuring and consist of gain on sale of shares MNOK 204, debt converted
to equity MNOK 1,217 and gain on loan to subsidiary MNOK 82.
Other nancial costs of MNOK 6 consist of loss on receivables converted to shares in subsidiaries. Comparative gures for 2020 of
MNOK 579 consist of loss on sale of shares MNOK 541, other cost 25 MNOK and currency loss MNOK 13.
Note 6 - Shares in subsidiaries
31.12.2021 Place of business
Owner- /
voting shares
Number of
shares
Nominal
value
Share
capital
Cost price /
book value
Solstad Shipholding AS Skudeneshavn 100 % 30,000 6,66 200 575,198
Solship Invest 1 AS Skudeneshavn 100 % 30,000 1 30
Solship Invest 3 AS Skudeneshavn 100 % 30,000 1 30
Farstad Shipping AS Skudeneshavn 100 % 30,000 1 30 30
Solship AS Skudeneshavn 100 % 30,000 1 30 30
Total 575,228
Solship Invest 1 AS was liqudated in 2021.
The investment in Solstad Shipholding AS was increased by MNOK 118 by conversion of debt to equity.
The Company had no employees in 2021.
Board of Directors fee:
2021 2020
Harald Espedal 600 676
Frank O. Reite 406 376
Ellen Solstad 196 370
Peder Sortland 246
Ingrid Kylstad 246
Thorhild Widvey 196
Toril Eidesvik (until 20.10.2020) 138 443
Harald Thorstein (untill Q1 2020) 390
Merete Haugli (untill 20.10.2020) 104 383
Anders Onarheim 25 25
31.12.2020 Place of business
Owner- /
voting shares
Number of
shares
Nominal
value
Share
capital
Cost price /
book value
Solstad Shipholding AS Skudeneshavn 100 % 30,000 6,66 200 457,002
Solship Invest 1 AS Skudeneshavn 100 % 30,000 1 30
Solship Invest 3 AS Skudeneshavn 100 % 30,000 1 30
Farstad Shipping AS Skudeneshavn 100 % 30,000 1 30
Solship AS Skudeneshavn 100 % 30,000 1 30 30
Total 457,032
Note 7 - Inter company group
Solstad Offshore ASA had the following debt to companies in the Group:
31.12.2021 31.12.2020 Interest
Solstad Shipholding AS 40,033 46,335
Solstad Subsea Holding AS 11,724
Solstad Rederi AS 300
Other current assets 40,033 58,359
Solstad Shipping AS 117,281 112,896
Solstad Rederi AS 229
Solstad Management AS 29,750 34,136
Normand Drift AS 41,984 41,984
Account payable 189,245 189,016
Solstad Offshore ASA | Annual Report 2021100
Contents
Annual Report 2021
2021 2020
Taxable income
Result before tax 91,813 821,993
Changes in tempoary diferrences -34,829
Permanent differences -91,594 -917,68 6
Unrecovered interest
Transferred to/from loss carry forward -219 130,522
Taxable income - -
Change in deferred taxes - -
Tax on ordinary result - -
Short-term receivables -2,000 -36,829
Unrecovered interest carried forward - - 43,176
Unrecovered loss carried forward -323,481 -150,002
Total temporart differences -325,481 -230,007
Cuclulated deferred tax asset 71,606 50,601
Unrecognized part of deferred tax asset -71,606 -50,601
Booked deferred tax asset - -
Analysis of effective tax rate:
22 % of Prot before Tax 20,199 -163,734
Deferred tax asset not recognised -48 22,880
Tax effect of permanent differences -20,151 140,854
Estimated tax - -
Note 8 - Taxes
Provisions for deferred tax are recorded for accounting position where a future realisation will return in payable taxes.
Note 9 - Equity, shareholders and treasury shares
Share capital
Share
premium Other equity Total equity
Equity 31.12.2020 74,873 175,572 77,606 328,051
Share capital increase by
conversion of debt 736 1,355 - 2,091
Annual result - - 91,813 91,813
Equity 31.12.2021 75,609 176,927 169,420 421,956
At 31.12.20 the Company’s share capital represents 74,872,682 shares at NOK 1.
At 31.12.21 the Company’s share capital represents 75,609,658 shares at NOK 1.
Capital increases by convertion of debt is through exercise of warrents issued by decision of the Company’s general meeting held on
20 October 2020. Warrents will be excersised for any unsettled debt after disposal of vessels held for sale.
The number of shareholders at 31.12.21 was 7,248 (7,773 at 31.12.20).
Number of shares Ownership
Aker Capital AS 18,843,913 24,92 %
Hemen Holsing Ltd 7,016,727 9,28 %
Jarsteinen AS 3,130,73 4 4,14 %
Citibank Europe plc 1,921,921 2,54 %
Magne Hystad 1,800,000 2,38 %
DNB Markets Aksjehandel/-analyse 1,542,780 2,04 %
The Export-Import Bank of China 1,139,842 1,51 %
Otto Rognvær 991,598 1,31 %
Sparebanken Møre 965,728 1,28 %
Knut Invest AS 800,000 1,06 %
Nordea Bank ABP, Fil 793,196 1,05 %
Morten Østdahl 777,527 1,03 %
The Bank of New York Mellon SA/NV 773,570 1,02 %
40,497,536 53,56 %
Shareholders with more than 1 % holding at 31.12.2021
Number of shares
Harald Espedal 656,687
Frank Ove Reite -
Ellen Solstad -
Thorhild Widvey -
Ingrid Kylstad -
Peder Sortland -
In accordance with the denition in corporate law, the Directors had the following holdings at 31.12.2021
The Chief Executive Ofcer holds 3,130,734 shares through Jarsteinen AS in addition to a right to subscribe 5,038,187 shares in the
Company with a nominal value of NOK 1 per share. The subscription right expires 20.10.2023.
The Company’s auditor does not hold shares in the company.
Per 31.12.2021 the company holds 124 treasury shares at a cost price of MNOK 9.6.
Per 31.12.2020 the company holds 124 treasury shares at a cost price of MNOK 9.6.
Note 10 - Earnings per share
In 2021, earnings per share was NOK 10.94. The equivalent value in 2020 was NOK 3.30. Earnings per share is calculated by
dividing the company’s result by the average number of shares, adjusted for the stock of treasury shares. There are no instruments
that prevents the possibility of dilution.
Note 11 - Transactions with related parties
Related parties are considered to be Board Members (including associated companies) and the company management.
There are no management agreements with related parties outside the Group that charge management fees.
Note 12 - Guarantees
Solstad Offshore ASA has issued a Parent Company Guarantee of MNOK 20,837, hereof lease guarantee of MNOK 2,424.
Solstad Offshore ASA | Annual Report 2021102
Contents
Annual Report 2021
Note 13 - Other long-term liabilities
As part of the renancing in 2020 Aker, Hemen and Jarsteinen issued convertible loans as an instrument to avoid dilution. Portions
of the convertible loans will be converted in relation to sale of non-strategic vessels, and exercise of warrants from certain banks.
31.12.2021 31.12.2020
Aker Capital AS 1,244,782 1,401,545
Hemen Holding Ltd 441,367 496,950
Jarsteinen AS 230,484 259,510
1,916,633 2,158,005
Solstad Offshore ASA | Annual Report 2021104
Contents
Annual Report 2021
Our Global Footprint
South Americas
(Brazil & Argentina)
6 AHTS | 3 PSV | 4 CSV
Oil & Gas
Americas
(USA, Mexico, Gulf)
4 CSV
Oil & Gas
Macaé
Brazil
Rio de Janeiro
Brazil
Ofces
Aberdeen
United Kingdom
Europe
5 AHTS | 22 PSV | 14 CSV
Oil & Gas, Renewable Energy, Cable
Asia Pacic
5 AHTS | 6 PSV | 4 CSV
Oil & Gas, Renewable Energy, Cable
Ålesund
Norway
Skudeneshavn
Norway
Odessa
Ukraine
Perth
Australia
Singapore
Singapore
Manila
Philippines
Limassol
Cyprus
Solstad Offshore ASA
Nesavegen 39
4280 Skudeneshavn
Norway
Postal address:
P.O. Box 13
4297 Skudeneshavn
Norway
Telephone: +47 52 85 65 00
Email: contact@solstad.com
www.solstad.com
Statsautoriserte revisorer
Ernst & Young AS
Thormøhlens gate 53 D, 5006 Bergen
Postboks 6163, 5892 Bergen
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Solstad Offshore ASA
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Solstad Offshore ASA (the Company) which comprise the financial
statements of the Company and the consolidated financial statements of the Company and its subsidiaries (the
Group). The financial statements of the Company comprise the balance sheet as at 31 December 2021, the
profit or loss account, the statement of cash flows for the year then ended and notes to the financial
statements, including a summary of significant accounting policies. The consolidated financial statements of
the Group comprise the consolidated statement of financial position as at 31 December 2021, the consolidated
statement of comprehensive income, consolidated statement of cash flows and consolidated statement of
changes in equity for the year then ended and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion
• the financial statements comply with applicable legal requirements,
• the financial statements give a true and fair view of the financial position of the Company as at 31
December 2021 and its financial performance and cash flows for the year then ended in accordance
with the Norwegian Accounting Act and accounting standards and practices generally accepted in
Norway,
• the consolidated financial statements give a true and fair view of the financial position of the Group as
at 31 December 2021 and its financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the audit committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Company and the Group in accordance with the
requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation
(537/2014) Article 5.1 have been provided.
We have been the auditor of the Company since the listing in 1997, for more than 24 years from the election by
the general meeting of the shareholders.
Emphasis of matter
We draw attention to note 6 of the financial statements, which include information about possible
consequences for Solstad Offshore ASA related to guarantees provided under the bareboat charter of
Normand Maximus, and the recourse claim received from MYF Limited. Our opinion is not modified in respect
of this matter.
Penneo document key: ZTPFZ-6XZQ5-U2YHH-8G5F3-LQTYK-QDE76
2
Independent auditor's report - Solstad Offshore ASA 2021
A member firm of Ernst & Young Global Limited
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements for 2021. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the financial statements.
Impairment evaluation of vessels and right of use asset (vessels)
Basis for the key audit matter
Management identified the challenging market
conditions and price/book ratio below 1 as
impairment indicators and tested recoverable
amounts of the Group’s vessels (includes right of
use assets vessels). Each individual vessel was
assessed as a separate cash generating unit, and
management estimated recoverable amounts by
comparing the carrying amount to the highest of fair
value less costs of disposal and value in use. For a
majority of the vessels, value in use was the basis
for the recoverable amount.
As per 31 December 2021 book value of the Group’s
vessels amounted to NOK 20 413,5 million,
representing 82 % of the Group’s total assets. The
Group recognized an impairment of NOK 45 million
in 1Q21 related to a “non-strategic” vessel that was
sold later the same year.
When estimating value in use, management applied
budget and long-term strategic plans approved by
the Board of Directors, including assumptions
regarding future market and economic conditions.
Key estimates for the value in use calculation were
future day rates, utilization rates, and discount rate.
The estimated fair value less cost of disposal was
based on sales transactions for comparable vessels
and an average of three external broker valuation
reports for each vessel.
Considering the extent of estimates and
assumptions applied in the impairment evaluation,
and management’s involvement and significant
judgement in establishing them, we assess
impairment evaluation of vessels as a key audit
matter.
Our audit response
Our audit procedures related to value in use
included, among others, an evaluation of the cash
flows through comparing assumptions for revenue
projections to budget and strategic plans approved
by the Board of Directors, current contracts, and
market analysis from third-party. For operating
expenditures, we compared the estimates to
approved budgets, historical data and external long-
term forecasts. We performed an assessment of the
reliability of management’s forecast through a review
of actual performance against previous forecasts
and the consistence of valuation methodology
applied. We involved an internal valuation specialist
in testing of the mathematical accuracy of the value
in use calculation, in the assessment of the model
and the discount rate applied. With support from our
internal valuation specialist, we performed sensitivity
analysis of management’s assumptions.
Furthermore, we compared management’s value in
use calculations with third-party broker valuation
reports obtained by management.
For fair value less cost of disposal, our audit
procedures included comparing estimated net
proceeds to actual sales transactions for comparable
vessels and third-party broker valuation reports
obtained by management. We evaluated the
appropriateness and reliability of the broker
valuations through comparing the broker estimates
to management’s value in use calculations.
We refer to note 2 Accounting estimates and
assessments, note 7 Tangible fixed assets and note
8 Right of use assets
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Independent auditor's report - Solstad Offshore ASA 2021
A member firm of Ernst & Young Global Limited
Other information
Other information consists of the information included in the annual report other than the financial statements
and our auditor’s report thereon. Management (the board of directors and Chief Executive Officer) is
responsible for the other information. Our opinion on the financial statements does not cover the other
information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and,
in doing so, consider whether the board of directors’ report, the statement on corporate governance and the
statement on corporate social responsibility contain the information required by applicable legal requirements
and whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information or that the information
required by applicable legal requirements is not included, we are required to report that fact.
We have nothing to report in this regard, and in our opinion, the board of directors’ report, the statement on
corporate governance and the statement on corporate social responsibility are consistent with the financial
statements and contain the information required by applicable legal requirements.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements of the
Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway and of the consolidated financial statements of the Group in accordance with International
Financial Reporting Standards as adopted by the EU, and for such internal control as management determines
is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Company or the
Group, or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
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Independent auditor's report - Solstad Offshore ASA 2021
A member firm of Ernst & Young Global Limited
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s and the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company and the
Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirement
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of our audit of the financial statements of Solstad Offshore ASA we have performed an assurance
engagement to obtain reasonable assurance whether the financial statements included in the annual report,
with the file name SOLSTAD OFFSHORE ASA-2021-12-31-en.zip, has been prepared, in all material respects,
in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European
Single Electronic Format (ESEF Regulation) and regulation given with legal basis in Section 5-5 of the
Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report
in XHTML format and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements included in the annual report have been prepared, in all material
respects, in compliance with the ESEF Regulation.
Management’s responsibilities
Management is responsible for the preparation of an annual report and iXBRL tagging of the consolidated
financial statements that complies with the ESEF Regulation. This responsibility comprises an adequate
process and such internal control as management determines is necessary to enable the preparation of an
annual report and iXBRL tagging of the consolidated financial statements that is compliant with the ESEF
Regulation.
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Independent auditor's report - Solstad Offshore ASA 2021
A member firm of Ernst & Young Global Limited
Auditor’s responsibilities
Our responsibility is to express an opinion on whether, in all material respects, the financial statements
included in the annual report have been prepared in accordance with the ESEF Regulation based on the
evidence we have obtained. We conducted our engagement in accordance with the International Standard for
Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical
financial information”. The standard requires us to plan and perform procedures to obtain reasonable
assurance that the financial statements included in the annual report have been prepared in accordance with
the ESEF Regulation.
As part of our work, we performed procedures to obtain an understanding of the company’s processes for
preparing its annual report in XHTML format. We evaluated the completeness and accuracy of the iXBRL
tagging and assessed management’s use of judgement. Our work comprised reconciliation of the iXBRL
tagged data with the audited financial statements in human-readable format. We believe that the evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Bergen, 21 April 2022
ERNST & YOUNG AS
The auditor's report is signed electronically
Øyvind Nore
State Authorised Public Accountant (Norway)
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