2022
ANNUAL
REPORT
Net interest-bearing debt reduced by NOK 431 million
through the year, mainly driven by the sale of preference
shares held in Odfjell Drilling
Strong activity growth year-over-year across almost all
portfolio companies
HMH executed on synergy plan with wave one of ERP
implementation completed. Bridge loan facility refinanced
with new Nordic bond of USD 150 million.
New four-year contract for Aker Wayfarer with a total
value of around USD 282 million secured within AKOFS
Offshore
DRU arbitration proceeding was further progressed, with
hearing concluded last week of February 2023. Arbitration
outcome expected in second half of 2023.
Agreement to divest Cool Sorption entered into in the
year, with closing completed in February 2023
NOK .bn
Net Capital Employed
(: .bn)
NOK m
Net Interest-bearing Debt
(: m)
Total Shareholder return
(: %)
Equity share
(: %)
0
1000
2000
3000
4000
5000
2 863
615
636
536
231
(237)
4 645
(553)
(984)
4 092
OtherDRU
contracts
Net Capital
Employed
NIBD Equity
Net capital employeed per year end 2022
NOK million
2022 in brief
Book value per share (NOK)
10.4 2.2 2.3 2.0 0.8 17.0 -2.0 14.9-0.9
3Annual Report 2022
TABLE OF CONTENTS
01. BOARD OF DIRECTORS' REPORT 4
02. DECLARATION BY THE BOARD
OF DIRECTORS AND CEO 14
03. CORPORATE GOVERNANCE STATEMENT
– AKASTOR ASA 15
04. FINANCIALS AND NOTES 24
a. Akastor Group 24
b. Akastor ASA 77
05. AUDITOR'S REPORT 89
06. ALTERNATIVE PERFORMANCE
MEASURES 94
07. BOARD OF DIRECTORS 96
08. MANAGEMENT 99
09. COMPANY INFORMATION 100
4 Annual Report 2022 | Board of Directors' Report
Board of Directors’ Report
Akastor is an investment company based in Norway with a
portfolio of companies in the oilfield services sector, with a
flexible mandate for active ownership and long-term value
creation. The shares of Akastor ASA are traded on the Oslo
Stock Exchange under the ticker AKAST. The Akastor portfolio
of companies had a total net capital employed of NOK 4.6 billion
at the end of 2022.
Highlights 2022
2022 will be remembered first and foremost by the geopolitical
tension seen in the world, escalated by Russia’s invasion of
Ukraine in February. The war in Ukraine had effect on energy
prices and led to increasing oil prices through the first half of
2022, primarily because of supply concerns and low oil
inventories going into 2022. Through the second half of 2022,
oil prices decreased driven by fear of recession and lower global
activity levels following high global inflation seen through the
year, partly driven by energy prices. Despite a volatile year in
terms of crude oil prices, with only a moderate price increase
year-over-year, the activity within oil and gas related businesses
increased and is expected to further increase in 2023 and
forward driven by high focus on energy security and higher
global activity following the normalization after the COVID-19
pandemic. For Akastor, the increase in offshore upstream capex
seen through 2022 and higher rig activity had positive bearing
on activity levels throughout the Akastor portfolio of companies.
Despite uncertainty related to inflation and increasing interest
rates threatening global growth as well as geopolitical instability,
the prospects for Akastor going into 2023 look promising based
on continued estimated growth for energy related businesses.
In January, Akastor announced that its 50% owned joint venture
HMH Holding B.V. (HMH) had successfully completed a USD 150
million senior secured bond issue with a tenor of 3 years with net
proceeds used for repayment of a bridge loan. The bond loan
was listed at the Oslo Stock Exchange in November.
In July, Akastor’s 50% owned joint venture AKOFS Offshore AS
(AKOFS Offshore) entered into a firm contract for its vessel
“Aker Wayfarer” in order for the vessel to continue to perform
services as a subsea equipment support vessel (SESV) for
Petrobras in Brazil. The duration of the contract is around 4
years, and the services are expected to commence in the first
half of 2023. Total contract value was about USD 282 million, of
which about USD 198 million will be revenue allocated to
AKOFS Offshore and included in the company’s backlog.
In September, Akastor announced that its wholly owned
subsidiary, DDW Offshore, had been awarded a firm one year
contract by Petrofac for the AHTS vessel Skandi Atlantic with
contract start in September 2022.
In November, Akastor sold the preference shares held in Odfjell
Drilling for a value of USD 95.2 million, of which USD 75.2
million was settled in cash at closing. The remaining USD 20
million is to be settled pursuant to a seller’s credit agreement
with maturity date July 31, 2024. The warrants held in Odfjell
Drilling were not part of the transaction and remain with Akastor.
The transaction reduced net debt and strengthened the financial
position of Akastor.
In December, Akastor announced a change in the management
team of HMH as Chairperson & Chief Executive Officer, Merrill
A. (“Pete”) Miller, Jr, was to step down as Chief Executive Officer
at the end of 2022. Mr. Miller remains Chairperson of the HMH
Board of Directors while Mr. Eirik Bergsvik, former President of
the Equipment and System Solutions Division in HMH, was
elected to succeed Pete Miller as Chief Executive Officer,
effective from January 1, 2023.
Also in December, Akastor entered into a share purchase
agreement with Diamond Key International Pty. Ltd. (“DKI”)
regarding the sale of all shares held in Cool Sorption A/S (“Cool
Sorption”) for DKK 20 million on a cash and debt free basis.
Closing of the transaction took place in February 2023.
Akastor’s total net capital employed decreased from NOK 5.1
billion in 2021 to NOK 4.6 billion in 2022, mainly driven by the
sale of Odfjell Drilling preference shares. Net interest-bearing
debt for Akastor was reduced from NOK 1.0 billion per year end
2021 to NOK 0.6 billion per 2022 driven by proceeds received in
connection with the divestment of Odfjell Drilling shares. Total
equity of Akastor was NOK 4.1 billion per year end 2022, at the
same level as per year end 2021.
Company Overview
Aker Holding AS, wholly owned by Aker ASA, is the largest
shareholder of Akastor with a shareholding of 36.7 percent.
Akastor is primarily operating within the oilfield services sector.
The portfolio per end of 2022 includes several industrial holdings
within this sector, including:
HMH, which provides drilling systems, equipment, and
aftermarket services. Ownership interest is 50 percent.
AKOFS Offshore, a subsea well installation and interven-
tion services provider. Ownership interest is 50 percent.
AGR, which delivers well-, reservoir- and software ser-
vices to the offshore drilling industry. Economic interest
is 64 percent (agreement to sell AGR entered into in
March 2023, see Subsequent Events).
01. BOARD OF DIRECTORS' REPORT
5Annual Report 2022 | Board of Directors' Report
Each above-mentioned Akastor portfolio company is organized
as an independent business which is self-sufficient and with its
own dedicated management team fully responsible for all
aspects of its operational activities. All portfolio companies have
separate boards of directors, consisting of appointed Akastor
investment managers, including, for some companies, external
board members and employee representatives. This governance
model provides for strong management of operational activities
and a good foundation for close cooperation between Akastor,
the portfolio companies and their employees.
In addition to its portfolio of industrial holdings, Akastor has
several financial investments, including:
DDW Offshore, which owns and operates five offshore
vessels. Ownership interest is 100 percent.
NES Fircroft, a technical and engineering staffing com-
pany. Economic interest is approximately 15 percent.
DRU contracts, full economic interest in four drilling
equipment contracts with Jurong Shipyard. This posi-
tion was carved out from MHWirth in connection with
the merger with Baker Hughes’ SDS business.
Awilco Drilling, ownership interest is 6.8 percent.
In addition to the equity ownerships, Akastor also holds interest
bearing positions towards HMH and AKOFS Offshore, as well
as towards Odfjell Drilling as a result of the seller’s credit
agreement following the sale of the preference shares held in
Odfjell Drilling in November 2022.
The Akastor corporate organization is based at Fornebu, just
outside of Oslo in Norway, with a team of 13 employees, working
closely with the boards and management of its portfolio
companies.
Akastor has a total of 412 employees (including hired-ins) within
its consolidated subsidiaries as per year end 2022.
Strategy
The strategy of Akastor remains unchanged compared to last
year. Akastor is an investment company, employing an
independent approach for each portfolio company to optimize
its development potential. Akastor aims to create long-term
value for its shareholders through active development of its
portfolio companies as stand-alone businesses, while
maintaining the flexibility to be opportunistic. Akastor works
closely with each portfolio company’s management to make
decisions on operational activity, business development,
acquisitions and divestments to maximize the value of the
company. Each portfolio company develops and executes
independent value creation plans in close cooperation with the
Akastor investment team. As an owner, Akastor emphasizes
understanding the portfolio companies’ markets and challenges
in depth, in order to evaluate current valuation versus future
potential.
The business models of the portfolio companies are decentralized
with each entity being self-sufficient, but as part of the Akastor
portfolio, all companies share a common foundation based on
Akastor’s values, governing documents, and compliance structure.
Akastor seeks to maximize value by combining strategic,
operational, and financial measures. Akastor’s strategy as an
investment company remains as before, targeting to generate
an acceptable return on its current investments. New
investments may be made in the existing portfolio companies in
order to strengthen the companies and prepare for a future exit.
The ultimate goal is to return the capital to the shareholders of
Akastor upon divestments of assets, however ensuring that
Akastor has a solid capital structure.
Market Outlook
Akastor’s portfolio companies operate mainly in the oilfield
services industry. In 2022, the energy markets were heavily
affected by the Russian invasion into Ukraine which led to
disruption of gas supplies into Europe and extreme increases in
energy prices through the first half of the year. Despite Akastor’s
portfolio companies having very limited exposure towards the
Russian or Ukrainian markets, a lot of efforts and focus in 2022
were used on monitoring the situation in these countries as well
securing compliance with the sanctioning regulations. The war
in Ukraine has led to an increasing focus on energy security
throughout the world which in turn should have positive bearings
for the industries, where the Akastor portfolio companies
operate, through increasing investment levels. However, the
geopolitical situation following the Russian invasion also
represents a risk going into 2023 in terms of instability and a
higher degree of geopolitical and economic uncertainty.
Over the last couple of years, the industry in which Akastor
operates has also been heavily affected by the outbreak of the
COVID-19 virus which caused significant disruption to the global
economy. The oil and gas markets were strongly affected by
negative demand development following lower global activity,
adding additional pressure on the global economy, with direct
effects on the investment level of oil companies and thereby
effects also for the oilfield services industry. In 2022, the effects
following the global pandemic continued to normalize, with
increasing activity levels seen across most industries. After a
period of decreasing investment levels seen within oil and gas
following the outbreak of COVID -19, the global offshore oil and
gas project capex commitments in 2022 increased compared to
2021 on the back of higher commodity prices. Further growth is
forecasted from 2023 and forward.
2022 was also a strong year for investments in renewable
energy sources. According to Rystad Energy, aggregate
investments in renewable energy capacity exceeded upstream
oil and gas investments for the first time in 2022 and several
6 Annual Report 2022 | Board of Directors' Report
large new renewable energy hubs came on stream during the
year. Akastor acknowledges and strongly believes that the
development and growth of renewable energy sources as part
of the total energy mix are crucial to reach the global emission
targets. We also believe the trend towards cleaner and greener
energy represents opportunities for the Akastor portfolio
companies as an addition to its current primary focus on more
traditional oil and gas related activities.
Through 2022, the oil and gas markets have seen further
increase in important macro fundamentals such as global
offshore upstream capex spending and rig utilization, which in
turn had positive bearing on Akastor through increased activity
for the various portfolio companies. A clear risk looking forward
into 2023 is a potential deeper recession following high inflation
and rapidly increasing global interest rates seen in the second
half of 2022 which in turn could affect global industrial activity
and energy prices, and thereby also oilfield service activity.
Also, the turmoil in global financial markets seen in March 2023
increases uncertainty and risk. If the turmoil leads to longer term
effects on financial markets, this could in turn also affect Akastor
and its portfolio companies, e.g. through ability to conclude
transactions and limit access to financing.
In 2023, Akastor will continue to closely monitor the development
of the war in Ukraine with focus on mitigating any direct effects
following these circumstances, including securing compliance
with all relevant economic sanctions. Despite limited direct
exposure to the region, Akastor could be affected through more
general market effects. Akastor is part of the Aker Security
Centre of Excellence, which is an Aker network focusing on
monitoring global risk factors related to the geopolitical situation,
cyber security as well as climate risk with the target of improving
the basis for decisions and ensuring business security for the
Aker Group of companies. Also, Akastor will continue to follow
the general economic outlook in light of a potential recession
with the ambition to adjust capacity throughout the portfolio if
required as a result of a potential lowered activity level. The
financial impact as a result of the changing global dynamics
remains uncertain as it is difficult to predict the duration and the
longer-term impact on financial markets and industrial activity
level. From an accounting perspective, these factors could
however impact future assessments of valuation of Akastor’s
assets if the current volatility results in a negative long-term
market outlook.
Based on the current footprint of the portfolio, the oilfield
services industry will remain the primary market for Akastor and
its portfolio companies going forward. However, Akastor clearly
believes that the ongoing energy transition represents exciting
opportunities and will through its role as an active owner
continue to develop offering and presence within non-oil markets
and the renewable energy space to further diversify the portfolio.
Technology development remains a strategic target for all
portfolio companies and Akastor is targeting to support the
industry’s transition to more energy-efficient operations for its
clients through development of new solutions. Akastor will
continue to support HMH in its efforts to optimize and reduce fuel
consumption and carbon footprint for its clients through enabling
more efficient drilling operations while also seeking opportunities
within industries outside of oil and gas. AGR is continuing the
development of its suite of software solutions, enabling more
efficient operations for oil companies and is also positioning itself
within low carbon solutions such as carbon capture, geothermal
drilling and wind solutions. Early in 2022, AGR established Føn
Energy Services, a joint venture together with IKM, to provide
wind power project management, operations and maintenance
services to offshore wind farms. Akastor views this as an
interesting opportunity for growth within the renewable space
and will continue to invest in this platform in 2023.
Through 2022, Akastor saw an increase in activity across almost
all portfolio companies. Despite continued risk and uncertainty
related to the global geopolitical situation as well as the global
financial turmoil seen lately, Akastor management remains
cautiously optimistic that activity levels within the oilfield services
industry will continue to increase going forward based on the
positive underlying market fundamentals and increasing focus
on energy security.
Group Financial Performance
Akastor presents its consolidated financial statements in
accordance with the International Financial Reporting Standards
(IFRS) as adopted by the European Union.
All amounts below refer to the consolidated financial statements
for the group, unless otherwise stated. Please note that
consolidated revenue and operating profit in Akastor only
include financial performance of portfolio companies that
constitute a minor part of Akastor’s total net capital employed.
Income Statement
Revenue and other income for 2022 increased by 11 percent to
NOK 1 059 million. Operating profit before interest, tax, depreciation
and amortization (EBITDA) was negative NOK 10 million,
compared to break even in 2021.
Depreciation, amortization and impairment was NOK 66 million in
2022, compared to NOK 82 million in the previous year.
Net financial income were NOK 80 million in 2022 compared to
NOK 194 million in the previous year. Akastor’s share of net loss
from the equity-accounted investees is NOK 263 million, compared
to NOK 346 million in 2021, mainly related to net loss in AKOFS
Offshore and HMH.
The pre-tax loss for the year was NOK 259 million, compared to a
loss of NOK 235 million the previous year.
The income tax expense for 2022 was NOK 2 million, compared to
a tax benefit of NOK 20 million in 2021. The effective tax rate is
impacted by several items, such as impairment of deferred tax
assets as well as non-tax deductible items.
7Annual Report 2022 | Board of Directors' Report
Net loss from continuing operations was NOK 261 million,
compared to loss of NOK 215 million in 2021. The group had an
operating loss of NOK 257 million for the year.
Financial Position
Total assets of Akastor amounted to NOK 6.8 billion as of
December 31, 2022, compared with NOK 7.2 billion at year-end
2021. The decrease is mainly related to sale of preference
shares held in Odfjell Drilling.
Net debt (excluding lease liabilities) was NOK 1 220 million at the
end of the period, while net interest-bearing debt (NIBD) was NOK
553 million. Net interest-bearing debt decreased by NOK 431
million through the year, primarily explained by the sale of
preference shares held in Odfjell Drilling, partly mitigated by
corporate costs in the period.
Total equity amounted to NOK 4.1 billion at year-end 2022, of
which non-controlling interests were NOK 36 million. The equity
ratio was 60 percent as of December 31, 2022, compared to 57
percent in 2021.
Cash Flow
As of December 31, 2022, Akastor had cash of NOK 119 million,
compared to NOK 89 million in 2021. The net cash flow from
operating activities was negative NOK 244 million, compared to
operating cash flow of negative NOK 96 million in the previous
year. The net cash flow from operating activities comprises of cash
flow generated from operating activities of negative NOK 176
million as well as net interest cost payments of NOK 102 million.
Net cash flow from investing activities was positive NOK 619
million, compared to NOK 431 million in 2021. The cash flow
from investing activities included proceeds of NOK 750 million
from sale of preference shares in Odfjell Drilling.
Net cash flow from financing activities amounted to negative
NOK 318 million, compared to negative NOK 516 million in 2021.
The cash flows included net repayment of borrowings of NOK
240 million and payment of lease liabilities of NOK 78 million.
Subsequent Events
In February 2023, the maturity of Akastor’s corporate credit
facilities was extended to February/March 2024. In March 2023,
the subordinated Aker facility was increased with NOK 200
million to NOK 450 million.
In March 2023, Akastor entered into a share purchase
agreement with ABL Group ASA (“ABL Group”) for the sale of all
shares in AGR against a combination of shares in ABL Group
and cash. Certain defined assets are excluded from the
transaction and will be retained by Akastor. This includes AGR’s
ownership in Føn Energy Services AS. The transaction is
expected to generate an accounting gain upon completion
in 2023.
Going Concern
The group was not in breach of any financial covenants as of
December 31, 2022. The current assessment is that the group
will continue to be able to meet the mandatory terms and
conditions of its banking facilities including the minimum liquidity
covenant, taking into account the extension of the maturity of
the corporate financing facilities to February/March 2024 and
the NOK 200 million increase of the subordinated Aker facility
secured in March 2023.
The current strategy of Akastor is based on realization of its
investments and the base plan for 2023 includes cash proceeds
from several holdings. Through this, Akastor is targeting to
increase liquidity and reduce refinancing risk in 2024.
Based on this, the board of directors confirms that the going
concern assumption, on which the consolidated financial
statements have been prepared, is appropriate.
The Akastor Portfolio
HMH
HMH was established in October 2021 following the merger
between MHWirth (previously 100% owned by Akastor) and
Baker Hughes’ Subsea Drilling Systems (SDS) business.
Akastor owns 50 percent of the shares in HMH, with the
remaining shares owned by Baker Hughes. HMH is classified
as a joint venture and accounted for using equity method in the
consolidated financial statements.
HMH is a global provider of drilling solutions, engineering,
projects, equipment and services. HMH has a track record of
product and service delivery in more than 120 countries
worldwide. At year-end 2022, the company had approximately 2
000 employees. The company’s operations are divided in two
main business areas: Projects, Products and Other and
Aftermarket Services. HMH is Akastor’s largest portfolio
company both in terms of sales revenue and employees.
Key Figures
1)
Amounts in USD million 2022 Proforma 2021
Revenue
2)
675 562
EBITDA (adj)
3)
100 85
EBITDA 79 64
Order intake 692 820
NIBD (incl. shareholder loans) 260 226
1)
The figures are unaudited, presented on 100% basis
2)
Revenue/EBITDA excludes disposed entities in 2022
3)
EBITDA (adj) excludes integration costs and other non-recurring items
The revenue for 2022 of USD 675 million was up 20 percent
compared to 2021 proforma figures for the combined entity,
driven primarily by increased activity within Projects, Products
and Other. EBITDA adjusted for integration cost and defined
non-recurring items increased from USD 85 million in 2021 to
8 Annual Report 2022 | Board of Directors' Report
USD 100 million in 2022. The adjusted EBITDA margin ended at
14.8 percent for 2022, slightly down from 15.2 percent in 2021
explained mainly by the increase in revenues from Projects and
Products where contribution margin is lower.
Revenues from Projects, Products and Other increased with
around 81 percent to USD 232 million in 2022, driven by higher
revenues from large projects following the order backlog within
this segment secured in 2021 and executed in 2022. Full year
revenues from Aftermarket Services were USD 445 million in
2022, slightly up from USD 436 million in 2021 (proforma). The
average number of active rigs with equipment package from HMH
increased slightly compared to 2021, however with a higher active
base per end of period and good growth potential into 2023.
The offshore drilling market has over the last couple of years
been affected by an overcapacity of offshore drilling rigs.
Following the increased focus on energy security and higher
global capex spend among E&P companies, the rig demand
through 2022 increased and led to an improved drilling market
and higher activity for HMH as a result of more rigs with their
equipment in operation. Despite these effects, order intake
within Projects and Products decreased in 2022 compared to
last year, driven primarily by the award of three larger project
contracts in 2021. Order intake within single equipment
increased in 2022, with the non-oil segment continuing as the
main driver. Total order intake for HMH was USD 692 million in
2022, compared to USD 820 million in 2021. Going forward,
HMH remain positive and anticipate good growth in rig activity
based on the current outlook, fuelled by Brazil and Middle East
activity. The rig newbuilding market continues to be muted and
is expected to remain so also in the near future.
In 2022, HMH refinanced its bridge bank facility with a new
Nordic bond loan of USD 150 million which was an important
step to establish a longer-term capital structure. HMH also
executed on its synergy plan with wave one of the ERP
implementations completed, and the Baker Hughes transitional
service agreement exited. HMH will during the course of 2023
complete the integration, including the finalization of the
implementation of a joint ERP system for the combined
company. Through 2023, HMH will also increase its focus on
growth and will assess both organic initiatives as well as M&A to
potentially strengthen its presence within the offshore and
onshore drilling markets. HMH will also evaluate opportunities
to grow within the renewable sector and a further expansion of
its offering to non-oil markets. It is still important for HMH to
participate in the oil and gas industry’s transition towards more
energy-efficient solutions, and this will form a key area in the
strategy of HMH going forward.
AKOFS Offshore
AKOFS Offshore is a provider of vessel-based subsea well
installation and intervention services to the oil and gas industry.
The company operates three specialized offshore vessels,
AKOFS Santos, Aker Wayfarer and AKOFS Seafarer, and
employed 348 people as per the end of 2022.
Akastor owns 50 percent of the shares in AKOFS Offshore, with
the remaining shares owned by Mitsui & Co and Mitsui O.S.K.
Lines, each with 25 percent. AKOFS Offshore is classified as a
joint venture and accounted for using equity method in the
consolidated financial statements.
Key Figures
1)
Amounts in USD million 2022 2021
Revenue and other income 149 147
EBITDA 48 37
EBIT 8 (15)
CAPEX and R&D capitalization 29 5
NCOA 19 25
Net capital employed 349 375
Order intake 198 80
Order backlog 470 384
Employees (FTE) 348 292
1)
The figures are presented at 100 percent basis.
The company’s revenue was USD 149 million in 2022, around 1
percent higher than previous year, positively affected by full
year operations of the Aker Wayfarer vessel which in 2021
underwent its five-year periodic survey, partly mitigated by the
AKOFS Santos vessel that went to yard in July. The EBITDA
increased by USD 11 million to USD 48 million in 2022, primarily
explained by higher revenue utilization for Aker Wayfarer.
Through 2022, both AKOFS Santos and Aker Wayfarer operated
on contracts in Brazil for subsea equipment installation work.
Aker Wayfarer was on contract with Petrobras through the year
while AKOFS Santos was operating on a short-term contract
with a third party until July, after which she went to yard to
prepare for the new three-year contract with Petrobras originally
expected to commence late 2022. However, a period of delay
related to deliveries from a sub-supplier led to that the contract
first commenced in March 2023. Utilization for the two vessels
operating in Brazil was good throughout 2022, with revenue
utilization for Aker Wayfarer and AKOFS Santos of 97 percent
and 91 percent respectively, adjusted for the AKOFS Santos
yard stay.
In July, AKOFS Offshore secured a new four-year contract for
Aker Wayfarer to perform services as a subsea equipment
support vessel Petrobras in Brazil. The new contract is expected
to commence in the third quarter of 2023, following expiry of its
current contract in April 2023 and a shorter yard stay. Total
contract value of the new contract is about USD 282 million, of
which about USD 198 million will be revenue allocated to
AKOFS Offshore and included in the company’s backlog.
AKOFS Seafarer continued to operate on its five-year contract
with Equinor for Light Well Intervention services in the North
Sea and has through 2022 been delivering solid operational
performance. The vessel recorded a technical uptime above 97
percent in 2022, adjusted for periods on yard and waiting on
weather. Total revenue utilization ended at around 86 percent,
affected by a period of both mobilization and demobilization of
9Annual Report 2022 | Board of Directors' Report
coiled tubing equipment to prepare the vessel for coiled tubing
operations during the summer season. 2022 was the first time
AKOFS Seafarer was used for coiled tubing, and the vessel
delivered a successful campaign for its client.
The market situation for AKOFS Offshore over the last years
has been affected by relatively low investment levels among oil
companies. This has affected the prospects available for the
company and more concretely day rates on the contracts for the
various vessels. In 2022, AKOFS Offshore secured a new
contract for the Aker Wayfarer vessel, an important achievement
for the company, and with this all AKOFS Offshore’s vessels are
on relatively long-term contracts.
In 2023 and forward, AKOFS Offshore will continue to focus on
delivering high uptime on its existing contracts. Further, securing
successful commencement of the Aker Wayfarer vessel on the
new four-year contract is a key focus area in the year. In
addition, the company is continuously evaluating opportunities
to grow through further leveraging its competencies within
subsea well construction and intervention services.
AGR
AGR is a provider of well-, reservoir- and software services to
the offshore drilling industry. Akastor holds 100 percent of the
shares and 64 percent of the economic interest in the company.
Nordea and DNB hold the remaining 36 percent of economic
interest.
Key Figures
Amounts in NOK million 2022 2021
Revenue and other income 789 723
EBITDA 81 33
EBIT 66 9
CAPEX and R&D capitalization 10 16
NCOA 19 (9)
Net capital employed 246 192
Order intake 804 769
Order backlog 554 518
Employees (FTE) 368 388
AGR had total revenues of NOK 789 million in 2022, compared
to NOK 723 million in 2021. EBITDA in 2022 ended at NOK 81
million, up from 33 million in 2021, partly driven by a non-cash
accounting gain of NOK 21 million related to establishment of
the joint venture Føn Energy Services.
During 2022, the increased activity level in AGR was driven by
increased activity within its Norwegian consultancy business.
The Norwegian consultancy segment remains the largest
business segment in AGR, constituting more than 80 percent of
revenues in 2022.
Over the last years, AGR has had strong focus on its cost base,
targeting to improve profitability within its international segments.
After AGR closed down its UK well management business in
December 2021, all geographical segments of AGR delivered
positive earnings in 2022. AGR today is mainly exposed towards
Norway and APAC, with APAC delivering solid growth and strong
results in 2022 driven by good activity within both consultancy
and well management.
As described under Subsequent Events above, Akastor entered
into a share purchase agreement with ABL Group ASA (“ABL
Group”) for the sale of all shares in AGR in March 2023.
Following signing of the agreement, AGR will be presented as
discontin ued operations for Akastor and held for sale until
completion of the trans action which is expected to occur in the
second quarter of 2023.
Other Holdings
Other Holdings per end of 2022 mainly included 100 percent
ownership of Cool Sorption (sold to Diamond Key International
Pty. Ltd. with closing in February 2023), 100 percent ownership
of DDW Offshore AS, around 15 percent economic interest of
NES Fircroft, a warrant structure towards Odfjell Drilling and 6.8
percent shareholding in Awilco Drilling. Also, the financial
interest in four drilling equipment contracts with Jurong Shipyard
(the DRU contracts) is included within Other Holdings. In
addition, this segment includes corporate functions and certain
long-term office lease contracts that remained in Akastor after
the demerger from Aker Solutions in 2014.
Key Figures
Amounts in NOK million 2022 2021
Revenue and other income 270 232
EBITDA (91) (32)
EBIT (142) (92)
CAPEX and R&D capitalization (2) 65
NCOA 224 239
Net capital employed 921 1 483
Employees (FTE) 44 43
Total EBITDA for Other Holdings for the year was negative NOK
91 million. Cool Sorption delivered an EBITDA of NOK 4 million
in 2022, same as in 2021. DDW Offshore contributed positively
with NOK 7 million in 2022, compared to NOK 17 million in
2021. The positive EBITDA of DDW Offshore in 2021 included
an accounting gain related to bareboat charter agreements
entered into with OceanPact Servicos Maritimos S.A. which
was classified as financial lease. Thus, the underlying
performance in DDW Offshore in 2022 was better than last year,
driven by higher utilization on the remaining vessels. The
remaining negative EBITDA within Other Holdings mainly related
to corporate overhead costs, as well as certain legacy costs.
Parent Company and Allocation of Net Loss
The parent company Akastor ASA is the ultimate parent
company in the Akastor group and its business is the ownership
and management of all subsidiaries. Akastor ASA has
outsourced all management functions to other companies within
the group, mainly Akastor AS. However, assets and liabilities
related to the Akastor Treasury function are held by Akastor
10 Annual Report 2022 | Board of Directors' Report
ASA. Akastor ASA has a net loss of NOK 457 million in 2022
(loss of NOK 664 million in 2021).
The parent company’s dividend policy states that Akastor's
shareholders shall receive a competitive return on their
investment either through cash dividends or increases in the
share price, or both. The company does not intend to distribute
regular or annual dividends, but will consider dividends on an
ongoing basis taking into consideration the company’s M&A
activities, expected cash flow, capital expenditure plans,
financing requirements and appropriate financial flexibility. The
board thereby proposes no dividend for 2022 and the net loss
for the year of NOK 457 million be allocated to retained earnings.
Risk Management
Akastor and its portfolio companies are exposed to various
forms of market, operational and financial risks that may affect
the companies’ performance, their ability to meet strategic goals
and the companies’ reputation.
Akastor’s risk management model is designed on the basis that
Akastor is an investment company with an overall objective of
securing its shareholders’ investments and developing the
group’s assets in order to provide the shareholders with a solid
return. Akastor’s current investment portfolio is focused on the
oilfield services industry. This focus is mainly driven by the
company’s experience, expertise and track-record within this
industry. Although Akastor has a flexible mandate, it has
traditionally not sought to spread risk by investing in different
industries. Instead, Akastor has focused on mitigating its
vulnerability to the risk environment inherent to the oilfield
services industry through sound risk management systems.
The risks associated with the global uncertainty that have
impacted markets during most of 2022, both arising from the
war in Ukraine as well as the recession warnings, also impact
Akastor’s ability to execute value enhancing transactions. More
specifically, we have seen that the runway on some transactions
has had to be extended or delayed and that the financing costs
have increased. On the other hand, this has been balanced and
to a large degree been offset by solid performance from
Akastor’s portfolio companies combined with increased focus
on the oil service industry as an important business to ensure
energy security. In sum, Akastor’s financial position has been
strengthened and we believe that Akastor is well positioned to
continue its strategy to make value enhancing transactions in a
continued unstable market situation.
Our focus on climate risk has continued throughout 2022, in
close dialogue with all portfolio companies. Following on the main
achievements in 2021, where i.a. all portfolio companies have set
defined sustainability targets, focus for 2022 has been to ensure
that proper reporting requirements are set and that a credible
strategy for achieving the targets is set and monitored. All portfolio
companies are expected to prepare and be ready when Corporate
Sustainability Reporting Directive (CSRD) is implemented.
On the operational side, risks are primarily mitigated by securing
new orders and sound project execution by the portfolio
companies. Results also depend on costs, both the portfolio
companies’ own costs and those charged by suppliers. Akastor
and its portfolio companies are also exposed to financial risk
under performance guarantees and financial guarantees issued,
and financial market risks as further detailed below.
In addition, the portfolio companies, through their business
activities within their respective sectors and countries, are also
exposed to legal/compliance and regulatory/political risks, e.g.
political decisions on international sanctions that impact supply
and demand of the services offered by the portfolio companies,
as well as environmental regulations. Moreover, we have over
the recent years seen an increase in the threat faced from
different forms of cyber risks such as e.g. risk of ransomware
and phishing attempts. These are risk areas that are under
continuous development and where it is important that Akastor
and its portfolio companies continuously monitor this
development and the risks associated.
As an investment company, Akastor and its portfolio companies
from time to time engage in mergers and acquisitions and other
transactions that could expose the companies to financial and
other non-operational risks, such as warranty and indemnity
claims and price adjustment mechanisms. Moreover, the entire
transaction process, including the process from signing to
closing as well as proper integration of new business operations,
entails a set of risks for Akastor that will need to be managed
and mitigated.
To manage and mitigate risks within Akastor, risk evaluation is
an integral part of all business activities, including when making
decisions regarding mergers and acquisitions and other
investment matters. As an owner, Akastor actively supervises
risk management in its portfolio companies through participation
on the board of directors of each portfolio company, and by
defining a clear set of risk management and mitigation processes
and procedures that all portfolio companies must adhere to. The
current and revised governing documents defined by Akastor
were rolled out during the first half of 2016 and are reviewed
annually. The overall responsibility for ensuring sound internal
control and an appropriate framework for risk management in
Akastor lies with its board of directors. A risk review is presented
to and reviewed by the audit committee and the board of
directors of Akastor on an annual basis.
The directors and officers of Akastor companies are covered
under an Aker group Director & Officer’s Liability Insurance
(D&O). The insurance covers personal legal liabilities including
defence- and legal costs. The officers and directors of the parent
company and all subsidiaries globally (owned 50% or more) are
covered by the insurance. The cover also includes employees
in managerial positions or employees who become named in a
claim or investigation.
11Annual Report 2022 | Board of Directors' Report
Financial Risks
Akastor is exposed to a variety of financial market risks such as
currency risk, interest rate risk, tax risk, price risk, credit and
counterparty risk, liquidity risk and capital risk as well as risks
associated with access to and terms of financing. The financial
risks, affecting the group’s income and the value of any financial
instruments held, are discussed in greater details in Note 29
Financial risk management and exposures to the group’s
consolidated financial statements. The objective of financial risk
management is to manage and control financial risk exposures
and thereby minimize potential adverse effects on Akastor’s
financial position.
Akastor per today is an investment company with limited
upstream cash flow from its portfolio companies and therefore
to a large degree depends on realization of assets to reduce
debt and improve liquidity. As described under Going Concern
above, liquidity risk has been mitigated in the short to medium
term through the increase of the Aker facility in March 2023.
However, in order to mitigate 2024 refinancing risk when the
corporate financing facilities mature and secure available
liquidity past 2023, Akastor is in accordance with its strategy
focusing on realization of holdings. In 2023, the outcome related
to the DRU arbitration process is a key milestone in this regard.
If realization processes planned for the year should be delayed
or if proceeds come in at a lower value than anticipated,
refinancing risk in 2024 would increase and other sources of
capital could be required.
Integrity Risks
All Akastor portfolio companies use education and awareness
training to manage and mitigate integrity risks. All employees
must complete an annual Code of Conduct training program. In
addition, all Akastor managers and office-based staff are
required to conduct integrity e-learning training and participate
in classroom courses. For employees in specific functions,
where chance of facing integrity risk is considered higher than
normal, additional training has been tailored for their role and
responsibilities. Hired-in personnel in high risk roles are also
required to undertake integrity training, just as third-party
representatives receive integrity training specially prepared for
them. The requirement for all portfolio companies is to complete
and report on the training within six months from employment or
publication of a new training session.
Akastor has established a whistleblowing system in line with the
company’s Governance Policy. The whistleblowing channel is
open for all external and internal stakeholders who wish to
report a breach of the Code of Conduct, other internal guidelines
or governing policies. Akastor employees are required to report
breaches of the Code of Conduct, and Akastor encourages
reporting of any concerns pertaining to compliance with law or
ethical standards.
Climate Risks
The main climate-related risks in Akastor are with our industrial
investments due to the fact that the industry is in a state of
accelerated transition to a lower-carbon intensive industry.
Governmental regulation of GHG emissions is expected to
increase and it will continue to be challenging to get necessary
financing with potential lenders electing not to invest in the oil
and gas market but rather move capital to new green markets.
Unless these risks are met with mitigating measures, we could
face a scenario where many of Akastor’s portfolio companies
lose its market positions and/or are left with product lines that
are obsolete and replaced by more energy efficient/green
alternatives. However, this transition to low carbon intensive
industry will also create several opportunities, which the portfolio
companies are addressing, for example HMH’s concept
developments towards the offshore wind industry and AGR’s
Carbon Capture and management services.
Each portfolio company addresses climate-related risks and
opportunities within its yearly risk assessment, and the
assessment is reviewed by its Board of Directors.
Environmental, Social and Governance
Akastor’s operating model reflects the fact that the portfolio
companies are independent companies which operate different
business models and therefore face different Environmental,
Social and Governance (ESG) risks and expectations from
stakeholders. As a holding company, Akastor is responsible for
setting the overall ESG priorities and providing the appropriate
risk management framework and policies applicable for the
portfolio. Akastor Sustainability Policy describes how Akastor
aims to integrate sustainability in its investment processes, own
operations, and in the governance of its organisation. The policy
includes the investment policy and how Akastor engages with
the portfolio companies. In turn, and based on these
expectations, each portfolio company is responsible for defining
their own ESG strategy with relevant activities and, where
necessary, supporting policies.
Akastor also focuses on maintenance and development of
industrial relations and collaboration with unions. Historically,
good industrial relations have played an important role, and
maintaining these strong relations have proven to be one of the
success criteria in developing the company over the years.
Within the ESG efforts, Akastor is focused on areas that build
financial and non-financial value in the portfolio companies.
Akastor’s ESG strategy is based on four main priorities: working
against corruption, respecting human rights, addressing health
and safety and minimizing adverse impact on the environment.
Environment and Human Rights have had an increased focus in
2022 where Akastor intends to take part in the industry’s
transition towards more sustainable operations. All the portfolio
companies have completed human rights risk assessment, and
climate risk and opportunities assessments and are responsible
for working systematically and managing these possibilities and
consequences. In regards of Human Rights, Akastor and its
portfolio companies have not identified any actual adverse
impacts or significant risk for adverse impacts through its risk
12 Annual Report 2022 | Board of Directors' Report
assessments or due diligences of business partners. The
portfolio companies are defining their own ESG strategies
encompassing these priorities. Akastor is continuously
monitoring the implementation and integration of the priorities of
the ESG strategy, Code of Conduct, Sustainability Policy and
Integrity Policy across all the portfolio companies. For in-depth
reporting on each portfolio company’s approach to ESG,
including their Health, Safety and Environment work, refer to the
Akastor ESG Report for 2022. The Akastor ESG report also
includes Akastor's reporting adhering to the Transparency Act, a
Norwegian legislation, which requires companies to promote
respect for human rights and decent working conditions. The
Akastor ESG report is available on the website www.akastor.
com.
Research, Innovation and Technology Development
NOK 9 million was capitalized in 2022, compared to NOK 24
million in 2021, related to development activities. No research
and development costs were expensed during the year (NOK 1
million in 2021). All research, innovation and development
initiatives are performed by the Akastor portfolio companies.
Akastor ASA and Akastor AS performed no such activity in 2022.
People and Teams
Akastor is committed to equal opportunity and non-discrimination.
This commitment is described in Akastor’s Code of Conduct, as
well as Akastor’s policies and agreements, and builds on a
frame agreement signed with national and international trade
unions in 2008. This agreement was renewed in 2012 and sets
out fundamental labour rights and standards for general
employment terms and employee relations, with specific focus
on non-discrimination. Equal opportunities are fundamental for
Akastor and its portfolio companies. In 2022, as in previous
years, no events violating these agreements were reported.
As of year-end 2022, Akastor ASA’s board comprised eight
directors inclusive three employee elected directors, of which
two shareholders elected directors are female directors. Akastor
and its subsidiaries had a total of 412 employees (FTE) as of
December 31, 2022. AKOFS Offshore had a total of 348
employees (FTE) as of December 31, 2022. HMH had a total of
1 983 employees (FTE) as of December 31, 2022. In Akastor
AS, the male/female ratio was 77/23. The male/female ratio
(excluding hired ins) in the major portfolio companies and
Akastor Group were as follows:
HMH
AKOFS
Offshore AGR
Akastor
Consolidated
Female 18% 10% 27% 26%
Male 82% 90% 73% 74%
All portfolio companies regularly assess whether they live up to
the principle of equal pay for equal work and no significant
differences have been identified. Each portfolio company
promotes equal opportunities by setting specific requirements
for diversity in recruitment and people development, and by
supporting programs dedicated to equal opportunity. Akastor
and its portfolio companies are not aware of any employees that
work involuntary part time. Akastor ASA fulfils the requirements
of the Norwegian Companies Act with regards to gender
representation on the board of directors, as two out of five
shareholder elected directors are women.
Aggregated sick leave in Akastor Group was 2.0 percent in
2022. There were no fatal injuries in any of the portfolio
companies. The total recordable incident frequency has
increased for all companies, and Akastor has thoroughly
analysed all incidents and taken actions to avoid similar
situations going forward. Caring for employee’s health and
safety is an integrated part of the group’s culture. See figures
below for details.
HMH
AKOFS
Offshore AGR
Akastor
Consolidated
Lost time Incident
Frequency (LTIF)
1)
1.6 - - -
Total Recordable Incident
Frequency (TRIF)
1)
3.2 1.7 - 8.9
Fatalities incl. subcontractors - - - -
Sick leave (percent) 3.6 3.8 3.3 2.0
1)
Per million hours worked. Includes subcontractors
13Annual Report 2022 | Board of Directors' Report
Board of Directors’ Report
Asle Christian Halvorsen | Director Stian Sjølund | Director Karl Erik Kjelstad | CEO
Henning Jensen | Director Kathryn M. Baker | Director Luis Antonio G. Araujo | Director
Svein Oskar Stoknes | DirectorFrank O. Reite | Chairperson Lone Fønss Schrøder | Deputy Chairperson
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
Corporate governance
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. It is the
responsibility of the board of directors of Akastor to ensure that
the company implements sound corporate governance. The
audit committee supports the board in safeguarding that the
company has internal procedures and systems in place to
ensure that corporate governance processes are effective.
Akastor’s corporate governance principles are based on the
Norwegian Code of Practice for Corporate Governance and are
designed to secure the shareholders’ investment through value
creation and to ensure good control with the portfolio
companies. The corporate governance principles are included
in this annual report and available on the company’s website
www.akastor.com.
14 Annual Report 2022 | Declaration by the Board of Directors and CEO
Declaration by the Board of Directors and CEO
The board and CEO have today considered and approved the annual report and financial statements for the Akastor group and its
parent company Akastor ASA for the year ended on December 31, 2022. The board has based this declaration on reports and
statements from the group’s CEO and/or on the results of the group’s activities, as well as other information that is essential to
assess the group’s position which has been provided to the board of directors.
To the best of our knowledge:
The financial statements for 2022 for Akastor group and its parent company have been prepared in accordance with all
applicable accounting standards.
The information provided in the financial statements gives a true and fair portrayal of the group and its parent company’s
assets, liabilities, profit and overall financial position as of December 31, 2022.
The annual report provides a true and fair overview of the development, profit and financial position of Akastor group and its
parent company, as well as the most significant risks and uncertainties facing the group and the parent company.
Asle Christian Halvorsen | Director Stian Sjølund | Director Karl Erik Kjelstad | CEO
Henning Jensen | Director Kathryn M. Baker | Director Luis Antonio G. Araujo | Director
Svein Oskar Stoknes | DirectorFrank O. Reite | Chairperson Lone Fønss Schrøder | Deputy Chairperson
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
02. DECLARATION BY THE BOARD
OF DIRECTORS AND CEO
15Annual Report 2022 | Corporate Governance Statement
Corporate Governance Statement
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. Sound
corporate governance shall ensure that appropriate goals and
strategies are adopted, that the strategies are implemented in a
good manner and that the results achieved are subject to
measurement and follow-up.
1. The Corporate Governance Report
Basis for this Report
The corporate governance principles of the group are laid down
by the board of directors of Akastor ASA (“Akastor” or the
“company”). The principles are based on the Norwegian Code
of Practice for Corporate Governance dated 14 October 2021
(the «Code of Practice»), the regulations set out in the
Rulebook II of Oslo Børs (the stock exchange in Oslo) and the
relevant Norwegian background law such as the Norwegian
Accounting Act and the Norwegian Public Limited Liability
Companies Act. The Code of Practice may be found at
www.nues.no and the Oslo Børs Rulebook II may be found at
www.euronext.com. Norwegian laws and regulations are
available at www.lovdata.no.
This report outlines how Akastor has implemented the Code of
Practice. Deviations from the Code of Practice are addressed
under the relevant sections. In general, the Akastor board only
approves deviations that the board believes contributes to value
creation for its stakeholders.
In addition to the Code of Practice, the Norwegian Accounting
Act section 3-3b stipulates that companies must provide a
report on their policies and practices for corporate governance
either in the annual report or in a document referred to in the
annual report. Such report is integrated in the below corporate
governance statement
.
Governance Structure
Akastor is an oilfield services investment company with a
portfolio of industrial holdings and other investments. The
company has a flexible mandate for active ownership and long-
term value creation. Completed transactions in 2022 include the
sale of preference shares in Odfjell Drilling Ltd as well as the
sale of all shares in Cool Sorption A/S (sales agreement signed
in December 2022 and completed in February 2023).
On this background Akastor currently has an active investment
portfolio within the oilfield services industry consisting of AGR,
DDW Offshore, 50 percent of the shares in HMH, 50 percent of
the shares in AKOFS Offshore, a 15 percent economic
ownership in NES Fircroft, in addition to other holdings and
investments (see below), with a total net capital employed of
NOK 4.6 billion. HMH is a global provider of drilling solutions,
engineering, projects, equipment and services. AKOFS Offshore
is a provider of subsea well installation and intervention services.
AGR is a leading provider of well and reservoir consultancy
services as well as software and technical manpower for its
clients. DDW Offshore operates five offshore vessels. NES
Fircroft is a global technical and engineering staff provider.
Other investments mainly include warrant investments in Odfjell
Drilling and Awilco Drilling, a subletting portfolio through Akastor
Real Estate and an investment in Aker Pensjonskasse. In
addition, following the completion of the transaction in 2021
when HMH was formed, Akastor holds full ecomonic interest in
the four DRU contracts, which are still held by MHWirth as
contract holder, but where the financial exposure will be with
Akastor.
It is the responsibility of the board of directors of Akastor to
ensure that Akastor and its portfolio of companies implement
sound corporate governance. The board of directors evaluates
this corporate governance statement on an annual basis. The
board’s audit committee also evaluates the corporate
governance statement as well as other key policies and
procedures pertaining to compliance and governance.
Compliance with, and implementation of these corporate
governance guidelines are continuously evaluated by the board
and said committee; inter alia by way of the board being the
decisive body for the company’s defined management and
reporting structure, which include regular reporting.
Policies and Procedures
Akastor has a total of eleven corporate policies providing
business practice guidance within a number of key areas, all of
which are reviewed and updated on an annual basis. These
policy documents express the overall position of the group with
regard to for instance compliance, integrity and governance.
The policies provide instructions and guidelines that apply to the
portfolio companies and to individual employees in order to
ensure that the group’s operations are in compliance with
internal and external regulatory framework. In addition, the
portfolio companies are requested to implement their own
policies specific to their business within areas like project
execution, HSE and tendering.
Values and Code of Conduct
Akastor aims to develop and refine its portfolio of companies as
stand-alone enterprises, with the goal of maximizing the value
potential of each entity. The company works to develop the
business models of the portfolio companies, capitalize on their
market positions and promote aftersales services for the
equipment and systems delivered. The current investments are
03. CORPORATE GOVERNANCE STATEMENT
– AKASTOR ASA
16 Annual Report 2022 | Corporate Governance Statement
within the oilfield services sector, but the company has a flexible
mandate for active ownership and long-term value creation.
Akastor has an opportunistic approach and will continue to own
the portfolio companies as long as Akastor creates more value
than alternative owners.
Akastor wishes to contribute to sustainable social development
through responsible business practices. The company’s Code
of Conduct is a handbook that applies to all employees and
provides guiding on what Akastor considers to be responsible
ethical conduct. The Code of Conduct provides a framework of
core corporate values which reflects Akastor’s prudent business
practice and shall be reflected in every aspect of our operations.
The ethical guidelines and other governing documents of the
group have been drafted on the basis of these core corporate
values.
2. Business
The objectives of the company, as defined in its articles of
association, are «to own or carry out industrial and other
associated businesses, management of capital, and other
functions for the group, and to participate in or acquire other
businesses». The articles of association are available at www.
akastor.com.
The principal strategies of the group are presented in the annual
report. To ensure value creation for its shareholders, the board
of directors annually performs a designated strategy process
where it sets objectives and targets for the company, assesses
risk, evaluates the existing strategy and approves any significant
changes. Information concerning the financial position and
principal strategies of the company, and any changes thereto is
disclosed to the market in the context of the company’s quarterly
reporting and in designated market presentations as well as at
www.akastor.com.
Corporate Responsibility
Akastor takes an active approach to corporate responsibility.
Corporate responsibility in Akastor is about making prudent
business decisions, with minimum risk to reputation, brand and
the future sustainability of our business. The main focus of
corporate responsibility activities in Akastor, defined in our
group-wide integrity policy, is to work against corruption, to
respect human rights and to care for health, safety and the
environment. In the Akastor Sustainability Policy it is described
how Akastor aims to integrate sustainability in its investment
processes and engages with the portfolio companies. Akastor’s
primary stakeholders are the shareholders (existing and
potential), customers of its portfolio companies and employees
of the Akastor group. Akastor has an ongoing stakeholder
dialogue, media analysis and investor presentations, which
provide important input to Akastor’s work on corporate
responsibility topics. All our portfolio companies are expected to
ensure integration of stakeholder engagement and a strong
corporate responsibility in their operations. Akastor recognizes
and respects the United Nations’ 17 Sustainable Development
Goals (SDGs), and has identified four SDGs that Akastor
positively impacts. A self-assessment is used to identify where
Akastor has the most opportunity to contribute to the SDGs.
Akastor identified 8, 12, and 13 as priority SDGs and encourages
the portfolio companies to identify and work towards relevant
SDGs in their work and strategy.
Akastor is committed to follow the Global Framework Agreement
(GFA) entered into by Aker with the trade unions Fellesforbundet,
IndustriALL Global Union, NITO and Tekna on December 17,
2012. The GFA builds on and continues the commitment from
the previous framework agreements signed in 2008 and 2010,
and outlines key responsibilities in relation to human and trade
union rights. The parties commit themselves to achieving
continuous improvements within the areas of working conditions,
industrial relations with the employees of the Aker group of
companies, health and safety standards at the workplace and
environmental performance. Akastor is a member of the UN
Global Compact, and also aligns with the principles of the
United Nations Convention against Corruption, the Universal
Declaration of Human Rights, the UN Guiding Principles for
Business and Human Rights and the ILO Declaration on
Fundamental Principles and Rights at Work. These international
principles guide our Code of Conduct and Integrity Policy and
provide the overall framework for the corporate responsibility
efforts in the Akastor group.
Further information in respect of the corporate social
responsibility work of Akastor and its portfolio of companies can
be found in the separate Environmental, Social and Governance
(ESG) report published simultaneously as the company’s
annual report for 2023.
3. Equity and Dividends
Equity
The management and the board regularly monitor that the
group’s equity and liquidity are appropriate for its objectives,
strategy and risk profile. The book equity of the group as per
December 31, 2022 is NOK 4 092 million, which represents an
equity ratio of 60 percent. The management of financial risk is
further described in the annual report.
Dividend Policy
The board proposes the level of dividend payment to the general
meeting who in turn is the decisive corporate body for dividend
decisions.
Over time, the aim is that Akastor’s shareholders shall receive a
competitive return on their investment either through cash
dividends or increase in the share price, or both. The company
does not intend to distribute regular or annual dividends, but will
consider dividends on an ongoing basis taking into consideration
the company’s M&A activities, expected cash flow, capital
expenditure plans, financing requirements and appropriate
financial flexibility.
17Annual Report 2022 | Corporate Governance Statement
Authorizations for the Board of Directors
Proposals from the board of directors for future authorizations
for share capital increases, share buy-backs or similar shall be
for defined purposes, such as share purchase programs and
acquisitions of companies, and shall remain in effect until the
next annual general meeting.
The company’s annual general meeting on 20 April 2022
resolved to authorize the board to purchase treasury shares for
three purposes for utilization, all of which were subject to
separate voting under the general meeting: (i) purchase of
treasury shares to be used as transaction currency in connection
with acquisitions, mergers, demergers and other transactions,
(ii) purchase of treasury shares to be sold and/or transferred to
employees and directors under share purchase programs and
(iii) purchase of treasury shares for the purpose of investment or
for subsequent sale or deletion of such shares. The
authorizations were all limited to ten percent of the share capital.
The board’s authorizations to purchase treasury shares are
valid for the period until the date of the annual general meeting
of 2023. No shares were bought by the company in 2022
pursuant to the authorizations to the board of directors. As of
December 31, 2022, the company holds 1 985 164 own shares.
In addition, the annual general meeting in 2022 granted the
board of directors the mandate to approve the distribution of
dividends based on the company’s annual accounts for 2021 as
set out in the Public Limited Liability Companies Act section 8-2,
second paragraph. The mandate is valid for the period until the
date of the annual general meeting of 2023.
There are no current provisions in the articles of association of
the company or power of attorney from the general meeting
which grant the board of directors the mandate to issue or buy
back of shares in the company for the purposes of capital
increases.
Share Purchase Programs
There are currently no active share purchase programs in place
in Akastor.
4. Equal Treatment of Shareholders and Transac-
tions with Related Parties
The company has only one class of shares, and all shares carry
equal rights. Existing shareholders shall have pre-emptive
rights to subscribe for shares in the event of share capital
increases, unless otherwise indicated by special circumstances.
If the pre-emptive rights of existing shareholders are waived in
respect of a share capital increase, the reasons for such waiver
shall be explained by the board of directors. Transactions in
own shares are effected via Oslo Børs.
The largest shareholder of Akastor, Aker Holding AS, is wholly-
owned by Aker ASA, which in turn is controlled by Kjell Inge
Røkke through TRG Holding AS and The Resource Group TRG
AS. As of December 31, 2022, Aker Holding AS owns 36.7% of
the shares in Akastor ASA, which is an associated company of
Aker ASA.
The board of directors is of the view that it is positive for Akastor
that Aker ASA assumes the role of an active owner and is
actively involved in matters of importance to Akastor and to all
shareholders. The cooperation with Aker ASA offers Akastor
access to special know-how and resources within strategy,
transactions and funding. Moreover, Aker ASA offers network
and negotiation resources from which Akastor benefits in
various contexts. This complements and strengthens Akastor
without curtailing the autonomy of the group. It may be necessary
to offer Aker ASA special access to commercial information in
connection with such cooperation. Any information disclosed to
Aker ASA’s representatives in such a context is subject to
confidentiality undertakings and disclosure regulations in
compliance with applicable laws.
Aker ASA and Aker Solutions ASA (or their subsidiaries) are not
deemed, within the meaning of the Public Limited Liability
Companies Act, to be a related party of Akastor. The board of
directors and the executive management team of Akastor are
nevertheless conscious that all relations with these companies
shall be premised on commercial terms and structured in line
with arm’s length principles.
In the event of any material transactions between the company
and shareholders, directors, senior executives, or related
parties thereof, which do not form part of the ordinary course of
the company’s business, the board of directors shall arrange for
an independent assessment. The same shall, generally
speaking, apply to the relationship between Akastor and Aker
ASA related companies.
In respect of the above, the «Related parties» note to the
consolidated financial statements contains information on the
most significant transactions between Akastor and companies
within the Aker ASA group.
5. Freely Negotiable Shares
The shares are listed on the Oslo Børs and are freely
transferable. No transferability restrictions are laid down in the
articles of association. There are no restrictions on the party’s
ability to own, trade or vote for shares in the company.
6. General Meetings
Attendance, Agenda and Voting
The general meetings in Akastor will be conducted electronically.
The decision to hold virtual meetings without the possibility to
attend a physical meeting, is partly due to the requirements in
the Public Limited Liability Companies Act section 5-8, third
paragraph, letter b, and party for practical considerations. The
shareholders will be invited to participate online via PC, phone
or tablet, and a description of how to participate is included in
the notice of general meeting that will be announced. By
18 Annual Report 2022 | Corporate Governance Statement
participating online, shareholders will receive a live webcast
from the general meeting, the opportunity to ask written
questions, and vote on each of the items. The company
encourages shareholders to attend the general meetings.
It will also, like previous years, be possible to vote in advance or
give a proxy before the meetings. Notices convening general
meetings, including comprehensive documentation relating to
the items on the agenda, including the recommendation of the
nomination committee, shall be sought made available on the
company’s website no later than 21 days prior to the general
meeting. The articles of association of the company stipulate
that documents pertaining to matters to be deliberated by the
general meeting shall only be made available on the company’s
website, and not normally be sent physically by post to the
shareholders unless required by statute.
The following matters are typically decided at the annual general
meeting, in accordance with the articles of association of
Akastor ASA and Norwegian background law:
Election of the nomination committee and stipulation of
the nomination committee's fees;
election of shareholder representatives to the board of
directors as well as stipulation of fees to the board of
directors;
election of the external auditor and approval of the
auditor’s fee;
approval of any amendments to the board of directors’
policy regarding stipulation of salary and other
remuneration to the executive management, if any;
advisory vote on the board of directors’ report on
remuneration to the executive management;
approval of the annual accounts and the board of
directors’ report, including distribution of dividend; and
other matters which, by law or under the articles of associ-
ation, are the business of the annual general meeting.
The deadline for registering intended attendance is as close to
the general meeting as possible. Information concerning both
the registration procedure, online participation and the filing of
proxies is included in the notice convening the general meeting
and on the registration form. The company also aims to structure,
to the extent practicable, the proxy form such as to enable the
shareholders to vote on each individual item on the agenda.
Chairperson
The articles of association stipulate that the general meetings
shall be chaired by the chairperson of the board of directors or
a person appointed by said chairperson. According to the Code
of Practice the board should however «make arrangements to
ensure an independent chairperson for the general meeting».
Thus, the articles of Akastor ASA deviate from the Code of
Practice in this respect. This has its background in a long-lasting
tradition in Akastor. Having the chairperson of the board chairing
the general meeting also simplifies the preparations for the
general meetings significantly.
Election of Directors
It is a priority for the nomination committee that the board of
directors shall work in the best possible manner as a team, and
that the background and competence of the directors shall
complement each other. As a consequence, the nomination
committee will propose that the shareholders are invited to vote
on the full board composition proposed by the nomination
committee as a group, and not on each director separately.
Hence, Akastor deviates from the Code of Practice stipulating
that one should make «appropriate arrangements for the
general meeting to vote separately on each candidate nominated
for election to the company’s corporate bodies».
Minutes
Minutes of general meetings will be published as soon as
practicable on the announcement system of Oslo Børs,
www.newsweb.no (ticker: AKAST), and at www.akastor.com.
7. Nomination Committee
The articles of association stipulate that the company shall have
a nomination committee. The nomination committee shall have
no less than three members, who shall normally serve for a term
of two years. The current members of the nomination committee
are Ingebret G. Hisdal (chairperson), Charlotte Håkonsen and
Kjetil E. Stensland, who were all elected at last year’s annual
general meeting and are therefore not up for re-election this
year. Charlotte Håkonsen is the General Counsel of Aker ASA
(and was employed by Akastor until 2018). No members of the
nomination committee are employed by, or directors of, Akastor.
The majority of the members of the nomination committee are
independent of both Akastor’s board of directors and the
executive management of the company.
The committee’s recommendations (relating to particularly the
board of directors and their remuneration) shall address how
the new board candidates will attend to the interests of the
shareholders in general and fill the requirements of the company,
including with respect to competence, capacity and
independence.
The composition of the nomination committee shall reflect the
interests of all shareholders and ensure independence from the
board of directors and the executive management. The
members and the chairperson of the nomination committee are
appointed by the general meeting, which also determines the
remuneration of the committee.
The annual general meeting in 2010 adopted guidelines
governing the duties of the nomination committee. According to
19Annual Report 2022 | Corporate Governance Statement
these guidelines, the committee shall emphasize that candidates
for the board have the necessary experience, competence, and
capacity to perform their duties in a satisfactory manner. A
reasonable representation with regard to gender and
background should also be emphasized.
The chairperson of the nomination committee has the overall
responsibility for the work of the committee. In the exercise of its
duties, the nomination committee may contact, among others,
shareholders, the board, management, and external advisors.
The nomination committee shall also ensure that its
recommendations are endorsed by the largest shareholders.
Information concerning the nomination committee and deadlines
for making suggestions or proposing candidates for directorships
will be made available on the company’s website, www.akastor.
com when there are candidates up for election.
8. Composition and Independence of the Board of
Directors
Composition
It has been agreed with the employees that the company shall
have no corporate assembly. Hence, the board appoints its own
chairperson, cf. the Public Limited Liability Companies Act
section 6-1, second paragraph, unless the chairperson is
appointed by the general meeting. The proposal of the
nomination committee will normally include a proposed
candidate for appointment as chairperson of the board of
directors. The board of directors appoints its own deputy
chairperson. According to the Public Limited Liability Companies
Act, the directors are appointed for a term of two years at a time
unless otherwise stated in the company’s articles of association.
The articles of association of Akastor stipulate that directors
may be elected for a period of one to three years.
The right of the employees to be represented and participate in
decision making is safeguarded through expanded employee
representation on the board of directors of both Akastor and in
a number of the group’s portfolio companies.
The articles of association stipulate that the board of directors
shall comprise six to twelve persons, one third of whom shall be
elected by and amongst the employees of the group. In addition,
up to three shareholder-appointed alternates may be appointed.
As per December 31, 2022, the board of directors comprised
eight directors, five of whom were elected by the shareholders
and three of whom were elected by and amongst the employees.
The company encourages the directors to hold shares in the
company. The shareholdings of the directors as of December
31, 2022 will be set out in the 2022 remuneration report. The
chairperson Frank O. Reite and the directors Lone Fønss
Schrøder, Kathryn M. Baker and Svein Oskar Stoknes are
currently shareholders in Akastor. The board composition,
including information about the directors’ background and
expertise will be detailed in the annual report for 2022.
The appointment of employee representatives to the board of
directors is conducted as prescribed by the Public Limited
Liability Companies Act, the Representation Regulations and
also as per practice agreed with the union representatives of the
employees of Akastor’s portfolio companies and industrial
holdings. The board of directors has appointed a designated
election committee charged with implementing the appointment
of such employee representatives.
Independence
A majority of the directors elected by the shareholders are
independent of the executive personnel and important business
associates of Akastor. None of the executive personnel of the
company are members of the board of directors.
The composition of the board of directors aims to ensure that
the interests of all shareholders are attended to, and that the
company has the know-how, resources, and diversity it needs at
its disposal. Among the five shareholder-elected directors, the
majority are deemed independent from the company’s largest
indirect shareholder, Aker ASA.
9. The Work of the Board of Directors
Procedures
For each calendar year, the board plans for its work and
meetings. Furthermore, there are rules of procedure for the
board of directors and Chief Executive Officer, which govern
areas of responsibility, duties and the distribution of roles
between the board of directors, the chairperson of the board of
directors and the Chief Executive Officer. The rules of procedure
for the board of directors also include provisions on convening
and chairing board meetings, decision making, the duty and
right of the Chief Executive Officer to disclose information to the
board of directors, the duty of confidentiality, etc. According to
the company’s articles of association, each of the directors
elected by the shareholders will serve for a period of one to
three years pursuant to further decision by the general meeting.
This to provide the nomination committee with the flexibility to
propose varying terms of service for the candidates.
Akastor has prepared guidelines as part of its rules of procedure
for the Chief Executive Officer and board of directors ensuring
that directors and the Chief Executive Officer notify the board of
directors if they have any material direct or indirect personal
interest in any agreement concluded by the group. The
guidelines stipulate that the directors and the Chief Executive
Officer shall not participate in the preparation, deliberation, or
resolution of any matters that are of such special importance to
themselves, or any of their related parties, so that the person in
question must be deemed to have a prominent personal or
financial interest in such matters. The relevant board member or
the Chief Executive Officer shall raise the issue of his or her
competence whenever there may be cause to question it, and
each director is the primary responsible for adopting the correct
decision as to whether he or she should step down from
participating in the discussion of the matter at hand.
20 Annual Report 2022 | Corporate Governance Statement
In general, as further stipulated in Akastor’s principles for related
party transactions, directors of Akastor should be cautious in
participating in the consideration of issues where a potential
conflict of interest or conflict of role may arise, undermining the
confidence in the decision process. Such person may not
participate in board discussions of more than one company that
is part of the same agreement, unless the companies have
common interests. These assessments will be carried out on a
case-by-case basis; in most events, and as a starting point, by
the relevant directors themselves, but often also in cooperation
with internal and/or external legal counsel.
The above principles will normally also be applied if Akastor
contracts with other companies in which said board members
hold direct or indirect ownership interests that exceed, in relative
terms, their ownership interests in Akastor.
If grounds for legal incapacity are established, the relevant
board member will, as a ground rule, not be granted access to
any documentation prepared to the board of directors for the
deliberation of the agenda item in question.
In general, Akastor applies a strict norm as far as competence
assessments are concerned. In cases where the chairperson of
the board of directors does not participate in the deliberations,
the deputy chairperson of the board of directors chairs the
meeting.
As far as the other officers and employees of Akastor are
concerned, transactions with related parties and conflicts of
interest are comprehensively addressed and regulated in the
group’s Code of Conduct.
Meetings
The board of directors will hold board meetings whenever
needed, but normally six to twelve times a year. The need for
extraordinary board meetings may typically arise because the
internal authorization structure of the company requires the
board of directors to deliberate and approve material tenders to
be submitted by the company or in relation to M&A transactions.
Whilst the deadlines for such submission often change, it is
difficult to fit this into the calendar of ordinary board meetings.
The board of directors held six ordinary board meetings in 2022.
In addition, two extraordinary board meetings were held
whereby decisions were taken by way of circulation. The
aggregate attendance rate at the board meetings was close to
100 percent.
The Matters Discussed by the Board of Directors
The Chief Executive Officer prepares cases for deliberation by
the board of directors in cooperation with the chairperson of the
board. Endeavours are made to prepare and present matters in
such a way that the board of directors is provided with an
adequate basis for its deliberations. The board of directors has
overall responsibility for the management of Akastor and shall,
through the Chief Executive Officer, ensure that its activities are
organized in a sound manner. The board of directors shall adopt
plans and budgets for the business, and keep itself informed of
the financial position of, and development within, the company.
This encompasses the annual planning process of Akastor, with
the adoption of overall goals and strategic choices for the group,
as well as financial plans, budgets, and forecasts for the group
and the portfolio companies. The board of directors performs
annual evaluations of its work and its know-how.
Audit Committee
Akastor will have an audit committee comprising two to four of
the directors. The audit committee currently comprises the
directors Lone Fønss Schrøder (chair), Kathryn M. Baker and
Henning Jensen. The audit committee is independent from the
management.
At least one of the members of the audit committee shall have
either formal qualifications within accounting or auditing, or
relevant experience and skills within the same. Both members
Fønss Schrøder and Baker have such relevant experience and
skills. The audit committee has a mandate and a working
method that complies with statutory requirements. The audit
committee mandate forms an integrated part of the rules of
procedures for the board of directors. The committee will
participate, on behalf of the board of directors, in the quality
assurance of guidelines, policies, and other governing
instruments in Akastor. The audit committee performs a
qualitative review of the quarterly and annual reports of Akastor,
including Akastor’s reporting on ESG and other non-financial
matters. Significant judgment calls (uncertain estimates) made
in the financial statements in the quarter are reviewed by the
audit committee. The audit committee further supports the
board of directors in safeguarding that the company has sound
risk management and internal controls. The audit committee
reviews the status on internal controls on an annual basis. In
order to safeguard appropriate processes and assessments,
the board’s audit committee shall also review major M&A
transactions as well as related party transactions which are not
part of the company’s ordinary course of business, unless such
related party transactions are immaterial.
Akastor currently has no remuneration committee as the
experiences from having such showed more merit in discussing
matters comprised by this committee’s mandate with all directors
present. As of December 31, 2022, there are no other board
committees than the audit committee. The board does not
envisage appointing any further board committees in 2023.
The board evaluates its performance and qualification annually.
A summary of the evaluation was made available to the
nomination committee.
10. Risk Management and Internal Control
Governing Principles
The board of directors shall ensure that Akastor has sound internal
control and systems for risk management that are appropriate in
21Annual Report 2022 | Corporate Governance Statement
relation to the extent and nature of the company’s activities. The
audit committee supports the board of directors in safeguarding
that the company has internal procedures and systems that ensure
good corporate governance, stakeholder engagement, effective
internal controls and proper risk management, particularly in
relation to financial reporting. The Chief Financial Officer reports
directly to the audit committee on matters relating to financial
reporting, financial risks and internal controls.
Akastor has implemented an internal system for reporting
serious matters such as breaches of ethical guidelines and
violations of the law, which is also available to external parties
at www.akastor.com.
Risk Management
Akastor and its portfolio companies are exposed to a variety of
market, operational and financial risks. The board of directors
carries out an annual review of the company’s most important
areas of exposure to risk and its internal control arrangements.
Being an investment company, the main objective of Akastor is
to create value for its shareholders. Potential impacts on the net
asset value, share price or predictability of earnings are
therefore key parameters in the board’s risk evaluation. Sound
risk management throughout the organization, including by its
portfolio companies and industrial holdings, is recognized by
Akastor as an invaluable tool in the process of achieving
strategic, financial and operational goals while at the same time
ensuring compliance with regulatory requirements and
adherence to high integrity standards.
Risk evaluation is an integral part of all business activities and
Akastor employs a decentralized model for allocating managerial
responsibility under which the portfolio companies are required
to establish their own risk management and internal control
systems. Akastor’s representatives on boards of directors in the
portfolio companies seek to ensure that the portfolio companies
follow the principles of sound corporate governance.
Akastor manages risk through an internal framework both on a
corporate and portfolio company level comprising guidelines,
policies and procedures intended to ensure good business
operations and provide unified and reliable financial reporting.
The board of directors has adopted an authorization matrix that
forms part of its governing documents where authority is
delegated to the Akastor Chief Executive Officer. Furthermore,
authorization matrices are adopted for each of the portfolio
companies, pursuant to which the Akastor Chief Executive
Officer delegates authority to the boards and Chief Executive
Officers of the respective portfolio companies, which again
adopts authorization matrices for the portfolio organizations.
The board receives and reviews risk reports prepared by the
management, in respect of regular operational/business risk as
well as risk related to ESG. The management’s risk reporting is
based on the total level of insight obtained through regular
reporting and the close cooperation that Akastor has with the
portfolio companies, including from Akastor’s investment
directors and board representatives. Management of operational
risk and risk related to ESG primarily rests with the underlying
portfolio companies, although Akastor acts as an active driver
through its involvement on the boards and through support and
follow-up by the various Akastor corporate functions towards
relevant functions in the portfolio companies.
Akastor’s management holds review meetings with the
management of the different portfolio companies. The purpose
of the meetings is to conduct an in-depth review of the
development of each portfolio company, focusing on operations,
risk management, market conditions, the competitive situation
and strategic issues. These meetings provide an important
foundation for Akastor’s assessment of its overall financial and
operational risk.
A key risk in one of the smaller portfolio companies may still be
negligible on the group level, whereas important risks in the
largest portfolio companies may have a serious impact on the
group as a whole. Akastor’s decentralized approach to
operational risk management, as described above, raises a
need for management to process and calibrate the insight
obtained through various interfaces with the portfolio companies
prior to the board’s annual risk review. The objective of such
exercise is to ensure that risks are reported in a format that
allows the board to acquire a true and fair view of the overall risk
environment of the Akastor group in an efficient manner and to
focus its attention on risks that are material on an aggregated
group level.
Prior to the board’s review of risk reporting, the audit committee
reviews the reported risks and associated risk-reducing
measures. The audit committee also reviews the company’s in-
house reporting systems and internal control and risk
management, and prepares the board’s review of financial
reporting.
Financial Reporting
The Akastor financial reporting division reports to the Chief
Financial Officer and is responsible for the external reporting
process and the internal management financial reporting
process. This also includes assessing financial reporting risks
and internal controls over financial reporting in the group.
The consolidated external financial statements are prepared in
accordance with IFRS and IAS standards as approved by the
EU. The existing policies and standards governing the annual
and quarterly financial reporting in the group, including the
Akastor accounting principles, are available for Akastor
employees.
Clearing meetings are held with the management teams of the
portfolio companies (with owernship more than 50 percent) in
connection with the annual closing of accounts and may also be
held in connection with quarterly financial reporting. For the
2022 financial year, clearing meetings with the portfolio
22 Annual Report 2022 | Corporate Governance Statement
companies were held in October 2022 and January 2023. The
main purpose is to ensure high-quality financial reporting. Such
meetings focus on important items involving estimation and
judgment, non-balance-sheet items, accounting for significant
transactions, new or modified accounting principles and other
topics relevant to the respective portfolio companies. The
external auditor is present in the clearing meetings.
Other Reporting
In addition to the abovementioned financial reporting, there are
regular business review and board meetings in the portfolio
companies which ensure timely and high-quality reporting from
the portfolio companies to the corporate management.
Regular reports for Akastor and the portfolio companies are
submitted to the board of directors. The quarterly business
update contains key financial numbers, M&A updates, financing,
status of value creation plans, compliance, risk management
and share price information for the Akastor group. Further, it
contains key financial numbers, key operational topics, status
on value drivers as well as key market information for the main
portfolio companies. The monthly business update contains
high level financial and operational information for the Akastor
group, as well as key highlights for the main portfolio companies.
11. Remuneration of the Board of Directors
The remuneration of the board of directors will reflect its
responsibilities, know-how and time commitment, as well as the
complexity of the business. The remuneration will be proposed
by the nomination committee, and is not performance-related or
linked to options in Akastor. More detailed information about the
remuneration of individual directors is provided in the
remuneration report for 2022, as further described in section 12
below. Neither the directors, nor companies with whom they are
affiliated, should accept specific paid duties for Akastor beyond
their directorships. If they nevertheless do so, the board of
directors shall be informed and the remuneration shall be
approved by the board of directors. No remuneration shall be
accepted from anyone other than the company or the relevant
group company in connection with such duties.
12. Remuneration of Executive Personnel
The board of directors has adopted designated guidelines for
the remuneration of executive management pursuant to the
provisions of section 6-16a of the Public Limited Liability
Companies Act. The current guidelines were adopted by the
general meeting on April 20, 2022. The board of directors has
not considered it necessary to suggest any amendments to the
guidelines and the existing policy will therefore apply also for
2023.
In accordance with section 6-16b of the Public Limited Liability
Companies Act, the board of directors has also prepared a
report on the remuneration to the executive management,
detailing the remuneration received by members of the
executive management in 2022. The report is available at www.
akastor.com, and will be subject for an advisory vote on the
annual general meeting 2023.
13. Information and Communication
Akastor has no option schemes or option programs for the
allotment of shares to employees. The Chief Executive Officer
determines the remuneration of executive management on the
basis of the guidelines laid down by the board of directors. All
performance-related remuneration within the group will be
made subject to a cap. Further information about the
remuneration of each executive manager is provided in the
mentioned remuneration report for 2022.
The company has adopted a designated communications and
investor relations policy which covers, among other things,
guidelines for the company’s contact with shareholders other
than through general meetings.
The company’s reporting of financial and other information is
based on openness and the equal treatment of all securities
market players. The long-term purpose of the investor relations
function is to ensure access for the company to capital on
competitive terms, whilst at the same time ensuring that the
shareholders are provided with the most correct pricing of the
shares that can be achieved. This shall take place through
correct and timely distribution of price-sensitive information,
whilst ensuring, at the same time, that the company is in
compliance with applicable rules and market practices.
Reference is also made to the above discussion concerning the
flow of information between Akastor and Aker ASA in connection
with their cooperation within, inter alia, strategy, transactions,
and funding.
All stock exchange announcements and press releases are
made available on the company’s website, and stock exchange
announcements are also available at www.newsweb.no. The
company holds open presentations in connection with the
reporting of financial performance, either by a physical meeting
or by a conference call and webcast, and these presentations
are broadcasted on the internet. The financial calendar of the
company is available at www.akastor.com.
14. Take-overs
The overriding principle for Akastor is equal treatment of
shareholders. In a bid situation, the board of directors and
management have an independent responsibility to help ensure
that shareholders are treated equally, and that the company’s
business activities are not disrupted unnecessarily. In a take-
over situation, the board will have a particular responsibility to
ensure that shareholders are given sufficient information and
time to form a view of the offer.
The board of directors has not deemed it appropriate to adopt
specific guidelines for take-over situations as long as Aker
23Annual Report 2022 | Corporate Governance Statement
Holdings AS continues to be the dominant shareholder of
Akastor. This represents a deviation from the Code of Practice.
15. Auditors
The external auditor presents a plan for the performance of the
audit work to the audit committee annually. In addition, the
auditor provides the audit committee with an annual written
confirmation to the effect that the independence requirement is
met. The auditor attends all audit committee meetings, and the
auditor has reviewed any material changes to the accounting
principles of the company, or to the internal controls of the
company, with the audit committee. The external auditor also
attends the board meeting where the annual financial statements
are reviewed and approved, normally in March. The board of
directors holds a minimum of one annual meeting with the
auditor without any executive personnel being in attendance.
The board’s audit committee stipulates guidelines on the scope
for using the auditor for services other than auditing,and makes
recommendations to the board of directors concerning the
appointment of the external auditor and the approval of the
auditor’s fees. Fees payable to the auditor, separated into those
relating to auditing and those relating to other services, are
specified in the «Other operating expenses» note to the
consolidated financial statements for the group and are also
reported to the general meeting. The auditor’s fees relating to
auditing are subject to approval by the general meeting.
24 Annual Report 2022 | Financials and Notes | Akastor Group
Financials and Notes | Akastor Group
a.
04. FINANCIALS AND NOTES
AKASTOR GROUP
Akastor Group | Consolidated income statement 25
Akastor Group | Consolidated statement of comprehensive income 26
Akastor Group | Consolidated statement of financial position 27
Akastor Group | Consolidated statement of changes in equity 28
Akastor Group | Consolidated statement of cash flow 29
General
Note 1 | Corporate information 30
Note 2 | Basis for preparation 30
Note 3 | Significant accounting policies 31
Note 4 | Significant accounting estimates and judgements 36
Performance of the year
Note 5 | Discontinued operations 38
Note 6 | Disposal group held for sale and disposal of subsidiaries 39
Note 7 | Operating segments 40
Note 8 | Revenue and other income 44
Note 9 | Salaries, wages and social security costs 46
Note 10 | Other operating expenses 46
Note 11 | Finance income and costs 47
Note 12 | Income tax 48
Note 13 | Earnings per share 50
Assets
Note 14 | Property, plant and equipment 51
Note 15 | Intangible assets and goodwill 52
Note 16 | Impairment testing of goodwill 53
Note 17 | Equity-accounted investees 54
Note 18 | Other investments
Note 19 | Non-current interest-bearing receivables 56
Note 20 | Trade and other receivables 57
Note 21 | Cash and cash equivalents 57
Equity and liabilities
Note 22 | Capital and reserves 58
Note 23 | Borrowings 59
Note 24 | Other liabilities 60
Note 25 | Employee benefits – pension 61
Note 26 | Provisions 64
Note 27 | Trade and other payables 64
Financial risk management
Note 28 | Capital management 65
Note 29 | Financial risk management and exposures 66
Note 30 | Financial instruments 69
Other
Note 31 | Leases 72
Note 32 | Group companies 74
Note 33 | Related parties 75
Note 34 | Events after reporting date 76
25Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated income statement
For the year ended December 31
Amounts in NOK million Note 2022 2021
Revenue and other income 7, 8 1 059 953
Materials, goods and services (420 ) (294 )
Salaries, wages and social security costs 9 (366 ) (367 )
Other operating expenses 10 (109 ) (78 )
Impairment loss on receivables 20 (174 ) (214 )
Operating expenses (1 069 ) (953 )
Operating profit before depreciation, amortization and impairment (10 ) -
Depreciation, amortization and impairment 14,15, 31 (66 ) (82 )
Operating profit (loss) (76 ) (82 )
Finance income 490 369
Finance expenses (244 ) (175 )
Impairment loss on debt instruments (166 ) -
Net finance income 11 80 194
Share of net profit (loss) from equity-accounted investees 17 (263 ) (346 )
Profit (loss) before tax (259 ) (235 )
Income tax benefit (expense) 12 (2 ) 20
Profit (loss) from continuing operations (261 ) (215 )
Profit (loss) from discontinued operations (net of income tax) 5 4 1 140
Profit (loss) for the period (257 ) 925
Profit (loss) for the period attributable to:
Equity holders of the parent company (276 ) 919
Non-controlling interests 19 6
Basic / diluted earnings (loss) per share (NOK) 13 (1.01 3.38
Basic / diluted earnings (loss) per share continuing operations (NOK) 13 (1.03 0.81
Basic / diluted earnings (loss) per share discontinued operations (NOK) 13 0.02 4.20
26 Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated statement of comprehensive income
For the year ended December 31
Amounts in NOK million Note 2022 2021
Profit (loss) for the period (257 ) 925
Other comprehensive income
Cash flow hedges, effective portion of changes in fair value - (22 )
Cash flow hedges, reclassification to income statement - 1
Total change in hedging reserve, net of tax - (21 )
Total change in fair value reserve, net of tax - (20 )
Currency translation differences - foreign operations 325 33
Currency translation differences, reclassification to income statement upon disposal - (472 )
Share of OCI from equity-accounted investees 17 (86 ) (7 )
Total items that may be reclassified subsequently to profit or loss, net of tax 239 (487 )
Remeasurement gain (loss) net defined benefit liability 25 (11 ) 9
Deferred tax of remeasurement gain (loss) net defined benefit liability - (6 )
Share of OCI from equity-accounted investees 17 10 -
Total items that will not be reclassified to profit or loss, net of tax (1 ) 3
Total other comprehensive income, net of tax 238 (484 )
Total comprehensive income (loss) for the period, net of tax (19 ) 441
Attributable to:
Equity holders of the parent company (38 ) 435
Non-controlling interests 19 6
27Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated statement of financial position
As of December 31
Amounts in NOK million Note 2022 2021
Deferred tax assets 12 37 42
Property, plant and equipment 14 237 251
Intangible assets and goodwill 15 146 145
Right-of-use assets 31 27 41
Equity-accounted investees 17 3 502 3 408
Other investments 18 869 1 625
Non-current interest-bearing receivables 19 668 315
Non-current finance lease receivables 31 10 176
Other non-current assets 2 21
Total non-current assets 5 497 6 025
Inventories 5 5
Trade and other receivables 20 769 872
Derivative financial instruments - 10
Current finance lease receivables 31 208 64
Current investments 18 162 147
Cash and cash equivalents 21 119 89
Assets classified as held for sale 6 43 -
Total current assets 1 307 1 187
Total assets 6 804 7 212
Issued capital incl. treasury shares 22 161 161
Other capital paid in 1 540 1 538
Reserves and retained earnings 2 355 2 393
Equity attributable to equity holders of the parent company 4 056 4 091
Non-controlling interests 36 18
Total equity 4 092 4 109
Non-current borrowings 23 198 1 372
Non-current lease liabilities 31 37 72
Employee benefit obligations 25 96 108
Deferred tax liabilities 12 4 4
Other non-current liabilities 24 459 628
Provisions, non-current 26 3 26
Total non-current liabilities 796 2 211
Current borrowings 23 1 142 16
Current lease liabilities 31 48 82
Current tax liabilities 2 1
Provisions, current 26 31 20
Trade and other payables 27 498 625
Other current liabilities 24 162 148
Liabilities classified as held for sale 6 32 -
Total current liabilities 1 916 892
Total liabilities 2 712 3 103
Total equity and liabilities 6 804 7 212
Fornebu, March 22, 2023 | Board of Directors of Akastor ASA
Asle Christian Halvorsen | Director
Stian Sjølund | Director Karl Erik Kjelstad | CEO
Henning Jensen | Director Kathryn M. Baker | Director Luis Antonio G. Araujo | Director
Svein Oskar Stoknes | DirectorFrank O. Reite | Chairperson Lone Fønss Schrøder | Deputy Chairperson
28 Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated statement of changes in equity
Amounts in NOK million
Share
capital
Treasury
shares
Other
capital
paid in
Hedging
reserve
1)
Fair
value
reserve
1)
Currency
trans-
lation
reserve
1)
Retained
earnings
Equity
attributable
to equity
holders of
the parent
company
Non-con-
trolling
interests
(NCI)
Total
equity
2021
Equity as of January 1, 2021 162 (2 ) 1 538 21 (52 ) 182 1 808 3 657 11 3 669
Profit (loss) for the period - - - - - - 919 919 6 925
Other comprehensive income - - - (21 ) (20 ) (446 ) 3 (484 ) - (484 )
Total comprehensive income - - - (21 ) (20 ) (446 ) 922 (435 ) 6 441
Transaction with NCI - - - - - - (1 ) (1 ) 1 -
Equity as of December 31, 2021 162 (2 ) 1 538 - (72 ) (264 ) 2 730 4 091 18 4 109
2022
Profit (loss) for the period - - - - - - (276 ) (276 ) 19 (257 )
Other comprehensive income - - - (8 ) - 248 (1 ) 238 - 238
Total comprehensive income - - - (8 ) - 248 (277 ) (38 ) 19 (19 )
Treasury share transactions - - 2 - - - - 2 - 2
Equity as of December 31, 2022 162 (1 ) 1 540 (8 ) (72 ) (16 ) 2 453 4 056 36 4 092
1)
See Note 22 Capital and reserves.
29Annual Report 2022 | Financials and Notes | Akastor Group
Akastor Group | Consolidated statement of cash flow
For the year ended December 31
Amounts in NOK million Note 2022 2021
Cash flow from operating activities
Profit (loss) for the period - continuing operations (261 ) (215 )
Profit (loss) for the period - discontinued operations 4 1 140
Profit (loss) for the period (257 ) 925
Adjustments for:
Income tax expense (benefit) 2 (20 )
Net interest cost and unrealized currency (income) loss 193 142
Depreciation, amortization and impairment 14, 15, 31 66 260
(Gain) loss on disposal of subsidiaries (25 ) (1 225 )
(Gain) loss on disposal of assets (2 ) (51 )
(Profit) loss from equity-accounted investees 17 263 346
Other non-cash effects (229 ) (272 )
Changes in net working capital (187 ) (151 )
Cash generated from operating activities (176 ) (46 )
Dividend received 22 37
Interest paid (168 ) (120 )
Interest paid for leases (6 ) (26 )
Interest received 66 38
Interest received for leases 21 12
Income taxes paid (3 ) 8
Net cash from operating activities (244 ) (96 )
Cash flow from investing activities
Acquisition of property, plant and equipment 14 2 (112 )
Payments for capitalized development 15 (11 ) (24 )
Acquisition of subsidiaries, net of cash acquired 2 -
Proceeds (payments) related to sale of subsidiaries (96 ) 591
Proceeds from (acquisition of) other investments 745 (9 )
Payments to equity-accounted investees (76 ) (47 )
Proceeds from finance lease receivables 53 29
Net cash flow from other investing activities - 3
Net cash from investing activities 619 431
Cash flow from financing activities
Proceeds from borrowings 23 756 1 067
Repayment of borrowings 23 (996 ) (1 472 )
Payment of lease liabilities 31 (78 ) (112 )
Proceeds from transaction with non-controlling interests - 1
Net cash used in financing activities (318 ) (516 )
Effect of exchange rate changes on cash and bank deposits (26 ) (5 )
Net increase (decrease) in cash and bank deposits 31 (186 )
Cash and cash equivalents at the beginning of the period 89 275
Cash and cash equivalents at the end of the period 21 119 89
Of which is restricted cash 2 -
The statement included cash flows from discontinued operations prior to the disposal.
30 Annual Report 2022 | Financials and Notes | Akastor Group
Note 1 | Corporate information
located at Oksenøyveien 10 , Bærum , Norway . The largest shareholder is
Aker Holding AS which is wholly owned by Aker ASA as of December 31,
2022.
The group is an oilfield services investment company with a portfolio of
provided in Note 32 Group companies. Information on other related party
relationships of the group is provided in Note 33 Related parties.
Derivative financial instruments are measured at fair value.
Non-derivative financial instruments at Fair Value through Profit or
Debt instrument at Fair Value through Other Comprehensive
Contingent considerations assumed in business disposals are
Net defined benefit (asset) liability is recognized at fair value of
31Annual Report 2022 | Financials and Notes | Akastor Group
32 Annual Report 2022 | Financials and Notes | Akastor Group
Assets and liabilities, including goodwill and fair value adjustments,
Income statements are translated at average exchange rate for
A financial asset is measured at amortized costs if the business
A debt instrument is classified at FVOCI if the business model
All financial assets not classified as measured at amortized cost or
33Annual Report 2022 | Financials and Notes | Akastor Group
Goodwill not deductible for tax purposes
The initial recognition of assets or liabilities that affects neither
Temporary differences relating to investments in subsidiaries to
34 Annual Report 2022 | Financials and Notes | Akastor Group
35Annual Report 2022 | Financials and Notes | Akastor Group
36 Annual Report 2022 | Financials and Notes | Akastor Group
37Annual Report 2022 | Financials and Notes | Akastor Group
38 Annual Report 2022 | Financials and Notes | Akastor Group
39Annual Report 2022 | Financials and Notes | Akastor Group
40 Annual Report 2022 | Financials and Notes | Akastor Group
HMH is a premier drilling solutions provider, which was formed as
AKOFS Offshore is a global provider of vessel-based subsea well
AGR is a well design and drilling project management, HSEQ,
41Annual Report 2022 | Financials and Notes | Akastor Group
42 Annual Report 2022 | Financials and Notes | Akastor Group
43Annual Report 2022 | Financials and Notes | Akastor Group
44 Annual Report 2022 | Financials and Notes | Akastor Group
45Annual Report 2022 | Financials and Notes | Akastor Group
46 Annual Report 2022 | Financials and Notes | Akastor Group
47Annual Report 2022 | Financials and Notes | Akastor Group
48 Annual Report 2022 | Financials and Notes | Akastor Group
49Annual Report 2022 | Financials and Notes | Akastor Group
50 Annual Report 2022 | Financials and Notes | Akastor Group
51Annual Report 2022 | Financials and Notes | Akastor Group
52 Annual Report 2022 | Financials and Notes | Akastor Group
53Annual Report 2022 | Financials and Notes | Akastor Group
54 Annual Report 2022 | Financials and Notes | Akastor Group
55Annual Report 2022 | Financials and Notes | Akastor Group
56 Annual Report 2022 | Financials and Notes | Akastor Group
57Annual Report 2022 | Financials and Notes | Akastor Group
58 Annual Report 2022 | Financials and Notes | Akastor Group
59Annual Report 2022 | Financials and Notes | Akastor Group
60 Annual Report 2022 | Financials and Notes | Akastor Group
61Annual Report 2022 | Financials and Notes | Akastor Group
62 Annual Report 2022 | Financials and Notes | Akastor Group
63Annual Report 2022 | Financials and Notes | Akastor Group
64 Annual Report 2022 | Financials and Notes | Akastor Group
65Annual Report 2022 | Financials and Notes | Akastor Group
Investing in projects and business areas which will increase the
Optimizing the company’s capital structure to ensure both sufficient
The use of banks based on syndicated credit facilities.
The issue of debt instruments in the Norwegian capital market.
The issue of debt instruments in foreign capital markets.
The company’s gearing ratio shall not exceed 0.5 times and
Equity ratio shall not be lower than 32.5%, calculated from the
Minimum liquidity amount shall exceed NOK 150 million on
66 Annual Report 2022 | Financials and Notes | Akastor Group
67Annual Report 2022 | Financials and Notes | Akastor Group
Performance guarantees on behalf of group companies of
Performance guarantees on behalf of related parties of
Parent company indemnity guarantees for fulfillment of lease
Financial guarantees including counter guarantees for bank/
68 Annual Report 2022 | Financials and Notes | Akastor Group
69Annual Report 2022 | Financials and Notes | Akastor Group
70 Annual Report 2022 | Financials and Notes | Akastor Group
71Annual Report 2022 | Financials and Notes | Akastor Group
The forecast EBITDA were higher (lower);
The market multiples applied were higher (lower); or
The net debt of the investees at the date of disposal were lower
Liabilities depending on future earnings: The recognized amounts
Liabilities depending on outcome of indemnity claims and price
72 Annual Report 2022 | Financials and Notes | Akastor Group
73Annual Report 2022 | Financials and Notes | Akastor Group
74 Annual Report 2022 | Financials and Notes | Akastor Group
75Annual Report 2022 | Financials and Notes | Akastor Group
76 Annual Report 2022 | Financials and Notes | Akastor Group
77Annual Report 2022 | Financials and Notes | Akastor ASA
Financials and Notes | Akastor ASA
04.b. FINANCIALS AND NOTES
AKASTOR ASA
Akastor ASA | Income statement 78
Akastor ASA | Statement of financial position 79
Akastor ASA | Statement of cash flow 80
Note 1 | Accounting principles 81
Note 2 | Operating revenue and expenses 82
Note 3 | Net financial items 82
Note 4 | Tax 83
Note 5 | Investments in group companies 83
Note 6 | Shareholders’ equity 84
Note 7 | Receivables and borrowings from group companies and related parties 84
Note 8 | Borrowings 85
Note 9 | Guarantees 86
Note 10 | Financial risk management 87
Note 11 | Related parties 87
Note 12 | Shareholders 88
Note 13 | Subsequent events 88
78 Annual Report 2022 | Financials and Notes | Akastor ASA
Akastor ASA | Income statement
For the year ended December 31
Amounts in NOK million Note 2022 2021
Operating revenue 2 1 2
Operating expenses 2 (40) (53)
Operating profit (loss) (40) (51)
Net financial items 3 (429) (613)
Profit (loss) before tax (468) (664)
Income tax benefit (expense) 4 12 -
Profit (loss) for the period (457) (664)
Profit (loss) for the period distributed as follows
Other equity (457) (664)
Profit (loss) for the period (457) (664)
79Annual Report 2022 | Financials and Notes | Akastor ASA
Akastor ASA | Statement of financial position
As of December 31
Amounts in NOK million Note 2022 2021
Assets
Deferred tax assets 4 12 -
Investments in group companies 5 4 194 4 515
Non-current interest-bearing receivables on group companies 7 500 500
Other non-current interest-bearing receivables 2 2
Total non-current assets 4 708 5 018
Current interest-bearing receivables on group companies 7 126 173
Other receivables on group companies 7 - 1
Other receivables 4 3
Cash in cash pool system 7 11 -
Total current assets 141 177
Total assets 4 849 5 195
Equity and liabilities
Issued capital 162 162
Treasury shares (1) (1)
Share premium 2 000 2 000
Other paid in capital 2 005 2 003
Other equity (227) 229
Total equity 6 3 939 4 393
Non-current borrowings, external 8 - 719
Total non-current liabilities - 719
Current borrowings, external 8 870 16
Other liabilities to group companies 7 40 52
Other current liabilities 1 15
Total current liabilities 910 83
Total liabilities 910 802
Total equity and liabilities 4 849 5 195
Fornebu, March 22, 2023 I Board of Directors of Akastor ASA
Asle Christian Halvorsen | Director Stian Sjølund | Director Karl Erik Kjelstad | CEO
Henning Jensen | Director Kathryn M. Baker | Director Luis Antonio G. Araujo | Director
Svein Oskar Stoknes | DirectorFrank O. Reite | Chairperson Lone Fønss Schrøder | Deputy Chairperson
80 Annual Report 2022 | Financials and Notes | Akastor ASA
Akastor ASA | Statement of cash flow
For the year ended December 31
Amounts in NOK million Note 2022 2021
Profit (loss) before tax (468) (664)
Adjustments:
Group contribution and dividend 3 - (7 000)
Non-cash impairment 3 355 7 593
Net interest cost and unrealized currency (income) loss 111 46
Profit (loss), net of adjustments (3) (25)
Changes in net operating assets (28) 18
Net external interest paid (41) (38)
Net cash from operating activities (71) (45)
Capital contribution in group companies (34) -
Net cash from investing activities (34) -
Proceeds from borrowings 756 1 067
Repayment of borrowings (731) (1 483)
Changes in borrowings from group companies - 844
Changes in borrowings to group companies - (171)
Change in overdraft cash pool 40 (225)
Net cash from financing activities 65 32
Effect of exchange rate changes on cash and cash deposits 50 14
Net increase (decrease) in cash and bank deposits 11 -
Cash in cash pool system at the beginning of the period - -
Cash in cash pool system at the end of the period
1)
7 11 -
1) Unused committed credit facilities amounted to NOK 304 million as of December 31, 2022 (NOK 553 million in 2021).
81Annual Report 2022 | Financials and Notes | Akastor ASA
Note 1 | Accounting principles
Akastor ASA (the parent company) is a company domiciled in Norway. The
financial statements are presented in conformity with Norwegian Accounting
Act and Norwegian generally accepted accounting principles (NGAAP).
Revenue recognition
Operating revenue mainly comprise parent company guarantees (PCG)
recharged to entities within the group. The revenue is recognized over the
guarantee period.
Investments in subsidiaries
Investments in subsidiaries are measured at cost in the parent company
accounts, less any impairment losses. The investments are impaired to
fair value if the impairment is not considered temporary. Impairment losses
are reversed if the basis for the impairment loss is no longer present.
Investments in subsidiaries and associates are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount may exceed the fair value of the investment.
Dividends, group contributions and other distributions from subsidiaries are
recognized as income the same year as they are recognized in the financial
statement of the provider. If the dividends or group contributions exceed
withheld profits after the acquisition date, the excess amount represents
repayment of invested capital, and is recognized as a reduction of carrying
value of the investment.
Classification
Current assets and current liabilities include items due within one year or
items that are part of the operating cycle. Other balance sheet items are
classified as non-current assets/debts.
Non-current borrowings are presented as current if a loan covenant breach
exists at balance date. If a covenant waiver is approved subsequent to
year-end and before the approval of the financial statements, the liability
is presented as non-current debt to the extent maturity date is beyond one
year.
Measurement of borrowings and receivables
Financial assets and liabilities consist of investments in other companies,
trade and other receivables, interest-bearing receivables, cash and cash
equivalents, trade and other payables and interest-bearing borrowing.
Trade receivables and other receivables are recognized in the balance
sheet at nominal value less provision for expected losses.
Interest-bearing borrowings are initially recorded at transaction value less
transaction costs. Subsequent to initial recognition, these borrowings
are measured at amortized cost with any difference between cost and
redemption value being recognized in the income statement over the period
of the borrowings on an effective interest basis.
Cash in cash pool system
Akastor ASA has a cash pool that includes the parent company’s cash as
well as net deposits from subsidiaries in the group cash pooling system
owned by the parent company. Correspondingly, Akastor ASA’s current
debt to group companies will include their net deposit in the group’s cash
pool system.
Share capital
Costs for purchase of own shares including transaction costs are accounted
for directly against equity. Sales of own shares are performed according
to stock-exchange quotations at the time of award and accounted for as
increase in equity.
Cash flow statement
The statement of cash flow is prepared according to the indirect method.
Cash and cash equivalents include cash, bank deposits and other short-
term liquid investments.
Functional currency and presentation currency
The parent company’s financial statements are presented in NOK, which
is Akastor ASA’s functional currency. All financial information presented in
NOK has been rounded to the nearest million (NOK million), except when
otherwise stated. The subtotals and totals in some of the tables in these
financial statements may not equal the sum of the amounts shown due to
rounding.
Foreign currency
Transactions in foreign currencies are translated at the exchange rate
applicable at the date of the transaction. Monetary items in a foreign
currency are translated to NOK using the exchange rate applicable on the
balance sheet date. Foreign exchange differences arising on translation are
recognized in the income statement as they occur.
Tax
Tax income (expense) in the income statement comprises changes
in deferred tax. Deferred tax is calculated as 22 percent of temporary
differences between accounting and tax values as well as any tax losses
carry-forward at the year end. Net deferred tax assets are recognized only
to the extent it is probable that they will be utilized against future taxable
profits.
82 Annual Report 2022 | Financials and Notes | Akastor ASA
Note 2 | Operating revenue and expenses
Operating revenue comprises NOK 1 million in income from parent company
guarantees (NOK 2 million in 2021).
There are no employees in Akastor ASA and hence no salary or pension
related costs and also no loan or guarantees related to the executive
management team. Group management and corporate staff are employed
by other Akastor companies and costs for their services as well as other
parent company costs are recharged to Akastor ASA.
NOK 3.2 million has been allocated to payable fees to the Board of Directors
for 2022 (2021: NOK 3.0 million). Remuneration to and shareholding of the
Board of directors and CEO is described in Remuneration Report 2022.
Fees to the auditors
Fees to the auditors for statutory audit amounted to NOK 1.1 million
exclusive VAT (2021: NOK 2.0 million).
Note 3 | Net financial items
Amounts in NOK million Note 2022 2021
Interest income from group companies 41 29
Interest income, external 52 31
Interest expense, external (108) (82)
Other financial income - 1
Dividends from group companies - 7 000
Impairment on receivables to group companies 7 - (56)
Impairment of shares (355) (7 537)
Other financial expenses (9) (3)
Net foreign exchange gain (loss) (50) 4
Net financial items (429) (613)
83Annual Report 2022 | Financials and Notes | Akastor ASA
Note 4 | Tax
Amounts in NOK million 2022 2021
Calculation of taxable income
Profit (loss) before tax (468) (664)
Dividend income from group companies - (7 000)
Impairment of shares and receivables to group companies 355 7 593
Changes in timing differences 9 (7)
Generated (utilized) tax loss 104 79
Taxable income - -
Taxable (deductible) temporary differences
Provisions 2 (2)
Interest deduction carry-forward (21) (5)
Tax loss carry-forward
1)
(180) (79)
Net temporary differences (199) (86)
Tax rate 22% 22%
Tax effects of temporary differences 44 19
Not recognized deferred tax assets
2)
(32) (19)
Deferred tax assets (liability) 12 -
Tax expense
Taxes payable - -
Change in deferred tax 12 -
Income tax benefit (expense) 12 -
1)
In addition, Akastor ASA has unrecognized tax loss carry forwards of NOK 440 million as of 2022 which is currently being subject to inquiries from Norwegian Tax Authorities
2)
Deferred tax assets are not recognized when the management assesses that it is not probable that future taxable profit will be available, against which the deductible
temporary difference can be utilized.
Note 5 | Investments in group companies
Amounts in NOK million
Registered
office
Share
capital
Number of
shares held
Percentage
owner- / vot-
ing share 2022 2021
Akastor AS Fornebu, Norway 1 004 1 100% 2 882 3 237
Mercury Holdco AS Fornebu, Norway - 1 000 100% 1 312 1 279
Total 4 194 4 515
Financial information in group companies 2022 (unaudited)
Amounts in NOK million Akastor AS
Mercury
Holdco AS
Profit (loss) for the period (343) 75
Equity as of December 31 2 859 1 400
84 Annual Report 2022 | Financials and Notes | Akastor ASA
Note 6 | Shareholders’ equity
Amounts in NOK million Share capital
Treasury
shares
Share
premium
Other paid in
capital
Retained
earnings Total
Equity as of January 1, 2021 162 (1) 2 000 2 003 894 5 057
Profit (loss) for the period - - - - (664) (664)
Equity as of December 31, 2021 162 (1) 2 000 2 003 229 4 393
Treasury shares transaction - - - 2 - 2
Profit (loss) for the period - - - - (457) (457)
Equity as of December 31, 2022 162 (1) 2 000 2 005 (227) 3 939
The share capital of Akastor ASA is divided into 274 000 000 shares with a
nominal value of NOK 0.592. The shares can be freely traded. See Note 12
Shareholders for an overview of the company's largest shareholders.
Sale of 405 051 treasury shares to employees was carried out in 2022
in connection with the company’s variable pay program. The number of
treasury shares held by the end of 2022 was 1 985 164 and the shares
are held for the purpose of being used for future awards under any share
purchase program for employees, as settlement in future corporate
acquisitions or for other purpose as decided by the board of directors.
Note 7 | Receivables and borrowings from group companies and related parties
Amounts in NOK million 2022 2021
Group companies (borrowings) deposits in the cash pool system (121) (171)
Akastor ASA's net deposit (borrowings) in the cash pool system 131 171
Cash in cash pool system 11 -
Non-current interest-bearing receivables on group companies 500 500
Current interest-bearing receivables on group companies
1)
126 173
Net interest-bearing receivables on group companies 626 673
Other receivables on group companies - 1
Other liabilities to group companies (40) (52)
Total other receivables on group companies (40) (52)
1)
Includes group companies’ borrowings in the cash pool system.
Interest-bearing receivables on and borrowings from group
companies
Akastor ASA is the group’s central treasury function (Akastor Treasury)
and enters into borrowings and deposit agreements with group companies.
Deposits and borrowings are done at market terms and are dependent of
the group companies’ credit rating and the duration of the borrowings.
In 2021, an impairment of NOK 56 million was recognized related to interest-
bearing receivables on Step Oiltools BV prior to recapitalization of the entity.
Cash pool arrangement
Akastor ASA is the owner of the cash pool system arrangements with DNB.
The cash pool systems cover a majority of the group geographically and
assure good control and access to the group’s cash. Participation in the
cash pool is vested in the group’s policy and decided by each company’s
board of directors and confirmed by a statement of participation. The
participants in the cash pool system are jointly and severally liable and it
is therefore important that Akastor as a group is financially viable and can
repay deposits and carry out transactions. Any debit balance on a sub
account can be set-off against any credit balance. Hence, a debit balance
represents a claim on Akastor ASA and a credit balance a borrowing from
Akastor ASA.
The cash pool system has a net cash of NOK 11 million as of December 31,
2022 (net overdraft of NOK 11 million in 2021).
85Annual Report 2022 | Financials and Notes | Akastor ASA
Note 8 | Borrowings
Amounts in million Currency
Nominal
currency
value
Carrying
amount (NOK) Maturity
1)
Interest terms
2)
2022
Revolving credit facility (USD 66 million) USD 66 656 Feb 2024 USD LIBOR + margin 5.5%
Revolving credit facility (NOK 250 million) NOK 200 198 Feb 2024 NIBOR + margin 5.5%
Subordinated Aker facility (NOK 250 million)
3)
NOK 16 16 Mar 2024 NIBOR + margin 10%
Total borrowings 870
Current borrowings 870
Total 870
2021
Revolving credit facility (USD 89 million) USD 83 721 Feb 2023 USD LIBOR + margin 5.5%
Revolving credit facility (NOK 250 million) NOK - - Feb 2023 NIBOR + margin 5.5%
Subordinated Aker facility (NOK 250 million) NOK 3 3 Mar 2023 NIBOR + margin 10%
Overdraft facility NOK - 11
Total borrowings 735
Current borrowings 16
Non-current borrowings 719
Total 735
1)
In February 2023, the maturity date was extended to February/March 2024. The borrowings are classified as current reflecting the maturity date as at the balance sheet date.
2)
Commitment fee is 40 percent of the margin.
3)
In March 2023, Aker facility was increased to NOK 450 million (NIBOR + margin 12%).
All facilities are provided by a bank syndicate consisting of high-quality
Nordic and international banks and DNB is acting as the agent. The terms
and conditions include restrictions which are customary for these kinds of
facilities, including inter alia negative pledge provisions and restrictions on
acquisitions, disposals and mergers, dividend distribution and change of
control provisions.
In 2021, Akastor ASA carried out refinancing of its credit facilities as a
result of MHWirth divestment. In February 2023, the maturity date of the
revolving credit facilities was extended to February/March 2024. Under the
loan agreements, the financial covenants are a gearing ratio based on net
debt/equity, an equity ratio based on equity/total assets and a minimum
liquidity amount.
The company’s gearing ratio shall not exceed 0.5 times, calculated
from the consolidated total borrowings to the consolidated Equity.
Equity ratio shall not be lower than 32.5%, calculated from the
consolidated total equity to consolidated total assets.
Minimum liquidity amount shall exceed NOK 150 million on
consolidated level.
The covenants are monitored on a regular basis by the Akastor Treasury
department to ensure compliance with the loan agreements which are
tested and reported on a quarterly basis. Akastor was in compliance with
its covenants as of December 31, 2022. On the basis of the covenant levels
and its financial forecasts, management believes that the risk of covenant
being breached is low and that the group will continue as a going concern for
the foreseeable future. See more information in Board of Directors’ report.
86 Annual Report 2022 | Financials and Notes | Akastor ASA
Financial liabilities and the period in which they mature
Amounts in NOK million
Carrying
amount
Total
undiscounted
cash flow
1)
6 months
and less 6–12 months 1–2 years
2)
2022
Revolving credit facility (USD 66 million) 656 668 35 32 602
Revolving credit facility (NOK 250 million) 198 217 9 9 200
Subordinated Aker facility (NOK 250 million) 16 16 - - 16
Total borrowings 870 901 43 40 818
2021
Revolving credit facility (USD 89 million) 721 787 27 22 738
Subordinated Aker facility (NOK 250 million) 3 3 - - 3
Overdraft facility 11 11 11 - -
Total borrowings 735 800 37 22 740
1)
The interest costs are calculated using the last fixing rate known by year end (plus applicable margin).
2)
Repayment of the loan in the table is according to maturity date of the facility in the loan agreement.
Note 9 | Guarantees
Akastor has provided the following guarantees on behalf of wholly owned subsidiaries and related parties as of December 31 (all obligations are per date
of issue):
Amounts in NOK million 2022 2021
Parent Company Guarantees to group companies
1)
639 1 025
Parent Company Guarantees to related parties
2)
4 017 4 416
Counter guarantees for bank/surety bonds, group companies
3)
232 305
Counter guarantees for bank/surety bonds, related parties
3)
1 8
Total guarantee liabilities 4 889 5 754
Maturity of guarantee liabilities:
6 months and less 45 104
6-12 months 1 4
1-2 years 555 497
2-5 years 3 623 3 315
5 years and more 665 1 835
1)
Parent Company Guarantees to support subsidiaries in contractual obligations towards clients.
2)
Parent Company Guarantees to support related parties in contractual obligations towards clients, mainly AKOFS 1 AS, AKOFS 3 AS, AKOFS Norway Operations AS and
MHWirth AS.
3)
Bank guarantees and surety bonds are issued on behalf of Akastor subsidiaries and related parties, and counter indemnified by Akastor ASA.
Although guarantees are financial instruments, they are considered contingent obligations and the notional amounts are not included in the financial
statements.
US pension plan
AK Wilfab Inc, a wholly owned subsidiary of Akastor, is together The Resource Group TRG AS and Akastor ASA sponsoring the US pension plan named
the Kvaerner Consolidated Retirement Plan. Akastor Group holds one third of the liability of the sponsors for the underfunded element of the plan and The
Resource Group TRG AS holds two thirds of the ultimate liability. Aker ASA guarantees for The Resource Group TRG AS’ liability and covers for all its
expenses related to the pension plan.
87Annual Report 2022 | Financials and Notes | Akastor ASA
Note 10 | Financial risk management
Currency risk
The company’s exposure to currency risk is primarily against USD as the
company has external borrowings denominated in USD. As of 31 December
2022 or 2021, Akastor ASA had not entered into any forward exchange
contracts.
Interest rate risk
The company is exposed to changes in interest rates because of floating
interest rate on loan receivables and loan payables. The company does
not hedge transactions exposure in financial markets and does not have
any fixed interest rate loan receivables nor loan payables. The company is
therefore not exposed to fair value risk on its outstanding loan receivables
or loan payables. Interest bearing loan receivables and loan payables
expose the company to income statement and cash flow interest risk.
Interest-bearing borrowings to group companies reflect the cost of external
borrowing, reducing the interest risk exposure for Akastor ASA.
Credit risk
Credit risk is the risk of financial losses to the company if a customer or
counterparty fails to meet contractual obligations. Credit risk relates to
loans to subsidiaries and related parties, guarantees to subsidiaries and
related parties and deposits with external banks. External deposits are done
according to a list of approved banks and primarily with banks where the
company also have a borrowing relationship.
Loss provisions for interest-bearing receivables are made in situations of
negative equity if the company is not expected to be able to fulfill its loan
obligations from future earnings. No impairment related to receivables
from group companies was recognized in 2022 (NOK 56 million in 2021).
See Note 7 Receivables and borrowings from group companies for more
information about receivables.
Liquidity risk
Liquidity risk relates to the risk that the company will not be able to meet
its debt and guarantee obligations and is managed through maintaining
sufficient cash and available credit facilities. Due to the dynamic nature of
the underlying businesses, Akastor Treasury maintains flexibility in funding
by maintaining availability under committed credit lines. Development in
the group’s and thereby Akastor ASA’s available liquidity is continuously
monitored through monthly cash flow forecasts, annual budgets and long
term planning.
Note 11 | Related parties
Transactions and balances with subsidiaries and related parties are described in the following notes:
Transactions Note
Other services Note 2
Financial items Note 3
Investments Note 5
Cash pool, receivables and borrowings Note 7
Guarantees Note 9
All transactions with related parties are carried out at market terms and in accordance with the arm’s lengths principle.
88 Annual Report 2022 | Financials and Notes | Akastor ASA
Note 12 | Shareholders
Shareholders with more than 1 percent shareholding as per December 31
Company
Number of
shares held Ownership
2022
Aker Holding AS 100 565 292 36.70%
Goldman Sachs & Co Nominee 38 731 705 14.14%
Ministry of Trade, Industry and Fisheries, Norway 33 100 085 12.08%
Morgan Stanley & Co. LLC Nominee 30 438 269 11.11%
Apollo Asset Limited 6 049 000 2.21%
Mh Capital AS 4 000 000 1.46%
F2 Funds AS 3 270 000 1.19%
Tigerstaden AS 3 000 000 1.09%
Company
Number of
shares held Ownership
2021
Aker Holding AS 100 565 292 36.70%
Goldman Sachs & Co Nominee 39 245 843 14.32%
Morgan Stanley & Co. LLC Nominee 33 139 698 12.09%
Ministry of Trade, Industry and Fisheries, Norway 33 100 085 12.08%
Verdipapirfond Odin Norge 10 575 925 3.86%
F2 Funds AS 3 239 187 1.18%
Note 13 | Subsequent events
In February 2023, the maturity of Akastor’s corporate credit facilities was extended to February/March 2024. In March 2023, the subordinated Aker facility
was increased with NOK 200 million to NOK 450 million.
89Annual Report 2022 | Auditor's Report
Auditor's Report
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Akastor ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Akastor ASA, which comprise:
• the financial statements of the parent company Akastor ASA (the Company), which comprise
the statement of financial position as at 31 December 2022, the income statement and
statement of cash flow for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and
• the consolidated financial statements of Akastor ASA and its subsidiaries (the Group), which
comprise the statement of financial position as at 31 December 2022, the income statement,
statement of comprehensive income, statement of changes in equity and statement of cash
flow 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 statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its 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 as required by 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.
05. AUDITOR'S REPORT
90 Annual Report 2022 | Auditor's Report
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We have been the auditor of the Company for one year from the election by the general meeting of the
shareholders on 20 April 2022 for the accounting year 2022.
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 of the current period. 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.
Key Audit Matters
How our audit addressed the Key Audit Matter
Accuracy of Equity-accounted investees
Investments in the Joint Ventures (JV) HMH
Holding B.V (HMH) and AKOFS Offshore
AS (AKOFS) amounts to approximately
51% of the Group’s total assets, and any
year
-on-year fluctuations in Akastor’s share
of the JV’s booked results may amount to a
significant
part of the Group’s total results.
As such, accuracy in reporting Group
management receives from JVs is of
significance to the Group’s financial
statements.
See note 3 “Significant accounting policies”,
section “Basis of consolidation” for
significant acc
ounting policies applied for
investments in joint ventures. Information on
the recognition and measurement of the JVs
are disclosed in note 17 “Equity
-accounted
investees”.
We completed the Group audit plan based on our
understanding of HMH and AKOFS, discussions with
Akastor’s management and collaboration with the
component audit teams. We were involved in the
component audit team's risk assessment, including
the susceptibility of material misstatement due to
fraud or error, and we reviewed their audit plan with
regards to identified significant risks. We agreed with
the component auditors on the materiality levels for
their audit. Our involvement and communication, both
written and otherwise, was extensive.
We obtained a sufficient understanding of the
component audit firm and the engagement teams
through meetings with them, prior experience with the
component team, and frequent communication. They
confirmed to us that they were independent.
To evaluate the sufficiency and appropriateness of
audit evidence obtained by the component audit
teams, we reviewed the received audit reporting, held
meetings with the component audit teams and
reviewed their audit documentation. Our procedures
were focused on the audit of significant risks and the
audit of the consolidation process and -journals.
Through our involvement with the component
auditors, we were able to obtain sufficient appropriate
audit evidence regarding the financial information of
the components and the consolidation process to
express an opinion on the Group’s financial
statements.
Finally, we considered the adequacy of disclosures in
notes related to equity-accounted investees and
found them to be appropriate.
91Annual Report 2022 | Auditor's Report
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Valuation of Other Investments and Trade
and Other Receivables
Other Investments and
Trade and Other
Receivables amount to approximately 24%
of the Group’s total assets. Management
uses valuation techniques to estimate the
fair value of Other Investments and the
recoverability of Trade and Other
Receivables.
These two line items are sign
ificant to the
financial statements, and the carrying value
is sensitive to management’s use of
judgment.
The substantial part of Other Investments is
measured at fair value through other
comprehensive income and is classified as
level 3 in the fair value
hierarchy. Trade and
Other Receivables are measured at
amortized cost less any impairment, if
present.
See note 4 “Significant accounting
estimates and judgements” for disclosures
on Management’s fair value measurement
and Impairment of financial assets.
The
carrying value of Other Investments is
specified in note 18 “Other Investments”.
See note 20 “Trade and Other Receivables”
for disclosure on trade and other
receivables.
For Other Investments, we obtained the valuation
model from management, evaluated the valuation
method applied and tested the mathematical
accuracy of the model. We agreed with management
that the valuation model used was appropriate.
We challenged the key assumptions applied by
management in the valuation model. Specifically, we
discussed with management to challenge their view
on EBITDA, peer groups, EV/EBITDA valuation
multiples, assumed exit date and discount rate. We
compared applied assumptions to budgets approved
by management and to obtainable market information
such as relevant benchmarks for enterprise value
multiples and discount rates. We also tested data
used in the model against relevant agreements. We
found management's key assumptions to be
reasonable.
For the substantial part of Trade and Other
Receivables, composed of Other Receivables, we
obtained management’s valuation and held
discussions with management to challenge their
assessment of the impact on Other receivables of the
dispute related to four terminated construction
contracts with Jurong Shipyard.
To corroborate the valuation assessment, we
obtained supporting documentation on key
assumptions. We found that supporting
documentation corroborated with the information
presented.
Finally, we considered the adequacy of disclosures in
notes for Other Investments and Trade and Other
Receivables and found them to be appropriate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
92 Annual Report 2022 | Auditor's Report
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obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view 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. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate 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 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. We 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
93Annual Report 2022 | Auditor's Report
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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.
• 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 a true and fair view.
• 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 Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Akastor ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name AKASTORASA_ESEF_2022-12-31, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
94 Annual Report 2022 | Auditor's Report
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2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to
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 the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 22 March 2023
PricewaterhouseCoopers AS
Anders Ellefsen
State Authorised Public Accountant (Norway)
95Annual Report 2022 | Alternative Performance Measures
Alternative Performance Measures
06. ALTERNATIVE PERFORMANCE
MEASURES
Akastor discloses alternative performance measures as a supplement to the consolidated financial statements prepared in accordance with IFRS. Such
performance measures are used to provide an enhanced insight into the operating performance, financing abilities and future prospects of the group. These
measures are calculated in a consistent and transparent manner and are intended to provide enhanced comparability of the performance from period to
period. It is Akastor's experience that these measures are frequently used by securities analysts, investors and other interested parties.
The definitions of these measures are as follows:
EBITDA - earnings before interest, tax, depreciation and amortization, corresponding to "Operating profit before depreciation, amortization and impairment"
in the consolidated income statement.
EBIT - earnings before interest and tax, corresponding to "Operating profit (loss)" in the consolidated income statement.
Capex and R&D capitalization - a measure of expenditure on PPE or intangible assets that qualify for capitalization.
Net current operating assets (NCOA) - a measure of working capital. It is calculated by current operating assets minus current operating liabilities,
excluding financial assets or financial liabilities related to hedging activities.
Net capital employed - a measure of all assets employed in the operation of a business. It is calculated by non-current assets and finance lease receivables
(excluding non-current interest-bearing receivables) added by net current operating assets minus non-current operating liabilities (deferred tax liabilities,
employee benefit obligations, other non-current liabilities and lease liabilities).
Gross debt - sum of current and non-current borrowings, excluding lease liabilities.
Net debt - gross debt minus cash and cash equivalents.
Net interest-bearing debt (NIBD) - net debt minus non-current and current interest-bearing receivables.
Equity ratio - a measure of investment leverage, calculated as total equity divided by total assets at the reporting date.
Liquidity reserve - comprises cash and cash equivalents and undrawn committed credit facilities.
Order intake - represents the estimated contract value from the contracts or orders that are entered into or committed in the reporting period.
Order backlog - represents the remaining unearned contract value from the contracts or orders that are entered into or committed at the reporting date. The
backlog does not include options on existing contracts, or contract value from short-cycled service orders.
The tables below show reconciliation of alternative performance measures to the line items in the financial statements according to IFRS.
Net current operating assets (NCOA)
Amounts in NOK million 2022 2021
Inventories 5 5
Trade and other receivables 769 872
Current operating assets 774 877
Current tax liabilities (2) (1)
Provisions, current (31) (20)
Trade and other payables (498) (625)
Current operating liabilities (531) (647)
Net current operating assets (NCOA) 243 231
96 Annual Report 2022 | Alternative Performance Measures
Net capital employed (NCE)
Amounts in NOK million 2022 2021
Total non-current assets 5 497 6 025
Net current operating assets (NCOA) 243 231
Current investment 162 148
Current finance lease receivables 208 64
Non-current interest-bearing receivables (668) (315)
Deferred tax liabilities (4) (4)
Employee benefit obligations (96) (108)
Other non-current liabilities (459) (628)
Other current liabilities (162) (148)
Non-current provisions (3) (26)
Total lease liabilities (85) (155)
Net assets held for sale 11 -
Net capital employed (NCE) 4 645 5 084
Gross debt/Net debt/NIBD
Amounts in NOK million 2022 2021
Non-current borrowings 198 1 372
Current borrowings 1 142 16
Gross debt 1 340 1 387
Cash and cash equivalents (119) (89)
Net debt 1 220 1 299
Non-current interest-bearing receivables (668) (315)
Net interest-bearing debt (NIBD) 553 984
Equity ratio
Amounts in NOK million 2022 2021
Total equity 4 092 4 109
Divided by Total assets 6 804 7 212
Equity ratio 60% 57%
Liquidity reserve
Amounts in NOK million 2022 2021
Cash and cash equivalents 119 89
Undrawn committed credit facilities 304 553
Liquidity reserve 423 642
97Annual Report 2022 | Board of Directors
Board of Directors
07. BOARD OF DIRECTORS
Frank O. Reite | Chairperson of the Board
Frank O. Reite is a Norwegian citizen, born in 1970. He first joined Aker in 1995 and held the
position as CFO in Aker ASA from August 2015 until August 2019. Mr. Reite has previously held
the position as President & CEO of Akastor (up until 2015) and also held a variety of executive
positions in the Aker group, including overseeing and developing Aker’s investments in Converto
Capital Fund AS, Havfisk ASA, Norway Seafoods AS and Aker Yards ASA. Mr. Reite also has
experience from banking and served as Operating Director at Paine & Partners, a New York-based
private equity firm. Reite’s current board positions include being chair of Converto AS, deputy chair
of the board and chair of the audit committee in Aker ASA, chair of Norron AB, and director of
Solstad Offshore ASA. He holds a B.A. in business administration from Norwegian Business
School BI in Oslo.
As of March 22, 2023, Mr. Reite holds, through a privately owned company, 200,000 shares in
Akastor ASA and has no stock options. He is a Norwegian citizen and has been elected for the
period 2022-2024.
Lone Fønss Schrøder | Deputy Chair
Lone Fønss Schrøder is CEO of Concordium AG, a global provider of blockchain technologies.
She is vice-chair of Volvo Cars AB and chair of the audit committee, and director of Geely Sweden
Holdings AB and Ingka Holding B.V. (Ikea Group). She has held several senior management and
CEO positions in the A.P. Møller-Maersk group and became CEO and president of Wallenius Lines
AB in 2005. Fønss Schrøder has board experience from Kværner ASA, Eukor Inc, Vattenfall AB,
Yara ASA, Valmet OY and others. Fønss Schrøder holds an MSc in law from the University of
Copenhagen and in economics from Copenhagen Business School in Denmark.
Ms. Fønns Schrøder serves as an independent director. As of March 22, 2023, she holds 4,400
shares in the company and has no stock options. She is a Danish citizen and has been elected for
the period 2022-2024.
Svein Oskar Stoknes | Director
Svein Oskar Stoknes has been CFO at Aker ASA since August 2019. Prior to this, he served as
CFO at Aker Solutions, where he joined in 2007 and was named CFO in 2014. Previously, Mr.
Stoknes held a range of senior positions within finance and advisory for organizations like
Tandberg, Citigroup and ABB. He graduated from the Norwegian School of Management and has
an MBA from Columbia Business School in New York.
As of March 22, 2023, Mr. Stoknes owns 1,297 shares and no stock options in the company. He is
a Norwegian citizen and has been elected for the period 2022-2024.
98 Annual Report 2022 | Board of Directors
Kathryn M. Baker | Director
Kathryn M. Baker has over 35 years of business experience in a broad range of industries and
roles. She currently serves as Chairwoman of Terra Mater Renewable Investments, and board
member of MPC Energy Solutions and Gaming Innovation Group ASA and member of the
Investment Committee of Norfund. Ms. Baker previously served on the Executive Board of the
Central Bank of Norway (Norges Bank), the European Advisory Board of the Tuck School of
Business and the Ethics Committee of the Norwegian Private Equity and Venture Capital
Association (NVCA), where she also previously served as Chairwoman. Ms. Baker was a partner
at the Norwegian private equity firm Reiten & Co for 15 years. Prior to that, she was a management
consultant at McKinsey & Company in Oslo and a financial analyst at Morgan Stanley in New York.
Ms. Baker holds a bachelor’s degree in economics from Wellesley College and an MBA from the
Amos Tuck School of Business at Dartmouth College.
As of March 22, 2023, she holds 45,683 shares in the company. Ms. Baker is an American citizen
and has been elected for the period 2021-2023.
Luis Antonio G. Araujo | Director
Luis Antonio G. Araujo has over 38 years of experience in the energy and oil & gas industries. He
was CEO of Aker Solutions from July 2014 to August 2020. Prior to his appointment as CEO, Mr.
Araujo held the position as Regional President and Executive Vice-President for Aker Solutions in
Brazil since November 2011 where he led a major turn-around of the local operations. Prior to his
period with Aker Solutions, he was CEO of Wellstream in Brazil (currently part of Baker Hughes
GE), and held several senior positions within ABB, FMC Technologies, Vetco Gray and Technip
Coflexip. Mr. Araujo is currently an independent director and member of the board of Magseis
Fairfield ASA listed on the Oslo Stock Exchange, and Chairperson of the board of OceanPact, a
Brazilian company. Mr. Araujo holds a bachelor degree in Mechanical Engineering from Gama
Filho University and an MBA from Edinburgh University.
Mr. Araujo serves as an independent director. As of March 22, 2023, Mr. Araujo holds no shares
and no stock options in the company. He has triple citizenship; Brazilian, British and Portuguese
and has been elected for the period 2021-2023.
Henning Jensen | Director, Elected by the employees
Henning Jensen currently works as a Service Account Manager in DLS department at HMH. Mr.
Jensen joined MHWirth in 2005. He has since then held various positions in the company. Mr.
Jensen holds a bachelor degree in Marine Technology and a Master in Industrial Economy and
Technology from Agder University College in Grimstad.
As of March 22, 2023, Mr. Jensen holds no shares or stock options in the company. Mr. Jensen is
a Norwegian citizen and has been elected for the period 2021-2023.
99Annual Report 2022 | Board of Directors
Asle Christian Halvorsen | Director, Elected by the employees
Asle Christian Halvorsen currently works as Sales Manager in the Global Sales dept at HMH. He
began his career with the Aker group in 2011 when he joined STEP Offshore. Mr. Halvorsen holds
an Executive Master of Management from BI Norwegian Business School.
As of March 22, 2023, he holds 10,000 shares in the company. Mr. Halvorsen is a Norwegian
citizen. He has been elected for the period 2021-2023.
Stian Sjølund | Director, Elected by the employees
Stian Sjølund currently works as Performance Optimization Engineer at HMH. Mr. Sjølund joined
the Company in 1998 as an Engineer in Drilling Lifecycle Services department. He has since then
held various positions in the company in Norway and abroad. Mr. Sjølund holds a technical college
degree in electrical engineering from Grimstad Technical College.
As of March 22, 2023, he holds 10,000 shares in the company. Mr. Sjølund is a Norwegian citizen
and has been elected for the period 2021-2023.
100 Annual Report 2022 | Management
Management
08. MANAGEMENT
Karl Erik Kjelstad | CEO
Karl Erik joined Akastor in 2014, he has been part of the Aker group since 1998 and has numerous
key positions including various CEO positions. Karl Erik has held several board positions in
different industries, including oil service, offshore drilling, offshore and merchant shipping,
shipbuilding, IT services, real estate and construction industry. Karl Erik holds an MSc in Marine
Engineering from the Norwegian University of Science and Technology (NTNU) and an AMP from
Harvard Business School.
As of March 22, 2023, Kjelstad holds 700,000 shares in Akastor ASA through his company
Byesvollen AS.
Øyvind Paaske | CFO
Øyvind joined the investment team in Akastor as Investment Manager in 2014 and has held the
position as CFO of Akastor from March 2020. Prior to this he was Investment Manager at Converto
(Aker ASA). Øyvind holds an MSc in Financial Economics from the Norwegian School of Economics
and Business Administration (NHH) and UNC Kenan-Flagler Business School.
As of March 22, 2023, Paaske holds 135,083 shares in Akastor ASA.
101Annual Report 2022 | Company Information
Company Information
Reports on the Internet
The quarterly and annual reports of Akastor are available on the
internet. Akastor encourages its shareholders to subscribe to
the company’s annual reports via the electronic delivery system
of the Norwegian Central securities Depository (VPS). Please
note that VPS services (VPS Investortjenester) are designed
primarily for Norwegian shareholders. Subscribers to this
service receive annual reports in PDF format by email. VPS
distribution takes place at the same time as distribution of the
printed version of Akastor’s annual report to shareholders who
have requested it. Quarterly reports, which are generally only
distributed electronically, are available on the company’s
website and other sources. Shareholders who are unable to
receive the electronic version of interim reports may subscribe
to the printed version by contacting Akastor’s investor relations
staff.
Copyright and Legal Notice
Copyright in all published material including photographs,
drawings and images in this publication remains vested in
Akastor and third party contributors to this publication as
appropriate. Accordingly, neither the whole nor any part of this
publication can be reproduced in any form without express prior
permission. Articles and opinions appearing in this publication
do not necessarily represent the views of Akastor. While all
steps have been taken to ensure the accuracy of the published
contents, Akastor does not accept any responsibility for any
errors or resulting loss or damage whatsoever caused and
readers have the responsibility to thoroughly check these
aspects for themselves. Enquiries about reproduction of content
from this publication should be directed to Akastor ASA.
09. COMPANY INFORMATION
Contact details
Oksenøyveien 10, 1366 Lysaker, Norway
PO Box 124, 1325 Lysaker, Norway
+47 21 52 58 00
akastor.com
HMH
Norway
Butangen 20, 4639 Kristiansand, Norway
PO Box 413 Lundsiden, 4604 Kristiansand, Norway
+47 38 05 70 00
Houston
3300 North Sam Houston Parkway East
77032 Houston, Texas, United States
+1 281 449 2000
hmhw.com
AKOFS Offshore
Karenslyst Allé 57, 0277 Oslo, Norway
PO Box 244, 0213 Oslo, Norway
+47 23 08 44 00
akofsoffshore.com
AGR
Karenslyst allé 4, 0278 Oslo, Norway
+47 24 06 10 00
agr.com
2231043 • BOLT.as • Photo: Ilja C. Hendel