ANNUAL
REPORT
2022
3
AWILCO LNG ASA ANNUAL REPORT 2022
Table of contents
Contents
About Awilco LNG
Organisation
Vessel Overview
Shareholder Information
Board of Director’s Report
Statement of Responsibility
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Parent Company Income Statement
Parent Company Statement of Financial Position
Parent Company Cash Flow Statement
Parent Company Statement of Changes in Equity
Parent Company Notes to the Financial Statements
Auditor’s Report
Corporate governance
Social Responsibility
Alternative performance measures
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AWILCO LNG ASA ANNUAL REPORT 2022
The Awilc o LNG Gr oup (the Group or Awilco LNG) is a fully
integrated owner and operator of LNG vessels. The Group owns
two 156,000 cbm 2013-built LNG TFDE membrane vessels,
WilForce and WilPride.
2011 by Awilco AS, a company in the Awilhelmsen Group, for the
purpose of acquiring three second-hand LNG vessels.
The three LNG vessels WilGas, WilPower and WilEnergy were
acquired for an aggregate price of USD 67 million in 2011,
financed through private placements and shareholder loans
that were subsequently converted to equity. The three vessels
were sold in 2015 and 2016 for combined net proceeds of USD
50 million.
In May 2011 Awilco LNG signed shipbuilding contracts for the
construction of two LNG carriers, which were part financed
through a private placement of NOK 534.8 million.
In September 2011 the Company’s shares were listed on the
In September and November 2013, the Group took delivery of its
two vessels, WilForce and WilPride. Both vessels were financed
through sale/leaseback arrangements, financing about 75 % of
the delivered cost.
In 2017 a comprehensive refinancing was completed,
comprising an amended and more flexible financial lease
agreement for WilForce and WilPride, and an equity issue of
USD 26.8 million to re-establish a robust financial platform.
In January 2020 WilForce and WilPride were refinanced with
a new 10-year sale-leaseback facility at improved terms. The
Group have purchase option on the vessels starting in January
2023 and a purchase obligating at the end of the period in 2030.
ABOUT AWILCO LNG
AWILCO LNG ASA ANNUAL REPORT 2022
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AWILCO LNG ASA ANNUAL REPORT 2022
JON SKULE STORHEILL
Chief Executive Officer
Prior to his appointment as CEO of Awil co LNG ASA Mr. Storheill
was Managing Director of Awilco AS, Director of S&P/Projects
with Frontline Management and Director/Partner of shipbroking
company P.F. Bassøe AS. Mr. Storheill has also been the
Chairman of the Board of Wilhelmsen Marine Services AS in
addition to serving with various board positions in the industry.
Mr. Storheill has more than 30 years of shipping experience and
is a Norwegian citizen.
PER HEIBERG
Chief Financial Officer
Prior to joining Awilco LNG ASA as CFO Mr. Heiberg served as
CFO in Golden Ocean Group Limited, a US listed drybulk ship
owner, since April 2016. Mr. Heiberg was with Golden Ocean
since 2005. Prior to joining Golden Ocean, he worked in the
Nordic Power market and held various positions within Statkraft
SF and Electrabel Nordic. Mr. Heiberg is a Norwegian citizen.
JAN ESPEN ANDERSEN
Head of Operation
Mr. Andersen was previously Head of Operations at Höegh LNG.
He is a certified Master Mariner and has held various shore side
marine related positions since 1997 following 7 years at sea. Mr.
Andersen has more than 30 years of shipping experience and is
a Norwegian citizen.
MANAGEMENT
Awilco LNG had seven employees at the end of 2022. The Group
handles commercial and technical operations of the vessels
from its office in Oslo.
The Group purchases certain administrative services from
Awilhelmsen Management AS and technical sub-management
services from Awilco Technical Services AS and Integrated Wind
Solutions, all companies in the Awilhelmsen Group.
ORGANISATION
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AWILCO LNG ASA ANNUAL REPORT 2022
BOARD OF DIRECTORS
SYNNE SYRRIST
Chairperson and Non-Executive Director
Mrs. Syrrist has work experience as an independent consultant
for Norwegian companies and as financial analyst in Elcon
Securities ASA and First Securities ASA. She has also an
extensive non-executive experience from both listed and private
companies and is currently among others a member of the
boards of Awilco Drilling Plc, Integrated Wind Solutions ASA,
ABL Group ASA and Naxs AB. Mrs. Syrrist holds an MSc from
NTNU and is a Certified Financial Analyst (AFA) from NHH. Mrs.
Syrrist is a Norwegian citizen. Mrs. Syrrist is the Chairperson
of the Remuneration Committee and a member of the Audit
Committee.
OLE CHRISTIAN HVIDSTEN
Non-Executive Director
Mr. Hvidsten is Vice President Corporate Finance in the
Awilhelmsen group. He has extensive experience from senior
positions in investment banking/investment companies and is
a board member of Awilco AS. Before joining the Awilhelmsen
group in 2011, he worked 11 years in the Corporate Finance
department of ABG Sundal Collier. Mr. Hvidsten holds an MSc in
Business Administration from NHH / Fuqua School of Business
(Duke University). Mr. Hvidsten is a Norwegian citizen.
JENS-JULIUS R. NYGAARD
Non-Executive Director
Mr. Nygaard is the CEO of Awilco AS and a member of the Board
of Integrated Wind Solutions ASA. He has 18 years of experience
from shipping and investment companies through various
positions in the Awilco group of companies. Mr. Nygaard has a
BA Honours in Finance from Strathclyde University and an MSc
in Shipping, Trade & Finance from BAYES Business School. Mr.
Nygaard is a Norwegian citizen. Mr. Nygaard is a member of the
Remuneration Committee.
JON-AKSEL TORGERSEN
Non-Executive Director
Mr. Torgersen is the former CEO of Astrup Fearnley AS,
the parent company of a number of investment and broker
companies. Mr. Torgersen has extensive board experience
from a number of companies in the property, shipping, finance
and offshore sectors, and serves as Chairman of the Board
of Atlantic Container Line AB. He is also a member of the
board of Transportation Recovery Fund and Finnlines Plc. Mr.
Torgersen holds an MBA (Finance) from Hochschule St. Gallen.
Mr. Torgersen is a Norwegian citizen. Mr. Torgersen is the
Chairman of the Audit Committee.
ANNETTE MALM JUSTAD
Non-Executive Director
Mrs. Malm Justad previously held positions as CEO in Eitzen
Maritime Services, Vice President and Head of Purchasing
at Yara International ASA, Vice President and Fleet Manager
at Norgas Carriers AS and has held various technical and
commercial positions for Norsk Hydro ASA. She serves
as Chairman of the Boards of AMSC ASA, Store Norske
Spitsbergen Kulkompani AS and Småkraft AS. She also serves
as a board member of Torm Plc. and Powercell AB. Mrs. Malm
Justad holds a master’s in technology management from
NTNU/NHH/MIT and a master in chemical engineering from
NTNU. Mrs. Malm Justad is a Norwegian citizen.
AWILCO LNG ASA ANNUAL REPORT 2022 AWILCO LNG ASA ANNUAL REPORT 2022
7
YEAR BUILT
2013
YARD
DSME
CAPACITY
156,007 M3
DWT
87,750 MT
DRAFT
12.521 M
MANAGER
ALNG TM
FLAG
Malta
PROPULSION
TFDE
WILFORCE
YEAR BUILT
2013
YARD
DSME
CAPACITY
156,089 M3
DWT
87,677 MT
DRAFT
12.521 M
MANAGER
ALNG TM
FLAG
Malta
PROPULSION
TFDE
WILPRIDE
VESSEL OVERVIEW
Awilco LNG owns two 156,000 cbm 2013-built LNG TFDE vessels WilForce and WilPride.
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AWILCO LNG ASA ANNUAL REPORT 2022
33 %
AWILCO LNG SHARE PRICE DEVELOPMENT (TICKER: ALNG)
SHAREHOLDER INFORMATION
SHARE PRICE DEVELOPEMENT
DURING 2022
Source: Oslo Stock Exchange
Volume (RHS) Share price (LHS)
AWILCO LNG ASA ANNUAL REPORT 2022
9
AWILCO LNG ASA ANNUAL REPORT 2022
18.48
4.47
3.83
1.61
1.23
1.02
1.00
0.72
0.71
0.70
0.70
0.63
0.61
0.60
0.59
0.58
0.57
0.52
0.44
20 LARGEST SHAREHOLDERS
(AS PER 31.12.2022)
38.56
OWNERSHIP
OWNERSHIP
NUMBER OF SHARES
NUMBER OF SHARES
SHAREHOLDER/
SHAREHOLDER/
Morgan Stanley & Co. Int. Plc.
24 501 425
The Bank of New York Mellon SA/NV
928 260
B.O. Steen Shipping AS
5 926 060
Euroclear Bank S.A./N.V.
5 076 299
Credit Suisse (Switzerland) Ltd.
2 134 367
Vidar Anfinn Taranger
1 625 000
Clearstream Banking S.A.
959 375
Trapesa AS
946 332
Patronia AS
1 322 988
The Bank of New York Mellon SA/NV
1 357 891
Interactive Brokers LLC
921 770
The Bank of New York Mellon
838 344
J.P. Morgan Securities Plc
809 440
The Bank of New York Mellon
689 596
Barclays Capital Sec. Ltd Firm
582 897
Kristian Falnes AS
800 000
Skips AS Tudor
781 429
Nordnet Livsforsikring AS
768 849
Kilsholmen AS
750 000
Awilco AS
51 114 080
AWILCO LNG ASA ANNUAL REPORT 2022
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AWILCO LNG ASA ANNUAL REPORT 2022
Board of
Directors’ report
12
AWILCO LNG ASA ANNUAL REPORT 2022
2022 was a far from normal year in LNG shipping with high
volatility during the year. Rates fell throughout the first quarter
as the Russian invasion of Ukraine led to re-routing of US
cargoes from Asia to Europe, implying shorter sailing distances
and reduced utilization. Into the second quarter gas prices
came down as consumption fell with winter coming to an end
and cargoes again finding its way to Asia. During April and May
the market looked to recover until the Freeport LNG terminal
experienced an explosion and was closed for the rest of the
year. The closure of Freeport LNG, counting for approximately
18% of total US LNG export capacity, released a number of
vessels to the spot market, with a substantial downward
pressure on spot rates. In the third quarter gas prices increased
substantially when Europe started to refill inventories in
anticipation of the coming winter and LNG rates increased to
all time high levels. Few fixtures were however done at these
levels as portfolio players preferred to keep vessels under their
control rather than sub-let them in the market. This pattern
lasted throughout the year, and we ended the year at relatively
high spot rates. While the spot market was volatile during the
year, the short- to medium term TC market was strong and
we saw a number of high fixtures for period from 1- to 5-year
contracts.
According to Fearnley LNG a total of just over 400 MT of LNG
was traded in 2022 which is up from 380 MT in 2021, despite
several supply disruptions through the year. The main change
in trade flows in 2022 was the change of destination of US LNG
from Far East to Europe. Europe’s share of US export went from
25% in 2021 to 61% in 2022, while the Far East share decreased
from 46% to 23%. In addition to more LNG from US, Europe
has tackled their gas supply challenge with increased pipeline
gas from Norway, UK and Algeria to meet the reduced volumes
from Russia. The biggest Asian importers, Japan and China,
have both reduced their LNG imports year over year, but they
are still the largest importers of LNG across the world.
The additional volume in 2022 has come from a range of
sources, including US extensions, Norway resuming production
at Snøhvit and the Coral South FLNG outside Mozambique.
On the import side several new import facilities in Europe
have come on stream during the year and we expect high
focus on energy security will increase both production and
import terminals in the years to come with several new Final
Investment Decisions (FID) for new liquefaction project expected
during 2023. By the end of the first quarter 2023, Freeport LNG
has resumed production, increasing the US export capacity
substantially.
In 2022 a total of 27 newbuildings were delivered, down from
53 in 2021. Newbuilding orders were record high and at the end
of the year the total order book reached 269 vessels with a live
fleet of 604 vessels according to Fearnley LNG. In 2023 and 2024
we will see a moderate number of newbuilding deliveries with
32 and 64 respectively, while 2025 is set to be a record year in
LNGC deliveries with 85 vessels scheduled. More orders have
been placed with deliveries in 2026 and 2027 and we continue
to see yard prices increasing to currently just below USD 260
million.
Following a period in the spot market early 2022 both vessels
were fixed on medium term time charter at the end of the year.
WilPride commenced a 3 year firm + 2 optional years contract
in December 2022 and the Company entered into an 18-month
contract for WilForce in November 2022 and the vessel
commenced this contract late January 2023.
Both WilForce and WilPride are financed through a sale-
leaseback facility with maturity in January 2030 provided by
CCB Financial Leasing Co. Ltd. (CCBFL). As from January 2023
the Group have the option to repurchase the vessels and have
a purchase obligation at the end of the period. As the financing
is done with floating interest rate the last years increase in US
libor rates led to increased financing cost compared to previous
year.
BUSINESS SUMMARY
The Awilco LNG Group (Awilco LNG, ALNG or the Group) is a
fully integrated pure play LNG transportation provider, owning
BOARD OF DIRECTORS’ REPORT
AWILCO LNG ASA ANNUAL REPORT 2022
13
AWILCO LNG ASA ANNUAL REPORT 2022
and operating LNG vessels. The Group currently owns two
2013-built TFDE LNG carriers. The parent company Awilco
LNG ASA is listed on Euronext Expand with ticker ALNG. Awilco
LNG’s registered business address is Beddingen 8, Osl o,
ASA and technical management of the vessels is performed by a
wholly owned subsidiary.
LNG market
Throughout 2022 the focus on energy security to Europe was the
main driver behind both gas prices and LNG shipping markets.
The year started with the lowest spot charter rates seen in
years, but by the end of October the highest ever spot charter
rates were experienced. In combination with elevated gas prices
the Russian invasion of Ukraine in February evidenced Europe’s
vulnerability to disruption of energy supply. At the cost of Asian
import, Europe managed to fill gas storages prior to the winter
and with a mild winter the gas prices fell from the highest peaks
and are back to more normal levels at the time of this report.
Spot charter rates have experienced a seasonal drop at the start
of 2023 but seems to have found a floor at the time of writing,
while term charter rates have held up as the focus to secure
tonnage for next winter is still high on the agenda.
The LNG fleet had a net growth of 25 vessels in 2022 and a new
record of ordering activity was seen with 169 vessels ordered
according to Fearnley LNG. This ordering activity brought the
orderbook at yearend 2022 to a record high of 269 vessels
according to the same source. Deliveries will be relatively
moderate during 2023 and 2024 as most of the newbuildings are
ordered with delivery in 2025 and onwards. Newbuilding prices
took no breather and are up from around USD 220 million at the
end of 2021 to the current level of around USD 260 million.
Even if we see a record high orderbook, LNG shipping looks
promising for the years to come as most of the deliveries are
contracted and deliveries match new LNG capacity under
construction.
Operations
During first quarter of 2022 both WilForce and WilPride were
redelivered from their multi-month contracts and traded in the
spot market through most of second and third quarter. From
August WilForce was on a six-months charter contract until she
was delivered on an 18 month contract early February 2023.
WilPride entered a 3 years fixed period contract with 2 optional
years in December 2022. Both vessels experienced idle periods
when trading spot and the combined utilisation for the vessels
ended at 81% for 2022, compared to 100% utilization in 2021.
CONSOLIDATED FINANCIAL STATEMENTS
Income statement
The Group generated net freight income of USD 45.3 million
in 2022, down from USD 57.1 million in 2021, mainly caused
by a weak market in second and third quarter with both
vessels having idle periods and cost related to repositioning.
These numbers equate to TCE earnings of USD 62.000 in 2022
compared to USD 78.200 in 2021. Fleet utilisation for the year
ended at 81% compared to 100 % in 2021.
Operating expenses for the year ended at USD 11.0 million in
2022, up from USD 10.0 million in 2021, driven by increased cost
for most services, including increased travel expenses related
to crew changes following the Covid-19 pandemic.
Other income of USD 0.4 million related to an adjustment of
loss of hire insurance in connection with the collision involving
Wilforce in 2019.
Administration expenses went down from USD 3.9 million in
2021 to USD 3.6 million in 2022, mainly caused by change in
foreign currency.
Depreciation and amortisation were USD 12.7 million in 2022
compared to USD 12.6 million in 2021.
Net financial expenses were USD 12.6 million in 2022, up from
USD 9.6 million in 2021 following the increase in floating LIBOR
rates.
Profit before tax for the period was USD 5.8 million compared to
USD 21.1 million in 2021.
Earnings per share
Basic and diluted earnings per share for the year were USD
0.04, down from USD 0.16 in 2021.
Financial position
Total assets and total equity for the Group as of December 31,
2022 was USD 348.1 million and USD 126.4 million respectively
(USD 356.7 million and USD 120.6 million at December 31, 2021)
corresponding to an equity ratio of 36.3%, up from 33.8% at
December 31, 2021.
Cash and cash equivalents amounted to USD 26.1 million at
December 31, 2022, up from USD 23.6 million at December 31,
2021.
The combined book value of the vessels was USD 317.1 million
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AWILCO LNG ASA ANNUAL REPORT 2022
at December 31, 2022 compared to USD 326.9 at year-end 2021.
Total interest-bearing debt for the Group was USD 207.6
million at December 31, 2022, down from USD 225.8 million at
December 31, 2021. The current portion of the interest-bearing
debt constituted USD 18.8 million as at December 31, 2022.
Cash flow statement
The Group generated USD 34.5 million in cash inflow from
operating activities in 2022 compared to USD 40.5 million in
2021.
Net cash used in investing activities was USD 2.8 million, up
from USD 1.0 million in 2021.
Net cash outflow from financing activities was USD 29.2 million
in 2022, constituting of USD 18.9 million in repayment of debt
and USD 10.4 million of interest under the finance lease with
CCBLFL. Net cash outflows from financing activities in 2021 was
USD 28.4 million.
Subsequent to the CCBFL refinancing completed in January
2020 as described in note 26, cash break-even for each vessel is
expected at approximately USD 68,000 per day in 2023, subject
to interest rate fluctuations and excluding dry-dock expenses
and engine overhauls that will be capitalized.
PARENT COMPANY FINANCIAL STATEMENTS
Operating income for the year amounted to NOK 7.9 million
(NOK 8.0 million) and administration expenses NOK 27.3 million
(NOK 25.8 million).
Net finance income amounted to NOK 22.1 million (NOK 3.4
million).
Profit for the period was NOK 2.8 million (Loss of NOK 14.4
million).
The Board of Directors propose that the profit for the period
of NOK 2.8 million for the Parent Company is transferred to
retained earnings. In February 2023 the Company passed a
resolution for distributing share premium to the shareholders.
This is recorded as dividend per year end and the payment was
processed in March 2023
The Board of Directors approved a revised dividend policy in
November 2022. The Board is committed to return value to
shareholders and intend to distribute a substantial part of
annual free cash flow, paid out quarterly, always subject to debt
covenants, capital requirements and a robust cash buffer. A
proposal for further dividend payments will be presented to the
Annual General Meeting in 2023.
GOING CONCERN ASSUMPTION
The consolidated financial statements of the Group, and the
parent company financial statements of Awilco LNG ASA,
have been prepared on a going concern basis pursuant to the
Norwegian Accounting Act § 3-3a.
The Group’s ability to continue as a going concern is dependent
upon generating sufficient cash flow from operation of the
vessels. The Group’s vessels are currently trading on mid-
term fixed rate contracts but might in the future trade in the
spot market which then will expose the Group’s financial
performance to volatility and seasonality in rates and utilisation.
RISK FACTORS
Shipping market conditions have historically been volatile and
consequently the financial results may vary significantly from
year to year. The risk factors in the LNG shipping market can
be divided into the following main components: market risk,
operational risk and financial risk.
Market risk
Market risk relates to the supply of LNG vessels and the
demand for LNG transportation. In the past there have been
prolonged periods of oversupply of vessels due to delays in the
construction of LNG production plants, with correspondingly
low utilisation and depressed market rates. Over time this
express the interim risk to balance supply with demand as
it goes faster to build vessels than to build LNG production
facilities. Currently we see a record high orderbook with peak
deliveries in 2025 and 2026. LNG production coming on stream
seems to meet the delivery pace and most newbuilding are
committed on long term contracts to meet demand from this
production capacity. There might be a risk of imbalance in the
market during the coming years as demand need to come on
stream simultaneously to increased shipping capacity when the
newbuildings are delivered.
The demand for LNG is affected by the importing countries’
demand for energy as well as the relative pricing of LNG
compared to alternative energy sources. A high relative pricing
spread between LNG and other energy sources will reduce the
demand for LNG and thereby negatively impact demand for
LNG transportation. In the longer-term perspective lower gas
prices in combination with the growing supply side is expected
AWILCO LNG ASA ANNUAL REPORT 2022
15
AWILCO LNG ASA ANNUAL REPORT 2022
to support growth in demand for natural gas as a flexible and
clean fuel compared to other fossil alternatives.
Gas price levels in different geographic markets has a
significant impact on demand for LNG transportation to execute
arbitrage opportunities. During the winter season in 2022 we
experienced extreme price differences and going forward the
arbitrage is difficult to predict as it is closely linked to the gas
price level in Europe, the US and Far East, which again is highly
dependent upon several factors including weather, policies and
regulations and the price of alternative energy sources.
Operational risk
Employment risk
The Group’s ability to obtain charters will depend upon the
prevailing market conditions. If the Group is unable to employ
its vessels, revenue will be substantially reduced.
Laws and regulations
The Group’s operations and vessels are subject to international
laws and regulations, which have become more proliferate
and stringent in recent years. Although the Group is doing its
outmost to comply, changes in laws and regulations may expose
the Group to liability.
Technical risk
LNG vessels are highly sophisticated, and there is a risk that
equipment may fail despite pre-emptive maintenance. The
Group has in place loss of hire insurance, but a technical
breakdown will affect earnings for a period of at least 14 days
due to the deductible period.
Piracy, war and cyber risk
A piracy attack, outbreak of war or cyber-attack may affect the
trading and earnings of the vessels.
Crew
Depending on the pace of older ships exiting the LNG carrier
fleet may increase by close to 50 % in the coming years. This
exposes the Group to the risk of not being able to attract
qualified officers and seafarers. The Group has, and will,
continue to take steps to mitigate this risk.
Bunker price
The Group is exposed to bunker price risk when the vessels are
not on charter.
Environmental regulations
From 2023 our vessels are required to comply with new
regulations on energy efficient design (“EEXI”) and operation
through Carbon Intensity Index (“CII”). EEXI is a one-time
certification and both vessels in the fleet have been confirmed
to be in compliance.
With respect to CII this is measured on the vessels’ actual
emissions over the previous year and thereby rated according to
a formula. Both vessels have operated in 2022 with an emission
intensity that corresponds to a “C” rating, which is well above
the required minimum level. We are continuously working on
several efficiency improvements however the main criteria is
the vessels’ trading pattern which owners have very limited
influence on when on Time Charter. We are therefore working
closely with charterers to ensure that the operation of the
vessels is planned and executed in a way that ensures at least C
rating is achieved also for 2023 and the coming years.
Starting from 2024, our vessels will be required through the
EU Emissions Trading System (“ETS”) to submit emissions
allowances for carbon emissions during voyages to and from
EU ports. Monitoring and Reporting of the carbon emissions are
already in place through our procedures for EU MRV reporting.
Based on the above we maintain our assessment that the useful
lifetime is 40 years for our vessels.
Financial risk
Financing risk
The WilForce and WilPride financial leases were refinanced in
January 2020 with a 10-year sale-leaseback facility provided
by CCB Financial Leasing Co. Ltd. (CCBFL). Both vessels were
sold for a gross consideration per vessel of USD 175.0 million
including non-amortizing and non-interest bearing pre-paid
charter hire of USD 43.8 million per vessel. The vessels are
chartered back on bareboat basis to wholly owned subsidiaries
of the Company for a period of up to 10 years. The Group has
rolling repurchase options and repurchase obligations at
maturity of the facility at USD 37.5 million per vessel.
Currency risk
The companies in the Group have USD as functional currency.
Currency risks therefore arise in connection with transactions
denominated in other currencies than USD. The Group is to a
certain degree exposed to currency fluctuations, as it is exposed
to administration expenses denominated in NOK. The Group
may use financial derivatives to reduce short-term currency
risk, but as at December 31, 2022 no such instruments were
entered into.
Liquidity risk
The shipping business is capital intensive and insufficient
16
AWILCO LNG ASA ANNUAL REPORT 2022
liquidity can severely impact the ability to operate the vessels.
The Group’s approach to managing liquidity risk is to ensure,
as far as possible, always having sufficient liquidity to meet its
obligations without incurring unacceptable losses or risking
employees’ safety or damage to the Group’s reputation.
According to the sale-leaseback facility provided by CCBFL,
the Awilco LNG Group shall maintain minimum consolidated
cash and cash equivalents of USD 10.0 million and positive
consolidated working capital. During 2020 the Company and
CCBFL agreed to make certain temporary amendments to
the financial covenants, and as a result of these amendments
the Company agreed a permanent restriction from declaring
or paying dividends if the consolidated cash position of the
Awilco LNG Group is lower than USD 20.0 million on the day of
declaration and the day following the payment.
Interest rate risk
The CCBFL sale-leaseback facility completed in January 2020 is
subject to a floating interest rate, and the Group is continuously
evaluating using financial derivatives to hedge the interest rate
exposure. At the yearend 2022 no such derivatives were entered
into.
Counterparty- / credit risk
The Group is exposed to credit risk from its operating activities
through freight income trade receivables and from its financing
activities, including deposits with banks. The Group aims to do
business with creditworthy counterparties only. Charter hire
is normally received monthly in advance, effectively reducing
the potential exposure to credit risk. Bank deposits are only
deposited with internationally recognised financial institutions
with a solid credit rating.
HEALTH, SAFETY AND ENVIRONMENT
Based on the long-term goal of environmental excellence, Awilco
LNG works continuously towards minimising the environmental
impact from its vessels and operations.
Awilco LNG aims to minimise the emissions of CO2, NOx and
SOx from engines, boilers, incinerators, cargo, fuel oil tanks
and systems through evaporation. In 2022 there was a negative
development in the CO2 intensity for the vessels. This is in a large
part caused by a higher level of vessel idling and ballast voyages,
causing higher emissions per nm. We expect these values to
improve with higher activity in 2023.
The Group has a zero tolerance for environmental spills,
emissions of ozone depleting substances and unauthorised
disposal of any type of garbage or waste to the marine
environment.
The Group has a lean onshore organisation and has outsourced
certain services. At year end 2022 the Group had seven onshore
employees. There is currently no female representation among
management. The Group is aware of this imbalance and is
positive to improve this ratio in the future. The Board of Directors
of the Company has two female directors, representing 40 % of
the Board.
The safety and well-being of Awilco LNG’s employees and
seafarers has the highest priority. Vessels are to be properly
operated and maintained, and safe for crew, cargo, visitors, and
the environment. The Group’s quality of operations is supported
by experienced, educated, and well-trained staff onboard and
onshore. The Group adheres to national and international
laws and regulations and promotes best practices identified
within its own operations and the industry in order to improve
the competence of individual crewmembers and vessel safety
performance. ALNG’s management is actively engaged in
monitoring the Group’s performance to further encourage and
promote positive trends, and to provide advice and take corrective
action where negative trends are detected. To ensure retention
of personnel, Awilco LNG aims to ensure a stable and motivating
work environment for both onshore and offshore employees.
The Group is proactively seeking to identify requirements and
needs for additional training through regular audits, master and
management reviews.
Absence due to illness for onshore employees was 0.0% in 2022
(0.4 % in 2021). No onshore work-related injuries were reported
in 2021 or 2022. For seafarers, an LTIF (accidents per one million-
man hours worked) of 2.1 was reported during the year (0.0 in
2021).
For further information please see the Social Responsibility
section in the annual report, which complies with the
requirements under the Norwegian Accounting Act § 3-3c. The
Board of Directors of the Company have approved the Guidelines
for embedding the work in connection with the Norwegian
Transparency Act which came into effect on July 1, 2022 and a
report will be made available on the Company’s website (www.
awilcolng.no) within June 30, 2023.
CORPORATE GOVERNANCE
Awilco LNG strives to protect and enhance shareholder equity
through openness, sustainability, integrity and equal shareholder
treatment, and sound corporate governance is a key element in
AWILCO LNG ASA ANNUAL REPORT 2022
17
AWILCO LNG ASA ANNUAL REPORT 2022
the basis of the Awilco LNG strategy.
The corporate governance principles of the Company are
adopted by the Board of Directors. The principles are based
on the Norwegian Code of Practice for Corporate Governance
as of 17 October 2018 (the «Code of Practice»). Please see the
Corporate Governance section in the annual report, and the
Company’s web site www.awilcolng.no.
Awilco LNG do have a Director and Officers insurance.
STRATEGY
The main strategy for Awilco LNG is to create shareholder value
through the provision of a quality, sustainable, reliable and
customer-oriented service to the market, in the best manner
for its shareholders, employees and business connections.
The management team shall safely, efficiently and effectively
provide LNG transportation services to customers with an
objective to secure the most profitable contracts coupled with
the highest achievable vessel utilisation.
Awilco LNG shall evaluate growth opportunities in terms of
vessel acquisitions and disposals which best complement the
Group’s financial and operational aspirations.
OUTLOOK
Full gas storages at the start of 2023 combined with mild
weather in Europe have sent gas prices and spot charter rates
significantly down, which we see as a normal seasonal pattern.
We continue to see demand from charterers to secure tonnage
medium to long term as energy security continues to be in
focus. The strength in the market has also led to high ordering
of newbuildings in 2022, most of this match new LNG capacity
under construction. As the Company’s vessels are chartered
out on fixed rate time charters, with the first vessel coming
open in August 2024, the Company will focus on performance
and return of capital to our shareholders with the aim of paying
quarterly dividends the next year.
Oslo, April 20, 2023
Jon-Aksel Torgersen
Board member
Synne Syrrist
Chairperson of the Board
Annette Malm Justad
Board member
Jon Skule Storheill
CEO
Ole Christian Hvidsten
Board member
Jens-Julius R. Nygaard
Board member
18
AWILCO LNG ASA ANNUAL REPORT 2022
STATEMENT OF RESPONSIBILITY
We confirm to the best of our knowledge that the consolidated
financial statements for 2022 have been prepared in accordance
with International Financial Reporting Standards as adopted
by the European Union, as well as additional information
requirements in accordance with the Norwegian Accounting
Act, and that the financial statements for the parent company
for 2022 have been prepared in accordance with the Norwegian
Accounting Act and generally accepted accounting practice in
Norway, and that the information presented in the financial
statements gives a true and fair view of the assets, liabilities,
financial position and profit/(loss) for the period of Awilco LNG
ASA and the Awilco LNG Group as a whole.
We also confirm to the best of our knowledge that the Board
of Directors’ Report includes a true and fair review of the
development and performance of the business and the position
of Awilco LNG ASA and the Awilco LNG Group, together with
a description of the principal risks and uncertainties that they
face.
Oslo, April 20, 2023
Jon-Aksel Torgersen
Board member
Synne Syrrist
Chairperson of the Board
Annette Malm Justad
Board member
Jon Skule Storheill
CEO
Ole Christian Hvidsten
Board member
Jens-Julius R. Nygaard
Board member
AWILCO LNG ASA ANNUAL REPORT 2022
19
AWILCO LNG ASA ANNUAL REPORT 2022
AWILCO LNG ASA ANNUAL REPORT 2022
21
AWILCO LNG ASA ANNUAL REPORT 2022
Consolidated
Financial
Statements
And Notes
22
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
2022
(163 )
(12 606 )
2021
(9 571 )
In USD thousands
Profit/(loss) for the period
Other comprehensive income:
Other comprehensive income items
Total comprehensive income/(loss) for the period
Note
4,5
6
7
7
8
11
17
17
17
10
9
9
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Freight income
Voyage related expenses
Net freight income
Other income
Operating expenses
Administration expenses
Earnings before interest, taxes, depr. and amort. (EBITDA)
Depreciation and amortisation
Earnings before interest and taxes (EBIT)
Finance income
Net gain/(loss) and valuation adjustment of securities
Finance expenses
Net finance income/(expense)
Profit/(loss) before taxes
Income tax expense
Profit/(loss) for the period
Earnings per share in USD attributable to ordinary equity holders of
Awilco LNG ASA:
Basic, profit/(loss) for the period
Diluted, profit/(loss) for the period
AWILCO LNG ASA ANNUAL REPORT 2022
23
AWILCO LNG ASA ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Group - figures in USD
31.12.2022
(74 562 )
31.12.2021
(80 362 )
In USD thousands
Note
11
12
13
17
14
15
19
19
8
22
22
10
16
ASSETS
Non-current assets
Vessels
Pension assets
Other fixed assets incl right-of-use assets
Total non-current assets
Current assets
Trade receivables
Inventory
Financial investments
Other short term assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Other paid-in capital
Retained earnings
Total equity
Non-current liabilities
Pension liabilities
Long-term interest bearing debt
Total non-current liabilities
Current liabilities
Short-term interest bearing debt
Trade payables
Income tax payable
Provisions and accruals
Total current liabilities
Total equity and liabilities
24
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
CONSOLIDATED CASH FLOW STATEMENT
2022
(2 802 )
(2 802 )
(18 879 )
(10 364 )
(29 243 )
2021
(4 635 )
(1 025 )
(1 025 )
(18 880 )
(9 566 )
(28 446 )
In USD thousands
Note
17
11
11
22
15
Cash Flows from Operating Activities:
Profit/(loss) before taxes
Income taxes paid
Interest and borrowing costs expensed
Items included in profit/(loss) not affecting cash flows:
Depreciation and amortisation
Changes in operating assets and liabilities:
Trade receivables, inventory and other short term assets
Trade payables, provisions and accruals
i) Net cash provided by / (used in) operating activities
Cash Flows from Investing Activities:
Investment in vessels
ii) Net cash provided by / (used in) investing activities
Cash Flows from Financing Activities:
Repayment of borrowings
Interest and borrowing costs paid
iii) Net cash provided by / (used in) financing activities
Net change in cash and cash equivalents (i+ii+iii)
Cash and cash equivalents at start of period
Cash and cash equivalents at end of period
AWILCO LNG ASA ANNUAL REPORT 2022
25
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
Share
capital
Share
capital
Note
Note
Share
premium
Share
premium
Other
paid-in capital
Other
paid-in capital
Retained
earnings
Retained
earnings
Total
equity
Total
equity
For the period ended 31 December 2022
For the period ended 31 December 2021
(80 362 )
(74 562 )
(101 477 )
(80 362 )
In USD thousands
In USD thousands
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity at 1 January 2022
Profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income
Balance as at 31 December 2022
Equity at 1 January 2021
Profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income
Balance as at 31 December 2021
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
26
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 2 // SUMMARY OF
SIGNIFICANT ACCOUNTING
POLICIES
AWILCO LNG ASA ANNUAL REPORT 2022
27
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
28
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
29
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
30
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
31
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
32
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
33
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
34
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
35
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
36
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
37
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
38
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
39
AWILCO LNG ASA ANNUAL REPORT 2022
40
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
41
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
NOTE 11 // VESSELS AND OTHER FIXED ASSETS CONT
42
AWILCO LNG ASA ANNUAL REPORT 2022
AWILCO LNG ASA ANNUAL REPORT 2022
43
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
44
NOTE 18 // FINANCIAL INSTRUMENTS CONT
AWILCO LNG ASA ANNUAL REPORT 2022
45
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
46
NOTE 20 // CAPITAL AND FINANCIAL RISK MANAGEMENT CONT
AWILCO LNG ASA ANNUAL REPORT 2022
47
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
48
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
NOTE 21 // RELATED PARTIES CONT
AWILCO LNG ASA ANNUAL REPORT 2022
49
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
NOTE 21 // RELATED PARTIES CONT
50
AWILCO LNG ASA ANNUAL REPORT 2022
NOTE 21 // RELATED PARTIES CONT
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
51
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
52
NOTE 22 // INTEREST-BEARING DEBT CONT
AWILCO LNG ASA ANNUAL REPORT 2022
53
AWILCO LNG ASA ANNUAL REPORT 2022
Group - figures in USD
AWILCO LNG ASA ANNUAL REPORT 2022
55
AWILCO LNG ASA ANNUAL REPORT 2022
Parent Company
Financial
Statements
and Notes
AWILCO LNG ASA ANNUAL REPORT 2022
56
Parent - figures in NOK
AWILCO LNG ASA ANNUAL REPORT 2022
20212022
In NOK thousands
Operating income
Administration expenses
Earnings before interest, taxes, depr. and amort. (EBITDA)
Depreciation and amortisation
Earnings before interest and taxes
Finance income
Net gain/(loss) and valuation adjustment of securities
Finance expenses
Net finance income/(expense)
Profit/(loss) before taxes
Income tax expense
Profit/(loss) for the period
Allocations/transfers of profit/(loss) for the period:
Allocated to/(transferred from) retained earnings
Repaid share premium repaid in 2023
Transferred from share premium
Total allocations and transfers
6
3
4
4
4
5
7 925
27 268
(19 342)
9
(19 351)
19 878
3 599
1 331
22 146
2 795
-
2 795
2 795
(66 274)
66 274
2 795
8 037
25 847
(17 810)
9
(17 819)
3 760
-
314
3 445
(14 373)
-
(14 373)
(14 373)
-
-
(14 373)
Note
PARENT COMPANY INCOME STATEMENT
AWILCO LNG ASA ANNUAL REPORT 2022
57
Parent - figures in NOK
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
20212022
In NOK thousands
ASSETS
Non-current assets
Pension assets
Other fixed assets
Shares in subsidiaries
Loans to subsidiaries
Total non-current assets
Current assets
Short term receivables subsidiaries
Financial investment
Other short term assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Other paid-in capital
Retained earnings
Total equity
Non-current liabilities
Pension liabilities
Total non-current liabilities
Current liabilities
Short term payables subsidiaries
Inter company debt
Trade payables
Provisions and accruals
Total current liabilities
Total equity and liabilities
3
6
6
6
7
8
8
3
6
6
9
4 944
63
679 665
-
684 672
7 681
-
695
169 399
177 775
862 448
13 255
682 574
419 800
(403 027)
712 603
5 614
5 614
1 360
70 947
234
71 689
144 231
862 447
4 504
72
679 665
85 603
769 844
5 239
-
503
150 291
156 032
925 876
13 255
748 849
419 800
(406 145)
775 758
5 144
5 143
1 137
138 880
278
4 680
144 975
925 876
Note
AWILCO LNG ASA ANNUAL REPORT 2022
58
Parent - figures in NOK
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2022
For the period ended 31 December 2021
Other
paid-in capital
419 800
-
-
419 800
Other
paid-in capital
419 800
-
419 800
Retained
earnings
(406 146)
2 795
-
(403 350)
Retained
earnings
(391 772)
(14 373)
(406 146)
Total
equity
775 758
2 795
(66 274)
712 279
Total
equity
790 132
(14 373)
775 758
Share
premium
748 849
-
(66 274)
682 575
Share
premium
748 849
-
748 849
In NOK thousands
Equity at 1 January 2022
Profit/(loss) for the period
Share premium reduction
1)
Balance as at 31 December 2022
1)
In March 2023 the Board of directors used the authority given bu the Annual General Meeting to pass a resolution for distribution share
premium to the shareholders. This is recorded as dividend per yearend. The dividend payment was processed in March 2023
In NOK thousands
Equity at 1 January 2021
Profit/(loss) for the period
Balance as at 31 December 2020
Share
capital
13 255
-
-
-
Share
capital
13 255
-
13 255
PARENT COMPANY CASH FLOW STATEMENT
20212022
In NOK thousands
Cash Flows from Operating Activities:
Profit/(loss) before taxes
Items included in profit/(loss) not affecting cash flows:
Depreciation and amortisation of property, plant and equipment
Changes in operating assets and liabilities:
Other short term assets
Short term receivables/payables subsidiaries
Trade payables, provisions and accruals
i) Net cash provided by / (used in) operating activities
Cash Flows from Investing Activities:
Loans to/from subsidiaries
ii) Net cash provided by / (used in) investing activities
Cash Flows from Financing Activities:
Proceeds from borrowings
iii) Net cash provided by / (used in) financing activities
Net change in cash and cash equivalents (i+ii+iii)
Cash and cash equivalents at start of period
Cash and cash equivalents at end of period
6
7
7
2 795
9
695
(70 152)
66 995
343
85 603
85 603
-
-
85 392
150 291
169 399
(14 373)
9
503
85 159
1 936
73 232
-
-
-
-
73 226
77 065
150 291
Note
AWILCO LNG ASA ANNUAL REPORT 2022
AWILCO LNG ASA ANNUAL REPORT 2022
59
Parent - figures in NOK
PARENT COMPANY NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1 // CORPORATE INFORMATION
Awilco LNG ASA (the Company) is a public limited liability
company incorporated and domiciled in Norway. Its registered
office is Beddingen 8, 0250 Oslo, Norway. The Company was
incorporated 2 February 2011 and is listed on Euronext Expand
with the ticker ALNG.
Awilco LNG ASA is through its subsidiaries engaged in the
operation of and investments in LNG transportation vessels.
NOTE 2 // SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis for preparation
The financial statements of Awilco LNG ASA have been prepared
in accordance with the Norwegian accounting act and generally
accepted accounting principles in Norway. The financial
statements are presented in Norwegian kroner (NOK) rounded
off to the nearest thousands, except as otherwise indicated. The
financial statements are prepared in English, as approved by the
Norwegian Directorate of Taxes.
The principal accounting policies applied in the preparation of
these financial statements are set out below.
Shares in subsidiaries
Shares in subsidiaries are measured at cost less accumulated
impairment losses. Such assets are impaired to fair value when
the decrease in value is for reasons not considered being of a
temporary nature and must be deemed necessary based on
generally accepted accounting principles. Impairment losses
are reversed when the rationale for the recognised impairment
loss no longer applies. Dividends, group contributions and other
distributions from subsidiaries are recognised in the same
period as they are recognised in the financial statement of the
subsidiary. If dividends and group contributions exceed withheld
profits after the acquisition date, the excess amount represents
repayment of invested capital and will be deducted from the
carrying value of the subsidiary in the balance sheet of the
Company.
Foreign currency
The functional currency of the Company is USD whereas
the presentation currency is NOK. Transactions in foreign
currencies are recorded at the rate of exchange on the date of
the transaction. Monetary assets and liabilities denominated in
other currencies are translated at the exchange rate applicable
at the balance sheet date. Realised and unrealised foreign
currency gains or losses on monetary items are presented as
finance income or finance expense.
Revenue recognition
Revenues from the sale of services are recognised in the
income statement once services have been rendered.
Other fixed assets
Other fixed assets are capitalised and depreciated linearly over
the estimated useful life. Costs for maintenance are expensed
as incurred. If the carrying value of other fixed assets exceeds
the estimated recoverable amount, the asset is written down to
the recoverable amount. The recoverable amount is the higher
of the net realisable value and value in use. In assessing value
in use, the discounted estimated future cash flows from the
asset are used.
Classification of items in the balance sheet
Current assets and current liabilities include items that fall due
for payment within one year after the balance sheet date. The
short-term part of long-term debt is classified as short-term
debt.
Loans and receivables
Loans and receivables are initially recognised at fair value net
of any transaction costs. The assets are subsequently carried
at amortised cost using the effective interest method, if the
amortisation effect is material, and the carrying amount is
subsequently reduced by any impairment losses.
Taxes
The income tax expense consists of current income tax and
changes in deferred tax.
Current income tax is the expected tax payable or receivable on
the taxable income or loss for the year.
Deferred income tax is provided using the liability method on
temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts in the
financial statement.
Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised
for all deductible temporary differences to the extent that it
is probable that taxable profits will be available against which
the deductible temporary difference can be utilised. Deferred
income tax is calculated on temporary differences arising
AWILCO LNG ASA ANNUAL REPORT 2022
60
Parent - figures in NOK
on investments in subsidiaries, except where the timing of
the reversal of the temporary difference is controlled by the
Company.
Current income tax and deferred tax is recognised in profit or
loss except to the extent that it relates to items recognised
directly in equity.
Pensions
The Company is required to provide a pension plan towards
its onshore employees, and has implemented a defined
contribution plan. The plan, which is fully funded, complies with
the requirements in the Mandatory Occupational Pension act in
Norway (“Lov om obligatorisk tjenestepensjon”). Contributions
on salary up until 12G are funded in a life insurance company,
whereas contributions on salary above 12G are transferred to
a separately administered scheme and pledged towards the
participating employees. G refers to the Norwegian National
Insurance basic amount.
Contributions to the pension plan are recognised as an
employee benefit expense in the income statement when they
fall due. Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in the future payments
is expected. The Company has no further payment obligations
once the contributions have been paid.
The liability arising from the plan > 12G is classified as a non-
current liability in the statement of financial position. Changes
in the liability are recognised as employee benefit expenses in
the income statement in the periods during which services are
rendered by employees. The liability becomes payable to the
employee upon termination, voluntary or involuntary, of the
employment.
Dividends
Proposed dividend payments from the Company are recognised
as a liability in the financial statements on the reporting date 31
December the current year.
Cash flow statement
The cash flow statement is presented using the indirect method.
AWILCO LNG ASA ANNUAL REPORT 2022
AWILCO LNG ASA ANNUAL REPORT 2022
61
Parent - figures in NOK
NOTE 3 // ADMINISTRATION EXPENSES
2021
13 015
2 350
1 240
136
16 742
1 537
2 390
5 178
25 847
2021
5
4,8
2021
431
-
-
431
2022
14 799
2 482
1 248
83
18 612
1 586
1 367
4 429
25 995
2022
5
5
2022
386
-
-
386
Administration expenses
Salaries and other remuneration
Social security cost
Pension
Other employee related expenses
Total employee related expenses
Management fees
Consultant, legal and auditor’s fees
Other administration expenses
Total administration expenses
Number of employees
Employees year end
Average number of work years
Auditor’s fee
Statutory audit
Other assurance services
Tax advisory
Total fees to auditor, excl. VAT
Pensions
The Company has a defined contribution plan for its employees which complies with the requirements in the Mandatory Occupational
Pension act in Norway (“Lov om obligatorisk tjenestepensjon”). Contributions on salary up until 12G are funded in a life insurance
company, whereas contributions on salary over 12G are transferred to a separately administered scheme and pledged towards the
participating employees. G refers to the Norwegian National Insurance basic amount.
Remuneration to key management
Please see note 21 in the consolidated financial statements for disclosures regarding remuneration to key management.
Remuneration to Board of Directors
Please see note 21 in the consolidated financial statements for disclosures regarding remuneration to Board of Directors.
Information regarding management fees to related parties is provided in note 6.
AWILCO LNG ASA ANNUAL REPORT 2022
62
Parent - figures in NOK
2021
4
3 203
279
0
274
3 760
2021
-
-
2021
276
94
55
42
468
2021
-
-
-
31.12.2021
2
(4 504)
5 144
61 876
62 518
(62 518)
-
22 %
-
2022
2 103
1 527
8 950
6 986
312
19 878
2022
3 599
3 599
2022
132
1 240
0
27
1 399
NOTE
6
NOTE
6
2022
-
-
-
31.12.2022
3
(4 944)
5 614
60 956
61 629
(61 629)
22 %
-
Finance income
Interest income
Interest income group companies
Currency gain
Dividends and group contributions from subsidiaries
Other finance income group companies
Total finance income
Net gain/(loss) and valuation adjustment of securities
Net gain/(loss) and valuation adjustment of securities
Total Net gain/(loss) and valuation adjustment of securities
Finance expenses
Interest expense
Interest expense group companies
Currency loss
Other finance expenses
Total finance expenses
Income tax expense
Current income tax
Changes in deferred tax
Total income tax expense / (income)
Specification of basis for deferred tax
Other fixed assets
Pension assets
Pension liabilities
Tax loss carry forward
Basis for deferred tax asset / (liability)
Not recognised deferred tax assets (basis)
Basis for deferred tax asset / (liability)
Tax rate
Deferred tax asset / (liability)
Tax regime
The Company is subject to ordinary corporation tax in Norway at a tax rate of 22 % in 2022
Currency gains and losses mainly relate to translation effects from bank accounts and balances with subsidiaries denominated in USD
and translated into NOK at the balance sheet date. See note 6 for a specification of finance income and expense payable from/to group
companies.
NOTE 4 // FINANCE INCOME AND EXPENSE
NOTE 5 // INCOME TAXES
AWILCO LNG ASA ANNUAL REPORT 2022
AWILCO LNG ASA ANNUAL REPORT 2022
63
Parent - figures in NOK
2021
(247 887)
(54 535)
52 463
2 072
(0)
2021
-
-
-
Date
incorporated
2 February 2011
2 February 2011
2 February 2011
6 May 2011
6 May 2011
17 September 2012
2022
2 795
615
(419)
(196)
(0)
2022
-
-
-
Country
Norway
Norway
Norway
Norway
Norway
Norway
Principial activity
Former vessel SPV
Former vessel SPV
Former vessel SPV
Owner of LNG/C WilForce
Owner of LNG/C WilPride
Technical management
Reconciliation of effective tax rate
Profit/(loss) before taxes
Tax based on ordinary tax rate (22 %)
Effects from:
Permanent differences
Not recognised deferred tax assets
Effect of change in tax rate
Total income tax expense / (income)
Income tax payable
Current tax payable recognised in income statement
Current tax payable recognised directly in equity
Total income tax payable
Company name
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Subsidiaries
As at 31 December 2022 the Company has the following subsidiaries:
The subsidiaries’ registered office is Beddingen 8, 0250 Oslo, Norway.
Recognition of deferred income tax assets is subject to strict requirements in respect of the ability to substantiate that sufficient taxable
profit will be available against which the unutilised tax losses can be used. Based on these requirements and an assessment by the
Company deferred tax assets arising from tax loss carry forward has not been recognised. Utilisation of the tax loss carry forward is not
limited in time.
Transactions with related parties
To provide the Company with access to important and required knowledge and services, the Company has entered into various
agreements with related parties. Information regarding these contracts and the transactions and balances with related parties, except
for transactions and balances with subsidiaries, is provided in note 21 in the consolidated financial statement. Transactions with
subsidiaries are disclosed below.
NOTE 5 // INCOME TAXES CONT
NOTE 6 // RELATED PARTIES
AWILCO LNG ASA ANNUAL REPORT 2022
64
Parent - figures in NOK
NOTE 6 // RELATED PARTIES AND INVESTMENTS IN GROUP COMPANIES CONT
Ownership/
voting share
100 %
100 %
100 %
100 %
100 %
100 %
Carrying amount
31.12.2022
8 692
1 146
10 008
373 800
275 900
10 120
679 665
Carrying amount
31.12.2022
8 692
1 146
10 008
373 800
275 900
10 120
679 665
2022
3 874
4 052
7 925
2022
2
0
6
821
691
6
1 527
2021
3 318
4 719
8 037
2021
-
-
-
1 070
2 067
34
3 171
Company name
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total carrying amount 31 December
Subsidiary
Awilco LNG 4 AS
Awilco LNG 5 AS
Total
Interest income from subsidiaries
Subsidiary
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total
Transactions with subsidiaries
Commercial management fee
Awilco LNG ASA provides commercial management services to the vessel owning subsidiaries. The commercial management fees are
based on a fixed fee of USD 100 000 per vessel per year a fixed percentage of gross freight income of 1.25 %.
Project management fee Awilco LNG Technical Management AS
A subsidiary of the Company, Awilco LNG Technical Management AS, provides project management services to the Company. In 2022
the Company paid a fee of TNOK 801 for these services (TNOK 853 in 2021)
Guarantee commission from subsidiaries
The Company has issued guarantees towards the lessor of WilForce and WilPride on behalf of lessees’ Awilco LNG 4 AS and Awilco LNG
5 AS respectively, see note 11. A guarantee commission of TNOK 156 was charged each of the two subsidiaries in 2022 (TNOK 137 each
in 2021).
AWILCO LNG ASA ANNUAL REPORT 2022
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65
Parent - figures in NOK
NOTE 6 // RELATED PARTIES AND INVESTMENTS IN GROUP COMPANIES CONT
Short-term
payables
3
3
3
-
-
1 350
1 360
Short-term
receivables
-
-
-
1 570
1 106
5 005
7 682
Long-term loans (+)
/borrowings (-)
-
-
-
-
-
-
-
Subsidiary
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total
Short-term receivable TNOK 5 005 towards Awilco LNG Technical Management AS relates to group contribution.
Balances with subsidiaries as at 31 December 2022
Short-term
payables
2
2
2
-
-
1 132
1 137
Short-term
receivables
-
-
-
2 023
3 216
-
5 239
Long-term loans (+)
/borrowings (-)
-
-
-
29 198
56 405
-
85 603
Subsidiary
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total
Balances with subsidiaries as at 31 December 2021
Balances with subsidiaries
The Company provides financing to its subsidiaries through both long-term and short-term loans. Interest on both long-term loans and
short-term receivables/payables is agreed to LIBOR + 3 % for USD denominated loans and NIBOR + 3 % for NOK denominated loans.
See below for interest income from subsidiaries.
2022
178
29
487
40
204
302
1 240
2021
7
1
19
21
39
7
94
Interest expenses subsidiaries
Subsidiary
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total
AWILCO LNG ASA ANNUAL REPORT 2022
66
Parent - figures in NOK
Cash pool deposits subsidiaries
The group has a cash pool arrangement which entails that the subsidiaries’ deposits on these accounts are formally either a receivable
or a liability against Awilco LNG ASA.
As at 31 December 2022 TNOK 2 661 was restricted cash related to employee withholding tax (31 December 2021 TNOK 2 212), TNOK
765 was restricted cash related to requirements from operating Awilco LNG’s vessels (31 December 2021 TNOK 675) and TNOK 376 was
restricted cash provided as deposit towards the office lease (31 December 2021 TNOK 376).
Awilco LNG’s liquidity is organised in a cash pool arrangement in which cash in the subsidiaries formally represents receivables or
payables towards the parent company Awilco LNG ASA. The Group companies are jointly and severally liable for the total outstanding
amount under the arrangement.
NOTE 8 // SHARE CAPITAL
31.12.2022
-
71 689
-
71 689
31.12.2021
-
4 680
-
4 680
NOTE 9 // PROVISIONS AND ACCRUALS
Provisions and accruals
Accrued expenses, invoice not received
Salary related provisions
Other accruals and provisions
Total provisions and accruals
Information about the Company’s share capital is provided in note 19 to the consolidated accounts.
NOTE 7 // CASH AND CASH EQUIVALENTS
FX rate
9.8573
1
Carrying
value
89 440
8 573
98 014
31.12.2022 31.12.2021
FX rate
8.8194
1
Carrying
value
5 538
5 873
11 411
Code
USD
NOK
Currency
US dollars
Norwegian kroner
Total cash and cash equivalents
NOTE 6 // RELATED PARTIES AND INVESTMENTS IN GROUP COMPANIES CONT
31.12.2022
71 386
31.12.2021
138 880
31.12.2022
10 896
1 753
29 777
10 303
(353)
19 009
71 386
31.12.2021
9 629
1 572
26 259
4 437
82 253
14 731
138 880
Note
7
Company name
Awilco LNG 1 AS
Awilco LNG 2 AS
Awilco LNG 3 AS
Awilco LNG 4 AS
Awilco LNG 5 AS
Awilco LNG Technical Management AS
Total
Cash pool deposits subsidiaries
AWILCO LNG ASA ANNUAL REPORT 2022
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Parent - figures in NOK
NOTE 11 // COMMITMENTS, CONTINGENCIES AND GUARANTEES
Please see note 24 in the consolidated accounts. In addition, Awilco LNG ASA has issued certain guarantees on behalf of companies in
the Awilco LNG Group:
The Company has issued a guarantee towards CCB Financial Leasing Co. Ltd on behalf of the Company’s subsidiaries Awilco LNG 4 AS
and Awilco LNG 5 AS, guaranteeing for the performance of the bareboat charter agreements described in note 22 in the consolidated
accounts.
NOTE 12 // EVENTS AFTER THE REPORTING DATE
NOTE 10 // CAPITAL AND FINANCIAL RISK MANAGEMENT
General information regarding capital and financial risk management is provided in note 20 in the consolidated accounts. Awilco LNG
ASA presents its financial statement in NOK, and is thus exposed to foreign exchange translation risk on monetary items denominated in
foreign currencies.
Information on events after the reporting date is disclosed in note 26 in the consolidated accounts.
AWILCO LNG ASA ANNUAL REPORT 2022
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Parent - figures in NOK
Auditor’s Report
70
AWILCO LNG ASA ANNUAL REPORT 2022
Statsautoriserte revisorer
Ernst & Young AS
Dronning Eufemias gate 6a, 0191 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Awilco LNG ASA
Repor t on the audit of the finan cial statem ents
Opinion
We have audited the financial statements of Awilco LNG ASA (the Company) which comprise the
financial statements of the Company and the consolidated financial statements of the Company and its
subsidiaries (the Group). The financial statements of the Company comprise the statement of financial
position as at 31 December 2022 and the income statement, cash flow statement and statement of
changes in equity for the year then ended and notes to the financial statements, including a summary of
significant accounting policies. The consolidated financial statements of the Group comprise the
statement of financial position as at 31 December 2022, the income statement, statement of
comprehensive income, cash flow statement and statement of changes in equity for the year then ended
and notes to the financial statements, including a summary of significant accounting policies.
In our opinion
the financial statements comply with applicable legal requirements,
the financial statements give a true and fair view of the financial position of the Company as at 31
December 2022 and its financial performance and cash flows for the year then ended in
accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway,
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022 and its financial performance and cash flows for the year then
ended in accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the audit committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the Company and the Group in
accordance with the requirements of the relevant laws and regulations in Norway and the International
Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 12 years since incorporation on 2 February 2011 (with a
renewed election on 24 May 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 for 2022. 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
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A member firm of Ernst & Young Global Limited
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the financial statements.
Accounting estimates related to vessels
Basis for the key audit matter
Market interest rates increased significantly during
2022, which again impacted the discount rate,
and as a result, management identified
impairment indicators related to the vessels and
tested recoverable amount of the vessels. The
impairment evaluation of vessels is dependent on
estimates and assumptions regarding future day
rates, vessel utilization, operating expenses,
capital expenditures, useful lives and discount
rate. Considering the extent of estimates and
assumptions applied in the impairment evaluation,
and management’s involvement and judgement in
establishing them, we assess impairment of
vessels as a key audit matter. The Group
recognized an impairment of nil in the 2022
consolidated financial statements.
Our audit response
We performed an evaluation of revenue and
utilization assumptions in the cash flows
estimated by management through comparison
towards the Company’s historical data and data
from independent market analyst’s sector reports.
We compared operating expenditures to approved
budgets and historical data. Furthermore, we
compared the risk premiums used in the weighted
average cost of capital with external data and
considered management’s adjustments for
company specific factors. We evaluated
management’s estimation of useful lives and
residual value, and compared these to industry
practice, also considering future changes to
environmental regulations. We considered the
accuracy of management’s prior year assumption
and evaluated the level of consistency applied in
the valuation methodology from previous years.
We also tested the mathematical accuracy of the
valuation model and performed sensitivity
analysis of the assumptions.
Finally, we read the disclosures regarding this
assessment, which are included in note 3 and
note 11 of the Group’s consolidated financial
statements.
Other information
Other information consists of the information included in the annual report other than the financial
statements and our auditor’s report thereon. Management (the board of directors and the Chief Executive
Officer) is responsible for the other information. Our opinion on the financial statements does not cover
the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information,
and, in doing so, consider whether the board of directors’ report, the statement on corporate governance
and the statement on corporate social responsibility contain the information required by applicable legal
requirements and whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that the other information is materially inconsistent with the
financial statements, there is a material misstatement in this other information or that the information
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required by applicable legal requirements is not included in the board of directors’ report, the statement
on corporate governance or the statement on corporate social responsibility, we are required to report
that fact.
We have nothing to report in this regard, and in our opinion, the board of directors’ report, the statement
on corporate governance and the statement on corporate social responsibility are consistent with the
financial statements and contain the information required by applicable legal requirements.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements of the
Company in accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway and of the consolidated financial statements of the Group in accordance
with International Financial Reporting Standards as adopted by the EU, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or the Group, or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
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.
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Independent auditor's report - Awilco Lng ASA 2022
A member firm of Ernst & Young Global Limited
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Repor t on other legal and r egulator y r equir em ent
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Awilco Lng 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 5967007LIEEXZXJO5C34-2022-12-31-en, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation 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
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material
respects, the financial statements included in the annual report have been prepared in accordance with
the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance
Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial
information”. The standard requires us to plan and perform procedures to obtain reasonable assurance
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about whether the financial statements included in the annual report have been prepared in accordance
with the ESEF Regulation.
As part of our work, we perform procedures to obtain an understanding of the company’s processes for
preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial
statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL
tagging of the consolidated financial statements and assess management’s use of judgement. Our
procedures include reconciliation of the iXBRL tagged data with the audited financial statements in
human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Oslo, 20 April 2023
ERNST & YOUNG AS
The auditor's report is signed electronically
Johan Lid Nordby
State Authorised Public Accountant (Norway)
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Corporate
governance
78
AWILCO LNG ASA ANNUAL REPORT 2022
The main strategy for Awilco LNG ASA (the Company or Awilco
LNG) is to create shareholder value through the provision of a
quality, reliable and customer-oriented service to the market, in
the best manner for its shareholders, employees and business
connections. Awilco LNG strives to protect and enhance
shareholder equity through openness, integrity and equal
shareholder treatment, and sound corporate governance is a
key element in the basis of the Awilco LNG strategy.
The corporate governance principles of the Company are
adopted by the Board of Directors of Awilco LNG ASA (the
Board). The principles are based on the Norwegian Code of
Practice for Corporate Governance, dated 14 October 2121 (the
«Code of Practice»). Below follows a description of the basis
that Awilco LNG has implemented the Code of Practice. This
description follows the same structure as the Code of Practice
and covers all sections thereof. Deviations, if any, from the Code
of Practice are discussed under the relevant section.
1 IMPLEMENTATION AND REPORTING ON CORPORATE
GOVERNANCE
The Board of Directors shall ensure that appropriate goals
and strategies are adopted, that the adopted strategies are
implemented in practice, and that the results achieved are
subject to measurement and follow-up. The principles shall
also contribute to ensure that the activities of the Company
are subject to adequate controls. An appropriate distribution
of roles and adequate controls shall contribute to the largest
possible value creation over time, for the benefit of the owners
and other stakeholders.
The Company has defined a mission statement “Marine
Transportation through Safety and Environmental Excellence”
and identified a set of core objectives that describes the
focus and continuous improvement process based on the
mission statement. The objectives include policies regarding;
safeguarding of people, ships and cargoes, focus on limitation
of any negative impact on the environment from our vessels
and a separate statement regarding Safety Management &
Environmental Protection Policy. This policy document, which
is available on the Company’s website www.awilcolng.no,
describes the basic principles of the corporate values.
Awilco LNG’s code of conduct – values and ethics forms an
important foundation for Awilco LNG’s corporate governance
and demands high ethical standards, in which focus on safety
and integrity are key factors. The Company has continuous
focus on making sure that the corporate values are practiced in
the Company’s everyday life. The Company’s code of conduct –
values and ethics can be found on the Company’s website.
2 THE BUSINESS
According to the Company’s articles of association, its purpose
is to carry out “shipping and other business related hereto”. The
objectives clause of the Company also includes “acquisitions,
management, borrowings and sale of capital assets in the
shipping business in addition to investments in shares, bonds
and partnership contributions of any type connected with
shipping, as well as participation, including ownership stakes
in other shipping companies and other business naturally
connected hereto.”
The principal objectives and strategies of the Company are
presented in the annual report and are subject to annual
assessments.
The Company’s social responsibility is set out in a separate
section in the annual report.
3 EQUITY AND DIVIDENDS
The Company’s equity is assessed as appropriate based on its
objectives, strategies and risk profile. The book equity of the
Awilco LNG Group as per 31 December 2021 was USD 120.6
million, which represents an equity ratio of 34 %.
The Company’s long-term objective is to pay a regular dividend
in support of the Company’s main objective to maximise return
on invested capital. Any future potential dividends declared will
be at the discretion of the Board of Directors and will depend
upon the Group’s financial position, earnings, debt covenants,
capital requirements and other factors. Dividends will be
proposed by the Board for approval by the General Meeting.
Any proposal to confer to the Board of Directors the mandate to
distribute dividends is to be explained.
To the extent it is considered desirable, the Company may raise
new equity in the capital markets.
The Board is currently not authorised to purchase own shares in
the market.
4 EQUAL TREATMENT OF SHAREHOLDERS AND
TRANSACTIONS WITH RELATED PARTIES
The Company has one class of shares, and each share has one
CORPORATE GOVERNANCE
AWILCO LNG ASA ANNUAL REPORT 2022
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AWILCO LNG ASA ANNUAL REPORT 2022
vote at the General Meeting.
Where the board resolves to carry out an increase in
share capital and waive the pre-emption rights of existing
shareholders based on a mandate granted to the Board of
Directors, the justification should be publicly disclosed in a
stock exchange announcement issued in connection with the
increase in share capital.
Any transactions the Company carries out in its own shares are
carried out through the stock exchange and at prevailing stock
exchange prices.
In the event of any material transactions between the Company
and shareholders, Directors or close associates thereof, the
transactions will be conducted on arm’s length terms and the
Board of Directors shall consider arranging for an independent
assessment of the transaction.
Awilco LNG has entered into a sub-management agreement
with Awilco Technical Services AS (ATS) for assistance in
technical management of the fleet. Furthermore, Awilco LNG
has entered into an agreement with Awilhelmsen Management
AS (AWM) for administrative services. Both ATS and AWM
are related companies to Awilco AS, which owns 38.6 % of
the shares in Awilco LNG. The management fees are, in the
Company’s opinion, made at market terms. Information
regarding transactions with related parties is described in note
21 to the consolidated financial statements.
5 FREELY NEGOTIABLE SHARES
The shares of Awilco LNG are listed on the Euronext Expand
stock exchange. All issued shares carry equal shareholder
rights in all respects, and there are no restrictions on transfer
of shares. The articles of association place no restrictions on
voting rights.
6 GENERAL MEETINGS
The Annual General Meeting will normally take place in the
second quarter of each year, and latest by 30 June. Notice
of the meeting will normally be published through the Oslo
Stock Exchange distribution channel and the Company’s
website at least 21 days in advance. Documentation containing
the information necessary for the shareholders to make
decisions on all the items on the agenda will simultaneously
be made available on the Company’s website and will only
be sent to shareholders that request the documentation on
paper. The Board may decide by the notice of the meeting that
shareholders who intend to attend the General Meeting shall
give notice to the Company within five days prior to the General
Meeting.
Registration is made in writing or by e-mail. The Board wishes
to make efforts to enable as many shareholders as possible to
attend. Shareholders who are not able to attend are invited to
meet by proxy, and efforts will be made for the proxies to relate
to each individual item on the agenda.
The General Meeting will be chaired by the Chairperson of the
Board unless otherwise agreed by a majority of those shares
represented at the meeting.
7 NOMINATION COMMITTEE
According to the articles of association the Company shall
have a Nomination committee which has the responsibility of
proposing members to the Board of Directors and members of
the Nomination committee. The Nomination committee shall
also propose fee payable to the members of the Board and the
members of the Nomination committee.
The members of the Nomination committee shall be
shareholders or representatives of shareholders. The members
of the Nomination committee, including its Chairperson,
are elected by the General Meeting. The members of the
Nomination committee’s period of service shall be two years
unless the General Meeting decides otherwise.
The Nomination committee is to maintain contact with
shareholder groups, members of the Board of Directors and
the Company’s executive personnel in its works with proposing
members to the Board of Directors.
The Annual General Meeting held on May 24, 2022 elected the
current Nomination committee consisting of Eric Jacobs and
Henrik A. Christensen.
8 THE BOARD OF DIRECTORS; COMPOSITION AND
INDEPENDENCE
The Company’s Board of Directors shall comprise three to six
directors pursuant to the decision of the General Meeting. The
Directors are elected for a period of two years unless otherwise
determined by the General Meeting. The Board appoints the
Chairperson amongst the elected Board members.
The composition of the Board of Directors aims to ensure that
the interests of all shareholders are represented. Currently
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AWILCO LNG ASA ANNUAL REPORT 2022
three of the five directors are independent from the principal
shareholder of the Company. The Board consists of the
following members: Synne Syrrist (Chairperson), Ole Christian
Hvidsten, Jens-Julius R. Nygaard, Jon-Aksel Torgersen and
Annette Malm Justad.
9 THE WORK OF THE BOARD OF DIRECTORS
The Board’s statutory duties include the overall administration
and management of the Company. The Board adopts a meeting
schedule for the following year in the fourth quarter each year.
The directors shall normally meet in person, but if so allowed
by the Chairperson, directors may participate in any meeting by
means of telephone.
The allocation of responsibilities and tasks within the Board
of Directors is regularly discussed and monitored. The Board
is regularly briefed on the Company’s financial situation, the
vessels’ chartering and market situation, liquidity situation and
cash flow forecast, as well as any changes in the competition
situation. The Board performs a yearly evaluation of its work.
The Board has established an Audit committee consisting of
Jon-Aksel Torgersen (Chairman) and Synne Syrrist and has
implemented an Audit committee charter. The Company’s CFO
is the secretary of the committee. The auditor shall participate
in discussions of relevant agenda items in meetings of the Audit
committee. The committee shall hold separate meetings with
the auditor and the CEO at least once a year.
Furthermore, the Company has established a Remuneration
committee consisting of Synne Syrrist and Jens-Julius R.
Nygaard. The Remuneration committee prepares guidelines
and proposals regarding remuneration of executive personnel,
which are reviewed and resolved by the Board of Directors.
10 RISK MANAGEMENT AND INTERNAL CONTROL
The Board ensures that the Company has satisfactory internal
control procedures to manage its exposure to risks related
to the conduct of the Company’s business, including social
responsibility, to ensure compliance with laws and regulations
and to support the quality of its financial reporting. The Board
performs an annual review of the Company’s key risks and
the internal controls implemented to address these risks. The
Board has identified and stated the various risks of Awilco
LNG in the Company’s annual report. Additionally, the Board is
regularly briefed on the Company as described under section 9
above.
The Company has established an Audit committee that regularly
evaluates and discusses the various risk elements of Awilco
LNG, and potential for improvement. The Audit committee
reports to the Board.
Awilco LNG’s main goal is safe and efficient ship operation
with no accidents, personal injury, environmental damage, or
damage to equipment. In order to achieve these goals Awilco
LNG has identified some core objectives that describe our focus
and our continuous improvement process. The operation of
technical management and newbuildings is closely monitored
through dedicated supervision and safety reporting systems.
Furthermore, the Company has established contingency plans
and executes drills and training in order to improve emergency
preparedness.
In addition to its own controlling bodies and external audit, the
Company’s ship management is subject to external supervision
by Det Norske Veritas (DNV) for certification in accordance with
ISO.
11 REMUNERATION OF THE BOARD OF DIRECTORS
The remuneration of the Board shall reflect the Board’s
responsibilities, knowhow, time commitment and the complexity
of the business activities. The directors do not receive profit
related remuneration, share options or retirement benefits from
the Company. The remuneration is proposed by the Nomination
committee. More information about the remuneration of the
individual directors is provided in note 21 in the consolidated
accounts.
Directors or their related companies shall normally not
undertake special tasks for the Company in addition to the
directorship. However, the Company utilises outsourcing of
technical sub-management, accounting and administrative
services to ATS and AWM which are related companies.
In addition, ship brokering services are purchased on a
competitive basis from a group of companies related to one
of the Board members. All agreements and fees with related
parties are approved by the Board. Furthermore, the members
of the Audit committee and Remuneration committee receive a
fee for serving on the committees.
12 REMUNERATION OF EXECUTIVE PERSONNEL
The Board has drawn up guidelines regarding remuneration to
leading persons. The remuneration is based on a base salary
and a bonus program. The guidelines regarding remuneration
to leading persons have been prepared by the board of directors
AWILCO LNG ASA ANNUAL REPORT 2022
81
in accordance with section 6-16 a of the Norwegian Public
Limited Liability Companies Act and was adopted by the Annual
General Meeting in 2021. Awilco LNG will present a report on
remuneration to leading persons to be approved by the Annual
general meeting in 2022.
For information about remuneration of executive personnel see
note 21 in the consolidated accounts.
13 INFORMATION AND COMMUNICATION
The Company aims to keep shareholders, analysts, investors
and other stakeholders continuously updated on the Company’s
operations and performance. The Company provides
information to the market through quarterly and annual
reports; investor- and analyst presentations open to the media
and by making operational and financial information available
on the Company’s website. Information of importance are
made available to the stock market through notification to the
Oslo Stock Exchange in accordance with the Stock Exchange
regulations. Information is provided in English.
All stock exchange announcements and press releases,
including the financial calendar, are made available on the
Company’s website.
14 TAKE-OVER
The Company’s Articles of Association contains no defence
mechanism against the acquisition of shares, and no other
actions have been taken to limit the opportunity of acquiring
shares in the Company.
In the event of a takeover bid the Board will seek to comply
with the recommendations outlined in item 14 of the Code of
Practice. If a bid has been received, the Board will seek to issue
a statement evaluating the offer and make recommendations
as to whether the shareholders should accept the offer or not.
Normally it will be required to arrange a valuation from an
independent expert. If the Board finds that it is unable to give
a recommendation, the Board will explain the reason for not
giving a recommendation. The statement should show whether
the decision was unanimous, and if not, the background for why
certain Board members did not adhere to the statement.
If a situation occurs where the Board proposes to dispose of
all or a substantial part of the activities of the Company such a
proposal will be placed before the General Meeting.
15 AUDITOR
The auditor is appointed by the General Meeting, which also
determines the auditor’s fee. The auditor shall annually present
an audit plan to the Audit committee. The auditor attends
the Board of Director’s review and discussion of the annual
accounts. The Board of Directors minimum holds one annual
meeting with the auditor without the CEO or other members of
the executive group being in attendance.
The Company’s management regularly holds meetings with
the auditor, in which accounting principles and internal control
routines are reviewed and discussed.
The auditor shall annually confirm compliance with the
applicable independence rules and regulations in legislation
and the audit firm’s internal independence standards. The Audit
committee has issued guidelines stipulating the management’s
possibility to undertake consulting services by the auditor.
Auditor’s fees are disclosed in note 21 in the consolidated
accounts.
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Social
responsibility
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AWILCO LNG ASA ANNUAL REPORT 2022
INTRODUCTION
The Awilco LNG Group (Awilco LNG or the Company) has
implemented a set of objectives, principles and procedures
concerning our social responsibility to enable the Company
to achieve and maintain its mission statement and objectives.
Awilco LNG has implemented the highest standard of safe
operation to meet all environmental protection requirements,
ensuring safe custody of our vessels, crew, customers’
cargoes and owner’s interests. Our commitment to our social
responsibility ensures that Awilco LNG is a preferable LNG
shipping company.
Awilco LNG is engaged in the global marine transportation of
LNG. Marine transportation is generally considered the most
efficient form of transporting natural gas over long distances.
Natural gas is widely accepted as the least pollutive fossil
fuel and emits up to 60 % less CO2 than coal when used for
electricity generation. Natural gas is widespread, flexible,
abundantly available and cheap when comparing to other fossil
fuels. The increased use of natural gas is expected to reduce
the use of more pollutive fossil fuels such as coal and oil in the
global energy mix. Awilco LNG’s contribution to sustainable
economic growth mainly relates to the potential for increased
use of natural gas in the global energy mix.
Awilco LNG aims to provide positive impact on the communities
we operate in, our employees, clients and suppliers through
the Code of Ethics and Conduct (available at our webpage www.
awilcolng.no), such as opposing corruption and facilitation
payments in any form.
In general, global marine transportation has a significant effect
on the environment. Awilco LNG takes this impact seriously,
working continuously to reduce our environmental footprint
through improving fuel efficiency, optimising trade routes and
improving waste management.
This report constitutes Awilco LNG’s reporting according to the
requirements of the Norwegian accounting act § 3-3c on social
responsibility reporting.
SCOPING OF MATERIAL ISSUES FOR AWILCO LNG
A materiality assessment forms the basis for how we prioritise
our social responsibility efforts, and thereby also impacts our
internal and external reporting on social responsibility. The
following issues have been assessed as the most material
based on both their importance to Awilco LNG’s business and
to Awilco LNG’s stakeholders such as employees, customers,
suppliers, regulators and investors:
The Company’s strategy is to integrate sustainability on these
matters systematically into all material business processes to
ensure Awilco LNG is assessed as a responsible enterprise.
THE MATERIAL ISSUES
Mission statement
Awilco LNG’s mission statement is “Marine transportation
through safety and environmental excellence”.
Health and safety
Company policies and objectives
The safety and well-being of Awilco LNG’s employees and
seafarers has the highest priority, as set out in the mission
statement above and detailed in the Company’s Safety
Management & Environmental Protection Policy. Our objectives
are zero accidents and no personnel injuries. The Group shall
adhere to national and international laws and regulations and
constantly promote best practices identified within its own
operations and the industry to improve the competence of
individual crewmembers and vessel safety performance.
Social responsibility
Importance to business
IMPORTANCE TO STAKEHOLDERS
ENVIRONMENTAL
IMPACT
ANTI-
CORRUPTION
HEALTH AND
SAFETY
AWILCO LNG ASA ANNUAL REPORT 2022
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AWILCO LNG ASA ANNUAL REPORT 2022
How we achieve our objectives
Our objectives are operationalised in the Company’s Safety
Management & Environmental Protection Policy. The objective
of this policy is to ensure that the Company gives the highest
priority to the safety of human life and health through the
following measures:
• Provide support to ships’ operation by implementation
of a well-structured Safety Management System
(SMS) based on a well-defined management
organisation. The SMS is an integral part of all our
activities and includes instructions and procedures
which contribute to the highest safety standards
onboard our ships, ensuring that cargo is handled
correctly and preventing situations which threaten
safety of our personnel. The SMS is based on
national and international requirements and
standards for quality and safety, including the ISM
code (International Management Code for the Safe
Operation of Ships and Pollution Prevention), ISO
14001 (environmental management system), ISO 9001
(quality management system) and the TMSA (Tanker
Management and Self-Assessment guidelines) issued
by OCIMF (Oil Companies International Marine Forum)
• Operate the vessels with continuously properly
trained, informed and motivated crews. Awilco
LNG aims to ensure a stable and motivating
work environment for both onshore and offshore
employees, ensuring high retention rates. The Group
is proactively seeking to identify requirements and
needs for additional training through regular audits,
master and management reviews. A healthy lifestyle
is promoted by providing fresh and healthy food and
physical exercise opportunities
• Provide, equip and maintain the ships to the
necessary standard as required by national regulation
and international convention
• Avoid safety hazards through preventive safety
measures
• Establish contingency plans and execute drills and
training to improve emergency preparedness to meet
situations which represent dangers to life, health,
environment, ship and cargo
• Implement and maintain a safety management culture
within the Company
• Use a reporting system for accidents, near accidents,
non-conformities and improvements, with special
attention to the learning effect through feedback of
experience and suggestions for improvement
• Use performing measures to continuously improve
our operations
To accomplish the objectives Awilco LNG will plan, organise,
perform, document and verify performance. Awilco LNG has
a comprehensive Risk Management Program which includes
detailed step by step risk assessment procedures.
Performance in 2022
The Company’s senior management is actively engaged in
monitoring Awilco LNG’s performance in order to further
encourage and promote positive trends, to provide advice
and to take corrective action where negative trends are
detected. Performance and results are measured using
certain Key Performance Indicators (KPIs). KPI targets are
resolved by senior management on an annual basis, and
results are reported to senior management on a quarterly
basis. Procedures and any new initiatives shall be part
of the management review and include monitoring and
measurements, adjustment of targets, and recording of
achieved improvements. The procedures and activities shall
be audited on a routine basis. The following main KPIs are the
focus of Awilco LNG with regards to health and safety:
KPI
DEFINITION
RESULT 2022 RESULT 2021
LTIF (Lost time injury frequency)
Number of accidents per one-million man-hours worked
2.1 0.0
TRCF (Total recordable case frequency)
The sum of all work related, lost time injuries, restricted
work injuries and medical treatment injuries
4.2 0.0
Personnel injuries
Number of personnel injuries
3 0
Number of fatalities due to injuries
Number of deaths among the crew resulting from a work
injury
NIL NIL
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AWILCO LNG ASA ANNUAL REPORT 2022
Going forward
Performance in 2022 was satisfactory, although our performance
has decreased from the excellent level in 2021. One Lost Time
Injury and one Restricted Work Case occurred onboard in Q4.
Both injuries were non-serious, and the injured crewmembers
have quickly recovered with no long-term effects. Preventive
actions have been implemented to avoid recurrence. The third
reported personnel injury was a minor First Aid Case.
In 2023 Awilco LNG will continue efforts to improve and
strengthen the safety culture and return to 0 injuries for the year.
The Company’s objectives are zero accidents and no personnel
injuries.
Environmental impact
Background
Awilco LNG’s potential environmental impact can be divided in
three main components:
1. Emissions from fuel consumption
2. Major environmental accidents
3. Waste management including ballast water and spills
Although the shipping industry contributes with 3 to 4 % of
the global annual CO2 emissions to the atmosphere, marine
transportation is generally considered as the most efficient form
of transporting natural gas over long distances.
Awilco LNG’s fleet consists of vessels with tri-fuel propulsion
systems, which mainly run on boil-off gas from the LNG cargo.
When natural gas is cooled down to its liquefied state at minus
160 degrees Celsius, a certain amount of the LNG will naturally
re-gasify into its gaseous state (boil-off gas). The boil-off gas is
produced at a rate dependent on the outside temperature and
the level of filling of the tanks and can either be reliquefied into
LNG or used as fuel for propulsion of the vessels. Due to the cost
and energy needed to power a reliquification process plant very
few vessels are outfitted with such plants. The boil-off gas is thus
used for propulsion, which makes sense both economically, as
natural gas is significantly cheaper than oil-based alternatives,
and also environmentally, as natural gas is a considerably
cleaner fuel than oil-based alternatives. Compared to oil-based
fuels, natural gas emits 10-20 % less greenhouse-gases, virtually
zero SOx and particulate matter and 90 % less NOx.
As LNG vessels carry regular bunkers for ballast voyages the
potential for major environmental accidents mainly relate to
the risk of a ship suffering a breach and subsequently leaking
substantial amounts of bunkers oil into the environment.
The last potential impact is waste produced by the vessels,
discharge of untreated ballast water and potential spills of
chemicals, bilge water and sludge etc. into the environment.
Discharge of untreated ballast water may potentially introduce
non-native organisms into marine environments worldwide.
Company policies and objectives
Based on the long-term goal of environmental excellence, and as
set out in the Company’s Safety Management & Environmental
Protection Policy, Awilco LNG works toward minimising the
environmental impact from its vessels with the goal of zero spills.
The Company has adapted a zero-tolerance policy towards:
• Spills to the environment
• Emissions of ozone depleting substances
• Unauthorised disposal of garbage or waste to
the marine environment
Additionally, Awilco LNG aims to minimise as far as practically
possible the emission of CO2, NOx and SOx from combustion
engines, boilers, incinerators and emissions from cargo and fuel
oil tanks and systems through evaporation.
Awilco LNG shall adhere to national and international
environmental laws and regulations, and constantly promote best
practices identified within its own operations and the industry to
improve our impact on the environment.
How we achieve our objectives
Our objectives are operationalised in the Company’s Safety
Management & Environmental Protection Policy. The objective
of this policy is to ensure that the Company gives the highest
priority to the environment through the following measures:
• Provide support to ships’ operation by implementation
of a well-structured Safety Management System (SMS)
based on a well-defined management organisation.
The SMS is an integral part of all our activities and
includes instructions and procedures which contribute
to the highest safety standards onboard our ships,
ensuring that cargo is handled correctly and preventing
situations which threaten the environment. The SMS is
based on national and international requirements and
standards for quality and safety, including the ISM code
and the TMSA issued by OCIMF
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AWILCO LNG ASA ANNUAL REPORT 2022
• The management system of the fleet is certified
according to ISO 14001 and ISO 9001
• Operate the vessels with continuously properly trained,
informed and motivated crews
• Provide, equip and maintain the ships to the necessary
standard as required by national regulation and
international convention. Both WilForce and WilPride
are fitted with ballast water treatment systems.
• Establish contingency plans and execute drills and
training to improve emergency preparedness to meet
situations which represent dangers to life, health,
environment, ship and cargo
• Implement and maintain a safety management culture
within the Company
• Use a reporting system for accidents, near accidents,
non-conformities and improvements, with special
attention to the learning effect through feedback of
experience and suggestions for improvement
• Antifouling paint systems with lowest resistance (Jotun
X200)
• Hull and engine performance monitoring systems are
installed on the vessels and used for monitoring of
performance (KYMA system)
• Optimisation of hull and propeller cleaning intervals to
reduce drag and fuel consumption
• Replaced bottled water for crew with buying in bulk
• Improved waste handling onboard and increased
amount of waste being sent ashore
• Implement a policy of environmentally friendly
purchasing with approved vendors based not only on
cost and quality but also environmental performance
and focus; procurement and purchasing activities shall
address environmental aspects such as:
i. Reducing packaging volumes;
ii. Encouraging recycling activities; and
iii. Use of non-disposable and recyclable
equipment and materials
• Onshore focus on saving energy, recycling and reducing
use of single use plastics
• Use performing measures to continuously improve our
operations
• Continuously consider vessel technical improvements
and retrofits to reduce fuel consumption and lower
environmental footprint
The same risk assessment procedures and continuous
improvement tools and initiatives as described under Health
and Safety above is utilised in Awilco LNG’s work to reduce its
environmental impact.
Performance in 2022
The Company’s senior management is actively engaged in
monitoring Awilco LNG’s performance, in order to further
encourage and promote positive trends, to provide advice and
to take corrective action where negative trends are detected.
Performance and results are measured using certain Key
Performance Indicators (KPIs). KPI targets are resolved by senior
management on an annual basis, and results are reported to
senior management on a quarterly basis. Procedures and any
new initiatives shall be part of the management review and
include monitoring and measurements, adjustment of targets,
and recording of achieved improvements. The procedures and
activities shall be audited on a routine basis. The following main
KPIs are the focus of Awilco LNG with regards to environmental
impact:
KPI
DEFINITION RESULT
2022
RESULT
2021
Number of releases of substances to the
environment
The number of releases of substances to the environment covered by MARPOL
Annex 1-6
NIL NIL
Annual efficiency rate (AER) The mass of carbon emissions per ton-mile [g/nm*ton)] (based on vessel DWT) 8.67 7.59
CO2 efficiency laden voyages The total mass of emitted CO2 in grams per m
3
-mile 9.07 6.17
NOx efficiency laden voyages The total mass of emitted NOx in grams per m
3
-mile 0.16 0.112
SOx efficiency laden voyages The total mass of emitted SOx in grams per m
3
-mile 0.0019 0.00017
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AWILCO LNG ASA ANNUAL REPORT 2022
2022 emissions performance
In 2022 there was a negative development in the CO2 intensity
for the vessels. This is in a large part caused by a higher level
of vessel idling and ballast voyages, causing higher emissions
per nm. We expect these values to improve with higher activity
in 2023.
Going forward
Environmental emissions are to a large extent dependent
on charterers operations and type of fuel burned in ships
engines. In 2023 Awilco LNG will continue efforts to reduce the
Company’s environmental footprint.
EEXI, CII and EU-ETS
From 2023 our vessels are required to comply with the new
regulations on energy efficient design and operation, EEXI
and CII. Both vessels in the fleet have been confirmed to be in
compliance with their EEXI and have onboard approved EEXI
technical files.
With respect to CII, both vessels have operated in 2022 with a
emission intensity that corresponds to a “C” CII rating. We are
working closely with charterers to ensure that the operation of
the vessels is planned and executed in a way that ensures this
C rating is achieved also for 2023 and following years.
Starting from 2024, our vessels will be required through the
EU Emissions Trading System (ETS) to submit emissions
allowances for carbon emissions during voyages to and from
EU ports. Monitoring and Reporting of the carbon emissions
are already in place through our procedures for EU MRV
reporting. Inclusion of ETS clauses for future and current
charter parties is in progress.
Anti-corruption
Company policies and objectives
Corruption is generally estimated to cost at least 5 % of global
GDP each year. Reduced corruption would increase safety for
seafarers, reduce costs of operations and reduce complexity
and risk. Awilco LNG is a firm opponent of corruption in any
form, and is committed to the highest ethical standard in
business conduct worldwide. Awilco LNG desires fair and open
competition in all markets, both nationally and internationally.
Awilco LNG’s policy is to comply with all applicable laws and
governmental rules and regulations in the country in which it
is operating.
How we achieve our objectives
The Company’s anti-corruption policies are described in our
Code of Ethics and Conduct document. The following policies
to address the objectives have been implemented in the
Company:
• No employee of the Company shall directly or
indirectly offer, promise, give or receive bribe, illegal
or inappropriate gifts or other undue advantages or
remuneration in order to achieve business or other
personal advantage
• Under no circumstances shall the Company or
any of its employees be part of actions that breach
applicable competition legislation. Any employee
is to confer with his or her immediate superior,
the executive management or the board if he or
she has a question with respect to the possible
anti-competitive effect of particular transactions
or becomes aware of any possible violation of
applicable competitive legislation
Implementation of the Company’s policies takes place through
emphasis on awareness and the use of risk assessments on a
Group level.
Performance in 2022
As in previous years, management has not become aware of
any breaches of the Company’s Code of Ethics and Conduct
throughout the year.
Going forward
Going forward Awilco LNG will continue work to ensure that
our standards of behaviour are according to the Code of Ethics
and Conduct, and the Company expects that the positive
results from previous years are upheld.
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AWILCO LNG ASA ANNUAL REPORT 2022
Alternative performance measures (APMs), defined as financial
performance measures not within the applicable financial
reporting framework, are used by Awilco LNG to provide
supplemental information. Financial APMs are intended to
enhance comparability of the results and cash flows from period
to period, and it is Awilco LNG’s experience that these are
frequently used by analysts and investors.
These measures are adjusted IFRS measures defined,
calculated and used consistently. Operational measures such
as, but not limited to, volumes, utilisation and prices per
MMBTU are not defined as financial APMs. Financial APMs
should not be considered as a substitute for measures of
performance in accordance with IFRS. Disclosures of APMs are
subject to established internal control procedures.
Awilco LNG’s financial APMs:
• Net freight income
1)
: Freight income – Voyage related expenses
• EBIT: Net freight income – Operating expenses – Administration expenses – Depreciation and amortisation – Impairments
• EBITDA: EBIT + Depreciation and amortisation + Impairments
• Interest bearing debt: Long-term interest-bearing debt + Short-term interest-bearing debt + Pension liabilities + Other non-
current liabilities
• Book equity ratio: Total equity divided by Total assets
• TCE (time charter equivalent): Net freight income including loss of hire insurance divided by the number of calendar days less
off-hire days not covered by loss of hire insurance
The reconciliation of Net freight income, EBIT and EBITDA with IFRS figures can be derived directly from the Group’s consolidated
Income Statement.
1)
When vessels operate in the spot market, freight income includes bunkers compensation and the fuel element of ballast bonuses,
whereas voyage related expenses include the corresponding bunkers costs and other repositioning costs. The APM net freight income
adjusts for this grossing up, and provides for improved comparability of the Group’s performance between periods.
Alternative performance measures
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Awilco LNG ASA
PO Box 1583 Vika
0118 Oslo
Norway
Tel +47 22 01 42 00
Org no. 996 564 894
awilcolng.no