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Hunter Group ASA
Annual Report • Mar 28, 2024
3626_10-k_2024-03-28_a986cddf-2481-4d4a-9585-8a6cf1e36e03.pdf
Annual Report
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Annual report 2023
Table of contents
| ▪ | Highlights | 03 |
|---|---|---|
| ▪ | Corporate governance policy | 04 |
| ▪ | Corporate social responsibility policy | 11 |
| ▪ | Responsibility statement | 16 |
| ▪ | Board of Directors' report | 17 |
| ▪ | Consolidated financial statements | 21 |
| ▪ | Financial statements for Hunter Group ASA | 48 |
| ▪ | Auditor's report | 62 |
Highlights
Financial highlights in 2023
- Total revenues and other income from continuing operations of USD 1.95m
- Net realized time chartering of USD 52k
- Unrealized gain on time charter contracts of USD 1.8m
- Total operating expenses from continuing operations of USD 1.41m
- Net profit from continuing operations of USD 0.41m
- Net profit, including discontinued operations of USD 1.29m
- Average daily VLCC earnings of USD 54,190 per day achieved in December 2023
Key events in 2023
- Extraordinary general meeting held on 19 January 2023, which approved two dividends of i) NOK 0.51 per share as repayment of paidin capital and ii) NOK 1.80 per share as ordinary dividend
- Extraordinary general meeting held on 16 February 2023, which rejected a proposed ordinary dividend of NOK 0.04 per share
- Entered into a joint cooperation agreement with DNV for the development of a low pressure mid-stream shipping solution for Carbon Capture, Transportation and Storage ("CCTS")
- Extraordinary general meeting held on 21 March 2023, which approved the election of new board members
Key events in 2023 (cont'd)
- Annual general meeting AGM held 30 June 2023, which approved the 20:1 reverse stock split effectuated on 3 July 2023
- Entered into a three-year back-to-back timecharter for an eco scrubber fitted VLCC, which was delivered on 1 December 2023. The VLCC was chartered in on a fixed rate of USD 52,500 per day and chartered out on a floating indexlinked rate
- Completed a NOK 21.5 million equity private placement on 30 November 2023, in connection with the back-to-back time-charter transaction effective from 1 December 2023
Subsequent events
- Completed a USD 12 million equity private placement on 10 January 2024
- Entered into a second three-year back-to-back time-charter for an eco scrubber fitted VLCC, which was delivered in March 2024. The VLCC was chartered in on a fixed rate of USD 51,000 per day and chartered out on a floating indexlinked rate
- Extraordinary general meeting held on 2 February 2024, which approved the USD 12 million equity private placement and the two subsequent offerings
- Completed two subsequent offerings in March 2024 for a total of approx. NOK 35 million
- As of the date of this report, the Company has achieved an average index-linked charter out rate of USD 54,900 per day for 100% of available days for the Company's two chartered in VLCCs during the first quarter of 2024
Hunter Group ASA's Board of Directors approved this updated Corporate Governance Policy on 27 March 2024.
1. Introduction
Corporate Governance regulates the responsibilities of the executive personnel and the Board of Directors of Hunter Group ASA and its subsidiaries. The subsidiaries adopts the relevant governing documents.
Hunter Group ASA ("HUNT", "the Company" or "the Group") is a Norwegian public limited liability company which shares are listed on Euronext Expand Oslo and it is therefore subject to the corporate governance requirements as set out in the Norwegian Code of Practice for Corporate Governance. HUNT works according the Norwegian Code of Practice for Corporate Governance dated 14th October 2021 (www.nues.no). Where HUNT does not fully comply with the recommendations, an explanation or comment is given.
Oslo Stock Exchange prescribes that companies listed on the Oslo Stock Exchange must publish a report in their annual report on the Company's corporate governance.
HUNT aims to have effective systems in place for communication, monitoring, accountability, and incentives that also enhance the market value, corporate profit, long-term strength, continuity and overall success of the business of HUNT. In addition to strengthen the confidence amongst its shareholders.
HUNT is a small company with limited resources available within the organization. The number of employees (including managers) were 3 at year-end 2023. This limits the ability to allocate resources to report and follow up on Corporate Governance and Corporate social responsibility (CSR). On the other hand, a limited organization in combination with an external board and a transparency culture is a strength in the companys daily work with Corporate Governance and CSR. The principles, rules and regulations are outlined to meet both todays business model and complexity and future, more complex business environments. The board will monitor the need for increased capacity to fulfill external and internal rules and regulation as the business develops.
2. Reporting on Corporate Governance
Hunter Group ASA's Board of Directors review and approves this Corporate Governance Policy annually, which can also be found on its website (www.huntergroup.no) and is included in the annual report.
The Company's basic corporate values are incorporated in the Company's management system. The Board of Directors has implemented ethical guidelines and a corporate social responsibility policy, which are reviewed and re-issued annually.
3. Business
In the Articles of Association HUNT's business is described as follows:
Hunter group is a publicly traded investment company focusing on shipping and oil service investments.
The Company's primary business currently consists of chartering in and chartering out of oil tankers. The Company currently has two three-year contracts for eco scrubber-fitted VLCCs, chartered in on fixed rates and chartered out on floating index-linked rates.
The main investment between 2018 and 2022 was Hunter Tankers AS, a wholly owned ship owning company. Hunter Tanker AS' fleet consisted originally of eight identical VLCCs. The VLCC fleet was gradually divested throughout 2021 and 2022. The Company was dissolved in 2023.
The Badger Explorer technology for exploring and mapping of hydrocarbon resources is organized in the subsidiary Indicator AS. It has no employees and there has been no activity in the company in 2023. The cash burn is down to a bare minimum and is close to zero.
4. Equity and Dividends
The development of the Group's equity up to 31 December 2023 is described in the "Statement of change in equity" in the financial statements of the annual report.
HUNT's dividend policy aims to yield a competitive return on invested capital to the shareholders through a combination of dividends, share buybacks and share price appreciation. In 2023. the Company distributed a total of NOK 2.31 per share in dividends (NOK 46.2 per share adjusted for the 20:1 reverse stock split in July 2023).
At the Company's annual general meeting on 30 June 2023 the Board of Directors was granted a mandate to increase the Company's share capital by up to NOK 549,999 to fund investments. Furthermore, the Board of Directors were granted a mandate to acquire, on behalf of the Company, up to 57 536 200 of the Company's own shares.
The mandates granted by the Company's annual general meeting on 30 June 2023 are valid until 30 June 2024. The authorizations are in accordance with Norwegian Code of Practice for Corporate Governance.
5. Equal Treatment of Shareholders and Transactions with Close Associates
HUNT has one class of shares and is dedicated to applying equal treatment to all shareholders.
The decision to waiver the existing shareholders' pre-emption rights in the event of an increase in the share capital must be justified. The Board of Directors will disclose such a justification in the stock exchange notification in connection with the increase in share capital.
If a transaction between the Company and a shareholder of the Company, a shareholder's parent company, a member of the Board of Directors or a member of executive personnel (or related parties to such persons) is considered to be material in accordance with the Norwegian Code of Practice for Corporate Governance, the Board will obtain an evaluation from an independent third party. This will not apply if the GM's approval for such transactions is required according to the Norwegian Public Limited Companies Act §3-8.
Board members and the executive personnel shall notify the Board of any material direct or indirect interest in any transaction entered into by HUNT.
Deviation from the Norwegian Code of Practice for Corporate Governance:
The shareholders' pre-emptive rights are exempted because the Group wishes to be able to (i) use share issues for its employees, Directors and others important stakeholders with the Group as a part of the Group's share incentive scheme and (ii) issue shares towards certain specifically chosen institutional investors or others if required or desired in conjunction with the Group's expansion, development and/or strategic acquisitions.
6. Freely Negotiable Shares
All HUNT shares carry equal rights and are freely negotiable. Each share represents one vote at the GMs. The nominal value per share amounts to NOK 0.0038 (rounded). At the date of this annual report, there are no restrictions regarding transferability in the Group's Articles of Association or any other transfer restrictions related to HUNT's shares.
7. General Meetings ("GM")
The shareholders exercise the highest authority in HUNT through AGMs.
In 2024 the Annual General Meeting of HUNT will be held on 25 April. The Group's financial calendar has been published in a notice to the Oslo Stock Exchange and is available on HUNT's website. The GMs shall approve the annual accounts, the annual report, distribution of dividend, and otherwise make such resolutions as required under the Corporate Governance Policy and the applicable law.
The Board shall publish notices of GMs and any supporting material, such as the agenda, recommendations of the Nomination Committee, the information about the shareholder's right to propose resolutions in respect of matters to be dealt with by the General Meeting and other documents as set out in the bye-laws of the Group, no later than 21 days prior to the day of the GM, on the Group's website (www.huntergroup.no). The Board will also ensure that the distributed notice and all supporting material are sufficiently detailed. The Board will make reasonable efforts to enable as many shareholders as possible to attend.
The notice shall also include information on the procedure of representation through proxy, as well as a proxy that allows giving separate voting instructions for each matter to be considered by the General Meeting and for each candidate nominated for election. The Group will nominate a person who will be available to vote on the shareholder's behalf if the shareholder has not appointed a proxy.
The Board shall make such notices of General Meetings and the relevant supporting material available through the notification system of Oslo Stock Exchange and on the Group's website no later than 21 days prior to the day of the GM.
Every shareholder has the right to put matters on the agenda of a General Meeting along with a proposed resolution within the statutory timeframe.
The shareholders may be asked to notify their attendance prior to the GM. The deadline for the notification of attendance for the AGM will be as close to the meeting as possible. Shareholders who are unable to attend may vote by proxy. A proxy form shall be attached to the notice of the GM.
The Company's Board and the chairperson of the GM shall ensure that the shareholders vote separately for each candidate nominated for a corporate body. HUNT will publish the minutes of GMs (alternatively only such resolutions that were not made in accordance with the proposals made in the notice to the GM) through the notification system of Oslo Stock Exchange and on its website no later than 15 days after a GM has been held and will maintain them available for inspection in the Company's offices. The Annual General Meeting in 2023 was held in Oslo on June 30th where 20.87% of all shares were represented.
Deviation from the Norwegian Code of Practice for Corporate Governance:
The Norwegian Code of Practice for Corporate Governance demands that the Board of Directors as a whole, the members of the Nomination Committee and the Auditor are present at the General Meetings. HUNT considers it sufficient that only the chairperson of the Board attend GMs.
8. Nomination Committee
HUNT's Nomination Committee consists of two to three members, elected by the Company's General Meeting. The majority of the members shall be independent of the Board of Directors and the Company's executive personnel. No more than one member of the Board of Directors shall be member of the Nomination Committee and should not offer himself for re-election to the Board. The members of the Nomination Committee are elected by the shareholders in a GM for a period of no longer than two years.
The Nomination Committee proposes to the GM candidates for election to the Board. The composition of the Board of Directors should reflect the provisions of the Group's Corporate Governance Policy, commitment to shareholder return, independence and experience in relevant sectors (technology and business development, financing and accounting, disclosure and regulatory, etc.). The Nomination Committee also proposes the remuneration to be paid to the members of the Board of Directors.
The Nomination Committee's recommendations shall include justification as to how the recommendations take into account the shareholder interests and the Group's requirements. The following information about the proposed candidates, in particular each person's age, education, business experience, term of appointment to the Board (if applicable), ownership interest in the Company, independence, any assignments (other than the proposed Directorship) for the Company and material appointments with other companies and organizations will be disclosed. In the event that the Nomination Committee recommends re-electing current Directors, the recommendation will include information on when the Directors were appointed the Board and their attendance records.
The Nomination Committee shall elect its own chairperson according to the Group's Articles of Association. Meetings of the Nomination Committee shall be convened when deemed necessary by any of its members to adequately fulfill its assigned duties. Notice of a meeting shall be issued by the chairperson of the Nomination Committee no later than one week prior to the meeting, unless all members approve a shorter notice period.
The Group will provide information on its website regarding the membership of the Committee and any deadlines for submitting proposals to the Nomination Committee.
The Nomination Committee consists of: Jacob Iqbal (chairperson) – elected until AGM in 2024 Kristin Hellebust – elected until AGM in 2024
One member of the Nomination Committee is considered independent of the Board of Directors.
Deviation from the Norwegian Code of Practice for Corporate Governance:
The Group's Articles of Association regulate the election of the chairperson of the Nomination Committee. According to §6 of the Articles of Association of Hunter Group ASA the Nomination Committee elects its own chairperson.
The Norwegian Code of Practice for Corporate Governance requires guidelines regarding the Nomination Committee's duties to be set out by the General Meeting. At HUNT, the Committee itself sets out its duties in accordance with the duties presented in chapter 8 of the Group's Corporate Governance Policy.
9. Board of Directors: Composition and Independence
HUNT shall be headed by a Board with collective responsibility for the success of the Group.
The Board shall comprise between three and eight Directors according to §5 of HUNT's Articles of Association. Currently the Board consists of three Directors, who have all been elected by the shareholders and are not representatives of HUNT's executive personnel. The members of the Board of Directors are elected for a period of two years.
The members of the Board of Directors consists of: Morten Eivindssøn Astrup (Chairman) – elected until AGM in 2025 Kristin Hellebust – elected until AGM in 2025 Bertel Steen – elected until AGM in 2026
All members of the Company's Board of Directors are considered independent according to the Norwegian Code of Practice for Corporate Governance. Detailed information on the individual Board member can be found in the Group's website (www.huntergroup.no) and in the Annual Report.
Board members and close associates' ownership as of 31 December 2023: Morten Eivindssøn Astrup owns 5,410,835 shares, through Surfside Holding AS, which represents 12.6% of the shares in the Company.
Bertel Steen owns 4,686,667 privately and through B.O Steen Shipping AS and Skarris Kapital AS, which represents 10.9% of the shares in the Company.
Kristin Hellebust owns zero shares.
According to the Norwegian Public Limited Companies Act § 6-35 and the Norwegian Code of Practice for Corporate Governance a Group with more than 200 employees is required to elect a corporate assembly. The Group has less than 200 employees and has therefore not yet elected a corporate assembly.
10. The Work of the Board of Directors
The Board shall ensure that the Group is well organized and that operations are carried out in accordance with applicable laws and regulations, and in accordance with the objects of HUNT as specified in its Articles of Association and guidelines given by the shareholders through resolutions in GMs.
HUNT's Board of Directors has the ultimate responsibility for inter alia the Group's executive personnel, supervision of its activities and the Group's budgets and strategic planning. The Board of Directors produces an annual plan of its work.
To fulfill its duties and responsibilities, the Board has full access to the Group's relevant information. The Board shall also consider for example obtaining such advice, opinions and reports from third party advisors as it deems necessary to fulfill its responsibilities.
The "Rules of Procedure for the Board of Directors of HUNT and the Relation to CEO" were approved by the Board on 31st October 2017 and were implemented.
All of the board members are also members of the Audit Committee and Remuneration Committee.
The Board of Directors evaluates its own performance and expertise once a year.
The Board of Directors arranged 13 board meeting during the fiscal year 2023.
Deviation from the Norwegian Code of Practice for Corporate Governance:
The Norwegian Code of Practice for Corporate Governance requires the Board of Directors to consider appointing a remuneration committee. At HUNT, the Board itself prepares all matters relating to compensation paid to the Group's executive management.
11. Risk Management and Internal Control
HUNT has implemented internal control and risk management systems appropriate to the size and nature of the Group's activities. The Group's core values, ethical guidelines and the corporate social responsibility policy are incorporated in the internal control and risk management systems.
The Board of Directors carries out an annual review of the control and risk management systems and the Group's most significant exposures.
In the annual report, the Board of Directors describes the main features of the Group's internal control and risk management systems in relation to the Group's financial reporting.
12. Remuneration of the Board of Directors
The remuneration of the members of the Board of Directors reflects the Board's responsibilities, expertise, the committed time and the complexity of the Group's activities.
The Board Members' remuneration (form and amount) will be reviewed annually by the Nomination Committee and is not linked to the Group's performance. It is the Nomination Committee's responsibility to prepare a proposal for the Annual General Meeting regarding the above-mentioned remuneration.
13. Remuneration of the Executive Personnel
The Board of Directors establishes, as required by law, guidelines for the remuneration of the members of the executive personnel. The AGM will vote on these guidelines which help ensure convergence of the financial interest of the executive personnel and the shareholders.
The guidelines for remuneration of the executive personnel are published in the Annual report 2023 in note 20.
Performance related remuneration of the Group's executive personnel shall aim for value creation for HUNT's shareholders or the Group's earnings performance. Such arrangements shall encourage performance and be based on quantifiable factors which can be influenced by the employee. Performance related remuneration shall be subject to an absolute limit.
As of 31st December 2023, the executive personnel's private and affiliated holdings of shares are the following:
| Name | Shares |
|---|---|
| Erik A.S. Frydendal | 2,049,166 |
| Sujoy K. Seal | 1,772,916 |
| Lars M. Brynildsrud | 1,754,937 |
| Total | 5,577,019 |
14. Information and Communications
HUNT provides its shareholders, Oslo Stock Exchange and the financial markets generally (through Oslo Børs'/Oslo Stock Exchange's Distribution Network) with timely and accurate information. Such information takes the form of annual reports, quarterly interim reports, stock exchange notifications and investor presentations as applicable. HUNT communicates its long-term potential, including its strategy, value drivers and risk factors, maintains an open and proactive investor relations policy and a best-practice website, and gives presentations regularly in connection with annual and interim results in Oslo and Stavanger, Norway.
The Company's current financial calendar with dates of important events including the Annual General Meeting, publishing of quarterly reports and its presentations, etc. are accessible for all shareholders on https://live.euronext.com/ and on the Company's website www.huntergroup.no. Subscription to news about HUNT can be made on the Company's website www.huntergroup.no.
Generally, HUNT, as a company listed on Oslo Stock Exchange, discloses all required information as defined by law. Certain resolutions and circumstances will in any event be disclosed, including but not limited to Board and GM resolutions regarding dividends, mergers/de-mergers or changes in share capital, issue of warrants, issue of convertible or other loans, any changes in the rights vested in the shares of the Company (or other financial instruments issued by HUNT) and all agreements of material importance that are entered into between the Company and a shareholder, member of the executive personnel, or related parties thereof, or any other company in the Hunter Group ASA.
HUNT will disclose all material information to all recipients equally in terms of timing and content.
15. Takeovers
The Group has not implemented any specific guidelines on how to act in the event of a takeover bid.
Deviation from the Norwegian Code of Practice for Corporate Governance:
The Group has not yet implemented guidelines in case of a takeover. Any bid will be dealt with by the Board of Directors in accordance with applicable laws and regulations, the Norwegian Code of Practice for Corporate Governance and based on their recommendation the shareholders' approval will be requested.
16. Auditor
Under Norwegian law the auditor of the Company (the "Auditor") is elected by the shareholders in a GM. The current Auditor serves until a new auditor has been elected.
The Auditor participates in meeting(s) of the Board that deal with the annual accounts as well as the General Meetings. At these meetings the Auditor reviews any variations in the accounting principles applied, comments on material accounting estimates and issues of special interest to the Auditor, including possible disagreements between the Auditor and the management.
At least once a year the Auditor and the Board of Directors meet without any members of the Group's executive personnel present.
The Auditor presents annually to the Audit Committee/Board of Directors the main features of its plan for the audit of the Group, as well as a review of the Group's internal control procedures.
The Board of Directors established guidelines in respect to the use of the auditor by the Group's executive personnel for services other than the audit.
The remuneration of the Auditor and all details regarding the fees of the audit work and other specific assignments are presented at the AGM.
The Company's auditor shall annually submit a written confirmation that the Auditor still continues to satisfy with the requirements for independence and a summary of all services in addition to audit work that has been undertaken for the Company.
1. General
The purpose of this policy is to provide information to all our stakeholders about Hunter Group ASA's ("HUNT", "the Company" or "the Group") approach to ethical and corporate social responsibility and how we as a Company propose to work towards achieving it. HUNT is committed to enhancing shareholder value in an ethical and socially responsible manner.
By implementing this policy, the Company aims to be responsible and an exemplar of good practice. Honesty, integrity and respect for people underpin everything we as employees do and are the foundation of the Company's business practice. We are judged by how we act, and the Company's reputation will be upheld if each one of us acts in accordance with the law and the Company's social responsibility and ethical standards set out herein. The Company's reputation and future success are critically dependent on compliance, not just with the law, but also with high ethical and social standards. A reputation for integrity is a priceless asset. This policy is a further commitment to integrity for all of us and will help to safeguard that asset.
This document applies to staff, Board members, temporary employees, consultants and any person or entity acting on behalf of Hunter Group ASA and its subsidiaries. We encourage our business partners to strive for similar performance.
We are committed to continuous improvement in our corporate social and ethical responsibility and the Board of Directors and the Company will therefore review this policy regularly.
This policy was approved by the Board of Directors on 27 March 2024 and shall apply until revised and reapproved.
2. Business practice
2.1 Correct Information, Accounting and Reporting
HUNT's business information is disclosed accurately, timely and entirely. According to the applicable laws and regulations and stock exchange listing standards, HUNT provides complete and precise accounts in all its periodic financial reports, in its public communication and documents submitted to regulatory authorities and agencies.
No information shall be withheld from the external or internal auditor.
All employees who draw up such documents are expected to apply the utmost care, and caution and will use the applicable accounting standards.
2.2 Fair Competition
HUNT performs its business in such a manner that customers, partners and suppliers can trust in the Group and competes in a fair and open way.
2.3 Anti - Corruption
Corruption diminishes legitimate business activities, destroys reputations and distorts competition. The Group opposes all forms of corruption. Through Group procedures, tight internal control and this policy all employees have to comply with, HUNT acts to prevent corruption within the Group.
Bribery, trading in influence, facilitation payments and all forms of corruption are prohibited. HUNT promotes its policy on corruption amongst its business partners, contractors and suppliers.
- Bribery is defined as an attempt to influence individuals when performing their duties through offering improper advantages.
- Trading in influence exists when an improper advantage (cash, loans, travel, services or similar) is offered to an individual to influence the performance a third party's duties.
- A facilitation payment is small payment to a public official to enable or speed up a process, which is the official's job to arrange.
HUNT complies with all applicable national and international laws and regulations (for example the OECD Guidelines for Multinational Enterprises and the International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery) with respect to improper payments to local and foreign officials.
2.4 Money laundering
Money laundering is when proceeds from criminal activity which appear to be legitimate sources is converted into assets.
HUNT employees shall ensure financial transactions and business activities involve funds from legitimate sources and are not used to launder money.
2.5 Business Communications
HUNT opposes inappropriate, inaccurate or careless communications as it can create serious liability and compliance risks for the Group. All employees are required to exercise due care when communicating both internally and externally and particularly when the communication is a written document (including email).
2.6 Political Activity
HUNT does not support any political party. An individual employee may become involved politically as a private person without referencing to their relationship with the Group.
3. Personal conduct
3.1 Human Rights
HUNT respects the principles of the UN's Universal Declaration of Human Rights and is guided by its provisions in the conduct of the Group's business. The Board of Directors adopted this policy to express the Group's requirements for business practice and personal conduct and to demonstrate the Group's commitment to maintaining a high standard of social responsibility, ethics and integrity.
Relations with employees are based on respect. HUNT is committed to a working environment with mutual trust and where everyone is accountable for their own actions and share responsibility for the performance and reputation of HUNT.
3.2 Equal Opportunity
HUNT does not tolerate any kind of discrimination of employees, customers and partners on account of religion, gender, sexual orientation, age, nationality, political views, disability or other circumstances. HUNT does not tolerate unlawful employment discrimination of any kind.
The Group expects all of its employees to treat others they come in contact with through work with respect and courtesy, and to refrain from harassment, discrimination and any other behavior that may be regarded threatening or degrading.
It is everyone's responsibility to create and contribute to a positive working environment for all employees.
3.3 Protection of HUNT's Property and Possessions
HUNT assets are of considerable value, whether financial or physical assets or intellectual property, and may therefore only be used to advance HUNT business purposes and goals. These assets must be secured and protected in order to preserve their value.
All employees are entrusted with Group assets in order to do their jobs and are personally responsible for safeguarding and using these appropriately. Such assets include buildings and sites, equipment, tools and supplies, communication facilities, funds, accounts, computer programs and data, information, technology, documents, and know-how, patents, trademarks, copyrights, time, and any other resources or property of HUNT.
Employees are responsible for protecting Group assets against waste, loss, damage, misuse, theft, misappropriation or infringement and for using those assets in responsible ways. Use of Group assets without direct relation to HUNT requires the prior authorization of the employee's supervisor.
3.4 Confidentiality
To protect the Group's legitimate interests and the individual's privacy and integrity, every employee shall apply the utmost care to prevent disclosure of confidential information. The Group's property or information gained through the employee's position in HUNT may never be used for personal benefit.
The duty of confidentiality continues after the termination of the employment.
3.5 Conflict of Interest
Individuals acting on behalf of HUNT shall behave objectively and without any kind of favoritism. Companies, organizations or individuals the Group does business with shall not be given any improper advantages.
No employee may work on any matter or participate in any decision in which they, their spouse, partner, close relative or any other person with whom they have close relations has a material direct or indirect financial interest or where there are other circumstances that may undermine the trust in the employee's impartiality or the integrity of their work.
Closely related parties shall not have positions within the Group where one is the other's supervisor without the CEO's prior approval.
No employee may participate through employment, directorship or any other assignment in companies in the same line of business as HUNT without the prior written approval of the CEO or the Chairman of the Board. Members of the Company's Board shall inform the chairman of the Board of their involvement in other companies.
3.6 Gifts and Hospitality
No employee may, directly or indirectly, accept gifts from any of the Group's associates. This rule applies also to ongoing negotiations. If an employee is offered or may be offered such a gift, he/she shall immediately contact his/her supervisor, who will decide if the gift will affect the employee's independence should it be accepted.
Token gifts in connection with Christmas, anniversaries and the like may be exempted from this rule.
Social events, meals or entertainment may be acceptable if there is a clear business reason, and provided the cost is within reasonable limits.
4. Health, safety and environment (HSE)
HUNT is committed to achieving excellence in all business activities, including health, safety and environmental performance.
HUNT's overriding goal is to operate safely, in environmentally and socially responsible ways, and thereby:
- Do no harm to people
- Protect the environment
- Comply with all applicable HSE laws and regulations.
HUNT aims to provide a safe, secure and healthy working environment for all its employees, contractors and suppliers. We believe that accidents and occupational illnesses and injuries are preventable, and hence apply our efforts and resources to achieving the goals listed above.
HUNT requires its subsidiaries to implement HSE systems relevant to their industry in compliance with internationally recognized standards.
HUNT is paying for insurance for all sub-contracted workers involved with the production of ordered vessels at DSME.
HUNT has adopted the Norwegian "inkluderende arbeidsliv" (equal opportunity rights) scheme, incorporating procedures for an active follow-up on employees' sick leave and cooperating with the Group's health service. During 2023 absence due to sickness in HUNT was approximately 0%.
HUNT aims to reduce the Company's carbon footprint and its impact on the environment through a commitment to continual improvement. It is the responsibility of the Company's management and subsidiaries to meet the Company's ambition and to comply with all applicable legislation and regulations.
No injuries or accidents have been reported in 2023.
5. The Transparency Act
5.1 The Transparency Act
A general description of the enterprise's structure and area of operations is given under "Corporate Governance" policy on page 4 and forward.
As an integrated part of our Corporate social responsibility, HUNT as a company and our employees will respect and work to promote human rights and decent working conditions within the laws and regulations that apply to our business.
HUNT's Board of Directors has approved a Responsible Business Conduct to reflect and emphasize this corporate responsibility. The Business Conduct is incorporated in our guidelines. We have established specific guidelines for both accepting new clients, new suppliers, new business partners, and follow up ongoing contracts and operations. Risk of violation of human rights and decent working conditions have always been relevant criteria for accepting new clients, suppliers, or business partners. It is also reflected in how we negotiate new contracts and in the wording of those contracts we enter.
Further, we have an ongoing due diligence process of all our suppliers and business partners based on three parameters that might indicate risk. When we have all considered all, each will have a risk profile. We will continue further investigation based on the highest risk.
If situations arises and an employee sees that human rights and decent working conditions may come under pressure, the CEO shall be notified in written. CEO will determine appropriate measures to further investigate the situation based on the severity of the situation and the probability of adverse impacts on fundamental human rights and decent working conditions. If the situation is not solved through information, dialogue or other measures, Hunter Group has reserved the right to withdraw from the contract as a last resort.
So far, our due diligence has not indicated any situations where there have been actual or potential adverse impacts on fundamental human rights and decent working conditions. Hence, it has not been necessary to implement suitable measures.
HUNT will continue to have focus on the ongoing due diligence work according to the Transparency Act.
6. Follow-up
6.1 Personal Follow-Up
Everyone to whom this policy applies shall make themselves familiar with the same and carry out their duties accordingly.
6.2 Handling Cases of Doubt and Breach
All employees shall without undue delay contact their supervisor, the CEO or the chairman of the Board in the event of ethical doubts, breaches of this policy or when discovering anything illegal or unethical.
6.3 Manager's Responsibility
Managers shall ensure that this Group policy is communicated to their staff, and shall give advice on how they are to be interpreted. Operations within their department shall be conducted according to this policy.
6.4 Outlook
HUNT will work with and assign priority to corporate social responsibility in 2024. HUNT aims to keep absence due to sick leave low in 2024. With further emphasis on HSE, the Group works towards another accident and injury free year at HUNT.
Responsibility Statement
The Board of Directors and the CEO confirm that to the best of our knowledge the financial statements as of 31 December 2023, which have been prepared in accordance with IFRS as adopted by the European Union and generally accepted accounting practice in Norway, provides a true and fair view on the Group's consolidated assets, liabilities, financial position and result.
We also confirm, to the best of our knowledge that the Board of Directors' report includes a true and fair overview of the development, performance and financial position of the Group, together with a description of the principal risks and uncertainties they face.
Oslo/Verbier, 27 March 2024
The board of directors and Chief Executive Director Hunter Group ASA
Morten Eivindssøn Astrup Chairman of the board
Kristin Hellebust Member of the board
Bertel Steen Member of the board
Erik A. S. Frydendal CEO
Operations and locations
HUNT is a public limited liability company pursuant to the Norwegian Public Limited Companies Act, incorporated under the laws of Norway. The legal and commercial name of the Company is Hunter Group ASA.
The Company was established on 20 June 2003 and is registered in the Norwegian Register of Business Enterprises under the organization number 985 955 107. The Company changed its name to Hunter Group ASA in in April 2017 and also moved the Company's registered office to Oslo. The Company's registered business address is Dronningen 1, N-0287 Oslo, Norway.
In April 2018 Hunter Group entered into a definitive VLCC contract transfer agreement with Apollo Asset Ltd. Subsequently, Hunter Tankers AS was established. In the May 2018 AGM, the shareholders of Hunter Group ASA approved taking over the four VLCC construction contracts and three options from Apollo Asset Ltd on a "backto-back" basis as contracted with Daewoo Shipbuilding Marine Engineering Co., LTD whereby the Company assumed the obligations versus the Shipyard. All the VLCCs were divested during 2021 and 2022 and the Company have since distributed the investment return to the shareholders.
Following the sale of the last remaining tanker vessel in late November 2022, the group has discontinued its tanker shipping business and the subsidiary Hunter Tankers AS was liquidated in 2023. The Group has had no other material activity in 2022, and also general overhead expenses has in its entirety been allocated to the discontinued tanker business.
On 30 November 2023, the Company announced that it had entered into a three-year back-to-back time-charter contract for an eco scrubber fitted VLCC, where the VLCC will be chartered in on a USD 52,500 per day fixed rate contract and chartered out on a floating index-linked contract. The VLCC was delivered on 1 December 2023.
At present, there are no business activities in Indicator AS (containing the Badger-technology).
The Company's shares are listed on Oslo Euronext Expand, a regulated market operated by the Euronext Group under the ticker "HUNT".
Going concern
In accordance with the Accounting Act § 3-3a, we confirm that the financial statements have been prepared under the assumption of going concern. This assumption is based on the sound financial position of the Company. The Company is classified as an investment Company and has recently divested a major oil tanker investment project. Most recently, the Company has invested in two three-year back-to-back time charter for ECO scrubber fitted VLCCs. Simultaneously with the investment in the VLCC charters, the Company has worked with the development of a maritime infrastructure solution to serve an expected increase in activity in the carbon capture market.
Comments related to the financial statements
The Group's revenues and other income decreased from USD 74.8 million in 2022 to USD 1.95 million in 2023. Net income from operations in 2023 was USD 0.41 million compared to USD 47.4 million in 2022. The profit in 2022 is mainly due to discontinued operations relating to Hunter Tankers AS.
Total cash flow from operating activities was negative USD 0.7 million in 2023 mainly due by limited revenue generating business operations during the year. Net cash flow to financing activities for 2023 was negative USD 130.4 million, mainly related to dividend payments. Net cash flow from investments were negative USD 2.5 million, mainly related to investments in working capital in connection with VLCC chartering.
Total consolidated adjusted cash position as per 31 December 2023 was USD 3.2 million.
Total assets at year-end 2023 amounted to USD 8.5 million, compared to USD 139.2 million last year. The equity ratio was 96.3% as of 31 December 2023, compared to 99.4 % the year before.
Financial risk
Overall view on objectives and strategy
HUNT's main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position.
HUNT manages its capital structure and adjusts it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may issue equity, take up debt or a combination of the two. No changes were made in the objectives policies or processes during the financial year.
Market risk
The Company was at year end in the process of establishing a new business segment within oil tanker chartering, in which certain investments in working capital has been made. The tanker market and the general economic and financial market conditions may affect the Company's profitability and ability to grow.
The Company has zero financial indebtedness.
Credit risk
The Company only trades with recognized, creditworthy third parties. It is the Group's policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Group is currently deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk.
Liquidity risk
The Company monitors its liquidity on a regular basis and produces rolling liquidity forecasts in order to identify liquidity requirements in future periods. The policy for HUNT's management of liquidity risk is to maintain a minimum liquidity corresponding to its net liquidity requirements for 12 months.
The Company was at year end in the process of establishing a new business segment within oil tanker chartering, in which certain investments in working capital has been made. The Group had one VLCC on a fixed three-year charter at USD 52,500 per day, at year end 2023. The VLCC is chartered out on a floating indexlinked time three-year time-charter. The VLCC chartering market is volatile, and the Group may experience periods of negative cash flow. The Group estimates that it has sufficient liquidity to meet potential periods of negative cash flow.
The working environment, the employees and equal opportunities
The Company has not registered any critical incidents or leave of absence due to incidents. The percentage of days lost through illness was 0 % in 2023 and 2022.
Relations with employees are based on respect. The Company is committed to a working environment with mutual trust and where everyone is accountable for their own actions and share responsibility for the performance and reputation of the Company.
The Company had 3 employees by the end of 2023.
We kindly refer to our corporate governance and corporate social responsibility documents on page 4 to 16 for further information.
There is an insurance in place for the members of the Board.
Discrimination
The Discrimination Act's objective is to promote gender equality, ensure equal opportunities and rights, and to prevent discrimination due to ethnicity, national origin, descent, skin color, language, religion and faith. The Company does not tolerate any kind of discrimination of employees, customers and partners on account of religion, gender, sexual orientation, age, nationality, political views, disability or other circumstances. The Company does not tolerate unlawful employment discrimination of any kind. The Group expects all of its employees to treat others they come in contact with through work with respect and courtesy, and to refrain from harassment, discrimination and any other behavior that may be regarded threatening or degrading.
Environmental report
There have been no incidents reported related to emissions that has resulted in a breach of the pollution act or other pollution of significance.
Research and development
All R&D activities in Indicator has been put on hold.
Subsequent events
Completed a USD 12 million equity private placement on 10 January 2024
Entered into a second three-year back-to-back time-charter for an eco scrubber fitted VLCC, which was delivered in March 2024. The VLCC was chartered in on a fixed rate of USD 51,000 per day and chartered out on a floating index-linked rate
Extraordinary general meeting held on 2 February 2024, which approved the USD 12 million equity private placement and the two subsequent offerings
Completed two subsequent offerings in March 2024 for a total of approx. NOK 35 million
As of the date of this report, the Company has achieved an average index-linked charter out rate of USD 54,900 per day for 100% of available days for the Company's two chartered in VLCCs during the first quarter of 2024
Future challenges
For the Group, the future challenges relates to the successful development and execution of the oil tanker chartering business, as well as new investment projects.
Allocation of net income
The Board of Directors has proposed the net income of Hunter Group ASA of USD 1.3 million to be attributed to retained earnings.
Oslo/Verbier, 27 March 2024
Morten Eivindssøn Astrup Chairman of the board
Kristin Hellebust Member of the board
Bertel Steen Member of the board
Erik A. S. Frydendal CEO
Consolidated statement of profit and loss
| For the year ended 31 December | ||||
|---|---|---|---|---|
| (Figures in USD 1 000) | Note | 2023 | 2022 | |
| Revenues and other income | ||||
| Net realized time chartering result | 15 | 52 | 0 | |
| Unrealized change in fair value of time charters | 15 | 1 782 | 0 | |
| Other income | 15 | 121 | 0 | |
| Total revenues and other income | 1 955 | 0 | ||
| Operating expenses | ||||
| Depreciation and amortisation expense | 4, 5 | 74 | 0 | |
| General and administrative expenses | 14, 16, 20 | 1 341 | 0 | |
| Total operating expenses | 1 415 | 0 | ||
| Operating profit (loss) from continuing operations | 540 | 0 | ||
| Net financial income (loss) | 17 | -134 | 0 | |
| Profit (loss) before taxes from continuing operations | 406 | 0 | ||
| Tax on ordinary result | 18 | 0 | 0 | |
| Net profit (loss) from continuing operations | 406 | 0 | ||
| Discontinued operations | ||||
| Net profit (loss) from discontinued operations | 22 | 893 | 47 376 | |
| Net profit (loss) | 1 299 | 47 376 | ||
| Earnings per share discontinued operations | 19 | 0,03 | 0,08 | |
| Earnings per share diluted discontinued operations | 19 | 0,03 | 0,08 | |
| Earnings per share continuing operations | 19 | 0,01 | 0,00 | |
| Earnings per share diluted continuing operations | 19 | 0,01 | 0,00 | |
| Consolidated statement of comprehensive income | ||||
| (Figures in USD 1 000) | 2023 | 2022 | ||
| Profit (loss) for the year | 1 299 | 47 376 | ||
| Other comprehensive income, items to be reclassified to profit & loss | ||||
| Translation differences | 0 | 0 | ||
| Total compehensive income | 1 299 | 47 376 | ||
| Total comprehensive income attributable to: Equity holders of the parent company |
1 299 | 47 376 | ||
| Total comprehensive income | 1 299 | 47 376 | ||
Consolidated statement of financial position
| As at 31 December | |||
|---|---|---|---|
| (Figures in USD 1 000) | Note | 2023 | 2022 |
| NON-CURRENT ASSETS | |||
| Investment in shares | 10 | 492 | 0 |
| Other tangible assets | 4, 5 | 78 | 148 |
| TOTAL NON-CURRENT ASSETS | 570 | 148 | |
| CURRENT ASSETS | |||
| Trade and other receivables | 6, 13 | 0 | 2 160 |
| Other short-term financial assets | 7, 13, 15 | 2 500 | 0 |
| Back-to-back time charters | 13 | 1 782 | 0 |
| Other short-term assets | 7, 13 | 424 | 55 |
| Total current assets | 4 706 | 2 214 | |
| Cash and cash equivalents | 8, 13 | 3 236 | 136 866 |
| TOTAL CURRENT ASSETS | 7 942 | 139 080 | |
| TOTAL ASSETS | 8 512 | 139 228 |
Consolidated statement of financial position
| As at 31 December | |||
|---|---|---|---|
| (Figures in USD 1 000) | Note | 2023 | 2022 |
| EQUITY | |||
| Share capital (43 101 434 shares) | 21 | 180 | 126 |
| Own shares | 21 | 0 | -2 |
| Share premium | 1 897 | 0 | |
| Other equity | 6 118 | 138 314 | |
| TOTAL EQUITY | 8 195 | 138 438 | |
| LIABILITIES | |||
| Interest-bearing debt | 5, 9, 10 | 11 | 74 |
| Total non-current liabilities | 1 1 | 7 4 | |
| Trade payables | 11, 13 | 121 | 71 |
| Accrued public charges and indirect taxes | 13 | 41 | 44 |
| Current portion of interest-bearing debt | 9, 10 | 67 | 78 |
| Other current liabilities | 12, 13 | 77 | 523 |
| Total current liabilities | 306 | 716 | |
| TOTAL LIABILITIES | 317 | 790 | |
| TOTAL EQUITY AND LIABILITIES | 8 512 | 139 228 |
Oslo/Verbier, 27 March 2024
Morten Eivindssøn Astrup Chairman of the board
Kristin Hellebust Member of the board
Bertel Steen Member of the board
Erik A. S. Frydendal CEO
Consolidated statement of cash flows
| For the year ended 31 December | |||
|---|---|---|---|
| (Figures in USD 1 000) | Note | 2023 | 2022 |
| Profit (loss) before tax from continuing operations | 406 | 0 | |
| Profit (loss) before tax discontinued operations | 22 | 893 | 47 376 |
| Profit (loss) before tax | 1 299 | 47 376 | |
| Depreciation | 74 | 8 033 | |
| Gain on sale of VLCC | 2 | 0 | -56 418 |
| Financial income | -454 | -1 614 | |
| Financial expenses | 6 | 4 386 | |
| Change in accounts receivables and accounts payables | 2 209 | 3 230 | |
| Net foreign exchange differences | 0 | 6 941 | |
| Change in other receivables and payables and other | -3 851 | 1 258 | |
| Net cash flow from operating activities | -717 | 13 190 | |
| Investments in PP & E | 4 | -4 | 0 |
| Interest received | 17 | 454 | 1 614 |
| Sale of VLCC* | 4 | 0 | 383 000 |
| Investments in other financial investments | 7, 15 | -2 992 | 0 |
| Net cash flow from investment activities | -2 542 | 384 614 | |
| Interest paid | 17 | -6 | -4 168 |
| Installments other interest-bearing debt | 9, 10 | 0 | -193 769 |
| Installment leasing-debt (IFRS 16) | 5 | -74 | -92 |
| Capital contribution | Equity | 1 951 | 0 |
| Purchase of own shares | Equity | 0 | -4 311 |
| Dividend paid | Equity | -132 243 | -81 296 |
| Net cash flow from financing activities | -130 372 | -283 636 | |
| Total change in cash and cash equivalents | -133 630 | 114 168 | |
| Currency effect on cash | 0 | -6 941 | |
| Cash and cash equivalents beginning of year | 136 866 | 29 639 | |
| Cash and cash equivalents end of year | 8 | 3 236 | 136 866 |
* Includes broker commision related to the sale of VLCC of TUSD -1,995 in 2022.
Consolidated statement of changes in equity
| Share | Own | Share | Currency | Retained | Total | ||
|---|---|---|---|---|---|---|---|
| (Figures in USD 1 000) | Note | Capital | Shares | premium | translation | earnings | equity |
| Equity as of 01.01.2022 | 82 625 | -1 660 | 15 034 | -2 289 | 82 811 | 176 521 | |
| Net profit 2022 | 0 | 47 376 | 47 376 | ||||
| Other comprehensive income | 0 | 0 | 0 | ||||
| Total comprehensive income 2022 | 0 | 47 376 | 47 376 | ||||
| Repayment of capital *) | -82 499 | 1 319 | -12 794 | 0 | 12 677 | -81 297 | |
| Purchase of own shares | -2 071 | -2 240 | 0 | 0 | -4 311 | ||
| Awarded of own shares | 2 410 | 0 | 0 | -2 410 | 0 | ||
| Share based payment | 0 | 0 | 149 | 149 | |||
| Equity as of 31.12.2022 | 126 | -2 | 0 | -2 289 | 140 603 | 138 438 | |
| Net profit 2023 | 0 | 1 299 | 1 299 | ||||
| Other comprehensive income | 0 | 0 | 0 | ||||
| Total comprehensive income 2023 | 0 | 1 299 | 1 299 | ||||
| Dividend paid | 21 | 0 | -132 243 | -132 243 | |||
| Private placement 6 December 2023 | 21 | 54 | 0 | 1 897 | 0 | 0 | 1 951 |
| Share based payment | 0 | 0 | 40 | 40 | |||
| Exercise of options | 20, 21 | 0 | 2 | 0 | 0 | -1 291 | -1 289 |
| Equity as of 31.12.2023 | 180 | 0 | 1 897 | -2 289 | 8 407 | 8 195 |
*) Repayment of capital per share is USD 0.14 in 2022.
Note 1 - Accounting principles
Hunter Group ASA (HUNT) is a public limited liability company, incorporated in Norway, headquartered in Oslo and listed on the Oslo Stock Exchange (Euronext Expand), address headquarter: Dronningen 1, 0287 Oslo, Norway.
The financial statements of Hunter Group ASA for the fiscal year 2023 were approved in the board meeting on 27 March 2024.
The Group's activities are described in the Board of Director's report.
1.1 Basis of presentation of the accounts
HUNT's financial statements have been prepared in accordance with International Financial Reporting Standards® (IFRS®), and IFRS as adopted by the EU, and are mandatory for financial year beginning on or after 1 January 2023, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2023.
The historical cost basis have been used when preparing the financial statements, except for financial instruments measured at fair value. These policies have been applied consistently to all periods presented. Some totals may not equal the sum of the amounts shown due to rounding.
Following the sale of the last remaining tanker vessel in late November 2022, the group has discontinued its tanker shipping business. The Group has had no other material activity in 2022, and also general overhead expenses has in its entirety been allocated to the discontinued tanker business. As the entire business was discontinued in 2022, the disclosures in the corresponding notes information for 2022 pertaining to income statement amounts and cash flows relate to discontinued operations. Disclosures related to balance sheet items as of year-end 2022 relates to assets remaining in the group following the sale of all tanker vessels, and primarily relates to working capital. The settlement was finalized in 2023, resulting in some additional discontinued effects. Please see note 22 for the accounting effects of the discontinued operations. The Group focuses on the development of a low-pressure midstream shipping solution for Carbon Capture and Storage through a joint cooperation agreement with DNV, and back-to-back charterparties on Very Large Crude Carriers ("VLCC") based on fixed rates per day charter-in and floating index-linked spot rates charter-out.
Consolidation
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. The Group consist of the following companies as per 31 December 2023:
- Hunter Group ASA (parent company)
- Hunter Chartering AS (100% owned subsidiary dormant)
- Hunter Carbon Carriers AS (100% owned subsidiary dormant)
- Indicator AS (100% owned subsidiary dormant)
The wholly-owned subsidiary Hunter Tankers AS was liquidated in 2023, please see note 22 for information about the accounting effects of the discontinued operations.
Note 1 - Accounting principles cont.
1.2 Use of estimates when preparing the annual financial statements
Estimates and their underlying assumptions that affect the application of accounting principles and reported amounts of assets and liabilities, income and expenses are based on historic experience and other factors considered reasonable under the circumstances. The estimates constitute the basis for the assessment of the net book value of assets and liabilities when these values cannot be derived from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
The preparation of the Group's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. This applies mainly to the Group's Back-toback charterparties, Investment in shares and Receivables, ref. note 1.6.
1.3 Cash and cash equivalents
Cash includes cash in hand and at bank. Cash equivalents are short-term liquid investments that can be immediately converted into a known amount of cash and have a maximum term to maturity of three months.
1.4 Statement of cash flows
The statement of cash flows is prepared in accordance with the indirect method.
1.5 Functional currency and presentation currency
The main transactions for Hunter Group ASA has been in USD. Due to the functional currency for the main company in the Group is in USD, it is also the considered to be beneficial to present the financial statements of the Group in USD.
Note 1 - Accounting principles cont.
1.6 Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss at amortized cost, as appropriate. All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. The Group determines the classification of its financial assets at initial recognition. The Group's financial assets include back-to-back charterparties, investment in shares, cash and cash equivalents, trade and other receivables.
Subsequent measurement
The back-to-back charterparties are classified as financial assets measured at fair value through profit or loss. Receivables are classified as financial assets measured at amortized costs.
The subsequent measurement of financial assets depends on their classification as described below:
Back-to-back time charterparties
Back-to-back time charterparties are derivative financial assets based on a fixed charter-in rate and a floating index-linked charter-out rate for a fixed period. At initial recognition, the fair value of the charterparty is zero, and after initial measurement, such financial assets are subsequently measured at the net present value of the charterout rates based on reported time charter rates from recognized analysts less the charter-in rates for the applicable period. The change in the net present value is recognized in the profit or loss statement as Net result from leaseleaseback in the Revenue-category.
The charterparties financial assets and liabilities are offset and the net amount is reported in the statement of financial position as there is an enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Investment in shares
Investment in shares consist of shares with an ownership without significant influence, typical below 20 per cent. These investments are valued at fair value in the statement of financial position with net changes in fair value recognized in the statement of profit or loss.
Receivables
After initial measurement, such financial assets are subsequently measured at amortized cost using the EIR (effective interest rate) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profit or loss. The losses arising from impairment are recognized in the statement of profit or loss in other operating expenses for receivables.
This category includes accounts receivable and other receivables carried at amortized cost or at nominal amount less provision for bad debt where this can be regarded as a reasonable proxy for fair value.
Other financial assets are cash and cash equivalents and other financial investments, measured at balance sheet date rate for items in foreign currency.
Note 1 - Accounting principles cont.
1.7 Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, or borrowings at amortized cost, as appropriate.
HUNT's financial liabilities include trade and other payables and lease liabilities.
1.8 Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses. When fixed assets are sold or disposed of, the gross carrying amount and accumulated depreciation are derecognized, and any gain or loss on the sale or disposal is recognized in the statement of profit or loss.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Plant and machinery: 3 - 5 years
The depreciation period, the depreciation method and the residual value of fixed assets are evaluated annually.
1.9 Recognition of income
The Company enters into back-to-back time charterparties on Very Large Crude Carriers ("VLCC"). The Company charters in the Vessels on a fixed rate per day, and immediately charters the Vessel out on a floating index-linked spot rate. The index-linked spot rate is based on the recognized VLCC benchmark TD3C, and enables the Company to capture every daily VLCC spot market movement with maximum utilization. The contracts are considered to be financial assets that are to be measured at fair value through profit or loss. The fair value of the contracts is measured to present value of the expected floating index-linked spot rate for the charter periods, less the fixed rates. Both realized and unrealized gain/loss of the back-to-back charterparties are presented net as Operating profit or loss as this is considered to be the Group's main activity. Other income is recognized to reflect the transfer of services, and then at an amount that reflects the consideration the company expects to be entitled to in exchange for services.
1.10 Equity
Cost of equity transactions
Transaction costs directly related to an equity transaction are recognized directly in equity after deducting tax expenses.
1.11 Segments
For management purposes, the Group is organized into one business unit based on its products and services, and has one reportable segment, which consist of vessel chartering activities and other related costs and investments. No operating segments have been aggregated to form the reportable operating segment.
The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements.
Note 1 - Accounting principles cont.
1.12 Accounting principles for discontinued operations
All the VLCC vessels were sold in 2022 and the tanker vessel segment was as such discontinued.
1.13 Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year, except for the new and amended standards and interpretations to IFRS which have been implemented by the Group during the current financial year. Several other amendments and interpretations apply for the first time in 2023, but do not have an impact on the consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS® Practice Statement 2
The amendments to IAS 1 and IFRS® Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group's disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group's financial statements.
Amendments to standards and interpretations with a future effective date
None of the future amendments to standards are expected to have material impact on the group.
Note 2 – Significant acquisitions and disposals, and discontinued operations
On 30 June 2022, the Group concluded the sale of Hunter Disen for an en-bloc price of USD 96.0 million, with a gain of USD 15.1 million. On 22 July 2022, the Company concluded the sale of Hunter Idun for an en-bloc price of USD 95.5 million, with a gain of USD 13.9 million. On 2 August 2022, the Company concluded the sale of Hunter Frigg for an en-bloc price of USD 96.0 million, with a gain of USD 9.0 million. On 23 November 2022, the Company concluded the sale of Hunter Freya for an en-bloc price of USD 95.5 million, with a gain of USD 18.0 million.
As all of the Group's VLCC were sold the tanker vessel segment discontinued at the end of 2022. In January 2023 it was decided to distribute the major part of the Group's cash position to its share holders.
Note 3 - Segment information
Based on the nature of the vessels, processes and type of customers it was concluded that the Group had one segment and information on segment performance is found in the consolidated statements of income and financial position. As the financial statement is consistent with the internal financial reporting, no further disaggregation is provided. The tanker vessel segment was discontinued at the end for 2022. As from 2023 the one segment consist of the administration of back-to-back charterparties for VLCCs based on floating index-linked charter-out rates less fixed charter-in rates.
Note 4 - Property, plant and equipment
| (Figures in USD 1 000 ) | Right of | Other tangible | ||
|---|---|---|---|---|
| Per 31 December 2023 | use assets | assets VLCC vessels | Total | |
| Cost price at 1 January | 403 | 18 | 0 | 421 |
| Additions | 0 | 4 | 0 | 4 |
| Sale | 0 | 0 | 0 | 0 |
| Transfer to VLCC in operation | 0 | 0 | 0 | 0 |
| Cost price at 31 December | 403 | 22 | 0 | 425 |
| Accumulated depreciations at 31 December | -329 | -18 | 0 | -346 |
| Book value at 31 December | 74 | 4 | 0 | 78 |
| Depreciation (straight-line method) | 74 | 0 | 0 | 74 |
| Estimated useful life | 3-5 years | 3-10 years | 25 years |
| (Figures in USD 1 000) | Right of | Other tangible | ||
|---|---|---|---|---|
| Per 31 December 2022 | use assets | assets VLCC vessels | Total | |
| Cost price at 1 January | 471 | 18 | 350 235 | 350 724 |
| Additions | 0 | 0 | 0 | 0 |
| Sale | -68 | 0 | -350 235 | -350 303 |
| Transfer to VLCC in operation | 0 | 0 | 0 | 0 |
| Cost price at 31 December | 403 | 18 | 0 | 421 |
| Accumulated depreciations at 31 December | -256 | -18 | 0 | -274 |
| Book value at 31 December | 148 | 0 | 0 | 148 |
| Depreciation (straight-line method) | 97 | 3 | 7 933 | 8 033 |
| Estimated useful life | 3-5 years | 3-10 years | 25 years |
| Note 5 - Leases |
||||
|---|---|---|---|---|
| (figues in USD 1 000) | 2023 | 2022 | ||
| Right of use assets 1.1 | 148 | 313 | ||
| Additions | 0 | 0 | ||
| Sale | 0 | -68 | ||
| Depreciation | -74 | -97 | ||
| Right of use assets 31.12 | 74 | 148 | ||
| Other interest-bearing debt 1.1 | 152 | 313 | ||
| Addition | 0 | 0 | ||
| Sale | 0 | -69 | ||
| Installments | -74 | -92 | ||
| Other interest-bearing debt 31.12 | 78 | 152 | ||
| Interest | 6 | 11 | ||
| Less than | Between | More than | ||
| Remaining rental-payments as per 31.12.23 | 1 year | 2 - 5 years | 5 years | Total |
| Office rent | 74 | 11 | 0 | 86 |
The remaining right of use assets and interest-bearing debt as of 31 December 2023 relates to the office rent.
Note 6 – Trade and other receivables
| (Figures in USD 1 000) | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Performed work earned, not invoiced (contract assets) | 0 | 2 160 |
| Other | 0 | 0 |
| Total trade and other receivables | 0 | 2 160 |
Age distribution of trade receivables
As at 31 December, the ageing analysis of trade receivables is as follows:
| Neither | |||||||
|---|---|---|---|---|---|---|---|
| past due nor | Past due but not impaired | ||||||
| Total | impaired | >30 days | 30-60 days | 60-90 days | 90-120 days | >120 days | |
| 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2022 | 2 160 | 2 160 | 0 | 0 | 0 | 0 | 0 |
Trade receivables were in 2022 non-interest bearing and the payment terms were generally net 30 days. Fair value of the receivables approximated the nominal values, less provision for doubtful receivables, which was USD 0 thousand per 31 December 2023 and 31 December 2023.
Note 7 - Other short-term assets
| Total other receivables | 424 | 55 |
|---|---|---|
| Other short term receivables | 411 | 0 |
| Prepaid expenses | 13 | 55 |
| (Figures in USD 1 000) | 31.12.2023 | 31.12.2022 |
Other short-term financial assets 2 500 0
In connection with the three-year back-to-back charterparty on an eco-design and scrubber fitted Very Large Crude Carrier built in 2016 contract, the Company has provided a security deposit of USD 2.5 million in an account at Mercuria. The security deposit is earning interests and is restricted until the end of the charter party as of 30 November 2026.
Note 8 - Cash and cash equivalents
| (Figures in USD 1 000) Cash at bank |
3 236 | 136 866 |
|---|---|---|
| Total cash at bank | 3 236 | 136 866 |
| Restricted bank deposits for employee withholding taxes | 49 | 50 |
Note 9 - Current interest-bearing loans and borrowings
| (Figures in USD 1 000) | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Current portion of interest-bearing debt | 67 | 78 |
| Current portion of interest-bearing debt | 67 | 78 |
Note 9 - Current interest-bearing loans and borrowings cont.
Reconciliation of liabilities arising from financing activities:
| Non-cash changes | ||||||
|---|---|---|---|---|---|---|
| Cash | Lease | FX | Fair value | |||
| 2023 | 31.12.2022 | flows | liabilities | movement chng. & other | 31.12.2023 | |
| Other interest-bearing debt (long-term) | 74 | 0 | -63 | 0 | 0 | 11 |
| Short-term liabilities | 78 | -78 | 67 | 0 | 0 | 67 |
| Total liabilities from financing activities | 152 | -78 | 4 | 0 | 0 | 78 |
| 2022 | Non-cash changes | |||||
|---|---|---|---|---|---|---|
| 31.12.2021 | Cash flows |
Lease | FX | Fair value | ||
| liabilities | movement chng. & other | 31.12.2022 | ||||
| Other interest-bearing debt (long-term) | 180 514 | -180 442 | 2 | 0 | 0 | 74 |
| Short-term liabilities | 13 500 | -13 328 | -94 | 0 | 0 | 78 |
| Total liabilities from financing activities | 194 013 | -193 769 | -92 | 0 | 0 | 152 |
Note 10 - Other interest-bearing debt
| (Figures in USD 1 000) | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Other interest-bearing debt (long-term) | 11 | 74 |
| Other interest-bearing debt (long-term) | 11 | 74 |
| Maturity of long-term and short-term interest-bearing debt | 31.12.2023 | 31.12.2022 |
| Maturity 0-1 year (classified as short-term debt) | 67 | 78 |
| Maturity 2-4 years | 11 | 74 |
| Maturity 5 years and after | 0 | 0 |
| Total long-term and short-term interest-bearing debt | 78 | 152 |
Average interest rate on interest-bearing debt was 5 % in 2023 ad 2022 (lease liabilities). Please see note 13 for the maturity analysis for short-term liabilities.
Note 11 - Trade payables
Trade payables are generally non-interest bearing and the payment terms are net 30 days. Fair value of the payables equals the nominal value.
Note 12 - Other current liabilities
| Total other current liabilities | 77 | 523 |
|---|---|---|
| Interest payable | 0 | 0 |
| Other accrued costs | 5 | 463 |
| Unpaid vacation pay | 72 | 60 |
| Other current liabilities | 31.12.2023 | 31.12.2022 |
| (Figures in USD 1 000) |
Note 13 - Financial instruments risk management objectives and policies
HUNT has been subject to market risks (foreign currency exchange risk and interest rate risk), credit risk and liquidity risk.
The Group's management oversees the management of these risks and assures that HUNT's financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group's policies. It is the Group's policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below.
Foreign currency risk
The Group's cash reserves of USD 3.2 million are deposited in the Norwegian bank DNB. Following a decision in 2022 to pay out all excess cash as dividend in NOK in early 2023, 81.6 % of cash reserves of USD 136.9 were placed in NOK and subject to foreign currency risk from year-end and until payment of dividend. The main transactions for the Group has been in USD.
Interest rate risk
The Group's financial income in the statement of profit or loss was influenced by changes in interest rates as the interest with DNB was on a floating basis. The Group had USD 0 million in interest expense in 2023 and USD 4.4 million in 2022. No interest-bearing debt exist as of 31 December 2023 other than lease liabilities.
Credit risk
HUNT only trades with recognized, creditworthy third parties. It is the Group's policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Group is deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk.
Liquidity risk
HUNT monitors its liquidity on a regular basis and produces rolling liquidity forecasts on a monthly basis in order to identify liquidity requirements in future periods. The target for HUNT's management of liquidity risk is to minimum maintain a liquidity corresponding to its net liquidity requirements for 12 months. In January 2023 it was decided to distribute the major part of the Group's cash position to its share holders.
The management will continue to focus on efficient operations, good planning and close monitoring of the liquidity situation and maintaining a clear business development strategy. The Company expects to retain a level of net liquidity, which will sufficiently cover operating costs and periods of time charter rates below the fixed rates. Should the time charter rates decline and stay at levels below the fixed charter rates, the Company may need to strengthen its liquidity. In January 2024 the Company raised NOK 124 million in gross proceeds through a private placement strengthen the liquidity in connection with the two three-year back-to-back charterparties on eco-design and scrubber fitted Very Large Crude Carriers ("VLCC"). The liquidity is considered to be sufficient the date of this annual report.
Climate risk
The Group assesses where climate risks could have a significant impact. These risks in relation to climate-related matters has been included as key assumptions where they materially could have impacted the measure of recoverable amount. How the company affects the climate and how the climate affects the company will be a part of the decision-making basis when new business opportunities are assessed.
Note 13 - Financial instruments risk management objectives and policies cont.
Climate-related matters
The Group considers climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on the group due to both physical and transition risks. Even though the Group believes its business model and products will still be viable after the transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions underpinning several items in the financial statements. Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes and developments, such as new climate-related legislation. The items and considerations that are most directly impacted by climate-related matters are:
• Fair value measurement. The Group has currently the back-to-back charterparties valued at fair value in the balance sheet. When estimating the fair value, the Group considers the effect of physical and transition risks and whether investors would consider those risks in their valuation. The contracts have a short duration period (3 years), and it is therefore considered that the transition to renewable energy will not influence the VLCC market during the current duration period. The group believes it is not currently exposed to severe physical risks, but believes that investors, to some extent, would consider impacts of transition risks in their valuation, such as increasing requirements for energy efficiency.
| (Figures in USD 1 000) | within | within | within |
|---|---|---|---|
| 31.12.2023 | 3 months | 3-9 months | 9-12 months |
| Accounts payable | 121 | 0 | 0 |
| Public duties payables | 41 | 0 | 0 |
| Current portion of interest-bearing debt | 17 | 33 | 17 |
| Other short-term liabilities | 5 | 72 | 0 |
| within | within | within | |
| 31.12.2022 | 3 months | 3-9 months | 9-12 months |
| Accounts payable | 71 | 0 | 0 |
| Public duties payables | 44 | 0 | 0 |
| Current portion of interest-bearing debt | 20 | 38 | 20 |
| Other short-term liabilities | 393 | 129 | 0 |
The table below shows a maturity analysis for HUNT's total short-term liabilities:
The back-to-back charterparty are settled on a net basis and as such the fixed payment obligation of USD 52,500 per day is not defined as a short-term liability, ref. note 1.6. Please see note 10 for the maturity analysis for long-term liabilities.
Note 13 - Financial instruments risk management objectives and policies cont.
Capital management
HUNT's main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position and a good credit rating.
HUNT manages its capital structure and makes adjustments to it in light of changes in economic conditions.
| (Figures in USD 1 000) | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Long-term lease liabilities | 11 | 74 |
| Short-term lease liabilities | 67 | 78 |
| Trade and other payables | 240 | 638 |
| Bank deposits | -3 236 | -136 866 |
| Net debt (asset) | -5 419 | -136 076 |
| Equity | 8 195 | 138 438 |
| Total capital | ||
| Capital and net debt | 2 776 | 2 362 |
| Gearing ratio | -195,2 % | -5760,2 % |
| Equity ratio | 96,3 % | 99,4 % |
Set out below is a comparison by category of carrying amounts and fair values of all of the Company's financial instruments:
| Fair value | 31.12.2023 | 31.12.2022 | |||
|---|---|---|---|---|---|
| (Figures in USD 1 000) | measurement | Carrying | Fair | Carrying | Fair |
| Financial assets | hierarchy | amount | value | amount | value |
| Cash and cash equivalents | Level 1 | 3 236 | 3 236 | 136 866 | 136 866 |
| Investment in shares | Level 3 | 492 | 492 | 0 | 0 |
| Other financial investments | Level 1 | 2 500 | 2 500 | 0 | 0 |
| Trade receivables | Level 3 | 0 | 0 | 2 160 | 2 160 |
| Back-to-back time charters | Level 3 | 1 782 | 1 782 | 0 | 0 |
| Other short-term receivables | Level 3 | 424 | 424 | 55 | 55 |
| 31.12.2023 | 31.12.2022 | ||||
| Carrying | Fair | Carrying | Fair | ||
| Financial liabilities | amount | value | amount | value | |
| Other interest-bearing debt (long-term) | Level 3 | 11 | 11 | 74 | 74 |
| Current interest-bearing loans and borrowings | Level 3 | 67 | 67 | 78 | 78 |
| Trade payables | Level 3 | 121 | 121 | 71 | 71 |
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
Note 13 - Financial instruments risk management objectives and policies cont.
The Investment in shares were acquired at the end of 2023. There has not occurred significant changes in the market conditions at the end of 2023, which indicates that the acquisition cost in all material aspects equal the fair value less cost to sell as of 31 December 2023. Back-to-back time charters are subsequently measured at the net present value of the charter-out rates based on reported time charter rates from recognized analysts less the charter-in rates for the applicable period. The Group does not use hedge accounting.
Note 14 - Transactions with related parties
The following table provides the total amount of transactions that have been entered into with related parties controlled by members of executive management of HUNT for the relevant financial year. The purchases from related parties are made at terms equivalent to those that prevail in arm's length transactions.
| Transcations with related parties (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Purchased services | 13 | 94 |
The Group has used the services of the law firm Ro Sommernes DA for legal advice in 2023 and 2022. Ro Sommernes DA has invoiced the Company USD 7 thousand in 2023 and USD 20 thousand in 2022. The Company's previous chairman Henrik Christensen is a partner in Ro Sommernes DA, and served as the Chariman until March 2023.
The Group renewed its renting of office space from Dronningen Eiendom AS in October 2021. The renewed rental agreement is for 36 months. One of the Company's shareholder was also a shareholder of Dronningen Eiendom AS.
Hunter Group had served as a manager for several agreements where Apollo paid NOK 1,500 per hour and a fee of USD 5 thousand per transaction. Apollo Asset Ltd. is 100% owned by Mr. Arne Fredly, previously a board member and the largest shareholder of Hunter Group ASA in 2022.
Note 15 – Revenues and other income
| (Figures in USD 1 000) | ||
|---|---|---|
| Year | 2023 | 2022 |
| Type of goods or services | ||
| Pool revenues | 0 | 6 899 |
| Time charter revenues | 0 | 11 482 |
| Total revenues | 0 | 18 381 |
| Net realized time chartering result | 52 | 0 |
| Unrealized change in fair value of time charters | 1 782 | 0 |
| Other income | 121 | 0 |
| Total revenues and other income | 1 955 | 18 381 |
Pool revenues were day rates received from the pool Tankers International, and is considered earned per day. Time charter revenue was recognized straight-line over the lease term. The service component of time charter revenue, was recognized per day as the service was performed.
Note 15 – Revenues and other income cont.
| 2023 | 2022 | |
|---|---|---|
| Realized floating index-linked spot rates | 1 655 | 0 |
| Paid fixed rates | -1 603 | 0 |
| Broker commision (1 % of realized floating index-linked spot rates) | -17 | 0 |
| Net realized result from lease-leaseback | 35 | 0 |
| Change in fair value of the three-year back-to-back charterparty | 1 782 | 0 |
| Financial assets at fair value through profit or loss | 2023 | 2022 |
| Three-year back-to-back charterparty eco-designed and scrubber fitted VLCC | 1 782 | 0 |
Financial assets at fair value through profit or loss consist of a three-year back-to-back charterparty on an ecodesign and scrubber fitted Very Large Crude Carrier built in 2016, with an internationally renowned counterparty (the "Charterparty"). The Company charters in the Vessel on a fixed rate of USD 52,500 per day, and immediately charters the Vessel out on a floating index-linked spot rate. The index-linked spot rate is based on the recognized VLCC benchmark TD3C, and enables the Company to capture every daily VLCC spot market movement with maximum utilization. Delivery of the Vessel was made on 1 December 2023.
In connection with this contract with Mercuria, the Company has provided a security deposit of USD 2.5 million in an account at Mercuria. The security deposit is earning interests and is restricted until the end of the charter party as of 30 November 2026.
The fair values of the back-to-back time charterparties is based on the present value of the expected floating indexlinked spot rate less the present value of the fixed rated for the remaining period of the two contracts.
Note 16 – Specification of Other operating expenses
Vessel operating expenses primarily consisted of crewing related costs, in addition to insurance costs and various spare parts, and were discontinued at the end of 2022.
Other operating expenses
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Payroll expenses | 795 | 978 |
| IT and office-related expenses | 77 | 99 |
| Audit, audit-related services and accounting fees | 169 | 253 |
| Various legal fees | 232 | 244 |
| Insurance, car, travel, tonnage tax and other expenses | 67 | 419 |
| Total operating expenses | 1 341 | 1 993 |
Note 17 - Finance income and finance expenses
This section provides additional information about individual line items of finance income and finance expense in the statement of profit or loss by type.
| Finance income (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Interest income related to cash, cash equivalents & other financial investments | 454 | 1 614 |
| Other financial income | 0 | 2 911 |
| Currency gain | 3 | 0 |
| Total finance income | 457 | 4 525 |
| Finance expenses (Figures in USD 1 000) | 2023 | 2022 |
| Interest expense related to debt to financial institutions | 6 | 4 386 |
| Other financial expences | 77 | 1 125 |
| Currency losses | 509 | 7 121 |
| Total finance expenses | 592 | 12 633 |
| Total finance income (loss) | -134 | -8 108 |
Interest income on cash & cash equivalents consist of earned interest on the Group's cash & cash equivalents placements.
Note 18 - Income tax
| Income tax expense (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Payable tax | 0 | 0 |
| Changes in utilized tax asset | 0 | 0 |
| Total tax expense | 0 | 0 |
| Calculation of basis for tax (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Earnings before tax | 406 | 47 376 |
| Permanent differences | -816 | 0 |
| Dividend received | 0 | -2 911 |
| Currency adjustments due to NOK as tax basis | -672 | -6 384 |
| Adjustment related to shipping tax rules | -366 | -45 416 |
| Changes in temporary differences | -6 | -2 |
| Use of tax loss brought forward | 1 454 | 7 336 |
| Total basis for tax | 0 | 0 |
| Summary of temporary differences: | 2023 | 2022 |
|---|---|---|
| Fixed assets | -13 | -19 |
| Loss carried forward | -26 260 | -30 850 |
| Total | -26 273 | -30 870 |
Calculated deferred tax asset (22 %) -5 780 -6 791
| Statement of financial position | |||
|---|---|---|---|
| --------------------------------- | -- | -- | -- |
| Deferred tax asset (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Loss carried forward | -5 777 | -6 787 |
| Fixed assets | -3 | -4 |
| Total deferred tax asset | -5 780 | -6 791 |
| Not recognized deferred tax asset | 5 780 | 6 791 |
| Total deferred tax asset recognised in the statement of financial position | 0 | 0 |
Note 18 - Income tax cont.
| Loss carried forward as of 31 December | 2023 | 2022 |
|---|---|---|
| Unlimited carrying forward | -26 260 | -30 850 |
| Effective tax rate | 2023 | 2022 |
| Profit / (loss) before tax | 406 | 47 376 |
| 22% tax of earnings before tax | 89 | 10 423 |
| Permanent differences and other | -180 | -641 |
| Currency effect due to NOK as tax basis | 365 | -1 404 |
| Adjustment related to shipping tax rules | -81 | -9 991 |
| Changes in deferred tax asset not recognised in the statement of financial position and other | -194 | 1 615 |
| Calculated tax cost | 0 | 0 |
Effective tax rate 0 % 0 %
The tax loss brought forward is related to Norway, and there exist no restrictions of the possibility to bring forward these tax losses (no maturity date). The deferred tax asset is not recognized as the Group has limited taxable income. The tax loss brought forwarded related to Hunter Tankers AS of USD 5.5 million as of 31 December 2022. Hunter Tankers AS was liquidated in 2024.
Note 19 - Earnings per share
Earnings per share is calculated as net profit (loss) for the year attributable to equity holders of the Company divided by the weighted 'average number of shares outstanding over the year.
Diluted earnings per share is calculated as net profit (loss) for the year attributable to equity holders of the Company divided by the weighted average number of share outstanding over the year plus the weighted average number of dilutive potential shares. All options executed in 2023.
| (Amounts and shares in 1 000) | 2023 | 2022 |
|---|---|---|
| Net profit (loss) | 1 299 | 47 376 |
| Weighted average number of outstanding ordinary shares during the year | 29 750 | 28 768 |
| Treasury shares (held by the issuing entity itself) | -18 | -411 |
| Weighted average number of outstanding ordinary shares during the year | 29 732 | 28 357 |
| Effect of dilution - warrents | 0 | 0 |
| Effect of dilution - share options | 0 | 0 |
| Weighted average diluted shares | 29 732 | 28 357 |
| Earnings (loss) per share | 2023 | 2022 |
| Earnings per share discontinued operations | 0,03 | 0,08 |
| Earnings per share diluted discontinued operations | 0,03 | 0,08 |
| Earnings per share continuing operations | 0,01 | 0,00 |
| Earnings per share diluted continuing operations | 0,01 | 0,00 |
Note 20 - Payroll and related expenses
| Payroll and related expenses (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Salaries and vacation pay | 611 | 647 |
| Social security tax | 123 | 103 |
| Pension expense ("OTP") | 28 | 43 |
| Employee share option program expense (incl. national insurance contributions) | 40 | 149 |
| Remuneration to the Board of Directors and the Nomination Committee | 5 | 31 |
| Other benefits | -12 | 6 |
| Total payroll an related expenses | 795 | 978 |
| 2023 | 2022 | |
| Average work years | 3 | 3 |
Pension scheme
The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called "OTP"). The pension contributions range from 4 % 0 - 7.1 G to 7 % 7.1 -12 G of the employee's salary - maximized to a percentage of 12 G (NOK 1,423,440). The National Insurance scheme basic amount for 2023 is NOK 118,620. The retirement age for all employees, including the management, is 67 years
The Group is obliged to have an occupational pension scheme pursuant to the Act on Occupational Pensions. The Group's pension plans meet the requirements of this Act.
| 2023 | 2022 | |
|---|---|---|
| Contributions expensed during the year | 28 | 43 |
Remuneration to management (amounts in USD)
The total remuneration for the members of the management was USD 437 thousand in 2023, compared to USD 467 thousand in 2022.
| Total remuneration to management during the year ended 31 December is as follows: 2023 | 2022 | |||||
|---|---|---|---|---|---|---|
| Other | Other | |||||
| Salary remuneration | Pension cost | Salary remuneration | Pension cost | |||
| Erik Frydendal, (CEO) | 227 457 | 29 779 | 6 880 | 194 769 | 79 460 | 9 321 |
| Lars M. Brynildsrud (CFO)* | 151 529 | 14 411 | 6 880 | 141 277 | 35 328 | 7 146 |
Executive management of HUNT consists of CEO and CFO.
Note 20 - Payroll and related expenses cont.
Shares and options held directly or indirectly by the management group as of 31 December 2023 are as follows:
| Number of | Exercise price | ||||
|---|---|---|---|---|---|
| shares | % shares | Options | (USD) | ||
| Lars M. Brynildsrud, CFO | 1 754 937 | 4,07 % | 0 | - | |
| Erik Frydendal, CEO | 2 049 166 | 4,75 % | 0 | - | |
| Total | 3 804 103 | 0 | - |
Changes in share options held by the management group are as follows:
| Options | Options Options as of | |||
|---|---|---|---|---|
| Options of 1 | granted in | exercised in 31 December | ||
| January 2023 | the period | the period | 2023 | |
| Lars M. Brynildsrud, CFO | 1 750 000 | 0 | -1 750 000 | 0 |
| Erik Frydendal, CEO | 4 000 000 | 0 | -4 000 000 | 0 |
| Total | 5 750 000 | 0 | -4 000 000 | 0 |
See the section "Remuneration policy for members of executive management" for further information.
Remuneration to the Board of Directors and the Nomination Committee
The allocation of remuneration to the members of the Board and Nomination Committee is paid as follows in 2023 and 2022:
| (amounts in USD) | 2023 | 2022 |
|---|---|---|
| Kristin Hellebust - Board member from April 2018 | 11 800 | 12 946 |
| Henrik A. Christensen - Chairman of the Board from April 2018 to March 2023 | 17 700 | 19 419 |
| Total remuneration | 29 500 | 32 365 |
Employee share option program
The number of employees share options and average exercise prices for HUNT and development during the year:
| 2023 | 2022 | |||
|---|---|---|---|---|
| Weighted | Weighted | |||
| Share | average | Share | average | |
| Summary of oustanding options: | options exercise price | options exercise price | ||
| Balance at 1 january | 7 800 000 | - | 5 750 000 | - |
| Granted during the year | 0 | - | 2 050 000 | 0,29 |
| Cancelled during the year | 0 | - | 0 | - |
| Exercised during the year | -7 800 000 | - | 0 | - |
| Balance at 31 December | 0 | - | 7 800 000 | - |
| Vested options | 0 | - | 0 | - |
| Weighted Average Fair Value of options granted during the period | 0 | - | 7 800 000 | - |
All share options were exercised in 2023.
Note 20 - Payroll and related expenses cont.
Fair value of the options granted was measured using the Black-Scholes model. Measurement inputs included share price on measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments, expected dividends, and the risk-free interest rate.
As a consequence of the repayment of capital and dividend distributions, the strike price for the options were reduced by such amount of dividends declared by the Company on a per share basis since the date of grant, but the Strike Price was reduced to an amount lower than the par value of the Share. The weighted average strike price for options outstanding as per 31 December 2022 was reduced to the par value of the Share of NOK 0.002 per option. When the options were exercised in 2023, each option holder was compensated through cash dividends for the portion of the strike price that were below par value of the share. The effect has been charged against other equity ref. note 21.
Implemented remuneration policy for members of executive management for 2023:
The fixed salary for each member of the management shall be competitive and based on the individual's experience, responsibilities as well as the results achieved during the previous year. Salaries as well as other benefits shall be reviewed annually and adjusted as appropriate.
In addition to their base salary, the Company's management may be granted additional remuneration in the form of a bonus. The assessment criteria of such bonus will be based on both the Company's performance and the individual's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO will set relevant targets for the other members of the management, based on principles defined by HUNT's Board of Directors. No provision for bonus has been recognized for 2023 or 2022.
The Company's management will receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses.
The CEO and CFO have a 6-month notice period with salaries.
Remuneration policy for members of executive management - Guidelines for 2024:
The main principle of the Company's remuneration policy for HUNT's management is to offer competitive terms in an overall perspective taking into account salary, payments in kind, bonuses, pension plans and other benefits, to retain key staff.
In addition to their base salary, the Company's management may be granted additional remuneration in the form of a bonus. The assessment criteria of such bonus will be based on both the Company's performance and the individual's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO will set relevant targets for the other members of the management, based on principles defined by HUNT's Board of Directors.
The Company's management will receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses.
Note 20 - Payroll and related expenses cont.
Auditor's fee
The following table shows remuneration related to professional services rendered by the Company's principal auditor, Ernst & Young AS, for fiscal year 2023 and 2022. The amounts shown are exclusive of value added tax.
| (Amounts in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Audit fee | 102 | 131 |
| Assurance services | 0 | 0 |
| Other assistance | 0 | 0 |
| Total | 102 | 131 |
Note 21 - Share capital and shareholder information
Share capital as of 31 December 2023 was USD 180 thousand, being 43,101,434 ordinary shares at a nominal value of USD 0.004 each (NOK 0.038). All shares carry equal voting rights.
| Number of ordinary shares | 2023 | 2022 |
|---|---|---|
| Ordinary shares issued at 1 January (reverse share split 20:1 as of 3 July 2023) | 43 101 434 | 28 768 101 |
| Treasury shares (held by the issuing entity itself) | -19 428 | -410 641 |
| Ordinary shares at 31 December | 43 082 006 | 28 357 459 |
On 14 February 2023, leading employees of the Company exercised all of their options for 7,850,000 shares in the Company. The exercising of the options for the primary insiders in February 2023 resulted in a negative equity effect of NOK 1.25 million.
On 4 July 2023 a reverse share split of 20:1 ratio was registered with the Norwegian Register of Business Enterprises according to the General Assembly decision, each share with a nominal value of NOK 0.038 (rounded) after the registration. The corresponding figures for 2022 have been adjusted accordingly.
On 6 December 2023, the private placement of 14,333,333 new shares as a subscription price of NOK 1.50 was registered. The Company's new share capital is NOK 1,648,061 (rounded), divided into 43,101,434 shares, each with a nominal value of NOK 0.038 (rounded).
On 10 January 2024 Hunter Group ASA raised NOK 124 million in gross proceeds through a private placement of 70,857,143 new shares, each at a subscription price per share of NOK 1.75.
On 19 January 2023, the General Assembly approved the proposal from the Board of Directors of 29 December 2022 to distribute a total dividend NOK 2.31 per share of which NOK 0.51 was conducted as a reduction of the Company's equity capital, while the NOK 1.80 per share dividend was distributed as earned capital.
Note 21 - Share capital and shareholder information cont.
The 20 largest shareholders held 59.1 % of the outstanding shares. As at 31 December 2023, the 20 largest shareholders were as follows:
| Shareholders | Number of shares | % shares |
|---|---|---|
| 1 Surfside Holding AS | 5 410 835 | 12,6 % |
| 2 B.O. Steen Shipping AS | 4 366 667 | 10,1 % |
| 3 Avanza Bank AB | 3 261 221 | 7,6 % |
| 4 Sagittarius Capital Ltd | 2 049 166 | 4,8 % |
| 5 Seal Invest AS | 1 766 666 | 4,1 % |
| 6 Lama Global AS | 1 754 937 | 4,1 % |
| 7 Clearstream Banking S.A. | 1 050 357 | 2,4 % |
| 8 Nordnet Bank AB | 841 178 | 2,0 % |
| 9 North Energy ASA | 824 187 | 1,9 % |
| 10 Nordnet Livsforsikring AS | 706 714 | 1,6 % |
| 11 Røynlid, Rolf | 500 000 | 1,2 % |
| 12 Green Highlander Holding AS | 449 335 | 1,0 % |
| 13 Euroclear Bank S.A./N.V. | 432 070 | 1,0 % |
| 14 Beyer, Rene | 370 808 | 0,9 % |
| 15 The Bank Of New York Mellon | 334 647 | 0,8 % |
| 16 Swedbank AB | 319 223 | 0,7 % |
| 17 Zhang, Lin Hu | 308 800 | 0,7 % |
| 18 Company One AS | 250 000 | 0,6 % |
| 19 Skarris Kapital AS | 250 000 | 0,6 % |
| 20 Argentum Fondsinvesteringer AS | 246 034 | 0,6 % |
| Total shares for top 20 shareholders | 25 492 845 | 59,15 % |
| Total shares for other shareholders | 17 608 589 | 40,85 % |
| Total shares | 43 101 434 | 100,0 % |
The following members of the Board of Directors and member of executive management held shares as of 31 December 2023:
| 2023 | 2022 | |
|---|---|---|
| August AS (Henrik Christensen - Chairman until March 2023) | n/a | 750 000 |
| Surfside Holding AS (Morten Eivindssøn Astrup - Chairman from March 2023) | 5 410 835 | n/a |
| B.O. Steen Shipping AS & Skarris Kapital AS (Bertel Steen - Board member from February 2024) | 4 616 667 | n/a |
| Apollo Asset Ltd (Arne Fredly - Board member until March 2023) | n/a | 191 500 000 |
| Lama Global AS (Lars Brynildsrud - CFO) | 1 754 937 | 15 400 |
| Sagittarius Capital Ltd (Erik Frydendal - CEO) | 2 049 166 | 1 650 000 |
| Ordinary shares | 13 831 605 | 193 915 400 |
| % of total shares | 32,1 % | 33,7 % |
Note 22 - Accounting effects of the discontinuing of the VLCC operations
The table below sets out the income statements, the statements of financial position and the cash flow statements for the part related to the VLCC operations (discontinued operations) for the periods presented.
| (Figures in NOK 1 000) | Year to date | |
|---|---|---|
| Results related to the VLCC operations | 31.12.2023 | 31.12.2022 |
| Revenues | 485 | 18 381 |
| Gain on sale of VLCC | 724 | 56 418 |
| Total operating expenses | 225 | 19 316 |
| Operating profit (loss) from discontinued operations | 984 | 55 483 |
| Net financial income (loss) | -91 | -8 108 |
| Profit (loss) before taxes from discontinued operations | 893 | 47 375 |
| Tax on ordinary result | 0 | 0 |
| Profit (loss) from discontinued operations | 893 | 47 375 |
| Earnings per share | 0,02 | 1,65 |
| Earnings per share diluted | 0,02 | 1,67 |
| Year to date Year to date |
| Cash flow related to the VLCC operations | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Net cash (to)/from operating activities | 169 | 13 190 |
| Net cash (to)/from investing activities | 724 | 384 614 |
| Net cash (to)/from financing activities | 0 | -283 636 |
| Net cash flow for the year from discontinued operations | 893 | 114 168 |
Revenues relates to Pool revenues and Time charter revenues. The revenues and gain on sale of VLCC in 2023 relates to changes in estimates on final voyages of the VLCC performed prior to sale in 2022 as well as adjustments to the gain calculation on the 2022 sale.
Note 23 - Events after the reporting date
Completed a USD 12 million equity private placement on 10 January 2024
Entered into a second three-year back-to-back time-charter for an eco scrubber fitted VLCC, which was delivered in March 2024. The VLCC was chartered in on a fixed rate of USD 51,000 per day and chartered out on a floating indexlinked rate
Extraordinary general meeting held on 2 February 2024, which approved the USD 12 million equity private placement and the two subsequent offerings
Completed two subsequent offerings in March 2024 for a total of approx. NOK 35 million
As of the date of this report, the Company has achieved an average index-linked charter out rate of USD 54,900 per day for 100% of available days for the Company's two chartered in VLCCs during the first quarter of 2024
Statement of profit and loss – Hunter Group ASA
| (Figures in USD 1 000) | Note | 2023 | 2022 |
|---|---|---|---|
| Revenues and other income | |||
| Net realized time chartering result | 19 | 35 | 0 |
| Unrealized change in fair value of time charters | 19 | 1 782 | 0 |
| Other income | 10 | 134 | 590 |
| Total Revenues and other income | 1 951 | 590 | |
| Operating expenses | |||
| Depreciation and amortisation expense | 2, 3 | 74 | 80 |
| General and administrative expenses | 11, 14 | 1 330 | 1 361 |
| Total operating expenses | 1 405 | 1 440 | |
| Operating profit (loss) | 547 | -850 | |
| Net financial income (loss) | 12 | 1 846 | 124 164 |
| Profit (loss) before taxes | 2 393 | 123 314 | |
| Tax on ordinary result | 13 | 0 | 0 |
| Net profit (loss) | 2 393 | 123 314 | |
| (Figures in USD 1 000) | 2023 | 2022 | |
| Total comprehensive income | |||
| Profit (loss) for the period | 2 393 | 123 314 | |
| Comprehensive income for the period | 2 393 | 123 314 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the parent | 2 393 | 123 314 | |
| Total comprehensive income | 2 393 | 123 314 |
Statement of financial positions – Hunter Group ASA
| (Figures in USD 1 000) | Note | 31.12.2023 | 31.12.2022 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Property, plant & equipment | 2, 3 | 74 | 144 |
| Total tangible assets | 7 4 | 144 | |
| Investment in subsidiaries | 2, 17 | 8 | 200 |
| Investment in shares | 17 | 492 | 0 |
| Long-term receivable subsidiaries | 18 | 40 | 4 104 |
| Total finacial long-term assets | 540 | 4 304 | |
| TOTAL NON-CURRENT ASSETS | 614 | 4 448 | |
| CURRENT ASSETS | |||
| Other short-term financial assets | 19 | 2 500 | 0 |
| Back-to-back time charters | 8 | 1 782 | 0 |
| Other short-term assets | 4 | 464 | 28 |
| Total current receivables | 4 747 | 2 8 | |
| Cash and cash equivalents | 5 | 3 230 | 134 299 |
| TOTAL CURRENT ASSETS | 7 977 | 134 327 | |
| TOTAL ASSETS | 8 591 | 138 776 | |
| (Figures in USD 1 000) | Note | 31.12.2023 | 31.12.2022 |
| EQUITY | |||
| Share capital | 15 | 180 | 126 |
| Own shares | 0 | -2 | |
| Share premium | 1 897 | 0 | |
| Other equity | 6 163 | 5 022 | |
| TOTAL EQUITY | 8 240 | 5 147 | |
| LIABILITIES | |||
| Long-term lease liabilities | 3 | 3 | 74 |
| Total non-current liabilities | 3 | 7 4 | |
| Trade creditors | 121 | 102 | |
| Accrued public charges and indirect taxes | 41 | 55 | |
| Short-term lease liabilities | 3, 6 | 67 | 71 |
| Other current liabilities | 7 | 118 | 133 327 |
| Total current liabilities | 348 | 133 555 | |
| TOTAL LIABILITIES | 351 | 133 629 | |
| TOTAL EQUITY AND LIABILITIES | 8 591 | 138 776 |
Oslo/Verbier, 27 March 2024
Morten Eivindssøn Astrup Bertel Steen Chief of Board Board member
Board member CEO
Kristin Hellebust Erik Andreas Skaurum Frydendal
Statement of cash flows – Hunter Group ASA
| (Figures in USD 1 000) | Note | 2023 | 2022 |
|---|---|---|---|
| Profit (loss) attributable to equity holders | |||
| of the parent | 2 393 | 123 314 | |
| Depreciation | 74 | 80 | |
| Financial income | -454 | -1 334 | |
| Financial expenses | 6 | 1 051 | |
| Change in accounts receivables and accounts payables | 19 | 43 | |
| Change in other receivables and payables and other | -3 198 | 1 121 | |
| Net cash flow from operating activities | -1 160 | 124 275 | |
| Investments in PP & E | -4 | 0 | |
| Interest received | 12 | 454 | 1 334 |
| Investments in other financial investments | -3 000 | 0 | |
| Divestment of subsidiary | 1 707 | 0 | |
| Increase in long-term interest bearing receivable subsidiaries | 0 | -117 527 | |
| Repayment of long-term interest bearing receivable subsidiaries | 1 305 | 206 008 | |
| Net cash flow from investment activities | 463 | 88 481 | |
| Interest paid | 12 | -6 | -1 051 |
| Installment leasing-debt | 3 | -74 | -67 |
| Purchase of own shares | Equity | 0 | -4 311 |
| Capital contribution | Equity | 1 951 | 0 |
| Dividend paid | Equity | -132 243 | -81 296 |
| Net cash flow from financing activities | -130 372 | -85 391 | |
| Total net changes in cash flow | -131 068 | 127 365 | |
| Currency effect on cash | 0 | 0 | |
| Cash and cash equivalents beginning of period | 134 299 | 6 933 | |
| Cash and cash equivalents end of period | 5 | 3 230 | 134 299 |
Statement of changes in equity – Hunter Group ASA
| Share | Own | Share | Currency | Retained | Total | ||
|---|---|---|---|---|---|---|---|
| (Figures in USD 1 000) | Note | Capital | shares | premium transl. adj. | earnings | equity | |
| Equity as of 01.01.2022 | 82 625 | -1 660 | 20 859 | -2 289 | 0 | 99 536 | |
| Net profit (loss) | 0 | 0 | 123 314 | 123 314 | |||
| Total comprehensive income 2022 | 0 | 0 | 123 314 | 123 314 | |||
| Repayment of capital * | 19 | -82 499 | 1 319 | -12 794 | 0 | 12 678 | -81 296 |
| Purchase of own shares | -2 071 | -2 240 | 0 | 0 | -4 311 | ||
| Awarded of own shares | 2 411 | 0 | 0 | -2 411 | 0 | ||
| Option plan payment | 0 | 0 | 148 | 148 | |||
| Dividend payable * | -5 824 | -126 417 | -132 241 | ||||
| Equity as of 31.12.2022 | 126 | -2 | 0 | -2 289 | 7 311 | 5 146 | |
| Net profit (loss) | 0 | 0 | 2 393 | 2 393 | |||
| Total comprehensive income 2023 | 0 | 0 | 2 393 | 2 393 | |||
| Private placement 6 December 2023 | 54 | 1 897 | 0 | 0 | 1 951 | ||
| Share based payment | 0 | 0 | 40 | 40 | |||
| Exercise of options | 2 | 0 | -1 291 | -1 289 | |||
| Equity as of 31.12.2023 | 180 | 0 | 1 897 | -2 289 | 8 454 | 8 241 |
* As of 29 December 2022 the Board of Directors proposed two dividends totaling NOK 1,310 million as a combination of repayment of capital and extraordinary dividend.
Note 1 - Accounting principles
Hunter Group ASA (HUNT) is the parent company of the Hunter Group, consisting of Hunter Group ASA and its subsidiaries Indicator AS and Hunter Carbon Carriers AS. Hunter Group ASA's main activities are shareholding in group companies and corporate functions, focus on the development of a low-pressure mid-stream shipping solution for Carbon Capture and Storage through a joint cooperation agreement with DNV, and back-to-back charterparties on Very Large Crude Carriers ("VLCC") based on fixed rates per day charter-in and floating index-linked spot rates charter-out.
The financial statements of Hunter Group ASA are prepared in accordance with simplified IFRS pursuant to the Norwegian Accounting Act § 3-9 and regulations regarding simplified application of IFRS issued by the Norwegian Ministry of Finance on 3 November 2014.
These parent company financial statements should be read in connection with the Consolidated financial statements of Hunter Group, published together with these financial statements. With the exceptions described below, Hunter Group ASA applies the accounting policies of the group, as described in Hunter Group's disclosure note 2 Significant Accounting Policies, and reference is made to the Hunter Group note for further details.
Subsidiaries
Shareholdings in subsidiaries are accounted for using the cost method. It is annually evaluated if there exist indicators for impairment.
Dividends and group contributions
Dividends will be reflected as Dividends payable within current liabilities. Group contributions to other entities within Hunter Group are reflected in the balance sheet as current liabilities within Liabilities to group companies. Under simplified IFRS the presentation of dividends payable and payable group contributions would differ from the presentation under full IFRS, as it would also include dividend and group contributions payable which at the date of the balance sheet would be subject to a future general assembly approval before distribution.
Note 2 - Property, plant and equipment
The Company has recognized the following assets in the statement of financial position (including internal built-up assets such as development costs).
| Property, | Property, | ||
|---|---|---|---|
| plant & equip. plant & equip. | |||
| (Figures in USD 1 000) | 2023 | 2022 | |
| Cost price at 1 January | 21 | 21 | |
| Additions | 4 | 0 | |
| Cost price at 31 December | 25 | 21 | |
| Accumulated depreciations at 31 December | -21 | -21 | |
| Booked value at 31 December | 4 | 0 | |
| Depreciation | 0 | 6 | |
| Impairment charges | 0 | 0 | |
| Estimated useful life | 3-5 years | 3-5 years | |
| Depreciation method | straight-line | straight-line |
Note 3 – Lease liability
IFRS ® 16 requires that all leases, except for short-term and low-value leases are reflected in the balance sheet as a lease liability and a Right of Use (RoU) asset. The weighted average discount rate used to calculate the IFRS 16 opening balance lease liability was 5 %.
Lease liabilites
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Right of use assets 01.01 | 144 | 219 |
| Additions | 0 | 0 |
| Depreciation | -74 | -74 |
| Right of use assets 31.12 | 70 | 144 |
| Other interest-bearing debt 01.01 | 144 | 218 |
| Additions | 0 | 0 |
| Installments | -74 | -67 |
| Foreign currency adjustment | 0 | -7 |
| Other interest-bearing debt 31.12 | 70 | 144 |
| Interest expense | 6 | 11 |
| Operating leasing costs (figures in USD 1000) | 2023 | 2022 |
| Operational leasing costs | 2 | 2 |
| Total operating leasing costs | 2 | 2 |
Note 4 - Other receivables
| Total other receivables | 464 | 28 |
|---|---|---|
| Other short term receivables | 223 | 0 |
| Prepaid expenses | 241 | 28 |
| (Figures in USD 1 000) | 2023 | 2022 |
Note 5 - Cash and cash equivalents
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Cash at bank | 3 230 | 134 299 |
| Total cash at bank | 3 230 | 134 299 |
Restricted bank deposits for employee withholding taxes 49 50
Note 6 - Short-term liabilities
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Short-term lease liabilities | 67 | 71 |
| Short-term liabilities | 67 | 71 |
Note 7 - Other current liabilities
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Unpaid vacation pay | 72 | 60 |
| Dividend payable | 0 | 132 241 |
| Other accrued costs | 46 | 1 026 |
| Total other short-term liabilities | 118 | 133 327 |
Note 8 - Financial instruments risk management objectives and policies
HUNT has been subject to market risks (foreign currency exchange risk and interest rate risk), credit risk and liquidity risk.
The Company's management oversees the management of these risks and assures that HUNT's financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies. It is the Company's policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below.
Foreign currency risk
The Company's cash reserves of USD 3,230 thousand are deposited in the Norwegian bank DNB. The main transactions for the Company has been in USD. As commercial operations were in a large scale, a foreign currency exchange risk policy has been introduced.
Interest rate risk
The Company's financial income and financial costs in the statement of profit or loss are influenced by changes in interest rates as the interest on debit facility with DNB is on a floating basis. The Company had USD 454 thousand in interest income in 2023 related to cash and cash equivalents.
Credit risk
HUNT only trades with recognized, creditworthy third parties. It is the Company's policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Company is deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk.
Liquidity risk
HUNT monitors its liquidity on a regular basis and produces rolling liquidity forecasts on a monthly basis in order to identify liquidity requirements in future periods. The target for HUNT's management of liquidity risk is to maintain a liquidity corresponding to its net liquidity requirements for 12 months. The cash position of HUNT at year end 2023 was USD 3,230 thousand, compared to USD 134,299 thousand in 2022. The Company expects to retain a level of net liquidity, which will sufficiently cover operating costs and periods of time charter rates below the fixed rates. Should the time charter rates decline and stay at levels below the fixed charter rates, the Company may need to strengthen its liquidity. In January 2024 the Company raised NOK 124 million in gross proceeds through a private placement strengthen the liquidity in connection with the two three-year back-to-back charterparties on eco-design and scrubber fitted Very Large Crude Carriers ("VLCC"). The liquidity is considered to be sufficient the date of this annual report.
Note 8 - Financial instruments risk management objectives and policies cont.
The management has focused on efficient operations, good planning and close monitoring of the liquidity situation and maintaining a clear business development strategy.
The table below shows a maturity analysis for HUNT's total short-term liabilities:
| within | within | within 9-12 months |
||
|---|---|---|---|---|
| 2023 (figures in USD 1 000) | 3 months | 3-9 months | ||
| Accounts payable | 121 | 0 | 0 | |
| Public duties payables | 41 | 0 | 0 | |
| Other short-term liabilities (including dividend payable) | 118 | 0 | 0 | |
| within | within | within | ||
| 2022 (figures in USD 1 000) | 3 months | 3-9 months | 9-12 months | |
| Accounts payable | 102 | 0 | 0 | |
| Public duties payables | 55 | 0 | 0 | |
| Other short-term liabilities (including dividend payable) | 133 327 | 0 | 0 |
Capital management
HUNT's main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position and a good credit rating. The increase in equity as of 31 December 2023 is in all material aspects due to a private placement of approximately USD 2 million.
HUNT manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may issue new shares. No changes were made in the objectives policies or processes during the financial year.
Furthermore, Hunter Group ASA has guaranteed for the continued operation of the wholly-owned subsidiary Indicator AS, which is an empty company with negligible debt to Hunter Group ASA. There is no external debt in Indicator AS as of 31 December 2023.
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Trade and other payables | 281 | 1 243 |
| Dividend payable | 0 | 132 241 |
| Bank deposits | -3 230 | -134 299 |
| Net debt | -2 949 | -815 |
| Equity | 8 240 | 5 147 |
| Capital and net debt | 5 290 | 4 332 |
| Gearing ratio | -55,7 % | -18,8 % |
| Equity ratio | 95,9 % | 3,7 % |
Note 8 - Financial instruments risk management objectives and policies cont.
| 2023 | 2022 | |||
|---|---|---|---|---|
| Carrying | Fair | Carrying | Fair | |
| Financial assets (figures in USD 1 000) | amount | value | amount | value |
| Investment in shares | 492 | 492 | 0 | 0 |
| Other financial investments | 2 500 | 2 500 | 0 | 0 |
| Back-to-back time charters | 1 782 | 1 782 | 0 | 0 |
| Current receivables | 464 | 464 | 28 | 28 |
| Cash and cash equivalents | 3 230 | 3 230 | 134 299 | 134 299 |
| 2023 | 2022 | |||
| Carrying | Fair | Carrying | Fair | |
| Financial liabilities (figures in USD 1 000) | amount | value | amount | value |
| Long-term lease liabilities | 3 | 3 | 74 | 74 |
| Short-term lease liabilities | 67 | 67 | 71 | 71 |
| Trade and other payables | 281 | 281 | 133 484 | 133 484 |
The Investment in shares were acquired at the end of 2023. There has not occurred significant changes in the market conditions at the end of 2023, which indicates that the acquisition cost in all material aspects equal the fair value less cost to sell as of 31 December 2023. Back-to-back time charters are measured at the net present value of the charter-out rates based on reported time charter rates from recognized analysts less the charter-in rates for the applicable period. The Group does not use hedge accounting.
Note 9 - Transactions with related parties
Please see note 18 below and note 14 in the consolidated financial statements for further information. Interest expense related to the net interest-bearing payable to the subsidiary Hunter Tankers AS was an expense of USD -1,040 thousand in 2022. Furthermore, Hunter Group ASA invoiced Hunter Tankers USD 590 thousand in 2022 and USD 12 thousand for management services in 2023.
Note 10 – Revenue and other income
| Type of goods or service (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Net realized time chartering result | 35 | 0 |
| Unrealized change in fair value of time charters | 1 782 | 0 |
| Other income | 134 | 590 |
| Total oher income | 1 951 | 590 |
| Geographical market (figures in USD 1 000) | 2023 | 2022 |
| Sales in Norway | 134 | 590 |
| Sales abroad | 1 817 | 0 |
| Total other income | 1 951 | 590 |
| Timing of revenue recognition | 2023 | 2022 |
| Goods transferred at a point in time | 0 | 0 |
| Services transferred over time | 1 951 | 590 |
| Total other income | 1 951 | 590 |
Note 11 – Other operating expenses
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Payroll expenses | 755 | 977 |
| IT and office-related expenses | 77 | 103 |
| Audit, audit-related services and accounting fees | 166 | 165 |
| Various legal fees | 232 | 52 |
| Insurance, car, travel and other expenses | 100 | 63 |
| Total | 1 330 | 1 361 |
Note 12 - Finance income and finance expenses
This section provides additional information about individual line items of finance income and finance expense in the statement of profit and loss by type.
| Finance income (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Interest income | 454 | 1 334 |
| Dividend reveived from subsidiaries | 1 614 | 166 562 |
| Repayment of capital contribution in subsidiaries | -192 | -38 669 |
| Other financial income | 485 | 2 918 |
| Currency gain | 0 | 0 |
| Total finance income | 2 361 | 132 146 |
| Finance expenses (figures in USD 1 000) | 2023 | 2022 |
| Interest expense | -6 | -1 051 |
| Other financial expenses | 0 | -1 040 |
| Currency losses | -510 | -6 931 |
| Total finance expenses | -515 | -9 022 |
| Total finance income (loss) | 1 846 | 123 124 |
TUSD -1,040 of interest expense in 2022 relates to an internal balance from/to Hunter Tankers AS.
Note 13 - Income tax
| Income tax expense (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Payable tax | 0 | 0 |
| Change in utilized tax asset | 0 | 0 |
| Total tax expense | 0 | 0 |
Note 13 - Income tax cont.
| Calculation of basis for tax | 2023 | 2022 |
|---|---|---|
| Earnings before tax | 2 393 | 123 314 |
| Permanent differences | -1 782 | 0 |
| Dividend received | -1 422 | -130 805 |
| Currency adjustments due to NOK as tax basis | -654 | 3 042 |
| Changes in temporary differences | -6 | -2 |
| Transfer to tax loss brought forward | 1 472 | 4 450 |
| Total basis for tax | 0 | 0 |
| Summary of temporary differences: | 2023 | 2022 |
| Fixed assets | -13 | -19 |
| Accruals | 0 | 0 |
| Loss carried forward | -26 155 | -25 284 |
| Total | -26 167 | -25 303 |
| Calculated deferred tax asset (22 %) | -5 757 | -5 567 |
| Statement of financial position | ||
| Deferred tax asset (figures in USD 1 000) | 2023 | 2022 |
| Loss carried forward | -5 754 | -5 562 |
| Accruals | 0 | 0 |
| Fixed assets | -3 | -4 |
| Total deferred tax asset | -5 757 | -5 567 |
| Not recognized deferred tax asset | 5 757 | 5 567 |
| Total deferred tax asset recognised in the statement of financial position | 0 | 0 |
The company has not recognized a deferred tax asset in the statement of financial position for 2023 and 2022 as the Company has limited taxable income.
| Loss carried forward as of 31 December | 2023 | 2022 |
|---|---|---|
| Unlimited carrying forward | 26 155 | 25 284 |
Note 13 - Income tax cont.
| Effective tax rate | 2023 | 2022 |
|---|---|---|
| Profit / (loss) before tax | 2 393 | 123 314 |
| 22% tax of earnings before tax | 527 | 27 129 |
| Permanent differences and other | -705 | -28 777 |
| Changes in deferred tax asset not recognised in the statement of financial position | -190 | 979 |
| Currency effect due to NOK as tax basis | 369 | 669 |
| Calculated tax cost | 0 | 0 |
| Effective tax rate | 0 % | 0 % |
| Note 14 - Payroll and related expenses Payroll and related expenses (figures in USD 1 000) |
2023 | 2022 |
| Salaries and vacation pay | 611 | 646 |
| Social security tax | 123 | 103 |
| Pension expense ("OTP") | 28 | 43 |
| Employee share option program expense (incl. national insurance contributions) | 40 | 148 |
| Other benefits | -47 | 38 |
| Total payroll an related expenses | 755 | 977 |
| 2023 | 2022 |
Number of employees (average work years) 3 3
Pension scheme
The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called "OTP"). The pension contributions range from 4 % 0 - 7.1 G to 7 % 7.1 -12 G of the employee's salary - maximized to a percentage of 12 G (NOK 1,423,440). The National Insurance scheme basic amount for 2023 is NOK 118,620. The retirement age for all employees, including the management, is 67 years.
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Contributions expensed during the year | 28 | 43 |
Please refer to note 20 in the consolidated financial statements for further information about remuneration and option program for the management and board of directors.
Auditor's fee
The following table shows remuneration related to professional services rendered by the Company's principal auditor, EY, for fiscal year 2022 and 2021. The amounts shown are exclusive of value added tax.
| (Figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Audit fee | 102 | 100 |
| Assurance services | 0 | 0 |
| Other assistance | 0 | 0 |
| Total | 102 | 100 |
Note 15 - Share capital and shareholder information
Please see note 21 in the consolidated financial statements.
Note 16 - Provisions, commitments and contingent liabilities/assets
There do not exist any material provisions or contingent liabilities/assets for Hunter Group ASA.
Note 17 - Investment in subsidiaries and other investments
| (Figures in USD 1000) | Voting | Book value | Equity at | Net | |||
|---|---|---|---|---|---|---|---|
| Company | Location | Share | rights | Cost | 31.12.2023 | 31.12.2023 | income 2023 |
| Indicator AS | Stavanger | 100 % | 100 % | 91 | 0 | -34 | -3 |
| Hunter Carbon Carriers AS | Oslo | 100 % | 100 % | 8 | 8 | 6 | 0 |
The Group invested USD 492 thousand for 4 % in Njord Bay AS. Njord Bay AS owns the vessel MV Baltic Bay.
Note 18 - Intercompany receivables/payables
| Receivables (figures in USD 1 000) | 2023 | 2022 |
|---|---|---|
| Long-term receivable subsidiaries | 40 | 4 104 |
| Short-term receivable subsidiaries | 0 | 0 |
| Payables (figures in USD 1 000) | 2023 | 2022 |
| Other current liabilities subsidiaries | 0 | -1 040 |
| Dividend payable | 0 | -132 241 |
Note 19 - Financial assets
| Financial assets at fair value through profit or loss | 2023 | 2022 |
|---|---|---|
| Three-year back-to-back charterparty eco-designed and scrubber fitted VLCC | 1 782 | |
| 2023 | 2022 | |
| Realized floating index-linked spot rates | 1 655 | 0 |
| Paid fixed rates | -1 603 | 0 |
| Broker commision (1 % of realized floating index-linked spot rates) | -17 | 0 |
| Net realized result from lease-leaseback | 35 | 0 |
| Change in fair value of the three-year back-to-back charterparty | 1 782 | 0 |
| Net result from lease-leaseback | 1 817 | 0 |
Financial assets at fair value through profit or loss consist of a three-year back-to-back charterparty on an ecodesign and scrubber fitted Very Large Crude Carrier built in 2016, with an internationally renowned counterparty (the "Charterparty"). The Company charters in the Vessel on a fixed rate of USD 52,500 per day, and immediately charters the Vessel out on a floating index-linked spot rate. The index-linked spot rate is based on the recognized VLCC benchmark TD3C, and enables the Company to capture every daily VLCC spot market movement with maximum utilization. Delivery of the Vessel was made on 1 December 2023.
In connection with this contract, the Company has provided a security deposit of USD 2.5 million in an account at Mercuria. The security deposit is earning interests and is restricted until the end of the charter party as of 30 November 2026.
The fair values of the back-to-back charterparty is based on the present value of the expected floating index-linked spot rate less the present value of the fixed rated for the remaining period of the two contracts.
Note 20 - Events after the reporting date
Completed a USD 12 million equity private placement on 10 January 2024
Entered into a second three-year back-to-back time-charter for an eco scrubber fitted VLCC, which was delivered in March 2024. The VLCC was chartered in on a fixed rate of USD 51,000 per day and chartered out on a floating indexlinked rate
Extraordinary general meeting held on 2 February 2024, which approved the USD 12 million equity private placement and the two subsequent offerings
Completed two subsequent offerings in March 2024 for a total of approx. NOK 35 million
As of the date of this report, the Company has achieved an average index-linked charter out rate of USD 54,900 per day for 100% of available days for the Company's two chartered in VLCCs during the first quarter of 2024
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Hunter Group ASA Org. no. 985 955 107
Address: Dronningen 1, 0287 OSLO E-mail: Erik A. S. Frydendal, CEO, [email protected] Lars Brynildsrud, CFO, [email protected]
