Annual Report • Mar 10, 2023
Annual Report
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Annual Report
| Board of directors | 4 |
|---|---|
| Directors` Report | 5 |
| Consolidated statement of | |
| – comprehensive income | 11 |
| – fi nancial positi on | 12 |
| – cash fl ows | 13 |
| – changes in equity | 14 |
| Notes to the consolidated fi nancial statements | 15 |
| Parent Company unconsolidated statement of | |
| – comprehensive income | 29 |
| – fi nancial positi on | 30 |
| – cash fl ows | 31 |
| – changes in equity | 32 |
| Notes to the Parent Company fi nancial statements | 33 |
| Independent auditor`s report | 39 |
| Contacts | 43 |
Chairman
Major shareholder of ADS Maritime Holding Plc, OSM Maritime Group, OSM Aviation Academy Group and Norse Atlantic ASA. Mr. Larsen is a Norwegian citizen and resides in Norway.
Bjørn Tore Larsen was appointed Chairman of the Board of Directors on 10 August 2018. As at 31 December 2022, he held 53,398,573 shares in the Company, equivalent to 75.20% of the outstanding shares in the Company, through controlling ownership of BT Larsen & Co Ltd and affiliated companies.
Marios Demetriades is an experienced Financial Services professional with significant experience as a Non-Executive Director in various listed and private companies in the Banking, Infrastructure and Shipping industries. He previously served as the Minister of Transport, Communications and Works for the Republic of Cyprus from 2014 to 2018 and held various positions in the Accounting, Investment and Banking sectors. He is a qualified Chartered Accountant and Chartered Financial Analyst holder and a member of the CFA Institute, the Institute of Chartered Accountants in England and Wales and the Institute of Certified Public Accountants of Cyprus (ICPAC). Mr. Demetriades is a Cypriot citizen and resides in Cyprus.
Mr. Demetriades was appointed to the Board of Directors on 10 August 2018. As at 31 December 2022 he owns no shares in the Company.
Sofi Mylona is a Partner in the Shipping Department of the law fi rm Scordis, Papapetrou & Co. LLC in Cyprus and has over 20 years experience as an advocate focusing on Shipping, Internati onal Trade and Banking. She studied law at the University of Leicester and the Bar Vocati onal Course at Holborn College, in the United Kingdom. She is a member of Lincoln's Inn, Inns of Court (Barrister at Law), the Cyprus Bar Associati on, WISTA Cyprus and WISTA Internati onal. Mrs. Mylona has served as member of the board of directors of various Cyprus registered shipping and other companies. Mrs. Mylona is a Cypriot citi zen and resides in Cyprus.
Mrs. Mylona was appointed to the Board of Directors on 21 August 2019. As at 31 December 2022 she owns no shares in the Company.
Lia Papaiacovou has more than 20 years' experience in the mariti me industry and is currently the Head of Corporate and General manager of Shiphold Management Services Ltd and director of BT Larsen & Co Ltd. Mrs. Papaiacovou holds a degree in Business Administrati on, is a member of WISTA (Women's Internati onal Shipping and Trading Associati on) as well as being Chairperson and member of the PR Committ ee of the CSC (Cyprus Shipping Chamber) Events Committ ee. Mrs. Papaiacovou is a Cypriot citi zen and resides in Cyprus.
Mrs. Papaiacovou was appointed to the Board of Directors on 21 August 2019. As at 31 December 2022 she owns no shares in the Company.
ADS Mariti me Holding Plc is a shipping investment company established in 2018 and listed on the Euronext Growth Oslo Stock Exchange. The Company's strategy is to make counter-cyclical investments in quality ships bought at prices discounted to new building parity, as well as projects with long-term secured cashfl ow, low residual risk, and solid returns on equity. Since incorporati on of the Company in 2018 a total of USD 69.8 million has been paid to shareholders, including dividends of USD 18.8 million and return of capital of USD 51 million.
The principal acti viti es of ADS Mariti me Holding Plc (the "Parent Company") and its wholly owned subsidiaries (together, the "Company") during the period from 2018 to 2020 were operati ng three VLCC tankers, predominantly in the Middle East Gulf to Far East Asia spot market. During the latt er part of 2020 the Company sold all three vessels, locking in a signifi cant gain for shareholders compared to the vessel purchase prices.
The Company issued new share capital in July 2022 giving a net USD 9,9 million cash proceeds. The cash will be used for further investments and general business purpose.
In Q2 2022 the Company subscribed for a 20% interest in a PLSA (Profi t and Loss Sharing Agreement) in a chartered-in VLCC trading in Navig8's VL8 pool for a fi rm period of 12 months and with an opti on period of an additi onal 12 months. The Company will receive its share of the earnings from the Vessel as it trades in the Pool and will be liable to pay its share of the fi xed ti me charter hire. The Vessel was delivered on charter May 2022. The Company also subscribed in a PLSA on similar terms for a 20% interest in a chartered-in scrubber-fi tt ed MR trading in Navig8's MR pool for a fi rm period of 36 months +/- 60 days,
In June 2022 the Company acquired a 5 % shareholding in AET Sea Shutt le AS and AET Sea Shutt le II AS, the owners of 4 modern shutt le tankers operati ng in the North Sea, mainly on long term charters to Equinor. Sellers were ADS Shipping Limited. The shares were acquired at a discount to valuati ons of the Vessels obtained from independent internati onal brokers. The acquisiti on is fi nanced by an interest-free sellers' credit repayable within 2 years.
In October 2022 the Company acquired a 10% share in United Overseas Products AS (UOG AS), owning two MR tankers. UOG Sparta delivered 26th October and will trade in the spot marked and UOG Oslo delivered 27th October and is also fi xed on a 2 year charter with an opti onal period of 12 months. The Company will act as disponent owner with primary responsibility for following up the owning companies' acti viti es related to the vessels.
The Company conti nues to evaluate investment opportuniti es in a range of vessel types and segments. The Company has a cash balance of USD 12.0 million at the end of 2022 which enables the Company to be in a positi on for further investments.
The administrati ve and corporate management of the Company has been provided by Arendals Dampskibsselskab AS. From July 2022 all corporate and management functi ons have been transferred to ADSMH Management AS, a 100% owned subsidiary of ASD Mariti me Holding Plc.
| 12 months | 12 months | 8 months | |||
|---|---|---|---|---|---|
| (In thousands of USD) | 2022 | 2021 | 2020 | 2019 | 2018 |
| Revenue | 150 | - | 57 160 | 42 226 | 13 432 |
| Net revenue¹ | 150 | - | 42 978 | 20 047 | 7 907 |
| Vessel operating days | - | - | 776 | 885 | 417 |
| TCE¹ per day (in USD) | n/a | n/a | 55 362 | 22 653 | 18 962 |
| Gain on vessel sales | - | - | 5 763 | - | - |
| Operating profit/(loss) | (703) | (233) | 23 088 | 1 674 | 903 |
| Net profit/(loss) | 1 957 | (214) | 19 554 | (948) | 102 |
| EPS (in USD per share) | 0.03 | (0,01) | 0.84 | (0.04) | 0.01 |
| Dividend (in USD per share) | - | - | 0.48 | 0.15 | - |
| Total capital paid to shareholders¹ | - | 51 000 | 15 250 | 3 500 | - |
| Cash flow from operations | (446) | 56 | 41 240 | 2 380 | (2 595) |
| Net cash flow | 7 273 | (50 990) | 50 373 | (8 381) | 13 689 |
| Cash and cash equivalents | 11 966 | 4 693 | 55 682 | 5 309 | 13 689 |
| Equity ratio | 59% | 98% | 98% | 52 % | 61 % |
Following the vessel sales at the end of 2020 the Company had no revenue generati ng vessels during 2022 and revenue reported in 2022 are from various fees from services. Total operati ng costs in 2022 were USD 0.852 million (2021: USD 0.233 million). The Company had a net fi nancial income of USD 2.7 million in 2022 (2021: USD 0.2 million), mainly related to changes in fair value on fi nancial assets. The Company recorded a net profi t of USD 1.957 million during 2022 (2021: net loss of USD 0.215 million).
During 2021 the Company returned USD 51 million to shareholders by way of a capital payment, funded by the net proceeds from the vessels sales completed at the end of 2020.
In July 2022 the Company issued 47 619 048 new shares with a USD 9.9 million net proceeds to the Company. The Company had gross assets of USD 28.0 million at 31 December 2022 (2021: USD 4.7 million), consisti ng mainly of investments in fi nancial assets of USD 13.9 million (2021 – 0.0 million) and cash equivalents of USD 12.0 million (2021: USD 4.7 million).
The book value of equity at the yearend was USD 16.5 million, an increase of USD 11.8 million from USD 4.6 million at the end of 2021. The increase is due to MUSD 9,9 new share capital issued in July 2022.
Non-current liabiliti es increased to USD 10.9 million (2021: USD 0.0 million).
Net cash fl ow from operati ons was USD 0.4 million outf low (2021: infl ow USD 0.1 million). Cash from investi ng acti viti es was USD 12.6 million outf low in 2022 compared to net cash fl ow of nil in 2021. Cash fl ow from fi nancing acti viti es was a net infl ow in 2022 of USD 20.3 million (2021: outf low USD 51.0 million) due to a capital repayment to shareholders paid in 2021. Cash and cash equivalents held at 31 December 2022 totalled USD 12.0 million (2021: USD 4.7 million).
The Board proposes that the net profi t of USD 2.0 million recorded in the consolidated income statement in 2022 is transferred to retained earnings and that no dividend is declared for 2022.
The Company has declared the following dividends and capital payments since incorporation in 2018:
| Financial period | Total dividend/ capital payment |
Dividend /capital payment per share¹ |
Announced | Ex-div date | Payment date |
|---|---|---|---|---|---|
| 2021 | USD 51.0m | USD 2.18 (NOK 18.48) | 10 Dec 2020 | 22 Feb 2021 | 1 Mar 2021 |
| Q3 2020 | USD 4.0m | USD 0.17 (NOK 1.54) | 18 Nov 2020 | 23 Nov 2020 | 3 Dec 2020 |
| Q2 2020 | USD 4.3m | USD 0.18 (NOK 1.60) | 28 Aug 2020 | 1 Sep 2020 | 11 Sep 2020 |
| Q1 2020 | USD 7.0m | USD 0.30 (NOK 2.86) | 28 May 2020 | 4 Jun 2020 | 16 Jun 2020 |
| Q4 2019 | USD 2.0m | USD 0.09 (NOK 0.79) | 27 Feb 2020 | 10 Mar 2020 | 18 Mar 2020 |
| Q2 2019 | USD 0.5m | USD 0.02 (NOK 0.19) | 22 Aug 2019 | 4 Sep 2019 | 16 Sep 2019 |
| Q1 2019 | USD 1.0m | USD 0.04 (NOK 0.37) | 29 May 2019 | 12 Jun 2019 | 26 Jun 2019 |
| USD 69.8m | USD 2.98 (NOK )25.83) |
¹ADS Maritime Holding Plc's functional and presentational currency is USD and all dividends announced by the Company are initially announced in total USD and estimated USD equivalents per share. As a result of the Company's shares being traded on Euronext Growth Oslo Stock Exchange all dividend payments are made in NOK based on an exchange rate secured by the Company between the date of announcing a dividend and the ex-div date.
These financial statements have been prepared based on the assumption of going concern.
In July 2022 the Company issued new shares giving a net USD 9.9 million proceeds to the Company with the purpose of strengthening the Company's financial position for further expansion. The Company has during 2022 invested in 3 new projects.
The Parent Company recorded a net profit of USD 1.9 million for the year (2021: net loss USD 0.7 million). The increase is due to profit from new investments. A dividend of USD 41.4 million was received from subsidiaries in 2021 and was booked against the carrying value of the investment in subsidiaries and no income from divided was recognized in the income statement in 2021. General and administrative
costs were USD 0.8 million (2021: USD 0.5 million), while net financial items were profit USD 2.6 million in 2022 (2021: nil USD). An impairment of USD 0.2 million was recognized on the Parent Company's investment in ADS Crude Holding AS in 2021.
The Board of Directors propose to transfer the net profit of USD 1.9 million to retained earnings. The Parent Company had gross assets at 31 December 2022 totaling USD 27.9 million (2021: USD 4.7 million), of which USD 17,5 million (2021: USD 3.5 million) are noncurrent assets and USD 10.6 million (2021: USD 1.2 million) current assets. The increase in non-current assets is due to new investments in other shares and financial instruments. The Parent Company's book equity was at yearend 2022 USD 16.6 million (2021: USD 4.7 million).
The Company's primary fi nancial risks relate to market risk, credit risk and liquidity risk. The Company's principal fi nancial liabiliti es are long term debt related to the investment in AET shares, as well as trade and other payables. The Company's principal fi nancial assets are investments in shares, fi nancial instruments and cash.
The table below shows the carrying value of the Company's fi nancial assets and liabiliti es.
| (In thousands of USD) | 31-Dec-22 | 31-Dec_21 |
|---|---|---|
| Financial assets | ||
| Non-current fi nancial assets | ||
| Financial assets at fair value through profi t or loss | 13 317 | - |
| Other non-current fi nancial assets | 545 | - |
| Current fi nancial assets | ||
| Financial assets at fair value through profi t or loss - current porti on | 630 | |
| Other current assets | 1 135 | 43 |
| Cash and cash equivalents | 11 966 | 4 693 |
| Total fi nancial assets | 27 592 | 4 736 |
| Financial liabiliti es | ||
| Non-current liabiliti es | ||
| Lease liability | 329 | |
| Long term-loan | 10 561 | |
| Current liabiliti es | ||
| Lease libility - current | 47 | |
| Other current liabiliti es | 339 | 75 |
| Trade payables | 179 | 32 |
| Total fi nancial liabiliti es | 11 454 | 107 |
| Net current fi nancial assets/(liabiliti es) | 13 166 | 4 629 |
| Net current and non-current fi nancial assets/(liabiliti es) | 16 138 | 4 629 |
The Company has no interest-bearing liabiliti es and is not exposed to interest rate risk.
The Company operates in the global shipping industry, for which the majority of transacti ons are denominated in US dollars, the Company's functi onal and presentati onal currency. The majority of the Company's administrati on costs are denominated in Norwegian kroner.
As at 31 December 2022 the Company had cash and cash equivalents denominated in
Norwegian kroner that had a carrying value of USD 0.9 million (2021: USD 0.3 million) and in Euros of USD 0.0 million (2021: USD 0,1 million). Material porti on of the Company`s personnel expenses and G&A expenses are denominated in NOK. Financial assets and liabiliti es of the Company at 31 December 2021 are denominated in US dollars and, hence, the Company's maximum exposure to foreign exchange risk is limited to the above expenses.
Credit risk is the risk that a counterparty defaults on its contractual obligati ons, resulti ng in a fi nancial loss to the Company. The Company is exposed to credit risk primarily from receivables from customers and cash held at banks. The Company manages its credit risk related to customers by aiming to provide services only to reputable customers. As at 31 December 2022 the Company has no customer receivables (2021- USD 0.0 million). The Company had other receivables related to investments at 31 December 2022 of USD 1.5 million.
The Company aims to manage its counterparty risk relati ng to cash held at bank by only holding deposits at recognizable internati onal banks. As at 31 December 2022 all of the Company's cash and cash equivalents and restricted cash was held with Nordea Bank.
Liquidity risk is the risk that the Company cannot meet its fi nancial obligati ons as they fall due.
The Company manages its risk of a shortage of funds by conti nuously monitoring maturity of its fi nancial assets and liabiliti es and using a cash fl ow forecasti ng tool that makes projecti ons about future cash fl ows from operati ng acti viti es and required for investi ng acti viti es.
The Company's registered offi ce is in Cyprus and its Norwegian subsidiary is based in Norway. The Company's operati onal perspecti ve is the global shipping market. The Company has employees both in Cyprus and Norway. The administrati ve and corporate management of the Company has been provided by Arendals Dampskibsselskab AS unti l 1 July 2022. From 1 July 2022 management has been employed by the Company. The Company has 4 fullti me and 2 part ti me employees. Two of the current four members of the Board of Directors are female.
The Company's strategy is to make countercyclical investments in quality ships bought at prices discounted to new building parity as well as projects with long-term secured cashfl ow, low residual risk, and solid returns on equity. The Company conti nues to evaluate investment opportuniti es in a range of vessel types and segments. The Company has a cash balance of USD 12.0 million at the end of 2022 which enables the Company to be in a positi on for further investments.
Limassol, 9 March 2023
Bjørn Tore Larsen Chairman
Marios Demetriades Deputy Chairman
Sofi Mylona Lia Papaiacovou
| (In thousands of USD) | Note | 2022 | 2021 |
|---|---|---|---|
| Revenue | |||
| Other income | 2,13 | 150 | - |
| Total revenue | 150 | - | |
| Operati ng expenses | |||
| Vessel operati ng expenses | 270 | ||
| Personell cost | 5,13 | (343) | (8) |
| General & administrati ve costs | 6,13 | (480) | (495) |
| Depreciati on | 11 | (29) | - |
| Total operati ng expenses | (852) | (233) | |
| Operati ng (loss)/profi t | (703) | (233) | |
| Finance cost | 9 | (316) | (45) |
| Finance income | 9 | 2 975 | 64 |
| (Loss)/Profi t before tax | 1 957 | (214) | |
| Income tax | - | - | |
| Profi t/(Loss) aft er tax and total comprehensive income | 1 957 | (214) | |
| (In USD) Earnings per share att ributable to equity holders - Basic and diluted |
7 | 0.03 | (0.01) |
| (In thousands of USD) | Note | 2022 | 2021 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Right-of-use assets | 11 | 376 | |
| Financial assets at fair value through profit or loss | 8,10 | 13 317 | |
| Other non-current assets | 8,10 | 545 | |
| Total non-current assets | 14 237 | ||
| Current assets | |||
| Financial assets at fair value through profit or loss – current | 8,10 | 630 | - |
| Other current assets | 8 | 1 135 | 43 |
| Cash and cash equivalents | 3,8 | 11 966 | 4 693 |
| Total current assets | 13 731 | 4 736 | |
| Total assets | 27 968 | 4 736 | |
| Equity and liabilities | |||
| Equity | |||
| Issued share capital | 14 202 | 4 678 | |
| Share premium | 207 | 207 | |
| Other issued share capital | 410 | ||
| Retained earnings | 1 696 | (256) | |
| Total equity | 16 514 | 4 629 | |
| Non-current liabilities | |||
| Lease liability | 8,11 | 329 | |
| Long term loan | 8,12,13 | 10 561 | - |
| Total non-current liabilities | 10 890 | - | |
| Current liabilities | |||
| Lease liability | 8,11 | 47 | |
| Other current liabilities | 8 | 339 | 75 |
| Trade payables | 8,13 | 179 | 32 |
| Total current liabilities | 565 | 107 | |
| Total liabilities | 11 454 | 107 | |
| Total equity and liabilities | 27 968 | 4 736 |
| (In thousands of USD) | Note | 2022 | 2021 |
|---|---|---|---|
| Cash fl ow from operati ng acti viti es | |||
| Profi t for the period | 1 957 | (215) | |
| Adjustment for non-operati ng cash fl ow items | |||
| Depreciati on | 29 | - | |
| Impairment | - | ||
| Fair value adjustment | 10 | (1 386) | |
| Interest expense | 9 | 288 | 45 |
| Interest income | 9 | (155) | - |
| Operati ng cash fl ow before working capital items | 734 | (170) | |
| Working capital movements | (1 180) | 226 | |
| Total operati ng cash fl ow | (446) | 56 | |
| Cash fl ow from investi ng acti viti es | |||
| Investment in subsidiaries | |||
| Investment in Financial assets at fair value | (12 560) | ||
| Change in intercompany receivables | - | - | |
| Dividend and capital received | - | - | |
| Total cash fl ows from investi ng acti viti es | (12 560) | - | |
| Cash fl ow from fi nancing acti viti es | |||
| Proceeds from share issue | 9 935 | ||
| Proceeds from loan | 10 281 | ||
| Lease payments | (35) | - | |
| Interest paid | (2) | (45) | |
| Interest recived | 155 | ||
| Decrease/(increase) in restricted cash | - | - | |
| Dividends and capital paid | (51 000) | ||
| Total cash fl ow used in fi nancing acti viti es | 20 334 | (51 045) | |
| Eff ect of foreign currency revaluati on on cassh | (56) | ||
| Net increase in cash and cash equivalents | 7 273 | (50 990) | |
| Cash and cash equivalents at beginning of period | 4 693 | 55 682 | |
| Cash and cash equivalents at end of period | 3 | 11 966 | 4 693 |
| (In thousands of USD apart from number of shares) | Number of | Issued share | Share | Retained | Total |
|---|---|---|---|---|---|
| shares | capital | premium | earnings | equity | |
| Balance at 1 January 2021 | 23 390 300 | 4 678 | 51 207 | (42) | 55 844 |
| Total comprehensive loss for the period | - | - | - | (214) | (214) |
| Dividends paid during the period | - | - | (51 000) | (51 000) | |
| Balance at 31 December 2021 | 23 390 300 | 4 678 | 207 | (256) | 4 629 |
| (In thousands of USD apart from number of shares) |
Number of shares |
Issued share capital |
Share premium |
Other issued share capital |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Balance at 1 January 2022 | 23 390 300 | 4 678 | 207 | (256) | 4 629 | |
| Issue if share capital 7/7/2022 at NOK 2,10 per share |
- 47 619 048 |
- 9 524 |
- | 410 | 9 934 | |
| Total comprehensive income for the period Currency translation and other effects |
- | - | 1 957 (6) |
1 957 (6) |
||
| Balance at 31 December 2022 | 71 009 348 | 14 202 | 207 | 410 | 1 696 | 16 514 |
At 31 December 2022 the nominal value of the Company's authorized share capital is USD 1,000 million, consisting of 1,000,000,000 shares of par value USD 0.20 each, of which the Company has issued 71 009 348 shares with total share capital USD 14.2 million.
These consolidated fi nancial statements of ADS Mariti me Holding Plc ("ADS Mariti me Holding" or the "Company") were authorized for issue in accordance with a resoluti on of the Board of Directors passed on 9 March 2023. ADS Mariti me Holding Plc is a public limited company listed on the Euronext Growth at the Oslo Stock Exchange. The Company is incorporated in Cyprus and the address of its registered offi ce is OSM House, 22 Amathountos, 4532 Agios Tychonas, Limassol, Cyprus. The Company is domiciled in Cyprus and has a Norwegian subsidiary based in Arendal, Norway. The principal acti viti es of the Company are shipping investments.
These fi nancial statements are prepared in accordance with Internati onal Financial Reporti ng Standards (IFRS) as issued by the Internati onal Accounti ng Standards Board (IASB) and as adopted by the EU.
These fi nancial statements have been prepared based on the assumpti on of going concern.
Revenue is recognized when a contractual performance obligati on is sati sfi ed by transferring a promised good or service to a customer.
The Company assesses whether a contract is or contains a lease, at incepti on of the contract. The Company recognizes a right-ofuse ("ROU") asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for shortterm leases (defi ned as leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Company recognizes the lease payments as an operati ng expense on a straight-line basis over the term of the lease unless another systemati c basis is more representati ve of the ti me patt ern in which economic benefi ts from the leased assets are consumed.
The lease liability is initi ally measured at the present value of the lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The lease liability is subsequently measured by increasing the carrying amount to refl ect interest on the lease liability (using the eff ecti ve interest method) and by reducing the carrying amount to refl ect the lease payments made. The lease liability is presented as a separate line in the consolidated statement of fi nancial positi on. All variable lease payments, that are payable based on actual uti lizati on of the underlying asset, are excluded from the calculati on of lease liability. All variable lease payments are expensed to the statement of comprehensive income during the period to which such variable payments relate to.
The ROU assets comprise the initi al measurement of the corresponding lease liability, lease payments made at or before the commencement day less any lease incenti ves received and any initi al direct costs. They are subsequently measured at cost less accumulated depreciati on and impairment losses.
ROU assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciati on starts at the commencement date of the lease. The Company applies IAS 36 to determine whether a ROU is impaired and accounts for any
identified impairment loss in its consolidated statement of comprehensive income.
Financial assets and liabilities are recognized when the Company becomes party to the contractual obligations of the instrument and are initially recognized at fair value, except trade receivables that are measured at transaction price if the trade receivables do not contain a significant financing component. At 31 December 22, the Company holds financial instruments measured at amortized cost and financial assets at fair value through profit and loss. The classification depends on the characteristics of the financial assets and financial liabilities and the purpose for which they were acquired. The Management determines the classification of its financial instruments at initial recognition. Debt instruments are subsequently measured at amortized cost. Subsequent to initial measurement, financial assets and liabilities are classified as per below.
This category is the most relevant for the Company and includes lease liabilities, borrowings, trade payables and other financial assets and liabilities with fixed or determinable payments that are not quoted in an active market. Financial assets and liabilities in this category are initially recognized at fair value, net of directly attributable transaction costs. After initial measurement financial assets and liabilities in this category are subsequently carried at amortized cost using the effective interest rate (EIR) method, less any allowance for impairment. The EIR amortization is included in finance income for receivables and finance cost for borrowings. Losses arising from impairment of accounts receivable are recognized in operating expenses.
The Company derecognizes a financial liability only when the Company's obligations are discharged, cancelled or expire.
Expenses that are directly attributable to the inception of a loan are capitalized and amortized over the term of the relevant loan using the effective interest rate method. Amortization of loan costs are included as finance costs in the income statement. The capitalized but unamortized amount of such loan costs are recorded net of the loan liability in the statement of financial position. On derecognition of a loan as a financial liability any previously unamortized loan fees are expensed in full.
This includes the financial assets and liabilities measured at fair value upon initial recognition with change in fair value recognized through the consolidated income statement. Subsequent to initial recognition, financial assets and liabilities in this category are measured at fair value at the end of each reporting period with unrealized gains and losses being recognized through profit or loss. As at 31 December 2022 the Company have forward contracts and equity instruments that are measured at fair value through profit or loss.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. Forward
contracts are initi ally recognized at fair value on the transacti on date and subsequently measured at their fair value.
Forward contracts are classifi ed within the category 'fi nancial assets at fair value through profi t or loss' as long as the derivati ves are not designated as hedging instruments for accounti ng purposes.
The consolidated enti ty recognises a loss allowance for expected credit losses on fi nancial assets which are either measured at amorti sed cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated enti ty's assessment at the end of each reporti ng period as to whether the fi nancial instrument's credit risk has increased signifi cantly since initi al recogniti on, based on reasonable and supportable informati on that is available, without undue cost or eff ort to obtain.
Where there has not been a signifi cant increase in exposure to credit risk since initi al recogniti on, a 12-month expected credit loss allowance is esti mated. This represents a porti on of the asset's lifeti me expected credit losses that is att ributable to a default event that is possible within the next 12 months. Where a fi nancial asset has become credit impaired or where it is determined that credit risk has increased signifi cantly, the loss allowance is based on the asset's lifeti me expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anti cipated cash shortf alls over the life of the instrument discounted at the original
eff ecti ve interest rate.
When an asset or liability, fi nancial or non-fi nancial, is measured at fair value for recogniti on or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transacti on between market parti cipants at the measurement date; and assumes that the transacti on will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumpti ons that market parti cipants would use when pricing the asset or liability, assuming they act in their economic best interests. For nonfi nancial assets, the fair value measurement is based on its highest and best use. Valuati on techniques that are appropriate in the circumstances and for which suffi cient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabiliti es measured at fair value are classifi ed into three levels, using a fair value hierarchy that refl ects the signifi cance of the inputs used in making the measurements. Classifi cati ons are reviewed at each reporti ng date and transfers between levels are determined based on a reassessment of the lowest level of input that is signifi cant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal experti se is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
The The consolidated financial statements comprise the financial statements of ADS Maritime Holding Plc (the "Parent Company") and its subsidiaries (together, the "Company"). All of the subsidiaries in the group are 100% owned by the Parent Company and, thus, there are no minority ownership interests.
Subsidiaries are all those entities over which the Parent Company has control. The Parent Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Parent Company. They are de-consolidated from the date that control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent Company, using the same accounting policies. All intercompany transactions and balances are eliminated upon consolidation of the financial statements.
The functional and presentational currency of the Company is US dollar. The functional and presentational currency of the Parent Company and all subsidiaries is US dollar.
Income and expenses denominated in foreign currencies are translated into US dollar at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses resulting from settlement of such transactions as well as from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement as finance income and finance costs.
From 1 January 2022 ADSMH Management AS (former ADS Crude Holding AS) changed functional currency from USD to NOK.
Cash and cash equivalents consist of cash deposits held at call with banks. Cash and cash equivalents that are restricted for the Company's use are disclosed separately in the statement of financial position.
Shares are classified as equity. Incremental costs directly attributable to the issue of new shares are recorded in equity as a reduction from the gross share issue proceeds.
Basic earnings per share is calculated based on the net profit attributable to ordinary shareholders for the period divided by the weighted average number of shares in issue. The Company has no potentially dilutive equity instruments in issue.
The Company's statement of cash flows is prepared using the indirect method. Cash flows are divided into cash flows attributable to either operating activities, investing activities
or fi nancing acti viti es. In the cash fl ow statement, net profi t for the period is adjusted for non-cash items recorded in the income statement, such as depreciati on, as well as for non-cash movements in working capital. Any cash fl ows that have been recorded initi ally in the income statement as part of net profi t but which are investi ng or fi nancing in nature are removed from operati ng cash fl ows and presented as part of investi ng of fi nancing cash fl ows. All amounts presented in the investi ng acti viti es and fi nancing acti viti es secti ons are pure cash fl ows only.
Dividends payable or paid to shareholders are recognized when declared during the fi nancial year and are no longer at the discreti on of the Company.
The Parent Company is subject to income tax in Cyprus and the subsidiary is subject to income tax in Norway. In 2022 and 2021 no tax expenses were recognized for the Company, and there are no tax obligati ons. The Norwegian subsidiary has accumulated taxable defi cit in Norway that has not been recognized as deferred tax asset in the balance sheet.
There were no changes to accounti ng standards and amendments that the Company has applied for 2022 for the fi rst ti me and which had any signifi cant eff ect on the Company's fi nancial statements. Certain new standards, amendments and interpretati ons of existi ng standards have been published that are mandatory for the Company's accounti ng periods beginning 1 January 2022 or later.
None of the new standards, amendments and interpretati ons relevant for the Company are expected to have a signifi cant impact on the Company's fi nancial statements.
The preparati on of the Company's consolidated fi nancial statements requires management and the board to make esti mates, judgments and assumpti ons that aff ect the reported amount of revenue, expenses, assets and liabiliti es, as well as the accompanying disclosures. Uncertainty about these esti mates, judgments and assumpti ons could result in outcomes that require a material adjustment to the carrying amounts of assets or liabiliti es in future periods. For the 2022 fi nancial statements there have been accounti ng esti mates or judgments that may impact the fi nancial statements as described below:
The fair value of fi nancial instruments that are not traded in an acti ve market is determined by using valuati on techniques. The Company uses its judgment to select a variety of methods and make assumpti ons that are mainly based on market conditi ons existi ng at each reporti ng date.
The Company's primary financial risks relate to market risk, credit risk and liquidity risk. Market risk is the risk that the fair value of future cash flows of a financial asset or liability will fluctuate because of changes in market prices, such as foreign exchange and interest rates. The Company's financial risk exposure is monitored by Management and its Board of Directors oversee the management of these risks.
Subsequent to repayment in full of the Company's non-current loans used to finance the Company's vessels that were sold in 2020, the Company's principal financial liabilities are trade and other payables. The Company's principal financial assets are customer receivables, other assets and cash deposits at banks.
The table below shows the carrying value of the Company's financial assets and liabilities.
| (In thousands of USD) | 31-Dec-22 | 31-Dec_21 |
|---|---|---|
| Financial assets | ||
| Non-current financial assets | ||
| Financial assets at fair value through profit or loss | 13 317 | - |
| Other non-current financial assets | 545 | - |
| Current financial assets | ||
| Financial assets at fair value through profit or loss - current portion | 630 | |
| Other current assets | 1 135 | 43 |
| Cash and cash equivalents | 11 966 | 4 693 |
| Total financial assets | 27 592 | 4 736 |
| Financial liabilities | ||
| Non-current liabilities | ||
| Lease liability | 329 | |
| Long term-loan | 10 561 | |
| Current liabilities | ||
| Lease libility - current | 47 | |
| Other current liabilities | 339 | 75 |
| Trade payables | 179 | 32 |
| Total financial liabilities | 11 454 | 107 |
| Net current financial assets/(liabilities) | 13 166 | 4 629 |
| Net current and non-current financial assets/(liabilities) | 16 138 | 4 629 |
The Company has no interest-bearing liabiliti es and is not exposed to interest rate risk.
The Company operates in the global shipping industry, for which the majority of transacti ons are denominated in US dollars, the Company's functi onal and presentati onal currency. The majority of the Company's operati ng costs are denominated in US dollars and Norwegian kroner.
As at 31 December 2022 the Company had cash and cash equivalents denominated in Norwegian kroner that had a carrying value of USD 0.9 million (2021: USD 0.3 million) and in Euros of USD 0.0 million (2021: USD 0,1 million). Material porti on of the Company`s personnel expenses and G&A expenses are denominated in NOK. Financial assets and liabiliti es of the Company at 31 December 2021 are denominated in US dollars and, hence, the Company's maximum exposure to foreign exchange risk is limited to the above expenses.
Credit risk is the risk that a counterparty defaults on its contractual obligati ons, resulti ng in a fi nancial loss to the Company. The Company is exposed to credit risk primarily from receivables from customers and cash held at banks. The Company manages its credit risk related to customers by aiming to provide services only to reputable customers. As at 31 December 2022 the Company has no customer receivables. The Company aims to manage its counterparty risk relati ng to cash held at bank by only holding deposits at recognizable internati onal banks. As at 31 December 2022 all of the Company's cash and cash equivalents and restricted cash was held with Nordea Bank which has an external credit rati ng of Aa3. The expected credit loss calculated is not material to the consolidated fi nancial statements.
| (In thousands of USD) | 31-Dec-22 | 31-Dec_21 |
|---|---|---|
| Cash and cash equivalents | 11 966 | 4 693 |
Liquidity risk is the risk that the Company cannot meet its fi nancial obligati ons as they fall due. The Company manages its risk of a shortage of funds by conti nuously monitoring maturity of its fi nancial assets and liabiliti es and using a cash fl ow forecasti ng tool that makes projecti ons about future cash fl ows from operati ng acti viti es and required for investi ng acti viti es. The Company has long-term debt that matures in full on 23 June 2024 with MUSD 11, 4 payable.
The Company's objecti ves when managing capital are to maximize the return to shareholders through its investments, aiming to have an opti mal capital structure whereby it safeguards the Company's
ability to continue as a going concern but while returning excess liquidity to shareholders in the form of regular dividends. The management of the capital structure involves active monitoring and adjustments in light of changes in economic conditions and risk characteristics of the Company's investments.
The chief operating decision maker currently reviews the Company's activities on a consolidated basis as one operating segment.
The Company's registered office is in Cyprus and its Norwegian subsidiary is based in Norway. The Company's operational perspective is the global shipping market. The Company has employees both in Cyprus and Norway. The administrative and corporate management of the Company has been provided by Arenal's Dampskibsselskab AS until 1 July 2022. From 1 July 2022 management has been employed by the Company. The Company has 4 fulltime and 2 part time employees.
| (In thousands of USD) | 2022 | 2021 |
|---|---|---|
| Wages, salaries | 280 | 8 |
| Social security cost | 40 | - |
| Pension – defined constribution plan | 21 | - |
| Other personell costs | 2 | |
| Total salaries and personell expense | 343 | 8 |
From July 1, 2022 the Company operates defined pension contribution plans in Norway. The defined pension contribution plans require the Company to pay premiums to a private administrative pension plan on a mandatory basis. The Company has no further obligations once these premiums are paid. The premiums are accounted for as personnel expenses as soon as they are incurred. Defined contribution plan in Norway complies with local Pension legislation.
The statutory audit fee for the 2022 audit of ADS Mariti me Holding Plc and subsidiaries to RSM Cyprus Ltd and RSM Norway AS is approx. USD 17 000 plus VAT (2021: USD 16 000 plus VAT). In additi on, a fee for tax services provided of approx. USD 3 000 plus VAT is charged for 2022.
The Company has no diluti ve or potenti al diluti ve shares.
| (In thousands of USD) | 2022 | 2021 |
|---|---|---|
| Profi t/(loss) for the period Weighted average shares outstanding |
1 957 71 009 348 |
(215) 23 390 300 |
| Basic and diluted EPS (USD per share) | 0.03 | (0.01) |
All of the Company's fi nancial assets and fi nancial liabiliti es are measured at amorti zed cost or at fair value through profi t or loss.
The fair values of the Company's fi nancial assets and liabiliti es are summarized in the table below.
| 31-Dec-22 | 31-Dec-21 | |||
|---|---|---|---|---|
| (In thousands of USD) | Carrying value |
Fair value |
Carrying value |
Fair value |
| Financial assets | ||||
| Non-current fi nancial assets | ||||
| Financial assets at fair value through profi t or loss | 13 317 | 13 317 | ||
| Other non-current fi nancial assets | 545 | 545 | ||
| Current fi nancial assets | ||||
| Financial assets at fair value through profi t or loss - current porti on |
630 | 630 | ||
| Other current assets | 1 135 | 1 135 | 43 | 43 |
| Cash and cash equivalents | 11 966 | 11 966 | 4 693 | 4 693 |
| Total fi nancial assets | 27 592 | 27 592 | 4 736 | 4 736 |
| 31-Dec-22 | 31-Dec-21 | |||
|---|---|---|---|---|
| (In thousands of USD) | Carrying value |
Fair value |
Carrying value |
Fair value |
| Financial liabilities | ||||
| Non-current liabilities | ||||
| Lease liability | 329 | 329 | ||
| Long term-loan | 10 561 | 10 561 | ||
| Current liabilities | ||||
| Lease libility - current | 47 | 47 | ||
| Other current liabilities | 339 | 339 | 75 | 75 |
| Trade payables | 179 | 179 | 32 | 32 |
| Total financial liabilities | 11 454 | 11 454 | 107 | 107 |
The fair values of receivables from customers, other current assets, restricted cash and cash and cash equivalents, other current liabilities and trade payables approximate their carrying values largely due to their short-term maturities. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques and makes assumptions that are based on market conditions existing at the reporting date. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted and unadjusted prices in active markets for identical assets or liabilities.
Level 2: other techniques for which inputs which have a significant impact on the fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
| (In thousands of USD) | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value through profit or loss | ||||
| Unlisted equity securities | 12 560 | 12 560 | ||
| Forward TC contracts | 1 386 | 1 386 | ||
| Total | 0 | 0 | 13 946 | 13 946 |
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Financial income | ||
| Gain on fi nancial assets at fair value through profi t or loss | 2 785 | - |
| Interest income | 155 | (0) |
| Realized forex exchange gain | 64 | |
| Unrealized forex exchange gain | 3 | - |
| Other fi nancial income | 33 | - |
| Total fi nancial income | 2 975 | 64 |
| Financial cost | ||
| Loss on fi nancial assets at fair value through profi t or loss | - | - |
| Interest expenses | (288) | (44) |
| Realized forex exchange loss | (27) | (1) |
| Unrealized forex exchange loss | - | - |
| Other fi nancial cost | - | - |
| Total fi nancial cost | (316) | (45) |
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Balance at 1 January | - | |
| Additi ons | 12 560 | |
| Change in fair value | 1 386 | |
| Balance at 31 December | 13 946 | 0 |
| Less non-current porti on | 13 317 | |
| Current porti on | 630 | |
ADS Mariti me Holding Plc has entered into two TCP profi t and loss sharing contracts with Navig8 Inc. Profi t and loss split is calculated from the diff erence between the actual TCP hire rate in the period, relati ve to a reference TCP hire rate as agreed between the parti es. For ADS Mariti me Holding Plc the contracts cover 20% the total profi t and loss for the vessels. The contract on M.T. FPMC C MELODY was entered into on 12 April 2022 and has a durati on of 1 year plus 1 year opti on period. Working capital payment is booked as a short-term receivable of kUSD 337.
The contract on M.T. AYOE was entered into on 1 June 2022 and has a durati on of 3 years plus opti on period of +/- 60 days. Working capital payment is booked as a long-term receivable of kUSD 545
On 23 June 2022 the Company purchased 5% of the shares in each of the two companies AET Sea
Shuttle AS and AET Sea Shuttle II AS from ADS Shipping Ltd for USD 11,4 million not payable until 2 years after the transaction. Both companies are non-listed and each company owns two shuttle tankers.
On 5 October 2022 the Company purchased 10% of United Overseas Production AS, a non-listed company with two MR tankers for USD 2,4 million.
In the cash flow statement financial assets at fair value through profit or loss are presented within the section on operating activities as part of changes in working capital. In the statement of profit or loss and other comprehensive income, changes in fair value of financial assets through profit or loss are recorded in finance income.
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use ("ROU") asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
| Right of use assets | |
|---|---|
| (In thousands of USD) | Office premises |
| Initial measurement | |
| Net present value of lease liabilities | 406 |
| Initial direct cost | |
| Prepaid leases | |
| Right of use assets at lease commencement | 406 |
| Depreciation | 29 |
| Balance as at 31-12-2022 | 376 |
The right-of-use asset relates to rented head office for ADSMH Management AS at Sandvigveien 19 in Arendal, Norway. The rental contract expires on 31 July 2029, and the RoU Asset is depreciated on a straight line basis until the expiration date of the lease.
| Lease liabiliti es | |
|---|---|
| (In thousands of USD) | 31-12-2022 |
| Initi al measurement | 406 |
| Lease payment during the period | 23 |
| Interest accrued | - |
| Interest paid | 6 |
| Balance as at 31-12-2022 | 376 |
| Of wich: | |
| Due Within 12 months | 47 |
| Due within 36 months | 329 |
The interest rate used to calculate the lease obligati on is 6,5% which is considered to be the alternati ve cost of fi nancing for the Company.
The Company received a seller credit on the purchase of a 5 % shareholding in AET Sea Shutt le AS and AET Sea Shutt le II AS in June 2022 from ADS Shipping Ltd. A total of USD 11,4 million is payable within two years from the acquisiti on. The seller credit is at zero interest rate and without collateral. The loan is recognized at fair value as of 31 December 2022 at carrying amount of USD 10,6 million and interest expense of USD 280k has been recognized in 2022.
| Directors | ||||
|---|---|---|---|---|
| (In thousands of USD) | Since | To | 2022 | 2021 |
| Payments to Board of Directors | ||||
| Bjørn Tore Larsen (Chairman) | 10-Aug-18 | - | - | |
| Marios Demetriades (Deputy Chairman) | 10-Aug-18 | 14 | 14 | |
| Sofi Mylona | 21-Aug-19 | 8 | 10 | |
| Lia Papaiacovou | 21-Aug-19 | - | - | |
| Total Board of Director fees | 22 | 24 | ||
On 1 July 2022 the Company entered into an agreement for the lease of offi ces at Sandvigveien 19, Arendal. The lease contract was previously leased to Arendals Dampskibsselskab AS. The lease term is approximately 7 years from incepti on of the lease which is also the commencement date. There are no lease deposits or redelivery costs according to the lease contract.
Non-executi ve independent board members are enti tled to Board fees at the rate of EUR 7.5k per annum, while the Deputy Chairman positi on receives an additi onal EUR 2.5k per annum.
Lia Papaiacovou is a remunerated part-ti me employee of the Company.
MD Mindset Capital Ltd, a company controlled by Deputy Chairman Marios Demetriades, received fees for director services totaling EUR 10k in 2022 (2021: EUR 10k) and for consulti ng services of EUR 20k in 2022 (2021: EUR 20k). Scordis, Papapetrou & Co LLC, a company in which board member Sofi Mylona is a partner, received fees for director services totaling EUR 8k in 2022 (2021: EUR 8k) and for other legal services of EUR 3k in 2022 (2021: EUR 3k)
The administrati ve and corporate management of the Company has been provided by Arendals Dampskibsselskab AS unti l 1 July 2022.
From 1 July the corporate management was transferred to ADSMH Management AS, and as part of this transfer ADSMH Management AS took over the offi ce lease contract from Arendals Dampskibsselskab AS at similar rental terms. ADSMH Management AS paid USD 36k for offi ce rental from 1 July 2022 to 31 Dec 2022.
In 2022 Arendal Dampskibsselskab AS invoiced the Company a total fee of USD 63k for corporate management services provided in the period from 1 January to 1 July, when the management agreement was terminated. The Company has invoiced Arendal Dampskibsselskab AS USD 30k for services provided from 1 July to 31 December. As of 31 December 2022 the Company has payables towards Arendals Dampskibsselskab AS of USD 0k (2021: 2k).
The Company has a long-term loan from ADS Shipping Ltd due to seller credit on the Company`s purchase of 5% of the shares in each AET Sea Shutt le AS and AET Sea Shutt le II AS. ADS Shipping Ltd is controlled by Bjørn Tore Larsen. See note 12 for additi onal details.
On 10 December 2020 shareholders passed a special resoluti on to make a USD 51 million capital repayment by way of a reducti on of the share premium account, subject to regulatory approval in Cyprus. On 16 February 2021 the District Court of Limassol, Cyprus approved the USD 51 million reducti on of the share premium account. The payment was made in NOK to all shareholders of ADS Mariti me Holding Plc on 1 March 2021
On 3 January 2023 Anders Hall Jomaas was appointed as the new CFO of ADS Mariti me Holding Plc, replacing Dagfi nn Andersen.
Limassol, 9 March 2023
Bjørn Tore Larsen Chairman
Marios Demetriades Deputy Chairman
Sofi Mylona Lia Papaiacovou
| (In thousands of USD) | Note | 2022 | 2021 |
|---|---|---|---|
| Revenue | 117 | - | |
| Operati ng expenses | |||
| Personnel expenses | (6) | (8) | |
| General & administrati ve costs | 9 | (787) | (473) |
| Total operati ng expenses | (793) | (481) | |
| Operati ng profi t | (676) | (481) | |
| Finance cost | 6 | (288) | (3) |
| Finance income | 6 | 2 895 | 3 |
| Impairment | (225) | ||
| Profi t/(Loss) before tax | 1 930 | (706) | |
| Income tax | - | - | |
| Profi t/(Loss) aft er tax and total comprehensive income | 1 930 | (706) |
| (In thousands of USD) | Note | 31-Dec-22 | 31-Dec-21 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Investments in subsidiaries | 5 | 3 528 | 3 528 |
| Financial assets at fair value through profi t or loss | 4,7 | 13 317 | |
| Other non-current assets | 4,7 | 545 | |
| Total non-current assets | 17 390 | 3 528 | |
| Current assets | |||
| Financial assets at fair value through profi t or loss - current porti on | 4,7 | 630 | |
| Other current assets | 4 | 1 091 | 59 |
| Cash and cash equivalents | 3,4 | 8 832 | 1 148 |
| Total current assets | 10 553 | 1 207 | |
| Total assets | 27 942 | 4 735 | |
| Equity and liabiliti es | |||
| Equity | |||
| Issued share capital | 14 202 | 4 678 | |
| Share premium | 1 255 | 1 255 | |
| Other issued share capital | 410 | ||
| Retained earnings | 704 | (1 226) | |
| Total equity | 16 571 | 4 707 | |
| Non-current liabiliti es | |||
| Loan | 4,8 | 10 761 | |
| Total non-current liabiliti es | 10 761 | ||
| Current liabiliti es | |||
| Trade payables | 4 | 123 | 28 |
| Other current liabiliti es | 4 | 488 | |
| Total current liabiliti es | 611 | 28 | |
| Total liabiliti es | 11 372 | 28 | |
| Total equity and liabiliti es | 27 942 | 4 735 |
| (In thousands of USD) | 2022 | 2021 |
|---|---|---|
| Cash fl ows from operati ng acti viti es | ||
| Profi t for the period | 1 930 | (706) |
| Adjustment for items not aff ecti ng operati ng cash fl ows: | ||
| Decreciati on | 1 | |
| Impairment | - | |
| Fair value gain/(loss) on fi nancial assets 7 |
1 386 | |
| Interest expences 6 |
282 | 225 |
| Interest income 6 |
(114) | - |
| Net operati ng cash fl ow before working capital movements | 712 | (480) |
| Working capital movements | (994) | 26 |
| Total operati ng cash fl ow | (282) | (454) |
| Cash fl ows from investi ng acti viti es | ||
| Investment in subsidiaries | ||
| Investment in other shares 7 |
(12 560) | |
| Investment in other fi nancial assets | - | |
| Investment in other assets | - | |
| Loans repaid by/(to subsidiaries) | - | - |
| Changes in inter-company receivables | - | - |
| Dividends received in cash from subsidiaries | - | 41 407 |
| Total cash fl ows from investi ng acti viti es | (12 560) | 41 407 |
| Cash fl ows from fi nancing acti viti es | ||
| Proceeds from share issues | 9 935 | |
| Proceeds from loan 8 |
10 281 | |
| Repayment of loan | - | - |
| Interest paid | (3) | (1) |
| Interest received | 114 | - |
| Dividends and capital paid | (51 000) | |
| Total cash fl ows used in fi nancing acti viti es | 20 327 | (51 001) |
| Eff ect of foreign currency revaluati on on cash | 198 | |
| Net increase in cash and cash equivalents | 7 683 | 10 048 |
| Cash and cash equivalents at the beginning of the period | 1 149 | 11 197 |
| Cash and cash equivalents at the end of the period 3 |
8 832 | 1 149 |
| (In thousands of USD apart from number of shares) | Number | Issued share | Share | Retained | Total |
|---|---|---|---|---|---|
| of shares | capital | premium | earnings | equity | |
| Balance 1 January 2021 | 23 390 300 | 4 678 | 52 255 | 2 411 | 59 344 |
| Total comprehensive income for the period | - | - | - | (706) | (706) |
| Repayment of share premium | - | - | (51 000) | (51 000) | |
| Balance at 31 December 2021 | 23 390 300 | 4 678 | 1 255 | (1 226) | 4 707 |
| (In thousands of USD apart from number of shares) |
Number of shares |
Issued share capital |
Share premium |
Other issued share capital |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Balance 1 January 2022 | 23 390 300 | 4 678 | 1 255 | (1 226) | 4 707 | |
| Issue if share capital | - | - | - | |||
| 7/7/2022 at NOK 2,10 per share | 47 619 048 | 9 524 | 410 | 9 934 | ||
| Total comprehensive income for the period | - | - | 1 930 | 1 930 | ||
| Balance at 31 December 2022 | 71 009 348 | 14 202 | 1 255 | 410 | 704 | 16 571 |
At 31 December 2022 the nominal value of the Company's authorized share capital is USD 1,000 million, consisti ng of 1,000,000,000 shares of par value USD 0.20 each, of which the Company has issued 71,009,348 shares with total share capital USD 14.2 million.
ADS Maritime Holding Plc (the "Parent Company") is a holding company. The Parent Company's activities are investing in subsidiaries, including ownership of shares in subsidiaries and provision of intercompany financing.
These financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the EU.
The Parent Company's accounting principles are consistent with the accounting principles of the Company, as described in Note 2 of the consolidated financial statements, apart from as described below. Note disclosures that are similar to the information available in the consolidated financial statements are not repeated in these unconsolidated financial statements.
Investments in subsidiaries are presented at cost, less any impairment. To assess for impairment, the estimated recoverable amount is compared to the carrying value of investments in subsidiaries. The recoverable amount is calculated as the discounted estimated future cash flows.
The Parent Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment are present. If facts and circumstances indicate that investment in subsidiaries may be impaired, the estimated future discounted cash flows associate with these subsidiaries would be compared to their carrying amounts to determine if a write-down is necessary.
The loss allowance for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, by considering supportive forward-looking information. The main financial assets that are subject to the expected credit loss model relate to receivables from related parties, including loans receivable.
The Parent Company's primary financial risks are consistent with the financial risks of the Company, as described in Note 3 of the consolidated financial statements, apart from as described on the next page.
Credit risk is the risk that a counterparty defaults on its contractual obligati ons, resulti ng in a fi nancial loss to the Company. The Company is exposed to credit risk primarily from cash held at bank as summarized in the table below.
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Cash and cash equivalents | 8 832 | 1 148 |
| Total fi nancial assets | 8 832 | 1 148 |
All of the Company's fi nancial assets and fi nancial liabiliti es are measured at amorti zed cost. The fair values of the Company's fi nancial assets and liabiliti es are summarized in the table below.
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Financial assets | ||
| Non-current fi nancial assets | ||
| Financial assets at fair value through profi t or loss | 13 317 | |
| Other non-current fi nancial assets | 545 | |
| Current fi nancial assets | ||
| Financial assets at fair value through profi t or loss - current porti on | 630 | |
| Other current assets | 1 091 | |
| Cash and cash equivalents | 8 832 | 1 148 |
| Total fi nancial assets | 24 414 | 1 148 |
| Financial liabiliti es | ||
| Non-current liabiliti es | ||
| Long term-loan | 10 761 | |
| Current liabiliti es | ||
| Other current liabiliti es | 410 | |
| Trade payables | 704 | 28 |
| Total fi nancial liabiliti es | 11 874 | 28 |
| Net current fi nancial assets/(liabiliti es) | 9 439 | 1 120 |
| Net current and non-current fi nancial assets/(liabiliti es) | 12 540 | 1 120 |
The fair values of receivables from subsidiaries, cash and cash and cash equivalents, other current liabilities and trade payables approximate their carrying values largely due to their short-term maturities.
| 31-Dec-22 | 31-Dec-21 | |||
|---|---|---|---|---|
| (In thousands of USD) | Carrying value |
Fair value |
Carrying value |
Fair value |
| Financial assets | ||||
| Non-current financial assets | ||||
| Financial assets at fair value through profit or loss | 13 317 | 13 317 | ||
| Other non-current financial assets | 545 | 545 | ||
| Current financial assets | ||||
| Financial assets at fair value through profit or loss - current portion |
630 | 630 | ||
| Other current assets | 1 135 | 1 135 | 43 | 43 |
| Cash and cash equivalents | 11 966 | 11 966 | 4 693 | 4 693 |
| Total financial assets | 27 592 | 27 592 | 4 736 | 4 736 |
| Financial liabilities | ||||
| Non-current liabilities | ||||
| Long term-loan | 10 761 | 10 761 | ||
| Current liabilities | ||||
| Other current liabilities | 410 | 410 | 0 | 0 |
| Trade payables | 704 | 704 | 28 | 28 |
| Total financial liabilities | 11 874 | 11 874 | 28 | 28 |
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted and unadjusted prices in active markets for identical assets or liabilities.
Level 2: other techniques for which inputs which have a significant impact on the fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
| 31-Dec-22 | ||||
|---|---|---|---|---|
| (In thousands of USD) | Level 1 | Level 2 | Level 3 | Total |
| Financial assets at fair value through profit or loss | ||||
| Unlisted equity securities | 12 560 | 12 560 | ||
| Forward TC contracts | 1 386 | 1 386 | ||
| Total | 0 | 0 | 13 946 | 13 946 |
The table below shows all subsidiaries the Parent Company owns directly and indirectly.
| Carrying value | |||||
|---|---|---|---|---|---|
| (In thousands of USD) | Country of incorporation |
Equity interest 31-Dec-20 |
31-Dec-22 | 31-Dec-22 | |
| Name of subsidiary ADS Crude Holding AS |
Norway | 100% | 3 528 | 3 528 | |
| Total | - | - | 3 528 | 3 528 |
The subsidiary changed name in 2022 from ADS Crude Holding AS to ADSMH Management AS.
The table below shows the movement in the carrying value of the Parent Company's investments in subsidiaries during the Period.
| (In thousands of USD) | 2022 | 2021 |
|---|---|---|
| Carrying value | ||
| Investments at start of period | 3 528 | 45 160 |
| Dividend from subsidiary | - | (41 407) |
| Impairment | - | (225) |
| Total at end of period | 3 528 | 3 528 |
During 2021 ADS Crude I AS, ADS Crude II AS and ADS Crude III AS were all liquidated and remaining net assets transferred to their parent company, ADS Crude Holding AS. ADS Crude Holding AS declared a dividend of USD 41.4 million to ADS Maritime Holding Plc in 2021. An impairment of USD 0.2 million was recognized on the Parent Company's investment in ADS Crude Holding AS.
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Financial income | ||
| Gain on financial assets at fair value through profit or loss | - | - |
| Interest income | 109 | 3 |
| Realized forex exchange gain | 5 | - |
| Unrealized forex exchange gain | (4) | - |
| Other financial income | 2 785 | - |
| Total financial income | 2 895 | 3 |
| Financial cost | ||
| Loss on financial assets at fair value through profit or loss | - | - |
| Interest expenses | (281) | (3) |
| Realized forex exchange loss | (1) | - |
| Unrealized forex exchange loss | (6) | - |
| Other financial cost | - | - |
| Total financial cost | (288) | (3) |
| (In thousands of USD) | 31-Dec-22 | 31-Dec-21 |
|---|---|---|
| Balance at 1 January | ||
| Additions | 12 560 | - |
| Capital reduction | ||
| Change in fair value | 1 386 | - |
| Exchange differences | ||
| Balance at 31 December | 13 946 | 0 |
| Less non-current portion | 13 317 | |
| Current portion | 630 | |
ADS Maritime Holding Plc has entered into two TCP profit and loss sharing contracts with Navig8 Inc. Profit and loss split is calculated from the difference between the actual TCP hire rate in the period, relative to a reference TCP hire rate as agreed between the parties. For ADS Maritime Holding Plc the contracts cover 20% the total profit and loss for the vessels.
The contract on M.T. FPMC C MELODY was entered into on 12 April 2022 and has a duration of 1 year plus 1 year option period. Working capital payment is booked as a short-term receivable of kUSD 337.
The contract on M.T. AYOE was entered into on 1 June 2022 and has a durati on of 3 years plus opti on period of +/- 60 days. Working capital payment is booked as a long-term receivable of kUSD 545
On 23 June 2022 the Company purchased 5% of the shares in each of the two companies AET Sea Shutt le AS and AET Sea Shutt le II AS from ADS Shipping Ltd for USD 11,4 million not payable unti l 2 years aft er the transacti on. Both companies are non-listed and each company owns two shutt le tankers.
On 5 October 2022 the Company purchased 10% of United Overseas Producti on AS, a non-listed company with two MR tankers for USD 2,4 million.
In the cash fl ow statement fi nancial assets at fair value through profi t or loss are presented within the secti on on operati ng acti viti es as part of changes in working capital. In the statement of profi t or loss and other comprehensive income, changes in fair value of fi nancial assets through profi t or loss are recorded in fi nance income.
The Company received a seller credit on the purchase of a 5 % shareholding in AET Sea Shutt le AS and AET Sea Shutt le II AS in June 2022 from ADS Shipping Ltd. A total of USD 11,4 million is payable within two years from the acquisiti on. The seller credit is at zero interest rate and without collateral. The loan is recognized at fair value as of 31 December 2022 at carrying amount of USD 10,6 million and interest expense of USD 280k has been recognized in 2022.
The statutory audit fee for the 2022 audit of ADS Mariti me Holding Plc to RSM Cyprus Ltd and RSM Norway AS is approx. USD 14 000 plus VAT (2021: USD 14 000 plus VAT). In additi on, a fee for tax services provided of approx. USD 500 plus VAT is charged for 2022
On 3 January 2023 Anders Hall Jomaas was appointed as the new CFO of ADS Mariti me Holding Plc, replacing Dagfi nn Andersen.
Limassol, 9 March 2023
Sofi Mylona Lia Papaiacovou
Bjørn Tore Larsen Chairman
Marios Demetriades Deputy Chairman
RSM Cyprus Ltd
131, Gladstonos Street Kermia Court, 2nd Floor 3317 Limassol, Cyprus
T. +357 25 204 000 F. +357 25 761 146
We have audited the consolidated financial statements of parent company ADS Maritime Holding Plc (the ''Company'') and its subsidiaries (the ''Group''), which are presented in pages 12 to 29 and comprise the consolidated statement of financial position as at 31 December 2022, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
We have also audited the Company's unconsolidated financial statements which are presented in pages 30 to 39 and comprise the unconsolidated statement of financial position as at 31 December 2022, and the unconsolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the unconsolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated and unconsolidated financial statements give a true and fair view of the consolidated and unconsolidated financial position of parent company ADS Maritime Holding Plc as at 31 December 2022, and of its consolidated and unconsolidated financial performance and its consolidated and unconsolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the ''Auditor's Responsibilities for the Audit of the Consolidated and unconsolidated Financial Statements'' section of our report. We are independent of the Group in accordance with the ''International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants'' (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated and unconsolidated financial statements in Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
RSM Cyprus Limited is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
The Board of Directors is responsible for the other information. The other information comprises the information included in the Board of Directors' Report, but does not include the consolidated and unconsolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated and unconsolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated and unconsolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and unconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors is responsible for the preparation of consolidated and unconsolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated and unconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated and unconsolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Group's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated and unconsolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and unconsolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
This report, including the opinion, has been prepared for and only for the Group's members as a body in accordance with Section 69 of the Auditors Law of 2017 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.
George Themistocleous Certified Public Accountant and Registered Auditor for and on behalf of RSM Cyprus Limited Certified Public Accountants and Registered Auditors Limassol, 09 March 2023
ADS Maritime Holding Plc OSM House, 22 Amathountos 4532 Agios Tychonas Limassol, Cyprus Tel +357 25335501
ADSMH Management AS PO Box 198 4802 Arendal, Norway Tel: +47 41 49 40 00
Visiting Address Norway Sandvigveien 19 4816 Kolbjørnsvik Norway
Email: [email protected]
www.adsmh.com
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